Welfare Reform Bill
Lord Skelmersdale Excerpts(12 years, 6 months ago)
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Lord McKenzie of Luton
My Lords, this is a probing amendment designed to focus on issues of in-work conditionality. We attach it to Clause 15, which is just on the “Work-focused interview requirement”, but it is intended to cover work preparation requirements as well as work search and work availability requirements.
The Minister will be aware that some of us were able to attend a briefing session with officials yesterday—I thank them for that. It is clear from that session that much of the thinking about in-work conditionality is at best embryonic, notwithstanding that we are being asked to give considerable powers to the Secretary of State in this primary legislation.
The proposition that conditionality should not stop when someone accesses work is not of itself unreasonable. The progression from a mini-job to a full-time job is to be encouraged for those whose health, family and caring commitments permit. How it will work in practice is what matters. We have only a few parameters at the moment. It is the express policy intent that conditionality will cease to apply for claimants without caring responsibilities or health conditions at a level of gross earnings equivalent to 35 hours per week at the national minimum wage, currently £212 per week, or £11,000 a year. Obviously, other things being equal, that would put someone within the tax and national insurance net and therefore into the higher tapers. Someone being paid twice the national minimum wage would have to work only 17 and a half hours per week; someone on lower pay twice that long. The threshold for an equivalent couple is double that for an individual, so the family income would need to be £22,000 before they escape conditionality.
It is not clear how well those parameters have yet filtered into the public consciousness. Perhaps the Minister can point us in the direction of the equality impact assessment which covered that issue. We welcome the fact that the Government have given some assurances about easements—for example, for lone parents with young children and for those with health challenges and caring responsibilities. There is also the flexibility promulgated for ways in which claimants can increase their earnings by supposedly increasing hours or pay, changing jobs or taking on a second job. That is nice in theory but likely to give rise to all sorts of practical problems.
The vagueness around the provisions, the extent to which providers or Jobcentre Plus staff will be making the determination, and the sources of capacity and training are a real worry. Affirmative regulations are all very well, but we know that they provide limited parliamentary oversight of what is a significant change.
A number of points arise: we know from the briefing that the ultimate requirement in terms of hours or overall remuneration will be included in the claimant commitment ab initio. How will this help those who wish to have a staged return to the job market? How will employers who are able to offer part-time work react to someone whose claimant commitment accepts that they are to achieve full-time work? It seems to me that this could damage their job prospects.
The test is apparently to be on gross earnings, so where does this leave, for example, employer pension contributions? These will be a significant feature, given auto-enrolment, which we know the Government are committed to introducing next year. What capacity will there be in the system to do the appropriate kinds of comparison? These will be complicated matters.
How will this work for the self-employed? What happens if the profits of the business are slower to materialise than hoped for, margins are squeezed beyond expectations, or the business operates in a fluctuating market? If it is a seasonal business, one can see the prospect of fill-in work, but on what analysis will Jobcentre Plus or providers seek to divert individuals from the sometimes painful process—particularly in the current economic climate—of building a profitable and sustainable business? What expertise will they be able to bring to bear?
Our discussions yesterday raised a number of issues about how the work programme fits with this, as well. There seems to be a potential conflict between work programme providers, which are remunerated by sustaining individuals in work for at least 16 hours per week, and in-work conditionality, which seeks to move people to 35 hours a week, if remunerated at the national minimum wage.
It is understood that there is scope to renegotiate outcomes with existing providers, but this could be a significant change of focus. What evaluation has been undertaken of the potential to renegotiate? Can the Minister tell us what discussions have taken place with the business community and, indeed, the TUC, on how this novel interaction with the labour market should proceed?
We acknowledge what the Government are seeking to achieve, but there appear to be so many unknowns—unless the Minister can give us comfort this afternoon—that it is difficult to accept that we should give the powers that the Government are seeking in this Bill. At the least, this looks to be a case for a sunset clause. I beg to move.
Lord Skelmersdale
My Lords, first of all, I should apologise to the Committee for not being here when it last discussed this Bill on Monday, and accord my grateful thanks to the noble Baroness, Lady Meacher, for speaking to some of my amendments in a large group which was somewhat precursored—I think that is the word—by the noble Lord, Lord McKenzie.
The noble Lord, in his speech to this probing amendment, asked a whole string of questions which I am not in any sense qualified to respond to. I am able to respond to the amendment, which leaves out,
“or more paid work or better-paid work”.
The object of the exercise, we all agree, is to get as many people as possible into work, through this system. The trouble is, if the words I have just quoted from lines 10 and 11 on page 7 of the Bill are left out, then once the claimant has got paid work that is the end of the Secretary of State’s responsibility.
What happens if the claimant decides that the hours he is doing are not sufficient for his needs, even with the universal credit? I accept there are the pension commitments and various other commitments that the noble Lord, Lord McKenzie, spoke about. Is the claimant going to go back to the provider or to Jobcentre Plus and ask how he is to increase his earnings? If so, there is very good reason to have these words remain in the Bill. The question—
Lord Skelmersdale
Can I just finish? The key question asked by the noble Lord, Lord McKenzie, is to what extent there will be bullying, by either the provider or the Jobcentre Plus officials. I hope to goodness that there will be none.
Lord McKenzie of Luton
The amendment, as I explained, was a probing amendment and was not of itself meant to be taken literally. It was the peg on which to hang the argument and this very important debate, which we should have. The noble Lord was musing about what would happen with claimants who wish voluntarily to increase their hours. There is nothing to stop them doing it, and we would all applaud that if they were able to, and to do so without further pressures on Jobcentre Plus or the providers. There is nothing wrong with that.
Lord Skelmersdale
No, my Lords. The reason I added my last sentence and prevented the noble Lord, Lord McKenzie, from rising to interrupt me was for the simple reason that the claimant may well need guidance and help in order to get the extra hours or money that he requires. Therefore, I am asking the Minister to what extent this is going to be driven by the claimant, or by the job provider, education or Jobcentre Plus. I said that I hoped it would be claimant-driven, and nothing else.
Baroness Hollis of Heigham
My Lords, I wonder whether I could add to the burden of questions that the Minister will be facing. This will appear somewhat on the tangent but, in my view, it is not, as it feeds into a lot of our other discussions and is related to work conditionality. At the moment, as I understand it, a lone parent is regarded as being in full-time work for the purposes of conditionality or eligibility for tax credits if she is working 16 hours a week, and is then topped up. With a child under, I think, 12—although coming down to 10, seven et cetera—that 16 hours kicks in at an earlier stage. As far as I am aware—and I stand to be corrected on this—there is no point at which the lone parent is expected to increase her hours beyond that as the child gets older. With a couple, the main claimant, as we know, may claim on behalf of both. I have no objections at all in principle with expecting either claimant in a couple relationship to be available for work; and, in certain circumstances, both.
What concerns me, and what I would like to ask the Minister about, is the impression that the support papers that I have read so far seem to give: that when a child is 12, whether you are a lone parent or in a relationship as a couple, all such people must work a full-time job, which is now defined as 35 hours a week. If I understand it correctly, it could mean that a lone parent with a 13 year-old could be expected to move from working for 16 hours to 35 instead, as part of work conditionality; and a couple—a husband and wife, or two partners—with children of 13 and 15 might each be expected to work 35 hours a week. If I have understood the proposals correctly, then I would like to come back on that because I find it antithetical to everything we know about the need for children to have support. I have no problem at all with couples and the second partner, or a lone parent, being asked to find work within school hours. However, if the Minister is saying that at the age of 12, both partners in a couple, as well as a lone parent, are expected to be in what we would traditionally regard as full-time work of 35 hours-plus, then this is certainly something that we would like to revisit. I would be grateful if the Minister could help us to be sure that we have the facts right, as this is part of a wider debate on conditionality.
Lord McKenzie of Luton
I thank the Minister for his reply and will certainly withdraw the amendment. One point pressed on us was that if there is a recognition that volunteering programmes can be beneficial, perhaps that could be recognised by Jobcentre Plus in the other programmes that it is structuring for individuals. There have been suggestions that sometimes people slip out of volunteering programmes because they cannot keep the commitments, because they have work-focused interviews or other mandatory activity.
Lord Skelmersdale
My Lords, perhaps I might interrupt here as I am interested in volunteering, having been a volunteer in various fields myself, as I suspect most of us in this room have at one time or another. Volunteering strikes me as a way of getting work experience—not necessarily but it could be—and therefore is to be most definitely applauded.
Lord McKenzie of Luton
My Lords, I agree with that and I am sure that we all would. I suppose it depends a little bit on the precise programme and activity, but the point is not to lose that opportunity for individuals who are already undertaking it because Jobcentre Plus is imposing other requirements with clashing commitments, meaning that people have to drop out of the programmes. That was a particular point that was pressed on us. I beg leave to withdraw the amendment.
Lord Skelmersdale
My Lords, having been wonderfully rude about the first probing amendment of the noble Lord, Lord McKenzie, I am going to do exactly the opposite now because I regret that he announced that this was a probing amendment. This is the widest power that I have seen for many years in any potential Act of Parliament. Paragraph (d) of Clause 19(2) states that,
“the claimant is of a prescribed description”.
Subsections (3) and (4), which relate to the subsequent amendments as the noble Lord has explained, include the word “may”. However, if “may” is included, “may not” would also be included. The phrase that sprang to mind was, “How wide is the ocean; how deep is the sea?”. I actually think that for once the Merits Committee has not gone far enough; nor, as I said, has the noble Lord.
Baroness Thomas of Winchester
My Lords, just to correct my noble friend Lord Skelmersdale, it was the Delegated Powers and Regulatory Reform Committee, not the Merits Committee.
Lord Freud
My Lords, noble Lords will be aware that we intend to use the power in subsection (2)(d) to establish the conditionality threshold. In summary, the threshold will be defined by establishing the hours we expect each individual in a benefit unit to work, taking account of their particular capability and circumstances, and multiplying this by the relevant national minimum wage. We believe that setting their threshold in this way is the right thing to do. It will mean that we can impose work-related requirements only on those claimants working less than we could reasonably expect in benefit units falling under the threshold and it ensures that we take full account of a claimant’s circumstances and capability. As we have discussed, we believe that we must have the power to encourage and support such claimants to do more to support themselves. Without a threshold many more working claimants would fall into the all work-related requirements group. We do not want to bring into conditionality those claimants who are working as much as we can reasonably expect. Having a threshold is essential for this.
Finally, we intend to use this power to do more than set the conditionality threshold. We will also use this to add other categories of claimant to the no work-related requirements group, ensuring that particular groups of claimant are treated appropriately. This includes working claimants on jury service, claimants on adoption leave and claimants who are over state pension age. It is clearly important that such claimants remain out of conditionality. I should make clear to my noble friend Lord Skelmersdale that paragraph (d) is a protective measure. If we did not have it, we would not be able to protect those people from conditionality.
Lord Skelmersdale
My Lords, may I come back to my noble friend the Minister? I totally—surprise, surprise—trust this Government but one day there will be another Government, perhaps not even comprised of the party of the noble Lord, Lord McKenzie. That Government may use this power in ways that we cannot now foresee, which is why I do not like it.
Lord Freud
I thank my noble friend for that, although I think in practice paragraph (d) allows a Government not to impose conditionality. This measure protects the individual. Of course, I absolutely understand my noble friend’s suspicion that the measure might overrestrict what another Government might do, which would not favour getting people into work. I am sorry; that was meant to be a joke.
Let me come back to the matter in hand. Given that we expect the first use to set the principles and to remain broadly unchanged, I hope I can assure noble Lords that affirmative for the first use is appropriate. We have set out how we intend to use this power. We define a threshold, as we have set out in our note, and add in the additional groups, as in the draft regulations. I can assure the noble Lord, Lord McKenzie, that we do not expect significant changes to this. For this reason, I ask him to withdraw this particular amendment.
Welfare Reform Bill
Lord Skelmersdale Excerpts(12 years, 7 months ago)
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Baroness Campbell of Surbiton
My Lords, I would also like to support the amendment of the noble Baroness, Lady Lister, and congratulate her on her first amendment. What a good first amendment. Disability charities, including the full membership of the Disability Benefits Consortium, have expressed grave concerns to me that many disabled claimants, particularly those with mental health problems or learning disabilities, will struggle to manage their budgeting over monthly intervals. With the proposed replacement of the discretionary Social Fund and by confusing an unpredictable plethora of local schemes, accessing crisis payment when budgeting problems arise will be very hard for this group of people also.
I support a man with mild learning and behavioural difficulties. He can just about manage his two-weekly payments and often, at the end of the two weeks, it is up to his friends—normally me—to sub him until the end of that two-week period. I have no idea how he will manage on a monthly basis. He falls under the radar of most help and I know that he would not seek it anywhere but me. So it also puts a burden on families, friends and other poor relatives who are often in the same situation to make up the shortfall. I support the noble Baroness and would like to know what the Minister has in mind for this particular group of people to cope with a monthly payment.
Lord Skelmersdale
My Lords, at Second Reading I think all of us supported the idea of simplicity for universal credit. Of course, simplicity works both ways: it works in favour of the beneficiary and in favour of the department. If you offer people a choice, you are mucking up that simplicity as far as the department is concerned and, inevitably—and I am sure my noble friend will tell me—there will be a cost in so doing. He may even be able to quantify that cost.
As most of the Committee will know, my wife runs a small business which for part of the year depends entirely on attracting extra casual staff. Two years ago, she went to them and said, “It would make life a lot easier for me if we could pay your wages monthly rather than weekly”. Some of them immediately were very happy to say yes; others to say no. Eventually, without undue coercion or persuasion—except from their colleagues—they decided they would all go on a monthly wages basis. That is fine, but what I find difficulty with in the amendments is the proposal to offer people a choice and for the department to have to stick to that choice. For me, payments should be either fortnightly or monthly. We have heard very good arguments against monthly payments, which I accept. However, the second amendment in this group—the either/or amendment—is just plain loopy.
The Earl of Listowel
My Lords, I, too, thank the noble Baroness, Lady Lister of Burtersett, for tabling these amendments and speaking to them so persuasively. I was very concerned to hear what she had to say. Three issues came to my mind. First, I thought of the children of alcoholic parents and of parents who misuse substances. If these individuals have a large sum of money in their hand, they can go on a bender and spend huge sums on alcohol, crack and other substances. If there is no hope of getting money fairly shortly for their children, the children will be in a very difficult position.
My second concern is more general. I was reminded of it at lunchtime today, at a meeting of the Associate Parliamentary Group for Parents and Families, which my noble friend Lord Northbourne chairs. There was an intervention from the noble Baroness, Lady Tyler, the chief executive of Relate. She referred to the 120,000 most chaotic families about whom the Prime Minister is particularly concerned, and for whom he has given specific responsibility to the Department for Communities and Local Government. I would be very interested to learn what assessment has been made of the impact of these changes on those chaotic families. Perhaps the Minister will consult the Department for Communities and Local Government about what the change might mean for them.
Thirdly, in my capacity as vice-chair of the All-Party Parliamentary Group for Looked after Children and Care Leavers, it seems to me that this change might contribute to more children coming into care because their parents, who are somewhat chaotic, will be put under additional stress as they try to make ends meet. This might be an additional burden on them that will lead to family breakdown. I hope that that is not overstating the case, but what I heard troubled me, and I would like to know more about the impact from moving from weekly to fortnightly payments. There seems to be some questioning of the evidence that that was been done without much harm. I look forward to the Minister's reassurance on these issues.
Lord McAvoy
My Lords, although I did not intend to speak after the amendment was moved so excellently by my noble friend Lady Lister of Burtersett, she holds to the hope that the Minister’s attitude is not set in stone, so I have decided to contribute a point of view. One thing about the other place along the Corridor is that its Members come from various backgrounds, especially from working people. That House achieves a balance and gets a view that perhaps individuals over here do not have. When people over there hear a view, it may influence how they vote on legislation.
My noble friend Lord Kirkwood of Kirkhope said that he does not have much experience of this, but I sure that if he thinks back to where he comes from—Cranhill, a housing estate in Glasgow—he will remember that when the family allowance of eight shillings was paid on every week on Tuesday, it was a lifesaver. He was also correct to point out that it is being sexist against women to say that they carried the burden of budgeting. They were responsible for making sure that the family budget and the household were run properly. Certainly that was the case in my family, one with a very matriarchal mother. Without her, I think our family would have been lost. I can assure colleagues that the certainty of a weekly payment, not a monthly payment, is still very important to a certain sector of society.
The amendments offer choice. I know that the noble Lord, Lord Skelmersdale, criticised that as perhaps being confusing, but the noble Lord, Lord Boswell of Aynho, in very reasonable tones defended and advocated it. I certainly believe in the choice outlined in these amendments. In addition, other amendments would provide the certainty of knowing that these decisions, which will impact on so many people’s lives, will be covered by a review. We can look at the evidence to see the effect of different types of payment periods.
I am encouraged by the Minister’s attitude and I hope that my noble friend Lady Lister has read it right. I want to bring to the debate the point of view of someone from a family for whom, when we were growing up, that payment of eight shillings of family allowance was worth a lot. I am sure that quite a lot of people remember the family allowance, although I had better be quiet about age. I can assure the Minister and my colleagues that that eight shillings a week in family allowance, paid every Tuesday to the mother, the person who actually ran the household and looked after the children, was absolutely essential. I hope therefore that the Minister can see his way at least to considering some movement on that.
Lord Skelmersdale
My Lords, before the debate continues, I have to say that I am afraid that the noble Lord, Lord McAvoy, has somewhat misunderstood what I said. I came down firmly in favour of fortnightly payments. What I did not say, if for no other reason, was that the move from weekly to fortnightly payments is so recent. I do not believe that it has yet bedded down.
Baroness Howe of Idlicote
My Lords, I congratulate the noble Baroness, Lady Lister, on her excellent exposition of the case and the passion with which she presented it to us. Like my noble friend Lord Northbourne, for many years I have been and still am involved with the Peckham Settlement charity. I know that there was considerable concern when the money that the women had charge of ran out for one reason or another.
I am very impressed by the range of options here, but I would really like to support the one identified by the noble Lord, Lord Kirkwood of Kirkhope, because I think that really said it all. It is a question of choice, and that should be what we give individuals in this situation. We know the number of times families have gone hungry when women have not had control of the money, for all the reasons that have been explained previously. This particular option is the one that we should all consolidate behind. More than anything else, I say this because the more people who speak in favour not just of this amendment but of what is being said in all these amendments, the more likely we are to persuade the Minister to have another look at this, and above all to take it back to his colleagues, who may have rather different views, and to try and persuade them.
Lord Freud
They are exactly the same—200,000 and 400,000 adults. Those figures have not changed. Let me come back to the issue raised by the noble Baroness, Lady Hayter, on the target rate of the taper. I do not think it is right to have a target rate of what the optimum figure is, and I will not talk about the iron triangle today. I will spare the Committee. A lot of factors are involved in what the optimum rate will be. We do not know, so it would be foolish to set a target, whether it is 55 or 65 per cent. If noble Lords want my opinion, I think 65 per cent is too high and a future Government—when they have some money—would be smart to lower it. But by then I would hope that we would know exactly what the optimum figures were. When we know that, a smart Government would move to it. It would be wrong to set a target when we do not know what the optimum figure is. I agree that we need to be very sophisticated in our understanding of how people behave and the impacts of universal credit. I take on board the spirit of this amendment in the sense that we do need to assess it. I do not think this is the right way and I hope to be able to discuss with this Committee better ways of assessing it. I am hoping for some real enthusiasm behind those ways as well.
I hope that these answers have helped to clarify our intentions in these areas. They are really important areas, and I urge noble Lords not to press their amendments.
Lord Skelmersdale
My Lords, my noble friend will no doubt remember that many years ago I was the Minister for War Pensions in the days when war pensions were looked after by the then Department of Personal Health and Social Security, and then Social Security, since when they have been transferred to the MoD. Many local authorities provide a war pensioner’s discount on housing benefit. I wonder whether this will be added to his list of discounts, because he did not mention it.
Lord Freud
I did not mention it for a very good reason. I am currently consulting across government on how best to recognise war pensions and other payments to veterans, war widows and dependants. The reason this is not straightforward is because the practice across all the different benefits varies wildly. When you create one single clean system, you have to go nap on one approach. What I am looking at doing is getting the right approach which recognises that someone in receipt of a war pension is owed an extra reward for that experience. We have to work out the optimum way of doing that. As I say, I am consulting on that.
Welfare Reform Bill
Lord Skelmersdale Excerpts(12 years, 7 months ago)
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Lord Skelmersdale
My Lords, we have heard an enormous amount of words, some of them very persuasive, for this amendment. But I find myself remarkably schizophrenic about the whole thing. The noble Baroness, Lady Turner, put her finger on at least half my schizophrenia.
Universal credit is a cash sum. You get it in your bank account, through your giro, from the post office or wherever. Council tax benefit is exactly the opposite. It is a discount; you do not see the money. Therefore, I can see that it ought to be treated in a totally different way from universal credit. On the other hand, you cannot live in a house without paying council tax. This is where my schizophrenia comes in. From your lump sum of universal credit, you are going to pay your rent, and so on, but you have the likelihood of outgoings and you cannot from those outgoings separate out the council tax that you are also going to pay. I wonder whether my noble friend Lord Freud can solve this great dilemma that I have.
Lord McKenzie of Luton
My Lords, I will speak briefly on this issue in support of the amendment proposed by my noble friend Lady Hollis and the exceptionally powerful case made by her and by pretty much every other the noble Lord who has spoken on the issue. The noble Lord, Lord Skelmersdale, raised an interesting point about how you would extract the payment. My noble friend Lady Turner asked whether it was a rebate, a discount or quite what it was.
I recollect that she pressed us in Government on behalf of the Royal British Legion, who were campaigning to have the term rebate replacing the benefit. We all signed up to that at the time. I am not quite sure what progress was made. I think that it went to local authorities. However, I remember that there was a potential price tag of tens of millions of pounds to local authorities just for that one system change. These are not inexpensive projects that we are dealing with. I cannot believe that this is what the noble Lord or the DWP want. The noble Lord is an exceptionally logical person. He analyses things. The scale of the problems that the localisation of council tax would bring seems to me to be totally out of kilter with all of the work and analysis that has gone on in producing plans for the universal credit. As everyone has said, it undermines the universal credit—the benefits of the single taper in particular. With all the raft of issues about how people would understand what their position was, the simplicity of the system would fall away.
We had a meeting with officials. As ever they were very helpful. We explored this issue a little bit. My understanding is that it was not until March of this year that the department started to contact local authorities to get their minds around how it would work. To produce something in a Bill and develop a policy on an assumption that this component can be dealt with separately without any clear knowledge as to how that will work in practice seems unusually foolhardy. Again, I cannot believe that the Minister believes that this is the best way forward. There are lots of practical issues. We know lots of local authorities will have outsourced their arrangements in respect of housing and council tax benefits. You would have to break the costs involved in the multiplicity of contracts. I do not know if the Minister has any idea of what would be involved in that exercise.
What we are seeing here is what we have seen in the Localism Bill writ large. There have been a lot of instances where the Government and the Secretary of State have said that they want to devolve power and give more freedoms to local authorities, but have then realised the consequences and drawn those back with all sorts of regulation powers, which, as my noble friend Lady Hollis said, would have to be there if you were going to make any sort of sense of this proposal to have any sort of understanding of whether it is regional systems, which are common.
There is another component as well. It relates to the cut in the total amount available. I agree with the noble Lord, Lord German, that in a sense there are two issues: the financing and what cash sum is available, and how it should be dealt with. This Government have a record of imposing on local authorities and getting them to take the pain, the heat and the difficult decisions, and seeking to walk away scot free. We will see and debate what is going to happen with the social fund. That is another example—no duties on local authorities and no ring-fenced funding from it.
My noble friend Lady Hollis made a telling point. If our understanding is correct—and the Minister will doubtless confirm this—this is switching AME to DEL, the reverse of what I think the Minister himself negotiated so effectively when he was dealing with work programmes. It does not make any sense. I know that the Minister has to do his job. We have all been in the position of defending the indefensible before. However, I cannot believe that it is going to end up as currently proposed because it would seriously undermine the universal credit and all the good work that the Government are trying to do on that.
Lord Freud
As I was about to say, we will soon publish an impact assessment on the universal credit that incorporates this approach. As noble Lords will be aware, the existing impact assessment assumes council tax in the system. This one will assume council tax out of the system.
Lord Skelmersdale
My Lords, does that mean that in this impact assessment, there will be an assumption that the taper will be the same? That seems to me to be all-important.
Lord Freud
I ask my noble friend to resist pressing me, which I know he enjoys doing, at this moment. Let us wait for the new impact assessment.
Welfare Reform Bill
Lord Skelmersdale Excerpts(12 years, 8 months ago)
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Lord Skelmersdale
My Lords, I am rather tempted to start my speech with that part of his speech that the noble Lord, Lord Kirkwood, left out. Be that as it may, many noble Lords have made the point that this Bill starts the greatest single reform to the social security system since 1942. I note that the Minister and indeed Barnardo’s, in its excellent brief, called it “radical”. I would call it revolutionary. It is not, of course, that there have been no reforms since 1942. We have, though, arrived at a system that is costly, confusing and error prone both to the potential recipients and DWP staff. I agree completely with the noble Baroness, Lady Meacher, in her plea for good training of DWP staff. My noble friend Lord German and my former temporary boss, my noble friend Lord Brooke of Sutton Mandeville, also made the point about the difficulty of operating social security for recipients and DWP staff alike.
Looking at the Beveridge report, from whence modern social security arose, two things struck me. Paragraph 9 of the introduction states that:
“The state, in organising security, should not stifle incentive, opportunity [and] responsibility”.
I am grateful to my noble friend Lord Feldman, in his excellent and philosophic speech, and to the noble Lord, Lord Bilimoria, for speaking on this point. A little later, in paragraph 22, the report makes the point that:
“The insured persons should not feel that income for idleness, however caused, can come from a bottomless purse”.
Of course we would not use these exact words now, political correctness being what it is, but the points are nevertheless well made and form the basis of this Bill. The Government, very naturally, want to steer as many benefit recipients as possible into work, a policy which was adopted by the last Labour Government. That will not be easy as people are wedded to their current entitlements and the various add-ons and passported benefits that have crept into the system over the years. We have heard about many of them in this debate, not least from the noble Baroness, Lady Hayter.
What we have in this Bill is a system that is simple and easy to operate, which is something that no one can say of the current situation. The important thing about these new arrangements is that financially, even at the minimum wage, the withdrawal taper is reduced so that a single person is always better off in work, and a couple with two children only loses out, on my calculations, by working between 17 and 18 hours a week. Working for 16 or 19 hours is okay, but 17 or 18 hours is not—or at least that is what the White Paper says. So to all intents and purposes, as my noble friend Lord Freud almost said, the benefit trap disappears. Not only that, but it is intended that the introduction of universal credit will not mean a reduction in a recipient’s current benefit. To me, as my noble friend Lord Freud knows, the trick has always been to achieve a single out-of-work benefit coupled with the adoption of a permanent disability benefit. That is why I am not troubled by the proposal to limit contributory employment and support allowance to one year as opposed to the current two years. After one year, it should be possible to assess whether the incapacity is permanent for, say, the next three or five years before a new assessment is made. I was struck by something said by the noble Baroness, Lady Hollis. She spoke, as I understood her, as if the withdrawal of contributory ESA would mean that there would no longer be any state financial support. That, of course, is quite wrong.
I accept though, that there are debates to be had and questions to be answered on when the reassessment should start. Should it, for example, be after nine months with no change of benefits until the 12 months is up; or should it be after the full 12 months, in which case what happens to the benefits until the assessment is made? For myself, I prefer the former, but like so much in this Bill, I await developments once we see the statutory instruments that flow from it. In this connection, I am grateful to my noble friend for saying that we will be able to see as much information as is available, well before our consideration is completed.
A certain amount has been said about working mothers. Of course, this is a subject that we are returning to after dealing with it previously in the Bill and statutory instrument, which I am sure the noble Lord, Lord McKenzie of Luton, will remember well. The key for working mothers, of course, is affordable childcare. The noble Baronesses, Lady Meacher and Lady Hollis, I and others asked—or quizzed, I should say—the then Minister as to whether this would be available. He said words to the effect of, “Don’t bother your little heads about it, all will be well”. I ask my noble friend Lord Freud whether that statement has borne fruit, and the situation is such as the noble Lord, Lord McKenzie of Luton, predicated.
This debate has shown that the House is in favour of a universal benefit. The noble Baroness, Lady Hollis, put it well and most of us have followed her. That is fine, but the noble Baroness uttered a very loud “but”. This reminded me of a phrase I uttered in a pantomime in my amateur dramatics days: “But me no buts”. I know enough of my noble friend Lord Freud to know that he will examine all our buts, to which he knows we will all require answers if he is to secure his Bill. I look forward to receiving them in the remaining stages.
I make one plea to the Minister, for him to abide by an acronym that I invented last night. The beauty of universal credit is in its simplicity. I urge him therefore to abide by KISISS, which stands for Keep it Simple in Social Security.
Pensions: Britons Living Abroad
Lord Skelmersdale Excerpts(13 years, 2 months ago)
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Lord Skelmersdale
My Lords, would my noble friend accept that what matters when paying British pensions to pensioners in places such as Canada is reciprocity? In other words, if the Britons in Canada are paid the Canadian pension and the Canadian pensioners in this country are paid British pensions, that would be regarded as a fair deal. What discussions on reciprocity are going on at the moment between his department and overseas Governments?
Lord Freud
My Lords, there are currently no discussions on reciprocity. That is not a strategy that we have. The reciprocity agreements are, if you like, a little like a double tax treaty network of agreements. We are not going into that at the moment. There are 30 countries with which we have reciprocal agreements, and currently we are not planning to expand that. However, this is a policy that we keep under review.
Pensions Bill [HL]
Lord Skelmersdale Excerpts(13 years, 2 months ago)
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The Deputy Chairman of Committees (Lord Skelmersdale)
My Lords, I have received a request for a rapid break for nefarious purposes. Therefore the Committee stands adjourned for five minutes.
Health and Safety: Common Sense Common Safety
Lord Skelmersdale Excerpts(13 years, 5 months ago)
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Lord Skelmersdale
My Lords, as a result of my noble friend Lord Young’s introduction to this debate, it seems to me we ought to amend our Standing Orders to include the phrase “re-maiden speech”. I thank him for his reappearance and for agreeing to meet me towards the end of his inquiry.
Health and safety is a subject that concerns every one of us; it gets the blame for a whole range of activities being stopped, and all noble Lords have their own pet stories. These activities bear little or no relevance to the current law on which the Health and Safety Executive depends. The one good thing that the previous Government did in this area was to combine the commission and the executive. Their failure, however, was not to put a stop to the culture of blame which has pervaded this country for many years and stopped the incorrect attribution of no-risk policies to the HSE as the noble Baroness, Lady Donaghy, will know only too well.
Almost exactly a year ago, I received a letter in which my correspondent asked, “Why can’t we enjoy warming ourselves around the school bonfire on 5th November any more?”. She also asked, “Why can’t our children have a few sparklers?”. The answer in both cases was that someone might burn their fingers and sue. She was quite right, as is my noble friend’s report. He cites the reasons for this on page 19—the introduction of conditional fee agreements, the growth of after-the-event insurance and the proliferation of claims management companies, which my noble friend Lord Hunt described as claims farmers. I am not sure whether that is an accurate description; to me, farmers proliferate themselves and their crops, whereas I am not sure whether claims management companies do.
This report makes the point that the enormous number of claims management companies are a direct, if unintended, consequence of no-win no-fee legislation. Like any business, these companies are in it to make a profit; they clearly do, or they would disappear. Although they are regulated, my noble friend believes that more regulation is necessary, especially in the field of advertising, which is done in such a way as to make individuals believe that they can claim compensation for the most minor of incidents. In this connection, I was alarmed to find a text message on my mobile on Tuesday this week saying, “Our records show that you may be entitled to £3,750 for the accident you had. To claim for free, reply YES to this message”. Needless to say, I have not had an accident.
I believe that there are two reasons for successful claims—first, the leniency of the courts towards the claimant, and, secondly, the cost of court proceedings, which includes staff time and costs over and above those of instructing a solicitor and leads, in many cases, to out-of-court settlements. If the report of Lord Justice Jackson was acted upon, conditional fee and insurance claims would cease to be recoverable from the losing party in litigation. This would immediately put a damper on the number of court cases. My noble friend Lord Young told us that the Ministry of Justice is consulting on this report as a whole. That is important, because among Lord Justice Jackson’s proposals is the suggestion that lawyers’ fees should be capped at 25 per cent of the reward and that general damages should be increased by 10 per cent. We have been told of screams of anguish from some claims management companies and the solicitors in question, but it seems to me that here we have a carrot and stick proposal. As in the case of breaking the opticians’ monopoly on the supply of reading glasses almost 25 years ago, if the Government conclude that the proposals of Lord Justice Jackson are correct, they should get on with it. I am also told that although contributory negligence is well established in law, very often the courts do not give it enough weight in coming to their judgments. I would be grateful if the Minister could comment on this when he winds up.
It may be a little provocative but we should consider two organisations—or rather aspects of organisations—that it should be impossible to sue directly. The NHS runs an insurance scheme that seems to work to a greater or lesser extent, but neither schools nor the police seem to be properly insured—and, if my somewhat off-the-wall suggestions are accepted, nor would they need to be. I do not see why teachers on school property or the policeman on the beat should be sued at all. I would continue to make teachers responsible for their charges on, say, a visit from Tunbridge Wells to your Lordships’ House, as occurred the other day; and the police responsible for the mistreating of arrestees in police stations. I am, however, convinced that the absence of a clip around the ear of a misbehaving youth is one of the reasons for youth crime. If parents will not or cannot control their children, or give them the sort of guidance that we were all blessed with from our parents, let us leave it to the people whom we, as a society, charge with keeping law and order.
Over the years I have identified two employees that exist in every local authority. The first is a planning officer, who has nothing to do with this debate. The second is the environmental health officer, who most certainly does. I believe he sees his job as preventing the local authority being sued. This is the wrong attitude and it is not what he is there for. I agree with the report that, if the environmental health officer bans such events as bonfires or playing conkers on school grounds, he should give his report in writing and, in extreme cases, have his actions referred to the local authority ombudsman. I also agree that it is ridiculous that parents should have to sign a consent form for every school outing. The ideal would be for the pupil to hand it in on the first day he attends a new school. The present situation is a complete and utter nonsense.
I have just time to refer to the adventure activities licensing scheme, which my noble friend in his report suggests should be abolished. I will not go into detail but I observe that the noble Lord, Lord Ramsbotham, agrees with me that it is not in the Public Bodies Bill. Since my noble friend says that his report is being considered favourably on the whole, could the Minister tell us what has happened to that proposal?
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I congratulate the noble Lord, Lord Young, on his work in investigating the concerns about the perception and application of health and safety legislation, together with the rise of the so-called compensation culture, resulting in the report that we have been debating this afternoon, Common Sense Common Safety. This report has been widely welcomed and is fully supported by the Government as a turning point for health and safety. I also congratulate my noble friend Lord Faulks on his admirable maiden speech. I can expect to see this Chamber adopt the position of an old folks’ home if he continues in that vein.
Today’s debate has given the House an opportunity to discuss the operation of health and safety laws, and we have had a debate of great quality from many noble Lords. Interestingly, there has been general support—not unanimous support—for the report of the noble Lord, Lord Young. I can assure noble Lords that the Government are fully supportive of the report and individual departments are making progress in implementing the proposals. The great majority of them are included in departments’ published structural reform plans. Picking up the point from the noble Lord, Lord Rooker, about the need for a champion, I think the fact that these recommendations are now embedded reduces that need significantly. A small number of the recommendations do not fit neatly into a single government department’s purview and the review implementation team is currently working with the relevant government departments to ensure that these recommendations also are taken forward.
I particularly want to focus on the work of the Ministry of Justice and the Health and Safety Executive. The Ministry of Justice has a central role in the implementation of the compensation recommendations, while my department is the sponsor department for the HSE. That said, the recommendations impact on many other departments in government and I commend them all for their swift and positive response to recommendations and for their recognition of the need for change.
We must emphasise that this is not change for change’s sake. We need to build on the achievements of the past and recognise that, when responsibly applied, health and safety and the compensation system have an important part to play in making all our lives better. That is not in dispute. It is right that people should be protected from risk at work, whether in potentially dangerous environments such as oil rigs, construction and farm yards, or in lower-risk areas such as shops and offices. It is also right that those who, due to the negligence of others, are injured or made ill from their work or the work of others should have the right of redress. That point was made by the noble Baroness, Lady Donaghy, and we fully endorse it. The issue, as the noble Lord, Lord Young, so rightly brings out, is that we need to regain a sense of proportion.
The Health and Safety at Work etc. Act 1974, which was pioneered by Lord Robens, was ground-breaking at the time of its introduction with the switch of emphasis from detailed prescriptive legislation to goal-setting regulations. However, his vision has now been distorted by overinterpretation, as my noble friend Lord German pointed out. Rules intended to protect workers in high-hazard industries have been overzealously applied to low-risk workplaces. Consultants encourage businesses to take unnecessary actions to avoid litigation. No-win no-fee adverts encourage people to seek compensation for genuine accidents, rather than to take responsibility for their own actions. These factors have led to pointless risk avoidance.
The Government have therefore welcomed the report of the noble Lord, Lord Young, as a milestone on the road to restoring proportionate health and safety. We need to push back against the use of health and safety and compensation, which become paralysing rather than protective. The emphasis should be on addressing real risks and preventing death, injury and ill health to those at work and those affected by work-related activities.
The Health and Safety Executive is already working to implement the recommendations of the noble Lord, Lord Young, especially those aimed at low-risk businesses. One example is an online risk assessment tool for those working in low-risk office-based environments which can be completed in 20 minutes. I hope that goes some way to satisfying the concerns expressed by the noble Lords, Lord Bhattacharyya and Lord Sugar. That particular tool will help employers to consider relevant hazards in their offices and think about how to control them. It will also help employers to avoid unnecessary paperwork and bureaucracy. A similar tool is out now for consultation to ease the paperwork burden that teachers face; tools for low-risk shops and for charity shops will be put out for consultation next month and the HSE will consult on similar guidance for small firms.
There is also the new occupational safety consultants register, which will be launched in January 2011. The register will provide businesses with details of safety consultants who have met the highest qualification standard of recognised professional bodies and who are bound by a code of conduct that requires them to give only advice which is sensible and proportionate. That may help to stop the gravy train referred to by the noble Lords, Lord Bhattacharyya and Lord Sugar, and by my noble friend Lord German.
The Ministry of Justice has been equally as prompt as the HSE in addressing my noble friend Lord Young’s recommendations. I shall touch on two areas in particular. The first is the concern about conditional fee arrangements and the culture surrounding them. The noble Lord, Lord Sugar, referred to the rogues in the industry. This point was touched upon by my noble friends Lord Hunt and Lord Black. As the House knows, last week we launched a consultation on Lord Justice Jackson’s recommendations on the reform of civil litigation, which will close on 14 February. It is in the structural reform plan of the Ministry of Justice, and the Government are very committed to this issue, which we will seek to implement rapidly, although it is up to the Secretary of State at the MoJ to confirm that.
Secondly, in March next year, the Ministry of Justice will launch a consultation on the reform of civil justice, covering the extension of the road traffic accident personal injury scheme. This consultation will address three aspects of the recommendations by my noble friend Lord Young. It will look at introducing a simplified claims procedure for personal injury claims similar to that for road accidents, explore the possibility of extending the framework of such a scheme to cover low-value clinical negligence claims, and explore the option of extending the upper limit for road traffic accident personal injury claims to £25,000.
These are specific examples of our response to the recommendations by my noble friend Lord Young, but noble Lords have raised a number of wider points that I will do my best to address in the time available. I shall start on a warmer note with the request from my noble friend Lady Thomas about hydrotherapy pools. I have to admit that I do not know off the top of my head what the situation is, but I do know that they are likely to be a lot warmer than the 6 degrees centigrade that Highgate men’s pond was this morning. I will put a letter in the Library when I have found out what the situation is.
The noble Lord, Lord McKenzie, asked me about progress on tracing an employer’s liability policies. I cannot give him very much hard information. All I can do is assure him that this is receiving my full attention to get a satisfactory outcome. I know this is an important matter, I am in discussion with various bodies and I hope to get some resolutions, although the matter has not been made easier by the current court case about the definition of when a loss occurs.
My noble friend Lord Skelmersdale asked about the Adventure Activities Licensing Authority. The HSE is taking forward my noble friend Lord Young’s recommendation to abolish that authority. Its work will be replaced effectively by a code of practice.
Lord Freud
My noble friend will forgive me for not being able to answer him off the top of my head. I am not absolutely sure about how that abolition will happen. I will write to him and place a copy of the letter in the Library.
My noble friend Lord German and the noble Lord, Lord McKenzie, asked about the SR settlement of the HSE and the reference to cuts among local authorities in this area. I hardly need to confirm that the HSE faces the kind of spending restraint that is seen in the rest of the public sector. Its current funding of £228.8 million will be reduced by 35 per cent over the SR period to around £150 million. The HSE is looking at how to maintain the position of health and safety in the country within that context and looking at its approach, and will report on how it will manage within that financial environment.
My noble friend Lord German and the noble Lord, Lord Smith, observed that there was a lack of evidence in my noble friend Lord Young’s report. I think I can speak for him in saying that there was wide consultation with stakeholders in the course of his review. The noble Lord, Lord McKenzie, raised whether we are talking about reality or perception. My noble friend Lord Young’s report said that perception becomes reality at a certain point. The fact that people read silly health and safety myths in the media on a regular basis affects behaviour, has an impact and does not encourage a sensible and proportionate approach to risk. This dialogue about what is perception and what is reality does not properly take that point on board.
Gold-plating was raised by my noble friends Lord German and Lord Vinson. It is at the heart of what the Government are doing in this area. We need to position health and safety as an enabler for business and citizens. The Government strongly support that approach. We know that it is central to the HSE’s new approach in the context of the financial rigours that we are facing.
The noble Lords, Lord Smith and Lord Sugar, raised advertising. The claims management regulator has already agreed to look at the code regarding offering inducements and plans to close this loophole by April 2011. I am sure that the noble Lord, Lord Sugar, in particular, will welcome that assurance.
My noble friend Lord Vinson and the noble Lord, Lord Rooker, talked about bureaucracy and the criminal records check system. The clearly excessive bureaucracy adds little to our real safety and has become part of the perception problem. Such checks fall outside the HSE’s remit, but I will bring the concerns on that to the attention of colleagues.
Welfare Reform
Lord Skelmersdale Excerpts(13 years, 6 months ago)
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Lord Freud
The mandatory work activity is designed to help a small number of customers to get back into the labour market, with labour market disciplines. If the noble Lord is referring to the attitude of the ILO on the matter, ILO experts produced a report on it in 2007 in which they accepted that this kind of work to help people back into the workplace was acceptable.
Lord Skelmersdale
My Lords, may I take my noble friend a little further? Does not Article 2(2)(b) of ILO Convention 29 specifically exclude,
“any work or service which forms part of the normal civic obligations of the citizens of a fully self-governing country”?
Will not these provisions, once enacted, cover that point?
Lord Freud
I thank my noble friend for that question. As noble Lords will be aware, Convention 29 was originally designed with colonialism in mind and was then applied more generally. We do not think that the programmes that we are looking at apply in any way to ILO Convention 29 or, indeed, ILO Convention 105. Likewise, the Joint Committee on Human Rights looked at the European Convention on Human Rights in this context and found that these programmes do not apply.
Welfare Reform
Lord Skelmersdale Excerpts(13 years, 7 months ago)
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Lord Freud
I thank the noble Baroness for those questions. We do not have a target for the transfer of IB claimants into JSA, but we estimate that 23 per cent will move straight over. However, it is an estimate and one point of the trials that have been launched today is to find out what the figure might be. The process by which we move people over from IB to ESA means that a substantial proportion will move on to unconditional support allowance so that they are fully supported. However, we would like to make sure that the work-related activity group within ESA moves through the process so that it does not become another place to park people. We are therefore looking at ways to ensure that those in the work-related activity group move through so that they go into JSA as fast as possible. The worst thing is for people to remain inactive for a week longer than necessary.
Lord Skelmersdale
My Lords, my noble friend will not be surprised to learn that I am broadly supportive of the plans he repeated today. However, I wish to ask a specific question about the Atos programme of work capability assessments for those on ESA—in other words, the programme to ascertain which people currently on ESA are suitable to move into work preparation and perhaps into work. My noble friend will have noticed that recently there have been big complaints in the press about the work capability assessment. There was a suggestion in at least one of the papers over the past few days that 40 per cent of people who have been assessed as capable of work or working towards work have successfully appealed. My right honourable friend the Secretary of State said in the Commons that actually around 5 per cent were successful in appeal. None the less, it seems that the assessment needs to be looked at critically. Can my noble friend give me an assurance that it will be?
Lord Freud
I thank my noble friend Lord Skelmersdale for his question on the work capability assessment. He will be aware that there has been an internal review of the work capability assessment and that four changes have been made to it. In practice, these changes will come into the work capability assessment next spring. On top of that, in June we employed Professor Malcolm Harrington to review how the work capability assessment worked on an annual basis. He is supported by a scrutiny group, which includes Paul Farmer, the chief executive of Mind, and three others. I mention Paul Farmer in particular because of the importance of mental health and the fluctuating conditions to do with mental health. We are determined to make sure that the work capability assessment does the job it needs to do.