Social Housing Sector
Baroness Sherlock Excerpts(8 years, 10 months ago)
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Lord Freud
We are talking to the relevant supported housing associations—it is a variegated sector. There are a couple of issues that are concerning them at the moment, and this is one of them. We are looking, as we develop a dialogue, to get a policy that works for this sector as soon as we possibly can.
Baroness Sherlock (Lab)
My Lords, the other issue that is probably concerning the sector is that the Welfare Reform and Work Bill is forcing all housing associations to cut their rents by 12% over this Parliament—money that will almost all go directly to the Treasury. It is a double whammy. I spoke this morning to the head of Depaul UK, a small charity that houses 700 young homeless people in the north-east and around the country, dealing with kids who have come out of prison or have escaped abuse and exploitation. It has already absorbed cuts of 30%. If this policy goes through, the support workers who teach the young people how to live, cook, pay the rent and go to work and get them ready for independent living simply cannot be paid for. If this goes ahead, Depaul will pull out of hostel provision altogether. Is that what the Government want?
Lord Freud
As my noble friend Lady Williams made clear on Monday night, this area is under active consideration within the timetable of the Bill.
Lord Freud
This is a variegated sector, which is exactly what we are discovering now. Supported accommodation or specified accommodation, using the other definition, effectively looks at the services that are provided to support people. I suspect that some of them will supply aids of some kind, but the real thing is the actual service elements that are provided for people.
Baroness Sherlock
My Lords, perhaps the noble Lord could ask his noble friend Lord Strathclyde to do the review. That might speed it up.
Lord Freud
I constantly consult my noble friend Lord Strathclyde about absolutely everything.
Welfare Reform and Work Bill
Baroness Sherlock Excerpts(8 years, 10 months ago)
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Baroness Lister of Burtersett (Lab)
My Lords, I rise to speak to Amendments 98 and 99, in my name and that of my noble friend Lord Kirkwood of Kirkhope, to whom I am once again grateful for his support.
Amendment 98 would delete child benefit from the list of benefits covered by the four-year freeze. Amendment 99 applies to child benefit the triple lock that currently governs the uprating of retirement pensions, a policy promoted by CPAG—again, I declare my interest as honorary president—and End Child Poverty.
Far from a triple lock, child benefit has been the victim of a triple whammy since 2010. It was first frozen for three years and then uprated by only 1%, and now it is to be subject to a four-year freeze. The upshot is that, according to CPAG’s calculations, it will have lost 28% of its value between 2010 and 2020. In other words, it will be worth less than between a quarter and a third of what it was when Labour left office. A graph prepared for me by Professor Jonathan Bradshaw shows how the gain in value under the previous Labour Government has already been nearly wiped out. It also shows how child benefit represented a much higher percentage of average earnings in the early 1980s under another Conservative Government. However, it was then subject to similar treatment to now, until it was rescued by Sir John Major, who understood why child benefit is important and why its value should be protected. Sadly, his successors do not appear to share his understanding.
I tabled these amendments to encourage a debate about the role of child benefit. I quite accept that it is rather ambitious to argue for the extension of the triple lock to child benefit in the current context, but there is a parallel with pensions. One of the justifications for its application to pensions, and for excluding pensions from the freeze, is that pensioners are among those least able to increase their incomes through work. Leaving aside how true this still is of younger pensioners such as myself, it is in some ways even truer of children. I know the response will be that their parents can increase their income through paid work, but as the judges in the benefit cap case made clear, children’s rights cannot be sacrificed for any failing on the part of their parents.
Moreover, one of the reasons why the family allowance—the mother of child benefit—was introduced in the first place was that wages cannot and should not take account of the number of mouths a wage earner has to feed. In the jargon, child benefit enables horizontal redistribution from those without children, such as myself, to those with, and recognition that we all benefit from children being brought up as healthy, thriving citizens. It may be a bit of a cliché but children do represent our future. Of course, as most people do have children, for the majority it in any case represents redistribution over their own life course.
Child benefit thus has an important function in supplementing wages without the drawbacks associated with means testing. In particular, it cannot be accused of subsidising low-paying employers and it does not create poverty traps. CPAG’s annual research into the cost of a child carried out by my colleague at Loughborough University, Professor Donald Hirsch, shows how the benefit represents core income, not an extra for families, so perhaps it is not surprising that, despite what the noble Lord, Lord Lawson, said in our first sitting about its unpopularity, a recent poll of 1,000 parents for End Child Poverty found that only one in 10 parents thinks that child benefit and child tax credit should not keep up with inflation. As many as two-thirds thought they should be increased in line with the cost of living or more, with virtually no difference between income groups. As I said, most people are parents at some point in their lives, and many grandparents will share these concerns about decent benefits for their grandchildren.
Moreover, because it is paid to the so-called “hard-working families” beloved of politicians, child benefit can act as a work incentive. It therefore makes no sense to freeze it when one of the primary objectives of the freeze, according to the impact assessment, is to increase work incentives, and it makes every sense to uprate it in line with average earnings. There is also a strong case for uprating it in line with personal tax allowances.
Those of us who have been in the game for a long time, such as my noble friend Lord Kirkwood, will remember that child benefit replaced child tax allowances as well as family allowances. At the time, there was a cross-party consensus that they should therefore be treated as akin to personal tax allowances when it comes to uprating policy. Unfortunately, that consensus soon broke down, but it does not invalidate the argument. For a Government who purport to care about child poverty and making work pay, it makes no sense to sink huge amounts of public money into raising tax allowances while freezing child benefit. Apart from anything else, the latter reaches parents in work earning below the tax threshold who gain nothing from further increases in personal tax allowances. Also, low-income parents earning above the tax threshold lose most of any gains from an increase in the personal tax allowances through cuts in means-tested benefits—a drawback that will increase under universal credit.
A constant thread running through our deliberations these last few days and weeks—however long it has been—has been how, despite government protestations, the best interests of the child have not been a primary consideration, as required by the UN Convention on the Rights of the Child. I fear that this Bill will be used as evidence against the UK when its record is interrogated by the UN committee next year. If at the very least the Government were prepared to remove child benefit from the four-year freeze, it would represent a degree of mitigation.
Baroness Sherlock (Lab)
My Lords, I will not detain the Committee long as I made clear the Opposition’s approach to the uprating of benefits on the last group of amendments.
Amendment 97 would allow benefits claimed by carers to be increased in line with inflation. My noble friend Lady Pitkeathley once again outlined very powerfully the problems faced by carers. I commend her brilliant, long and persistent attempts to put these things before the public and Ministers.
As the Committee heard in previous debates, there must be a real danger that the state will start to penny-pinch its way into driving carers out of caring, leaving those for whom they care to be the responsibility of the state. Throughout this Bill there seems to be little attempt to try to assess the costs to the public purse that might accrue to other parts of government, national or local, as a result of savings in the social security budget. My noble friend Lady Lister, in moving her amendment, advocated a triple lock for child benefit. I very much appreciated the history lesson for those of us who remember going back to where that is. The CPAG warned us that during the last Parliament child benefit lost 13% of its value against CPI, and 16% against RPI. Of course, that is far from the only cut affecting children. The levels of benefits and tax credits for children have faced repeated real-terms cuts.
I am using this amendment to ask the Government to do something very specific that they keep refusing to do—namely, to provide a cumulative impact assessment of the effect on particular categories of people of the changes that they are making. Whenever we ask them to do this, they put up two defences. The first is that it is all a bit complicated because everybody’s circumstances are different, so they cannot be expected to produce a single cumulative assessment. Well, somehow the Treasury and the IFS have managed for years to assess the impacts of measures on categories of people, if necessary by modelling them in relation to different household sizes and compositions. We would be happy to get that.
The Government’s second argument is that you cannot just consider benefits, you have to consider all the other wonderful things the Government are doing, such as the national minimum wage and tax allowances. That is fine. Include those in the models as well and we can all see who will be better off and who will not as a result of the combination of all these effects. A variation on that defence is that it is too hard because of the dynamic effects of the Government’s wonderful welfare reforms. Translated, that means either the Government reckon that universal credit will make people better off or that they are going to make them so desperate that they will have to work because they will have no other choices. In neither case have the Government produced enough evidence, let alone hard evidence, that can be included in modelling and put in the impact assessment, because the evidence is not there—so they just say that it is all a bit hard.
I have tried repeatedly to get the Government to do this, as have other noble Lords, and we are getting nowhere at all. But there comes a stage where if the Government keep bringing forward legislation which repeatedly attacks the same people, and do not do this, there is a significant democratic deficit. It is hard to know how this House can begin to understand the implications of what is being done when the Government simply refuse to give us the evidence to do it. So I urge the Government to take advantage of this debate to agree at last to address the gaping hole in the evidence and commission some cumulative impact assessments.
Baroness Sherlock
Baroness Sherlock
My Lords, I rise to move Amendment 103A and to speak to Amendment 104AZA, which are in my name and that of my noble friend Lord McKenzie of Luton. In doing so, I remind the Committee of my declared interest as a senior independent director of the Financial Ombudsman Service, in case it proves relevant to the later debate. I will speak at slightly greater length than I have recently because there are some quite complex issues involved and I need answers to questions. I hope the Committee will bear with me.
At present, owner-occupiers receiving income-related benefits may claim additional help towards their mortgage interest payments in the form of support for mortgage interest, or SMI. The payments are normally made direct to the lender and are intended to ensure that someone who is struggling to pay their mortgage does not end up having their home repossessed, causing misery to them and leading, most likely, to their claiming larger amounts in housing benefits to rent an alternative home. This Bill will end the SMI scheme and empower the Government to create a loan scheme as an alternative, with the loan secured by a charge against the property. I understand that the intention is to have the scheme administered by the DWP, with the recovery run by a third-party organisation which will be able to charge fees to claimants to cover the cost of administering the loan scheme.
In the impact assessment, the Government argue:
“Without the policy change there is an incentive for households to allow the taxpayer to take the burden of their mortgage without taking steps to repay it themselves”.
The only way to get this benefit is for your income and savings to be so low that you qualify for a means-tested benefit such as income support, jobseeker’s allowance, ESA or pension credit. The idea that people poor enough to qualify for those benefits could pay off their mortgage but are choosing to allow the taxpayer to do it instead seems unlikely. At present, claimants have to wait 13 weeks from first claiming a qualifying benefit before they can apply for SMI. That waiting period is to be extended to 39 weeks, and Amendment 103A seeks to restore the 13-week waiting period. The Minister will doubtless say that it had previously been 39 weeks, under the last Labour Government, but in 2009 the then Government brought it down to 13 weeks as a result of the economic situation.
Peers may have seen the helpful briefing from the Money Advice Trust, StepChange, the Building Societies Association and the Council of Mortgage Lenders, all of which strongly support this amendment to retain the 13-week period. As they put it:
“Lenders and advice agencies alike know from experience that early intervention is the key to resolving financial difficulty”.
They say that the Bill’s extension of the waiting period to 39 weeks risks making it “significantly more difficult” to resolve mortgage problems. The change would mean that claimants would be well over six months in arrears with their mortgage by the time SMI kicks in. As those organisations point out, two separate pieces of research, commissioned for DWP and DCLG, show the 13-week period has been effective in holding down arrears and repossessions—which, after all, is of course the point of the scheme.
In its evidence on the Bill in another place, the Council of Mortgage Lenders said:
“If the waiting time is extended, as planned, we believe that it will result in more cases of repossession … Extending the waiting time will only cause additional consumer detriment”.
It points out that interest rates have been so low for so long that probably 2 million borrowers have never experienced a rate rise. It is our view that the market is far from stable and that this is a very bad time to increase the waiting period, especially at the same time as abolishing the grant scheme and moving to a loan option.
Amendment 104AZA seeks to retain the SMI grant scheme for claimants who are in receipt of pension credit—in other words, our poorest pensioners. This is what I like to call the reverse Salisbury/Addison amendment: we are helping the governing party to fulfil a manifesto commitment which seems temporarily to have slipped its mind. The Conservative manifesto explicitly said that a Tory Government would protect pensioner benefits. Yet almost half of those getting SMI are of pension age and a disproportionately high number of claimants are pensioners. In fact, the impact assessment says that,
“SMI claimants are considerably more likely to be over pension age than mortgage payers in general”.
Baroness Sherlock
Before the Minister replies, I have a few other questions; perhaps he can answer them together. I thank the right reverend Prelate for clarifying that. Indeed, I wanted to be sure that the advice was independent of the debt recovery under the provisions. I apologise if I missed any of the Minister’s answers—I tried to tick them off as I went along, and he did pretty well, so I thank him for that.
First, can the Minister clarify that anyone in receipt of a qualifying benefit will be entitled to a loan whether they have or could be expected in the future to have any equity, or certainly enough equity to cover the loan? Secondly, if somebody loses SMI and as a result loses pension credit, will they lose access to passported benefits as well?
On the question of advice, the Minister described what subjects the advice would cover but I was not quite sure of the level of personalisation. I would put money on the fact that the pensioner will say, “These are my circumstances—should I apply for this?”. Will the adviser be able to say, “I advise you to do it—yes, you should”, or “I advise that you shouldn’t”, or will the advice be much more general, like the kind of money advice we are talking about in pension schemes? Did the Minister say that it was free to the claimant? I am sorry, I may have missed that. Finally, there was the question on redress for customers in the case of bad advice.
While the Minister is reflecting on those, I will respond to a couple of points made in the debate. I thank all noble Lords who contributed. I welcome the noble Lord, Lord Young, to the debate, and thank him for what I choose to regard as the implied compliment that I had some good arguments earlier in the evening, even if I did not do so well just now. In response to the points he made, I find persuasive the research done for two different government departments that the move to 13 weeks had been effective in holding down arrears and repossessions. That was government-commissioned research. I may be wrong about that but it seemed to be one of the most compelling arguments for not going back to 39 weeks. But presumably the Minister will say that they will monitor and evaluate it, and I will be interested to hear what they say.
Both the noble Lord, Lord Young, and the Minister said that in the case of pensioners the beneficiaries are essentially not the claimants themselves but those who will benefit from their estate, but of course it is often the case that that is not strictly true. I live in Durham, and in County Durham plenty of people have houses which are, frankly, worth not very much at all by London standards, so they have very little equity in them. If this kind of debt prevents them accessing all that equity, it may mean that they will not have equity available to them which they might need to get at for care costs or other non-NHS covered support costs of different kinds. So it does potentially have an impact on the pension in their lifetime, not just on those to whom they bequeath the house.
Finally, I should have reiterated something right at the start. The Minister was kind enough to give his officials the freedom to brief us on the session, and I had a particularly helpful conversation on this area. I know it might not seem like it, since I have rewarded them by coming back with lots of questions, but in fact it has been very helpful and has meant that in this debate I have tried to focus more on how this will work than adopting a more combative style. So I appreciate that and I look forward to the answer to those questions.
Lord Freud
I do my best. On the independence of people providing the advice, it will be independent of those providing the loan.
Lord Freud
Yes, I think that it is likely to be independent of the recovery. Yes—it is now. On the point about passported benefits, we are working to ensure that individuals who are no longer entitled to an income-related benefit as a result of the introduction of the SMI loans will have access to passported benefits. We are scoping out what the advice will look like and what we expect it to cost. Until we start the contracting process, I cannot prejudge whether SMI advice will be free. So that is outstanding.
I think that I have answered most of the points. If not, I will hit the typewriter—the Kremlin uses only typewriters because computers can be hacked. On the point about the number of weeks, I think that the noble Baroness will find that the level of forbearance with 39 weeks was very high and that very limited numbers of houses were repossessed by the mortgage providers, so I think that that will provide her with some reassurance.
Baroness Sherlock
My Lords, I thank the Minister for those answers and for the little glimpse that he has given us into the security that goes on within the DWP. I shall certainly take that home with me.
I should probably say for the record that if indeed one of our amendments would have had the effect of making pensioners wait to access help with mortgage interest payments, that certainly was not our intention. I feel that I should clarify that. However, in the light of the answers that the noble Lord has given, I beg leave to withdraw the amendment.
The Earl of Listowel (CB)
My Lords, I will speak briefly to my Amendment 104BB. I am grateful to the noble Earl and my noble friend Lady Meacher for adding their names to it, reflecting our earlier debates about the great concerns around increasing homelessness. Clearly these amendments are important because we wish to encourage landlords to take low-income tenants to address that homelessness. I declare my interests as noted in the register as a landlord.
I will not go into the details of this amendment because the noble Earl did that already. My concern is that paying HB directly to claimants may compound the homelessness issue we discussed earlier and contribute to a reduction in social housebuilding. Many of those receiving housing benefits may already be in debt, feel tempted to use their rent to pay off such debts and consequently become homeless. It may be that the eight-week limit that has been discussed will protect them from that. Social landlords are concerned that direct payment to tenants of HB may lead to tenants accruing arrears. Pursuing arrears is a costly business. Social landlords already face reduced incomes thanks to the reduced rents that this Bill introduces. Consequently, they may have less money to build more homes and we may see an impact on the building of social housing. I have two questions for the Minister on the effect of the move to direct payments of HB to claimants. What level of cost to social landlords does the Minister anticipate arising from that move to direct payments? What impact on homelessness, if any, does the Minister anticipate?
Baroness Sherlock
My Lords, Amendments 104BB in the names of the two noble Earls, Lord Listowel and Lord Cathcart, and the noble Baroness, Lady Meacher, would address the question of direct payment. Direct payment was the subject of considerable discussion during the passage of what became the Welfare Reform Act 2012, together with deliberations on the frequency of payments and split payments, not to mention jam-jar accounts.
My noble friend Lady Hollis asked about the research mentioned by the noble Earl, Lord Cathcart, from the National Federation of ALMOs and ARCH. It did indeed show that 89% of universal credit claimants were in arrears and that 34% of them were eight weeks in arrears, so they were in receipt of an APA. That is a significant proportion, so there clearly is an issue that they have picked up on about the extent of arrears—hence the question of direct payments.
We know that the Government’s starting point is that in the overwhelming majority of cases they want and expect universal credit to be paid as a single monthly payment in arrears to the claimant. But they have set down criteria for considering alternative payment arrangements in limited circumstances for the payment of the housing element of universal credit, invariably the first in order of priority. The guidance states that when arrears reach one month’s rent the DWP will review the situation, following notification by the claimant or the landlord, and when they hit two months or eight weeks, either the landlord or the claimant can request an APA. There is no automatic right to one because the Government are still clinging to the concept that managing benefits should mirror the choices in managing money that they say those in work have to make.
However, if an APA is in prospect, this would normally start with personal budget support followed by a managed payment to the landlord. The guidance sets out the tier 1 and tier 2 factors which will be considered for an APA. But having theoretical opportunities to have direct payments is one thing; what matters is how the rules are being applied in practice, so perhaps the Minister can help us here. We know that through to 3 December 2015, there have been 287,310 universal credit awards. Will the Minister tell us how many of them had a housing element included and how many have had an alternative payment arrangement? How many requests for direct payment to a landlord have been made by either landlord or claimant and, of those, how many were approved and how many rejected? I accept that the Minister may need to write to me on these points, but it would help us understand the scale of the problem and whether the research that has been identified is in fact representative of the situation for universal credit claimants more broadly.
Amendment 104BA in the name of the noble Earl, Lord Cathcart, seeks arrangements whereby payment of arrears in respect of a former property can be made by direct payment of a current universal credit claim. This has obvious difficulties because maintaining the current home should be the priority. There must be a risk that adopting that suggestion could lead to a round of evictions for rent arrears as arrears build up in a current tenancy in order to satisfy the arrears on a previous tenancy. There could be further complications because a universal credit award may not cover identical households for the current tenancy and the previous tenancy, so it is not clear how it might be apportioned.
Amendment 104B in the name of the noble Earl, Lord Cathcart, and the noble Lord, Lord Best, seeks a power for the Secretary of State or somebody else to supply information relating to any relevant social security benefit to a landlord, depending on the written authority of the tenant. Noble Lords will be aware of regulations enabling the limited supply of social security information to social landlords, which is governed by the Data Protection Act. I understand the potential benefit to landlords of this, but it raises issues of a different magnitude given the sheer number of private landlords, let alone the capacity issue, so I will be interested to know how the Minister thinks that that might be approached.
There may be an issue here with regard to arrears and universal credit, and if the Minister is not minded to accept this amendment, he needs to come back to the House to suggest how the Government are going to go about dealing with this. I look forward to hearing his reply.
Lord Freud
These amendments relate to a number of housing issues, and I will deal with them in the order in which they are listed.
Amendment 104B would enable the Secretary of State to pass information relating to a claimant’s social security benefits to their landlord as long as the claimant had given written consent. As the noble Earl and the noble Lord have stated, knowing that a tenant has claimed a social security benefit will allow a landlord to take early action to ensure that the tenant does not get into rent arrears and jeopardise their tenancy.
As the noble Baroness, Lady Sherlock, said, the Secretary of State already has power to supply some limited information to a social-sector landlord when one of its tenants claims universal credit. This information is shared for the specific purpose of enabling the landlord to determine whether that tenant needs advice, assistance or support in relation to their financial affairs.
The Government recognise that the need for this support might arise because, under universal credit, claimants are now responsible, in many cases for the first time, for handling a monthly budget. Claimants must also use their benefit to pay rent directly to their landlords, something that social tenants were not typically required to do under the housing benefit regime.
However, we do not recognise the need for the same level of support in relation to claimants living in the private rented sector. This is because such claimants will typically already have been responsible for paying their own rent under the housing benefit regime, so will struggle less with the changes introduced by universal credit. In any case, if these claimants require support in relation to managing their finances, it is unlikely to come from their private landlords. We therefore see no need to put additional information-sharing provisions in place.
Welfare Reform and Work Bill
Baroness Sherlock Excerpts(8 years, 10 months ago)
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Baroness Sherlock
“( ) A report prepared under this section must include information regarding the adequacy of resources given to local authorities to fund the support provided for troubled families.”
Baroness Sherlock (Lab)
My Lords, in moving Amendment 70 in my name and that of my noble friend Lord McKenzie of Luton, I will speak in support of Amendment 71 in the name of the noble Baroness, Lady Manzoor.
We are supportive of the recognition by successive Governments of the need to invest intensively in co-ordinated support for families facing multiple challenges, many of whom are involved with a number of agencies. Labour began work in this area, and in 2012 the coalition Government launched the first phase of what they called the troubled families programme. The Prime Minister, David Cameron, was reported as saying that he would put “rocket boosters” under efforts to turn around the 120,000 troubled families in the wake of the riots of 2011. I declare an interest as one of the four members of the Riots Communities and Victims Panel set up by the Prime Minister in the wake of those riots.
My experience as a member of the panel really stays with me. The panel was unpersuaded that there was much overlap between the rioters and the surprisingly precise number of 120,000 families who were then the target of the troubled families programme. In a poll we conducted of 80 local authorities, only 5% felt that there was much overlap between the rioters and the troubled families. One of our concerns was how we should support the roughly 500,000 forgotten families, who would not be reached by the government programme because things were not bad enough. They were bumping along the bottom, not coping but not doing badly enough to get help.
Those families need our help. I have never felt that the challenges families face are just about money, although its absence can be and often is a significant or at least aggravating factor. I will be interested to see the evaluation of the various programmes local authorities set up under the banner and funding regime of troubled families. I welcome the proposal in Clause 3 to require the Secretary of State for Communities and Local Government to report annually to Parliament on the progress of families supported by the troubled families programme. Amendment 70 would require that report to include information,
“regarding the adequacy of resources given to local authorities to fund the support provided for troubled families”.
I find it hard to work out the detail from the published financial framework so I hope the Minister can help. Can she say for the record what the longer-term funding proposals are, now that the Autumn Statement is out? Councils are being asked to design their own programmes to work with an agreed number of families, using criteria set out by central government. I understand that the original troubled families programme offered £4,000 per family. The financial framework says there will be a £1,000 attachment fee when an authority first works with a family, then an extra £800 on a payment-by-results basis depending on certain outcomes. Satisfactory outcomes are either “continuous employment” or “significant and sustained progress” over the five-year period.
I have some questions for the Minister. First, what work have the Government done with local authorities to ensure that that is an appropriate amount to incentivise them to choose the right outcomes for each family, rather than the ones that are the easiest to evidence, to make sure that they get the money that they are going to depend on to be able to run the provision? Secondly, are the Government talking to local authorities to make sure that the reporting requirements are not so onerous that they drain valuable resources or create incentives to focus on more readily documentable activity or more easily evidenced outcomes?
On the reporting point, one local authority representative said in the evidence session on the Bill in another place that the troubled families programme is addressing behaviours built up over decades or even generations. It is not,
“a 12-month, quick-fix, dip-in dip-out programme”.—[Official Report, Commons, Welfare Reform and Work Bill Committee, 10/9/15; col. 17.]
How will the Government ensure that annual reports reflect the need for longer-term interventions?
Have the Government considered the extent to which other proposals in the Bill may obstruct the success of the troubled families programme and, if so, how they might mitigate that? The reduced benefit cap and the two-child limit are likely to force some families to move in pursuit of cheaper housing. One Member of Parliament reported that 1,000 families had already moved from her inner London borough to cheaper areas. But as the cap is reduced, they could end up moving again. Losing track of families who move has been a recognised problem for social services for years and it features quite often in serious case reviews, including some very well-known and damaging child protection cases.
Having to move is worrying because after families have been given support for the first time, when they move they can simply drop out of sight. They also lose access to community support services such as preschool activities, parenting classes, health visitors or support workers in mental health. I am particularly worried about children having to move schools—I will return to this on a later group—when a lot of work could have been done to get that child and school working together and keep them in school.
The family will also lose their troubled families support worker and that is a relationship based on trust, which can take a long time to establish. On the assumption that the worker will not move to the new boundary, how can the programme ensure that the work that has been invested in that relationship of trust is not lost? That relationship between the worker and the family is not the icing on the cake; it is the cake. Louise Casey, who runs this programme, has talked movingly about the missing ingredient in these settings often being love. This is based on relationships. My concern is that a significant investment in those families, both emotional and financial—as taxpayers’ money—will be thrown away if that relationship is broken. Can the Minister tell the Committee what arrangements have been made for transferring support for families if they end up moving across boundaries, especially as a result of the Government’s own policies? I beg to move.
Baroness Manzoor (LD)
My Lords, I shall speak to Amendments 70 and 71. I do not want to repeat what has already been so well put by the noble Baroness, Lady Sherlock, concerning Clause 3 and reporting obligations. I want briefly to summarise something that the Guardian found under a freedom of information request in November 2015. That request showed that in the 120 councils that responded, only 79,000 families were turned around through a family intervention, which is meant to be an integral part of the troubled families programme. The research also found that more than 8,000 families in more than 40 local authorities had not received any kind of family intervention but had instead been turned around solely on the basis of data-matching exercises. The research found that councils might, for example, trawl through employment, youth crime and truancy data to identify a family that would have been eligible for the programme and which, without receiving any help from the troubled families programme, fulfilled the criteria for being turned around because school attendance had improved or one of the parents had found a job.
My Amendment 71 is an attempt to prevent this. It asks that a report prepared under this section must include an assessment of,
“the types of interventions provided by local authorities in the previous financial year, and … the success or failure of the types of interventions provided by local authorities in the previous financial year”.
I hope that the Minister will feel that this amendment would enable an improved assessment of the interventions provided by local authorities and will accept it because without this kind of data, we are not going to get underneath exactly which services local authorities are providing. I believe that the Government believe they must have an evidence-based approach, and this amendment will enable them to do so.
Baroness Evans of Bowes Park
I believe that the full scope of the reports has yet to be decided. I am certainly happy to take back those two suggestions to the department.
Baroness Sherlock
My Lords, I thank all noble Lords who contributed to this short debate. I thank the noble Baroness, Lady Manzoor, the noble Lord, Lord Kirkwood, and my noble friend Lord Beecham for their support.
We heard a lot of emphasis on evaluation. When the Minister takes this back to the department, I urge her to reflect a bit more carefully on that. I was a little concerned that, towards the end of her remarks, she seemed to imply that we do not need to assess either quality or funding because if the outcomes work it must have been okay. The question I would raise is that of causality. We are dealing here with very complex situations. Essentially, a family that is already engaged with lots of agencies and that may have multiple problems is an organic and dynamic unit—coming in and going out all the time. To assume, because it started at X and ended at Y, that what happened must have been the right thing is a very central government assumption and a slightly risky one in the circumstances.
I ask her to take that back, along with the suggestion of my noble friend Lord Beecham about longitudinal studies and peer review, to try to think very carefully about how we can capture the learning. With respect to the noble Lord, Lord Farmer, the point of these programmes is that what one authority does may not be the best thing for another authority. It depends on the circumstances, as my noble friend Lord Beecham described.
I also take the point made by the noble Lord, Lord Kirkwood, about terminology. Certainly, when I was on the riots panel I talked to a number of families who felt that being stigmatised got in the way of their trying to deal with things. It was not that they did not know they had problems; it was just that everybody constantly telling them that they had problems did not help. They wanted help to get themselves out of those problems, not to be branded. We need to find a way to ensure that that does not happen. I encourage the Government to think some more on that.
I am also grateful to my noble friend Lord Beecham for pointing out to the noble Lord, Lord Farmer—whose interest in this subject I recognise—how many local authorities are struggling with funding, especially in the poorest areas where so many of these families will be. We need to be aware of that. I am grateful for the subject having been aired in this debate and I hope that the Government will come back to us on this on a regular basis. Given that, I beg leave to withdraw this amendment.
Baroness Sherlock
Baroness Sherlock
My Lords, I shall speak also to Amendment 92. These amendments were tabled in my name and that of my noble friend Lord McKenzie of Luton. I shall also speak to the other amendments in this group. In doing so, I thank the many organisations which supplied briefing on this subject, including CPAG, Gingerbread and Shelter.
When the benefit cap was introduced, the Government made much of the fact that they were setting it at the level of average earnings. In May 2011, the then Minister, Chris Grayling, sought to defend the rationale for the cap by saying in another place:
“Our policy approach, and the Government’s clear intent, is to have a cap that bears reference to average earnings. That is necessary for the credibility of our benefit system. It is the right place to set the cap”.––[Official Report, Commons, Welfare Reform Bill Committee, 17/5/11; col. 952.]
We in this House debated at length whether the test was fair, and we voted to exclude child benefit from the cap—a move that was overturned in another place. Now the Government have simply abandoned any such rationale and have plucked figures out of the air. The Bill reduces the cap to £23,000 a year in London and £20,000 elsewhere.
Even more worryingly, in future the Secretary of State can review the cap whenever he wishes without reference to any external benchmark and change the level simply by regulation. This could become a vehicle for Ministers to ratchet down the amount of help given to needy families without adequate parliamentary scrutiny. Our amendments seek to remove the subsection which would enable a reduction in the benefit cap. The effect would be to leave the cap at its current level.
Now that the Government have abandoned any external benchmark, it is hard to understand their rationale for choosing these levels. The impact assessment sheds little light. The nearest it comes to justifying the lower rate outside London is on the grounds that one in four households in London earns less than £23,000 a year while one in four households outside London earns less than £20,000. Is that the new benchmark? Is it to be set at a level equivalent to 40% of median earnings or is this, as I suspect, a post hoc rationalisation of an arbitrarily chosen figure? Once again, the rationale is misleading by referring only to household earnings rather than to income and in doing so failing to acknowledge that many households earning below the cap will also be receiving benefits covered by the cap, such as child benefit, child tax credit or housing benefit.
The new threshold will drastically change the impact of the cap. It will more than quadruple the number of capped households. The DWP estimates that as many as 90,000 additional households will be affected, and they could see their housing benefit reduced substantially. Rather than hitting large families in expensive areas, it will hit small families right across the country. For example, Shelter says that the new cap would affect a family with one child living in Guildford, a family with two children in Leeds or Plymouth or a single-parent family with two children sharing a room in almost one in five areas in England.
As the Government’s evaluation shows, relatively few households have been able to move into cheaper accommodation to escape the benefit cap. The lower thresholds will make it even harder for families to move to cheaper accommodation as ever-lower rents must be found. Without the availability of cheaper housing in areas where there are also suitable jobs and childcare, families are going to be put in an impossible position. If they find it hard to escape the benefit cap, their only choice is to become poorer.
Once again the people most affected by this policy are poor families with children. The impact assessment says that 330,000 children will be hit further by the reduced cap, 24,000 for the first time, and the benefits of the rest, who are already in capped households, will be cut further still. They will include families who have been forced to move to cheaper houses or areas only to find that they are now above the new cap and could have to move again, with the children having to move to new schools.
Can the Minister reassure the Committee that it is not the Government’s intention to keep cutting the cap repeatedly? Otherwise, these families, some of whom will have very good reasons for being unable to work, as we will hear in the next couple of debates, could face being shunted around the country, moving repeatedly, damaging their children’s education and destroying family stability in the process. How will that help the Government’s desire to focus on improving educational outcomes for poor children?
Lord Freud
It was a small report on, I think, 14 children, and we aim to look at things on a much safer basis. I ask the noble Baroness to withdraw her amendment.
Baroness Sherlock
My Lords, I thank all noble Lords who have contributed to this extensive debate. There are three more groups to come on the same subject, so we are going to do it very good justice. Given the extent of the debate, I will not try to respond to all the many points that were made. I am grateful to all those who have contributed, particularly in trying to highlight the impact of this lower benefit cap on a number of different groups: on single parents, as the noble Baroness, Lady Manzoor, said; on disabled people, as the noble Baroness, Lady Meacher, said; on carers, as the right reverend Prelate the Bishop of Durham and my noble friend Lady Pitkeathley pointed out; and on children.
I decline to rise to the noble Lord, Lord Blencathra, and engage in political debates about who said what and when, but I confirm that it is the policy of the Labour Front Bench in both this House and another place that we oppose the reduction in the benefit cap to the new levels. I was hoping to respond to the noble Lord, Lord Lansley, but, sadly, he is not in his place. Perhaps when he comes to read this debate he will start to reflect that it is important for us as a House to understand what the Government are trying to do here. They have always offered two arguments for this measure: one is that it is related to work incentives; the second is that it is fair.
On work incentives, the noble Lord may not be aware that significant work incentives are already built into the system. In fact, the CPAG did a report on this very recently showing how much better off families with children already are if they work. The point is that this is comparing individual wages and household income. Someone may earn a certain amount in wages but how much the household needs depends on where they live, how many children there are, whether they have a disability and whether they are carers. As my noble friend Lord Beecham said, this is primarily driven by high housing costs in the private sector. Most people do not get anything like these amounts of money in benefits. Where they do, it is almost always because they have very high rents. That is not their fault; it is the fault of the state, which has failed to get a grip on the housing market, have enough supply and make sure that people can afford to rent in places where there are jobs without driving themselves into this situation. I urge the Government to consider that very carefully.
The point about the comparator really matters. Whether or not the Government are going to set it at 50% or something else, there needs to be a way of understanding at what point the Government would do this. I can create brilliant work incentives tomorrow: I will abolish all benefits. That would be a fantastic work incentive but it would not be reasonable. The point of a social security system is to support people who cannot work—to enable them to meet their needs and feed their children—and then, where appropriate, to support them in work. We have to get an appropriate balance between, on the one hand, the needs of families, and particularly of children and vulnerable people, and the ability of the state to afford it; and, on the other hand, work incentives.
It is not unreasonable for this House to want to understand how the Government reach that judgment. Once you take away any external benchmark, it can simply become an annual whim. That is not appropriate, but it is completely appropriate for this House not to get into the micropolitics but to say, “We want to understand the impact on individual families, and we press the Government to make clear their thinking so that each year we can judge what is a fair amount of money to give to families”, as the noble Lord, Lord Kirkwood, pointed out.
In this country we have a very long tradition of Parliament looking carefully at what families need to survive and building up components of a social security system to address the different sets of needs. The benefit cap overrides all that, so it matters very much how it is constructed and it matters very much that the Government are transparent and accountable in the way that they go about creating it.
I shall not go into the other areas as we have a number of different debates coming up, but on the question of work incentives I point out that 85% of those who are capped at the moment are not in categories required to work, as we will come on to look at in two of the next three groups. Given all that has gone before and given all that we have yet to come, I beg leave to withdraw the amendment.
Lord Blencathra
The noble Baroness makes an interesting point. We addressed the capacity for work test at an earlier stage. There are concerns and it may not be perfect. It is very difficult to assess. We can have 100,000 people with MS and every single one is different, so it is very difficult to come to a firm conclusion. I know that the Government are continually improving it. Labour improved it. The coalition improved it and the current Government are trying to improve that test. I hope that my noble friend will continue with that.
Baroness Sherlock
My Lords, I rise to speak to Amendments 87 to 90 in our name, and to comment briefly on the other amendments in the group. Ours are probing amendments designed to encourage the Minister to talk to the Committee a bit more openly than he has been able to do so far. What behavioural responses are being sought from some of the groups of people affected by the cap?
I thank the noble Earl, Lord Listowel, for talking about kinship carers so powerfully. I shall be listening very carefully to what the Minister says at the end, and I hope to hear him engage rather more substantially with the issue than I feel he did when this came up in earlier stages, particularly in relation to the two-child policy.
Amendment 87 would exclude from the cap anyone claiming carer’s allowance. I am very happy to press pause on that and come back to it on Report. The Minister should be aware that expectations are now running exceedingly high in this House. I am sure that what he has to say when he comes back will be a delight to all of us, and I very much look forward to that.
There are two things from the judgment that he might still take, even if the Government decide to accede to the very small number of people who were there. The first goes to a point made by the right reverend Prelate the Bishop of Durham. At the opening part of the judgment Mr Justice Collins said that,
“to describe a household where care was being provided for at least 35 hours a week as ‘workless’ was somewhat offensive”.
That was a very good point and one we could all do well to remember.
The other point that Mr Justice Collins made, which is of wider relevance, was that what often seemed small capped sums for the DWP could be such a loss to these families as to “tip them into destitution”. One of the cases he gave as an example was of somebody who was losing £11 a week. These may seem small sums to the department but they can make the difference in Dickensian terms between happiness and misery to individual families. I hope that we will all bear that in mind.
Amendment 88 would exempt from the cap those who are claiming universal credit and are not subject to all work-related requirements. Amendment 89 would exempt people in receipt of ESA in the WRAG group, which was just addressed by the noble Lord, Lord Blencathra. Amendment 90 would exempt claimants of income support. In the impact assessment, the Government talk about reducing the levels of the cap for those not making a “behavioural response” by an average of £63 a week. That is a lot of money.
These amendments require the Government to explain what behavioural responses are being sought. The Minister says that this is hugely successful in getting people into work. In fact, as we have already heard from the IFS, the majority of people affected are not responding by either moving house or moving into work because 85% of them are not required to work as a condition of receiving benefits. Therefore, the cap will try to push into work certain people who would otherwise not be required to do so because they are on ESA, or they are the parents of very young children, or they are carers—a point made very strongly by my noble friend Lady Hollis on an earlier amendment.
The only ways to escape the cap are to move into work of at least 16 hours a week—to open a working tax credit claim, or be on the minimum wage while on UC—or move home. In the case of people on ESA—the point made by the noble Lord, Lord Blencathra, notwithstanding—does the Minister accept that some people in the ESA WRAG group will either not be capable of working at the moment, or will not be able to sustain 16 hours’ work a week, or will not be able to work consistently because of the nature or their illness or disability? If that is the case, can he explain to the Committee what behavioural responses he wants from them and, if they are not capable of making any of the available responses—working or moving house—does he think it fair that they should simply have their income cut because they are incapable of doing the thing he wants them to do?
In the case of parents who are capped, the normal work requirements do not apply, so a single parent or main carer could have two children, including a very young baby, and be expected to work if the cap means that they could not otherwise afford to pay their rent. Whenever we talk about single parents or parents working, the Minister tells the House that the Government are putting lots of extra money into childcare and that parents of three and four year-olds will have extra childcare, as will disadvantaged parents of two year-olds, but here we are talking about children who could be one or two years old. There is no free entitlement to childcare when a child is under two. Even the provision of childcare for disadvantaged two year-olds is for only 15 hours in term time, which would not match the requirements of someone moving into a job for 16 hours a week throughout the year to escape the benefit cap.
Research undertaken by the Family and Childcare Trust found significant gaps in provision for young children in 136 local authorities surveyed in England and Wales. The evidence bears this out. It shows that single parents with younger children are already less likely to move off the cap than other groups, presumably because they are struggling to find suitable flexible jobs and suitable childcare while combining them with minding very young children.
The impact assessment also talks about the aim being to improve work incentives, but I wonder whether the Minister has read the report from the Child Poverty Action Group, which showed just how strong work incentives were, even for families who might be getting significant amounts of benefit. It gives the example of a very rare occurrence of a lone parent with four children, who would be better off by £105 a week working just 16 hours a week on the minimum wage. Therefore, work incentives already exist so, if parents are not working, something else may be going on.
When the Minister responds, I hope that he will address these probing amendments by talking about individual cases. He has talked a lot about how he wants to move to a much more personalised situation so that advisers can engage with individuals and understand that their circumstances differ, yet this measure feels like a very blunt tool, indeed. Therefore, could he tell us a little more about what it might mean in practice?
The Lord Bishop of Southwark
My Lords, I rise to express my support for the intention behind the amendment in the name of the noble Earl, Lord Listowel, which makes sound social and economic sense. If a child can be cared for within the family network, and that is not to be parents or step-parents, that is in most cases preferable for the emotional, physical and spiritual well-being of the child. Churches have watched and participated for centuries in the patterns of such relationships and know that while they can hide dangers, they provide in the main the best setting for the formation of life. Better that than the anxiety, grief and hardship imposed by benefit rules not designed for such scenarios, and that a proportion of such children be an economic charge on local authorities and reap the emotional deficit that will all too often occur.
We have heard that there are an estimated 200,000 children raised by kinship carers across the UK. Some 50% are grandparents and a little under a quarter are siblings bringing up younger brothers and sisters. If 95% of children living in kinship care arrangements are not looked after by the local authority, can we imagine what the cost would be if there were any sort of shift in that figure—yet we expect the carer to bear that cost? It is a cost often undertaken at short notice and in an emergency. Kinship carers face significant additional costs in terms of both equipment needed and maintenance costs. Their family size increases and can even double overnight. Unlike adopters, they are not entitled to a period of paid leave for the children to settle in. The largest survey of kinship carers in the UK, conducted by the Kinship Care Alliance, found that 49% of respondents had to give up work permanently as a result of taking on the kin children, a further 18% had to give up work temporarily, and 23% had to reduce their hours temporarily or permanently. In many cases, this plunged the household into poverty and debt. One grandmother carer responding to the survey said:
“We are struggling to buy food and pay our bills. We have to get food vouchers every three months”.
The Kinship Care Alliance survey found that 30% of kinship carers’ households were currently receiving housing benefit. The figure rose to 36% among larger kinship care households with three or more children—kinship care households such as that headed by Rachel, a grandmother in her 50s who lives near my diocese in south London. She took on the care of her three young grandchildren when her daughter died in a car accident last year. The children’s father is in prison. She has had to give up work to raise the oldest grandson, who is six years old and her two youngest granddaughters, who are three and one years old. She is also grieving the loss of her daughter, just as the children are grieving the loss of their mother.
I would be grateful to the Minister if he could tell me whether the Department for Work and Pensions has undertaken an assessment of the likely impact of this measure on kinship care households and, if so, whether he could provide the detailed figures. Furthermore, if the Government do not favour this amendment, will they bring forward their own amendment to address the points I have raised? Is the Minister not concerned—as I am—that the numbers in care may rise if action is not taken?
Many of the children arrive to live with kinship carers following a crisis and are deeply traumatised. Many have severe needs and some have suffered prior abuse. The survey to which I have referred found that kinship carers reported that a staggering 43% of the children had emotional and behavioural problems. Forcing carers into work cannot always be a just and appropriate response.
The right reverend Prelate the Bishop of Portsmouth, who spoke earlier in these debates, dearly wished that he could have spoken today, and I pay tribute to his endeavours in this regard. I welcome the focus of the Government’s own family test on stable and strong family relationships and the explicit reference to kinship carers in the test. This amendment is entirely consistent with the application of the family test and I hope that the Minister will accept it.
Baroness Sherlock
Baroness Sherlock
My Lords, I shall also speak to Amendments 77, 79, 82, 84 and 85, which are in my name and that of my noble friend Lord McKenzie of Luton. These amendments would exclude a series of benefits from the cap which relate to families with children, and I want to say a brief word about each of them. Once again, we have tabled these as probing amendments and I therefore encourage the Minister not simply to say yes or even no. If he said yes, I would obviously fall over in shock. I am trying to use these amendments as a vehicle to get him to explain more carefully to the House what he expects people affected by the cap to do to avoid it. That is all I am asking for here, so I encourage him to respond in that vein.
Amendment 76 would exclude child benefit from the cap and Amendment 77 would exclude child tax credit. Just to be clear, the Minister mentioned in the last group that he feels that all income replacement benefits should be included. Those are specifically not income replacement benefits but extra-cost benefits. Child benefit has traditionally been a universal benefit—it is still available to all but the highest-tax bracket households—and it is designed to be the classic extra-cost benefit. It is a horizontal transfer from taxpayers as a whole to households with children, out of a recognition that children are a public as well as a private good and therefore we should all share in the costs of raising them. The parents pay the lion’s share but we all make a contribution because it is in all our interests to raise children who are happy and healthy, and who will be the next generation paying for the rest of us. Why are they therefore excluded?
Amendment 79 would exclude guardian’s allowance from the cap. You can claim guardian’s allowance only if you are caring for somebody else’s children because their parents have died, or because one has died and the other cannot look after them because, for example, they have gone missing or are in prison. What behavioural incentives are the Government seeking by including guardian’s allowance in the cap?
Amendment 82 would exclude maternity allowance from the cap. Maternity allowance is available only to those who are in work but cannot get statutory maternity pay. It enables the woman to take paid maternity leave. The Minister may mention the grace period but that applies only to people who have been in work for the last year at the point when they make an application for benefit, and that may not apply to everybody in this circumstance. Suppose that a woman finds that she hits the cap because her household benefits rise as a result of her maternity allowance. What is she to do? Let us say that she is single or that her partner is unable to work. What behavioural response does the Minister want? The two things that have traditionally been suggested are to work or to move house. Is she to work when she has a job but is going on maternity leave? Is she to move house when she is about to give birth? Neither of these seems an obvious response, although I may have missed something, and I very much hope that I have. I raised this at Second Reading or some other point during discussions on the Welfare Reform Bill in 2012, because I remember at the time I could not really believe that the Government genuinely meant to include a maternity benefit in the cap, when the way you got out of it was by working. However, I very much hope I have missed something and look forward to the Minister explaining that one.
Finally, Amendments 84 and 85 would exclude from the cap widowed mother’s allowance and widowed parent’s allowance, which are paid only to widows below state pension age who have dependent children. Those are contributory benefits, eligibility for which depends on the contribution record of the late spouse. I would be interested to hear the Minister’s reasons for including those benefits in the cap.
The impact of this on children will be quite significant. To date, more than twice as many children have been hit by the cap as adults. Children are disproportionately affected by the benefit cap, and 63% of households capped to date contain a child under five. Reducing the cap means that some families simply will not have enough income to manage. Even if they manage some weeks, there will come a time when their budgeting gets thrown off course; for example, when a winter heating bill comes in, both kids have a growth spurt, a child moves to secondary school and needs a new uniform, or the fridge breaks down. With access to hardship payments much reduced, and unable to repay loans or catalogue payments, parents will build up debts and miss rent payments simply to feed the kids and buy essential items. If the Government are going to cut benefits to families with children unless their parents take certain specified actions, the very least they can do is explain to us what those actions are and what they expect them to do about it.
Baroness Lister of Burtersett
My Lords, I rise to speak in support of Amendments 76 and 77, to which I have added my name. I apologise that we will be going over some of the issues raised in the first group of amendments, particularly by my noble friend Lady Hollis, but they are crucial because they go to the nub of some of the disputes among us as to what is fair and what is not.
The amendments follow on from my Amendment 93, discussed earlier, which was designed to safeguard and promote the welfare of children. In speaking to that amendment, I referred to Lord Carnwath’s judgment in the recent Supreme Court case on the cap, in which he made the point that the inclusion of child benefit and child tax credits in the cap raises,
“questions why the viability of a scheme, whose avowed purpose is directed at the parents not their children, is so disproportionately dependent on child related benefits”.
He also said:
“The cap has the effect that for the first time some children will lose these benefits, for reasons which have nothing to do with their own needs, but are related solely to the circumstances of their parents”.
This takes us to one of the “policy objectives” or “intended effects” listed in the impact assessment, namely to:
“Promote even greater fairness between those on out of work benefits and tax payers in employment (who largely support the current benefit cap), whist providing support to the most vulnerable”.
The “most vulnerable” are not defined, but in the impact assessment on the benefits freeze, the term is qualified with the phrase,
“who are least able to increase their incomes through work”.
Surely children fall into that category. Yet the justification for the way the cap is constructed and for the reduction in its level ignores this and, as Lord Carnwath observed, takes no account of children’s needs, relating instead solely to the circumstances of their parents. Moreover, it is worth repeating the observation of the noble and learned Baroness, Lady Hale:
“The children affected suffer from a situation which is none of their making and which they themselves can do nothing about”.
My noble friend Lady Hollis made the point that it is not a level playing field here—a horrible sporting metaphor—and that we are not comparing like with like when we compare in-work earnings with out-of-work incomes, although I will not go into more detail on that. I tried to find out by way of a Written Question how much the so-called hard-working families we hear so much about were likely to be receiving in benefits. This time the response I received rehashed the latest government mantra of their commitment to,
“a higher wage, lower tax, lower welfare economy”,
and referred me to the HM Revenue & Customs website. I enlisted the help of the Library to see whether it could elicit the answer from the website, but—surprise, surprise—it could not. In effect, a government Minister—in this case, the noble Lord, Lord O’Neill of Gatley—was encouraging me to waste my time by sending me to a website that would not supply me with the answer to the questions I was posing. Given that the Government were able to supply similar figures in answer to a Written Question during the passage of the Welfare Reform Bill in 2012, it is surely possible, and beneath the disproportionate cost threshold, to do so again now. I fear that, increasingly, government departments simply cannot be bothered to answer our completely legitimate questions, thereby ignoring their responsibility for parliamentary accountability.
Similarly, I tabled a Question to find out what the impact would be in terms of the total number of households capped, the number of children affected and the cost to the public purse, if children benefit and child tax credit were excluded from the cap. Once more, I was referred by the Minister to the impact assessment, as if that contained the answer. Yet again, such information was made available during the passage of the Bill in 2012, showing that nearly half the savings from the cap were being made as a result of the inclusion of children’s benefits: in other words, nearly half the savings were being made on the basis of a blatant piece of unfairness that drives a coach and horses through the Government’s claim to be creating that beloved level playing field between families in and out of paid work, giving rise to Lord Carnwath’s query about why the policy’s viability is so disproportionately dependent on child-related benefits when its avowed purpose is directed at the parents not the children. It is clear from the evaluation of the existing cap that one consequence is likely to be even greater arrears and debt, thereby aggravating what the Government themselves consider to be a root cause of child poverty.
On our first day, there was broad agreement among noble Lords who spoke that the two-child policy does not meet the Government’s own family test. Although it might not be quite so blatant here, I believe the same applies to the inclusion of children’s benefits in the children’s cap. Although the impact assessment for the cap is much more thorough than that for the two-child policy, I could not see any reference to the family test having been applied. Could the Minister confirm that it was applied and could he undertake to publish the documentation?
When we last discussed this issue, during the passage of what became the 2012 Act, as we have already heard, there was strong support in your Lordships’ House, under the leadership of the right reverend Prelate the Bishop of Ripon and Leeds, for excluding children’s benefits from the cap. I very much hope that that support will be there again now, because with a reduction in the level of the cap to an arbitrary two-tiered level below median earnings, the case for exclusion is stronger than ever.
Lord Freud
I will try one last time. If noble Lords are dissatisfied, that is the reality.
We currently have a benefit cap in operation at a single rate of £26,000, and we are taking that down. That has mainly affected London. We are now spreading it out to affect just short of 100,000 people—90,000-odd on the impact assessment, although it is interesting that, in 2012, a smaller number were involved in practice than in our original impact assessment, so let us just see.
Our experience of running that benefit cap and the reaction to it were such that the Government decided that we could safely reduce the level and put it into two tiers, so that its impact is spread through the country more evenly. We have taken it down by 12.5%. It is the experience of running it live that has led the Government to think that we could move it to these levels and get the incentive effects that we are looking for to operate. I do not have any more information to provide for the noble Baroness—much though I know that she would like more. I apologise to the extent that she is disappointed.
Baroness Sherlock
My Lords, I thank the Minister for trying, if not succeeding, to answer the questions. He must appreciate that we had some very good discussions during the passage of the Welfare Reform Act, which brought in the cap in the first place. One reason that they were good was because a lot of evidence was around. He was asked some searching questions from Peers from all Benches, he engaged with the argument, we had some good debates and I would like to think that the system that we now have in universal credit is better than it would have been had it not been for them. In fact, I think he was kind enough to say so at the time.
One reason why I have always enjoyed participating in debates in this House in this area is precisely because we have been able not just to trade in political slogans but get into detail and understand how we might improve current policy—which is the whole purpose of this Chamber as a revising Chamber.
Lord Freud
I say only that I remember with some fondness—not entire fondness, because 17 Sittings in Committee is too much for anyone—that we had some very valuable dialogues then. One of the most important was about universal credit and led directly to the creation of universal support, which is becoming a valuable tool that we are developing. I remember equally vividly that the benefit cap area was one where at least equivalent frustration was expressed by noble Lords about what I was saying. I remember that very distinctly. There were some very punchy discussions. I will say no more than that, but it was not an area where we had the most sweetness and light on that Bill.
Baroness Sherlock
I thank the Minister for reminding me of that joyous period; I think of it often.
The Minister mentioned that a lone parent could avoid the cap by going into work for 16 hours on working tax credit. He did not pick up the point that I made on the previous amendment, which was that, on universal credit, he always said that lone parents would be expected to work only if they could find a suitable job where they could get childcare. He has not responded to the fact that a lone parent with a baby would have to go to work. The offer of childcare for three and four year-olds does not apply to babies. The offer of childcare for disadvantaged two year-olds does not apply all year round. There is a real issue. Someone might find that the only response was to take jobs which either might not be available or for which they could not find suitable childcare.
I am sorry to say that I did not find the Minister’s response on maternity allowance persuasive at all. I think this is one of these oddities, and I think the Government just got it wrong and should have just put their hands up. These are generally probing amendments, but I think that that is just genuinely bizarre. The impact assessment says that, if people do the right thing and move into work, they will not be capped. How is it possible for a woman who is about to give birth to do the right thing and move into work? That just does not work. However, I fully accept that I am not getting any more than I have.
Finally, during Committee, my noble friend Lady Lister has given two or three examples of Written Questions that she has asked, the Answers to which have been, frankly, unsatisfactory. They have mostly referred her to another document or website in which the answer was not found—as she has established with the help of the Library. That is a very bad trend in which legitimate questions are being asked for information which would help to inform deliberations in Committee on a Bill, but the department, via its Minister, is not providing them. We will keep a close watch on this and, if it comes up again, we will raise it again on the Floor of this House.
In the mean time, I beg leave to withdraw the amendment.
Baroness Sherlock
“(a) the rate of inflation, and(b) the national economic situation.”
Baroness Sherlock
My Lords, a change of subject. I am pleased to say that these amendments are not about the benefit cap. Amendments 95 and 102 are in my name and that of my noble friend Lord McKenzie of Luton, and Amendment 100 is in our names and that of my noble friend Lady Lister.
Clauses 9 and 10 provide for the freezing of certain working-age benefits for a period of four years until 2019-20. This is estimated to save the Government £3.5 billion in 2019-20 when compared to an uprating by CPI. The benefits and tax credits included in the freeze are the main working-age components of income support, jobseeker’s allowance, ESA, housing benefit and ESA WRAG, together with the key elements of working tax credit and the individual element of child tax credit, universal credit and child benefit. It does not extend to disability premiums, allowances for caring responsibilities or pension benefits.
Amendment 95 would displace the automatic freezing of those items and require a review to take into account inflation and the national economic situation. Amendment 100 would have the same effect for child benefit, and Amendment 102 for the otherwise frozen elements of universal credit.
Clearly, even if they were accepted, such amendments would not preclude the various rates remaining unchanged, but they would require some consideration of their real value and the capacity for the economy to share more fully the benefits of growth. It would give the Government the opportunity to think again in the light of changing—the Government would doubtless argue, improving—economic circumstances.
A bit of a pattern has been developing here. Previously, the retail prices index was used for uprating. Then Ministers robustly argued that CPI was the right measure. Then, in 2013, they decided to limit increases to 1% as a temporary measure. Now, whatever happens to inflation, they will not uprate benefits and tax credits for the rest of this Parliament. First RPI, then CPI, then 1% and now 0%.
Our major concern with the way that this freeze is being done is that it both cuts the link between prices and earnings and widens the gap between the income of the poorest and the living standards of the mainstream of society. It uncouples eligibility for support from need, a feature also of changes to the benefit cap and the local housing allowance.
We have been living in fairly benign inflationary times, with CPI expected to rise from 0% in quarter 3 of 2015 to near the Bank of England target of 2% by the second half of 2017—although the components of CPI do not necessarily reflect the basket of costs which most impact poorer households. We know that GDP growth is projected by the OBR to be between 2.3% and 2.4% through to 2020.
In considering these matters, we must have some regard to the financial resilience of households and their ability to cope with what will be a sustained real-terms reduction in their resources between now and the end of the Parliament. If we look at the tax and benefit changes under the coalition Government, we see that austerity was used to introduce net tax rises of £13.6 billion and net benefit cuts of £16.6 billion, including pension increases of £5 billion. The IFS analysis shows that, in terms of changes to income, the poorest two deciles did the worst over that period, with working-age households with children particularly hit. The End Child Poverty Alliance reminds us that some 4.1 million families and 7.7 million children have already been affected by below-inflation rises over the last three years. Ministers will doubtless point to the Government’s manifesto commitment to freeze benefits, but I hope that the Minister will acknowledge that that commitment covered only a two-year period, not the four-year period that the Bill proposes.
I am really interested in process. We have a long tradition according to which Ministers are required to assess what people need to live on before coming to Parliament annually to propose what should happen to the levels of benefits and tax credits. Sometimes in this House there is just the noble Lord, Lord Kirkwood, and me in the Moses Room, along with the Minister; but the point is that we got to test the Government’s case before decisions were taken affecting the lives of millions of our citizens. I therefore have two questions to ask the Minister. First, what assessment are the Government making to ensure that there is some link between benefits and tax credits and what a family needs to live on? Secondly, will the Minister assure the Committee and the country that once this Parliament is over, it is the intention of the Government to return to linking the level of benefits and tax credits with inflation and to the practice of Ministers being accountable annually to Parliament for those decisions? I beg to move.
Baroness Lister of Burtersett
My Lords, I will speak in support of all of the amendments in this grouping. The only reason that my name is not on the first one is that I did not spot it in the Marshalled List. The four-year freeze in most working-age benefits represents the largest of the many cuts in the Bill. Conveniently for the Government, it is an invisible cut; gradually people will find that the benefit that they rely on is able to buy less and less, but they will probably blame the cost of living, not realising that it is the result of deliberate government policy. As the Joseph Rowntree Foundation study commented a few years ago, upgrading policies have big effects over time:
“They are among the most significant decisions taken by Chancellors … Their gradual effects seem imperceptible on a year-to-year basis, yet they carry immense implications for the future”.
So let us not underestimate the significance of Clauses 9 and 10.
Benefits have already been cut in real terms due both to below-inflation increases and to the switch to the use of the CPI rather than the RPI. Moreover, as the latest JRF Monitoring Poverty and Social Exclusion report points out, essentials have risen faster than the average price index in recent years. Since low-income families spend proportionately more on essentials,
“low-income families have in effect experienced a higher rate of inflation than other families”,
meaning that their benefits have been able to buy even less than before.
This latest cut in real value has been described by the IFS as,
“highly regressive, with the bottom three deciles losing most”,
which is hardly surprising. If any noble Lord suggests that benefits are adequate, and that therefore those reliant on them can afford to take such a cut, I suggest that they try living on benefits—not for a week as a benefit tourist, but for months without savings or the kind of stocks that we all take for granted.
The briefing note that we were given spells out two main objects as the policy’s rationale, the first being to deliver savings to contribute to deficit reduction,
“while maintaining support for the most vulnerable”.
To be more accurate, it should say “some of the most vulnerable” since, for instance, children’s and some disability-related benefits will not be protected, as the EHRC points out. Nor does it protect protected groups, with women and black and minority-ethnic groups disproportionately affected. Whatever one thinks of the primacy given to deficit reduction—and eminent commentators such as Martin Wolf of the Financial Times question it and the extent to which it is to be achieved by spending cuts—it is a political choice to make those with the narrowest shoulders bear so much of the burden, particularly when others have enjoyed tax cuts. These, as it happens, were, in effect, paid for by benefit cuts under the coalition Government, according to CASE at the LSE.
As my noble friend Lady Hollis has pointed out in previous discussions, it is a myth that social security spending is out of control. As the OBR analysis shows, over the past 30 years, the real increase in spending has been broadly in line with growth in the economy, so there has been no significant change in the proportion of national income devoted to social security spending. The largest contribution to the increase in spending since 2008 has been the rise in the real value of pensions.
The other main objective given is to,
“help to reverse the trend where earnings growth has been slower than the growth in benefit rates”.
However, this is a very recent trend. Professor Jonathan Bradshaw has used the DWP abstract of statistics to show that the adult rate of unemployment benefit was worth 21% of average earnings in 1972, the earliest date for which there are consistent data. By 2008, the JSA rate had fallen to 10.5%, half of what it was in 1972. It is true that the short-term trend, to which the Government refer, means that it has increased slightly now to 11.7%, but now that wages are expected to start rising again it will no doubt fall back again, even without this freeze.
The other justification given in the impact assessment is, once again, that it will increase work incentives. It is worth pointing out that some of the benefits affected are paid to those in work in any case, a point to which I will return in the next grouping. As the famous OECD quote used by the Government to justify ESA for new WRAG claimants made clear, work incentives can be improved in a distributionally fairer way by improving in-work benefits rather than adopting this Poor Law mentality of cutting out-of-work benefits. Indeed, a cross-national study reported in the 2009 British Social Attitudes survey concluded that,
“employment commitment is stronger in countries with higher levels of welfare state generosity”.
Therefore, I really do not believe that there is any justification for freezing benefits, not just for two years, as stated in the Conservative manifesto—as my noble friend pointed out—but, in effect, for the whole of this Parliament. I accept that, at present, it looks as if inflation will remain low, but who knows what shocks might hit the world economy and with what effects? It therefore behoves a responsible Government to keep benefit levels under review and to accept these amendments.
Baroness Evans of Bowes Park
As I said, by being upfront about the freeze, we are trying to ensure that people in receipt of these benefits understand that that will be the situation over the next four years. We are taking numerous other measures, including the national living wage and the childcare changes, to try to help these families in other ways. That is what we are doing with this freeze, and I urge the noble Baroness to withdraw her amendment.
Baroness Sherlock
My Lords, I thank all noble Lords who have spoken in this short debate. I thank my noble friend Lady Lister and the noble Lord, Lord Kirkwood, for highlighting the difficulties that the Government must have in understanding the implications of their decisions, since looking forward four years they have no way of knowing what economic conditions will prevail and what will happen to inflation.
I particularly want to thank the right reverend Prelate the Bishop of Durham for making a very obvious point: that when this House voted on tax credits, the Chancellor was in position to make a difference. The reason why he was able to overturn that decision was that he found £27 billion down the back of the sofa. It is not impossible that there might be some more money down the sofa, if he shakes it hard enough. It is not impossible that, if all the boasts the Government make about the marvellous things happening to the economy come to pass, a couple of years down the line he may find the economic situation is looking good. If the economy is growing again, he may want to reconsider his decision not to share the proceeds of that growth with the poorest in our country. Why on earth would he want to tie his hands?
I would put money on it that if I asked the poorest people affected by this whether they would rather have the certainty of benefits falling in real terms year on year, or keep open the possibility that they will rise if the economy improves, most would be willing to take a chance—unless the Government are suggesting they would in fact cut them. All this amendment does is to allow the Government, if they wish to do so, to have exactly the same savings in four years’ time, but it would make them do two things. Every year, they would have to come back and look the country in the face, via this House, look at what people have to live on and explain their decision, and they would have to account for it. All they would have to do is to put it to both Houses of Parliament every year. What are they afraid of? People out there have suffered enough. The very least the Government can do is stand up for themselves. Given that we are in Committee, I beg leave to withdraw the amendment.
Employment: Job Creation
Baroness Sherlock Excerpts(8 years, 11 months ago)
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Lord Freud
In the past five years, 57% of new jobs went to UK nationals compared with 50% under the previous Government. One of the most dramatic figures I want to boast about is what has happened to youth employment. I have quoted again and again in this House the figure about workless youngsters not in education: it is now a million below what it was in 1997. It went right up under the previous Labour Government and is now at a low of 14.2%.
Baroness Sherlock (Lab)
My Lords, the employment rate for disabled people is now under 48%, leaving a disability gap of 30 percentage points. The Government have committed to halving that gap, which I welcome, but in the Committee on the welfare reform Bill this week there was support from every Bench of this House to require the Government in their new statutory reporting on employment specifically to report on progress on closing the disability employment gap. The Minister resisted that. Will he think again or, if not, will he tell the House why the Government are so resistant to that?
Lord Freud
This Government are going to produce a White Paper in the new year on how to support people who are disabled and pull them back into their rightful place at the economic heart of this country.
Welfare Reform and Work Bill
Baroness Sherlock Excerpts(8 years, 11 months ago)
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The Earl of Listowel (CB)
I rise to support both these amendments and have attached my name to Amendment 62. I have an interest in this as vice-chair for the last 10 years of the parliamentary group for children in care and care leavers, and as a carer of a mentally ill adult. I know how fragile many of the individuals seeking welfare support are. The Minister himself may have been shocked to discover the issues around mental health as he has done his important work in building capacity in jobcentres. I strongly support my noble friend’s amendments.
Baroness Sherlock (Lab)
My Lords, I intend to speak very briefly as we have had a good debate on sanctions and the noble Lord, Lord Low, introduced his amendment with characteristic care and detail.
I just want to say a couple of things to the Minister. I know that the department is not attracted to statutory guidance on universal credit in particular. One of the reasons is that it likes to make personalised decisions. Before the noble Baroness tells us how the system is meant to work, I want to flag something up. I worked in government and know that you always get complaints from non-profit organisations about how things are working. At some point, the noise being made reaches a certain level, and you know that maybe things are not working quite the way they are meant to work. It is my judgment that we are approaching that level. The level of concern expressed by charities about the way the sanctions environment is working, particularly for vulnerable groups, and about the severity of some individual mistakes that have been made, suggests there may be something systemic going wrong. I am not suggesting that means it is going wrong on a large scale across the caseload, but that something is going wrong often enough, and on occasions badly enough, to merit attention.
When the Minister responds, even if she is not attracted to the way the amendment might resolve this issue, could she address the underlying problems and tell us how the Government might like to deal with them?
The Earl of Listowel
I will speak to Amendment 62D in this group and apologise to your Lordships for giving so little notice of it. The issue was only drawn to my attention on Friday. I felt that it was important and timely so I asked for a manuscript amendment. I am very pleased to see that the noble Baroness, Lady Armstrong of Hill Top, has attached her name. Unfortunately, she cannot be here. I have not had the opportunity to thank the Minister for saying that there would be a life chances strategy and I am sorry that I was so pessimistic. I was very pleased to read the comments made last week by Christine Lagarde, the head of the IMF, about the success of the economy in terms of employment and improving productivity. The Minister may feel that this is recognition of his good work and that of his colleagues in these areas.
This amendment was brought to my attention by the Family Rights Group and is supported by many other children’s charities. Its purpose is to ensure that lone parents under the age of 25 who are also care leavers continue in the same system under the new arrangements, so that they will be £780 a year better off. I very much welcome the extremely good work the Government have done and are doing for young people leaving care. The strategy has been a great success. Many people recognise that it is very difficult to get different departments to work together. Through the strategy, the DWP identified care leavers and can give them the additional support they need. Other departments also are aware of that. Staying Put has been a very important step forward. It recognises that young people leaving care should have the right to remain with their foster carer until the age of 21 where both parties agree. Some 50% of children in the general population stay with their parents until the age of 22, so these children should also be able to remain.
However, there is much further to go with these young people. Ofsted has recently started assessing care-leaving services. Its most recent report found that, of the local authorities it examined, 63% of the care-leaving services were inadequate or needed improvement. There is a very long way to go.
The Centre for Social Justice has done some important research on births. There is a much higher likelihood of teenagers leaving care becoming pregnant. One in 10 young people leaving care between the ages of 16 and 21 have their child removed. Often, they have been in care and then lose their own child. It is important that these lone-parent care leavers get all the support they can. This additional cash would be very important for them. They do not have the family network that many of our children have to support them. I hope the Minister is prepared to accept this amendment, and I look forward to his response.
Baroness Sherlock
My Lords, I will say a brief word on Amendment 62D and move on to the main amendment in the name of the noble Baroness, Lady Manzoor. The noble Earl, Lord Listowel, has clearly made the point about the particular vulnerability of young care leavers and the way the changes to the provision of support for under-25s and universal credit will affect them. In 2013, half of 22 year-olds in the UK still lived with their parents. This Bill makes it more likely that even more young people will need to live at home. The issue, of course, for care leavers is that they do not have a home to live in. One of the problems is that they are simply not in a position to depend on the kind of support and home environment that other young people can turn to as an alternative. Perhaps the Minister will comment on that in responding to this amendment.
Likewise, an important point was made by the noble Earl about the position of care leavers who are much more likely to become teenage mothers and, in turn, lose their children. Certainly, when they are supported appropriately by charities and given appropriate financial support, there is much more chance of their being able to keep the children with them and then try to break the cycle. Without that, there must be some risks. I will be very interested to hear the Minister’s comments.
I really want to talk about universal credit and the implications of the amendment in the name of the noble Baroness, Lady Manzoor. We on these Benches have long supported the principle of universal credit. I know the Minister has done a lot of work to make sure that the new system will make work pay and will work for working families. But I am getting increasingly concerned, as are many people, about the Treasury’s continuous slashing away at the money involved, which makes it harder and harder for universal credit to do the job. I do not expect him to comment on that, but he has my sympathies.
The speed at which this is being rolled out is also making a difference. As we know, from October 2013 there should have been no more claims for the old legacy working-age benefits. In fact, everyone would have been transferred over by April 2017. By last March, we should have had 4.5 million households on universal credit. The last time I saw the figure, it was about 141,000. There have been various slippages in timing and now it will not be fully rolled out until, I think, 2021. That matters because it goes right to the heart of the transitional protection arrangements for people moving across, as mentioned by the noble Baroness, Lady Manzoor. Along the way, the Treasury has made six—this is the seventh—cuts to universal credit: £6 billion has been slashed from the budget before it has even been fully rolled out. There are some potentially serious traps down the line.
I unreservedly welcome the fact that, after pressure from all quarters and being asked to think again by this House—I pay tribute to my noble friend Lady Hollis and congratulate her on her successful delaying Motion, which caused Mr Osborne to have the opportunity to think again—the Chancellor decided not to proceed with the tax credit cuts. Three million working families would have lost an average of £1,300 a year.
However, as has been mentioned, he did not reverse the comparable cuts in universal credit. I want to understand the implications of that, so I hope the Minister can help us. The Autumn Statement suggested that the Government are still planning to take £10 billion from working families through cuts to universal credit during this Parliament, as a result of removing work incentives and work allowances. That means that 2.6 million families will still be £1,600 worse off by 2020, on average. Therefore, I am trying to understand why the Secretary of State, Iain Duncan Smith, when touring TV and radio stations last week, was able to say that universal credit is a big success. He said on “The Andrew Marr Show” that nobody will lose a penny from the UC cuts. How can that be true?
In the wake of the Autumn Statement, the OBR put more figures out to help people understand. I have been poring over them with a wet towel around my head to try to make sense of them. I suspect that I have not, but the Minister will put me right. There are three issues: whether people on UC will be better off than those on tax credits, whether people transferring from tax credits to universal credit will lose out, and whether anyone will lose out in cash terms come next April.
Baroness Sherlock
“Disability living allowance (mobility component) for young children
In section 73 of the Social Security Contributions and Benefits Act 1992 (the mobility component), for subsection (1) substitute—“(1) Subject to the provisions of this Act, a person shall be entitled to the mobility component of a disability living allowance for any period and throughout which—
(a) he or she, from birth and on account of a condition, must always be accompanied by bulky medical equipment which cannot be carried around with him or her without great difficulty; or(b) he or she, from birth and on account of a condition, must always be kept near a motor vehicle so that, if necessary, treatment for that condition can be given in the vehicle or the child can be taken quickly in the vehicle to a place where such treatment can be given; or(c) he or she is over the age of five and is suffering from physical disablement such that he or she is either unable to walk or virtually unable to do so; or (d) he or she is over the age of five and falls within subsection (2) below; or(e) he or she is over the age of five and falls within subsection (3) below; or(f) he or she is over the age of five and is able to walk but is so severely disabled physically or mentally that, disregarding any ability he or she may have to use routes which are familiar to him or her on his or her own, he or she cannot take advantage of the faculty out of doors without guidance or supervision from another person most of the time.””
Baroness Sherlock
My Lords, I seek clarification on an issue that was raised with me by a charity called Together for Short Lives, which represents parents and children with life-limiting and life-threatening conditions. The amendment is brief but the issue is this: I understand that children under three are not eligible for the higher-rate mobility component of DLA. I believe that the rationale is that children under three are generally not independently mobile, although anyone who has babysat a toddler might disagree. The assumption is that under-threes will have to be carried in arms, lifted into prams and buggies and from them into cars and car seats anyway, whether or not they have a disability.
For most children and their parents that is true, but Together for Short Lives points out that there are small numbers of children who need help and should have access to the mobility component of DLA. That is because there is a small group of children who depend on ventilators for survival, who may have one or more shunts and IV lines for feeding or drug administration, or other technologies that are life-sustaining. The children are in effect constantly attached to life-sustaining equipment that is often bulky or heavy. The child has to be placed in a wheelchair or medical buggy capable of carrying the equipment, monitors and so on, so that the lines and tubes can be securely attached to the child. Parents therefore need specially adapted or broad-based vehicles capable of carrying these small children, linked together with their decidedly not small equipment, securely. The children cannot easily be lifted in and out of cars like most children of their age.
I want to put to the Minister the case for why this small group of children needs the mobility allowance. Some of the children always have to be placed in a medical buggy or wheelchair when not in bed because they need postural support. These are heavy items. In addition to the life-sustaining equipment attached to them, most of these children require a variety of equipment to go with them wherever they are. This could include a spare ventilator and battery, monitors, oxygen supply, a mask, emergency tracheotomy kits and feeding kits. That is on top of the usual paraphernalia that all parents of children under three find that they need to carry with them at all times. The children cannot travel on public transport, because buses will not take oxygen bottles, and there is the inevitable risk of infection.
As well as being susceptible to infection, the children are often prone to medical crises, such as fitting, and their parents need to be able to get them to hospital immediately for life-saving treatment 24/7. If they do not have a car, the children may not be assessed as safe to live at home and will need to remain in hospital or a hospice. As well as being heart-breaking for families and their children, that could, of course, cost rather more than the higher-rate mobility allowance of £57.45 per week.
What would this all cost? As a result of the Welfare Reform Act 2012, disability living allowance has been replaced by PIP for people aged over 16, but DLA is still given to under-16s. This amendment seeks to open up access to the higher-rate mobility component of DLA for under-threes who require life-sustaining equipment as described above. I am told that there are nearly 49,000 children with life-limiting and life-threatening conditions, but only a very small proportion are under-threes who require life-sustaining equipment.
To establish how many might need this component of DLA, Together for Short Lives submitted a freedom of information request to the Department for Transport in 2014 to ask how many parents of children under three had asked for a blue badge because their child was dependent on heavy medical equipment or needed to be near a vehicle in case they need emergency medical treatment. It found that 1,530 children had blue badges. The wording of this amendment is aligned to the criteria for blue badges. If those figures are correct, the cost of giving all 1,530 children access to the higher-rate mobility component of DLA of £57.45 a week would be about £4.5 million. That is a small sum for DWP but would transform the lives of families with a child with a threatening or life-limiting condition.
What I have described feels to me like an anomaly—I cannot believe that the department intended this to happen. I hope that the Minister will give it a very careful response. I am sure that there cannot be anybody listening to this debate here or outside whose hearts would not go out to the children and families in these circumstances. I hope that the Minister agrees that I have made the case that babies and children under three who depend on big and heavy life-sustaining equipment to stay alive and/or have need for immediate access to transport for medical reasons should be regarded as having an additional mobility need and become eligible for the mobility element of DLA. I beg to move.
Lord Freud
I thank the noble Baroness for tabling the amendment and for providing that degree of clarity over its purpose. I must express my own empathy regarding the intention of what this amendment aims to achieve. There can be no doubt about the harrowing position of families with very young, severely disabled children. However, I find myself in the unusual situation of needing to reflect a position set out by the noble Lord, Lord McKenzie, some six years ago when he was the government Minister for Work and Pensions.
On that occasion, what was to become the Welfare Reform Act 2009 was being debated in Grand Committee. Noble Peers may recall that that Act introduced, by way of amendment in the other place, a new provision which now gives access to the higher rate mobility component of DLA to severely visually impaired people. In Committee a further amendment, in much the same terms or at least intended as the amendment we are discussing today, was introduced by the noble Baroness, Lady Thomas, who is not in her place today. On that occasion the noble Lord, Lord McKenzie, was sympathetic to the situation set out by the noble Baroness, Lady Thomas, but ultimately resisted the motion. He said that,
“in this difficult financial climate, we need to consider carefully the potential cost of any such change … This amendment would, of course, result in additional costs”.
He estimated costs at that time to be around £15 million a year and went on to say:
“This would obviously be a significant increase in what is, unfortunately, a difficult economic situation, and is simply not affordable in the current context”.—[Official Report, 25/6/09; col. GC 538.]
I have never been sadder to have to agree with the noble Lord and to resist an amendment.
On the techie side, the amendment confers entitlement to neither the higher or lower rate of the mobility component. That is because the distinction between the two rates has been lost. There would also be some unintended consequences of the amendment—most notably that it would remove entitlement from the 16,500 children and adults who currently receive the higher-rate mobility component as a consequence of a severe visual impairment. However, I think that that is just a matter of drafting and I would not want to dwell on that issue—we could always sort it out.
The primary reason for there being a lower age limit for entitlement is that, while many children can walk by the age of three, not all will do so, regardless of disability, and few will be able to walk for any considerable distance. Age three therefore provides a reasonable boundary line between what may be considered developmental delay and walking difficulties arising from a disability or long-term health condition.
I think we can all agree that the majority of very young children, whether disabled or not, will need a considerable degree of support and help from parents and carers. Most parents will also be reliant on a range of bulky and possibly heavy items, such as prams or buggies, and items of equipment for feeding and changing. Nevertheless, I recognise that some young children with particular conditions may be heavily reliant on additional therapeutic equipment, some of which can be bulky and heavy. However, such technologies are improving all the time and in some instances equipment is becoming lighter, smaller or in other ways more transportable.
Despite the mobility component being unavailable to children solely on the basis of a need for such equipment, there already exists a range of provisions, financial and in kind, which can help support such children and their parents. For example, the care component of DLA places no restriction on how it can be used, and any entitlement to DLA can bring with it access to the disability premiums in the income-related benefits or tax credits. Parents may also be able to receive a blue badge for free parking if their child is reliant on heavy equipment or needs to be near a vehicle for treatment.
That, in turn, leads me to question the provision in the amendment which focuses on children who need to be near a vehicle for treatment or where a vehicle is used to transport them for such treatment. I question this for two reasons. The first is on the basis that the provision could help only those parents who already have use of a motor vehicle or who would gain access to one through the higher-rate mobility component of DLA. As I said earlier, the amendment is not clear in its intent regarding the rate at which children under three should become entitled, meaning that, by effect, it is also not clear whether such children would be given access to the Motability scheme and, in turn, a motor vehicle. Hence, the amendment as currently drafted would exclude families without access to a vehicle.
Secondly, I question this provision on a more practical basis. If a child requires emergency transportation along with bulky medical equipment, it is doubtful whether transportation by the parents would be a reasonable and practical expectation. Our emergency services, which are much better equipped in terms of medical training and suitable vehicles, are in place for exactly this kind of situation.
Finally, I must turn to the financial implications of the amendment, which are estimated to be still in the order of £15 million. Clearly, this amendment goes further than that debated previously and, in the time available, we have been unable to determine how many children could potentially be entitled on the basis of access to a nearby vehicle. However, patently that would add to what is already a significant extra cost burden and would further damage our capacity to stay within the welfare cap.
I am sympathetic to the broad intentions behind the amendment but, particularly now, the Government cannot accept it on the basis of the unfunded cost implications. Therefore, regrettably, I have to agree with the noble Lord, Lord McKenzie, and I urge the noble Baroness to withdraw the amendment.
Baroness Sherlock
My Lords, before I withdraw the amendment, which I will do, can the Minister tell me how many children his costings are based on?
Lord Freud
I thought that I knew the answer to that, but I am a bit uncertain. I hope that inspiration is striking.
Sorry, it is not 1,600; 18,500 children under the age of three are in receipt of DLA and 5,500 children impacted.
Baroness Sherlock
I am grateful to the Minister for that. I am grateful also for his thoughtful reply. When he reads Hansard, and given all that he tells us of his view of the current economic situation and how it compares to when my noble friend Lord McKenzie was in office, he might like to reflect on whether his own assessment may be different from that. However, I can see that the two men are obviously of one mind. I ask the Minister to think very hard. My noble friend Lord McKenzie has put his name to this amendment and is very much supportive of it.
I wonder whether the Minister might also be willing for his department to meet somebody from Together for Short Lives, perhaps with me. I think that they would like to be able to understand the basis of the arguments that he was making, not so much in terms of the money but in terms of other things.
Lord Freud
I would appreciate meeting them with the noble Baroness. I really regret what I have had to say.
Baroness Sherlock
I thank the Minister for that. On that basis, I beg leave to withdraw the amendment.
Welfare Reform and Work Bill
Baroness Sherlock Excerpts(8 years, 11 months ago)
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The Lord Bishop of Portsmouth
My Lords, my concerns about this measure, along with those of other faith groups and organisations, are set out in the briefing note that my colleague the right reverend Prelate the Bishop of Durham circulated to all Members of the House prior to the Second Reading debate. In that note we expressed our belief that children are a blessing and that anything that sends an implicit or explicit message that a child is unwanted or burdensome should be strongly resisted.
The stated rationale for the policy outlined in this measure is to ensure that people on benefits and tax credits face the same financial choices around the number of children they can afford as do those supporting themselves through work. I understand, and support, the Government’s desire to encourage responsibility through the welfare system. However, it is important that personal responsibility is not defined too narrowly or in purely financial terms, and that it encompasses our responsibilities to our families and neighbours, and to the communities to which we belong.
I turn to the amendments in this group. Kinship carers, for example grandparents, older siblings and other relatives and friends who step in to care for children, many of whom would otherwise be in the care system, are affected by these proposals. We have a responsibility towards these people and the Bill does not adequately reflect the share we all properly have in caring for and supporting them. These children are unable to live safely at home because of domestic abuse, their parents’ mental health problems, alcohol or drug misuse or the death of a parent.
In purely financial terms, becoming a kinship carer is an unwise decision. Kinship carers face significant additional costs and often a loss of income as the majority are forced to give up work temporarily or permanently to look after these children. Yet many people take on this responsibility sacrificially out of a commitment to love and care for their extended family, often at great personal expense to their own emotional and physical health. Thanks to their dedication, children in kinship care do significantly better than children in unrelated care, despite having suffered similar adverse experiences. In personal financial terms, it is an unwise decision: in social and community terms, it is a generous and good decision.
For example, Jane is a paternal grandmother and kinship carer. She and her husband are raising four grandchildren who are all under six years old. The children cannot live with their parents due to severe physical abuse. Although Jane and her husband get some special guardianship allowance support from the local authority, they are reliant on tax credits.
Jane tried to continue at first working full time when she and her husband took on the children, but it was too much. The children were suffering with their health and their well-being. They were upset, too. And she did not get any help with child care. Eventually her husband gave up his business to care for them so that Jane could work three days a week. If their tax credits are reduced, she would obviously have to go back to work full time in order for them to manage financially, at the expense of the needs of those very vulnerable children.
It has been estimated by the Family Rights Group that there are around 200,000 children being raised by kinship carers across the nation. More than one in five kinship-care families contains three or more children, and nearly two-thirds of these receive tax credits—around 18,000 families in total. The changes proposed in the Bill with the consequent reduced financial support for these families could well stop potential kinship carers from being able to take on the care of a sibling group of children, or lead to the splitting of a group of three or more siblings, or discourage carers from taking on an additional child if they already have dependent children of their own.
This is clearly not in the children’s best interests, nor in society’s—and nor is it in the Chancellor’s best interests. Exempting this group from Clauses 11 and 12, as I and others are proposing, would reduce the savings to the Exchequer by an estimated £30 million in 2020-21. That is down from £1,365 million in savings to £1,335 million. It would require only 200 kinship carers to be financially prohibited from taking on a sibling group of three or more for the extra care and court costs to outweigh any public savings. In care, the cost per year of a child is about £40,000: the one-off court costs are about £25,000.
The Government’s long-standing commitment to ensuring that families are stable is welcome. Will the Minister be able to agree with us that creating the best possible environment for children to flourish would be best enabled by reviewing this proposal? The moral case for supporting this group of amendments is sufficient, in my view, but the economic case is strong, too.
Baroness Sherlock (Lab)
My Lords, I rise to speak to Amendments 16 and 17 in my name and that of my noble friend Lord McKenzie of Luton and to support the other amendments in this group. I fully support the case on kinship care set out so carefully by the right reverend Prelate the Bishop of Portsmouth. There are some common arguments that apply to adoption and kinship care, the two subjects in this group, and reasons that the Government should think very carefully before deciding not to provide tax credits and universal credit to third and subsequent children in those settings.
First and most obviously, we should not be putting financial barriers in the way of families willing to take on what are often very vulnerable children. As the right reverend Prelate has pointed out, if such families are deterred, the state is likely to find that the costs go up, albeit not to the Department of Work and Pensions, but I hope the Minister would not be so parochial as to allow that in any way to influence him.
The average child tax credit claimed for a family of three or more children is £3,670, but, as the right reverend Prelate has pointed out, the NAO found in 2014 that it cost £40,000 a year to foster a child, aside from the one-off costs. How can that make sense? In many cases, had those children been able to stay with their birth families, tax credits would have been payable for them anyway, so it is not as though the cost is increasing. As we have heard, there is clear evidence that children in kinship care settings do better than those in unrelated care, despite having similar adverse circumstances.
Lord Freud
Of course, one of the most interesting things about the way tax credit has moved is that people who might have gone into the benefits system may well have gone into the self-employed tax credit system, but the figures I have just provided are the best comparison and include the self-employed on tax credits. They show an enormous increase in the overall figure. Because this is clearly a complex set of figures, I am very happy to write formally to the noble Baroness setting out the true figures on this important matter.
Baroness Sherlock
My Lords, I wonder whether the Minister can help me. When I asked what assessment the Government had made about the impact on the likelihood of couples to adopt sibling groups, and whether costs would increase elsewhere, he kindly referred me to the impact assessment. I spent quite a bit of time this weekend reading the impact assessment, being a slightly sad person, and I cannot actually find the section which refers to adoption at all, to sibling groups in particular, or, indeed, to costs elsewhere in any government department. If he can point me to the page or paragraph number, it would be very helpful.
While I am on my feet, the Minister may have forgotten to answer the question raised by the noble Baroness, Lady Howarth of Breckland, who asked specifically about the impact on couples who had not made a choice. The Government mention in the impact assessment that one of their objectives is to ensure that families make the same choice about the number of children they have as might other families who are not in receipt of tax credits—of which more later; watch this space. I think the point the noble Baroness was making is that the kind of choice you get at midnight, when the knock on the door comes, as described by the noble Baroness, Lady Drake, is not quite the same as the choice other families make. Has any distinction been made?
Lord Freud
It is actually extraordinarily hard to draw up a system. Those choices are different for different groups. What we are trying to do in this measure is make the choices the same whether you are reliant on the state support system—tax credits—or whether you are reliant on your own resources. That is the parity we are looking for here. That, I am afraid, is the best I can do in terms of the government response.
Baroness Sherlock
Has the Minister responded to the question about the impact assessment? I am sorry, which page is it on?
Lord Freud
Again, all I can say is that the impact assessment looks at all the impacts. The costs and savings derived are based on the full gamut of impacts.
The Lord Bishop of Portsmouth
My Lords, I highlight two particularly vulnerable groups in my Amendments 5, 6, 13 and 14, groups that I believe should be exempted from this measure. These are bereaved parents and victims of domestic abuse. In focusing so heavily on promoting personal responsibility, there is always a danger with welfare reforms that we neglect our collective responsibility to look after those who fall on difficult times, people we will probably never meet but whom we support through our taxes in their time of need so that we, too, will be supported when we need help.
It is not as simple as there being two groups in society, those who contribute and those who receive. I know that one of the most tragic events a child can experience is the death of a parent. When my first wife died, I was the sole parent of my children and a recipient of some benefits. Quite apart from the emotional upheaval, the impact on a family’s situation can be drastic, much more drastic than the situation I faced. It is common for families to require additional support in these circumstances, either because the main earner has died or because the surviving parent must give up work or reduce hours to care for the children. According to the Childhood Bereavement Network over 23,000 parents died last year, leaving around 40,000 newly bereaved children. One in three of these children live in larger families with two or more siblings and will potentially be affected by the two-child limit, if it goes ahead in its current form. It feels particularly unfair that the families who have experienced such a traumatic event should have to cope with additional financial pressures on top of it.
Likewise, parents who are the victims of domestic abuse should not be put in a position where they have to choose between staying with the abusive partner and leaving them for a life in poverty for themselves and their children. I understand that, at any given time, there are around 250 children staying in refuges for women fleeing abusive relationships and that one-third of those are from larger families. Many women remain in abusive relationships for long periods, in part due to the financial considerations. Unless this group is exempted from Clauses 11 and 12, this could prolong their abuse and put them and their children at risk, making it even harder to leave their partner.
As with kinship carers, who we considered in the last group, the cost of exempting bereaved parents and victims of domestic abuse would be relatively small by comparison with the total projected savings, and would help to address the most obvious cases of injustice. I therefore bring before the Committee these amendments in my name, seeking to reflect the circumstances of these children and their parents.
Baroness Sherlock
My Lords, I shall speak to Amendments 15, 18 and 20, which are in my name and that of my noble friend Lord McKenzie of Luton. I shall also speak to the other amendments in this group.
Amendment 15 seeks explicitly to exempt from this measure children entering a household as a result of a multiple birth. In the light of the Minister’s commitment on the record that such children will be exempted, I will not dwell on this for very long but ask him to clarify a couple of things. First, he mentioned that this will be done by regulation. Will the regulations be of the affirmative or negative kind, given the question raised by the Delegated Powers Committee on that point? Secondly, can he confirm that the Government intend that the exemption will apply to any means-tested benefits, not just tax credits, and irrespective of the number of children who may come along at the same time in that multiple birth?
Amendment 18 is a simple amendment which provides for exemptions to apply in exceptional circumstances, as defined by the Social Security Advisory Committee. The thinking behind this amendment is that, as we have heard already today, there are a number of special circumstances which Ministers may not have thought about when devising the Bill. I know that Ministers never like to admit that things can crop up which they have not already thought of but, just every now and again, things that none of us has been clever enough to work out may suddenly turn up and make a difference. To protect the Minister from the exigencies of such a disastrous situation befalling him, I offer the Committee this amendment today. It would enable the Social Security Advisory Committee—a statutory body with huge expertise—to spot these things that, unaccountably, none of us had managed to spot and to bring forward to the Minister recommendations for exemptions which could then be put into legislation. I commend this idea to the Minister; he may have it free of charge. If he does not like it for any reason, and I cannot think that he would not, he might instead like SSAC to undertake a formal review of the impact of this policy 12 months, say, after its enactment and to advise him and his colleagues of any additional exemptions that might be needed. I would settle for that.
Amendment 20 proposes to exempt from this provision couples with dependent children who, if living in separate households, would not be affected by the two-child limit. This is a broader exemption than that proposed by the noble Baroness, Lady Manzoor, in Amendment 4, although I also support her amendment should mine not go forward. Her amendment would seek to exempt someone who is a single parent and previously claiming tax credits; my amendment seeks to address all such reformed families. This is one of the issues which exposes why this whole measure is such a bad idea. The Government have spent a lot of time advocating the importance of family life and making much of their support for marriage. I approve of them doing that, yet they are again proposing a policy which will run in direct contravention to that other policy objective. If two people meet and fall in love and they each have two kids, if they get married or partner and set up home together then overnight this measure alone will make them worse off to the tune of £5,560 a year. The irony is that they may find by coming together as a household—for example, if they are both working—their entitlement to benefits would go down naturally as a result of the means test. It seems particularly unfair to deprive them of support for the children when they would have been supported by the state had those two people decided to stay separate.
I have been struggling to get a handle on data on stepfamilies. Maybe the Minister can write to me. I have had to work my way through official statistics trying to make sense of them. It seems to me that more than 20% of adoptions registered in 2014 were in stepfamilies, and ONS data based on the 2011 census seem to suggest there are 326,425 children living in stepfamilies with three or more children where the parents are either married or in civil partnerships. There are another 196,173 children living in stepfamilies with three or more children where the parents are co-habiting. I make that more than half a million children. They will not all be eligible for tax credits or universal credit, but up to half a million children could be affected by a measure not because they themselves were third children but because their parents made the unconscionable error of falling in love with somebody else who already had children, and by coming together the household suddenly becomes ineligible for those benefits for the third and subsequent children.
I used to run a charity that worked with single parents. Unless the trends have changed significantly, there was a tendency that lone parenthood was a state someone would stay in for an average of five years. It tended not to be a lifetime choice. People tended to repartner or remarry. We are increasingly putting barriers in the way of people ever doing that. I wonder if that is wise. I also wonder whether it is an intention of the Government’s policy. If not, has the Minister given any thought and has the department done any assessment on the likely impact on second marriages or repartnering?
I want to comment briefly on the other proposed exemptions. The noble Baroness, Lady Manzoor, expressed the concern I think many noble Lords will share about how intrusive a process might have to be to establish that a woman had been raped. I certainly hope the Minister realises that he will find it a challenge to get the Bill through this House in its entirety without explaining how a proposal that somebody should be tested to see if they have been raped would be implemented. At the very least, is the intention that it is only when a woman has made a complaint to the police or someone has been charged or convicted? If not, who will she give evidence to in DWP and how will that be assessed? How will the Minister guarantee that the process will be confidential? If any other official in a benefit or tax office or school could see that a woman was getting benefits or tax credits for a third or subsequent child, there are only two ways at the moment that that could happen—a multiple birth, which would be evident, or the pregnancy being the result of rape. I wonder where that leaves us in terms of confidentiality. Has the Minister given any thought to that? Given that, has the Minister considered the impact on the child if at some point they discover they had been conceived as a product of rape—something the parents may have gone to considerable pains to disguise from them? The Government mentioned in the impact assessment that they would consult stakeholders before deciding how to deal with this. Can the Minister tell us who the Government have consulted and who they intend to consult?
I also asked at Second Reading—but got no answer—what the rationale was for exempting children in multiple births or those conceived as a result of rape. The Minister has indicated that this is about choice. Does he accept therefore that there are other circumstances where a woman may not be able to exercise choice? The noble Baroness, Lady Manzoor, mentioned domestic violence. The proposal, which I support, to exempt people in cases of domestic abuse rests on two arguments: first, that a child may have been conceived under duress, rather than as a result of a clear choice; and secondly, that the two-child limit may make it harder for a parent of more than two children to leave an abusive relationship as they would struggle to support the children.
We have heard how widespread domestic abuse is. Each year more than 2 million people suffer some form of domestic abuse. Its impacts are severe and hard to escape. About 42% of domestic violence victims have been victimised more than once. On average victims experience 20 incidents a year, which can often increase in severity every time. While 80% of victims report physical abuse, it is not just that—nearly 90% of high-risk victims report experiencing emotional abuse and/or coercive control or behaviours. Those are exactly the kind of things that could lead a woman to become pregnant without exercising choice. Abuse can include a refusal to allow a woman to use contraception. It can include rape and pregnancy as a result of rape which she may have been reluctant to report to the authorities because of fear of the abusive partner. Of course, the use of power and coercion are the very things that make it hard for someone to leave an abusive relationship. Sometimes they do manage to leave, often by getting advice or support and by meeting other victims; sometimes things go too far, such as when a child is caught in the cross-fire of domestic abuse. At the point at which they flee, they need all the help they can get. Too often they leave just with the clothes they stand up in. They are homeless and need to move and often hide from their abuser; they leave behind schools and jobs. It is hard enough to rebuild a life in those circumstances but this policy could act as a further barrier, so I hope very much that the Minister will consider this exemption very carefully.
Baroness Sherlock
Just to clarify, I was talking in this case about the exemption for multiple births, although it applies to all of them. Will the exemptions apply to all means-tested benefits—for a family not getting universal credit, for example?
Lord Freud
I am trying to think of another example because, as the noble Baroness knows, we are trying to incorporate all means-tested benefits. The main one is housing benefit and the other one that the noble Baroness may be thinking of is support for council tax where we have not made any provision because each council has its own policies. I cannot think of any other means-tested benefit to which, once universal credit is in and working, that would apply. I think that I have dealt as best I can with all the points raised and, for the reasons set out, I urge noble Lords not to press their amendments.
Lord Freud
Taking the noble Earl’s points in order, we need to have good strategies for care leavers. Clearly, the statistics are disturbing, and they have been for decades. I am not utterly convinced that exemptions in this particular area are the best way of supporting care leavers. There are other things that we can do that are way ahead of this. However, we do now flag care leavers in the benefit system so we know who they are and we can look at what they are doing, certainly with JSA, and I hope that we will be putting that into UC, although I am not absolutely up to date on where we are with that system.
On the noble Earl’s point about popularity, it is important that the benefits system does not become unpopular because that will undermine its legitimacy. It could be argued that one thing that we are doing now is creating a benefits system that has legitimacy and acceptance because it is perceived to be fair and to drive the right outcomes, which is not something that people feel about the legacy benefits system. That is a subtle point and closely related to what we are doing here.
The figures that I have seen, which I am afraid I cannot recall off the top of my head, show that very rich families and very poor families tend to be larger than those in the middle—thereby hangs a tale that goes to my noble friend’s point about who can afford to have large families. But I will have to write to the noble Earl with the exact figures.
Baroness Sherlock
When the Minister does that, will he look at the study circulated to most noble Lords which specifically used ONS statistical data to assess the population? One of the things it concluded was that:
“These data show that socio-economic class, perhaps contrary to popular belief, does not affect family size”.
In the higher managerial and professional classes, 6.8% of families had three or more children compared with 6.4% at the very bottom. I can share the reference with the Minister but the data are not as he suggested. Maybe we can compare notes and come back at Report, but as I understand it—and I pay tribute to the noble Earl’s passion for caring for the very poor—one of the reasons that these things are popular is a presumption that poor people have lots of children, which is not true. Even if they did, if they were not working the benefit cap would cut them off once they had two children, if they were renting anywhere—even modest—in Plymouth.
Lord Freud
We can cut through debating this by getting the facts, which I shall get to noble Lords.
Welfare Reform and Work Bill
Baroness Sherlock Excerpts(8 years, 11 months ago)
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Baroness Pitkeathley (Lab)
My Lords, I support these amendments. It is very important to remember that being the parent of a disabled child is not the same as being a parent. It is sometimes very difficult to get that point over. I remember that when we discussed the Children and Families Bill, officials and even Ministers said, “I am a parent and I do not need any extra support”. However, this is not the same as being a parent of a normal child, if I can put it that way. We all expect to care for our children until they are 18, and many of us for much longer than that but, for a parent who is caring for a disabled child, that caring is likely to be a lifelong commitment— your life or their life. That is the point we have to remember. That lifetime commitment means that these parents face huge problems. They face practical problems, particularly when services are being cut and there is not enough support. They also face very severe emotional problems. As the noble Baroness reminded us, marriage breakdown is very common where there is a child, or more than one, with disabilities. These parents also face financial problems, which is what we are concerned with here. I suggest that most households with a disabled child already face financial hardship, even without these changes. More than half—53%—of parent carers answering the State of Caring survey in 2015 said that they were struggling to make ends meet.
Research shows that it is three times more costly to bring up a disabled child than a non-disabled child, as we have been reminded. Some 34% of sick or disabled children live in households where there is no adult in paid work compared with 18% of children who are not sick or disabled. Four in 10 disabled children live in relative income poverty once the additional cost of their disability is accounted for. Last year, the Carers UK Caring & Family Finances Inquiry found that parent carers of disabled children were one of the groups least likely to be in employment. As one carer said: “I gave up work thinking I would be able to return within a year or two once I got my daughter the support she needed. Little did I know how poor local services were and I am still caring years later”. That carer will probably be caring all her life and certainly for all the life of that disabled child. Surely we are not thinking of making hard lives even harder by these pernicious changes. I support the amendment.
Baroness Sherlock (Lab)
My Lords, I wish to speak to Amendment 19, standing in my name and that of my noble friend Lord McKenzie of Luton, and to the other amendments in this group, which I support.
The case has already been so well made by the noble Baroness, Lady Meacher, and my noble friend Lady Pitkeathley that I will not add much more. However, I want to get a sense of scale. Contact a Family reports that there are 770,000 disabled children under the age of 16 in the UK. That equates to one child in 20. Most struggle on alone with only 8% of families getting services from their local social services. As we have heard, it costs up to three times as much to raise a disabled child as it does to raise a child without disabilities. We have heard the figures from official statistics showing the much higher rate of poverty among families with a disabled member and the high proportion of children with a disability who live in households in poverty
Families are already struggling. It is very good that we will retain the disability element, which covers some of the additional costs of disability, but the child will still have to be fed and clothed and cared for. The reality is that not only do disabled children cost much more but it is much harder for parents to increase their income, a point made by the noble Baroness, Lady Meacher. Suitable childcare for disabled children is much harder to find and more expensive when it is found. For some children the nature of their disability makes it very hard for anyone other than the parent to be able to take care of them.
As the Children’s Society pointed out in its briefing, the child disability element for children other than those on the high-rate care component of DLA has already been effectively halved within universal credit. Currently a family with a disabled third child would receive a maximum child tax credit entitlement of £5,920. Following the reduction of the disability component and the two-child limit, they get a maximum of just £1,513, little more than a quarter of their entitlement in the current tax credit system.
The Minister has said repeatedly today that this is about choice and that we want to enable families who are on tax credits and universal credit to make the same choices as other families. Will he acknowledge that having a disabled child is not a choice a family makes? Often the family will not know that the child is going to be disabled when the child is conceived. Either the disability may not be known, or the child may develop a disability or an illness which causes a disability after birth. The family are therefore not in a position to know the additional costs they are going to be taking on. I have problems in general with this policy, as I will explain in a later stand part debate, but one of the reasons for having so many exemptions is to try to get the Government to explain the rationale of exempting certain categories of person and not others. The Minister needs to be consistent. If his intention is all about clear-eyed choice, then can he explain how that applies in this case?
Lord Kirkwood of Kirkhope (LD)
My Lords, I put my name to Amendment 3, and I support the powerful speech made by the noble Baroness, Lady Meacher, and other contributions that we have had in this short debate. I want to make a simple point about disability. I had the distinct impression that, although the Government were determined to force through their £12,000 million savings, health and disability were going to be a priority for Ministers over the next five years. There are signs that that is true. Some of the attempts that we are watching unfold to bridge the disability employment gap and issues of that kind are welcome, as far as they go. That should give the Minister some cover to go back to the Treasury and say that there should be some identified exemptions for working families in particular. We are trying to encourage people to sustain employment in the future. Some families have young members with different levels of disability as well as mental health issues and disabilities. There is a little more emphasis on this, thanks to the excellent work that was done during the coalition Government days. There is a real peg on which the Minister can hang an approach to these tragedies which says that something needs to be said and some provision made for disability in the context of Clauses 11 and 12.
I say again to the Minister, and I mean it, that the Committee will weigh carefully what he says in terms of the exemptions or otherwise. So far he has been playing a pretty straight bat and holding the line on behalf of the Government, by which I think he means the Treasury. I understand all that, but he has to be very careful. I have said this before, and I will say it again in the clause stand part debate, that he risks losing some of these clauses, if he is not careful, if he does not appeal to good moderates such as the noble Lord, Lord McKenzie, and me. No, I take that back—it will damage his political career in the new Labour Administration.
There is an opportunity in the context of Ministers rightly focusing again on work and health. If that is applied to the amendments that have been so ably moved, I think there is some room for compromise. If there is not some give and take, I think that the Minister is going to have trouble carrying some of this Bill through the rest of its proceedings.
Baroness Sherlock
My Lords, before the Minister answers that, can I just say that I have found his responses today a little surprising. Many noble Lords have experience of being in Committee with him and having careful, detailed and well-informed debates. We are used to the Minister regularly getting up and telling us how much things cost and I find it almost impossible to believe that his department does not know how much these elements will cost. They have been proposed a long time. The department has had every opportunity and there are very good statisticians and modellers in the DWP. I can conclude only one of two things—either they know and have not told him or he knows and is saving it up for Report to launch it at us from the Box when we try and press a vote. Which is it?
Lord Freud
I would never launch something at noble Lords on Report in that way. Let me go and think about how I might present some useful figures in a reasonably timely way. That is not a promise to produce anything more than I have but I will look and see whether I can be more helpful, given that I clearly have not been now.
Baroness Sherlock
My Lords, I propose that Clauses 11 and 12 do not stand part of the Bill. We have heard during the debate today that this measure will have all sorts of, presumably, unintended consequences disincentivising kinship care and private fostering, disincentivising adoption, separating sibling groups, incentivising the break-up of larger families and acting as a deterrent to the formation of stepfamilies. It could require intrusive inquires of women who have been raped and, of course, will take large amounts of money from families with children. Another problem with the policy is the lack of any mitigation. Impact assessments often have a section that explains how the policy will be mitigated but here there is nothing. Of course that is because, once a child is conceived, there is no mitigating action that parents can take other than to have an abortion or to give up the child for adoption. I presume that nobody is advocating that. However, the Government are offering no help to families to mitigate the impact of these losses except where a woman has been raped or in the case of multiple births.
The Minister still has not explained the rationale for the exemptions. I am not satisfied with the question of choice. We also are left with the question of domestic violence and the 16% of pregnancies that are unplanned. Ministers sometimes talk as though conception were simply a matter of choice. The NHS website says very clearly that no contraceptive is 100% reliable. Where contraception has failed a woman has not exercised a choice to have a third child, unless the Minister is suggesting that a refusal to have an abortion constitutes a choice to have a baby, which it clearly does not. So why is that family penalised for having a third child? As we have discussed and will discuss again in a moment, it will affect some children who are already alive, as people making fresh claims for universal credit will get no money for their third child.
Given those effects and the lack of mitigation, the Government need a pretty compelling case for this policy. Have they made their case? The impact assessment says:
“The objective of these policies is to reform tax credits and Universal Credit to make them fairer and more affordable. They will ensure that the benefits system is fair to those who pay for it, as well as those who benefit from it, ensuring those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work. Encouraging parents to reflect carefully on their readiness to support an additional child could have a positive effect on overall family stability”.
That is what it is meant to do, so does it? Let us deconstruct it. The first objective is to make the system,
“fair to those who pay for it, as well as those who benefit from it”.
This contains an implied fallacy from the start, suggesting that there are two categories of person—those who pay for benefits and those who receive them, and ne’er the twain shall meet. We know that this is not true. As my noble friend Lady Hollis pointed out in a compelling Second Reading speech,
“over the course of 18 years, half the population has needed and received a means-tested benefit”.—[Official Report, 17/11/15; col. 57.].
People move in and out of entitlement to benefits and tax credits and the amount of tax they pay, and the degree to which they are a net recipient or contributor to the system changes over their lifetime and as things happen to them.
What about the second part, namely,
“ensuring those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work”?
Again, that paints a picture of people who are not working and having lots of children that hard-working families, who pay the taxes that fund the benefits and tax credits, could never afford to have. Let us test that. First, are those affected unemployed? The IFS figures show that, at the moment, 872,000 families receive an average of £3,670 for three-plus children. Of these families with three-plus children, 548,000 have parents in work, so approximately 63% of those getting benefits at the moment are in work—the typical victim of this policy is not the unemployed mother of a large family.
Of course, if the benefit cap is reduced, as the Bill proposes, to £23,000 in London and £20,000 elsewhere, then any family out of work with three-plus children is unlikely to get to enjoy the benefit of the child tax credit in any case. Shelter has pointed out that a typical couple with two kids renting a house in somewhere like Plymouth or Leeds—so not Mayfair—will be hit by the cap. Most of those affected are working, which means that tax credits are only part of their household income and top up their earnings, with the exact amount they get at any point depending on how much they earn. They are already funding much of the cost of raising their children in any case from their own resources and their own earnings. In that case, is there evidence that those in receipt of tax credits are having lots of children in a way that other people are not? No. We began a debate on this earlier. I have looked quite carefully at a study based on ONS statistical information which looked specifically not just at very large families but at what proportion of families had three or more children. It put it very starkly:
“These data show that socio-economic class, perhaps contrary to popular belief, does not affect family size”.
The third policy aim was:
“Encouraging parents to reflect carefully on their readiness to support an additional child”.
That raises two questions. First, do the Government believe that cutting funding will reduce the number of children born to poorer families? Although it mentions in passing a study on working tax credit, the impact assessment acknowledges there is “no evidence” on the strength of any such effect. My reading of the global evidence is, frankly, that it is inconclusive. Secondly, to what extent is this about choice and, more specifically, economic choice? Ministers—to be fair those of more than one Government—have in my view a surprisingly touching faith in the rational-actor model of humanity. In fact, the evidence shows that plenty of us make economically irrational decisions, or rational non-economic decisions, all the time. People may have cultural or religious reasons for wanting larger families, or be unwilling to take steps that might limit family size because of ethnical views on contraception or abortion. If people had children only when they were sure they could support them, that would mean conceiving only if they knew for sure their household income would be secure for the next 18 years. How many people can be confident of that? Who would have children if that were the case? Eighteen years ago, people might have thought working in steel factories could be a job for life, but factories close and economies falter; even MPs can lose their jobs. Things happen to people and working patterns change.
I then began to wonder whether this could be a way of managing population change. Ministers have not claimed that, but maybe it is a secret option which is so politically sensitive that they cannot mention it. But that does not make sense either, because again the latest ONS population studies, published in 2013 using 2011 census data, showed the fertility rate. They focus on women born in 1968 because they assume that when you reach 45 you are past your child-bearing years—many of us certainly hope we are. The assumption at that point is that you can assume that the child-bearing period has finished. Women born in 1968 had an average of 1.92 children—it is worth noting, as Naomi Finch and others do, that a replacement rate, which would maintain the population, would be a fertility rate of 2.1. The studies also show that fertility rates are remarkably constant. The ONS notes that for over 70 years the two-child family has been the norm, while the numbers for families with three children and no children are also broadly consistent for women born in 1968. Interestingly for those worried about large families, one in 10 women born in 1968 had four-plus children, down from one in five for women born in 1941. That is clearly going in a direction that need not worry the Minister.
I have the following questions for the Minister. If the policy were to result in families on benefits and tax credits having fewer children, would the Government regard that as a good thing or a bad thing, or would they be indifferent to it? Secondly, what will the Government do to mitigate the effects on children of the hardship and damage to life chances that must result from increasing poverty in large families? If this policy succeeds in persuading poorer families to have fewer children, our society will suffer. As my noble friend Lady Hollis mentioned, since our birth-rate is below replacement rate, if the Government are serious about wanting to clamp down on immigration as our population ages, who is going to be around of working age to pay our pensions, fund our health service and care for us when we get old?
Lord Freud
I will just deal with that. In universal credit we are producing something very clearly tapered, without the trap at the 16-hour point, which is in the current legacy welfare system. Therefore we have a pathway. One of the things we are doing, particularly for lone parents, is that once you are freed from that tyranny of the 16-hour rule, it is interesting how firms in the north-west, where that is already happening, are able to work with those people and start moving them up the earnings progression—not just as regards the number of hours but earnings progression—and we are beginning to see signs of a transformation. That is behind some of these changes—we want to make people independent of the state as much as we can.
Baroness Sherlock
My Lords, I have debated a lot of subjects with the Minister over the last few years, and I am not sure I have ever been as disappointed in a Dispatch Box performance as I have been today. I know that the Minister knows these issues very well, and that he normally comes back. When noble Lords take a lot of care to mount arguments, take apart his arguments and engage, as many have done today, he normally does us all the courtesy of taking them on and responding to them carefully. He simply has not been doing that today.
I asked him only two questions and he did not answer either of them. I deconstructed the argument, and all he did was repeat it. He did not even engage with it. This is only a suspicion, and I am sure I am wrong, but it may just be that the Minister does not have any more enthusiasm for these provisions than I do. However, I am sure that that cannot be the case, and we will find that he comes back from supper enthused with zeal to take on and defend these proposals—which, frankly, has been sadly lacking so far.
I will say a couple of things. One is to reassure the noble Lord, Lord Kirkwood. He mentioned worrying about constitutional implications. He need not worry, of course, as he will well know, being much longer-serving than I am. Since this is primary legislation there is absolutely no reason why we should not send matters back to the House of Commons. The Companion makes this very clear at paragraph 8.181, where it says that,
“with regard to Commons financial privilege, the Lords may properly make amendments to Commons bills (other than supply bills) which, when they come to be considered by the Commons, are deemed by them to infringe their financial privileges. It also follows that the Lords need not anticipate what view the Commons may take of any Lords amendments with respect to”,
that. I hope that as a result he will sleep more easily tonight and will feel able to pursue this at a later stage.
I will make just one final point. I agree with the point made by many noble Lords that this two-child policy is qualitatively different from all the other measures. What we have traditionally done in support is to recognise in social security that children are a public and a private good and therefore that the costs of raising them should properly be shared between the taxpayer and the family. Traditionally, in the case of child benefit, we have said that we should all contribute something to the raising of all children; that where there are particular needs—for example, for disabled children—we should all contribute more; and that where people’s needs are greater, we should contribute more through means-tested benefits. This is a very dangerous day indeed if we move away from that and I hope very much that we will return to it at a later stage in the Bill. But I beg leave to withdraw my opposition.
Welfare Reform and Work Bill
Baroness Sherlock Excerpts(8 years, 11 months ago)
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Baroness Sherlock
“( ) Subsection (1A) does not apply in respect of persons who are either children or qualifying young persons born before 6 April 2017.”
Baroness Sherlock (Lab)
My Lords, I rise—albeit a little slowly—to move Amendment 11 in my name and that of my noble friend Lord McKenzie of Luton. This is a very simple amendment which would ensure that the two-child limit applies only to children born after 6 April 2017. The impact assessment for this measure states:
“Entitlement will remain at the level for two children for households who make the choice to have more children in the knowledge of the policy”.
That simply is not true. If someone has more than two children and needs to make a claim for universal credit after 6 April 2017, and if they are not getting tax credits or UC and they have not in the past six months, this measure will apply to them. Entitlement will remain at the level of two children for those households, even though they quite clearly have not made the choice to have more children in the knowledge of the policy.
I suppose that it is just about possible that there will be those who manage to conceive and deliver a child between the passing of the Bill and April 2017, though they would have to get a move on, but most of the children affected by this will be living, breathing, existing children, conceived and born when this policy was just a glint in the eye of a cost-cutting Chancellor.
I know that various attempts have been made to get the Government to explain their rationale for this. I understand that it was indicated to Peers during a briefing session that the reason was that, if someone had not needed to claim benefit or tax credits during the past six months, they clearly have enough money to protect themselves against unforeseen events, so should not have access to the full support of the welfare state. I may be mistaken, but if I am the Minister can correct me. If that is right, however, surely that is precisely what the welfare state is for—to protect all of us against unforeseen circumstances.
Let us suppose that a couple have two primary-school children, and then they have two year-old twins. One day the husband dies or disappears or is paralysed in an accident and cannot work, and they turn to the welfare state. Those twins will be invisible for the purposes of universal credit, so you can see that the dream scheme that Ministers have boasted would swing seamlessly into action as soon as someone’s circumstances changed will not help that family feed, clothe and house the twins.
The family will potentially lose £5,560 a year every year until the twins are adults. We are talking about the best part of £90,000. How should the family have provided for that when they did not know they had to? What should they have done? Saved that much when they are raising toddlers? Maybe they should have bought a PPI policy, the cause of the biggest mis-selling scandal in modern financial history—and I should know, since I am the senior independent director of the Financial Ombudsman Service. But even if that were a good idea, why would they do it? They thought the welfare state was there to help them at such times. That was what they had been led to believe when they had those children.
As I indicated in the previous debate, I think that this whole measure is a terrible idea. But perhaps I can pass on some advice to the Minister from the greatest Cabinet Secretary of modern times, the legendary Sir Humphrey Appleby. Sir Humphrey once said to his Minister: “If you’re going to do this damn silly thing, don’t do it in this damn silly way”. If the Minister is going to reduce support for larger families on the grounds that families on universal credit will have to make the same choices as those who are not, he should at least not apply it to people who have already made their choices because their children are already here. I beg to move.
Baroness Lister of Burtersett (Lab)
My Lords, I support my noble friend, who made a very powerful case. The joint briefing from the churches and faith groups that was circulated to all Peers made a very good point. It said:
“A policy designed to incentivise families to make responsible choices, becomes an unavoidable financial penalty for anyone confronted by relatively common life events”.
This amendment in particular puts that quotation into relief. The Office of the Children’s Commissioner has raised similar concerns.
I made the point at Second Reading that this provision sits oddly with the Government’s own emphasis in this and earlier legislation on the importance of a dynamic perspective on family behaviour. Indeed, in a letter of 13 October to the EHRC about impact assessments for the current Bill, the Secretary of State made as his main point the need,
“to take fully into account the dynamic nature of people’s lives”.
So why are the Government refusing to do so now, especially, as my noble friend said, in relation to existing third or subsequent children where there is a new universal credit claim? What is the justification?
As my noble friend said, when this was explained to us I think the way it was put was that there would be an unfair advantage to richer families if they were able to claim universal credit for third and subsequent children. Perhaps these families were not claiming tax credits or universal credit before, but they could still be on a low income and simply not have claimed. We know that take-up is far from perfect. I know that the Government expect take-up to be higher for universal credit, but that remains to be seen. I have been around this game for quite a long time with the expectation that take-up would be improved by various benefits and so forth. However, it remains stubbornly at less than 100% for means-tested benefits. Even if they were better off—my noble friend made a powerful point here—financial circumstances can change very quickly in the event of life events or shocks. So where is the fairness in refusing support to, say, an early teenage child who is the third in the family and who was born many years ago?
Baroness Sherlock
My Lords, I congratulate the noble Lord on being able to cost one of tonight’s amendments. I find his defence genuinely impossible to understand. I think he actually said that there is no stronger justification for exempting existing children than children who have yet to be born. I simply cannot understand how he can say that with a straight face because he has spent much of this evening telling us that this was all about choice and that parents who are on tax credits should make the same choices before having additional children as parents who are not. These are parents who already have children. These children already exist. They are not making a choice at all. The only reason they are making a claim for tax credits, or universal credit in this case, is because something has happened which means they have then had to fall back on the support of the welfare state. I do not understand how that is a justification and I invite him to think about it and maybe come back before I sit down and give me a choice.
The Government need to think very carefully. They keep giving justifications about choice until they do not hold, in which case they suddenly go, “Oh, look over there. Look at fairness”. This is either about choice or it is not. It cannot be about choice and when that breaks down a different defence is pulled out. It surely has to be one or the other. If it is about choice, how can it apply to people who have not made a choice? If it is not about choice, will the Minister please stop telling us that it is. Can I tempt the Minister to explain to me again why there is not a stronger justification for existing children than new claimants because I think I may have misheard? Is that what he meant?
Baroness Sherlock
At least my hearing is better than my understanding. I find that a profoundly disappointing response, even by the standards of tonight. But given that we are in Committee, I beg leave to withdraw this amendment.
Baroness Lister of Burtersett
My Lords, in speaking in support of this amendment, I will pick up what the right reverend Prelate said about the inadequacy of the impact assessment. This point was also made by the Equality and Human Rights Commission from the perspective of equality and human rights. It argued that it does not “enable proper scrutiny” or meet the requirements of the public sector equality duty; nor is there an assessment of the “aggregate effect” of the changes on people.
In fact, the impact assessment is inadequate from any perspective. In particular, there is no assessment of the impact on child poverty, despite the Joint Committee on Human Rights recommending that the Government should assess the impact on child poverty of any new law, as child poverty is a human rights issue—I declare an interest as I was a member of the committee at that point. I asked a Written Question about the impact, only to be told to look at the impact assessment—the implication being that I had not read it, which I found rather insulting.
Not only is there no assessment of the impact on child poverty, but this is the quality of distribution analysis:
“The policy has the impact of redistributing income from Universal Credit/tax credit recipients to the Exchequer (i.e. society as a whole)”.
Actually it is not society as a whole, because when I last thought about it, universal and tax credit recipients were themselves members of society. The assessment continues:
“The policy therefore has distributional impacts”.
That is the distribution analysis—and the impact assessment on life chances is similarly risible.
I remind the Minister of what it says in the Companion—that Ministers should be as open as possible in answering questions, because this is inherent in ministerial accountability to Parliament. I therefore ask him again now: what is the department’s assessment of the impact of these clauses on the number of children living in poverty? I simply do not accept that it is not possible to make an assessment. I accept that there might have to be a fairly wide margin of error—we cannot just say that it will be exactly x thousand—but I do not accept that there is no assessment. It is not possible.
The right reverend Prelate also mentioned the family test. That is drawn up by the Department for Work and Pensions itself. It is supposed to be equivalent to the public sector equality duty. According to the DWP, its application should be documented and the relevant department should consider publishing it. Given that this clearly has a family impact, why did the department decide not to publish the family test? As part of its equality statement for reforming asylum support, the Home Office set out very clearly each of the questions that the family test is supposed to answer and gave its answer. I might not agree with those answers, but that was a model of how a department should deal with it.
Will the Minister undertake to provide noble Lords with the documentation of the application of the family test before Report? There must be documentation, according to the DWP’s own guidance. Given that the measure has a clear family focus, can he tell us what additional analysis was undertaken involving stakeholders, as is recommended in the DWP’s own guidance on the test? Finally, will the Minister tell us which other countries restrict payment of benefits for children to smaller families in this way? I am reliably informed that there is no other country, but I accept that I may be wrong. When I last looked at this, I found that countries that cared about family policy and child poverty tended to pay more to larger families, rather than less, but I would welcome elucidation on that.
Baroness Sherlock
My Lords, I rise to support Amendment 21 in the name of the right reverend Prelate the Bishop of Portsmouth. I fully support the requirement in the amendment to report on the impact on family relationships and functioning, for the reasons that have been articulated in the debates we have been having this evening. Until now we have not discussed in any detail the impact on faith communities, so I am going to concentrate on that.
As we have heard, larger families are strongly prevalent within some faith traditions and cultures, which leads to legitimate concerns about the differential ways this policy will be felt throughout society. There is an issue of equality for children born into families of faith. This measure will disproportionately affect families where, perhaps because of the parents’ faith, there is a devout desire to avoid contraception and abortion. As we have heard and discussed this evening, family planning is not infallible and many people of faith and other like-minded people are concerned that unexpected pregnancies could lead to a rise in the number of abortions. This point was made by the right reverend Prelate the Bishop of Portsmouth earlier.
As my noble friend Lady Lister pointed out, the most damning evidence about the differential impact of this measure on equality grounds comes from the Equality and Human Rights Commission. I declare an interest, in that I am a former commissioner of EHRC. It says:
“The proposed changes may have a disproportionate negative impact on people from particular ethnic or religious groups … The impact assessments and human rights memorandum which accompany the Bill do not assess the effect of the Bill on equality and human rights in sufficient detail to enable proper scrutiny of the legislation”.
It is not kidding.
Disgracefully, the Government have resisted all pressures to conduct cumulative impact assessments of these measures, giving impact assessments only for individual measures. Even within that, however, I was staggered to find that there had been no attempt to conduct an equality impact assessment on the two-child policy. The short section in the IA on the impact on protected groups mentions gender and disability in passing, acknowledges that ethnic minority households may be more likely to be impacted, though offers no detail, but makes no reference at all to the protected characteristic of religion and belief. Can the Minister explain why there is no such reference, when even a cursory glance at the data suggests the possibility for significantly differential impacts on the grounds of some protected characteristics, particularly religion and belief?
Lord Freud
As I said, the documentation that we have published is the documentation that we need to publish to comply with our public sector equality duties. We have done that, even though the noble Baroness may feel that it is inadequate.
Baroness Sherlock
I do not presume to know any more than others about this subject—no one knows more than my noble friend Lady Lister. But on a number of occasions this evening, Peers from different Benches have asked the Minister very specific questions and he has simply got up and said, “What we have published, we have published”. The question he was asked just now was: “The Government must have conducted this test, because they are required to do it, so why won’t they publish it?”. “We have published what we have published” is not an answer. I am getting increasingly anxious about the quality of the responses this evening.
Take the example of dynamic benefits. Could the Minister explain that to me again? If he does not think that static analysis is good then he needs to find another way of analysing it. He simply cannot come to this House and say, “I cannot tell you the impacts of this because it is all dynamic”, because otherwise we will never be able to assess anything that the Government are going to do before they do it. That cannot be reasonable, surely.
Lord Freud
This amendment is asking us to do an analysis over the next six months. In practice, that is what will be happening on a dynamic basis, because we have introduced as part of universal credit a test-and-learn approach in which we are able to assess what happens to families and learn the lessons in order to roll out universal credit. That is a pretty public process and we publish what we learn. So, in practice, we have a process that incorporates the dynamic effect of these changes in its overall impact, rather than taking individual bits and pieces of the policy. That is the best answer that I can give to the question. On that basis, I urge the right reverend Prelate to withdraw this amendment.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
Amendment 24. I call the noble Baroness, Lady Lister.
Baroness Sherlock
My Lords, I understood that it had been agreed between the usual channels that this was the point at which we would finish. If that has changed then perhaps somebody might have told the Chief Whip before he left.
Lord Taylor of Holbeach (Con)
I do apologise, but I came into the Chamber expecting that we would be going on to the next group. We have fallen short of the target today by three groups. It is up to noble Lords to decide how they deal with this Bill but I do advise that, if we adjourn the Committee at this stage, it will put us under pressure on successive days. The matter is in the hands of the Committee. If the Opposition do not wish to continue, I will note that point and adjourn the Committee.
Baroness Sherlock
My Lords, I think that that is deeply unfair. I am well aware of the discussions that were held in the usual channels. I am well aware that representations were made that today was likely to be tight. Things always move slowly on the first day and there were a very large number of amendments with a very large number of Peers attached to them. I think we fully expected to be at this point. I thought that we might make the next group, but since we have not, I presumed that we would go on to the next day. I am sorry to say it, but I am disappointed. I think we should stick to the agreement that has been made.
Lord Taylor of Holbeach
In that case, I suggest that the Committee adjourn.
Welfare Reform and Work Bill
Baroness Sherlock Excerpts(8 years, 12 months ago)
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Baroness Sherlock (Lab)
My Lords, I thank the Minister for that introduction to the Bill and I look forward to the debate, especially to the four maiden speakers.
In his speech to the last Conservative Party conference, the Prime Minister talked of the need to tackle social problems, including entrenched poverty, in our country. Why? He said this:
“So when the new mum looks at her new-born baby—the most precious thing she’s ever seen—and she vows to provide for it, she knows she actually can”.
This Bill makes a mockery of that pledge. It is a sustained assault on low-income families. It will increase poverty, penalise working households and push more families out of their homes and into temporary accommodation, homelessness or on to housing benefit, and the evidence base for it is poor. So often, I am sorry to say, this Government’s cuts to social security end up being counterproductive, adding more to the benefit bill by undermining work incentives or raising spending elsewhere.
A good example is the proposal to cut social sector rents by 1% a year. This sounds great, but, as the IFS points out, it does little for the 93% of tenants who will lose housing benefit pound-for-pound as their rents falls. As the IFS points out:
“The policy largely represents a transfer from social landlords … to the exchequer, rather than to social tenants”.
As the OBR has pointed out, it will mean fewer social sector properties being built. Social landlords risk having their credit ratings downgraded, planned investments are being cancelled and if specified or all supported housing becomes unviable, costs are simply transferred to the NHS and local government.
As the Minister mentioned, the Bill abolishes the scheme that gives help to some people on benefits to pay the interest on their mortgages so that they do not lose their homes and end up on housing benefit. In future, they will be offered a nine-month wait then the option of a loan secured by a charge on the property. Almost half of recipients are of pensionable age, despite the Government’s pledge to protect pensioner benefits. We will seek, as the Bill goes through, to retain support for low-income pensioners, who may never be able to pay off a loan.
The Bill also takes £30 a week, one-third of their employment and support allowance, from the 500,000 sick and disabled people in the work-related activity group. The impact assessment reassures us that if they worked for just five hours a week at the new higher minimum wage rate, they could recoup the money, but these are people an independent assessor has decided are unfit for work. They include people with learning difficulties, mental health issues, Parkinson’s disease or MS. Only 5% of that group will get back to work within a year. We can see no justification for making people poorer to incentivise them back to work they have been deemed unfit to do. How can the Minister justify this, especially in the light of the manifesto commitment not to cut disability benefits?
The other measures in the Bill all hit low-income families with children. Child poverty has already risen by 400,000 since 2010 and is predicted to rise by another 300,000 by 2020. Two-thirds of poor children will have a parent in work. Those figures could explain why the Bill decides to remove the requirement to measure child poverty or to do anything to reduce it. It abandons the internationally recognised benchmark for poverty because the Government have decided poverty is no longer about money. The Bill expunges the word “poverty” from the legislation. We all accept that deprivation is multifaceted. By all means measure other things as well, but the idea that poverty is not really about money is risible. I fear that what is really happening is that the Government are trying to hide the trail of devastation their reforms are leaving in their wake.
Successive government welfare reforms are hitting the same groups of people, yet Ministers consistently refuse to do a cumulative impact assessment, and now they will not even count child poverty. This will not do. The first rule of power surely means that if you will the ends, you must will the means and you must know and take responsibility for the consequences of your decisions. I hope this House will see fit to challenge that proposal as the Bill goes through.
Then there is the benefit cap. When the Government introduced it, their whole argument was that it was set at the level of average earnings. We had a long debate in this House on whether the test was fair. I remember marching into the Lobby behind the much-missed Bishop of Ripon and Leeds, who proposed an amendment to remove child benefit from the cap on the grounds that people would get child benefit as well. We voted for it. Now Ministers have ditched the entire standard and simply plucked figures out of the air. They have simply decided that they are going to cut the cap by £3,000 for families in London and by £6,000 for families elsewhere. In future, Ministers can change the cap at whim by regulation without reference to any external benchmark and with minimal parliamentary scrutiny. The evidence is nowhere near as strong as even the impact assessment has suggested. Housing providers are worried that rent arrears will rise, as will evictions and homelessness. We have heard that £800 million has already been set aside for discretionary housing provision to deal with it. In Committee, we will want to see a great deal more evidence about the cost-benefit analysis of this policy, as well as about the impact on families.
The Minister mentioned that DWP is changing conditionality in universal credit. At the moment, parents are expected to work when their youngest child turns five. The Bill will mean that parents on universal credit will be expected to work when their youngest turns three. They will have to do work-related activity when their youngest is two and when the youngest reaches one, they will be out doing work preparation interviews. If the Government are going to push mothers of very young children and babies into work preparation activity, they need to be a lot more convincing about the availability and affordability of suitable childcare than they have been in this House in recent months when the Childcare Bill was going through.
Then there is the benefit freeze. Previously, the retail prices index was used to uprate benefits. Then the Government came along and decided that CPI was the measure—the only thing that would do—so they changed it to CPI. Then in 2013, they decided it would be reduced to just 1%, as a temporary measure, rather than CPI. Now it will be 0%, whatever happens to inflation during this Parliament. If inflation carries on flatlining, the Government may not get the savings they have been hoping for. There is a real process issue here. This is undermining the long-standing convention by which Ministers are meant to make an assessment annually of what poor households need to live on, come to the House and propose an alternative, and take responsibility for what should happen to benefits. This is moving away from that, which is deeply regrettable.
Finally, there is the proposal the Minister outlined to change universal credit and tax credits to abolish the family premium for all families with children and to limit the amount paid per child to the first two children in a household. This means that 3.7 million households will lose money. The two-child limit will cut payments by up to £2,780 per child per year, affecting 640,000 families by 2021 and 150,000 families with disabled children.
The Government repeatedly stress that the aim of their welfare reforms is to get people into work but child tax credit and universal credit are paid to working families as well as those who are out of work. If the aim is not to get families into work, what is it? The impact assessment said that,
“people may respond to the incentives that this policy provides and may have fewer children”.
I should like to ask the Minister some questions. First, is the objective that people in low-paid work should have fewer children, or is it just to give them less money? What does the Minister expect to happen in the 16% of pregnancies in the UK that are unplanned? What assessment has he made of the impact on adoption and kinship care, especially of sibling groups? Will there not be a disincentive to remarry if a stepfamily would then have more than two children in the household? The equality impact assessment is silent on religion and belief; can the Minister tell the House what work his department has done in assessing whether this policy will be likely to affect people of some religions more than those of others or of none. We are also told in the impact assessment that the Government will exempt women who have a third child as a result of rape. I wonder if the Minister has really thought through the implications of a woman having to prove to the Department for Work and Pensions that her pregnancy was the result of rape.
Even if the Minister could answer all those questions robustly, this policy spectacularly fails the Government’s own family test. There are reasons the state has traditionally helped with the cost of raising children. First, it is to avoid British children growing up in poverty, since child poverty is significantly higher in larger families. The real losers of this policy will be children born into larger families, especially as younger siblings, through no choice of their own. Secondly, it is because children are good for society. Maybe if I use the language of economics the Minister will work with me on this. In economic terms, children are a public as well as a private good. Parents bear the bulk of the costs of raising their children but we all contribute through our taxes because we want to see the next generation thrive and, being practical, as our population ages, we need to ensure that there are enough people around of working age to pay for our pensions, our health service and our social care. Most of all, it is because children are not a luxury. We give child tax credit to families to ensure they can afford to raise their children healthily.
Let us be clear: this is not about the small number of people with lots of children who are not in work. They would be caught by the benefit cap anyway. Shelter pointed out that the benefit cap would kick in for a couple with two children renting a house not in Mayfair but in Leeds or Plymouth. It is not about them. It is about a family with three children who, despite working very hard, are struggling to make ends meet. It is about the mum I met who never thought she would need state help until her husband disappeared and left her with three children. It is about all those people who had children confident they could provide for them, until something happened—perhaps a parent died or became sick or disabled and could not work; perhaps they had their hours cut or got made redundant. These are all things our welfare state is meant to protect us against. When the Minister says it affects only people making new claims, anybody making a fresh claim for universal credit next year will get no help for their third child already in existence.
When Mr Cameron spoke about that mum looking down at her new baby and knowing she could provide for it, the reason she knows that is that she lives in a country that offers the safety net of the welfare state alongside the National Health Service and state education. Our welfare state was never about workers helping workless or rich helping poor. It is about pooling risk across our life cycles and across our population. There are times, such as when children are young, when it is hard to make ends meet even if you are working. The best laid plans can go also astray. Anyone can get cancer, lose their job, lose their spouse or have a disabled child. We will all get old—we hope—and draw a pension. When things go well we pay in, and when things go badly we take out. The Government’s reforms undermine that. They change the way our welfare state works, by undermining work incentives, breaking the link between need and support and refusing to protect the next generation from growing up in poverty. If the Bill goes through unchanged, when that mum described by the Prime Minister looks down at her newborn baby, especially if it is her third child, she can no longer know that she can provide for it because that safety net will have a child-sized hole in it.
Disabled People: Independent Living
Baroness Sherlock Excerpts(8 years, 12 months ago)
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Baroness Altmann
My Lords, the Government believe that local authorities are best placed to decide what intervention and support disabled people require. I should add that all Independent Living Fund users had one-to-one visits, and reports were sent to local authorities before the scheme was closed.
Baroness Sherlock (Lab)
My Lords, I can see that the Minister has a brief that requires her to tell us how committed the Government are, but I wonder whether she can listen to some of the stories she has heard today. From the comments made by the noble Baronesses, Lady Campbell, Lady Hollins and Lady Brinton, and from the two reports that have been mentioned, it is quite clear that there is very serious disquiet that people who used to get help from the ILF are not now getting it. Therefore, I ask her again: what plans do the Government have specifically to ensure that disabled people are able to get the care that they used to get and can expect to get in the future?
Baroness Altmann
My Lords, as I have said, we are monitoring the impact of the Independent Living Fund: 94% of users were already receiving local authority support. Local authorities have an obligation under the Care Act to meet the minimum standards required for all those who need care and support, including taking account of their requirement to live independently. I assure the House that the Government are committed to supporting those who need care and support. As I said, the spending will be higher each year between now and 2020 than it was in 2010. This will rely on local authorities carrying out their duties, which we will monitor.