Welfare Reform and Work Bill
Lord Kirkwood of Kirkhope Excerpts(8 years, 4 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, we thank the Minister, the noble Baroness, Lady Evans, for her introduction and we are grateful for the separate briefing that we received before Christmas with her colleague, the noble Baroness, Lady Williams. This is a very substantial list of government amendments, but we will not oppose them, as overall they are intended to make the policy work more effectively and securely. We understand that they are, in essence, technical.
However, we might just reflect on the fact that in Committee in another place we saw the introduction of four new clauses and one substantial new schedule, with more government amendments on Report. The amendments in this group include those—for example, 108B—which replace provisions inserted by government amendments in Committee in the House of Commons. This creates the impression that the policy has not been fully worked through. I wonder what else is being worked on which will require amendment before we are finished with this Bill.
We know from the Government’s briefing note of Clauses 21 to 28 and Schedule 2 that work is under way on regulations to come into force on 1 April 2016. These are to cover further exceptions but also alternative provision for accepted categories and alternative conditions for granting directions. Regulations are also to cover the enforcement of Schedule 2 by the regulator. Can the Minister say whether we will see at least a draft of these regulations before we get to Report? Clearly, the clock is ticking, and drafting must have reached an advanced stage if the regulations are to come into force on 1 April this year.
So far as Clause 23 is concerned, there is the opportunity for the Secretary of State to direct that the provisions of Clause 21 do not apply to a local authority if it would be unable to avoid serious financial difficulties. Similar considerations arise for private registered providers, where the regulator has to take a view on financial viability. Can the Minister say whether any general guidance will be published covering these matters? We note that the Secretary of State is taking powers to publish measures which individual local authorities can take, so we are back with central government micromanaging the affairs of local authorities—so much for devolving power. But as I say, we do not and will not oppose these amendments.
Lord Kirkwood of Kirkhope (LD)
My Lords, I support what the noble Lord, Lord McKenzie, has just said. He is right to say that the process of this particular measure and its sections through its various parliamentary stages has been less than best practice. Of course, it is not the Minister’s fault; I think that the Committee is grateful to her for her concise explanation of what these amendments seek to do, and it is agreed that they are, by and large, improvements. However, having substantial bits of policy of the kind covered by the sections and amendments that we are dealing with this evening in a summer Budget Statement, with no prospect of any consultation beforehand—an ex cathedra Statement by the Chancellor of the Exchequer, and then a long Summer Recess where everybody tries to work out what on earth it all meant—is not a good way of producing legislation.
It does not surprise me that there was a degree of confusion at the Commons Committee stages and that we are now faced at this quite late stage with admittedly helpful amendments. However, they are technical and they need consideration, because they increase the corpus of housing law and make things more complicated. Not only does the primary legislation make it more complicated; it will spawn secondary legislation. This House will no doubt look forward to studying it in great detail, larding and littering the statute book with consequential changes, including protecting mortgagees, implied terms in leases—which is always dangerous; from a legal point of view, implication by statutory legislation is never a good thing—and transitional protection, which may well be necessary. But at this stage I think it is appropriate for the noble Lord, Lord McKenzie, and the Committee to say to the Minister that housing Bills and measures of this kind should be done properly. Consultation and Green Papers are always an advantage. If we had had a Green Paper in relation to these clauses, some of the difficulties that the Minister faced in introducing these amendments could have been avoided and could be avoided in future.
Baroness Evans of Bowes Park
I thank both noble Lords for their contributions and take note of the points that they raised. In specific relation to the draft regulations, we will be putting out information on our detailed intentions in due course, and I will look at what more information can be provided at Report.
Baroness Manzoor
I rise just briefly, because I am an optimist and I do not want to delay the Committee further, to say that I totally concur with Amendments 107 and 109—they are one and the same—and the issues surrounding them relating to supported housing. I commend the Government on keeping supported housing out of universal credit and other benefits when they did their calculations. To my mind this is very similar. There needs to be clarity. As I said, I am an optimist; I do not for one minute think that the Government intended for these negative consequences to occur for supported housing where it is particularly needed for young people and people who may be homeless, and where crisis housing and services are needed.
I concur with everything that has been said and will add just one last point: if an organisation is totally on its knees, it will not think about investing for the future or how to improve. If an organisation has to come cap in hand back to the Government to say, “We need to be exempted now”, that will be too late because those services will have been lost for the future. That will invariably have an adverse effect on service standards. People may well end up being homeless. We must not forget that these organisations are there because we need crisis management for these people, whether they are drug users, young people on benefits, women fleeing domestic violence and so forth. I ask the Minister to answer the questions that were put so well by the noble Lord, Lord Best, to clarify whether specific accommodation and supported accommodation will be exempt from the measures in the Bill.
Lord Kirkwood of Kirkhope
My Lords, I should like to add a codicil to the debate. I hesitate to join in this interesting discussion and I have listened very carefully to what has been said. I come from Scotland. North of the border, this debate and the Government’s proposals for the housing association social rented sector in general, particularly the supported part of that important contribution to our housing capacity, are viewed with total disbelief. People north of the border would consider that this debate, while taking into consideration the economic case, omits the social ethic and commitment that housing associations and supported housing organisations bring to the provision of accommodation units in the United Kingdom. There is a separate way of looking at things, and that ethic is being put at risk by some of these policies.
We have heard the Prime Minister say that he will address poverty by addressing what he calls its root causes. Some of that is absolutely embedded in the homes of challenged families, with drug abuse and people who are recidivists and serial offenders who come out of prison, and all of that kind of thing. The housing association supported sector as it is deployed in the United Kingdom is absolutely at the centre of supplying some of the solutions that the Prime Minister is aiming for in other aspects of government policy. That includes the Work Programme and universal credit. Housing associations are playing a very engaged and positive role in the rollout of universal credit, as I have seen for myself when visiting some of them. So I am puzzled that this supported sector is being put at risk—and I think that it is being put at risk.
We have heard evidence from some very powerful people with professional understanding of this issue. The right reverend Prelate and his colleagues also have personal experience of the consequences of a failure to support, care for and supervise some of the clients who use supported accommodation. It is clear to me that there is a real and present danger that we will end up reducing the sector’s capacity to operate. To my mind that case has been absolutely made. The noble Lord, Lord Young, referred to a powerful meeting attended by people who will be affected by these changes, which he and I both attended.
How I approach this issue on Report will depend a lot on whether I can understand the Government’s position with regard to the future risk to supported accommodation but, more importantly, with regard to exemptions. If we do not know what the Government are willing to do—if anything—by way of exemptions, we will be left to our devices in coming up with amendments, which will be pressed. Speaking for myself, although I am from Scotland, if some of the issues that have been so powerfully argued this evening are put to the vote, I will have no hesitation in supporting attempts to mitigate the Government’s policy.
The approach of the noble Lord, Lord Kerslake, is absolutely right. The Government have made their position clear and no one is trying to stop that happening, but mitigation is possible, constructive and available if the Government are willing to discuss and treat. The only way they can begin to help us do that is by making their policy clear this evening, as Committee ends. Then we can go away and discuss the options collectively and respectively so that we can get the best outcome in the remaining stages of the Bill. The Minister needs to make clear the Government’s position on exemptions for supported accommodation. Otherwise, we will meet her in the Lobbies on Report later in the month.
Welfare Reform and Work Bill
Lord Kirkwood of Kirkhope Excerpts(8 years, 4 months ago)
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“( ) Any relevant provider assisting with any provision for the expenses of the Secretary of State under subsection (2)(a) shall provide an annual governance report to Parliament or the Public Accounts Committee of the House of Commons, detailing—
(a) the remuneration of its directors;(b) a register of interests; and(c) the transparency of its board meetings.”
Lord Kirkwood of Kirkhope (LD)
My Lords, I hope not to detain the Committee for too long in the consideration of the administration of DWP matters and other things.
I am grateful for the support of the noble Lord, Lord Rooker, on this amendment, and it is to him that I acknowledge my interest in this matter. I was minding my own business at one of the famous uprating order debates, which I always attend, when the noble Lord used the occasion in an exemplary fashion. The man is a parliamentary genius at finding niches that come up only every so often, and in this case it is our old friend the Social Security Administration Act 1992. It does not come up that often but it needs to be explored a little more. I shall try to do so briefly but it is important—or at least I believe that it is.
The amendment seeks to insert a requirement for any relevant provider—for “relevant provider”, under the current circumstances noble Lords should read “Motability”—to provide governance reports to Parliament detailing certain matters. The amendment is important because the structure under which Motability provides its service is not straightforward; it is quite complicated. I am choosing my language carefully.
I make it clear at the outset that the Motability service has been absolutely invaluable to those whom it seeks to serve—namely, claimants who are eligible for the higher rate of the DLA mobility component and the enhanced rate of the personal independence payment. The leases for the cars, motorised wheelchairs, scooters and other devices that it provides are a lifeline for hundreds of thousands of our citizens.
Before I go into the questions that are on my mind, I ask the Minister in his response to perhaps take a moment to explain exactly what Clause 20 is seeking to do in terms of the mechanics of reclaiming the expenses of paying sums in respect of vehicle hire. It is a puzzle to me that we are only now getting round to this. The scheme has been in operation since 1977. I do not know how much expense is being reclaimed here, but we are using the 1992 Social Security Administration Act. Therefore, it occurs to me that if there were expenses that should have been recovered, perhaps the 1992 Act would have been the best place to put that, and not the 2015 Welfare Reform and Work Bill. I am told that it might be as much as £1 million. Is that £1 million a year? How is it being recovered? Can the Minister give us as much information as possible on how Clause 20 is designed to operate?
As I understand it, the department makes available to Motability, as a relevant provider, the details of those who have the eligibility qualifications for these two disability benefits in order that an offer may be made to them by Motability. Motability is a long-established charity run by very distinguished people and is subject to the normal rules and regulations of charities. It also has a secondary charity, although I am not quite sure what it is designed to do, called the Motability Tenth Anniversary Trust Ltd, and it has a relationship with Motability as a charity. So there are some complexities in the first line of the operation. I hope that the department understands this better than I do. I am trying to make sense of all the individual parts of the machinery that is put in place.
The charity certainly has substantial resources available to it. Otherwise, it would not be able to make the generous and important offer of transitional support schemes. It has made grants of £150 million and £25 million in the last two financial years respectively to try to take some of the pain out of the removal of eligibility at the higher rates for some of the clients who are being reviewed under the government policy of reviewing DLA and transitioning it into personal independence payments.
What I also struggle to understand is the relationship between the charity and the operations company, which is a private company that carries out the work on behalf of Motability. Page 86 of the latest annual report and accounts for 2015 records that, for the highest paid director, the aggregate emoluments in respect of qualifying services totalled £944,719. Colleagues might now begin to understand the extent to which these companies and charities have, one could say, blossomed and developed. They certainly have grown to an extent that is perhaps not widely understood. The restricted reserves of the operating company are in the region of £2 billion; the annual turnover is £3.9 billion; and the asset base is some £7 billion. So this is a very big business. It even has a rating from Moody’s and Standard & Poor’s as an A+ investment risk, and it regularly raises money on the bond market.
Lord Freud
I will have to write on that latter point. The funding for the £2,000 comes from Motability itself—the charity—as I understand it, based out of the reserves it has built up. It needs very substantial reserves because the risk in a leasing business is in the residuals, which can be very volatile, even though you are the biggest. You need very substantial reserves, but it took a view that it had some excess which it was prepared to spend in this way. I urge the noble Lord to withdraw his amendment.
Lord Kirkwood of Kirkhope
My Lords, the moment that the noble Lord, Lord Rooker, suggested to me that this was something worth looking at, I noticed that Motability Operations had set up a review of its remuneration committee’s decisions for its executives. The annual report, which has just been published, shows that it has merely tinkered with this. There was a real hope that it would respond to some of the external interest in what it was doing, yet it has come back with some tiny amendments to the remuneration package and increased the co-salaries in the way that I explained earlier.
I think that the Minister should tell his friends at Motability that Parliament is interested in this. It is in Motability’s interests to respond to the need to be more transparent and to be more assiduous in explaining what it is doing and why it is doing it. This will not go away; I will be standing shoulder to shoulder with the noble Lord, Lord Rooker, so the sooner we can get a modus vivendi whereby Parliament shows that there is an interest in engaging, the better that would be for Motability and for everyone else. However, I beg leave to withdraw the amendment.
Welfare Reform and Work Bill
Lord Kirkwood of Kirkhope Excerpts(8 years, 4 months ago)
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Baroness Manzoor (LD)
My Lords, I shall speak to Amendments 70 and 71. I do not want to repeat what has already been so well put by the noble Baroness, Lady Sherlock, concerning Clause 3 and reporting obligations. I want briefly to summarise something that the Guardian found under a freedom of information request in November 2015. That request showed that in the 120 councils that responded, only 79,000 families were turned around through a family intervention, which is meant to be an integral part of the troubled families programme. The research also found that more than 8,000 families in more than 40 local authorities had not received any kind of family intervention but had instead been turned around solely on the basis of data-matching exercises. The research found that councils might, for example, trawl through employment, youth crime and truancy data to identify a family that would have been eligible for the programme and which, without receiving any help from the troubled families programme, fulfilled the criteria for being turned around because school attendance had improved or one of the parents had found a job.
My Amendment 71 is an attempt to prevent this. It asks that a report prepared under this section must include an assessment of,
“the types of interventions provided by local authorities in the previous financial year, and … the success or failure of the types of interventions provided by local authorities in the previous financial year”.
I hope that the Minister will feel that this amendment would enable an improved assessment of the interventions provided by local authorities and will accept it because without this kind of data, we are not going to get underneath exactly which services local authorities are providing. I believe that the Government believe they must have an evidence-based approach, and this amendment will enable them to do so.
Lord Kirkwood of Kirkhope (LD)
My Lords, I want to make a short intervention in support of the two excellent speeches that have been made in introducing Amendments 70 and 71. I agree with everything that has been said, and I think we need another name for this programme as “troubled families” is a terrible name for it. I do not know whether we should have a competition for it—it might be too late. However, those families are certainly more troubled for being called troubled, so we need to think carefully about this. I hope that these suggested annual reports will not just be analytical and statistical but will come up with some policy advice and dynamics about change, to make these programmes better for the future.
I have had a bit of experience of working with a troubled families programme indirectly as a non-executive director of the Wise Group in Glasgow. It had a pay-as-you-go performance contract in the north-east of England, which was very interesting. I am in favour of the multiagency approach, but it is still in its early days and needs to be developed. I hope that these annual reports will look at a snapshot year by year and look across the different experiences and the different programmes mounted by the different local authorities to try and get best practice established and shared. That would be really useful.
Lord Freud
I have tried to make it as clear as I can that we are looking at the level of earnings here. It is not a matter of direct comparisons between earnings and income: we are looking at the level of earnings.
Lord Kirkwood of Kirkhope
May I try to make sense of this? I do not think that the Government know what the disposable income per head is of the families that are subject to the benefit cap. That is my objection, because big families obviously have a disposable income that is divided by the number of people in the house. I do not think that these metrics exist, and therefore the noble Baroness is absolutely correct: it is not safe to rely on earnings, because you are not comparing like for like. The really important question for me is: how do we know, in relation to the impact it has on children, what the disposable income per head is in those families that are subject to the cap?
Lord Freud
I accept that that is a point about which noble Lords opposite are concerned, but I can only reiterate that we have reached these levels by using the basis of earnings. That is the basis.
Lord Freud
I am clearly not in a position to comment on the work that we do, but I can say that estimating dynamic effects is extraordinarily difficult. We are working on improving how we do that. One of the reasons why we can often get into sterile debates is that getting hold of the real figures and the real behavioural impacts is very difficult. I quoted our child poverty experience. The latest Universal credit at work, in which we outlined theses new approaches, set out big behavioural changes. Many more people—13% more—are going into work, compared with the comparable JSA. That is an example of behavioural effects that is very difficult for us to pre-estimate.
Amendments 92, 93 and 94 are tabled by the noble Baronesses, Lady Meacher, Lady Sherlock, Lady Pitkeathley and Lady Lister, the noble Lords, Lord McKenzie and Lord Kirkwood, and the Earl of Listowel. These amendments would require the Secretary of State, when reviewing the level of the benefit cap, to have regard to any impacts on disabled people, their families and carers; the relationship between the level of the cap and median household income; the promotion of the welfare of children in the United Kingdom; households affected by the cap; and public authorities, local authorities and registered social landlords.
The noble Baroness, Lady Sherlock, asked whether we will go on reducing the cap. The Bill requires the Secretary of State to review the level of the cap at least once during a Parliament and provides him with the power to review it at any other time if he considers it appropriate. We believe that this provides the most effective means of ensuring that the cap stays at the appropriate level, while also providing the stability that households on benefits require. Any changes to the benefit cap level will be sensitive to its key principles of maximising work incentives, bringing fairness for working households and providing a reasonable level of support for capped households.
The noble Baroness, Lady Pitkeathley, spoke about carers. I emphasise that the Government recognise the contribution carers make to society. I will deal with carers when discussing the amendment that appears in a later grouping.
The power to review the level of the cap is necessarily broad and has been drafted to allow the Secretary of State to take into account any matters he sees relevant—for example, the wider impacts on families and children. I do not think it right to prescribe in legislation any particular factor which must be considered as part of this review.
Amendment 94 requires the Secretary of State when reviewing the level of the benefit cap to take into account the impact on disabled people, their families and carers. As I mentioned, there are exemptions from the cap for people who are a member of a household that includes somebody who is entitled to attendance allowance, disability living allowance and PIP.
That has been in place since the cap’s introduction and reflects the fact that these benefits are paid in recognition of the extra costs that disability can bring. There is also an exemption for those who are entitled to the support component, and the equivalent in UC, whose health conditions mean that they are unable to undertake any work-related activities. Those exemptions are not changing.
The new provisions will allow the Secretary of State the ability to consider the context of the cap and its level in a broad and balanced way. For example, he may take into account, although he is not limited to these, factors such as: earnings, housing costs and the wider impact on disabled people, families and carers.
Lord Kirkwood of Kirkhope
How does this fit into the annual uprating statement? The Minister has just said that the Secretary of State, who has this power, must do it once in every five-year period. There is an annual social security uprating where all these things are considered. Surely we are not going to have, at random in the middle of the year, the Government coming up with a judgment on the cap that is in isolation from the rest of the established procedures for uprating benefits.
Lord Freud
The established procedures, of course, are basically to go in line with CPI; this is a much broader look than that, as I have tried to describe. While we have safeguarded those with illness or disability, we do not think it right that in undertaking a review of the level of the cap the Secretary of State should have a legislative requirement to take into account any extra impacts on specific groups.
Baroness Lister of Burtersett
My Lords, I will speak in support of all of the amendments in this grouping. The only reason that my name is not on the first one is that I did not spot it in the Marshalled List. The four-year freeze in most working-age benefits represents the largest of the many cuts in the Bill. Conveniently for the Government, it is an invisible cut; gradually people will find that the benefit that they rely on is able to buy less and less, but they will probably blame the cost of living, not realising that it is the result of deliberate government policy. As the Joseph Rowntree Foundation study commented a few years ago, upgrading policies have big effects over time:
“They are among the most significant decisions taken by Chancellors … Their gradual effects seem imperceptible on a year-to-year basis, yet they carry immense implications for the future”.
So let us not underestimate the significance of Clauses 9 and 10.
Benefits have already been cut in real terms due both to below-inflation increases and to the switch to the use of the CPI rather than the RPI. Moreover, as the latest JRF Monitoring Poverty and Social Exclusion report points out, essentials have risen faster than the average price index in recent years. Since low-income families spend proportionately more on essentials,
“low-income families have in effect experienced a higher rate of inflation than other families”,
meaning that their benefits have been able to buy even less than before.
This latest cut in real value has been described by the IFS as,
“highly regressive, with the bottom three deciles losing most”,
which is hardly surprising. If any noble Lord suggests that benefits are adequate, and that therefore those reliant on them can afford to take such a cut, I suggest that they try living on benefits—not for a week as a benefit tourist, but for months without savings or the kind of stocks that we all take for granted.
The briefing note that we were given spells out two main objects as the policy’s rationale, the first being to deliver savings to contribute to deficit reduction,
“while maintaining support for the most vulnerable”.
To be more accurate, it should say “some of the most vulnerable” since, for instance, children’s and some disability-related benefits will not be protected, as the EHRC points out. Nor does it protect protected groups, with women and black and minority-ethnic groups disproportionately affected. Whatever one thinks of the primacy given to deficit reduction—and eminent commentators such as Martin Wolf of the Financial Times question it and the extent to which it is to be achieved by spending cuts—it is a political choice to make those with the narrowest shoulders bear so much of the burden, particularly when others have enjoyed tax cuts. These, as it happens, were, in effect, paid for by benefit cuts under the coalition Government, according to CASE at the LSE.
As my noble friend Lady Hollis has pointed out in previous discussions, it is a myth that social security spending is out of control. As the OBR analysis shows, over the past 30 years, the real increase in spending has been broadly in line with growth in the economy, so there has been no significant change in the proportion of national income devoted to social security spending. The largest contribution to the increase in spending since 2008 has been the rise in the real value of pensions.
The other main objective given is to,
“help to reverse the trend where earnings growth has been slower than the growth in benefit rates”.
However, this is a very recent trend. Professor Jonathan Bradshaw has used the DWP abstract of statistics to show that the adult rate of unemployment benefit was worth 21% of average earnings in 1972, the earliest date for which there are consistent data. By 2008, the JSA rate had fallen to 10.5%, half of what it was in 1972. It is true that the short-term trend, to which the Government refer, means that it has increased slightly now to 11.7%, but now that wages are expected to start rising again it will no doubt fall back again, even without this freeze.
The other justification given in the impact assessment is, once again, that it will increase work incentives. It is worth pointing out that some of the benefits affected are paid to those in work in any case, a point to which I will return in the next grouping. As the famous OECD quote used by the Government to justify ESA for new WRAG claimants made clear, work incentives can be improved in a distributionally fairer way by improving in-work benefits rather than adopting this Poor Law mentality of cutting out-of-work benefits. Indeed, a cross-national study reported in the 2009 British Social Attitudes survey concluded that,
“employment commitment is stronger in countries with higher levels of welfare state generosity”.
Therefore, I really do not believe that there is any justification for freezing benefits, not just for two years, as stated in the Conservative manifesto—as my noble friend pointed out—but, in effect, for the whole of this Parliament. I accept that, at present, it looks as if inflation will remain low, but who knows what shocks might hit the world economy and with what effects? It therefore behoves a responsible Government to keep benefit levels under review and to accept these amendments.
Lord Kirkwood of Kirkhope
My Lords, I will add a few comments to what has already been said. I think that Clauses 9 and 10 are terrible. I object in principle, as did the noble Baroness, Lady Lister, to the idea that we can forecast need. I am speaking for myself: I do not know what my party position is or will be, but I am convinced that nothing is more emblematic of the approach of this Government of attacking the working poor and dealing with austerity disproportionately.
That does not mean to say that austerity does not mean to be addressed. The low-income households in this country—in or out of work—will suffer; thankfully, that distinction will become less relevant as universal credit rolls out. I do not think universal credit will come on stream fast enough to help everybody. We have been waiting for the rollout; there are around 155,000 in full compliance with the universal credit system. That will be a much better place to be once the whole country is there but, in the interim, these four years in which we will be freezing these benefits will cost low-income families dear. Why? It is because it is on top of everything else, and I have said that before. One of the biggest disappointments—and I have said this before as well—in the coalition government days was the fact that we did not evaluate the results of the totality of the integrated cuts that were made. That applies to services as well. Now, we are having another four years’ freeze, which is £3 billion or more on top of everything else, without any metrics that begin to contemplate what that might mean for people caught in different, unforeseeable ways by a combination of the cuts.
I have been looking at this area of policy for as long as anybody here, and I am not sure that we will be able to look as far ahead as 2018, 2019 or 2020 with any confidence whatsoever about the conditions that some of these households will face. That is disgraceful and completely unjustified. Of course, the Government are able to found this on the fact that there was a mandate, as it is called, for these measures. Well, there was certainly not in Scotland—the evidence for that is pretty clear. I have said before in this Committee that I worry about the political aspects of this Bill and some of the consequences that will be felt in the coming weeks and months of the Scottish elections for the next Holyrood Parliament. This Bill will not have escaped the notice of some of the more hard-line nationalists north of the border, which is not in the long-terms interests of the United Kingdom. I am sure about that and feel really cut off at the knees in trying to explain to people north of the border what is going in.
Welfare Reform and Work Bill
Lord Kirkwood of Kirkhope Excerpts(8 years, 5 months ago)
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Lord Kirkwood of Kirkhope (LD)
My Lords, perhaps I may make two points on this very important subject, which will become more important as universal credit comes to be rolled out. That will happen significantly over the coming months and it is causing fear and anxiety that the sanctions regime, which at the moment affects individual benefits, as colleagues know, will start to be applied on a much wider scale on a wrapper which contains within it six benefits. The stakes are therefore a lot higher and, as I said last week and as the noble Baroness, Lady Lister, mentioned, I am getting strong signals that people are worried about universal credit, in a way that I hoped they would not be because of the extra 1 million people who will be embraced on full rollout. In steady state, universal credit will bring that new degree of conditionality, so we need to be careful to answer some of the questions that have been raised.
Some of the casework that we have heard about obviously needs to be thoroughly investigated, and we need to try to deal with that as much as we can. However, the issue for me is about working with interest groups, such as Gingerbread and others, to try to bridge the gulf—and it is a gulf at the moment—with what the Government say is actually happening. The noble Baroness, Lady Evans, did a valiant job against the clock last week in trying to set out what the Government believe to be the circumstances. I would just report that that explanation, while done in good faith, was met with incredulity by some of the specialists working in this field. It may be that they are dealing with families which are predisposed to the risk of the sanction effect, particularly in the lone-parent client category. But we really need to try to bridge the gap between what the Government think is happening and what the pressure groups, which we have all worked with for years and whose judgment I trust, feel is happening before universal credit gets too much further rolled out.
I am in favour of a review of the generic kind suggested by the noble Baroness, Lady Lister. Speaking for myself, what really needs to happen concerns decision-makers, particularly skilled and experienced decision-makers. The problem is that the people who I get access to in Jobcentre Plus offices are more likely to be experienced because, if I was the departmental manager, I would want visitors such as me to see experienced hands and I have been doing that for a long while, so I have factored that in. I am presupposing that the training and guidance have been rolled out properly; the departmental expenditure limit makes that harder and harder but the explanation of the noble Lord, Lord Freud, last week, which I accepted, was that you can front-load the staff because you save money on administration with the technology. But I am absolutely convinced that these decision-makers with experience are skilled and savvy enough to know whether a case in front of them is missing essential evidence. I do not think that they have enough discretion at the moment about freezing the application until they are satisfied that they have the information in front of them.
The trouble is that these cases are visited on them through the technology system, so they are not able to see the case all the way through in the way that case officers could in the old days. Jobs get passed around the system, which is technologically clever and efficient, but that deprives the decision-makers of being able to say “Look, there’s something missing here. I want this attended to, and within two weeks I need this other information. If it is absent, their sanction will be applied but if we can find it, I’d be much happier”. I do not think that that flexibility exists.
I know that the guidance is all online and people can see it, and that it all makes sense when read in a cold situation. But in a hot family situation, an experienced decision-maker should be given more latitude in looking at the papers which they have and estimating what other evidence, which because of their experience is likely to exist somewhere else, would make a difference. That would save a lot of money in successful appeals, which would be spawned once the evidence was received, and make the client’s experience a whole lot better. There are things that could and should be done, but my plea, as it is all through the Bill, is that we have to get these things straightened out to the best of our possible ability before universal credit is rolled out to 7.7 million households across the country by 2020 or thereabouts.
Baroness Hollis of Heigham
My Lords, I would like to ask the Minister a question. Concerns have been expressed to me by legal advice centres and the local equivalents of CABs and so on. Anybody who is threatened with a sanction can obviously appeal or ask for a second opinion, and that would then go to an independent decision-maker. How long will that independent decision-maker take to arrive at their judgment? The advice I have been getting is that that is where it is being held up and that there are sometimes waits of six, eight, 10 or 12 weeks before a decision is made. As a result, there is a long queue for the independent decision-maker.
However, you cannot go to appeal, where the original decision may quite possibly be overturned, until it has been reviewed by the independent decision-maker. I am in favour of the department reviewing its own internal decision-making before we go through to the tribunal appeal process, but only if that is done speedily and competently, as well as fairly. Can we be reminded of those statistics, because I am advised in case after case that it is being used as a narrow gateway? It puts a lot of delay in and doubles the difficulties of the sanction procedure.
Then there is an entirely different question, not connected with that at all, which goes back to the Minister’s words towards the end of the last Committee day on work conditionality and sanctions and on the preparation for work interviews for those with a toddler aged two years or more—although the requirement to work does not bite until the toddler is three. Are people required to attend such work interviews or work preparation without their toddler? Consider a situation in which a lone parent has recently had to move, perhaps six months before, from a privately rented, mouldy property on an insecure tenancy to another property, and there is no support system in place. The little two year-old boy still does not speak, although he perhaps has the beginnings of a bit a temper. That child still needs to be fed and to have his nappies changed, but there is no local support network in place and the little boy has never been looked after by anyone other than his mother. Given that we are not talking about a work placement or continuous employment, as would happen when that toddler is three years old, but about attending, often on quite short notice, a work interview or work preparation training, may I have the Minister’s assurance that the lone parent may bring her two year-old toddler with her? In that case, are the jobcentres appropriately staffed and do they have provision for nappy-changing facilities and the like for such small infants?
Baroness Evans of Bowes Park
I have already said that I cannot speak to all the facilities, but as I am writing to the noble Baroness on a previous issue I will include that in that response.
It is important that we focus on ensuring that all the agreed recommendations proposed by the Work and Pensions Select Committee are delivered and can be embedded in the design and delivery of universal credit. To clarify for the noble Lord, Lord Kirkwood, I say that universal credit sanctions are just on the standard element, not on the whole amount. We believe that a call for a further independent review is unnecessary to embed this in legislation.
Lord Kirkwood of Kirkhope
The noble Baroness said earlier that a pilot was being mounted in Scotland for five months. Is that for all of Scotland, or just individual areas within Scotland? I would be surprised if it was Scotland-wide.
Baroness Evans of Bowes Park
No, it will be within a particular region of Scotland.
Sanctions play an important part in the labour market, encouraging people to comply with conditions which help them move into work. We want the sanctions system to be clear, fair and effective in promoting positive behaviours and we will continue to keep it under review so that it meets its aims, but also to ensure that it is flexibly delivered, as noble Lords said.
The noble Lord, Lord McKenzie, asked about sanctions statistics. We will look carefully at the point raised and consider what further information is useful to inform public debate. We have made a start on this, and our statistical releases now include additional information on sanctions.
Welfare Reform and Work Bill
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Lord Kirkwood of Kirkhope (LD)
My Lords, I added my name to this amendment. I do not want to add anything to what was said by my noble friend Lady Lister of Burtersett—I call her that advisedly as we worked so closely for so many years and have always had a common approach to this kind of problem. It is a priority for me in this Bill to try to establish the importance of working poverty. Because of the incipient recovery we are experiencing at the moment and some of the other labour market conditions that apply, subject always to risks from the global economy, the future challenge for Government will be less one of providing employment and more one of providing sustainable, predictable employment and career progression.
Universal credit has the mechanism and architecture to enable us to do that but I am concerned that we seem stuck in the problems of the past 10 years, which clearly included worklessness. It was right that we focused on those problems. Universal credit was created in 2008 and at that time our economy was suffering from many years of serious unemployment and its consequences. However, conditions have now changed. It is very important that in-work poverty should be addressed together with career progression. As my American friends say, it is any job, better job and then career—an ABC of employability. That is a very important part of the Government’s responsibilities.
In passing, I have to say that I am disappointed that the Child Poverty Act 2010 has been emasculated to the extent that it has been. I want to underscore everything that the noble Baroness, Lady Lister, said; she is merely reflecting the problems relating to the reporting requirements. What we have lost from the 2010 Act are the targets and the strategy. I think that it was the noble Lord, Lord Lansley, who made the point in his excellent maiden speech that declaratory legislation is not always that clever, given that it is not what Governments intend to do, but what they actually achieve and how they go about it, that is important. When the noble Lord, Lord McKenzie, brought forward the Child Poverty Act 2010, I approached it from that point of view. However, I am now better informed and have changed my mind—I think it is worth having and that the targets and strategies are certainly worth fighting for. We are losing a lot in picking this 2010 legislation apart; I really regret that. We will come back to that in later amendments, but for the moment I am satisfied to seek to get the Government to concentrate on in-work poverty in the development of their poverty programme—such as it is—but even more so to get career progression developed within the mechanism of universal credit.
Baroness Manzoor (LD)
My Lords, I shall speak to Amendments 24, 26 and 46, to which I have added my name along with those of the noble Baroness, Lady Lister, and my noble friend Lord Kirkwood of Kirkhope. Amendment 24 clarifies what we mean by children in low-income households where one or both parents are in work. Amendment 26 builds on Amendment 24 and inserts “low income” and “in work” for further clarity.
The Bill repeals the Child Poverty Act 2010 and the requirement for the Secretary of State to develop a strategy for tackling child poverty. That is really worrying, because poverty is a cost that the UK cannot afford. It wastes people’s potential, drains public finances and hampers economic growth. The new definition risks underestimating the rise in in-work poverty, downplaying income and obscuring families’ ability to pay for decent housing. Moreover, as we all know and heard again in the first Committee sitting, such children are more likely to suffer from poor health, do worse at school, be jobless in future and die earlier.
I agree with the Joseph Rowntree Foundation, which believes that income measures should better account for household costs by including analysis of income after essential costs such as childcare and housing costs are removed—particularly given how high housing costs are in cities such as London. I agree that that would support a much more dynamic picture of the living standards of UK households. Will the Minister consider bringing forward government amendments to develop and publish a life chances strategy that retains some income-related measures in the basket of measures we already have—given, in particular, that the Government intend to retain the HBAI reporting measures? I cannot see why those could not be added, because they are going to be collated anyway, but it would be good to have them on the face of the Bill.
Lord Freud
That is the point that I just made: they could not determine the extent but they could determine the direction. Lastly, the Sheffield Hallam report, which the noble Lord, Lord Patel, mentioned, says that it is unlikely that they will move into employment because of the obstacles that they face. However, we are providing additional support. Indeed, that report did not look specifically at the WRAG.
A number of noble Lords have questioned why we are suggesting that claimants who have been found to be “not fit for work” should be expected to be able to work. I stress that ESA claimants in the work-related activity group have been found to have limited capability for work. The same is true for universal credit claimants. This is very different from being unfit for any work and, although they are not required to look for work, ESA explicitly recognises that claimants may be able to undertake some work via the permitted work rules.
On the question from the noble Baroness, Lady Meacher, about adding employability to the WCA, the Secretary of State announced his intention to look at how assessments can be better geared towards those preparing for work. As a number of noble Lords have pointed out, we have announced a White Paper to set out our reforms to improve support for people with health conditions and disabilities.
There may be limitations on the type and amount of work that people in the WRAG can do, and they may also need workplace adjustments, but employment is not ruled out. This is an important distinction; we know that many people with disabilities and health conditions are already working, and many others want to do so. The move to universal credit, an in-and-out-of-work benefit that supports small or fluctuating amounts of work, means that many of the barriers in the current system that claimants face when moving into work are removed. Those are the kind of issues that the noble Baroness, Lady Hollis, was talking about with regard to linking rules. This is particularly helpful for people whose health condition means that they can work only some of the time.
To pick up the points from the noble Lord, Lord Low, and the noble Baroness, Lady Grey-Thompson, about the way in which some of these costs are used when either finding work or being in work, travel-to-work costs can be met by the Access to Work scheme, and travel-to-interview costs can be met by the flexible support fund, which is run in JCP. The Government are committed to ensuring that disabled people are able to participate fully in society, and we have set out our ambition to halve the disability employment gap. It is a duty of the Government to support those who want to work to do so and, as I have already mentioned, most people with disabilities and health conditions want to work, including the majority of ESA claimants. Some 61% of those in the WRAG tell us that they want to work, and we mean to put those people’s ambitions at the centre of what we do.
On the point raised by the noble Baroness, Lady Meacher, and touched on by my noble friend Lord Blencathra, about whether employers would employ disabled people, we recognise that that is an issue and have pushed the Disability Confident campaign. We have Access to Work behind that, not to speak of the incentive structure of universal credit to get people into work.
In 2012, the UK had a disability employment rate gap of 34 percentage points, which was higher than that in France and Germany, with 19 and 22 percentage points respectively. Therefore, we know it is possible for us to do better and ensure that people with health conditions do not get trapped in the benefits system. That leads to why we are committed to halving the gap.
Lord Kirkwood of Kirkhope
Could the Minister give us some assurance about the impact of the 60% reduction in the departmental expenditure limit between now and 2020? I hear what he says, but to get the kind of service that he aspires to needs specialist help and experienced people, who will be harder to find because the department will have less money to pay them.
Welfare Reform and Work Bill
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Baroness Drake (Lab)
My Lords, I support the amendments in this group, because Clause 11 removes eligibility for the child element of child tax credits for the third and subsequent children and Clause 12 introduces the two-child limit for receipt of the child element of universal credit for families making a new claim. Families with three or more children could lose up to £2,780 per year for each additional child, and may also face the loss of the family element of tax credits—currently £540 per year per family.
Like other noble Lords, I am deeply concerned about the impact of these changes on the families of friends and kinship carers. Some 22% have three or more children in their household—about 29,000 families. That is why these amendments seek to exempt kinship carers from the two-child limit. Otherwise, future carers voluntarily taking on vulnerable children will hit a financial barrier to support, even where the third child is disabled. Yet these carers will still incur significant costs and may face financial distress from taking on these children. Kinship carers provide vital support for some 200,000 children when parents are unable to care for them, often because of urgent circumstances. The children frequently have emotional difficulties, often because they have been living with parents who are drug-dependent or who have abused or neglected them.
The Family Rights Group estimates that exempting carers from the two-child limit would cost £30 million. Yet these carers already save taxpayers the cost of placing the children in care. To restate the figures referred to by the right reverend Prelate the Bishop of Portsmouth, the cost of keeping a child in care for a year is £40,000. The cost of care proceedings is £25,000. The savings that the 132,000 kinship families deliver by voluntarily caring for these 200,000 children run into billions. The disincentive effect of the two-child limit needs to deter only 200 kinship carers from caring in the future for three or more children, and the £30 million saving would be wiped out. That is without counting the human cost to the children.
This disincentive effect on kinship carers is compounded by the benefit cap, which will be set at an increasingly lower level. Kinship carers are not entitled to paid leave while children are settled; they care for the children at their own cost. Some 49% have to give up work when the children move in, or reduce their earnings, because they need to take time to settle a distressed child—often a requirement imposed by the social worker, for good reason. Children can arrive with no notice, after a late evening call from the social worker asking the carer to take the children. The impact of the two-child limit on the kinship carer is deeply unfair, and could act as a disincentive to care for the children. It will impact on future carers, whether working with modest incomes or not working. It will impact harshly on carers who already have their own children, or who are young themselves and want to have their own children—such as the family that Grandparents Plus is in touch with, a sibling carer and his partner who are raising four brothers and sisters since their father’s death as well as their own baby.
Let us look at the reasoning for withdrawing support for any child beyond the first two. The impact assessment advises that the Government expect the limiting of the child element of child tax credit and universal credit to the first two children to,
“encourage parents to reflect carefully on their readiness to support an additional child”.
Of course, such a statement is a nonsense—in fact, contrary to common sense—in the context of kinship carers. The need is not to get such carers to reflect carefully on their readiness to care for the vulnerable child. To the contrary, public policy needs to support such carers in their readiness to care for an additional vulnerable child. That is better for the children and secures savings for the state by not placing them in the care system. Kinship carers are not the birth parents of the children, but voluntarily embrace their care. The Government stress that the limits on benefits beyond the first two children is a behaviour-related measure, because,
“encouraging parents to reflect carefully on their readiness to support an additional child could have a positive effect on overall family stability”.
However, such reasoning is incoherent when applied to kinship carers. Encouraging carers to pause and reflect on the disincentives in the Bill on taking responsibility for a vulnerable child could, perversely, have a negative effect on the family stability available to the child. Kinship carers should not be disincentivised; they should be supported.
During the passage of the Children and Families Bill, I listened to a BBC radio programme examining the experiences of kinship carers and interviewing a lady who recounted the night—she remembered the date, having celebrated her birthday with her own two children—when her doorbell rang around midnight. She opened the door to see a police officer, a social worker and two distressed children, her sister’s children, at risk of domestic violence. She told movingly of how she had raised those children along with her own two, and had struggled, with little support from the local authority services, and of how proud she was of the recent graduation of the little girl on her doorstep that night. That alone was a powerful story but she went on to recall how, a few years after that night, the doorbell rang, again late at night. This time, the policeman and the social worker were holding her sister’s baby. The interviewer asked if she was tempted to decline to take the baby in view of the lack of support that she had received previously. I remember the incredulity in the woman’s voice at the question, and the power of her answer to the effect of: “How could I abandon a little baby just because I had been poorly treated?”. She brought up five children, two that she gave birth two and three that she embraced. I ask the Minister: if someone like that lady were faced with a similar scenario in future, under this Bill, what behavioural response would the Government be seeking to achieve from them with the two-child limit on benefits?
If the Government disincentivise kinship carers, the people they will hurt are vulnerable children. I doubt that that would pass the public litmus test. The Minister has previously demonstrated his understanding of the importance of kinship carers to vulnerable children, so I ask him to commit to considering that kinship carers be exempted from the two-child limit on benefits. It does not make sense, either for the interests of the child or in terms of public expenditure.
Lord Kirkwood of Kirkhope (LD)
My Lords, it is a pleasure to follow the noble Baroness, Lady Drake. The House owes her a debt because of the exemplary work that she has done over many months and years on the subject of kinship caring. Her speech will repay careful study, and I shall look forward to doing that when the Official Report is printed.
This is going to be a harder Committee stage in social security terms than some that we have had in the past. This is basically a Bill that reduces money but does little else of interest. However, it is a very important one. I noticed that the very mild-mannered noble Lord, Lord McKenzie of Luton, characterised it as the most wretched Bill that he had ever seen in his life. That is a considered view from a moderate man, so we need to be careful about how we take our proceedings forward.
The Bill dramatically changes the money and resources available to the social security system. I am sure that everyone understands that there is a case in periods of austerity for making special arrangements to deal with immediate and urgent circumstances. However, we need to be careful that we are not making changes that, as if by magic, get woven into the social security fabric in perpetuity. What I am most worried about—this is really a discussion for clause stand part on Clauses 11 and 12—is that the two-child limit is going into universal credit. That is a matter of great concern to me. I say in passing that the noble Earl, Lord Listowel, was contrite earlier about having been too nice to the Government. Indeed he was, but I am pleased that he has put the record straight.
The department has certainly done a very good job, because the universal credit situation could have been a whole lot worse, which would have overshadowed all these proceedings in Committee. The way we contrive to support people is important, particularly those with larger families; it is mainly ethnic minority communities which have that culture, which we know predisposes them to risk of poverty, and we need to take that into account along with everything else as we go forward.
The Minister needs to listen carefully to the case for exemptions. The Committee will be faced, certainly at the later stages of proceedings on the Bill, with deciding to what extent what the Government are trying to do is reasonable in the long term as well as in the short term. As far as I am concerned—I put it bluntly on the record and cannot make it any clearer than this—I am willing to work with the Government to mitigate some of the sharp edges of the Bill as regards the savings that they hope to make. If the Government are willing to make concessions and think carefully, which the Minister in the past has demonstrated he can successfully do, and if he is willing to go away and look at some of these exemptions we are talking about today, I would be much more disposed to decline to support attempts on the Marshalled List to vote against Clauses 11 and 12 standing part. I will approach the Bill in that way. I will not be unreasonable; I perfectly well understand the financial exigencies that we must face and the continuous battle the department has with the Treasury—it would be unrealistic not to accept that. However, the onus is on the department to look at ways of mitigating some of the changes in the Bill, because it needs to be changed.
I said at Second Reading that I wanted to pursue preventive spending. After the cases that have been made, by the right reverend Prelate and others, I find it hard to believe that a saving of £30 million would not risk a much greater public cost in other silos within Treasury spend across central government as a whole. Therefore the question asked by the noble Baroness, Lady Sherlock, on whether the Government have done any work about what it would cost if we reduced the support to kinship carers in this way is important.
The situation we face as a Committee will be difficult to reconcile unless the Government are able to answer some of these questions, certainly about spending money and investing to save in future. I certainly hope that the Government will think very carefully about some of the powerful speeches that have been made, in particular on kinship carers.
Baroness Massey of Darwen (Lab)
My Lords, I will say a few words about kinship care. I remember the Minister speaking twice on this topic at previous Committee stages. I think that he knows the issues and is sympathetic to them—he certainly was the last time we met to discuss the issue of kinship carers. My noble friend Lady Armstrong has tabled a debate on this topic tomorrow, when I shall say much more, but this issue of adding complexity to the lives of kinship carers is important. Kinship carers deserve all the help they can get not to be landed with some other complex issue of how many children they can care for.
I recall being chair of the National Treatment Agency some years ago, where I came across quite a few grandparents who were carers—I think grandparents make up some 40% of kinship carers. The grandparents called themselves the midnight grannies, because they were often landed with children. But I am talking about complexity because they do not have the support they need. I met people who were getting no support—neither advice nor financial support from the local authority; it seemed to me to be hit or miss as to how local authorities behaved. Some grandparents had court battles about the children they were caring for. These are people in distress, as are the children. The grandparents have lost a daughter or son—they may be in prison, be dead or be using drugs and alcohol—and the children have lost their parents. So there is a lot of distress in the family, and yet these kinship carers are coping with that. One of them said to me, “I’m tired of filling in these forms when I should be reading to my grandson”. That is how it works: they have to fill in forms and go to court, rather than being able to spend time caring for the children as they would want to.
It is a complex issue and I think that we ought to be aware of that—I am sure the Minister is aware of that. Therefore, we do not want to heap complexity on these people who, after all, save the state a huge amount of money a year for each child they care for.
Welfare Reform and Work Bill
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Baroness Sherlock (Lab)
My Lords, I wish to speak to Amendment 19, standing in my name and that of my noble friend Lord McKenzie of Luton, and to the other amendments in this group, which I support.
The case has already been so well made by the noble Baroness, Lady Meacher, and my noble friend Lady Pitkeathley that I will not add much more. However, I want to get a sense of scale. Contact a Family reports that there are 770,000 disabled children under the age of 16 in the UK. That equates to one child in 20. Most struggle on alone with only 8% of families getting services from their local social services. As we have heard, it costs up to three times as much to raise a disabled child as it does to raise a child without disabilities. We have heard the figures from official statistics showing the much higher rate of poverty among families with a disabled member and the high proportion of children with a disability who live in households in poverty
Families are already struggling. It is very good that we will retain the disability element, which covers some of the additional costs of disability, but the child will still have to be fed and clothed and cared for. The reality is that not only do disabled children cost much more but it is much harder for parents to increase their income, a point made by the noble Baroness, Lady Meacher. Suitable childcare for disabled children is much harder to find and more expensive when it is found. For some children the nature of their disability makes it very hard for anyone other than the parent to be able to take care of them.
As the Children’s Society pointed out in its briefing, the child disability element for children other than those on the high-rate care component of DLA has already been effectively halved within universal credit. Currently a family with a disabled third child would receive a maximum child tax credit entitlement of £5,920. Following the reduction of the disability component and the two-child limit, they get a maximum of just £1,513, little more than a quarter of their entitlement in the current tax credit system.
The Minister has said repeatedly today that this is about choice and that we want to enable families who are on tax credits and universal credit to make the same choices as other families. Will he acknowledge that having a disabled child is not a choice a family makes? Often the family will not know that the child is going to be disabled when the child is conceived. Either the disability may not be known, or the child may develop a disability or an illness which causes a disability after birth. The family are therefore not in a position to know the additional costs they are going to be taking on. I have problems in general with this policy, as I will explain in a later stand part debate, but one of the reasons for having so many exemptions is to try to get the Government to explain the rationale of exempting certain categories of person and not others. The Minister needs to be consistent. If his intention is all about clear-eyed choice, then can he explain how that applies in this case?
Lord Kirkwood of Kirkhope (LD)
My Lords, I put my name to Amendment 3, and I support the powerful speech made by the noble Baroness, Lady Meacher, and other contributions that we have had in this short debate. I want to make a simple point about disability. I had the distinct impression that, although the Government were determined to force through their £12,000 million savings, health and disability were going to be a priority for Ministers over the next five years. There are signs that that is true. Some of the attempts that we are watching unfold to bridge the disability employment gap and issues of that kind are welcome, as far as they go. That should give the Minister some cover to go back to the Treasury and say that there should be some identified exemptions for working families in particular. We are trying to encourage people to sustain employment in the future. Some families have young members with different levels of disability as well as mental health issues and disabilities. There is a little more emphasis on this, thanks to the excellent work that was done during the coalition Government days. There is a real peg on which the Minister can hang an approach to these tragedies which says that something needs to be said and some provision made for disability in the context of Clauses 11 and 12.
I say again to the Minister, and I mean it, that the Committee will weigh carefully what he says in terms of the exemptions or otherwise. So far he has been playing a pretty straight bat and holding the line on behalf of the Government, by which I think he means the Treasury. I understand all that, but he has to be very careful. I have said this before, and I will say it again in the clause stand part debate, that he risks losing some of these clauses, if he is not careful, if he does not appeal to good moderates such as the noble Lord, Lord McKenzie, and me. No, I take that back—it will damage his political career in the new Labour Administration.
There is an opportunity in the context of Ministers rightly focusing again on work and health. If that is applied to the amendments that have been so ably moved, I think there is some room for compromise. If there is not some give and take, I think that the Minister is going to have trouble carrying some of this Bill through the rest of its proceedings.
Baroness Lister of Burtersett
My Lords, I was so disappointed with the Minister’s responses to the olive branch that the noble Lord, Lord Kirkwood of Kirkhope, held out and the inflexibility in response to all the suggestions of how these clauses could be mitigated. In support of the contention that these clauses should not stand part of the Bill, I want to address two main issues: one is the mentality underlying the clauses, and the other is the equality and human rights implications.
My noble friend Lady Hollis referred back to the 19th century in her earlier speech. I will go back just one century. The mentality of the Bill was summed up rather well in a letter to the Scotsman in 1931 which was quoted in The People by Selina Todd, which I just happened to read on holiday—it is a very good book. The letter complained that:
“Many of the workless marry and breed families while in receipt of the dole”,
adding to the taxpayers’ “heavy burden”. Nearly a century on, perhaps we are a bit more subtle, but that sums up the mentality. We have this constant false division, referred to by my noble friend Lady Sherlock, between taxpayers who fund the tax credits system and those who benefit from it and references to how families supporting themselves solely through work do not see their incomes increase when they have another child. Who are these families? Apart from the very wealthiest, those families will be in receipt of child benefit, so they are not supporting themselves solely through work. If they have another child, they will get extra child benefit, and rightly so.
The main difference between now and the situation referred to in the letter to the Scotsman is that the Government do not want those in work and on low incomes to breed too many children either, given that, as we have heard, the majority affected will indeed be in paid work. Incidentally, could the Minister tell us what the rationale is for the abolition of the family element and its universal credit equivalent, which I think perhaps we have rather overlooked in focusing—rightly—on the two-child limit? Is that to discourage people in poverty from breeding altogether?
I turn to the human rights and equality implications. The Equality and Human Rights Commission has raised concerned under a number of articles of the UN Convention on the Rights of the Child, the International Covenant on Economic, Social and Cultural Rights and the Convention on the Rights of Persons with Disabilities. The impact assessment and the Government’s human rights memorandum do not adequately address these issues at all, although I commend the department for providing the latter.
Relating back to the point made by my noble friend Lady Hollis about the gender impact, the legal officer of the Child Poverty Action Group—I declare an interest as honorary president—refers to Article 14 of the ECHR and the disproportionate impact on women as mothers. Indeed, the impact assessment notes that women are more likely to be affected than men. Article 16.1(e) of CEDAW guarantees that women have the right,
“to decide freely and responsibly on the number and spacing of their children and to have access to the information, education and means to enable them to exercise”,
that right. The International Conference on Human Rights proclaimed:
“Parents have a basic … right to determine freely and responsibly the number and the spacing of their children”.
With regard to families and children, as the Government acknowledge in their human rights memorandum, it may be argued that the clauses discriminate against large families and that large families have status for the purposes of Article 14. They discriminate against religious groups with a conscientious objection to contraception and abortion, which is contrary to Article 14, read with Article 9, of the ECHR. We have heard a lot from different faith groups about their very real concerns about the impact of these clauses.
It is difficult to see how these clauses are in the best interests of children affected, in line with Article 3 of the UNCRC. The Government’s justification in their human rights memorandum is that the articles are,
“justified, proportionate and not manifestly without reasonable foundation”.
That is based partly on all the usual guff about fairness and the encouragement,
“to make the same financial decisions as families supporting themselves solely through work”.
However, we have already heard that the majority of the families affected will be in paid work anyway. The overwhelming response, from a wide range of organisations, suggests that the clauses are not justified, are not proportionate and are without reasonable foundation.
Article 3 of the UNCRC is addressed with what I would call unconvincing arguments in the human rights memorandum, which says:
“The best interests of children … is to have parents in work”—
as we have already heard, the majority of these parents will be in work—
“and work remains the surest way out of poverty”.
These clauses will mean that it is a less sure way out of poverty than it is at present, and that is saying something.
The memorandum says that the savings,
“will allow the Government to protect expenditure on education, childcare and health and the improvements to the overall economic situation will have a positive impact on children and their best interests”.
I draw attention to the arguments of the noble and learned Baroness, Lady Hale, in the recent judgment on the benefit cap. She said that,
“article 3(1) … requires that first consideration be given to the best interests, not only of children in general, but also of the particular child or children directly affected by the decision in question”.
I suspect that the noble and learned Baroness, Lady Hale, would give the arguments in the human rights memorandum pretty short shrift. She will probably have the opportunity to do so quickly, if this Bill becomes law. I look forward to hearing her judgment on it.
The EHRC is also concerned about the disproportionately negative impact on particular black and minority ethnic groups, which are more likely to have large families. It says that this could be at risk of breaching Articles 2 and 5 of the International Convention on the Elimination of All Forms of Racial Discrimination. The statistics bear this out—of course, those statistics are not provided in the impact assessment, as it would be asking too much to have statistics in the impact assessment. For example, an analysis of the HBAI statistics, pooled for 2010-13 by Professor Lucinda Platt for the Women’s Budget Group, shows that just under two-thirds of children in Pakistani and Bangladeshi families with three or more children are already in poverty. Two-thirds is a staggering figure, and I dread to think what that figure is going to be like if these clauses go ahead.
Lord Kirkwood of Kirkhope
My Lords, I will make just two points. First, although it makes me sound old-fashioned, I am in favour of using the social security uprating rules, established over years, for looking at the total spend of the department and what proportion of the national wealth goes to social protection. I am always frustrated and angry when Chancellors of the Exchequer stand at the Dispatch Box. The Treasury knows the square root of nothing at all about social protection. In the run-up to the Budget, we have purdah, so nobody knows what is going to issue forth from the Chancellor’s Budget briefcase. We get things landed upon us that we all have to live with as a consequence.
I want to try to persuade Governments in the future to stick to the established rules, because there are very clear ways of changing rates and benefits. In the annual uprating, Parliament has a chance to look at trends and how things are changing, make decisions and support the Government or make suggestions otherwise. That is a sensible, well-established way of doing business.
My objection to clause stand part, absent any further exemptions, is that we now have a two-child rule. It is a precedent that I believe is very dangerous, because Chancellors of the Exchequer in future could start importing it to other parts of the social security system without let or hindrance. We might start asking ourselves: what are the intrinsic differences between the child element of tax credits and child benefit itself? They are semantic and subtle; we could be entirely wrong. My point is that a clause such as Clause 11, interfering with child tax credits, and the way in which it has been done, leaves the House with some really serious thinking to do about whether this is supportable.
My view is an olive branch, and I will probably be off the Christmas card list of the noble Baroness, Lady Lister, as a result of taking this weak-kneed position. But if the Government do not come up with serious responses to the powerful speeches that have been made this evening, it will condition how I will approach any future support for Clauses 11 and 12. Of course, it is technically true that clause stand part is not necessarily available to us on Report or at Third Reading, but there will be ways of trying to address this in other ways. I was put right on that by a stern note from the noble Baroness, Lady Hollis, a moment ago. She is of course right, as she always is.
I am quite clear about this: it is dodgy procedure and a dangerous precedent. The Minister might be able to sell it to people like me if there is serious consideration of the powerful speeches that have been made. I understand the constitutional context; we are not in easy territory. I am not looking for trouble or to pull the Government down, defeat manifestos or any nonsense of that kind, but I have a conscience to deploy in deciding how to vote on some of these really important things and I will follow my conscience. I am not frightened of constitutional rows, if that is what it comes to. However, we do not need to get into that territory if the Minister carefully reflects, as he has done in the past, on what he has heard this evening and comes back with further and better particulars in terms of exemptions.
The Earl of Listowel
My Lords, in listening to this debate, a few things have become clearer to me. One is how important it is that the Government have been so successful in securing employment for so many of our people. In the debate that the noble Baroness, Lady Hollis, had and the noble Baroness, Lady Stroud, spoke to, both agreed that getting work is the most important way out of poverty. I pay tribute to the Government again for being so successful in that.
The Minister opened by saying that we are in an atmosphere of austerity and may need to make some tough choices. But it seemed to me that the language changed later on, to say that this is not just about austerity but is the right thing to be doing. I challenge that sincerely. It does not seem at all right to put these burdens on people. Just think: at the moment there is a storm in the north of England—Storm Desmond—flooding many families’ homes. A family in poverty, who may be working but on a very low income, may think to themselves, “We won’t take out insurance on this, that and the other, and we will hope for the best. We hope that there won’t be a storm”. Then this storm comes along and they have not insured their home, and they are already borrowing money anyway for various things because that is the only way that they can afford them, so they already have that debt and now they have lost more. The point I am making is that we are dealing here with some of the more vulnerable families in our society, and we are reducing their resilience.
Welfare Reform and Work Bill
Lord Kirkwood of Kirkhope Excerpts(8 years, 5 months ago)
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Lord Kirkwood of Kirkhope (LD)
My Lords, it has been a long evening and we are now in injury time. I will try to dispose of my winding-up speech with as much dispatch as I can. I am bound to warn the Minister at the beginning that, as my noble friend Lady Manzoor said at the end of her excellent speech, my noble friend Lady Thomas is not able to be with us because she managed to break her right patella while opening her mail. She obviously gets more exciting mail than I do, but the message I got said specifically that the noble Lord, Lord Freud, must understand that she still has one whole patella left. I do not know with what malice this was meant, but I pass it on, for what it is worth. She will be watching us on Parliament TV as we speak.
I characterise the Bill as one that would never have seen the light of day had any Liberal Democrats been left in the Government. I could say more about that, but I will save it for Committee, where we will all be manning the barricades yet again. I look forward to that. However, there is an unreality about the debate. It has been a very well-informed debate—I would expect nothing else—but we are all in the difficulty that we do not know what is happening in the comprehensive spending review. That will change the game in a way that will not help.
I see all this as a second squeeze. The first squeeze in 2010 was more understandable. This will be a harder sell. The Government will find this very difficult politically when it all beds down and the consequences are fully known and understood. I say that not just because of the deficit reduction programme embedded in the Bill; it is on top of everything else. One of my biggest disappointments in the coalition Government was that, despite the DWP having 200-odd researchers, they never got round to the interrelated, total evaluation of how some of phase 1 of the squeeze in the last Parliament was affecting individual, low-income families. We still do not know that. We are now putting extra pressure on low-income families who are in a much worse position than they were in 2010 when this went through its first iteration. Another thing that is different is not just that they are worse off than they were, but that the public services on which they could rely in 2010 are much degraded. That is almost as big a factor as some of the reductions in finance available to these low-income groups.
We really need to move in this direction with massive caution. I know and trust the Minister. I know that this has less to do with him than it does some other people, but he understands the importance of monitoring, piloting, watching and learning. He gets that. We are relying on him to maintain as much of that as he can keep hold of. Obviously he is not in charge of everything —I do not think that he would be here in the first place if he was—but we will need him to be in listening mode. Committee on the Welfare Reform Bill in 2012 was a model of what a Minister should do in response to some constructive but positive criticism from an Opposition who, I am sure, will continue to be constructive in the way they approach Committee on the Bill.
We have 32 clauses. I hope that the business managers understand that we need time for the noble Lord, Lord Freud, to work his listening magic. He needs time to reflect on what we say to him. The business managers may say, “32 clauses; we can do that in three or four weeks”. We seriously need to take time on this. My former colleague in the House of Commons, the noble Lord, Lord Young of Cookham, spoke about being a former Chief Whip. Once a Chief Whip, always a Chief Whip; I was a Chief Whip in my time. I would not like to be whipping the government side.
Although some powerful and well-informed speeches were made by the Opposition, they were all about the need to get reports made to Parliament. Annual reports are terrific, but they change absolutely nothing and they make no one any better off. That does not mean that they are not important, but they are insignificant compared to some of the other changes that got the House’s attention. Clearly, I consider those to be Clauses 13 and 14. There has been a powerful set of speeches from all sides of the House about the need to change the provisions for the ESA WRAG group clients. That is clearly something we need to think about.
The child poverty measures will take time. The noble Baroness, Lady Lister, made a powerful speech, and I always agree with everything that she says. In particular, however, I agree with the reference to the LSE British Politics and Policy survey by Nick Roberts and Kitty Stewart, which looked at the results of the consultation on child poverty indicators. They looked at 230 of the 257 submissions under a freedom of information request. They said:
“There is very strong support for the existing measures, and near universal support for keeping income poverty and material deprivation at the heart of poverty measurement”.
That does not exclude any of the other things mentioned, a point made earlier. I am in favour of expanding some of the measures. What I am absolutely not in favour of, and I do not know anybody sensible who is, is ditching income. It does not make any sense at all. It makes us the laughing-stock of our European neighbours. We have academics—the noble Baroness, Lady Lister, is one of them—who understand these things better than anybody else in the world. Theirs were among the 230 submissions that were looked at by the LSE group, and that was their conclusion. It was a serious piece of work looking at what we need to do to get that set of indicators correct.
I want to say something else in passing—I have no time to develop it. Parts of the Bill affect Scotland. Parts of it, however, do not. I invite the noble Lord, Lord Freud, to come to Drumchapel and Easterhouse. He and I will go around advocating low-welfare and low-tax policies in the coming May elections in Scotland for Holyrood. Let us see how we get on. I promise the House that this could be used by the Scottish nationalist propagandists. They are grudge experts; we know that. This is meat and drink to them. It will make the job of the unionist parties, including the Conservative Party in Scotland, a lot more difficult than it otherwise might be. There are unintended consequences that we need to deal with. This is a very important Bill. I could say more, but I hope the Minister will be able to arrange some serious time in Committee to deal with this.
As a final point, I want to explore the idea of preventive spending. The noble Baroness, Lady Stroud, whose maiden speech was excellent, and whose work I know—although I do not always agree with her conclusions—made a very powerful speech. What she was actually saying was that if we were cleverer about evaluating the outcomes of preventive spending, the kind of things that she does would be an absolute no-brainer. However, they cost money and you cannot do bespoke preventive spending on an invest-to-save basis without giving some basic income support to keep people alive while you are doing it. I want to use Committee to explore some ideas about that through probing amendments. I hope that we will have a constructive Committee. We need to: this is an important Bill. It is important that we get it right. It would not have happened if there had been a Liberal Democrat in the Government.
Housing: Underoccupancy Charge
Lord Kirkwood of Kirkhope Excerpts(8 years, 6 months ago)
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Lord Kirkwood of Kirkhope (LD)
Does the Minister accept that there is an important regional dimension to all this? I support the request made by the noble Baroness, Lady Quin, for a regional look at some of this, and also her idea of looking again at the Newcastle study, which demonstrated not only that the bedroom tax increased poverty but that it had an adverse effect on health and well-being, and on social responsibility and networks within neighbourhoods. When the final report is published, will he use his best offices to get a regional dimension into it, so that it considers the community-wide impact, not just the household impact, and the totality of the policy across the piece? I hope that the report will be published before the end of the year.
Lord Freud
Yes, the current plan is to publish the report before the end of the year. It does incorporate the regional effects, and I will take the noble Lord’s points about how thoroughly it does so when I go back and talk to the team. For very obvious reasons, I have not seen what is inside that report before it is published, but I will transmit those thoughts to the team.
Universal Credit (Waiting Days) (Amendment) Regulations 2015
Lord Kirkwood of Kirkhope Excerpts(8 years, 10 months ago)
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The Lord Bishop of Portsmouth
My Lords, I and others from these Benches have welcomed the principle of universal credit, and I readily do so again. However, the best of policies and principles have practical consequences which make all the difference to the effectiveness of policy. In that constructive spirit, wishing universal credit to be successful in simplifying the complexity faced by benefit claimants and confirming the dignity of work at a decent rate of pay, I add some reservations to the extension of waiting time to seven days.
Delay in receiving first benefit payments has been an issue for many years. Inevitably, and sadly, there can be administrative delays. I am not aware that any assurance has been given that universal credit processes would prevent such delays; indeed, I doubt that any such reassurance could be given. Process, technology and human error are realities. Compounding these with longer statutory waiting times will exacerbate the problem. We should be reticent about further lengthening that wait, at least until delays consequent on the new universal credit process and procedures are ironed out. It would be rash, given our general experience, not to expect some continuing transitional challenges. There are some worrying instances and worrying delays. That is not to attribute blame—rather, it is to remind ourselves of the importance of extensive and ongoing training for those involved in assessing applications and advising on helplines. I hope the Minister might confirm ongoing commitment to this.
Some caution about extending waiting times is therefore appropriate. Furthermore, whereas, as we have heard, jobseeker’s allowance provided for a waiting time of a fortnight, universal credit has a month before first payment is reached. Carers and lone parents have not previously faced a waiting time rule at all. Not all those affected will benefit from redundancy payments or have the cushion of savings. Though some will, a compassionate and just system provides for the worst cases and for those most vulnerable. A job search, which we would wish to encourage, costs money.
The welcome advantage that universal credit encompasses a number of previously independent benefits, which in almost every way is a huge step forward, is in this instance, perversely, a disadvantage. The consolidated nature of universal credit being awaited by a claimant means that the payment being delayed is likely to be a very significant part of income.
As I understand it, the intention of the noble Lord, Lord German, and the noble Baroness, Lady Sherlock, is to moderate the impact of these proposed changes—to moderate risk. On balance, I have some anxiety that the first amendment risks complicating universal credit arrangements by excluding housing benefit from the regulations. It seems to go a bit against the grain of simplifying the benefit system. The second amendment, delaying enactment, gives some time to assess the impact of moving to monthly payments and any protection needed for vulnerable groups, for instance. I hope that the Minister can consider agreeing to a delay to allow for some learning in transition to what I trust will be a significant step forward in supporting those in need through universal credit into work at a decent living wage.
Lord Kirkwood of Kirkhope (LD)
My Lords, I shall make a brief intervention in these two important debates. I congratulate my noble friend and the noble Baroness, Lady Sherlock, on securing the time. I should perhaps say at the outset—and the noble Baroness, Lady Lister, rightly adverted to the fact—that I had a failure of nerve earlier last week and withdrew my prayer to annul. I did so because I think the Treasury is requiring the department to take the introduction of this fundamental flagship policy right to the edge of proper implementation. The Minister told the House last week that the department has already been required to make significant savings. Some £2.4 billion was the anticipated spend, but that has now been reduced to £1.8 billion. The Minister may be able to persuade me otherwise on the rollout of the digital element of the service, and I would like to hear him on that subject but, if not, I am really worried that we are cutting this so thin that we may lose the core benefit of universal credit. I agree with the noble Baroness, Lady Sherlock: everybody in this House, or certainly anyone who served in the Welfare Reform Bill Committee in 2012, is committed to the principle of a single working-age benefit that is blind to work. But if the Treasury is not careful, the house of cards will collapse. So if I had succeeded in a fatal Motion and the Minister had been sent back to the Treasury with his tail between his legs, it may have said, “It’s all too much—we’re just going to let you swing in the wind”.
I know that it is not the Minister’s fault at all, but the idea that this is a save-to-spend initiative is a complete nonsense, as far as I am concerned, and I just do not believe it. It is a departmental expenditure limit that will carry these savings and, as the noble Baroness, Lady Lister, said, the claimants will carry the can, on top of everything else. We are talking about £200 million or £150 million—we do not know—but we really are in danger of putting people at risk.
Another thing that irks me is the fact that we are now beginning to confuse means-tested safety nets with income replacement benefits. Means-tested safety nets should apply in any circumstances; they are the point of last resort. I do not believe that the local government establishment, although it tries hard with reduced budgets, can pick up all of the downstream damage that will be done to low-income households that will struggle to stay alive. Therefore, we have to get behind the department to get the Treasury to recognise a bit more what is at stake here. That is one of the purposes that I hope the debate this evening will serve.