Universal Credit Regulations 2013

Baroness Thomas of Winchester Excerpts

Wednesday 13th February 2013 Lords Chamber

[Baroness Hollis of Heigham]

My Lords, like my noble friend, I thank the Minister and the Box for the papers and seminars that we have found so helpful. I congratulate my noble friend on her powerful scrutiny of some very extensive regulations that effectively took 17 days in Committee to debate.

The noble Lord, Lord Freud, admitted that the regulations assume economic rationality. As a result, they are heavy on sanctions—in my view, appallingly heavy sanctions in Regulation 102 lasting for up to three years—believing that they can sanction people into the behaviour they want. However, as abundant research shows—I am sure that the Minister is familiar with it—and as the Trussell food bank network confirms, most people do not know why they have been sanctioned. It is as though it has happened to them. They live chaotic and confusing lives, to the intense irritation of the benefits staff. The CAB says that the claimant does not understand the responsibilities and the adviser does not understand the claimant. The personalised claimant commitment will, we hope, introduce an essential flexibility and headspace into the regulations, but I fear that the very clarity produces a yes/no, either/or approach to regulations and guidance that is not reflected in real life. Some of these issues have been raised by the noble Lord, Lord German.

The second issue is that we face major delivery problems, an issue perhaps associated with transitional arrangements. I want UC to work. I fear that on delivery we will be heading for a train crash. At one and the same time, the Minister is rightly introducing a new benefit architecture that will, however, confuse most people with its new rules, new conditionality, new sanctions, new tapers and new backdating rules and that has most benefits in, but some, from DLA to council tax benefit, out. That is the first thing that is happening.

Then, on top of that, come the cuts. Some benefits, such as HB, will be cut because of the bedroom tax. Claimants will think that it is DWP error and will go frantic trying to correct it. Thirdly, in the past they will have received their benefits weekly or fortnightly, but now it will be monthly in arrears. As nearly half of those in the bottom two quintiles are in work paid weekly, many will not cope and debt will grow.

Fourthly, for the first time, they will find their housing benefit paid to them and not to their landlord. Inevitably, on a monthly basis, it will be raided before the month is out to meet other bills. The DWP’s demonstration projects show that 40% of tenants will find it difficult, and a quarter will need substantial, long-term support. The chief executive of Wakefield, one of the pilot areas, is reported to have said that people are now ceasing to pay their rent at all. That is from a pilot area where tenants have had considerable support. It is worth reminding ourselves that this demonstration project showed that 40% of tenants were in debt, already excluding rent arrears. Over 90% had no savings as a buffer. Over a third had sought help from the CAB.

Fifthly, these arrangements come as a single electronic payment, paid probably to him, leaving her and the children potentially vulnerable, when claimants have been used the past to separate flows of benefit, particularly to the one with children, and to a cash economy for food. And all the claims are online, although 30% of the poorest have no access to IT at all. Citizens Advice, which would have helped them, has lost nearly half its grant thanks to coalition Government cuts. Claiming benefits online would certainly terrify me. However, in exceptional cases, there will be face-to-face support. Will the Minister tell us what percentage of people he expects to take up that proposal? As these tenants do not have and cannot afford a word processor at home, their benefit claims cannot be interactive. They go to a community centre and fill in their forms online with the help of someone present, and then they go home. And then what? How do they get any interactive dialogue going should there be any query over, or error in, their submission? How will DWP manage this?

I greatly welcome the local support service, but the obvious hard questions are how many centres there will be, how many claimants there will be and how much new money there will be. Or is it another slice off the HB under-occupancy test for someone else? It cannot be left to district managers to decide, as is proposed. As it is, my housing association will be employing and paying new staff out of tenants’ rents to provide the self-same welfare advice that, hitherto, trained CAB volunteers offered for free.

The delivery of any one of these seven major changes to benefits would need careful implementation. To bring in all seven at the same time seems like folly. I think that we are setting up UC to fail, and causing much misery in the process—and that is before the IT plays up and falls over.

UC is for the benefit of claimants. I fear that most of the delivery changes which I have listed will destabilise it and are for the benefit of the department, making UC harder for claimants to embrace and understand. I have been through ambitious change programmes, but nothing as ambitious as this. I beg the Minister to sequence these seven changes properly—to introduce them incrementally on an agreed timeline so as to take people with him. Yes, claimants will come across in manageable cohorts; that is entirely right. However, once in UC, they face all these seven delivery changes simultaneously. Those changes need to be phased in, as well as the claimants themselves.

I beg the Minister to consider, even at this late stage, a transitional year for claimants to be able to opt for fortnightly payments, split payments within couples and direct housing benefit payment to their landlord, while the claimants get their heads around UC and learn to work IT—itself a big enough challenge over the course of a year. At the very least, we should ensure that those who are treated as exceptional or vulnerable for the purposes of housing benefit payment are passported to the exceptional payment grounds within UC and vice versa. What estimate has the Minister made of the percentage of people who will be protected in this way under the heading of “exceptional or vulnerable”?

Finally, the regulations that worry me most are sanctions, hardship and housing. First, as regards sanctions and Regulation 102, if you are economically rational, as the Minister surely is, you also surely reward people who become compliant. You reward them for good behaviour. With three-year sanctions, what is the point of the claimant changing his behaviour if nothing happens as a result and he continues to be sanctioned? What message does the Minister think he is sending? The concession on holding down a job for six months is empty in this situation. Will the Minister at least follow the SSAC recommendation that when a claimant has complied, the sanction should be suspended? That is the message to get across. It then can be reimposed if the claimant breaches his conditionality subsequently. Otherwise, I expect this to be judicially reviewed. Will the Minister also ensure that when one person in a couple—for these purposes, I will assume that it is a male—is sanctioned, the payment is automatically switched to the main carer to protect the children?

Secondly, I should like to make a few comments on hardship and Regulation 116. The guidance is really helpful and very worrying. I believe that there are three problems. At the moment, you are automatically entitled to hardship payments if you are vulnerable—for example, if you have children—but you will not be entitled in future. All expenditure is to be scrutinised to see if the family is truly and deeply in hardship. Should they return the TV? What about smokers, Christmas presents, or train fares to attend granny’s funeral? None of those is covered in the four basic criteria of health, housing, hygiene, food and so on that the Minister has put into regulations and guidance.

Iain Duncan Smith, I think, believes that poverty is primarily a moral failing. Like the Victorians, he is insisting that the poor must always live in the light and display their income and behaviour for scrutiny by their betters; that is, young, local office staff with often little experience of difficult lives. The intrusiveness of it all appals me. What is worse is that the hardship handouts will be, as far as I know for the first time ever, clawed back. A hardship handout now is a loan and not a reduced benefit entitlement secured for the vulnerable. Paying it back will in future cut the UC a claimant gets and will further increase debt, which is one of the major problems that all claimants will face.

Most disgraceful of all is that under Regulation 116 (1)(b), households get hardship payments for the vulnerable only if they have met compliance conditions. So why are we still sanctioning them? Why do they need to claim hardship payments at all? We have never made hardship payments conditional in this way, nor should we. Hardship payments meet needs—above all, those of children. They are a safety net. Instead, in these regulations, they are being treated as another lever to make sanctions and compliance bite. It is ugly and indecent. Are we going to refuse hardship payments to a lone parent where she and the decision-maker disagree about her availability for work given the age and vulnerability of her children? That is the sort of example that my noble friend Lady Sherlock described so effectively. The lone parent is sanctioned and is not compliant. She is refused hardship money. I hope and expect that this will also be judicially reviewed.

Finally, on housing benefit and Schedule 4, we now find that the bedroom tax may affect one-third of working-age tenants. They will be fined—because they cannot move—£14 a week for accepting the home which was offered to them in good faith a decade previously, which is where they have brought up their family. As a result, unable to pay that £14—they have no savings—they will go into debt, arrears, be evicted, bed and breakfasted, children traumatised. Then they will be rehoused, either in the private sector at higher housing benefit costs or back again in the same size accommodation that they left, since that is all that we have. This is simply because the DWP and the coalition have so decided. The issue of overcrowding, which the noble Lord sometimes quotes, is, as my noble friend said, utterly irrelevant because they are in different places.

So why are the Government appealing the Court of Appeal judgment in the Burnip case, which allowed disabled children to have their own bedroom? A decent coalition Government would not fight on. If they lose, as I fervently hope—we will not know until December—what estimate have they made of the numbers who will then be protected? What are the implications for middle-aged couples, whose ill-health requires separate bedrooms, or do we need to judicially review that as well? Will the Minister tell us what level of disability aids and adaptions have to be fitted into a property and at what approximate cost before the Government accept that it makes no sense for the household to move and to refit another, but smaller, property in its place? Housing bodies need to know to make sensible forecasts. Foster carers have been mentioned and I am sure that the Minister will respond.

Turning to another issue, following bereavement the Minister is allowing only three months’ grace if someone is required to move house. I think that I am resilient, but I could not have coped with finding a house, packing up and moving within three months of my bereavement. I was wiped out. The distress of a forced, speedy move from the home built together is like being bereaved twice over. SSAC called for 12 months’ grace, not three months. Will the Minister, in all decency and compassion, please agree?

I have one final housing point. At the moment, households where an unemployed person under 25 years old lives at home getting £56 a week JSA do not incur non-dependant adult deductions. In future, they will lose £68 a month, the same as those on higher benefits or in work. That seems grossly unfair. If he is economically rational, as no doubt he is, he will increase the HB bill by finding separate accommodation of his own and leaving home.

We have more regulations to come in October and, I am sure, amending regulations of regulations. We are already starting to see them. We also have negative regulations, some of which I am sure we shall pray against. However, we cannot amend these regulations. Will the Minister at least attend to some of the concerns being expressed all around this House in regulations that we have yet to examine?

[Baroness Thomas of Winchester]

I have one small point to raise under these regulations, which I expect the House will welcome. Before I do that, whatever we think of the detail of these regulations I pay tribute to the Minister and his staff in the DWP, who have worked absolutely non-stop to get out these regulations and all the guidance. We might complain about having so many piles of paper, but somebody has had to prepare them. It has been a tremendous effort, so I thank him very much.

Noble Lords will be pleased to hear that the one matter I address in these regulations is a success story. It is possibly the end of a long road leading to the better treatment of all those service users and carers who are involved in helping to improve health and social care services. This is about having their expenses disregarded for benefits.

There is one matter to ask my noble friend about: the word “consult”. When service users and carers report their involvement to Jobcentre Plus, they are likely to do so by using the terms that are used by the health and social care organisation that has asked for their help rather than the term “consult”, which is used by the DWP in these regulations. We were told that the lawyers insisted on this word. In order to avoid misunderstandings in Jobcentre Plus offices, it would be helpful to explain that service user and carer consultation may be described as “involvement” or “participation” and “co-production” by the Department of Health. Other health and social care organisations also use the expressions “experts by experience” and “acting together”. Will my noble friend ensure that the guidance for Jobcentre Plus staff will include an explanation about the terminology likely to be used? This will prevent a great deal of misunderstanding and I am sure will reap dividends.