Policy-making: Future Generations

Baroness Sherlock Excerpts

Tuesday 1st October 2019 Lords Chamber

[Baroness Stedman-Scott]

I would be foolish to say that we have not got some catching up to do, but I assure all noble Lords that we wish to work hard to achieve this. In terms of cross-government working, I have been in the department only a short while, and I have met with people in other government departments to talk about things that we can do together to make the impact better. The principle is well understood, and I assure all noble Lords that we are completely committed to making sure that the resources we have are deployed well for the benefit of all generations.

[Baroness Sherlock (Lab)]

My Lords, the Minister referred to The Green Book as being the means by which the Government decide how to adjudicate between the interests of different generations. But The Green Book, which is a Treasury document, sets out the tool for analysing or comparing policy objectives using things like net present social value or social time preference rates; you can work out how to judge those transfers. Will the Government publish the results of those analyses in the impact assessment along with everything else? More importantly, the young people I saw in Durham on the climate strike were convinced that we are not prioritising their interests. What tools can the Government use to assess damage done to the climate and to the planet—although, of course, there is no planet against which we can compare it?

[Baroness Stedman-Scott]

Well, there is an exam question! On the question of publishing the impact assessment, I will go back and ask my boss. Do not think that that is a cop-out; I do not actually know. I will ask my boss and then write to the noble Baroness, and everybody will receive a copy of his response through the Library.

On climate change, I think that we have done really well to be the first country to legislate for long-term climate targets. Between 1990 and 2017 we reduced emissions by 42%, so we are serious about this. I hope that the efforts of young people in this respect will help them realise that they are having a great impact on the activities of the Government to make that happen.

Universal Credit: Managed Migration

Baroness Sherlock Excerpts

Tuesday 23rd July 2019 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Statement. We have had a lot of Statements from DWP in the last year, and there is beginning to be a rule of thumb that the gentler and blander they sound at the time, the more they contrast with the story behind them. I will try to unpack what I think has happened to get us to this point, and I invite the Minister to correct me when she responds if I make any mistakes.

I think this is now the fourth version of these regulations, and the plot has thickened with every turn. We have been awaiting a debate on them for months and suddenly, in the very last days of this Session, they have been snatched away and replaced with a negative version. These regs cover two things: the process of moving people en masse on to universal credit—known as managed migration—and the losses faced by people getting the severe disability premium in legacy benefits, who lose out a lot when they go on to universal credit because there is no equivalent in UC.

The Government originally published some draft regs in June last year. These prompted outrage because the process of managed migration turned out not to be managed at all, but meant that millions of people would simply get a letter saying, “Your benefits will stop on date X. It is up to you to apply for universal credit. If you do not apply for that date then you will not get any money, and if you do not apply within a month, even if you get money later, you will lose the right to make sure that you get transitional protection, which stops you being worse off”. That went down very badly. The Government had intended always to pilot these, but the regulations covered managed migration as a whole.

The same month, Esther McVey, then Secretary of State, had announced that nobody else who was getting the severe disability premium would be forced on to universal credit until the managed migration stopped, so they could not lose out on that transitional protection, and that the Government would compensate people who had already gone across for the money they had lost. That statement, as it happened, coincided with a successful legal challenge against the Government by two people who had moved house, had to go on to universal credit and lost out as a result. The Government were then required to pay them damages and ongoing payments of nearly £180 a month. I wonder whether the Government are still appealing the various decisions on this.

The Social Security Advisory Committee then consulted on the regulations, and eventually some slightly revised regulations were tabled on 3 November together with a very critical report by that committee. That version of the regs still covered the whole managed migration process, involving up to 3 million people, even though everybody had urged the Government to take powers only for the pilot and then to come back to Parliament. There was also strong criticism of this approach from voluntary organisations working with claimants, because they were worried that many vulnerable people getting benefits would struggle simply to take responsibility for making the transition to the new system alone. The SSAC report also flagged up that the payments being made to people who had been moved across under UC and had lost this disability benefit were actually only £80 a month, whereas their losses were £180 a month.

Then, Amber Rudd became Secretary of State. She admitted to the Work and Pensions Select Committee that the Government had thus far failed to obtain cross-party support for these regulations. In January, they withdrew the SI laid in November and brought in two new SIs: a negative one, which prevented anyone else getting this disability payment from transferring to UC before managed migration, which came into force in January; and an affirmative SI which was to provide for a year-long pilot for managed migration and set the level of transitional payments for those who had been moved on to UC loss of disability payment. With me so far? Excellent.

We have been waiting since then to debate this affirmative SI. The Secretary of State said in March that the pilot would begin in July, and said again on 1 July that the pilot would definitely begin this month, yet there was no debate on the regulations which would provide for the pilot to take place. That is possibly because the regulations contained provisions for payments to people on this disability benefit which have been found to be unlawful. However, Ministers had promised that the pilot would not start without Parliament having had a debate first. In fact, on 8 January, the Minister for Employment, Alok Sharma, told the House of Commons:

“We will also ensure that the start date for the July 2019 test phase involving 10,000 people is voted on”.—[Official Report, Commons, 8/1/19; col. 175.]


Well, it has not been.

There were serious questions about the pilot. Ministers needed to be clear about the aims and the success criteria and whether or not the nature of the pilot would satisfy people. Those were the questions that Parliament wanted to debate before the regulations were approved. Then, the final twist: yesterday those regulations were withdrawn and a new negative regulation was tabled instead, published in the last week of term to take effect in the same week. The Government are not even abiding by the convention that 21 days should elapse between tabling regulations and their taking effect. Moreover, although it is a wonderful thing that the eyes of the country are on the Palace of Westminster this week, they may not be looking at us primarily for the purpose of considering universal credit and the managed migration pilot regulations.

I am really worried about universal credit and how it is rolling out. The Government should stop rolling it out while they fix it. But that is for another day. These regulations affect two specific but important issues and Parliament has a right to consider them properly. There may be an urgency but it is entirely of the Government’s making; handling it in this way is disrespectful to Parliament.

I ask the Minister three questions. First, can she explain why, having promised that Parliament would debate the regulations before starting the pilot, Ministers have reneged on that commitment? It cannot surely be simply because Amber Rudd admitted that she did not know that she could get them passed in the other place. We surely cannot have come to the point where Parliament will no longer be asked questions unless Ministers are satisfied that the answers will be the ones they want.

Secondly, can she guarantee that everybody who was getting STP and has been moved across to universal credit will be no worse off than they would have been, and that the Government’s new plans satisfy the requirements of all the legal judgments against them?

Finally, will she promise that Ministers will return to Parliament with a full report of the results of the pilot and give us the chance to debate them before laying any further regulations for a full rollout of managed migration?

I do not blame this Minister, but it is the responsibility of her department. I urge her to answer those questions as fully as she can in order to start trying to rebuild some trust.

[Baroness Janke (LD)]

My Lords, I too am grateful to the Minister for repeating the Answer to the Urgent Question and would like to ask some questions about the pilot.

I am not completely familiar with processes of this kind and am grateful to the noble Baroness for raising a lot of issues that had occurred to me. I would be grateful if we could have more detail of the scope, approach and methodology of the pilot, when the findings are likely to be made public, when there will be an opportunity for external agencies to examine and question the report and, indeed, when there will be a debate here before the Minister comes back to Parliament for permission to carry out managed migration.

I hope that the pilot will look at some of the needs as expressed by the various groups and that they will be taken account of and reviewed: for example, bringing assessments back in-house for people with disabilities, following the whole record of the assessment process; providing split payments to protect vulnerable women; reviewing the work search process requirements, particularly for women with young children or caring responsibilities; and the piloting of different approaches to digital accessibility, particularly for disadvantaged groups and people with disabilities.

I welcome the proposed action on the judgment of the High Court and would like more detail as to how it will communicate to all people who are eligible, with a report back from the Minister on how that is being carried out. I very much hope that the pilot will provide us not only with insight and the chance to review some of the problems that I have been aware of since I have been covering the issue, but the opportunity for debate and external scrutiny before the managed migration process is carried out in full.

Universal Credit Fraud

Baroness Sherlock Excerpts

Wednesday 10th July 2019 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Answer. Claimants need these advances because they have to wait five weeks to get their universal credit in the first place, and that money must be repaid. Now the BBC tells us that tens of millions of pounds have been stolen in fraudulent advance claims. It saw DWP messages on an internal forum describing lots of suspicious claims, from a 19 year-old with six blind children to those inventing street names or people, where the landlord was called Harry Kane and the kids were Homer, Bart and Lisa.

In other cases, a genuine claimant has been conned into giving their details to someone who says that they can get them a government grant or payday loan. Instead, that person applies for universal credit in the claimant’s name, and they find out only when they are taken off their old benefits and put on to UC; the claimant then finds themselves worse off and may have to pay back a debt of £1,500 in the bargain.

Can the Minister tell us two things? First, assuming that the Government are not about to stop the rollout—which I think they should—where a legacy benefit claimant was scammed and a UC claim was made without their knowledge, will the DWP allow them to return to legacy benefits, especially if they are worse off? Secondly, eight leading banks have signed up to a new code to reimburse victims of fraud on a no-blame basis. Will the DWP do the same?

[Baroness Buscombe]

My Lords, I repeat that we take this issue incredibly seriously. First, there is no question of us stopping the rollout; we will not. It is already completed in that it is now in every jobcentre in the country. The termination of legacy benefits is triggered simply where a UC claim is made, not where it is treated as made. It is essential for a smooth transition from legacy benefits to universal credit that the trigger for the move is simple, and that legacy benefit overlap is avoided as far as possible or is otherwise accounted for. The chief goal is prompt and accurate payments of UC to claimants, and, where fraud is alleged, a fraud referral is raised so that the case can be investigated to assess the evidence to establish the facts and determine who was involved, including any third parties. In deciding whether the claim is valid, the consideration needs to factor in whether, or the extent to which, the claimant is involved in the claim.

We at the Department for Work and Pensions are doing all we can to take this matter extremely seriously. We are talking about crime and the money of the poorest being taken away and going to the wrong people. It is important to properly investigate every circumstance; we deal with this on a case-by-case basis.

Work Capability Assessment

Baroness Sherlock Excerpts

Thursday 4th July 2019 Lords Chamber

[Baroness Sherlock (Lab)]

I thank the Minister for repeating that slightly opaque Answer. This is really serious. There have long been complaints about the WCA process from campaigners concerned about the impact on people—including, in some cases, their deaths—following assessments.

The DWP conducts peer reviews into serious outcomes and deaths associated with DWP activity. The independent statutory reviews the Minister mentioned were conducted by Paul Litchfield in 2013 and 2014. Disability News Service reported earlier this year that letters to Ministers from coroners, along with several peer reviews, were not given to Dr Litchfield’s team. The DWP will not confirm that, but DNS says that it then lodged a complaint with the Information Commissioner and that the summary of its discussions with the DWP shows that that information was not passed along to the review team.

In response to a letter from my honourable friend Debbie Abrahams, the DWP finally said that it has had a good look around the department and that despite,

“a robust and thorough search”,

it could not find any information about this, citing,

“the length of time since the reviews were carried out”,

and,

“factors such as document retention”.

It also implied, as the Minister did, that the review team did not ask for them. These were documents related to the circumstances of people’s deaths. The independent reviewers were investigating the WCA process, including its impacts on the clients. Either these documents were withheld from the reviewers or the DWP’s record keeping is so poor that the department does not know whether they were passed across. I regret that, given the level of anger and mistrust of the DWP out there as a result of repeated cuts and the profoundly dysfunctional nature of the benefit assessment system, this will inevitably fuel suspicions that there was something in those documents that the DWP did not want an independent reviewer to see.

Does the Minister accept that it is the department’s responsibility to ensure that an independent reviewer has any potentially relevant information? It is not their responsibility to work out what to ask for. If that is true, why did it not include all peer reviews and coroners’ letters?

Secondly, since trust is now so low, will the Government accede to the widespread calls for an independent inquiry into how assessments are carried out and the medical evidence of their impact on the health and well-being of claimants? Will she guarantee that all documents relating to deaths or serious and complex cases related to DWP activity will be shared with any future independent reviewer? This is a matter of justice and it is the only way to restore trust in a deeply discredited system.

[Baroness Buscombe]

My Lords, I refute the allegation that this is a deeply discredited system. The Department for Work and Pensions takes the death of any claimant very seriously. Where it is made aware that a person has died and it is suggested that that is associated in any way with the department’s activity, a review will be undertaken to identify any lessons that can be learned. It is important to make it very clear that in a case of suicide, a mandatory internal assessment review is undertaken. All these reports will be kept for six years from the date of the final report.

In October 2015, we moved from peer reviews to an internal review process, which is what I meant to call it in the first place. That process means that we hold more information, including all emails relating to the case, the original commission, the final report and any recommendations resulting from the internal process review. That relates to the death of any individual who has been in receipt of any benefit—not necessarily just the work capability assessment but any benefit at all.

It is important to make the point that we retain that information for six years. Some of it is highly confidential. What we do not retain for more than one year is the day-to-day business on emails which is where requests come in and out about who is asking for what information. That is in line with normal practice. We retain that information for only one year. Complex issues are involved in the decision-making for this, however, and we examine those issues with great care, also taking into account letters from the coroners’ courts. Once again, the department takes the death of any claimant seriously and always conducts an investigation into the circumstances.

Mental Illness: Job Security and Inequality

Baroness Sherlock Excerpts

Thursday 4th July 2019 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Bird, for using the initiative he described to us at the start to seize the opportunity of securing this debate and giving us the chance to talk about these issues. I thank all noble Lords who have spoken, for some very interesting speeches. I thank the right reverend Prelate the Bishop of St Albans for some really thoughtful reflections on the interaction between mental health and employment, issues around stigma and discrimination, and the role of the Church and communities. There is so much more that one could go into.

I thank the noble Baroness, Lady Hollins, for another piece of articulate advocacy on behalf of those with learning disabilities and autism. I loved that story about an employee and the impact that one person with learning disabilities can make. It reminded me so much of the lessons taught to us by the late and much-lamented Jean Vanier on how much we could all benefit by taking them on. I also thank the noble Baroness, Lady Jolly, for a really interesting approach, talking about risks and interventionist factors and how we could use those on a rights-based agenda, as well as the existing health and LEP programmes we have to tackle these issues.

I am being quite literal. I want to look at the title of the debate and ask: do job security and inequality impact on mental health? What does the evidence say? There are two questions. First, does inequality have an impact? Yes, it does. There is clear evidence, summarised well by the Equality Trust, that a much higher percentage of the population suffers from mental illness in more unequal countries; for example, the evidence from the USA is that rates of depression in US states are associated with income inequality. The evidence and the academic side are clear. While I am here, it is worth noting that poverty is also a significant driver of stress and poor mental health, a point made by the right reverend Prelate. The 2016 report from the Mental Health Foundation and the JRF found that:

“Poverty increases the risk of mental health problems and can be both a causal factor and a consequence of mental ill health”.


Secondly, what about job insecurity? Various studies have looked at the impact of the nature of employment on mental health. I read one just this morning. Research by Menéndez-Espina et al, published in February, observed that,

“job insecurity … has direct effects on the different areas of mental health evaluated, in men as well as in women”.

Of course, the report of the UN rapporteur, which we have already heard about, draws attention to the fact that the way work is organised has profound and lasting social and psychological repercussions.

Does the UK have a problem with either inequality or job security? Yes, it does. The Equality Trust shows that, according to the most recent data from 19 OECD member states in the Luxembourg Income Study dataset, the UK is the fifth most unequal country and the fourth most unequal in Europe. Figures from 2016 show that the poorest fifth of society has only 8% of the total income, whereas the top fifth has 40%. The figures for wealth are even worse. We are not talking about poverty, but the figures on poverty show that it is rising and the problem is getting worse for those in and out of work.

What about job insecurity? A recent spate of company closures from retail to steel has put many people out of work and made other people very nervous about what is happening to their jobs. Also, we have 850,000 workers on zero-hours contracts, two-thirds of them stuck on them for more than a year. A TUC-commissioned poll of workers on zero-hours contracts found that more than half had had shifts cancelled with fewer than 24 hours’ notice. Nearly three-quarters had been offered work with fewer than 24 hours’ notice. More than a third have been threatened with not being given shifts in the future if they turn down work. It also found that only 12% get sick pay, only 7% would get redundancy pay and 43% do not get any holiday pay.

This is really stressful and insecure work. If you have no idea how many hours you will get each week, you do not know whether you can pay your rent or feed your kids. If you do not get sick pay or any other pay, you will be afraid to turn down work. You will go to work when you are sick or injured because you do not have any alternative. If you are threatened with not been given work if you turn down shifts, you will go even if you are not up to doing it. That is bad for people’s physical and mental health. Other TUC analysis found that those on zero-hours contracts were twice as likely to be working night shifts or seven-day weeks. They earn less per hour as well. This is not good work.

What is the Minister going to do about it? First off, does she accept this association between job insecurity and inequality on the one hand and mental ill-health on the other? If she does, I have some serious questions to ask. What might she do about it? Will the Government look again at the rights extended to workers on insecure jobs? Why should they not get the full range of rights that other workers do? If she is in the position to, will she look again at whether people should be presumed to be employed, with the burden of proof going on to the employer to show that they are not? Does she recognise that, in fact, most workers’ rights have been won by trade unions over the years? History shows that. The reduction in collective bargaining and unionisation in many sectors has been clearly associated with a reduction in rights. What will the Government do about that? Will she consider revisiting some of the anti-union legislation or making it easier for people to organise to get the rights they deserve?

Also, what will the Government do about addressing the fall in living standards, especially for those in low-paid work? What are they going to do about the inequality that has been revealed by the studies I have mentioned? Will the Government look again at the way they use the tax and benefits system to address inequality? What will they do about those who are in work, or those who want to get into work, but are struggling with mental health? All the evidence we have heard from people is that the nature of the assessment process they have to go through to get help—with PIP, for example, to get help with moving into work or trying to get help because they cannot work—actually makes people’s mental health worse.

I have personally sat down with someone who had an appalling time applying for PIP. She was turned down, but she got it on appeal. She said that the process was so bad for her mental health that she would never again apply for it, no matter how desperate she got. I know that that is a single case, but I have heard over and again that people find the process so stressful that something has to be done about it.

That is an amazing canter through what is there, but I suggest that if we take seriously the association between job insecurity and poor mental health, and between inequality and poor mental health, it is not enough simply to buy a much bigger box of sticking plasters. We need to tackle the root causes.

Child Support (Miscellaneous Amendments) Regulations 2019

Baroness Sherlock Excerpts

Tuesday 2nd July 2019 Lords Chamber

[Lord McKenzie of Luton (Lab)]

My Lords, I have just two quick questions. First, where the recipient who is due to make payment is subject to a benefit sanction, what impact does that have on the amounts that are collectable, as proposed in this order? Secondly, the £8.40 can be an amalgam of the collection fee and the maintenance payment. So far as the government accounts are concerned, how is that split and dealt with?

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her explanation of these regulations, and all noble Lords who have spoken, particularly my noble friend Lord McKenzie; he always comes up with questions I would never have thought to ask, and they are always excellent. I hope the Minister had thought further ahead than I did—although I see someone running to the Box so perhaps she had not.

I very much agree with the points made about child poverty and the role that child support plays in helping to provide a platform on which single parents can build an income which helps lift their children out of poverty. So we do not oppose these regulations. It is important, wherever possible, that both parents should contribute towards the cost of raising a child after a break-up. An adult may leave their partner but they do not get to leave responsibility for their children.

I accept that the regulations are designed to provide a series of changes and clarifications to make it easier to collect arrears and maintenance payments under the Child Maintenance Service scheme. I will concentrate on a few specific points: the proposal to allow deductions for child maintenance to be made from universal credit where a non-resident parent has earnings and meets the criteria to be eligible for the flat rate; the increase in the amount, plus collection charges, that can go towards paying arrears; extending the scope; and the enforcement points.

The proposal to allow deductions of £8.40 from benefits for arrears in cases where the non-resident parent is no longer paying ongoing maintenance seems sensible. I can understand that for someone on a low income, £8.40 is a lot of money, but it is entirely possible that the single parent on a low income could also be on benefits, and both parents may well have suffered from the cut in living standards brought about by the benefits freeze and the other cuts in benefits. That seems to be an element of fairness that has to be addressed.

It is also very important that non-resident parents are clear that they will be chased for any arrears they owe. I ask the Minister for a broader update on this. She mentioned that we debated some child maintenance regulations last November. At that point the key thing the Government did was to write off billions of pounds of arrears from the old CSA system, and the quid pro quo for that, because we pushed them at the time, was that they would promise to pursue enforcement. This really matters because otherwise there is a moral hazard question. If a message goes out to parents: “If you just hold off long enough and don’t pay, in the end the Government will give in and write it off”, clearly that creates a disincentive to pay the money that should be paid for your children. So it is really important that we do not get back into that question. Ministers made the case in those regulations for a clean break with the old system, but that places a huge onus on them to make sure that arrears do not build up again in the new system.

I looked at the latest statistics and I am a bit worried. Since the new Child Maintenance Service began, a total of £259.2 million of child maintenance is unpaid, which should now be paid through the collect and pay service. That is 11% of all child maintenance due to have been paid since the service began. In the last quarter of last year, only 66% of paying parents using that collect and pay system were compliant; and compliant does not mean that they pay all of it but that they are paying some of it. So only two-thirds who were using the actual statutory system of compliance were paying anything at all. I may have misread those figures, but can the Minister confirm whether that is right? If the figures are right, is she happy with them? If she is not happy with them, how much difference does she expect these regulations to make to that performance?

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank the noble Baronesses, Lady Janke and Lady Sherlock, for their contributions. I am pleased that the noble Baroness, Lady Janke, is supportive of the statutory instrument. We have been working hard since 2012 to ensure that this system is fairer. It is important that, wherever possible, we encourage both parents to support their children.

The noble Baroness, Lady Janke, referred to the two-child limit, which is not actually related to these statutory instruments but I will touch on it very briefly. We are very clear that people should take responsibility and think hard about whether they can afford additional children, in the same way that those who do not rely on the state often make the difficult decision to limit the number of children they have to how many they can afford. It is also important to point out that, although the limit was introduced for children born after April 2017 and the change of policy was notified a good two years earlier, people continue to receive child benefit for as many children as they have.

On the benefit cap, it is very important to note that the cap is lifted when the parents are working a sufficient number of hours. Indeed, a couple with three children have to work only 24 hours a week between them—just 12 hours a week each. The benefit cap is then lifted and they are then in receipt of income equivalent to a net income of £35,000 a year, plus their housing benefit. I think most noble Lords would agree with me that that is generous. This is funded by the taxpayer.

The noble Lord, Lord McKenzie, asked what happens in cases where the parent has a fraud penalty or is sanctioned and is possibly in financial hardship because of the sanction. Some clients will have a fraud penalty or undergo sanctions while claiming benefits and may be eligible to claim a recoverable hardship payment. If a claimant has a fraud penalty or sanction applied to their universal credit award which is equal to or more than 40% of their standard allowance, the only deductions that can be taken at the same time are arrears of housing service charges or rent and fuel. These are to help protect the claimant and their family from being made homeless or having their fuel supply disconnected. All other deductions cease while the fraud penalty or sanction is being applied, so no child maintenance deductions will be taken. From October 2019, the 40% maximum deduction rule will be reduced to 30%.

I congratulate the noble Baroness, Lady Sherlock, on her ordination last weekend. That was very good to see, although it has not put her off from taking time out to ask me some difficult questions.

On the question of write-off statistics, up to the end of March 2019 217,500 cases held on the CSA computer systems with non-paying historical debt had the debt adjusted or written off. Some cases on the CMS system with debt below representation thresholds have also had their debt adjusted or written off. Activity on CMS system cases started later than on the CSA system and the data we need to report on them is not available yet. However, the CSA case load continues to reduce: the number of CSA cases held on CSA or CMS IT systems decreased from 809,000 in December 2018 to 674,00 in March 2019. The reduction in case load is mainly due to the closure of cases with government-only debt—a debt owed to parents of less than a thousand pounds. This historic debt continues to reduce, but the CSA has written to 125,200 parents with care to ask if they want a last attempt to be made to try to collect the debt owed to them.

We have not written off any debt without authority. As part of the case closure process, we brought to account some outstanding payments and activities and tidied up details of some cases. A significant number of CSA cases involved moneys being transferred directly between the two parties, and the case records have been adjusted to reflect this.

In July last year, the Government published their new compliance and arrears strategy for the Child Maintenance Service. This sets out how we are tackling the legacy of the failed Child Support Agency and the steps we will take to prevent arrears accruing at such a high rate again. Where it is cost effective and reasonable to do so, we are offering parents the choice of whether they would like us to make one last attempt to collect their debt. Where the collection of the outstanding debt is not possible or appropriate, we are writing it off. It was a difficult decision—we took some time to come to it because we strongly believe in enforcement—but many of the sums involved were very small. At the same time, it was costing the Government—in other words, the taxpayer—a lot of money to maintain this system and the debt within it. We prioritised the collection of maintenance for today’s children over historic debt where no child stands to benefit. The majority of the historic debt was owed to parents, not the taxpayer.

There was another question on how many parents on “collect and pay” actually pay. In the quarter ending March 2019, 67% of paying parents using the collect and pay service were compliant, up from 60% for the same period in 2018. This includes parents who transferred from the direct pay service having failed to pay their liabilities.

The noble Baroness also asked whether parents would be encouraged to be non-compliant, as they have seen outstanding CSA debt being written off. The write-off of CSA arrears is a one-off exercise and the regulations allowed us to do this only for debt accrued on the CSA schemes. These were historical arrears and this was in recognition that the majority of the CSA debt could not be collected, given its age and the circumstances of the parents. Where there is a possibility of successful collection at a reasonable cost to the taxpayer, we continue to do that. Looking forward, we believe that we are building a better CMS. In this package of regulations, we are making further provision to collect payments and stop arrears like this building up again.

Have we made use of the new enforcement powers? We have started to use the powers from the previous package of regulations, which allow us to deduct from joint and business accounts and disqualify a parent from holding a passport. In these early stages, the new enforcement powers are proving successful, and we continue to monitor their implementation. Where a parent fails to pay on time or in full, we aim to take immediate action to re-establish compliance before enforcement action is needed, but new powers introduced in the 2018 regulations enable disqualification from holding or obtaining a UK passport and deductions from joint and business bank accounts.

Moving on, we are proposing to change our power of entry process so that inspectors must seek a judicial warrant to access premises where they have previously been refused entry or may apply for a warrant to enter premises at which they expect to be refused. Inspectors will also be able to apply for a warrant authorising entry if they are unable to contact the occupier of the premises in advance. A judicial warrant is a safeguard, which will allow occupiers to make representation before a magistrate as to why an inspector should not be allowed to enter, but we expect this to be quite a low-impact change, with the Child Maintenance Service expected to apply for fewer than 20 judicial warrants a year. This change brings us into line with the Protection of Freedoms Act 2012, and we believe that it adds a modest protection in a very small number of cases.

Deductions from universal credit will come into force on the day after the day these regulations are made.

I think that I have covered most of the questions. The fee for an application to the Child Maintenance Service is £20. This is intended to encourage parents to consider whether they really need a statutory scheme case, but it is not so high that it creates an obstacle to entering the scheme. Where an applicant has experienced domestic abuse or is under the age of 19, they are exempt from paying the application fee. It is not our intent to create a barrier of any sort for vulnerable claimants.

These regulations build on our earlier changes as part of the child maintenance compliance and arrears strategy. They will make deductions from benefit more consistent, allow writing-off of unenforceable debts suspended on the CMS systems, improve our information-gathering processes and update the CMS calculation and fees regulations. I commend this statutory instrument—

[Baroness Sherlock]

My Lords, before the Minister sits down I want to thank her for her kind words. I should perhaps have reminded the House of a now rather historic interest, as a former board member of the Child Maintenance and Enforcement Commission. Can I press her on a couple of questions which I think she did not pick up?

In one question, I was asking whether the Minister was happy with the compliance rate. I think we agree broadly what it is, at 66% or 67% of those paying something. That seemed quite low to me. I wondered whether the Government were satisfied with that and, if not, what difference these regulations might make. The other question I asked was about the proportion of parents who currently have an effective child maintenance arrangement in place, and how that compares to before when there was a more widespread statutory system. Is she able to comment on either of those points?

Extreme Poverty and Human Rights: United Nations Report

Baroness Sherlock Excerpts

Wednesday 19th June 2019 Lords Chamber

[Baroness Buscombe]

My Lords, we are tackling poverty across the country. I refer noble Lords to the leader article in the Times of 25 May:

“The failings of Mr Alston’s report are legion … it is padded out with such accusations as that the government evinces a ‘punitive, mean-spirited and often callous approach’”.


This is the Times. It said, “This is nonsense”. It goes on:

“yet poverty in this sense does not exist in Britain in the 21st century”.

We are responding to reports with care but, in all seriousness, we must say that many things in this report are exaggerated and inflammatory.

[Baroness Sherlock (Lab)]

My Lords, perhaps I may offer the Minister a quote about the report:

“we did a fact check of that report. He made a lot of good points. It was factually correct … in terms of the facts, of austerity, cuts to local government funding, of the reliance that we have on the labour market and the risk that we face if there was a recession, all of those things were really good points that we have taken on board”.

That is a quote from the policy director for children, families and disadvantage at the DWP, giving evidence to the Work and Pensions Select Committee last week.

Given that we have received not just this report but one after another showing that families on low incomes are really struggling, and given the crucial point made by the right reverend Prelate the Bishop of Leeds that families are turning up at food banks all over the country, working parents are going to food banks and schools are feeding hungry children, something is going wrong. Please will the Minister look again at this?

[Baroness Buscombe]

My Lords, we continue to listen and to learn. The Government continue to spend more than £95 billion a year on benefits for people of working age. I say again, as I have said so many times before, that when the party opposite were in government, 20% of all working-age households in the United Kingdom—including Wales—were entirely workless. We have brought that figure down to 13.9% and we want to bring it down much further, but there are many different ways in which we are making a difference, listening and investing more money in real terms into the system to support and encourage people into the world of work and support those who cannot work.

Children Living in Poverty

Baroness Sherlock Excerpts

Monday 17th June 2019 Lords Chamber

[Baroness Buscombe]

My Lords, I have already made it clear at this Dispatch Box that we intend to end the benefit freeze next year. Again, the stats produced by the Social Metrics Commission last year predate much of the additional support that we have invested in the system since the last Autumn Budget.

We have done a huge amount to help families through transforming the welfare system so that people are not just helped into work. We are working hard on in-work progression, so that people preferably do not just have a full-time job—three-quarters of all jobs since 2010 are full time—because we want people to have good jobs, and are piloting new ways of supporting that. We are also boosting our capability to work with local businesses and working with jobcentre specialists to encourage local employers to support progression and good-quality flexible working which will support the children of those families in work.

[Baroness Sherlock (Lab)]

My Lords, the Minister has talked a lot about what the Government are doing to help people in jobs, but if the aim is to get families out of poverty, it is not working. The facts are clear: people are simply moving from one kind of poverty into another—that is, from out-of-work poverty into in-work poverty. The impact on children is very serious. Did the Minister see the recent research in the Archives of Disease in Childhood showing that child poverty has not only risen but will rise further? It looked at the impact on children of being in poverty in childhood and found that those in “persistent poverty” were three times as likely to have mental health problems and twice as likely to have a long-standing illness. The president of the Institute of Child Health said that we need,

“national targets to reduce child poverty backed by a national child poverty strategy, the reversal of cuts to universal credit and the reversal of public health cuts”.

Does the Minister agree?

[Baroness Buscombe]

My Lords, again, we are doing a huge amount, quite a lot of which is not reported or reflected in the additional support we have injected. I have just returned from the G7 in Paris, where we focused on labour. There is no question that, across the world, the changing world of work presents challenges. We are at the forefront on this issue; other countries look to us. Our living wage is way in excess of what other countries afford their citizens. We are setting an example and achieving a huge amount in having a transformational system that helps people into work, pays them to work and gives them in-work progression. Let me give an example: a couple with three children need to work for a total of only 24 hours per week to be exempted from the benefit cap; they can then receive from the state the equivalent of a £35,000 gross salary a year, plus housing support. That is not ungenerous.

Housing: Pensions and Deposits

Baroness Sherlock Excerpts

Wednesday 5th June 2019 Lords Chamber

[Baroness Buscombe]

I do agree. I am sorry that I am not the Housing Minister answering this Question, but it is important that we are committed to ensuring the housing market works for everyone. Of course, there is more to do. That is why we have announced an extra £17 billion in funding for Help to Buy since 2017 and reformed stamp duty so that 80% of first-time buyers will not pay tax. We are absolutely on a track that does not mean an increase in house prices. The important thing is that we focus on supporting first-time buyers. The number of first-time buyers is at an 11-year annual high.

[Baroness Sherlock (Lab)]

My Lords, I agree with the noble Lord, Lord Tebbit.

[Noble Lords]

Oh!

[Baroness Sherlock]

There is a first time for everything. When I read about this, like my noble friend Lord Kennedy I initially wondered whether it was April Fools’ Day. The Minister in charge of housing has a wheeze whereby young people should raid their pension pots to fund the deposit on a new house. I can immediately see three things wrong with this. First, frankly, most young people do not have enough money to put a deposit on a flat to rent—there is certainly not enough for fish and chips afterwards. Secondly, if they have enough money in their pension pots it should stay there, otherwise they will not have anything to retire on. Thirdly, as my new friend, the noble Lord, Lord Tebbit, points out, this will drive up the cost of housing. Given all that, and given that the DWP has had a multi-million-pound advertising campaign to encourage younger people to save, what will happen to James Brokenshire?

[Baroness Buscombe]

My Lords, I am very grateful that the noble Baroness has formed a new friendship over this topical Question. In short, our focus in the Department for Work and Pensions is on ensuring we support young people in every way we can to save for the long-term, for their retirement and security. I have to say to noble Lords opposite that, if they feel as I do, perhaps it is not right that we should be giving so much oxygen to this idea in the House of Lords.

Households Below Average Incomes Statistics

Baroness Sherlock Excerpts

Thursday 28th March 2019 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Statement and for advance sight of it, but, not for the first time, I rather wish Lords Ministers were allowed to make their own Statements. I do not blame the Minister for the rather partisan nature of that; I suspect it may be aimed more at the Secretary of State’s Back-Benchers than at this House. None the less, since she has had to put that on the record, I am now obliged to repudiate it before we can get on to talking about poverty figures. Bear with me while I do that briefly, then we can talk about what was actually in the Statement.

Since the Secretary of State chose to attack what she called “Labour’s welfare splurge” and what we called lifting children out of poverty, I have to put to rest once and for all that old canard that the Government were forced to cut spending on the poor because of Labour’s record. A detailed study, by Ruth Lupton et al, of the coalition Government found that,

“the poor bore the brunt of its changes to direct taxes, tax credits and benefits”.

Meanwhile, with the exception of the richest 5%, those in the top half of the distribution were net gainers from the changes.

“Perhaps surprisingly, overall the ‘welfare’ cuts and more generous tax allowances balanced each other out, contributing nothing to deficit reduction”.


Those coalition austerity cuts were not needed to reduce the deficit or to do anything about Labour’s spending in the past; they were to pay for tax cuts. The benefits of those tax cuts are felt primarily by higher earners. If you increase the personal allowance, someone earning £80,000 a year benefits from all of it. A single mum working 35 hours a week during term time at the minimum wage does not earn enough to benefit at all.

I have now taken a deep breath and will move on to today’s Statement. One thing that the HBAI—households by average income—does is to give us an interesting sense of perspective, and I want to remind us of that today. It tells us that, to lie in the top half of the income distribution, a single individual last year needed a net income over £17,700. A single individual with an annual net household income of over £34,900 would be in the top decile. In other words, he or she would have an income higher than 90% of the population. We all tend to assume that other people earn similar amounts to us and that is a really good reminder that, if that is what the average is, think what the poor are living on.

The Minister mentioned relative poverty today. Normally, Ministers in this Government end up talking about absolute poverty because it is the only figure they can find that does not appear to be rising. Under these figures, they have not looked at the international measure, which is relative poverty, but even today’s figures show that the number of children living in absolute poverty before housing costs increased by 300,000 and after housing costs by 200,000. It is staggering to see absolute poverty rising in our country.

But that is inevitable. Ministers may not wish to come into politics to make people poorer, but I am afraid that if one wills the ends one must will the means. It is inevitable that, if you keep cutting benefits to children, families with children will get poorer. The benefit freeze alone will now save the Government some £4.4 billion a year. That is £4.4 billion that has gone into the Treasury and come from the pockets of some of the poorest families in our country. That means that the Government have cut the value of all the main means-tested working age benefits—all the classic ways in which people keep body and soul together, including personal allowance, income support, jobseeker’s allowance, ESA, housing benefit, universal credit, lower disabled child addition—I could go on. According to the Joseph Rowntree Foundation, the effect of the benefit freeze carrying on for yet another year next year means that families will lose another £560 a year on average.

Perhaps even more surprising is that these figures show that the number of pensioners living in poverty actually rose by 100,000 last year, which means that it has increased by 400,000 since 2010. What are the Government planning to do about that?

I have three questions for the Minister. The last Labour Government set out to reduce and eventually eliminate child poverty. They had a clear strategy. What is now the Government’s strategy? Do they aim to reduce child poverty? If so, by how much, by when and on what measure? Or do they think it acceptable that 30% of British children are growing up below the poverty line, half of whom are under five?

Secondly, given that the Government repeatedly stress the importance of people being in work, what will they do about the fact that the proportion of poor children who are in working families has risen again, to 70%?

Finally, will the Government please rethink the benefit freeze? If they would invest just enough to stop it now and not continue it for another year, that could make a real difference to some of the poorest families. These families have suffered enough. When food bank use is at record levels and we keep reading about teachers having to bring in food and clothes to schools simply to help children be well enough, clothed enough and fed enough to learn, surely something has to be done. Please will the Government act?

[Baroness Thomas of Winchester (LD)]

My Lords, I am afraid that I am a very inadequate substitute for my noble friend Lord Kirkwood of Kirkhope, who is unavoidably absent today. I am a very poor stand-in—or rather, sit-in.

Today’s figures come as a result of a deadly combination of high inflation, weak pay growth and big cuts in benefit support for working-age households, as we have heard. The most shocking figure is that there are 200,000 more children in absolute poverty. I echo the noble Baroness, Lady Sherlock, in asking the Government to use the upcoming spending review to restore the remaining £1.3 billion taken out of universal credit work allowances in 2015 and consider introducing a work allowance for second earners to help get both parents into work.

As for getting more disabled people into work, which was mentioned in the Statement, the National Audit Office report which is out today is pretty critical of the department, saying that it cannot assess, for example, whether disabled people receive a consistent service between jobcentres or over time. It also says that the department underspends its budgets by overestimating the take-up rate of some of its programmes. Will the Minister say whether the department will undertake to look seriously at the recommendations from the National Audit Office?

Finally, disabled people themselves are very keen to help the Government to get this right. There are a lot of brilliant disabled people who would be very keen to engage with the department on employment.