Welfare Reform Bill

Baroness Meacher Excerpts

Tuesday 14th February 2012 Lords Chamber

Moved by

[Baroness Meacher]

As an amendment to Motion A, at end insert “but do propose Amendment 1B as an amendment in lieu”

1B: Page 4, line 34, at end insert “, and such additional amount to be paid at a higher rate, a middle rate or a lower rate; and the middle rate shall be no less than two-thirds of the higher rate as may be prescribed; and the lower rate shall be no less than one-third of the higher rate”

[Baroness Meacher]

My Lords, before I say anything else, I will say two things. First, I was somewhat surprised that this particular amendment was dismissed in the other place on grounds of financial privilege, because I presented this as a revenue-neutral amendment. We were looking at ratios of benefits. As the Minister agreed in discussion, one could of course shift the higher rate in relation to the lower rate without spending any more money. We were not arguing in favour of spending more money, but about the cliff edge between the higher rate and the lower rate. I challenge the other place, if I am permitted to do that from this vantage point. Secondly, I express my personal gratitude to the Minister for the concessions and changes he has driven through as a result of the wonderful work done across all sides of this House. It is a credit to the House—we can feel proud of the work of the House—but also a great credit to the Minister.

--- Later in debate ---

[Lord Freud]

Gosh, that is a good question. I had better hold my counsel on that.

The amendment inserts a third rate for disabled children. It sets fixed relationships between those rates. With our primary structure, we are trying to have two elements—for disabled children and adults—aligned at the same rates, which are principled changes so that we have some consistency and make the system simple and fairer. I am trying to take out complexity from a system that, if your Lordships remember, is falling down because it is so complex. So simplicity has a value in itself. If the amendment went through, we would have different rates and a mismatch within the structure of universal credit.

I have been asked a lot of questions about the amount of money. The noble Lord, Lord McKenzie, will be pleased to know that I did not include this figure in the £2.1 billion that I cited earlier. To maintain the level of £77, under the original amendment, would have cost £200 million, which is why the Commons attached financial privilege to it, in answer to the question of the noble Countess, Lady Mar. To answer the noble Lord, Lord McKenzie, the reason why it is conditional is that there is not much point in having all the paraphernalia and trauma of a review if we have an amendment of this nature where we are locked anyway. That is why I made it conditional.

To answer the questions of the noble Lord, Lord Wigley, about how it would work, we start the universal credit timeline in late 2013, collecting information up to 2015, so we will have the information to undertake the review in 2015. The changes that the review will presumably recommend can be incorporated from then on.

[Baroness Meacher]

This is an important point. Can the noble Lord make clear that, having undertaken the review, the Government could adjust the rates for disabled children with different disabilities within the current legislation so that we would not have to wait for new legislation? If we had to do that we would be talking not about 2015 but an uncertain date in the future.

[Lord Freud]

It will depend on what comes out of the review. If it concerns child PIP, which it may very well be, which is a recasting of the whole structure, we may need primary legislation; but if it is an adjustment of DLA, I think we may not. It will depend on the outcome of the review, which will be serious and substantial. One issue that noble Lords are raising is that there is dissatisfaction with the way that we are applying these rates. There is general dissatisfaction about whether we are using the right criteria. We have one rather simple criterion at the moment. Building that review of how we do it will be a substantial exercise. The interesting thing about this debate is the general level of dissatisfaction about whether we are using the right definitions to get to the right children and the right families. Funnily enough, that has been one of the main things driving us to make this commitment.

We have here a commitment that either we are going with a major review of the child PIP or, if not, a fallback where there will be a review anyway, albeit within the context of the DLA. That is the commitment, and I can tell your Lordships that it has been somewhat hard fought.

[Lord Freud]

I think that we will be discussing this a lot in the years to come—it is not a dead issue. When you set up such a review, it generates its own momentum. Noble Lords know how powerful a review in this kind of area is. Once you have a review like this and the momentum that follows from it, something happens reasonably rapidly. I do not think that you have set it in absolute terms because it becomes an irresistible force. Therefore, I do not think that that is a concern. The exact nature of what we then do begs a lot of questions that we simply do not need to ask. However, with regard to how we carry out the review, the involvement of this House will be taken very much into account.

[Baroness Meacher]

I really do not want to hold up the House at this stage but this is such an important point. My understanding is that the details are going to be in regulations. If that is the case, a review will be undertaken and I have no doubt that it will show that these rates are unfair. Why cannot regulations be changed within current legislation to achieve a fairer distribution of additions? That is my only question.

[Lord Freud]

I am saying that that may be one outcome but there may be a much more radical outcome in the introduction of PIP for children. The question is: are you better off doing that or adjusting DLA with the passporting arrangement? That is very difficult to prejudge when we have not done the review. Therefore, there is method in the, or perhaps I should say there is some method behind—

--- Later in debate ---

[Lord Freud]

Yes, my Lords. I am sorry; I forgot to answer that. At this stage, I am not in a position to lay out transitional protection because we are currently looking at how it will work. However, it will be a bundled up protection. The work in progress effectively involves taking someone’s existing entitlement, comparing it with their universal credit entitlement and paying the difference as a lump sum, which is then maintained. However, in the context of what we are talking about, the migration process is rather more important than the transitional protection. In the vast bulk of cases, it is when those families move on to universal credit that will matter more than transitional protection, which will be towards the tail end of this period, if at all.

[Baroness Meacher]

I thank the Minister for his response. I accept what he says about the simplification of the system. That is absolutely right. However, I do not accept the suggestion that this system—certainly in this part of the Bill—is fairer. The fact is that it is not; it is deeply, deeply unfair. I find myself in a situation where we are either going to have the Minister’s acceptance—I think we do have that—that this is unfair and needs a full-scale review, or we have nothing. As the noble Lord, Lord Peston, indicated, maybe we are being bullied. My sense is that there are perhaps some rather large, old, hefty powers from another place leaning on us. Therefore, I would not wish to allege that the Minister is bullying us. I accept that if one has a full-scale review, there is a momentum and we will be there to see what happens and to try and make sure that the right thing does happen.

Disabled people and the disabled organisations who will be involved in the review will be on the case. Therefore, I feel reasonably confident that we will get there. My biggest worry concerns the timeframe and the need for further legislation. I still hope that if the Government get to the right answer in terms of the allocation of benefits to families with disabled children they could make adjustments to regulations while we await new legislation. That matters a great deal. We should not leave families newly coming on to these benefits severely damaged and, I think, cruelly treated. With that, I beg leave to withdraw my amendment.

Motion A1, as an amendment to Motion A, withdrawn.