Welfare Reform and Work Bill

Debate between Lord McKenzie of Luton and Baroness Meacher

Wednesday 27th January 2016 Lords Chamber

[Baroness Meacher]

My Lords, I will contribute briefly to this debate in support of the amendment. The issue here is that we are in a very different benefits culture from the one we had maybe until 2010—I am not sure when exactly. The point is that the claimant commitment is the basis for sanctioning. If a parent fails to comply with a claimant commitment, that is when they will be sanctioned. If the claimant commitment is completely unrealistic and the parent cannot comply with it—for example, if it requires the parent to travel 90 minutes each way and they manage to have childcare for only five or six hours a day, or whatever it is—it will be physically impossible for them to satisfy that claimant commitment.

We know, certainly from the Fawcett Society inquiry I was involved with, that there is quite a need for training for these staff. That of course goes back for as long as I have ever been involved with welfare matters, which is probably some 40 years. Staff are very poorly paid, they tend to be rather inadequately trained and there is always a rapid turnover of staff, so you always have new staff who are trying to learn the rules, and so on. So this claimant commitment takes on a far greater significance in this day and age than it would have done 30 or 40 years ago.

That is why I ask the Government to take this very seriously. They need to accept that they have low-paid staff, a rapid turnover, poor training, and therefore that sanctions happen utterly inappropriately. The claimant commitments are wildly unrealistic in the experience of the inquiry I was involved with, which is very dangerous for the children. The parent goes along on a Friday to pick up their benefit and is told, “Oh, sorry”—or probably not even “sorry”—“your benefit has been stopped”. Is there any supper for the children? No, sorry, no food in the house—and so on. It is very serious for children affected by sanctions following the claimant commitment. That is why, although this sounds like a fairly innocuous amendment, believe me, it is very important.

[Lord McKenzie of Luton]

My Lords, I agree wholeheartedly with this amendment. It would be difficult to do otherwise because, as my noble friend reminded us, I moved a parallel amendment to what became the Welfare Reform Act 2009 when we were in government. When one looks back at legislation one has been responsible for there is always a moment of trepidation, but we are on safe ground in this case. Those were the days when the noble Lords, Lord Skelmersdale and Lord Northbourne, were heavily involved in our debates. Having said that—and I underline the importance that the noble Baroness, Lady Meacher, has placed on this amendment—it is slightly disconcerting to understand that one’s labours at the Dispatch Box all those years ago have lain dormant and fallow, so I press the Minister to say why it has not been introduced.

Pensions Bill

Debate between Lord McKenzie of Luton and Baroness Meacher

Wednesday 15th January 2014 Grand Committee

[Lord McKenzie of Luton (Lab)]

My Lords, I join my noble friend Lady Hollis in reviewing why this clause should stand part of the Bill. This debate gives us an opportunity to review its rationale, as my noble friend has done, and particularly to scrutinise what alternative support mechanisms are to be put in place for those newly required to notify the DWP of changes to retirement provision. As we know, the assessed income period removes the requirement to notify changes to capital and retirement pension for the purposes of pension credit. It will run for five years but is set indefinitely for somebody who has reached the age of 75.

As the Minister himself has said, the concept was based on the assumption that the capital and retirement income of pensioners would not vary significantly, that administratively it was appropriate to have a light touch for claims maintenance, and that it was also less intrusive for a claimant whose reporting of changes of circumstances obligations was significantly reduced. It is now asserted that the administrative burdens will not be forthcoming, in part because a huge volume of cases come up for review at the same time, and there is not the stability in levels of capital and retirement income originally envisaged. So far as the administration issues are concerned, it would presumably be possible to spread the load by modest extensions of the end dates of existing AIPs to even out their reconsideration. Perhaps the Minister can tell us why such an option was not considered.

We learn from the impact assessment that just under 2 million of 2.5 million people on pension credit have an AIP split roughly half and half between those with a specified end date and those of an indefinite period. Given that those with an indefinite period AIP are not to be preserved, it looks as though these provisions will potentially affect some 1 million pensioners. Do we have figures for those within this cohort who are in receipt of savings credit only, guarantee credit only or both? Obviously, savings credit would have no application for those who reach state pension age after 5 April 2016, and to a certain extent these provisions wither on the vine because those who reach state pension age post-April 2016 will get STP generally which will be above the guarantee credit level, so they get floated off and savings credit does not apply to them in any event.

As for changes to income and capital, as my noble friend has made clear, the numbers have been predicated on scaling up and are now, I think, upwards of 99,400 cases. We know that of those cases, 36,000 will see a reduction in their award—13,000 will lose all pension credit—18,000 will see an increase and nearly half will see no change. However, over a five-year period, the impact assessment suggests that 540,000 people will be affected by the change in policy, with one-third gaining and two-thirds losing. It would seem that the reasons for a reduction in award are attributable to increases in non-pension income as well as increases in capital—the former cases, I think, being more numerous.

We know that in a steady state the Government will benefit to the tune of £82 million a year and will gain further savings from housing benefit and rent support. I do not know whether we have an updated assessment for that figure. Incidentally, will the Minister remind us what is happening because we went through a period when an application for pension credit, council tax benefit or housing benefit was going to involve one process of application, and that was then going to be shared? I do not know what has happened to that process. Clearly, the council tax part of it has had to go because of the localisation of that but it would be helpful to have an update on that process.

Ensuring that pension credit assessments of means-tested benefit are accurate is not an unreasonable ambition, but an equally important ambition should be to improve the take-up of pension credit, as my noble friend made clear. We know that about one in three of those eligible for pension credit are currently not claiming it, although take-up of the guaranteed credit is higher. The greater the required engagement with the system, the greater the risk will be that pensioners will fall out of the system or not engage with it in the first place.

As my noble friend asked, what are the Government’s plans to improve take-up of pension credit? This issue must not be underestimated, especially in an environment in which people are living longer, and living at least semi-independently, with support from formal and informal carers. I have seen this in my family: whereas bank statements and pension slips were once neatly filed in date order, they are now tucked away down the side of a chair, scattered randomly in a drawer or thrown out with the rubbish. When you cannot always remember whether you have had breakfast, it is not always easy to remember to pass on a piece of correspondence to a family carer. These are real issues, particularly as people get older.

Of course, there are penalties for failure to report changes of circumstances, and we know that this Government are hot on sanctions. So can the Minister please say, given the changes to the AIP policy, what additional cost is to be incurred in supporting pensioners, both at the point of the change and routinely thereafter? What special protections will be in the system if someone is at risk of being sanctioned?

Finally, on the matter raised by my noble friend Lady Hollis concerning the effect of this change on equity release and capital more widely, it is with a degree of trepidation that I am bound to say that I cannot fully support the position of my noble friend. I know that that is dangerous territory. I agree that AIPs facilitate the accumulation of substantial sums from equity release without impact on pension credit, but that, of itself, is not a reason why it should be retained. It is common ground that AIPs were designed as an administrative easement, not as a route to allow certain types of capital to be outside the pension credit rules. I see great merit in equity release but I am not sure why capital raised just in that way should have more favourable treatment under the benefit system than capital raised in any other way. There is already a series of provisions under which capital is disregarded for the purposes of pension credit and, indeed, other benefits. They include amounts held to buy a home or to carry out essential repairs. There may well be an argument—and my noble friend has advanced these—to extend these capital disregards in effect to cover costs of caring. However, this should be done explicitly, not under the guise of hanging on to something via an administrative easement.

The Government are going down a dangerous path. Thousands of pensioners could be disadvantaged by this provision administratively, and we certainly want to know, if the Government are going to press ahead with it, what support is going to be given. I do not see anything in the figures about extra costs and more frequent reviews. What is in the analysis that states that the Government are going to support pensioners, particularly older pensioners, effectively to make sure that they take up pension credit when they are entitled to it, and that that they are able to comply with the new, more onerous reporting rules that flow from these provisions?

[Baroness Meacher (CB)]

My Lords, I support my noble friends. I have just worked out that it was about 40 years ago when I undertook and produced the first research report of the Child Poverty Action Group. The subject of that study was the non-take-up of means-tested benefits. At that time, when I was a young person, I assumed that the important issue was stigma. Of course stigma is a major feature, but what took me by complete surprise was the level of ignorance and complete unawareness on the part of, most particularly, the poorest potential claimants—ignorance that they might even conceivably be entitled to any benefit at all. It just had not crossed their mind. If you do not ask any questions, you do not get the answers to those questions. If he really wants to extend means-tested benefits, I urge the Minister to undertake some research into the levels of knowledge and understanding of potential pension credit recipients, because if the level of ignorance remains today as it was then, the social consequences of these reforms will be very alarming indeed.

Local Government Finance Bill

Debate between Lord McKenzie of Luton and Baroness Meacher

Tuesday 24th July 2012 Grand Committee

[Baroness Meacher]

My Lords, my concern is about the people at the bottom of the heap and the changes in council tax benefit. I know that many colleagues who are in this Room also share that concern. I would be very interested in having the Minister look at what funds might be raised through this amendment and whether something could then be done about the 10% reduction in council tax benefit. As we know, that reduction will not affect pensioners and will therefore affect other households incredibly heavily and disproportionately. Maybe there is a small possibility here to prevent unbelievable hardship as a result of this cut to council tax benefit. We would then achieve less regression—both by the changes at the top end and by using that money to effect changes at the bottom. I would be grateful if the Minister would respond to that.

[Lord McKenzie of Luton]

My Lords, like my noble friends Lady Hollis and Lord Smith and the noble Lord, Lord Shipley, I am not an advocate or supporter of local income tax. My noble friend Lady Hollis has, as ever, made a challenging case for the introduction of a new band, although her case is, in a sense, seeking a process of consultation. My noble friend is aware that, from this Front Bench, we are not yet able formally to support that proposition, although I note that she has occasionally trail-blazed an opinion and the party—or otherwise—has caught up with her later. There is obviously a range of issues here and my noble friend Lord Smith instanced some of the wider ramifications, such as the redistribution of revenues that might come from this. However, I am interested in the Minister's response on this and we should recognise that there are growing discrepancies and inequities in the current system, if for no other reason than the passage of time. This amendment raises a serious issue.

Welfare Reform Bill

Debate between Lord McKenzie of Luton and Baroness Meacher

Monday 23rd January 2012 Lords Chamber

[Baroness Meacher]

My Lords, I rise to move, very briefly, Amendment 62 on behalf of my noble friend Lord Ramsbotham, who apologises to the House for not being able to be in his place. As noble Lords will know, he generally speaks with little in the way of notes, so I shall do my best.

The purpose of the amendment is to ensure that regulations will provide for prisoners who were receiving benefit at the time of their imprisonment to be assessed during their time in prison or custody for their eligibility for benefit on their release from custody. I passionately agree with my noble friend Lord Ramsbotham that the amendment has huge merit. In Grand Committee the Minister outlined the arrangements that have been made to cover those who claim jobseeker’s allowance, which my noble friend accepts, but the Minister did not accept my noble friend’s proposal that all prisoners should have claims to other benefits processed before release.

Last week my noble friend had an extremely useful meeting with officials in the DWP, with whom he discussed the situation, reaching the following conclusion—that my noble friend Lord Ramsbotham would now table an amendment to the Legal Aid, Sentencing and Punishment of Offenders Bill, putting the onus on the Ministry of Justice to confirm a prisoner’s national insurance number and current entitlement to benefits on reception into prison. Before release, these should be processed in time for suspended benefits to be resumed and necessary arrangements made to cover the gap before any payment could otherwise be made, subject to payment in arrears. This will require protocols between the DWP and the MoJ to be established. The question is whether the Minister will be prepared to support this proposal.

The arguments in support of the amendment were put by my noble friend Lord Ramsbotham most forcefully in Committee and I shall not repeat them. I beg to move.

[Lord McKenzie of Luton]

My Lords, I shall speak briefly. The thrust of what the noble Lord, Lord Ramsbotham, is trying to achieve has considerable merit. I wonder how some of the detail in the amendment about assessments when people start their sentence would work in practice, particularly if someone is likely to be in prison for some while.

We dealt with regulations about a fortnight ago on the importance of people being able to get into the work programme on immediate release from prison. However, I was a little disturbed that, as the Minister explained, applying for JSA was voluntary but that once on JSA there was an inevitable path into the work programme. That of itself is fine, except that it may not take account of many good programmes that are already around in prisons where people are supported sometimes before they leave prison and certainly supported when they do. The route via the work programme might pre-empt and override all of that. The noble Lord, Lord Kirkwood, was involved in that debate.

The thrust of trying to get as many benefits as possible sorted out for individuals before or at the point they leave prison must be helpful to them. The opportunity for them to have resource—presumably under the advance payment arrangements if it happens immediately, because typically benefits would be payable in arrears—is fine, but there is a concern about potentially damaging those good programmes in prison, where they exist, which help people to adjust to the world of work before they formally finish their sentence.

Welfare Reform Bill

Debate between Lord McKenzie of Luton and Baroness Meacher

Tuesday 1st November 2011 Grand Committee

[Baroness Meacher]

My Lords, I support Amendment 51EA moved by the noble Baroness, Lady Lister. I was impressed when the Minister mentioned in an earlier debate that providers of support to claimants will be rewarded financially if their clients find a job and remain in it for two years. That claimants should achieve long-term employment is clearly the objective of the Minister and the Government. I have no doubt that it is a fine objective. Certainly it is supported by me and, I am sure, by other noble Lords around the table. However, this clause seems to run absolutely in the opposite direction. It encourages claimants with young children to rush into a low-paid and probably insecure job rather than taking the opportunity to train and prepare themselves for long-term work.

Will the Minister explain the rationale behind the lack of protection for carers responsible for very young children aged five or six while they complete a training course up to level 3? Does he see the apparent inconsistency between the aim of placing people in long-term employment, which we all support, and incentivising them to take low-paid work rather than educate and train themselves in order to better their future? I will be interested to hear what he says about that.

My second point is about the unreliability as an employee of a primary carer of children who are in the first two years of school. Having had four children, I have strong recollections of the childhood illnesses they pick up in the early years: for example, a cold, an infection or German measles. If you have four children, it is not one lot of German measles but four, one after the other. Employment? Forget it. This is a serious point. The strain of working when your young children are starting school and picking up all those bugs has to be experienced to be fully understood. In education and training, one can catch up when life settles down and the kids go back to school. I know because I did it. I did an economics degree when I had three children under seven.

We know that the Minister is under enormous pressure to deliver cuts through Parliament, but perhaps this issue is worth fighting for in terms of the Government's own admirable priorities of encouraging claimants to undertake training in order to improve their long-term employment prospects for the future.

[Lord McKenzie of Luton]

My Lords, I will speak briefly in support of the thrust of the amendment. It raises issues about the right age at which full conditionality should apply, and perhaps takes us back to debates we had on another Bill. Perhaps today is not the occasion to revisit them. However, I am not sure that we have debated thus far in the Bill the basic conditions for accessing universal credit. This is predicated on the fact that somebody is within the system and subject to full conditionality. This is what the amendment seeks to ameliorate. One basic condition for accessing universal credit is that somebody should not be receiving education. I presume that that is meant to cover broadly the same arrangements as exist under JSA. Perhaps the Minister will clarify that.

Welfare Reform Bill

Debate between Lord McKenzie of Luton and Baroness Meacher

Monday 24th October 2011 Grand Committee

[Lord McKenzie of Luton]

My Lords, as I was saying, these amendments relate to Clauses 13, 14 and 22, the introduction of work-related requirements and the claimant commitment. The drivers of some of the work-related requirements, or indeed no work-related requirements, depend on whether the claimant has limited capability for work and/or work-related activities. These concepts are, of course, familiar to us from ESA deliberations, and are to be imported into universal credit under Clause 38. We will debate that in due course when we reach those clauses. The definitions are aligned to the provisions of Clause 12, and the additional amounts payable under that clause.

Amendment 51CAC seeks to ensure that the claimant commitment provided for by Clause 14 should be not only a record of a claimant’s responsibilities but a statement of the responsibilities of the Secretary of State with regard to the claimant. Amendment 51CCA is in similar vein and requires the claimant commitment to include a statement of the Secretary of State’s responsibilities and details of how the claimant can appeal the contents of the commitment. A similar proposition was advanced in the other place and received short shrift, but given the Minister’s clear commitment to transparency and to the universal credit actually changing attitudes, we are interested directly on these issues.

We had understood that there was a consensus around the proposition that welfare benefits systems should involve both rights and responsibilities for claimants. Those responsibilities clearly encompass compliance with work and work-related activity requirements and the rights obviously include, but are surely not limited to, receipt of relevant benefits. Much of the support for claimants will come via the work programme in which the Government are investing heavily and seem committed to providing personalised support to individuals. A black-box approach gives a framework for that flexibility, but not of itself individualised assurance to claimants. What contractual obligations will providers have to spell out for individual programmes and communicate this to the claimants? Although we accept that the incentivised payments structure will provide encouragement not to abandon the hardest to help—a point that the noble Earl, Lord Listowel, focused on—the obligation to be clear on what support would be provided should surely reinforce this. Of course, not all claimants will enter the work programme, or at least for a while, so there should be an obligation on Jobcentre Plus staff to particularise their side of the bargain.

It is fine having general customer charters, but they are no substitute for setting out what the Secretary of State will commit to in respect of individual claimants. Incidentally, could the Minister take this opportunity to take us briefly through the claimant journey, as it is now envisaged—those who will or will not enter the work programme and the related timescales for the claimant commitment? It is understood that the intent is that the claimant commitment would result from dialogue, although that does not necessarily mean total agreement in every case.

Amendment 51CCA would also have the claimant commitment set out information on how to challenge the contents of that commitment. The Minister in the other place indicated that appeals could arise only following sanctions for failure to comply and we will obviously be discussing those in due course. In respect of work search and availability requirements, the briefing note provided by the department indicated a right to object to what is proposed and an ability to have the position reviewed by another employment officer. However, that is stated not to apply to other requirements recorded in the claimant commitment. Why not?

The amendments yet to be spoken to by the noble Lord, Lord Skelmersdale, and the noble Baroness, Lady Meacher, are concerned in an important way with those involved in drawing up the claimant commitment to make sure that they are appropriately trained. That must involve access to specialists to cover the multiplicity of situations that will be encountered, such as dealing with those with mental health conditions, fluctuating conditions and hidden disabilities, to name just some. Will the Minister remind us what information from the WCA or indeed the work-focused health-related assessment—he might update us on that because it was suspended for a while—will be before those who have responsibility for inputting into the claimant commitment? So far as the work programme is concerned, what contractual commitments do providers have in respect of training and how is that to be monitored?

These issues of claimant commitment are very important, but in the words of the noble Baroness, Lady Campbell, who is not with us today, we believe that co-production is an important issue. If there is to be real commitment for individuals, it should not be something that is imposed: the Secretary of State should have some ownership of it. I beg to move.

[Baroness Meacher]

I rise to speak to Amendments 51CB, 51CC, 71C and 71D on behalf of the noble Lord, Lord Skelmersdale, who sends his apologies to the Committee because he cannot be in his place today. It is a little unusual for me to speak to amendments on behalf of a Conservative Peer, but it is a pleasure to do so.

Before I refer to the comments of the noble Lord on these amendments, I would like to support the comments of the noble Lord, Lord McKenzie, in relation to the claimant commitment and the importance of that containing the responsibilities of the Secretary of State as well as the responsibilities of the claimants themselves, and the importance of specialist Jobcentre Plus staff. I will also speak about those two points in the next group. The groups were together but now they are apart.

The noble Lord, Lord Skelmersdale, has given me his notes on these amendments, which I will try to reflect in my remarks. He says that we heard a lot on the Health and Social Care Bill about the myth that the Secretary of State for Health is in total control of the National Health Service. The situation is not very different in the DWP, is it, he asks. I emphasise the fact that the noble Lord said that because it is more interesting that he makes these comments than if I were to make them. We all know that, although technically it is the Secretary of State who is occasionally involved in tribunal and court cases, it is really one of his officers who does the work and occasionally is found to be at fault—or, says the noble Lord, in the case of the employment and support allowance, not so occasionally.

The noble Lord was alarmed to discover that for ESA alone, there have been around 518,000 fit-for-work decisions between October 2008, when it started, and November 2010. The rate of appeal was around 40 per cent and, in that percentage, 40 per cent were successful in their appeals. The reason for all those successful appeals is not solely the Atos computer; the desk officers and DWP staff generally share the blame, although perhaps not to the same extent. The noble Lord has, with difficulty, discovered the success rate of appeals against decisions relating to other benefits from April to August this year. They are 15 per cent for JSA and 27 per cent for income support. Those are probably the nearest thing we have to the universal credit arrangements in the Bill and they give us a guide to what we might expect, not least because the fault, if fault there is, will be with DWP staff rather than computers. This all brings us to the noble Lord’s amendments: it must be vitally important that staff are not only trained, which to some extent they are, but monitored as well. The 24th report of the Merits Committee also raises these issues.

I share those concerns of the noble Lord, Lord Skelmersdale, but perhaps I might add a few remarks of my own. I am aware that the Minister has been determined to reduce the appeals success rate and that he has in fact had some considerable success. If I understand it correctly, this has been in part as a result of introducing a review process, prior to appeal hearings, which has enabled errors to be picked up earlier. Perhaps the Minister can explain the average length of time between the initial decision and the review decision following an appeal, and how that average time gap compares with that between a benefit entitlement decision and an appeal hearing, as we had them before the reviews came into play—we still have them, of course. In other words, has the introduction of the review process significantly improved the position for claimants by providing a significantly earlier opportunity to have wrong decisions righted or overturned? Also, does the Minister know what proportion of successful appeals, whether at review or ultimate appeal hearing, apply to claimants with mental health problems?