25th Anniversary of the World Wide Web

Lord Knight of Weymouth Excerpts

Thursday 16th January 2014 Lords Chamber

[Lord Knight of Weymouth (Lab)]

My Lords, last night, looking at the time limit for today, I tweeted in despair:

“Tomorrow I speak in @Marthalanefox’s Lords debate in 25th birthday of World Wide Web. Time limit of 3 minutes! What’s most important to say?”.

Adam replied from New York:

“That you can simply ask the ‘common folk’ what to spend your 3 minutes saying, just by tweeting the question!”.

So that was that. I will use my time to tell you what my social media followers on the world wide web wanted me to say. I must first refer the House to my entry in the register, in particular as chair of the Tinder Foundation. Thanks to successive government funding, we have helped 1.2 million people to get online since 2010 through UK online centres.

I turn back to Twitter and Facebook, starting with Tom Watson MP:

“Just say: Thanks Tim!”.

Ed Balls just said:

“@edballs”.

Then Councillor Warren Morgan said:

“The web has connected and empowered, informed and democratised, tackled isolation, built new generations of businesses, spread ideas”.

Susan had the freedom of Facebook to say more:

“Connections through the internet enable ordinary people in different countries to communicate directly with each other, to understand each other better ... It also means lots of people who would otherwise be isolated—whether geographically or because of disability or because they are carers—are able to keep their minds and spirits alive. Politically, it's wonderful. More people can be engaged in trying to influence the decisions a country makes”.

Louise and Peter had a more nuanced view:

“The web is a powerful tool that's used for good and ill. With the freedom the WWW gives comes greater personal responsibility resting on the shoulders of those in power”.

Stephen Heppell asked:

“Why isn’t Tim on a banknote yet?”.

He also wants kids to own their learning data and to have education discounts on connectivity for learners. Ruth agreed and added:

“Plus maybe something about digital exclusion—geographically (it’s still APPALLING in some parts of the country) and demographically (viz poverty). And you ought to celebrate the richness of life brought through cat videos. Probably”.

Helen agreed with Ruth and said:

“Make sure you mention how handy it is for sharing cat videos”.

Emma Mulqueeny just posted another video of her kitten, Grape.

There were also several who celebrated the freedom of the web but worried about who controls it. That was best summed up by Mark, William and Adam who said:

“This will only be persistent as a benefit if we actively seek to protect the neutrality of the network. 25 years can be about celebrating the past but absolutely also needs to be a call for vigilance in developing further an equitable future. We need to address the surveillance problem. And we need personal control over personal data. The freedom and anonymity of the web which is a vital part of its power and vitality is being eaten away by govts and big corps. If this continues a lot of what makes it important will vanish. Sorry to sound like a liberal”.

I have curated all the comments on Storify but will conclude by quoting Owen:

“The web is the single most powerful thing that mankind has ever created but, like most other things, it can be used for good or for evil purposes. What we have to master is giving freedom to the good whilst curbing the evil”.

Finally, from me, thanks Tim for your gift to everyone. You gave it for free to keep it universal. As a result, we all have to change how we do things to make the most of it, for everyone.

Housing: Under-Occupancy Charge

Lord Knight of Weymouth Excerpts

Wednesday 9th October 2013 Lords Chamber

Tabled by

[Lord Knight of Weymouth]

To ask Her Majesty’s Government whether they have any plans to suspend the under-occupancy charge.

[Baroness Hollis of Heigham (Lab)]

My Lords, on behalf of my noble friend Lord Knight of Weymouth, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

Employment: Work Programme

Lord Knight of Weymouth Excerpts

Wednesday 29th February 2012 Lords Chamber

[Lord Freud]

My Lords, the way that we are trying to reduce the cherry picking, which has been natural in all of the programmes that have been introduced, is to try to fine-tune the financing so that providers are incentivised to help the hardest to help. That is why providers can earn up to £14,000 to help the very hardest to help. If we see problems developing, in that we have not priced accurately, we will need to look at pricing structures, because that is the way to solve the problem.

[Lord Knight of Weymouth]

My Lords, the Department for Work and Pensions says that, of those referred on to the Work Programme—those unemployed for more than 12 months—30 per cent would get a job anyway, regardless of any intervention. I gather that the minimum contract performance on the Work Programme is to get 33 per cent into work. Therefore, for a difference of only 3 per cent, they can start making a profit. Is it not therefore vital that there is full disclosure region by region or contractor by contractor in real time—that is what is wanted from employers for universal credit—so that we can make sure that those contractors are doing a lot better than a paltry 3 per cent?

[Lord Freud]

My Lords, this is designed so that people are investing their own money, which they will get back when they start making a return above what would have happened anyway—that is, in the jargon, above the dead weight. We will produce statistics to national statistics standards. Clearly, we can do that only once we can see some results. This is a long-term programme in the sense that you start getting rewards, even your first reward, possibly only after six months of that person being in work. Then you start getting further rewarded as you keep the people in work. The first time we think that it is sensible to have national statistics is around the autumn. That is what that process has come up with. I assure the noble Lord that I am looking forward a lot to showing noble Lords what those figures say. From what I am hearing anecdotally, I think that I shall be feeling very smug at that point.

Universal Credit

Lord Knight of Weymouth Excerpts

Wednesday 21st December 2011 Lords Chamber

[Lord Freud]

My Lords, there are two processes: the assurance of the RTI programme and that of the universal credit programme. The RTI programme went through its latest assurance rather earlier than the UC assurance process, which was reviewed between 9 and 11 November. The review said that the engagement between the DWP and HMRC represented an exemplar of how these things should be done. I am looking through this project very closely, as noble Lords can imagine, and one area that I am pretty confident about is that the relationship between these two departments is right and working well.

[Lord Knight of Weymouth]

My Lords, for the universal credit system to work, the tax and benefit systems need to be successfully merged, as do the IT systems at the DWP and HMRC. The Minister talks about a good relationship, and he is very happy with his relationship with HMRC. However, can he really give us confidence that HMRC, as an unaccountable ministerial body capable of writing off £25 billion of taxpayers’ money, is going to be able to produce a real-time information system that talks seamlessly to the DWP IT system so that universal credit can work?

[Lord Freud]

My Lords, an extremely thorough process of review and assurance is taking place on a rolling six-month basis, and it is clearly a process that we rely on to monitor from the outside whether we are doing the right things. Currently, as I said, both these programmes are on time and on budget. You cannot predict the future but that is a very good, solid base on which to look into the matter.

Welfare Reform Bill

Lord Knight of Weymouth Excerpts

Monday 12th December 2011 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, we take the position of carers very seriously and, as the noble Baroness, Lady Hayter, pointed out, today I was very pleased to write a letter, as I had promised, about how the passporting arrangements from PIP would go in and how all of PIP passports into carer’s allowance. I have to apologise—I promised that letter three days before the first day of Report and I think that I am three days late. I hope my apology will be accepted. There was informal information going out, and so it was not too much of a surprise.

The noble Baroness, Lady Lister, asked me whether I was confused. This is an important point, because I sat and worked very hard on this element of carer’s allowance. Two things are happening here. The caring community—the carers—are very keen to have an allowance which is not means-tested, and which recognises their effort and work. I understand that. It is not a question of means-testing it. However, there is a cliff off which the whole allowance falls away, when the carers earn a certain amount. Clearly, that undermines considerably their incentive to work. Therefore, as we were refining the structure for carers, we looked to create, essentially, an additional element in universal credit on top of carer’s allowance, which in practice does not involve a cliff fall in the same way. It is probably easier for me to send a letter on this. I need to clarify this, particularly if the carers’ organisations are confused, as the noble Baroness has said. However, the structure is designed to get rid of these awkward “drop offs” and to be smoother. In fact, noble Lords will be shocked to know that I found a bit of money to put into the system to allow that. If I am not getting credit for that—and I need it—I shall try to earn it by writing a letter spelling out how that has worked.

[Lord Knight of Weymouth]

I am terribly grateful to the Minister. Could he tell us where he found the money?

[Lord Freud]

Finding money is a black art. I need say no more. If I were to reveal any more, it would just rebound negatively on me in every direction. Anyway, that is what has happened. I shall try to spell that out in a letter to the noble Baroness, Lady Bakewell. It is vital that the earnings disregards in universal credit are simpler than those in the current system, in order to achieve the core aim of making the system clear both to claimants and to administrators.

The earnings disregards in universal credit for carers who are in a couple, lone parents or themselves disabled will be more generous than the disregards in the current benefit system, thus enhancing work incentives for the great majority. As we discussed in Grand Committee, I have sent examples to the noble Baroness, Lady Hollis, and more widely, which clearly demonstrate the substantial gains at most earnings levels. I am deeply impressed by the example cited by the noble Baroness, Lady Bakewell, which got to within 3p of the worst possible point. There is a narrow band of between two and five hours where the absolute maximum you could lose is £4.25 a week. I think that the example used by the noble Baroness was £4.22, so she nearly hit it on the nose. I do not know how she managed to miss it by 3p. But the structure means that as you move up, there are some substantial gains. If you move off the small area of two to five hours, there are some big gains. At eight hours of work a week, a single carer would be over £5 a week better off under universal credit, and at 12 hours they would be nearly £15 better off. That is real money, worth £780 over a year.

It may be that the effect of the system is to drive people off the four-hour rate to the six-hour rate. I do not accept that the number of people in that narrow bracket is 50,000. It simply is not that figure and I do not think there is any reliable estimate of what the number is.

Unemployment: Young People

Lord Knight of Weymouth Excerpts

Wednesday 16th November 2011 Lords Chamber

[Lord Freud]

My Lords, I was very impressed, as I am sure many noble Lords were, with the report by Professor Wolf on what has been going wrong for young people. Her conclusion was that there are four things that young people need: a job, proper educational qualifications, apprenticeships or work experience. This Government are trying to concentrate on really effective solutions for young people.

[Lord Knight of Weymouth]

My Lords, the Government inherited falling youth unemployment, yet this is the eighth consecutive monthly rise in unemployment and precedes the eurozone crisis. This crisis is down to this Government’s decisions to scrap the EMA, to cut post-16 education funding and to scrap the future jobs fund, and an austerity plan that has choked off growth. How bad will it get before the Government realise that you reduce the deficit by growing jobs, thereby cutting the cost of benefits and increasing tax receipts? When will we get a credible jobs plan, or will it take another million youngsters on the scrapheap before the Government finally get it?

[Lord Freud]

My Lords, let me assure you that we get it all right. We have inherited a really poor structural position of youth unemployment—

Welfare Reform Bill

Lord Knight of Weymouth Excerpts

Monday 24th October 2011 Grand Committee

[Baroness Sherlock]

My Lords, I, too, support the aims of this amendment, which are primarily about protecting certain key benefits but also making sure that they are not subject to the benefit cap, which we will come to later. My noble friend Lady Hayter of Kentish Town carefully set out the challenge that the Minister will have in squaring a circle, in making sure that work pays but also dealing with the consequences of a quite important specific provision. I ask the Minister to reflect briefly in his reply on the fact that free school meals, for example, have more than one public policy aim. How does he go about squaring that? They clearly are a means of effectively transferring a benefit that has a cash value to some of the poorest families in the country, but they also have the effect of making a hot or at least good, nutritious, meal available to children within all those poorest families. That feels like a separate and quite specific policy aim. How will he ensure that that policy aim will be achieved within whatever solution he comes up with?

As the Minister will know—and I certainly support the view of his erudition, which is obviously legendary—the evidence of the efficacy of free school meals goes back to the 1960s. If anything, the evidence suggests the extension of breakfast clubs rather than going in the opposite direction. Some noble Lords, perhaps more on this side of the House, may have read the Observer yesterday, in which there was a piece specifically on breakfast clubs. It looked at both, mentioning in passing that one in four school children in the UK are in a position where the only hot meal that they have in the day is their school lunch. It was talking in particular about breakfast clubs. An interesting head teacher in a very poor area described the benefits of breakfast clubs as being way beyond any cash benefit and being in the energy of children, improving their behaviour and improving their learning. She said:

“It helps with their socialisation skills too. School is about life chances and unless the children have something in their bellies then they are not going to get those life chances they deserve. There is very little money out there in our community and for many it's cheaper to feed the family on takeaway fried chicken than anything else. You see the leftovers in lunchboxes, or rice; we get a lot coming in with just rice.

We tried to run a breakfast club ourselves, it was £1 a day, but the numbers just dwindled away and you realise that it doesn't seem expensive but it adds up, five days a week, three children or more. It's a lot. And you can't turn a child away if they arrive without their £1”.

The article also pointed out that breakfast clubs are starting to shut around the country as a result of a combination of budget cuts and the ending of ring fencing for wrap-around care. If we are not careful and end up with a solution that does not retain the provision of free school meals, we could end up with a double whammy, with the two potential sources of nutritious food available to children disappearing at the same time.

I am just as concerned, as I know everybody in this room is, that the universal credit system continues to make work pay and that we do not find ourselves in a position where someone who is now entitled to free school meals will not be entitled to them in the future. That would be a travesty of the anti-poverty element as well as of the work incentive element of universal credit. It means that we have to consider carefully the other policy implications.

In the years I worked with single parents, I became very aware that the vast majority of parents prioritise spending on their children. In fact, I often met lone parents who went without food themselves in order to buy things for their children. Indeed, there is research that bears that out. I suspect that my noble friend Lady Lister may have done it; she seems to do most of it. The evidence is very clear, but none the less there is a minority who, for a variety of reasons, are not in a position to put the kind of food in front of their children that we would wish them to do. In some cases there simply is not enough money to go round. Since it is cash, it is subject to an awful lot of other pressures: a huge bill coming in, debt collectors, being sanctioned or fined, or other pressures on the budget. At least this is money that is for the child, not simply for the family. I do not want to say any more than that. I am not pretending it is easy. When he replies, will the Minister reflect how he will do those three things: protect those families that currently get the benefit of free school meals; ensure that work continues to pay; and fulfil the other policy objective?

[Lord Knight of Weymouth]

I want to comment briefly on this. I say “briefly” because I have the next amendment, there is more I want to say and I do not want to take up too much of the Committee’s time today. I got a bit of billing from my noble friend Lady Hayter as someone who might know something about this, which daunts me somewhat as I had intended to make a contribution more in keeping with my noble friend Lord Foulkes than my noble friend Lady Hollis in terms of knowing something about it or being something of an expert. My noble friend Lord Foulkes is, of course, the master of the probing question, rather than the probing answer.

My noble friend Lady Hayter and others have set out the quandary that the Minister and the Social Security Advisory Committee are clearly in as regards issues around whether it will be included within the cap, for example. If it is going to be part of a tapering rather than a cliff edge, I hope that extra money is added so that you are not taking money away from those who currently get free school meals. I particularly want to focus on free school meals because if I know anything about any of these things, it is about free school meals, given the time I served as a Schools Minister.

Very much in keeping with what my noble friend Lady Sherlock said, I think there is great importance in ensuring that free school meals continue to reach the child. It is a finely grained argument, but I encourage the Minister to look at whether it is possible to get the money straight to schools rather than including this in universal credit. It is important to note that free school meals are used as a proxy within the education system for all sorts of things, and I am sure in other areas as well. In particular, the level of the pupil premium in England is set by the numbers on free school meals. That presents an opportunity to the Government, if they choose to follow the side of the argument that I would advocate in terms of giving the money to schools, and, through them, to children, rather than having it within the universal credit. If the pupil premium is set on the basis of knowing how many children are eligible for free school meals within a school, it ought to be possible to passport the money for those meals to the school directly, given that most schools now operate a cashless payment system. It will then be possible to passport that money through to children's fingertips, if they use fingerprint technology, in respect of paying for their school meals, or on to their cards, if they use a card system. Either way, if they do not operate that, it is possible to get the money into schools so that we can be confident that children are getting a nutritious meal every day, which is hugely important.

I represented a parliamentary seat in Dorset for some time where I found that the health inequalities were such that a child born in my constituency had a life expectancy 10 years longer than one born in Manchester. A lot of that was to do with issues like whether or not they were getting a decent start to the day as regards food and nutrition and the quality of the nutrition that they were receiving during the day. I know that school meals are a crucial part of that. That is why, in the end, my contribution on this is to encourage the Minister to think about that aspect in terms of the needs of children to get a decent meal every day, rather than how things work within the universal credit.

[Baroness Lister of Burtersett]

I have a quick point to make in support of the very strong case made by my noble friends Lady Sherlock and Lord Knight, even if he does not want to be thought of as an expert. If the money for free school meals is paid through universal credit, could the Minister explain how families will know what part of the universal credit is supposed to be for school meals? We know from research that money that is clearly labelled for a particular use is more likely to be spent on that use, but if it is swallowed up in the universal credit, that credit may not be paid to the person responsible for ensuring that the child has money for a school meal or a packed lunch. The danger is that the money will not be spent on the school meal, with all the consequences that my noble friend Lady Sherlock has pointed out.

--- Later in debate ---

Moved by

[Lord Knight of Weymouth]

51CA: After Clause 12, insert the following new Clause—
“Secretary of State obligations
Before the implementation of the universal credit system can commence, the Secretary of State shall publish a report to both Houses of Parliament demonstrating that the following have been fully tested and established—(a) the relevant Department of Work and Pensions IT system,(b) the relevant Her Majesty’s Revenue and Customs IT systems,(c) the integration of the necessary IT systems,(d) any necessary administrative agreements between the Department of Work and Pensions, local authorities and other delivery agents, and(e) other systems and processes necessary for the successful delivery of the universal credit system.”

[Lord Knight of Weymouth]

My Lords, forgive me for taking a little time in introducing this amendment. It seeks to address delivery concerns around the implementation of universal credit and requires a report to be published in both Houses demonstrating that there has been proper, full testing and establishment of things such as the IT systems, the “necessary administrative agreements” and other systems that are necessary to make the universal credit work. I know that, as discussed last week in Committee, we have a much fabled briefing that the Minister is going to give us on delivery. I think that is on 3 November; the sooner we get some detail on that, if nothing else, the better so that we can get the right time and place in our diary. However, I hope that the Minister, in responding to and thinking about this, can at least give us some thought that is on the record.

My intention in moving this amendment is to get some of my concerns about the delivery of universal credit on the record here in this Committee, in front of your Lordships and in the official record. As I have said on other occasions in discussing this Bill, I strongly support the principle of the universal credit as indeed I support the work programme. In many ways, they are both too important to fail but I am worried about failure. My worry is not about the strategy, which is right, but more about the tactics and timing given what else is going on in the environment around the introduction of these reforms, so that they in turn will then affect the reforms being delivered with any success.

My worry is that there is in some ways a time bomb set to go off around 2013-14, as universal credit starts to be introduced, and that we need Parliament to be able carefully to monitor the development of these reforms in order to have reassurance that my worst predictions are not going to come true. There is a high risk around this performance and, as I said at Second Reading, I would like to see the delivery milestones for this programme published. That risk is enhanced given that the additional funding for implementing the universal credit is capped at £2 billion, including the additional AME cost attached to the programme, as I understand it, from my reading of the Public Accounts Committee's recent report. There is a background to that, which I will go on to talk about, and which makes me very anxious.

The background is principally economic but it also involves some of the things that the department itself is responsible for. We are seeing housing benefit changes and planning reforms in the form of the Localism Bill, some that have been discussed in this Bill and others that have been moved in regulation that raise serious questions in my mind around housing affordability and homelessness. We will discuss in Committee the effect of the changes in this Bill on the disabled. There is also the effect of the failure of government economic policy in stimulating growth, which, as we heard last week, is leading to rising inflation and rising unemployment. We know from the Institute of Fiscal Studies’ recent report about worries that another 300,000 children will move into child poverty over the next two years despite the fact that median incomes will remain stagnant or worse, which is quite an achievement given the relative poverty measure for children. The IFS thinks that there will be such a disproportionate impact on poor people's wages and benefits that another 300,000 children will go into poverty.

This impact on unemployment in particular is leading to growing fears among providers of the work programme that there will be a collapse in the viability of that flagship programme in about two years’ time because there simply will not be the jobs for people to go into to be paid by results for. At the same time, the capacity of Jobcentre Plus is being reduced in order to deal with the fallout of an 8,000 headcount reduction over the comprehensive spending review period, which will lead to a loss of talent in the welfare-to-work area, which compounds the loss that has already taken place with people being moved from the flexible New Deal into the work programme. A survey that I saw in the Times last week said that that had led to a 50 per cent loss of talent in the industry already.

There is a £1.4 billion temporary allocation to the DWP to assist with the recession, which is now being withdrawn even though unemployment is going up. All of this, which sounds very rambling, leads to an external environment that will put huge pressure on the Department for Work and Pensions as it is seeking to implement this programme and huge pressure on DWP budgets at the same time. I cannot see that the assumption within the CSR of the DWP's funding settlement of unemployment falling to 1.1 million will hold true. No serious commentator would agree with it. That has implications around the risks to universal credit as a programme. I appeal to the Minister to get his head out from beneath the towel he has to hide under in order to think about these things and think seriously about that external environment.

I have real fears of significant social problems emerging over the next year or so and becoming more acute in two years’ time as a result of all these changes. They will increase the number of people dependent on universal credit and that in turn increases the pressure on it, hence the need for a report to Parliament on delivery to ensure that it is staying on track and that none of my fears is founded. It is worth reflecting on what the new Permanent Secretary at the department said in evidence to the Public Accounts Committee in the other place. When he was asked how risky the change was in respect of universal credit, he replied in Question 58 of the evidence that:

“There is substantial risk in it”.

It does not take a genius to say that there is substantial risk, but it is not just my opinion.

On some of those risks, we are reliant according to the programme on 80 per cent being able to apply online by 2017. I did a lot of work on digital inclusion during my time in the department. It is something for which I have a great passion. In many ways, it is right to be digital by default in the design of a programme like this and then to work hard at making sure that poorer families have access to online so that they can make substantial savings in their household bills, for example, in order to be able to do that.

The question for the Government is: have they allocated resource to get people online? I am sure that they will be working with UK Online and the excellent work that Helen Milner does as its head. Are they extending discussions with her to extend some UK Online centres into job centres? Will they extend the number of terminals in job centres so that people can use them, perhaps with assistance for those who are unable to do so?

[Lord Boswell of Aynho]

The noble Lord might like to know that when I applied online for my state pension, I got a very rapid response. It was so rapid that it set some alarm bells ringing in my mind. I put down a Question—one can look up the date but it would have been in 2005—and at that time only 2 per cent of applicants were applying for state pension, which admittedly is perhaps a skewed distribution, online. There is a long way to go.

[Lord Knight of Weymouth]

Certainly, it is important that individuals such as the noble Lord can apply successfully for their state pension online. We have seen some great successes across government in being able to use digital as the default route—in particular, the student loan application process, and vehicle licensing and road tax services are excellent. The Department for Transport should be a model on how this is being done. But still a significant proportion of the population is not online, despite the best efforts of Martha Lane Fox and the rest, who I wholeheartedly support. The Government need to set out what they are going to do. In education, I introduced a home access programme that got 167,000 families online but it cost quite a lot of money. It was a fantastic, fraud-free scheme using prepaid credit cards. It was great but, I repeat, it cost a lot of money. I would ask the Minister whether he has got the money in his back pocket.

There are big questions around the delivery of IT. I am looking forward to the briefing. The Minister is evangelistic in his enthusiasm for how it will work, which is impressive, and I want to know more. But, at its basic level, what concerns me is that in essence it seems that we will have three IT systems being developed. There is the IT system within DWP to integrate the benefits side of things. As I understand it, it is not much more complicated—it might even be less complicated—than the IT project that the department successfully delivered in respect of ESA, which gives the department considerable confidence. As I think I said at Second Reading, the chief information officer at the DWP, who is one of the better-rewarded civil servants across Whitehall, is an excellent official and deserves every penny of what he gets because he delivers for the taxpayer in this regard.

That complicated database is quite possibly within the capacity of DWP to deliver successfully. However, it has to integrate with another database which is being developed by Her Majesty’s Revenue and Customs for real time information around employers who will have to report in real time how much they are paying their staff. The two databases will have to integrate in order for universal credit to work. That is not just the complication of an integration of two databases.

I know, for example, from the SATs crisis—I was the Minister who oversaw it—that that crisis was as a result of three databases interlocking, corruptions occurring and the data letting us down. In developing this real time information system, HMRC is also developing something based on a tax system, which looks at our personal tax, that has to integrate with a benefits system database, which looks at household tax. You have to make sure that all the data have enough alignment around the identifiers to make sure that the right individuals and households all fit together properly. That seems quite a tall order.

Now I also understand that there is a contingency plan; at last the Government have a plan B. This is good. That is the contingency plan around whether or not the real-time information database at HMRC will work. It can then fall back on the third database, which has to be developed, for self-employed people, who will be self-reporting into a database at HMRC their changes in income and circumstances so that they can be eligible for universal credit. That might be fine in terms of database integration, but it raises a consequent question. If plan B is to work, it needs us to believe that all the employers up and down the land will happily self-report in real time without error or fraud to the HMRC in order for universal credit to be paid accurately. Of course, we all know what happens when either the database falls down or the information going into the database is inaccurate from our experience of tax credits, which in part we are looking to replace through universal credit. As a Member of Parliament, I found that quite a significant proportion of my case work and the work that my staff did for me and my constituents was chasing up problems with tax credits—over payments, when individual families were weighed down with debt to HMRC, which was then at times quite aggressive in chasing it and needed a phone call or a letter from an MP’s office to get it to calm down and be reasonable. We do not want universal credit to suffer reputational damage and cause real problems for families in that way.

If noble Lords are interested in any of this, they may be interested in the Public Accounts Committee report from the other place. Its third recommendation says:

“The Department admits that there are substantial risks attached to implementing major welfare reforms while at the same time reducing its costs. The successful transition to Universal Credit, for example, will depend heavily on the development of a new IT system with HM Revenue and Customs to a very tight timetable. We have often seen problems with delivering new IT to time, budget and specification. The Department should allocate clear responsibility for scrutinising progress of the welfare reforms alongside cost reductions, develop a clear understanding of the risks to each and how they will be managed and encourage staff to report any emerging problems early”.

That is at the root of this amendment. The Public Accounts Committee is saying that there should be clear responsibility for scrutinising progress of the reforms, and that is what I want for Parliament. I want parliamentary scrutiny of the progress of these reforms.

I have mentioned the efficacy of the self-employed database and the plan B for real time information in the HMRC system. I have, in a previous debate in this Committee, mentioned my worries about documentation and housing benefit local delivery, which will be answered in the famous meeting that we are going to have on 3 November. I am sure that there are many more delivery risks that others can think of, but I shall not take up the Committee’s time in going into them. I repeat that I want this to work, but I want it to work in a way that is fair. The Minister, understandably, has to spend time with his head under a towel working out the details, but he also needs to get out and have a look around at the environment into which he is going to introduce this. It is the worst possible economic environment in which to carry out this massive welfare reform; it adds huge risk, as the DWP has to lead the response to a worsening situation in the employment market with limited, effectively capped, resources. I believe that it is a perfect storm, and it is therefore right for this House to demand absolute transparency on the risk assessment and risk management and the delivery of the various milestones in the programme. Indeed, it may be prudent for the Minister to reflect and say, “Let’s get the legislation through, but let’s adjust the delivery timetable until the employment situation has stabilised and we can be confident that the work programme will be able to be delivered successfully, because jobs will then be created by the private sector in order to make that programme a success”. All my worries will then dissipate.

Finally, I want noble Lords to imagine the consequences of this programme going wrong, with people already moving from fortnightly to monthly budgeting having to manage without getting into rent arrears, and so on, then getting no money and facing recovery action. They are already the poorest and most disadvantaged, in part because of policies from other departments having no money; they will have to beg at the door of impoverished local councils for social fund money. That does not bear thinking about in human terms. We know that local authorities will run out of that social fund money and then where will they go? All of that is a scandal, a year or so out from a general election. I am giving political advice to the Minister: that it is in his best interests and in the coalition Government’s interest to take this seriously and to think about the delivery timeline, which may have made sense when it was first written, but I do not believe it makes sense now, given what is going on in the economy.

[Lord German]

My Lords, I thank the noble Lord, Lord Knight, for his self-declaration. He is an enthusiast for IT and the changes that it can produce, but he also recognises the difficulties which could overtake anyone who is trying to undertake such a major change as this. It is very difficult. I shall not repeat much of what he said, but his last point is: what happens if we fail with an IT structure that does not deliver the welfare reform that we are looking for? I think that, more than anyone else getting the blame, the political class as a whole will get the blame for a structure under which individuals would suffer. So it is very important to get it right.

Unfortunately, we tend to roll a number of words together. I suppose you might say that the universal credit depends on a substantial, reliable, appropriate and functioning IT system. I have used the phrase “IT system”, which is probably not the correct phrase because we tend to throw these words around. I use a series of analogies, and I hope that noble Lords will bear with me. I used the phrase “daisy chain” because it is the easiest way to describe linking between one system and the next. In essence, there is a number of inputs into the IT structure, some of them from employers and some from potential claimants, and all those pieces of data have to be linked together—hence the phrase “daisy chain”. If you break the daisy change, clearly you do not complete the circle and the person does not get paid at the end.

None of those changes will be possible without substantial shifts, in recent years, in the IT platforms that we have available to us in order to deliver such as programme. If we are going to make this work, we have to ensure that all those parts are working. Of course, there are—most noble Lords would recognise this—two substantial departments of government, both of which have a hand in ensuring that this works. I do not know, but there are plenty of people who will tell me, whether the relationship between the two big departments, Her Majesty’s Treasury and DWP, works as one might hope. If that were the case, you would be looking for the sort of regime where one department was trying to exercise responsibility over another. I hope that that has not happened. I hope that there is genuine cross-departmental working. My first question for my noble friend is: who is taking responsibility? Is DWP sitting in the driving seat, as that is the hub from which all this will happen, and is HMRC material coming across to it in the way that DWP prescribes in order to achieve the result?

My second question relates to the passing on of data. One of the lessons that we and the world have learnt about the passing on of individual items of data connected together is that there is now an international standard for data passing. I would like reassurance from the Minister that we are using the correct ISO standard for the passing on of data. If we are, we can be reassured that not only are we able to pass it on from one department to another, but that it can be passed on to any other part of the system in the public or private sectors, or whoever else wants that piece of data, and that it has the same level of acceptability from one to the other. I would like a reassurance—particularly on what happens at the end, the starting point of which is this data from employers—that we are going to be using and transferring the employer’s data at that ISO level, and that there will be no “Well, we’ll do it this way to start with and move on to a better way later”. I want to be reassured that that happens, because without it we would have some difficulty in achieving the result we want to see.

--- Later in debate ---

[Lord Freud]

Yes, I am absolutely aware of that. The Major Projects Authority is looking at the process, and coming up in November or December is the next major independent look through the whole project. It is genuinely independent and quite a tough set of governance.

[Lord Knight of Weymouth]

I am grateful to the Minister. Can he tell us when those reviews will be published and whether they will continue to be published?

[Lord Freud]

The responsibility for those reviews is with the Cabinet Office. It is slightly hazy—I think that is the best word. They seem to get out, but I am not sure of the exact process. I take the point of that question and I will explore and report back to the Committee exactly how that information will be published. It may well be that we would look at extracts. Leave it with me. I take the point and will come back and say exactly how that information will be treated.

I want to clarify for the noble Lord, Lord Knight, his questions on costs because there are a lot of different figures flying around. One of the confusing things is that the figure of £2 billion has genuinely attached itself to two or three different parts of the project so it is easy to get confused. If you see £2 billion you think it is that £2 billion. The first £2 billion is all the costs associated with the implementation and operation of universal credit across the SR10 years, which is not just purely an IT investment. Some £1.5 billion of that is investment in systems, people, estates and other resources to allow the creation of the model. On top of that, there is another £0.5 billion for transitional and future running costs following the launch in October 2013. That £2 billion is a separate £2 billion to the net extra AME costs when it is all in operation compared with the current system. I apologise for the various £2 billions. There are some more running around but let us not get into those.

[Lord Freud]

Yes, that is the £2 billion of the implementation. The £628 million was within the £1.5 billion figure that I was talking about. I apologise for the confusion. There are a lot of figures. There are too many £2 billions. This is the oddest topic to joke about that I have ever come across, but there we are.

The noble Lord raised an issue about the complexity of universal credit in comparison with the ESA. This is a large project. There is no doubt about that. It breaks down to three different projects from the one that the noble Lord, Lord Knight, was talking about. The first is the universal credit administration platform. That is a DWP responsibility. That incorporates large elements that have already been developed, such as the payment accounting system. The next thing is the universal credit real-time earnings calculation and the payment and accounting system. That is basically the front end of the system and the rules engine behind it. Then there is the feed, which is the HMRC RTI system. You are looking almost at two components there: the supply of the information, which is being piloted—those pilots are getting going—and the data cleansing because, as the noble Lord rightly pointed out, getting the data through in a way that is readable and matchable is the key. Currently, the HMRC is working really hard on getting that right. It has got up to a data cleanse of 98.3 per cent and its aim is to push that higher and higher.

On data security, we will use our secure file transfer system, which is already in place between DWP and HMRC and is currently used for national insurance systems as well. We have recently had an independent assessment, which is an extra piece of independent scrutiny, undertaken by IBM on that technology plan. I should add on data sharing, as there was a question from my noble friend Lord German on data standards, that we are using the relevant information—the ISO standard. In fact, it is not a question of having it to be used for universal credit; we are already doing so and it is in place today.

We have a robust governance process with the Major Projects Authority. There is a commitment from me to keep noble Lords well informed on this matter, and I can make that commitment from a stronger position than most Lords Ministers because I am responsible for it. I make that commitment informally and I make it formally. The development can also be monitored by Select Committees in another place—the Work and Pensions Select Committee or the Public Accounts Committee—and they indeed look at it. All the structures are in place to ensure that the introduction of universal credit is properly scrutinised and on that basis I ask the noble Lord not to press this amendment.

[Lord Knight of Weymouth]

My Lords, in my view we have had a useful debate and I hope that others agree. Some helpful and important points were made. The noble Lord, Lord German, talked about the data daisy-chain. Clearly, I hope that he is one of those who will be able to attend at 11.30 am in Room 3A on 3 November to help us scrutinise this. The points that he made about bank accounts and financial inclusion are things that the Minister can take away and reflect on.

The point made by the noble Lord, Lord Boswell, about getting errors seen to quickly and easily—they will inevitably arise—is equally important. I was perhaps clumsily trying to make a point there in respect to the link with rising unemployment, although it is not perhaps directly relevant to universal credit beyond there being potentially more claimants and more volume. That may well not affect the systems but there may well be an increase in the individual cases of error that the system would have to deal with. The substantial worry in increased unemployment is of the capacity of the department itself to oversee the programme when it is distracted by having to deal with the recessionary impacts on it that I outlined. My noble friend Lady Sherlock's points about independent assurance went right to the heart of the issue.

I was reassured, as ever, by the Minister’s detail. The bit I am worried about is that that is what he is focusing on exclusively. I am trying to make the point that there are times when you need to rise above the detail and look at the overall environment in which this is being introduced, and to do your own health check on whether this is the right time—given the economic cycle—to introduce such an ambitious and important reform.

I am reassured by his informal and formal promises to keep this House up to date. In an ideal world, I would ask him, through a Written Ministerial Statement perhaps, to publish the major milestones of the project so that we could anticipate further Written Ministerial Statements in response to each of those milestones as they were reached so that we could have real transparency over the scrutiny. He said there is something hazy around the Major Projects Authority reviews being published and admitted that they tend to come out anyway, so when he looks at that, I hope he decides that, given that they are going to come out anyway, he might as well publish them, then he can take the credit for being an open and transparent Minister, rather than them having to dribble out. Finally, given the confusion around £2 billion and the succession of £2 billions, I would value a note from him to clarify how that works. My guess is that if he copied that to the Committee, it would be gratefully received. On that basis, I am happy to withdraw the amendment.

Amendment 51CA withdrawn.

Welfare Reform Bill

Lord Knight of Weymouth Excerpts

Tuesday 13th September 2011 Lords Chamber

[Lord Knight of Weymouth]

My Lords, I start by paying tribute to the ambition of the Minister and his Bill. I know that the Minister is motivated by the very best of intentions in trying to tackle a system that is complex and needs continual reform. Certainly, the principles of the Bill are difficult to argue with, although it feels as if they have been ranked. He listed the three principles. I would rank them in the order of affordability, because he has to answer to the Treasury, followed by dealing with dependency, which is important. I am afraid that fairness appears to come third.

My worry for him and for the reform is that, to coin a phrase, it is too far too fast. As a department, as well as focusing on welfare reform, the Minister should focus on employment and work. The clue is in the title. We have an unemployment problem and if we really want to bring down the benefit bill, tackling unemployment is something that we need to take seriously. He should look, for example, at what the noble Lord, Lord Hall, has published in terms of the evaluation of the Future Jobs Fund in London with the Culture Quarter Programme, which had a 73 per cent success rate in getting people into permanent employment or full-time training. I substantially agree with the noble Lord, Lord Sheikh, and with the excellent maiden speech of the noble Lord, Lord Feldman of Elstree—I pay tribute to him—who said that work works. I think that the noble Lord, Lord Bilimoria, said the same. The Minister also needs to concentrate on the work programme. A lot of other things must be done alongside this important reform.

When we were in Government, we were committed to a single working age benefit. That should be the staging post for a more prudent and pragmatic way of going forward—tackling all those things that I described and then trying to simplify the benefit system before then taking something that is assessed on the basis of households and merging it with a taxation system that is based on personal assessment, which complicates things unduly. I will come to that.

I hope that the universal credit works. The noble Lord, Lord Skelmersdale, paid tribute to its simplicity. In many ways, the Minister is trying to design a swan—something that looks beautiful in its simplicity, but we all know underneath will be working frantically in a complicated way to move forward. Other noble Lords have spoken about those who will potentially lose out as a result of this reform if what looks like an ugly duckling grows up to be a duck rather than a swan. I hope it becomes a swan.

Rather than repeat some of the points that have been made—I thank all those who have corresponded with me principally by e-mail—I want to focus on the risks that need to be addressed in the context of delivery. There are two. The first relates to merging household and personal assessment, which particularly relates to IT. The Government have produced some excellent briefing and I thank them for that. I remember that in his first emergency Budget the Chancellor announced huge savings by cutting consultancies and big IT projects. I genuinely hope that, with this enormous IT project, on which this whole set of reforms is dependent, he is employing some good consultants. I hope that he is ignoring Francis Maude and getting some good capacity in. Much as I believe that in Joe Harley, the CIO at DWP, he has a really good guy who can help the Minister to oversee this from the department's point of view, he will need all the help he can get to make this work.

The briefing that the department has given me talks about agile development for the IT system. Certainly, I do not have a problem with developing the IT and business solutions together so that you can get the IT designed as you go along. Then you can do the things that you know will happen right from the outset rather than waiting for the whole thing to be designed, producing a specification and having a long delay. I certainly agree with digital by default, although it has to answer some questions around inclusion and ensuring that there are still people who can deal face-to-face with those who have complex needs and those who are struggling to do things digitally.

Other questions remain. The system that is being developed in respect of benefits has to bolt in with HMRC’s real-time information system which, I gather, is on track to be up and running for October 2012. We all know that Governments have had some problems with IT in the past—the NHS is the best possible example. However, the tax credits system is another one. It is a great system, at the root of this reform, to make work pay, but we have problems with it. In the end, as an MP, I knew more about the problems than I knew about the successes, even though there were many great things that we got out of tax credits.

Once you bolt together HMRC and DWP, you create vulnerabilities in terms of risk. Then you add into that the other system that is being developed which is for self-employed people so that they can self-declare income. That will be the fallback IT system if the HMRC system does not work. We can ask questions about whether self-declaration of employment in real time will work and whether it will deal with possible fraud and error, but the integration of those three IT systems against a very tight timetable needs close scrutiny. I hope that the Minister will look at the report from the Public Accounts Committee in the other place, which was published today. I hope that he is learning lessons from the NHS IT programme and from the problems that we had with that and with tax credits. I hope that, ultimately, he will produce and publish for us to scrutinise an analysis of the risks that are attached to the IT programme. The Permanent Secretary in his evidence to the Public Accounts Committee had a bit of a Rumsfeld moment when he talked about the unknown unknowns in respect of risk when you are doing something in a way that Whitehall has not done before. If that risk register can be published, if the project milestones and the target dates attached to those milestones can be published and there is a report to Parliament on the progress, I am sure that this House will be very grateful to the Minister for giving us some confidence about how this crucial part of the process goes.

I shall quickly touch on one other subject, which is the centralisation of housing benefit as part of these reforms. Yes, I worry about those staff working in local authority offices who are doing benefit assessment, but I understand that there may be a significant saving that has already been scored with the Treasury through centralisation. My worry is that individuals will have crucial documents to prove their identity and their income, which they will have to send off to a DWP processing centre with the potential for those to be lost. We know from casework and from our interaction with the real world that that happens. I worry that there will be a duplication of some of the information that local councils will have to gather in respect of council tax benefit, which is now being localised, thanks to Eric Pickles. I worry about the complex cases of some individuals, where a default to online with support from telephony might not be sufficient to understand their needs. I also worry about some loss of local expertise.

I ask the Minister to consider whether individuals could go to council offices with their key documents, as we do when we take our documents to the post office to submit an application for a passport, to get them checked for their council tax benefit applications. That information can be collected electronically and put into the wonderful IT system which I think I have already said I hope will be a success. You would have a halfway house between some sensitivity around local processing and a central system. When the individuals in local council offices who are doing the interviews spot someone who has complex issues attached to their case, they could set up an appointment there and then with someone locally from the DWP, or perhaps from Jobcentre Plus, who can come and do a one-to-one interview to make sure that we get it right first time. We all know that in difficult cases, if we get it right first time it makes things a hell of a lot easier than trying to fix it after we have got it wrong.

With those comments, I will sit down. I wish the Minister well in his reforms and wish the House well in amending the Bill and the reforms so that, to some extent, we slow it down to get it right.

Jobseeker’s Allowance (Mandatory Work Activity Scheme) Regulations 2011

Lord Knight of Weymouth Excerpts

Tuesday 10th May 2011 Lords Chamber

I would like to see these regulations taken away and returned to us as a complete picture, rather than a sketch, but of course that depends upon the flexibility of the Minister. I regret that he has ignored the advice of the SSAC and the Merits Committee. I beg to move.

[Lord Knight of Weymouth]

My Lords, it is a pleasure to follow the noble Countess and I am very supportive of what she has said and of her Motion, but I am now speaking to the Motions standing in my name on the Order Paper. In that context, it is probably as well for me to explain to your Lordships why I thought it necessary to add to her Motion by tabling two of my own.

I am only too aware that it is exceptional for your Lordships to agree an annulment. In this case, I am not opposed in principle to the subject of the regulations, to mandatory work activity—I was a Minister when we proposed a pilot of something similar, just referred to by the noble Countess. I was therefore very reluctant to seek to annul these regulations. What I was after was a mechanism that required the Government to take back the regulations and return with them, in improved form, with the necessary evidence to support their introduction on a national scale, much as the noble Countess has said she would like. In this, I too was informed by the 27th report from the Merits Committee that she referred to.

As I understand it, the regret Motion in the name of the noble Countess effectively reprimands the Government, but does not prevent the regulations from proceeding. Given the extent of criticism from the Social Security Advisory Committee and then from the Merits Committee, it seems appropriate to offer your Lordships the option of requiring the Government to address the concerns of those committees and come back with sufficient information before the instrument is agreed, but giving an indication orally that if they have such evidence the instrument will of course be passed. I was therefore delighted to discover a 2006 report from a Joint Committee on conventions to your Lordships. On page 63 of the report, at paragraph 232, it says:

“In the absence of a power to amend SIs, the most constructive way for the Lords, as the revising chamber, to reject an SI is by motion (or amendment) incorporating a reason, making it clear both before and after the debate what the issue is”.

I therefore tabled such an amendment in this spirit, incorporating a reason, and it was initially accepted. It was quickly then unaccepted, because such a Motion was without precedent. After further discussion, it was then accepted again before finally being rejected by the Clerks. The Clerks were then very helpful in splitting my Motion into the two we have before us tonight. The first is a traditional annulment and the second regret Motion is the explanation. I am most grateful to them for their assistance, but I have to say to your Lordships that I think the current situation a little odd. The way my two Motions sit on the Order Paper is not in the interests of transparency and has elicited a number of media enquiries as to what I am up to. I am therefore writing to the Procedure Committee to suggest that the recommendation of the 2006 committee be accepted so that we can be clearer in future on the Order Paper.

I turn to the substantial issue. As we have heard, the regulations allow the Secretary of State to introduce mandatory work activity for customers in receipt of jobseeker’s allowance from April of this year—that is, last month. Each placement consists of up to 30 hours’ activity per week and lasts for up to four weeks. Participants will at the same time be expected to be actively seeking work, attend fortnightly interviews and be available for work. If they fail to meet these conditions, they can lose 13 weeks’ benefit for the first offence and 26 weeks’ benefit subsequently.

While there is an appeal process for the sanction, there is no appeal for being mandated on to the scheme. There will be around 10,000 places per year and customers will not be able to volunteer to take up these places. An enthusiast would therefore have to persuade their adviser to make them go on the scheme. The DWP does not plan on issuing detailed guidance, as we have heard, but wants to give flexibility to Jobcentre Plus in how it uses this new weapon in its armoury. I was an early evangelist for local flexibility but I worry that this is all left a little too vague, given the seriousness of the sanctions that I have set out.

As I have said, I am not against the general principle; when in government, we legislated for a pilot to mandate Work for your Benefit. However, I am concerned about proceeding with a national scheme without evidence. If this Government had proceeded with the pilot for Work for your Benefit, they would have that evidence on whether this will work.

As the Social Security Advisory Committee has said in paragraph 4.2 of its report,

“published evidence is at best ambivalent about the chances of ‘workfare’ type activity improving outcomes for people who are out of work. The Department’s research indicates that ‘there is little evidence that workfare increases the likelihood of finding work’ unless conditions are as close to work as possible. The evidence suggests that the mandatory work activity must be carefully tailored to an individual’s specific needs and carefully timed to be of maximum effectiveness”.

In the light of that clear statement from the department’s independent experts, how does this four-week work activity differ from the work done on, say, community punishments? How will advisers be trained to tailor it to the individual’s needs and timed to be most effective?

As the Merits Committee said, the purpose of the mandatory work activity is not clear. Is it, as the Explanatory Memorandum says, to require extra support to help customers refocus their approach to job search? Or is it more, as the department’s memorandum to the Social Security Advisory Committee says, to give jobcentre advisers another intervention to deal with those doing only the bare minimum to comply with the requirement to seek work? The SSAC is concerned about the,

“precedent set by appearing to punish claimants who are satisfying the conditionality rules but who in the view of the Personal Adviser appear to display the ‘wrong attitude’”.

Is the committee not right that this is an extension of the conditionality rules by the back door, by negative instrument, and with no evidence to support it?

Why not delay the regulations and proceed with the pilot to ensure that the 10,000 work experience places are an effective use of taxpayers’ money in helping people into work? How would the Minister respond to those who suggest that this is going to end up just being a way of parking 10,000 customers and generating a few headlines in the Daily Mail, but not actually helping anyone?

Then there are the concerns about certain groups being able to do the activity and fulfil the other conditionality rules. I shall quickly run through those, and if he has time perhaps the Minister could address them too. Rural residents may be sent to work at some distance, at their own transport cost, and potentially a long way from the local office for signing on. Will the requirements be relaxed to allow them to sign on by phone during the period of the placement?

What about participants with children? According to the SSAC report, their childcare has to be funded from their benefits. Can that be right? Does that not put them in a position of choosing to use all their benefit for 30 hours’ childcare leaving nothing to live on, to lose a benefit sanction of three months, or to take risks on the reliability of informal childcare, which might mean that they were unable to get to work? What will that do to their experience of work as a positive activity? Remember, they have no appeal on the mandation. The Minister could assist greatly by being clear now that advisers will put the interests of children first in applying these regulations, and that parents will be mandated on to the scheme only if the childcare arrangements are adequate and affordable.

Housing Benefit

Lord Knight of Weymouth Excerpts

Tuesday 3rd May 2011 Lords Chamber

[Lord Freud]

My Lords, I am really pleased that we will have a lot of review for the amount of money that we have. We will cover no fewer than 19 carefully selected case study areas, which will include three each in Scotland and Wales, and 13 in England. Clearly, there will be a concentration on the key area of London and the south-east but we will cover representative areas right through the country.

[Lord Knight of Weymouth]

My Lords, the Government’s change of heart on cutting housing benefit for the long-term unemployed was most welcome. It reflects the possibility that the Minister is compassionate and listening. In that spirit, will he now listen to my noble friends Lord Kennedy and Lord Best, and to the University of Cambridge research which estimates that within five years almost the whole of inner London will be unaffordable to those in receipt of benefits? Will he even listen to the Mayor of London who described these reforms most colourfully as Kosovo-style ethnic cleansing? If the consortium finds that it is right and that he is wrong, what will he do?