Child Poverty Act 2010 (Persistent Poverty Target) Regulations 2014
Baroness Lister of Burtersett Excerpts(10 years ago)
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Baroness Lister of Burtersett (Lab)
My Lords, I endorse what the Minister has said about the damaging effects of long-term persistent poverty. However, I am sure that he did not expect me to come here to agree with him, so I will now make a few critical points. The Secondary Legislation Scrutiny Committee was critical of the lack of clarity in the explanatory material with these regulations, which, as it points out, is not for the first time. It asked about the definition of qualifying households. Just for the record, will the Minister clarify which children are excluded? The scrutiny committee referred to children in state institutions. Am I right in thinking that it also excludes the children of asylum seekers and Travellers? Are there any other groups? It would be helpful for noble Lords to know that.
A perhaps rather techie but significant point, which was not raised by the committee, is the use of before housing costs to measure child poverty. According to the Social Mobility and Child Poverty Commission’s State of the Nation report—I did not realise that the Government’s response was published today; I am not a clairvoyant and I have not read it—if you use the after-housing-costs measure rather than the before-housing-costs measure, which is preferred by the Government, it adds an additional 1.4 million children to the numbers in relative poverty. Therefore, 27% of all children rather than 17% of children are in poverty. As I say, that may seem a rather techie point but it makes a huge difference. As recent research by the Joseph Rowntree Foundation has underlined, housing costs are an increasingly important driver of poverty among people of working age and their children. When I questioned the Minister about this in Oral Questions yesterday, he did not answer my question, and it is a rare opportunity to be able to come back the next day. I will not re-ask the question, which concerned what the Government are doing about high housing costs, but I noted that, instead of answering the question, he talked about how they are making really good progress in tackling poverty. Of course any reduction in the figures is welcome, but it is interesting that every time the Government get up and say, “We’re reducing poverty”, they use a measure that in other contexts they tend to rubbish. Anyway, I will put that to one side.
If we take the figures after housing costs, they are rather less favourable. Indeed, the child poverty figures increased in 2012-13 over the previous year, whereas if you look at before housing costs, they are flat. That is just to underline the importance of these different measures and how they are used.
The scrutiny committee also queried, as the Minister acknowledged, why the target figure in the regulations is not lower. I absolutely accept that zero is not realistic, but the committee pointed out in particular that the majority of consultation responses argued for 5% or less. In fact, 31 out of 39 written responses were against the below 7% target, with only six arguing for it, and 23 were in favour of a below 5% target. One example was the Child Poverty Action Group—I declare an interest as honorary president—which made the point that:
“In setting the persistent child poverty target, the government should consider past historical performance in the UK, and the performance of other comparable countries in tackling persistent poverty. This is suggestive of a range of 3 to 5 per cent”.
It was also critical of the lack of ambition of a 7% target.
I cannot help wondering why the Government bothered to consult in the first place. When they reject a clear consensus of pretty expert opinion, I fear that that feeds cynicism around consultation exercises, despite the warm words in the Written Ministerial Statement, which the noble Lord repeated, that the Government “carefully considered all representations”.
The scrutiny committee also said that it remained unclear as to how the Government intend to implement their policy. The Minister talked about that today with regard to the child poverty strategy, which, as I am sure noble Lords are aware, was published earlier this year. I could say plenty about that, but I will not say what I think about it; I will simply quote—at a bit of length, because it is worth putting on the record—what the Social Mobility and Child Poverty Commission said in response to the draft child poverty strategy, and the final strategy was not that different regarding the overall strategic approach. The commission said:
“The new strategy is the Government’s opportunity to revise its plans for tackling child poverty to get back on track towards meeting its legal obligation to end child poverty by 2020 … Our key conclusion is that this opportunity has not been taken. While there have been improvements in the Government’s strategic approach and in some policy areas, overall the strategy falls far short of what is needed”.
The Minister talked about reducing worklessness being at the heart of the strategy, but the commission points out that its research shows that,
“ending poverty mainly through the labour market does not look remotely realistic by 2020”.
It goes on to say:
“We acknowledge that there are some good things in the draft strategy”—
as do I—but continues:
“However, overall it falls far short of what is needed. Key problems include: the lack of any clear measures, with the Government continuing to distance itself from the statutory measures in the Child Poverty Act 2010 without suggesting any additions or alternatives. This is not acceptable—a strategy which cannot be measured is meaningless. In the absence of further measures and in line with our statutory duty, the Commission will continue to monitor progress”.
Other key problems are:
“The absence of a step-by-step plan for meeting the statutory targets, with the strategy presenting a list of policies rather than a detailed plan with impacts clearly delineated. A failure to engage with independent projections that poverty is set to increase substantially … Lack of new action on in-work poverty … Limited action to mobilise society-wide efforts to tackle poverty … Ignoring the impact of additional welfare cuts”.
It points out what that likely impact would be. Then it says:
“To ensure the final strategy is an effective and credible plan for tackling child poverty, the Government needs to … set out clear measures … Develop a step-by-step plan … Engage with independent projections of increases in child poverty over the next few years … Resolve gaps in the strategic approach … by taking action to address the structural as well as the individual-level causes of poverty”.
That is a really important point, because the Government are always going on about how they are concerned about the causes of poverty but do not tend to acknowledge the structural causes as opposed to individual ones. The response also says that the Government need to:
“Ensure the strategy represents a clear plan for mobilisation and leadership of other actors in society … Engage with the challenges posed for the child poverty strategy by continued fiscal consolidation”.
All the projections are very worrying regarding what the impact of other policies will be on the numbers in poverty, including the numbers in persistent poverty. The fear is, obviously, that the 7% is not going to be achieved because of these policies. It sometimes feels a bit unreal that we are designating 7% or 5% when the policies now being implemented suggest that we are going to go the wrong way on levels of child poverty, including persistent child poverty.
Lord Freud
My Lords, I wish that the noble Lord, Lord McAvoy, had not gone rather crudely political on what is a difficult area, especially as the facts that he used are simply not true. There has been an absolute cut in income for the richest 20% and an increase for the lowest, as has been put out by the Government. This is not the forum to have that kind of crude debate and I do not want that.
Some really important points have been made today. This is a difficult area at a difficult time. My noble friend Lord Kirkwood looked at the national debt and blanched, for very good reason. I look down my nose at him because, when looking at the performance of the last Government on poverty, one saw that they achieved the trajectory for people who were out of work, and they were able to do that through income transfers, but for people at the next level who were just in work and at the next level of income, there was very little movement. That is the problem that we are addressing. We are looking at a problem that cannot be solved just by moving money around particular areas. I commend the noble Lord to look through those figures, which are very interesting and illustrate the fact that we have got to the limits of what you can do just by income transfers, which is what the previous Government did.
Baroness Lister of Burtersett
I was not part of that Government, but will the noble Lord not accept that part of their child poverty strategy was also to move people into work? Part of the problem with the current situation, as the noble Lord, Lord Kirkwood, said, is that, although it may not be completely new, this is certainly the first time where more people in poverty are in work than out of work. We all agree that work is a good route out of poverty; but it is not necessarily a route out of poverty. Both Governments have faced the same problem of what you do with a labour market which is not providing enough to keep people out of poverty.
Lord Freud
I speak here from a somewhat privileged position, in that I advised the last Government in exactly this area and now speak for the current Government on it. So I am in a position—
Baroness Lister of Burtersett
I am sorry to intervene again. Before the Minister moves on, my understanding was that although the noble Lord, Lord Kirkwood, mentioned the delay because of the survey data, he was asking about what the actual measures are, and that is separate from the survey data. There was a big consultation about a set of measures that I personally did not think were measures of poverty. That is also what most people said in response so, fortunately, that time the Government did take note of the consultation and withdrew it. However, as the commission says, they are still distancing themselves from the measures that they have without coming forward with a more acceptable set of measures to complement them. The question is: what has happened to them? Have they got lost? There have been rumours about the Treasury having had something to do with it. What has happened to those complementary measures?
Lord Freud
In the long term, the Government think that we need a revised set of child poverty measures which would better reflect the evidence about poverty’s underlying causes and where we need to target action most—the kind of thing that my noble friend Lord Farmer, in particular, was talking about, but we are not currently in a position to put those new measures forward. As our consultation, which the noble Baroness mentioned, showed, this is a complex area and there are a variety of views. I am afraid that that is all I am in a position to say at this stage.
On the noble Lord’s point about how these measures are made up; clearly, both relative and persistent poverty levels depend in part on how both median income changes and how those with low incomes improve relative to the median. That is just how the Act was made. We spent an awfully long time debating during the passage of the Bill a general level of discomfort with just this mechanistic approach to this kind of measure. That is just how it is, and that is what the Act shows, but the fundamentals are that we need to maintain our focus on helping those on lower incomes, which means helping people into work—or more work, which is what universal credit will do—and in help with living costs.
Universal Credit
Baroness Lister of Burtersett Excerpts(10 years ago)
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Lord Freud
In the last strategic outline business case the costs of the programme to 2023-24 were £1.8 billion. That is down from the £2.4 billion figure that we had in 2011. Under that case, we anticipate that the bulk of the exercise to transfer people on to universal credit will be completed by 2019.
Baroness Lister of Burtersett (Lab)
My Lords, recent research by the Joseph Rowntree Foundation, and the Social Mobility and Child Poverty Commission’s recent State of the Nation report, underline the extent to which high housing costs drive poverty among working people, their children and young people. What are the Government doing about these high housing costs?
Lord Freud
The poverty figures show that we are making really good progress in tackling poverty, with 600,000 fewer people in poverty through this Government. We are ensuring that housing costs are covered within universal credit and that people can take control of their lives in that way.
Social Security (Jobseeker’s Allowance and Employment and Support Allowance) (Waiting Days) Amendment Regulations 2014
Baroness Lister of Burtersett Excerpts(10 years ago)
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Lord Kirkwood of Kirkhope (LD)
My Lords, I am substantially discomfited by the fact that sitting on my right-hand side is the chairman of the Delegated Powers and Regulatory Reform Committee. Next week she is chairing a seminar on how we deal with these orders, and I hope that she does not mark me down too hard.
These regulations are not new to us, and we as a Grand Committee have been considerably assisted in their consideration by the work done, as always, by the scrutiny committee, which identified—rightly, I think—that these amendment regulations raise issues of policy interest to the House. I am also indebted to the Social Security Advisory Committee, which—again rightly, in my view—engaged in a formal consultation on these orders. I think that that was the right thing to do. I am sure that, like me, colleagues have been able to read the orders carefully; they repay careful study, and a consultation was proper.
In passing, I would say that it is disappointing that we got advance notice of these regulations in 2013—I think it was in the Budget, or perhaps the Autumn Statement—and that was repeated in the Budget Statement 2014, but these regulations required some consultation if the policymaking was going to be done carefully, and there was a whole fallow year following their announcement with a flourish—and I am getting more and more nervous about social security announcements that are made with a flourish in Budgets. So, that time in the year 2013-14 could have been used to look at some of these things.
The evidence that the SSAC has uncovered is invaluable in the consideration of this policy. Indeed, as the Explanatory Memorandum says, the estimated saving is some £50 million in fiscal year 2015-16, and the savings will diminish thereafter. I guess that that is because we approach the introduction of universal credit in 2017-18, and I shall come back later to that important moment. The Explanatory Memorandum mentions the calculations done by the department, and these are useful for reference. Paragraph 3.10 of the SSAC report says:
“The … analysis indicates that for 2015/16, the number of new claimants likely to be most at risk of suffering financial hardship are around 245,000 in JSA and 35,000 in ESA … The estimated average loss of benefit to each claimant from this policy change is £40 for JSA claimants and £50 for ESA claimants”.
That is very helpful to know. The point that I want to raise more than anything else is the hardship that will be experienced by that client group—the 35,000 people on ESA and the 245,000 on JSA. That is the point of discussing this here today.
I am opposed to these changes. If I thought I had any chance of getting a Division that would successfully annul them, I would have tried that. I am seriously considering doing so, depending on what support I can garner from colleagues if restrictions such as waiting days are put on universal credit as we approach 2017. These are savings dressed up. They are pretty mean-spirited and hit the most vulnerable. They again concentrate cuts on the working-age population and take no account whatever of the environment of the past four or five years. A policy of this kind, if it were to be applied eventually to universal credit, would be much worse.
I therefore support the SSAC’s recommendations and need to continue the analysis. I understand and am grateful for the extra work that the department has put in as a result of the request from the Social Security Advisory Committee. The case for exempting ESA was strongly made but resisted by the Government, which is a shame. The case that the SSAC made for promoting short-term benefit advances as a way of trying to alleviate some of the hardship was discarded in a rather offhand way by the Government. Members of the ESA and JSA client group who are most at risk in 2015 and beyond will have to rely on STBAs because they do not have any other options to plug gaps in benefit. I clearly support the idea from the SSAC that communications must be absolutely crystal clear regarding what is happening to the client group so that they can understand the position in advance and get their claims in early. The recommendations of the committee were all well founded. I was pleased that the Government accepted some, but not all, of them.
I want to say a word about context because I get the impression that the department does not pay enough attention to the payment regime. The system of paying benefits to low-income households who operate on a weekly or fortnightly cash basis underestimates problem that some of these delays and reductions will bring. I remember the good old days before 1998, as will other colleagues, when benefits were actually paid weekly and everyone knew where they were. That changed in 2009 to payments fortnightly in arrears, and in 2018 we are facing the cliff edge of universal credit paid monthly in arrears. I do not think that the department fully appreciates the significance of the change in the method of payment. I point out the obvious fact that Social Fund crisis loans are no longer available and there is an uncertain labour market in which people are much more quickly churning in and out of benefits and work.
Yesterday I was made aware of a publication by the Institute for Fiscal Studies which reminded me that over the past four years we have been taking, and will take, £20,000 million out of benefit expenditure in every year of this Parliament. That is a huge amount and the vast majority is being focused on working-age benefits. In a wider context, although I might be out of order in terms of this debate, we need to think clearly about how the cuts are shared across any future attempts to reduce social security spending, 50% of which is now spent on the retired cohort of our population.
I want to say a brief word about the eight vulnerable groups who have been identified. I am sure that the categories are not new to any of us. They include 18 to 24 year-olds, the homeless, disabled people and prisoners—who are of particular interest to me as a non-executive director of the Wise Group. We have a Routes Out of Prison programme which tries to mitigate the fact that we send prisoners out on a Thursday morning from Barlinnie prison with £46 in their hands and next to no other support. Issues such as those contained in the regulations will make their lives and futures worse. Concerns about the vulnerable groups identified by the SSAC are all well founded, and we need to watch the impact of these regulations on these eight categories very carefully.
I want to make two other points. The so-called list of investments that we now have access to as a result of this £50 million saving being recycled was first adverted to by the Chancellor as part of the 2013 spending review. They are things like upfront work search, English language requirements, weekly work search reviews and annual verification. I may be missing something, but I thought all this happened anyway. If it has not been happening since 2013, I will be disappointed. I do not see that we can demonstrate clearly that these savings are going to make any difference whatever, which folds back to the point that I made at the very beginning—that this is actually a dressed-up saving. It is the departmental expenditure limit that will get the benefit of this £50 million and next to nothing else. This is why I want to press the Minister about evaluation. There is an undertaking here in the Explanatory Memorandum which talks about looking at the results of these new investments and how beneficial they will be. I am very sceptical about that and would like to hear a little more about it.
The SSAC report says that the statement in the Explanatory Memorandum that there was likely to be “no impact” on business or charities is “implausible”. It is being very polite. Anybody who knows anything about the 245,000 and 35,000 people in the client groups that we are dealing with realises exactly how important charities are to people in that situation. I do not think that the department is living in the real world. It is a laughable statement. This will lead to payday loans and all that they bring, which is potentially deeply regrettable.
With the funding available to local authorities also being reduced, these regulations are bound to increase hardship. It may not involve millions of people, but it will affect those whom it does affect severely. I want the Government, in evaluating how these regulations are implemented, to have very careful regard to the consequences and the effects on these families. I want them in particular to reflect very carefully about bringing forward similar regulations when it comes to introducing universal credit later in the next Parliament. I beg to move.
Baroness Lister of Burtersett (Lab)
My Lords, I thank the noble Lord, Lord Kirkwood of Kirkhope, for initiating this take note debate on a very important subject. I apologise if I repeat any of the points that he made, but they bear repetition because there has not been sufficient publicity about the implications of these important regulations. The SSAC, as we have heard, is very critical of them, especially of the lack of robust analysis of the costs and benefits. The impact assessment that the Government have produced in response is certainly an improvement. Whether it constitutes that robust analysis is another matter, but it does at least give us more information on those who are likely to be affected. I accept that it does give some credence to the original—unevidenced—claim that many affected would be,
“coming to benefits from relatively well paid jobs”,
as the lowest paid are more likely to have linked claims and therefore not be affected. Nevertheless, nearly two-fifths of JSA and three-fifths of ESA unlinked claims were from those earning less than £5,200.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
I thank noble Lords for their many helpful contributions to the debate. It is clear that this measure has generated a great deal of interest, not just within this House but outside among voluntary and public organisations, which have also presented their views to the Government. The principle behind this extension from three to seven waiting days is that benefits are not intended to provide financial support for very brief periods, for instance when someone is between jobs or during a short period of illness. This measure will generate savings of £125 million over five years. It is money that, as noble Lords have touched on, will be reinvested to help those most at risk of long-term welfare dependency. As noble Lords know, the measures will fund schemes including additional support for lone parents and improving literacy and numeracy skills.
To pick up the question from my noble friend Lady Thomas about any change in those estimates, they were based on departmental forecasts which themselves were based on OBR economic assumptions at the Autumn Statement 2013 and in Budget 2014 and there have not been any updates to this analysis since then, although we are, of course, awaiting another financial event quite shortly.
On the related question from my noble friend Lord Kirkwood and the noble Baroness, Lady Lister, about what and where these investments are, we are expanding on measures that are already in place. They will introduce more rigorous scrutiny on the hardest-to-help claimants. The English language provision is new and will ensure that claimants have the language skills for the workplace. Those methods should enable the claimants to enter the workplace sooner than they otherwise would, which means that they will be earning sooner and not receiving benefits.
Baroness Lister of Burtersett
Perhaps I may ask the noble Lord the question raised by SSAC. Is it likely that the people who are going to be adversely affected by this change will be the people who will be helped by these measures?
Lord Freud
Yes; I thought that I had made that clear—that the intention is to focus on the people with longer-term difficulties. So, yes, the intention is that it will be those people.
This measure means that many people who make a new claim for jobseeker’s allowance and ESA will see a reduction in their first benefit payment. However, we have measures in place through exemptions and the offer of advances and signposting advice to ensure that claimants who are most in need will continue to be protected.
I hope that I can pick up all the points that have been raised. On the point raised by my noble friends Lord Kirkwood and Lady Thomas on the exemption of ESA claimants, if there had been a differentiation between the two types of claimant there would have been a perverse incentive for people to self-certify sickness for a week and claim ESA rather than JSA in order to get an additional four days’ benefit. There is no evidence that ESA claimants are at greater risk of financial hardship than JSA claimants. Furthermore, to exempt ESA claimants to make that differentiation would be inconsistent with future proposals for universal credit, where our intention is that all ESA-type claimants will be placed in the all work-related requirements group and therefore subject to waiting days. Clearly, waiting days themselves have been a feature of ESA since its introduction in 2008. This measure has simply extended that existing provision for those who do not qualify for an exemption.
The point that my noble friend made about exempting vulnerable groups is clearly one into which we put a lot of consideration, particularly around care leavers, sufferers of domestic violence and ex-prisoners. Bluntly, they were exempted on grounds of practicability. It would have introduced an unworkable, three-tier system and these groups are already required to serve three waiting days, so the only other option would be a full exemption which would go beyond the scope of this change. Despite what my noble friend said about the UC provisions in this line, we are able to make an exemption for these groups in the UC-equivalent provisions. Perhaps that will leave my noble friend somewhat more relaxed about those.
Baroness Lister of Burtersett
I am sorry to intervene on the Minister. I was not asking about savings, because that is in the public sphere. My question was whether there was any information about people who come out of work in debt or arrears?
Lord Freud
I was coming on to that. The noble Baroness asked a series of questions. We do not currently have the information on the proportion of people coming on to benefit who are likely to be in arrears or debt. I am not aware of any published analysis that would allow us to estimate this quickly. All noble Lords who spoke raised the question of short-term advances. SSAC recommended that communications about them should be strengthened.
Lord Freud
A number of noble Lords raised the communications issue around short-term benefit advances. We have taken the recommendation of the committee and issued communications to all staff to improve staff awareness of benefit advances and to remind them of the circumstances in which an advance can be considered.
On the point made by the noble Baroness, Lady Lister, on the report on food banks, I was not at today’s press conference but no one takes the decision to use a food bank lightly. The factors driving food-bank use are many and complex, as today’s report recognises. The report said:
“The immediate income crisis that predominantly led to food bank use was often one incident in a complex life story, in which several other factors had combined to leave people vulnerable and less able to cope with dramatic changes”.
Baroness Lister of Burtersett
I agree that we are talking about very difficult lives here, but it is very clear from this research, which is not a huge study but it is from a number of different places using a number of different methodologies, that benefit delays were a very important factor. Given that, does the noble Lord not accept that this measure could well make it worse?
Lord Freud
My Lords, I would be the last person to say that the current benefits system was easy to navigate. One of the things that has been driving the reform that we are introducing, universal credit, is the production of an in-work and out-of-work benefit that is easy to navigate. I started researching this area in some depth in 2006 and the irony is that benefit delays under the existing, rather complicated system have actually been improving. That is why I revert to the point that this is a complicated matter, as is acknowledged in today’s report and in other reports. That is the only point I want to make.
There was a series of questions on universal credit and the noble Baroness raised the point about TUC concerns about the length of time claimants have to wait for payments under universal credit. Clearly we have an advances process built in, but probably more important is the system that is now developing of universal support delivered locally, which is designed to work in the local community, both with councils and with voluntary organisations, to bring the support that is specifically required by vulnerable people. The estimated saving from increasing the waiting days in universal credit is £200 million per annum once it is fully rolled out, but this figure will be reviewed and updated with the Autumn Statement. I have talked about exemptions within universal credit.
The noble Lord, Lord McAvoy, asked about our consideration of whether we add waiting days to the assessment period in universal credit or whether we have partial periods of universal credit. We spent a great deal of time considering that issue. Universal credit is an in-work and out-of-work benefit, paid on a monthly basis. That monthly basis is designed to help households to budget on a monthly income and eases the transition from and back into paid work. The one-month assessment period is therefore central to universal credit, and the waiting days in universal credit are days of non-entitlement. I need to remind noble Lords that because universal credit is an in-work and out-of-work benefit, one might not experience waiting days anything like the same number of times as, especially if one is moving from low-paid work to being out of work, one is likely to be consistently on universal credit. That is one of the safety features of universal credit in this regard.
With that I think I have dealt with all the questions raised today and thank my noble friend—
Introduction: Baroness Smith of Newnham
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Baroness Lister of Burtersett
To ask Her Majesty’s Government what progress they have made in implementing the Oakley report on Jobseeker’s Allowance sanctions.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
We welcome the findings of Matthew Oakley’s review and have published our response, in which we accepted all his recommendations. We know that sanctions play an important role in conditionality, and it is crucial that the system is operated effectively and fairly. We are taking forward all recommendations and have already completed a number of improvements.
Baroness Lister of Burtersett (Lab)
My Lords, as welcome as any improvements are to this punitive sanctions regime, given that Mr Oakley himself acknowledged the narrowness of his brief, the historically high level of sanctions and the accumulating evidence, including from food bank providers, of the hardship that they are causing, will the Minister now accept the growing demand for a more thorough, independent review of the whole sanctions system, as called for by the Work and Pensions Committee?
Lord Freud
I will respond to the noble Baroness in a moment, but first I would like to take this opportunity to repeat briefly the apology that I made last week. I want to make a full and unreserved apology for the comments that I made at the Conservative Party conference. Of course disabled people should be paid at least the minimum wage, just like everybody else, and I am profoundly sorry for any offence that I caused.
I turn to the noble Baroness’s question. Matthew Oakley found that benefit sanctions provide a vital backdrop in the social security system for jobseekers, and the OECD has ranked the UK as mid-table for the strictness of its sanctions regime. My right honourable friend Esther McVey has looked at these recommendations more widely and has made sure that we are reviewing claimant communications for all JSA claimants, not just the ones whom Matthew Oakley looked at, and that we are introducing a new IT interface to make sure that our relationship with local authorities works more smoothly.
Universal Credit
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Lord Freud
My Lords, we are rolling out universal credit on a careful basis right the way through the north-west. We are currently at 38 jobcentres across the country, the bulk of which—32—are in the north-west. On Monday we moved from singles to couples as well, and that will be introduced right the way through the north-west as we finish this rollout this year. In the autumn we will move to families; so there will be a substantial number as we do that rollout. I must emphasise that we are not doing this rollout in the same way as past programmes have been brought in, on a big-bang basis; we are making sure that we understand what is happening and we go at the pace at which we can do it safely.
Baroness Lister of Burtersett (Lab)
My Lords, as universal credit rolls out to couples and families, the question of the impact of the payment into a single account on women who are subject to domestic violence becomes more urgent. In oral evidence to the Joint Committee on Human Rights recently, Women’s Aid expressed its fears that the new payment arrangements will endanger such women. It warned that the discretionary power to make split payments—which, of course, will require women to identify themselves as victims of domestic violence—simply will not work. Will the Minister therefore commit to work with Women’s Aid and similar organisations to find a more effective solution to try to avert this very real danger?
Lord Freud
One of the things that we are doing as we roll this out is to watch key factors very closely. That is the point of going at this pace, so that we can see small numbers to start with and see what is happening. I will watch this very closely. I talked to the Women’s Aid groups intensively on a number of things of great concern to them and to me, and I will keep watching this one very closely.
Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014
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Baroness Nye (Lab)
My Lords, I completely share the views so ably put by my noble friend Lady Sherlock and my other noble friends, so I will be brief.
On the anniversary of the introduction of the bedroom tax legislation, the Government are trying to close by statutory instrument a loophole without any understanding of how local authorities can identify the people affected or the numbers involved. Instead of trying to close this loophole the Government should finally do the right thing and scrap the bedroom tax altogether, because as the Budget figures show, it will cost more money than it saves. According to the BBC, due to the lack of smaller accommodation only 6% of those affected have moved.
I know that the Minister will have heard these arguments many times before, but they bear repeating. He will have heard that the bedroom tax discriminates,
“against the most vulnerable in society”,
and that the Government have shown,
“a lack of appreciation of the housing requirements of children and adults with disabilities and care needs”.
Those words are not from this side of the House but from the motion passed by his coalition partners at their annual conference last year. I welcome the words of the noble Lord, Lord Taylor of Goss Moor, and I hope that more of his colleagues will join us in the Lobby this afternoon.
The one thing the Government have managed to do is to unite the noble Lord, Lord Tebbit, and the Liberal Democrats in the view that this bedroom tax will have damaging electoral consequences for both parties of the coalition. However, there are other voices, too. The chief executive of the CAB says:
“The Government’s solution to spiralling Housing Benefit costs is simply creating more problems. Thousands are being pushed into arrears, 96 per cent of people affected have no alternative smaller homes to move into and some housing associations”—
as we have heard—
“say they are being forced to demolish homes whilst 1.8 million languish on waiting lists”.
The United Nations says that the bedroom tax is taking a heavy toll on the most vulnerable and recommends abolition and that there is a,
“danger of retrogression in the right to adequate housing in the United Kingdom”.
The Chief Executive of the National Housing Federation has described the policy as an,
“unfair, ill-planned disaster that is hurting our poorest families”.
This retrospective “move or pay” tax simply is not working. For instance, in Merseyside more than 26,000 families are affected, but only 155 have moved. The Work and Pensions Committee has found that between 60% and 70% of homes affected by the change contained,
“someone with a disability and many of these people will not be able to move home easily due to their disability”.
It asked the Government to exempt anyone whose home had been adapted. Instead they are closing a loophole to bring more people into its remit.
Of the 660,000 people affected, two-thirds of those are disabled. The think tank Demos reports that £28 billion will have been taken out of disabled pockets by 2018 due to the cuts in DLA, ESA and housing benefit. Empty properties are increasing, in some areas by a third. In South Shields there are whole empty streets because people are afraid to move into larger houses.
If people end up in emergency accommodation, it costs the country more. But the human cost is huge, too. Grandparents cannot have their grandchildren to stay, so childcare arrangements are affected, and single parents are losing children’s bedrooms. Informal care arrangements for disabled people have come to a halt. A room is not a spare room when carers sleep in it, when couples cannot share a bed for health reasons, or when it houses vital medical equipment such as dialysis machines.
Now the Government have realised that they have been telling local authorities to take away housing benefit from people who were entitled to it all along, so they want to close that loophole. That will mean that local authorities will now have to spend more money and time trying to find out from their records—which go back to 1996 and which they may not have in electronic format—the identity of those people who qualify. It causes bureaucratic chaos and will lead to even greater chaos. This Conservative-led Government should be listening to what people—including their partners in the coalition—are saying, and scrap the whole sorry mess.
Baroness Lister of Burtersett (Lab)
My Lords, as the Regret Motion makes clear, we have to understand these regulations in the context of the impact of the bedroom tax.
My noble friend Lady Sherlock quoted Esther McVey on Radio 5. I will take us back to her rather wonderful interview on Radio 4, in which the interviewer had to drag out of her that the Government’s estimate is that only 8% of people had moved—a whole two percentage points more than the BBC estimate which she had been contesting. She was asked if she was disappointed. She replied:
“Well no, because it wasn’t that you had to move house”.
How is that consistent with her statement in debate in the other place? She said:
“The reason that we are putting these measures in place is that we want to ensure we make the best use of our social housing”.—[Official Report, Commons, 26/2/14; col. 311.]
In addition, how is it consistent with the constant refrain:
“How can we justify 1 million spare rooms when other people are sometimes crammed together in a room?”.—[Official Report, Commons, 24/3/13; col. 27.]
Can the Minister tell us exactly how many rooms have been freed up by this policy? As the Work and Pensions Committee report observed, it is,
“a blunt instrument for achieving this”
aim, and one that is causing hardship, as we have already heard from other noble Lords.
Why, then, have people not moved? As has already been said, it is partly because there is nowhere to move to. In the Independent, on 3 March, it was reported that,
“a severe shortage of smaller council homes across the country is being exacerbated by the right-to-buy scheme—leaving many victims of the bedroom tax with no choice but to accept reduced benefits”.
Also, many people do not want to move because they do not want to lose social networks that are very important to them—a point I have made over and over again in this House. We are not talking about housing in the abstract, but about people’s homes within communities that matter to them.
As Demos said, in a study it carried out on social ties,
“policies can serve to actively undermine the kind of self-help and mutual support that families engage in”.
One would have thought that that would be approved of by a Conservative-led Administration who believe in the big society. Reforms such as the removal of the underoccupancy penalty—dubbed the bedroom tax—have left people with a choice of either finding more money for rent from already stretched budgets or moving away from support networks that make life liveable for many.
We have heard about rising rent arrears, but they are only the tip of the iceberg. Earlier this week I attended the launch of a report by Community Links on the impact of the first year of so-called welfare reform—although I would call it social security cuts—in the London borough of Newham. The person presenting the findings pointed out that many people prioritise rent for fear of eviction. Therefore, there may not be rent arrears, but what other impact is it having on what people can spend on other essentials, and how many people are turning to payday lenders or, even worse, to loan sharks? That morning we heard tales of utter despair—the result of the cumulative impact of this and other benefit cuts such as council tax benefit.
The suggestion has been made: “Let them take lodgers”. Do we know how many people have taken on lodgers as a result of this policy? Some noble Lords who are following the Immigration Bill will know that later this afternoon we will talk about its residential tenancy provisions. Anyone who takes a lodger as a result of the bedroom tax will be turned into a mini-immigration officer and will have to check the immigration credentials of their lodger. Do we really want people on benefit being turned into mini-immigration officers to prevent illegal immigration?
The Minister, Esther McVey, pleaded that the BBC report showed how complex this is. I can suggest a simple solution: follow the policy of the Opposition—which I hope will very soon be the official policy of the Liberal Democrats—and abolish the bedroom tax.
Lord Beecham (Lab)
My Lords, I think I am the only serving, elected councillor who is likely to speak in this debate, unless the noble Lord, Lord Tope, in his declining days as a councillor—I believe he is standing down shortly—joins in to proclaim the new, belated Lib Dem policy on the bedroom tax. I bring a snapshot from Newcastle, where 5,400 households are affected, at an average cost to each of them of £13.47 a week. If paid, that represents around £3.75 million to be taken out of the local economy, so there is a knock-on effect, quite apart from the housing effect, on that economy. Just under one-quarter of those are working households, one-third have children and, as we have already heard, many have disabled people in them. In my own ward, there are 315 such households.
As has already been pointed out, it is not a simple matter to transfer into a smaller property. In Newcastle, we have 3,558 people seeking one-bedroom accommodation. The average number of available one-bedroom properties per year is 64. It would take a generation or more to accommodate those people. Some 615 are seeking to move down to two-bedroom accommodation. There is, admittedly, a slightly higher availability of this—all of 101 a year. Any effect on the private sector, which in Newcastle is largely taken up with students, will drive up rents. Landlords are increasingly reluctant to take tenants who are on benefits of one kind or another. This policy is not only cruel and inefficient; it is based on a complete misunderstanding—to put it generously—of what happens in the social housing market. It is damaging people’s lives.
I conclude with an anecdote about meeting a couple of people in their fifties—not in my own ward—who benefited from the decision which required the Government to effectively refund the amount paid because of the length of their tenure of the property. I was able to tell them they would be getting the money back but I also had to give the bad news that the Government were seeking to ensure that the money returned to them was spent on paying the bedroom tax. Here were two disabled people, living in a house for just under 30 years, with one of their grandchildren staying with them when I called. This just illustrates the cruelty and incompetence of the measure and I congratulate my noble friend on bringing this Motion of Regret.
Employment: Universal Jobmatch
Baroness Lister of Burtersett Excerpts(10 years, 8 months ago)
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Lord Freud
My Lords, to run a successful economy you need to make sure that you do not run it into the ground. I am very pleased to say that with today’s figures the employment rate, if you exclude full-time students, is now running at the same high level it peaked at before the crash. Therefore we have managed to put the right structural changes in place to get employment up to as high a level as it has ever been.
Baroness Lister of Burtersett (Lab)
My Lords, Stephen O’Donnell, who runs the National Online Recruitment Awards, said:
“I think it’s criminally unfair to sanction jobseekers for not using such a clumsily built website, rife with spammers … identity thieves and anonymous job ads”.
Will the Minister give a firm assurance that no jobseeker will be sanctioned for failing to use that hopeless website?
Lord Freud
My Lords, I make absolutely clear that it is not a hopeless website; it has been hugely misrepresented. Noble Lords in this House would not take criticism from a competitor interest quite as seriously as criticism from more disinterested sources. However, I can assure the noble Baroness that to the extent that anyone is sanctioned, that sanction does not stand. At the moment we are down to a vanishingly small number.
Welfare: Cost of Family Breakdown
Baroness Lister of Burtersett Excerpts(10 years, 9 months ago)
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Lord Freud
My Lords, the Government place the importance of sustaining relationships and families high up on their agenda and have a number of programmes to encourage that, which include extending childcare, tax-free childcare, and flexible working for both parents. We have worked on support for relationships and for parenting and have introduced a marriage tax break. We are looking at this whole area in our family stability review, which will be published later this year.
Baroness Lister of Burtersett (Lab)
My Lords, I would like to turn the Question around and ask the Minister of his estimate of the cost to family relationships of cuts to social security, which are forcing some families to move, breaking up their family and social relationships, and of the cost to them of ever increasing punitive sanctions, which are driving more and more families to food banks. Both these trends are leaving families under more and more stress, leading, potentially, to the break-up of relationships.
Lord Freud
My Lords, on the issue of food banks raised by the noble Baroness, which we have discussed several times in this House, clearly nobody goes to a food bank willingly. However, it is very hard to know why people go to them. The Defra report said that there was a lack of systematic peer-reviewed research from the UK on the reasons or immediate circumstances that lead people to turn to food aid.
Housing: Underoccupancy Charge
Baroness Lister of Burtersett Excerpts(10 years, 10 months ago)
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Lord Freud
My Lords, I have noted that the party opposite has said that it will be tougher on welfare than we are. If it is going to take £500 million of savings and put them back, and then risk matching that and paying the equivalent amount in the private sector—adding up to £1 billion a year—I do wonder where it can get that money back out of the welfare system.
Baroness Lister of Burtersett (Lab)
My Lords, almost a quarter of a million children are in households whose benefit has been reduced because of the bedroom tax—we will be debating this later today. What impact will this have on the Government’s child poverty strategy?
Lord Freud
My Lords, we monitor child poverty very closely. I am pleased to say—and as the noble Baroness knows perfectly well—that we now have lower relative child poverty and poverty than we have seen for a very considerable time. We will go on monitoring that figure.
Housing: Underoccupancy Charge
Baroness Lister of Burtersett Excerpts(10 years, 11 months ago)
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Baroness Lister of Burtersett (Lab)
My Lords, the numbers may be small, but it is people’s lives that have been affected, and I do not think the noble Lord the Minister actually answered my noble friend’s question about what will happen to them. Could he please answer it now? Also, it is quite likely that many of these people will have got into debt as a result of this. Will the Government pay compensation to cover the interest payments on that debt?
Lord Freud
The reductions in housing benefit will of course be repaid as we correct the anomaly for this period, so people will be made whole.