Infrastructure Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(10 years, 5 months ago)
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Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for outlining his support for Clauses 17, 18 and 19, and for explaining the reasons for tabling his amendment and seeking clarification about what we are intending with the proposals outlined in Clause 19. I hope that I am able to give him the reassurance he is looking for. I will do my best to be simple and straightforward in explaining this, but it is quite a technical thing to explain. I am quite confident that we share the same objectives, so I will give it a go and if needs be we can always talk further, I am sure.
Clause 19 will provide the framework for changes to regulations that will provide a quicker and simpler process for making changes to development consent orders. We will be consulting on changes to regulations shortly. For non-material changes, we will be proposing that responsibility for publicising and consulting on an application should in future lie with the applicant rather than the Secretary of State. Crucially, that will bring the process for making a non-material change in line with the rest of the Planning Act. In moving the responsibility for publicising and consulting on an application to the applicant, the Government want to ensure the necessary flexibility in the regulations to ensure that non-material changes that are unlikely to have significant impacts can be made quickly. In view of that, we intend to retain the provision in the existing regulations that would allow an applicant not to consult someone, but that would be only where they had gained the consent of the Secretary of State to do so.
I hope that the noble Lord, Lord McKenzie, and others who may be interested in this part of the Bill, have seen the briefing paper which we prepared in advance of this Sitting of the Committee. We circulated it by e-mail earlier this week. I will happily send it round again if anyone has not seen the document to which I am referring. The briefing paper gives a preliminary indication of the changes to the regulations on which we will consult later this month, so the consultation should start fairly soon.
The briefing paper does not suggest that we intend to change the current consultation and publicity requirements for non-material changes. I hope that once noble Lords have had the opportunity to consider the consultation paper on changes to the regulations, they will be reassured that the Government are not proposing to use the power of discretion provided in Clause 19 to allow applicants to decide who they should and should not consult. Applicants will continue to consult those persons and bodies set out in the regulations unless they have the consent of the Secretary of State not to do so. Given those comments, I hope that the noble Lord, Lord McKenzie, feels able to withdraw his amendment.
The noble Lord, Lord McKenzie, asked about progress on applications and decisions through the nationally significant infrastructure regime. Twenty applications have now gone all the way through the system and 19 have been granted consent, so that is a 95% approval rate. There was one refusal, which concerned the Preesall gas storage application. This project is being redetermined following judicial review. Four applications have been decided in 2014, with another nine expected, and 13 were decided in 2013. Two were decided in 2012 and one in 2011 through the Infrastructure Planning Commission. Therefore, the regime is being used, and we can see from the number of applications that the process is working. There are 56 applications in the pre-application phase and more in other parts of the system. I hope that gives the noble Lord the information he was looking for and that I have given him the reassurance he sought on this part of the Bill.
Lord McKenzie of Luton
I am grateful to the Minister for that explanation which dealt precisely with my narrow inquiry about the exercise of discretion. If I understood her correctly, it is clear that the Secretary of State’s permission will be needed if an applicant seeks to exercise discretion in this regard. The Minister gave a very helpful update on the statistics. It would also be helpful if at some point, not necessarily this afternoon, those figures could be broken down by sector or type of project and if a distinction could be made between those that arose in respect of the original construct of the infrastructure commission and those that fall within the expanded definitions and facilities in the Growth and Infrastructure Act. Having said that, I beg leave to withdraw the amendment.
Baroness Stowell of Beeston
My Lords, I am grateful to all noble Lords who contributed to this debate. I and the Government certainly share the vision that noble Lords expressed for great design and quality, and for the kind of communities that noble Lords talked about today. It is absolutely essential that in developing new places for people to live the kind of points raised in the debate today are very much reflected in the design and execution of those plans. However, it would be unhelpful to prescribe the objects of a new town development corporation in such detail as set out in the new clause put forward by the noble Lord, Lord McKenzie.
As the noble Lord said, the objects of the new town development corporations are set out in the New Towns Act 1981. They are quite simply to secure the laying out and development of the new town. We believe that that brevity is helpful because it allows the detailed objectives of development corporations to be established in each particular case, in consultation with the local area and reflecting local needs. Prescribing such detail in primary legislation takes away that opportunity.
I say to all noble Lords who have spoken today that the Government attach great importance to the design of the built environment. It is a key aspect of sustainable development and we have made that clear in the National Planning Policy Framework and our planning guidance. These make clear that local and neighbourhood plans should develop robust and comprehensive policies that set out the quality of development expected for the area. As I have already said, the proposed new clause would mean that sustainable development should be included in the new town development corporations’ objects. Although we strongly support the principle of sustainable development, we think that it is right that it is made clear in the National Planning Policy Framework. Making separate provision for one part of the planning system would serve only to dilute that clarity by defining sustainable development differently for different types of development.
It is worth reminding ourselves that no new town development corporations have been created since 1970. However, urban development corporations have been established more recently and the Government propose the establishment of a new one at Ebbsfleet. Unlike new town development corporations, an urban development corporation can be designated as the local planning authority for its area. Where this happens and it exercises functions in relation to local development documents, it is subject to the duty in the Planning and Compulsory Purchase Act 2004 to exercise those functions with the objective of contributing to the achievement of sustainable development.
In the context of Ebbsfleet, I can reassure noble Lords that we want to ensure that Ebbsfleet is a real place where people want to live and work. In setting the vision for Ebbsfleet Garden City, the urban development corporation will look closely at what garden city principles mean in an existing urban context, such as Ebbsfleet. It will work with local partners to support them in developing and delivering a high-quality settlement with locally available jobs and generous green space.
I acknowledge what the noble Baroness, Lady Andrews, said. My response to her and to others who have contributed today is that we absolutely share that fundamental principle of ensuring that, where new houses are built, communities are created which are properly designed and in which people want to live. However, we feel that prescribing this in primary legislation as the noble Lord has proposed is unnecessary, and I therefore urge him to withdraw his amendment.
Lord McKenzie of Luton
I start by thanking all noble Lords across the Committee who have spoken in support of this amendment. The Minister’s response does not altogether surprise me; it is where I thought the Government might be, but it is a pity that she is arguing for brevity. It is difficult to see what should be excluded or what anybody would want to remove from those objects and general powers of development corporations. They may wish to add to it; they may have a particular local focus on it, but that somebody should not want any of those is quite difficult to understand, although I understand where the Government are coming from.
I am grateful to my noble friend Lady Whitaker, who said that this is about having a vision for a place, a community and a town. The noble Lord, Lord Tope, focused on the point that this should not just be about a mechanistic, technical approach to building new developments; it has got to be something more fundamental. My noble friend Lady Andrews, with all her incredible wealth of experience, talked about planning as something which is creative and positive, not something which is mechanistic. She speaks with huge passion and experience on that issue. The noble Lord, Lord Jenkin, again speaking from a fantastic wealth of experience, made the point that things have moved on in recent years. There is the potential of a consensus to create something which may not be the precise wording here, but at least moves us on from where we are.
Would the Minister be prepared to meet the TCPA, just to talk through this issue, to see whether there is anything which can be created which does not necessarily pick up that precise wording, but seeks to retain the concept, the vision and the belief that we should be about more than just delivering bricks and mortar? I am sure that she meets them on a range of occasions. Would she be prepared to facilitate that, together with the TCPA?
Baroness Stowell of Beeston
Both I and my colleagues at the department are always open to meeting different people and I would never refuse a meeting, but if I or one of my colleagues were to agree to a meeting, it would be important for me to be clear at the start what the Government’s position is. I have outlined that today—but, on that basis, my door is always open to anybody who would like to come and talk to me.
Baroness Stowell of Beeston
I hope noble Lords will forgive me if I respond to my noble friend. He is someone for whom I have a huge amount of respect. I acknowledge just how experienced he is as a previous Secretary of State. He will know and understand the limitations I have when I stand at the Dispatch Box. When I meet anybody, I am willing to listen to what they have to say, but I feel I am duty bound, in agreeing to a meeting, to make clear what my starting position would be. I am always, of course, open-minded, as the noble Baroness, Lady Andrews, was generous enough to acknowledge in her contribution to the debate.
Lord McKenzie of Luton
I am grateful to the Minister for that assurance about the prospect of a meeting, and to the noble Lord, Lord Jenkin. I hope that noble Lords who have been involved in the debate today might join that meeting. I hope we can bring something back at a later stage in the Bill to keep this issue alive, notwithstanding what the Government have said today. It is an opportunity. These Bills do not come up—well, I suppose infrastructure Bills do come up quite frequently, actually; sometimes more frequently than one would want. Maybe we will have another one next year. I am grateful to the Minister and beg leave to withdraw the amendment.
Baroness Stowell of Beeston
I am always eager to make sure that noble Lords do not leave here unhappy. On this occasion, and especially having felt that I was not doing what I always seek to do with my noble friend, I can confirm that the Government will respond to the consultation before we get to Report. That response will be available.
Lord McKenzie of Luton
I thank the Minister for her detailed and full response to the range of points that were raised. Clearly, we need to look at the record and reflect on our concerns and the extent to which they may have been met by what the Minister said. I, too, had a question on the consultation but I am reassured to know that we will see the response by the time we come back at the end of the summer.
We probably need to spend some more time on the issues around Killian Pretty. The deeming of an application of conditions was only one of the possible solutions recommended for tardiness in the discharge of conditions. I asked why the Government did not pursue the other two rather than adopting the mechanism in the Bill. Like my noble friend Lady Andrews, I am still not clear about the reasons for the extent of the tardiness, if there is tardiness, and why it is happening. The noble Baroness said that this issue does not have the priority that getting permission has, and that therefore it sort of drifts. That seemed to be the import of what she was suggesting. We would like to drill into that a bit further.
I thank all noble Lords who have spoken on this amendment. They raised a range of concerns, which may have been satisfied to a greater or lesser extent—or not at all—by the Minister’s response. My noble friend Lord Whitty certainly expressed concern about the draconian nature of the provision. Even given its safeguards, it is a powerful tool which the Government are deploying. Like the noble Lord, Lord Jenkin, I imagine from what has been said that we will be able to see at least a copy of a draft order, presumably, as part of the consultation response when we come back after the summer. My noble friend Lady Andrews raised important issues around safeguards for heritage. Again, I guess we will have to see the extent to which they are satisfied in practice. My noble friend Lady Donaghy made a powerful point about the well-being of individuals and community cohesion, and whether this provision might disrupt that.
I think that the noble Lord, Lord Tope, got an answer to his question on whether this is a case of failure to respond or failure to agree. It is clearly the former, not the latter. Doubtless, he is reassured by that but, again, he stressed the need for evidence. This has been a helpful debate. I will, of course, withdraw the amendment as we are, after all, in the Moses Room, but we will need to reflect on the Minister’s response as I am not sure that it has dealt with all our concerns. I hope that some of those concerns will be alleviated by the process before Report. I cannot guarantee that they will all be alleviated, so we may return to the issue. Having said that, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, we are happy to support these amendments. I say only, in relation to the proposal to have one local authority elected member, that the key thing is not so much status on a board and voting rights but the imperative of engaging with the local authority. That is probably behind the amendments, which I am happy to support.
Baroness Stowell of Beeston
My Lords, I am grateful to my noble friend Lord Tope for explaining the background to these amendments. As I said in response to my noble friend Lord Jenkin in an earlier debate, it is not that the Government do not support the purpose of what a local development corporation could achieve in terms of what a local authority could get from that.
We believe that what a local development corporation could achieve is possible for local authorities to do already. They already have plan-making and development control powers for their areas and powers to acquire land compulsorily where necessary. Should they wish to focus on particular geographic areas, they can, under their general powers of competence—new powers brought in by this Government—make appropriate arrangements to do so, whether informally through a sub-committee or through a formal structure such as a limited company. For example, Liverpool has set up a mayoral development corporation to drive growth and development in the city without there needing to be any specific primary legislation providing for this. Where local authorities want to work together to secure the development of an area that crosses local authority boundaries, they are able to pool their planning powers so that decisions about that area can be taken in one place.
It is quite a straightforward measure but I feel that, as I have already explained, because the powers are already there for local authorities to act in this way, I have very little more to add to that, really, in responding to the debate.
Lord McKenzie of Luton
Will the Minister just explain again? Are we saying that any powers that could accrue and be put in place for a local development corporation are, in total, otherwise available to a local authority on an individual or a joint basis? Is that what the Minister is saying?
Baroness Stowell of Beeston
Will the noble Lord clarify what he means by joint?
Lord McKenzie of Luton
I thought the Minister said it is possible for local authorities to do certain things together with other authorities in terms of planning powers; they could share those. Is that the totality of the powers that a local development corporation could have available, or are there things that are excluded?
Baroness Stowell of Beeston
I hope that my noble friend, Lord Tope, will forgive me if I have in any way short-changed him in responding to this. I felt that I did not want to go off into great detail, as it seemed quite straightforward. I can also say to the noble Lord, Lord McKenzie, that the answer to his question is yes. They have the powers available and they can work together jointly, as I have described. There is a principle in what the noble Lord is seeking to achieve through this. It is available and possible; they can do it and there is nothing standing in their way to take advantage of the powers that already exist.
Lord McKenzie of Luton
If I may ask one further question, would a local development corporation be in a position to hold its own assets, effectively through a corporate structure? Would that be different to how a local authority might hold them?
Baroness Stowell of Beeston
Does the noble Lord mean to ask whether a local development corporation would have greater powers? Based on the information I have and the answers I have already given, I think the answer to that has to be no. They would not have any additional powers. As I said earlier, the local authorities can set up a limited company. That is available to them; in Liverpool, they have already set up a mayoral development corporation to deliver what this amendment seeks to achieve.
Lord McKenzie of Luton
So just to be clear, they could set up a local development corporation.
Lord McKenzie of Luton
My Lords, I am happy to support this amendment and I support the points made by the noble Lord, Lord Best. Doubtless, the Government will make reference to their custom-build fund, which was announced a couple of weeks ago. As for our plans for custom build, we support an actual requirement on local authorities to include a higher proportion of small sites in their five-year land supply, in order to boost small and custom build, and to guarantee access to public land for smaller firms and custom builders. As I think I said before, to make sure that we give people the chance to sign up to a waiting list for custom build, co-operative homes or community land, trust projects with local people have been the priority. We are certainly supportive of custom build, but we await with some trepidation the outcome of the Section 106 consultation for smaller sites.
Baroness Stowell of Beeston
My Lords, I am very grateful to my noble friend Lord Tope for tabling his amendment. This is, as he suggested, not because I think it is necessary in order to achieve an increase in custom build, but because it provides us with an opportunity to discuss and debate this important matter. This Government very much support custom build and are doing a lot to enable it. The noble Lord, Lord McKenzie, outlined the way the Opposition propose to approach this issue. However, it is worth noting that, sadly, when they were in government there was no advancement in this area, so we have some ground to make up.
Finding a suitable building plot remains the single biggest barrier holding back thousands of new projects every year. Of course, some councils already provide land for custom build. For example, at Bicester, Cherwell District Council is bringing forward land for up to 1,900 custom-build homes. However, the Government want to do more to help custom builders and support this growing industry. I note what the noble Lord, Lord Best, said. This is an important way of encouraging those smaller building firms as well. That is why we announced a further package of measures in the Budget to tackle this problem. Last week, we invited local authorities to apply to become right to build vanguards. Later this year, the Government will consult on creating the new right to build, which will give custom builders the opportunity to buy suitable shovel-ready plots of land.
Local authorities are already required by the National Planning Policy Framework to assess and plan for their housing needs and our planning guidance makes clear that this should include people who want to build their own homes. Those authorities forging ahead on custom build show that they already have the powers they need to support custom building. They can also already recover the costs of sales. Stoke-on-Trent City Council is doing just that and other authorities such as Cherwell, as I indicated, plan to do the same. The Government are keen to continue to consider what we can do to support custom builders but, as I said, I do not feel that this particular amendment is necessary to do that. I wholeheartedly agree with my noble friend that we want to see more local authorities doing more to support custom build.
The other thing is that most noble Lords who contributed to the debates this afternoon are more experienced in the field of housebuilding and planning than I am. However, my father worked in the building trade and I feel very much that, when we talk about custom build, we should be careful to ensure that we paint a picture to people that it is not just the preserve of a small minority or a certain kind of people. Custom build should be available to everybody. With the measures the Government are putting in place, we are firmly on the path to realising that ambition. I am grateful to my noble friend Lord Tope for giving us this opportunity to discuss this matter, albeit briefly, but I hope he will none the less withdraw his amendment.
Housing (Right to Buy) (Maximum Percentage Discount) (England) Order 2014
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, this order was laid before the House on 5 June. As the Prime Minister and the Chancellor of the Exchequer both recently reiterated, helping people buy their own home will always be part of this Government’s policy for housing, so I am delighted that the reinvigorated right to buy has already helped over 19,500 households achieve their home ownership aspirations since April 2012.
It is not just about buying but about building. Over £419 million from these right-to-buy sales has been ring-fenced to help local authorities fund new homes for affordable rent. Already, 3,000 new homes for affordable rent have been started on site or acquired by local authorities through additional right-to-buy receipts since April 2012. This includes authorities from across England such as Camden, Birmingham and Cornwall, to name but a few.
When we reinvigorated the right to buy in April 2012 by increasing the maximum cap to £75,000, we committed to keeping the discounts under review to ensure that they remain effective in helping people turn their home ownership dreams into reality. That is why we increased the maximum cash cap for social tenants in London to £100,000 in March 2013 in recognition of the unique nature of the housing market in London. It is why we are proposing, through a separate order, to increase the maximum cash caps annually in line with the consumer prices index rate of inflation, and it is also why we propose, through this draft order, to increase the maximum percentage discount available for houses across England from 60% to 70%.
This change, if it is approved, will provide tenants with a clear message about the discount levels available for all eligible tenants. It will ensure that those living in houses will be able to accrue the same maximum percentage discount as that available to those living in flats. Long-term tenants of houses will benefit from this policy—often those who have committed to the area for 30 years or more. Affording them the same opportunity to access up to the maximum percentage discount of 70%, just as their peers living in flats can, gives them every opportunity possible to achieve their home ownership aspirations and leave a legacy for their families. The revenue from additional sales will be ploughed back into delivering new affordable homes for rent.
The draft order also includes important transitional provisions, which will apply for this year only, to ensure that no eligible tenant currently in the right-to-buy application process misses out. Equally, however, we are mindful that some people who are near to completing the purchase of their property may not want to take up the new discounts, and the draft order will allow them to opt out if they wish.
We have listened to representations from social tenants who have asked to be allocated the same equality of opportunity as their friends and neighbours who are able to buy flats. My officials have also spoken to the Local Government Association and the National Housing Federation, as well as to social landlords.
Bringing parity between the maximum percentage discounts for all properties, combined with the changes we are making to increase the maximum cash caps, is the right thing to do to help more social tenants exercise their right to buy. I commend the order to the Committee.
Lord McKenzie of Luton (Lab)
I again thank the noble Baroness, Lady Stowell, for her clear introduction of this order, which deals with the maximum percentage discount. There are separate arrangements dealing with the change to the cap. The Labour Party supports those who want to buy their own home, which is why we support the right of tenants to buy their council home, including the preserved right to buy. However, at a time of national housing crisis, we do not want to see the stock of council homes diminished.
The Government have claimed that homes sold through the right to buy will be replaced one for one. Indeed, in March 2012, Reinvigorating Right to Buy and One for One Replacement stated:
“For the first time, every additional home sold under Right to Buy will be replaced by a new home for affordable rent”.
I shall probe that proposition a little.
The Government’s figures appear to show that currently for six homes sold, only one has started to be built. The evidence of the LGA during the passage of the Deregulation Bill was that in many local areas one-for-one replacement simply is not possible. As the LGA also made clear, replacement homes are not necessarily like for like. The rents in replacement homes will be higher, meaning the rents are unaffordable to many tenants and will increase the housing benefit bill. The houses are not necessarily the same size and may not even be in the same area. The LGA also expressed concern about the impact of these arrangements on councils’ business plans.
I shall ask the Minister a few questions. For a start, can she clarify the position of those who are deemed to underoccupy their social housing and who would, if they are on benefits, currently be subject to the bedroom tax—or, in the Government’s terms, have their spare room subsidy withdrawn? Should somebody exercising the right to buy and underoccupying their property be eligible for the full discount? Can the Minister confirm that, although the information we have before us for this order refers to the need to have at least five years as a public sector tenant, the Deregulation Bill reduces this qualifying period to at least three years? Assuming that the Bill is secured by the Government, it will provide that the qualifying period is to operate from a date determined by the Secretary of State. Can the Minister let us know what the Government’s intention is in respect of the starting date of those provisions? If this provision takes effect, will the starting discount rate still be 35%, with the additional 1% accruing after three years rather than after five years?
The assumption about the ability to replace one for one is that it would be at an affordable rent. Can we have an update on the definition of affordable rent in these circumstances? How does this replacement work where the sale is through preserved right-to-buy arrangements or previous stock transfers? Can we understand how many of the current sales are under preserved right to buy rather than the normal routine arrangements?
As for the changes that have taken place, there are changes to the cap: there will be CPI uprating of the cap—the qualifying period is going to be reduced to three years—and there is this change to the maximum discount. What are the estimates of the take-up that each of these changes has generated, and the estimates of the number of replacement homes? More specifically, I am trying to understand the financial model that drives the replacement arrangements—and, in a sense, who makes the decision. Is it always the council?
If we are talking here about a council that has sold the house and is in the driving seat in determining the nature of the replacement, in what circumstances is there wider provision by and engagement of government in the process? Having had one read of the documentation that was produced, it is less than clear to me. It is one of those issues that requires quite a lot of study. If the Government’s contention is that there is going to be one-for-one replacement, who is driving that? Who makes the decision about the nature of the replacement—the nature of the property that is going to replace the one that is sold—or its specific location? Is that primarily always the local council? At what stage is there a national or central input to that decision-making?
As I said, we will not oppose this order but we are seeking to understand how real the commitment is to one-for-one replacement, which we think is a very important part of the right to buy.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for clarifying that his party supports the right of people living in council homes to buy them. This is something that we feel very strongly about. It is an important right that we want to see more people have the opportunity to exercise than has been possible over the past few years, because the reduction in discounts had rather diminished the number of houses that were being sold to people. We wanted to change that, because we believe that owning your own home is an important aspiration for people and we wanted to make sure the opportunity was widely available to as many people as possible.
Lord McKenzie of Luton
Before the Minister sits down, may I return to the issue of numbers? I thought I heard her say that the issue of one-in one-out applied to additional housing sales. Is that right or are we talking about the total sales here, minus perhaps the preserved right-to-buy disposals?
Baroness Stowell of Beeston
We have always been very clear that the right-to-buy scheme is about generating money that is used to construct replacement homes. The money comes from the sale of houses under the reinvigorated scheme. We are committed to that. As the noble Lord acknowledged, both his Government and my Government previously did not make that commitment to take steps formally to use receipts from housing sales to build new social housing. This Government have made that commitment but we said specifically that we would do so on the basis of the additional homes resulting from sales under the reinvigorated scheme.
Lord McKenzie of Luton
I am not sure that that was clear. It was certainly not clear to me that it applied only to additional sales. I took the replacement arrangements to be that every council house that was sold would lead to another one being provided at an affordable rent. If I understand the noble Baroness, she is now saying that that is not the case and that it is a question only of housing under the reinvigorated arrangements. I am not sure how that sits with the additional housing which is above and beyond that which was assumed in business plans and reflected in local authorities’ housing revenue accounts. Which is it? Does the commitment apply only to those additional sales, or additional sales minus the preserved right-to-buy ones?
Baroness Stowell of Beeston
All sales of council houses clearly generate income that returns to the Exchequer. That has been the case since right to buy was first introduced. That money will be used for a range of purposes. When this Government came to power, we introduced a reinvigorated scheme to encourage more people to buy their council homes than had done so over the preceding years. We wanted to make it possible for more people to purchase homes. When we did that, and because we knew that it would lead to an increase in purchases of council housing, we said that the money received from the sales of houses that were made available under the reinvigorated right to buy would, for the first time, go right back in full to the local authorities that had sold those properties, and they would have to use that money to build replacement social housing. That had never happened before; that is what is new, and that has been the policy since it was introduced.
Lord McKenzie of Luton
Could the Minister explain which houses are deemed to be sold under the reinvigorated right-to-buy arrangements and which are otherwise?
Baroness Stowell of Beeston
I think that I will need to follow up this debate with a specific letter that covers some of the specific detail. What has happened in terms of business planning is that, clearly, local authorities were preparing for sales on the basis of the previous scheme. On the introduction of the new scheme, sales have increased; when sales have increased in the light of us reinvigorating the scheme, and there is an increase above and beyond their estimates, the money goes straight back to local authorities. It has never happened before. That money must be used for the construction of new homes.
Lord Deben (Con)
May I say how pleased many of us are that we have at least moved to this stage? It means that at least some of the money that goes from selling council houses goes back to building new ones. The trouble is that the Minister is saying, rightly, that this is the first time that this has happened, which is true—but both sides of the House should be pretty ashamed of what has happened before.
The truth is that the sale of council houses, for it to be sensible, should mean that you sell a house to somebody who lives in it and it is therefore not vacant for anyone else to live in, then use the money towards building houses that are not lived in and which new people can move into. At long last, we are doing this. But let us not kid ourselves—neither the Labour nor the Conservative Party has done this before, and that is what was wrong about the whole system. It was supposed to be circular and, as usual, the Treasury pinched the money, under both Labour and Conservative, because the Treasury never changes. So congratulations—and I hope that the Minister will press for all the money to go to local councils for this purpose.
Lord McKenzie of Luton
To be fair, I think that, in the past, not all the money was snaffled by the Treasury—I think that 25% went to local authorities. I was not pressing the point to be pedantic, but because it is a very bold statement about replacement to say that you will sell one house and another will replace it. That will be a very important policy, but as we pick away at it we see that it is not quite like that; it does not seem to be every house that is sold that will give rise to this replacement.
I am not sure that we can take the discussion much further, as I think that we need some facts and clarification on this. I would be very grateful if the Minister would write on this and share the answer, because my understanding is that the Government’s position is not as strong as I had understood it to be from the pronouncements that they had made on this.
Baroness Stowell of Beeston
I am grateful to my noble friend for his intervention. I am absolutely clear, and I know that the Government have been very clear, in introducing the policy that they did—and as my noble friend has reinforced, this is the first time that it has ever happened; it has not happened before—the change in policy was about ensuring that the money raised through the sales of homes in addition to those that were forecast would go straight back to local authorities for building new homes.
I understand my noble friend’s point about whether there is scope to do more. There is always, of course, scope to do more, but I remind him that we have done more to increase affordable and social housing through a range of different measures than happened under the previous Government. I do not think that I can be any clearer than I have been, but I will none the less commit to review the noble Lord’s specific points and, of course, to follow up this debate in writing with supplementary information.
Openness of Local Government Bodies Regulations 2014
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Lord McKenzie of Luton (Lab)
My Lords, I start by thanking the Minister for her explanation of these regulations, and I am delighted to have heard from my noble friend Lord Smith, the experienced voice of local government, who put the Department for Communities and Local Government correct in some of its submissions and reminded us just how precarious the financial position is of local government.
We do not oppose these regulations, although they are not without controversy. Of course, the principle of ensuring that local authority decision-making is accessible to the public so that they can better engage with it and encourage the delivery of value for money is not controversial. We are on the record—or the shadow Secretary of State Hilary Benn certainly is—about supporting the use of modern technology in the course of doing this. There is controversy about bringing the regulations into force the day after they are made. The Minister referred to the Joint Committee on Statutory Instruments, which was clear that it did not find compelling the justification that the department offered for the provision. I was going to ask the Minister to have another go at convincing us, but I understand from what she said in her introduction that the regulations will not be made for 28 days in any event—so in a sense that would give some breathing space.
The Minister could perhaps tell us why the Government eschewed a consultation on these regulations and opted for a short, focused, informal soundings exercise with partners. How transparent is that? We understand that all comments were carefully considered before finalising the regulations but, of course, we are not privy to all these comments. In the interests of transparency, could they be made available? We are told that the LGA did not support the regulations, believing that guidance would have sufficed. The National Association of Local Councils raised concerns over the practical implications of the proposals, and we all had the benefit of the submission of Transport for London, which set out its concerns and those of the GLA.
Will the Minister comment on the points raised on the vague and broadly based category of decisions that will need a written public record? There is a risk that lack of clarity will cause a wider interpretation of what is required with unintended and disproportionate burdens, and the suggestion, for example, that TfL would have to record and publish in the region of several thousands of decisions, including in relation to taxi and private hire licensing. There are concerns, too, over contracts whose terms and conditions include granting a permission or a licence, adding burdens with very little impact on transparency, given DCLG’s local government transparency code of 2014. There are also concerns about provisions on background papers. I do not assert that Transport for London is correct in its concerns, but we are entitled to hear a response from the Minister to what seem to be the very real issues that were raised with us.
On what is perhaps a minor matter, we note that written records must be retained and made available for inspection for six years, but background papers for only four years. Perhaps somebody could explain the difference between those arrangements.
The Minister said in her introduction that it was agreed during the passage of the Local Audit and Accountability Act 2014 that the Government would bring forward new powers to ensure that the public can film, blog or tweet at all meetings of the council, its committees and sub-committees, that they can attend. This is about bringing local democracy up to speed with today’s fast-moving digital age.
These new communication channels enable local authorities to speak quickly and directly to their local communities. As my honourable friend Roberta Blackman-Woods said in another place, the local media industry is sadly in decline. The internet and social media mean that people are accessing news and information online. The circulation of local newspapers has declined and staff and resources have been cut. Today, more and more council meetings are taking place without a reporter in the public gallery.
Over recent years, we have seen local authorities experiment with new ways of broadcasting council meetings such as live streaming video or audio, using Twitter to post updates and uploading transcripts online. Although the number of people watching these webcasts may be small, the online audience is significantly higher than in the meeting room itself, and has the power to grow exponentially. A retweet or a shared Facebook post grows the potential reach of that piece of information by tens or hundreds of people with just one click. We know that many local authorities are struggling to deliver their statutory services so it is right that we give powers to the public to film and record council meetings rather than make it mandatory for councils to do it themselves.
We are used to having our proceedings televised but rules govern how this is done. It seems to me that these rules will not necessarily exist at the town hall, so will the Minister offer her thoughts on circumstances where filming or recording is focused on one member in particular, and done in such a way as to intentionally seek to damage his or her reputation, perhaps by capturing an unguarded and unflattering moment? My honourable friend Roberta Blackman-Woods also referred in another place to the extent to which accommodation must be made for big equipment such as spotlights, but I think the Minister dealt with that in her opening remarks.
We note that there are no formal plans to monitor and review these regulations, which is a pity, but we look forward to the plain-English guide and hope that it will clarify some of the uncertainties around the drafting of these regulations—which, as I said, we nevertheless support.
Baroness Stowell of Beeston
My Lords, I am grateful to noble Lords for their contributions. The noble Lord, Lord Smith of Leigh, talked about the need for these regulations and said that there was a reference to him in one of the documents that my department provided to the JCSI.
As I said at the start of the debate, we all believe in openness and transparency. We think that is a good thing and want people to have access to meetings. However, people’s expectations of what that means are changing because of the onset of social media. People no longer want to go to meetings and listen; they want to provide a commentary through tweeting or make a recording so that they can have an element of control in the way that they use the information they have gathered. That is the modern way in which democracy works in terms of public access.
Although the noble Lord is absolutely right to say that there is already widespread use of these forms of access on the part of local authorities, there is, however, evidence of some local authorities not allowing them. I do not think it is right that in this country in 2014 we should be put in a situation where it is possible for some people not to be able to tweet or record a public meeting just because a council thinks that they should not do so.
I can refer to few examples in addition to those to which the noble Lord referred, which I will not repeat. Tower Hamlets, for instance, barred a 71 year-old resident for filming, due to the risk of reputational damage to the authority. In November 2013, it was stated at a meeting of East Riding of Yorkshire Council that it would not allow filming or blogging of any meeting until forced to do so by law. In Middlesbrough, an AGM was suspended because an internet blogger refused to stop filming proceedings; people were told to leave the building after the meeting was suspended while the police were called.
I understand that they may be limited in number, but earlier this year I was in Strasbourg at a Council of Europe meeting, responding to a report of one of the committees there about local democracy in England. There were people in that committee from Turkey and other countries. I wanted to be able to demonstrate that, in our country, we have the kind of freedoms that people believe in and that we will, if those freedoms cannot be accessed, change the law where necessary to make it possible. We have done it in a simple and straightforward way.
The issue of expense has been raised. There is nothing in these regulations that should incur any cost to local authorities, because they are not required to provide any kind of additional facility whatever. I am aware that some local authorities record or even stream their meetings live as they are happening. That is a good thing, but they are not obliged to do so, and we certainly would not make that mandatory. The fact that there is some evidence of restrictions on the public means that we are now making absolutely clear what is possible, which local authorities are in most cases already doing. It should be quite a simple change for people to be able to cope with and implement.
That said—as I said in my opening remarks and as the noble Lord, Lord McKenzie, asked me to confirm—we will not bring the regulations into force until at least 28 days after they have hopefully been approved by Parliament. We have produced a plain-English language guide, a draft of which is available on my department’s website. It addresses the sorts of concerns that are legitimate, such as making sure that this access does not lead to inappropriate disruption. If noble Lords have not yet had a chance to look at it, I encourage them to do so.
I turn to some of the specific points raised by the noble Lords, Lord Smith and Lord McKenzie, which I have not already addressed in my remarks. The noble Lord, Lord Smith, asked about criminal sanctions. It is worth me being clear that the criminal sanction applies only to a situation in which a person without reasonable excuse prevents someone from accessing an existing document. It does not apply to the decision as to whether such a document should be produced; it is a question of there being evidence of somebody obstructing somebody from accessing a document.
On the categories of decisions made by officers on behalf of elected representatives, the regulations do not require the recording of day-to-day administrative decisions taken by officers. Rather, they require the recording of two categories of delegated decisions: those taken by officers under a specific delegation, and certain decisions taken under general delegation, as I mentioned. To the noble Lord’s point that most local authorities are already following good practice in this area, we believe that the work necessary in preparation for these regulations coming into force is quite minimal.
The noble Lord, Lord McKenzie, asked what steps we have taken to consult others about these changes and about our informal soundings. The comments that we received from our soundings are described materially in the Explanatory Memorandum. The plain-English guide will make clear that decisions such as operational ones about, say, tickets, which the noble Lord referred to, do not need to be recorded.
Noble Lords raised the issue of whether access to the chamber for the recording of proceedings might lead to intimidation of councillors. Although it is important to be considerate of members of the public who do not wish to be filmed, we believe that an elected representative should not shy away from being held accountable for their words and actions in council meetings. In cases of actual intimidation, there are of course existing laws that prevent any kind of intimidation that would be threatening in nature.
On the recording of decisions, the noble Lord, Lord McKenzie, asked why background papers need to be kept for four years and decision records for six. This is consistent with existing rules contained in the Local Government Act 1972 for decisions taken by members in council or committees. It is also consistent with the 2012 regulations about the openness of council executives.
The noble Lord, Lord McKenzie, also asked about recording the granting of licences. It is right that, where a licence is granted, there needs to be a written record of the decision taken by the officer concerned. It is right that there should be transparency about the granting of such benefits to private individuals. Indeed, such decisions today will invariably be in writing.
I think I have covered all the points that were raised during the debate. I think that I should thank the noble Lord, Lord McKenzie, for the Official Opposition’s support for the regulations, although I was not entirely sure whether he was supporting them or not. However, there is a certain spirit of support for ensuring that we are as open and transparent as possible.
Cornwall: EU Structural Funds
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Baroness Stowell of Beeston
We are on track now. The consultation on the England operational programme has concluded and we are absolutely on schedule to meet the deadline set by the European Union to submit that document. It is really important that we do not try to reopen the negotiations, which would delay us in meeting that deadline. Once we have gone through all the processes, the money will start flowing at the beginning of next year.
Lord McKenzie of Luton (Lab)
My Lords, the Cornwall Council website makes it clear that European funding has already made a huge economic and social impact on business and residents in Cornwall and the Isles of Scilly thanks to the Objective 1 programme, and the convergence programme has delivered transformational projects such as the rollout of superfast fibre-optic broadband. It anticipates the benefits of the €592 million programme, to which my noble friend referred. Of course, that is part of a wider €6.2 billion ERDF and ESF programme for the UK as a whole. Are these programmes that the Government would wish to see preserved or changed under any renegotiation of the treaty?
Baroness Stowell of Beeston
As the noble Lord understands, we are about to enter this programme, which is for 2014 to 2020. Due to the Prime Minister’s effective negotiations in Europe, we have already cut the European budget and negotiated a much more streamlined use of these structural funds. We have done all that and protected Cornwall at the same time.
Council Tax: Support Schemes
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Lord McKenzie of Luton
To ask Her Majesty’s Government how they propose to assess the impact of council tax support schemes on vulnerable groups and on work incentives.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, the best councils are using local council tax support schemes to help get people back into work. They are increasing work incentives while protecting the vulnerable. An independent review of the schemes will be carried out, as required by the Local Government Finance Act 2012.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for that reply. Is evidence not emerging already from the Joseph Rowntree Foundation and Citizens Advice, and through FoI requests, about the misery that these arrangements are causing, by deliberate acts of government such as the transfer of responsibilities—underfunded from day one—and continuing cuts to the ongoing budgets of councils? Is it not the case that, in the current year, some 2.3 million people in low-income families will pay an average of £149 more a year in council tax than they would have under the council tax benefit system? This year, a further 70,000 families will have their support cut for the first time and nearly 400,000 disabled people will see their council tax increase. All this is fuelling a debt crisis and is a job creation programme for bailiffs. How is this contributing to the creation of a fairer society?
Baroness Stowell of Beeston
My Lords, I notice that the noble Lord did not inform your Lordships that council tax bills more than doubled under his Government, as did spending on council tax benefit, rising to more than £4 billion, which equated to £180 for every household. Action was therefore essential. We have cut council tax bills and changed the benefit system for council tax so that people are supported properly in their local areas by their local authorities, which are responsible for setting and collecting council tax. Those authorities now have a vested interest in supporting local people back into work. The latest unemployment figures show how our overall approach to the economy is working.
Business Rates
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Baroness Stowell of Beeston
There is no difference in treatment in terms of the business rate between businesses on the high streets and those located outside town centres. As I mentioned, the Government have made sure that their support is very much focused on the retail sector. We have made other measures, particularly the £1,000 discount for those with rateable values of below £50,000, which is aimed very much at small businesses.
Lord McKenzie of Luton (Lab)
My Lords, does the noble Baroness agree that the best way to support small businesses would be to prioritise the cutting of business rates in 2015 and freezing them in 2016, as we have proposed, rather than provide a corporation tax cut to some 80,000 businesses? That would help 1.5 million small businesses. Is the noble Baroness aware of reports that identify the negative effects of the Government’s decision to delay the next business rate revaluation? In particular, due to the delay, struggling retailers in the north of England are now subsidising luxury retailers in London’s West End.
Baroness Stowell of Beeston
As the noble Lord knows, we decided to postpone revaluation to provide certainty and stability. The Valuation Office Agency suggests that 800,000 premises would have seen a real-term increase in their rates at a 2015 revaluation had we carried one out. This would compare to only 300,000 seeing reductions, so I suggest the decision that we made was the right one.
Baroness Stowell of Beeston
The Labour Party policy paper to which I think my noble friend is referring suggests a range of measures. I can be very clear on one measure with which we disagree: a measure to introduce business rates for farmland and farm buildings, which would certainly lead to an increase in the cost of living by forcing up food prices.
Lord McKenzie of Luton
The noble Lord might care to know that the paper to which he refers is not Labour Party policy or part of the Labour Party’s policy review. That is another fiction from Members opposite.
Baroness Stowell of Beeston
I am glad to hear that the noble Lord is not intending to introduce business rates for farmers. I am sure they will be very pleased to hear that.
Local Government Pensions Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Baroness Stowell of Beeston
The point about police and crime commissioners—this is an area which, in due course, we will want to examine—is that, since they were recently created, we felt that it was not appropriate to make this change at this time. I do not assume that it will be something that will be left unattended for ever.
My noble friend Lord True asked, when we were talking about savings, about the publicity budget for my department. He suggested that somebody in the Box would have the answer. Because I have a great bunch of officials with me, yes, indeed, I do have the answer, which is £2.5 million—which I would guess is a whole lot less than it was under the previous Government.
I can assure the House that the Government did not take this decision lightly. We certainly looked carefully at transitional arrangements for those councillors who are in the pension scheme. I note that the noble Lord, Lord Palmer, dismissed the concessions that we made following consultation that will see that existing members will leave the scheme only at the end of their existing fixed four-year term of office. That means that councillors’ membership of the scheme will be phased out between 2014 and 2017 and that no change to the reasonable expectations that councillors had when they ran for their fixed term will be made. I can also confirm to my noble friend Lord Vinson that he is right that nothing will stop councillors contributing to a personal private pension in future, but the key point is that they will not be able to join a scheme to which taxpayers contribute as their employers.
I firmly believe that the best thing we can do to encourage more people to take part in municipal public life is to decentralise power to local communities so that being a councillor is an even more meaningful and rewarding role. We need to attract and retain a wide range of enthusiastic councillors, and I agree with noble Lords who said that this is important. When we are talking about ensuring that we have a wide range of councillors—in fact my noble friend is back with me on the Front Bench—it is worth noting that one of her successors as leader of Trafford Council is 26 years old, comes from a modest background and put himself through university. It is simply not true to suggest that people do not want to put themselves forward to become councillors.
The reason we are starting to attract a wide range of people is that this Government have made many changes to local authorities that mean that councillors are in a greater position to deliver change. For example, we have abolished the Audit Commission and government offices. This means that councillors can rightly focus on meeting the needs of local people, rather than spending their time dancing to the tune of central government. We have introduced new rights for communities to lead and deliver change, including through neighbourhood planning. This gives exciting opportunities for councillors to support and encourage local people to help them deliver their own aspirations.
The noble Lord may laugh, but neighbourhood plans are seeing a fantastic turnout at referendums, when local people know that, as a result of getting engaged, they will see change and will be able to take control of decisions in their local area. We have introduced the general power of competence. This means that councillors now have greater scope to do things to meet local people’s needs. We have helped councillors better represent their constituents and better enrich local democratic debate by scrapping the Standards Board and clarifying the rules on predetermination. These are just a few examples of the steps this Government have taken to strengthen the contribution that councillors can make to their communities.
The LGA briefing note that was distributed to noble Lords prior to this afternoon’s debate said that,
“76% of people trust their local councillor the most to make decisions about how services are provided in their areas”.
That is great news, and the reason for that kind of result is that councillors have the power to lead their communities, to speak for their communities and to deliver for their communities. That is a very good thing.
Lord McKenzie of Luton
My Lords, I start by thanking all noble Lords who contributed to this debate. I apologise to the noble Baroness, Lady Williams, for being remiss in not recognising her first appearance on the Front Bench on CLG matters. Despite the fact that this is an emotive subject, the debate has been fulsome, knowledgeable and very measured.
We recognise that the Minister today paid fulsome tribute to the role of councillors, but part of the problem with this whole issue is that some of her colleagues did not display the same attitude, and certainly not in presenting and developing the pensions issue that we are discussing today. Also, the concept that somehow people are rushing to stand for election because of the abolition of the Audit Commission is a little far-fetched. The issue about the numbers of people standing is not perhaps so much whether there are new people wanting to come forward but how many people are not standing who stood before because of the financial pressures and challenges of being in local government today. We have not heard anything new from the Minister—that is not to be expected, perhaps—in justification of the policy the Government are pursuing here.
On this issue of not being reliant on the municipal payroll, if there is not some basis for elected members to earn a living, will we not end up in a situation where only the rich, the retired and—less so these days—those with benevolent employers who are happy to give their employees lots of time off can serve in local government? There must be some form of remuneration. Is not the issue about pensions the general point that if we encourage people in all other spheres to save for a private pension because the state will not be able to produce enough for them to have a full retirement, why—in the words in particular of the noble Lord, Lord Shipley, who is not in his place—are councillors being discriminated against in that respect?
I will pick up on some comments from other noble Lords. I think all but two who spoke were in support of the proposition before us today. The noble Baroness, Lady Jones, raised a very important point about the mayor and PCCs, although that has been clarified. The noble Lord, Lord Bourne, reminded us that we should be careful about how we use the term “volunteer”, and I take that point. The problem is that the Government, in characterising what local councillors do as “volunteering” in the same category as some of the work done in the voluntary sector, undervalue, underestimate and do not recognise the role and responsibilities that councillors undertake in the modern era. That is the key point.
The noble Lord asked whether we would commit to bringing this back, and I think the Minister said that we were in favour of scrapping the 2014 revised scheme. Was that what she said?
Baroness Stowell of Beeston
The point I made was that that EDM that the Leader of the Opposition in the other place tabled goes beyond the narrow scope of the regret Motion that the noble Lord tabled today and prays against the regs completely.
Lord McKenzie of Luton
Let me make it absolutely clear that it is my party’s position that we support the revised Local Government Pension Scheme. So far as these arrangements are concerned and whether we would reinstate this, I cannot give a blanket commitment that we would. No incoming Government would do that without looking across the piece at all the things that must be addressed. More particularly, the Local Government Pension Scheme is currently under consultation to restructure on a more effective, collaborative basis. That is part of the Government’s consultation. We do not yet know how and where that will lead. Also, the consequence of the Government’s position is that councillors will be driven into the private pensions market. How readily that can be unpicked would be a real issue as well, particularly because small pension pots stranded in private sector schemes cannot be transferred back into the local government scheme. A raft of issues would, quite properly, need to be considered.
My noble friend Lord Beecham, with his usual incisive approach, reminded us that Conservative legislation laid the groundwork for some of these proposals and that it depends upon independent panels enabling members to become part of the Local Government Pension Scheme at the moment.
Rental Properties: Smoke Alarms
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Baroness Stowell of Beeston
My noble friend tempts me off the topic of the Question. However, I agree with what he says on that matter.
Lord McKenzie of Luton (Lab)
Does the noble Baroness agree that it is unbecoming for a Minister to encourage misrepresentation of our proposals? We are arguing not for old-style rent controls for the private rented sector but for more stability and security, with three-year tenancies being the norm, and with initial rents being set on a market-value basis for the full three-year tenancy but with an upper ceiling on any increases. Given that we now have 9 million people in the private rented sector, does the Minister agree that Generation Rent would welcome the stability that our proposals would bring?
Baroness Stowell of Beeston
The Question is about smoke alarms. It is worth noting that the noble Lord did not acknowledge that this Government listened to the debates in this House and are looking into whether smoke alarms should be made mandatory, which was something that his party did not do when it was in government.
Housing
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Baroness Stowell of Beeston
I certainly welcome the conversion of the shadow housing Minister to supporting the right to buy. I wish only that he would speak to his Labour colleagues who are in government in Wales as they seem to be doing everything they can over in Wales to prevent people exercising their right to buy. The contrast here in England is stark. I can reassure my noble friend that it is very much an important part of our housing strategy. We have increased the discounts available to those who wish to exercise their right and our commitment to replace the additional homes sold under our reinvigorated scheme will mean that even more people will have the same opportunity in future.
Lord McKenzie of Luton (Lab)
My Lords, I think that Jack Dromey is the former shadow housing Minister. Last year, the Government built the lowest number of genuine social homes for more than 20 years. We know that the Mayor of London has banned Labour councils from insisting on the building of genuine social homes through Section 106 agreements in his London plan—this against the guidance of the planning inspector. Indeed, we believe that he has just announced that at the dockyards at Deptford they are planning for 3,500 luxury flats—not a single affordable home, unless you are a millionaire, of course. Does the Minister seriously support that approach?
Baroness Stowell of Beeston
It is a shame that Jack Dromey is the former shadow housing Minister, because he very much supported our policy—talking about it as a policy of aspiration. On social housing, I say to the noble Lord that more council housing has been built under this Government than in all the 13 years of the previous Labour Government.
Urban Development Corporations in England (Area and Constitution) Order 2014
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for moving this order. When I first looked at the Explanatory Memorandum, I assumed that we were in effect dealing with two orders because the negative order as well as the affirmative order is covered in it. I hope that the Minister will therefore allow me to raise one or two questions about the West Northamptonshire Development Corporation (Transfer of Property, Rights and Liabilities) Order 2014. As we have heard, the urban development corporation order would appear to revoke the order which established three further development areas. The Thurrock Development Corporation was dissolved in 2012 and the London Thames Gateway Development Corporation was dissolved in 2013. In each case, the property, rights and liabilities were transferred to other bodies. However, in the case of the West Northamptonshire Development Corporation, it appears that some assets and powers have already been transferred to successor bodies. One of the orders completes the transfer and enables the revocation of the third urban development order.
As a general point, if each of the development corporations is devoid of assets and has been dissolved, is the revocation order just a tidying-up exercise to prevent them being revived at some stage in the future? I think the noble Baroness said that they have a 10-year life, so no wonder if they expire anyway. Given that there will be nothing in them, why is there a need formally to deal with them in this manner?
Specifically in relation to the West Northamptonshire DC transfer order, a reference is made to a dissolution date, being a dissolution by an order made under Section 166(1A) of the Local Government, Planning and Land Act 1980, so presumably that order will be laid in due course. I think that that may have been what the Minister referred to when introducing the order. Can she say why paragraph 2 of the West Northamptonshire DC order is being revoked separately from the residual revocation which is to take place with effect from 31 July 2014?
On paragraph 4.1 of the transfer order, can the Minister say what remaining property rights and liabilities are to be transferred to the Secretary of State? Also, what is the final destination of the property, rights and liabilities which are on the retained list? Similarly, what is the position in relation to contracts of employment and pension schemes under paragraph 3(3)(b), given that the import of those arrangements is obvious? What is the position of West Northamptonshire DC if it has not completed the winding-up of its affairs by 31 July 2014, or is there an inevitability about that? Paragraph 8.3 of the Explanatory Memorandum indicates ongoing discussions between Northampton Borough Council and the Department for Communities and Local Government. What are the points at issue and have they now been dealt with satisfactorily?
More generally, can the Minister confirm that there will be no adverse financial consequences for any of the local authority transferees from these arrangements, including their prudential borrowing power and capacity? Will that be affected in any way by these transfers? It is presumed again that there are no taxation consequences for the West Northamptonshire DC, but perhaps the Minister can confirm that. I ask the question simply because if an entity is transferring a range of assets to another entity, typically if it were a private sector entity, valuations and capital gains tax would have to be dealt with, as well as other issues. I presume that that does not come into play with the sort of body we are dealing with here, but it would be good to have that confirmation. Lastly, what measures are the Government putting in hand to estimate whether the successor arrangements are delivering on regeneration?
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for his remarks. I thought that he might have some questions about the orders that are referred to in the Explanatory Memorandum but are not before the Grand Committee for debate today, so I have some information which I hope will be helpful to him.
One of the first points he made concerned why we are introducing the order formally to bring these corporations to an end. Although there was an expectation that they would be time-limited when they were set up, no specific time was fixed for them at the point of their creation. Therefore, it is necessary to draw them formally to a close.
Prevention of Social Housing Fraud (Power to Require Information) (England) Regulations 2014
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Lord McKenzie of Luton (Lab)
My Lords, I again thank the Minister for introducing these regulations, which, as we have heard, are focused on facilitating investigation into social housing fraud. We support that focus and support these regulations. The Prevention of Social Housing Fraud Act 2013 introduced deterrents, additional to the right to terminate a tenancy, relating to unlawful subletting and recovery of profits. As we have heard, it was a Private Member’s Bill and was very ably steered through your Lordships’ House by the noble Baroness, Lady Eaton—we should again congratulate her on that effort.
We have common cause in tackling social housing fraud. Cheating on the system and denying those whose housing needs are thereby frustrated can in no way be condoned. This would be the same in any era, let alone that which faces us currently, with a housing crisis with, simply, too few new homes—private and social—being delivered; and notwithstanding also that those to whom social housing is unlawfully let may themselves be faced with appalling housing situations. We have heard the Audit Commission estimate that some 98,000 of the 4 million social homes are unlawfully occupied—4% of the stock in London and 2% elsewhere. Other estimates put it even higher. Whatever the actual numbers, we know that unlawful occupation prevents tens of thousands of social homes being allocated to the people who need them most. For many who let unlawfully, there are profits to be had: the difference between private sector rents and social rents. The inexorable rise of private sector rents make such letting potentially very lucrative. There is also the cost to the public purse of families being displaced into the private rented sector, with increased housing benefit bills.
As the privacy impact assessment makes clear, and in tune with what the noble Baroness, Lady Eaton, has just said, compelling certain private sector organisations to provide data to local authorities for social housing fraud investigation purposes raises important issues around privacy and data protection. It is asserted that although the key task of the social housing fraud investigation is to link the tenant to another property, through evidence of the receipt of rental income from a sublet or mortgage payments suggesting ownership of another property, the information reasonably requested should not include sensitive personal data. That analysis is one that we agree with. We accept that the powers sought in these regulations are based on the well established procedures for social security fraud and, indeed, are not as extensive in that levels of income, for example, are not needed. We understand that the fact that subletting is now a criminal offence itself enables organisations to lawfully disclose certain information but does not compel them—hence the need for new powers.
There are express safeguards surrounding these powers, which the noble Baroness, Lady Stowell, spelt out. I will not repeat them now. There are obviously, at least theoretically, robust safeguards but the issue is how they are being monitored in practice. The expectation is that local authorities will publish information through their Freedom of Information Act publication scheme—for example how often they use the gateway. There is also the expectation that they will comply with data protection principles around processing and handling the relevant data et cetera. Perhaps the Minister can just say a little more about what is expected in this regard and what local authorities’ records have been in relation to their powers in this regard to date. We will expect the Government to keep Parliament updated on how effectively the regulations are working in ensuring that social homes are reallocated, and on whether the anticipated savings are materialising, before the official departmental review in 2018. We are pleased to support these regulations.
Baroness Stowell of Beeston
I am very grateful to the noble Lord, Lord McKenzie, for his warm support for these regulations. I am also grateful to him for describing in some detail how the impact assessment on privacy has been carried out and what it contains. He is right—as, indeed, is my noble friend Lady Eaton—that we have to be careful that the relevant privacy issues are properly taken account of.
On that particular point, the noble Lord asked whether there was any evidence of misuse of these new powers. We certainly expect local authorities to have strong systems in place to prevent misuse. We would expect disciplinary action to be taken against an authorised officer who misused the power to require information because it is an offence to obtain unlawfully or disclose personal data. The Information Commissioner will be able to investigate complaints about the use of data by a local authority, and it will be for the Information Commissioner’s Office to investigate such claims. Should it find any failings in this area, it can, and will, give out fines for the misuse of data.
On the noble Lord’s questions about publication of the use of this power, that issue will be coming through to me and I will respond before I sit down. More generally, as I have already said and as we have acknowledged, social housing is an extremely valuable asset. While the vast majority of social tenants play by the rules, it is vital that social landlords have the tools they need to root out those who do not. Along with the other measures in the Prevention of Social Housing Fraud Act, the new power introduced by these regulations will help free up much needed homes for many of those on the waiting list who are in genuine need.
We talk a lot about the need to build more new homes but we are mindful also of the need to ensure that the existing social housing stock is being used as intended. Reducing fraud will mean that more households in genuine need will enjoy the security and stability that a decent home provides. Cracking down on that fraud will reduce the benefits bill by moving households on the waiting list from expensive temporary accommodation into the newly freed up social homes.
It is worth saying that about 90% of responses to the government consultation were in favour of the new data access power. Councils already have similar data access powers for social security and council tax fraud reduction schemes. As well as tackling fraud that is already in the system, these regulations will help to prevent fraud by stopping cheats getting into the system in the first place. The Government want social landlords to tackle fraud in their housing stock and we must give them the tools that they need to do that. I am very pleased that this power will enable them to do so.
Sadly, it does not look as though I am going to be able to provide the noble Lord with any more information at this time about how we will ensure that local authorities place their use of these powers in the public domain. However, I will ensure that I follow up that information in writing. I am slightly frustrated that I cannot find it in my brief because I know that I read something over the weekend about providing information of this kind to allow for proper accountability and scrutiny. However, I am confident that I will be able to send the noble Lord forthwith a comprehensive letter in reply.
Combined Authorities (Consequential Amendments) Order 2014
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Baroness Stowell of Beeston
The noble Lord raises a couple of points there. The point that I am getting to with the overview and scrutiny committee is that it would be made up of representation from the various authorities that make up membership of the combined authority. The scrutiny committee that will hold the combined authority to account will be made up not of the chairman or the leaders of the different local authorities but of people from the different parties represented in that local authority. So there will be a variety of political parties represented on the scrutiny committee that holds the combined authority to account.
As to access to meetings of the combined authority, I was going to come on to that, because it was a point that my noble friend Lord Storey also raised. They will be subject to exactly the same transparency requirements as local authorities. So, yes, the meetings of combined authorities will be open to the public; this is a statutory requirement. Their minutes will be published in exactly the same way as local authority minutes will be published—and, indeed, they will be subject to the requirements of the Freedom of Information Act in exactly the same way as local authority meetings are at this time. I hope that before I sit down I will be able to confirm that the scrutiny committees will also be open to scrutiny in the same way.
The noble Lord, Lord McKenzie, referred to West Yorkshire and York in particular. He acknowledged there that we are seeking what we describe as a legislative reform order to amend primary legislation on combined authorities to enable a council that is not contiguous with other members of the combined authority but which is in the same functional economic area to become a constituent council of that combined authority if it wishes. As a first step, we will be consulting on proposals for such a legislative reform order, which will be an opportunity for those with views on this to put them to government.
The noble Lord, Lord McKenzie, also referred, I think, to the combined authorities’ ability to reclaim VAT. I confirm that they will not be disadvantaged by VAT legislation. Last week, the Government launched a consultation on the proposal to add Greater Manchester and these proposed combined authorities to the existing VAT refund scheme for local authorities, which can be achieved through secondary legislation. The consultation closes on 18 April and, following that, if the Government decide to proceed, parliamentary approval will be sought to give effect to this and to enable established combined authorities to recover VAT, just as the constituent local councils can.
The noble Lord, Lord McKenzie, also sought confirmation that local authorities and the ITAs that will be abolished would not be subjected to any disadvantage around tax arrangements. I will see whether the answer to that emerges, but if it does not, I will write to the noble Lord. I can confirm that there will be no disadvantage. I am nearly at the point where I might be able to avoid a letter, which would be great.
Going back to the point that I was talking about previously, I confirm to the noble Lord, Lord Alton, and all noble Lords, that the scrutiny committee will be open to the public, as will be the combined authority meetings.
Several noble Lords mentioned devolution and localism more generally. The Localism Act 2011 devolved powers not only to local authorities but to local communities. We are interested in discussing with local authorities what more can be done to empower them to deliver economic growth and take their communities forward. We certainly hope that more of the combined authorities will come forward. As my noble friend Lord Shipley said, the combined authority covering local authorities in the north-east will be with us very shortly. I hope that I have been able to address all the key issues that have been raised.
Lord McKenzie of Luton
I may be able to avoid the Minister having to write. I am not sure that she dealt with the point about funding and whether the opportunity runs beyond the existing opportunities in relation to transport funding. In particular, given what is effectively a recent change, as levying bodies, presumably these are the very sorts of levies that have to be taken into account by individual local authorities in judging whether or not their council tax increases are excessive. Within the overall constraints—whether we agree with them or not—that the Government have imposed, there is an effective cap, subject to referendums, on what the combined authorities would charge in their constituent authorities. Should that not be an argument for perhaps some relaxation in relation to prudential borrowing for so long as it could be funded through the levy mechanism?
Baroness Stowell of Beeston
The noble Lord is right to say that I had omitted to respond to him on that important point. We are absolutely clear that levies should be included in the regime for the consideration of council tax levels. Levies will therefore be caught by the council tax referendum policy. We are absolutely clear that local people should be able to have their say on any proposed excessive increase in council tax, whether caused through a levy on the council or by any other reason. Certainly in Leeds, where this has been a particular debate, we are confident that the measures proposed in that area would be possible without an increase above 2%. If a combined authority wanted to propose an increase above 2%, it would be open to it to conduct a referendum.
Baroness Stowell of Beeston
My noble friend raises some very important points. As a point of principle, I or one of my ministerial colleagues would be happy to write to the combined authorities, and I will discuss with them the precise detail to put in such a letter.
Lord McKenzie of Luton
The exchange has prompted a thought. Presumably the combined authority will have to have an audit panel, subject to the constraints or requirements of the recent Act.
Baroness Stowell of Beeston
Yes, it will. I commend these orders to the Grand Committee.
Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2014
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston)
My Lords, these regulations will help to maintain the smooth operation of the business rates retention scheme in England. The scheme allows local authorities to retain up to 50% of business rates income in their area, which provides a direct incentive and a boost to those authorities that go for growth. This incentive could deliver a £10 billion boost to the economy by 2020.
The scheme was first introduced last April and since then we have continued to hold discussions with local government on how it operates in practice. These regulations make some technical changes to the rules for calculating the levy and safety net under the business rates retention scheme, which we have identified as a result of those discussions. All of the changes we are making today have been agreed with representatives of local government.
The rates retention scheme includes a safety net system to protect those authorities which, for whatever reason, see a large drop in their business rates income. The safety net ensures that no authority’s income from the rates retention scheme can drop by more than 7.5% below their baseline funding level. Authorities in that situation receive a safety net payment which increases their income to the 7.5% threshold.
Equally, there are some authorities which, because they have such a large amount of business rates income in comparison to their spending, are potentially able to generate significant sums in business rates growth. These sums may be very large when compared to the authorities’ spending requirements. Therefore, the system includes a levy on those authorities which can generate growth which is disproportionate to their spending. The income from the levy is used to fund the safety net.
These regulations make some technical changes to that levy and safety net system. First, the regulations, together with the original regulations which they amend, ensure that changes to business rate reliefs introduced by central government are not captured within the calculation of the levy or safety net. So, for example, in the Autumn Statement of last year the Government announced that small business rate relief will continue to be doubled until 31 March 2015, a change that was welcomed. This rate relief for business reduces the rates income for local government. These regulations ensure that the reduction in income from this change, and other changes introduced by the Government, are not included in the calculation of the levy and safety net.
We have done this because we will separately compensate local government for the lost rates income from central government changes to business rate reliefs. We will do this outside the rate retention scheme using a grant under Section 31 of the Local Government Act 2003. Indeed, the Section 31 payments for 2013-14 have already been made, and the payments for 2014-15 will commence in April.
If we did not make the amendments in these regulations, local authorities might also receive compensation for the Autumn Statement measures through a reduced levy or a safety net payment. For example, if an authority is already on the safety net then the Autumn Statement measures would merely increase their safety net payment, and this would duplicate the compensation they are already receiving through the Section 31 grant.
So these amendments ensure that authorities will receive the correct amount of compensation for changes to business rate reliefs introduced by the Government. The amendments and the method for calculating the Section 31 grants delivering the compensation have all been agreed with local government.
The regulations also make a number of technical improvements to the original scheme. They will ensure that when an authority which is paying a levy or receiving a safety net also chooses to reduce rate bills using a local discount scheme, it will have to meet only the local share of the cost of those discounts. The original regulations required it to meet the full cost of the local discounts, which was rightly criticised by local government, so I am pleased to be able to correct it now. We are also taking the opportunity to correct an error concerning the treatment of relief in an enterprise zone and we have also included amendments to future-proof, to use the common phrase, business rate retention pools so that we do not need to return to the House with further regulations every time those pools change.
I hope that I have been able to explain the measures clearly. They are designed to ensure as far as possible simplicity of the operation of the scheme. I commend the regulations to the Grand Committee.
Lord McKenzie of Luton (Lab)
My Lords, I thank the noble Baroness, Lady Stowell, for a very clear explanation of the regulations. As will be clear from our contributions in another place, we will certainly not be opposing them.
I shall come in a moment to the matter of helping to maintain the smooth operation of the current system and explore how the general progress of the new system is proceeding, but first I have one or two specific questions. On the adjustments being made to small business rate relief, is it just the extra small business rate relief for 2013-14 and 2014-15 which is being adjusted for or the totality of it? I have not worked through the formula, but I would be grateful for an answer. As for the Section 31 grant which is keeping local authorities whole, is that an exact compensation for each authority for the adjustment being made under the proposals?
The noble Baroness referred to discretionary rate relief; some of it has been amended under the provisions, but not all of it. Paragraph 7.7 of the Explanatory Note states:
“The 2013 regulations ensure that certain discretionary discounts (relating to not for profit organisations, community sports and social clubs, rural properties and property in enterprise zones) and hardship relief will be included for the purpose of calculating retained rates income, but that other discretionary relief will be ignored”.
Can the noble Baroness give a few examples of what is likely to be in that other discretionary relief which will be ignored?
I am trying to get a handle on what is happening to the safety net and the levy. For the two years in question, could we have an update on the amounts of the safety net now expected to be payable in comparison to the original estimate? Do we know how much of that safety net expenditure is attributable to appeals rather than to other changes in the capacity of the business rate base in any particular council? In respect of that safety net, how much is actually being paid for by the levy and how much is being top-sliced from the RSG? It is important to understand who is actually bearing the cost.
I conclude on the noble Baroness’s assertion that these regulations are helping to maintain the smooth operation of the new system. It is clear from looking at what is happening to local authority support, using the Government's own preferred measure of the spending power of the household, that the 10 most deprived authorities in England will lose 10 times the amount in spending power per household compared to the 10 least deprived local authorities between 2010-11 and 2015-16. If you look at the cumulative cut in spending power per household over that period of 2010-11 through to 2015-16, some of which I accept precedes the business rate retention scheme, for the 10 most deprived authorities there is a reduction of 25.3%, while for the 25 most deprived it is 22.5% and for the 50 most deprived it is 20.96%. However, for the 10 least deprived it is 2.54%. Can the Minister explain how these outcomes are justified? Is it an intent of policy that this be the outcome or some quirk that was not intended to happen? We have seen enough of the system now to be able to ask legitimately whether the Government really intend this redistribution. Perhaps we could understand where it is articulated because if we extrapolate forward what has happened over the past couple of years the situation for local authorities, particularly those most deprived and challenging authorities, is very dire indeed.
Baroness Stowell of Beeston
I am certainly grateful to the noble Lord for confirming that the Opposition do not oppose these regulations. As noble Lords will be aware, when this Government came into power we made some changes to business rates. One of our various changes was having measures to reduce the burden of business rates on business; the others were to ensure that local authorities were able to enjoy the benefits of the business rates that they collected and to do so in a way that encouraged and supported growth, so that they would see the benefits and enjoy some of the proceeds of that growth. We believe that this system is working well.
The noble Lord, Lord McKenzie, asked me some specific questions to which I am happy to respond. First, he asked about the Section 31 grants, which are paid to compensate local authorities for the reliefs that were announced in the Autumn Statement. I can confirm that each local authority will be compensated for the relief that they actually give. He also asked about the small business relief and the share for local government. I have been given an answer but I am struggling as I read it to recall which point the noble Lord raised. However, I think that the plus symbol in the regulations is 50% of the full cost of the small business rate relief that is the local share. Does that answer the point that the noble Lord raised? I think that he was asking about the small business relief and the half for local government share. I may need to come back to that one and perhaps clarify it.
The noble Lord asked for an update on the safety net and how that is working. In the last financial year, we have paid £69 million in safety net payments. Those numbers may change when outturn figures are available at the end of the year but, at the moment, I cannot give him any further information. I should make it clear that while I said “the last financial year”, it is the current financial year in which we are paying £69 million in safety net payments. Clearly, as we are still in that financial year I am not able to give him the final data on that number.
To go back to the question that I was struggling to answer, I think that the symbol that the noble Lord was asking about is T. In Regulation 4, there is a calculation and, in that rather scientific-looking formula in the regulations, T is 50% of the amount of small business rate relief given to local ratepayers. In other words, it is the amount of relief given as a result of the Government’s decision to double small business rate relief in 2013-14 and 2014-15. I hope that that clarifies the noble Lord’s question.
We have set aside £120 million from revenue support grant to pay for the safety net in 2014-15. If it is not needed, we will return it to authorities. I think that the noble Lord asked me how much of the safety net was being paid for out of the revenue support grant beyond that collected via the levy from those authorities that operate a surplus, if I can describe it in that way.
The noble Lord also pointed to paragraph 7.7 of the Explanatory Memorandum and asked for examples of other discretionary relief that will be ignored, as described in that paragraph. I spoke about other Localism Act relief schemes. These are local authority-run schemes, such as that in Croydon town centre. These regulations ensure that local authorities pay only their local share of the cost of those schemes. To expand briefly on that, we are saying—as the noble Lord understands and as I mentioned—that we have given local authorities the power to introduce their own discounts and reliefs. However, we need to ensure that, in introducing those discounts and offering those reliefs, they have to meet only 50% of the costs and not the full costs. The deal is that central government will meet half those costs, so we are amending the regulations to ensure that what we intend is borne out in practice.
More generally, to give some statistics on how the scheme is operating, our latest estimates show that business rates income in the next financial year, 2014-15, will be £22.4 billion, of which half, £11.2 billion, will flow directly to local government under the rates retention scheme. Local government will also retain a further £112 million for enterprise zones, renewable projects and collection costs. Some 92% of authorities will have more money in 2014-15 than their baseline funding level. Therefore, in only its second year, the rates retention scheme is delivering benefits for authorities that go for growth.
As to the noble Lord’s point about spending power more generally and the way in which local authorities are funded, he will know, because we have debated this in the past, that this Government are very clear that the changes we have made to how local authorities are funded represent the difference between us and the previous Government in principle. We are ensuring that areas of the country that are not currently in a position to benefit as much from this new system of going for growth are properly supported and that the grants that they receive and the spending power that is set for those areas reflect the pressures on them in terms of demands on their local services and the time that it may take them to be in a strong position to go for growth. We think that the way in which we have changed how local authorities are funded is right. We also think that the principle of encouraging growth is right.
With regard to towns and high streets, we are also making sure that local businesses have the right environment to be able to expand and flourish. The changes that we make, whether they are to business rates or other measures, such as tackling parking charges or development regulations in towns, mean that where there is potential for growth, that growth takes place and local authorities are able to benefit from it. They, in turn, can pass on the benefits to their local taxpayers.
I hope that I have been able to respond to all the points raised and I commend the regulations to the Grand Committee.
Lord McKenzie of Luton
Before the Minister sits down, I am grateful for some very detailed responses there. On the safety net for 2014-15, I think that she gave us a figure for the top-sliced amount. Can we have a figure for what is expected to be raised from the levy? Reverting to the more general point, one can see an argument in favour of encouraging people to go for growth, but if we look at what has actually happened in people’s loss of spending power, do the Government believe that it is right that the most deprived authorities should lose much more in percentage terms than the least deprived authorities? Is that an outcome of government policy which the Minister is happy with and believes is right?
Baroness Stowell of Beeston
On the specific question of money expected to be raised by the levy, I shall have to follow up in writing. As to the more general point about spending power, the point that I was trying to make to the noble Lord is that this Government are ensuring that those areas of the country in greatest need are properly supported. Spend per household in those areas is higher than in those areas that are wealthier. We certainly want to ensure that our approach supports all areas of the country to grow and to receive the benefit from a stronger economy so that, in time, they are all operating at their full potential.
Businesses: Town-centre Parking
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(10 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Stowell of Beeston
I thank it is worth offering your Lordships a little context in responding to my noble friend’s Question. Local authorities’ total income and net profits from parking more than doubled under the previous Administration and councils are still making net profits. We also know that there is public concern. The Transport Select Committee said in a report published last year:
“There is a deep-rooted … perception that local authorities view parking enforcement as a cash cow”.
All independent reports show that parking is affecting high streets and local businesses. Therefore, I am very pleased to be able to confirm to my noble friend today that the Government have just completed a consultation on new measures to tackle this problem, and are considering those responses before announcing what action they are going to take.
Lord McKenzie of Luton (Lab)
My Lords, with the Government’s renewed interest in tackling parking charges and easing the burden on local businesses, can the Minister explain why the three London councils with the highest parking charges and fines per person are Conservative? In fact, in London, Conservative boroughs took double the amount in parking fines and charges per residence compared with Labour boroughs.
Baroness Stowell of Beeston
As the noble Lord heard me say, this is a problem that we think started under measures introduced by the previous Government.
Local Authorities: Local Plans
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(10 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Stowell of Beeston
My noble friend makes some interesting points. My first response to him is to restate that local plans are indeed the best way for local people to decide how best to meet their own planning needs. The Government are supporting local authorities to publish and adopt their plans, because we recognise that this is a complex process. We have trebled the number of local authorities with adopted plans since 2010. However, as I have said, because this is so important, we will consult shortly on whether to make adopting a plan a statutory requirement and, if so, by when.
Lord McKenzie of Luton (Lab)
My Lords, we know that a number of local authorities are frustrated in facilitating the provision of housing, particularly affordable housing, where there is inadequate land supply within their boundaries and neighbouring authorities are ignoring their duty to co-operate on housing growth. The needs of Stevenage and Oxford are just two examples. As the Minister is aware, local authorities are required to provide evidence that they have complied with the duty in their development plans if the plans are not to be rejected by the examiner. How many local plans have, to date, been sent back for that reason? Does the Minister not agree that the duty to co-operate is proving to be a totally inadequate policy, given the scale of housing provision that our country needs?
Baroness Stowell of Beeston
I do not have the specific data to respond to that question from the noble Lord, but I can say to him that 75% of local authorities have now published a plan and 52% have adopted that plan. As I have already said, this is a massive increase on where we were in 2010, so there is real progress. However, because this is so important, we may, as I have said, introduce a statutory requirement to ensure that this happens across the board.
Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2014
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(10 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for introducing these regulations. As we have heard, they are concerned with planning arrangements for onshore operations for the winning and working of oil or natural gas, including exploration drilling. Onshore oil and gas activities are of course not new to the UK, but the more recent development of hydraulic fracturing or fracking is contentious and, as the noble Baroness, Lady Parminter, said, certainly topical.
The Government sought to address the regulatory regime for onshore oil and gas in the publication of planning practice guidance in 2013. At that time, they indicated that proposals would be brought forward to address issues relating to the application process and the level of fees payable to local planning authorities.
The first of these was the subject of a negative instrument that was slipped through Parliament over the Christmas period, giving, as we have heard, scant opportunity for debate; the second is the one that is before us today. So far as process is concerned, the department has been justifiably criticised by the Secondary Legislation Scrutiny Committee for laying these instruments without proper impact assessments and a proper analysis of the related consultation exercise, which itself attracted criticism for being over just a six-week period. The noble Lord, Lord Bichard, thoroughly expressed the concerns of that committee. Indeed, we share those concerns. Why does the department continue to get these matters so horribly wrong, showing scant respect for Parliament, as the noble Lord said? This is probably not the occasion to enter into a full-scale debate about future energy policy and energy security, but we are clear that gas has a role to play in the future balanced energy mix, along with renewables, nuclear and carbon capture and storage. Within that, there is a prospect for shale gas, but with a precautionary approach that needs to address legitimate environmental concerns.
The instrument before us today, which came into effect in January, represents easements for the extraction industry, although perhaps modest ones. These appear to go against the grain of the September 2013 consultation exercise, although the Government’s response does not provide us with details, numbers or percentages of those supporting or opposing the three broad propositions that were canvassed, including the third one, which is the standard application form. Please can these be provided to us?
Specifically, this instrument addresses how planning fees are calculated when there are drilling activities both above and below ground. This is pertinent because activity below the surface will take place horizontally as well as vertically, thereby spreading out much wider than the surface area. It is asserted that the basis of fees for oil and gas applications has long been intended to be related to the area of the surface works only, and that what is before us is a clarification to achieve that objective. That clarification comes with a general 10% fee uplift for all oil and gas applications, which was apparently offered by the offshore industry. Perhaps the Minister could clarify the basis of that calculation and how it relates to the costs that local planning authorities are likely to incur in dealing with applications. Was 10% the industry’s first offer, and what was the range of the negotiations that might have ensued?
The Minister in another place suggested that statutory planning functions are financed from a combination of fees, government grant and locally raised revenue. Indeed, the Minister reiterated that this afternoon. Perhaps she can advise us as to what grants are involved and the future trajectory of grant levels. The Minister in the other place told the Seventh Delegated Legislation Committee:
“Statutory planning functions are not only financed through the fees set, but subsidised by Government grant and locally raised revenue. Our approach to setting fees in England is that they are set nationally and grouped into broad categories such as housing, business and commercial, and onshore oil and gas, approximating to the amount of work involved. The fee is based on the average cost of determination across all local authorities in England. The principle underlying the planning fee regime is that would-be applicants should meet the majority of the costs incurred by planning authorities in determining planning applications”.—[Official Report, Commons, Seventh Delegated Legislation Committee, 5/2/14; cols. 3-4.]
Given the relatively small number of mineral planning authorities it is estimated might be involved in fracking applications, what work has been done to evaluate whether the average for oil and gas applications is appropriate?
The Explanatory Note sets out the government view that planning authorities should concentrate mainly—not exclusively—on the surface impacts of onshore oil and gas development and rely more on the regulatory regimes to manage sub-surface issues. Can the Minister give us some information on the necessary involvement of planning authorities in the non-surface impacts and on how this differs between applications involving hydraulic fracturing and those involving other onshore oil and gas applications, whether concerning exploration, appraisal or production?
Thus far the Government have not been convincing on how they have brought forward these proposals or how they have arrived at the new fee levels. Of course, there are much bigger issues around energy policy, hydraulic fracturing and how communities should be involved and share in the benefits of other developments, but consideration of these matters is not helped when relatively small issues such as this are not dealt with effectively and openly.
Baroness Stowell of Beeston
My Lords, I am grateful to all noble Lords who have contributed to the debate. As the noble Lord, Lord McKenzie, acknowledged, these regulations are not about energy policy or the planning process more widely. However, important issues have been raised by noble Lords which I shall seek to clarify and respond to. The noble Lord, Lord Bichard, echoed some of the concerns expressed by the Secondary Legislation Scrutiny Committee. I very much regret—my colleagues in the department share my view—that that committee felt moved to comment on the process that we followed in bringing forward these regulations. As I said in my opening remarks, we recognise the importance of providing Parliament with sufficient time and evidence to scrutinise the documentation and the responses to the consultation. In laying the material before Christmas, we did not expect the significant delay that then transpired between that happening and the consultation responses being provided. I assure noble Lords that there is no conspiracy here but I very much take on board the criticism and will reflect on it for the future.
The noble Lord’s remarks on the length of the consultation exercise and the consideration of responses to it were echoed by my noble friend Lady Parminter and the noble Lord, Lord McKenzie of Luton. It is important for me to stress again that these regulations are very narrow in their purpose. They clarify the existing law and ensure that the Government’s long-standing intention is clear. The other regulations, which are not before us today but were referred to in the scrutiny committee’s report, are important as far as a change around notification is concerned. Those regulations focus very narrowly on notification prior to an application being made by a relevant organisation and certainly do not affect the ongoing process of consultation, which is very important to the process that will be followed if exploration is continued. Therefore, we thought it right to follow the principles set out in the Cabinet Office code, and we felt that six weeks was an appropriate and proportionate amount of time for the consultation period.
As regards analysing the responses, we considered them very carefully but, not surprisingly, because shale gas is a contentious matter, many of those who responded to the consultation, and certainly those who opposed these regulations, used it—this is perfectly understandable and I am certainly not criticising anyone for doing this—to express their opposition in principle to shale. Once the responses were carefully analysed, the number of those who opposed the regulations were opposed less to what was being proposed in the regulations than to the principle of shale itself. They were therefore addressing a different matter in their responses. We have published the consultation responses, albeit belatedly. The noble Lord, Lord McKenzie, asked for further detail on this, and our analysis of the consultation is already available in the public domain.
Lord McKenzie of Luton
My Lords, perhaps I may deal with this point before it slips my memory. As I understand it, the fees relate to the averages of different categories, of which oil and gas is one category. My question was whether the average in respect of oil and gas is fairly representative when you have an oil and gas operation that involves fracking; that is, whether the nature of that operation means that the average for that subset of what is happening across England is fair and reasonable.
Baroness Stowell of Beeston
I am sure that my colleagues will confirm if I am wrong, but I would say that it is. This is about being clear that the fee is for the planning application and that that application, even if it is for shale or other forms of oil and gas, should apply in the same way. The relevant area is the surface area, so the process of determining the fee is the same; the fee is for the planning process rather than for carrying out the work that will take place. However, I gather that it is difficult to assess the averages of such applications, given the small number of applications so far.
The noble Lord, Lord McKenzie, asked about the 10% offer from the oil industry in terms of an increase in fees. This proposal came from the industry in response to the consultation exercise. It was not something on which the Government entered into negotiation with the industry. The noble Lord also asked about the role of planning authorities in surface and non-surface input and applications. The planning practice guidance published in July provides clarity on the role of the planning system and other regulatory regimes. The planning role is largely focused on surface impact, while the sub-surface matters are largely assessed by the Environment Agency, the Health and Safety Executive and DECC.
Lord McKenzie of Luton
I promise not to interrupt again. The Explanatory Note makes reference to surface impact being mainly involved, but opens up the possibility that it is not exclusively surface impact. I am trying to understand, having looked at the guidance, what specifically might be involved in other aspects of the process.
Baroness Stowell of Beeston
Does the noble Lord mean in terms of the planning application fee?
Lord McKenzie of Luton
In terms of what is involved in dealing with a planning application.
Baroness Stowell of Beeston
I will see if something further comes for me on that while I am on my feet, but I may have to follow it up in writing to the noble Lord.
The noble Lord also asked—this may also answer the point he has just raised—whether the planning fees should cover wider issues than processing an application. The planning legislation is clear that fees may be payable to the planning authority for considering an application; their use for any other purpose would not be possible. Other regulations already exist to ensure that the operator is liable for any damage or pollution that operations may cause. The operator is also responsible for safe abandonment of the wells and for restoring the well site to its previous state, or a suitable condition for reuse. If that is where the noble Lord was coming from, my point is that if there were other costs involved, they are already covered by other regulations. As I do not seem to be receiving any signal that I will be able to answer the noble Lord’s question while I am on my feet, I hope that he will accept my offer of following that up in writing.
In conclusion, I stress again that I hear loudly and clearly the concerns that have been expressed by the scrutiny committee, which have been echoed by the noble Lord, Lord Bichard, and others today. However, I emphasise again that these regulations clarify a point of law so that the Government’s long-standing policy intention is clear. They are nothing more substantial than that in terms of the contentious but important issue of shale exploration. On that basis, I hope that noble Lords will feel that I have answered all their points.
Localism Act 2011 (Consequential Amendments) Order 2014
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(10 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, the Localism Act 2011 introduced council tax referendums as a replacement for the previous capping regime. It did this by amending the Local Government Finance Act 1992, into which it inserted a new chapter—Chapter 4ZA—on council tax referendums and a new Section 31A, which changed the way local authorities in England determine their council tax. Other consequential amendments were made to legislation, including to the Greater London Authority Act 1999.
The order before the Grand Committee today updates the legislation to take account of changes that have taken place since the Act was passed. The order corrects several minor drafting errors, such as the incorrect classification of grant repayments as income rather than expenditure, and it provides a route for the GLA to recover from errors and oversights during the budget setting process. I do not propose to cover each of the amendments in detail, but I will just give a summary of what each article in the order does.
Article 2 details how local authorities should take account of any transfers from their general fund to their collection fund when determining their council tax requirement. Such transfers would be rare but theoretically possible, so it seems sensible to include a reference to them in legislation.
Article 3 makes it a requirement for major precepting authorities, such as county councils, when estimating their expenditure for the year, to take account of certain payments which may become due to billing authorities. This is again a minor amendment to ensure that legislation captures all the existing payments and transfers between authorities.
Article 5 corrects a drafting error in amendments made to the Greater London Authority Act 1999 by the Localism Act 2011. It requires repayment of grants by the GLA to be classed as expenditure rather than—as currently, and incorrectly, stated—as income.
Article 6 removes a redundant reference in the GLA Act to “relevant special grants”.
Article 7 also amends the GLA Act to address an unforeseen deficiency in the statutory timetable for the GLA when setting and revising its budget and council tax requirement. If the GLA were to set an excessive council tax increase, in common with the obligations on all local authorities it would be required to hold a binding referendum to seek local agreement to the increase. As part of this process, the authority would be required to draw up an alternative budget that did not require an excessive increase in council tax, which could be adopted if the referendum was lost. There are fixed statutory deadlines for these budgets to be set, revised and approved. Currently it is possible for the GLA, through error or oversight, to set an excessive council tax increase without leaving itself sufficient time to gain approval for an alternative, non-excessive budget. Article 7 provides the GLA with a way to recover from such a situation, by allowing the Assembly to approve a revised non-excessive budget at a later date.
A copy of the draft order was shared with the GLA and revised in the light of their comments. I commend the order to the Committee. I beg to move.
Lord McKenzie of Luton (Lab)
My Lords, I thank the noble Baroness, Lady Stowell, for introducing the order. I do not think we will detain her long in our consideration of the amendments that it makes, although this is one occasion—perhaps the first—when I found the Explanatory Note somewhat more impenetrable than the actual instrument.
As we have heard, the amendments focus on aspects of the calculations necessary as a result of the changes brought about by the Localism Act for so-called potentially excessive amounts of council tax. They amount to a capping regime and are driven by the determination of basic amounts of council tax for a financial year, rather than, as previously, budget requirements. Whatever our views on these arrangements, we accept that the detail of the calculations and the process should be logical.
Article 2 is said to be consequential and aimed, it seems, at ensuring symmetry by making sure that sums transferred from an authority’s general fund to its collection fund are excluded from the calculation of expenditure, just as funds transferred in the opposite direction are excluded from income. I think that that is the purpose, but I presume that this is not retrospective. Can the Minister say what the impact has been on any specific local authority situations of these provisions being absent? Is it possible that a preceding year has been done on the basis of the current rules, and can she therefore say what the implications of this change are?
Article 3 requires estimated expenditure as well as payments and receipts to be taken into account when calculating council tax requirements. Will the Minister assure us that there will be no double counting, whereby amounts estimated for one period are excluded from a later calculation when they are actually paid?
Article 5 is a consequential amendment to ensure that repayment of grants are taken into account on the expenditure side of the equation rather than netted as income. The Minister said that this corrected an error in the drafting. Can the Minister say a little more about the nature of the grants involved and the implications of the provision? How many authorities’ calculations have treated grant repayments as income to date, and how will matters be rationalised if they have? What is the impact of this? Does the new treatment affect the calculation of amounts of council tax in any circumstances?
So far as Article 6 is concerned, we accept that the provision is purely consequential.
On Article 7, the Explanatory Note was most difficult to fathom, but at the end of the day it seems to be essentially about a process issue. We understand that there is currently a range of circumstances in which the London Assembly has to initiate a substitute consolidated budget, or substitute council tax requirement, where the Mayor has failed to present one. However, currently these have to be made within statutory deadlines. Where a major precepting authority fails to notify an excessive increase to a billing authority, the precepting authority must issue a precept based on substitute calculations. However, until it does so, the billing authority cannot pass any funds back to the precepting authority, so it needs to have a process for making substitute calculations at a later date. Is our understanding of that correct? Is that all there is to this article?
Subject to any points the Minister may make, we certainly would not seek to resist the order.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for his comments and his point that, while we may differ on the underlying principles associated with the order, he agrees with us on the need for accuracy and, therefore, the importance of making the order.
The noble Lord raised a few questions which I will seek to address. He asked whether the order was retrospective and I can confirm that it is not. On Articles 2 to 5, he asked whether there had been any problems related to these inaccuracies being in place. We are certainly not aware of any reported problems, losses or errors on the part of local government due to the issues addressed by these articles. These are things which we see are inaccurate and need to be changed, but we are not doing them because we have had things reported to us as problems which need to be taken care of. The noble Lord also asked about double counting. Based on the information that I have given, I can confirm that the concern that he raises would not arise from the changes we are making.
Let me add a few more points to reassure the noble Lord. We are making the amendment in Article 3 because payments made by billing authorities to precepting bodies are sometimes subject to revision during the year, which could involve the precepting body making a payment back to the billing authority. The article requires major precepting bodies to take into account any estimate they make of such payments.
The noble Lord asked whether Article 5 would affect the basic amount of council tax calculations. The answer is no. There was, as I said, a drafting error when the provisions were first produced, so it is right to make that change; it is clearly inappropriate for them to remain in place.
The noble Lord also gave his assessment of what Article 7 meant, which is that it concerns a process issue, and asked whether his understanding of it was correct. He is absolutely correct. This is about process and about making sure that the Greater London Authority is acting in line with all local authorities in the way that it is required to set its council tax and consult its electorate. The order will make sure that, if it is necessary for the authority to hold a referendum because its budget is excessive, it can both do that and introduce a lower council tax rate should the referendum not support the excessive council tax increase. I assure the noble Lord that this is purely about process, and I hope that we will ensure that the situation that the GLA inadvertently found itself in is not repeated. I think that I have covered all the issues raised by the noble Lord.
Lord McKenzie of Luton
I am grateful for those further explanations. I do not propose to prolong this, but perhaps I might come back to Articles 2 and 5, which deal with drafting points. My question is: in respect of prior or current periods, were calculations done on the basis of the legislation as it is before the amendment, or did they anticipate the drafting errors and were therefore done on what we would now call the correct basis? If it was the latter, all well and good; if it was the former, I wonder what the implications of that are.
Baroness Stowell of Beeston
Yes, I can confirm that they were operating in line with these amendments: they have not been operating outside of the requirements of the Act.
Commons (Town and Village Greens) (Trigger and Terminating Events) Order 2014
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(10 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, if this order is agreed by your Lordships’ House, it will become an order of 2014. The effect of the order will be to stop town and village green applications where there is an active development interest in land and enable them to proceed where a development proposal is no longer active. The order is part of our overall programme to streamline and simplify the planning system, which in turn is about our proposals to deliver growth. The order addresses overlapping consent regimes. Applications for town and village green registration can cut across planned and permitted development. The order will ensure that decisions on the use of land are taken through the planning system, where there is proper provision for the public to get involved and express their views.
As noble Lords will know, the Growth and Infrastructure Act already excludes town and village green applications where development is under consideration or approved. Under the main parts of the planning system—planning applications, development plans and nationally significant infrastructure projects—the exclusion is engaged by a range of “trigger events”. The Act enables applications for town and green registration to resume if a development proposal is withdrawn or rejected, as set out in “terminating events”. The principle of what we are proposing is therefore already established and was extensively debated during the progress of the Growth and Infrastructure Bill. During the debates on that Bill last year, my predecessor, my noble friend Lady Hanham, said on behalf of the Government that we intended to extend the provisions to development under other planning procedures. We explained that we needed to consult on these extensions. Having done that, this order delivers on that commitment.
The proposals in this order deal with two matters. First, the provisions in the Act relating to local and neighbourhood plan preparation did not cover every eventuality. We need to ensure that all outcomes in plan-making are covered. That is why we are proposing a new catch-all terminating event for local or neighbourhood plans, which will ensure that, in those cases where a draft plan has not been adopted or made within two years of its publication by the local planning authority, the exclusion on the right to apply for registration of land as a green lifts. In other words, the opportunity returns to local residents. This is to avoid the situation where the exclusion on town and village green applications remains in place even where development is no longer proposed under a plan. This proposal has been welcomed by the majority of respondents to the consultation.
Secondly, the order extends the protections to local development orders, neighbourhood development orders and applications for deemed planning permission in respect of Transport and Works Act 1992 orders. What those measures have in common is the ability to grant deemed planning permission for development, meaning that a developer does not have to apply separately for planning permission from their local planning authority.
This order sets out trigger and terminating events for each of these procedures, to signal when a town or village green application must be excluded and when it can resume. If proposals are ultimately not taken forward under these measures then the terminating events will ensure that the right to apply for town or village green registration will resume. We think it only reasonable to introduce protections for development under consideration through these measures. Again, the principle of this is supported by respondents to the consultation. It makes for a consistent and open system.
There are requirements within planning legislation to ensure that people have opportunities to engage with the planning process and that their views are known when these measures are prepared. These changes will apply only to applications to register new town and village greens. Applications sent before the date that the order comes into force will be unaffected, and the changes will not weaken the strong protections which existing registered greens have.
These proposals are uncontroversial and indeed have been broadly welcomed during our consultation process. They ensure that land cannot be registered as a town or a village green to prevent the consideration of development, or to frustrate and delay planned and permitted development. Instead, it means that decisions about development will take place in the context of the planning system, which provides for public involvement and where all material considerations are taken into account. However, it also means that when development does not go ahead, the right to apply for registration of a green will not be unnecessarily excluded. In those circumstances there is no reason why communities should not be able to apply to register the land as a green.
I therefore commend this order to the Grand Committee. I beg to move.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for her introduction to this instrument, which takes us back to the issue of town and village greens. This is a matter, as the Minister noted, that we discussed with the help of the noble Lord, Lord Greaves—our world expert—in connection with both the Growth and Infrastructure Act and the Localism Act.
In those debates, the noble Lord, Lord Greaves, stressed the particular difficulty of aligning two disparate systems, the procedure for registering greens, as set out in commons legislation, and the planning regime, although the Growth and Infrastructure Act effectively aligned them in favour of the planning regime. We should restate our support for measures that prevent frivolous and vexatious use of provisions to prevent development but also our concern about the scope of some of the original triggers, and the paucity of some of the evidence base.
We also share concerns over the consultation process, a matter focused on by the Secondary Legislation Scrutiny Committee. I quote from paragraph 7 of its report, which states,
“We sought further information from DCLG about the timing of the consultation process. We have previously made clear our view that six weeks should be regarded as the minimum feasible consultation period, and that holiday periods should be avoided. The consultation process in this case included some three weeks in August. We are publishing DCLG’s responses …We note that the Department states that it ensured that those likely to be interested were directly made aware of the proposed consultation, and that no respondents expressed concern about the length or timing of the consultation. While this is welcome, it does not change our view: putting proposals out to consultation must allow for the possibility that potential respondents not previously identified by the Department are able to offer comments, and consulting over a holiday period cuts across this possibility”.
I will deal first with the two new terminating events: where a draft local plan is not adopted, or a neighbourhood plan is not made by the end of two years. As part of the justification for this, the impact assessment cites evidence on the timing of plan preparation. Can the Minister expand on this point so that we know more precisely what that evidence is? We are told that no development orders have been made to date—I think that that was as of 4 December—and I presume this is still the position, so none of the responses to the consultation in that regard is based on actual experience. However, all in all, recognising the benefits of some consistency in these terminating events, we believe these should be supported.
On the additional triggers and terminating events covering local development orders and neighbourhood development orders, again we are told that the use of local development orders has been relatively limited. Perhaps we can understand a little bit what that means. How many actually are there? Given the circumstances where they have or might be used, what is the assessment of the practical likelihood of attempts to register town and village greens? It would appear that one terminating event for the draft order granting permission for operational development—that is, the adoption of the order—is indeed the trigger event for the local development order.
Similar questions arise over local development orders. Given their expected focus as specified types of development within a defined area or on specified sites, what is the experience of any TVG applications? Terminating and trigger events criteria are to be adopted for Transport and Works Act orders, as we have had explained. Can the Minister say whether any such orders have been frustrated by a TVG to date? Can she give us an update on the number of TVG applications? The most recent figures that I have show a drop from 196 applications in 2008 to 103 in 2011. These numbers must be seen in the context of some half a million planning applications in the year ending June 2010.
The documentation that we have makes reference to the designation of land as local green space under the NPPF and suggests that this in a sense might be an equivalent to a TVG application. Paragraphs 76 and 77 of the NPPF state:
“Local communities through local and neighbourhood plans should be able to identify for special protection green areas of particular importance to them. By designating land as Local Green Space local communities will be able to rule out new development other than in very special circumstances. Identifying land as Local Green Space should therefore be consistent with the local planning of sustainable development and complement investment in sufficient homes, jobs and other essential services. Local Green Spaces should only be designated when a plan is prepared or reviewed, and be capable of enduring beyond the end of the plan period”.
I support that. It goes on to say that:
“The Local Green Space designation will not be appropriate for most green areas or open space. The designation should only be used … where the green space is … reasonably close … to the community it serves; … where the green area is demonstrably special to a local community and holds a particular local significance, for example because of its beauty, historic significance, recreational value (including as a playing field), tranquillity or richness of its wildlife; and … where the green area concerned is local in character and is not an extensive tract of land”.
I know that the NPPF is relatively new but how is that provision being interpreted and taken up in local and neighbourhood plans to date? Do the Government see it as effectively an equivalent to the TVG application?
We will not seek to resist this instrument. We are, of course, supportive of arrangements for local communities to be able to promote, support or object to development in their areas through a plan-making process. However, there is just a sense that this has unnecessarily tipped the balance against local inhabitants who seek no more than to register land over which there has been 20 years or more indulgence in lawful sports and pastimes.
Baroness Stowell of Beeston
I am grateful to the noble Lord, Lord McKenzie, for his support, in principle, for the order. I will deal first with the point that he raised about the consultation period. As he acknowledged, prior to issuing the consultation document, we identified a list of interested parties, who were notified of the proposals on the first day of the consultation period. None of them expressed concern about the length or timing of the consultation. Clearly we ensure, as we did in this case, that we act in accordance with Cabinet Office guidelines on consultation, and look carefully at the nature and impact of proposals in considering the length of time for consultation. We felt that six weeks was reasonable and proportionate, as the measures proposed here are an extension of measures consulted on and debated in the House during the passage of the Bill last year. The principle was there and in place, and we feel that the consultation approach that we undertook was appropriate for these measures.
The noble Lord raised a couple of points around the evidence of the need for the measures in the order. I will see in a moment whether I can provide him with some specific data in response to that question but the point to stress is that the extension of the trigger and terminating events supports the policy objective that decisions on the use of land should be taken through the planning system and related consent regimes. If we did not address that gap through this order, we would leave the system incomplete. It might mean, for instance, that a town or village green application could be used to block developments supported by a local community through a neighbourhood development plan and that applications for deemed planning permission in respect of important infrastructure works under the Transport and Works Act could be delayed or prevented. As I tried to make clear in my opening remarks, it is also about making sure that, at a point at which the application for development under either of those schemes does not transpire, it should be possible for local people to put forward an application to make a piece of land a town or village green. We want that to be possible and we want it to be clear when that should take place.
That leads me on to the noble Lord’s points about the two-year limit and why we have used that timeframe. We believe that a two-year period strikes the right balance and should allow sufficient time for local planning authorities and others to get a plan or order in place, including any amendment or consultation that is required. At the same time, it is not so long as to exclude town and village green applications for an unnecessarily long period that would place no onus on the local planning authority to undertake a plan or order-making expeditiously. This is something that we will of course keep under review as more evidence becomes available. There are powers in the Commons Act to amend the legislation should it become necessary.
The noble Lord raised the question of local development orders and whether their existence might prevent applications for town and village green registration. Parliament has agreed the principle that the planning system should not be held up or derailed by the town and village green registration system. Local development orders are prepared by local planning authorities and are usually focused on a specific area where the authority wishes to encourage development, for example enterprise zones. A local planning authority that brings forward a local development order must justify it or believe that, where built development is proposed or permitted, the right to apply for a town or village green should be excluded.
The noble Lord quoted from the National Planning Policy Framework document and asked some questions about it. The document allows communities to designate land that is special to them. There is no requirement for use of land by the public. I am struggling to understand this. I shall say what I think is the answer to the noble Lord’s question and if my colleagues want to shove that piece of paper at me again, I will go back to it. My understanding is that communities may consider using the new local green space designation introduced in the National Planning Policy Framework. Local communities can identify land of particular importance to them for special protection as local green space either by engaging with their local planning authority in the local plan-making process or by taking steps to bring forward a neighbourhood plan. My interpretation of that is that if, as part of drawing up a local plan, a local community designates an area in that way as part of that framework, it is then given the equivalent status of a town and village green.
The noble Lord asked about recent data on TVG applications. Defra has obtained and published data up to 2011. New data covering 2011 to 2013 will be published in the coming weeks. He asked whether any TWA orders have been frustrated to date by TVG applications. The answer is no but inclusion of TWA applications in the legislation is a precautionary measure that will ensure that the TVG application process is in line with the planning system in all circumstances, the point being that this is about principle as much as it is about other things. I can write to the noble Lord if there is anything further that I need to tell him on that.
I need to correct something that I said earlier. Local green space does not have the same protection as that involved in registration as a town and village green but has similar protection to the green belt. That is the relevant comparison, so I was wrong in my previous comment. The relevant comparison is with the green belt and not with the town and village green. I hope that I have covered most of the points that the noble Lord raised. As I say, if I can add further specific points in a letter to supplement my comments, I will do so.
In conclusion, the introduction of this order will ensure a consistent approach to town and village green registration in situations where a development is proposed or permitted. It will help to stop the potential for misuse of town and village green applications to undermine planned development. It will address overlapping consent regimes and reduce delay, uncertainty and cost to all concerned. It is an important precautionary measure, as I have already said, and will not affect the existing strong protection for registered town and village greens.
Social Fund
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(10 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Stowell of Beeston
As the noble Lord knows, the process of deciding the amount of funding that is made available through the local government finance settlement is very much considered on the basis of a range of issues, including pressures and demands that may be greater in some parts of the country than others. That is why we provide a higher rate of funding in some areas as opposed to others, as we do in Newcastle. Certainly, what we are also expecting all local authorities to do is to carry out measures that allow them to realise their own savings so that they can continue to provide the services that are needed by local people.
Lord McKenzie of Luton (Lab)
My Lords, the Minister confirmed earlier that the funding stream is to be subsumed into the general funding stream for local authorities. May I remind the Minister that the stream is going to be cut by some 13% in 2015-16, following the 9% cut in the year that we are just about to enter? We know that the basis for the distribution of the funding will continue to cut spending power for the most deprived councils, while increasing spending power for the wealthiest councils. I ask the Minister: how is that fair to the vulnerable?
Baroness Stowell of Beeston
As the noble Lord knows from the debates that we have had on the local government finance settlement, we look at the total spending power available to local authorities in terms of their spending revenue, and in 2015-16 the reduction of their spending power will be 1.8%. I also make the point to the noble Lord that in the course of our discussions with local authorities in looking at streams of funding, we have clearly understood where they are facing big pressures. That has led us, for example, to ensure that there is significant new funding for social care.
Local Audit and Accountability Bill [HL]
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(10 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text
Lord McKenzie of Luton
My Lords, I thank the Minister for her detailed explanation of the amendments in this group. Our discussion on them has been widened by a very pertinent inquiry from the noble Lord, Lord Shipley. We have generally seen these amendments as tidying up and consequential measures. We have issues around: the duty of auditors of health bodies to prepare a report; the provision of sequencing of electors’ rights concerning unlawful items of accounts; the procedures for auditors to be able to recover costs when there is no formal action they can take; copies of recommendations or public interest reports of functional bodies of the GLA to be sent to the GLA; and the drafting changes arising from the fact that the Mayor’s Office for Policing and Crime will cease to be a connected entity of the GLA. We have gone through these measures and are content with them.
Baroness Stowell of Beeston
I am very grateful to the noble Lord, Lord McKenzie, for confirming that he is content with these amendments. As regards the query of my noble friend Lord Shipley about the health and well-being boards, the arrangements for reporting on the accounts and the value for money conclusion, I shall give him what I have and, if I need to, perhaps we can follow up the matter after the debate.
The Bill places auditors of both health and local government bodies under a duty to satisfy themselves that the body has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources, which is known as the value for money conclusion. Unlike local government, the accounts of health bodies are consolidated within their sponsor Whitehall department resource account. Local authorities, on the other hand, are directly accountable to the local electorate in a way that health service bodies are not. Because of the different accountability arrangements for health service bodies, the Government consider it necessary to put the requirement to have opinions on the accounts in the Bill rather than in the code of audit practice, to provide assurance to the accounting officer and Parliament that budgets have been used for the purposes Parliament intended. We believe that it is unnecessary to do this for non-health service bodies because of the statutory power for local auditors to apply to the courts for a declaration that an item of account is unlawful. Furthermore, for non-health service bodies, we expect the code of audit practice will set out what auditors must report against this duty, as is currently the position under the code produced by the Audit Commission. Overall, we consider that this allows for greater flexibility in reporting for non-health service bodies, but for health bodies the different parliamentary accounting framework includes a strict requirement for regularity to be reported on.
I have just been reminded that the health and well-being boards are not included under the provisions of the Bill but I hope that what I have just read out has reassured the noble Lord and your Lordships’ House that value for money is very much part of the consideration of the auditors who will be looking at the health and local government bodies.
I have just been passed another note which I hope may be helpful because I am not sure how much of what I have already read out is entirely helpful to the noble Lord. The provisions in the Local Audit and Accountability Bill on value for money inspections do not cover health service bodies. I think we know that. The NAO’s existing powers in relation to value for money inspections are wider than those in the Bill, so the latter does not need to include provision on this in relation to health service bodies. I think that is the killer point that I have finally got to. On the basis of that additional information, I beg to move.
Lord McKenzie of Luton
My Lords, we should thank the noble Earl, Lord Lytton, for raising this matter in the first place, and he should certainly claim a substantial amount of credit for it. He regaled us in Committee with some of the anomalies and archaic processes concerning parish meetings. Voting only between 4 pm and 9 pm with no provision for proxy or postal voting is hardly the stuff of inclusion. The noble Earl was convincing on the need to modernise arrangements, and the Government responded by providing for the Secretary of State to have the power to make regulations about the conduct of parish polls. We consented in the other place, as the Minister acknowledged, in widening the scope of the Bill to facilitate this.
The Government gave undertakings in another place—they have been reiterated tonight—about continued collaboration with the National Association of Local Councils and with the noble Earl, and we trust that the promised wide consultation on draft regulations will now proceed apace. This is an opportunity, as has been said, to provide a method for local communities to have a voice on issues directly related to parish matters, and it has our support.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for his support for these amendments and I certainly join him in paying tribute to the noble Earl for all his work on the matter. I have nothing further to add but my thanks to all noble Lords for allowing us to respond so constructively to this proposal from the noble Earl.
Baroness Stowell of Beeston
My Lords, these amendments extend the potential purposes for which a data-matching exercise can be carried out by the National Fraud Initiative and make minor clarifications and updates to the data-matching provisions in Schedule 9. Following the helpful amendments of the noble Lord, Lord McKenzie, when the Bill was last in this House concerning data-matching exercises, the Government introduced Amendment 76. This amendment would add the prevention and detection of errors and inaccuracies as further potential purposes for which a data-matching exercise can be carried out by the National Fraud Initiative.
The amendment would allow the National Fraud Initiative to undertake the ad hoc data-matching exercises that it does at present through the Audit Commission’s wider powers once it moves over to the Cabinet Office. If your Lordships’ House agrees, the amendment would allow the possible extension of the National Fraud Initiative’s potential data-matching powers to include: the prevention and detection of crime other than fraud; assisting in the apprehension and prosecution of offenders; assisting in the recovery of debt owing to public bodies; and the prevention and detection of inaccuracy and error, which is the subject of this amendment.
The noble Lord, Lord McKenzie, proposed an alternative amendment relating to the prevention and detection of maladministration and error when the Bill was previously here in Committee, which we undertook to consider. However, although we felt that a good case had been made for the inclusion of “error”, we concluded that there was insufficient evidence as to how the investigation of maladministration over and above error might be used. Furthermore, “maladministration” has a strong association with the work of the Local Government Ombudsman. We were concerned that its use here might raise the potential for conflicting roles and responsibilities. We therefore considered that the term “error and inaccuracies” was both more appropriate and indeed wider than the amendment proposed originally. We hope that the noble Lord, Lord McKenzie, concurs with that, and I thank him for bringing forward the original proposal that has led to this amendment.
Before enacting any of these purposes, the Secretary of State must consult relevant authorities, their representatives and the bodies affected. In addition, those regulations would be subject to the affirmative resolution procedure. In our view, these safeguards will ensure that proper consideration is given to any extension to the initiative’s current powers.
Commons Amendments 74 and 75 are minor and technical amendments made purely to ensure consistency with other, similar provisions in the Bill or with other legislation. With these assurances, I hope your Lordships will feel able to approve these amendments.
Lord McKenzie of Luton
My Lords, I thank the Minister for her explanation of these amendments and her kind remarks. As has been noted, we had an extensive debate around data matching when the Bill was originally before us, prompted in particular by concerns that data matching undertaken by the Audit Commission under its audit powers would be lost with the demise of the Audit Commission. These powers were not covered by data-matching powers exercisable for the prevention and detection of fraud. Nor were they included in the list of items which, after due process, could be added to those powers. We pressed the case to add data matching for the purpose of detection of maladministration and error to the list of those powers which could be introduced. As the Minister has explained, we highlighted information provided by the Audit Commission as to how its powers had been used to identify problems with GP lists, for example, which would be lost without an amendment to the data-matching provisions. The Minister handling the amendment, the noble Lord, Lord Wallace of Saltaire, who coincidentally had Lords responsibility for Cabinet Office matters, rightly stressed the need for sensitivity around data matching but said that the Government would reflect. The point we pressed was that we were not seeking an extension of data-matching powers, leading to preservation of those that would be lost with the Audit Commission. We are delighted to note that the Government have responded positively on these matters and proposed the addition of,
“prevention and detection of errors and inaccuracies”.
We are told that this formulation will allow the National Fraud Initiative to undertake the ad hoc data-matching exercises it does at present through the Audit Commission under its powers once the NFI moves to the Cabinet Office.
The Minister will be aware of the amendment that we and colleagues in the Commons pressed about the prevention and detection of maladministration and error. As we have heard, there was some debate around excluding maladministration from the amendment, but the main thrust of the Government’s position was the overlap with the ombudsman’s responsibilities to look at this. I do not propose to rerun the arguments advanced by Andy Sawford about the omission of maladministration being a lost opportunity. However, we understand that the Audit Commission has confirmed that the Government’s amendment would enable the NFI to carry on the data matching it conducts through other powers—I think the Minister has actually confirmed that. This was our key starting point, so although we are a tad disappointed at the omission of maladministration, we are grateful that the Government have responded to our arguments and will not press the matter further today. Can the Minister say when it is planned to take the steps, including the necessary consultation, to add these purposes to the NFI’s powers to data match? We accept that Amendments 74 and 75 maintain the status quo in relation to the cross-boundary work of the NFI and we have no points to raise on that. We are happy, indeed pleased, to support these amendments.
Baroness Stowell of Beeston
My Lords, Commons Amendments 77 to 101 make a number of minor and technical related and consequential amendments to Schedules 10 and 12 to the Bill.
Commons Amendments 77 to 79 and 81 to 84, to Schedule 10, simply remove redundant references or make clarifications to related provisions in existing legislation. They are the result of amendments to the Local Government Act 1999 made by the Public Audit (Wales) Act 2013, which removed or amended provisions relating to the Auditor-General for Wales.
Commons Amendment 80 will amend Section 25(2)(a) of the Local Government Act 1999. The amendment ensures that inspectors and assistant inspectors of best value authorities will continue, as they do now, to have regard to any guidance issued by the Secretary of State when carrying out investigations or inspections of best value authorities once the Audit Commission is abolished.
Commons Amendments 85 to 101, to Schedule 12, will remove redundant references to the Audit Commission in a range of other Acts and, where necessary, replace them with reference to auditors appointed in accordance with this Bill, and amend provisions already in the Bill to avoid unintended outcomes once the Audit Commission has been abolished. I hope that I have been able to give noble Lords the assurances they need that these are technical, minor and consequential amendments.
In case this is the final time I am on my feet speaking about this Bill, I thank all noble Lords who have participated in this evening’s debate and I am grateful for the support I have received from noble Lords for these various amendments. I would also like to take this opportunity to thank the Bill team for their consistent hard work on this piece of legislation. It has been my privilege to work with them only for this very final stage of the Bill, but I know that they have had a long and hard-working journey through both Houses. My predecessor would, I am sure, want me to relay her thanks to the Bill team. I beg to move.
Lord McKenzie of Luton
My Lords, we accept that these are minor and technical amendments and have no points to raise.
This is my final utterance on this Bill so I, too, would like to take the opportunity to thank all those who have been involved, particularly the Bill team, who have been helpful during the passage of the Bill and in focusing on these amendments. I thank the stalwarts of our debates, the noble Lords, Lord Tope and Lord Shipley, the noble Earl, Lord Lytton, and my noble friend Lord Beecham, who brings with him not only a very serious understanding of local government and its challenges but the fantastic ability to deliver his thoughts in a light-hearted and challenging way. I also thank the noble Baroness, Lady Stowell, the noble Earl, Lord Attlee, and the noble Baroness’s predecessor, the noble Baroness, Lady Hanham.
Businesses: Business Rates
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Baroness Stowell of Beeston
My noble friend is right that the measures that we introduced were born out of listening to businesses, and measures have been introduced that support them to grow the economy without adding any extra burdens on other taxpayers. I make two points. Online retailers do, of course, still pay taxes, including business rates, on the properties that they use to facilitate their businesses. As to the business rate system itself, as my noble friend will know, my right honourable friend the Chancellor keeps all taxes under review. He is certainly looking at the administration of business rates and this review will take place later this year.
Lord McKenzie of Luton (Lab)
My Lords, we are in the era of the business rate retention scheme but there are emerging representations from councils, via the LGA, that currently the risks of the new system outweigh the rewards. This is partly to do with appeals but also business rates avoidance—exploiting the current relief and discount framework. What specifically are the Government doing to address these concerns about business rates avoidance?
Baroness Stowell of Beeston
The noble Lord will know that one of the changes that we have introduced is to allow local authorities to retain 50% of all the business rates that they raise. This is so that they can enjoy and benefit from business activity in their area. We have also changed the law so that local authorities are able to introduce their own discounts, and since April this year central government is funding 50% of those discounts. We think this is the right thing to do to make sure that there is the incentive there for new businesses and local authorities to receive the benefit from that activity.
Local Government Finance Settlement
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(10 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, I am grateful to the noble Lord, Lord Smith of Leigh, for securing this debate today and, indeed, for his warm welcome to me in this role and in responding to this annual event for the first time. I should like to respond particularly to the remarks made by the noble Lord, Lord Beecham, about my right honourable friend the Secretary of State, Eric Pickles. All I can say to the noble Lord, Lord Beecham, is that it is such a shame because he speaks so well of you.
Noble Lords have covered a lot of ground in this debate and I may not have the opportunity to respond to all the points that have been put to me. I will do my best today. Where I am not successful, I will, of course, supplement my response with a follow-up letter which I will place in the Library of the House. I will just point out to the noble Lord, Lord Whitty, that we have a debate on affordable housing before the end of this month so we will be able to return on that occasion to some of the points that he raised.
The starting point in a debate such as this is to look at the context in which we are debating these matters and acknowledge that over the past three years the Government have had to take some tough decisions about the public finances. Tough, but these are now paying off as the economy gets back on track. My noble friend Lord True highlighted one prediction of the noble Lord, Lord McKenzie, in his contribution to last year’s debate which did not materialise. That was about councils becoming insolvent. It is worth reminding the House that the noble Lord, Lord McKenzie, also suggested last year that we were facing an environment of little growth and increasing debt, but as we look ahead, growth is forecast to be 2.4% this year. The Office for Budget Responsibility expects that jobs will be up by 400,000 and employment is at an all time high.
Lord McKenzie of Luton
Will the Minister tell me when government debt is expected to stop growing?
Baroness Stowell of Beeston
As the noble Lord knows, while we remain having to bring down the deficit, we still have to pay off debt but we are having to deal with less debt than we might otherwise have done had we not taken the measures that we have.
I shall return now to what we have done in terms of the changes we have made and people’s reaction to them. It is worth reminding your Lordships that, as regards the changes we have made to the way in which councils are funded, a recent survey showed that public satisfaction with council services has stayed the same or actually improved in 90% of cases. That is a real credit to local authorities. We are making progress but in order to continue to do so it is vital that we stick to the disciplined course that has been set. Like every part of the public sector, councils have had to shoulder their fair share of the responsibility to pay down the deficit and get the nation’s finances back on a stable footing. The noble Lord, Lord Liddle, acknowledged that the right honourable Alistair Darling, when Chancellor, said in 2010 that cuts would be necessary if the Labour Government were re-elected at that time. However, it is worth noting that the Labour Opposition have opposed all of this Government’s cuts to local government. My noble friend Lord Shipley was right to ask what the noble Lord, Lord McKenzie, would do if Labour were elected. I noted that he did not provide us with much information on that in his winding-up speech today.
Much of the comment today has focused on reductions in central government grant. However, concentrating on those grants misses the bigger picture. It is far more accurate to look at the overall spending power that councils have. Contrary to what has been said, spending power is the best available measure of resources available to councils. We have published the methodology and the data in full on our website. Spending power includes the money the councils raise through council tax, business rates and financial incentives. I am sure noble Lords will welcome being reminded that local authorities now retain 50% of those business rates, which is not something they were able to do previously.
This debate illustrates some stark contrasts between this Government’s approach and philosophy and those of the Opposition. The previous system made councils dependent on central government for their income. Councils got more money by painting the blackest possible picture of their area. Indeed, Andy Sawford, the opposition spokesman in the other place, said only this week that the Labour Party would return to this approach if it succeeded in winning the general election next year. The Opposition talk about so-called fair funding but what they do not say is which councils they would cut if they were to introduce their preferred approach.
In contrast, we have set up a system which inspires ambition and aspiration and rewards councils which go for growth, support businesses, attract investment, help create jobs, and which are absolutely focused on transforming their services to deliver the best possible outcomes. By that I mean the most effective and most efficient public services which best support local residents. Our system means that councils which respond to new opportunities see the benefits of their efforts. I remind noble Lords what my noble friend Lady Hanham said when she spoke powerfully about the flexibility that local authorities now enjoy. I give way to the noble Baroness.
Severe Weather
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(10 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Stowell of Beeston
My noble friend raises an important point. On our investment in flood defences, it is important to make the point that this Government’s overall investment is higher than ever before. We announced in the Autumn Statement before Christmas—this has not happened before—a commitment to a protected, long-term, six-year capital settlement for flood defences. This will lead to £400 million a year by 2021 and will mean that a further 300,000 other properties are protected beyond those that already are.
Lord McKenzie of Luton (Lab)
My Lords, we join in paying tribute to all of those who are working in difficult circumstances to tackle these dreadful adverse consequences of our weather conditions and welcome the Bellwin scheme announcements. However, we have obtained figures in a Parliamentary Answer which make it clear that the Government have reduced investment in flood defences by as much as £100 million in real terms, lower than the level they inherited, from £646 million in 2010 to £527 million this year and £546 million in 2015. How does the Minister justify the claim that has just been made? How does she justify the proposed one-third cut in the budget of local flood authorities for 2015-16 that has just been announced in the local government finance settlement?
Baroness Stowell of Beeston
On the noble Lord’s first point, as I have said, this Government are investing more than £2.3 billion on flood defences in this spending review period and the overall investment, when that is combined with local authority and private sector expenditure, is higher than in the previous four years. As for any reductions in budgets, as the noble Lord will know, because he will have heard my honourable friends make the same point, in any reductions to budgets, necessary budget cuts that we have had to make because of economic situations, front-line flooding services are not affected.
Families: Troubled Families
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Baroness Stowell of Beeston
I understand the point that the right reverend Prelate makes. I can certainly assure him that, in the approach being taken by the programme, the key worker who works with every family is there to address all the fundamental problems that the family experiences—and, if that means relationship issues, that is what they will support that family on.
Lord McKenzie of Luton (Lab)
My Lords, on the question of departments working together, the Minister will be aware of a parallel DWP programme focused on families with multiple problems. Both programmes fund improvements in employability, crime and anti-social behaviour, among a similar group of people, and both fund similar activities. However, there were separate assessments of need, separate business cases and the programmes were launched within four months of each other without any clear data to show which programme was best suited to addressing which issue. The NAO has pointed out that that led to poor performance and loss of value for money. What are the Government going to do about that?
Baroness Stowell of Beeston
The recent NAO report, as with all NAO reports, is a useful and constructive contribution to how we can extend and build on the work that we are doing. However, as the noble Lord has heard me explain, one measure that we have introduced is to use Jobcentre Plus staff in this programme to address specifically the issue of work, and there is great co-operation between the two departments.
Infrastructure Planning (Business or Commercial Projects) Regulations 2013
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, I am grateful to the many Members of your Lordships’ House who have taken a close interest in the Government’s proposal to extend the infrastructure planning regime to business and commercial development as an opt-in for developers. This change was debated thoroughly in your Lordships’ House during the passage of the Growth and Infrastructure Act 2013. During the evidence sessions held at the start of the Act’s passage, both the CBI and the British Chamber of Commerce expressed support for the Government’s proposal. The CBI said that companies which are R&D intensive could see scope to use the infrastructure planning regime and,
“that those kinds of developments are very much in Britain’s interest not only from a local point of view in creating local jobs, but in terms of driving growth and developing Britain’s industrial strengths”.
In addition, the British Chamber of Commerce said that it supported the change that would make it possible for a large industrial development that is nationally significant and with export potential to benefit from a faster planning regime.
The Growth and Infrastructure Act provided a new provision enabling business and commercial projects to make use of the nationally significant infrastructure planning regime, and enabled regulations to be made setting out the particular types of projects that could benefit from this option. The Government carried out a consultation last winter to inform detailed design of these regulations. We received over 100 responses, which have allowed us to refine our approach to ensure that it will benefit a wide range of businesses. These regulations therefore prescribe the types of business and commercial projects that will be able to use the infrastructure planning regime. The regulations do not place any additional burdens on business but open up the streamlined infrastructure planning regime as an option for the most significant business and commercial schemes.
Increasing the speed and certainty of the planning regime is vital to our economic growth and has been a top priority for the Government. The Government have made significant strides in simplifying and speeding up the planning system, with the new National Planning Policy Framework published in 2011, streamlined and web-based planning guidance and important legislative changes through the Localism Act 2011 and Growth and Infrastructure Act 2013. However, over the past few years there has been a decline in the speed with which local planning authorities determine large-scale major commercial and industrial applications. This is despite a reduction in the number of cases that authorities have to process. Over the five years since 2008-09, the proportion of large-scale major applications that were determined within 13 weeks fell from 68% to 53%. Delay results in additional costs and uncertainty to developers, delaying much needed new investment and jobs. Large-scale major business and commercial schemes can be complex and controversial locally and may require a number of different consents, not just planning permission.
In response to these concerns, the Government announced their intention to extend the nationally significant infrastructure planning to business and commercial projects, as an option for developers. The infrastructure planning regime—which is focused on nationally significant projects relating to energy, transport, water, waste and waste water—allows for a single consent regime which is useful where multiple consents are required and a streamlined process for considering applications. The infrastructure planning regime offers a number of potential benefits to developers, including statutory timetabling of a maximum of one year from the start of the examination to decision and removing the potential for call-in or appeal. These features could provide important benefits to developers of the most significant business and commercial projects. Increased certainty could also enable developers of the most significant business and commercial projects to secure the necessary finance faster to commence their projects once a decision has been made. By offering a new, streamlined option for the determination of these business and commercial projects, we are providing a way for these important projects to be built more quickly and provide a crucial boost to the economy.
These regulations therefore enable business and commercial development—including offices, research and development, industrial processes, storage or distribution, conferences, exhibitions, sport, leisure and tourism—to benefit from the option of using the infrastructure planning regime. It might assist noble Lords if I briefly explained how the regulations will work in practice. If a developer wants their business or commercial project dealt with though the infrastructure planning regime, they will need first to make a written request to the Secretary of State for Communities and Local Government to use the regime. The Secretary of State will make a direction for the application or proposed application to be determined through the infrastructure planning regime, if he is satisfied that the project both falls within one of the prescribed types of project and is nationally significant.
To assist developers, the Government have published the factors that the Secretary of State will take into account in considering whether a project is nationally significant or not. These are set out in a policy statement published alongside the draft regulations, which is available in your Lordships’ Library and the Printed Paper Office. The Secretary of State will consider carefully all relevant matters concerning national significance, including whether the project is likely to have a significant economic impact over a period of time. Job creation and new investment into the economy would be taken into account. Consideration will be given to whether the impact of the project is wider than a single local authority area; major business or commercial schemes can generate, for example, economic benefits across more than one local planning authority area. The Secretary of State will also take into account the physical size of the project and its importance to the delivery of a nationally significant infrastructure project or other significant development. This could potentially benefit a complex mixed-use business development.
Once the direction is given, the project will need to comply with the requirements of the nationally significant infrastructure planning regime. These requirements include comprehensive pre-application consultation with the local community, local authorities and statutory consultees. The local authority plays a vital role in the infrastructure planning regime, preparing a local impact report and representing the views of the community during the pre-application and examination stages. This enables developers to recognise and understand the issues for local communities and allows them to refine their proposals accordingly.
We all agree on the need to support new investment and jobs. That is why we have acted to extend the benefits of the infrastructure planning regime to business and commercial development, helping to bring forward appropriate development and reduce delays that cause uncertainty for local communities and businesses looking to create jobs. These regulations provide an optional route for the developers of potentially nationally significant business and commercial projects and we believe that they should be approved as part of our wider plans for driving economic growth. I beg to move.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for her very full introduction of these regulations. She also thanked the many Members of the House who took an interest in the Growth and Infrastructure Bill—clearly a waning interest given the lack of presence in the Committee today. However, we all agree on the importance of generating new investment and jobs for our economy. I think it is fair to say that these regulations carry no surprises in so far as they are entirely consistent with the June 2013 response to the November 2012 consultation. They are part of a range of measures which have as their root the assumption that it is the planning system which is holding back growth and that opening up pathways for developers to circumvent local planning authorities should be facilitated. We could spend a long time debating this—the purpose of planning, the engagement of local communities, the balanced judgments that good planning should entail and much else—but clearly we have before us an SI that emanates from primary legislation which we must accept as a fait accompli.
In the same area, I take this opportunity briefly to ask about the designation of local planning authorities which are deemed not be dealing expeditiously or in a quality way under what was Clause 1 of the Growth and Infrastructure Bill. How many of those local authorities, which is an adjunct to this, have currently been designated? I have a few more questions for the Minister. We support the exclusion of the construction of dwellings from the scope of these regulations, but we would like some clarification. The SI covers developments that wholly or mainly comprise the activities set down, but it must not include the construction of one or more dwellings. Can it be confirmed that any minor part of a development, such as a residential floor atop of an office development, would preclude this procedure being adopted? That would seem to be what runs from a strict reading of the regulations.
The secondary legislation committee commented on the consultation process and made reference to the fact that the consultation ran for six weeks over Christmas, which it suggested was at odds with good practice. It went on to point out that it took the department five months to publish its response. Perhaps we might hear from the Minister why that was so. There was also some suggestion of disparity between the conclusions drawn by the Government and the level of responses received under the consultation.
Given the architecture of the position we are dealing with, we support the exclusion of new coal development and oil and gas, as well as the exclusion of retail and generally the exclusion of development of homes, but we are disappointed that there is no commitment on the production of national policy statements. Those criteria could have applications to developments which might have a regional or even sub-regional basis. As the Minister outlined, the criteria adopted are: whether a project is likely to have a significant economic impact or is important for driving growth in the economy, and I would be interested to understand how significant economic impacts are determined for this purpose; whether a project has an impact across an area wider than a single local authority area, which could occur in many developments and hardly be indicative of something of national significance; and whether a project is of a substantial physical size, which, similarly, may be indicative of some regional project rather than something which is of national significance. There is also reference to the creation of sports stadia and it is suggested that where seating capacity is less than 40,000 seats that should not be seen as being of national significance. A 40,000-seater stadium is not that unusual across the country. We in Luton aspire to maybe 25,000—we could do with 5,000 as it stands—but 40,000 does not seem to me indicative of something which is inevitably of national significance.
I have a few more questions. Will the Secretary of State be required to publish the reasons for his decision to assume authority to decide any particular application? In the absence of a relevant national policy statement, what will be the role of the local plan in guiding decision-making? What if anything will be required of local planning authorities in relation to this process? In particular, can the Minister remind us of what is entailed in consultation under this planning route? It appears that a new consent service unit has been established whose task is to improve co-ordination and communication between the Planning Inspectorate, applicants and consenting bodies. Can the Minister give us a clue as to how large that service unit is and how many individuals are involved in it? Can she also say how many applications are currently proceeding on non-business and commercial projects through the national infrastructure process and what the performance levels are? In particular, I am driving at whether the Minister is confident of the capacity for it to do more and to take on projects that might run from this SI.
There was debate, particularly in the other place, when the Bill was under consideration about whether quarrying or surface mineral extraction such as open-cast mining would be included. It is clear that we have excluded new coal, oil and gas, but I am not sure whether that potentially leaves anything under that description. Perhaps the Minister can enlighten us on this.
Clearly, we will not oppose the regulations, but they give rise to some quite serious questions as to the level of discretion which is left to the Secretary of State on what are fairly broad criteria. It would therefore be helpful to have as much detail on the record today as possible.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for making it clear that the Opposition will not oppose the regulations. I note what he said about the absence of many of those noble Lords who had contributed during the passage of the Bill not being here for the regulations today. I take that as a good sign and am grateful for the support that I have received.
As the noble Lord will know, it was my noble friend Lady Hanham and not me who took the Bill through your Lordships’ House, so it is something with which I am becoming familiar in some detail at this stage. I will try to respond to the numerous points raised. A good place to start is to remind the Committee that we expect that in most cases the local authority will be able to provide a swift decision on business and commercial developments, and that that will remain the route for the vast majority of applications. We are providing an alternative route and, in doing so, some certainty for developers, because of the statutory timetabling of the infrastructure planning regime.
The noble Lord raised a point about the length of the consultation, and about why we only consulted for six weeks. It is worth reminding noble Lords that, in accordance with revised Cabinet Office guidelines, we now take shorter periods for consultation where we believe that the issue is one specific to, or of primary concern to, professional or trade areas, or, in this case, local authority bodies. Therefore, six weeks was considered to be adequate for people to respond, and the fact that we received over 100 responses suggests that people felt they had adequate time.
The noble Lord asked why there was no national policy statement. We do not think the case for one here is strong, mainly because this is a new option for developers; it is not mandatory and the Secretary of State retains some discretion in deciding whether or not an application should follow this route. In this context, therefore, we do not think a national policy statement is needed. He asked about housing, and whether the criteria exclude any residential element. That is absolutely right: we are firm and clear that responsibility for housing should remain with local authorities, so if one of these plans included housing that would render it unsuitable for this type of application. However, I remind noble Lords that most big projects would want to use the existing routes—this is an option, not the way they have to go.
Lord McKenzie of Luton
The Minister has been clear. However, if there was a very significant official or commercial development, and it happened to have a few penthouse suites at the top, are we saying that that would completely preclude such a development from availing itself of these provisions, whereas without the suites it would have been eligible?
Baroness Stowell of Beeston
The advice I have been given is very clear that any kind of housing would not be permissible, if this was the route chosen by the developer. The regulations are quite clear on that, so I can be clearer than I am normally able to be in these circumstances.
The noble Lord referred back to a debate during the passage of the Bill and asked how many local planning authorities are designated as poorly performing. One local authority has been so designated. He asked about the consent service unit, the team responsible for this new process. It is a small unit of three people, with secondees from Natural England and the Environment Agency providing ongoing support to a number of major projects.
The noble Lord also asked why we have not explained how we will decide whether a project is likely to have a significant economic impact. I can best answer that by repeating a point I made in response to another question; namely, that the Secretary of State will need to consider these applications on a case-by-case basis. Therefore, it is not possible for me to be explicit in the way in which he would like me to be. To illustrate my point, perhaps I may use the example of whether a sports stadium is nationally significant or not, or whether cross-local authority issues may mean that it is nationally significant; in many cases it will not be. The point trying to be made by this is that, of itself, one element of a big plan might not warrant it being designated as nationally significant but, when combined with something else, a 40,000-seater stadium, for example, might qualify it as being nationally significant.
The noble Lord also asked about a policy framework for the business and commercial category, such as a national policy statement. I think that I have already answered that point. He also asked about the importance of local plans and how they fitted into the new regime. The local plan is likely to be an important and relevant factor to be taken into account. It is part of the type of things to be considered as and when an application is made.
The noble Lord asked about the number of cases going through the major infrastructure regime more generally. As he said, what was underpinning that question was whether we had capacity for more. Some 14 decisions have been taken under the infrastructure planning regime and another 20 are being considered either at the Planning Inspectorate or by Ministers. A further approximately 60 are at the pre-application stage. The regime is seen as working well and is widely supported by developers.
I think that I have covered all the points raised by the noble Lord, Lord McKenzie. On that basis, I just will restate how grateful I am to him for supporting these regulations. They will provide developers of potentially nationally significant business and commercial schemes with the choice of using the infrastructure planning regime and benefiting from its statutory timetable and certainty. These benefits are important in enabling developers to plan ahead and to secure the necessary finances in a timely manner to take forward their projects with confidence and, we believe, provide an important boost to growth.
Lord McKenzie of Luton
Perhaps the Minister would drop me a line on what, if anything, is left around quarrying and surface mineral extraction. She made reference to one authority which has been designated. Is she in a position to let us know which authority that is?
Baroness Stowell of Beeston
On the latter question, at the moment the answer is no but, if I can, I will write to the noble Lord. As to quarrying, he is right that I did not address that point. Regulations include winning or working of minerals but exclude winning or working of peat, coal, oil or gas. I hope that that answers the noble Lord’s question. If he requires further information, I will write.
Business Rates
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Baroness Stowell of Beeston
I am grateful to my noble friend for raising this important matter. Of course I recognise the difficulties faced by retailers around the country. I regret that I am not able to announce any new tax cuts today—my right honourable friend the Chancellor might have something to say if I did. He has a proven record in supporting business. It is worth reminding noble Lords that by 2015 corporation tax will have fallen eight percentage points to 20%. I also know that he is listening hard and considering all options before deciding what steps to take next towards reducing the deficit and stimulating growth.
Lord McKenzie of Luton (Lab)
My Lords, we know that small businesses are the driving force behind future jobs and growth. As the noble Lord, Lord Naseby, said, we know that many small business owners face a cost of living crisis as high streets struggle, and that many are under the pressures of rising business rates and energy bills. There are some 40,000 empty shops in the UK and more than one in 10 small businesses say they spend the same or more on business rates as on rents. While it is right that the UK has a competitive corporation tax rate, does the Minister not accept that the priority now is to direct more help to small and medium-sized businesses, as Ed Miliband proposed, by cutting the 2015 business rate on 1.5 million properties below the value of £50,000 and freezing it for 2016? This would be paid for by not cutting further in 2015 corporation tax for 80,000 larger companies and multinationals.
Baroness Stowell of Beeston
I think the Institute of Directors has already disagreed with that approach. We consider that it would be robbing Peter to pay Paul because all businesses benefit from a reduction in corporation tax. It is also worth reminding the noble Lord that this Government have given local authorities powers to grant their own business rate discounts. The local government sector now retains 50% of the business rates that are collected. If local authorities decide to reduce business rates further in their area, since April of this year the Government have been funding 50% of those costs.
Children: Temporary Accommodation
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Lord McKenzie of Luton
To ask Her Majesty’s Government what plans they have to ameliorate the impact on children of living in temporary accommodation.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, the Government are investing £470 million during this spending review period to help prevent and tackle homelessness. This investment has meant that the average time spent in temporary accommodation by those families who are at risk of becoming homeless has reduced from 20 months at the start of 2010 to 13 months as of September this year.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for that reply, which, frankly, I do not believe addresses the seriousness of the current situation. Shelter estimates that this Christmas 80,000 children in Great Britain will wake up homeless. The number of families in bed-and-breakfast accommodation is the highest for nearly 10 years, with some 40% having to stay beyond the legal limit of six weeks, and more than 11,000 homeless households have been based in temporary accommodation in another area. All of this is damaging and disruptive to children’s health, to their education and to family life. I ask the Minister how the costs of all this to families, communities and society are weighed against the benefit restrictions that are fuelling the homelessness crisis.
Baroness Stowell of Beeston
My Lords, all of us are concerned to protect children and, thankfully, in this country we have a strong homelessness safety net, which is protected in law and ensures that families with children at risk of being homeless always have a roof over their head. As I said in my original Answer to the noble Lord, we have invested £470 million in preventing homelessness. Our effort is very much around preventing and avoiding people being put at risk in the first instance, but we are also working very closely with councils to ensure that they are properly equipped to provide the support that is necessary to anyone who is at risk at any time, never mind whether it is at Christmas or not.
Carbon Monoxide Detectors
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(11 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Stowell of Beeston
My Lords, the noble Baroness raises an important point. The Department of Health has been working with the British Standards Institution to introduce warning labels on barbecues and barbecue fuels to warn people of the dangers of bringing barbecues indoors or into tents. I think that people are gradually starting to understand the risks and dangers of that.
Lord McKenzie of Luton (Lab)
My Lords, the Minister’s announcement is welcome. She will be aware that we now have some 3.6 million households renting privately in a sector that has hitherto been largely unregulated. Mention has already been made of the landlord’s obligations under health and safety legislation. Is she aware of research from Shelter that shows that in 2011-12 there were some 85,000 complaints against rogue landlords, two-thirds of which related to serious life-threatening hazards such as dangerous gas and electrical installations? Given savage cuts to the HSE and local authority budgets, how can the Secretary of State’s new-found zeal for cracking down on rogue landlords be brought to bear to ensure compliance with these vital health and safety regulations?
Baroness Stowell of Beeston
The noble Lord seems to want it both ways—he wants me to say that we are going to do more but then questions whether we can do more. As I said, a couple of weeks ago we announced a range of measures to enhance the safety of tenants in all kinds of rented accommodation. Among a range of measures that we will be introducing is guidance for local authorities to help them prosecute rogue landlords and press for the maximum possible penalties. From next month the courts will be able to take account of a landlord’s assets and not just their income, as at present, when determining an appropriate fine.
Housing: New-build Homes
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
Baroness Stowell of Beeston
We certainly encourage local authorities to use their assets and the borrowing power that they already have. Not all councils are borrowing up to their cap, but the cap is important because it is part of our larger strategic objective, which is reducing the overall deficit, so it is not possible at this time for us to lift the cap on local authorities.
Lord McKenzie of Luton (Lab)
My Lords, the Minister will be aware of an NAO report on the new homes bonus that found that the Government had got their sums wrong. Assumptions were unreliable, unrealistic and contained a substantial arithmetical error. It found little evidence that the bonus is increasing approvals for housing. It said that the Government were not monitoring the impact of £1.3 billion of taxpayers’ money and that the new homes bonus was unfair in its distribution. The PAC has called for an urgent review of the new homes bonus. Will the Minister support that?
Baroness Stowell of Beeston
As we made clear yesterday, and as was always the case, we are already reviewing the new homes bonus scheme; that report will be published next Easter. The most important thing to say to the noble Lord is that we are disappointed in the NAO’s report because it seems to miss the point of the new homes bonus. It is there to do what is says on the tin: to reward councils that help to build more new houses. That is what we are trying to do. We want to make sure that those local areas that build more houses attract and receive the benefit of doing so in their area.
Housing: Affordability and the Underoccupancy Charge
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, I start by congratulating the noble Baroness, Lady Quin, on securing this debate. While we have differences of view, we all agree on the importance of affordable housing. I am grateful to the noble Baroness for giving us the opportunity to debate this important issue. I also welcome my noble friend Lady Bakewell of Hardington Mandeville and congratulate her on her maiden speech.
We have covered a huge amount of ground and I know that I will not be able to reply to all the questions that have been put to me, but I will ensure that, where I fail to do so, I follow them up in writing. I start by addressing the issue raised by my noble friend Lord Shipley, which was echoed by many noble Lords, including the noble Lords, Lord Whitty and Lord Sawyer, as regards the most important issue being that of increasing supply and the number of affordable homes available to everyone in England. That is why, because it is so important that we increase supply, we are building more of those homes. More than 150,000 new affordable homes have been delivered in England over the past three years.
Our Affordable Homes Programme is generating nearly £20 billion of public and private investment to deliver 170,000 new affordable homes between 2011 and 2015. I say to my noble friend Lord Stoneham that we have already delivered more than 80,000 of those, and around £23 billion of additional public and private funding will help deliver another 165,000 new homes over three years from 2015. All this adds up to being the fastest annual rate of building of affordable homes for at least 20 years. As the noble Lord, Lord McKenzie, and others have heard me say in other housing debates to which I have responded in the past couple of weeks, this compares with the figure under the previous Administration, where the number of affordable rented homes fell by 420,000.
I am grateful to the noble Baronesses, Lady Blackstone and Lady Dean, for their realistic assessment of the previous Government’s performance. However, the noble Baroness, Lady Blackstone, was wrong to claim that things are getting worse because if we focus specifically on council housing we see that more council housing has been built in the three years of this Government than in all the 13 years of the previous Labour Government combined. As regards the increase both in specific council housing and the affordable housing to which I have just referred, it is important to bear in mind two things. The lack of supply under the previous Government occurred during a boom period whereas we are trying to increase supply and tackle the deficit at the same time. That leads me to respond to the point which I think was first raised by the noble Lord, Lord Whitty, but was certainly echoed by the noble Baroness, Lady Blackstone, and the noble Lord, Lord McKenzie, in criticising our policies on affordable housing. It is because of them that less government capital grant is required in terms of building. This means that we can build more affordable homes for every pound of upfront government investment using affordable rent. My noble friend Lord Stoneham questioned whether this was a sustainable approach in the long term. I think that I am just over my three-week anniversary in the job so I do not feel qualified at the moment to get into a detailed debate on that. However, I say to all noble Lords that we are increasing the supply of affordable housing—all noble Lords in today’s debate seem to be united in that request—at a time when we are also dealing with the deficit, so we are having to balance those competing needs.
Noble Lords also asked whether we were using other measures to increase supply. I should say to my noble friend Lord Stoneham, who asked about guarantee bonds, that up to £3.5 billion in government-supported guarantees will be available in the affordable homes guarantees programmes, but we have yet to get the approval of the first of those.
My noble friend Lord Shipley and the noble Lord, Lord Whitty, asked about the capacity of councils to borrow more money to build more affordable housing and whether the Government could raise the borrowing cap. Because of the competing objectives of retaining or bringing down the deficit and trying to stimulate new builds in local areas we do not feel that it is right to lift that cap. However, it is important to note that not all councils are borrowing up to their cap and it is possible from self-financing for councils to have a new source of revenue that was not open to them previously.
The noble Baroness, Lady Dean, asked how innovative we are being. We are certainly looking at a range of options whereby we can provide grant funding towards building new homes, which would first be let at affordable rents but give those tenants the first option to buy. In all of this area we are trying hard to fulfil the absolutely important objective that we all share, which is increasing supply, and we are making positive inroads in that area.
I am not going to get into a lot of detail about the wider issue of housing supply beyond affordable housing, except to say that I disagree with the noble Baroness, Lady Blackstone, and others who said that our efforts are not bearing any results. Housing supply is at its highest since the end of the boom in 2008, with 334,000 new homes built over the past three years. Only last month the Chartered Institute of Purchasing and Supply said that houses are being built at the quickest rate for a decade. The latest GDP figures showed that 2.5% was from construction output and jobs in the construction industry are up 9,000 on last year. I therefore agree that this is an important area but progress is being made.
While there is pressure on us to deliver more new homes, we also have to make the most out of existing stock. We are giving landlords the freedom to do that. The noble Baroness, Lady Dean, was right to highlight how things have changed in terms of those who now need access to social housing than perhaps had been the case 15 or 20 years ago. Some people may need social housing for life but for many others it should act as a stepping stone or springboard that provides stability and support for only as long as it is needed. Councils and housing associations can now offer short, fixed-term tenancies as well as lifetime tenancies to new tenants where it makes more sense. We have made sure that councils can decide who qualifies for social housing in their area while finding alternative solutions for those who do not qualify. I was moved by what the noble Lord, Lord Sawyer, said about people having a right to a home where they work and live. I agree with him about that but our changes to the law via the Localism Act mean that councils have much greater flexibility than they had in the past in terms of their power to respond to the crucial issue that the noble Lord raised.
Before I move on I should mention something that no one has raised in this debate. An important point for us not to lose sight of is that the Audit Commission estimates that around 98,000 social homes in England are being unlawfully occupied and that social housing fraud is costing us an estimated £1.8 billion a year. To try to drive that down because we need to make strong inroads in this area we are giving £19 million over four years to local authorities to help them tackle fraud in social housing. We are also funding a team of experts at the Chartered Institute of Housing who offer free help to landlords on how to tackle fraud and underoccupation.
Let me move on to the other issue raised in our debate—the removal of the spare room subsidy. The first thing I would say is that we in this Government strongly believe that removing that subsidy returns fairness to housing benefit through levelling the playing field. People who receive housing benefit when renting privately, as we have just heard in the exchange between my noble friend Lord True and the noble Lord, Lord McKenzie, have long been entitled to benefit for the number of bedrooms that they need. The Opposition have said that they will reintroduce the spare room subsidy for social housing, but if I understood correctly the point that the noble Lord, Lord McKenzie, was making in his exchange with my noble friend it is the Opposition’s position that they will not extend the reintroduction of that subsidy to those who are in receipt of benefit but in the private rented sector.
Lord McKenzie of Luton
Usually the questions go the other way but let me be clear. We see these two types of tenure as being quite different. My noble friend Lady Hollis stressed this point. A person’s council house tenancy is allocated at the time on the basis of their needs. If their need changes over time a change is made. It is different from short-term tenancies in the private sector where there is a much higher turnover. We do not see the two as being the same.
Baroness Stowell of Beeston
I am grateful to the noble Lord for that clarification. I understand the point that he and the noble Baroness, Lady Hollis, have made, but what I have been trying to outline regarding the use of existing stock and more innovative ways to address the need for social housing of all kinds—particularly in relation to the point made by the noble Baroness, Lady Dean—is that we need to ensure there is a level playing field in the way we deal with different people.
Lord McKenzie of Luton
If that is the proposition, how is there a level playing field when someone who is supposedly underoccupying has no effective means of downsizing within any reasonable space of time or to any reasonable geographic location?
Baroness Stowell of Beeston
If I may, I will move on in a moment to how we are helping those who require special support.
Removal of the spare room subsidy is also in part helping us get to grips with the housing benefit bill, which has grown to £24 billion this year and nearly doubled under the previous Government. I promise that I will come back to the remarks of the noble Baronesses, Lady Hollis and Lady Quin, on savings estimates. While it gives me no pleasure to say this, given the spiralling housing benefit bill it cannot be right, as my noble friend Lord Howard of Rising said, that the taxpayer should continue to pay for homes that are too large for the household’s needs. Before we made the change, up to 1 million spare bedrooms in working-age households in England were being paid for by housing benefit.
As I have acknowledged, we are in a transitional period, with both landlords and tenants facing change. The Government are investing heavily in new affordable homes and we have to get that supply coming through. Over time we think that there will be more efficient use of social homes, with the spread of accommodation being more appropriate for the area as a result of the measures we are introducing. However, getting there will take time, which is why we have made available £405 million of discretionary housing payments over this spending review period. The noble Baroness, Lady Blackstone, said that that is not enough, but we have trebled the DHP budget to £190 million this year. I think that it was my noble friend Lord True who talked about how his council is drawing on that fund and how other areas are adjusting to the new situation.
It is early days but I can report in general terms that councils are using the fund to give awards where it is clear that the claimant is unable to make up the shortfall. This includes longer-term awards, including, as the noble Baroness mentioned, to disabled claimants living in significantly adapted homes, and short-term support—for example, to help people who have been off work due to illness but are due to return soon, and people engaging with their landlord in attempting to downsize.
However, many people are of course already managing the change. Among those who are out of work, some are finding work for the first time, some people already in work are able to increase their hours and others are able to move to smaller accommodation. In the two and a half years between the policy being announced and it being implemented, local authorities, landlords and tenants in some areas started to prepare for this change. Because time is limited I shall not go into the detail but Westminster, for example, has used a scheme to ensure that support is available for those who want to downsize. Likewise, the council in Salford is running schemes to help to bring together tenants who may be interested in swapping their homes. My noble friend Lady Seccombe referred to HomeSwap Direct. Through this scheme, for the first time, social tenants who want to swap their homes can now see every available property, thus boosting their chances of moving. More than 10 million searches have been made on that website since it was launched a couple of years ago.
My noble friend Lady Seccombe mentioned some other schemes which support pensioners who, although they are not required to move, might want to downsize. My noble friend Lord Stoneham made an important point when he highlighted the effort made by some responsible local authorities and housing associations to advise tenants on financial management to avoid getting into arrears.
We are taking proper steps to make sure that we understand how the removal of the spare room subsidy is working. We have commissioned extensive research, which will provide evidence of how this and other welfare reforms are working in practice. I can reassure my noble friend Lord Shipley that the interim evidence on the removal of the spare room subsidy is due to be published next spring. In the mean time—I mean this absolutely sincerely—I acknowledge that it is inevitable that we will hear stories, which, albeit anecdotal, will be concerning and upsetting, about whether this is a policy that we support in principle or oppose. However, we believe that it is too early to draw conclusive evidence from the emerging data on how the policy is operating at the moment. We want to make sure that sufficient time is allowed to pass so that we can reach a fully informed view on the impacts on both landlords and claimants. As I have said already, I make it clear that we are committed to giving proper consideration to all that evidence. We will publish it, and be held to account for it, next year.
In conclusion, as I said at the start, this Government are committed to building more new affordable housing and we have made a strong start in putting right the previous decline. We are committed to making the best use of the existing stock of housing and have changed the law so that local authorities and housing associations have more freedom. We are also committed to supporting people who are not yet able to buy or rent on the open market but who, in time and with the kind of support that we are offering across the board, could realise their aspiration to do so.
As always, I have learnt a great deal today. The noble Lord is about to stand up and ask me a question, so before I sit down I shall give way.
Lord McKenzie of Luton
I have a very simple question. Obviously in the time available the Minister has not been able to answer all the questions that have been put to her. Will she undertake to look at the record and write to noble Lords where appropriate?
Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2013
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(11 years, 5 months ago)
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Lord McKenzie of Luton
My Lords, in thanking the Minister for introducing these regulations, let me make it clear that they have our strong support, as the Committee will have gathered from my noble friend Lady Drake.
At the start of her presentation, the Minister made reference to the progress that has been made with auto-enrolment. That is indeed heartening. I think the figure was more than 1 million people already enrolled—I was not quite sure whether that was gross or net of opt-outs. I understand from my noble friend that, thankfully, the level of opt-outs has been quite small.
It was a particular delight to hear from my noble friend Lady Drake in this short debate because she was there at the heart of the creation of auto-enrolment as one of the three members of the Turner commission. We always endeavour to follow her wise words.
We particularly endorse the analysis which points up the misalignment, which the Minister referred to, between the interests of the primary consumer—the employer—and the end customer—that is, the member. As my honourable friend the shadow Pensions Minister Gregg McClymont has made clear, the workplace pensions market is not made up of fully informed consumers. The inertia that this phenomenon fostered is, in part, to be addressed by auto-enrolment. A lack of informed consumers is not sufficiently balanced by good governance arrangements, particularly for contract-based DC schemes.
We see the issue of the complexity of charging as inextricably tied up with the wider issues of governance, especially for defined contribution schemes. My honourable friend has gone further and challenged whether the Financial Conduct Authority’s regulation offers sufficient safeguards for the workplace pensions market, and has proposed an extension of trust-based governance, a widening of fiduciary obligations and bigger schemes to improve the bargaining power of members. He argues that full disclosure of costs and charges is not a sufficient improvement to the current situation but it is a necessary one. We welcome the call for evidence around some of these matters.
As we have heard, in April 2013 the Work and Pensions Committee covered a number of these issues and made the point, with which we agree, that auto-enrolment will mean that many more people in the UK will be saving for their retirement. But given that most will be auto-enrolled into DC schemes, hence bearing most pension-saving risks themselves, the issue of good governance is of heightened importance. The committee says:
“Decisions made by contract-based scheme providers, and the employers who enrol their employees into them, may not always be made in the best interests of the scheme member. Trust-based schemes generally offer members greater protection, as scheme trustees have a fiduciary responsibility to act in the interests of scheme members”.
The committee also pointed out that:
“A confusing array of costs and charges is applied to pension pots by pension providers … and these costs and charges can have a serious negative impact on an individual’s retirement income”.
My noble friend’s comments about the need to maintain and build on the broad popular support for pensions saving that auto-enrolment has thus far engendered are very important.
Like the Minister, the Work and Pensions Committee was particularly concerned about members bearing consultancy charges. As the committee sets out:
“The provision of pensions advice to employers is currently an unregulated activity”,
and it would seem that the Government have no plans to change this, so tackling consultancy charges, which end up being paid by scheme members, has to be seen in this context. We consider that the Government are right to ban these arrangements rather than seek to ameliorate them by capping or strictures from the regulator. As the Minister has explained, such charges can have a particularly pernicious impact on the low-paid and transitory job holders, as the Explanatory Note makes clear.
I have a few brief questions. In fact, I think the Minister has pre-empted two of them. I am not sure whether that is foresight or I am getting predictable. Have the Government considered the risk of trading down in circumstances where employer contributions would be above the statutory threshold but could be reduced to the statutory threshold, with the savings covering the consultancy charges that would otherwise be on-charged to scheme members? I was going to ask what assessment has been made of the ramifications of the cut-off point where an employer has entered into an agreement before 10 May 2013. Those agreements presumably will run for some time in the future. Can the Minister say something about the nature of these contracts and whether they tend to be short or long term? If they can be terminated by notice, there does not seem to be an obligation on an employer to do that under these arrangements. However, the Minister in her opening remarks said that there seem to be just a few of them, so it does not seem to be a particularly big issue.
The Minister has covered my final question, which was to get an update on auto-enrolment. That is encouraging news. We are thoroughly supportive of the impact of these regulations.
Baroness Stowell of Beeston
My Lords, I first thank the noble Baroness, Lady Drake, and the noble Lord, Lord McKenzie, for their support for these regulations. I am grateful to them for that.
In response to the comments of the noble Baroness, Lady Drake, in particular, I will say a little more about the market study into workplace pensions that the Office of Fair Trading launched in January. The aim of the study is to examine whether DC pensions are set up to deliver the best value for money for savers and to take a forward look at the impact of auto-enrolment. On 11 July, the OFT published an update on its progress. This included several areas it wishes to explore further, including the current level of governance over the performance of some schemes, which the noble Lord, Lord McKenzie, raised; schemes with two-tier charging structures in which deferred members pay higher charges; and schemes that do not have a realistic prospect of reaching sufficient scale to generate value for their members. The OFT is also concerned about the way that charges are currently presented and about charges in older schemes that may not represent value for money.
The Government intend to publish a consultation in the autumn, following the publication of the OFT’s report and recommendations. Our consultation will cover a number of issues including a charge cap, active member discounts and extending the prohibition on consultancy charges to all qualifying schemes. These regulations are a first step in a wider move towards addressing the whole area of consultancy charges and their potential effect.
The noble Baroness, Lady Drake, stressed the importance of the FCA and TPR working together. The regulators have already set out how they will co-ordinate and exchange information. The FCA and TPR will jointly publish a document which sets out how regulation of work-based pensions operates in the autumn. This will better articulate the existing regulatory framework. The FCA is updating its pensions strategy and this will inform its business plan, to be published in the spring of 2014.
Welfare Benefits Up-rating Bill
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(11 years, 9 months ago)
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Baroness Stowell of Beeston
My Lords, there have been some very powerful speeches in this debate. I am very grateful to all my noble friends for their contributions and for laying out so clearly and eloquently the economic case for this Bill and for what we seek to achieve. As they have been so clear, I will not repeat much of what they have said. However, I will start by making clear to your Lordships’ House that the amendments before us would, in simple terms, remove the commitment to a 1% uprating from the Bill. The noble Lord, Lord McKenzie, said in Committee:
“We fully intend these amendments to undermine and negate the purpose of the Bill”.—[Official Report, 25/2/13; col. 855.]
My noble friend Lord Newby said in reply that these are the sort of amendments that equate to,
“a vote against the Bill at Second Reading”.—[Official Report, 25/2/13; col. 866.].
It is important that we understand what these amendments seek to do.
As has been made clear by my noble friends, these are not decisions that we take lightly. I do not deny that they will have impacts on those who receive the benefits in question or that those impacts will not be easy. However, we have made a conscious decision to protect those benefits which reflect the additional costs that disabled people face, while also protecting pensioners through our commitment to the triple lock.
The right reverend Prelate the Bishop of Leicester is right to highlight those in need and I am glad that he does. It is important that we all remember and are conscious of the people affected by some of these changes. However, I ask him and all noble Lords not to forget that, as part of the Government’s wider reforms, we are prioritising resources towards measures and reforms that support families and help to change lives.
Let me name just a few of those measures. We are expanding early-years education to ensure that children have access to early education and to support parents in work. We are attaching additional funding to disadvantaged pupils through the pupil premium, which will rise to £2.5 billion a year by 2014-15. We have protected the schools and NHS budgets to ensure that these vital services continue to support families. More than £1 billion of investment will go into schools. We are introducing universal credit—a new, radically simpler benefit payment designed to ensure that work pays.
As my noble friend Lord Bates already has acknowledged, this last change is about transforming our welfare system. It will significantly increase the incentive that people have to work. Indeed, we estimate that it will lead to up to 300,000 more people moving into work. It is important that we focus on that point for a moment. As my noble friends have already indicated in their speeches, we must not look at the changes that we are discussing today in isolation; we must see them in the wider context of the changes that the Government are making. They reflect the fact that this Government’s focus is on how to help people off benefits and into work.
We need to be aware of the level of support that people can receive while they are on out-of-work benefits. For many, this is supposed to be a temporary state—an interruption between periods of work. By making the system simpler, by reducing the risks from people moving into work and by making work pay, we can reinforce that temporary nature and ensure that more and more people are moving into work. That is what we are seeking to achieve through universal credit and, as I have said, I ask noble Lords to bear these wider changes in mind when considering this Bill and all the amendments that we will debate today.
This Bill is a short-term change, made at a desperately difficult time, as we seek to rebalance the public finances. However, in our other reforms we have made a huge commitment to the long term, a commitment to changing lives through helping people back to work. Although we still have challenges in the labour market, the fact is that more people are moving into work already. Unemployment is falling. Private sector employment is up by more than 1 million since the election and the number of people employed is at its highest level ever.
We are continuing to provide for a 1% increase in these benefit rates. As my noble friends have said, this will mean that the value falls in real terms, which is not a decision that we take lightly, but it is an increase and we must compare this, as some of my noble friends already have, with what is happening elsewhere. Ireland has cut unemployment benefit by 4% a year for two years since 2010. Portugal has cut unemployment benefit by 6%. Spain has cut payments to people who are unemployed for more than six months by 10%. Let me remind noble Lords that the UK’s deficit in 2010 was larger—I repeat, larger—than the latter two countries. I am not saying that that justifies the measures we are discussing today; they are justified by the need to rebalance the public finances. However, it is, I hope, a reminder that these are very difficult times. The actions this Government have taken and continue to take to reduce the deficit are helping to secure economic recovery, but there are still tough decisions to make.
While this group of amendments seeks in simple terms to remove the 1% figure from the Bill, as many of my noble friends have already pointed out, it does not suggest an alternative. It should be noted that if the amendments before us were to pass, they would make it possible for the Government to increase benefits by any amount that they wanted in the years in question, without reference to prices or any specified factors, including uprating by less than 1%. Let us assume that the intention would be to upgrade in line with CPI. That would mean that the £3 billion in savings from the Bill would not be delivered. I appreciate that the decisions we have made in the Bill are not easy. We never claimed that they were. However, they are absolutely necessary. This was made clear by my noble friends, who made contributions that were much more powerful than I could have made.
Let us not forget that the central purpose of the Bill is to set out clear plans on uprating that deliver significant and vital savings that will help us on the road to economic recovery, along which we simply must travel if we are to preserve for the future the kinds of things that we value and from which we will all benefit: a stable economy, a growing labour market and opportunities for the next generation.
When the noble Lord, Lord McKenzie, moved the amendment, he said that all the amendments in the group were linked and were consequential one on another. Perhaps it is premature for me to make this point, but I will make it clear that in the Government’s view the amendments are not consequential one on another. If Amendment 1 is agreed, the Government will not oppose Amendment 5. However, we will oppose Amendment 7. It is important to make that clear.
I have made the case for seeing these changes in a wider context, and my noble friends have made powerful contributions about the wider economic context. It is clear that the changes, while painful, are necessary. Therefore I urge the noble Lord to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I start by thanking the noble Lord, Lord Low, for his support for the amendments in this group. He made the very important point that we are potentially moving into a period of greater inflation. This point was made last week by the FT, which talked about the risks of stagflation in this country. I also thank the right reverend Prelate the Bishop of Leicester for his support. He posed the key question: how will making these people poorer help the national interest? What we heard from noble Lords who oppose the amendment did not help us on that point.
I say to the Minister and to the noble Lord, Lord Bates, who prayed in aid universal credit, that it would be good to know that universal credit is on track because from everything we hear it is not. Even with universal credit as proposed, we know that something like 1.8 million people will have their benefits from work reduced in comparison to their current position.
I stress that the amendment challenges the locking-in over a three-year period of the restrictions on uprating. Uprating by less than the rate of inflation is a real-terms cut. We should recognise that it is a cut in people’s benefits. The fundamental proposition in the amendment is that these things should be looked at in the normal way on an annual basis by reference to what is happening to prices.
The noble Lord, Lord King, and the Minister said that other countries are cutting benefits. Benefits have been cut in this country, too. Council tax benefit, housing benefit, DLA, ESA and tax credits have been cut by something like £18 billion to date.
Lord McKenzie of Luton
It depends on what the alternative proposition would be. I have tried to stress that this amendment takes ESA outside this 1% fixed uprating—outside that collar—so we would have to judge the impact at each uprating period thereafter. A judgment would have to be made in the light of inflation and general economic circumstances at that point in time. That seems a very clear proposition, is it not? It is certainly a basis on which we are very happy to support this amendment.
Baroness Stowell of Beeston
My Lords, all of us want to protect those who are furthest from the labour market or who have additional costs because of disability, and I think that all of us who have contributed to this debate so far and all of us in the Chamber today share that view. There is no disagreement among us on that.
That is what the Government are doing. We have not included key disability benefits, including disability living allowance and attendance allowance in the 1% annual uprating decision in the Bill. Nor have we included the disability premiums in working age benefits or the disability elements of tax credits in the Bill. We have also excluded the support group component of employment and support allowance and the higher of the universal credit disabled child additions. All these benefits will continue to be uprated by CPI. We have protected them because they help support those who are furthest from the labour market or who have additional costs because of disability.
In one of the exchanges that has just taken place, the noble Lord, Lord McKenzie, referred to cancer sufferers and made the point that we want to make sure that we provide them with the support that they need. It is worth reminding noble Lords that earlier this year, in January in fact, we introduced changes that will mean that more people with cancer will now qualify for the support group, which is protected, whereas before they might have been placed in the work-related activity group. We have taken on board the concerns in that area. They were valid concerns, and we were glad to be able to act on them.
Welfare Benefits Up-rating Bill
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(11 years, 9 months ago)
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Lord McKenzie of Luton
My Lords, I thank my noble friend Lady Lister for displaying yet again her knowledge of and passion for a very important subject and I pay tribute to all noble Lords who have spoken in this debate for their work on the cross-party inquiry. Some important issues have been raised, such as that of asylum seekers not being able to access paid work as a route to dealing with the circumstances they find themselves in, worrying reports about 10,000 children and extra costs that are imposed on public services such as the NHS, which were identified by the noble Lord, Lord Avebury. Clearly, that report is a telling report but it is a report currently for Government. However, we, too, will have to reflect on it as well.
The principle here is that we must be able to provide support to those in genuine need but must do so in a way that minimises incentives to economic migrants who could undermine public support for genuine refugees. There is an issue here that we need to be frank about. There is a balance between dealing with the issue of benefit tourism and separating that out from the needs of genuine asylum seekers. It complicates the picture. An important issue has been raised today and an important report has been prepared. It is currently for the Government to give their views on it, but we will have to reflect on its contents.
Baroness Stowell of Beeston
My Lords, the purpose of this schedule is to set out benefits, payments and tax credits to which the Bill provisions apply. Paragraph 1 refers to sums of social security benefits, payments and child benefit covered by Clause 1. Paragraph 2 of the schedule sets out the relevant amounts of tax credits covered by Clause 2.
The debate has of course been about asylum seeker benefits. As the noble Baroness, Lady Lister, acknowledged in her opening remarks, asylum seeker benefits fall under the remit of the Home Office and the UK Border Agency and are not part of this Bill. As has been said, there is an ongoing review of our approach to asylum support. In response to a question as to when this will conclude, we expect to finish conducting our inquiries before the end of the financial year. As the review is ongoing, there are some questions that I will not be able to answer, but I am none the less grateful for this opportunity to lay out how support for asylum seekers is provided.
As noble Lords have acknowledged, there are two types of support. First, there is support provided to those people who have made an application for asylum that has not yet been decided. That is provided under Section 95 of the Immigration and Asylum Act. People in that context are usually described as people under Section 95. Secondly, there are people who have been found by the UK Border Agency and by the courts not to need protection in the UK, but who cannot return home due to a temporary problem. They are provided for under Section 4 of the Immigration and Asylum Act. That is the Section 4 to which several noble Lords have referred today.
As noble Lords are aware, the support provided is expressly intended to meet people’s essential needs. By that we mean their food, toiletries and clothing. As an example, a family of four receiving Section 95 support while the decision on their application is pending is given £178 per week to cover these essential costs. The same family receiving Section 4 support is given £151 per week. The levels of support provide for the fact that asylum seekers have, as has been acknowledged by noble Lords, fully-furnished, rent-free accommodation with household equipment, utilities and council tax included. This support is temporary in its nature. It is true to say that the allowance is less than income support equivalents but that is because the recipients do not have to pay for other things such as utility bills or other costs associated with running a household.
Likewise, new mothers receiving asylum support do not have to buy a cot or things of that kind because sterilising equipment and such things are provided. They are given a grant to help pay for a pram and clothing. Healthcare and schooling are also provided. In addition to the weekly subsistence rates, families receive the following benefits. A single one-off payment of £300 may be provided to asylum seekers to help with the costs arising from the birth of a new baby. This is different from the maternity grant provided by DWP as recipients will not need to cover the costs of a new cot, stair gates and sterilising equipment. Pregnant women and young children aged between one and three each receive an additional £3 per week, and babies under one receive an additional £5 per week. Assistance with travel costs to medical appointments is available on application.
For those receiving Section 95 support, children receive between 80% and 90% of the equivalent mainstream benefits. Children on Section 4 support, which is intended to be temporary while their parents arrange travel home, receive over 60% of equivalent mainstream benefits.
National Employment Savings Trust (Amendment) Order 2013
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(11 years, 9 months ago)
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Lord McKenzie of Luton
My Lords, I thank the Minister for introducing this order and I say upfront that we will be supporting it. Perhaps I may revert to an item touched upon by the noble Lord, Lord German, which I was going to raise in our previous debate concerning people’s expectations of pensions, the importance of auto-enrolment and certainly the importance of NEST as a key component of that. When the Turner commission looked at the prospect of auto-enrolment and how employer pensions were to be organised in future, I think that the criteria around contribution levels and the band of earnings to which they applied were struck so that over a working lifetime the required level of replacement earnings would be produced. I am bound to say that with what has happened to the band of earnings, contribution levels have not shifted. I have not seen an update of that calculation and I do not know whether there is one—I think that it is an adjunct to this order—but if there is, it would be interesting to see it.
I have one or two questions in respect of some of the detail. We understand why the discretionary period to allow self-enrolling members to be accommodated is necessary, but can the Minister update us on the current elongated process for enrolment? I do not have that fully in my mind. What is the position of new self-enrolling members at the end of that period? Do they have an unfettered right to enrol? Perhaps we can use this occasion, given that NEST has been up and running for a little while now, although with regard to auto-enrolment larger employers are involved first, to find out whether we have any early numbers for the employers and employees who are enrolled.
We support the lifting of the obligation dealing with cross-border obligations and the other essentially technical amendments. I have a small point on terms and conditions. The Minister said that the proposed change would mean that self-enrolment individuals, as others, do not have to agree to members’ terms and conditions, so what is the purpose of those conditions? What relevance do they have? As for multiple jobs, again we support the change that has been outlined, but what is the position on multiple jobs within the same employer group? There is a maximum of 4,400 but, if that can be exceeded and there can be multiple jobs, are there any constraints if those multiple jobs are within the same group, possibly on a specifically organised basis to circumvent the limit?
With those few small inquiries, I say again that we support the order and are pleased to see that NEST is making progress.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for his support for this order and, indeed, for the support from my noble friend Lord German. I will try to respond to a few points, but I must say straight from the start that I will probably have to write to the noble Lord on many of his queries. This being quite a technical order with quite a lot of associated technical questions, I am afraid that I know my own limits. This one might take me beyond them, so forgive me from the start if I have to follow up in writing.
The noble Lord, Lord McKenzie, asked me for the latest figures about membership of NEST. I have those in front of me. It has been operating since July 2011 and automatic enrolment commenced, as we know, in October last year. We estimate that by the end of staging it will have 2 million to 4 million members and 750,000 participating employers. To the end of January, NEST has more than 200 participating employers, around 45,000 members and a little over £2.2 million in assets under management.
The noble Lord, Lord McKenzie, asked, in going back to the last debate that we had on the last order, about the percentage of average earnings that people will accrue as they enter retirement. If there is anything more that I can say on that, I will have to follow up in writing.
The noble Lord, Lord German, asked about next of kin and what is happening there. The requirement for NEST to have to consider next of kin is in line with the Administration of Estates Act 1925. In Scotland, a person is entitled to moveable estate on intestacy. These are very specific; the change allows NEST to determine who to pay survivor benefits to. The rules with a capital “R” are the NEST rules that support the order. On why the trustee’s discretion to pay survivor benefits is applicable to pots only under £5,000, the Administration of Estates Act specifies a limit on the amount of property allowed to be disposed of on death without the necessity for probate or other proof of title. That limit is currently £5,000.
The noble Lord, Lord McKenzie, asked about the position of self-enrolling members after the staging period. They will be able to join NEST, as NEST has an obligation to accept them. He also asked about what he described as the elongated staging profile. Currently, large employers have staged and medium employers will become subject to the duty from April 2014. Smaller employers will become subject to the duty from June 2015, and all employers will be in by February 2018.
The noble Lord, Lord McKenzie, also asked whether there is an update on the calculation of contribution levels. I think I am about to answer something that I promised to write to him about. In the hope that this answer will mean a shorter letter, if not another letter, the qualifying earnings band is from about £5,500 to about £42,500. A revision order has been laid in draft and will be debated shortly. The noble Lord is correct in saying that the contribution rates remain as in the 2008 Act.
Lord McKenzie of Luton
That is very helpful. I am specifically interested to see, if it is available, what that would mean if one revisited the original Turner commission’s calculation to see what, over a working life with that earnings band and those contributions levels, that would be likely to give in terms of the level of replacement income for somebody about to retire. There was a specific calculation that drove many of these parameters at that time. If there is no update, it is of no great moment, but if there is, I would be interested in seeing it.
Baroness Stowell of Beeston
If there is anything available that I am able to provide, I will do so. The noble Lord also asked whether there were any constraints on minimum contributions within the same job. Where there is an upper limit on contributions into a scheme, however expressed, the scheme can still certify as long as the upper limit could not result in contributions that are less than those required by Section 20. I think I am right on that one.
Since I have run out of pieces of paper in order to try to respond to the questions that noble Lords have generously put to me today, I will conclude by saying that I am grateful for those contributions. The changes in this order are consequential, minor and technical. They are deregulatory and will ensure NEST continues to operate efficiently for employers and members who use it. NEST is critical to the success of automatic enrolment. I am grateful to noble Lords for their support today. I commend this order to the Committee.
Guaranteed Minimum Pensions Increase Order 2013
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(11 years, 9 months ago)
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Lord McKenzie of Luton
What is the Government’s assessment of the effect that the measures in this order, let alone those in the uprating Bill, will have on vulnerable people? Have the Government concluded that it will have no effect or an adverse effect? If it is as the Minister has said and the Government are mindful, as I am sure the noble Baroness is, of not pushing people into poverty, what will be the effect of this order?
Baroness Stowell of Beeston
I was about to remind noble Lords that we have carried out an impact assessment of both the order and the Bill on child poverty. That is in the public domain. However, we cannot consider only the impact of these welfare changes; other dynamic changes are being made that will have an effect on child poverty. For example, the introduction of universal credit is expected to lift up to 250,000 children out of poverty. There are varying ways of looking at its impact on child poverty. We want to make sure that it is done in the round and that it is not considered in a one-dimensional way. We are very much seized of this issue and take it seriously.
My noble friend Lord Kirkwood asked about the GAD report. GAD has said that the balance of the national insurance fund at 31 March 2014 is expected to be greater than one-sixth of the amount of benefit payments in 2013-14 and that there is no immediate need to address the fund balance. We welcome this statement. GAD has also said that there is no immediate need to do anything to address the risk of the fund falling below the one-sixth threshold. It will review the situation again in a year’s time.
There were other points that the noble Lord, Lord McKenzie, made which I have not covered already. He asked about various costings. I think that he asked about statutory maternity pay and the WRAG component. I will have to write to the noble Lord with the details of that. He also asked for information on the average time that people are on ESA—the work-related activity group. Fewer than half of new ESA claimants are on the benefit for a year, but perhaps that is something else on which I could write to the noble Lord with a little more background.
The noble Lord, Lord McKenzie, also asked me—I may not have had an answer through on this; sorry, I have it here—which benefits are not covered by this order but are in the Bill. I think he was asking whether there was any inconsistency. He is right that this does not include tax credits; there will be a separate order on them, which should be coming soon. I think the only other significant difference between the order and the Bill is on child benefit.
Lord McKenzie of Luton
I also asked the related question of whether there is anything that is not uprated by only 1% for a CPI amount.
Baroness Stowell of Beeston
That would include child dependency increases and capital limits, but I think I will have to write with a full list on that one.
The noble Lord, Lord McKenzie, asked about the 1.5 million pensioners who will see a loss from the savings credit measures. The pass through to the triple lock is a cost-neutral measure: 1 million people gain an average of 50 pence. They are the poorest pensioners, but as this is cost neutral some will obviously see a smaller cash increase. One-and-a-half million pension credit claimants will see this smaller cash increase, which is on average about 35 pence. We have done this to provide protection for the poorest pensioners and ensure that they see the cash increase from the triple lock. As I said at the beginning, my main point here is that this order ensures that the poorest pensioners receive the proper entitlement to that triple lock and get its full benefit. As I have said, I will respond to any outstanding questions that I have not covered in writing.
In conclusion, my main point is that this uprating order is one for the long term, but it is critical to have regard to those who will be affected by the order today, and we have done that. I have already explained that we are spending an extra £2.8 billion on uprating pensions and benefits in 2013-14, enabling us to protect key benefits and vulnerable groups, but we are also taking decisions that will matter to all families in the years to come. Those decisions will help us to secure a better economy and a better future for everyone. That is something which I hope all noble Lords can support and it is on that basis that I commend these orders to the Committee.
Welfare Benefits Up-rating Bill
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(11 years, 9 months ago)
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Baroness Stowell of Beeston
My Lords, I am grateful to all noble Lords who have contributed to this debate. It is probably worth my summarising that the two amendments we are talking about seek to make changes to the ESA. Amendment 2 would remove from the Bill the 1% increases in the personal allowance for those in the support group, while Amendment 3 relates to those in the work-related activity group.
I understand why noble Lords have tabled these amendments and raised the points that they have in this debate. We all want to protect those who are furthest from the labour market, or who have additional costs because of disability, and that is what the Government are doing.
On the points raised by the noble Baroness, Lady Meacher, referring to the principles outlined by my noble friend Lord Freud during the passage of the Welfare Reform Act, I am clear that those principles—that we will target welfare spending to those most in need and ensure that we do not do anything to disincentivise people from pursuing work—remain intact via this Bill. We are prioritising those in greatest need.
It is right to say that there will still be some effects among disabled people through the Bill because we are including the personal allowance for both types of ESA as well as the additional element for those in the work-related activity group. However, we are ensuring that all those benefits that are paid specifically to cover the additional costs associated with disability are not included in the Bill. For example, the disability living allowance and the attendance allowance are protected, as are the disability premia in benefits such as income support, ESA, JSA and housing benefit, and we have excluded the disability elements of tax credits from the Bill.
In many cases, the basic rate of ESA is just one element of the total package of benefits received. Many people on ESA are also in receipt of other benefits, such as DLA, to which I have just referred, and housing benefit. It is worth noting that around 65% of people in the support group also claim DLA. The point I am trying to make here is that ESA is not the only benefit that most people are relying on. People in the support group receive a component worth £34.80 a week, as has already been said, and they are also automatically entitled to the enhanced disability premium of £14.80 a week if eligible for income-related ESA. We should not forget that some people will be eligible for the severe disability premium or the carer premium. All these are protected, like the support component. Income-related ESA households where a member of the couple is over pension age also receive a pensioner premium to ensure that the rate of benefit is the equivalent of the pension credit rate. This rate is also uprated as normal.
My noble friend Lord German asked in particular about the personal allowance aspect of ESA and why it is included in the Bill. It is important for me to be clear that the personal allowance is there to provide basic support. It is designed to meet the basic needs of all those on out-of-work income-related benefits. The personal allowance is consistent across all benefits which relate to those of working age. There is a standard amount. For single people, it is currently £71 a week. It is important that I am clear that this rate is common across all claimants who receive ESA, JSA, income support and housing benefit and reflects the fact that they perform a similar function of providing basic support for everyday needs. They do not reflect disability or the additional costs of disability, so therefore it is right that they are set at a standard rate. That is the rationale for including the personal allowance in this Bill and for the personal allowance to be subject to the 1% cap on annual increases. Treating one personal allowance rate differently from that in other benefits would mean that there would be no clear level of income at which state support is set and at which access to other help would be available across a wide range of services. It would also introduce an element of complexity in terms of the coherence of the benefit system which would introduce new challenges and be likely to add further costs to the running of the overall system.
As has been acknowledged, the support group component is protected, so it is not included in the Bill. It is the component element of ESA which differentiates the need based on the effects of a disability or a condition. That particular component relates to the effects of a specific disability. The support group component is paid in recognition of the fact that more severely disabled people are less likely to be able to increase their income by moving into work and may have additional needs. Therefore we pay those in the support group a higher increase than those in the work-related activity group.
It is worth making the point that for those in the work-related activity group, ESA is not like the old incapacity benefits that usually led to people being in receipt of that benefit for a long period. This is intended to be a short-term benefit for those in this group. Those who are placed in the work-related activity group are there because they have been found able to prepare for work. As such, they will be referred for appropriate support, training and provision to ensure that they get the help they need. ESA for people in that group is intended to be a short-term benefit and we expect these claimants to be closer to the labour market and be in a better position to prepare for work. Therefore, while they may not be looking for work immediately in receipt of that benefit, they have some ability to affect their own incomes. That is why it is right that the annual increase for those in the work-related activity group should—unlike that for those in the support group—be fully within the scope of the Bill.
In his opening remarks, the noble Lord, Lord McKenzie, again referred to the alternative option of the Government bringing forward annual orders rather than introducing the Bill. It is important for me to stress heavily that a central purpose of the Bill, in addition to achieving savings, is to provide certainty. I will say that regularly throughout the passage of the Bill; it is an important aspect of what we are doing. I know that the noble Lord seeks to undermine that, but it is central to what we are trying to do. It is important that we recognise the long-term benefits of providing that certainty; that is how we retain the credibility of the Government’s fiscal policy.
Lord McKenzie of Luton
Can the Minister explain to me the certainty that is achieved for claimants on the real value of their benefits as a result of the Bill?
Baroness Stowell of Beeston
The point I am making, which the noble Lord is clear about, is that the Bill still provides annual increases in benefits, but at a reduced rate for some elements of those benefits. We are doing this in the way that we propose because it adds to the certainty. As I told the noble Lord when we were outside the Chamber, the IMF was very clear that to anchor market expectations, policymakers need to specify adequately detailed medium-term plans for lowering debt ratios, which must be backed by binding legislation or fiscal frameworks. This is part of what we are doing, and why it is important.
As I have said, despite the economic situation, which we have already discussed today at some length, we have found the resources to fund a 1% increase in working-age benefits and, in doing so, protected the incomes of disabled people as far as we can—especially those elements which are provided to cover the additional costs of disabled people.
The noble Lord, Lord McKenzie, said that it would not be hugely expensive to accept these amendments and to make this change. It is important that I make it clear to the Committee that accepting these amendments would mean a loss of £340 million in savings, which we would have to find elsewhere. Those in the work-related activity group are deemed able to prepare for work and, as such, are better placed to be able to improve their income levels. Therefore, we believe it right that the component is also within the scope of the Bill.
Personal allowance rates are common across the working-age benefit system, as I have already said, reflecting the fact that they perform the same function: to provide basic support for everyday needs. Accepting these amendments would therefore break away from that model and would create additional complexity in the benefits system. Our proposals are proportionate. Although I understand the concerns and points that have been raised in the debate—please believe me, I do—what is being proposed here is fair. I therefore ask the noble Lord to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I start by thanking the right reverend Prelate, the Bishop of Leicester, for these amendments. I hope he will understand that, should he press them to a vote tonight, he would present us with a little difficulty. I doubt that will come as a surprise. The difficulty is that the strictures under which we are operating mean that we cannot at this stage make commitments in respect of the next Parliament. Clearly, an uprating in the tax year beginning 5 April 2015 would operate in the subsequent year, which crosses that particular line.
Having said that, there is much to support and sympathise with in the case made by the right reverend Prelate and the noble Lord, Lord Kirkwood. We on this side wish universal credit well and hope that it will deliver that which is promised for it. However, we know that there are a number of teething problems; we think the Government have been right to extend the introduction way beyond the original intention. It therefore seems to me that very important questions have been raised about why we should at this stage include universal credit within these provisions. We on these Benches want to see everything outside this Bill; we think that would be the right way forward, but certainly the universal credit would be a start.
The issue of work incentives is very important. Although we probably do not espouse it often enough, I think we have a shared view around this Chamber about the importance of work, which is the route out of poverty for most people. It generally seems to be better for their health and well-being and all those things. Therefore, it is crucial that any measures such as this support the proposition that we should try to get people into work when they can work, and help them get closer to the labour market when they cannot.
The noble Baroness, Lady Howe, widened the debate to discuss the broader impact of this Bill on child poverty. The figure of 200,000 is the one that was identified by the Minister in the other place. That comes on top of IFS figures, which suggest that another 800,000 children are going into poverty as a result of measures since 2010—in a sense, reversing the gains of the past decade for children and women, too. Therefore, without being able to support the wording of the amendment formally tonight, there is much for us to reflect on and support in the right reverend Prelate’s proposals. I hope that between now and Report—particularly picking up the points made by the noble Lord, Lord Kirkwood—we could end up in a position where we were not only in sympathy but were marching through the same Lobby.
Baroness Stowell of Beeston
My Lords, we have covered a lot of ground with these amendments tabled by the right reverend Prelate the Bishop of Leicester. I will do my best to cover that ground. It is probably worth starting by noting some common issues raised by this group of amendments. They come under the headings of their impact on savings from the Bill, their impact on certainty—as I have already talked about—and the inclusion of in-work benefits. I will then refer to some of the points related to housing. Before I begin, however, I note that the right reverend Prelate has added his name to Amendment 13, which removes housing benefit and personal allowances from the schedule, but Amendment 13 is to be discussed later as part of a different group.
Lord McKenzie of Luton
I should have said when I got up to speak that Amendment 13 was originally part of this group but unwittingly got moved to be grouped with two later housing benefit amendments in the names of my noble friends. I apologise to the right reverend Prelate for that.
Baroness Stowell of Beeston
I was going to say that because Amendment 21, which inserts housing benefit and personal allowances into a different part of the schedule, and Amendment 5, which places a duty to uprate by at least prices, are reliant on Amendment 13, I will speak to the amendments in this group as if Amendment 13 were assumed. I hope that makes sense. Hopefully, we are all following each other in respect of these different amendments.
Noble Lords have already outlined the effects that the amendments would have on the Bill. In broad terms, the legislation would revert to the existing annual exercise of discretion by the Secretary of State. To remove these benefits and payments from the Bill would reduce savings by around £800 million in 2015-16: that is, around £600 million that year from removing universal credit, which would increase over time as more households moved to universal credit; around £160 million that year from removing working tax credits; and, under Amendment 13, around £60 million that year from removing housing benefit and personal allowances—in total, an £800 million reduction in the Bill’s savings in the final year, which is about 40% of the Bill’s savings.
I have to disagree with the right reverend Prelate and say that it would simply not be affordable to give up those savings. If we look at the two years of the Bill together, we are talking about a loss of £1.1 billion in savings. As I have said before, none of these decisions is easy, but we have to recognise that if we do not take the savings that this Bill provides in the way it does, this money will have to be found elsewhere.
While I am talking about general matters, it might be worth responding to a point made by the noble Lord, Lord McKenzie, either just now or in an earlier debate—I cannot remember—about the wide range of changes that the Government are introducing in welfare reform. The noble Baroness, Lady Hollis, is not in her place, but she also made the point in an earlier debate. We are making a lot of changes to the welfare system. We absolutely believe in those changes; we think that we are doing the right thing and that those changes will result in a much more effective system. It is safe for me to say that in broad terms most of those changes have received support from the House. There has been recognition on all sides that the welfare system as it stood needed to be reformed. As we move into 2013-14, a lot of those changes will be implemented, so it will no longer be a discussion in theory; it will be real in practice. Of course, as we go through the implementation phase, we will ensure that all changes are implemented in a way that we designed them to be made and that they have the effect and the outcomes that we set out in the legislation. This is not something that we will not be closely involved in to make sure that things operate in the way that we intended.
While talking about general issues, it is perhaps worth responding to points raised about cumulative impacts and assessments. I know that my noble friend Lord Newby referred to this in his response to the first group of amendments, but the matter having been raised again it is worth making a couple of points. The Government introduced a new system of greater transparency around impacts and we publish the impacts of government policy every time there is a fiscal event. The last time we did this was in the Autumn Statement. That cumulative impact includes information about changes to all tax, welfare and public spending policy that can be modelled since the June Budget of 2010.
So far that analysis has not included universal credit, and a separate analysis shows that 75% of the gains from universal credit goes to the bottom 40% of the income distribution. It is worth adding that the IFS has acknowledged that the effects of reforms, such as those to DLA and housing benefit, cannot be precisely modelled, but as I say we are producing quite a lot of information. It is there and publicly available, but let us not forget that all those assessments are against the previous Government’s plans for this period—this Parliament, had they come into power—and we have acknowledged that those plans were not affordable. We are assessing something against a benchmark that we have already acknowledged we cannot afford.
A key principle of this Bill is the certainty that it gives as part of the Government’s fiscal plans. I have said that before, and said then that I hoped noble Lords would not tire of me saying it. I will not tire of saying it to the House as it is important. By taking these benefits out of the Bill and thereby restoring the annual exercise of discretion in relation to prices, the amendments would undermine the key principle of certainty. Amendments 4 and 5, if taken with the others, would make it a requirement to uprate universal credit, working tax credit elements and housing benefit personal allowances by at least prices. I am not sure whether that is the intention, but the amendments would take us further than existing legislation, while not giving a firm commitment to addressing the deficit that the Bill provides.
Noble Lords have talked about the inclusion of in-work benefits and questioned whether these should be included. We cannot escape the fact that some working households will be affected. I am not seeking to suggest for one moment that they will not. Tax credits, for example, account for around £30 billion of expenditure this year. Tax credit spending rocketed under the previous Government by an extraordinary 340% compared with the benefits they replaced. Eligibility for tax credits was extended to nine out of 10 families with children, so it would be unrealistic to exclude the benefits received by working people from these decisions that we are taking. For my part I think people understand that. There is a general recognition that this element of spending could not be excluded, particularly when those in work are facing tight restrictions, if not freezes, to their own pay.
Employment and Support Allowance (Sanctions) (Amendment) Regulations 2012
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(11 years, 10 months ago)
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Lord McKenzie of Luton
These regulations are subject to the negative procedure, so the Motion to Take Note is an opportunity for us to bring some focus to these provisions. This follows on from the report of the Secondary Legislation Scrutiny Committee’s 15th report, which draws the regulations to the special attention of the House on the grounds that they give rise to issues of public policy. Indeed they do.
ESA was introduced in 2008 as the replacement for incapacity benefit. It was designed to focus on what individuals could do rather than what they could not, placing emphasis on their functional capabilities. This was all part of the broad consensus concerning the importance of work and of helping people move nearer to the labour market. The introduction of ESA has not been without its challenges, although the basic concept has been validated, but with periodic reviews bringing improvements to the process. However, concerns remain about the process and the role of Atos, so perhaps we can use this opportunity to get an update on some of these matters.
Can the Minister give us an update for last year on how many appeals are entered against decisions, either to access the support group or to the work-related activity group rather than JSA? What is the current rate of success? I probe these points because the quantum of appeals on a success rate is clearly indicative of how effectively the system is making the judgments that it should. It is these judgments, made by DWP decision-makers, which drive the conditionality in the regime and the sanctions which flow from it.
The regulations under consideration introduced from 3 December 2012 a new sanctions and hardship regime. As the Explanatory Memorandum makes clear, the rationale of the change is to align as far as possible the sanctions regime with the equivalent category under universal credit. For those claiming ESA, and in the work-related activity group, conditionality involves attendance at a work-focused interview and undertaking work-related activity. No conditionality of course applies to someone in the support group, but obviously greater conditionality applies to somebody placed on JSA rather than in the WRAG.
These new sanctions have an open-ended period which can be brought to an end when the claimant meets a claimant condition followed by a period of one, two or four weeks, depending upon the number of prior sanctions. The effective date of the sanctions to operate is to be brought forward in comparison with current arrangements. In addition, the amount of the sanction is to be increased; rather than 50% or 100% of the work-related activity component, which is currently some £28, the sanction will be 100% of the prescribed ESA amount, currently £71. This will leave the individual with only £28 plus any premiums to which they might be entitled.
We accept that the regime should involve conditionality and that this implies some form of sanction, but this level of sanction is frankly draconian and unacceptable. Our concerns are about not only the huge reduction of income that it entails but the risks of the system for vulnerable people. There is provision for hardship payments; we can ask about any differences between the regime which is being introduced by these regulations and the existing position in terms of eligibility for payment and the amount of any payment.
The Explanatory Note to the regulations says that in determining whether hardship payments are appropriate, a decision-maker will take the following matters into account: whether a member of the family satisfies the requirements for a disability premium or an element of child tax credit in respect of a disabled child or young person; the household’s likely resources without hardship payments, including whether the claimant can seek assistance from others, such as family and friends; the difference between the claimant’s likely resources and the amount of a hardship payment which can be made; the difference between the claimant’s likely resources and the amount of a hardship payment which could be made; the risk that the claimant’s household will not have access to essential items such as food, clothing or heating, or will have access to such essential items at considerably reduced levels without a hardship payment; and the length of time that these factors will continue.
To what extent does that description differ from the detail of the current regime? I am particularly interested in the suggestion that people have to go outside the household, not only to family but to friends, and that resources that friends may have are taken into account in whether or not the hardship payment is made. We need to know particularly about the protections built into this whole regime. As we have discussed on many occasions, individuals in the WRAG, even if properly judged to be capable of work-related activity, could suffer from a wide range of conditions. There are concerns in particular about those with a mental health condition, with fluctuating conditions, and indeed with hidden conditions. It was the prior intent that nobody with a mental health condition would be sanctioned without a face-to-face visit. Is this still the case?
Can the Minister say something about the process attached to these sanctions and the extent to which it differs from that attaching to JSA? Are the good cause rules identical to the current ones? My understanding is that the following still apply as constituting good cause: if there is any misunderstanding on a person’s part because of learning, literacy or language difficulties, or misleading information given by the benefit authority; attending a doctor’s or dentist’s appointment; difficulties with transport where no reasonable alternative was available; the practice of a religion that prevented attendance at a set time; attending a job interview; the need to work in a business if you are trying to become self-employed; if you or a person for whom you were caring had an accident, illness or relapse; attending the funeral of a close friend; a disability that makes attendance impracticable; and any other relevant data. Are those the rules that still apply? I want confirmation of the extent to which they differ, if at all, from those applying currently. The Explanatory Note makes reference to a comprehensive suite of products being developed for operational staff. This is welcome, provided that the DWP has the staffing resources to cope. For the latest year available, how many individuals in receipt of ESA were subject to a sanction, how many appealed, and what was the outcome of those appeals?
We will be watchful regarding these regulations. We note the monitoring review proposals. Finally, how soon will the revaluation of the JCP offer be forthcoming? I beg to move.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for his Motion to Take Note, and for giving us the opportunity to discuss these new regulations. Standing back a bit, I think it is worth saying from the start that there is a widespread consensus that the welfare system in this country is in need of a great deal of change. Clearly some of that change is in the structural area, where we are bringing in universal credit, while some changes address the cost of welfare and the fact that the bill for welfare is unaffordable.
Under the heading of structural change, and building on what the previous Government did and on what the noble Lord, Lord McKenzie, referred to, we are putting the emphasis on helping people to get back into work, and on making sure that those who are able to work and those who have been diagnosed as being unable to work but who may be able to return to work at some point in the future have the support that they need in order to return to the workforce. That is what people want. When they are on benefits and find themselves in the very difficult situation of being out of work, particularly at the end of a long illness, they want to know that there is an opportunity for them, as there is for all of us. We proposed the tighter sanctions regime because we place so much importance on the requirements to help people back into work.
As the noble Lord, Lord McKenzie, said, these regulations came into force on 3 December last year. They provide for a more effective and proportionate ESA sanctions system, but they also preserve the important safeguards and clarity that are required to ensure a fair and balanced system. The regulations make no change to the assessment of who is eligible for ESA or to the requirements placed on ESA claimants. They form part of the wider package of reforms that move the employment and support allowance and jobseeker’s allowance sanctions systems substantially closer to that intended for universal credit, helping staff and claimants to prepare for the new benefit.
ESA is designed to place greater emphasis on what the claimant can do, and on the importance and benefits of moving towards work. I will be clear that we never ask ESA claimants to apply for jobs—only to prepare for work if they are able to do so, and to meet their Jobcentre Plus or other trained advisers to discuss this. Most claimants value this support and meet the requirements placed upon them. It is only fair to those who meet the requirements that the sanctions system places due importance on these obligations and provides incentives for all claimants to meet them.
I will now set out how ESA works. Claimants in the work-related activity group have been assessed as having a limited capability for work and are required to attend work-focused interviews to meet a personal adviser and discuss the support available to help them to take steps towards employment. Claimants placed in this group can also be required to undertake work-related activity where this is appropriate in their personal circumstances, such as attending a training course or updating a CV. Whether these work-related activity requirements are imposed by a Jobcentre Plus adviser or a work programme adviser, they must be reasonable in the claimant’s circumstances and cannot include requirements for the claimant to look for work or undergo any form of medical treatment.
If claimants do not meet suitable work-related activity requirements and work-focused interview requirements without good reason, a sanction can and should be applied. This is not new. Sanctions have been a feature of ESA since the benefit was launched in 2008. The regulations we are discussing today did not change what the claimant is expected to do or who might be sanctioned. But until these regulations came into force, the financial consequences of the sanction did not give sufficient weight to the importance of the requirements they enforced. As the Social Security Advisory Committee found, claimants do not always realise that they have been sanctioned. If claimants are unaware that they are losing benefit as a result of a sanction, there is little incentive for recompliance.
An ESA award for single claimants who have been found to be capable of work-related activity is made up of two elements: the work-related activity component of £28.15 and the personal amount of £71. Until December 2012, when these regulations came into force, claimants who failed to attend a work-focused interview or to undertake work-related activity without good reason received an open-ended sanction that was lifted when they re-engaged. The effect of the sanction was to reduce the work-related activity component of their award—£28.15—by 50%, which meant that their award of £99.15 a week would decrease by £14.17. After four weeks of non-engagement, the sanction increased to a 100% reduction of the work-related activity component, so claimants lost the full amount of the £28 which was on top of the original £71.
Baroness Stowell of Beeston
I am sure that if evidence is there that would be relevant to what we are doing, it would be very welcome.
Lord McKenzie of Luton
My Lords, I thank the Minister for her response and for dealing with quite a lot of detailed questions. There is not a difference between us on the importance of encouraging people into work and the difference that that can make to their lives as well as to the economy of our country. The key issue around these particular regulations is how these things operate for a range of people who might have a mental health condition, autism, learning disabilities or fluctuating conditions—a whole range of circumstances—where the approach needs to be particularly sensitive, particularly knowledgeable and sometimes very specific, if not individual. I do not think I got the flavour of that from the response.
The statistics for the appeal success rate, which I thought was going to be declining, are worrying because they seem to suggest that the process under way for people in the WRAG or support group, or left on JSA, is still not working as well and effectively as it should be. It has a chequered history. I think the approach is right—indeed we legislated for that approach—but how it works, and is working, in practice, particularly with Atos, remains a cause for concern. That point is not unrelated to these regulations—it is germane to the starting point, so I have residual concerns about that. Helping people to understand their obligations under the system to take advantage of facilities, work-focused interviews and work-related activity is fine. However, a sanction of £71 a week to concentrate the mind is, frankly, outrageous. For us, it is totally unacceptable.
Over the past 12 months, there have been sanctions for people on ESA, and one of the few questions that was not answered was the extent to which there have been appeals and the outcome of those appeals. That goes to the heart of the resources that the DWP will need to address this regime. I would be very grateful if the noble Baroness, in the fullness of time, could follow up on that. The noble Lord, Lord Wigley, made a very pertinent point about the impact assessment and the impact on civil society. Perhaps the noble Baroness will share her answer on that with Members of the Committee. Having said that, we have had one go at this and will keep it in our sights because it is of concern.
Public Bodies (Abolition of the Disability Living Allowance Advisory Board) Order 2013
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(11 years, 10 months ago)
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Baroness Stowell of Beeston
My Lords, this order was laid before Parliament on 15 October last year under the powers of the Public Bodies Act 2011. It provides for the abolition of the Disability Living Allowance Advisory Board.
The board provides independent advice to the Secretary of State on matters relating to disability living allowance and attendance allowance. It cannot provide advice unless specifically asked to do so and cannot be asked to provide advice on issues other than those relating to DLA or AA. It is not a representative body for disabled people and plays no role in the decision-making process for benefits.
The Disability Living Allowance Advisory Board Regulations 1991 specified that the board’s function was,
“to give advice to the Secretary of State on such matters as he may refer to them for consideration”.
The Secretary of State usually commissioned work on medical matters relating to specific conditions or illnesses. For example, the board undertook a study of cases where the highest rates of benefit had been awarded under special provisions for people who were terminally ill and not expected to live beyond six months, yet a number of such awards had been in payment for more than seven years. The board was supportive of the fact that special rules exist and should continue to exist but nevertheless it recommended that such cases should be reviewed after three years.
Clearly, the board provided some excellent advice in its time. However, the defined scope and membership of the board means that there is a limit to the type of advice it can provide. In fact, the last time the board was commissioned to do any work was in 2008, two years before the end of the previous Government. Since coming into government, we have found that using time-limited, tailored advisory groups and targeted professional advice—as we did with the Harrington reviews of the work capability assessment—is better than the prescriptive approach of a standing board.
We have used this more dynamic approach in relation to the design and development of the personal independence payment, involving experts and consulting disabled people and their organisations. The Secondary Legislation Scrutiny Committee commended the department for its extensive consultation on PIP, including our work with voluntary organisations that represent the interests of disabled people. I will return to this in a moment.
In its 15th Report of Session 2012-13, the Secondary Legislation Scrutiny Committee made a number of points that need to be answered in this debate, particularly on the tests laid down in the Public Bodies Act. I will address the points in turn. The report is clear that it expects me to use this forum to answer some of the points. I hope that noble Lords will forgive me if it takes me a little while to go through them systematically.
I will start with our decision not to consult on the proposal to close the board. The Secondary Legislation Scrutiny Committee accepted the department’s explanation of why there was no legal obligation for us to consult but it did not consider this to be in keeping with the spirit of the consultation requirements. I should restate that the board was not outward facing and did not have free rein to examine the policy, operation or administration of DLA, being able to respond only to concerns expressed by the Secretary of State. In our view, to offer a consultation to groups with no ability to influence the work of the board would not be in the spirit of meaningful consultation.
Moreover, disability organisations have shown little interest in the board over the years. Back in 2007 when it was reviewed as part of the normal process of reviewing non-departmental public bodies, more than 100 organisations of and for disabled people were contacted, but only 11 responded. Out of those, three reported that they could not spare the time to comment and the remainder had little to say about the functions of the board.
During the design of the personal independence payment, which as noble Lords know will replace disability living allowance, we undertook three consultation exercises. I acknowledge absolutely that no specific questions were asked about the board during those consultations, but the respondents had the opportunity to raise anything they wanted to about the reform of DLA. We received more than 5,500 responses, and again not one of them mentioned the board. We also discussed the board in both Houses during the passage of the Public Bodies Act, and the department has not received any correspondence or parliamentary Questions on the subject. There have been several meetings between disability organisations and Ministers and officials, and again the future of the board has never been an issue.
Perhaps I may turn to the issue of efficiency and effectiveness, which is another one of the tests under the Public Bodies Act. The department has an existing medical policy team covering a wide range of policy areas who can provide medical opinion or who can commission work by others, if needed. This is a more flexible resource than that provided by a standing board. The team also produces guidance for operational staff, advice on operational issues and audits the quality of outsourced medical advice. It is our view that short-life working groups can be set up quickly when work is needed, which is more efficient and effective than retaining a standing collection of eminent people whose expertise is not necessarily being put to good use consistently. For instance, during the development of PIP, we set up a group to help develop the assessment criteria. The group encompassed a wide range of expertise across health, social care and disability, including from occupational therapy, social work and a representative from Disability Rights UK. Very importantly, we also sought the views of user-led organisations and disabled people themselves through our implementation stakeholder forum. This group involves more than 60 user-led, grass-roots and national organisations working with us to get the design and delivery arrangements right.
Legislatively maintaining the status quo for the board places a burden on the department because the regulations require that the membership contains specifically qualified personnel. Therefore, if a member leaves the board either by choice or because their tenure has ended, the department is required to recruit even though there may be no actual work to do. The recruitment process is expensive, resource intensive and, in my view, verges on being disrespectful to those people who apply for the post. We consider that using time-limited groups is more effective than maintaining a standing body. We continue to use the expertise of other disability groups, and our recently launched Disability Action Alliance has convened a wide range of disabled people and their organisations who will work alongside the department to deliver results in a less prescriptive manner.
I shall move on now to the test of economy. As the Secondary Legislation Scrutiny Committee acknowledges, it is cheaper to run one NDPB rather than two, while Equality 2025 is a body representing disabled people that helps the Government to understand their needs and wishes. It has been in existence since 2006 and there have been no additional costs to that body since the DLA board has not been used. In addition, I can assure noble Lords that the medical policy team has absorbed some of the work previously undertaken by the board at no extra cost. Commissioning independent advice on an ad hoc basis is more economical than commissioning it from board members because they were paid fees for attending meetings and for contributing to reports, whereas the individuals and organisations who advised the department on the development of the PIP assessment did not receive a fee.
The Department of Work and Pensions considers that the use of time-limited groups will increase accountability. The scrutiny committee is of the opinion that accountability remains the same, as the Minister will commission time-limited groups, much in the same way as the board could meet only at the Minister’s direct request; it disagrees with our view that accountability will be enhanced. However, the board’s composition was laid down in statute. It is required to have members with professional knowledge or experience of physiotherapy, occupational therapy, social work, nursing people with disabilities and medical practice, as well as six or more members who are themselves disabled and at least one carer. Now we can target individuals with the specialist knowledge that we require. For instance, if the department wants up-to-date information on people with mental health conditions, it can specifically target mental health professionals who may be better placed to provide that advice.
In addition, the board could report only to Ministers and only at their request. Time-limited groups have the flexibility to engage with and report to a range of parties. For example, in his independent reviews of the work capability assessment, Professor Harrington took evidence from hundreds of organisations and individuals and ultimately presented his report to Parliament.
On safeguards, I do not consider that the abolition of the board will remove any necessary protection or prevent any person continuing to exercise any right of freedom. I say that because, as I have already mentioned, there is a range of ways in which Ministers receive and seek advice, and consult. There have been scores of stakeholders meetings with Ministers and officials. These will clearly continue.
This is a good and sensible reform, formally closing a body which, although of considerable help to the department in its time, has not been asked to give any advice since 2008. Before I close, I pay tribute and offer sincere thanks on behalf of all current Ministers at DWP to the current chair, Anne Speight, her predecessors and all members who have served on the DLA board over the years.
I hope that I have been able to give the Committee the information necessary to demonstrate that, in abolishing the DLA advisory board, we are in no way diminishing the way in which we will consult properly with experts and ensure that all ranges of advice are taken properly into account. I beg to move.
Lord McKenzie of Luton
My Lords, I thank the noble Baroness for her introduction to this order which, as has been described, abolishes the DLA advisory board. I join the noble Baroness in paying tribute to those who have served on the board over the years and all the work that they have done. We acknowledge the extensive consultation that has taken place on the creation of PIP. The extent to which it was always spot on is something we will have the chance to discuss when we discuss the regulations quite shortly. However, we acknowledge that that has been an extensive process.
We have of course debated the proposition of the board being abolished when we considered it during the passage of the Public Bodies Act. Since then, we have had time to reflect on those discussions and the Minister will be aware of the debate at the other end, particularly the strong points made by my right honourable friend Anne McGuire, former Minister for the disabled.
Paragraph 4.6 of the Explanatory Memorandum makes it clear that the board satisfied the three tests of performing a technical function whose activities require political impartiality and needing to act independently to establish facts. Can the Minister say a little more about the assessment that was undertaken to make the judgment that the DWP is better suited to the in-house team of medical advisers? Can we have an update on the size of that in-house team and the range of skills which it encompasses? Paragraph 7.2 of the Explanatory Note refers to “a larger resource”, but how does the range of skills match that which is available to the board? The Minister ranged over the skills that the board has. Paragraph 4.4, on the constitution of the board, sets out the range of skills which the board should have. It should include people from the fields of,
“physiotherapy, occupational therapy, social work, nursing disabled persons, medical practice, and at least one member with experience of caring for a disabled person”.
Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived: EUC Report
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(12 years ago)
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Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord Boswell, and indeed the EU Committee for scrutinising the proposal from the Commission and producing the report that we are debating today. Along with the noble Lord, Lord McKenzie, I am grateful also to the noble Lord, Lord Boswell, for his very clear introduction to this debate. Because he was very comprehensive in going through the history of how we got to the present position, I will not spend any time repeating that history, not least because we are all feeling the chill in this Room and brevity is the key. However, first, it is essential to make the point that the Government share the committee’s view that this Commission proposal is not consistent with the principle of subsidiarity and that we support the Motion put forward today.
In 2011, the Commission sought to extend the existing scheme. It is worth reminding ourselves, as I think the noble Lord, Lord Boswell, already has, that the French and German declaration at that time stated that they considered that the conditions were not met for a proposal for a new programme after 2013—even though they had supported at that time the extension of the existing programme—and that they could not agree with legal and financial proposals by the Commission for such a programme in future. In response, the Commission issued a declaration saying that it,
“takes note of the opinion of a significant group of Member States not to pursue the program beyond 2013”,
and that:
“Without prejudice to its right of initiative under the Treaty, the Commission will take account of this strong opposition to any legal and financial proposal of such a program in the future”.
The Commission has now produced a proposal but it is very difficult to see how the Commission has taken account of this strong opposition that was stated at the time. We have to ask what the main changes are in the new proposal.
First, the new scheme is presented as an instrument to promote social cohesion and to contribute to the European 2020 target on reducing poverty, whereas the current scheme has an agricultural legal base. Secondly, the fund will no longer be financed from the CAP but from the structural and cohesion fund, as has already been mentioned, for the 2014-20 budget. Thirdly, the fund will be used to purchase basic consumer goods for the personal use of homeless people or children, as well as to provide food aid. Fourthly, the new fund will be obligatory—this is a key point—whereas the current scheme is optional. Each member state will receive a financial allocation and be required to set up a single national programme to implement the fund in 2014-20. Fifthly, not only will the fund be obligatory, but member states will be required to provide matched funding of at least 15% of the costs of their national programmes—in other words, on top of the welfare programmes we already have in this country. The fund from the European budget will contribute only up to 85% of the costs of the scheme being proposed in most cases. Sixthly, the new fund will be implemented along similar lines to the structural and cohesion funds.
Despite these changes, the Government’s view has not changed. We remain unconvinced as to the merits or appropriateness of this proposal. The principle of subsidiarity, currently enshrined in Article 5 of the Treaty on European Union, states that the EU should act collectively only where the objectives of the proposed action cannot be sufficiently achieved by the member states acting on their own, and that they can therefore be better achieved by action on the part of the Union.
We consider that measures to assist the neediest members of society, as set out in this proposal, can be better and more effectively delivered by individual member states through their own social programmes and not at EU level. The member states and their regional and local authorities are best placed to identify and meet the needs of deprived people in their countries and communities, and to do that in ways that are administratively simple and efficient. We will therefore oppose this proposal on the grounds that social measures of this sort are a matter for individual member states.
We are also concerned that the proposal does not represent value for money and would be burdensome to administer. Using EU structural and cohesion fund processes to deliver this instrument would lead to heavy and costly administrative burdens on member states and partner organisations, without adding value to existing arrangements in member states.
Not only is this fund inconsistent with subsidiarity, it will use resources that would be better deployed at national or local level. It is worth pointing out that if this fund were removed from the proposals, the UK could argue for an equivalent reduction of €2.5 billion from the EU budget over the seven years of the multiannual financial framework.
I underline that the Government strongly support measures to tackle poverty and social exclusion and certainly agree with the points made by the noble Lord, Lord Boswell. In the UK, we have a full range of social security benefits and tax credits in place to cover financial needs for those who are both in and out of work. We are investing £400 million in the current spending review period to help local authorities prevent and tackle homelessness. We are committed to eradicating child poverty and are taking a new approach to tackling the root causes, including worklessness, educational failure and family breakdown.
On food aid, the Healthy Start scheme provides a nutritional safety net in the form of vouchers for basic healthy foods and free vitamin supplements for pregnant women and children aged under four in disadvantaged and low-income families. Initiatives such as FareShare and FoodCycle are good examples of the essential work that charities are doing to support communities to relieve food poverty.
The noble Lord, Lord McKenzie, asked a couple of questions. I know that he directed them to the noble Lord, Lord Boswell, but it is perhaps worth me responding to them. He asked whether each member state provides for the three issues that the new fund would cover. Obviously, I will allow the noble Lord, Lord Boswell, to respond as he sees appropriate on behalf of the committee. From the Government’s perspective, it is clearly not for us to comment on other member states’ ability. Our approach is to tackle the root causes of poverty, as I just said. Any future proposal will have to be considered on its merits and in the circumstances at the time. If an alternative proposal were put forward by the Commission, we would want to consider it rather than set out our views now on whatever alternative might be proposed.
Lord McKenzie of Luton
Just to pick up on that point, a moment ago the Minister said that it is accepted that the EU can act where objectives cannot be sufficiently achieved by member states acting on their own. Does that imply some understanding of the resources that are available to individual member states? Is that part of the judgment about whether, acting on their own, they can deal with the issue?
Baroness Stowell of Beeston
The principle of subsidiarity is clear. I set that out clearly in my previous remarks and the noble Lord, Lord Boswell, has done the same. It is not for this Government to comment on whether other individual member states feel that they are in a position to be able to fulfil the objectives of the proposed fund.
Lord McKenzie of Luton
I am sorry to interrupt, but who can therefore make that judgment and how? If the judgment is about whether it can be sufficiently achieved by member states acting on their own—that is what the Minister has just said—who makes that judgment and on what basis? If we are saying that each individual member state has to ignore what the resources are and what the position is in each other member state on this issue, how on earth does that make sense of trying to make that evaluation, which she says is important?
Baroness Stowell of Beeston
The Commission itself, in bringing forward a proposal, has no doubt made a judgment in order to inform its decision to put forward this proposal to fund the scheme. I am saying that it is not for us as a member nation to comment on the ability of other member nations as to whether they can meet the objectives that the fund is there to meet. It is our view, from the position of a member state, that we are can provide for our citizens in the way that we are. We think that the issues to be addressed are better addressed by nation states and by local communities or regional bodies within those nation states because of the nature of the issue. That is the point that I am seeking to make.
I conclude by saying that we agree with the committee that the Commission has provided no convincing argument that its proposal meets the principle of subsidiarity. I restate that I thank the committee for its report and all its members who have contributed to this debate. I repeat that the Government support the Motion on the reasoned opinion.
Small Pension Funds
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(12 years ago)
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Lord McKenzie of Luton
Perhaps the Minister might write on another point: whether or not the automatic transfers—be they legacy pots or otherwise—could be transferred into NEST.
Baroness Stowell of Beeston
I will certainly write to the noble Lord about that matter as well.
The noble Lords, Lord Stoneham and Lord Kirkwood, referred to the Government’s Reinvigorating Workplace Pensions strategy. As they acknowledged, the Pensions Minister, Steve Webb, announced a range of proposals to restore people’s confidence and trust in pensions and to encourage savings. The most significant, in terms of scale, is the defined ambition scheme. I absolutely acknowledge the point made by all noble Lords tonight that there is a serious issue about lack of trust and confidence in pensions and savings; that is something on which the Government are very clear. For me, however, perhaps the most important point made in that strategy—indeed, it is one specifically raised by the noble Lord, Lord Stoneham, although others mentioned it too—was the Minister’s call on industry to use plain language when sending information to its members. As a new reader on this topic, I absolutely share people’s view that the jargon around pensions can create a real barrier.
I have very little time left but would like to say in response to the proposals from the noble Lord, Lord Patten, about perks—as he described them—for well-off pensioners that I will of course highlight to my right honourable friend the Chancellor what has been said. However, if I may beg the indulgence of the House, as my mum will definitely be watching on a matter such as this, I would be doing her a great disservice and be in huge trouble if I did not say that many of her friends, as pensioners, make the point to me on many occasions that they feel passionately about their bus pass. I want to mention that for my mum.
In conclusion, the number of stakeholders who have engaged with the Government in developing all these policies is indicative of common goals and a real drive by all to ensure that consumers can engage with the choices that they need to make about their retirement income. In the future, the FSA will be closely monitoring the impact of the RDR on consumers’ engagement with the market through its post-implementation review. An evaluation strategy will be agreed for measuring the success of the open market option package of measures, including the code of conduct. More generally, the Government remain committed to ensuring that everyone has the information and tools that they need to make responsible and informed decisions at retirement. I will of course follow up this debate with any letters to cover the issues that I have not been able to cover today.
Disabled People’s Right to Control (Pilot Scheme) (England) (Amendment) Regulations 2012
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(12 years ago)
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Baroness Stowell of Beeston
My Lords, for the record, I should like to begin by paying tribute to the noble Baroness, Lady Campbell of Surbiton. Although she is not here today, it was her work that helped shape this policy and it was she who chaired the Advisory Group on Right to Control until earlier this year.
The purpose of these amendment regulations is to make two changes to the main Right to Control regulations, which were made in November 2010. The first change is to extend the period of the current pilot from December 2012 to December 2013, and the second is to remove Oldham Council from the list of local authorities delivering Right to Control.
In November 2010 your Lordships considered and supported the Right to Control (Pilot Scheme) Regulations. The purpose of the 2010 regulations was to pilot giving disabled people in certain parts of England a legal entitlement to choice and control over some of the public services they receive. Rather than providing disabled people with what we think they need or what is most convenient for the service provider, the Right to Control pilot gives the power to the disabled person to decide how money is best spent to meet their needs. For many, this right has been empowering. However, others have concluded that they do not want the responsibility of managing a personal budget and are happy for the services they need to be purchased and managed on their behalf. A third group may have been keen to take control of the funding allocated for them but have felt that they lacked the knowledge or experience to do this. This is where the support of their peers, perhaps from a disabled people’s user-led organisation, has helped them to gain the skills and confidence to take control of their funding.
The purpose of running a pilot scheme is to test what works and what does not, and Right to Control is no different. Seven trailblazing areas in England are currently testing the right. The results from the pilot will be used to inform decisions about the long-term future of Right to Control. The pilot scheme is currently due to end in December 2012, and when the 2010 regulations were made we thought that two years would be enough time for the pilot to show us what has worked best and how. However, while a great deal of progress has been made since the pilots began, there is still insufficient evidence on which to make an informed decision about the long-term future of Right to Control.
This view was informed by the interim evaluation report, which was published in February of this year, and by our ongoing monitoring, review and discussion with all the trailblazing areas. The interim evaluation identified some early successes as well as some areas for improvement. Moving from the start-up phase to a steady-state environment took longer than originally envisaged and the trailblazing areas also told us that the cultural change required proved to take far longer than had been anticipated.
Although progress continues to be made and more than 34,000 people have benefited from Right to Control, we concluded that there was insufficient evidence on which to make a firm decision about the best way forward. As a result, we decided that the best solution was to extend the pilot scheme by a further year, taking it to December 2013. This will enable us to gather more information and evidence of what works best, both for disabled people and for the authorities and organisations delivering Right to Control.
At this point, I should reassure the Committee that the primary legislation in the Welfare Reform Act 2009 places an overall limit of 36 months on the pilot. To be clear, it is not possible, even if it were our intention, to come back in another year with a proposal to extend the pilot again. The Welfare Reform Act 2009 also requires us to consult on any draft regulations about Right to Control. So between June and September of this year we consulted on the draft regulations before the Committee today. Although the number who responded to the consultation was low—only 40— those who did respond were in favour of extending the pilot by a year. We also consulted with, and sought the agreement of, each of the local authorities currently delivering the right, and all but one agreed to continue in the extension period. Oldham Council decided that it did not want to remain as part of the pilot but, importantly, its participation so far will be captured in the evaluation. The experiences of disabled people living in Oldham and of Oldham Council will feed into the formal evaluation and the overall lessons learnt from the pilot. We will use the extension period to continue to collect management information and to monitor progress. The results from this, together with the results of the full evaluation exercise, which is due next spring, will enable us to make a final, evidence-based decision on the way forward.
In conclusion, we see the extension of the pilot scheme as a key factor in reaching the right decision about the future of Right to Control. I am satisfied that the draft regulations are compatible with the European Convention on Human Rights and therefore I beg to move.
Lord McKenzie of Luton
My Lords, I thank the Minister for the introduction of these regulations, which have our full support. Right to Control is an important new right for disabled people, giving them greater control and choice over the support they receive to go about their daily lives. It results from the powerful advocacy, not least from the noble Baroness, Lady Campbell of Surbiton, who the Minister rightly referred to, which was advanced during the Welfare Reform Bill 2009 and from the approach of co-production which helped frame these important opportunities. We were also supportive of Right to Control being piloted through trailblazers prior to being rolled out nationally, with the inevitable lessons and challenges that emerge from its practical application.
As the noble Baroness has said, we have had the benefit of the interim evaluation of the trailblazers. However, although not published until February 2012, this related to field work undertaken between June and September 2011, not long after the trailblazers had started. The interim evaluation is therefore inevitably influenced more by start-up issues and less by what might become the steady state. Nevertheless, there are some encouraging messages, even from this early assessment, around changes in culture, encouraging partner organisations to work together and positive influences on how delivery staff work with disabled people. The evaluation identified co-production as having long-term benefits for the design and delivery of services for disabled people.
However, at the early stage the evaluation pointed up some big challenges, including lack of awareness and understanding of Right to Control among staff, including front-line staff. This extended to a lack of certainty over process, a lack of differentiation from previous personalisation initiatives, and a lack of knowledge about legal entitlement.
There was also a lower than expected take-up of Right to Control in the Work Choice and Access to Work funding streams, although it was noted that young people’s access might be through their college rather than through Jobcentre Plus. There was caution on the part of some delivery staff about investing time if the future of Right to Control is not assured. There was the perception of conflicting priorities with the belief by some that it made it more difficult to safeguard vulnerable adults. For some trailblazers some funding streams were already tied into block contracts. Moving away from these has resource implications at a time of severe financial constraints. Budget cuts, redundancies and organisational restructuring have affected trailblazers, making implementation and delivery of Right to Control more difficult.
The Minister said in the other place, and the noble Baroness has reiterated it this afternoon, that the Government continue to monitor the position and to collect management information. Perhaps we can hear how matters are progressing on those above issues. What proactive steps are the Government taking to overcome some of these difficulties and challenges? Collecting information is all very well but there needs to be something more positive, particularly around awareness and understanding. Clearly, trailblazer authorities and stakeholders have a role in this, but so do the Government. Is it still the Government’s intention to see Right to Control being rolled out nationally?
As I said, we support these regulations and the extension of the pilots for one year—as we have heard, the maximum permitted under the 2009 Act. However, we would not wish that to be an excuse for doing nothing in the mean time to help make a success of Right to Control.
Child Support Management of Payments and Arrears (Amendment) Regulations 2012
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(12 years, 1 month ago)
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Baroness Stowell of Beeston
My Lords, these regulations were laid before both Houses on 15 October and will implement powers inserted into the Child Support Act 1991 by the Child Maintenance and Other Payments Act 2008, which was introduced by the previous Administration. A correction slip was published on 5 November, but the change was purely technical to correct a simple typing error in draft Regulation 3 concerning the amendment to the Child Support Information Regulations 2008.
I shall move on to the detail of the regulations in a moment, but first I will assure the Committee that the Government are determined to get to grips with the long-standing issue of child maintenance arrears. More and more parents are paying child maintenance, but we must ensure that those who do not are compelled to meet their financial responsibilities for their children and pay what they owe. To this end, we will shortly publish an arrears strategy, setting out our approach to preventing their accumulation and to collecting and enforcing them in future.
There are, however, some cases where child maintenance arrears are very unlikely ever to be collected in full, where we have no legal power to enforce them, or where they are no longer wanted by the parent with care. It is only these cases that the regulations we are debating today look to address. The regulations provide the ability for the department to accept a part payment in satisfaction of a child maintenance debt in full. When these regulations are introduced, the department will use them only in response to part-payment offers received from clients and will not take a proactive approach. Only once we are satisfied that we have a robust process in place will we consider how and when a proactive approach could be taken.
Where the department has exhausted all appropriate enforcement measures but has been unable to enforce the full amount owed, and where both parties are in agreement to a lesser amount being paid, this power will enable the department to bring cases to an acceptable resolution for clients. It is intended that the ability to accept such lower amounts will enable money to flow to children in cases where it may otherwise not have done and incentivise non-resident parents to come to agreements in respect of their arrears. As part of maintaining this principle of providing a real incentive for non-resident parents to pay, where a part-payment offer is made and the non-resident parent pays maintenance to more than one parent with care, they will have the ability to specify which parent they want the money paid to.
In plain English, what that means is that if the non-resident parent—for these purposes, let us assume that it is a man—is paying maintenance to two different parents with care—for these purposes, let us assume that they are both women—he will be able to choose which mother and child he makes the part payment to. However, I shall come on to a very important point about any parents to whom a part payment is not made. We will be clear with the non-resident parent that the arrears will remain owed in full and will be subject to enforcement. To make that absolutely clear, if a part payment is made to one parent with care—one woman—and there is another woman to whom the non-resident parent is paying maintenance, the other woman will not be in any way affected by this decision.
Where a part-payment offer is made, the department will consider on a case by case basis whether the offer made by the non-resident parent is reasonable, taking into account the probability of collecting all the arrears due and the non-resident parent’s employment status and income. The department will also obtain written consent from the parent with care in every case and will not accept any part-payment offer to which they have not given their explicit consent. So if the parent with care does not agree, it will not be forced upon them. This will continue to be the case if, in future, a more proactive approach is taken by the department in relation to part payment.
When the part-payment powers are introduced, they will only allow part payments to be made by non-resident parents in one lump sum. However, following the views of stakeholders in response to the public consultation, the department will introduce further regulations in future that will allow part payments to be made by instalments, once the required system changes have been made to accommodate them.
Moving on, the regulations also provide the power to write off some arrears of child maintenance, but only in the explicit circumstances set out in the draft regulations. The provisions of the 2008 Act limit those regulations to circumstances where it would be “unfair or otherwise inappropriate” to pursue enforcement of the arrears. An example of where arrears can be written off under these regulations is where the parent with care has explicitly informed the department that they do not want the arrears collected. Where this is the case, the department will ask the parent with care to confirm this in writing and ensure that it provides all the information necessary to enable them to make a fully informed decision.
In other circumstances covered by the regulations, such as where the non-resident parent has died and we cannot recover from their estate, there is no way of ever collecting the arrears. In such cases, where the arrears will never be collected, it is not sensible to allow them to remain outstanding. It is better to be open and transparent and write off the arrears. Where the department is considering writing off arrears it will inform both clients of this if they are still alive and, where appropriate, will give them 30 days to make representations. As my honourable friend pointed out in the other place, this period has been extended from 14 days following responses received to the public consultation on these regulations.
The department will then consider those representations and inform both clients of the decision on whether to write off the arrears. Cases will always be considered on their own merits and the views and information provided by clients will always be taken into account. All arrears written off under the write-off and part-payment powers will be carefully and fully recorded. Clients will be kept informed of what is happening in their case and why. Where appropriate, their consent will always be sought.
In summary, these powers are intended to address a minority of cases. They will be used only where the department is unlikely ever to collect the arrears in full, where all enforcement measures have either been exhausted or are not appropriate, and where clients have either been informed or, where appropriate, have given their consent. The department will continue to collect arrears whenever a parent with care wishes and it is appropriate and possible to do so.
I am satisfied that this statutory instrument is compatible with the European Convention on Human Rights, and I commend it to the Committee.
Lord McKenzie of Luton
My Lords, I thank the Minister for introducing these regulations in a comprehensive way. As she said, they derive from the provisions of the Child Maintenance and Other Payments Acts 2008. It was legislation of the previous Government, so we clearly support its thrust and that of the regulations. Incidentally, the “Other Payments” bit of the Act, as the noble Lord, Lord Kirkwood, will remember, was the no-fault scheme of compensation for sufferers of mesothelioma.
We have a few questions. One was prompted in particular by the Minister’s introduction, when she referred to the arrears strategy that will be published shortly. Can she give us a rough idea of what “shortly” means?
On the write-off of arrears, the Minister in the other place was clear, as was the noble Baroness, that the intent was that the power would be used only where the arrears were no longer wanted or where there was no legal way of enforcing the arrears owed. As example of the latter circumstance, the Minister instanced the PWC or NRP having died, or there having been an interim maintenance assessment. We have no questions on interim assessments, which were a mechanism designed to get some sort of payments out of non-resident parents who were not co-operating with the system. However, the new regulations also include circumstances, at paragraph 13G(f), where,
“the non-resident parent has been informed by the Secretary of State that no further action would ever be undertaken to recover those arrears”.
I am unclear whether this a separate circumstance rather than just an administrative requirement of the others. If it is not, what are the circumstances in which that would apply?
The death of the PWC raises the question—I cannot remember the answer although I asked it in the past—of whether the debt due from the non-resident parent is technically a debt due to the parent with care or to the CSA, or CMEC as it is now, which has a corresponding liability to the PWC. If the latter, is there any reason why it should die with the PWC? Even if the former, would it not be an asset of the estate—to the extent that it is collectable, of course? Presumably, if someone else takes on responsibility for caring for the child when the PWC dies, a new child maintenance assessment is potentially in point, unless a voluntary arrangement can be agreed. A similar power—which was referred to—applies when the NRP died before 25 January 2010, or where there is no further action which can be taken with regard to the NRP’s estate.
I presume that the January 2010 date is the relevant date under Section 43A, which was introduced to enable recovery from a deceased person’s estate. Will the Minister remind us of the status of such debts when the estate has insufficient funds to meet all outstanding debts and obligations? What will be the approach to compromising, or otherwise, on that which is owed under child maintenance arrangements? Before accepting part payment it is obviously important that the full rigour of the enforcement procedures available has been deployed. Doubtless the Minister will be aware of the considerable range of powers in the 2008 legislation. These include disqualification from holding or obtaining travel authorisation, curfew orders and disqualification from driving. Can we have an update on which of Sections 20 to 30 of the 2008 Act have been brought into force and when any remaining provisions are to commence?
Where part payment of arrears is to be accepted, whether or not appropriate consent is required, as I understand it, depends on the extent, if at all, that the amounts are due to the Secretary of State or to the PWC. It reasonably follows that where the amount of any payment is due to the Secretary of State—presumably for benefit recovery—then appropriate consent is not required for accepting a smaller sum in settlement. Will the Minister explain what safeguards are to be in the system to prevent any amounts being accepted as part payment in such a way as to leave the amounts which are collected due to, or disproportionately due to, the Secretary of State? If it is accepted that there must be a written agreement involving the PWC, what guidance and support will be available for them to make a judgment in these matters? Will amounts accepted in part payment always maximise the amounts due to the PWC, with the Secretary of State picking up any residue? Is there scope for the NRP to disagree with any allocation between the Secretary of State and the parent with care?
These regulations will presumably be applicable to the charging regime in due course. Again, what safeguards will be in the system to prioritise moneys for the PWC? As discussed in another place, the Explanatory Note envisages acceptance of part payment being by way of a lump sum—the noble Baroness referred to this in her introduction. However, it has been accepted that the primary legislation does not limit arrangements to lump sums. Nor, it would seem, does the order. The noble Baroness referred to bringing forward further regulations in due course. I am not clear, from these regulations, why that would be necessary and why the regulations cannot operate to cover a series of payments when the systems can cope with it.
If it is the intention to limit settlements to lump sums, this would appear to be a more limiting facility than is necessary. Would it not be the case that more NRPs are likely to be able to enter into some form of settlement if there were some prospect of spreading payments than if the compromise could only be by way of a lump sum? Indeed, it begs the question: if the NRP can make a payment in settlement of the arrears, what is defective in the enforcement powers that otherwise prevents these sums from being collected in the normal way?
We have followed the exchanges in another place concerning circumstances where the NRP may be obligated to make maintenance payments in respect of children in more than one family. Giving the NRP the right to allocate any settlement moneys is not an easy matter, but we see the thrust of the Government’s position on that, particularly as reinforced by the Minister’s comments in respect of the other parent whose arrears remain fully due and collectable.
As I said, we support the regulations. We are aware that they could be applied in a positive way to help move more money quickly for more children, but also in a negative way—the latter to avoid the grind of using to the full the extensive enforcement powers, with the temptation offered to PWCs to have the promise of some early money even if it is not their full entitlement. However, we note the assurances given by the Minister in the other place that the Government will only be reactive in the initial stages of using these powers, which again was reinforced by the Minister this afternoon. Nevertheless, when considering an offer from an NRP, what kind of assurances will be sought concerning full disclosure of the NRP’s current financial status? All in all, we are prepared to give the Government the benefit of the doubt, but we seek assurances on the monitoring of these provisions and regular reporting to Parliament.
Baroness Stowell of Beeston
My Lords, I am very grateful for the support I have received from the noble Lords, Lord McKenzie and Lord Kirkwood. I will endeavour to respond to the various detailed questions that have been put. I note the generous offer made by the noble Lord, Lord Kirkwood, that he will accept responses in writing to any questions that I am not able to address today. Of course, if that is necessary, I will ensure that I follow up in that way, although I hope that I can get through most of the points raised.
To try to make this manageable—for myself if no one else—I will take this in three chunks. I will start with what I would categorise as general queries, then move on to the small number of points made on the write-off part of the regulations, and finally I will deal with part-payment, on which I think most of the points were raised.
On the general questions, both noble Lords asked about the new arrears strategy. I can confirm that that will be published shortly and certainly in line with the deadline that the noble Lord, Lord Kirkwood, mentioned, which was this side of Christmas. The noble Lord, Lord McKenzie, asked about the commencement of the full range of enforcement provided for in previous Acts. As I think I have made clear, our primary focus is the delivery of the new scheme. We will consider what additional enforcement powers should be brought into effect after the new scheme is introduced. We have introduced deduction orders and are using them widely, so they are already in operation.
The noble Lord, Lord Kirkwood, asked how the exploration of a new means of reporting arrears was going—apparently a previous Minister referred to this. Following the recommendation of the independent arrears panel, we have begun a trial of the reclassification of arrears, based on an approach undertaken in Australia. This trial is still under way but once it is complete and we have undertaken a full evaluation of its results, the department will take a view as to whether the approach should be rolled out across the case load. That is something that is still ongoing.
I am new to the DWP but I am getting the impression that IT is a general theme, so I have put it under “general issues”. The noble Lord, Lord Kirkwood, asked whether the computer system can cope with part-payment. The answer is: yes, but not part-payment by instalments yet, hence the system changes that we are making. That is something that we acknowledge but are dealing with.
I will move on to write-off, although there are some things that I want to come back to. The noble Lord, Lord McKenzie, asked about the date under Section 43A and the deceased’s estate where a non-resident parent has died before January 2010. This is the coming into force date of the powers relating to recovery from a deceased’s estate. I apologise but I cannot quite remember the question the noble Lord put to me.
Lord McKenzie of Luton
I think that the noble Baroness has answered the question. Could she just confirm that that is the date from which recovery could be made against a deceased person’s estate? Prior to the 2008 Act, there was no facility for that. I seek confirmation only because it is the first time I have seen the date.
Baroness Stowell of Beeston
Yes, it is the coming into force date of the recovery from the deceased estate powers.
The noble Lord, Lord McKenzie, asked whether debt is due to the parent with care or to CMEC or the CSA, or should a debt die with the parent with care. The debt is due to the parent with care. Where the parent with care has died, we will try to find the executor of the estate, who may have an entitlement to the money. If we cannot find the executor, the debt cannot be collected. The reason I am hesitating here is that I am wondering if we have “parent with care” and “non-resident parent” in the right place in this answer.
The debt is due to the parent with care. Where the parent with care has died, we will try to find the executor of the estate, who may have an entitlement to the money. If we cannot find the executor, the debt cannot be collected. We have got to identify the person who would be legally entitled to that debt. We cannot collect on behalf of someone we have not been able to identify.
I shall move on to part payment and the various questions that were raised. Perhaps I may start with the points put by the noble Lord, Lord McKenzie—
Lord McKenzie of Luton
I am sorry to interrupt, but just so that we can tick the points off as we go along: in terms of write-offs, there is the issue around paragraph 13G(f) and whether that is an additional provision relating to write-offs and the circumstances in which that would apply.
Baroness Stowell of Beeston
This may be something I would prefer to write to the noble Lord about.
Again, moving on to part-payment, the noble Lord, Lord McKenzie, asked about safeguards and what guidance and support would be provided to the parent with care. The department will make an assessment of whether an offer is reasonable before passing it on to the parent with care. We will certainly not pass on an offer if we do not think that it is reasonable. In response to a later point raised by the noble Lord, Lord Kirkwood, in making that assessment, the agency will want to be clear about the status of the non-resident parent in terms of their current employment and so on.
The noble Lord, Lord McKenzie, asked how we will measure the success of these powers. The department will record all instances where a debt is extinguished as the result of a part payment agreement or under the explicit circumstances in the regulations which allow write-off. We will monitor the results carefully to ensure that the powers are being used correctly, effectively and only in appropriate circumstances. This information will be made publicly available as and when it is requested, for example in the usual way via a Parliamentary Question, and the department will be happy to answer any questions and to respond as we progress.
I was also asked in what circumstances the CSA has advised a non-resident parent that their arrears will never be collected. Advising non-resident parents that their arrears will never be collected is not standard practice in the CSA. We are, however, aware that this has happened on occasion. Where the non-resident parent can provide evidence to support their claim, it would be very unlikely that the department would be successful in enforcing a liability through the court in the future. The non-resident parent has been given a legitimate expectation that this would not happen and therefore the arrears should be considered for write-off.
Lord McKenzie of Luton
I think that deals with the point I raised earlier that the Minister was going to write to us about. There is a specific provision that says,
“the non-resident parent has been informed by the Secretary of State that no further action would ever be taken to recover those arrears”.
If that refers to what has happened in the past occasionally, that deals precisely with my query.
Baroness Stowell of Beeston
I am grateful to the noble Lord—he is demonstrating his experience in this area. That is one fewer letter for us to have to commission and I am sure that my friends behind me will be grateful for that. The noble Lord asked if there is scope for the non-resident parent to disagree between allocations to the Secretary of State and the parent with care. We will give the parent with care’s debt the priority and both clients will be informed of this. The non-resident parent can specify which parent with care, as I explained in my opening remarks, but the department will decide the priority hierarchy after that. Obviously, we will give the parent with care priority over the Secretary of State.
The noble Lord asked what was defective about the enforcement powers that might lead us to this arrangement for part-payment. The enforcement powers are not defective, but there are circumstances in which there is no suitable action to take; for example, where a non-resident parent is self-employed and has no assets. In this example, there is often no way of collecting the debt in full—I think that might address one of the points of the noble Lord, Lord Kirkwood, as well.
The noble Lord, Lord McKenzie, asked about the lump sum of part-payments and clarified why instalments have to be regulated for at a later date. This is one of those technical answers. If we regulated to allow for that now but could not facilitate it in practice I am advised that we could face legal challenge. We can therefore only introduce the legal power once we know that we can deliver it in practice. So we would if we could, but we cannot.
Jobseeker’s Allowance (Sanctions) (Amendment) Regulations 2012
Debate between Lord McKenzie of Luton and Baroness Stowell of Beeston(12 years, 2 months ago)
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Baroness Stowell of Beeston
My Lords, this instrument was laid in draft before the House on 9 July this year. It is regarded as being compatible with the European Convention on Human Rights. This instrument provides for a more effective, more proportionate and clearer sanctions system, but it also preserves the important safeguards that are required to ensure a fair and balanced system.
I think that there is a general agreement that it is right to expect claimants who are able to look for or to prepare for work to do so. We provide people with financial support when they are out of work. In return for that financial support, we expect them to do everything they reasonably can to get back into work. We know that active job search and engagement with advisers increases the chances that people find work more quickly than they would otherwise.
Most people who find themselves out of work and in receipt of jobseeker’s allowance are doing everything they can to get back into work and are complying with the conditions associated with this benefit. But not everyone is, and for those people, a more effective sanctions regime is needed. A sanctions regime should be clear and proportionate, and should fully encourage claimants to meet the requirements that will support them back to work.
The current sanctions regime is not achieving those objectives as well as it might. Let me offer a little more detail on the limitations of the current regime and how these new regulations will address those. First, some of the existing sanctions are simply not tough enough, and there is little to deter claimants from repeatedly failing to apply for a job or look for work. For example, if someone fails to meet one of the most important requirements, such as refusing a suitable job offer without good reason, they may be sanctioned for as little as one week. These regulations introduce escalating sanctions periods so that in relation to these most serious failures, the sanction periods will be 13 weeks for the first failure, 26 weeks for a second failure within a year of the previous one, and 156 weeks, or three years, for a third or further failure within a year of a previous failure which resulted in a 26 or 156-week sanction. So sanctions will be tougher for those who repeatedly fail to meet their requirements and repeatedly fail to change their behaviour.
Three-year sanctions will apply only in the most extreme cases where claimants have serially and deliberately breached their most important requirements. For these claimants, previous sanctions of 13 weeks and 26 weeks have unfortunately not provided sufficient deterrent to change their behaviour. We anticipate that very few claimants will be subject to this length of sanction, but we believe that such a sanction is necessary to act as a deterrent and to ensure compliance with the requirements that are critical to helping claimants move back into work.
We cannot expect sanctions to act as a deterrent unless the sanctions themselves are clear. Currently they are not. A sanction for failing to apply for a job could be anything between one and 26 weeks. Under the new regime, claimants will be able to understand upfront exactly how their benefit will be affected. They will know that the first time they refuse a job offer without a good reason they will get a 13-week sanction.
There is also a lack of clarity in relation to sanctions for failure to comply with the requirement designed to improve a claimant’s chances of finding or preparing for work. Currently there is a complex range of sanctions for these types of failure, including one or two-week sanctions for failing to attend an interview at a jobcentre, two and four-week sanctions for other failures such as failing to carry out a direction from an adviser and 26-week sanctions for some claimants in the work programme. Under these regulations, the sanction for not meeting such requirements will be set at a clear and simple period of four weeks for a first failure and 13 weeks for a second or subsequent failure within a year of the previous failure.
Another feature of the current system is that in some circumstances there are only limited consequences for failing to be available for work or failing to actively seek work. Not meeting these basic conditions of entitlement generally leads to disentitlement from jobseeker’s allowance. But currently those who are disentitled for these reasons can reclaim straightaway and in some cases lose only one or two days’ benefit. It is not right that claimants can fail to meet the fundamental requirements of claiming benefit and yet face little consequence. Therefore, those who reapply for benefit following disentitlement for these reasons will be subject to the new sanction of up to four weeks for a first disentitlement and up to 13 weeks for a second or subsequent disentitlement within a year of the latest one.
We want to introduce into the sanction regime some recognition for claimants who do the right thing. Therefore, as a new incentive for claimants to return to sustained work, if they work for six months before they become re-entitled to jobseeker’s allowance, the balance of any outstanding sanction is lifted. Under this regime, some things will not change and important safeguards will remain in place. We will continue to tailor requirements to suit claimant circumstances, for example to allow for caring responsibilities and to take account of mental or physical health conditions. Claimants will have the opportunity to explain why they have not complied with a requirement. Just as now, if they provide a good reason a sanction will not be imposed.
Claimants will still be able to request further information about the sanction decision, request a reconsideration and appeal against the decision. If claimants have concerns about whether the correspondence address they have given us is secure, we will arrange for letters and notifications to go to an alternative address or to be picked up from the jobcentre.
These regulations will broadly align the jobseeker’s allowance sanctions regime with that for universal credit. As well as providing the clarity and proportionate consequences described earlier, this change will ease the transition to universal credit for both claimants and Jobcentre Plus staff.
In conclusion, these changes are intended to better drive the behaviour that maximises a claimant’s chances of finding suitable work. I commend them to the Committee.
Lord McKenzie of Luton
My Lords, I thank the Minister for introducing these regulations. I welcome the noble Baroness, Lady Stowell of Beeston, to her first appearance at the Dispatch Box on DWP matters. We hope that there will be many more such appearances and that this is not just an operational response to the absence of the noble Lord, Lord Freud, who drew the short straw and had to go to the party conference.
We cannot support these regulations. That should be clear to the Minister from the debate in the other place. That is not to say that we oppose every aspect of them, nor do we oppose the principle of sanctions. Properly constructed and fairly applied, they have an important place in the benefits system. They encourage compliance with claimant obligations. We also support regulation for a clearer relationship between the length of a sanction and how that relates to the failure to comply with the particular obligations.
What concerns us in particular, however, is the three-year sanction, which we consider to be excessive and, indeed, counterproductive. As was spelt out in the other place, the concern over the three-year sanction is not only that it will inevitably create hardship but that it will create an extended period where there is a weak connection with the labour market. Will the Minister clarify what ongoing obligations an individual has during the period of the sanction and what entitlements the individual has during that period; for example, their access to the Work Programme? Would failure to meet any obligations during a period of sanctions itself be further sanctionable?
In considering these regulations and the JSA regulations, we need to be mindful of what is happening at the moment with all the reassessments, the flawed application of the WCA and the fact that many people were being pushed on to that benefit from ESA and IB. I would be grateful if the Minister would also clarify the circumstances where someone subject to a sanction gets a job and ceases to be eligible for JSA. What precisely is the position on their reclaiming? Paragraph 7.7 of the Explanatory Memorandum suggests that there is a disentitlement of four or 13 weeks where the original disentitlement was related to,
“not being available or actively seeking work”.
However, does this replace any unexpired portion of the original sanction or is it additional to it? What is the position of somebody who is subject to a 26-week sanction for refusing work but who gets a job for two weeks after, say, one month and then reverts to JSA? They would have been without JSA for six weeks. Do they have a further seven weeks of sanctions to go?
I have some more specific questions. Can we have an update relating to the numbers of sanctions and disentitlements? When we debated this during the Welfare Reform Bill it was noted that there was an alarming increase in 2010-11 in comparison with the previous year and a 42% increase between July and September 2010 in comparison with the comparable preceding period. Can we be given the numbers for the subsequent year, please? We have previously been assured that there is no question of the DWP having formal or informal targets for sanctions and that the previous overzealous misinterpretation of instructions has now been corrected. Will the Minister confirm that this is the case? Can we be told what management statistics will be collected on a routine basis and the use to which they will be put? While not being a target, what provision is made as regards the budgets for reductions in benefit arising from the application of sanctions for the current year, and what is the split between pre and post-October 2012 data?
Under the current arrangements, the days of a sanction period count towards any 182-day entitlement to contribution-based JSA. Will that change? Under the existing regime, we have the saving of just cause relating to leaving a job voluntarily and good cause for neglecting to avail oneself of a job opportunity. These terms have been developed in regulations and, it is understood, from time to time in commissioners’ decisions. The Explanatory Memorandum sets out that these concepts are to be subsumed into a new good reason concept, the interpretation of which is left to decision-makers. Does this mean that all existing precedents and guidance are to be disregarded? For example, a person is currently treated as having good cause if they do not accept a job that is vacant because of a trade dispute: that is, they are not required to be a strike breaker. Will this protection still operate under the new sanctions? Currently, if there is no automatic good cause, the decision-maker must nevertheless take certain circumstances into account. These include where a particular job or carrying out of a jobseeker’s direction would be likely to cause excessive physical or mental stress. What will happen to this requirement under the new regime and, similarly, the requirement for decision-makers to take religious and conscientious objections into account? Is there to be any guidance on this issue in the new world of sanctions? How will the consistency of approach to these matters be assured and, indeed, monitored within the department? The proposed penalty regime escalates—13 weeks; 26 weeks; three years—and the escalation is determined by the number of prior failures. At its point of introduction, what account is taken of any sanctionable failures prior to that date? Is the slate wiped clean at that point?
Baroness Stowell of Beeston
That is the case. That is what I have explained. If you are sanctioned, you are not in receipt of jobseeker’s allowance. There may be other benefits that you are entitled to, such as housing benefit. I think it is the use of the word “entitled” that is confusing matters, and I must apologise if I am confusing the Committee.
If somebody receives a sanction which leads to them not receiving their jobseeker’s allowance, that does not mean that they are not entitled to jobseeker’s allowance; it just means that they are not in receipt of it because they have not done something that is required of them in order to be entitled to receive that allowance. To be disentitled means that you have to stop being—I forget what the precise language is—available and able to carry out work. I think I have used imprecise language, and I apologise.
The noble Lord, Lord McKenzie of Luton—
Lord McKenzie of Luton
I shall pick up the point the noble Baroness has made. I apologise for interrupting. If somebody has been sanctioned for three years and the local job market is such that the prospects of getting employment for six months look pretty grim yet nevertheless they are still, at least in theory, subject to JSA conditionality, what will encourage them to undertake those obligations? It seems to me that if you have a three-year period when this persists, people will drift from that support. There is nothing that encourages them to engage. If they do not engage, does that mean that they could be further sanctioned during that period?
Baroness Stowell of Beeston
I think this is a point that the noble Lord raised earlier, and I was coming to it. I repeat that I think the number of people who will be sanctioned for a three-year period will be very small. However, during any sanction period somebody who is in receipt of a sanction will still be required to go into the jobcentre and receive support from the staff to help them get back into work. That aspect of the support that is available to somebody out of work would not be removed.
The noble Lord, Lord McKenzie of Luton, asked what measures we are putting in place to monitor the new sanctions to see whether they have the intended effect. There is a process in place. The department will consider undertaking further analysis once the findings suggest further lines of inquiry. There is a process that will monitor the process.
I think it was the noble Lord, Lord Kirkwood, who asked about pilots, which may have been in the same ballpark. On that matter, these regulations make changes to the JSA regime for a temporary period. It is the universal credit regime that will be tested in pilot, not these interim changes.
The noble Lord, Lord McKenzie, asked whether a sanction would still apply if someone who is sanctioned finds work, so the claim ends, and then reclaims. I am sure that he will clarify this for me if I have misunderstood, but he perhaps meant to go back to my misuse of language around sanction and disentitlement or entitlement. A 13-week sanction would apply only to a new claim after a disentitlement for failure to meet the jobseeking conditions. If someone had a sanction and then found work so that their claim ends, on a reclaim the unexpired portion of the previous sanction would apply, as now.
There were quite a few questions from various noble Lords about the process of decision-making and definitions of “good reason”. The noble Lord, Lord German, asked about this and why examples of good reason have been removed from regulations. Under the revised regime, we want the decision-maker to take into consideration all the facts and evidence presented by the claimant. We think that the regulations were perhaps a little too prescriptive. We would much rather that the decision-maker were in a better place to make that change.
The noble Lord, Lord McKenzie, asked why we are replacing “good cause” with “good reason”. This is just a simplification of language; it makes no substantial change. As now, if claimants can show good reason for failing to meet requirements, they will not receive a sanction. The noble Lord asked how well the “good reason” provision will work in practice. Notwithstanding what I said about regulations, examples of possible factors that might count as “good reason” include a sincere religious or conscientious objection, caring responsibilities, emergency duties, and so on, but this is not an exhaustive list.
The noble Lord, Lord McKenzie, certainly asked some specific questions about protections and whether trade disputes or a religion would still exist in referring decisions about whether somebody should apply for a job vacancy. Advisers can continue to agree restrictions on the type of job that a person is willing to take. These relate to the type of employment for which that person is available, the terms of employment and the locality. That would include those with religious or conscientious convictions, who may not wish to undertake certain types of work. For example, they may not be willing to work with animal products or for a company associated with live animal exports. No claimant will be expected to take a job that was vacant as a result of a trade dispute.
Lord McKenzie of Luton
I thank the Minister for a lot of the detail that she is providing to us this afternoon. Can she just clarify the position? At the moment we have “just cause” and “good cause”, which have been reflected in some particular regulations and certainly in some guidance. I think that there are some commissioners’ decisions which flesh out the meaning of those terms. Are all of those precedents going to be swept away and not applied, or are they going to stay in being and be used to support the concept of “good reason”?
Baroness Stowell of Beeston
Yes, they still apply.
The noble Lord, Lord McKenzie, also asked about people with health conditions. These regulations do not change the requirements that are on claimants as of now. Through Jobcentre Plus and the work programme, we will provide claimants with health conditions with the personalised support that they need to overcome their barriers to employment. All requirements will take their health into account to ensure that they are not asked to do something which would be unreasonable.
The noble Baroness, Lady Turner of Camden, asked in her remarks about those disabled people who may be moving from DLA to JSA or a version of that under universal credit. Today, we are obviously concentrating on JSA, which is very different to DLA. However, I take on board the point that she makes about ensuring that people have a clear understanding of what is changing and how they are affected by those changes. That is certainly something which needs to be addressed.