Debates between Baroness Lister of Burtersett and Lord Freud during the 2010-2015 Parliament

Mon 24th Nov 2014
Wed 30th Jul 2014
Tue 10th Dec 2013
Tue 24th Jan 2012
Tue 17th May 2011

Child Poverty Act 2010 (Persistent Poverty Target) Regulations 2014

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 25th November 2014

(9 years, 12 months ago)

Grand Committee
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Lord Freud Portrait Lord Freud
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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 Portrait Baroness Lister of Burtersett
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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 Portrait Lord Freud
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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—

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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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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 Portrait Lord Freud
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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

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 24th November 2014

(9 years, 12 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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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 Portrait Baroness Lister of Burtersett (Lab)
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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 Portrait Lord Freud
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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

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 19th November 2014

(10 years ago)

Grand Committee
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Lord Freud Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
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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 Portrait Baroness Lister of Burtersett
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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 Portrait Lord Freud
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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.

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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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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 Portrait Lord Freud
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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.

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Lord Freud Portrait Lord Freud
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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 Portrait Baroness Lister of Burtersett
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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 Portrait Lord Freud
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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

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 21st October 2014

(10 years, 1 month ago)

Lords Chamber
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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To ask Her Majesty’s Government what progress they have made in implementing the Oakley report on Jobseeker’s Allowance sanctions.

Lord Freud Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
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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 Portrait Baroness Lister of Burtersett (Lab)
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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 Portrait Lord Freud
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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

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 30th July 2014

(10 years, 3 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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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 Portrait Baroness Lister of Burtersett (Lab)
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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 Portrait Lord Freud
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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.

Employment: Universal Jobmatch

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 19th March 2014

(10 years, 8 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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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 Portrait Baroness Lister of Burtersett (Lab)
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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 Portrait Lord Freud
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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

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 4th March 2014

(10 years, 8 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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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 Portrait Baroness Lister of Burtersett (Lab)
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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 Portrait Lord Freud
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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

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 29th January 2014

(10 years, 9 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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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 Portrait Baroness Lister of Burtersett (Lab)
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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 Portrait Lord Freud
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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

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 14th January 2014

(10 years, 10 months ago)

Lords Chamber
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett (Lab)
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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 Portrait Lord Freud
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The reductions in housing benefit will of course be repaid as we correct the anomaly for this period, so people will be made whole.

Benefits: Sanctions

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 16th December 2013

(10 years, 11 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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I thank my noble friend for giving me advance notice of that question. Only a small proportion of claimants are sanctioned two or more times. For high-level sanctions, only 5% received two sanctions and 1% received a third sanction. On the specific question about the Troubled Families programme, that provision is delivered by local authorities and unfortunately we do not have the data available at the present time.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett (Lab)
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My Lords, given that the Social Security Advisory Committee warned that sanctions tend to impact disproportionately on the most vulnerable and disadvantaged, and given that a recent survey of citizens advice bureaux showed that the new sanctions regime is having a severe impact on physical and mental health, with one respondent saying,

“The strain has quite literally smashed our family to pieces”,

what steps are being taken to monitor the unintended consequences of sanctions, as called for by SSAC? Will the Minister undertake to report regularly on the impact of sanctions on these groups?

Lord Freud Portrait Lord Freud
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As I just said, we are having one review, undertaken by Matthew Oakley. My colleague the Minister for Employment is also looking at this area very closely, and I am expecting the details of the review that she is overseeing to be published reasonably soon.

Universal Credit

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 10th December 2013

(10 years, 11 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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My Lords, we already have an electronic payments system, so nothing is different or will change in the actual payments system. I think that the noble Baroness was asking: is there a proper back-up to the IT information systems? Clearly, in any IT system—and in today’s legacy systems, which are kept on computers, albeit somewhat older ones—we need to record that information and make sure that we have back-ups in case of loss. We will maintain that principle.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett (Lab)
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My Lords, Howard Shipley told the Work and Pensions Committee that the next stage is couples. That will be a complicated issue as couples come together and divide, and may have children. Things happen. This sort of software is not something that you get on the back of a cigarette packet. Surely it was understood before we got this far that couples come together and separate. Does the Minister accept that the evidence from single people about budgeting monthly tells us nothing about what it will be like for mothers trying to budget on behalf of families monthly?

Housing: Underoccupancy Charge

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 18th November 2013

(11 years ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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Again, my Lords, it is hard to reach definitive conclusions. We now have £180 million for discretionary housing payments for this year, including £20 million that is by demand, to be bid for. So far, we have had just 13 bids in for that money. Last year, some discretionary housing payment money was returned. We are monitoring this extraordinarily closely to make sure that councils are able to deal with their hard cases.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett (Lab)
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My Lords, there is a body of research showing the importance to families in poverty of local social networks to help them get by in poverty and even get out of poverty. Will the Minister explain how weakening those social networks through the bedroom tax contributes to the Government’s anti-poverty policy and the big society?

Lord Freud Portrait Lord Freud
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My Lords, there is a misunderstanding here about the nature of the provision of a lot of social housing. Some 61% of people in social housing are single: they are not the families envisaged. Those are the people, by and large, who are affected by the removal of the spare room subsidy. We are looking at that very closely indeed.

Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 21st October 2013

(11 years, 1 month ago)

Lords Chamber
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I am very sorry to prolong matters. I quite understand that it has not been possible to answer all the questions asked, but will the Minister undertake to write to all noble Lords who have taken part in this debate with detailed responses to the questions that have been asked?

Lord Freud Portrait Lord Freud
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I have tried to answer absolutely everything. I will double check. If I have missed anything, I will write on it, but my answers are on the record. I think that I answered virtually everything, but if there is anything more, I will make sure that I cover it.

Jobseekers (Back to Work Schemes) Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 25th March 2013

(11 years, 8 months ago)

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Lord Freud Portrait Lord Freud
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My Lords, I do not have the information on Sundays, particularly Easter Sunday. The underlying issue is compliance checks using different days for attending the jobcentre, which are an important element of Jobcentre Plus’s toolkit to combat benefit fraud and confirm conditions of entitlement to benefit. That can include asking claimants to attend a jobcentre on a day other than their normal signing day. That is not something that is different under this Government.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I am sorry to intervene, but does the Minister think it is reasonable to ask a mother to come in on Mothering Sunday?

Lord Freud Portrait Lord Freud
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My Lords, clearly, I cannot talk about examples when I am not familiar with the particular example. It may have been a strategy. As I said, there is a general strategy to prevent non-compliance by using the device of asking people to come in on different days. Sometimes people are asked to come in on every day of the week. The example I am thinking of is the five workings days, but I have seen examples of that. I saw that example under the previous Government to be honest. I do not know why noble Lords opposite are looking aghast as this was absolutely standard procedure under the previous Government and nothing has changed. It was standard procedure and has been maintained because it works in areas where we are concerned about benefit fraud.

On Amendment 4, it is worth noting that for sanctions more broadly much of the information that the noble Lord, Lord McKenzie, sets out in his amendment is already published by the department. For example, we have published, and will publish every six months, tables setting out the number of sanctions issued and the number of reconsiderations and appeals. The latest figures published for employment, skills and enterprise schemes and mandatory work activity show that up to October 2012 around 170,000 sanctions were issued. There were just over 50,000 reconsiderations, with claimants being successful in just over half of them. Following this there were about 5,000 appeals to the First-tier Tribunal, with claimants being successful in around a quarter of them. I hope that gives enough reassurance to the noble Lord and the noble Baroness that the independent review will be comprehensive and in the spirit of Clause 2. I therefore urge them to reconsider the position and not press their amendments.

The noble Baroness, Lady Lister, raised a point on hardship and the new hardship regime. The new hardship regime will not apply to these jobseeker allowance claimants. It will come into effect only when universal credit is in place. The lone parent’s caring responsibilities are taken into account when setting work search requirements. In the example used by the noble Baroness, they can be used in citing a good reason for non-compliance.

I turn now to the linked Amendment 6, the purpose of which is to ensure that there is an interim report on the operation of the provisions relating to the imposition of a penalty, as well as the report after 12 months that the Bill already requires. I am as keen as the noble Lord, Lord McKenzie, that the review is expedited and we will endeavour to complete it as quickly as possible. However, it may help if I set out why an interim report would be unhelpful in providing a complete picture. A claimant who has a sanction imposed on them has 13 months to bring an appeal against that sanction, so by imposing a six-month deadline for an interim report we would miss those appeals made at a later point. That could then give a misleading view of the overall picture in a way that could be unhelpful. As I said earlier, we are committed to producing a report as soon as is reasonably practicable and it would be far better to wait for the full annual report. I hope that the noble Lord will reconsider the position and not press that amendment.

Jobseekers (Back to Work Schemes) Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Thursday 21st March 2013

(11 years, 8 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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The moment that there is a ruling—if there were to be a ruling—against the department, we would be liable from that moment to repay. What would we do? Would we obfuscate, say that we could not pay and were dealing with the paper work while we put through emergency legislation? We would be obliged to make the payments from the moment when the ruling came through. That is what this is about. It is why we are going ahead at this time and at this speed, which is clearly not something that we enjoy doing.

I turn to the review, which we have taken on in response to the Opposition in the other place requesting such a review. It will focus on the sanctions affected by the provisions of the Bill, which amount to roughly 25% of all JSA sanctions issued in the period. I have heard today concern from Peers about how DWP issues sanctions to JSA claimants more generally. I would like to make it clear that the department will discuss with the Opposition the terms of reference of the sanctions review. I assure noble Lords that the stockpile of claimants who are issued with a benefit sanction as a result of the legislation will receive the same information that is received by all claimants who are sanctioned for failing to participate in a scheme; namely, they will be told about their right to appeal, how to appeal and how they can go about claiming for hardship.

I will try to pick up as many of the questions that I have not dealt with as I can. I hope that the noble Lord, Lord Pannick, appreciates how closely we have studied the Constitution Committee’s report. I can tell him that Miss Reilly will not be affected by the legislation as she complied with the scheme that she was required to attend and was not sanctioned. I say to the noble Lord, Lord McKenzie, that we needed to put the regulations out within a day to keep mandating claimants going forward. The retrospective legislation required careful thought and an exploration of all the avenues. We also consulted the Opposition and the whole process took some weeks. I assure the noble Lord that there are absolutely no benchmarks or targets for sanction referrals. Sanctions will involve a temporary loss of benefit. We will not seek lump sums from people in work. We will look to use good cause and, for the more recent sanctions, good reason, but they are in practice the same.

As I said to the noble Baroness, Lady Hollis, a little earlier, the information given to claimants was not confined to what was in the letters. The sanction decision notice provides information on how to appeal and access other help. The noble Lord, Lord Bach, was concerned about legal aid. The first stage of the tribunal process is inquisitorial and legal aid is not required. It helps to ensure that everything that is relevant is considered. That is the job of the tribunal. I say to the noble Baroness, Lady Lister, that the Bill is compatible with the ECHR and will overturn some of the undesirable consequences of the judgment. That should not be done lightly but it is entirely proper to do so in the circumstances.

A number of noble Lords enjoyed having a go at the Work Programme. However, it has resulted in 200,000 people moving off benefits. The PAC report is somewhat premature in its conclusion about what is happening. I look forward to talking about that programme further in the months to come. I conclude by urging the noble Lord to withdraw—

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I quite understand that the noble Lord has not been able to answer all the questions that were asked. However, will we get answers to those questions over the weekend?

Social Security (Payments on Account of Benefit) Regulations 2013

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 13th February 2013

(11 years, 9 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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This is a fascinating area because, following the growth of the micro-loan industry particularly in Bangladesh, where it started—it has spread all around the world—the lessons on helping people to learn how to budget are very much along the lines of giving someone a loan which they pay back before they get the next loan. There is therefore a real learning process. In our approach, we are picking up this global phenomenon, whereby we will provide credit—in practice, free credit behind which there is a discipline—which has to be repaid before the next loan is available. It is very much the same thinking as that which we see globally.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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If people know they can get only that amount, they will borrow more than they need at that point, knowing that that is it, whereas, as both of my noble friends are suggesting, you could have £100 here and £100 there, as you need it. I suggest that it would be good to look at this again.

Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) Regulations 2013

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 13th February 2013

(11 years, 9 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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Yes, the payment reflects what happened in the previous month, but it gives you what you need for the month that you are going to be spending that money in. I will take this debate outside over a cup of—sorry, over a glass of something; I think vodka is appropriate. I will argue this right the way through, because I think it is the most benign way to ensure that people have the appropriate amount of money for each month.

On the point about the advice sector, we are looking at working closely with the advice sector to look at how the existing infrastructure can be used to support claimants with complex needs, and we are looking at new services that we need to develop to ensure that claimants have access to the right support. I have already talked about the multimillion pound support package from the Cabinet Office and the Big Lottery Fund.

I hope that I can offer some reassurance to the noble Baroness, Lady Lister, on the question of supported exempt accommodation. I pulled this area out from the universal credit because I could see that people often came through these accommodations quite rapidly, and it just was not the appropriate way of doing this. We have left that for the time being but with a view to ensuring that there is a sustainable financial regime for this kind of accommodation.

I have to confess to the noble Baroness that I have heard concerns only recently that some of the kinds of accommodation that we would want to support are not within our definition of support-exempt accommodation. I will look at that when we look at the whole thing, and we will consult on it. It is an important issue that we have right up front.

I do not have numbers on payment exceptions. We do not want to set targets for this, but a useful figure to bear in mind in the private-rented sector is that currently about 25% of private-rental claimants have their landlord paid direct. We are trying to get as many people as possible to pay their own landlords.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I would not expect a target, but there must a working assumption. I am not thinking necessarily about direct payments but about those who are going to find it difficult to deal with monthly payments, which is one of my main concerns. Perhaps the Minister can write to me, because the Government must have some view about whether this is a very small group, a larger group or whatever.

Lord Freud Portrait Lord Freud
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We are not defining this by saying that they are vulnerable people; we are asking how many touch points of support people have. The four groups that have a large number of touch points are people who are homeless or who have mental health problems, addiction problems or learning difficulties. They are the groups about whom I have particular concern about making sure there is support for them. The noble Baroness will have her own figures on how big those groups are. We are working to get them refined. I will be able to provide more information on this as we work our way through. We are doing an enormous amount of work in this area, as noble Lords can see from the piloting we are doing and from how we have built up this network with the local support services. This is an area of great activity.

The noble Lord, Lord Bach, made an impassioned speech. Clearly, legal aid will still be available for appeals to the upper tier on a point of law. In our view, the first tier does not require legal representation because it is not adversarial. We are hoping that one of the things that mandatory reconsideration will do is mean that many applicants do not need to proceed to appeal. We are actively working on getting the right advice services locally.

These reforms are necessary and will not lose sight of the overarching policy drivers, but clearly we will go on listening and learning. I hope that noble Lords leave this debate thinking that the department’s decision-making and appeals structure is robust, fit for purpose and ready for the introduction of UC and PIP.

Benefit Cap (Housing Benefit) Regulations 2012

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 6th November 2012

(12 years ago)

Grand Committee
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Lord Freud Portrait Lord Freud
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Perhaps the noble Baroness will let me finish the point. A lot of the stories in the newspapers refer to the former. Councils have had arrangements for many years with other councils some distance away. We have reinforced the point—this is where the regulations coming in on 9 November apply—that where people are local, the council has to consider whether the location is suitable for the household’s individual circumstances, including the significance of any disruption to employment, education and caring responsibilities. Local authorities are required to carry out a full impact assessment before moving people out to other boroughs.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I am sorry to push this, but if the stories are referring to the first group, why are local authorities expressing fear that they could be subject to legal challenge for moving families out? We are talking about a different group.

Lord Freud Portrait Lord Freud
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I am trying to say that if you read the stories carefully, as I have been, you will see that they refer to preparatory moves about what councils may do and what they are preparing for. The stories are fairly evanescent, if you look at them closely. Clearly one reason for that is that these changes have not happened yet. Through this year, we have had the introduction of the LHA reduction from 50% to 30%, which my noble friend Lord German talked about. There has not been a huge flood of changes as a result of that. The stories are about councils being worried and their preparatory plans. They are about plans to move people around councils, but local authorities have always done that, for the reasons that I have given. They have always had this problem in London—people arrive and the councils have had to do something about them. Let me repeat the obligation in the 9 November regulations. Under the regulations, local authorities are required to keep people in the local area whenever they can and to carry out a full impact assessment before moving people out to other boroughs. We have strengthened that localism point in recognition of the same sentiments that are concerning noble Lords today.

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Lord Freud Portrait Lord Freud
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I will be corrected on this if I am wrong, but ATLAS works both ways, so the information flows both ways, so we will have the information and will be able to notify and go through the normal process. We will know what is happening on housing benefit. That is how it will flow back and forth. There had to be an adaptation to ATLAS to make it a two-way flow. When it started, as the noble Lord probably remembers, I hope with nostalgia, it was a one-way process.

How and when are the guidelines being produced? The local authority Practitioners Operational Group, with a subgroup based on the benefit cap, has been briefed at working level on detailed procedures and guidance. Members have confirmed that people will develop detailed guidance and products which will supplement those to be published via the DWP intranet and the LGA’s knowledge hub.

The way that the benefit cap interacts with financial sanctions is that the benefit cap will apply to the overall level of household benefits. If the sanction is imposed, any reduction will be applied to the sanctioned benefit after the application of the cap. Otherwise, clearly, the impact of the sanction would be negated.

My noble friend Lord German and the noble Lord, Lord McKenzie, raised the issue of ESA. The specific exemption is to do with the people in the support group of ESA, not in the WRAG group. Several noble Lords mentioned carers. The benefits system is designed to provide financial support where caring responsibilities prevent carers working full-time. As such, the carer’s allowance should be treated in the same way, for the purposes of the cap, as other income-maintenance benefits. Clearly, where the carer is in the same household as someone entitled to DLA or ESA support, the whole household, including the carer, will be exempt. Most carers of working age want to retain a foothold in the labour market where possible. We know that more than nine in 10 claimants receiving carer’s allowance are claiming another out-of-work benefit. In other words, they are looking for work. Carers who move into work clearly become eligible for the working tax credit and will be exempt from the cap.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I am still unclear what behavioural change the noble Lord seeks from that group of carers. If they are already seeking work anyway, why do they need the cap to spur them on to do it on top of their caring responsibilities?

Lord Freud Portrait Lord Freud
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Clearly, we are expecting that they will find work at that level.

On the grace period questions from the noble Lord, Lord McKenzie, which really boiled down to the self-employment questions, they are entitled to working tax credit if they meet the other conditions. On the 50 out of 52 weeks, there may be a gap in employment, but my understanding is that SSP, statutory sick pay, which is paid by the employer in the case of the employed, would constitute being in work, for obvious reasons. That actually responds to my noble friend Lord German’s questions.

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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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The point I was raising was about the effect on child poverty should the Government introduce a new cap on families who are not in work with three or more children, over and above the benefit cap. What work is being done in the department to look at the effect of the interaction of these two different caps on child poverty? It is possible that the noble Lord was about to go on to this but he seemed to be moving on to another issue.

Lord Freud Portrait Lord Freud
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We have not done any work on that because it is not agreed government policy, but it is something that we are looking at, clearly. To the extent that we do look at it, it will be done on flow and not on stock. That was very clear in some of the discussions on this particular option. However, it is about people who get more than two children rather than people with more than two children. People will at least be able to plan their families should that become government policy. Regarding local networks, as raised by the noble Baroness, Lady Lister, clearly we acknowledge their importance. That is one reason for the regulations coming in on Friday: to try to ensure that people are not moved without very serious consideration.

There was a question about our early findings. There has not yet been a coherent survey. However, there are some interesting figures from our early findings showing the effect of the cap, and I think we will be able to share those more widely when they are locked down. As the noble Baroness said, it is absolutely essential that we do not confuse things that are happening anyway, and that we try to get analysis of the excess. There is, however, an interesting point: quite a few people dropped out of the benefits system when this started. That is not a surprise. One would expect to find some of the people who feel uncomfortable claiming gathered in the area with the highest numbers of claims—I put that as delicately as I can. I hope to be able to give some more information on that.

The noble Baroness asked about childcare. Jobcentre Plus recognises the importance of childcare as a key enabler, and clearly financial assistance is available for a claimant moving into the labour market. We accept the need for appropriate childcare when we make that judgment.

I think that I have done my best to deal with the point about temporary accommodation. The noble Lord, Lord Best, talked about rent levels and urged a regionalised system, quoting the originator of the welfare state. The rate of increase in rent has slowed down a bit over the past year and local authorities are working with households affected by the cap to ensure that they are able to locate affordable homes. I was just looking at some rental levels, which show a slight slowdown in some months of the year.

I am running out of time. There is a lot of other business and I have to stop now. I will have to write on the other matters, as there was just so much—I counted 40 questions from the noble Lord. I commend the draft Benefit Cap (Housing Benefit) Regulations 2012 to the Committee.

Housing Benefit (Amendment) Regulations 2012

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 15th October 2012

(12 years, 1 month ago)

Grand Committee
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Lord Freud Portrait Lord Freud
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There is an implication in that: who takes priority for those new houses and then who do you take off the waiting list for the larger properties? There is then a kind of order of position that becomes somewhat more manageable. Do not forget some of the examples given, such as that there would be children in these rooms. The reality is that for the bulk of people affected by this, their children have left home. That is why they have too many bedrooms. I think the figure is—I am plucking a number from my memory—70% of the people affected by this. I will be hit hard by someone if I have the wrong figure and I will get the right one in a second but, from memory, 70% of these people do not have their children at home. That is obvious because of the underoccupancy effect.

I responded to the question on DHP use from the noble Lord, Lord Best. We are not talking about a ring-fence system with the DHPs. When you have very hard cases, of the kind discussed this afternoon, local authorities can move in and help.

As to the total figure, I have already given that as £165 million for next year. That is made up of the baseline funding of £20 million, £40 million from the LHA reforms, £30 million from the social sector—under the size criteria that we are talking about—and £75 million from the benefit cap. These are the kind of figures for people who have multiple effects.

I must correct my earlier figure of 70%. My memory was just slightly faulty; the figure is actually 66%, not 70%. I apologise.

This is a good time to answer the question of the noble Lord, Lord Best, about making an assurance. Actually, it was not Lord Best. Who wanted that assurance?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

It was the noble Baroness, Lady Lister, who wanted that assurance on the indefinite lasting of DHPs. I clearly cannot make any assurances through into the next spending review. To commit into the next spending review is, I suspect, the shortest way to get yourself fired that I know of, in any political party. However, when it comes to adaptations and foster children, the structure of this is not an eroding factor. It might erode, but only very slowly. Clearly, any Government would have to look very closely at how they maintained that type of support when they looked at the next spending review. So if that is some small reassurance, I leave it with the noble Baroness. I do not think I have got myself fired by saying that.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I certainly do not want to get the noble Lord fired, but will the department be doing all it can to ensure that that money is maintained into the next spending review period?

Lord Freud Portrait Lord Freud
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We are doing a serious review, as the noble Lords, Lord Best and Lord McKenzie, and others have pointed out. We take reviews very seriously. They are public and they provide information to look at as we consider how we go forward. I certainly can say that the department and I take the information from these reviews very seriously. That is as far as I can go at the moment. The noble Baroness perhaps understands better now than when we were going through the Bill when I am making a move and when I am not.

Perhaps I may pick up on a point made by the noble Baroness, Lady Hollis, about overcrowding. Clearly the primary reason for these regulations, and we have made it absolutely clear, is that this is a huge Bill and we have to look at where we want to spend the money and how we make the half a billion pounds in savings. In other words, if we do not make savings here, where else do we make them?

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Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

I do not want to get into a huge debate about housing policy because it is a huge and complicated area. Clearly, we are dealing with counterfactuals. There are some signs of bearing down on rents. During the middle part of this year, rents were below the CPI increase. As the noble Baroness argues, we are probably fighting supply and demand pressure going the other way. Within that, there are some signs that we are bearing down. Clearly, the Government’s strategies on getting more housing, particularly build-to-let, in the private sector as well as social housing are important initiatives. We have 146 providers delivering 80,000 new homes for affordable rent with government funding of just under £1.8 billion. Over the 12 months to August, private rents went up by 2.9% on the LSL rental measure for England and Wales, which is not hugely out of line with the CPI.

Arrears are clearly a primary concern for housing associations. I am aware of that. It is about managing the different proportions. When you look at the pie chart of the number of tenants who are affected, housing associations will have to watch closely how a proportion of tenants are supported. From going around talking to housing associations, I know they are ramping up their support for those groups. One of the interesting things about the housing demonstration projects is how housing associations are saying, “We thought we knew our tenants and we are finding with these demonstration projects that we did not, but we are now establishing completely different relationships with them”. I am sure that the noble Baroness’s housing association knew its tenants much better than the average, but that is what I am hearing from the demonstration projects.

On the point made by the noble Baroness, Lady Lister, the scheme already recognises the need for an extra room where there is a need for an overnight carer in the private rented sector, and we have carried that over into this scheme.

On the point made by the noble Lord, Lord Shipley, the legislation sets out the types of eligible charges, and guidance will provide more detail. We expect the costs to be met broadly as now.

The noble Baroness, Lady Lister, made a point about human rights. We have DHPs to assist people to move, and local authorities must consider human rights and obligations when making decisions about these kinds of cases.

The noble Lord, Lord McKenzie, asked about households not fit for work, and I think I have dealt with that. The two-thirds figure has not changed, and 56% report a disability that leads to a significant difficulty with one or more areas of daily life. That does not necessarily mean that the daily lives of the two-thirds are affected by their disabilities. I have touched on the question put by the noble Lords about what people can do; there are four or five things that can be done.

One or two noble Lords asked about income from lodgers. The first £20 of weekly income is disregarded entirely, which will usually cover the amount of money in the reduction, and half of the remainder is taken into account. I have made sure that under universal credit, the entire amount is disregarded. That is to be introduced from next year. I was asked by the noble Lord, Lord McKenzie, about the average cost of moving home. DCLG estimates that it is about £500 per move. On questions about the CPI, again that is to keep the pressure on. We froze it a year ago so that we can make the standardised changes with regard to CPI in April 2013. I was asked how long that pressure is likely to last. We have made it absolutely clear that we need to keep it under review. People have made projections up to 2030, but we are in unusual times since earnings normally rise faster than inflation and thus drag up other factoring events. Usually one would expect to have to review the figures as those factors come through. I am not sure yet how we will do the review, so I cannot spell it out. However, as we get closer to the right period, we will look at exactly how it will be done. I repeat, we will take it seriously.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I am sorry to hold the noble Lord up. I understand if he is not yet able to say how the review is to be carried out, but when the department does know that, could he perhaps tell noble Lords?

Lord Freud Portrait Lord Freud
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I have pleasure in giving a commitment that I will tell noble Lords exactly how we plan to do it when we know. I think I have covered all the issues that were raised—

Social Security Benefits Up-rating Order 2012

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 27th February 2012

(12 years, 9 months ago)

Grand Committee
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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To save the Minister getting up and down, I would appreciate a comment on the point that I made about child benefit. Perhaps it is more appropriate for the noble Lord, Lord Sassoon. What is the logic of putting so much emphasis on increasing personal tax allowance in real terms and then freezing child benefit, which is the equivalent of a personal tax allowance?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

Perhaps I may deal first with the point made by the noble Baroness, Lady Lister, although I am sure that my noble friend Lord Sassoon will provide a much more sparkling answer. My answer is that, as we look forward into a world where the poorest are supported by universal credit, which is very targeted—

Jobseeker’s Allowance (Domestic Violence) (Amendment) Regulations 2012

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 27th February 2012

(12 years, 9 months ago)

Grand Committee
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, I, too, welcome the order. I particularly welcome the very broad consultation that appears to have taken place, and the fact that—for once—there have been changes as a result of that consultation, which is very good to see.

The Explanatory Memorandum says that concerns were raised about some of the detail. In particular, it discusses:

“imposing time limits on the time a claimant can have to obtain evidence, and about having a maximum allowable deferral period”.

Were any other concerns raised that are not discussed in the Explanatory Memorandum? If so, perhaps the Minister could relay them.

The main issue I want to raise is in support of what my noble friend Lord McKenzie said about this being confined to victims of domestic violence or abuse where the perpetrator is living at a different address. Research in the United States shows that it is not unusual for a man who is abusing his partner to use violence to prevent her seeking paid work—for the obvious reason that he wants that woman under his control and if she gets paid work she can be independent of him economically. We know that economic dependence is linked to psychological dependence and makes women much more vulnerable to abuse. I am not aware of similar research having been done in this country but it seems quite plausible, now that partners are subjected to conditionality rules, that there will be situations in which someone may be prevented from seeking work by the violence or abuse of someone they are living with—and this will not allow for that. I would welcome the Minister’s response on that.

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

My Lords, as one would expect, this has been an interesting debate with some valuable contributions. I shall try to deal with the questions—slightly at random, if noble Lords will forgive me.

The evidence can be supplied by a very wide range of bodies: healthcare professionals, the police, registered social workers, employers, trade union reps, and public, voluntary or charitable bodies. My noble friend Lord German was concerned about the process being slow, but that is probably a pretty rare circumstance. Clearly there is the back-up of the domestic emergency discretion that is allowed to Jobcentre Plus when, after four weeks, the letter has not arrived and it looks as though the body is being slow in supplying it.

Both the noble Lord, Lord McKenzie, and the noble Baroness, Lady Lister, raised the issue of not living at the same address. Of course, that is how the primary legislation was framed; it says something about having to leave the address. The regulations provide financial support for a person when they have left the address, and the support is provided in order to help a person to move on. However, this is an interesting point. The noble Baroness, Lady Lister, talked about the interplay between conditionality and violence. I will bear that in mind as we look at universal credit, for which we are ramping up the conditionality. There might be households in which on the one hand the state says “go to work” and on the other hand the partner is using violence to prevent that. I suggest that that is an interesting, although I suspect rather narrow, group, but we need to keep it in mind. Overall, the purpose of this easement is to support changes in individual circumstances. That is what it is for, and clearly staying in the same place would not mean that such a change was made.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 14th February 2012

(12 years, 9 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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My Lords, I am always delighted to take the advice of someone who occupied my room in the department for so many years—although I think that there is a progression and that ignoring it early on does not mean that it will not come back. I will not go into this in too much detail. I am sure that the noble Baroness did not mean to say that I was making it up, because I was not.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
- Hansard - -

Before the noble Lord moves off the point, will he give us the assurance I asked for that, whether or not this is a pretext this time, the argument will not be used to bring forward proposals to abolish attendance allowance, DLA or PIP on the grounds that it is the only way to deal with such cases?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

My Lords, that is an enormous question. In this context, I am in no position to give the undertaking. We will have to look very carefully at how we frame our benefits if we do not want them all to be very freely and widely used. That is all I am saying. How we will frame them in the years ahead I do not know. I have not started to think about it. Clearly, we are going through a huge exercise to introduce PIP and it is very unlikely that anything will reverse it for many years. I cannot answer the question because it is too big. However, these are real concerns.

I will go back to a narrower point. We want to modernise and simplify the welfare system. We want to avoid duplication of provision, and to redefine the basis of the contract between the individual and the state. We need to do that in advance of universal credit coming in. We want to place claimants on the same basis as everyone else. All those who do not qualify for contributory benefits will qualify for income-related benefits. The effect in practice will be a streamlined system for these youngsters to receive passported benefits.

The amendment does not work, but I take the point. We will monitor this very closely and keep the outside world, including the Chamber, informed.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 31st January 2012

(12 years, 9 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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My Lords, let me cut straight to the chase. We have the powers in regulation to do whatever we or any future Government want to do to raise sanctions, so I can provide reassurance to that extent. I will go into a little detail about our plans and what we intend to do, but first I pay tribute to noble Lords because some really interesting and useful ideas were expressed in Committee that we took on board, although I do not think that we took them on board quite as much as some noble Lords would want. We moved a long way and thought about this again more specifically, so I thank noble Lords a lot for that.

We are trying to create a sanctions regime to provide at one level—probably the most important—a deterrent against behaviour that damages a claimant’s and indeed others’ employment prospects. Ending sanctions when a claimant complies with requirements can clearly play a role in incentivising sanctioned claimants to do the right thing. That is why we are moving in the direction of open-ended sanctions for lower-level failures, such as the failure to participate in training or to attend work-focused interviews. In essence, these sanctions apply only until the claimant re-complies, with a short fixed period of a week or a few weeks.

This amendment is about the higher-level sanctions: sanctions imposed for failing to comply with the most important requirements. These are employment-related failures, such as the failure to apply for a job when specifically asked to do so, the failure to accept a job offer, or the failure to leave employment voluntarily. By failing to do these things for no good reason, a claimant is fundamentally breaking the agreement that sits at the heart of jobseeker’s allowance: that they do everything possible to find work in order to be able to support themselves. That is why we believe it is vital that there are clear consequences for such failures. Fixed, substantive sanctions reinforce the message that these requirements absolutely must be met.

As I said on Report, we propose to wipe the slate clean by terminating any outstanding sanctions once a claimant has moved into employment for six months, but we believe that going further and ending these critical sanctions after a few weeks or months of compliance would undermine the clarity of our message and the effectiveness of the sanctions regime. It is worth noting that in the current system sanctions can be imposed for up to six months and are typically not lifted at all on re-compliance.

As I said at the beginning of this debate, we have the powers to end sanctions following re-compliance—we have defined the levels of re-compliance—so if, after a period of live running, we or future Governments wish to change the position, we have the powers to do so. Indeed, this is one area in which it might be very interesting to do some piloting work on how incentives and deterrents actually work.

Just to be techie about this, the powers that I mentioned are in this Bill and in the Jobseekers Act 1995. Clause 19(4)(b) provides a broad regulation-making power to set the duration of a sanction. Existing Section 36 of the Jobseekers Act allows for any regulations made under that Act to be subject to particular exceptions. I am not absolutely surprised that no one could piece that together.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I thank the Minister for the techie stuff, but what happens to someone who has been subject to a sanction, goes into paid work, through no fault of their own loses that job before the six months is up, then assiduously looks for work daily, just as they are supposed to do?

Lord Freud Portrait Lord Freud
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My Lords, under this construct, they will have to do the six months to wipe off the sanctions. Let us not forget that the sanctions that we are talking about do not involve the full amount of support but the equivalent of the JSA—£63-odd. There will be a very strong incentive on that person to take absolutely anything to fill in the rest of the time.

As I said, this is a very interesting area of deterrence and compliance and how we influence behaviour, which is exactly why I wanted to have the powers to pilot all these things. This is our starting point. Noble Lords have influenced us into making the lift at the six-month level, and it is clearly our best view today on what the reasonable balance is. No one can know yet as we have not done the live testing, but we will do it and we will be able to look at this and get the balance absolutely right. It might need to be milder, it might need to be tougher, but noble Lords will appreciate that if we pilot and test and look at these things in the way that I am describing, we will start to get answers on what works and move away from some of the rather more excited commentary and pressures from some of the media in this area. It could be of great interest to noble Lords if we start to move this into a social science area where we know the answer as opposed to an area where everyone has an opinion.

With those thoughts, I urge the noble Baroness to withdraw her amendment.

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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, I support the amendment. It is important that there has not been a change in meaning. I know that the Government have their doubts about targets and so forth but they are very important in terms of accountability. I talked a lot last week about accountability in relation to the Social Fund. This is accountability in terms of organisations which are very concerned about what is happening as regards child poverty and enabling them to know what progress the Government are making and are intending to make. I know that certain voluntary organisations are very concerned about child poverty and that there has been a slight shifting here in meaning that could make their job that much harder.

Lord Freud Portrait Lord Freud
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My Lords, Amendment 14 is designed to place a caveat on the amendment to Section 9 of the Child Poverty Act which is already included in the Welfare Reform Bill. As I discussed on Report last week, the amendment to Section 9 is a clarification which confirms the Government’s existing understanding that the requirement in Section 9(7) of the Child Poverty Act for a UK strategy to describe progress can be met with a description of progress in narrative or policy terms, rather than in numerical or statistical terms.

This amendment appears to seek clarification that the changes already agreed by the House will not undermine three requirements on the Secretary of State which are included in Section 9 of the Child Poverty Act; namely, first, that he must publish and lay before Parliament a child poverty strategy; secondly, that he must describe in that strategy the progress that he considers necessary to meet the four child poverty targets by the target year of 2020-21; and, thirdly, that he must describe in that strategy the progress he intends to make over the period of the strategy to reduce socioeconomic disadvantage as far as possible.

I can state clearly on the record that our amendment to Section 9 is not designed to remove the requirement on the Secretary of State to do any of those things. The Secretary of State will continue to have a duty to produce a strategy every three years which sets out the measures that will be taken, and the progress that needs to be achieved, in that period in order to meet the targets by the target year and reduce socioeconomic disadvantage as far as possible. The purpose of our amendment to Section 9 is not to change the substance or effect of the law. The amendments simply clarify how progress can be described—in particular, that it can be described in policy or narrative terms rather than statistical or numerical terms if the Secretary of State so wishes.

I discussed on Report the reasons why we think that this clarification is important. We believe that a requirement to set out the progress required in statistical terms is equivalent to a requirement for interim targets on child poverty towards the 2020 target. Interim targets incentivise the short-term, income-transfer approach that we have seen in the past. That approach has not worked and completely fails to address the underlying problems. This can lead therefore to small amounts of money being given to families just to lift them over the poverty line.

The Government remain committed to eradicating child poverty and improving social mobility. We do not believe, however, that the right way to achieve these aims is by using income transfers to move people above an arbitrary line, so we must focus on tackling the root causes of poverty and changing behaviour. In the long term, those with the lowest level of income can only improve their life chances by keeping pace with those at the top. This is why we must take long-term sustainable measures to improve skills, abilities and aspirations. An income-transfer approach does not work because it is unsustainable and does not deal with or address the underlying causes of long-term deprivation. We will continue to monitor progress through the annual publication of the Household Below Average Income Statistics, the beloved HBAI. However, we think it is very important to clarify that the law does not require the child poverty strategies to set out interim income targets. It is because of this that we cannot accept the amendment. By reintroducing the wording of the original Child Poverty Act, in effect it would remove the clarification that we introduced using the amendment to Section 9.

I emphasise that we remain fully committed to eradicating child poverty, and that amendment does not alter current government policy. We will continue to be required to produce a strategy every three years which sets out the measures that will be taken and the progress that needs to be achieved over the period. This amendment is unnecessary and unhelpful. The requirements it seeks to place on the Secretary of State already exist. All it will do is reintroduce lack of clarity regarding how progress is to be described, and I therefore urge the noble Lord to withdraw it.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 25th January 2012

(12 years, 10 months ago)

Lords Chamber
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, I rise briefly to support the amendment of my noble friend Lady Hayter. However, her case was made on the assumption that the commission will have expertise. The original requirement that commissioners must have expertise relevant to the work of the commission has been taken out by this legislation. Apparently, the Government have argued that, because the commission will be a reviewing rather than an advisory body, the expertise requirement is no longer needed in the schedule. However, as End Child Poverty points out, this makes no sense. Reviewing requires just as much expertise as advising.

I should therefore be grateful if the Minister could give a rather better explanation as to why that provision has been taken out, because it is in danger of weakening the commission. I understand that the commissioners will be appointed through the non-departmental public body appointing process. Can the Minister explain how the process will work in this instance? What type of expertise do the Government believe is necessary for the commission, taken as a whole, to have? How will the NDPB appointment process ensure that the commission has such expertise? We are of course talking about expertise on both child poverty and social mobility. It is perhaps also worth considering not just traditional academic forms of expertise but the expertise born of experience.

Lord Freud Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
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My Lords, at the start of these two groups of amendments on the child poverty commission, I want to make it clear that this Government are absolutely committed to tackling child poverty. Our child poverty strategy, published in April last year, set out the package of reforms that we are implementing to ensure that no child faces a life trapped in poverty. As part of this, we want to create a new and more powerful commission that can assess the progress made as reforms are implemented.

Amendment 62F seeks to ensure that the commission continues to provide advice to the Minister as to how to eradicate child poverty. As noble Lords are aware, the new Social Mobility and Child Poverty Commission differs from the original child poverty commission in a number of important aspects. First, it will have a broader remit that will encompass social mobility as well as child poverty. Secondly, it will for the first time have the power to publicly assess government progress. The previous child poverty commission’s role was simply to provide advice to government. The new commission is required to produce an annual report that assesses whether the Government are taking the steps that they said they would in their strategy, and it will therefore have the opportunity to hold the Government to account for the steps that they are taking and point out where they are falling behind. This will ensure that Ministers are still responsible for developing the strategy, as is right, but that there is external examination to ensure that it is being implemented.

Finally, the commission will no longer play a direct role in the development of the Government’s child poverty policy. This third change is crucial if we are to maintain our commitment to ensure that unelected public bodies are not established unless there is a clear need for their work to be carried out independently of government. This is one of the three key principles of the review of public bodies carried out by the Government last year. It is the role of the Civil Service, directed by Ministers, to develop policy. This is not a job for external bodies.

We cannot justify establishing a public body to provide advice when there is already a wide variety of ways in which government can access such guidance. Indeed, many of the organisations that we might expect to see represented on such a body provided recommendations on the current child poverty strategy via our extensive consultation exercise. Giving a single public body a statutory power to provide advice to government on child poverty policy also risks undermining ministerial accountability. It offers a degree of scope for Ministers to shift responsibility for their policy to an external body. When publishing its report each year, the commission will have the opportunity to advise the Government on steps that they should be taking to implement the strategy. As an independent body, the commission would be able to respond to government consultations and put points to Ministers, alongside other organisations with an interest. It is a fundamental principle of this Government that Ministers are accountable for the policies and strategies they put forward. Therefore, while we will continue to consult widely on this policy area, we do not believe that the commission should be given a special, statutory role in providing advice.

I can tell the noble Baroness, Lady Hayter, that we are committed to establishing the new commission as soon possible, once the necessary legislative changes are made. That means, given that I need to define “as soon as possible”, that as soon as the amending legislation has been passed we will begin to put the new commission into place.

If the commission thinks research is required but the Minister does not, whether or not a particular request is granted will be a matter for private discussion between the Government and the commission. The commission will be able to request research directly; there is provision for it to do that.

On the issue of the expertise on the commission, raised by the noble Baroness, Lady Lister, we intend that it have the appropriate balance of expertise in child poverty and social mobility and we agree that a commission without specific expertise in these areas would not be effective in carrying out the functions set out in the Bill. How will we conduct the appointment process? All members of the commission, including the chair and the deputy chair, will be appointed using a fair and open recruitment process which meets the standards required by the office of the Commissioner for Public Appointments.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I am sorry to interrupt, but I also made a point about expertise born of experience. I sat on the Commission on Poverty, Participation and Power, half of whose members had experience of poverty. It was one of the most rewarding experiences of my career, because the insights of those with experience of poverty were such that I could not bring to the subject. Will the Government be open to such expertise?

Lord Freud Portrait Lord Freud
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Yes, my Lords. I hope that I was making clear that our intention is to get people who are experts in the area. It is hard to overspecify what that means, but people in that category could provide a powerful insight. I am not going to write the job spec in detail tonight, but clearly those would be attractive sets of experience for the commission.

Amendment 62CZA would require that any steps taken in relation to collecting child support maintenance should be consistent with advice given by the Social Mobility and Child Poverty Commission. I will stick precisely to the point in relation to the commission rather than straying back into some of the discussions we had earlier this evening. Our view is that the commission should not be involved in developing policy. From that it follows that we do not think that it should develop policy on child maintenance. That is something for which Ministers alone should be responsible—or perhaps responsible for alongside the House of Lords.

Moreover, where payments are reliable and regular, child maintenance provides parents with care with a separate income stream that may improve the lives and life chances of some children in or near poverty. We have concluded that child maintenance payments are estimated to have a small, non-reportable impact on the number of families living in relative income poverty as currently measured and with current data sources.

Amendment 62JA, the government amendment, and Amendment 62K, would both create an explicit provision in the Bill for the Government to carry out research at the commission's request if it so wishes. We addressed that issue briefly in Committee. I gave assurances that having that provision in the Bill is unnecessary. The Bill already enables Ministers to provide the commission with any resources, including research, which Ministers think are required for the commission to carry out its functions. However, given that the issue has arisen again, we decided to table an amendment to allay any remaining concerns. The government amendment provides that Ministers have the power to carry out or commission research at the request of the commission if they so wish.

Before I ask the noble Baroness to withdraw the amendment, I make it clear that the Government do not consider any of the amendments consequential. I commend Amendment 62JA.

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Lord Freud Portrait Lord Freud
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My Lords, as noble Lords are aware, our focus is on supporting and helping to lift children out of poverty and improve their life chances by encouraging lone parents to enter paid work. Evidence shows that paid work is good for lone parents and their children in nearly all circumstances. Indeed, just under 80 per cent of lone parents with a youngest child aged five or six are either in employment, looking for a job, or would like to work.

Many lone parents consider making the transition to work when their youngest child starts school, and it is for these reasons that we announced our intention to align the age at which lone parents could reasonably be expected to look for work to when their youngest child reaches the age of five. This means that once a lone parent’s youngest child reaches the age of five we would want the parent to claim jobseeker’s allowance if they are capable of work. If they have limited capability for work, they would claim employment and support allowance, unless they are entitled to income support on some other ground, for example as a foster carer. If we delay carrying out this change and wait for the introduction of universal credit, we delay bringing these lone parents closer to the labour market, delay making any benefit savings but, more importantly, delay lifting more children in lone-parent households out of poverty.

Picking up the point on the current economic situation, it is important that we do not repeat the mistakes of past slowdowns and allow people to slip into inactivity. In fact, one of the best things about this economic slowdown—and there are not many good things about it—is that we have not let more people fall into inactivity. In fact, there is less economic inactivity now than a couple of years ago. Maintaining our active labour market policies will ensure that people, including lone parents, do not become detached from the labour market and are well placed to benefit when the economy picks up again.

As noble Lords are aware, this is especially significant because, compared to a child of a lone parent who is not working, a child of a lone parent who works part-time is almost three times less likely to be living in poverty, and a child of a lone parent who works full time is five times less likely to be living in poverty. While we want lone parents to enter work, we do not want them to do so at the expense of their caring responsibilities. This is why we maintained the right for lone parents to restrict their availability for work to school hours, and we will retain all other flexibilities within jobseeker’s allowance to ensure that lone parents can balance caring for their child while working. I described all those measures in Committee, and I shall not do so again given the lateness of the hour.

I stress that this initiative is an important lever in lifting lone parent families out of poverty. If it were delayed until October 2013, it would result in about 17,000 fewer lone parents being in work, which in turn would prevent increases in household income for up to 25,000 children. However, in response to the noble Baroness, Lady Lister, I am conscious of the importance of putting together training and employment strategies. When I wrote my report in 2007, the two strategies were so far apart that they never met. They are moving together, and my view is that we should move them as close as we possibly can, so the door is particularly wide open to discuss with the noble Baroness and, perhaps, with Gingerbread how we can achieve that in the months and years to come.

With that explanation, I ask the noble Baroness to withdraw her amendment.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I beg leave to withdraw the amendment.

Child Poverty

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 24th January 2012

(12 years, 10 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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My Lords, we are concerned about the slow way that people on ESA are moving into the work programme and we are looking closely at how to accelerate that process. Clearly, one of the ambitions of the programme is to get the hardest-to-help people back into the workforce, and there has been a rather slow start in that area.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
- Hansard - -

My Lords, can the Minister explain why the Government dismissed the projected 100,000 increase in child poverty due to tax credit cuts as a “statistical quirk” arising from the relative nature of that poverty when, in opposition, the Prime Minister promised,

“loud and clear … the Conservative Party recognises, will measure and will act on relative poverty”?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

My Lords, one of the recent decisions we have taken was to up-rate benefits by the CPI at 5.2 per cent, when average earnings in the period have increased by 2.8 per cent. Interestingly, that is the core reason why the IFS projections for this year and next show a decline on last year. Looking further ahead, we clearly have a lot of work to do in maintaining any reduction in child poverty and the IFS warns us that we need to have government policies to do that. However, I should point out that what we are driving towards is behavioural change, whereas the IFS measures concrete changes of income transfer.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 23rd January 2012

(12 years, 10 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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My Lords, I shall speak to Amendments 62ZA and 62B. I could almost do so like my noble friend Lord Kirkwood, but I will speak at slightly greater length.

I would like to assure noble Lords that we are in agreement on the need to ensure that a claimant’s childcare responsibilities are taken into account when setting work-related requirements and when determining whether a claimant has good reason for failing to meet a requirement. For the record, let me set out how we intend to do this.

The legislation will provide clear safeguards. When a child is under one, support will be unconditional. When a claimant’s child is under five, we will ask the claimant only to attend work-focused interviews. If claimants fail to meet this requirement for no good reason, they will be subject to the lowest level sanction; the sanctionable amount for these claimants will be limited to 40 per cent of the sanctionable amount for other claimants.

Secondly, advisers will take childcare responsibilities into account when setting work-related requirements, and we intend to set out some specific safeguards on this issue in regulations. Regulations will prescribe that claimants with a child under 13 will be able to limit their work search to jobs that fit around their children’s school hours. This is key. The best way to prevent the inappropriate application of sanctions is to ensure that requirements are reasonable in the first instance.

Amendment 62B seeks to introduce a blanket exemption from conditionality sanctions for claimants who can demonstrate that they did not have guaranteed and predictable access to suitable childcare. We do not think such a legislative exemption is needed. As I have previously explained, when a claimant fails to meet a requirement, a sanction will be imposed only if the claimant does not demonstrate that there was a good reason. In considering whether there is good reason, we will consider all relevant matters raised by the claimant, which could include the availability and cost of suitable childcare. This flexible, case-by-case approach is the right one, but to be absolutely clear, when a claimant demonstrates that a lack suitable childcare meant that the claimant was unable to meet a work-related requirement, a decision-maker should determine that the claimant has good reason and a sanction will not be applied.

Noble Lords have previously raised concerns about where the responsibilities lie in relation to the provision of good reason. I would like to take this opportunity to clarify the position. We have a responsibility to ensure that claimants understand the decision-making process and that they have an opportunity to explain the reason for a failure to meet a requirement. The onus is then on the claimant to tell us the reasons and provide supporting evidence where necessary. The department must then determine whether the reasons raised are relevant and whether any of those reasons constitute a good reason. The current practice of visiting ESA claimants with a mental health condition or learning disability before the application of a sanction is a good example of the proactive process required to collect evidence of good reason in some cases. I can assure noble Lords that we will review our approach to collecting evidence of good reason for all claimants to ensure that we get this process right.

The final safeguard is the appeals system. Any decision to reduce an award as a result of a sanction can be appealed to the First-tier Tribunal. Amendment 62ZA seeks to require the tribunal to consider whether the claimant had guaranteed and predictable access to childcare. We do not want to go down the route of prescribing specific matters to be taken into account by an independent body; the existing legislation is clear and sufficient. The First-tier Tribunal must consider any issue or circumstance raised by the claimant that is relevant to a valid appeal, so in an appeal against a decision to reduce an award of benefit because of a sanction where a claimant cites lack of suitable childcare as a good reason for failure, this should be considered by the tribunal because it is plainly relevant to whether the award ought to have been reduced.

Given the safeguards we have in place and the commitment I have made to reviewing our processes for collecting evidence for good reasons, I hope I have provided the assurances on the record that were required by the noble Baroness and I urge her to withdraw this amendment.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, I am very grateful to the Minister for his full response, given the lateness of the hour. I should have thanked One Parent Families Scotland for its help with this amendment. As this organisation has written to the Minister, if there is anything that it wishes to follow up, I wonder whether he would be willing to meet representatives of this and other organisations that have written to him just to go through in more detail what he has so kindly said to the House. I beg leave to withdraw the amendment.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 11th January 2012

(12 years, 10 months ago)

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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, in Grand Committee the question of the assessment period got a bit lost because there were so many issues that the Minister had to deal with. I asked the Minister why the assessment period was not included but never got an answer.

We talk about the time limit kicking in after a year but it is a year minus 13 weeks because for those first 13 weeks people affected will be paid at JSA rate, which is lower. Quite a number of us were confused, but the upshot was that the Minister said:

“I have to admit that I am not particularly happy about the assessment phase of ESA and how it is working … I would like to look at it. It is difficult to have a set of principles around something that one is somewhat unhappy about”.—[Official Report, 8/11/11; col. GC 46.]

I hope that the Minister has looked at it in the interim and has perhaps realised that there is no principled reason for the clause as it now stands and there is every principled reason for supporting the amendment. I hope that the Minister will see reason and it will not be necessary to test the opinion of the House in the way that the noble Lord, Lord Kirkwood of Kirkhope, was suggesting.

Lord Freud Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
- Hansard - - - Excerpts

My Lords, I shall leap straight in on the issue raised by the noble Baroness, Lady Lister, on the assessment phase. What I was really alluding to was the upcoming sickness absence review, which is an important review of how we treat sickness absence. One of the things it has looked at is the interrelationship between sickness absence periods and the ESA regime. Basically the review sees no real reason for the assessment phase. As we look at this we must ask: are we structuring ESA and sickness absence so that it is a vulnerable or difficult process? I am sympathetic to my noble friend when he says that there might be a way through this. I want noble Lords to be aware that huge weaknesses have been found. We are pushing people through a process that puts them in limbo for a long period of 92 days or more. The sickness absence review states that that is deeply unsatisfactory, and I suspect that a lot of noble Lords in this Chamber who understand the system also believe that. In that area, I am not sure that this is genuinely the direction in which I want to go because I am not sure that it is something we want to maintain.

Moving on from that, let me set out some of the technicalities of the assessment phase. It usually ends after 13 weeks unless by that point there has not yet been a WCA determination. If a WCA has not been carried out by the 14th week, the assessment phase ends when a determination about limited capability for work has been made. So if the claimant’s assessment phase lasts longer than 13 weeks and they are found to have limited capability for work or work-related activity, the payment of additional components is then backdated. That is the existing system, which I am not that happy with. The effect would be to exclude it in terms of counting to the 365 days, or at least the 730 days depending on where we are, but in practice it does not always happen within 13 weeks and we have a lot of disparity of treatment. Even if we were to stay with the regime, it would be a pretty messy system.

I know that noble Lords hate me when I go through figures, but let me give some—I shall do my best because these figures have been running around. Purely on this basis, there is a cost of an extra £430 million cumulative to 2016-17 over the five-year period. I shall try to make a quick off-the-cuff assessment of how much extra it is when we look at it on top of the two years, and it is not actually a hugely different sum. It is £200 million on the SR period and £400 million on the total period of five years. I know that noble Lords feel that hundreds of millions are easily obtainable, but it is not an insignificant amount of money.

Moving on to Amendment 40B, the effect of this amendment would be that for existing ESA claimants, the one-year time limit would be calculated from the date the clause is commenced, and none of the time already spent on ESA would count towards the 365-day total entitlement. I want to have a word about retrospection. The noble Lord, Lord McKenzie, used the word slightly freely and in fact slightly aggressively. I was upset but not ashamed. I can understand that noble Lords are unhappy that we are taking account of days before the clause is brought into account, but this is about the question of whether noble Lords feel that this is the right approach; it is not about retrospection. Retrospection involves interfering with a claimant’s past entitlement and we are not doing that with this measure.

It is worth explaining what retrospection of time limiting would involve if we were to do it, which we will not. It would involve interfering with past entitlement to ESA. An example would be: at the date we commence the time-limiting provisions, if a claimant who had been receiving contributory ESA in the WRAG for 18 months, it would be retrospective if we demanded repayment of the extra six months of benefit he had already received because that would interfere with the claimant’s past entitlement. We absolutely are not doing anything which is retrospective in that sense. We are redefining the terms on which claimants are entitled to ESA in the future.

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Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

My Lords, I do not want to reopen this matter at Third Reading on the basis of things that I will have no further information on at all. That does not make much sense. The noble Lord is absolutely right that if we were to get rid of the assessment phase—and clearly that is something on which, as those who know how government works will know, we would have to do some work—it would be a big change. It would tie in with a lot of other changes, with work that we are going to be doing this year. We are utterly committed to this sickness absence review, which has been a very important document for us. My noble friend said that there was some value in using this assessment phase in this way in the future. I am trying to say that I do not think there is, because I would not want to put any weight on it. There might be other things that we can do to get out of a hole—if we are in a hole—but I honestly do not think that this is a promising line. I do not want to have this debate again at Third Reading. I have said everything I can on it, but I hope that I have said enough.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I apologise, but I wonder whether the Minister could say one more thing now so that we do not have to come back to it at Third Reading. If the assessment phase is done away with, clearly there is no issue. Given that the Minister himself is clearly suggesting that he would like to see that, would it be possible for him then to say whether, in the event that the assessment phase is not abolished, he would accept the spirit of this amendment now?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

I am clearly not in a position, and it would take more than a couple of weeks to get into a position, to make that kind of assurance. I know how skilfully your Lordships ask me these questions, and I deeply appreciate it, but I cannot do that. All I can tell the noble Baroness is that we have had a very powerful report on sickness absence, which I am personally very closely associated with and have sponsored. It made this recommendation, and most people in this Chamber who understand these matters would say that that is the way to go—as I would. Noble Lords must take their conclusions from that, but I cannot go much further or make promises on hypotheticals, because that is not how the system works.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 11th January 2012

(12 years, 10 months ago)

Lords Chamber
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Lord Freud Portrait Lord Freud
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To be absolutely honest, unwinding the effects of the first full year, which will be in 2017, is quite hard to do in simplistic terms when compared to an SR. The simple answer is that the £4 billion is a real £4 billion, not an eroded £4 billion. The impact assessment makes it clear that it is made up of roughly half and half efficiency; it is a much more efficient system. We have taken the efficiencies that we have gained and put them back into the pockets of people, plus an extra amount of £2 billion. That is where the money is coming from. The bulk of it is going into the lowest two quintiles in a rather efficient way; I forget whether it is 80 per cent or 90 per cent, but the bulk of that money is directed very efficiently.

I turn to Amendment 45 in the names of the noble Lord, Lord Patel, and the noble Baronesses, Lady Lister and Lady Finlay. Clearly, the design of that amendment removes Clause 52 altogether. As I have just mentioned in my remarks on Amendment 45A, we have a principled approach to reform, in which we are trying to modernise and simplify the current welfare system and remove duplicate provision when our resources are limited.

As we move towards universal credit, on which I have just spent a bit of time, there are other areas of rebalancing the relationship between the state and individuals. I remind noble Lords again that the small number of youngsters who do not qualify for income-related ESA are in this position only because they have alternative resources available to them. All those in the ESA support group will continue to receive unlimited support. We will also, of course, provide support to ESA youth claimants whose awards end, and they later become vulnerable through their conditions deteriorating so they develop limited capability for work-related activity.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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Does the Minister accept that there may be resources available to that group but that they are not resources over which they would have control, as they do not provide those young people with any form of independence, as does the contributory ESA?

Lord Freud Portrait Lord Freud
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My Lords, where they have other resources, as they move into young adulthood, clearly they have to be resources of their households at that stage and their own capital and household income. The reality is that very many of this small group of youngsters are inheriting very substantial sums of money; that is why they are in the position that they are in. That is a decision in principle over whether we should support people who have very adequate resources of their own. We will continue to support those who have deteriorating conditions even when they have a high income. They just go back into the support group.

Let me just go into the rather complicated position with European law and the specific judgment here, which I am looking at. I do not know whether the noble Lord, Lord McKenzie, will regard it as recent enough—this is the Lucy Stewart case on 21 July last year. It is within half a year, so I think that is recent. We have a code for soon and sooner or whatever; recent is within half a year. That judgment made it clear that we cannot use the past/present test to deny access to a benefit if a claimant demonstrates a genuine link to the UK in other ways, which may include consideration of the relationship of a claimant and the social security system of the competent member state or claimants’ family circumstances. The past/present test requires that a claimant must be present in Great Britain for 26 weeks out of the last 52 preceding a claim for employment and support allowance. We still lost the case, even though we had lots of powers on residence. Clearly, the view of this Government is that it should be a matter for the Government of this country to decide how people qualify for benefits. The effect of this judgment is that young people can qualify for a benefit even when they have not lived in this country for many years.

I cannot be absolutely hard and fast on the European benefit-shopping issue; I can tell your Lordships only that this is causing us enormous concern at a number of levels and we are currently challenging Commission lawyers on it. The issue, at the simplest level, is that if you can call something social support it is much less likely to be abused and taken abroad than if it is a contributory right. That is where the battleground is and your Lordships can clearly see what we are doing here. When we are asked for a concession and whether we can get round the European law, what we are looking at is a system that basically provides the support for the vast bulk of the youngsters whom we want to support without opening our doors wide to current and future dangers of this kind of benefit exportability. That is the approach that we have adopted to try to get round this problem.

Lord Freud Portrait Lord Freud
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My Lords, I do not think that we ought to spend a huge amount of time on this—it is really difficult and moving very fast. The principle is that it is the automatic entitlement that makes us vulnerable. If it is for income supplement and social support, it protects us. Your Lordships can see that the change that we have made here is to cover the vast bulk of the youngsters with support, but it is not automatic. That is precisely the safety that we are going into with this European legislation. I do not think that the precise workaround from the noble Baroness, Lady Hollis, works or that we should sit round this Chamber and work something out. All I can tell your Lordships, for your consideration, is that this is the way that we have found to get round it while, as I say, covering 90 per cent of those youngsters.

I ought to hurry along, but let me move to giving your Lordships the figures on Amendment 45. The reduction in the cumulative benefits savings by 2016-17, over five years, would be around £70 million, which we would need to find elsewhere. A little bit here and a little bit there—it is a very hard thing finding bits of money.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I am sorry to interrupt again but in Grand Committee the cumulative saving during that period was £10 million. Now, suddenly, it is £70 million. Where has the other £60 million been accumulated?

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 14th December 2011

(12 years, 11 months ago)

Lords Chamber
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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We are very pleased to hear that. Can the noble Lord tell us what definition of domestic violence the Government have in mind? They are consulting at present on the question of domestic violence and I wonder what the implications are for this provision.

Lord Freud Portrait Lord Freud
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I am going to have to write with a precise definition of domestic violence and the threat of domestic violence.

Turning to Amendment 26, we are all too well aware that in-work conditionality is a difficult and contentious area. In this debate and in Committee noble Lords raised a number of concerns and questions. I think that I have been open enough to admit that I do not have all of the answers to those questions right now, but I hope that I can provide some real reassurance by describing our planned approach. We are going to take some time to get this right, because it is a new area. I said in Committee that there may be a role for piloting and I can now be much clearer on that.

We have decided that when universal credit is launched we will not be imposing conditionality on claimants with income or earnings which would, broadly speaking, have taken them over the cut-off point for the current out-of-work benefits. So we are effectively continuing with the current system. Rather than a review, our approach will be to pilot the application of conditionality on claimants whose income is above this level. We will want to gather views on the sort of approaches that could be tested and I commit to publishing the details of these pilots. We will then reflect on the results of that process before adopting any national approach.

Finally, turning to Amendment 24A, I have listened very carefully to the feelings of noble Lords on this and again let me say that we are of one mind on this matter. Work is already under way, as I said in Committee, around how kinship carers should be treated for conditionality purposes. I agree that kinship carers who need a period of adjustment should be given time to return to a stable footing before being expected to meet work-related requirements and juggle conditionality with new caring responsibilities. Advisers will have discretion to lift temporarily the requirements on individual claimants where a child’s needs are such that the claimant must be able to provide full-time care. I repeat what I said in Committee. I recognise the potential for value and clarity in a legislative exemption from conditionality and we are carefully considering options for further provisions. The Bill provides scope for flexibility in this area and we have powers to make regulations as necessary. These things take time, but I can assure noble Lords that work is progressing. I am on this case. We are currently talking to the Department for Education—

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Lord Freud Portrait Lord Freud
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No, my Lords, the sanction regime does not work like that. It takes away the equivalent amount of the JSA, so you keep getting your housing credit, but have this amount taken off, which will be a proportion of the total universal credit.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I am sorry to interrupt the Minister, but is he saying that the department is unable to measure compliance with work-seeking requirements? If that is the case, surely the whole basis of the sanction regime falls apart?

Lord Freud Portrait Lord Freud
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I think I can safely say that we are not saying that. We are just saying that we want real proof of a change. The prodigal son must do more than turn up and warm his hands on the fire as the fatted calf is slaughtered. I am saying that he has to take a job and hold it for a minimum of six months.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 28th November 2011

(12 years, 12 months ago)

Grand Committee
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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Is that also the case with any other penalty, not just the civil penalty? Is it a benefits sanction?

Lord Freud Portrait Lord Freud
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We absolutely will not do that. The noble Baroness drew a comparison with current levels of JSA usage. The online facility that we offer claimants is so markedly inferior that people would not want to use it. We need to make sure that people will want to use the online provision, and we are taking a lot of active steps to look at how to encourage and help people to use it. Indeed, this is one of the discussions that I am currently having with the various groups and charities that are trying to get the most disadvantaged in society online, because that is one way in which they become a full part of the economic life of the country, and indeed of the whole life of the country. They and I see that this could be an immensely powerful force for getting that inclusion. As I said, we will work very hard to encourage people to use it. One does not encourage people to do something that could be life-transforming for them through some of the things which the noble Baroness suggests I might be doing.

The aim of the civil penalty is to reinforce the importance to claimants of providing accurate information that we require in order to administer their claims and awards in advising us when they have a change of circumstance. It is a different issue when someone does something knowingly. That is fraudulent, and we will target that behaviour by looking at tougher punishments than the one for missing a dental appointment—I had better not talk about my teeth. We want claimants to take more responsibility for overpayments and to encourage a positive change in claimants’ future behaviour so that they take proper care of their benefit claims and awards.

The noble Baroness, Lady Drake, made an important point about mental health. We will take that into account. Indeed, that is why we require the claimant to have acted negligently and to have no reasonable excuse. The department must satisfy itself that the claimant has failed to take appropriate care. Each case will be considered individually by the decision-maker, and the penalty will not be imposed if a claimant’s state of health or mental health is considered relevant to the error that has been made.

Amendment 147ZA would mean that a civil penalty could be imposed only on those who failed to notify us of changes of circumstances and the failure resulted in an overpayment, while a claimant who incurred an overpayment by virtue of their negligence and who failed to take reasonable steps to correct the error would evade a penalty. We already help claimants in Jobcentre Plus and, as I have said, we will reinforce that. We believe that everyone should take responsibility for the accuracy of the information they provide in order to receive a benefit, whether that be at the start of their claim or during the life of their claim when there has been a change of circumstances.

As for the question asked by the noble Baroness, Lady Drake, on legal aid, information on benefits and the conditions of entitlement for them is readily available to the general public. If claimants remain uncertain of which benefit is most applicable to them or have a question about their benefit entitlement, they can and should seek further advice from the department. New Sections 115C and 115D will therefore act together to remind claimants that it is just as important that they correctly report their circumstances at the start of the claim as well as report changes that occur within the life of a claim.

I will aim to answer the remaining three questions, having been bowled out on the fourth. On the ability of local authorities to impose fines, we consulted local authorities on the detail of the initiatives in the strategy and on our plans to implement them. Local authorities have provided input to the various projects that we have set up to implement the strategy. We have local authority staff collocated with the DWP and working on the strategy. That includes the sanctions and penalties project, which is doing the work on civil penalties. We will support local authorities in their work to implement the new penalty, which will include providing clear instruction and guidance on how to operate the new scheme. On the £50—

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Lord Freud Portrait Lord Freud
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Let me quickly pick up three issues. First, when I talked about clusters, I meant that, where there are clusters and mistakes, something is clearly going wrong with the way in which we are presenting universal credit. In those circumstances, we would look very hard at fixing that problem and we would not be able to accuse anyone of negligence.

Secondly, I shall look very closely at the run-in to operating the universal credit system. I agree with the noble Baroness, Lady Hollis, on lots of things. She is absolutely right that we cannot have a system that demonstrates problems in its run-in phase.

Thirdly, on targets, I need to write to noble Lords. I would not mind forbidding the DWP from ever using those targets in that way—and I could offer it as a deal any day—but a future Government might not want to be so constrained.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I thank the Minister for his clarification about clusters. How many £50 fines would there need to be before there was a cluster? If it was then accepted in the department that the problem lay in universal credit or in the way in which the form was designed, would the department then consider paying back any £50 fine?

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No, I meant a cluster of mistakes. When we begin to see a cluster of mistakes around a particular set of questions, it clearly means that we have not got it right and need to do something about it. But we will know very fast.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I accept and quite understand that, but the point is that, before the department realises that there is a cluster, a number of people might have been fined.

Lord Freud Portrait Lord Freud
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My Lords, I buy the point about the delicacy of the run-in. I have a tool with which to monitor it very carefully. However, we must have a system that tells people that they must take care with their application. This is an application on which tens or hundreds of thousands of pounds are riding. It is no good people just putting in slapdash figures and not caring; this is really important information and it must be put down carefully. That is what we are trying to ensure with this relatively modest civil penalty.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 23rd November 2011

(13 years ago)

Grand Committee
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Lord Freud Portrait Lord Freud
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By the time that I am able to set out these arrangements Committee Members will have a tight band in which to make a judgment. Although it will not be precise I hope that there will be a reasonable degree of precision to enable Members to reach key judgments.

As I confirmed on Monday, support for childcare—

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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The Minister seems to be moving off PIP. When we discussed PIP earlier I asked a question and the Minister said that it would be appropriate to discuss it as part of the benefit cap. I do not think that he has addressed the question. How many people does he estimate will be affected by the cap as a result of the PIP waiting period going up from three months to six months, and will he consider backdating entitlement for those who then become eligible for PIP?

Lord Freud Portrait Lord Freud
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Yes, my Lords; that is an excellent question in this sense. I have made clear that we are looking at transitional arrangements, and I will look at precisely this issue of the timing with PIP in the light of those transitional arrangements as people move through. Clearly I have already committed to looking at the three months and the six months, so I have something of a three-handed chess operation to get through, but I hope to come back with the pieces in the right place—or, rather, although the pieces might be in position, they might not be in the right place as far as the noble Baroness is concerned. It will at least be a clear understanding of the position. I absolutely bear in mind the point that she has made.

The noble Baroness’s other question was on school meals. I am happy to commit that, however we restructure the provision of the passported benefit of school meals, it will remain outside the cap in the same way as childcare.

With regard to the kinship care amendment, we have already discussed and recognised in Committee the valuable role that kinship carers fulfil. I made a personal commitment, supported by the Secretary of State, to look at a range of issues affecting this group. I have already had a number of meetings with organisations that support kinship carers to help me better understand their priorities. These carers are able to receive support for the children in their care through the benefit system as, unlike approved foster carers, they have access to child benefit and child tax credit on the same basis as parents. Any payments they receive from the local authority will be disregarded. This parity of treatment with parents will be continued with the introduction of universal credit.

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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, perhaps the Minister will say more about that. I do not know about other noble Lords but I am afraid that I do not find that enough. I understand the broader argument about the limits and, as the Minister knows, I disagree. There has been talk about a level playing field. Will he explain to the Committee how the Government justify the fact that child benefit is being taken into account on one side of the equation and not on the other when we know that all those families on median earnings are getting child benefit? That is what I do not understand. In the previous session, I think it was my noble friend Lady Hollis who referred to comparing apples and pears. We are not comparing like with like.

Lord Freud Portrait Lord Freud
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My Lords, I acknowledge that we are not comparing like with like. We are looking at a sensible level at which to put the maximum benefit payment. The level that we are looking at is the equivalent of a household earning £35,000. I think that one can overelaborate the logic, which I will not attempt to do here.

Amendment 99AA, in the name of the noble Lord, Lord Best, would introduce a grace period. I accept that there will be occasions when changes occur that are beyond a household’s control. We have said that we are looking at what transitional arrangements might be appropriate. The arguments that I was laying around the PIP are equally applicable here.

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I return to the principle. As I understand it, this is a principle with which the Opposition agree: that there should be a limit on the amount of benefit a household can obtain. We have set that limit at the equivalent of £35,000 of earnings before tax and national insurance.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I do not know whether the noble Lord, Lord Kirkwood—of wherever he is of—would comment, if he were here, but he spelt out a very powerful argument of principle about entitlement. I have not heard the noble Lord address that argument and, in his absence, I would be very grateful if he could do so.

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Lord Freud Portrait Lord Freud
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That is one of the areas of support. If we have about one-third of families who are subject to full conditionality and others subject to partial conditionality, by which we mean moving towards work over a period, a very substantial proportion of the group can be helped into the workplace.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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Is the Minister really saying that it would be supporting, say, a lone mother who has a baby to, in effect, require her to take a job as the only way she can avoid the benefit cap or to move to an area where she does not know people and has not got the support network she needs for her baby? I cannot believe that that is what the Minister is saying.

Lord Freud Portrait Lord Freud
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There is a combination there. Those are the choices that half of the low income working families need to take, although they are not even low income families—this is pretty high income. I am not specifying any more, but we will look at hard cases. I do not want to be “loaves and fishes” about hard cases either, which I know the noble Baroness would want to accuse me of, but those are the two areas relevant to that case study.

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Lord Freud Portrait Lord Freud
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However, in circumstances where a universal credit award is split, neither party will receive specific elements such as housing or childcare. They will each receive a proportion of the total award and decide for themselves how best to use the money. This adheres to one of the key principles of universal credit, which is that claimants must be responsible for their own budgeting.

In answer to the specific question from the noble Baroness, Lady Lister, contributory benefits will continue to be individualised entitlements, but we are looking at options for payment of benefit in cases where a household has entitlement to both contributory benefits and universal credit. It may be simpler to make a single payment of universal credit in that situation, but that is just one possible option and we have the power to cover different approaches.

We are, however, committed to ensuring that people can access support to manage their payment and help them budget effectively. This is likely to include access to nationally available advice and guidance, locally delivered targeted support and improved access to budgeting products.

Budgeting products, I know, mystify the noble Baroness. It is easy to think about universal credit and such areas in slightly Victorian terms. When we look at what universal credit is and the support mechanisms that are under it and wrap it up, we see that there are a huge number of options. I am actively looking at those and interested in encouraging access to what are popularly known as jam jar accounts. Those accounts allow partners to allocate part of their payment for specific purposes, particularly the ones that need to go to utility bills and rent. Such accounts incorporate direct debits and such things. There is a lot of work to be done in this area and I hope to be able to share that with noble Lords as we develop it.

We are talking to a lot of people about this. As well as to the banks and the financial services industry, we are talking to local authorities, housing associations and the voluntary sector about how to deliver this. I may have some more information about how this will start to work. I hope that it will break us out of what could be a 20-year debate into the opportunities offered by modern technology. I hope that I will be able to keep noble Lords updated.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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Will the Minister be able to update us before we get to this on Report? I am sure that we will want to return to this on Report.

Lord Freud Portrait Lord Freud
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I would like to. I have people working on this and we are beginning to think quite differently about how these issues can be addressed—what is universal credit, what is a banking product and where is the join. We must not forget that, at a simple level, a universal credit is a payment stream with budgeting advances. It does not take a lot of imagination to see how it could join up with a more formal banking product and we have to work out where the line is drawn.

Turning to Amendment 102B, I appreciate that the intention behind it is to demonstrate that the taper can be applied to individual elements within the overall universal credit award so that payment of—

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To save the Minister jumping up and down, I asked him a specific question about monitoring the impact on the distribution of income within households which I would be grateful if he would answer. I do not think he answered it, although the reply has been so fragmented because of the Divisions that we may have missed it.

Lord Freud Portrait Lord Freud
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On the first question, I think we should look at this rather differently. It is one payment to the household. On whether we can look at how the household can do different things with that payment, I am very happy to look at all the budgeting supporting mechanisms. I am actively looking at them, and I hope I will get some more information on that.

To be honest, I have not got on the top of my head the detail on the monitoring. We will be looking at it very closely when that comes in and will be devising a structure to do that. As noble Lords know, we are planning to have a very substantial research exercise around universal credit, mainly because it is an almost unique research laboratory opportunity in that we can capture in one place all the different behaviours. I am looking very closely at how we can get world-class research behind many aspects of the universal credit.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 21st November 2011

(13 years ago)

Grand Committee
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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While the noble Lord is conferring, can he perhaps explain to the Committee what behavioural effects the Government are trying to achieve in the case of those who are not required to seek work?

Lord Freud Portrait Lord Freud
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On the figures, one reason why I am slightly betwixt and between is that we are looking at that impact assessment, which is now somewhat dated, with a view to updating it and providing fresher figures when we can. That work is in progress and we are getting some more detail. All that I can do is to offer to provide some of that extra detail as soon as we get it. I am not completely sure yet of its timetable but there is ongoing work there, which is why I am slightly hazy about exactly what some of these figures will end up being, for which I apologise.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 16th November 2011

(13 years ago)

Grand Committee
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Lord Freud Portrait Lord Freud
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Let me go on a little further and try to pull this issue back. Noble Lords have said that, in practice, DLA is being used in a slightly different way to the long-term intention, and that that is tied to three months as opposed to six months. I have said that it is not a matter of money but of coherence. I have heard many strong views expressed in Committee about noble Lords’ discomfort with the move to six months and so I will take this matter back—that might be a slight overstatement—and look very closely at what we are hearing, not only from here but from elsewhere. This is not one-way traffic; some people are more concerned that if you go to an earlier assessment it implies that you will have more reassessments, which some groups dislike rather more. So it is not all one-way traffic for people who are affected.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I apologise for interrupting the noble Lord. I am sure that the Committee is extremely pleased to hear him say that he will take this away. I hear what he says about it not being one-way traffic but, given that the Minister is writing to the Committee already on this issue, it might be helpful if he could list the organisations which are supporting the move to six months and those organisations who are against it, so that the Committee can weigh the balance of opinion for itself.

Lord Freud Portrait Lord Freud
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I have slight jitters about that level of transparency, apparently.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Thursday 10th November 2011

(13 years ago)

Grand Committee
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Lord Freud Portrait Lord Freud
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My Lords, I cannot bring to mind a particular piece of research on that question, but I suspect that the noble Baroness, Lady Lister, probably went into this in great detail when she was working on her piece of research for the CSJ. If I can find something which pinpoints that particular question, I will certainly give the noble Baroness the reference. But the general point I sought to make is that a range of research in this area shows the great benefits for families of working, and if I can give a particular answer to her question, I will.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I suspect that that was research done for the department by Millar and Ridge. It absolutely did show positives, but it also revealed some of the strains placed on mothers and on children. If I remember rightly—I have to admit that my memory for research is waning—in some cases mothers moved out of work again because of those strains. The research showed both sides of the issue.

Lord Freud Portrait Lord Freud
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Let us not debate research none of us can remember. I will have a look at this and if I can provide anything more solid, I will do so. On the point about school holidays, under the regulations, if a lone parent had to leave a job because no appropriate childcare was available in the holidays, that would be taken into account for good reason. Technically it is good cause, but it would become good reason.

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Lord Freud Portrait Lord Freud
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Yes, the noble Baroness is way ahead of us, as usual, as we structure how we do the universal credit. We are currently looking at that very closely in terms of how we do it. We have not settled this, but my view is to look at it in fairly cash-in-the-month terms, as she is implying. That is where I would come from as we started to devise it. However, I cannot give a commitment or go further than say how we would do that. I am not keen to elaborate averaging-out processes because I think that gets overcomplicated.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I am very grateful to hear that. In order to dot the “i”s and cross the “t”s, could the noble Lord confirm that a dinner lady, or someone in that position, would not be subjected to in-work conditionality rules? The fact that there is a contract means that they are still in work. I may have misunderstood.

Lord Freud Portrait Lord Freud
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Let me just try to pin down the point on transitions and whether people should be in work. There is little evidence relating to the effects of maternal employment on children's cognitive and behavioural outcomes in the UK, but what there is suggests that there are few negative effects of maternal employment once the child is aged over 18 months. If I can find some more research, I shall get it to noble Lord post-haste.

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We are not expecting it.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, perhaps I, too, may ask a question on the crisis loan budget. As I understand it, at present, if there were a disaster, people could get help from crisis loans. If there were a disaster, for example a flood—and more and more flooding is taking place—would local authorities get additional money to help out, or would they have to use the money that has already been transferred from the DWP, which may already have been spent on other things for that ring-fencing? Will there be provision to help people in the case of disasters?

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In the case of disasters, other measures would be introduced. This will not be a core methodology to deal with particular localised disasters.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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At present, people can turn to discretionary crisis loans in such cases. I would feel more reassured if the Minister could tell us what that provision would be.

Lord Freud Portrait Lord Freud
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I will have to fall back on offering to write on that particular matter. I do not know exactly how we finance local disasters. In practice, the Social Fund has not been much used in that area. However, I will have to write on how funding for local disasters works.

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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I raise this to ask not so much about housing but about people's white goods and furniture that may have been destroyed for whatever reason. My understanding is that, at present, they can turn to discretionary crisis loans in such cases.

Lord Freud Portrait Lord Freud
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As I say, that is not a major use of the fund. Clearly, the local authority with its housing obligations is very well placed to manage that on a holistic basis. In the case of that example, there would be a better and more efficient use of funding than we have today.

The amendments in this group seek to place constraints on the changes to the discretionary Social Fund that would undermine the much-needed reforms and prevent the needs of vulnerable people being addressed in an effective way. In line with our commitment to localism, and to allow local authorities to make the best decisions for their respective areas based on their more detailed knowledge of local concerns and requirements, we do not propose to ring-fence the funding given to local authorities in England and in the devolved Administrations of Scotland and Wales. Local authorities have entered very positively into discussions with us and have come forward with interesting and innovative ideas on how support can be delivered. For example, one large rural authority is considering using some funding to pay the delivery fees charged by an existing provider to deliver free goods to the vulnerable people they need to reach.

The noble Baroness, Lady Hollis, asked whether the funding would go to the upper or lower tier. The funding will be allocated to upper-tier local authorities in order to provide the greatest possible flexibility to local areas. From our discussions with local authorities, we know that a range of delivery models is being considered. Some of these models will result in funding being devolved to lower-tier services such as housing. Decisions about the ultimate funding route for each area will be determined by a range of local factors, including the location and the nature of existing services and how these align with areas of deprivation and need, and the level of funding that will be devolved. In less deprived areas it may not be necessary or practical to operate a number of services.

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Lord Freud Portrait Lord Freud
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My Lords, I am just pausing while I think about the reflection process. Can I ask my noble friend to leave the reflective process as open as possible? I do not want to be over-circumscribed in how we reflect.

It is also worth noting that even under the current system, community care grants do not support those in the process of fleeing domestic violence. Under the current scheme, victims of domestic violence must have already fled the family home to qualify for support from the discretionary Social Fund to set up home.

I turn now to Amendment 86ZZZE which requires the Secretary of State to,

“conduct a review into the impact ”

of these reforms, and to commence,

“one year from the coming into force of this Act”,

and that there should be subsequent annual reviews which should be published. Eligibility for an award under the current scheme depends on an extensive range of factors so that identifying those who would previously have been eligible is not a simple matter. This would therefore place an almost impossible task on the Secretary of State. Comparing the recipients of support from the existing scheme with those under a wide range of new local support seems to miss the point that the driver for these reforms is better targeting. We would expect certain under-represented groups such as pensioners to be better served by a more local approach. Local authorities will want to consider ways of monitoring and reporting on their activities to provide transparency to those they serve.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, if the Government are successful in their desire to open up the scheme more to pensioners, it will mean that less money will be available for non-pensioners. What are the Government’s thoughts on that?

Lord Freud Portrait Lord Freud
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Well, my Lords, local authorities will have to provide support for vulnerable people in their areas. They have a difficult balancing act to perform, particularly in the difficult economic circumstances we are in. Exactly how they spend the money is, in the context of the ring-fencing question, something for them.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I am sorry if I am being a little dense here. When the Minister says that local authorities will have to provide support, if there is no statutory duty to do so, what validity will this have? What power would central government have to make sure that local government provide support if they place no statutory duty to do so in the legislation?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

Local authorities have a number of duties under which they are bound, and those are the duties to which I am referring. Let me continue.

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Lord Freud Portrait Lord Freud
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I understand that it is fixed for two years, which takes us to the end of this spending review.

I turn now to a number of questions raised by my noble friend Lord German, who asked about the devolution aspects. The Scottish Government have consulted on the approach that they might take to deliver the new local provision. They considered local as well as Scotland-wide approaches and they now have to decide whether the local approach, in line with the English approach, or the centralised approach is best. If the Scottish Government decide to go down the centralised route, that would be an interesting test case of whether devolving down to the local level, to populations of between 12,000 in the City of London and 1.4 million in Kent, or centralised to cover 5.2 million people across Scotland, is the best way to administer this sort of discretionary support. Clearly, we have taken the view that the closer to the populations served, the better.

If the Scottish Government choose to divert funding from other sources to top up the funding they receive from the UK Government, that is their choice, but they will have to tell the Scottish people from where the money has been diverted. My noble friend asked about legislative consent motions, but those are not necessarily for Social Fund reform. On the accounting officer question, for the national payments on account provisions that will clearly be the DWP Permanent Secretary. I shall come back to him on the devolved moneys.

I hope that I have adequately explained why these amendments are necessary. I shall reflect on the points that have been made so powerfully. Meanwhile, I would urge the noble Baroness to withdraw her amendment.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I thank the Minister for his full response. Unless I missed it, I do not think he dealt with one amendment, but I shall come to that. I thank noble Lords for their very helpful contributions to the debate. The noble Lord, Lord Kirkwood, gave a cautionary tale of what happened in the 1980s. I cannot speak for the noble Lord, but the Minister’s response that local authorities will set up an internal review mechanism if they think it is appropriate is not the kind of positive response that, for instance, the noble Lord, Lord Newton, in his former incarnation made when similar points were being made about going from single payments to the Social Fund. Perhaps on his behalf I could say that I am disappointed with that response.

A number of noble Lords made the point about the money that would be available in the future. One thing that we have not talked about is that, at present, the crisis loans bit of it has money recycling, but money will not be recycling because there will not be any loans. Presumably, that will also mean, not just that it is not going up with inflation, but that there is no money coming back into the system. Again, that will make less money available for local authorities.

The noble Lord, Lord Kirkwood, made a very powerful point when he read out the principles that the Social Fund Commissioner set out and then compared and contrasted them, in good student essay style, with what the Government produced. My noble friend Lord McKenzie made another good point when he asked where the vision was for what the Government want to achieve. I am no clearer about that vision. We have talked about the importance of local decisions. The noble Lord reiterated the point about decision-making at local level but did not address the point that it is possible that these decisions will not be made at local level. If Westminster can send its emergency decision-making up to Scotland, what guarantee do we have that decision-making on “daughter of Social Fund” will be taken locally? If that is the vision and purpose, perhaps the Government need to make it clear and set down that those decisions must be made locally—otherwise we might not have localism at all. We need more reassurance on that.

The noble Lord, Lord German, made some important points about accountability. The Minister responded but did not explain what the reporting-back mechanism will be. Accounting officers may be accountable to the Permanent Secretary at the DWP, but how will they be accountable if there are no reporting-back mechanisms and no requirement to report on how the money is being used? Again, a bottom line must be written into this.

I welcome the fact that the noble Lord said that he will reflect on some of these issues, particularly ring-fencing. He said that he would like the reflection process to be as open as possible—so no ring-fencing around that reflection process. He made a very important statement, which will be on the record. He said that the Government would have to make sure that money will go to vulnerable people and will not be diverted elsewhere. I am pleased by that because we are clearly in agreement. However, I am not clear how we can achieve it without ring-fencing. If on reflection he could come back and satisfy the Committee that this can be achieved without ring-fencing, I am sure that we would all be very happy and impressed. However, I find it very difficult to see how it can be achieved without some form of ring-fencing. I remain to be surprised and impressed.

On domestic violence, the noble Lord made the point that someone must already have left home in order to get help from the Social Fund. I understand that, but does he not accept that some women will be afraid to leave their home if they are not sure that there will be help for them when they take their children into the great unknown? At present at least they know that there is a very good chance that they will get help from the Social Fund. There is a real danger here.

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

I will make this absolutely clear. Where one gets help from in those circumstances is the responsibility of local authorities under their homelessness obligations. The Social Fund plays a part way down the track. It was not the solution to that problem, so nothing is changing in that area. I would like noble Lords to understand that that is not an issue that arises from this change.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I thank the noble Lord for that, but that is certainly not how Women’s Aid sees it. It talks about it being a lifeline, and this lifeline is being taken away. Obviously the housing itself is the most important thing, but for a house to be a home it needs furnishings and the worry is that those furnishings will not be there for people. Perhaps in his reflections he can come back with better reassurance about that than at present.

I do not think the noble Lord has said anything about local connections. If he did, I apologise. The point was made that there should be no form of local connection test. Did the Minister say anything about that? I quoted from the other place, where the Secretary of State answered this by saying there will be a moral duty on local authorities to meet needs, but there are a lot of people who are going to be leaving institutional care. I refer not just to people fleeing domestic violence; they could be ex-prisoners or members of the Armed Forces. There are all sorts of reasons why someone might not have what is recognised as a bona fide local connection. The worry is that they could be left high and dry and we could be back into a kind of Poor Law situation where people are pushed around as they try to find somebody who will help them. Perhaps the Minister could say something about that.

Lord Freud Portrait Lord Freud
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I think I am going to be reduced to the letter.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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In that case, I look forward to this letter. I particularly look forward to the list of statutory duties and whether it will put flesh on that moral duty to provide a safety net that the Secretary of State talked about. I am not aware that local authorities have that statutory duty, but I look forward to seeing it when the Minister’s little list appears.

I acknowledge the fact that the Minister has accepted the spirit of the amendment on ring-fencing with his very strong statement about what must not happen. I look forward to the outcome of this reflective process and I hope that it will go some way—all the way, actually—to meeting the Committee’s concerns. We have had a very strong statement from the noble Lord, Lord Kirkwood, about his bottom line on this, which I am sure is ringing in the Minister’s ears, much more than anything I have said would ring in his ears. On that basis, I beg leave to withdraw the amendment.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 8th November 2011

(13 years ago)

Grand Committee
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I shall ask the Minister another question, so that he can get his breath back. I very much welcome what he said about credits. This may reflect my ignorance of the mechanics of it, but could he explain how people get credited, if they cease to be part of the system and have no entitlement to anything?

Lord Freud Portrait Lord Freud
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My Lords, clearly, the detailed mechanics of that is something that we will need to work out and set out in regulation. I am not absolutely convinced that we have it locked down—we might, but I simply do not know. But clearly we will make that clear.

I shall come on to the question asked by the noble Lord, Lord McKenzie. The run-ons in practice are rather complicated. I shall come on and deal with that in a little while.

For the most vulnerable, we will provide the support when it is needed for as long as needed. When people can work, they should be expected to; a lifetime on benefits is no longer an option.

Amendments 72 and 76 are technical amendments that seek to restore the original policy intent for Clauses 51 and 52. The current wording of those clauses meant that days in the assessment phase before the determination that the claimant should be placed in the support group must count towards the calculation of the 365-day limit. This would not of course affect a claimant who remains in the support group throughout their ESA award, but it would affect those claimants who moved to the work-related activity group from the support group, at which point they would be entitled only to the balance of the 365 days after deducting the day spent in the assessment phase. This was never our intention and I urge noble Lords to accept this amendment.

I shall now address Amendments 71M, 72A, 73, 74, 75 and 75A. Amendment 71M would increase the time limit for claimants receiving contributory ESA in the work-related activity group from 365 days to a prescribed minimum of 730 days. We disagree that two years is the right approach. The noble Lord, Lord McKenzie suggested that this was a modest change. It would, in fact, cost a total of £1.6 billion by 2016-17.

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Lord Freud Portrait Lord Freud
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My Lords, I shall come to the point about cancer, which is clearly very important. The powerful speech of the noble Lord, Lord Patel, on his amendment had to do with that. I shall deal with it as a whole. I am trying to make one point at a time. The point I am making is that our proposals are not out of kilter with the arrangements in many other countries. We still provide unconditional support to those in the support group and income-related benefits for the poorest.

I shall just pick up the point of the noble Baroness, Lady Lister, on the expectations of contributors to national insurance. National insurance contributions are used to pay for a wide range of contingencies. These include working-age benefits, the state pension and the NHS. The overwhelming proportion of expenditure—some £60 billion a year—goes on the state pension. This is in contrast to around £6 billion on ESA and incapacity benefit and around £1 billion on jobseeker’s allowance. There have been numerous changes to national insurance and the benefits system over the years to take account of changes in society and demographic factors. For example, far more women now pay national insurance than when contributory benefits were first created. As I have said, we believe that the adjustments we are making are fair and reasonable.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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Will the Minister acknowledge the point that has been made by several noble Lords? Some people will not see the pension that they have paid their contributions towards. Therefore, they feel particularly aggrieved that, having paid contributions all their life, the contributory ESA is being snatched away from them just like that.

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

My Lords, let me come back to that. It is to do with the debate about who should be in the unlimited support category for an unlimited time and who should not be in it. As I just said, we support the poorest on an income basis and those who are the most ill in the support group indefinitely.

Amendment 71N introduces another regulation-making power to the Bill. It would enable the Government, or a future Government, to exempt certain groups from the 365-day limit for those in the WRAG. This point was also raised by the noble Baroness, Lady Meacher. We believe that it is for the WCA to distinguish between those who are in the WRAG and those who should be placed in the support group and therefore be exempted from the time limit. As noble Lords will know, Professor Harrington has been working with Macmillan and other stakeholders to help us make sure that people are placed in the appropriate groups. Therefore, an amendment along the lines proposed by the noble Baroness is not necessary.

Amendment 71P introduces a new provision, which would mean that people whose contributory ESA exhausts after 365 days would be able to requalify for the support group if their condition deteriorates. However, this could mean benefits being reinstated 10 or more years after the claimant last worked, which is not reasonable. Moreover, we already have a series of safeguards in place that would protect people in this position. First, if the claimant leaves ESA before their contributory ESA exhausts, we have the linking rule, which enables the claimant to return to that contributory ESA within 12 weeks of leaving it.

Secondly, we already have within the ESA regulations an easement allowing a claimant to satisfy the first contribution condition for ESA if they have paid contributions in any tax year at a certain rate, and they had received a contributory ESA award in the last complete tax year before the current benefit year when they are claiming again. If it is decided that a person has limited capability for work-related activity, they will, of course, be placed in the support group. In addition, if someone qualifies for income-related ESA—as some 60 per cent of claimants will—eligibility for ESA can be reinstated automatically.

On the point raised by the noble Baroness, Lady Morgan, regarding protection for those who qualify under exceptional circumstances, time-limiting will apply in the same way as in all other cases. Those in the work-related activity group will be time-limited; those in the support group will be unaffected. Consideration of exceptional circumstances applies to those who do not have limited capability for work.

For those for whom work is simply not an option, we would expect them to be in the support group and not affected by time-limiting.

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Lord Freud Portrait Lord Freud
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I will come back to that issue and argue strongly that there is no retrospection. I will make that argument in a coherent way. No, the people who will have been on support will be in a position where there will be no difference between the existing group and the new group. There will not be that difference. As the noble Lord, who has infinitely more experience than I have, said, with cancer there is a differential experience, and some people literally sail through the process—the really lucky ones. Maybe that is slightly over the top, but they get through the process in a reasonable time, pretty fast, while others find it very tough indeed. If we put everyone in the same category by definition a type of illness, we get back to the problems that we have with treating people who need help to work and everything else—we are excluding them from that. Of course, once you set a precedent in that area, it rolls on and on. That is why we are going about this using the WCA as the route to putting people in different categories.

I was also asked about support to work. Support to find work will be widely available for all ESA claimants from the outset of their claim, irrespective of their health condition. Following the work capability assessment for most ESA claimants placed in the work-related activity group, that support will be mandatory either through Jobcentre Plus or through the work programme once their prognosis is down to a particular number of months.

The vast majority of ESA claimants who want the more intensive support offered by the work programme will be able to access it as soon as the outcome of the WCA is known. That includes contributory ESA claimants who can remain on the programme after their benefit has come to an end—to meet the point raised by the noble Baroness, Lady Lister. That ensures that they receive all the support they need to help them to return to work. Clearly, that was a conscious decision in the design of the work programme because it is clearly not supported by any sort of delaying switch. This is a straight investment in helping those individuals back into work.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
- Hansard - -

I thank the Minister. I am pleased to hear that. So that I am absolutely sure that I have understood, can he confirm that this would also apply to someone who does not qualify for income-related ESA? Is it simply enough that they have received contributory ESA in the past and that that is the ticket to the work programme for the future?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

The noble Baroness has got that absolutely right. It is both for people who are currently on income-related ESA and those who have been recipients of contributory ESA.

There will clearly be a financial cost to Amendment 71P, but I am afraid that in the short time available I have not been able to produce a robust costing.

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Lord Freud Portrait Lord Freud
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Well, my Lords, what was written in the document that my noble friend Lady Thomas referred to was posited on the notice given in it, which allowed people to prepare for this change. The notice was given in—

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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Can the Minister explain what this preparation is supposed to be? How do you prepare for the loss of a benefit if you are unable to take paid work? Is it preparation for your partner to give up work? I am not sure what preparation people are supposed to be making.

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

My Lords, one of the clear preparations is to understand whether you are now entitled instead to income-related ESA on the WRAG, or to take steps to get into a job, or whatever it is. There are a number of things, but preparation would cover all of them. However, the documents written in October 2010 were saying that this change was coming in April 2012, effectively giving 17 or 18 months’ notice that this change would apply. That is what was intended by the document.

We have taken steps to give people whose awards will end, either when the clause comes into force or shortly after, time to assess their circumstances and adjust to the change. We have written to all existing contributory ESA claimants who could be affected to make them aware of this change. It is important to remember that claimants in the support group and those claiming income-related ESA will not be affected. The noble Baroness, Lady Hayter, raised the issue of the impact on the lowest deciles. The analysis in the impact assessment shows that although many people affected are in the lowest deciles, they will tend to be fully or partially compensated by income-related ESA and those who will not be eligible for income-related benefits are typically in the middle or higher deciles.

The government amendments I have already outlined ensure that days in the assessment phase for a claimant subsequently placed in the support group are excluded from the 365-day total. Amendment 74 would go further than this; it would mean the 365-day limit for all contributory ESA claimants, including those placed in the WRAG, begins only from day 92 of the claim. This would therefore give an extra 13 weeks of contributory ESA to WRAG members, increasing their overall award to 15 months. Another effect of the amendment would be that, if claimants have repeated short-term claims and as a result they are not medically assessed via the WCA, these claims might never individually go beyond the 13-week assessment phase. If so, the 365-day time limit might never apply to their contributory ESA award. This amendment could therefore create a perverse incentive for claimants to terminate the award before the end of the assessment phase; they may also try to delay attending the WCA. We do not believe that such behaviour should be encouraged.

Amendment 75 would allow claimants receiving contributory ESA who move in and out of the support group, to start a fresh 365-day period each time they move from the support group back to the WRAG. For those claimants moving between the two groups regularly, it is likely to mean they would be able to remain on contributory ESA indefinitely. This amendment would lead to inconsistent periods on benefit for claimants. For some, time spent in the WRAG would count towards the 365-day limit while for others it would not. This is unfair. We believe that everyone should be treated the same, irrespective of when they are placed in the WRAG. I understand the noble Lords’ concern about fluctuating conditions, which may have prompted this amendment. We recognise the importance of the role the WCA plays for people with fluctuating medical conditions, as I have discussed.

To pick up one more point on the cancer issue, I want to make it absolutely clear that the present position is that anyone who is diagnosed as terminally ill and who is expected to die within six months will automatically be placed on the support group.

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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I thank the Minister for his answer, for I realise it is slightly off the main amendments, but I am glad that no final decision has been made. I do not know the nature of the customer insight research but on qualitative research with individuals in couples I know, having done that kind of research myself, that you need to talk to individuals separately within couples for them to be able to talk freely to a researcher. For many women, it is important to have control over a certain amount of income. As the noble Lord said, it is not simply an administrative matter. There is a matter of principle here about having paid into the system as an individual and being able to draw out from the system as an individual, rather than having that benefit paid to your partner. I just hope that the Minister will take that point away and think about it seriously before a final decision is made.

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

My Lords, we have had this discussion before. I come back to the point that one of the most interesting opportunities in the universal credit is the budgeting support. When I talk about budgeting support there is an element there of how you run your household finances, which we are just beginning to explore. There is huge potential in that and I am just beginning to think about what that could imply and what it means, so we will come back to this in the months to come because it has enormous promise in the areas that the noble Baroness is worried about.

Let me go through the AME savings, which were raised by the noble Baroness, Lady Hollis. Running each year from 2012, they are: £420 million; £780 million; £1,090 million; £1,330 million; and £1,380 million. The £500 million—

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Lord Freud Portrait Lord Freud
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You missed out £1,330 million. I have £420 million, £780 million, £1,090 million, £1,330 million and £1,380 million. That is nearly £5 billion.

Accepting Amendment 71M would reduce the total savings by around a third by 2016-17, which is £1.6 billion. Accepting Amendments 72A or 73 would reduce savings by around £420 million, which represents the entire savings forecast projected for 2012-13. Amendment 74 would reduce savings by around £430 million in total by 2016-17.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I apologise if I missed this because I know that the Minister has had an awful lot of ground to cover on so many different amendments, but did he explain why the assessment period is being included? The way that the policy has been put across is that if you are in the WRAG, you will get contributory ESA for only a year. But actually that is a year minus 13 weeks because you get a lower rate of benefit for that. Apart from cost, and by 2016-17 only a third minus 3 per cent of the savings would be forgone—I realise it is more up front, but it diminishes—what is the principal reason for including the assessment period?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

The reason is that we never intended to take it out in the first place. If someone is waiting to go into the support group it is not appropriate to have them assessed as if they are in the WRAG group.

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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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But this is someone who is going into the WRAG group, so they are getting only a year's contributory benefit. It will be a year minus the assessment period. What is the point in principle for cutting short what many people are already calling an arbitrary time limit on their entitlement?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

It is interesting that noble Lords are looking at the assessment phase as a different benefit, which it is not. It is the same benefit. It is just a phase. You go on the ESA assessment phase and then it discovers what type of support you are on—the support group or the WRAG group. That is what the assessment phase is doing.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
- Hansard - -

Forgive me if I am wrong and I expose the frailness of my knowledge of social security, but I thought that claimants got a lower rate during the assessment phase. Therefore it may be called the same benefit but, in terms of the money people get, it is less. That period is not being included. That is why I am saying that it is a year minus 13 weeks. Yes, they are getting a benefit but at a lower rate.

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Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

The assessment phase would last beyond 13 weeks. It can sometimes be a long period, but claimants are always paid the full rate from week 14 of their claim.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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Is the noble Lord saying that you can get backdated money for the assessment period?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

Yes, that is precisely the position.

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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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What is the principal reason for that? How does the Minister justify it?

Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

I have to admit that I am not particularly happy about the assessment phase of ESA and how it is working. It is becoming a separate benefit in practice. I would like to look at it. It is difficult to have a set of principles around something that one is somewhat unhappy about.

I shall go on with the costs. Amendment 74 would reduce savings by around £430 million in total by 2016-17. Amendment 75A would increase expenditure on ESA by approximately £500 million per year, plus up to £50 million more on other income-related benefits. I cannot accept that we should make these amendments. They would place a very high financial cost on us in the current fiscal climate. I believe our proposed changes are right in principle and fair to the taxpayer. I urge noble Lords not to press these amendments.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Thursday 3rd November 2011

(13 years ago)

Grand Committee
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Lord Freud Portrait Lord Freud
- Hansard - - - Excerpts

We are going round in circles. We all know the point that is being made. We all know the reality of the iron triangle. We are wrestling with it. This is what we can afford to do right now. Some people may be caught in such a position and we make the point that some people will have higher MDRs—a lot will not. As we improve the position when we have funding, and have proof of the dynamic benefits that may free up main funding, we will be able to apply them. However, this is the best we can do right now. I would love to do more, but I cannot find any more money.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
- Hansard - -

My Lords, I thank noble Lords who have supported the amendment with some helpful additions to the argument. I do not know whether any other noble Lords spotted it, but the Minister asked the “noble Lord” to withdraw the amendment. I do not know if he was making a Freudian slip and trying to reduce the bevy of Baronesses opposite him.

I should like to make a couple of more critical points before I come to a more positive one. I can understand the Minister’s frustrations that there are other parts of government that will not allow the department to do its calculations on a dynamic basis, but I was a bit disappointed that the department’s thinking was not dynamic in relation to this matter and it was not prepared to acknowledge that there could actually be positive dynamic effects through a second-earner disregard—whether they be anti-poverty or paid work effects, and all the things that the department is in favour of. I do not know whether these are just the noble Lord’s own arguments or those that are simply in the brief that comes from the various documents we have been given, but it seemed to me that there was still the unitary-household approach and an inability to understand that while couples are couples, they are also individuals within couples. I ask the noble Lord to go away and think about that a bit more and about the importance of individual autonomy within the context of coupledom. I would have been even happier if he had been able to go one step further and commit himself on the second-earner disregard in the longer term.

We have, however, made progress today. What the Minister has said takes us beyond some of the other things which have been said. I now take it as the official departmental view that it will, in the fullness of time, consider improving incentives for second earners, either through a second disregard or through the taper, as and when resources permit. I therefore beg leave to withdraw the amendment.

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Lord Freud Portrait Lord Freud
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My Lords, the intention is that the housing credit will broadly follow the current rules that apply in housing benefit. For someone to be entitled to the housing credit element of pension credit they will need to live in Great Britain, have reached the pension credit qualifying age and be liable for housing costs that relate to the accommodation they live in. The extent to which a person is liable for the housing costs, what constitutes the accommodation, how we treat temporary absences from home and how we calculate the amount of the housing credit will also be included in regulations.

A person may be entitled to the housing credit whether or not they receive the guarantee credit or saving credit element of pension credit. This schedule also enables us to specify that rates of support may differ by area. So, for example, different housing allowance rates can apply in different parts of the country.

In introducing the new housing credit we will, however, look for opportunities to streamline the benefit and align rules wherever possible. This includes extending pension credit provisions to the housing credit wherever possible. One such area includes assessed income periods. These are specified periods during which a customer is not required to report any changes in their requirement provision—namely, their occupational pensions and capital.

The schedule provides us with the flexibility to determine in what circumstances retirement provision will not be fixed in relation to the housing credit regulations, which will be subject to the appropriate level of scrutiny. The schedule also contains the consequential amendments to other legislation needed as a result of the abolition of housing benefit and the introduction of the housing credit.

This probing amendment would remove flexibility and would work to the detriment of those who, through no fault of their own, require assistance with their housing costs while at the same time making the system vulnerable to manipulation.

The noble Lord asked a large number of detailed questions on this matter. I can deal with some of them but I will answer most by way of a letter. On direct payments to landlords, it is not our intention that pensioners would be part of that regime, which is for working-age people. We are not planning to change the SMI arrangements for pensioners. Uprating will be done by CPI, as it will be with working age. We need capital limits in the system overall, clearly, and we need to determine what the right rates should be. They should be at a level where we do not see a substantial change in practice. As the noble Lord pointed out, this is now done by a tariff income process and, as we move towards an overall position in the housing credit, we need to get the equivalence.

I think that deals with the bulk of the questions. There are one or two more, which I will answer by letter, but, given the assurances about how we intend to use these powers, I urge the noble Lord to withdraw the amendment.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, will the Minister make sure that that letter includes the answer to a question which was asked a few sessions ago but to which the Committee never received an answer? It was not specifically about pensioners but was a more general question about whether mortgage interest will be paid as part of the universal credit or to the lender.

Lord Freud Portrait Lord Freud
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We are looking very closely at the support for mortgage interest. I can let the Committee know that we are planning to consult on how we do that. Rather than include that point in the letter, I will make sure that noble Lords are informed when that consultation paper comes out.

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Lord Freud Portrait Lord Freud
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My Lords, I share the noble Lord’s concern that the benefits system must be fair, efficient and affordable, which is indeed why this Bill is before the Committee today—to ensure that benefits are well targeted and fair and the system is simple to understand and simple to administer.

The first of these amendments would introduce a claimant regulatory body for universal credit. We are committed to involving claimants throughout the development of universal credit. This involvement will ensure that issues are known, understood and mitigated as universal credit is being built. As part of this, we are already conducting a programme of research among a broad range of future claimants and are testing the design of the claimant commitment with claimants, front-line staff and stakeholders. This process will continue over the coming months to ensure that claimants have real and sustained input into the creation of the new benefit.

The other amendment in this group would create a wider office for social protection, looking at the benefits system as a whole. There are already a number of other bodies with oversight of the benefits system and any changes made, not least the Social Security Advisory Committee. As well as scrutinising regulations, the committee comments on a range of operational matters, especially in relation to claimants’ interests. While I am grateful for the contributions of the noble Baroness, Lady Lister, and my noble friend Lord Kirkwood, I am not convinced that another body is needed. The coalition Government are committed to reducing the number and cost of quangos, and increasing accountability by transferring the responsibility for key decisions on public policy back to Ministers. Ministers are held to account in Parliament, including by powerful committees such as the Public Accounts Committee and the Work and Pensions Select Committee, not to say the Chamber of the House itself.

I do not intend to reverse this direction of travel, and I would urge the noble Lord to withdraw his amendments.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, before the Minister sits down I would like to make clear that I was not arguing for a separate body. I was arguing that Social Security Advisory Committee could perhaps be asked specifically to consider, on a regular basis, the issues contained in the noble Lord’s amendment—possibly in its annual report—namely the adequacy of the different elements of the system, the sustainability and the way the different elements of the system fit together. It would be very helpful to have that kind of annual overview. Perhaps the Minister can take that away and consider it.

Lord Freud Portrait Lord Freud
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My Lords, I know it is not our House, but I point out that the Work and Pensions Select Committee has that remit—a very direct remit to look at the system overall. If you are looking at how individual claimants are treated, we have a process of tribunal and independent review. There are a whole number of different processes.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 1st November 2011

(13 years ago)

Grand Committee
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Lord Freud Portrait Lord Freud
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My Lords, we are getting into philosophy here. I accept the point and have always been uncomfortable with the “work first” philosophy. It worked in the short term, as the noble Baroness has said, but the evidence is that, in relative terms, we have a poor workforce because we have too many people with no skills and too few with intermediate skills by comparison with our main competitors. We have to think about the balance between “work first”—which does get people a job—and the risk that training is sometimes used as an excuse to do nothing. There is a difficult balance here. We have not got it right. We had a welfare-to-work system that got it completely wrong. We are trying to pull it together. I do not think that this is going to be a rapid process but everyone in this room knows that it is very important to get this right. It will take some years to get it right but we are beginning to travel in the right direction.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, I thank all the noble Lords who have spoken in support of this amendment and who have helped to push the Minister slightly further than he had intended to go when originally reading from his brief. I am pleased to know the Minister is not a “work first” devotee. I was going to say, “You could have fooled me”, but his response to the noble Baroness, Lady Meacher, has confirmed that is the case and I welcome the spirit in which the Minister has responded. Even I am beginning to pick up the ministerial nuances to understand that was a helpful response.

My noble friend Lady Hollis helpfully reminded the Committee of some of the exemptions that exist and it is helpful to have on record that those exemptions will continue. The noble Lord said that it is always possible to do training in the evening. If you are a lone mother, trying to bring up children, trying to do your job and support them in their education, and to keep them off the streets, is it realistic to think that you are also going to do training as well? It is asking too much of lone mothers when we already ask too much of them. We expect them to be responsible, in paid work, in education, keeping their kids off the street and so forth. I hope the noble Lord will come back at Report with some response to what the noble Baroness, Lady Meacher, suggested in terms of opening up the potential for the future in the flexibility of this clause.

The noble Baroness also raised a question about the context of government expenditure cuts. It is not clear that this is going to cost very much to extend beyond the exemptions that already exist for this group. It would be helpful to know what the cost would be of doing it now rather than at some future date. Perhaps the noble Lord could let the Committee know. I suspect it would not be very much at all. In the spirit of the human capital approach, I am not sure what the stumbling block is to doing it sooner rather than later. I beg leave to withdraw the amendment.

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Lord Freud Portrait Lord Freud
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My Lords, it is important that the coalface does not do the sanctioning. It is important that there are really well trained people doing this. This is a complicated area that needs to be got right. These are some of the most highly skilled people in Jobcentre Plus aiming to do that with all these supports.

In response to the concerns raised by the noble Lord, Lord McKenzie, on Amendment 51FB, I want to make it absolutely clear that there are no benchmarks and no targets for sanctions referrals. Jobcentre Plus gathers a range of management information to support its work, as you would expect us to do. On the issue of numbers, over the last year, the number of sanctions and disentitlements rose by around 270,000 from approximately 490,000 in 2009-10 to around 760,000 in 2010-11. There are a complex range of reasons for this increase, including the introduction of new requirements, a slight increase in the average claim duration and a refreshed approach to monitoring compliance with requirements designed to maximise claimants’ chances of finding work. A particular reason is due to the 2010 rule change that led to a sanction rather than disentitlement for failing to attend an employment interview. The number of sanction referrals to decision-makers is a key piece of management information. It helps local mangers assess how consistently JSA conditionality and sanctions are being administered in their area. Managers may compare rates of referrals across different areas when analysing the data, but there is no benchmark and certainly no right or wrong level of referrals. The collection of management information also allows the department to monitor and evaluate the impact of sanctions. I urge the noble Lord, Lord McKenzie, to withdraw the amendments.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, my attention may have strayed, but did the Minister answer the question of the noble Lord, Lord Boswell, about the reports over the weekend that fines deducted from benefits are going up to £25, which seems to be a draconian response in the context of the riots in which we read about it? Is this something that can be done by regulation, or will it be an amendment to this piece of legislation? It is an issue about which some of us are very concerned.

Lord Freud Portrait Lord Freud
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My Lords, the press reports were about the level of deductions to pay fines and whether the current limit was right for people who had committed a crime and been fined. Although this is breaking news, this is not an area I am confident we will consider in this particular Bill because it is about fines. It is not a matter today that we will need to consider.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Wednesday 26th October 2011

(13 years ago)

Grand Committee
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Lord Freud Portrait Lord Freud
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My Lords, without wishing to go against normal procedure, it might be valuable if I came in straightaway to say where I stand on this, because it might enable us to move the debate on if noble Lords know what I am saying before rather than afterwards.

I recognise the valuable job that families and friends, kinship carers, do and I recognise the difficult circumstances that they face. I had a recent meeting with kinship care organisations to understand their priorities. I am absolutely convinced that this is a key area and am currently looking closely at ensuring that this group is treated appropriately under the universal credit. There is ongoing work, in which I am deeply involved, on how they should be treated for conditionality purposes; and, indeed, there are other areas where we can talk to other departments. What the noble Baroness, Lady Drake, said resonates with me.

Formally, there are safeguards and flexibilities for this group, and, as a minimum, family-and-friends carers are covered by the same safeguards as any other parent under universal credit; with the normal limitations against imposing full-time search and availability requirements on the carers of younger children and so on. Where the work-related requirements apply, the work-related advisers have broad discretion. However, there are circumstances where it is not reasonable to expect a person to meet even a limited work search or availability requirement. Among other things, advisers will have the scope to temporarily lift the requirements for any period when a child’s needs are such that the claimant must be able to provide full-time care. The point where the older child first moves into a household can often be a very difficult period of adjustment. There is a problem, which is not directly in the hands of DWP, with holding on to a job. That is a matter of concern, especially where you have advice, often from social workers, that the job must go. The noble Baroness, Lady Drake, gave one such example. The least that will happen is that we will look at easements on a case-by-case basis, given the difficulty of having blanket rules. However, we recognise that clarity of treatment and a clear legislative exemption could be of value. As I said, I am actively considering this area, and if further legislation is required, we already have scope to make regulations, as necessary.

Given the ongoing thought that we are giving to this area, I will ask the noble Baroness to withdraw her amendment. I have jumped in early so that any other noble Lords who want to discuss this area know where I am coming from, rather than trying to convince me where I should be coming from. I suspect that I will just say, “Yes, yes, yes”, to a lot of what people are going to say, so other things would be useful.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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I very much welcome the positive response of the Minister and the fact that he has clearly been talking with kinship carers and thinking about how to address the issues raised by the amendment tabled by my noble friend Lady Drake.

I just press him on his final point about doing this on a case-by-case basis. One of the recurrent themes of our discussions is the extension of discretion. I understand the value of discretion, but as the noble Lord himself has acknowledged, it does not provide the clarity of treatment that something in legislation would do. I get the sense that there may be something in future in regulations. I cannot speak on behalf of my noble friend but it would be valuable if there could be a firm commitment before the Bill leaves this House, even if it is not in the Bill, that it will be in regulation. I will not say all that I was going to say because the noble Lord clearly does not need convincing of the importance of this issue. It is one that I have become aware of only fairly recently, partly at the all-Peers meeting where a member of a kinship carers’ association spoke to us. I was very struck by their case in the way that the Minister has clearly been.

I also want to mention, if only to get it on the record, that I was at a conference at the Law Society at the weekend on economic and social human rights. A presentation was made there by the Poverty Truth Commission from Scotland. Some of its members are people with experience of poverty, some of whom are kinship carers. I was struck that it said one of the key issues was kinship care. I will not quote as much as I was going to, but the commission states:

“Kinship carers have been supporting each other and struggling for recognition and justice for many years”.

Recognition is very important for people living in poverty. This is something I have become aware of through my work on the Commission on Poverty, Participation and Power, which also involved people with experience of poverty. The kind of amendment that my noble friend proposes would have both symbolic and practical significance. It would provide that recognition that simply saying, “We will look at it on a case-by-case basis”, would not do. Having said that, for once I can hear the ministerial nuances and I know when to say thank you very much.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord Freud
Monday 10th October 2011

(13 years, 1 month ago)

Grand Committee
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Lord Freud Portrait Lord Freud
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My Lords, I thought I had delicately hinted that there could be some flexibility around that. In future, I will be less delicate in making my points.

We have discussed the other elements. The noble Baroness, Lady Hollis, directed a bit of abuse at the Warrington call centre. We are developing the system in Warrington, but that does not mean that the call centre in Warrington will do it all. We will have a much more sophisticated system. Indeed, the noble Baroness’s thoughts on using ATLAS, and the experience of housing benefit staff around the country in that regard, are very good. We are talking to local authorities to get the detail of this right. It would not make sense to lose the expertise of housing benefit staff, so we are involving them as we develop the process. It is too early to describe the system because it is not yet developed. However, the noble Baroness’s advice chimes with the way we are going about this, and we are grateful for it.

Amendment 28 would require the Secretary of State to conduct an annual review into the impact on claimants of monthly payments. I have already set out our firm commitment to safeguards, such as providing budgeting support and the facility to make more frequent payments where necessary or appropriate. I can assure noble Lords that in addition to this we will continue to monitor the impact of these policies after they are introduced. I urge noble Lords not to press these amendments.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, I am very grateful to my noble friends and noble Lords for their support. I am struck by the extent to which noble Lords throughout the Committee share my concerns and have made important points in support of these amendments. There is perhaps a slight disagreement over whether we should be pushing for fortnightly payments or for choice. My preference would be for fortnightly payments, as argued for by the noble Lord, Lord Skelmersdale. However, I tabled a menu of amendments thinking that choice would probably be more acceptable to the department than what I prefer, which is the status quo. Perhaps that is the one way in which I am a conservative. But as I have argued, and according to the Financial Times, the panoply of flexibility and special assistance which the Minister talked about will bring in complexity if we go down the route of monthly payments, and we have not heard what the costs will be. I am very disappointed with the Minister's response because he has not really engaged with the arguments that I put. Therefore, my supposed flirtation with conservatism has been very short-lived indeed.

The Minister made great play of the distinction between the assessment period and the payment period, and I understand that. However, the argument seems to support my position rather than his because paying a benefit more frequently does not affect proposals to assess it on a monthly basis. One could have a monthly payment that is paid in two tranches, which would make it easier for people to manage. The only hope that I got from the Minister was the statement that we had given him food for thought. I hope that it will not be too indigestible for him—actually, I hope that it will be indigestible, because he will then think seriously about it.

He has not answered some of the most basic questions. I know that the special assistance will not only be budgeting advice. The papers have said that it will “include” budgeting advice. However, it is still not clear who is going to provide this. Will it be officials? If I were a claimant, I am not sure that I would want officials advising me on how to budget. Or will it be the poor old voluntary sector/big society, which will be on its knees anyway because of cuts, the effects of the legal aid Bill and so forth? I am not at all reassured by vague talk about flexibility and budgeting support.

The Minister said that the Government would look at areas of flexibility after the next year or so. I am sorry, but I want to know what the position is by the Report stage. While I have made clear that I realise it is not appropriate to write into the Bill itself the frequency of payments, given the strength of feeling that has been expressed on all sides, it is not good enough that we should have to wait a year; the Bill will be an Act by then. We want to know before the Bill goes back to the other place what is going to be done to ensure that the kind of problems that I and other noble Lords have raised will be adequately addressed. One of these amendments must be the way to do it.

Child Poverty

Debate between Baroness Lister of Burtersett and Lord Freud
Tuesday 17th May 2011

(13 years, 6 months ago)

Lords Chamber
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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To ask Her Majesty’s Government what steps they will take to build on the reduction in child poverty in 2009–10 reported in Households Below Average Income, published on 12 May.

Lord Freud Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
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My Lords, I welcome the reduction in child poverty from 2.8 million to 2.6 million children, but despite £150 billion spent on tax credits since 2003-04, largely aimed at families, that figure is a long way off the previous Government’s aim of halving child poverty by 2010. Noble Lords will be aware that the Government published their child poverty strategy on 5 April, showing how our radical reform programme will help to transform people’s lives and break cycles of disadvantage.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett
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My Lords, I thank the Minister and I welcome the Government’s commitment to the eradication of child poverty. However, given that improved financial support for children played a key role in the previous Government’s achievement in reducing child poverty to its lowest level since 1985, will he comment on the Institute for Fiscal Studies’ prediction that cuts in such support could contribute to an increase in child poverty? Will he also explain why the child poverty strategy contains no specific, quantified targets for the period that it covers?

Lord Freud Portrait Lord Freud
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My Lords, that is a complicated question. As noble Lords know, fundamentally, child poverty has been stuck at the same level since around 2004-05. We have seen a statistically significant reduction this year, but it is very much the same figure as it was five years ago. The IFS, as the noble Baroness pointed out, predicts an increase of 200,000 in the number of children in poverty in two or three years’ time. That may or may not be true, but our fundamental reforms, particularly of the universal credit, will start to drive that figure down. We are predicting, as has already been announced, 350,000 fewer children in poverty as a result of the universal credit when it is introduced and 300,000 fewer workless families.