Welfare Reform Bill

Debate between Lord Newton of Braintree and Baroness Hollis of Heigham

Tuesday 31st January 2012 Lords Chamber

[Lord Newton of Braintree]

I did not suggest that this was setting rates in concrete; I suggested that it was setting relationships between rates in concrete. That runs into the point that the noble Baroness just made and my earlier point: that there is a spectrum which changes over time.

[Baroness Hollis of Heigham]

The noble Lord is precisely right and has therefore made my point for me. Precisely because that relationship may change over time, we do not want the cliff edge of being on either one-third or three-thirds of the rate. Precisely because, as he says, it changes over time, we want to reduce that cliff edge and not make such a sharp distinction in the spectrum of disability.

The final point that both the noble Lords, Lord German and Lord Newton, argued was that this should be in regulations because they believe in the benevolence of the Minister on the issue, as we all do. I am confident that the enemy of or opposition to the amendment is not the Minister. We know him, as we have been engaged in discussion in Committee and at Report. His principles, integrity, evidence and assiduity are without comparison. His enemy is the Treasury. I put to the House a simple question. Which does the House believe will most strengthen the Minister's arm in seeking to follow the wishes of the whole House as expressed today: leaving it to regulations which we cannot amend some way down the line—three months, six months, nine months or a year—when the Treasury can say “Go away”, as it said to me on many occasions; or passing an amendment today which would insist that the House of Commons and the Treasury think again? If they turn it over, I will be sorry about what I will regard as having happened to their moral compass, but that is their right and privilege.

I know that the noble Lord, Lord Freud, will have to read his script. I do not expect him to either confirm or deny this, but he will have to read out things that he would wish he could say differently. Whatever he may say, if we want to aid him today in his battle with the Treasury on behalf of the most vulnerable people in our entire society, we will support the amendment to establish the principle of proportionality in the Bill.

Welfare Reform Bill

Debate between Lord Newton of Braintree and Baroness Hollis of Heigham

Monday 12th December 2011 Lords Chamber

[Baroness Hollis of Heigham]

My Lords, I am moving this amendment precisely because I strongly support universal credit. If the House agrees with me in supporting universal credit, I suggest in all decorum that it should also support this amendment.

At the moment, council tax benefit is a social security benefit—a national benefit—which responds to local need. The DWP reimburses local authority spend. If, for example, a factory closes, the need for council tax benefit in that community may increase, and that need is met because the benefit is national and needs-led. Sensibly, therefore, it should be part of universal credit, along with JSA, housing benefit, ESA and so on, because the need for council tax benefit runs alongside those other benefits and should be related to family need, as universal credit will be. Instead, the DWP’s need to include CTB within universal credit appears to have been trumped by the demand of the DCLG and other departments that it form part of a completely separate agenda—the localism agenda. These agendas—universal credit versus localism—clash, and so far the wrong decision has been made.

What is DCLG proposing? In future DCLG will award a fixed-rate grant to local authorities from which it will have to construct its own council rebate scheme. What is wrong with that, your Lordships may think? Quite a lot, and there are three reasons in particular. First, instead of one national scheme that is common across the country, understood by everyone—claimants, local authorities, staff and advice centres—there will be 400 different schemes. There will be a separate and different scheme for every local authority in the country. Norfolk, for example, will have seven schemes that are all different.

Think of the staff resources involved, when we are trying to save money, in constructing and running such schemes, especially when local authorities already outsource much of their work. Think of the complexity of giving advice to people who come into, say, the Norwich Citizens Advice office from all over Norfolk, trying to understand UC and then having to add on seven different taper arrangements according to which district council they come from within Norfolk. All of the admirable simplicity of UC goes out the window. Think of the possibility of underpayment, overpayment, error or even fraud because there is no standard scheme. Given that there will not be enough money to go round, why would any local authority encourage take-up? They will not.

We in this House are rightly building these problems out of universal credit, and the Minister is to be congratulated on that. But we will be building them back in again if this amendment is not accepted. DCLG has balkanised council tax benefit in the name of localism. It recognises this, and now DCLG urges local authorities to do the opposite of what it was calling for—to share common schemes—in which case, why balkanise it in the first place? It will be financed by a fixed grant and will not be needs-led in future. If a factory closes and local need increases, the grant will not go up. Presumably everybody gets less. Or, it will have to be topped up by the council tax that is already suffering 30 per cent cuts in services and a freeze. Think, my Lords, for a moment if that applied to jobseeker’s allowance, and that what you have if you are unemployed in your district depends not on your needs, or on any national standard, but on the needs of everyone else in your district. Your payment would go up and down according to local employment or unemployment figures in your district.

DCLG in its consultation paper recognises this risk, so it suggests—hopefully, idealistically—that local authorities should voluntarily help each other and bail each other out. Oh yeah? Why balkanise, as DCLG requires, if local authorities are too small to bear the risk, as DCLG recgonises? Worse, that fixed grant will be cut by the DCLG by 10 per cent, perhaps more in future. There will be a 10 per cent reduction in council tax benefit per head, but pensioners are to be protected, so the cuts that fall on others will be 20 per cent. However the council, under pressure from local charities, could decide to protect, say, disabled people—I could understand why they would—and give them the full CTB. The more vulnerable families you protect in devising your own local scheme, the more that families in low-paid work—the last man standing, so to speak—carry the cuts.

The Association of North-East Councils has calculated that once vulnerable families are protected, other working-age claimants will face cuts of up to 50 per cent in their council tax benefit. Then work will not pay and universal credit will be a waste of time. Severe cuts in other words are being smuggled in under the drapery of localism but are they essential? At the same time DCLG is spending £250 million on reinstating weekly bin collection or £800 million to freeze council tax, so that my council tax bills are protected while those with much lower incomes on council tax benefit will face cuts of 50 per cent.

Finally, what you will get in CTB will, of course, be determined by your income. Families facing the means test of universal credit will now find that they also face a second means test—that of CTB. How on earth will the value of moving into work be calculated, which is what universal credit is all about, when people face two means tests, two tapers—one with national rules and one with 400 separate local rules—that are layered on top of each other? As the noble Lord, Lord German, rightly said in Committee,

“if you believe in a universal credit, and you have a postcode lottery for what that amount of money might mean to you, how on earth are you going to be able to judge whether or not work is beneficial for you?”.—[Official Report, 6/10/11; col. GC 381.]

Exactly so; I could not have put it better.

UC was designed to bring all working-age benefits together into one so that every one of us would know what we would get and why work paid. Under the localism agenda, council tax benefit—a social security benefit—is being plucked out of UC, thereby destabilising it and balkanising the system. Forgive me, but this is administrative madness. All of this is being proposed in the name of localism but do local authorities want it? City authorities, like the one I used to lead in Norwich, hate it, as they will see some of their poorest citizens unable to pay their council tax and facing arrears and debts. Equally, some small rural districts are now wondering where they will get the staff resources to devise and run their own in-house schemes. East Devon district council’s cabinet has said that the scheme means: “costs, costs, costs”. A councillor said:

“This should be strangled at birth. It is a disgrace . . . We haven’t got the resources and we haven’t got the time”.

Nearly 6 million people receiving council tax benefit will in future not know what they will get because they will have no entitlement—just a handout from the local authority whose generosity or meanness will vary from district to district, from factory opening to factory closure, and from year to year. We took social security away from local authorities when we finally abolished the Poor Law after the Second World War. Now one of the worst effects of the Poor Law—the postcode lottery—is being reinstated for council tax benefit under the name of localism. That is wrong. To add extra means-testing on top of universal credit’s means-testing is insane. It will undermine universal credit without a shadow of a doubt. I and almost every other Member of your Lordships’ House want to see it working, so what then is the point of this Bill? Worse, this guise of localism will make poor people poorer, and local authorities, in whose name this is being done, will be powerless to help them. Council tax benefit needs to be brought back within UC. I beg to move.

[Lord Newton of Braintree]

My Lords, I shall be brief because I know that the House wants to get on. I am a supporter of the universal credit, so I am opposed to anything that is inimical to its success, and the exclusion of council tax benefit is exactly that; it is totally inconsistent with the Government’s proposals.

It is an open secret, although I do not expect the Minister to confirm this from the Front Bench, that the DWP does not want council tax benefit to be excluded, that there has been a battle with the DCLG and that for the moment, although heaven knows why, the localism agenda has prevailed. When anyone asks about 400 different social security systems, we are told that it will not be allowed to happen—so the localism agenda, we are told, will not be allowed to be localism because the local systems will be made to come into line in some sensible way. That is daft, but it is what we are confronted with.

I have two or three points to make. This is said to be cash limited, and indeed a cut. What is going to happen in an area where there is a big factory closure and the money has already been spread out? Does everyone already on council tax benefit have to take a cut in order to finance those who have just come on to it? In areas where, say, a big Tesco opens and 400 new jobs are created, does everyone get a bonus because a lot of people have been taken off council tax benefit? It is mad.

My first constituency boundaries straddled a parish boundary; number 36 Havengore was in Braintree and number 34 was in Chelmsford, but the houses were semi-detached. Can we really have totally different benefit systems for the people living in those two houses? Again, this is mad. Do the local councils want it? The answer is no, it is a nightmare for them. We should stop it, and if this amendment is pressed to a vote, for the first time today I shall not be able to vote for the Government.

Welfare Reform Bill

Debate between Lord Newton of Braintree and Baroness Hollis of Heigham

Monday 14th November 2011 Grand Committee

[Baroness Hollis of Heigham]

My Lords, I support my noble friend in her request. In order to have a sound evidence base, we are going to need stats about how the existing clients of DLA—if I can put it that way—will map on to the future ones proposed for PIP and the implications for carers. It is not a discrete thing: it has interactions with ESA; it has interactions with in-work conditionality; and it has interactions with other things, like housing benefit, extra rooms and the rest of it. It has tentacles right through the whole of the Bill.

I will make a serious proposal to the Minister. I will personally not be happy to go into a Report stage of this Bill unless we have had, at least three days before the first day of Report, all the information that we need on the proposed changes to DLA and the linking effect to carer’s allowance, because it interacts with so many other aspects of the Bill. I hope the Minister will agree that that is an acceptable position to hold.

[Lord Newton of Braintree]

My Lords, before the Minister replies, which I assume he is about to do, I will just chip in again. I do not have the up-to-date knowledge that the noble Baroness, Lady Hollis, has from her more recent experience as a social security Minister, but I did once again prick up my ears at the reference to carers. There is obviously a link between disability living allowance with its three rates and the payment of carer’s allowance. This is not something that I have focused on, but I would much appreciate a word from the Minister about what the effects of that might be. That would be on top of the 652,000, as I understand it, and could mean that some households suffer what in conventional jargon would be called a double-whammy. We need to know something about that.

[Baroness Hollis of Heigham]

I would add to the noble Lord’s very helpful intervention that if someone who is currently getting carer’s allowance finds themselves disqualified in future, they will come within the whole remit of in-work conditionality and all the other issues that affect this Bill. It is not just a one-off enclosed issue; it has tentacles or effects or implications right across the Bill.

[Lord Newton of Braintree]

I can understand that; that is where the noble Baroness is more up to date than I am. The Minister must be the most up to date of all.

Welfare Reform Bill

Debate between Lord Newton of Braintree and Baroness Hollis of Heigham

Wednesday 26th October 2011 Grand Committee

[Lord Newton of Braintree]

May I come in from my sedentary position? I ought to start by saying that, having been in another part of the United Kingdom for most of the day, I only strayed in here to demonstrate continuing interest and to check that the Minister was still being reasonable. I felt driven to contribute, as all too often both upstairs and downstairs, by the subject matter that was being discussed.

If I may say so, the noble Earl, Lord Listowel, need make no apology for the length of a speech from a noble Lord who has taken greater interest in these matters than almost anyone else in the House over all the time I have been here. His genuine knowledge and concern comes through, and we all benefit from it.

That said, I shall now incur the wrath of the noble Baroness, Lady Hayter, the noble Lord, Lord McKenzie, or both, or indeed of everyone. I had better admit immediately that if I were the Minister I would not touch this amendment, in its present terms, with a bargepole. It is all very well for noble Lords to talk about guarantees, but what does all that mean? Does it mean predictable? The number of hurdles here is unbelievable. The amendment speaks of “guaranteed”, “predictable”, “high quality”, “flexible” and “affordable” childcare. Who will be the judge of all those? It also talks about the care being,

“acceptable to the parents and the children”.

Frankly, that is not on, as a workable concept. I will just put that on the record in the interests of being helpful to the Minister.

[Baroness Hollis of Heigham]

Which one of those would the noble Lord suggest we junk?

[Lord Newton of Braintree]

There are too many hurdles in the amendment. In legal terms, although I am not a lawyer, it would be impossible to have guaranteed and predictable access to,

“high quality flexible and affordable childcare”,

because the parents could say that it was not acceptable. Indeed, the child could say that it was not acceptable. It is not a sensible construct, as I am sure any legal mind would advise. The noble Baroness may not agree, but that is certainly the view I would take if I was advising the Minister.

However, coming back to the noble Earl, the childcare issue is an important one, as we have recognised throughout the proceedings on this Bill. It could be crucial to whether it is sensible or reasonable to expect some people, be they single parents or others, to take up work. So we need a clear policy on this, even if in my view this amendment does not give it to us. I hope that the Minister will be able to give us some encouragement on that front.

--- Later in debate ---

[Lord Newton of Braintree]

What if they disagree?

[Baroness Hollis of Heigham]

If they have good reason, we should listen to them.

Welfare Reform Bill

Debate between Lord Newton of Braintree and Baroness Hollis of Heigham

Monday 10th October 2011 Grand Committee

[Lord Newton of Braintree]

It is all right; I am not going to say any more.

[Baroness Hollis of Heigham]

I think that “um” would be a very good response from the Minister.

Welfare Reform Bill

Debate between Lord Newton of Braintree and Baroness Hollis of Heigham

Thursday 6th October 2011 Grand Committee

[Baroness Hollis of Heigham]

Just as a correction, there is no division on the opposition Front Bench. That is absurd. This is an addendum to a very well thought out amendment.

[Lord Newton of Braintree]

I rest my case.

[Baroness Hollis of Heigham]

So do I.