Welfare Reform Bill
Baroness Meacher Excerpts(12 years, 10 months ago)
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Baroness Meacher
My Lords, I will speak briefly to Amendment 50ZA and will refer to Amendment 50ZC. I very much applaud the aims of the noble Baroness, Lady Lister, in seeking to have publication of information about the allocations of money to local authorities for the purposes envisaged. She presented her case very powerfully as always.
I want to thank the Bill team for a most helpful conversation. I understand that the £36 million allocated for crisis loans could be spent by local authorities on grants or payments in kind as well as loans. I find that very encouraging. I for one am very suspicious of loans for people attempting to live on the breadline—they can build up even greater problems for the future—other than when provided for budgeting purposes, which I know is very much what the Minister has in mind. If, for example, households receive half their monthly income half way through the month as a loan only to be repaid at the end of the month, that would go some way to ameliorate what would otherwise, for me anyway, be a highly risky set of proposals.
Amendment 50ZA, tabled by the noble Baroness, Lady Lister, would provide information on whether the funds had been spent by local authorities on the purposes for which the Government are allocating them—we all understand that is what they are being allocated for. I have some concerns that, even if the Minister concedes this amendment, it remains true that there is no statutory requirement for local authorities to provide some form of assistance to households in crisis. Many Social Fund crisis loans are sought because mothers, often single mothers, have no cash for the electricity meter—apparently, this is really the dominant issue confronting people who seek these loans—with several days to go before getting any more benefit and, of course, the children are cold and the mother cannot even make a hot meal for them without some form of electricity. I understand that the idea of the settlement letter is to spell out the purposes for which the £36 million should be used. I applaud that. I also understand that the DWP plans to follow up a representative sample of local authorities after one year to find out how they have spent the money.
My concern is that over time the settlement letter might be redrafted—heaven forbid that Ministers even change from time to time—and, if local authorities report after one year that unfortunately the £36 million had to be spent on other matters, it seems to me that there is no way of ensuring that these households in crisis actually have funds allocated to those needs. That is actually my concern. We need to know that there will continue to be a system for dealing with these household crises, particularly for families with children. We do not want these children disadvantaged.
I understand the logic of making the £178 million for community care grants and crisis payments available to local authorities, which are no doubt closely involved with many of these families—certainly, if they are not involved, they should be. The aim, as I understand it, is that these funds need to be brought together with other forms of assistance for these families in order to generate greater value for money. At the moment, the Social Fund is a national system that operates at arm’s length from other services. I recognise that this has some disadvantages. The concern is that every local authority is likely to respond differently to this challenge. How can we be sure that households in crisis will have somewhere to go for help, as I have already said? The Government are already committed to the settlement letter and review after 12 months, again as I have already alluded to. I welcome those commitments very strongly. They are a start, but they are a weak provision in this very important area of policy.
I hope that the Minister will take seriously the need for a more robust system to underwrite what I understand to be the Government's intentions. The amendment tabled by the noble Baroness, Lady Lister, is one option, but whether or not the Minister accepts Amendment 50ZA, perhaps he will consider incorporating in regulations the requirement that the funds envisaged for resolving household crises are indeed allocated to that purpose. I understand that how local authorities want to do that is a matter for them, but I think that ensuring that the funds are focused on that issue merits a sentence in the regulations. That would certainly make a much stronger support for the provision and give an assurance to the House that we have not lost it.
I would be very grateful for the Minister's serious consideration of the amendment. I should mention that I will not move Amendment 50ZC at this stage.
Lord Kirkwood of Kirkhope
My Lords, I make a brief intervention to support the amendments, as I did in Committee. Clause 69 is very important for a relatively small but very vulnerable group of people. The discretionary Social Fund has been part of the furniture, if you like, of social security for a long time, and during the period that it has been deployed, people have been able to take advantage of it to save the public purse considerable sums. One of the main purposes behind the discretionary Social Fund is to prevent people being institutionalised in various ways, and it has done that very successfully. There is cross-party agreement that reform of the Social Fund is long overdue, but to abolish or decentralise it like this raises many questions, which remain unanswered. I hope that the Minister will take the opportunity to try to assuage the concerns that some of us continue to have.
First, the process that will now unfold is less than clear to me. Reading the penultimate subsection of Clause 69, I think that an affirmative resolution will be required to give effect to the power that the Government are seeking in the clause, but I should like reassurance about our ability to have ongoing discussion about how the Social Fund Commissioner’s assets and the apparatus that we have in place at the moment will be dismantled in a way that makes sense, and that the allocation formula for the disbursement of these moneys is carefully considered and consulted on, because the discretionary Social Fund spend obviously has a very spatial dimension to it because some communities need it much more than others. We need to be careful about how we make that decision in the first instance. That is another reason why Parliament, by virtue of affirmative resolution or statutory instrument, must be continuously approached for advice and reassurance. The sample of local authorities being lined up for the welcome review process needs to be carefully considered because of the point I have just made: the decentralisation process will affect some dramatically differently from others.
I still have serious misgivings about this. If we are going to do this, we need to be really careful that we are getting it correct in the first instance and that the client group who have relied on discretionary payments from the Social Fund in crisis situations are not left wanting, completely abandoned and without access to liquid cash in circumstances where they find it difficult to survive.
Baroness Meacher
Can the Minister also respond to the point raised by the noble Lord, Lord Kirkwood, which I also raised, on the real assurance—the teeth, if you like—that the Government will need in emergencies to make sure, without specifying how it is spent, that the money is spent on those in greatest need? I would be grateful for a response from the Minister.
Lord De Mauley
My Lords, I hoped that I had emphasised that point. A great deal of work has been done with local authorities explaining the proposal and the intentions behind it. We have encountered considerable enthusiasm for the principle. We have put a lot of effort into helping and educating local authorities which will be making the decisions. I hoped that I had emphasised the importance of that point. I am agreeing with the noble Baroness but I do not think that I can go very much further than I have gone.
Baroness Meacher
“(4) A person is not entitled to personal independence payment unless the person is aged 18 or over.”
Baroness Meacher
My Lords, in moving Amendment 50ZGA, I shall speak also to Amendment 56ZC, the purpose of which is to allow disabled children aged 16 and 17 to continue to qualify for DLA for children instead of PIP until they reach the age of 18. It would mean that they would not have to go through the PIP assessment process until they reach an adult age. It would also simplify the benefits system by aligning PIP with universal credit.
I thank the Minister for sparing time to discuss this amendment at the end of a long day, which was at the end of a long week. I should offer him my apologies because last week I was jetlagged, tired and not very well, and I did not always get all my little ducks in a row. But I understand that 16 and 17 year-olds applying for PIP would not have to go through an income assessment. However, they would have to undertake a capability assessment. The point of this amendment is to sort out some issues of principle and consistency in relation to 16 and 17 year-olds. When I met the Minister, we did not touch on these issues and I should be interested to know his response today.
I understand that this amendment would bring the Bill into line with the United Nations Convention on the Rights of the Child, which defines a child as,
“every human being below the age of eighteen years”.
More particularly—in my view more importantly—this amendment would deal with the adverse consequences of these clauses for the young people affected. In other words, if disabled 16 and 17 year-olds would benefit from being treated as adults, frankly, that would be good enough for me but the fact is that they will not.
Lord Freud
My Lords, I welcome these amendments tabled by the noble Baroness, Lady Meacher, and the noble Lord, Lord Patel. They allow me just to go through how the Government intend to introduce PIP successfully for young disabled people from the age of 16. Clearly, the central question is whether 16 or 18 is the right age. In one sense, all ages are a little arbitrary here. Adulthood is defined at different ages in different contexts. The key to the decision to start PIP at 16 was based around the assessment criteria and at what stage people fit in with those, in terms of the activities that they can undergo and how we can look at them. When we looked at it with a range of experts, we concluded that you would normally expect individuals without disabilities to be able to carry out these activities independently from the age of 16. For example, you would expect a 16 year-old to be able to wash and dress themselves, to communicate with others, to plan, and to follow and make a journey. It is the age at which, currently, you expect individuals to be able to be employed full-time. There is a general expectation that they have the capabilities of adults.
The group looked at whether you would expect even younger people—I had better use that word now, rather than adults or children—to fit this assessment. They concluded that children go through several developmental stages under the age of 16, and they do that at uneven speeds. So, there was a cut-off in developmental terms between the two stages, for the purposes of this test, at 16. The other way of looking at this is that it is about trying to move people into adulthood and independence. A lot of these youngsters are living in their households but need to move to independence. Having their own independent help and their own funding in PIP at that age matches their aspirations to move into adulthood, and allows them to make their own decisions about aspects of their lives.
This is an area where, as we described in our policy document, we have set out our intentions and outlined the key principles that we have debated and agreed with stakeholders. We have set up a subgroup of the PIP implementation development group specifically to help and inform the design and testing of the new system in relation to disabled young adults. Together with the focus group work and the interviews that we have held with disabled young people, their appointees and representatives, this is the process that we have under way to get the system right. One of the most important areas where we are using the development group is around the question of how we look at the process of moving people into the 16 category and how we signpost, communicate and get awareness of the changes and then join up the support for disabled young adults and their families.
Clearly, this is not the only testing that disabled youngsters undergo in this phase of their lives. There are a number of assessments as they move from childhood to adulthood. We will ensure that all young people claiming PIP or moving on to it at age 16 have the appropriate support to allow them fully to express their needs. We know it is important that they have a parent, an advocate or a friend to accompany them to that face-to-face consultation. We are not changing anything in terms of DLA in this area. We are changing a lot of things by moving DLA to PIP, and we will be discussing some of them, but in this area we are sticking with the same age as the existing DLA arrangements.
There was an anomaly that the noble Baroness, Lady Meacher, tried to pin me down on and defied me to find a good explanation for. I have been challenged and I shall do my best. On the point about the difference between the universal credit at 18 and PIP at 16, the blunt answer is that these are different benefits for different purposes. It is important that we do not think of PIP as an income supplement; that is not what it is, and nor is it for someone who is out of work. PIP is a payment to people who are disabled who will always need extra money to live because their costs of living are higher, and we will pay it regardless of whether people are in work or out of work. That is why it is a different argument. By giving PIP earlier, we are giving youngsters their independent funding to run their own lives from that point—not from the point when they are meant to be in the workforce and fully independent—when, if they do not have a job, they will need an income supplement. That is the difference. I hope that I have risen to the challenge; I am sure that the noble Baroness will say that I have not, but I have done my best.
We are working closely with the Department for Education to explore evidence gathered so that we can have a single assessment for an education, health and care plan that can be used to support a personal independence payment claim. We are trying to get rid of all the multiple assessments.
Baroness Meacher
Does the Minister accept that there are a lot of people who are very worried about this shift? The reality is that many of them who might have been entitled to DLA will not be entitled to PIP and will therefore lose out. They will also lose out on the disability additions. There is quite a big financial consequence here.
Lord Freud
I accept that there are concerns but one has to stand back. We are spending £12 billion on PIP in real terms, which is the same as the spending in 2009-10. The talk about a big cut refers to a big cut of a projection—the 20 per cent. I want to reinforce that point. In this House we should not get carried away with the simplicity of the big cut. It is not a big cut. With PIP we are trying to direct scarce resources, at a very difficult time, to the people who need them most. That is the purpose of it.
One of the other things that is happening—and is probably the biggest difference in emphasis between DLA and PIP—is that PIP is trying to take account of people with mental health problems in a way that DLA finds much harder. That is why the assessments and activities that are looked at are very different. Therefore, PIP is different and there are changes. Some people will lose out but they are the people who need the money less. That is the point of making the adjustment. However, the overall sum remains that £12 billion.
To pick up the point of the noble Lord, Lord McKenzie, we have the power and flexibility to treat 16 year-olds differently. This includes different assessment processes during the migration period. We are working actively now with children’s groups to make sure that we have the right migration strategy for youngsters and to finalise it. We will publish that approach. It is not a settled matter, which was, I think, the noble Lord’s real question. We are working very hard to get it right.
Let me deal with some of the amendments. Amendments 57, 58, 50ZGA and 56ZC would prevent our abolishing DLA for those aged 18, and potentially limit our flexibility by imposing statutory duties that would be less able to respond to change, especially as we refine and improve processes as a result of feedback and our experiences. It is very important that we have that flexibility. One of the things that we will discuss later this evening is feedback and the amount of research that we will carry out on a continuous basis. Clearly we want to incorporate that into how we apply PIP, particularly for youngsters.
This is very technical but I need to make it clear that the Government consider Amendment 56ZC to be consequential on Amendment 50ZGA; and, separately, Amendment 58 to be directly consequential on Amendment 57. I do not want any misunderstandings later, although the noble Baroness, Lady Hollis, is not in her seat at the moment to give me a piece of her mind. Given the reassurances that I have given the noble Baroness, and the technical limitations that the amendments of the noble Baroness, Lady Finlay, would impose, I hope she will withdraw her amendment.
Baroness Meacher
I thank the noble Baroness, Lady Finlay, and the noble Lord, Lord McKenzie, for contributing to this short debate. This amendment was tabled very late and others have not had a chance to catch up with the thrust of the argument. I thank the Minister for his reply, although I doubt that the considerable number of people who will be losing out as a result of this provision will be very reassured by his response. I do, of course, understand—at least in general terms—the thrust of the Government’s commitment to focus resources on those most severely disabled. I beg leave to withdraw the amendment.
Baroness Thomas of Winchester
My Lords, the importance of this amendment, and of collecting evidence from a person’s healthcare professionals, cannot be overstated. Some of us are shocked that not all medical reports are looked at presently under DLA; I think only around half are.
Turning to the assessments, I, too, was very interested in the finding by Citizens Advice that welfare rights workers report that the WCAs often present a distorted picture of what a claimant has said. In case noble Lords have forgotten that report, it said that 37 clients were asked to examine their reports and establish how accurately they reflected what they had said and done in their assessments. Sixteen were found to be very inaccurate. We know from experience that if you hear two people speaking to each other and one of them tells you afterwards what they said all over again, it often does not match your recollection of what they said at all. I note that in relation to PIP we are told:
“Individuals or professionals who support the customer on a regular basis will be able to provide evidence to support their claim”.
Who will ask these people to provide evidence? Will it be written evidence? If it is not from a healthcare professional, who else might it be from? The finding of Citizens Advice in connection with the WCA alarms me a great deal about the quality of some of the Atos healthcare professionals who are currently carrying out the assessments. I fervently hope that those doing the PIP assessments will be of a higher calibre altogether.
Baroness Meacher
My Lords, I support Amendment 50ZR, tabled by the noble Baroness, Lady Grey-Thompson, and to which I have added my name. The noble Baroness has made the case comprehensively so I will be brief. She referred to the alarming error rate in benefits decisions. At the same time, I am aware that steps are being taken to improve the accuracy of those decisions.
Here I want to make sure that we do not forget the particular problems of people with learning difficulties and mental health problems, who may not adequately convey their limitations in a face-to-face assessment. These groups have to spend their lives concealing their symptoms. They are embarrassed by them, and the last thing they want to do is to spell them out. They are acutely aware of the stigma associated with those symptoms. The Government are ensuring that claimants can take someone along to their assessment. There is no doubt that that will help and in some cases lead to appropriate outcomes. However, for many having a companion simply will not be enough. The companion cannot conduct the interview and the pressure on these individuals to conceal their problems is very difficult to overcome in these one-off assessment interviews.
There are also people for whom the very idea of one of these assessments is completely unacceptable. The obvious example is of people with agoraphobia, for whom just going out of the house can present real problems, as can getting on a bus or whatever it is. It is a real problem for this particular group. These people would benefit massively from having a psychiatric assessment at the start of the process, which would eliminate the need for them to go through all the distress of having to do something that they find completely intolerable. It is very fashionable to knock medical assessments but, having worked in mental health for a quarter of a century, in my experience psychiatric assessments are bio-psycho-social assessments. I think that was the term that the Minister used. They do look at the biological, the social, the genetic and every other aspect of someone’s functioning.
Also, any self-respecting psychiatrist will not do an assessment in a single sitting. They expect to assess someone over a period of time. They will bring in the views of social workers, nurses and others who have seen someone over a period. There is no way that a one-to-one assessment by someone who may be a nurse but not a psychiatric nurse—even if they call in someone who might be a psychiatric nurse but does not know the patient—can meet the need to make sure that someone is properly assessed, gets the benefits to which they are entitled and does not get benefits to which they are not entitled. It works both ways. This is an important issue.
Other examples include people with a psychosis whose symptoms are not controlled by medication. Many people’s symptoms are controlled but some people’s, tragically, are not. Those people should be able to have a medical—a bio-psycho-social—assessment and, on the basis of that assessment showing that such a person may not be able to function at all, it should be sufficient. I would have thought that the Government would accept that view.
There are physical diagnoses to which the same sort of arguments would apply. For example, those undergoing treatment for cancer, who again have uncontrolled and uncontrollable symptoms, would fall into this category. I referred to this group in connection with an earlier set of amendments. An early medical certificate for those people would avoid enormous distress and the gross injustice of requiring them to do things that none of us would wish them to do if we saw them face-to-face.
I understand the issue of medical fees, which has been referred to. GPs will not tolerate an inundation of requests for medical assessments without a fee. One of my daughters is a GP. I discussed it with her and she was not impressed by the idea. I am also aware that the Government have introduced an important new element in that the claimant can seek a report from their favoured clinician, who could be anybody—it might not be a doctor. This is helpful but it raises the issue, which has already been raised, of a two-tier system. Some people may be able to afford such a thing; others may not. It is a great step forward and I wish to acknowledge that, but it does not detract from the importance of this amendment. I look forward to hearing the Minister’s response.
Baroness Browning
My Lords, I am sorry to come in on Asperger’s syndrome again. I know that the Government involved people on the autistic spectrum in some trials that they carried out over the summer. I just wanted to encourage my noble friend to take the feedback from some of the people who took part in that, in a mock PIP assessment. Because the spectrum, particularly at the more able end, includes people who may be very articulate, on a good day it may be quite difficult to see that this is a communication disorder. On the other hand, you could have an assessment in which, even with the benefit of someone in support in the same room, the person on the autistic spectrum may have some difficulty in answering any question themselves as they struggle to put the words together or to make eye contact with the assessor.
On this group of amendments, I would encourage my noble friend to be aware of the variation in how people can present. However confident they may appear, it will inevitably be a very stressful situation for them to be in a room, answering questions from someone they are unfamiliar with. However they present, there will be stress behind it. I just reiterate something that I asked my noble friend a little earlier. I ask him to make absolutely sure that the people doing these assessments have not just mugged up on what autism or any other disability is from some book, but really understand and have a working knowledge of the disciplines in which they are assessing people. I will leave it at that.
Lord Freud
My Lords, one thing I was trying to get over about trying not to have a two-tier process so that the rich can get their evidence and the poor cannot, is that we turn the burden on to the assessors, so that when someone cannot come out, that requires a house visit if we cannot use paper evidence. There will be examples where paper evidence will do the job; where it cannot, the onus is on the assessor to do the checking, rather than the other way round. That is how we will provide that protection.
I hope I have gone through all the specific issues and given assurances on all those important matters. We are planning to meet the concerns expressed around the House. All I am asking for is that we have the flexibility to go on running the system as things change, as they inevitably do, and that we do not lock it up in primary legislation so that if we need to make changes it takes years. That is really what we are talking about.
Baroness Meacher
I apologise for interrupting the Minister. I just wanted to make a point about ME patients, who have the most awful time. I have direct personal experience of that—not myself but through people close to me. Does the Minister accept that Amendment 50ZR would enable someone bedridden with ME who has not seen a doctor for years to call their GP and have a proper assessment? They are bedridden; they cannot go to assessments. That would avoid getting into a benefit assessment straight off. That is the whole point of the amendment. There has been support around the House because of the many situations where tremendous distress can be avoided by an appropriate person—perhaps a nurse, perhaps a doctor—doing a full and careful assessment, rather than getting into the benefits system.
Welfare Reform Bill
Baroness Meacher Excerpts(12 years, 10 months ago)
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Baroness Sherlock
My Lords, I have two specific questions for the Minister. Following on from my noble friend Lady Hollis, even if the money were to be spent on the same people, how can the Government guarantee that it is spent for the purposes for which the Social Fund was originally created?
Looking at the local authority fieldwork summary report mentioned by my noble friend Lady Lister, the fear is clearly out there in local authorities that the money will be sucked up by social care budgets. For example, even if it was spent on child protection, that would simply be displacing other money and there would not then be money available to enable local authorities to give cash to vulnerable families. How will the Minister ensure that it gets to the right people and for the right purpose?
My second question follows on from what the noble Baroness, Lady Lister, said about the Office of the Children’s Commissioner, which believes that the Government are in breach of Article 9 of the UN Convention on the Rights of the Child. Has the Minister taken advice on this matter and, if so, will he share it with the House?
Baroness Meacher
My Lords, I rise to speak to Amendment 50ZC and I will try to speak extremely briefly in view of the hour. This amendment seeks to ensure that the Social Fund remains in place—
Baroness Garden of Frognal
With great respect to the noble Baroness, that is in the next group. We are going to stop on this group.
Baroness Hayter of Kentish Town
My Lords, I think I have the right group. As we have heard, unless this Bill is amended, it will fundamentally alter discretionary payments. Budgeting loans will be replaced by payments on account as part of the universal credit. Community care grants, which help those on means-tested benefits stay in their own homes, and crisis loans, which basically do what it says on the tin —they are for a crisis and they are a loan—will both be abolished and the money handed over to local authorities.
As has been said, the problem is that there are no guarantees that similar support will be available to vulnerable people who need it; the funding will not be ring-fenced; and there will be no statutory duties attached, not even any guidance of the sort that my noble friend Lady Hollis has requested. Earlier the Government were very clear that they would not issue any guidance—we trust they may have had time to rethink that. Without guidance, which would guarantee access to certain groups or place a statutory duty on councils to provide the sort of service that has existed, or to ring-fence the money, there is a real danger that the kinds of support that have been available will simply dry up.
The lack of ring-fencing caused the biggest concern to those responding to the Government’s consultation: 42 per cent of respondents raised it, a higher proportion than on any other part of the proposals. The various charities, which know a thing or two about vulnerable people, have, I am sure, contacted the Government—they certainly contacted us about this. Crisis is,
“deeply concerned about the impact on homeless people moving into independent, settled accommodation”.
Family Action is similarly,
“seriously concerned about the abolition of the discretionary Social Fund”,
which it fears,
“will remove one of the final safety nets for some of the most vulnerable and needy members of society”.
Barnardo’s also knows a thing or two about working with vulnerable people. It feels that,
“the Social Fund is a lifeline for many”
and is therefore “seriously concerned” about its removal and the money being given to local authorities, should this not be ring-fenced. Scope is similarly,
“deeply concerned that the Government plans to devolve a vital source of support … with no intention of ring-fencing”.
I am sure that some 22 charities have been in contact because they are worried about the loss of this last safety net for the most vulnerable when they suffer from emergency situations in the form of traumatic events such as homelessness and domestic violence, which has already been referred to by the noble Lord, Lord Blair.
The lack of the ring-fence was mentioned here tonight by the noble Lord, Lord Kirkwood, and in Committee, including by the noble Lord, Lord German, who is not in his place. In response to that, the Minister, who also is not in his place, said that he was extremely concerned about what was being said about the lack of a ring-fence and that he would reflect on the issues raised. I trust that his reflection is going to be shared with us shortly. As we have heard, a third of those getting community care grants are disabled, a quarter are lone parents and one in 10 are pensioners. These moneys go to people moving out of residential or institutional care to live independently, including children moving on from care and people coming out of homeless hostels, psychiatric hospitals and women’s refuges. These are exactly the sort of people who are being helped. In the future, of course, we may rather sadly have to add those who are forced to move as a result of the Government’s so-called under-occupancy rules, should the Government insist on overturning your Lordships’ amendment. Similarly, we risk larger families being forced to move elsewhere once the benefit cap, if that is not amended, affects high-rent areas such as London and the south-east. Again, people will be forced to move and set up home anew. Community care grants also help families at risk due to exceptional pressures. We have heard about overcrowding, relationship breakdown and the examples of a house fire or flooding.
Perhaps the Minister could tell the House whether he has read Destination Unknown, a Demos report tracking the lives of disabled families through the cuts. If he has read it, does he recall the central message that, for the disabled, one unexpected event such as an added illness, a mix-up over benefits, the need for new wheels on an electric chair or longer taxi rides to medical appointments can completely blow a person’s budget out of the water? The disabled tend to have no savings, no leeway and nothing else to rely on. It is exactly this sort of money that has been available to them. Charities, which have also often stepped in, are seeing their supply of funding drying up. They are finding themselves overburdened with demands. Jobs are less available, and the traditional hiccups or slight delays in payments that are bound to occur with the introduction of new systems that we will see at a later stage can have a devastating effect on the week-to-week budgets of disabled people. They just manage, but it is these sorts of emergency funds which can make all the difference when something goes wrong.
Crisis loans are slightly different from the other elements and the DWP has claimed that this expenditure rose following the introduction of the telephone-based application scheme. However, there is no actual evidence that it was a cause rather than a correlation which showed on the figures as the rise in claims also coincided with an increase in unemployment. Also, it is important to remember that the crisis loan scheme is a loan.
Another report that the House may be aware of was published by Barnardo’s in December last year on the vicious circle and heavy burden of credit on low- income families. Families can become trapped in a cycle of debt, which can have a very persistent effect. The Social Fund offers a far better alternative to vulnerable families than home credit, payday loans and other forms of high-interest lending, including of course illegal loan sharks. It is estimated that a £100 loan from a loan shark needs repayments of £285 and takes 57 weeks to repay. The same loan from the Social Fund costs £100 and takes 15 weeks to repay. Furthermore, these are the amounts we are talking about. I think that the average award last year was just £83, so we are not talking about hundreds of thousands, but we are talking about money that makes an enormous difference to a certain number of people. These loans can be life-changing. They can be the rent for a new home; they can be the move out of institutional care and help to pay either that rent up front or for the cooker that enables one to live there.
Our concern is that a lack of ring-fencing will mean that these loans are simply not available under a new scheme. Councils, as has been heard, are already worried that the money will drift away elsewhere, and we understand the temptation for that. We have already seen 123 local authorities increase their meals-on-wheels charges, some by up to 400 per cent, while their own grants to local voluntary agencies, which used to be able to help, are drying up. We should not be surprised if local authorities were a little tempted to move this funding elsewhere.
The amendment does not seek to frustrate the Government’s intention to localise, nor does it argue with the contention that need will best be met if identified at a local level. It seeks to provide a safeguard for the many people who need the support that the Social Fund now provides to help them in a crisis. It is because of the strong concerns that we have heard expressed across the House about the vulnerability of these groups of people if this money is not available that we support the amendment.
As Barnardo’s points out, some local authorities do not yet have expertise in working with the poorest. An inner London borough may well understand how to implement the infrastructure to offer a Social Fund replacement, but this is less likely in a shire county with a smaller and more dispersed population of disadvantaged people. Indeed, localised replacement is likely to be provided through adult social services. Many people who need the support of the Social Fund, such as homeless people, will not be clients of social services, so they may struggle to access it anyway. Without ring-fencing and some guidelines about who it should go to, we have grave worries about the gap that will be left. I hope that the Minister’s period of reflection on the amendment will enable him to accept it.
Welfare Reform Bill
Baroness Meacher Excerpts(12 years, 10 months ago)
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Lord Patel
My Lords, I speak to Amendment 42, to which the Minister has just referred. Before I start, perhaps I might wish him a happy new year and, in doing so, thank him enormously for his Amendment 43. It may be claimed that it was in response to my amendment in Grand Committee; if so, I am very grateful for it. I thank him and I do not need to go any further.
Baroness Meacher
My Lords, I support Amendment 43, tabled by the noble Lord, Lord Freud, and I also wish to congratulate him on levering a little money out of his Government, or the Treasury, to enable that amendment to be tabled. However, I also want to speak to my Amendment 42A, rather late in the day, which seeks to introduce just a little more humanity into this part of the Bill. It simply extends a little the remit of Amendment 43.
At present, a claimant who has a terminal illness and who is expected to live no more than six months would be placed in a support group, which means that they would have no conditions attached to their benefit entitlement. If they have a few good days when they might be able to work, there is no commitment for them to have to do that although anyone in this position who has a job will no doubt wish to work as far as they possibly can. I am talking about those people who do not have a job and who therefore find themselves in the position of having to look for one, when they have a terminal illness that will deteriorate over time until they finally die.
This amendment applies to a group of people who are suffering from a life-threatening disease, the symptoms of which cannot be controlled by any recognised therapeutic procedure, and where there is reasonable cause for these symptoms not to be able to be controlled by any such procedure. At present, the default position is that these claimants will be allocated to the work-related activity group and will be expected to undertake interviews and activities on this rather wild and ridiculous assumption that they should be finding a brand new job, with a brand new employer, for whatever little bits of time they are able to function. At the same time, of course, they have to prepare themselves mentally for the ever worsening symptoms that will lead to their death.
My question to the Minister is whether he regards such expectations of persons on a downward path towards death as humane and reasonable. I hope very much that he will answer that question rather carefully in his response, in the sense that having accepted the government amendment and put that forward, he will find that this amendment is a very minor shift which brings people in a rather similar position into line. Again, I must emphasise that this amendment would not in any way discourage terminally ill people who can work from doing so. Rather, it is an attempt to remove callous pressures from being applied to people who already have probably far too much to cope with.
The Minister knows that I understand very well the need to reduce the numbers of people on ESA and, most particularly, to reduce the months and years that some people remain on it. We are really of one mind on that. Of course, proper conditions need to be applied so that if people are really sufficiently well to work, they make every effort to do so. However, we are talking about people whose lives are severely curtailed. They will not be around to spend years on ESA, let alone to claim pensions. Are we not in danger of throwing the baby out with the bathwater here?
I shall leave your Lordships with just one case to illustrate the point. A CAB client had had major surgery for breast cancer, twice. At the time of her assessment for benefit she was suffering severe pain and undergoing tests that revealed some abnormal bone activity. She told the HCP about her condition and the fact that she was due to have a further scan. This lady was found to have metastatic non-curative cancer of her bones, primarily in her pelvis, hips, back and spine, as well as down her legs and in the rib area. She was told that she had three or four years to live, although I have to say that sounds a little unlikely to me, and my guess is that it will be a pretty miserable three or four years.
On appeal, this claimant had her “fit for work” status—which is mind-boggling in itself—removed, but she was placed in the work-related activity group. She became very tearful and had to see a psychologist. She was unable to return to her previous job due to pain from the operations removing the lymph glands under her arms. She got extremely tired, of course—if you have metastatic cancer you are not going to be in a good way to do anything. The CAB adviser was of the view that this client would not be able to work again due to the increasing pain levels that she was going to suffer.
Anyone who has known anyone with metastatic bone cancer will know that this is not a happy thing to have; it is seriously deleterious. That is the point that I want to make: here you have people whose pain, tiredness and general debility cannot be adequately controlled, and there should be some fairly automatic procedure to deal with them. Perhaps the Minister could consider the position of a potential employer. Who would take on an employee with metastatic bone cancer? I have to say that I would not. How reliable would such an employee be, and for how long—for how many days or weeks at a time? Who knows? The prospects, though, are pretty poor.
This client will have to go through the humiliating and endlessly negative experience of writing applications and going for interviews, knowing in her own mind that employers, if they are half sensible, simply will not take her on. It is that aspect that we need to get hold of. Also, she could be accused of wasting employers’ time: why should they be reading these applications and interviewing her when, poor soul, she really is not in a fit state to work?
Noble Lords have mentioned in previous debates that terminally ill claimants will be saving taxpayers substantial amounts of money because of course they will not be living for decades with dementia, as people like myself might be doing. All we are looking for is dignity in those last months and, if they are lucky—although perhaps this might not be lucky after all—years before they die. As the Prime Minister said in his first party conference speech as Prime Minister,
“people who are sick, who are vulnerable, the elderly—I want you to know that we will … look after you. That's the sign of a civilised society and it's what I believe”.
We are really not talking about a lot of money here. I hope that the Minister will consider this matter.
Lord Kirkwood of Kirkhope
My Lords, I would like to make a brief contribution to this debate. Anyone who was part of the collective consideration in Grand Committee would have to acknowledge the very constructive role that the Minister played in this part of the Bill. The Bill is very difficult territory. I think that it was an amendment in the name of noble Lord, Lord McKenzie of Luton, that opened the door to some of the changes that the Government are now proposing, but it was palpable to everyone who was watching the Minister that the defence that the department was taking at the time was not adequate to meet the demands that were being made of it in the cross-examination that he was getting. For myself, I think that it was commendable that he was alive enough to what was being said by adult people around him at the time on an important issue. It is not a huge issue; there may be 4,000 or so claimants who might now benefit from this measure, but those who do will get substantial benefit. It is appropriate, particularly from my side of the coalition on this side of the House, to recognise that this is a significant amendment that was won only because the Minister was willing enough to listen and make a constructive response. That is why we have the amendment in front of us today, and I hope that the House will support it unanimously.
Lord Freud
My Lords, picking up the point of the noble Lord, Lord McKenzie, about the discrepancy between Amendments 42 and 43, sometimes when a powerful argument is made in Committee, it succeeds even more than do the proponents of that argument. In this case we went back, thought about the measure and said, “If we are going to do it, let us do it properly”. That is why the measure is indefinite and not for five years. The noble Lord asked whether Section 1B on further entitlement after time-limiting covered contributory ESA under the first and second contribution conditions and the ESA youth awards. The answer is yes
Let me turn to Amendment 42A. I very much understand noble Lords’ concerns on this, but the amendment would not achieve the stated aims of placing in the support group individuals with conditions that reduce life expectancy to two or three years. Substantial provision is already available to ensure that individuals with life-limiting diseases are provided with appropriate support. The amendment seeks to ensure that individuals with uncontrollable diseases who do not meet the support group criteria of the WCA, set out in regulations, are treated as having limited capability for work-related activity. Under the current system, individuals who meet this provision and are treated only as having limited capability for work will have a condition that does not significantly limit their functional ability such that it would be reasonable to expect them to undertake work-related activity. However, anyone who has an uncontrollable condition may still meet the current support group criteria if, as a result of their condition, there would be a substantial risk to their health if they were held to be capable of work-related activity. A large number of protections are therefore built in.
Perhaps I may provide an example of how that might work—and does work. Consider an individual with extremely severe uncontrolled hypertension, who has little or no symptoms or functional impairment. This individual will not meet the test of limited capability for work-related activity necessary to go into the support group, or even the test of limited capability for work to go into the WRAG. As a result of their condition, work-related activity is likely to pose a substantial risk to their health.
Baroness Meacher
I apologise for interrupting the Minister. The point that I was trying to get across was in the example of the woman to whom I referred. It may be that today she could do a little bit of work—although probably not. The difficulty is that the assessors do not take into account the likelihood over a number of weeks that this person simply will not be able to maintain an employment pattern. No employer in their right mind would therefore take them on. The issue that I am trying to raise is that the assessment processes, as I understand them, absolutely do not go anywhere near that level of sophistication. I agree that we are not talking about large numbers of people, but each and every case is a tragedy in its own right. There will be people who, for reasons that we can understand, will be assessed as not qualifying for the support group at this moment, yet for whom employment is completely unrealistic. I hope that the Minister can get the sense of what I am trying to say.
Lord Freud
I am sympathetic to this issue—one has to be. Clearly, we are continuing the whole time with improvements to the WCA process. We are getting a lot of improvements. We are beginning to sense that. Although the figures do not show it, the anecdotal feedback is becoming much more encouraging. This is an area in which we can make the assessments with the kind of detail that is necessary as we work through the process. Indeed, that is where it should be done. As the noble Baroness, Lady Finlay, said, in these situations it is extraordinarily difficult to come up with a six-month or a year’s prognosis. We all know that. The position, on the balance of probabilities, is that if the prognosis is six months, people go straight into the support group. That has happened since 2008 and for about 10,000 people.
The data are extraordinarily imprecise. There is great variability among clinicians. It is very hard to pin down anything that we could use with any consistency stretching out to two or three years. Medicine is advancing with great rapidity, so whatever we decide on today may be radically different in two years’ time. A longer prognosis could mean that a condition could be very well controlled for a period and then deteriorate dramatically towards the end. The amendment concerns only conditions that are uncontrolled and uncontrollable. Clearly, that may not be the case for many life-limiting diseases. I think there is consensus around the House that in many circumstances work is beneficial and important for those with life-limiting conditions. Some will want to continue to work, and it is important that we have a system that does not write people off but allows for that.
Baroness Meacher
Baroness Meacher
Amendment 36A is a paving amendment for Amendment 46, which is consequential upon it. Our aim with these two amendments is to ensure that young people who are very severely disabled and who are assessed as qualifying for the support group continue to be entitled to contributory employment support allowance in the future. Clause 52, if not amended, would remove this entitlement from all such young people. Amendment 46 would accept the Government’s position that those somewhat less disabled young people would be entitled to employment support allowance as a member of the work-related activity group, or WRAG, but for one year only, so this is a very modest amendment. We recognise the financial constraints within which Ministers are working. Having said that, in principle I support Amendment 45, but Amendment 46 is more limited.
Until now, under the Welfare Reform Act 2007 the contributory allowance of ESA is payable to all those who have paid sufficient contributions and to young people who have not had an opportunity to make contributions because they have had limited capability for work for at least 28 weeks prior to being awarded the benefit. In other words, under the 2007 Act and under Amendment 46 a young person with a long-term condition or impairment which is so severe that they qualify for the support group—thus having a condition which prevents them working and paying contributions —can qualify for benefit as of right without having to be subject to a means test. The Government plan to remove this entitlement—at least for new claimants. As I understand it, those who have gained this entitlement as young people will continue within the support group.
The Government’s arguments in their impact assessment are, in my view, extraordinarily weak. First, they argue that abolishing the youth entitlement to contributory benefit puts those young people on the same footing as everyone else claiming contributory ESA. This is surely simply not the case. These young people with congenital conditions or impairments so severe that they are entitled to the support group provision are in a completely different category from people who are able to earn and build up capital, pay contributions and thus have some kind of dignity. They are surely in a category of their own.
The Government have said that they will protect the most vulnerable. As I said in my previous speech, the Prime Minister himself made a very personal commitment to protect these people. Is there anyone more vulnerable than a severely disabled young person who has never had, and will never have, the chance to earn a living? I find it difficult to think of anyone.
The second government argument is that the abolition of the youth entitlement to contributory benefit will simplify the system. My question is: simplify the system for whom? I understand that one of the most common errors made by jobcentre staff is the failure to advise young people of their entitlement to contributory ESA. Balancing a reduced number of errors against the hardship which Clause 52 will cause hardly justifies the reform. For the claimant, a contributory benefit which does not change with a change in income or capital is surely much, much simpler. Simplicity for whom? It may be simplicity for Jobcentre staff but certainly not for the complainant, so the Government’s argument does not stand up.
The Government’s attempt to save money by denying this particularly disadvantaged group of people may indeed backfire. Would it not be wonderful if some of them could find a partner, despite the level of their disabilities? In the long run, such a relationship would undoubtedly save the taxpayer. How much more difficult for someone to find a partner if not only do they have to cope with their own severe disabilities, but they are also a financial burden if they have no entitlement of their own to any income should their partner have any earnings? Such a position is quite different from an able-bodied person who has had an opportunity to build up earnings and capital—and indeed a pension of their own. These people will never have a pension; they will never have any sort of entitlement unless we make that provision for them in this Bill.
This is not an even playing field. The Government will argue that most of these young people will be entitled to some means-tested benefit. Indeed, I understand that only 10 per cent will receive nothing at all under a means-tested system. Then—you could turn that argument on its head—there will therefore be very little savings by denying these people the dignity of an entitlement to some benefit. Why remove that dignity from this peculiarly disadvantaged group?
The noble Lord, Lord Freud, in a letter sent to the Cross-Bench Convenor on 8 January, points to a very different argument with which I have some sympathy; it is quite, quite different. The noble Lord refers to a recent European Court of Justice ruling that restricts the Government’s freedom to apply the residence and presence tests that are part of the conditions of entitlement to ESA. This restriction makes the youth provision potentially available to people living abroad who come over here for a short period and then go home and have an entitlement for life. I understand that the Government are fighting the EU court ruling and I wish them well in that fight.
We need to be very clear that young people with very severe disabilities or impairments, which qualify them for the support group, are among the greatest priorities for this Government. As I said, the Prime Minister made his commitment to that group. Taking account of the EU ruling, but also the absolute priority for this particular group of claimants, I ask the Minister to take away this issue and consider tabling an amendment at Third Reading that would provide residential conditions, or perhaps parental contribution conditions for entitlement to this youth contributory benefit—the passporting in of youth to this benefit. There must be some way of providing for conditions for this benefit for young people that would preclude people abusing the benefit as the EU ruling has made possible.
If the Minister can agree to take this matter away and positively discuss with us and others a way forward to protect this group of people, while precluding the abuse, I would withdraw the amendment. But I would want the understanding that I will bring back the amendment at Third Reading if we cannot arrive at some satisfactory arrangement. We should not be ignoring the real entitlement of these young people—the most disadvantaged people in our society. They should have an entitlement to benefit, so that they do not have to rely on means-tested benefits for the rest of their lives. That is what we are talking about here. Either they have an entitlement to benefit or they are subject to means testing in perpetuity. It is an important matter and I hope that the Minister will be willing to take it away.
Lord Freud
My Lords, I start with government Amendment 45A, on which the noble Lord, Lord McKenzie, ended his remarks. We have already discussed government amendments to provide for further entitlement to ESA after a contributory award has been time limited. As I mentioned in the previous debate, it has been necessary to amend how the time limiting of ESA youth awards will operate as a result of providing for that new category of entitlement. We have introduced the amendments so that the deterioration category will be open to both claimants with a time-limited contributory ESA award and claimants with a time-limited ESA income-related award. In practice that means that the substance of the ESA youth time-limiting measure has been placed in Clause 51 instead of Clause 52. The government amendment preserves the intended policy for preventing new claims to ESA youth from being made in the future. The amendment to Clause 52 seeks to remove the substance of ESA youth time limiting, which will now feature in Clause 51, but to retain the measure that prevents new ESA youth claims being made.
Our proposed changes to the condition relating to entitlement to ESA on grounds of limited capability during youth are part of, basically, a set of principles around the form, where we are trying to focus our support for the poorest people. We are seeking to avoid duplication and to redefine the contract between the state and individuals as we move towards introducing the universal credit, which is clearly a far more efficient way of directing our resources to the poorest people.
As we go through some of the specific areas, I should remind the House that the universal credit, when it is introduced, is designed to focus each year an extra £4 billion into the pockets of the poorest people. On the other side, we do not think it is right in principle that, for example, a claimant who under the existing youth provision has qualified for contributory ESA as of right and then comes into a large amount of money—for instance, an inheritance from a parent—should then be in a position to continue to receive the scarce resources of the state in terms of contributory ESA without having paid any contributions. The figures available show that there is support for these youngsters in income-related ESA and that, indeed, 90 per cent of existing recipients will go from contributory to income related.
Baroness Meacher
My understanding is that many of these people may receive some income-related benefit but not at the same level of the contributory benefit that they would receive under the amendment. My second point is that the Minister has frequently referred to the £4 billion addition in the Welfare Reform Bill: is that a monetary addition rather than a real-terms addition because surely in real terms there will be a considerable drop in the overall welfare reform cost under the Bill?
Lord Freud
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.
Lord Freud
My Lords, not really. This is a prime area in which we have automaticity without any payment system. This is one of the areas where we are very vulnerable so it makes enormous sense to look at it now and as it comes up. Therefore, I would not agree with that point. Shall I rattle along?
Amendment 46 would create considerable and unwanted uncertainty for claimants and operational difficulties for the department. A claimant would need to claim ESA and go through the assessment phase without any entitlement to ESA at all until the question of limited capability for work-related activity was determined at their WCA. This is because, under Amendment 46, only claimants who were found to have limited capability for work-related activity at the end of the assessment phase would be entitled to ESA on the grounds of youth. As I have already said, the amendment would save rather less—£17 million until 2016-17. The discrepancy is in the SAR, which is covered by a very similar amendment, to pick up the point of the noble Baroness, Lady Lister.
I confirm that the Government see Amendment 46 as linked to Amendment 36A, but none of the amendments in this group is consequential on any other. We would expect the House to make a decision on each individually. In due course I will move the amendment in my name, Amendment 45A, and I urge noble Lords not to press theirs.
Baroness Meacher
I thank the Minister very much for his reply to the various amendments, and many Members of the House for their contributions. What we have here is an attempt to protect the dignity of a very vulnerable group of severely disabled people at a cost of £10 million, which is absolutely paltry. I refer to Amendment 46.
I feel that we are being somewhat sidetracked by the intervention on the European Union. Contributory benefits of all sorts are vulnerable to this situation. I think that the whole House has made it very clear that we are behind the Government’s fight to make sure that benefits tourism is stopped. We do not want to see it happen.
Lord Freud
My Lords, can I make it absolutely clear that contributory benefits per se are not vulnerable because they are paid? The vulnerability is in assumed contributory benefits, where they have not been paid.
Baroness Meacher
If I may say so, that brings me back to the point that I made earlier. We need to find a way of making it clear that this is a non-contributory benefit for people who, sadly, will never be able to contribute towards a contributory benefit. This is a social benefit for very disadvantaged and disabled people—a very small group of such young people, who will never have a chance, almost certainly in the rest of their lives, of any sense of independence or dignity, unless we give it to them today at a cost of £10 million to the entire tax-paying population of this country. On that basis, I do need to test the opinion of the House. However, I respect the Minister’s position and hope we can have further discussions about how we can prevent benefits tourism, which is completely unacceptable.
Welfare Reform Bill
Baroness Meacher Excerpts(12 years, 11 months ago)
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Baroness Meacher
“(d) the fact that the claimant is a severely disabled person and no one is in receipt of a carers allowance or a carers premium for looking after them.”
Baroness Meacher
My Lords, Amendment 21A seeks to provide for an addition within universal credit that is similar to the severe disability premium. The addition would be paid to those living alone, although it would not be restricted to that group. It would not be paid to a claimant with a carer who receives either the carer’s allowance or the carer’s premium. The point of the amendment is to provide for severely disabled people who do not have a carer, and for those who have a carer but who cannot qualify for carer’s allowance because, for example, the carer is a student or a child. To achieve this result on a cost-neutral basis would require the level of benefit for the support group to fall slightly. The amendment, however, would ensure a fairer outcome than the Bill achieves.
The severe disability premium, which the Bill abolishes, aims to meet the extra costs experienced by disabled people living alone and is currently worth £53.65 per week for a single person. It helps people who are on a low income, whether in or out of work, who have a severe level of disability and who have no one living with them who can help them. It is well recognised that people in this position face much higher costs than other disabled people with a comparable disability.
I recognise that the Government plan to abolish the severe disability premium, but that plan is not designed to save money. The Government will instead transfer the money to fund an enhancement of the support group benefits. I understand, having just had a brief conversation with the Minister, that the increase will be something in the order of £44. However, the loss of the SDP will also apply to people who live alone and who move into the support group after these changes occur, so this very disadvantaged group will in fact lose out—although by something in the order of £8 a week, as I understand it. The support group people will lose the £53.65 per week, minus the uplift to support group benefits in the order of £44.
The reason why the transfer of funds from the severe disability premium to the support group might not be fair and efficient is that the costs of disability do not correlate well with the level of impairment, which is what will determine whether a person qualifies for the support group. The recent Demos/Scope report, Counting the Cost, based on a survey of 845 disabled people, found little correlation between the costs of disability for an individual and their level of impairment. It is quite difficult for someone such as me, who is not disabled, to understand quite how that works in practice but maybe others in the Chamber can illuminate that for us.
The relevant point here is that the severe disability premium targets help where it is most needed—on the additional costs that people have to pay because of their disability. Because this amendment will ensure that the SDP-equivalent benefit is payable only to those who receive either the middle or the highest rate of the care component of DLA, only those with frequent care needs throughout the day will qualify. It should be said that these care needs have to be for personal care rather than for the more mundane sort of activities such as shopping or housework.
The groups who would benefit from this amendment include those who become eligible for the support group after the introduction of universal credit but who live on their own and do not have a carer. These groups will include new cancer sufferers, for example, and those with a new and severe impairment. Without this amendment that group will lose the £53.65, as I have said, although they will recoup a fair proportion of that through the higher support group payment. Another group that would benefit from the amendment are those who are entitled to the middle rate of the care component of DLA but who are in the work-related group, or perhaps even found fit for work.
Going to work costs money, of course, particularly for disabled people who might not be able to use public transport alone, for example. Under the current system, a severely visually impaired person living on their own and earning £100 a week will have a disposable income of £188 per week, after housing costs have been paid, plus their disability allowance. Under universal credit the same person will, as I understand it, be little better off than someone without an impairment. That must apply to those who do not actually make the support group assessment. If you are assessed as not having a sufficient impairment to justify the support group benefit, obviously you are in a very different situation.
Young carers will also benefit. Severe disability premium has played an essential role in supporting young carers. If a lone parent is severely disabled and their child acts as a carer, the child cannot claim carer’s allowance but the family can benefit from the extra financial help offered by the SDP payment. As I suggested at the beginning, this amendment is not designed to increase costs but rather to ensure that the money is not transferred from very needy groups to others whose impairments might be more severe but whose financial needs might be less. The issue is that these are different assessments, and come out with different results.
The Government strongly support the careful targeting of precious taxpayers’ money. This amendment seeks to support the Government’s objective, and to improve the fulfilment of that objective more effectively than the Bill currently does. I should say that this is a probing amendment, but I hope the Minister will understand the problem that I am raising and will consider a way forward. I beg to move.
Lord Freud
My Lords, this amendment seeks to put an additional element into the amount of universal credit that is payable for those who are severely disabled and who have no one receiving either carer’s allowance or a carer’s premium for looking after them. In essence it seeks to recreate the current severe disability premium within universal credit. As such it would involve a significant increase in cost compared with the Government’s plans. That increase stands at £400 million, unless there were other readjustments. However, let us just take it at face value. At face value, it is unaffordable.
On Monday the House approved the Government’s plans to simplify the disability-related additions. Instead of the seven different components within the current system of benefits and tax credits for adults, and two further rates in child tax credits for disabled children, universal credit will just have two rates for both adults and children. By restructuring the rates in this way, we are not looking to make any savings. We are redistributing around £800 million of current spend without returning any savings at all to the Exchequer. The full amount will be reinvested by increasing the higher rate for more severely disabled people. In our policy briefing note we made it clear that there would be some phasing. I know that I owe the noble Lord, Lord McKenzie, a letter on that matter.
Once resources became fully available, we expected to be able to provide a higher rate, at around £77 a week. This is significantly higher than the current £32.35 payable as the support component within ESA: £44.65, to give the noble Baroness, Lady Meacher, the exact figure she was seeking. It will provide a much more meaningful amount to severely disabled people than the current patchwork of premiums, which gives some people more than others and makes it difficult for people to understand and obtain their full entitlement. I should make it clear that one of the features of the universal credit as a whole is that we are expecting a substantial amount of the gains to the poorer people to come from much better take-up. The simplicity of a system with automatic provision of everything that people are entitled to will mean that more people in this category are likely to be recipients and get what they deserve.
Baroness Meacher
It would be helpful if the Minister could explain whether there is any provision in the new system for child carers, where the mother might not be in the support group. You have to be very disabled, as I understand it, to be in the support group. Yet a mother might need her child to do an awful lot in the home: shopping and cooking and all the rest of it. Is there any provision for her?
Lord Freud
My Lords, I will come to that. What we are dealing with here is rather interesting, as we move from one system to the universal credit. We are dealing with the current system as it exists on paper, we are dealing with where we want to go in the universal credit, and then we are dealing with something in the middle, which is how things actually work on the ground. This is one of the areas in which things are working on the ground as they are not really meant to. It is simply not the role of the severe disability premium to provide money for young carers. Clearly young carers could be affected if they are providing support for a disabled parent who receives the severe disability premium. Under the current system, the youngster gets it because there is no adult in the house looking after them and they are not allowed to receive the carer’s premium. It is one of those things that has unintentionally fallen through the cracks. It was simply not intended as a support for young carers; it was designed to support severely disabled people who live alone.
Baroness Meacher
I thank the Minister very much for his response. Certainly, the idea was that this amendment should be cost-neutral and a redistribution between the support group benefits and this benefit. There will obviously be significant losers in this; child carers will certainly be among them. I do not envisage local authorities picking up the tab in the years ahead. There are very real concerns but, at this time of night, I must accept the Minister’s response and withdraw the amendment.
Baroness Hollis of Heigham
My Lords, I strongly support my noble friend on his last point. The whole point of sanctions is not just to punish but to change behaviour. If someone does so and therefore, having learnt their lesson, is willing to comply, they should get rewarded for that, so to speak, otherwise there is no incentive for them to change their behaviour. I hope that the Minister will hear my noble friend’s wise words, otherwise the sanctions regime will not work or stick—and, I suspect, will end up being judicially reviewable.
Baroness Meacher
My Lords, I shall speak extremely briefly to Amendment 28, which is in this group, but I would not wish the House to take the brevity of my remarks as an assessment of the importance that I attach to it. The amendment concerns thousands of people up and down the country with mental health problems, mental impairments and learning difficulties and would affect whether they are fairly treated or denied benefits unfairly because of misunderstandings and a failure to understand why those people have failed to comply with the conditionality requirements and then have their benefits removed or cut.
I emphasise that it is not sufficient, as I believe the Minister said in Committee, that if a matter is drawn to the attention of the officials, they will take that matter into account. Many of these people will not be aware that they need to make that clear; they will not even necessarily have the capacity to make it clear that their disability, handicap or learning difficulty prevented them satisfying the conditionality requirements. They may indeed be lying in bed, not opening their post, not answering the phone, not responding to requests to come for an interview and so on.
The Minister is very familiar with these issues, but I was concerned in Committee that he seemed simply to suggest that a person can point out that they have a problem. I would be interested to know whether he can assure the House that specific actions will be taken by officials to ensure that they have considered and checked whether a person has a mental health problem or a learning difficulty, and whether that has in fact affected their capacity to respond.
The other issue in the amendment has to do with reasonable adjustments. Of course there are people who cannot get to the office and attend an interview or assessment, such as people suffering with agoraphobia. Many others are also sufficiently unwell in a mental health way that they simply will not be able to perform as others might. Reasonable adjustments have to be made for those claimants if they are going to be fairly assessed and not sanctioned unreasonably. I will be very interested to know what the Minister has to say in response to these issues.
Lord Freud
I am utterly shocked. Let me keep going; the hour is late and I am forgetting what I am talking about very quickly.
Turning to Amendment 28, we will impose reasonable requirements, taking into account the claimant’s particular circumstances, including any health condition or disability. Universal credit claimants with a health condition or disability that limits their capability for work will not be required to look for work. There are specific safeguards in this area. Decision-makers must consider any relevant matter raised by the claimant when considering whether there is good reason for a failure.
Baroness Meacher
That was the issue in Committee. Does it have to be raised by the claimant?
Lord Freud
When I say “by the claimant”, it can be done on behalf of the claimant by someone else. There is a clear duty on decision-makers to watch out for vulnerable people. The request I am making of the noble Baroness is this: if we begin to introduce specific legislative provisions around such matters of detail, we will end up with a whole mound—
Baroness Meacher
I thank the Minister for giving way. What I am looking for is an assurance that, in regulations, the Minister will guarantee that officials will ensure for themselves that this person could perfectly reasonably comply with conditions. That is all I am looking for—an assurance.
Lord Freud
Can I leave it like this, without giving a hard commitment right now, on my feet? When we get to the regulations on this, I will look very hard at exactly what the protection is. I cannot offer any more now but I am sure we will debate this in the months to come. My main point here is that overall duties, rather than lots of specific ones, are the way to go.
Let me turn now to Amendment 36, which proposes an exemption from the sanction for losing employment due to misconduct where the claimant disputes that the dismissal is fair and has instituted proceedings—in other words, is taking a case to an employment tribunal. First, I assure noble Lords that the decision-making process around sanctions for misconduct is rigorous and rounded. We are proposing nothing in this Bill that changes the current process. Decision-makers will take all relevant matters into account when determining whether a sanction should apply, including evidence about whether claimants have left employment through misconduct or been unfairly dismissed. If a tribunal finds that there has been no misconduct by the claimant, this will be very compelling evidence. Where a decision-maker decides that there has been no misconduct, a sanction will not be applied.
However, we do not consider that there can be a blanket rule which says that, where a claimant has instituted proceedings for unfair dismissal, sanctions cannot be applied in that case. One of the reasons for this is that we want to avoid creating a perverse incentive for claimants to make claims to employment tribunals, which would put a burden straight on to employers for no fundamental reason. Decision-makers must have the flexibility to look at each case on its facts and to assess the strength of the evidence. I trust noble Lords will agree that this flexible, case-by-case approach is the right one.
The final amendment, which the noble Lord touched on right at the beginning, and which seemed like a game of tiddlywinks between us, is on targets. He knows what I am going to say—his side likes targets, we do not like targets—so I will say it, as it just keeps the night going. We will continue to collect this information to support our work. We need to know how many sanctions are being imposed, but collecting information is not the same as using it to target. It helps us to assess the consistency of approach in this area and to monitor and evaluate the impact of those sanctions, so that is what we are collecting.
On the basis of that rather rapid, somewhat biblical, summary I would ask noble Lords to withdraw or not move these amendments.
Welfare Reform Bill
Baroness Meacher Excerpts(12 years, 11 months ago)
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Baroness Hollis of Heigham
I have a series of amendments on housing. This amendment calls for periodic reviews of the interconnection between CPI and rent levels. This is an issue that has concerned the whole House at different stages, including on the CSR Statement as well as in Committee.
We know now that the proposed deficit reduction programme, according to the Chief Secretary, will extend for a further two years at least beyond the general election. This amendment now takes on the added urgency that perhaps did not exist at the time when we discussed it in Committee. Local housing allowance, which I will call housing benefit, in the private rented sector is based on the 50th percentile of private rents, which should mean that half of all private rents are affordable on HB and half are not. It is a median. The HB, in other words, covers the average rent. We also know that the Government are reducing that 50th percentile to the 30th percentile, which means that 70 per cent of properties would be unaffordable but 30 per cent should still be so. We have argued that and resisted it, but the Government have insisted on their proposals. That is bad enough and will make it much harder to find a private rented home. But, in addition, HB to cover your rents up to the 30th percentile will rise only by CPI, not by the actual increase in private sector rents. Yet according to Savills rents are rising at the moment by more than 7 per cent a year, and CPI is only half of that—not this year but we expect it to be. Rents are rising on average at double the rate of CPI, mainly because of additional demand for private flats from young people for whom originally the flat would have been a transit tenure but who now stay there while they seek to save their deposit for a home of their own.
The Minister used to argue that capping HB would drive down rents. That is not happening, nor will it, because no longer do landlords have to let to HB tenants. Just as there are eight people after every job, there are eight tenants after most lets. HB tenants will get only what no one else will take: the substandard, the squalid and the downright unsafe. Any complaints and you are evicted after six months. Tenants will be forced into poorer and poorer accommodation. Worse, as I say, rents are rising at double the rate of CPI, so whereas now your HB may theoretically cover 30 per cent of available rents, in three years’ time it may cover only 20 per cent, and in five years only 15 per cent. In more expensive towns such as Winchester, it is estimated that there will be nothing available to rent for anyone on HB within the next few years.
This amendment is very simple. It requires that the Government's original policy intent—that HB in the private sector will allow the tenant the choice of the bottom 30 per cent of properties—continues to be respected and that the widening gap between the CPI uplift in HB and the actual rise in private rents does not invalidate the Government's intentions. In other words, this amendment simply asks the Government to ensure that they do what they say they want to do—no more, no less—and that we keep clear the policy intent, and that it is delivered.
In the past, the Minister has decorously brushed this aside by saying that it is outside the CSR period, but given the Chief Secretary's remarks, it is not any more. He also helpfully said in Committee on 20 October that,
“if local housing allowance rates are clearly out of step with rents, they can be reconsidered”.—[Official Report, 20/10/11; col. GC 146.].
It would be very helpful to know how this would be done, given the vagueness of the draft regulations. The Government should confirm whether reviewing the operating method will occur periodically or, if not, what will trigger it. This amendment seeks to get greater clarity in the regulations in order to protect the Government’s own policy intent: that 30 per cent or so of private lettings should be affordable and available to those on local housing allowance. I beg to move.
Baroness Meacher
My Lords, I support Amendment 17, to which I added my name. As always, the noble Baroness, Lady Hollis, has comprehensively covered the issues and I will therefore take only a few moments of your Lordships’ time to express my personal concerns about the issue.
The Government have a policy to reduce over time the percentage of GDP paid out in benefits to those on low incomes and those out of work. Perhaps the main mechanisms by which this will be achieved, though by no means the only ones, are the range of housing allowance controls to which the noble Baroness referred and the linking of housing allowance to the CPI, rather than to the rate of increase of rents themselves. The problem I have with the CPI link in particular, along with all the other controls, is that it is beyond the control of government how this plays out; hence the importance of these monitoring mechanisms that the noble Baroness has spelt out.
For example, if the euro collapses—it seems ever more likely that it may—and we have several years of recession or, indeed, deep depression with falling prices, do the Government have any idea how rents will respond in that situation? Because of the pressures of a growing population with more and more single-person households, as well as the limited stock of properties, particularly in London and the south-east, it is possible that rents may remain static, or even rise in the south-east, while other prices are falling. The Government assume that the downward pressure on housing allowances will ensure that in fact rents fall as well, but I am not at all confident about that. There is a huge private rented sector out there and as fewer young people can afford to buy, more and more of them will indeed move into that rented sector.
A very different scenario will be that once the years of fiscal tightening are over inflation could return with a vengeance, leaving a soaring gap between the RPI and the CPI—the prices claimants will have to pay in the shops on the one hand, and the CPI which will determine their housing allowance levels on the other. Of course, all these uncertainties will be there alongside a benefits cap, which may or may not be inflation-proof, and the need for many vulnerable people to adjust to a move from higher ESA to lower-level JSA. The Minister knows that I fear many vulnerable people will be included within that group, going down the slope towards the cheaper JSA. There is also the loss of disability benefits for children, the loss of tax credits and so forth, and the move to monthly payments if we cannot persuade the Minister that this will be the last thing that people are going to cope with. For all these reasons, I agree with the noble Baroness, Lady Hollis, that the House needs some assurance that there will be systematic and regular monitoring of the consequences of linking rents to CPI and on how the situation will be assessed and in what circumstances a change of policy would be regarded as appropriate.
I would also be grateful if the Minister could inform the House on a particular aspect of this issue. Shelter and the Chartered Institute of Housing estimate that the link between local housing allowances and the CPI will, by 2030, result in 60 per cent of local authority areas being unaffordable for LHA claimants. Undoubtedly, these will be the areas with jobs. Can the Minister say whether the Government accept this estimate and, if not, what the Government’s estimate is? Whether or not he accepts the estimate, has the DWP undertaken an impact assessment of the housing allowances/CPI link on employment in this country? What particular impact on employment will this have?
If households have no option but to move to areas with very few employment opportunities, how much higher will unemployment be year on year than would otherwise be the case and what will be the costs of that higher unemployment for the taxpayer? These sorts of issues need to be incorporated within the ongoing monitoring and assessments of the impact of these policies, year by year. Within the Minister's response to this amendment, I would be most grateful if he could include some reference to the employment impact.
Baroness Meacher
My Lords, I support Amendment 19. I have particular concerns. I fully endorse the point made by the noble Baroness, Lady Hollis, that when people lose their job it is unacceptable for them immediately to face not only the shock of being unemployed and the dramatic fall in their incomes but the prospect of having to move their home. Psychologists always say that it is important to avoid changing more than one of our three mainstays of security in any one year: employment, our main relationship and our home. The risks of mental health problems rise significantly if we do so, as the noble Baroness illustrated very well.
There is therefore a strong case for allowing newly unemployed people time to adjust before they have to think of moving home. Of course the hope would be that they would find work within that year and never have to move at all. I want to raise again a particular problem that to some degree would be assisted by the amendment. I raised this issue in my most helpful meeting with the Minister but have reason to believe that his assurances would not work as he thinks they would. The issue is that of people with severe mental health problems who may be absolutely unable to move into shared accommodation, either because they themselves could not handle having someone else around or because the situation would be untenable if not downright dangerous for anyone else trying to live with them. The Minister assured me that discretionary housing payments should deal with this problem. Perhaps in theory this might be the case, but apparently in practice it does not in fact work. Does the Minister regard it as right for sick people to be penalised when for therapeutic reasons they cannot move into a living space with someone else?
I have a couple of examples to illustrate the point. A woman in her early 30s, living alone in private rented accommodation, receives ESA because of her mental health condition. She already has rent arrears as her housing benefit does not cover her rent. She applied for a discretionary housing payment but this has been refused. She has now been told that her housing benefit will be cut further, of course, in January 2012, when she is only entitled to the shared accommodation rate. She finds it difficult to cope with other people, and could not cope with a shared flat, even if she could find one. The adviser who is dealing with her fears that she could become homeless.
The other example is of a woman in her early thirties with HIV and related health difficulties, including depression. She is regarded as being unlikely to receive a discretionary housing payment until she is 35. I do not know why, but that is what I am told. She comes from a traumatic background, needs regular access to her many medications, and to the bathroom. She is not regarded as someone who could cope with shared accommodation: again, a likely homeless person.
If these claimants finish up on the streets, they will no doubt end up on one of our hospital wards at a cost of £261 per day, £95,000 per year to the taxpayer. I realise that this is a cost to the Department of Health, and not to the DWP, but I know the Minister is broad-minded on such matters and will not want to cause a massive increase in Department of Health costs. I am serious about it. There might be a saving to the DWP, but a much bigger cost in the Department of Health. However, the noble Baroness, Lady Hollis, does not accept at all that there would even be a cost saving in the DWP. There would therefore be a double whammy. We already see people moving automatically from benefits, to losing benefits, then on to the streets, and then into hospital. That is the way the system works, and this measure will simply make matters worse.
Apart from the inappropriateness of shared accommodation for some, though not at all every mentally ill person, there is also the practicality of finding such accommodation for this particular group. Someone with a mental health problem is going to be the last person many people want to share with. We know that the stigma involved is considerable. People are frightened, and they assume that people are dangerous when in fact they are not at all. But also, in reality, some people have difficult personal assumptions which would make them quite difficult to live with.
The result is that these people will not find shared accommodation readily, even if they could cope with it, and many absolutely could not. I know many people on our wards whom we could not discharge into shared accommodation. They would simply sit around on the wards, and it would be a problem.
I have focused on a particular claimant group, but an important one, in view of the numbers of these people. I hope the Minister will be sympathetic to the amendment, for all the reasons the noble Baroness, Lady Hollis, pointed out, but also because it would ameliorate the problem of this particular group of people with mental health problems who, with any luck, might over a year settle down rather further and then might be able to be accommodated within the system.
Baroness Lister of Burtersett
My Lords, I support the amendment tabled by my noble friend Lady Hollis of Heigham. She has painted a vivid and powerful picture of what this means for the people affected. I have sat through and participated in a couple of debates already about this, partly on the regulations, in Grand Committee. The more I have listened and read the evidence, the more uncomfortable I feel about us allowing this measure to go ahead.
When I was younger, I flat-shared. I answered the ads in Time Out, and it is a very different thing. I am sure that many noble Lords may have been in that position, and think there is nothing wrong in sharing accommodation. But doing it from choice is very different from being pushed into it. As my noble friend has spelt out, we are talking about less salubrious accommodation.
I am concerned about various groups who are particularly vulnerable here, as we have already heard. When the Social Security Advisory Committee considered this, it talked in particular about the way women will be affected. Women are not disproportionately affected as a group, but those who will be affected could be particularly adversely so.
There are two groups in particular. Pregnant single women, the advisory committee said, will be restricted to the shared accommodation rate until they give birth. They face one of three undesirable situations. They can move home twice, at a time when they may be financially, emotionally and physically ill-equipped to do so, into shared accommodation, and then back to self-contained accommodation when the baby is born; they can decide to move into shared accommodation and remain there after the birth of their child; or they can try to make up the shortfall in their rent.
Lord Freud
My Lords, my intention is to reassure the noble Lord, Lord Best, so that he withdraws his amendment. I start by trying to convince the noble Baroness, Lady Howe, and my noble friend Lord Cormack of the reason why we are doing this. It is not an arbitrary thing. We are not doing it because we want to annoy housing associations or local authorities. We are doing it for a very simple reason. If you are a tenant in social housing whose housing benefit goes straight through to the landlord and you take a job, all your arrangements for paying for your housing have to change. It is a major change in your arrangements and a real block on you taking the job. It is a major thing for you to organise, and you have to learn, when you take that first job and your housing benefit goes down within universal credit—because that is the change—that the money no longer goes through automatically to the landlord.
We have to break that link. It has to be the same arrangement whether you are working or not working. We deliberately excluded pension-age people from this because we are not expecting them to work. We do not need to worry about the people who find it difficult to work. It is working-age people who we want to go into work.
Baroness Meacher
I listen to the Minister’s passion—“We have to do this, we have to do this”—and I find myself thinking that that would be fine if we were in normal circumstances and the benefits were not changing but were pretty much going on as they always have, and people were not going to be facing major drops in their benefit levels or having to adjust to having to move because of all sorts of rules about underoccupancy or because of the tying of benefits to the consumer prices index and so on. There are so many ways in which people on benefits are going to be losing—that is the context—and this is not the time to be determined to bring all these people into line with people in work. Can we not wait until things are stable and then maybe introduce the rather nice idea of bringing these two groups together?
Lord Freud
The answer to that is very simple: the universal credit will, each year, inject an extra £4 billion into the pockets of the poorest people. That is what the universal credit does. It will start coming in in 2013-17, when hopefully the laws of the business cycle will still be working and we can expect an upturn at some stage. As we move into that situation, the concern will be what happens to the universal credit. This measure is for universal credit. It does not stand outside it.
Baroness Meacher
I apologise for interrupting again, but £4 billion is surely a tiny amount relative to the losses in projected benefits. This huge budget would normally go up very extensively each year, would it not? I do not have all the numbers in my head, but £4 billion in a tiny fraction of the actual real losses in benefit that people are going to face.
Lord Freud
Absolutely not; £4 billion is a very substantial figure. Over the course of this SR, we are looking at a loss of £18 billion spread over the four-year period. The noble Baroness can do the sums. The most important thing about universal credit is that the money goes into the pockets of the lowest two quintiles very efficiently. I contend that the noble Baroness’s argument is not a real argument.
Welfare Reform Bill
Baroness Meacher Excerpts(12 years, 11 months ago)
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Baroness Meacher
“( ) Regulations must make provision for claimants to require payment of universal credit to be received more frequently than would otherwise be the case under subsections (1) and (3).”
Baroness Meacher
My Lords, I think that I owe a rather large apology to the House. I seem to have caused complete confusion, and am deeply sorry. I rise now to speak to Amendments 1 and 2, which, one way or another, would ensure that universal credit could be paid more frequently to claimants. Amendment 1 provides choice. Amendment 2 provides something rather specific.
The Government’s aim has been to encourage,
“out-of-work households to budget on a monthly rather than a fortnightly basis in the belief that it will better prepare people for the reality of working life”.—[Official Report, 10/10/11; col. GC 440.]
Those are the words of the Government. The point is that very many low-income earners are paid weekly or fortnightly, as the noble Baroness, Lady Lister, has rightly pointed out. Although two-thirds of tax credit recipients are paid monthly, many of these people will cease to be entitled to benefits in the future. The great majority of universal credit recipients will be very low paid, going in and out of work, as many people do, to weekly or fortnightly payments and then back on to benefit. People certainly do need to be prepared for the world of work—I completely agree with the Minister about that—but they need to be prepared for the world of work that they are actually going to move into. That is the whole point. At a very helpful meeting last week, the Minister seemed to accept that there are differences and that there needs to be some flexibility. Promotion of choice in the frequency of payment is very much in line with the Government’s choice agenda. I am sure that the Minister identifies with that.
In practical terms, it was made clear in Committee that monthly payments will cause very considerable management problems within households, and a dramatic increase in the numbers of people struggling with debts. The fact that applications for crisis loans rose significantly from 2009, when the change from weekly to fortnightly payments was introduced, tells the story. The CAB service saw a fourfold increase in the number of people with payday loans coming to them for debt advice in the first quarter of this year compared with the same period two years ago. The Association of Business Recovery Professionals is the UK’s leading trade association for insolvency and related issues. On Wednesday 7 November, it released a report into payday loans showing that 3.5 million adults are considering taking out a payday loan over the next six months and that 48 per cent of the people who receive payday loans believe that the loans have made their debt crisis worse.
What is the Government’s estimate of the number of payday loans to claimants of universal credit that will be in place within 12 months of the introduction of the new system? This is clearly a matter of very grave interest to Members of this House—we know that such loans have interest payments in excess of 300, 400 or 500 per cent, if not more than 1,000 per cent. We cannot just ignore that problem.
At the meeting with the Secretary of State on Thursday, he talked about the need for a culture change. Indeed, he even implied that this was the only problem—people just need to change the culture within which they live. However, people’s problems in managing money over a month are far more extensive than purely a matter of culture. Numeracy skills are vital if people are going to manage their bills and payments over a month. I understand that the Skills for Life survey found that 1.7 million people had very poor numeracy skills. A further 5 million had poor numeracy skills. All these people’s skills were described as “below functional”.
Lord Freud
My Lords, these amendments intend to provide for universal credit to be paid twice a month or, in Amendment 1, for a claimant to be able to choose to be paid more frequently than monthly. As with existing benefits, we will specify payment frequency in regulations made under existing powers in the Social Security Administration Act 1992. I am, though, grateful for the opportunity to set out why we intend for universal credit to be paid monthly.
We want universal credit to prepare people for work and to encourage them to move away from costly weekly and fortnightly budgeting. The present system does not allow people to take responsibility for their finances as the majority of people in work do, day in, day out. That is wrong. It means that the transition to work is more difficult than it needs to be as people have to adjust to monthly budgeting and managing their own rent payments, often with no support. We want to make the first steps into work easier by helping claimants to switch to monthly budgeting while claiming universal credit. Essentially, we are looking for a more empowering system.
The figures have already been raised in the debate. Some 75 per cent of all those in employment and 51 per cent of those earning less than £10,000 a year are currently paid monthly. It is then right that we help families to deal with the reality of working life, whether they are in or out of work, by paying benefits in a way that mimics payment of a salary.
The noble Lord, Lord McKenzie, asked the straight question: what is so important about monthly payments? He went on to talk about the exploitation of poor people. That is what this is about. Save the Children has estimated that low-income families can face an annual poverty premium of £253 on their gas and electricity alone. Organisations including Consumer Focus, Church Action on Poverty and Family Action recognise the importance that access to the right banking products and sound advice can make in helping families to make the best use of their income. The simple point is that if you are managing on small gobbets of money weekly, it is very tough to match your budgeting process to utility bills or some of the larger or medium-scale capital items. That is why larger amounts paid monthly help people with this poverty premium.
However, I recognise that many people on low incomes are used to budgeting on a weekly or fortnightly basis and are concerned about moving to monthly payments. We absolutely need to support some families to budget effectively. That is why I am keen to develop effective budgeting support for families in this position. In some cases that is just a question of signposting to existing information and advice, in other cases it may require much more intensive, face-to-face support; but we need to take an innovative approach to these budgeting products if we are to stop the exploitation of the poor continuing, as the noble Lord, Lord McKenzie, said.
The universal credit and how we flow money to poorer people in our community is the main opportunity that we have to make a real difference for people in this area. We are working with the banking sector, credit unions, supermarket financial services and the Post Office to explore the opportunity to create cost-effective budgeting accounts. I am looking at accounts that my noble friend Lord Kirkwood will not be able to arrest at his whim, because there are some protections in the way in which we devise those accounts. In the next 18 months there will be an absolute focus of intense work to get this right. One example is the housing demonstration project next year, which will help us to understand the demand for budgeting support and the best ways to deliver it. I am not saying that it will all be easy; it is not. However, it is essential that we develop 21st century solutions to these issues and not think back decades and get in the mindset where we did not have these new ways of approaching things.
A simple system of payment on account will be made available to support claimants. Budgeting advances will provide an efficient means for eligible claimants to have access to interest-free credit, providing an alternative for those on the lowest incomes to high-cost, and even illegal, lenders. I must say that I was admiring a Wonga.com advertisement on the side of a bus this morning. In our system of budgeting advances, in the last year already over a million claimants received budgeting loans worth almost half a billion pounds. In the department we have a revolving fund of £1.1 billon, which will continue to be under our control for these purposes.
Clearly there is an issue, which we are addressing, about helping people move from fortnightly to monthly payments. We need to help with that migration period by stretching payment periods and providing the missing funding, if you like, as they move up, and I am looking at a system of doing that over three months. Many noble Lords have made the point that there are people with exceptional circumstances for whom a monthly payment is simply not appropriate. My noble friend Lord Kirkwood talked about the 15 per cent; my noble friend Lord Newton talked about those who will not cope. Clearly there is a group in this category. Where there is a risk of harm to the claimant or the household, we will of course want to make sure that safeguards for these people are in place. Nevertheless, we cannot set up a system to get the bulk of people in control of their finances and then take that control away from them when they can manage it. We need to look at it that way round, not devise a system which protects the 15 per cent of people that my noble friend estimated would be affected. We must not have the tail wagging the dog. We must include support but we must not have a system which stops people going into the workplace when they can. We have begun working with local authorities, housing associations and the relevant third sector organisations to develop guidance around who might qualify for more frequent payments or the direct payment of a proportion of an award to a third party, such as a landlord. Again, the housing demonstration projects will allow us to test the criteria for exceptions.
I appreciate noble Lords’ concerns about protecting claimants who have not previously been required to budget monthly. However, I truly believe that this is a fundamental part of what we are trying to achieve with universal credit. It is an opportunity to change the dynamic to design a system that is right for the majority but takes account of exceptional circumstances by ensuring that we have the means to make payments more frequently.
I wish to pick up a couple of questions. We can make universal credit payable more frequently. I say in answer to the point made by my noble friend Lord Hamilton that there is a small cost to doing it fortnightly rather than monthly but it is very small; it is about a penny. As regards the fallback position, the regulation-making powers which are used to determine the frequency of payment are not in this Bill but in the Social Security Administration Act 1992. The legislation on ESA and JSA, for instance, says that they are payable weekly. However, as we know, they are paid fortnightly. We have complete flexibility to pay as often as we think is appropriate.
Baroness Meacher
The noble Lord said that payments can be made more frequently. Will he assure the House that payments will be made more frequently, and that that facility will be available?
Lord Freud
I assure the House that where people cannot handle monthly budgeting, we will have arrangements to help them. However, I ask noble Lords not to tie my hands on this. This can make a major difference to poor people by creating banking and budgeting products that will help their lives. Tying our hands on this, particularly mine, will not help. Therefore, I ask noble Lords not to vote against this.
Baroness Meacher
My Lords, I thank all noble Lords on all sides of the House who have contributed to this debate—the Conservatives, the Liberal Democrats, the Labour Party and Cross-Benchers. It has been a very powerful debate and strong concerns have been expressed about the impact of this amendment. The importance of the amendment lies in the mass of cuts to disability benefits, housing benefits—virtually every benefit that one can think of. Therefore, what the House is looking for is some sort of security for these very low income people to ensure that they can try to stay out of the way of these sharks who charge them hundreds and hundreds of per cents of interest over a year. I thank very much everybody who has spoken, in particular the noble Baroness, Lady Lister, who rescued the situation that I am afraid I caused.
The Minister referred to people managing small nuggets of money and having difficulty doing that because, of course, there are payments that need to be made monthly. I think the Minister is not familiar with the ways of very poor people in terms of having all their little jam jars on the mantelpiece and putting bits of money in as they can through the month to enable them to pay these bills. Obviously, in the middle classes we do not do that sort of thing. The Minister is shaking his head, but I am afraid this is actually the way things work. Therefore, it is all about the drastic cuts in benefits.
The Minister has referred to 21st century solutions. In fact, driving people into the hands of these sharks who charge them hundreds of per cents of interest is not really a 21st century solution. The Minister talks about the ability to make provision in exceptional circumstances. I am afraid we are not talking about exceptional circumstances; we are talking about huge numbers of people who are going to find it extremely difficult to manage. I do not have a sense of absolute assurance that there will be provision for these people to manage. This is not playacting; these are real concerns about what is going to happen to large numbers of people facing these cuts over the years ahead in difficult times. I know that the Minister does not want me to test the opinion of the House, but I feel an obligation to do that. I wish to test the opinion of the House.
Welfare Reform Bill
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Lord Newton of Braintree
My Lords, I shall be brief because I know that the House wants to get on. I am a supporter of the universal credit, so I am opposed to anything that is inimical to its success, and the exclusion of council tax benefit is exactly that; it is totally inconsistent with the Government’s proposals.
It is an open secret, although I do not expect the Minister to confirm this from the Front Bench, that the DWP does not want council tax benefit to be excluded, that there has been a battle with the DCLG and that for the moment, although heaven knows why, the localism agenda has prevailed. When anyone asks about 400 different social security systems, we are told that it will not be allowed to happen—so the localism agenda, we are told, will not be allowed to be localism because the local systems will be made to come into line in some sensible way. That is daft, but it is what we are confronted with.
I have two or three points to make. This is said to be cash limited, and indeed a cut. What is going to happen in an area where there is a big factory closure and the money has already been spread out? Does everyone already on council tax benefit have to take a cut in order to finance those who have just come on to it? In areas where, say, a big Tesco opens and 400 new jobs are created, does everyone get a bonus because a lot of people have been taken off council tax benefit? It is mad.
My first constituency boundaries straddled a parish boundary; number 36 Havengore was in Braintree and number 34 was in Chelmsford, but the houses were semi-detached. Can we really have totally different benefit systems for the people living in those two houses? Again, this is mad. Do the local councils want it? The answer is no, it is a nightmare for them. We should stop it, and if this amendment is pressed to a vote, for the first time today I shall not be able to vote for the Government.
Baroness Meacher
I support the amendment of the noble Baroness, Lady Hollis, on the importance of including council tax benefit within the universal credit structure and payments system, and I reinforce what the noble Lord has just said. As always, the noble Baroness has set out the arguments extremely cogently, and I know that the Minister needs no reminding of these arguments from me. I want only to reinforce the important point about the resentment of local authorities and their resistance to the proposal to leave them with the council tax benefit problem.
The head of the benefits department of a particular local authority explained on Friday that because they have so little time to change the council tax benefits system radically, they are going to have to use the current system with a 20 per cent taper. This means that they will have to impose a minimum percentage that every claimant of working age will have to pay. This will apparently vary from one local authority to another, depending, as the noble Baroness, Lady Hollis, has said, on the numbers of pensioners living in particular communities and of other vulnerable people who will have to be protected. This particular local authority will have a basic council tax rate of 25 per cent that will have to be paid—a sort of poll tax of 25 per cent of council tax. The local authority in question is far from happy about that, and I understand, as others have said, that anger on the part of local authorities is widespread.
Welfare Reform Bill
Baroness Meacher Excerpts(12 years, 12 months ago)
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Lord Touhig
My Lords, my noble friend Lady Drake has made some very powerful points this afternoon, which the Government need to take on board or we will get into a mess when this is finally introduced. They should be indebted, too, to the noble Lord, Lord Skelmersdale. His point is that there is an implication that the person who makes this sort of mistake has been deliberately negligent. That would mark people out as trying to defraud the system. It puts them in the wrong to start with, when these things can happen by accident.
Noble Lords will forgive me if I remind them of a point I made in one of our earlier debates. When I sat in the other place, I had a constituent who came to see me because she had been overpaid a certain benefit, and the department was pursuing her strongly for repayment. When we got the papers, we discovered what had happened. There were some boxes she had to tick. One of the boxes asked, “Have you received income support?”. She ticked “Yes”. However, she had stopped receiving it about six months before, and so beneath her tick, she wrote, “But this stopped”, and she wrote in the date on which it stopped. When we got to the bottom of this we found that when the form was sent in to the department, its computer could not scan in anything that was not in the box, so it continued to overpay her. She was in a terrible state. A large amount of money was involved, and there was a huge problem as a result. It will go wrong.
Noble Lords will forgive me if I repeat something that I mentioned in the Chamber a little while ago. In the case of universal credit, a lot will depend on a new IT system. Every major IT system that the Government have introduced in recent years has gone wrong. I know, because I sat on the Public Accounts Committee in the other place for a number of years and we had to look at some of these issues as a result of inquiries to the National Audit Office.
My noble friend Lady Drake also made the point, as others have, about people filling in these forms online. Thirty per cent of the poorest families in this country have no access to a computer. It has been possible to claim jobseeker’s allowance online for 20 months. The take-up is 17 per cent. The idea that we are going to get to 80 per cent of people claiming benefits online will cause a huge problem for the system.
My noble friend Lady Hollis has just made the point that a lot of the good things that this Bill will seek to introduce will be damaged because of the kind of approach that this particular clause takes. The Government should really think again and take note of the points made by the noble Baroness, Lady Drake.
Baroness Meacher
My Lords, I, too, support the excellent contribution of the noble Baroness, Lady Drake. I am sure that we all understand that if someone really has filled in a form negligently and as a result has received extra pay, that needs to be dealt with. My problem is how on earth you word such a clause. There are people who clearly are incapacitated and so cannot work things out—they cannot read adequately or have had to have some help from somebody else who does not quite understand their situation. You can imagine all sorts of situations in which things would go wrong, certainly when it comes to people with severe learning difficulties, major mental health problems and so on. Unless the official dealing with these things really understands the individual and how they might have come to make these errors, it seems to me that the most appalling injustices will result, which I am sure the Minister would not be happy about at all. Will he think about the wording of Clause 113 and try to generate wording that distinguishes between people who have in some way been negligent or perhaps on the edge of fraud but you cannot quite prove it? One can imagine a lot of people who might fall within that clause but who perhaps belong in a clause that relates to fraud. They are quite different from a large number of people who are struggling, whether with literacy or other problems. I am sure the Minister would wish to make that distinction clear and fair. It was helpful to have this amendment, and I look forward to the Minister’s reply.
Baroness Turner of Camden
My Lords, I do not want to add much to what has been so well said already in support of the amendment. On the other hand, we have been talking about other Bills while discussing this one, and I note that some of the information that we have from, say, Citizens Advice, indicates that it gets a lot of applications from individuals who have no idea of their entitlement and need assistance with that. If people do not know what they are entitled to, it is easy for them to make mistakes in claiming. That may very well have happened in the cases that have been cited this afternoon.
Moreover, it does not say in the Bill exactly what the prescribed amount of penalty will be, so apparently in addition to giving back the overpayment a penalty would be involved. That would mean that somebody who is already very vulnerable and who has no money could be in difficulty on paying both the penalty and the overpayment. I suggest that the Minister looks at this part of the Bill as it could do with a bit of rewriting in line with what a number of Peers have had to say this afternoon.
Lord Freud
Let us not bargain. It is not a bad suggestion. One of the things we want to do—
Baroness Meacher
The Minister said that if something is complex, you will not have negligence. Does he accept that what is complicated for one person might be not complicated for another? Certainly what is perfectly straightforward for somebody of average intelligence, for example, might be incredibly complex and difficult to follow for somebody with an IQ well below average. Is there any intention to check that sort of thing out? I know there is a later amendment on this, but it is relevant to this discussion.
Lord Freud
It is very relevant. One of the things that we are going to be monitoring as we look at the system is clusters of mistakes because, by definition, the system is not working properly where we are in that position. We will need to work this system in carefully. The noble Baroness, Lady Hollis, who is right on a lot of things, gives a warning, which is right. We cannot use this in an arbitrary way. We must have something, just as the NHS, HMRC and the train companies—I suppose everyone has boilingly paid the extra train ticket surcharge when they were on the wrong train—have systems to encourage people to comply with particular rules. It is particularly necessary where you have a system that is not even a free good. You are giving money out, so you have a positive incentive to shade a few inaccuracies without being fraudulent. We just want to keep people straight.
Welfare Reform Bill
Baroness Meacher Excerpts(13 years ago)
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Baroness Hollis of Heigham
My Lords, we are talking still about benefit caps. We left the debate on Monday, I think, accepting that families hit the cap, as the noble Lord, Lord Best, explained so straightforwardly for us, through the interplay of both high rents and large families, a problem particularly in London and the south-east, with 70 per cent of those affected in social housing. Amendments tabled during our previous day’s debate sought, first, a more appropriate comparator by excluding child benefit in particular from benefit cap calculations—this was an argument by my noble friend Lady Lister—so that we could compare like with like and not apples with oranges. A second group of amendments suggested, wisely, a transitional period of grace before the cap was imposed. This is a theme to which I think we will all want to return, because we need a period of grace for quite a lot of the measures being introduced in order for them to settle down before the whole weight of penalties comes into play. We ran a similar amendment on housing benefit earlier. A third group of amendments sought to exclude subgroups from the caps—for example, those in supported housing, carers and kinship carers.
I want to focus on two aspects of all the debates that we have had so far, plus on the issue of carers, which was raised so effectively by the noble Baroness, Lady Hollins, and issues of housing benefit raised by the noble Lord, Lord Best. I support the thrust of all the amendments. There was one golden rule of public finance that I learnt from my time in the department: amendments abating or removing cuts always cost more than the cuts originally saved, even if the situation is not restored to the pre-existing status quo. That may be the case here again.
I wish to raise some wider questions on Amendment 99A tabled by the noble Baroness, Lady Hollins. She argued powerfully that just as PIP will remain outside of UC and the cap, so, equally, should carer’s benefit not be included in the cap, because they mirror each other, as they do in real life. The financial pressures, the fatigue and exhaustion, the using-up of savings and the social isolation apply just as much to many carers as they do to so many disabled people. We know that the Minister is sympathetic to carers, as is the whole House. So far, however, we do not yet know how many carers face a reduced earnings disregard. We do not know how many carers will lose carers allowance, because of the possible uneven mapping of the existing DLA passported benefit to the new PIP. We also do not know whether CA will come within the cap.
Given that the Bill is going through Committee stage here I feel that we are entitled to require the Minister to give us this information before we start Report stage and that we should not have to wait until we get to the clauses specifically about carers. If a single carer—it could be no carers, or it could be 100,000 carers—loses their entitlement to a passported benefit they will come into the framework of in-work conditionality which we have to deal with before we get to the carers clauses, at which point the Minister tells us he will be able to give us the information we want. We cannot do it that way round. It is not fair to the carers and it is not fair to Committee Members, who have been trying to do our best to get from the Minister—I am sure that he wants to be helpful on this—this information on the situation in which carers will find themselves. We must know everything about this situation before Report; otherwise some of us will be demanding that we go back into Committee, in the middle of Report stage, in order to take on board information that should have been available to inform earlier debates. It is not a proposal I would wish to argue. It is annoying for everybody concerned, but I feel quite strongly that it is not reasonable to ask us to proceed in this way.
The second area is housing benefit. Again, I strongly support the amendments moved so powerfully by the noble Lord, Lord Best. However, perhaps I may widen the point to remind the Minister of where we are so far and what we so far know, and then to ask him what advice he would give to a housing association such as mine—I declare an interest as chair of Broadland Housing Association. First, there is under-occupying. So far we have learnt that many of our poorest tenants would be required to move to smaller accommodation—except that we do not have it; it does not exist and it will not be built in the next few years. So the tenants will stay put and be fined on average about £20 a week. They have no savings, so they will run up arrears. However, we will be asked to avoid evicting them on grounds of decency as well as cost savings. Although such tenants would not be intentionally homeless through arrears generated by benefit cuts—as the Minister has helpfully agreed on the record—we would in any event have to rehouse them, probably in the house next door, if we evicted them. We will get substantial arrears from—although not pensioners—perhaps one-fifth of our tenants. I do not know.
We will perhaps also be faced, as we found from the discussion last week, with some tenants who are up against the housing benefit or UC cap. They too will face arrears, and again we will be expected as social landlords to avoid evicting them for what is not their fault. Again, arrears for us will mount.
We may also face cuts in housing benefit for those with supported housing in its various forms, although obviously this is a much smaller group. Again their arrears may mount, and again those will pass to the housing association.
Finally—an issue which we have not yet debated—we will certainly face substantial arrears in the move to direct payments to tenants rather than to the landlord.
Each of these four changes in housing benefit from DWP will plunge social housing landlords into mounting arrears. What is my housing association to do? We cannot raise rents to compensate for those arrears because we are at our fixed-target rent and DCLG does not allow us to go above it. We cannot get extra revenues from HCA or DCLG—indeed, they have cut our capital revenues by some 60 per cent. Housing associations could well find their accounts qualified, at which point the banks may threaten to reprice their capital loans because of infringement of a covenant, at which point our building programme falls.
I suppose that we could cut staff but the Tenant Services Authority within the HCA requires us to improve services. A 95 per cent satisfaction rate on any of the criteria it produces is required, which means that there must be staff on the ground, and quite rightly so. The driving-up of standards equals staff, which means that you cannot cut in that field either.
Put those four cuts together and they could send many housing associations into the red. Any one or two of these proposed benefit changes would be difficult to manage, but to face all four would be unbelievably difficult. I warn the Minister that he could be jeopardising the financial stability of a swathe of housing associations across the country. How then will the Prime Minister’s newly voiced concern for affordable housing be met? Given that 95 per cent of all housing stock that will exist in 10 years’ time has already been built, we cannot adjust the stock to meet what I believe is very wrong-headed, and in some places downright indecent, changes to HB. Some of us feel very strongly about this and it would seriously jeopardise our support for UC. DWP’s cuts in housing benefit will be offloaded to housing associations as arrears.
Goodness knows that local authorities are strapped for cash with 30 per cent cuts, but at least they have other financial resources. Housing associations do not. I repeat to the Minister that his savings will be our debt. DWP and DCLG have to get their act together. As I suggested at Second Reading, not entirely jocularly, if we could persuade DCLG to give up its batty scheme of localising council tax benefit with all the savings that accompany it and trade it for protecting the housing benefit, which would finance the homes we need and keep people in the homes that they want, UC would be welcomed widely across the country. I warn the Minister to take this issue very seriously. It will be very difficult for those in the field of social housing to cope when his cuts become our arrears with no capacity to meet them.
Baroness Meacher
I support Amendment 99A, which would exempt from the benefit cap, as others have mentioned, claimants with entitlement to carer’s allowance or additional allowances within universal credit for claimants with regular and substantial caring responsibilities. I am sure that this amendment was moved extremely ably by my noble friend Lady Hollins.
Perhaps I may make a couple of comments about the cap more generally. As Cross-Benchers, we do not normally refer to any political activities that we might have undertaken even in the distant past. Over a quarter of a century, however, I have spent rather a lot of time knocking on doors. One incredibly powerful recollection that I have is that the perception of the so-called scrounger was always the biggest single issue on the doorstep, even bigger than immigration. We cannot get away from the fact that low-income earners bitterly resent neighbours who they regard as being on benefits and, apparently, seeming to do rather better than they themselves. It is important that low-income earners feel that they are benefiting from going to work, which was the objective of the tax credit system. I strongly support the principle of that, albeit that there were a few problems with complexity.
As for the political motivation behind the benefits cap, I understand that people must have that incentive to work and that those in work should not resent those who are out of work. I have concerns, however, which I believe others have expressed, about the cap as a mechanism for achieving that sense of fairness. My understanding is that the design of the universal benefit should achieve this objective if only, as others have said, the council tax benefit were incorporated within it—at least except for a small number of very large families and some people living in very high cost areas.
I suggest to the Minister that the Government give some thought to finding a formulation in the legislation to achieve their fairness objective as between claimants and low-paid earners without resort to the notion of the cap. I know that the Secretary of State is extremely committed to this cap because it is a beautifully simple little message about being tough on claimants, if one is really honest about it. However, the Secretary of State should think carefully about whether this is acceptable within the traditions of democracy in this country. The aim, of course, would be to avoid relinquishing parliamentary scrutiny of the Executive. That is important because the levels and structure of benefits should not be open to change by the Executive without reference to Parliament. I understand that that is possible with the Bill as drafted. I know that the Minister will correct me if I am wrong but that is my understanding.
As regards this amendment, if the Government are determined to have the benefit—and I still hope that they are not—one group of claimants who clearly should be exempt are carers. About 200,000 children in the UK are being raised by grandparents, older siblings or other family members and friends. These carers step in to bring up a child or children as a result of very difficult family circumstances which often involve drug or alcohol misuse, abuse or neglect, death or serious illness, domestic violence or imprisonment. These carers are saving the taxpayer very large sums. These households are often large, simply because they have children of their own and then bring in others, perhaps five or more; so they will be disproportionately affected by the cap. I am sure that others have already mentioned this issue but I hope that the Minister will address it directly.
The idea of imposing a cap or some form of benefit control on large families is presumably to discourage parents from having more children than they can readily cope with, but that argument does not apply at all to carers who take on other people’s children. I do not know what the Minister feels about that point. Is that actually the main incentive behind the cap in relation to these households? Have I misunderstood? I would welcome his clarification. I know that he will want to support carers and hope that he is in a position to hold out some hope of concession on this issue. I hope that, at the very least, he will take this matter away for consideration.
Lord Ramsbotham
My Lords, this amendment has its genesis as long ago as 1996. As Her Majesty’s Chief Inspector of Prisons, I found that, at the end of their sentence, prisoners were released with a discharge grant of £46 or, if they had no address to go to, £92. The numbers claiming £92 went down when home detention curfew or tagging was introduced because, in order to qualify, they had to give an address. They were then required to go to their local jobcentre and sign on for whatever benefits they were entitled to, so having to live on their discharge grant until those came through, which could take up to three weeks and sometimes longer. I ask Members of the Grand Committee how they would cope if they were a single parent with dependent children having to live on £46 for three weeks, probably having lost their accommodation thanks to the rule brought in by Mr Peter Lilley in 1995 whereby council accommodation would be forfeited after 13 weeks of absence and their possessions removed. That is not to excuse those who break the law, but it offers an explanation for the appalling high reoffending rate among recently released offenders.
When I was Chief Inspector of Prisons, and on several occasions since then, including in your Lordships’ House, I have asked why benefit claims could not be processed while someone is in prison so that on release they do not receive a grant but the first of future regular payments. As very many prisoners are receiving some form of benefit before they go into prison, it should not be beyond the wit of man to suspend those payments during the period of imprisonment and resume them on release. However, every sort of reason has been put forward about why that is impossible, which I put down to lack of will power: the prisons from which they are released may not be in the same geographical area where they live and, therefore, not in the area where their nearest jobcentre is; there are no Jobcentre Plus employees in prisons who could process the claims; or the prison into which they were received and which suspended their payment may not be the same one from which they are released. I think all this is baloney and that the Government, by not grasping the nettle, are contributing to the reoffending rate.
My amendment is designed to put an end to that nonsense by regulating that individual benefit claims are processed during a person’s imprisonment so that the discharge grant becomes a thing of the past, except for those who do not qualify for benefit. There are other spin-offs to this process that can only help the conduct of imprisonment, because an individual’s national insurance number is a unique identification weapon armed with which there is no reason why one cannot pass information regarding individual claims around the system. Unique national insurance numbers, without which benefit claims cannot be made, will also help to prevent identity fraud, because pretending to be someone else will deny provision.
My amendment specifically mentions those who were in receipt of benefits at the time of their reception into custody, but I shall amend it at a later stage to include the assessment of all people inside and the initial assessment of those whose entitlement is discovered only when they are in custody. What I am proposing is in fact in line with something that has already been set in train regarding the work programme. The Deputy Prime Minister announced on 16 August that the Government intended to mandate prison leavers to the programme immediately on release from prison, with national implementation for jobseeker’s allowance claimants from March 2012, and to work with the Ministry of Justice on a pilot integration of reoffending outcomes into work programmes.
To enable that to happen, Jobcentre Plus advisers will process jobseeker’s allowance claims in prison—although for some extraordinary reason it is said that discussions with claimants will be voluntary and not mandatory. They will then make a record of all prison leavers that will be retained for 13 weeks from the date on which they leave custody. If a claim for jobseeker’s allowance is made during that time, the prison leaver will be referred to the work programme at the point of claim. To a layman, this all seems convoluted and bureaucratic. If the Department for Work and Pensions really is fully committed to supporting the rehabilitation of offenders, why can officials not sit down with those from the Ministry of Justice and work out a system that applies to every single prison leaver, not just those who are in the market for the work programme or jobseeker’s allowance?
The reason for proposed subsection (3) in my amendment is that, all too often, resettlement essentials in prison are left until the very end of a sentence, in which case it may be too late to process benefit claims. However, if processing is started immediately so that a prisoner’s status on release is well known in advance, that will be avoided. This applies to the work programme as much as to the universal benefit. Of course there will be problems with those serving short sentences but, as I have suggested, suspension and resumption rather than initiation may well be the required process.
Bearing in mind the unnecessary reoffending and misery that present procedures have caused for too long, I have corresponded with both the Ministry of Justice and the Minister over this amendment, being amazed that successive Governments should not have done something to rectify this over the years—particularly this Government, in view of what they currently have in hand at both the MoJ and the DWP. I am very grateful to the Minister for his response to my letters but, with respect, I suggest that in drafting his answer his officials may not have made the connections that I have tried to describe. I therefore ask him to reconsider his written refusal to support my amendment, dated 26 October, and meet me to discuss further action before Report. I beg to move.
Baroness Meacher
My Lords, I have not prepared any comments on this amendment, but it seems to me to be of enormous importance. I cannot imagine that the Minister would not wish to support it.
One very obvious proposal would be for every prison to work out the release rate of their prisoners and to determine how many hours per week of a Jobcentre Plus person they need in the prison to process all these prisoners in order that they are paid their full benefit entitlement before, I suggest, they go out of the door or within the first week.
It is a fact that a very large number of prisoners reoffend within that very early period following release, which seems almost inevitable. What else are these people supposed to do? I therefore hope that the Minister will indeed meet my noble friend Lord Ramsbotham to consider how to do it. It has surely to be done; it is a matter of how best to do it—whether to have people in the prison doing this work to overcome the problems of people moving from one area to another and even while they are in prison. I can see that that is a problem for individual jobcentres, but, one way or another, I hope that this can be resolved.
Baroness Meacher
I think I slightly missed my cue. I apologise. I rise on behalf of the noble Baroness, Lady Grey-Thompson, who gives her apologies to the Committee. My noble friend is unable to be with us due to a commitment in Birmingham today and she asked me to speak. I rise to give notice of our intention to oppose the question that Clause 99 stand part of the Bill. I must express my gratitude to Sue Royston of the CAB service for her help with this contribution.
The purpose of this amendment is to remove Clause 99, which requires claimants to apply for a revision before they can appeal. This clause would mean a mandatory extra step in the system, which complicates the process for claimants. The extra step has a strict legal time limit within which the application must be made. This inevitably means that some vulnerable people will lose their right to appeal, having failed to submit their application in good time. It will create extra work and extra expense. The reconsideration process is already in place anyway when someone appeals; the DWP just needs to use it more effectively.
What does the proposal mean for the process of challenging a decision? At present someone who receives a decision they disagree with has a month to challenge it. They can either ask the decision-maker to reconsider the decision or they can put in for an appeal. If they appeal, the DWP still has a duty to reconsider the decision. If, after reconsideration, the decision is unchanged, the appeal is passed on to the Tribunals Service automatically. This means that at the start of the process claimants have only one legal time limit to meet if they appeal. If the new proposal set out in Clause 99 is passed, someone who receives a decision they disagree with will have a month from the date of the decision to ask for a reconsideration. Then, when the claimant receives the result of that, they will have only a month from the date of the new decision to submit their appeal. Both of these deadlines will be strict legal time limits and a late reconsideration or appeal will be accepted only if good cause is proven. We all know that good cause is a very tough hurdle and very much a matter of discretion. One can never be sure that the decision is fair.
Perhaps the Minister can explain why the Government regard this change as necessary. In the equality impact assessment published in October, one reason given by the DWP for this proposal is:
“We wish to ensure that as far as is reasonably possible, disputes between claimants and the relevant decision making body regarding social security, child support and certain other decisions are resolved through internal processes”.
It makes no sense to suggest that this proposal is to ensure that decisions are resolved through internal processes. The process for doing this is already in place. If a claimant wants to challenge a DLA decision and appeals, time is given to collect evidence and a proper reconsideration of the evidence is made. Where a good cause is presented, the decision is frequently overturned. The taxpayer is saved the cost of an appeal and the claimant the stress of that appeal.
However, in ESA cases, until recently it was very common to send in an appeal one day and get back the reconsideration by return of post refusing to change the decision—the appeal had been forwarded to the Tribunals Service before any evidence could be collected. The reconsideration process has recently improved. However, the improvements are patchy. One CAB in the south-west reported that it had started to see an improvement in the reconsideration process, but ever since the reassessment process started in earnest, it appears that the decision-makers have been overwhelmed and in not a single case where the CAB has helped claimants appeal has the decision been overturned on reconsideration, and yet at tribunal the CAB service has a success rate of 90 per cent. Clearly something is going rather badly wrong.
Lord De Mauley
My Lords, the noble Baroness, Lady Meacher, has eloquently explained her concerns and those of her noble friend Lady Grey-Thompson, who cannot be with us today, about Clause 99. Let me try to address them.
I assure your Lordships that the time limits for claimants wishing to request a revision, or make an appeal, in relation to most social security benefits are not changing. What is changing is that claimants will need to ask for the decision to be looked at again before they can appeal. I hope that noble Lords will agree that it is in everyone’s interests for disputed decisions to be resolved at the pre-appeal stage wherever possible. Previous figures have indicated that approximately 65 per cent of cases overturned historically were a result of additional evidence being provided that was not available to the decision-maker.
While the claimant will be required to apply for reconsideration within one month of being notified of a decision, the process for making the request is informal. It does not require the claimant to supply a substantial submission and can be done by telephone, face to face or in writing, so claimants should not be subject to additional expense.
The purpose of Clause 99 is to allow DWP to focus on revision rather than responding to appeals, enabling more disputes to be resolved at an earlier stage. Claimants will still be able to ask for a written explanation of the decision and, where they do, the one-month time limit for applying for reconsideration will be extended. In the event that a claimant fails to request a reconsideration on time, the deadline can be extended where there are special circumstances—for example, a hospital admission —which make it impracticable for the claimant to meet the deadline. I assure the noble Baroness that when a request for reconsideration is made beyond the one-month deadline, no formal submission of reasons will be required. They can be supplied by telephone, allowing a decision-maker to consider whether they meet the criteria for an extension of the deadline.
This clause does not change which decisions carry appeal rights; it will simply require claimants to go through the internal reconsideration process first. The purpose of this is to ensure that the decision-making and appeal process is both fair and proportionate.
Although reconsideration is already practised in DWP, there is no legislative requirement for it to be carried out when an appeal is made. Clause 99 will introduce this requirement. Currently, decisions are routinely reconsidered on appeal, so the reconsideration process takes place after the claimant has already decided to appeal to the tribunal.
Under the new arrangements, DWP will use direct contact with the claimant to gather additional evidence relevant to the decision and will provide an explanation of the outcome of the reconsideration. The process will allow a claimant’s decision to appeal to be informed by whether reconsideration had provided them with a clear justification for the original decision, and a clear explanation of it.
Some parts of DWP have already introduced a more robust and independent reconsideration process. However, claimants may often have already made a formal appeal before this process begins. As the noble Baroness has rightly pointed out, under Clause 99, where a decision is overturned upon reconsideration, this will save the taxpayer the cost of an appeal and the claimant the stress of appealing.
The noble Baroness makes the point that, under the current process, no one can get to a tribunal without confirming their intent to carry on. However, if a claimant does not respond to the TAS1, the appeal does not simply stop. The tribunal will still be required to make a decision to strike out the appeal.
Currently, the claimant has 14 days to respond to a TAS1, which is sent along with the DWP response to the appeal and often the reconsideration outcome. Unless the claimant appeals early, which is the issue that we are trying to resolve, this gives the claimant only a short time to consider this information and make an informed decision on whether to proceed with their appeal or to withdraw.
Clause 99 will allow the claimant to make an informed decision about whether to appeal, having passed through a less formal process. There is currently no time limit for the DWP to complete the reconsideration process, nor is one proposed, but it is important to the DWP that each stage of the decision-making and appeals process is carried out within acceptable timescales and does not result in unreasonable delays for claimants. The department is considering carefully how best to monitor and evaluate this in future.
The noble Baroness expressed a concern that claimants will not qualify for payment of ESA pending reconsideration. No appellants should be left without support, since other benefits such as JSA may be available. No decisions have yet been made to change ESA. The main focus of the DWP is to make the correct decision, based on all the available evidence, at the earliest point. Clause 99 will also help claimants distinguish between revision and appeal. The process will be clearly explained via decision letters, leaflets and through direct contact with claimants.
The noble Baroness referred to costs. There will, of course, be costs, particularly relating to IT changes, to implement this clause. The DWP expects to meet these within its spending review settlement. Furthermore, savings are expected to be made in both the DWP and the Ministry of Justice via a reduction in appeals.
I do not think that I have responded in detail—
Baroness Meacher
It seems to me that this is a tricky subject area. I am struggling as regards what benefit there might be in introducing Clause 99. It seems to me that one is shifting the responsibility from the DWP to get on and undertake one of these reconsiderations to the claimant requesting that this happens. I am sure that the Minister will accept that these claimants have a pretty difficult life to manage anyway. To add on another process that they have to go through is going to cause all sorts of problems. Why cannot the DWP improve its processes as regards the reconsiderations so that they can happen automatically if a claimant is concerned about a decision? The DWP should get on and undertake a reconsideration, asking for any further evidence or whatever it wants. If it comes out with the same decision, it then informs the claimant and asks him or her whether they wish to pursue their appeal. I am not clear about that process. Can the Minister help me with that?
Lord De Mauley
My Lords, we are not trying to introduce a new stage—reconsideration and appeal have existed before; we are trying to get a better process of reconsideration before we get to appeal so that we can avoid a large number of appeals that occur. We are introducing an element of flexibility and informality so that claimants are not held quite so rigidly to deadlines, information and the form in which it comes. We plan to make the process more streamlined for them as well as for the department. We require Clause 99 to effect that.
Lord De Mauley
It will not be an independent process but it will be monitored closely in the department.
Baroness Meacher
I thank the Minister for that full response and the detailed explanations about a number of these tricky issues. I have no doubt that my noble friend who is unable to be with us today will read Hansard carefully and may want to come back to it later.
Lord Freud
My Lords, I am delighted to hear such full-hearted support for monthly payments. First, I would like to speak to Amendment 103ZZA in my name. This amendment is technical in nature and seeks to restore the policy intent and simple premise that where a claimant has a debt, the debt should be recoverable from them. In the majority of cases, overpayments of benefit, penalties, payments on account and certain hardship payments will be recoverable from the claimant and will be recovered by deduction from the benefit that is paid to them. As the Bill is drafted, however, the Secretary of State is prevented from recovering such payments where the claimant’s benefit is paid directly to a third party, for example a landlord. This means that recovery from a claimant is limited to deduction from those benefits paid directly to them. This is unintended and so this amendment seeks to ensure that where a claimant’s benefit that is subject to recovery is paid to a third party, recovery may be made from that benefit.
This ensures that the DWP maintains the same powers of recovery as it does presently for recovery by deduction from housing benefit where it is paid directly to a landlord. Although the claimant may have other benefits from which deductions could be made, to do so adds both cost and complexity to the recovery process. In such cases, where no benefit is payable other than that paid to the third party, the DWP would be reliant on negotiating repayment from non-benefit income or potentially using direct earnings attachments to recover from debtors who are in pay-as-you-earn employment.
The situation becomes even more difficult where the debtor will not negotiate repayment, has no benefits paid directly to them and is not in pay-as-you-earn employment. Without the amendment, this would result in a situation where the DWP or local authorities have no effective way to recover the overpayment or penalty. I am sure noble Lords will agree with me that where there is an obligation to repay benefit debt, the fullest possible powers should be available to the relevant authorities to make recovery by the most efficient means.
I shall now address Amendments 103ZZB, 103ZZC, 103ZZD, 103ZZE, 103ZA and 103ZZZA. These opposition amendments seek to achieve a number of objectives, but are primarily concerned with protecting debtors. I am sure that there is no disagreement over the need for safeguards for vulnerable claimants and those in financial difficulty. We recognise, like the noble Baroness, Lady Lister, that protection needs to extend to the calculation of overpayments as well as their recovery. In common with the noble Baroness, we recognise that such a provision has value in ensuring that an overpayment reflects the true loss of public funds and for this very reason, such a provision already exists in secondary legislation relating to the recovery of overpayments of current benefits.
Like the noble Baroness, we believe that similar provisions should apply here, but feel that such a provision sits more happily in secondary legislation. For that reason, I am happy to offer my assurances that it is our intention to make provision for such a calculation in the regulations to be made under Clause 102, new Section 71ZB(4), which allows regulations to provide that recoverable amounts,
“are to be calculated or estimated in a prescribed manner”.
Placing the provision in secondary legislation allows for both flexibility and review.
Concerning the other issues raised within these amendments, I believe that future overpayment recovery from working-age claimants will be more streamlined and efficient than it is presently. Recovery will thus provide both greater returns and better value for money for taxpayers. For example, under the previous Administration, it was believed that there was a right under common law to recover overpayments occurring due to official error, and the DWP thus requested repayment of those overpayments on that basis. I see that noble Lords who may have been responsible for those requests are in agreement. The Supreme Court, however, ruled that there was no such right and that is why we are legislating to bring the law for working-age benefits back in line with the policy of the previous administration—a policy that we support.
Prescribing that an overpayment caused by official error would not be recoverable if the claimant could not reasonably be expected to know that they were being overpaid brings forward a need to make subjective assessment of the debtor’s capacity to understand entitlement before the overpayment is determined. Although I sympathise with the lack of understanding of the noble Baroness, Lady Hayter, about all the incredible overpayments that she gets and the £1 million that goes into her bank account on a regular basis, I have to say that that is not workable in this context. The DWP will not be prescribing those circumstances for the discretionary write-off or non-recovery of an overpayment. Cases will be considered carefully on their individual merits because each case is different.
As mentioned earlier, the code of practice will outline the policy as to whether recovery should be pursued, and lead to considered, consistent decision making. in response to the noble Baroness, Lady Lister, I am happy to confirm that that will be published in the form of a leaflet.
Considering whether an overpayment can, or should be recovered, the DWP will look at a number of factors, not solely whether the claimant received the money in good faith. It will have regard to ensuring that deductions from benefit or earnings—
Baroness Meacher
Will the code of practice be available to us before Report so that we know whether we have a reasonable situation?
Lord Freud
Yes, I am pleased to confirm that it will be available in draft. I want to avoid the cost of printing up a leaflet.
We will ensure that deductions from benefit or earnings to repay an overpayment should not lead a debtor to suffer undue hardship. That remains a cornerstone of our overpayment recovery policy. As presently, future benefit recovery will be subject to regulations that provide for a maximum rate of recovery. In many instances, however, this maximum rate of recovery may still prove unaffordable for some claimants. In such cases, the DWP will discuss an alternative repayment rate.
Welfare Reform Bill
Baroness Meacher Excerpts(13 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Lister of Burtersett
I was just quoting from a letter I received from a 50 year-old woman with complex mental health problems. She wrote that,
“my life revolves around trying to be as well as possible. I cannot stress enough how frightening it is to feel that you are not able to work, will not be put into the support group”,
she fears,
“and will be left to use up everything you have until eligible for means-tested benefits … My medicine prescription has been increased 4-fold and been supplemented with extra medication since the time limit was announced”.
As someone who has campaigned and argued for a more inclusive social security system for 40 years, I feel that I have to use the luxury of being a Back-Bencher to oppose this clause on principle. My noble friends on the Front Bench know and understand my position. However, if time-limiting goes ahead, it must be done on the fairest possible basis. Therefore, I hope that the Minister will look favourably on the proposed amendments in the name of the noble Lord, Lord Patel, which would aim to achieve that in three main ways.
First, I hope that action will be taken so as not to penalise people with fluctuating conditions who go on to the support group after the contributory ESA has expired. I know that that is a particular concern of Macmillan Cancer Support. Secondly, I could not believe at first that the rule would be applied retrospectively. The case against that has been made extremely eloquently by the noble Baroness, Lady Thomas of Winchester. As a result of this, the letter has gone out to existing recipients. According to one who wrote to me, far from providing the reassurance mentioned by the Minister in his opening remarks at Second Reading, that will, she warns, “strike fear” into the hearts of those affected. Could the Minister state whether there is a precedent for such a letter to go out before Parliament has agreed such a controversial change?
Thirdly, I was also dismayed when I realised that the 13-week assessment phase is included in the one-year time limit, which in effect means that full contributory ESA will last for a year minus 13 weeks. In Committee in the other place, the Minister of State agreed to look again at this issue in response to concerns expressed by a Liberal Democrat MP. What was the outcome of this further look? According to a Written Answer that I received, if the assessment phase were excluded it would reduce the savings by £100 million in 2012-13, rising to £120 million by 2014-15, but falling to only £40 million by 2016-17. Here is the nub: this clause is not about making social security fairer; it is about saving money, as my noble friend Lord McKenzie has already stated.
I have some sympathy with the Minister. He is extolling the virtues of universal credit at every opportunity, yet universal credit is in danger of being contaminated by sharing a Bill with unfair, cost-cutting measures such as this one. I hope, therefore, at the very least, that the Minister will think very hard about how to mitigate this unfairness through the kind of amendments before us.
Baroness Meacher
I rise to speak to Amendments 71M, 71N, 71P, 72A and 73. First, I thank the noble Lord, Lord German, for kindly allowing me to speak a little earlier than I had planned because I have to leave the Committee briefly at 5 pm. I apologise to the Minister and the Bill team that I have not been able to attend the briefing sessions. They are a wonderful idea and I had hoped and assumed that I would attend every one, but life has not been quite like that.
I also apologise for not having had quite the time I would have wished to prepare for this debate. Having said that, I have major concerns about the plan to limit entitlement to contributory ESA to one year. I understand from the CAB service that the DWP has estimated that, of those on contributory ESA and in the work-related activity group, 94 per cent will remain on the benefit from more than a year, so it is estimated that by 2015-16 700,000 people will be affected by limiting contributory ESA. Some will lose their entire benefit payment, currently worth £94.25 a week. I know that the Minister will correct me if that is wrong. It sounds astonishing. The rationale for this change is, I suppose, twofold. First, it is to give maximum incentive to people to return to work and, secondly, it is to save taxpayers’ money. I will refer to those two points briefly.
It is particularly difficult to support the employment incentive argument at present, when even able-bodied people and remarkably highly skilled people are finding it very difficult to find work. As we said, we think that about 94 per cent of those with disabilities will remain on this benefit beyond their contributory entitlement. I would welcome the Minister’s views on the fairness of this provision in relation to an individual with—obviously in terms of my own concerns—ongoing and fluctuating symptoms. He is very keen to work and does not need any incentive, but no doubt he will be given lots of incentives through the mechanics of the work-related activity group. But the fact is that he cannot persuade an employer to take him on. I know that the Minister is aware that there are very large numbers of people on ESA who want to work and cannot persuade an employer to take them. In other words, these people are very much the deserving unemployed. They used to be called the deserving poor. I happen to know hundreds of people personally who fall into that category. I would be grateful for the Minister's views on that.
If we consider for a moment the need to protect taxpayers’ money, I happen to believe that taxpayers would recognise that this group—people who are disabled and sick on benefits—should be entitled to their benefit, having contributed, many of them, for decades. Politically, I do not believe that this is something that one can possibly justify. It is very hard to argue that savings to taxpayers’ money should be made with this particular group—sick and disabled people—rather than at the expense of other groups in society with much broader shoulders. There are all sorts of cuts that a Government could make that would seem much fairer than this one.
Amendment 71M, tabled by the noble Lord, Lord McKenzie, would at least be a great deal fairer. In a sense you could say that it is all rather arbitrary— 365 days or some other number of days. Really, it is just not justified to cut contributory benefit at any stage for many of these people, but I suppose that that would be better than the alternative.
Lord Freud
Moving swiftly on—Amendments 72A and 73 exclude from time-limiting any days contributory ESA claimants in the WRAG have received ESA for before this clause comes into effect. We expect that around 100,000 people will have been in receipt of contributory ESA in the WRAG for more than 12 months by April 2012, plus an additional 100,000 who will reach 12 months’ duration in the WRAG during the rest of 2012-13.
On the issue raised by my noble friend Lady Thomas on retrospection, a benefit claimant has no right to receive ESA indefinitely if the conditions of entitlement change or their circumstances change and they no longer meet the conditions of entitlement. Through the amendments made by the Bill, we are changing the conditions of entitlement for the future so that entitlement will not end until Clauses 51 and 52 is commenced. This will not affect any entitlement that has already arisen. I assure noble Lords that we are not seeking to recover past ESA payments that claimants have received correctly, but merely defining their future entitlement to ESA on the basis of whether at the time the clause is commenced they have had ESA already and if so for how long, and whether they are in the WRAG. We took the decision to issue 115,000 notification letters to all claimants potentially affected by this change to ensure that they were given sufficient notice. This generated around 4,200 inquiries from claimants in response.
We wish to strike a balance between fairness of treatment for all those affected and complexity. We do not think that it is reasonable that people in the WRAG who have already received contributory ESA before Clause 51 comes into force should continue to do so for an additional year after the clause is commenced. This would be unfair to new claimants; we want as many people as possible to receive benefit for the same period of time. Given the very difficult financial position that we inherited from the previous Administration, this is another difficult decision that we have had to make to ensure that the economic well-being of our country is protected.
Baroness Meacher
Can I just raise a question? The Minister talks about the unfairness about those in the future and those in the past, but that issue exists anyway. People who started claiming 18 months or two years ago, or whatever, clearly had a different length of contributory ESA to those people who claimed any time from 1 April last year in the Government’s terms. What I was suggesting was that the conditions are changing as of 1 April next year, and it is retrospective to suggest that the conditions change from 12 months previously. That is what is retrospective. Of course, you will always have unfairnesses between the past and the future when you change laws. It is not logical to suggest that there is some sort of inequity between past and future and, therefore, there is no retrospection. I think that the Minister has to accept that there is retrospection here.
Baroness Hollis of Heigham
My Lords, perhaps I may add to the Minister’s woes. He will no doubt be aware that previous Administrations faced this difficulty when we moved from IVB—invalidity benefit—to incapacity benefit. What happened was that people on invalidity benefit remained on that benefit and only new entrants went onto incapacity benefit. That is one path. I can quite see that allowing long-term claimants to have two or three different paths is technically complicated and administratively undesirable, but it is what is most supportive and decent to the individuals concerned. Their expectations are not suddenly changed part-way through their later years.
The second path that the noble Lord could adopt would be to say that from now on, at a certain date, this will be a common rule for all new and existing applicants. That would be the middle path. What would clearly be wrong would be to say that this will apply only to new applicants and that we will knock off existing claimants who have come up to the time barrier. I have never known that in social security before—ever.
Lord Freud
My Lords, the accepted convention on retrospection is that it applies from the announcement of a measure. When the price of petrol goes up in the Budget, it goes up that night or the next night and then the Finance Bill becomes an Act four or five months later. That is the convention—you go from the date of announcement. We announced this move from October 2010.
Baroness Meacher
Perhaps I may suggest that the Budget is a completely different kettle of fish, because you absolutely have to implement financial changes on the day of the announcement—otherwise all sorts of people will play games and use the delay to do all sorts of things. However, social security is completely different. You are talking about vulnerable people dependent on benefits, and that is why the convention in the social security field is totally different from the convention regarding the Budget.
Lord Kirkwood of Kirkhope
Can I just make a point? As to the Minister’s explanation of when things start from, this announcement was made in 2010. If logic is to stay on his side, implementation should have started in 2010.