Welfare Reform Bill

Baroness Meacher Excerpts

Monday 23rd January 2012 Lords Chamber

Moved by

[Baroness Meacher]

61B: Clause 98, page 66, line 18, at end insert—
“(b) to determine that payment should be made to whichever of those persons is the responsible carer (as defined in clause 19(6) of the Welfare Reform Act 2011) in the case of any benefit awarded in respect of responsibility for children or young persons or any childcare element, or”

[Baroness Meacher]

My Lords, the amendment would ensure that within universal credit the elements of benefit awarded for children or young persons, and any child carer element, will be paid to the parent or person who is the primary carer of those children. The amendment is supported by Oxfam, Women’s Aid, the Children’s Society and Platform 51, whose experience makes clear that for millions of people living in poverty the way in which benefits and tax credits are paid is vital in enabling them to keep food on the table for their children day by day.

Recent government research shows that benefits that are labelled as being intended for children are much more likely to be used for that purpose. A study by Hall and Pettigrew for HM Revenue and Customs showed that child tax credit, for example, is commonly identified as money for children and is spent accordingly. A recent study of winter fuel allowance by the Institute for Fiscal Studies, published in 2010, also found,

“robust evidence of a behavioural effect”,

of the labelling of that benefit. A study for Save the Children, HelpAge International and the Institute of Development Studies, published in 2005, points to the value of targeting and delivery mechanisms.

Labelling is currently absent from the new system of universal credit. The amendment would rectify that apparently small but profoundly important fault in the system. I and many other noble Lords on all sides of the House have made clear that we support many of the principles behind universal credit. The amendment neither challenges those principles nor would increase the cost of the system, other than marginally, to cover the administrative costs of making two payments to some households or to those with children. I understand that all the amendment would require is a change to a few lines of code in the current IT system to mirror what already happens with child tax credit. It will be much cheaper to do that now, while the IT infrastructure is being constructed, than to leave it until much later to be dealt with under regulations.

Without the amendment, the universal credit system would deter couples from forming long-term, stable relationships, which I think the Minister would accept is an important point. For many single parents considering whether to form a joint family with a potential new partner by living together or getting married, the prospect of the entire benefit for the whole newly formed family being paid into one account will be a strong disincentive to forming a single unit, but the formation of such families holds out the best hope for those benefit claimants coping well with their children, becoming self-sufficient and coming off dependence on the taxpayer.

Another concern is that, once money reaches the household, it is often unequally distributed, particularly in low-income households, as the DWP and Ministers have acknowledged and as the research shows very clearly. Emergency powers in the Bill enable payments to be shifted in the event of abuse. That will not be a sufficient protection. Abuse is often hard to prove; it is often hidden within families and hard for the state to identify. In view of the pervasiveness of the financial vulnerability of primary carers, the aim of the system must surely be to prevent abuse, where it can, to protect children.

The Minister’s budgeting products, including jam-jar accounts provided by the financial services industry, might help with different problems, but they will not resolve the problems addressed by the amendment. We are trying here to deal with common family problems where the primary carer repeatedly finds themselves without money to feed the children. As the DWP knows from its research, many parents suffer from alcoholism, drug addiction and gambling addiction, and far greater numbers suffer from unhappy and often abusive relationships. In all those situations, the risks of the primary carer not receiving the money with which to feed and clothe the children are real. Those primary carers will continue to receive child benefit, but for them to receive the child elements of universal credit as well would go a long way to reducing their vulnerability in violent or otherwise abusive marriages.

The Children's Commissioner has expressed concern about the new single lump-sum payment arrangements. The amendment is not about the sex of the primary carer. A growing number of fathers take responsibility for children’s welfare if a mother is the one who is abusive, mentally ill or otherwise unable to take the primary carer responsibilities. I make the point that this is not about men versus women or women versus men.

The Government argue that putting universal credit into a joint account could guarantee access to both partners. That is not the answer. Of course, not all couples have joint accounts, especially those who might not have been together very long. In fact, joint savings, investments and debts are decreasing. Often, couples will have individual accounts and will have to opt for one or other for the payment of universal credit. That is our concern. In many cases, a joint account does not guarantee equal access to money for both partners anyway. Often one partner dominates the joint account, and there might be only one chequebook.

It is difficult to imagine that the Minister would disagree with the proposition that the payment of benefits for children to their main carer would be the best way to ensure that the money is spent on the children. I should be grateful if the Minister could confirm his view on that matter. Further, does the Minister agree that for new couples where one or both partners has at least one child and one partner would have responsibility for housing costs—which is likely to be the case if the couple get together—the payment of the whole universal credit to one bank account is likely to be a disincentive to the partners to come together?

Again, I endorse the Government’s objective to simplify the benefit system and I realise that this is a tiny fly in the ointment of that simplification process. I hope that the Minister will recognise, however, that the costs and benefits of this amendment would come down very solidly on the side of our proposed small change to the Bill, and I hope that in view of that the Minister will be willing to table his own amendment—no doubt this one would not be perfect—on this apparently small but fundamentally important matter. I beg to move.

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[Baroness Meacher]

I apologise for interrupting the Minister. How does he feel that that will work if the partner into whose bank account the money is paid is an alcoholic and likes to spend most of the money, on a Friday or whenever it is, on alcohol, or a gambler, or somebody with mental health problems who is controlling and dominant and therefore gets the money paid into their account?

[Lord Freud]

I was going to say that 7 per cent of cohabiting couples and 2 per cent of married couples manage their finances completely. However, we recognise that there are cases—the noble Baroness mentioned some of them—which will require alternative arrangements. The Government intend to retain powers to split payments to couples as a safeguard. We are looking at the precise circumstances of where and how that split will be made and we will produce further detail as we develop the regulations. The obvious example, as the noble Baroness has said, is where there is proven abuse of the money by one partner or where children are considered to be at risk. But there will be other circumstances as well. That general point is accepted. Where an intervention by the state is required, we will make it to ensure that money goes to the right people or is split in the right way.

However, in circumstances where a universal credit award is split, neither party will receive specific elements such as that for child care. They will receive a proportion of the total award and be responsible for their own budgeting. Therefore, in practice, the amendment tabled by the noble Baroness, Lady Lister, Amendment 61C, is much closer to how we will manage such situations.

Universal credit is replacing a benefits system which in practice undermines personal responsibility by separating a person’s income into different streams for different circumstances. This does not reflect the world of work or encourage financial responsibility. We must trust that people know what is best for them and for their families, with the exception of those individuals and families who cannot handle that responsibility. In respect of those who can, it is not for government to dictate how a family manages its money. However, we are committed to ensuring that people can access support to manage their payments and help them budget effectively.

We are looking at a wide range of support. As noble Lords may remember, I think that one of the most exciting opportunities offered by universal credit is to enlarge the scope for financial inclusion which has been so lacking for many benefit recipients. We are looking at access to nationally available advice and guidance and at locally delivered, targeted support. We are talking to local authorities, housing associations and other stakeholders about how best to deliver this support. We are talking to the financial services sector about widening access to basic, including joint, bank accounts and developing improved budgeting accounts to help benefit recipients manage their money. We are looking to create valuable support mechanisms for a part of our community that simply has not had them. My aim is to have some quite specific new products that slot right under universal credit and give families much more flexibility to manage their money. I look forward to sharing more detailed proposals with your Lordships in due course.

With regard to my noble friend’s sleeping patterns, I think I can allow him to sleep at night. If we find that we need to make more splits than anticipated, the computer system will allow us to do that. We are designing that in. If he is right and I am wrong we will be able to make those changes, albeit more in the pattern of Amendment 61C than Amendment 61B. I can also assure him of a commitment to conduct intensive research on how universal credit works. We will make sure that what we are doing optimises the position for families. I hope with that second commitment my noble friend will not only sleep but sleep like a baby. With these explanations, I urge the noble Baroness to withdraw the amendment.

[Baroness Meacher]

I thank those who have contributed to this debate and thank the Minister for his reply. I am interested in his suggestion that we are dealing here with normal families who are perfectly capable and reasonable about the allocation of their money. When I ran the Child Poverty Action Group campaign for the introduction of child benefit 40 years ago, I received 2,000 letters, most of them from normal families. The letters were from the wives of all sorts of people—vicars, doctors and members of the Army—whom I would have considered very normal. However, they wrote to say that they depended on family allowance, which was only some ridiculous amount like 90p for the first child, and would often have to survive on it for a week because their doctor husband or their vicar husband gave them nothing, having drank their money away or whatever else they were doing with it. There are too many “normal families” that one might see walking up and down the street who do not treat their other half in a normal and acceptable way, so I am very relieved to hear from the Minister that there will be a computer system that will enable more splits and more complexity and sensitivity in this system. I am absolutely sure that it will be necessary, not only for a handful but for vast numbers of people across this country.

I am also relieved that the Minister will look closely at not only how universal credit in general will work but how it will work in this particular regard. I think I understood him to say that, and I very much hope he will pay great attention to this issue. I am absolutely certain it is terribly important for an awful lot of families. After my experience of 40 years ago—and I do not think human nature changes in 40 years—I really believe that is the case. I very much respect his new products and I think they will be splendid, but they will not deal with the sort of issue we are throwing up in this debate. I am sad to withdraw this amendment, but I am pleased to have had some assurances that this issue will not be lost.

Amendment 61B withdrawn.

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Moved by

[Baroness Meacher]

62: After Clause 99, insert the following new Clause—
“Benefits payments to prisoners
(1) Regulations shall provide that a person undergoing imprisonment or detention in legal custody who, at the time that imprisonment or custody commences, is in receipt of any of the qualifying benefits, shall be assessed, during his time in imprisonment or custody, for eligibility for those benefits at the time of his release from imprisonment or custody.
(2) For the purposes of this section, the qualifying benefits are—
(a) universal credit;(b) jobseeker’s allowance;(c) employment and support allowance;(d) income support;(e) personal independence payment, to the extent provided for in regulations made under section 84 (prisoners) above; and(f) any other benefits provided for in regulations made under this section.(3) Regulations made under this section shall provide that the assessment required under subsection (1) shall commence as soon as a person is received into imprisonment or custody.
(4) Regulations shall in particular provide that a person appointed by the Secretary of State shall record, at the time a person is received into imprisonment or custody, details of any qualifying benefits which are in payment at that time, together with any personal information needed to establish the person’s identity, including but not limited to their national insurance number.
(5) An assessment of eligibility under subsection (1) shall be completed in such time as to ensure that the person assessed receives payment of any benefits for which he is assessed as being eligible no later than one week after his release from imprisonment or custody.
(6) Regulations under this section shall be made by the Secretary of State and shall be subject to the affirmative resolution procedure.”

[Baroness Meacher]

My Lords, I rise to move, very briefly, Amendment 62 on behalf of my noble friend Lord Ramsbotham, who apologises to the House for not being able to be in his place. As noble Lords will know, he generally speaks with little in the way of notes, so I shall do my best.

The purpose of the amendment is to ensure that regulations will provide for prisoners who were receiving benefit at the time of their imprisonment to be assessed during their time in prison or custody for their eligibility for benefit on their release from custody. I passionately agree with my noble friend Lord Ramsbotham that the amendment has huge merit. In Grand Committee the Minister outlined the arrangements that have been made to cover those who claim jobseeker’s allowance, which my noble friend accepts, but the Minister did not accept my noble friend’s proposal that all prisoners should have claims to other benefits processed before release.

Last week my noble friend had an extremely useful meeting with officials in the DWP, with whom he discussed the situation, reaching the following conclusion—that my noble friend Lord Ramsbotham would now table an amendment to the Legal Aid, Sentencing and Punishment of Offenders Bill, putting the onus on the Ministry of Justice to confirm a prisoner’s national insurance number and current entitlement to benefits on reception into prison. Before release, these should be processed in time for suspended benefits to be resumed and necessary arrangements made to cover the gap before any payment could otherwise be made, subject to payment in arrears. This will require protocols between the DWP and the MoJ to be established. The question is whether the Minister will be prepared to support this proposal.

The arguments in support of the amendment were put by my noble friend Lord Ramsbotham most forcefully in Committee and I shall not repeat them. I beg to move.

[Lord McKenzie of Luton]

My Lords, I shall speak briefly. The thrust of what the noble Lord, Lord Ramsbotham, is trying to achieve has considerable merit. I wonder how some of the detail in the amendment about assessments when people start their sentence would work in practice, particularly if someone is likely to be in prison for some while.

We dealt with regulations about a fortnight ago on the importance of people being able to get into the work programme on immediate release from prison. However, I was a little disturbed that, as the Minister explained, applying for JSA was voluntary but that once on JSA there was an inevitable path into the work programme. That of itself is fine, except that it may not take account of many good programmes that are already around in prisons where people are supported sometimes before they leave prison and certainly supported when they do. The route via the work programme might pre-empt and override all of that. The noble Lord, Lord Kirkwood, was involved in that debate.

The thrust of trying to get as many benefits as possible sorted out for individuals before or at the point they leave prison must be helpful to them. The opportunity for them to have resource—presumably under the advance payment arrangements if it happens immediately, because typically benefits would be payable in arrears—is fine, but there is a concern about potentially damaging those good programmes in prison, where they exist, which help people to adjust to the world of work before they formally finish their sentence.

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[Lord Freud]

My Lords, it is a real point because we know that virtually all addiction treatment centres are manned by people who have gone through the experience of addiction. That is one of the reasons why they are able to help people. There is probably a very similar argument for convicts. Given the way in which we have incentivised the work programme, I would expect that that fairly basic knowledge will be picked up. I am in no position to instruct any work programme to do anything, but I hope that the way in which this has been structured financially will drive that logic.

[Baroness Meacher]

The Minister was talking about being unable to accept this amendment in full and referred to alternative arrangements. The whole point of this amendment tabled by my noble friend was to have clarity on the Floor of the House about acceptance of it. As I understand it, it seeks to ensure that the processing of claims goes on while prisoners are in custody so that when they come out the benefits can be paid very quickly. The idea is to avoid such people running straight off to recommit crimes. There is tremendous power behind this—logic, sense, cost-saving and so on—in terms of criminal justice costs. Perhaps the Minister could spell out what in the amendment the Government cannot accept and what the Government would put in instead. That would be very helpful.

[Lord Freud]

Last week, I think, we had a regulation on this. Time does not fly for the noble Lord, Lord McKenzie, as he thought it was weeks ago. We have already announced that we are processing all JSA claimants in prison. It is hard to process everything. Clearly, housing cost is one element that is not there. I know the noble Lord is concerned about what we do with ESA claimants. The issue becomes real because as we move from universal credit, it is not just a question of not having JSA claimants but having universal credit claimants; we also have to look at how we will do that. We have to do that anyway. However, at the moment we have done JSA claimants and we have the issue of housing. We have support at the prison gate. When we discussed it in Committee, the noble Lord seemed almost shocked that we were doing that. We are moving very fast now. For the record, we will continue to work with the Prison Service, the Ministry of Justice and the other agencies to ensure that prisoners have all the necessary information about claiming benefits on release, and that benefit payments are made as quickly as possible on release. With these assurances, I urge the noble Baroness to withdraw this amendment.

[Baroness Meacher]

I would like to thank the noble Lord, Lord Kirkwood, but also the Minister for that very helpful reply. It seems that the Government are doing everything they can to resolve what has been a ridiculous situation of prisoners coming out of prison and having virtually nothing to live on for some time. With that, I am happy to withdraw the amendment.

Amendment 62 withdrawn.