Benefit Changes: Vulnerable People

Lord McKenzie of Luton Excerpts

Thursday 27th June 2019 Lords Chamber

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the noble Baroness, Lady Janke, for securing this debate and for the wide-ranging manner in which it was introduced. She referred to the fact that we have seen a host of reports recently, to issues with schools having to buy food for their pupils, to the increase in homelessness and rough sleeping, to universal credit, of course—to which I will return—and to the five-week waiting period and sanctions. It gave us a good start.

My noble friend Lord Livermore gave a powerful critique of where we are on these matters. He challenged the idea regarding the position that we should take in times of austerity. He said that it does not preclude progressive tax and benefits reform; that there are choices even in a period of austerity. He was concerned about the lack of work incentives for low earners, which has still not been addressed, and second earners’ progression to work. He noted with some regret that the Chancellor did not cancel the fourth year of the freeze. Perhaps the Minister will address that issue.

In a moving contribution, the right reverend Prelate the Bishop of Chichester said that we should scrap the two-child policy, and that the Church was speaking out on this and would continue to do so. I am sure many other noble Lords welcome that. He made a compelling case for the removal of the policy. His reference to parents having to eat just toast was a telling part of what he had to say.

The noble Baroness, Lady Thomas, said there is no reason why we cannot change the way in which benefits are administered even if, given the wider political climate, fundamental reform is difficult. She mentioned the growth in food banks and appointments and referred to the PIP assessment. I think I am right in saying that she did not support the merging of the WCA and the PIP assessment; but perhaps that is a little unclear.

The noble Lord, Lord Kirkwood, queried whether a deaf ear was being cocked at some complaints but recognised that that was an unfair criticism. He referred to what happens in Scotland, but I do not know whether we have ready means of tracking that.

The noble Lord, Lord Greaves, referred to his case work as a local councillor. I warmed to that. I can remember hours of council surgeries. Sometimes you got a good result from a query; sometimes you did not, however hard you worked. However, it is a good training ground for knowing what is happening at grass-roots level.

My noble friend Lady Armstrong made a compelling case in referring to her work with Changing Lives and the complex needs associated with childhood sexual exploitation. If the system cannot adequately support the people to whom my noble friend refers, then it is not fit for purpose. How will the Minister respond to that? What changes will be needed? My noble friend referred to removing the wait before payment, the vouchers option and issues associated with the verification of bank accounts.

The noble Lord, Lord Low, explained—powerfully, as ever—that he spoke on the basis of RNIB briefings and referred to partially sighted people and universal credit. His position was that the sample to date is too small for concrete conclusions to be drawn, but there were emerging concerns about accessibility issues. He said that 90% of PIP appeals are successful and commented on the WCA and PIP assessments being brought closer together, which caused him some concern.

The noble Lord, Lord Shipley, defined “recent” as 2015. If he does not mind, I might take issue with that: 2010 seems a more appropriate date of change of government. Whatever their defence, frankly, the Liberal Democrats have to step up to the plate regarding their contribution to the most savage of the cuts that we are enduring.

I now turn to those cuts. In his first Budget, in June 2010—not 2015—George Osborne announced spending cuts of £32 billion, to take place by 2014-15, £21 billion of which was to come from welfare reform. It is a staggering amount. Changes included removing £14.5 billion from social security spend through a combination of restrictions on eligibility and reducing the value of benefits. Protecting pensioner benefits by the triple lock added to the burden falling on working-age claimants and families with children.

I am sure all noble Lords have received extensive lists of the individual changes, which are overwhelmingly detrimental to claimants. Some 3.5 million households were affected by the increase in the tax credit taper. The basic and 30-hour elements of working tax credit were frozen for three years; local housing rates were capped and uprated in line with CPI, and then by just 1%—at a time when rents were soaring; and child benefits were frozen. Further cuts post 2015—I absolve the noble Lord of responsibility for them—included the freezing of most working-age benefits; the reduction of the benefit cap, which was projected to affect 88,000 households; the abolition of the family element of tax credits; the imposition of the two-child limit; restrictive changes to mobility assessment criteria; and restrictions in the Sure Start maternity grant, which was a classic example of how enlightened public policy can make a real difference to people’s lives. These are but some of the changes. Overwhelmingly, these cuts were focused on poor and vulnerable people, and seemingly delivered without regret. They were nowhere near compensated for, as is sometimes claimed, by the national living wage, increases in personal tax allowances and childcare provision.

The issue which has dominated consideration of social security policy, and which to a certain extent has pervaded our debate today, is the introduction of universal credit. Its original concept—the merging of six benefits, smoothing transition into and out of work—seemed entirely reasonable, but more detailed analysis has suggested that payments for disabled people are lower than under the legacy system, and it has suffered an alarming range of cuts since being enacted. The Office for Budget Responsibility has confirmed that, on average, universal credit is less generous than the system it is replacing, that 2.1 million families will lose on transfer to the system and that only 1.8 million will gain. There has been a raft of design and implementation problems with the scheme, which are covered in a range of reports by the PAC, the NAO and the Work and Pensions Select Committee. Many of these problems were predicted when the legislation was in progress. The NAO has concluded that the DWP underestimated the amount of money claimants have in order to manage the initial waiting period, and that one in five claimants are not receiving payment on time. A scheme that is meant to help is pushing more people into poverty. The PAC concluded that the DWP’s systematic culture of denial and defensiveness in the face of adverse evidence is a significant risk to the programme. Does the Minister agree, or does she deny that that is the case?

When we address these matters, we are in danger of talking of statistics in the abstract when we should be focusing on individuals’ lives and how they are affected, as my noble friend Lady Armstrong did. I hope that we can get justice. We should build a system that is fit for purpose to serve all the vulnerable people in our communities.