Welfare Reform and Work Bill

Debate between Lord Kirkwood of Kirkhope and Baroness Hollis of Heigham

Monday 14th December 2015 Lords Chamber

[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?

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

Debate between Lord Kirkwood of Kirkhope and Baroness Hollis of Heigham

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.

Welfare Benefits Up-rating Bill

Debate between Lord Kirkwood of Kirkhope and Baroness Hollis of Heigham

Monday 25th February 2013 Lords Chamber

[Lord Kirkwood of Kirkhope]

I am happy to support these amendments and have added my name to most of them. The House owes a debt of gratitude to the right reverend Prelate the Bishop of Leicester for raising these points. I particularly support his concerns about lone parents. Over the whole systematic process of change, my concerns are getting greater and greater about the compounding effect of all these changes that we see in the social protection available in the United Kingdom. Lone parents, who are mainly women, are struggling already, and we need to watch their situation with great concern in future.

My heart absolutely sank when I saw that this Bill was being applied to universal credit, because universal credit should be the future; it is the architecture around which we as a country should and must have serious consideration about provision for low-income households. We need to have a discussion with people such as my noble friend Lord Forsyth of Drumlean as well, between now and the next election. I hope that there will be a grown-up discussion about how the United Kingdom, as a poorer country, accommodates some of these new pressures, and I am willing to engage in that to the best of my ability. However, what is wrong about applying these two years of locked-down 1% increases is that they risk prejudicing the whole new future, as I see it, of how we cope.

In my experience, the administrative cuts in the health service prejudiced the view of a lot of people towards some of the NHS reforms. My real fear is that people will not know that the cuts are being introduced by the uprating Bill and will think, in the early years of universal credit, when they are transitioned across into the new system, that they are being sold a pup. That will potentially damage the public’s understanding of what universal credit is about and that is a real shame. I understand perfectly well all the arguments that the noble Lord, Lord Forsyth, makes, and we have to put up with them in the best way we can, but we should have isolated universal credit for the reasons that I have explained.

Further, I do not think that we know how universal credit will work out when it is in steady state, and it will take a long time to get there. I come back to the costs that will be saved by applying this uprating Bill to universal credit because I am a bit confused about exactly what the Government think they are going to save. Therefore, I make my first complaint—it is another moan—with conviction. The noble Lord, Lord Freud, bless him, has worked very hard to try to get universal credit to stand up. I read a worrying story in the Financial Times, which said that the self-employed have not yet been told that there is a real-time HMRC system heading in their direction. Not many of them know about it. That is more than slightly worrying—it is very worrying, because the computer system is essential to that measure working sensibly. However, we must try to do the best we can to make it work in future.

Secondly—again, the right reverend Prelate was right to give this priority—one of the best elements of universal credit is the way it deals with what used to be known in the old language as income disregard. Some of us have fought for years to do something constructive about income disregard. It is a very intractable problem and universal credit has given us an opportunity to get hold of that and provide incentives to get into work. Universal credit does that, but the first thing that the Government do after bringing in this new progressive reform is to cap it at 1%. How that is supposed to meld with everything else that has been done in connection with the Work Programme makes no sense to me. It will save relatively small amounts of money in terms of the big picture savings that the Government are trying to lock in, but for the life of me it seems a counterproductive, silly cut to introduce and it compounds my first point in that it makes the universal credit system look worse than it is.

The right reverend Prelate the Bishop of Leicester made eloquent and important points about child poverty targets. I concur with everything that he said, so I do not need to elaborate on that. My final point is about costs because I am struggling to understand the savings that have been alluded to. I do not expect the Minister to be able to do this off the top of her head but it would be helpful to me if, before Report, I could be told what the universal credit cost savings are in this measure because I cannot make any sense of the impact assessment. I agree with the noble Baroness, Lady Hollis, that it is—

[Baroness Hollis of Heigham]

Perfunctory.

[Lord Kirkwood of Kirkhope]

Indeed. I am looking at the Treasury Autumn Statement 2012, Table 2.1, which has a category headed, “Exchequer savings resulting from 1% uprating of benefits and tax credits”. This is over the three years, not just the two years in the Bill. The table also has a category headed, “Universal Credit: finalise disregards and increase by 1% for two years from 2014-15”. The figure given suggests that the saving for 2015-16 will be £640 million. However, my honourable friend Steve Webb, in a Written Answer to Stephen Timms on 13 February, identified universal credit additional savings as £20 million in 2014-15, £100 million in 2015-16 and £150 million in 2016-17. I am not sure how these figures relate to one another. I may be misreading the statistics and the tables may be drawn up using different bases, but between now and Report I would like to understand how these figures are worked out.

As the noble Baroness, Lady Hollis, said, the assumptions about how many people will be translated on to universal credit are best guesses, to put it mildly. I think the roll-out programme will take much longer, for the reasons that I explained earlier, and the story in the Financial Times compounds my anxieties in this regard. I think the figures that the right reverend Prelate gave of 10% of claimants being on universal credit by 2014-15 and 30% by 2015-16 are ambitious, to put it mildly, so can we have some greater clarity?

This is an important Bill. I understand the significance of the situation in which the Government find themselves. If I did not believe that before this weekend, all the financial circumstances of the past few days have confirmed the difficulty of the situation. However, before Report, we must try to get a better fix, in particular on the savings related to the universal credit inclusion in the Bill, because it is unclear to me. It is important and, from where I am sitting at the moment, I do not think that the savings are worth the candle. I would be much happier leaving universal credit out of the Bill. Let it be the future and let us all work on it, try to protect it and build on it in the best way we can. The Bill is a retrograde step as it affects universal credit, and I support these amendments for that reason.

Housing Benefit (Amendment) Regulations 2012

Debate between Lord Kirkwood of Kirkhope and Baroness Hollis of Heigham

Monday 15th October 2012 Grand Committee

[Lord Kirkwood of Kirkhope]

My Lords, perhaps I may make a brief intervention at this stage. It is right not to dredge back over the painful territory of the policy intent, because we discussed it at great length in another context earlier in the year. We should use our time this afternoon to look at some of the detailed implementation questions that arise from the policy. Actually, we should be thinking about getting a housing policy for the United Kingdom that is worthy of the name when trying to sort some of this out.

People have been asking me some of the practical questions about this and I just do not know the answers. I am nervous that we are getting towards a single implementation date, 1 April 2013, when there will remain a great deal of uncertainty on the back of the substantial change. If people get substantial change and are not prepared for it, they are even more badly affected by it. We must avoid that at all stages, if we can.

Has the department any confidence in working with local authorities and local housing associations? I was interested to hear the Minister talk about the work done in Liverpool and the Midlands on the home swap direct scheme. That is entirely healthy and welcome. However, if we had taken this at a slower pace and worked with local authorities and local housing associations across the length and breadth of the United Kingdom, a lot of that would have been in place before 1 April. I have no confidence, even if everyone works hard—and I am sure that they are working hard—that we will get proper home swap direct-type arrangements in place across the United Kingdom.

Are there sufficient co-ordination mechanisms in place between the DWP and the other constituent nations of the United Kingdom—Scotland, Wales and Northern Ireland? Presumably, they are making their own arrangements in their own ways. Is the department confident that there is a proper exchange of information and swap of best practice, and that the circumstances north of the border, and in Wales and Northern Ireland, will be as fit for purpose as they can be, come 1 April next year? That is a very important question.

Discretionary housing payment distribution is an important element of that. I understand the Minister to have just said that decisions will be taken later about how it is to be rolled out. However, I say to him that only last week someone in a local authority tenancy came to me. He is in a two-bedroom property, had some adaptations made to the premises and signed a letter of undertaking to the local authority to say that he would stay in that property for a one-year or two-year period. Therefore, he is locked into that tenancy and cannot move. He was prepared in principle to consider moving but he is now caught both ways.

That is just one example of, I am sure, many detailed questions that are arising which would have been better addressed if we had had a more measured transitional phase in the policy’s implementation. Following our important debates on the Bill earlier in the year—it is now an Act—does the department have any further research on the availability of single and two-bedroom properties? Is the map any clearer as regards where the accessibility lies so that people can make a decision about whether there are appropriate smaller properties into which to downsize? It would be reassuring to know that some work had been done and that people were being helped to understand where to start looking for some of these properties.

I concur with what the noble Lord, Lord McKenzie, said about the disability issue. When looking at the impact assessment and the briefing that we received last week, I missed the significance of that. I am not a disability expert; a lot of people know a lot more than I do about this technical and politically very important problem. I was taken aback by the extent to which the client group will be affected by this policy change. I did not know that. I wish that I had known it during the passage of the Bill.

[Baroness Hollis of Heigham]

The figure is two-thirds.

[Lord Kirkwood of Kirkhope]

Yes, it is two-thirds. I would not have guessed that. That is new and it is deeply concerning. I hope that the Minister will help us to understand what is being done about that.

During the passage of the Bill, the noble Baroness, Lady Hollis, kept referring to rurality. Another point that was driven home to me over the summer, coming from south-east Scotland, is that people are panicking about where they should begin to look for appropriately sized accommodation if they are to avoid the penalties that these policy changes introduce. There are no real alternatives in many cases, which is a problem.

A lot of us are relying heavily on the review. I was reassured that the Minister committed himself to conduct a proper review working with the noble Lord, Lord Best. I think that he made that commitment on his own initiative. Therefore, we are entitled to be confident about the review. However, if the review shows that the policy intent has not been delivered in some of these important areas, which I am sure are causing concern to other Members of the Committee as well as to the noble Lord, Lord McKenzie, and me, I would like him to reassure me that action will follow as a result of the review, so that this is not an academic piece of work that says, “On the one hand or on the other hand”, but will say, “Actually, we did not think that would happen. The culture has not changed in the way that we expected it would and therefore we are going to do something different and perhaps even change the policy”.

Of course, housing benefit needs to be constrained; it is a very big number and it is getting bigger. However, I think that we are grabbing at this policy. Irrespective of whether you think that the policy is right or wrong, the process is being carried out far too fast. Doing it all on one day—1 April next year—is a very unsafe thing to do in my view. I hope that we get this right and that the review will lead to some amelioration of some of the problems that are bound to come out of the woodwork when these policy changes are implemented.

Welfare Reform Bill

Debate between Lord Kirkwood of Kirkhope and Baroness Hollis of Heigham

Wednesday 11th January 2012 Lords Chamber

[Baroness Hollis of Heigham]

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

[Lord Kirkwood of Kirkhope]

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

Welfare Reform Bill

Debate between Lord Kirkwood of Kirkhope and Baroness Hollis of Heigham

Monday 28th November 2011 Grand Committee

[Lord Kirkwood of Kirkhope]

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

[Baroness Hollis of Heigham]

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

Welfare Reform Bill

Debate between Lord Kirkwood of Kirkhope and Baroness Hollis of Heigham

Monday 21st November 2011 Grand Committee

[Lord Kirkwood of Kirkhope]

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

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

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

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

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

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

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

“determined by reference to estimated average earnings”,

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

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

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

[Baroness Hollis of Heigham]

It is putative.

[Lord Kirkwood of Kirkhope]

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

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

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

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

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

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

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