Universal Credit (Transitional Provisions) Regulations 2014

Lord Kirkwood of Kirkhope Excerpts

Wednesday 18th June 2014 Lords Chamber

Moved by

[Lord Kirkwood of Kirkhope]

That this House takes note of the Universal Credit (Transitional Provisions) Regulations 2014.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, it is a pleasure to move this Motion. I should say that I have had notice from a number of colleagues about it. I know that there is concern in all parts of the House about the implications of universal credit and, because of the shortness of notice given for this debate—I was offered the opportunity for it to be this evening only 48 hours ago—many colleagues have indicated to me that they would have been here had they had more notice. In that regard, I am particularly pleased that the Minister himself has seen fit to come to answer the debate, which is typical of him and his well known interest in this important area of public policy. I hope that the debate will not stretch for too long but it is important to make the best use of the next few minutes, if we can.

I am of course founding this Take Note debate on the transitional provisions regulations and if I am founding it on any part of the documents at all, it is on paragraph 4.3 of the Explanatory Memorandum. As colleagues will know, paragraph 4.3 refers to “widening the availability” of universal credit and says that,

“as announced in Parliament on 5th December 2013, the introduction of the 2014 Regulations is part of the Department’s changing approach to how legislation relating to the rollout of UC is structured”.

I hope to be able to use that to describe some of the wider ramifications that sit alongside the content of these regulations.

I also start by referring to the always excellent work of the Secondary Legislation Scrutiny Committee. In paragraph 20 of its first report, it draws attention to the changes that the technical regulations bring and, in particular, expresses surprise that the regulations were,

“accompanied by the original cost/benefit analysis”,

of the impact assessment from 2012. That is a well founded question because things have changed so much over the past two years, so the department is not safe simply to rest its case on the impact assessment made all those months ago.

The other two points that the committee made which are salient to this evening’s discussion are, first, the fact that by now,

“Universal Credit has been made more flexible and can be ‘managed’ if problems arise in a particular area”,

and that those changes can now be “made by Commencement Orders”. Commencement orders are fine but they are not subject to parliamentary scrutiny, so I would be a bit nervous if such orders started to be used willy-nilly for claims being allowed in areas or to special cohorts of claimants without that scrutiny. Finally, the report says that the regulations,

“include provision to allow the Secretary of State discretion … to stop taking Universal Credit claims in … geographic areas”.

As the regulations suggest in paragraph 4.3 of the memorandum, that is a change to previous provision.

So the first part of my case is that on the surface these regulations are what we expected and contain no other surprises, since we always understood that the 2014 regulations would replace the 2013 regulations, and so far so good: I am perfectly comfortable about that. However, when you look at the position outside and the context in which these regulations are being introduced you discover huge and increasing uncertainty about the programme, which is no surprise to anybody who has been following the debate. Against the background of the regulations and the Secondary Legislation Scrutiny Committee’s report, I want to spend a little time on that mounting uncertainty this evening under four different headings.

First, on case load, I would have been surprised to be told in 2012, when the Minister took the primary legislation through in the Welfare Reform Act, that in 2014 the active case load would amount to 5,610 straightforward cases—I have the statistics here that were published on 11 June 2014. More than six in 10 of the 5,610 cases in that case load on 31 March 2014 were younger people under the age of 25. They are mainly single and are what is known in the trade as straightforward cases. They could not be more straightforward and it could not be a much smaller number. I remind the House that we are talking about a target case load by 2017 of 7.7 million households. At the current rate of progress, there are questions—I put it no higher than that—about how we get from where we are now to where we want to be in 2017.

I think that only three Jobcentre Plus areas are handling more than 1,000 cases each at the moment: Oldham, Wigan and Warrington. I know that the Government are rolling out the case load from time to time and there are, I think, up to 10 or more places where the new pathfinders are in operation. However, as far as it is conceivably possible, what I would like is a year-by-year estimate of the new rollout period in terms of case load because the transitional period that we are now facing in these regulations is much longer than I anticipated. Other people may have different ideas but if you had said to me in 2012, when the primary legislation was passed, that the transitional period would be as long as it looks it will be, I would have found that difficult to believe.

My second point is about how a longer transition period will impact on claimants. There is a very obvious case that the sooner people get access to the smoothing effects and the work incentive effects of universal credit, the better it will be for them. Day by day, for the people who do not have access to these provisions, making work pay and all the rest of it gets much harder. More acutely than that, in these regulations there is notification that employment and support allowance claimants, in particular, may be facing a delay even beyond 2017. I have read press reports about this. A report in the Guardian on 24 May suggested that 700,000 employment and support allowance cases could be affected. I understand why: it is because they have been transported off incapacity benefit. However, if we are really starting to talk now about 2018 to get this job done, we are in territory that begins to call into question the programme rollout as it stands. I have even seen knowledgeable IT experts make the case that this rollout may take anything between five and 15 years—from now. These are serious people who know about major projects.

We really have to look at some of the consequences of a longer transition period. For example, the local authority costs for continuing housing benefit administration would not have been anticipated and will not be in their plans. What steps are we taking to look out for that and make proper plans? Finally, on claimants, there is the local support services framework. At an earlier stage, the Government themselves said, rightly, that the LSSF is almost as important as universal credit itself. I agree with that, but if there is a much longer transition period, what is happening to finance that? The delays in the transitional phase are causing uncertainty in local authority and local support service framework circles.

My next point is about value for money. I note with interest that it is a while since the National Audit Office report was published. The Minister will know that my spies are everywhere. Actually, some of my spies may be double agents; I think that the department has found out whom I have been talking to and turned them against me, which, if true, is a dastardly act. I am being facetious, of course. However, I make the point that if there is a continuing NAO interest in this programme rollout, it may well be gearing itself up for a second investigation. If that is the case, I think it will indicate that the NAO is uncertain about the future of the project, and nothing could underline that more clearly.

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Kirkwood, for that speech and indeed for this opportunity to question the Government on the progress of universal credit. I do not think that he need worry too much about whether he strayed from the regulations. The points that he made were precisely the areas that I too had zoned in on from the regulations, so it is certainly my view that his questions are within the spirit, and clearly the content, of tonight’s business.

Before I turn to the content, I want to ask the Minister a process question. Could he explain to the House what the rush was for the consideration of this Motion? I saw these regulations appear on the green sheet certainly no more than two or three sitting days ago, and it was only yesterday that it was confirmed that this debate would take place tonight. There may have been other noble Lords with an interest in this subject—there were certainly plenty of us during the passage of the Welfare Reform Act—who wanted to participate in the debate.

[Lord Kirkwood of Kirkhope]

I have to leap to the defence of the Minister. This is my fault: I tabled the debate and was offered a slot, and the Government were very generous in giving me a slot on the Floor so I took it early. That is entirely my fault and was nothing to do with the Government or the Chief Whip.

[Baroness Sherlock]

I thank the noble Lord for that intervention and for leaping to defend the honour of the Minister. The only point that I make is that it may not be widely understood outside the House that no one consults, for example, the Opposition to see whether a spokesperson is available. This gave me 24 hours to get these regulations out, read them and understand what they were about in order to be able to hold the Minister to account. The process should allow for that. I was not suggesting any conspiracy on the Minister’s part—I know that these matters are far above his pay grade and mine by some considerable distance—but I simply place that point on the record. I think that we would get better debates if we all had a bit more notice when things of this complexity were coming forward. It is not as though universal credit is in a rush. It is not about to be rolled out across the country next week or next month.

The noble Lord, Lord Kirkwood, raised the question of the speed of transition. I think he was rather generous to the Secretary of State. On 1 November 2011 Iain Duncan Smith promised that 1 million people would be claiming universal credit by April 2014. So how does it look now? The noble Lord pointed out that the case load now, far from being 1 million, is 5,610, and the signs are not promising. In January this year, 1,010 people started claiming universal credit, in February it was 630 people and in March it was 560 people. Only 6,550 people have claimed anything at all since the scheme began. That is an enormous difference.

The Secretary of State has insisted repeatedly that universal credit would meet its deadlines of first national rollout from October 2013 and final replacement of housing benefit, child and working tax credits, income support and non-contributory JSA and ESA by 2017. I am with the noble Lord, Lord Kirkwood, on this; I would not bet the DWP pension pot on that deadline being met at the moment.

The noble Lord asked a question about what “reset” means. He is right not to believe everything he reads in the papers, but the papers were pretty much of the same view that the reason the project had to be reset was that it had previously had an amber/red rating from the Major Projects Authority and was probably about to get a red rating, so in order not to get a red rating it was reset so that it did not get any rating at all. I very much hope that that is scurrilous suspicion on the part of the media and that the Minister can correct it and explain the process to us.

However, it is not the first time. Whenever criticisms are made of the project, the department comes back and Ministers say that those criticisms are not fair because they do not take account of changes that have recently been made. There comes a stage when, if problems keep arising and changes are made, it is legitimate to say: how can you persuade people outside, never mind the House, that the department has learnt enough from previous mistakes to have any confidence in the next level of management development that has been put forward? I hope the Minister will be able to give us some reassurance on that front.

Recently, there have been even more worrying reports about problems in the pilot universal credit areas with claims that administrative errors and computer glitches had led to increases in personal debt, rent arrears and evictions.

The noble Lord, Lord Kirkwood, raised the question of value for money. In four years, more than £600 million has been spent and, as he pointed out, the Government admit that £40 million has been totally wasted and a further £90 million “written down” because the IT bought was not fit for purpose. That is a lot of money for 5,610 people to be claiming universal credit. That context means that the Minister will understand why there is nervousness about the fact that these regulations seem to give the Government considerable discretion in deciding how the rollout should take place in future.

First, as the noble Lord pointed out, unlike the 2013 transitional regulations, these regulations give that discretion to the Government. They no longer contain proposals for categories of people to be brought on to universal credit. Rather, “gateway conditions” for universal credit claimants will in future be spelt out in commencement orders which, as the Joint Committee on Statutory Instruments points out, are not subject to parliamentary scrutiny. Secondly, the regulations permit the Secretary of State to stop taking universal credit claims altogether either for certain categories of people or in certain parts of the country. That is a really significant shift in powers from Parliament scrutinising or passing regulations to the Secretary of State. Will the Minister give us some indication of whether there is any limitation to those powers? Could he, for example, decide not to include several benefits? Could he decide not to do Wales? Could he decide not to do the north of England? Is there any limitation to that discretion? If so, what does that mean for our understanding of what the transition timetable will be, a point pressed very effectively by the noble Lord, Lord Kirkwood?

The questions I would like to ask the Minister are these. First, why are these changes necessary? What was wrong with things that were done previously when regulation was used? What is necessary? What is it about the process and, more importantly, what do the Government think the process is going to look like in future that means they need these powers?

Secondly, how will Parliament be enabled to scrutinise the decisions taken by the Secretary of State to control who is entitled to universal credit? The noble Lord, Lord Kirkwood, flagged up one of the points made in defence of universal credit, which is that it will give various benefits to categories of claimant. If that is the case—certainly the Government have used that defence in explaining why they had to cut existing benefits—that is a considerable power. How can Parliament hold Ministers to account for deciding who is and is not entitled to access a system created by Parliament with an expectation that it would by now have been experienced by 1 million people and would be entirely rolled out by 2017? That is a very serious constitutional question.

Disabled People: Independent Living Fund

Lord Kirkwood of Kirkhope Excerpts

Monday 31st March 2014 Grand Committee

[Lord Kirkwood of Kirkhope (LD)]

My Lords, it is a pleasure to follow the noble Lord, Lord Low of Dalston. I entirely agree with his concluding point that the needs of people who have multiple impediments are not being properly taken account of. I join others in congratulating the noble Baroness, Lady Campbell of Surbiton, on introducing this debate. She is being entirely realistic in the demands that she makes, and I support both of them. I hope that the Committee will not allow the Minister to duck both the propositions that she put: first, her idea of a reference group to monitor the two-year period that is just about to unfold; and secondly, the possibility of regulations and guidance that would continue thereafter. These are both entirely appropriate and I agree with her desire to bring them about.

Like some other colleagues, I am a refugee from the days when the 1988 regulations were put in place by that great man, Lord Newton, and Nick Scott. Those were the days of an enlightened Conservative Administration—some of us remember that. There was a real problem in 1988, and Tony Newton cut through some of the difficulties of moving the supplementary benefit into the new social security system and was enlightened enough to set this thing up.

We would be moving in entirely the wrong direction if the Independent Living Fund was closed. One of the books I received for Christmas—I am still reading it because it is very, very thick—is Andrew Solomon’s Far from the Tree: Parents, Children and the Search for Identity. It is inspiring and I recommend it to the Minister in particular because it might occupy his time and prevent him from getting involved in anything more nefarious in the department. It is an inspirational book because it shows what can be done with proper support. It also shows what can be done regarding employment if there is adequate support.

The simple point I want to make is that if you look at the work being done by the noble Lord, Lord O’Donnell, on the question of well-being and the inadequacies of using GDP and simple monetary ways of measuring some of these issues faced by severely impaired individuals, we are missing an opportunity. Some of the case histories that Andrew Solomon considers in his book represent positive contributions to the families. In those cases, not only is well-being demonstrably and undeniably increased but they create a business case for preventive spending for the long term. If people get into work, they do not need nearly as much financial support. With assistance, they can trade their way out of difficulty.

Looking forward, the idea is not easy and is still novel. We should be testing whether systems such as the Independent Living Fund can be reconfigured in a way that considers spending as preventive. The reference group that we are thinking about setting up here—I hope that the Minister can consent to that—could additionally be tasked with looking at individual examples in which severe impairments are faced by family members and at how they can be turned around into success stories, and in which the well-being of everyone involved can be increased. That is a very interesting aspect of public policy that we are missing at the moment, and from which we are stepping away by closing the Independent Living Fund. We are doing the wrong thing. I would personally agree to the setting up of a reference group such as that suggested by the noble Baroness, with guidance to examine in a more informed way the issues and possibilities for preventive spending.

Like my noble friend Lord Cormack, I am already a signed-up member of the fan club of the noble Baroness, Lady Campbell of Surbiton. I will therefore follow her lead and support her in every way that I can in trying to establish the reference group that she is asking for.

Social Security Benefits Up-rating Order 2014

Lord Kirkwood of Kirkhope Excerpts

Monday 3rd March 2014 Grand Committee

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am pleased to follow my noble friend Lord German, who asked some pertinent questions. I want to take a slightly different approach and put these uprating orders into the context of a longer timescale. As I think we all know, changes to upratings will generate more savings for the department over the middle to longer term than any other single change, so it is important for Parliament to stay abreast of what is going on.

My first point is about process. In the old days—he says, reverting immediately to nostalgic mode—this used to be a huge debate. My noble friend the Minister will know, because he was there and was briefly a Minister, that the uprating order was a big event then, when we were spending millions, not billions as now. There was a full Chamber in the House of Commons and those numbers were keenly contested. It has now come to this, at the fag end of a late Monday, with the Minister and two or three lonely survivors discussing these very important matters. We must make sure that the parliamentary process is maintained because the scrutiny of these matters is important.

The process which we now have is a bit confusing to me. The Minister is absolutely right that the Welfare Benefits Up-rating Act 2013 basically takes out the working-age benefits from consideration this afternoon. I do not think that is for all time coming but I am not sure. I assume that the 2013 Act will render it nugatory to discuss working-age benefits until that Act falls away, after its third year. Presumably we will then go back to the uprating system as before. I am also a bit nervous about losing sight of tax credits and child credit Treasury-type benefits, which in the old days were also all subsumed into the one comprehensive debate.

I am even more confused about the annually managed expenditure proposals which the Chancellor has been talking about. I am always suspicious about Chancellors talking about social security department business as, in my experience, they invariably make a hash of it. I would stiffen the Minister’s resolve to resist these territorial ambitions from the Treasury, which are very hard to contain. I can see some heads nodding, so I am obviously on a strong point there.

The point that I am making is a simple one. In Parliament, we should insist on being able to have proper opportunities in good time to look at the comprehensive changes being made, even though they are getting more complicated, so that we can satisfy ourselves that at least we know what is going on and can make the best points to the Minister and his future heirs and successors. I am fearful that this is becoming so piecemeal that it is getting difficult to do. That is my first point and I suspect that the Minister will not disagree with it.

I would like to know what the additional costs of these orders are. They are basically pension-orientated. I have nothing whatever to say about the Guaranteed Minimum Pensions Increase Order. I have never had anything to say about that order; it goes on and it goes up, and that is fine. However, my impression is that there is £3 billion or so involved in increased spend and I would like to know to what extent, over the period of this order, that is derived from an increased caseload. In the middle to longer term, the demographics will obviously change regarding the proportion of the population. There will be more and more pensioners, so we will have more and more trouble paying for them, which is perhaps part of the answer to the important question that my noble friend Lord German asked. I would not mind being copied into any answer that he gets because it is a very important question. However, the caseload is bound to increase, so if that number increases, the costs will get bigger as the numbers get higher. I understand this, perhaps, more than most. As of the fiscal year 2014-15, we spend £211,000 million each year, every year, which is a serious sum of money. We really need to make sure that we understand how we are spending it and that we get control and make it as effective as we can. I should like to know the cost of these orders, just to keep track of the expenditure.

The Section 150 duty on the Secretary of State in the Social Security Administration Act 1992 is that he considers and reviews, and, in a kind of Delphic way, the answer comes out as CPI. I hope that the Minister would be able to give me some reassurances, after some of the evidence coming out from the archbishop, now cardinal, and the powerful intervention that he made about destitution. I do not think that he is right to say that the entire safety net has been withdrawn, but he is a serious man, and the Church of England and other churches are beginning to pick up the fact that some serious things are emerging in their localities. I think that they are correct about that, although I would not go as far as to say that the safety net was being removed. But that evidence is the kind of thing that I would hope somebody in Parliament would put in the box for the Secretary of State when he did the annual review.

There are other political issues as well. People like myself cannot understand why universal benefits for pensioners, in these circumstances when austerity is upon us, are not in the mix and being considered as possible savings. The fact that I get a winter fuel allowance is not appropriate to the financial circumstances that we are in. That is the kind of thing which I hoped the review would have looked at.

I was very struck by the Barnardo’s report just before last Christmas about the emergency food services now being used. The Minister and I have both watched these issues for a long time but I have never seen evidence as cogent as that—750,000 families. The emotional cost of rolling up and asking for food must be enormous. That is new and it cannot be ignored.

Finally—and I think that this is more hidden—the impact on local authorities’ service provision is beginning to be bigger than I have ever seen before in my past experience. That is characterised perhaps by the local welfare assistance fund, which I think the Local Government Association was right to complain that the Government seemed to be withdrawing funding from. These are the kinds of things which I hope the Minister will be able to tell me were thought through carefully in the department before the Secretary of State discharged his duty under the 1992 Act, because they are bits of evidence that are more cogent than I have seen in the recent past—and I have a longer list, but I shall spare him.

I am a member of the council of the Institute for Fiscal Studies, and I want to make a point about the 2.7% and CPI. I guess that the Government had no option but to go for CPI, because RPI is not appropriate any more—if discredited is too strong a word—and I can understand that. But there are problems with CPI in how it differentially impacts on low-income and high-income families. My speech will be a lot shorter, if the Minister says that he will read, or get somebody in his department to read, the IFS Green Budget of February 2014. Chapter 6 of that document says that,

“the average price level faced by households in the bottom quintile rose by 7.1 percentage points more than that faced by households in the top quintile between 2007-08 and 2013-14”.

That is a long stretch and 7.1% is a big figure. That is at page 126, in chapter 6 of the IFS Green Budget 2014. That figure struck me.

The other side of the question, looking at inflation, is on page 138 under the heading “Group specific inflation rates”. It states:

“Figure 6.10 shows that inflation rates since the recession have tended to be higher than average for low-income households … The average rate of inflation experienced by low-income households over the period 2008–09 to 2013–14 was 3.4%, compared with 2.4% for high-income households”.

These are snapshot quotes and you need to read the whole chapter to get the sense of the work that has been done by Oxford Economics, which did this work. This is very compelling evidence that it is dangerous just to go from mean average figures of inflation and prices because they impact differentially on different households and in different proportions of spend within family budgets, because lower-income people spend a lot more money on energy, food and the like than they do on mortgage interest payments. If I can have an agreement that somebody will read chapter 6, I will go on to my next point.

Although there is only a glancing reference in these regulations to universal credit and personal independence payments—it is the first time we have seen uprating orders for those two benefits and I wish them both well—the Minister and I both know that there is some controversy and uncertainty about the programmes and timetables for implementation for these benefits. I am sure that that will become clear during the period of the duration of these orders. Can the Minister say anything, even if it is in writing, about the timetable for it? The press comments and indeed the ministerial comments that have been made about the Atos origin contract for PIP understandably have caused a lot of uncertainty.

I have always believed that we have a problem in this country with the capacity of professional occupational health specialists. The Government are suffering from that, and any Government suffer from it. If you do not have the professionals—and it is a very skilled thing to do properly—any company, Atos or otherwise, will struggle to carry the weight of these hugely important and very onerous contracts. Can the Minister give us any comfort about the upratings contained in these orders as it relates to the personal independence payment and the timetable for dealing with Atos? Similarly, there are uprating elements in these orders about universal credit. If the Minister could give us any comfort on the timetable for universal credit and the ICT contract, that would be very welcome.

Finally, I noticed in the Explanatory Memorandum—they are always very instructive and helpful for these things, and I pay tribute to the poor people who have to write them—that the deductions for service charges on housing benefits for energy charges is 7.7% in the year to September 2013. I understand what service charges are and what rental agreement deductions are in housing benefit, and that they are not new. However, 7.7% is a big percentage. It might not be much—a couple of pounds—but that is a big change. I was grateful that the Explanatory Memorandum took the trouble to point it out to us. I hope that the Minister will take that back and satisfy himself that that is not an outlier figure as regards 2.7% increases here and there. Particularly when energy costs have gone up so dramatically over the recent past—there have been some quite significant increases—7.7% is striking. If the Minister can go away and satisfy himself that that is not a relative punitive increase in a deduction, I would be very grateful.

My main concern is that Parliament, over the distance, is able to track low-income households in particular. As we go into fiscal consolidation—I am sure we will and I hope we do, the sooner the better—differentially, as incomes go up the thrust in controlling the benefits spend keeps benefits down. Incomes go up and the difference gets too great. As parliamentarians—and I know that my noble friend takes an interest in these things—we are bound to make sure that we do everything we can to protect the poor.

Child Support Fees Regulations 2014

Lord Kirkwood of Kirkhope Excerpts

Tuesday 4th February 2014 Grand Committee

[Baroness Howe of Idlicote (CB)]

My Lords, your Lordships may remember that I was one of those who supported the noble and learned Lord, Lord Mackay of Clashfern, in the very important amendment that he has just referred to. I, too, remain concerned that despite the concessions made by the Government in reducing the application fee for a child maintenance calculation to £20 and reducing the parent with care collection charge by 4% on every payment—on which I congratulate them—there is a real danger that the effect of the new charging regime will be that fewer children end up with fair and reliable child maintenance.

In this respect, I share the conclusion of the Secondary Legislation Scrutiny Committee, which found that,

“although the transfer scheme may make savings it may imperfectly achieve the overarching objective of providing financial support for children”.

I want to press the Minister for assurances that the Government will closely monitor what happens to maintenance for children whose CSA cases are closed during the next three years. After all, the department has details of the parents and children so can track what happens to them, case by case, in terms of future maintenance arrangements—or the lack of them.

It will not be enough for the Government to congratulate themselves if fewer parents apply to use the statutory maintenance service, unless they know for certain that the parents concerned have made private arrangements for maintenance that result in regular payments of realistic amounts for the children concerned. Similarly, it will not be enough to be satisfied that fewer parents are asking to use the collection service and have opted for a direct payment arrangement—again, unless they know for certain that those direct payment arrangements are resulting in regular payment of the liabilities that have been calculated by the Child Maintenance Service.

In the past, the department has said it can assume that every direct payment arrangement is paid in full and on time because, if not, parents with care would ask to use the collection service. Even if this assumption were true now, it will certainly not be true in the future, given that the collection charges are expressly intended to deter parents from asking to use the collection service, regardless of the circumstances. I therefore seek full assurances from the Minister that the department will track in detail how children fare as their CSA cases are closed down and charges are brought in.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, it is a pleasure to follow my two colleagues in this important debate. My noble and learned friend Lord Mackay led the House in earlier stages of the Bill in a commanding and profoundly serious way. His weight being added to this question is something to which I hope that the Minister and department will pay careful attention; that is also true of the noble Baroness, Lady Howe.

I underscore what my noble and learned friend Lord Mackay emphasised at earlier stages of this discussion: the fee money that we are talking about is actually the child’s. My noble and learned friend is right to point to the clause in the memorandum that says that this is controversial; that is why it is controversial. This money which is being taken out of the system should be going to the assistance of, mainly but not exclusively, poorly paid families who are doing their best to struggle to bring up children in very difficult circumstances. That controversy is not going to go away. I pay tribute to my noble and learned friend Lord Mackay and the noble Baroness, Lady Howe, for the work that they have done in the past.

I also acknowledge that there have been concessions, and I do not think that my noble friend the Minister needs an alibi. He has other fish to fry; this is none of his business. It is a very bad change. I actually take a more fundamental view. I have been of the opinion since 1991, when I started on all of this, that charging was wrong in principle. I am long enough in the tooth to remember the period during 1993 and 1995 when we tried charging. I have said this before: it was a disaster. Why? Because nobody collected any money. They were not collecting fees or enforcing debts, so people were saying, “Why are we paying these fees when we are not getting any money?”. The scheme was quickly abandoned. We need to learn lessons about that. I do not believe that even the new, all-singing, all-dancing Child Maintenance Service—while the improvements are welcome—can offer guarantees that the enforcement will be effective.

Changing the balance of my concern, because I have always been really worried about the parents with care more than anything else, some of the charges which are going to be levelled at the non-resident parents are eye-wateringly high. There are a lot of non-resident parents out there who do not understand the difference that will be made with the combination of a recalculation and a collection fee. I wait with bated breath to see where this new co-operation which is going to break out all over the place is going to start. It is fantasy. A long time ago I was a divorce lawyer, and I know what people can do to one another when they separate. It is sometimes quite unbelievable. I am sure that my noble and learned friend Lord Mackay, with his previous distinguished legal career and all his work with children’s charities, would reinforce that. I object to fees in principle. I do not think that they will work. I hope that I am wrong, but that has always been my position and it is worth restating.

Secondly, this system that we have used for charging fees is flawed. Again, I agree with everything that my noble and learned friend Lord Mackay has said, but I want to add a point which has been drawn to my attention by Gingerbread, which is right in saying that if the Child Maintenance Service has the weight of decision in testing the question of “unlikely to pay or not”—to allow the parent with care to join or stay in the service—that is a contestable decision. It is an important decision for both parents. It is an administrative decision which is taken out of both their hands. I do not know what assurances have been given, or whether there is anything that I have missed in the regulations which makes it a requirement to explain in detail why that decision has been taken, but it seems to me contrary to natural justice. In any other area of public life where such an administrative decision is made an inbuilt independent appeal is automatically attached to it. That is entirely absent from this new system. I appeal to my noble friend to go away and look at the provisions in the Child Maintenance and Other Payments Act 2008, Section 6(5), where, I think, the Secretary of State is given discretion about introducing an appeal. As part of the undertaking that I hope my noble friend will give to the Committee to continue to monitor all this carefully there should be the possibility of the Secretary of State making that discretionary decision, so that we can have an appeal available, if it becomes obvious—as I believe it will—that it is necessary.

25th Anniversary of the World Wide Web

Lord Kirkwood of Kirkhope Excerpts

Thursday 16th January 2014 Lords Chamber

[Lord Kirkwood of Kirkhope (LD)]

My Lords, the great thing about anniversaries is that they happen every year. I suggest to the noble Baroness that she puts in her diary now the date 16 January 2015 and that we do this all again. I am making a sensible point there: we should be having annual debates about the effect of the digital revolution we face. I absolutely agree with the noble Lord, Lord Giddens, as the internet is certainly the most transformative thing that has happened in my lifetime and is something that we cannot ignore.

As chairman of the Information Committee in your Lordships’ House I was absolutely delighted—that is the only word I can use—when I heard that the noble Baroness was joining us, because I was sure that she would have an effect on the way we work. We have been engaged in parliamentary business for 700 years. We are now facing a change in circumstances that will require revolutionary methods of responding if we are not to fall far behind. The process of legislation that is the important duty of this House will become more difficult to deliver if we do not respond to the degree of challenge we now face.

I absolutely agree with the noble Baroness about the three or four values she set out as absolute necessities for the future: inclusion, transparency and openness, in that order. As somebody who is involved and interested in social security, inclusion for me is first: the last thing we need in this country is a digital divide that is exacerbated by leaving a huge proportion of our population behind. That is something to which we must attend.

In the next two minutes, I want to persuade your Lordships that we have a serious problem in the way we do business here if we are to keep up with the change that is coming. The nexus of mobile working together with cloud computing, social media and big data information that is about to happen to us, if it is not happening already, is extraordinary. If we continue to ignore it, we will be leaving the process of engagement and disengagement with Parliament in a much more difficult position over the next few years. Somebody said to me the other day that, by 2017, 75% of all government data will be in the public domain, so we cannot continue to go on the way we are going.

There is good news. Now that we have a completely wi-fied parliamentary precinct, which was a welcome decision by the administration, we will—although this will be troublesome for some Members, and I am sorry we cannot avoid that—be rolling out Windows 365 during the rest of this year. It is hoped that by the summer we will all be capable of moving and working at the same time. I exhort Members to take advantage of the possibilities now being offered.

However, in the future we need to get a plan for a digital political system of operating in Parliament. Otherwise, the public will leave us behind completely, which will not be good for Parliament or for the rest of the country.

Employment

Lord Kirkwood of Kirkhope Excerpts

Wednesday 15th January 2014 Lords Chamber

[Lord Freud]

My Lords, the leader of the Labour Party said in 2010 that we had a programme that would lead to the loss of 1 million jobs. In fact, we have had a programme that has led to an increase of 1.2 million jobs. We have the right policies to get this country back on the move.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, whereas it is quite clear that the headline unemployment figures are welcome, there is a problem about emerging underemployment and intermittent hours. While we are waiting, with more and more impatience, for the arrival of universal credit, which in due course will help, will the Minister do all he can to encourage people to take advantage of the existing in-work benefits, which can help employees get into full-time, sustainable jobs? While he is at it, will he do his best to try to tone down the Government’s anti-welfare rhetoric, which indiscriminately and unfairly seeks to caricature every social security claimant as either a scrounger or a cheat?

[Lord Freud]

My Lords, as my noble friend is fully aware, we are introducing a programme to blend the out-of-work benefits with the in-work tax credits. That is vital because it gets rid of that distinction and makes a smooth transition from being out of work to being in work. That is a vital reform which, as my noble friend knows, I am pursuing with all my energy.

Pensions Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 16th December 2013 Grand Committee

[Lord Stoneham of Droxford (LD)]

I would like to make three points. I hope that there will be cross-party support but, if we are now saying that the higher pension should apply to everybody, clearly we need to know the cost. I have to ask the question: why did Labour not do this in its 13 years if it does not cost money? The point has to be made. Resentment could build up among those who see younger people coming forward on larger pensions. We know that there is a problem with women in the 1951 to 1953 age group. We have to understand exactly how much this is going to cost. The noble Baroness, Lady Hollis, is absolutely right: it is not necessary for this legislation, but in the future obviously we should look—as the country can afford it—at how we can phase in for various groups of pensioners the higher rate and get rid of means-testing for them. We need to know about the money but we also have to be realistic. You have to start somewhere on this higher-rate pension, and where the Government have tried in difficult circumstances to start is the best that can be done at the moment, I think. Obviously we should look at the future at some stage, once we are aware of the cost and how we can afford it.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I would like to add a more operational note to the questions raised by the important amendment from the noble Baroness, Lady Turner of Camden. She makes a powerful case, but the financial circumstances suggest to me that there is more likelihood of eventually getting into the position that was explained by the noble Baroness, Lady Hollis, than she was suggesting.

The implication of the amendment is that it would extend the single-tier pension to all pensioners. I have some questions about the operational capacity of the system to deliver sensibly some of these significant changes. In the first place, the Green Paper suggested that we should be looking at this by 2017. That has been brought forward; there are obvious advantages to that but it has caused some people to raise questions with me. Some of that is informed by the current controversy about the efficacy of the systems for universal credit, which are of course of a different order in terms of the IT systems. It also has to be acknowledged that the Pension Service has a very good record of implementing some of this stuff; when pension credit came in, it was done in a way that got very high marks from the National Audit Office, as I recall. So it may be that everything is going to be fine, but if the national insurance records are not all clean data then we could be facing some serious difficulties in delivering the payment of pensions on time. There are other operational matters that I am sure are concerning people at Longbenton in Newcastle, as they should be.

Speaking for myself, I would be very pleased to get some kind of assurance at some stage in Committee that with regard to this huge and significant change, affecting a number of very vulnerable households, the department, having regard to the recent reductions in staff and all the other matters, is in place to be able to deliver this efficiently and on time in the way that is proposed.

[Baroness Sherlock (Lab)]

My Lords, in speaking to Amendments 1 and 2, I look forward to a productive time in Grand Committee. I assure the Minister that there will be cross-party consensus over the direction of travel; this very much carries on the direction that Labour took in government, and I look forward to being able to debate the detail. This first group has already highlighted a number of the issues that we are going to want to explore over the next few weeks. The point about cost made by the noble Lord, Lord Flight, and my noble friend Lady Hollis is an important one, and I hope that the Minister will be able to give us an indication of both the cost of bringing all these people into the system but also the cost drivers that might help us to understand better my noble friend’s point. If he could cost her ingenious scheme before we got to the end of this stage of the Bill, that would also be very helpful.

The point made by the noble Lord, Lord Kirkwood, about operational issues is going to become very important. There are amendments later on in which we will begin to explore how the department will communicate with people, and that will surface many of those issues. The Minister may want to be prepared before we get to that stage.

I, too, have heard concerns from all kinds of people. I know that Age Concern has been very worried; it has been getting letters, e-mails and phone calls from people who are anxious about the fact that they will not get this new pension that they have read so much about. One of the requirements on the Government from a very early point is going to be to try to manage their communication better, as I will say later on when we come to discuss information. The Select Committee found a huge amount of confusion among the public about who would get what and when. It is not surprising, therefore, that people are as anxious as they are.

Will the Minister reassure the Committee that the Government are alive to the concerns of those who have already reached state pension age or will do so before implementation, and will carry on listening? Will they consider the impact on those pensioners as the system is brought in? Will the Government, maybe at the next Committee day, take the opportunity to explain to us the impact of the new amendments tabled in the wake of the autumn Statement? That could be helpful, and we could look at it later this week.

Will the Minister help the Committee to reflect on the position of those who retire before implementation on modest incomes? Will he clarify that those who have saved with the second state pension or its predecessors will find that any amount they get in future which is above the single-tier pension is in fact uprated only by CPI? There is a perception that everybody before the transition gets one thing and everybody after it gets another, when in fact, as we will unfold, it is going to be a lot more complicated than that.

Is the Minister concerned at all about the distributional impact for those in that area of modest earnings? He will know that S2P is distributive because it treats anyone earning between the lower earnings limit of £5,668 and the lower earnings threshold of £15,000 as though they earn £15,000. That distributive element is quite important in protecting those on modest incomes and making sure that they can save for the future.

--- Later in debate ---

Therefore, there will still be inequalities in the existing system because of the historic situation with women in the workplace taking time off as primary carers or for childcare and not receiving credits until the previous Government brought in changes to provide credits for that sort of situation. However, even under the changes brought about by the previous Labour Government, it would have taken until 2020 for women to receive outcomes from the full basic state pension equivalent to those for men. As far as the state second pension is concerned, it would have taken until 2050. When you bring about these sorts of changes, it is always difficult to decide at what stage they should be brought in, but it seems reasonable to do so at the date that the pension changes for those people who are not currently in receipt of the existing state pension.

[Lord Kirkwood of Kirkhope]

My Lords, I wish to comment briefly on this group of amendments as much as anything to apologise for the fact that I should have declared an interest earlier. I am the chairman of the General Medical Council superannuation fund, as declared in the register of interests.

This is an important debate. We are all very familiar with the unintended consequences of different parts of the system affecting people in a way that might not have been fully appreciated, and I want to look carefully at what the noble Baroness, Lady Hollis, has said. However, on a more strategic basis relating to the policy contained in the Bill, no one is denied any accrued rights, and that is a quintessentially important protection in provision. I was concerned that that was not the case but the foundation calculation is based on actuarial calculations with which we are all familiar within the basic state pension. Therefore, of course we need to look at some of these anomalies, and that is what this Committee is for.

In passing, the debates in the other place have all been based on this being a nil-cost reform within its own terms. However, my position is that that does not take account of the substantial savings that the Government will make over a very long period. For my money, I am willing to look beyond the self-contained envelope if the case is made properly, but, for me, the absolutely important and cardinal thing is that accrued rights have been protected.

Amendment 4, in the name of the noble Lord, Lord McKenzie, is very important and well crafted but my real reason for speaking to it is that I think that everybody should be written to. Everybody who is subjected to this change should get a letter from the Pension Service, although obviously that cannot happen until Royal Assent and other mechanics have taken place. I was grateful for the very full answer earlier from the Minister, and I shall study it with great interest. That is the very least that is required. My noble friend Lord Paddick is absolutely correct that there is confusion. We are all slightly finding our way through some of these policy and operational matters. Within the terms of Amendment 4 as it is currently cast, I do not think it is unreasonable to ask for individual letters looking at the foundation costs and calculations that apply to each individual so that everybody knows where they are before this policy takes shape.

[Lord Freud]

My Lords, these amendments centre on the group of women who will receive a state pension under the existing system, while men born on the same day as them may be eligible for a single-tier pension. We recognise that people are concerned about this issue and we have already reviewed the position of this group of women. Having looked at the numbers, our analysis shows that about 90% of the women in this group will receive more in state pension and other benefits over the course of their retirement than a man born on the same day as them with the same national insurance record who will be getting a single-tier pension. To be specific, this comparison excludes pension credit but includes savings credit.

The reason is that those women reach state pension age between two and four years before their theoretical twin brothers. Indeed, almost half the group are already drawing their state pension and, on average, will have drawn up to £26,000 before their male twins have begun to draw their pensions. I am excluding from that the unemployed group to which the noble Baroness, Lady Hollis, drew our attention. This group of women were not affected by the Pension Act 2011 pension age changes; their state pension age was set back in 1995. We are increasing pension age to maintain sustainability and fairness between the generations. These interactions with pension credit are inevitable consequences of introducing single tier at a time of unequal pension ages. We do not want to wait until late 2018, when pension ages will have equalised, before introducing single tier.

In addition, being a single-tier pensioner, especially in the early years, does not necessarily mean people receiving a full single-tier pension. Under the current system, the median average entitlement for the women in this group is projected to be £125 per week. A similar valuation based on single-tier rules results in a figure of £131 per week—a difference of £6. These are median averages; about half the group would see no change in their entitlement at all. To pick up the point made by my noble friend Lord Paddick, these women have benefited from the triple lock. Basic state pension will be £8 higher per week in 2014-15 than if their pensions had been uprated by earnings since the start of this Parliament. Almost half these women already drawing their state pension are benefiting from the triple lock.

It is often assumed that the new system will simply be more generous than the current system but, as the Committee will be aware, and as we will discuss in depth later, that is not necessarily the case. We will put in place a minimum qualifying period and close access to the savings credit. We will also reduce the deferral increment rates and cease the ability to derive pension from a spouse’s record. Many people will gain from single tier but there are those who will receive less, compared to the current rules. In response to the questions on costings from the noble Baroness, Lady Sherlock, we assume that these women could choose the system that is better for them, although that is not necessarily an easy choice. However, that is the basis on which we have got to those particular costings.

Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013

Lord Kirkwood of Kirkhope Excerpts

Monday 21st October 2013 Lords Chamber

[Baroness Hollis of Heigham (Lab)]

My Lords, I will follow the right reverend Prelate the Bishop of Ripon and Leeds in his point about going online. First, I want to say, as others have said, that I very much support universal credit and I am watching with wry horror now the number of people being taken to court for failure to pay the £2 or £2.50 owed on their council tax bills by virtue of the localised council tax system. One wishes that some other parts of the Government had listened to some of the debates that we had in Grand Committee on that subject.

Like others, I am concerned about where some of the cuts are going to fall. In particular, I remain worried by the disincentives to second earners, usually women, in couples whom we want to encourage to go back into the labour market. We increasingly make it less financially worth while that they should do so. I think that is very foolish indeed.

However, my biggest concern has been not just the payment problems, which my noble friends Lady Lister and Lord McKenzie have mentioned, but the assessment issues associated with them. Perhaps I may remind the noble Lord that, as far as I am aware, most of the pathway schemes and experiments so far have been with younger people in urban areas. They are more likely to be IT-literate and more likely to have access to IT facilities. I am chair of a housing association that runs across a rural county. A substantial proportion of my older tenants have no access to WPs. Of those who do, only 14%, when I had my last tenants’ conference, actually used them for financial matters, such as the handling of bank accounts and so on. In order for those other tenants to be able to claim universal credit, they have somehow to access a WP. I have four centres across the county of Norfolk—in King’s Lynn, Norwich, Dereham and Great Yarmouth, and possibly North Walsham, but we will see—in which we will set up local offices. There will be terminals and there will be people to guide people through their applications. That is fine, except that people may have to go on something like a 15-mile bus ride to make their application. Because it is a paperless system, they will not be able to correct any mistakes online. They will not be able to answer any queries about the information. They will not be able to follow it up because they will be back home.

I tried to see whether there was any way I could bring IT facilities to people in that situation. I considered, for example, whether I could provide terminals in people’s homes inexpensively, possibly through a leasing system. Yes, I could, except that those same tenants cannot afford to pay the broadband or dial-up charges. So I cannot put them online in their homes. I then thought about whether I could in some way get them smartphones to give them some online access. No, they cannot afford the charges of smartphones. So they cannot afford to go online. Indeed, in some parts of Norfolk you cannot even get access to broadband, but that is another matter. We have only 90% coverage, so sod the 10%. No doubt they will get their money somehow. None the less, in large parts of Norfolk, there will be a large number of people who have no access to terminals in their home or to a smartphone, who have no computer skills, who have to go into a local centre, and who, if any mistake is made, will have no ability to correct it.

You may think that assessment will be only once a year or once every six months and therefore this is a minor problem compared with the payment issues. I hope that is right, but one of the crucial reasons why the old CSA computer toppled over, which was at the core of the failure of the CSA to deliver the service it should have delivered, was that half of all lone parents had more than 12 changes of circumstances in a year. They were largely associated with changes in childcare at each holiday period because it did not fit the school’s working time or the mother’s work patterns. You can get real-time information from an employer about income, but you cannot get real-time information in the same way for ever-changing childcare bills. That means that that lone parent or that couple will have to reassess, reclaim and adjust their UC online as it is going to be paperless. Will the Minister tell me how I should respond to this? I have hundreds of tenants who at the moment have no IT skills, no access to gaining them, although I am trying to do crash courses where people are willing to take them, no terminals at home, no ability to afford dial up if it were to exist and no access to phones. How are they going to input the information they need to input to get the money they are entitled to? I would be glad of some help on this point.

[Lord Kirkwood of Kirkhope (LD)]

I shall make a short contribution to this important debate. I am grateful to the noble Lord, Lord McKenzie, for introducing it. Using a Motion of Regret is clunky, but this is important. I shall start with a question about parliamentary process. Things have changed since the old days. In my experience of parliamentary change of this kind, Bills were much less far reaching and were implemented over a much shorter timescale. After the six-month period of purdah, Ministers could always explain the unfolding of the regulations that flowed from the primary Act. We are getting to a stage where we are paying more attention to guidance rather than to statutory instruments. Statutory instruments are becoming almost as skeletal as the primary legislation. Therefore, how are parliamentarians able to keep up with what is going on, particularly when this is at least a five-year implementation phase? I think it would be a good trick if the Government could achieve it in a five-year period.

In parenthesis, I want to strengthen the Minister’s hand. Speaking for myself, I am much more interested in getting this universal credit reform right than I am in sticking to any timetable, political or otherwise. I have next to no interest in what will happen in May 2015 compared with this important legislation. It is transformational architecture, but because it is transformational, it is difficult to deliver for reasons that we have heard.

It is not just that it is taking five years to do. It is now intimately engaged with other government departments. HMRC is the prime one, but not the only one. There is also DCLG—is it DCLG or DCLM?

[Baroness Hollis of Heigham]

DCLG.

[Lord Kirkwood of Kirkhope]

Thank you. I am Scottish. Luckily it does not apply to me.

[Baroness Hollis of Heigham]

You are lucky.

[Lord Kirkwood of Kirkhope]

I know.

We have a lot of extra heavy lifting to do to try to make sense of what is going on. If that was not enough, we have for the first time a completely transformational application of ICT technology in digital delivery. All that means that this has to be done slowly and sensitively. I would like to think that the kind of flexibility that the Minister showed in the seminal Committee stage of the 2012 Act is still available to us because if he is not sensitive to the sort of things that are being raised he risks prejudicing public perception of what he is trying to do, as the noble Baroness, Lady Lister, said.

I am absolutely certain that the vast majority of people who will need to take advantage of universal credit in future are literate and have internet access. We know from government research that the penetration of digital technology is increasing and will continue to do so. It is the two lowest deciles of income distribution in terms of household income that I continue to lose sleep about—people who earn less than £10,000 a year. We have been hearing about some of these acute problems and they are just as acute as they were in 2012. I understand that we have to hasten slowly to get this right, but we have to find a better way of informing Parliament about what is going on. I think the next set of detailed guidance that we can expect—my spies tell me and my spies are everywhere—will be in the late summer of 2014 and the next substantial rollout might not be until the spring of 2015. How are we, as parliamentarians, to keep up with what is actually going on? Reading the newspapers is not always helpful because, although they can highlight some of the problems, they do not tell the whole story.

I make a plea to the Minister. Can he think about ways of dealing with this other than Motions of Regret? It is a game we can all play, and we could do it every month if we had to, but I think there is a more grown-up way of accepting that, for the next two years and, indeed, for the rest of this Parliament, there will be periods when the Government could find a parliamentary opportunity for us to have a sensible discussion, be given reassurances and ask these detailed questions which are so important, not just to us, but to the people outside.

I agree with everything that has been said about the monthly payment, particularly by the noble Baroness, Lady Lister. That is probably my biggest worry. I know that she has more expertise than I about the split payments, but I listened carefully to what she had to say and I think that her questions deserve answers. The additional problem of behavioural change, on top of everything else, is something that is too dangerous, and I wish we were not doing it at all. Maybe we could do it in future, when this gets straightened out, but it is too risky to do it in this way.

My final point before I sit down, because it is late, is that the SSAC has done a very good job. I still remember the long look I got down the ministerial nose when I suggested this at the beginning. This was my idea, because I thought it would help. Luckily, the Minister eventually took my advice. The SSAC has done a remarkable job and I hope that the Minister will continue to involve it. Although it does not have any statutory control over guidance, if we get to the position where guidance is needed, such as in the definition of what is vulnerable, and we cannot get that clear with the stakeholders that the SSAC knows and works with so well, then we will be lost when this gets implemented. I hope that the Minister will give us an assurance that the SSAC will have a key and continuing role in this evaluation and monitoring process. Otherwise, it will be more difficult to achieve successfully.

Queen’s Speech

Lord Kirkwood of Kirkhope Excerpts

Tuesday 14th May 2013 Lords Chamber

[Lord Kirkwood of Kirkhope]

My Lords, it is a real pleasure to follow the noble Lord, Lord Morris of Handsworth. I share his analysis in his powerful speech. I certainly subscribe to his view that we have yet to bottom out the full extent of the necessary changes to public policy to deal with the significant impact of longevity, not just in the areas to which he alluded in his excellent speech but more widely across government. In my brief remarks this evening, I also follow him on the need to look after low-income households, whether they are elderly or of working age.

I have enjoyed this debate. I have listened with care. I was interested in the remarks of the noble Baroness, Lady Armstrong of Hill Top, with which I largely agreed. The noble Baronesses, Lady Drake and Lady Hollis, both made powerful speeches about the legislation in the Queen’s Speech with which I will be most directly involved relating to pensions and carer issues.

The context of this Queen’s Speech, the political atmosphere in which we are considering these measures, is different from anything that I have seen in my political experience, and I have been around for a long while—I am not as young as I look, but that is not to mention how I feel. There is a lack of understanding of the pressures that the bottom 15% of households in our income distribution are feeling. They are severely distressed in a way that is likely to be with us for some time: longer than many of us would wish. We need to do something about that. I was recently reading some figures that demonstrated that graphically. Comparing household income internationally, the ONS discovered that the UK has dropped from fifth place in 2005 to 12th place in 2011, so it is under stress in a way that will affect all dimensions of public policy, in the Queen’s Speech and elsewhere. Welfare reform was addressed in the Welfare Reform Act 2012, but it will still cast its shadow over the coming year and beyond.

The noble Baroness, Lady Armstrong, made a point with which I particularly agreed. There is a different tone in the public mood about social protection. I have never experienced it to be quite so negative and we cannot ignore it. Again, I was looking at some figures on this, which show that 20 years ago 15% of the public thought that people lived in need because of laziness or lack of willpower; now, it is 23%. We have to be aware of that. Now, it is difficult to pass legislation to deal with such things, but it would be quite wrong not to take care to appreciate that the circumstances in which we are introducing this legislation are substantially different.

I want to say a word about housing, particularly new low-income housing. I know there are other colleagues in here who have much better experience of housing associations and I am looking forward to hearing what the noble Lord, Lord Best, says. However, I have come to the conclusion that the most important thing in the welfare domain is trying to deal long-term with housing benefit. Reflecting on and reading some of the background, I have also concluded that the only way sensibly to do that in the long term is to develop housing policy, particularly the construction of new low-income housing. We need to encourage the Government to adopt a cross-departmental strategy to deal with this. It should also be cross-country because we need to be conscious of the fact that other constituent nations of the United Kingdom are dealing with these issues—and in some cases dealing with them quite differently. We need to make sure that co-ordination is maintained.

We also need to do that with a much closer association and a more trusting relationship with local authorities because they can, and must, play a more constructive role in trying to address some of the problems. We are simply not building enough new affordable housing. I think that the National Housing Federation and others have identified the gap as being something in the region of 240,000 units each year, so the conflict between the demand and the supply is really quite substantial.

I am not saying that the Government are not taking steps, because I know that they are. Indeed, the noble Lord, Lord Best, with help from some of his friends, managed to get the noble Lord, Lord Freud, to undertake a review of some consequences of the Welfare Reform Bill that related to housing benefit changes and the like. We might get access to some of these details and statistics in the not-too-distant future, and I look forward to looking at them carefully and discussing them. This is perhaps more a matter for the comprehensive spending review which we will see in July because then we will see the spending profile that the Government have in mind, although that might take us only into the first year of the new Parliament. My real concern is that if we leave the adoption of a more coherent, cross-departmental framework in this very important area, it will be 2016 before we get started. That will be unforgivable and we will be wasting a lot of time that we do not have.

There are some obvious benefits in adopting a comprehensive new strategy for new build for low-cost housing. There is an economic case and an employment mobility case. It increases disposable income for low-income families if they have lower rent costs. More than anything else, it has a political dimension as well because ever lengthening waiting lists for housing are a major cause of concern. It is one of the reasons why the electorate is in such an unhappy situation, to put it at its mildest. If we could demonstrate some progress in reducing waiting lists, even though it cannot be done immediately, that would be beneficial.

There are lots of things that we really need to do. They need to be done in a joined-up way and to embrace future levels of capital investment and rent levels as well as housing benefit costs, but we have to do this in a way that looks as if we are addressing the problem seriously. The evidence is that we are not doing that.

I shall end with the surprising statement that I came across the other day which demonstrates that currently for every pound the Government spend on housing, 95p goes on housing benefit and 5p goes on new build. That is completely the wrong way round, and we have to use the next year to do as much as we can to redress that balance and make that change a positive reality in the not-too-distant future.

Jobseekers (Back to Work Schemes) Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 25th March 2013 Lords Chamber

[Baroness Lister of Burtersett]

I thank my noble friend, particularly as I am quoting from a lone mother who is very upset. She says:

“The sanction is over a missed Thursday 9am appointment. My next appointment is 3pm on a Monday. My advisor is well aware that my son is at school for 8.50 am, it takes 25 minutes to get to WP, I collect my son at 3.15 pm yet I’m expected to attend at 3pm for 30 mins. So I’ll be taking him out of school at 2.30pm. I want to help him do well at school, attendance is a high priority of mine”.

Here we have the threat of sanctions demoralising a lone mother who is trying to do the right thing by her son. How making her feel useless and overwhelmed is going to help her in her jobseeking is a mystery to me.

As I have said, I have not been able to do full justice to the briefing that SPAN sent me. I therefore suggest that it be invited to submit evidence to the review established under Clause 2. Indeed, what provision will be made to enable outside organisations with experience of what is happening on the ground to feed evidence into the review?

Of course, the public sector equality duty is not just about lone parents. An international review of the evidence about the operation of sanctions within conditional benefit systems, conducted for the Joseph Rowntree Foundation a couple of years or so ago, warned that evidence suggests that the administration of sanctions is not rational and equitable. The studies conducted in the US have identified racial bias in the imposition of sanctions.

At Second Reading the Minister emphasised that,

“we are trying to design a much more flexible welfare system in which we individualise responses”.—[Official Report, 21/3/13; col. 753.]

It is difficult to quarrel with flexibility and individualisation, but the downside is that they leave greater scope for discrimination, in the negative sense of the term, and they can undermine rights. It is therefore all the more important that the sanctions review allows us to judge whether the administration of sanctions is indeed rational, equitable and consistent with the public sector equality duty.

The Government’s willingness to discuss the terms of reference of the sanctions review with the Opposition is, of course, welcome. I hope therefore that the Minister will accept Amendments 4 and 5, in the interests of ensuring that the review is as thorough and informative as it needs to be, and that the Government will express a willingness to take evidence from organisations on the ground.

[Lord Kirkwood of Kirkhope]

My Lords, as far as I am concerned this is an important debate on an important amendment and, indeed, it is an important suggestion that we should have a review of the sanctions regime. Most colleagues already know this, but I am a non-executive, non-remunerated director of the Wise Group, an intermediate labour market provider in Glasgow that is subcontracted to the Work Programme, so I have had experience of some of these matters. There are difficulties that need to be ironed out and I hope that this review will take the opportunity to do just that.

I strongly urge my noble friend on the Front Bench to pay careful attention to what is being said, although I think that the amendment is a little ad longam to put in a Bill. I am with the noble Lord, Lord McKenzie, in spirit, but I am not sure that the amendment is necessary. I think that we get the point that he is trying to make—I certainly do.

To the need for a review in this amendment I would add the question of the costs, which have been calculated as a maximum of £130 million. At the risk of being pedantic at this time of night—and I apologise to the House—I refer the Minister to page 6 of the impact assessment and Annexe A on the methodology of the calculation. Paragraph 18 describes the total value of the money allegedly at stake in this Bill. Frankly, I cannot understand it, but that may just be the hour of the morning. It states that the total value equals the number of sanctions multiplied by the number of weeks, although, in passing, I have to say that sanctions are variable in weeks—they are not all fixed-week sanctions, so I do not know quite how you can multiply by a number of weeks when they vary. That is multiplied by the percentage of cases of under-25s multiplied by the rate for under-25s and the percentage of cases of over-25s multiplied by the rate for over-25s. However, the final clause puzzles me, because that total value is,

“multiplied by reduction due to successful appeals and hardship”.

You have a multiplier multiplied by a reduction. Either my arithmetic is not good, which it is not, or the language in that paragraph is wrong. If the language in that paragraph is wrong, I would like to be told, because that is what we are being invited to consider as the potential cost to the taxpayer as a result of these changes. If the impact assessment has not got the methodology of the calculation correct, it would be good to know.

My other point is about recompliance. My experience in the Wise Group is that although many of these sanctions are originally set at, say, 26 weeks, the participant in the programme gets the message that they are going to lose out rather quickly and they come back into compliance. They are therefore reduced from a 26-week penalty to a four-week penalty as a matter of course. I do not know to what extent that is factored into the calculation of the total value. There are a number of methodological problems that I do not understand. One of the things that this report should do—I am not suggesting for a moment that we need answers to all these things this evening—is to look carefully at exactly what the total amount at stake in this Bill is. We look forward to getting that confirmed one way or the other.

Briefly, my view is that the Work Programme was introduced with indecent haste. The flexible New Deal programme was in the middle of its operation and in 2010, in a very short space of time, everything was changed. I understand the need to take away everything that went before, but everyone I now talk to tells me that the loss of corporate knowledge is a difficulty in working with the department. A lot of serious and expert people are no longer in the positions that they had. Bringing this programme in so early and losing such a lot of corporate knowledge over a short space of time is bound to lead to symptoms and consequences of this kind.

Part of the problem generated by these sanctions is that the notices that are given to participants in these programmes are often handled not by prime contractors but by subcontractors. I do not believe that some of them are authorised by the Secretary of State as they should be under the Jobseekers Act 1995, which is part of the reason why some of these notices are not detailed and informative. Therefore, it does not surprise me that the court took the view that it did. That is something that this review should be looking at as well.

Finally, one thing that I am clear about from my Wise Group experience is that a lot of participants in these courses do not appeal against sanctions because they cannot do without the benefit for the duration of the pending appeal—it is a serious loss of money to them. I hope that this will be investigated in the review, but we really need to look at whether the sanctions are being properly scrutinised in terms of the numbers who go to appeal. I think that people just throw in their hand because they cannot afford to do anything else.

In conclusion, there is a lot of important work to be done. I hope that the review will be serious in undertaking that work and making the results and conclusions available to the rest of us so that we can get this sanctions regime better adjusted for future use in the jobseeker’s allowance regime.