Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations 2018

Baroness Lister of Burtersett Excerpts

Tuesday 20th March 2018 Lords Chamber

[Baroness Lister of Burtersett (Lab)]

My Lords, I am very pleased to follow the noble Lord, Lord Freud, because it fits well with what I want to say—but first I pay tribute to my noble friend Lord Bassam for his powerful introduction.

The Government have prayed in aid the report of the Social Security Advisory Committee to suggest that there is not a problem about work incentives. Last week in Oral Questions the noble Baroness, Lady Buscombe, said that when SSAC looked at the issue it found that there was no rigorous research evidence to show that the provision of passported benefits acted as a work disincentive. I am not sure whether the Ministers have read the report—I have it here; it is a right door- stopper—but it actually says that very little is known, which is slightly different.

However, the response to SSAC from the coalition Government was interesting. It said in its introduction to the report:

“The coalition Government endorses the SSAC’s view that the design of passported benefits under Universal Credit can have a key impact on incentives to work ... SSAC notes that there is mixed evidence about the impact of passported benefits on work incentives. However, it is important to highlight that the responses gathered in the review focus on the impact of passported benefits within the current benefits and tax credit system rather than the impact under Universal Credit. This is an important distinction as, currently, at the point some passported benefits are withdrawn, recipients often receive an increase in working tax credits that helps compensate for the loss of the value of the passported benefits”.


Quite—as my noble friend Lady Sherlock pointed out. But this was ignored by the Secretary of State when last week he told the House of Commons that there had always been a cliff edge. He seemed to interpret that as meaning “meal or no meal”.

SSAC’s fears have been borne out by the analysis by Professor Jonathan Bradshaw and Dr Antonia Keung, the Children’s Society and the Child Poverty Action Group—I declare an interest as its honorary president—which has already been referred to. I look to that report also to address a point made by the noble Lord, Lord Lexden. We have always known that what is happening currently is an interim arrangement, that is true, but the SSAC report was six years ago, in 2012. It is not surprising that some noble Lords have forgotten about that, because it was a long time ago.

However, the Government also said then that they would consult on new criteria that year to put in place the new system in October 2013. We have had to wait six years. What took them so long? I suspect that it was because they could not find a way round the cliff- edge problem, because SSAC repeatedly drew attention to the fact that if you go down the route of introducing an income threshold it creates a cliff-edge problem. It did not have an answer to it because there is no answer if you are not prepared to pay for free school meals for all those on universal credit. As has already been said, that undermines the foundational principle of universal credit. Perhaps that is why the noble Lord, Lord Freud—who did so much work on that benefit—is so concerned.

Yes, the Government made this clear in 2012—but the living standards landscape is very different from what it was then. For example, we did not know then that there was going to be a two-child limit on benefits for families. We did not know then that universal credit was going to be subjected to cut after cut. The CPAG has suggested that the average loss for working families on universal credit will be more than £400 a year. We did not know then that working age benefits were going to be frozen. Child benefit is particularly relevant here. Professor Jonathan Bradshaw kindly did some calculations for me—I am not very good at calculations—and calculated that for a two-child family child benefit is worth £2.66 a week less than it was in 2012 when the Government first suggested that they were not going to give it to everyone on universal credit. It is £5.44 less if we go back to 2010. That is in the context of the Resolution Foundation pointing out that for a two-child-plus family, child benefit is less generous than at any point since it was fully introduced in 1979. So, as they say, when the facts change, perhaps the policy should change as well.

Many of these matters come down to how things work in practice, so perhaps I may ask a few practical questions. We know that the earnings of people at the lower end of the labour market fluctuate repeatedly. The Government have addressed how they are going to estimate what those earnings are, but if they are going to be recalculated every month—as in the briefing referred to by the right reverend Prelate from the representatives of the Children’s Society—this will be an absolute nightmare. I cannot see any reference to what will happen to people on zero-hours contracts or self-employed people. Can the Minister explain how their earnings will be calculated?

On the point made by the noble Baroness, Lady Walmsley, have the Government given any consideration to decoupling free school meals eligibility from pupil premium eligibility? As I understand it, it is the latter that costs so much, not free school meals. So it would be possible to pay for free school meals for everyone on universal credit at not a huge extra cost and treat the pupil premium separately.

Finally—I hope this is not too cheeky—when the Minister responds, will he respond to what has actually been said here today? Last week in Oral Questions I got the sense that officials had expected us to say the same things that had been said in the House of Commons the day before. We did not, but that was what the response was to.

I say the same to the noble Lord, Lord Patten. My noble friend Lord Bassam made it very clear what he was talking about. He produced facts from the Children’s Commissioner which showed that the facts that the Government have been presenting over and over again—that 50,000 children will be better off—are fake facts, to quote a certain President. So let us get our facts right and address what people are saying in this House rather than what we expect them to say.

[Lord Polak (Con)]

My Lords, I also pay tribute to the noble Lord, Lord Bassam. His words about his experiences and circumstances as a child were very moving. However, change is often difficult to deliver. As George Bernard Shaw said, progress is impossible without change, and those who cannot change their minds cannot change anything.

The introduction of universal credit transforms the benefits system by making work pay. At the same time, public resources can be targeted at the families most in need, and that must include setting a threshold for free school meals.

I was particularly struck by the contribution to the debate in the Commons by my honourable friend the vice-chairman of the Conservative party Maria Caulfield. She too talked about her experiences of being brought up in a working-class background where there was no hope and no ambition for working-class kids other than a future life on benefits. Universal credit, I am sure noble Lords will agree, will help such families and such individuals. I will not repeat the arguments made and the reply to the Labour smears of last week; suffice it to say that as a result of the changes we are told—facts—that 50,000 extra children will get free school meals by 2022. I have called them facts; we cannot call them facts because only in 2022 will we know the real facts on any of the projections, but those will be as a result of changes brought about by the Government. As Maria went on to say last week, what some Labour Members did was to spread fear in a political, point-scoring way and use working-class families, shamefully, as a political football. That was clear. It was clear if you read what was in the press.

I was absolutely sure that it must be right that free school meals are intended for the most disadvantaged families on low incomes. Thus, targeting taxpayers’ money at those most in need is the right thing to do. I support the Government’s position, which is good for all, and I remind those who will not accept change of the words of the late Harold Wilson:

“He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery”.

--- Later in debate ---

[Lord Agnew of Oulton]

My Lords, it will depend on the circumstances of the family at that time.

I turn to the comments about the Office of the Children’s Commissioner, which published a briefing which assumed that the number of 50,000 more pupils who will benefit from free school meals does not take into account population growth. This is incorrect. Our analysis compares 2022 under a universal credit system to 2022 under the legacy benefits system, and population growth is by definition captured within this comparison. Furthermore, the Government have just published an updated equalities impact assessment, on 7 February. The majority of respondents to the consultation agreed with us that there would be no adverse impact on those with protected characteristics.

It is important to add that the £7,400 threshold relates to earned income. It does not include additional income through universal credit. A typical family earning around this threshold, depending on their exact circumstances, would have a total annual household income of between £18,000 and £24,000 once benefits are taken into account.

I take this opportunity to bust a myth. Some have claimed that these reforms will take away free school meals from 1 million children. This is simply not true. As my noble friend Lord Patten said, Channel 4 made this clear in its FactCheck article. It highlighted that this claim is based on an entirely hypothetical scenario in which universal credit was to continue being an automatic eligibility criteria. This was never going to be the case. Contrary to some people’s claims, this Government’s plan will result in more children benefiting, not fewer, and is more generous than the old system.

I also acknowledge the report published by the Secondary Legislation Scrutiny Committee on 1 March this year. We have listened to the committee’s comments and have responded to its report requesting that we publish the methodology supporting the modelling of the 50,000 children who will benefit by 2022. This has been published as part of the report.

The noble Baroness, Lady Lister, expressed concern about fluctuating income. We recognise that some households see their earnings fluctuate on a regular basis and have written into regulations that earnings should be checked over a period lasting up to three months, where the assessment period data is available. We are also exploring ways to ensure that families with very low incomes can receive free school meals during the initial assessment period for universal credit.

[Baroness Lister of Burtersett]

What will happen with self-employed people and those on zero-hours contracts? I could not find that in the document.

[Lord Agnew of Oulton]

As I mentioned, we are assessing those who are on very low incomes to ensure that they can receive free school meals. That information will become available in due course.

I hope your Lordships will agree when I state the importance of targeting public resources where they are needed the most. If free school meals were extended to all families on universal credit, as some suggest, this would mean that by the end of the rollout around half of all pupils would become eligible. Some universal credit households are on middle incomes, sometimes exceeding £40,000 a year. We estimate that extending free school meals to all these families would cost in excess of £3 billion more a year by 2022, including the cost of the extra meals and associated school deprivation funding. The additional meals alone would cost in excess of £450 million a year. As the noble Baroness, Lady Walmsley, said, fairness requires Government to direct resources to where they are needed most. These are not the low-income families that we want to target with free school meals, and this is not a sensible or indeed fair use of public money.

The noble Baroness, Lady Walmsley, was concerned about the decoupling of free school meals from the pupil premium. The Government are very committed to providing equality of opportunity so every pupil, irrespective of their background, can realise their academic potential. Since the introduction of the pupil premium in 2011, the difference in the relative attainment of disadvantaged children and their peers has reduced across both the primary and secondary phases. It has narrowed by 10.5% at key stage 2 and 10% at key stage 4. This means better prospects for disadvantaged pupils and a more prosperous life as an adult.

Concerns were raised about conditionality and the use of sanctions. Sanctions are only ever used as a last resort. When considering whether a sanction is appropriate, a decision-maker will take all the claimant’s individual circumstances, including any health conditions or disabilities, and any evidence of good cause, into account before deciding whether a sanction is warranted.

I want to address some of the comments made by the right reverend Prelate the Bishop of Portsmouth and the noble Baronesses, Lady Sherlock and Lady Lister, dealing with cliff edges. Universal credit is designed to be more generous to claimants who take on additional hours, and the smooth taper rate gives incentives to do so because, unlike under the old system, people see more money in their pocket for every extra hour that they work. As my noble friend Lord Polak said, change does involve some disruption, but in general we are seeing a better system for people who want to achieve more and to work harder or to be able to have the opportunity to work. In addition, the well-established links between employment and improved health and well-being mean that there are considerable non-economic benefits for parents who increase their working hours.