Welfare Reform Bill

Baroness Meacher Excerpts

Tuesday 31st January 2012 Lords Chamber

Moved by

[Baroness Meacher]

1: Clause 10, page 4, line 36, at end insert—
“such additional amount to be paid at either a higher rate, or a lower rate, which shall be no less than two-thirds of the higher rate as may be prescribed”

[Baroness Meacher]

My Lords, Amendment 1 seeks to ensure that the gap between the higher and normal-rate additions for disabled children is not too great. The Government’s proposals for these additions, according to the Minister, are designed to be revenue neutral. The money saved is to be used to raise the level of income for adults in the support group.

[Baroness Garden of Frognal]

My Lords, I apologise to the noble Baroness, but might I just suggest that people leave the Chamber quietly, because it is very difficult to hear what she is saying?

[Baroness Meacher]

The amendment proposes that Ministers revisit the relationship between the new levels of disability addition for children and allocate resources to adults in the support group when new money allows. I know that we must move on from arguments made on Report, but I must make just a few points to help my argument here to be coherent.

Very briefly, under the new provision for a disability addition and a higher addition, families who have a child who is eligible for the higher addition will receive £1.50 per week more than current claimants do, but families with disabled children who do not meet the stiff criteria for the higher addition will receive £27 per week less. Most families with a disabled child will therefore lose about £1,400 a year.

This amendment would peg the normal addition for disabled children at two-thirds the level of the higher disability addition for children. The House voted on a more radical amendment on this issue on Report and the Division was lost by two votes. We are seeking to eliminate the cliff-edge between the two levels of disability addition for children because all such families are far less likely, for example, to be able to rely on relatives or other informal carers. Their childcare costs will be far higher than those with a non-disabled child. Of course, families will have to pay 30 per cent of their childcare costs whereas today they pay, I think, 5 per cent. There really is an issue of work incentives for those parents, although I understand that the Minister will have a go at me on that issue.

On another terribly important matter, the need for high childcare costs will continue until the child is very much older, if not indefinitely. That applies to children who would not qualify for the higher rate addition yet who may be very severely disabled. That is the point. This amendment would go a long way to creating a much fairer system, which is what we are all about.

One might ask whether it really matters. It does matter because 100,000 or so disabled children affected by this loss of benefit are very likely to live in poverty. Recent research by the Children’s Society indicates that once the additional costs of disability are accounted for, four in every 10 disabled children are living in poverty and a loss of income would really matter. Therefore, disabled children would not only live in poverty but would have vastly greater costs.

The Government argue that their new additions align the levels of support for disabled children with those for disabled adults, but the levels of support are based on completely different tests. For children the test is based on eligibility for DLA, and for adults it is based on their fitness for work. So I am not quite sure how the Government are arguing that these have been aligned.

The Government argue that the changes will ease the transition to adulthood for disabled children. On Report, the Minister said:

“We want to smooth the transition from childhood to adulthood by removing that artificial divide”.—[Official Report, 12/12/11; col. 1054.]

In fact, the restructuring will reduce the support for most disabled children. It will not reduce the support for the very most disabled children who require night-time care, but it will reduce it for others. Therefore, I do not accept the argument.

There are good reasons for proposing a disability addition at two-thirds of the higher rate for children. This addition is needed to contribute to the costs of special clothing, repairing damage, safety measures and special food, and to contribute to the costs of giving disabled children access to the opportunities that other children have. We know that simple things like swimming lessons cost something like £270 for 12 lessons for a disabled child as opposed to £80 for a normal child. Where will that money come from? A summer club costs £450 per week for a disabled child compared with £100 a week for a non-disabled child. Yet these are the things that would give a parent a break and really help a child to socialise and benefit from development opportunities.

The Government’s proposed child additions go nowhere near covering these extra costs. I fear that their proposed reforms to disability additions are short-term fixes. I understand the position of the Minister, who is under huge pressure from the Treasury. One of the troubles for this House and noble Lords is that this reform, much of which we support in principle, is being tangled up with swingeing cuts to benefits which are having unacceptable impacts. Therefore, we are trying at the edge to ameliorate some of those unacceptable impacts. That is what we are about. The Government’s proposed reforms to disability additions therefore need another look by Ministers.

I turn to the particular problems of single parents with a disabled child. Many years ago I ran a group for parents of severely disabled children. I expected lots of mums and dads to turn up, and I was faced with what I thought was an absolute tragedy: the room was full of mothers who told me that the fathers had gone. Many of them had left home within months of the birth of the disabled child. It is these mothers and a great deal of others whom we need to have in our minds today.

Many parents of disabled children will be doing something very valuable for society by staying at home to develop their children’s full potential. They should not be under pressure, even in these stringent times, to go out and stack shelves. By devoting themselves full-time to therapy, play exercises and other learning activities, they are reducing the dependency levels of their children that, with luck, will last throughout their lives—some cannot make progress, of course, but many can—and increasing the possibility that their children can develop a degree of independence, and maybe even financial independence, in adulthood. It would be wise for the Government to take this issue very seriously.

I would ask the Minister to revisit the two levels of disability additions to consider whether the balance is right. Is there not merit in leaving the higher rate at £76 and retaining the basic level at two-thirds of that sum, which is something like £50? That really would make an enormous difference to these families. I would be grateful if the Minister would agree to take this matter away for further consideration, even at this very late stage, in the light of what I think are very powerful arguments for some change in their approach. Finally, will he agree to review the impact of the disability benefits changes in the universal credit system one year after its introduction—although I know that the system is to be introduced over time, so a year may not be terribly realistic? While doing that, will the Minister consider taking a look at reviewing the entire welfare reform package? I beg to move.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, I think that I have to take up the challenge of the noble Baroness, Lady Hollis, and try not to read anything at all in order to convince her that I actually believe in what I am going to say.

I preface my remarks by reminding noble Lords that the amendment is in the same territory as the one we discussed on Report that was moved by the noble Baroness, Lady Grey-Thompson, and on which there was a Division. I confess to feeling slight surprise when I saw it come back in such a similar guise. If my arguments sound somewhat familiar to noble Lords, it will be because they have heard many of them before. I need to go through them in the context of this skilfully drawn-up amendment.

I start by making it absolutely clear to all noble Lords—in particular, to my noble friend Lady Browning—that this is not about deficit reduction. Every penny of the money will be recycled to increase support for severely disabled children and adults. None of the money that we are talking about will go to Her Majesty's Treasury, with which I have absolutely cordial relations at all times. The principle that was picked up by my noble friends Lord German, Lord Newton and Lady Thomas concerns the cliff edge that exists at 16 when youngsters transition from childhood to adulthood. As my noble friend Lady Browning pointed out, many of these youngsters are in practice dependent on their families for a long time. The cliff edge is something that we wanted to smooth out. This will be essential to protect work incentives in adulthood.

I said many times in the debate that we are overhauling the whole support system for people who rely on benefits. It simply does not make sense to concentrate on any one element. The universal credit will provide a package of support for families to meet a range of their needs. That is why we need to look at the overall impact of universal credit on families rather than look at individual components. If some families get a bit less on one component, it does not mean that they will get less overall. I will pick up on the point raised by the noble Baronesses, Lady Meacher and Lady Wilkins, about some of the social activities that are required to have a good quality of life. The intention is for DLA to pay for those facilities. The purpose of universal credit is income replacement. The two benefits do different things.

I also remind noble Lords that, contrary to some estimates that have gone around this afternoon on the impact of universal credit, clearly the impact will be that families will be much better off. I remind noble Lords that I and my friends in the Treasury are managing on a steady-state basis to put £4 billion a year into the pockets of the poorest people through universal credit. That is the context in which we are making these changes. Noble Lords should not underestimate what it took to get that out through a government process: a steady-state £4 billion a year in universal credit for the poorest.

[Baroness Meacher]

My Lords, I think that I am right in saying that about £18 billion has been taken out in cuts. We are not getting extra benefit payments, but I applaud the Minister for having retrieved £4 billion; that is wonderful, and great news.

--- Later in debate ---

[Lord Freud]

My Lords, we are talking about severely disabled children receiving the full rate of £77. That is the point: we are trying to direct the money towards the people with the greatest need regardless of their age. That is what we are trying to do here.

[Baroness Meacher]

We have to be very clear about this. One of the main reasons for this amendment is the fact that it is so difficult to divide those who are eligible for the higher rate from those who are not. There is often a very narrow—and fairly arbitrary—margin. They just happen not to need to be disturbed at night, but during the day the costs may be even higher—the disruption to the family, the impossibility of working—all those issues are possibly just as great for those who will not qualify for the higher rates. It is really important to hang on to that.

[Lord Freud]

My Lords, this is a really important point. It may very well be that the concern of the House actually boils down to a discomfort with the dividing line between severely disabled and disabled. If that is the case, the way to do it—and I pick up what my noble friend Lord Newton was saying—is not to look at aspect or concrete ratios but at the precise issue that noble Lords are actually worrying about, which is the relationship. I will commit to having a very close look at this. It is clearly tied up with DLA definitions, which are under constant review and are being reviewed.

If we move the children from DLA to PIP, we need to look at this and there will be a real consultation process. I will review this dividing line and look at that very closely, and when we come to the regulations on this, I will report back to noble Lords on exactly what we find. My sense is that this is the real issue underneath all this. I know noble Lords had to find an amendment that had to weave through, to express this concern, so we all know what is happening on a technical basis. Let us go to the real issue. The real issue is: are we getting the dividing line right? People ask me if I am listening—I hear what noble Lords are saying; this is what I think noble Lords are saying, and I will go and do something about that.

--- Later in debate ---

[Lord Freud]

I thank my noble friend Lord Trimble for that. That is the position. I have heard strong arguments here and very great concern. I will talk to noble Lords before we get the regulations out to make sure that they find the regulations acceptable. I give that undertaking now. I beg the noble Baroness to withdraw her amendment.

[Baroness Meacher]

My Lords, I feel a huge weight of responsibility here. The Minister does not want me to test the opinion of the House, and I understand that, but hundreds of thousands of families all over the country with disabled and severely disabled children are desperate about this issue; I repeat, they are desperate. The pressure of that is difficult to bear. But I do want to say that I respect very strongly the Minister, the noble Lord, Lord Freud, for the huge amount of work that I know he does all the time on working towards a simpler welfare system. He has done a fantastic job on this. But, as he knows, the job of this House is to try to ameliorate the worst effects of legislation, and that is what we have done consistently throughout this process. The Minister has generously agreed to take back and think about these issues following the moving speeches that have been made by many noble Lords, but the fact is that we in this House do not have an assurance that anything will happen.

The Minister is under huge pressure from a Secretary of State who is an awfully long way from this. I think that he has little real understanding of what it is to be a poor family with a very disabled child and not able to afford to give to that child what they know it needs. I have concerns about that because we need the Government to understand the enormity of the pressure on these families. I have often said to my own children that I do not think I could have managed it at all because these things are so tough. That is the situation here.

The Minister referred to a cliff edge at the age of 16. The noble Lord in his place beside me referred to a cliff edge at the age of three. The worry is that what the Government are doing is introducing a cliff edge at birth and then at one, two and three, when severe disability hits. Do we want these families to fall off a cliff—and that must be how it feels—when they realise that they have made a lifelong commitment to care for a child but the state withdraws some of its support? That is a big issue for us.

The Minister referred to DLA funding swimming lessons, school holiday clubs and so on. The reality is that DLA does not cover adequately those expenditures, and that is the issue. Families do not have enough money, and it is why 40 per cent of them are in poverty. They need more money if they are to help their children fulfil their potential, whatever that potential may be. The Minister also referred to families being better off in work. I accept that, but the difficulty is that that is being achieved by impoverishing an awful lot of people, some of whom can work—speaking for myself, I support the Government’s quest to get more and more people back into work. But when we consider families with disabled children, particularly single parents with disabled children, as others have said, they cannot do this and it is terrible to impoverish them.

That is the dilemma we are facing. I know that the Minister is going to be deeply unhappy with me and I do not like making him deeply unhappy, but I owe it to the families out there to test the opinion of this House. We have to do it.