Welfare Reform Bill

Baroness Tyler of Enfield Excerpts

Monday 23rd January 2012 Lords Chamber

[Baroness Drake]

My Lords, I rise to move Amendment 60B, the purpose of which is to exempt from the benefit cap family and friends carers who are bringing up children whose parents cannot do so. These are children who would otherwise be in care and this community of carers is looking after a population well in excess of 200,000 children.

Family and friends carers may be disproportionately affected by the benefit cap as they are likely to be living in larger households because of taking in a sibling group, particularly if they have children of their own living at home. It is not uncommon for a kinship carer to be looking after four, five or six children. As a result these families could immediately be up against the cap. Grandparents Plus research finds that 10 per cent of kinship carer households consist of five or more people. While in most of the country carers receive benefits that are less than £500 a week, in parts of London people with larger families are already paying upwards of £400 a week in rent. The cap would leave these future kinship carers with less than £100 a week to cover all their family’s, including their new family’s, needs.

Around one in three kinship carers gives up work to care for children when they move in. Almost half of these children have emotional and behavioural problems or other special needs or disabilities. In about half of cases their parents are misusing drugs or alcohol. Bringing up someone else's children is enormously emotional and a big financial commitment, yet only a minority of carers—around a third—receive an allowance from the local authority. In the present financial climate, local authorities are even more reluctant to pay kinship carers allowances.

No one sets out in life to become a kinship carer. People do it because they do not want to see their grandchildren, their younger siblings or their nieces or nephews, or children who they know well, taken into care. Often, giving up work is not a choice for them. They are told by social workers or by other authorities that the children will be put in care or placed for adoption if they do not do this. Children who are cared for can be of any age, not just in their early years. Kinship carers are not entitled to an employment break when a child or children first move in and can face significant financial disadvantage as a result of having to give up work. If they are older, they may find it difficult subsequently to re-enter the labour market.

An unintended consequence of the benefit cap is that fewer family and friend carers may volunteer in difficult circumstances, increasing the number of children taken into care as a result. This would be more expensive from the point of view of the state and certainly not in the child's best interest. It costs £40,000 for one child to be in an independent foster care placement for one year and I understand that there is already a shortage of 10,000 foster carers.

The argument that imposing a benefit cap on larger families will discourage people from having more children has no resonance or behavioural leverage for family and friend carers, who are taking on other people's children. A benefit cap can have no positive incentive at all. Rather, it is a disincentive to kinship carers, who save the state significant amounts of money and provide a better solution for the child. Which of the three choices identified in the impact assessment do kinship carers take to mitigate the impact of the cap? Do they go to work, reduce their expenditure or move to cheaper accommodation?

Kinship carers may have to give up work as a condition of assuming responsibility for the child. Grandparents Plus has many examples of grandparents being told by social workers that unless they give up work, their grandchildren will be taken into care. They cannot mitigate the cap by going to work because they then hurt the child. Often, kinship carers want to stay in work, but this may not be an option if they want to take over the responsibility for the child. They may have their own children to support and moving to cheaper accommodation would seem to punish those who voluntarily embrace the responsibility for somebody else's children, often in difficult circumstances.

Children moving into kinship care because of serious family difficulties need stability, and if the carer has to move house to reduce housing costs that will be highly disruptive and mean that children have to change schools. It may mean that the local support networks, on which the kinship carers rely, will also be disrupted. This places further strain on carers, who are already under enormous stress because of the family difficulties that the children they are taking on have endured. Even more than for other parents, community links with families, neighbourhoods, friends, churches and community groups provide vital support to carers who are often bringing up children who may be traumatised.

The amendment covers only carers who are looking after children who would otherwise be in care and under a relevant order. There is no possibility that exempting these kinship carers would result in any sort of perverse incentive for people to go round sweeping up children in the hope of claiming that they are caring for them and accruing additional benefits.

At the risk of repeating myself, I will go back to what I said in Committee and quote the Secretary of State, Iain Duncan Smith. If his words are compelling, as I said in Committee, why should I use alternatives? He said:

“The state has become ambivalent about the importance of family structure … the role of the extended family … in a context of growing family breakdown, it is all the more important that we continue to support … and hold together these wider relationships”.

Unless family and friends carers are exempt from the effect of the cap, the state will move from ambivalence to antipathy. In referring to exempting people from the cap, the Minister said in Committee on 23 November:

“We have … been very careful in providing exemptions and deliberately kept the list short”.—[Official Report, 23/11/11; col. GC 415.]

I simply ask that the short list includes family and friends carers. That protects the children and certainly makes fiscal sense.

I acknowledge that the Minister has recognised the valuable role that kinship carers fulfil and that he has committed to looking at a range of issues affecting this group—an important commitment that I accept and I know that he will keep to it. But it remains uncertain as to what the noble Lord intends and this may be my last chance to argue the case for this community before the Bill leaves this House. It is important that a decision on whether individual carers are exempt from the cap should not be left to local discretion. People who are thinking of taking on something as significant as the care of vulnerable children need a degree of certainty about the support that they can expect.

In response to the noble and learned Baroness, Lady Butler-Sloss, the Minister used words to the effect that, “Kinship carers are a special case and we need to get it right in regulations. Families need a period to adjust to looking after troubled children”. I would like to push him on that sentiment. As I said, this may be my final chance to argue the case for the valuable job that this community of carers delivers. Will he accept the amendment or agree to include an exemption from the cap for family and friends carers under regulation? Not only is the case for the carers and the children compelling, but it also makes fiscal sense to exempt them.

[Baroness Tyler of Enfield]

My Lords, I support the amendment that has just been moved so powerfully and comprehensively by the noble Baroness, Lady Drake. Having myself moved a similar amendment in Committee, I do not wish to go over the same ground that she has, save to say that there is a powerful case for providing an exemption from the cap for grandparents, older siblings, aunts, uncles and other family members who are raising vulnerable children because of very difficult family circumstances such as parental death, alcohol or substance misuse, imprisonment, severe illness, disability, abuse or neglect—the list goes on and on. Children living in the care of family and friends are often exceptionally vulnerable and have already suffered huge disadvantages and traumas in life.

As the noble Baroness clearly put across, one consequence of the benefit cap that I am sure is unintended is that fewer family and friends may step forward as carers in these difficult circumstances, and the cost to the state, particularly if more children go into care as a result, would be considerable. To amplify that point, I shall mention a few statistics that the Family Rights Group was good enough to share with me from an internet survey that it has just conducted—the largest survey of family and friends carers in the UK—with 500 respondents. The survey’s findings show that: more than 16 per cent of respondents were raising three or more children, both kinship children and their own; 11 per cent of respondents were in private rented accommodation and 28 per cent in housing association or council rented accommodation; 29 per cent received housing benefit; 31 per cent had given up work permanently when taking on kinship children while 14 per cent had given up work temporarily; and 20 per cent of the children that they were raising had previously been in an unrelated foster care placement. I think this puts some flesh on the bones of this particular issue.

I know that my noble friend the Minister was very sympathetic in Committee to this issue and has written in very sympathetic terms to the charities which are most involved. I very much hope that he has some reassuring words to give us tonight.

[Baroness Hayter of Kentish Town]

My Lords, rather like the amendment which we discussed earlier on carers, this amendment will, as has been spelt out, protect another unappreciated group: grandparents and other family members or friends who take on the care of children. As the noble Baroness, Lady Tyler, has just told the House, we know that the Minister is sympathetic to this group, which includes many children who have experienced significant traumas before their move to a new caring family.

The Who Cares? Trust estimates that a quarter of these children have lived with abuse, neglect and violence, and a quarter will have been deserted by their parents, often after drug and alcohol abuse. About 60 per cent go to grandparents after family breakdown, one in 10 after a parent’s illness—often mental illness—and one in 10 after the death of a parent. Applying the benefit cap to these families may leave them facing the difficult choices, of which we have already heard, about whether they can simply afford to carry on taking care of the child or children.

As we know, the impact assessment tells us that a family will lose about £93 a week. That is a substantial chunk of income. That may not be very much to Sir, or Mr, Fred Goodwin, but it is a fortune to some of these families. Should any of them decide that they can simply no longer afford to continue looking after the child, that will, as we have heard, create significant costs for the state. With regard to kinship carer allowance, there are estimates that if just 5 per cent of those currently in the care of family or friends were in formal foster care, that alone would add £500 million a year to the cost that the Minister would have to justify to his friends in the Treasury.

The Minister has spoken many warm words about the role played by kinship carers. He has also told us that the benefit cap is primarily intended not as a deficit reduction measure but to change behaviour. Indeed, his right honourable friend the Secretary of State told the BBC that the cap was aimed at making lives better by reducing dependency. We are not talking about dependent claimants here. We are talking about dependent children, who, after some great trauma or difficulty with their own parents, desperately need the kindness, care and homes offered by these grandparents, siblings, aunts or friends. We should be very careful that the Government’s laudable desire to reduce dependency for one group does not have dire effects on the well-being of another.

Given that the cap is not about deficit reduction, so we are not sending the Minister off to arm-wrestle with Her Majesty’s Treasury, we hope that he will try to turn those warm words into concrete protection. It has been suggested earlier this evening that maybe there is a little bit of movement to come. I look forward to hearing from him.

Welfare Reform Bill

Baroness Tyler of Enfield Excerpts

Monday 23rd January 2012 Lords Chamber

The Minister has said that this is a matter of principle. Frankly, that is the one thing it is not. He has decided on a cap but he has told us—and we already know—that certain types of payment will be exempt, such as disability living allowance, attendance allowance and some payments to war widows. All we are suggesting in the ame benefit to that list and saying that payments of child benefit specifically should be exempt as well. If we cannot do that for the children of our community, what can we do? I am pleased to support the amendment.

[Baroness Tyler of Enfield]

My Lords, I support the amendment, to which my name is also attached. We have heard a lot today about fairness. It is important that people in work feel that there is fairness in terms of how much money can be received by those out of work and on benefits, and that there is a clear incentive for all those capable of work to do so in order to r themselves and their families. I place on record that I welcome the measures being taken by the Government, such as the work programme, to give intensive help and support to people needing a lot of help to get back into the jobs market.

There is another aspect to fairness, though: fairness to children, irrespective of the circumstances of their birth. I shall run through the reasons why I feel that child benefit should be exempt from the calculation of the benefit cap. First, as we have heard, it is a non-means-tested benefit paid to all households with children. We have already heard this question posed today, but is it fair that children born into small families with earnings in excess of £80,000 a year receive child benefit while those born into larger families with a benefit income of £26,000 a year do not? I do not think that that passes any fairness test.

Secondly, child benefit is paid to assist with the costs of raising children. In my view, it is not about sending signals or penalising adults who do not work—and I add that all adults who can work should do so. Thirdly, this measure would have a disproportionate impact on children. We have heard the figures from the noble Lord, Lord Wigley, and the right reverend Prelate, and I do not intend to go through them again. Fourthly, it is a question of a compromise solution between children in large families receiving the full current level of state support and receiving nothing at all, which I perceive to be unfair. Fifthly, reducing the impact of this policy on large families would reduce the couples penalty that is currently built into the benefit cap.

The reason why I am concerned about the current situation is the issues raised compellingly in the debate earlier by my noble friend Lady Walmsley. This is about families having to move abruptly to cheaper areas and the disruption that that will cause to children’s schooling, often halfway through a school year. It is about families feeling, rightly or wrongly, that they will have to split up because if they created two households instead of one, parents would then be entitled to £26,000 a year in benefits. That cannot be right. Experts in the field have said that there is a substantial couples penalty built into the cap that is completely at odds with my own view, and that of the Government, of the need to support strong and stable families.

I am concerned about the impact on children who might find themselves homeless, perhaps in unsuitable and expensive temporary accommodation. With children and young people’s services already very overstretched, there is a real danger of children at risk simply disappearing from view below the radar, which raises child protection and safeguarding concerns.

I will summarise by saying, as was said earlier today, that children should not be the innocent victims of this policy. The vulnerability of children is very important to people on these Benches, and I look forward to hearing what safeguards the Minister has to offer in this area. I heard him say in the previous debate that he saw the transitional issues as a second-order issue. I do not consider the welfare of children to be a second-order issue at all.

[Lord Greaves]

My Lords, I have not spoken in the Welfare Reform Bill debates so far and I will be brief now. On the specific issue of child benefit, the Government seem to have got it seriously wrong. What is being proposed undermines the whole principle on which child benefit—and before that, as many of us will remember, the family allowance—has been based. If the Government are going to do that, I fear that that is the beginning of a slippery slope, and they will have to explain to us very carefully why they think the basic principles no longer apply.

In illustration, I go back to the example given by the noble Lord, Lord Best, about typical, ordinary—perhaps very ordinary—accommodation in the East End. There has been lots of fancy new development in the East End in the past decade or two, but most of it is still not regarded as being the most desirable part of London. People living in other parts of London in particular usually find themselves paying a great deal more than £350 a week for an ordinary two or perhaps three-bedroom flat. According to the paper today, for a four-bedroom house in the least salubrious part of Kingston—I did not know that such places existed, but it appears that they do—£400 a week is not unusual. That is four times what you would pay for an ordinary, perfectly decent house in my part of the world, but there you go.

If as a family whose benefits are being capped you receive £500 a week, and you are paying out £400 a week for rent, that leaves you £100 for everything else. I challenge any Members of your Lordships’ House to tell us how well they would do at bringing up a family of two, three or four—or perhaps more—children, plus one or two adults in the house, on £100 a week. It can be done, and many people in many parts of the world survive on far less than that, but this country is now almost the most prosperous that it has even been, if you take away the last five years. We are still incredibly well-off. If Members of your Lordships’ House think back—most of us are getting on a bit—to our childhoods and the circumstances that we were brought up in, they will see that this country is now incredibly rich and well-off. To require families to bring children up on £100 a week for everything apart from their rent is unacceptable.

When the media are encouraged, I have to say by some politicians in this country, to rant and rave about how these people are getting £26,000 a week and that everyone ought to be able to live on that—I apologise, £26,000 a year; some people are on £26,000 a week, but they are rather different—the debate really ought to start at what you have left after your rent. The state of the private housing market, and indeed rents in the public sector, is not the fault of people who have to live in these houses. There is a scandalous situation in which commercial landlords are ripping off people—indeed, they are ripping off the state, if people are getting housing benefit—by charging ludicrously high rents that are not justified by the cost of maintaining those properties but that are what the market will bear. If the Government and the rest of us want to do something about the state of the private housing market, we should look at housing policy and perhaps at the way in which the private housing market works. But that is a different issue all together. It is not the fault of the people. To try to do this—to try to force rents down or to try to regulate the markets and move people around the country by capping the benefits of the people living in those houses so that they can no longer live there—is penalising the tenants when the people who ought to be penalised are the landlords.

I have digressed a little from child benefit. I apologise for that. Child benefit, as my noble friend and others have said, has always been a non-means-tested benefit that goes as of right to families with children. It has always been paid on a per capita, per child, basis. That is a fundamental principle. The first child gets more nowadays, then each child after that gets the same, in order to assist the work of bringing up that child. To abolish child benefit, which is what is actually being done in this Bill, for people who are at the benefit cap and who are getting other benefits that take them up and beyond that cap, as is highly likely, is a fundamental attack on the whole principle of child benefit.

This ought to be resisted. Your Lordships ought to resist it, and we really ought to ask the Government very seriously to think again on this particular issue.

--- Later in debate ---

[Baroness Howe of Idlicote]

I am grateful for being put right. However, I still have differences of opinion with my noble friend Lady Flather.

However, my amendment was very much part, alas, of all the other amendments that have been debated. I have listened very carefully and, having had the benefit of being in the Chamber the entire time, I have been fully appraised before deciding which amendment to support and which not. The general impression that I have got from these debates is that there is a great feeling about families and about doing the best for children whatever household they are in. It is for that reason that I was happy to table the amendment for London—London Councils kindly provided me with the material—because London is such an obvious area where you have extremes of very expensive accommodation and fairly poor areas where it is not as easy to survive if you are living on benefits and are among some of the more disadvantaged and disabled.

All three of my amendments relate to the same issue which is why it is better to address them all together. If the Government want a benefit cap that fairly reflects average earnings, it would be logical and just for the cap to reflect geographical variations, not only in wages but in other important living costs such as those related to accommodation and childcare. The amendments would require the Secretary of State to take account of these variations: the average weekly cost of private rented accommodation, the average weekly cost of childcare and average weekly earnings.

By way of background, the most recent evidence regarding these factors shows that, as regards accommodation, London has the highest average private sector rents in the country at £222 per week. That is more than 36 per cent higher than the national average. Childcare in London and the south-east is at least 20 per cent higher than the national average. For example, a nursery place for a child costs an average of £113 per week in London and the south-east compared with the national average of £94 per week. Earnings in London are £31,935 compared with £26,133, a 20 per cent difference.

What would be the impact of the Government’s proposals on the benefit cap? Independent research by Navigant Consulting, commissioned by London Councils—I should emphasise that London Councils is a cross-party organisation speaking on behalf of all London boroughs and the City of London—has estimated that the impact on London of the proposed universal credit cap would be as follows. A total of 73,000 workless households would experience a shortfall in their benefits against living and housing costs. In aggregate, the cap would produce a loss of £8.2 million per week for workless households and more than £427 million per annum across London. There would be a significant impact on families with children and on larger families in particular. While less than 3 per cent of households without children will find their accommodation unaffordable, that rises to more than 30 per cent for families with children. The average weekly loss across London for households affected by the cap is £105.

The majority of the London boroughs are already reporting that a significant number of households are having to move home as a result of changes to housing benefit caps. That has led to an increase in the number of homeless households placed by boroughs in bed-and-breakfast temporary accommodation. The use of temporary accommodation recently reached a three-year high after 25 quarters of reduction since 2003. Now almost 1,500 families are living in bed-and-breakfast accommodation in London. That effect will be replicated elsewhere and will undermine efforts to retain and build sustainable mixed communities, a point that has been made very effectively by others in other debates. There is a genuine concern that reductions in benefit entitlements for workless households may lead to an increase in child poverty and safeguarding issues. With children and young people's services already stretched, the fear is that vulnerable children might slip through the net.

The Government have argued that they need to cap household benefit entitlement in order to reduce the £20 billion deficit bill and to return fairness to the welfare state. Of course, both of those objectives are laudable and entirely understandable. However, simply fixing a national limit and attempting to apply it across all households, regardless of variation in individual circumstances, is not only unfair but it is also likely to usher in a host of unintended consequences. We have heard about many of them in previous debates so I shall not go into the detail of those.

The cost of life's essentials varies from place to place and family to family. One does not expect to pay the same to rent a two-bedroomed home as a four-bedroomed home. One does not expect to pay the same to rent a home in the south-east as one might in the north-west. If the welfare system is genuinely to support people and households, surely it is only fair that any support matches, in so far as it is possible, the scale of the challenges facing households, which, so often, through no fault of their own, find themselves in high-cost areas. I hope that the Government will agree to these very reasonable amendments.

I would like to stress that I hope that the Minister will agree to meet London Councils and go through some of its real concerns about this issue. That would reflect on whether I might wish to bring this matter back at Third Reading

[Baroness Tyler of Enfield]

My Lords, I would like to add some of my concerns about the impact of the benefit cap in London. The noble Baroness, Lady Howe of Idlicote, has set out very clearly and eloquently all the facts and figures and I certainly do not wish to repeat them. I shall pick out one which is particularly relevant to me.

The level of rents in London means that families with just two children will be subject to the cap in many parts of inner London and also in some parts of outer London, including Newham, Haringey, where I live, and Hounslow. I am concerned about the impact of this on mixed communities, or looking at it the other way, one might refer to social segregation as poorer families are moved out of expensive areas. This is a very particular issue in London in terms of social cohesion. It also puts pressure on public services. I think that London Boroughs is right to be worried. The migration and concentrations of workless households in some areas will potentially have significant implications for the full range of local authority services. Boroughs with an inward migration of households are likely to face significantly increased service pressures very quickly and with very little time to plan for them in relation to unemployment, poverty, housing and so on. On the other side of the coin, boroughs that experience reduced demand for such services—again very quickly and without time for planning to adjust—will certainly face challenges and costs in adapting to different, if reduced, demands.

Families, particularly larger families, will be very much affected. In London it will also affect families with two children. I share the concerns that have already been voiced by the noble Baroness opposite. I also hope that there will be an opportunity to meet the Minister and London Councils to discuss further the sort of measures that could be put in place to mitigate some of the harsher implications that I have just set out.

[Lord McKenzie of Luton]

My Lords, I start with the amendments of the noble Baroness, Lady Flather. I find them confused on a number of levels. I should explain that during Second Reading—the noble Baroness referred to my comments about not wishing to hear what she said again—she said that Pakistani and Bangladeshi communities have lots of children because of the money. I objected to that and I thought I objected in about as gentle a way as one can, without being rude, and that is consistent with how we do business in this House.

The noble Baroness has just made reference to Luton and supposed problems there. I know Luton well; I live there. One of the strengths of Luton is its great diversity. We have a range of communities and—I almost called him my noble friend—the noble Lord, Lord Hussain, would attest to that as well. Having diversity brings challenges but also joy and I believe that is a great strength of Luton. I do not believe the proposition that people in any community, particularly the Pakistani and Bangladeshi communities, have lots of children because they believe it will be beneficial in terms of child benefit. If people had children only on the basis of a cost benefit analysis, I suppose there would be no children at all, given all the challenges that come with them. My experience of communities in Luton, particularly the Bangladeshi, Pakistani and Indian community, is that there is great aspiration for their children. If you sit down with people, you hear them speak with pride about their children just having qualified as a doctor, or a lawyer, or even some as an accountant, which brings particular pleasure. I honestly do not see the picture painted by the noble Baroness.

Technically, it seems to me that the amendment that she moved is flawed. As I understand it, the “relevant amount” is that which is based on estimated average earnings and effectively sets the level of the cap. It does not, therefore, specifically include amounts in respect of children. If it were based on income, rather than earnings—depending on the definitions—of course it would. It could, for example, involve child benefit, but this is not how the Government wish to proceed and it is not how they have constructed the cap.

Universal credit will be, as we have discussed, an in-and-out-of-work benefit and we still do not know what the cut-off point will be for those treated as in work. Perhaps the Minister can give us an update on that. Presumably the calculation of earnings would not include any amount of universal credit. If the noble Baroness is arguing that an award of universal credit should involve reduced amounts for third and fourth children, in terms of the cap, of course, that would clearly lessen its impact. However, the family cap of £26,000 applies regardless of the number of children in the household, so larger families are likely to be particularly affected, as we have just discussed. Estimates are that 80 per cent of the households likely to be affected by the cap will include three or more children. We know from the DWP impact assessment—certainly the original one—that children from BME groups are more likely to be disproportionately hit by the cap. It would seem that what the noble Baroness intends would drive these families further into poverty and that is not something that we could countenance or support in any way.

The noble Baroness, Lady Howe, introduced some interesting amendments. Certainly the issue of the impact on London, particularly of high rents, featured in our earlier discussion and that is recognised. The broader issue of whether one could have benefits constructed on a regional basis is a very wide debate—we would be unwise to tick that through tonight—although we should recognise that it is done, for example in local housing allowances done on a local basis, structured by reference to local market areas.

Welfare Reform Bill

Baroness Tyler of Enfield Excerpts

Monday 28th November 2011 Grand Committee

[Baroness Sherlock]

My Lords, I rise to support and speak specifically to Amendment 113B, to which my name is attached. In doing so, I remind the Committee of the interests which I have in the Register, in particular that I was a non-executive director of the Child Maintenance and Enforcement Commission, having stood down from that position shortly after my introduction to the House. I am also a former chief executive of the National Council for One Parent Families, which has now merged with Gingerbread. I am very grateful to Gingerbread and other organisations for their briefing.

It is a huge disappointment to me that this issue has come at the end of the Bill because, along with the noble Lord, Lord Kirkwood, and many other noble Lords, this is one of my favourite subjects. Frankly, I could happily talk about child support for a very long time. However, as the noble and learned Lord, Lord Mackay, is looking sternly at me, I shall limit my remarks to only one of the amendments and then speed on to allow him to offer an infinitely more informed view.

The noble Lord, Lord Kirkwood, has explained why the amendment is necessary. In particular, it would re-establish the notion of the objectives that are currently the main objectives of the commission, which will disappear as a result of its being abolished and brought back inside DWP as an executive agency. No doubt in due course these will become objectives of the Secretary of State, but I want to explain why it will be a problem if they vanish altogether from legislation.

At the moment, the commission’s main objective is to maximise the number of children who live apart from one or both of their parents for whom effective maintenance arrangements are in place. There are two subsidiary objectives, the first of which would encourage the support and the “making and keeping” by parents of voluntary maintenance arrangements. The second would support the making of and compliance with statutory arrangements. A further objective of the commission is:

“The Commission shall aim to pursue, and to have regard to, its objectives when exercising a function that is relevant to them”.

Not only must it do that but it must also have regard to those objectives in deciding how it discharges its various responsibilities.

As the noble Lord, Lord Kirkwood, said, Maria Miller, in the House of Commons, as I may now say, has said that the Government remain committed,

“to maximising the number of effective … arrangements”.—[Official Report, Commons, Welfare Reform Bill Committee, 24/5/11; col. 1103.]

That is welcome but I should like to explain why it is not enough. When I was a member of the board, we discussed and debated the priorities of the commission, what we should do and how we should do it. We came back repeatedly to the objectives set out by Parliament. Those were very much in front of us at all times.

If we were tempted to forget them, the very able civil servants who worked for the commission and the department would remind us of them at relevant moments, which they were right to do. They carried considerable weight. In fact, they carried far more weight than the assurance of the Minister of the day—distinguished though he was, of course. It is right that the objectives set down by Parliament should carry more weight than the views of any Minister who happens to hold office on any particular day. That is what Parliament is for. There is a big diminution in weight in moving from having clear objectives set out in legislation to having simply the assurance, however welcome, of the Minister of the day.

CMEC was beginning to make some significant improvements. It was created in 2008. Last year, 970,000 children benefited from child maintenance, including more than 100,000 from private arrangements, which must be due considerably to the CMEC option service and the fact that the commission had a statutory obligation to go out and pursue private arrangements. In March 2008, the figure was 750,000, so there was quite a big jump.

The noble Lord, Lord Kirkwood, mentioned possible cost reductions of the order of 30 per cent. This is important because—I am sorry to bring this to the attention of noble Lords—there are people with suspicious minds who fear that the Government’s primary aim is to save money, rather than to move to a better system of child support. Like other noble Lords, I would not dream of having any truck with such a notion. But perhaps the Minister could help Members of the Committee to make sure that they are in a position to understand and to rebut these claims when they are made by people outside this Chamber.

It is important because, if there is no broader objective to maximise the number of effective arrangements in place, Ministers might feel that they have done their job simply by deterring people from using the statutory system of child maintenance. They do not have any obligation to make absolutely sure that those people are going elsewhere and making arrangements, rather than simply not making any arrangements at all. If the Minister were willing to accept that this is an important objective, he could reassure us all. In the absence of that, there is a very real danger that these charges will come to be seen—we will go on to discuss them in detail—not simply as a means of raising money but primarily as a means of deterring people from using the statutory system in order to save considerable amounts of money in administration to the state. Frankly, it is hard to see how savings of the order that have been described by the noble Lord, Lord Kirkwood, can be achieved otherwise.

I am delighted that the noble Lord, Lord Freud, has given the noble Lord, Lord De Mauley, the opportunity to step into the breach on so important an occasion. Should the noble Lord, Lord De Mauley, hear at any point someone saying, “I am right behind you”, I suggest he takes a look behind him to be sure that that is true. I am delighted to see him at the Dispatch Box on such an important occasion. Perhaps he will take the opportunity to reassure the Committee, first, on whether the Government accept the content of the amendment. Are they committed to maximising,

“the number of those children who live apart from one or both of their parents for whom effective maintenance arrangements are in place”?

Is the principle acceptable? If it is acceptable, is he happy to put this into legislation? After all, it is likely that the Official Opposition are supportive since it was their Bill which brought these words into legislation in the first place. If we are all in agreement, perhaps this happy outbreak of unanimity can be celebrated by having an amendment accepted in Grand Committee. I look forward to that. If he is not able to do that, will he explain why not, what he believes the consequences will be and how else we can go out and give assurances to the cynics in that difficult world?

[Baroness Tyler of Enfield]

My Lords, I will speak briefly to Amendment 113B. In so doing, I declare an interest. I am currently the chief executive of Relate, which provides a wide range of services to separating families. I am also part of an advisory group of people from the voluntary sector which advises DWP Ministers on what a network of integrated support services might look like. From that point of view, it is important that that is clearly stated on the record.

I want briefly to support the case that has been put forward by my noble friend Lord Kirkwood as to why it is important that we incentivise non-resident parents to engage in the gateway process, as well as parents with care. There are two points I want to make. First, the gateway and the application charge—and I know that we will come to the charge in a later grouping—bite at the moment on parents with care wishing to use the statutory child maintenance system. The aim of this is to incentivise them to try to negotiate a voluntary agreement with the other parent instead. I support that. It is right and proper, where it is practical, that incentives to do so are built in. But there is no equivalent mechanism pushing the non-resident parent actively to engage in the process of trying to reach a mutually agreeable arrangement. As the legislation is currently constructed, it is only after a parent with care has paid an application fee of £100 and a statutory calculation has been made that any incentive will be given to the non-resident parent to reach a private agreement. That is basically very unfair.

My second point is a more positive one: the gateway stage is an opportunity for meaningful conversation between both parents. It aims to explore the scope for reaching collaborative arrangements, to assess what help either or both parents might need in order to arrive at such arrangements and to signpost and refer one or both parents—and, indeed, the children involved—to suitable provision and the help that exists for separating parents and families. Non-resident parents who are responsible for paying child maintenance should, I feel, be especially involved in this process.

I conclude by saying a couple of things that come very much from my experience at Relate. It is very important to children that both parents after separation continue to be involved as co-parents of those children. The relationship between the adults may be completely and utterly at an end, and indeed new relationships may well have been formed; but for that child, the active involvement—of course, where safe—of both parents is absolutely critical, emotionally, in practical ways, financially and in a range of other ways. It is critical that these new arrangements, however they are finally constructed, put the maximum possible incentive on both parents to see how they can discharge their responsibilities to be effective co-parents after separation—a responsibility which I think that most of us think is for life.

[Baroness Lister of Burtersett]

My Lords, I, too, shall speak in support of Amendment 113B, although what I have to say is also relevant to Amendment 113DA in the next group. I, too, thank Gingerbread for its help.

I want to concentrate on how Clause 131 in particular, coupled with the wider government proposals to charge parents for use of the statutory child maintenance scheme, will disproportionately impact on women who, according to the Government’s own analysis, make up around 97 per cent of parents with care who are eligible for child maintenance. It seems very surprising that, at a time when the Government are worrying about the erosion of their support among women, particularly so-called C2 women, they should be proceeding with a policy on child maintenance which will unfairly impact on this group.

The Government say that the new gateway and the proposed charges are intended to drive behavioural change—yet again—yet in the brief circulated last week, the DWP acknowledges that a significant proportion of parents will not be able to collaborate and that there are circumstances where there will be no reasonable steps that they could take. Therefore, echoing a question I asked last week in relation to the benefit cap, what behavioural change are they trying to achieve in such cases? Is it really fair to subject this group to charges, particularly in the name of behavioural change?

--- Later in debate ---

[Lord Kirkwood of Kirkhope]

My Lords, just for completeness I shall speak to Amendment 113E. I will be grateful if the Minister will respond to the prospect of, if everything else fails, having a waiver system for low-income families facing some of these fees. I want to know whether the Government have thought about this carefully and looked at the operational and other implementation arrangements that might be necessary. I look forward to the Minister’s response.

[Baroness Tyler of Enfield]

My Lords, I would like briefly to add a few comments to those that have been made so powerfully around this Committee. We have heard some moving quotes today, but the one I want to give is not from someone who has been part of this process as an end user but from Sir David Henshaw who, back in 2006, came up with the report that is often cited as being the genesis of the idea of charging. We have heard his name referred to on a number of occasions as his policy has been explained. Sir David Henshaw himself recognised the limits to charging when he said:

“I do not want to create a disincentive to use the service for those parents who have no other option for agreeing maintenance”.

We know, because DWP estimates tell us, that about half of all eligible families have no child maintenance arrangements at all. The danger is that even more children in poorer families will go without child maintenance as a result of the proposal to charge the parent with care. This is my final point, which I want to link to the one I made on the previous group of amendments. Not only will the children be worse off—we have heard some graphic and moving accounts of the real hardship that some children could be in—but more will grow up without a role model of a father who contributes, however modestly, to the cost of raising his own children.

[Lord McKenzie of Luton]

My Lords, like all noble Lords, I am indebted to the noble and learned Lord, Lord Mackay, for tabling the amendment. His being in tandem with the noble Lord, Lord Newton, is an irresistible combination. I do not envy the Minister having to reply.

There have been some powerful and moving contributions. I should start by putting clearly on the record where we are in relation to charging. It has been suggested that what the Government are bringing forward is just based on the previous Government’s proposals, but that is not so. It is absolutely correct to say that charging is permitted under the 2008 legislation, which is supported by the noble and learned Lord, Lord Mackay. But that is enabling legislation like so much of this Bill. It certainly did not envisage proposals such as those advanced by the coalition Government. It should be recognised of course that there were charging arrangements under the original 1991 legislation, but I believe that that was stopped in 1995 because the CSA was not delivering.

Our position on charging is clear. It is reflected in the White Paper entitled, A New System of Child Maintenance, dated December 2006. It cites in part what the noble Baroness, Lady Tyler, has just said and makes reference to Sir David Henshaw.  Paragraph 5.48 states:

“We recognise the importance of having a charging regime that does not dissuade vulnerable and low-income parents with care from seeking maintenance in the first place. Therefore, the future charging regime will be based on three clear principles. First, that the charging structure should incentivise non-resident parents to meet their responsibilities. Second, that the clear burden of charging should fall on the non-resident parent and not the parent with care. Third, that cost recovery for C-MEC should never be prioritised above payment of outstanding debt for the parent with care”.

Those provisions were not debated particularly extensively when we considered the Bill in 2008, although there was some discussion. At that time, we made it clear that it was for CMEC to advise and recommend to Ministers the detail of any charging regime but that such advice would be subject to CMEC’s overarching objective of maximising the number of children benefiting from effective maintenance arrangements, a point made by my noble friend Lady Sherlock a short while ago.

Although the clear focus on any charging should be on the non-resident parent, CMEC was not precluded from considering a small application fee to both non-resident parents and parents with care where voluntary arrangements might be more effective for them. We also made it clear that any charging structure should not commence until the service was fit for purpose and that this would not be before the launch of the new scheme then planned for 2010, which I think is now planned for 2012.

The Government have proposed a range of charges, including an upfront application fee of £100, which would be reduced for parents on benefits, and an ongoing collection charge on both non-resident parents and parents with care. The latter would be avoided for each if maintenance direct were used. However, whether maintenance direct is a secure and sustainable method of payment is wholly dependent on the non-resident parent. The Government’s proposals for charging fall foul of our criteria in a number of respects. An upfront fee of £100 is bound to act as a deterrent for lower-income households. It is payable not only in circumstances where a voluntary arrangement might be possible but in circumstances where it is not, for whatever reasons. That seems highly likely to increase the prospect of circumstances where no maintenance arrangements are entered into. Penalising parents with care with a collection charge, which depends on the NRP acting responsibly, is wholly unjust. The proposals allow for a reduction in the case of those on benefits but there is no exemption. Neither is any relief proposed for the collection charge.

That is why we are fully supportive of the amendment in the name of the noble and learned Lord. In short, it states that there will be no fees charged to parents with care where they have taken all reasonable steps to enter into a maintenance arrangement and it is not possible or appropriate to do so. There may be a multiplicity of reasons why it is not possible or appropriate to do so, some of which are particularised in later amendments. My noble friend Lady Sherlock has just spoken to one, as indeed has the noble Lord, Lord Kirkwood. In such circumstances, the only prospect of obtaining arrangements is the statutory system. There should be no charge which precludes this, which is what the noble and learned Lord’s amendment seeks to secure.

Amendment 113E, in the name of the noble Lord, Lord Kirkwood, seeks to introduce a reduction or waiver of fees where the income of a parent falls below prescribed levels. We have already indicated why we consider an exemption to be appropriate, although we acknowledge that the scope of Clause 6 is already wide enough to accomplish this.

Amendment 113EA has been spoken to powerfully by my noble friend and sets down circumstances where voluntary arrangements would clearly be inappropriate. The Government, I am sure, will be sympathetic to this given that they already acknowledge that individuals experiencing domestic violence will by-pass their new gateway.

Government Amendment 114 prompts me to raise questions relating to issues of enforcement. Can the Minister give an update on the various measures contained in the 2008 Act, including the use of deduction-from-earnings orders; regular deductions from accounts; lump-sum deduction orders; orders preventing avoidance; administrative liability orders; disqualification for holding or obtaining travel authorisation; curfew orders; and disqualification from driving? Can he say which of these are in force? If it is about getting sensible arrangements, it is also about making sure that those people who are responsible non-resident parents meet their commitments. We put in place a raft of enforcement measures which should have facilitated that and I would be grateful for an update on their progress.

Welfare Reform Bill

Baroness Tyler of Enfield Excerpts

Monday 21st November 2011 Grand Committee

[Baroness Tyler of Enfield]

My Lords, I should like to explain why I decided to add my name to the excellent amendments that have just been put forward by the right reverend Prelate the Bishop of Ripon and Leeds. I, too, was indebted to the work of the Children’s Society, which did an excellent analysis in this area. I understand the rationale for a benefit cap. I am not trying to say that I am against it; I understand the arguments about promoting fairness between those in work and those receiving benefits, and indeed the need to reduce the cost of the rapidly growing benefits bill as part of the overall deficit reduction strategy. My concern, though, as I looked at the numbers, at who would be affected and at the types of families that would be affected, was the implications for some of the most vulnerable families, particularly families with children. I shall say a few more words about that.

I was very taken by the analysis of the Children’s Society that showed that children would be disproportionately affected by how the benefit cap is currently constructed. While it is estimated that some 50,000 households will have their benefits reduced at the moment by this policy, it has also been estimated that over 200,000 children will be affected and up to 80,000 of those could be made homeless.

The composition of the households that are likely to be affected is interesting. The figures are one-third couples, two-thirds single women—generally single mothers—and about half will also be disabled. Indeed, 60 per cent of the households likely to be affected live in London, where housing is more expensive, particularly people living in private rented accommodation. Various ethnic groups will also be particularly affected, when they have larger families.

The first consequences of the benefit cap, unless it is possible to look at constructing it in a different way—perhaps using one of the approaches suggested in these excellent amendments—will be families having to move very abruptly to cheaper areas. This risks children moving school in the middle of a year, thereby disrupting their education and their social networks. It also risks families splitting up, and I shall come back to that point. It could have adverse consequences on kinship carers—family and friends—which is why in the next grouping I am moving an amendment on that point. I also feel that families who will be able to continue to pay the rent will have less money left for other essentials such as food and clothes, which will therefore contribute to child poverty. For families who are not able to pay the rent, are evicted and become homeless, this will be a parlous situation. Children are a priority group for council housing so this is likely to lead to additional pressure on temporary accommodation costs, adding to the cost pressures on local authority budgets. We have heard quite a bit about this in recent months.

There is then a very real danger, which has had virtually no attention, that children at risk will simply disappear from view. This raises real child protection and safeguarding concerns for me. We all know the very tragic stories of children who have disappeared from view and what happens to them in the very worst circumstances. We must ensure that the benefit cap does not, however inadvertently, have that consequence.

Then there is the reduction in what I call mixed communities, as poorer families are forced to move out of an expensive area. As I said earlier, this is particularly the case in London. Not only will it create very undesirable ghettoisation but there will be pressure on public services in ways that different bits of different boroughs will find difficult to deal with. For example, the concentration of workless households in some areas has significant potential implications for a wide range of local authority services. Boroughs that have an inward migration of households are likely to face severely increased service pressures such as demand for school places, the impact of unemployment, poverty and poor housing conditions, whereas in contrast other boroughs will experience reduced demand for such services but will themselves face challenges and costs in adapting very quickly to these different demands.

The point that I should like to finish on, which I feel particularly passionate about—perhaps because I am chief executive of the country’s largest relationships support organisation Relate, which is a declared interest—is the inherent couple penalty currently built into the benefit cap. This has had very little attention so far, but it will affect couples substantially more than lone parents. Indeed, it has been suggested by experts in the field that the cap will introduce one of the most substantial couple penalties ever seen in the benefits system, so it could have the perverse consequence of breaking up families as well as deterring people from entering new relationships and forming new households. Surely this couple penalty is completely at odds with the Government’s, and indeed the Prime Minister’s, very clear stance on wishing to support strong and stable family relationships. I am sure that this is an unintended consequence and has not been thought through, but we need to look at this.

Finally, the impact would be particularly keen where two lone parents decide to move in together, particularly if they both had children from the previous relationship. Such couples could then find that they would be far worse off by moving in and forming one household rather than living as two separate households. I will not detain the Committee’s time any longer, but I just wanted to explain why I feel that having some in-depth discussion of an alternative way of constructing the benefit cap is so vital.

[Lord McKenzie of Luton]

My Lords, I think that the noble Lord, Lord Best, wishes to speak.

--- Later in debate ---

[Lord Best]

My Lords, I am speaking to Amendments 99AA, 99AB and 99D. We now return to housing matters. I have already made the point that it is high housing costs that so often will push families over the cap. High housing costs do not of course equate to housing quality. A £350-a-week two-bedroom flat in outer London can be to far lower standards than an £85-a-week three-bedroom council house with a garden in the north-east, yet the outer London family in Newham has only £150 left within the £500 cap after paying their rent while the well housed family in the north-east has £415 left to meet other needs. I have argued for the housing cost element in the benefits received to be taken out of the equation to create greater fairness. That change would render several of my amendments in this group redundant, but I turn to them none the less.

Amendment 99A calls for a period of grace for those affected by the new cap during which the claimant would remain entitled to full benefits. Only after this period—my amendment suggests 26 weeks—would the total benefit cap be applied. Without this concession, many families in private rented accommodation in the south of England will see the benefits for their housing costs cut, forcing them to look immediately for alternative housing elsewhere. Current housing benefit regulations allow for a 13-week period of grace from restrictions on the rent that they have been paying independently up to that point, so the claimant who could afford to pay the rent until they lost their job will get that rent covered in full for 13 weeks even if it breaches the maximum levels of local housing allowance. A longer period is allowed for households that have suffered bereavement. For them there is a 52-week period of grace. It seems entirely right that a proper safety net should be available to a family that faces a sudden change in circumstance to give them a chance to get back on their feet.

It is generally agreed that an important function of the benefits system is to provide such a full safety net for those suddenly hit by redundancy or relationship breakdown. If, from the very day that such a drastic change of circumstances has struck, the family has a substantial shortfall to find between their benefit for housing costs and the rent that they must pay, then a major setback becomes a real crisis. How much better to give the household some weeks to secure a new job, or indeed to move home without having to present themselves as homeless. How much more cost-effective to give people the opportunity to get back into work rather than having to move the family to another area where rents are lower and jobs likely to be scarcer, all the while accumulating rent arrears and seeing the chances of a settled life with a proper job taken from them.

If they are going to have to move to a cheaper part of the country, at least they must have time to make all those arrangements and, hopefully, secure employment in the new place. We all know that the cap is intended to reinforce the message that work pays and a life on benefits is not sustainable, but it will affect newly unemployed households that have a strong desire to work but have lost their jobs because of factors outside their control. Rather than penalise people who are doing all they can to make a swift return to employment, the arrangements should see people through a difficult period so that they can re-establish themselves for the long term.

Where relationship breakdown and the loss or desertion of the main breadwinner is the trigger for the benefit entitlement that is now to be capped—the DWP’s impact assessment shows that more than half the households affected by the cap are likely to be headed by lone parents—a precipitous application of the new limit seems likely to lead simply to homelessness. This compounds the harm and distress experienced by the children. Surely it makes more sense to allow those lone parents to look for a suitable job following separation, make arrangements for childcare—so often relying on grandparents, who themselves will need to make new arrangements—and get back on their feet in a sensible way, and to ensure that for the children the loss of a parent is not followed by the loss of a home.

At the same time, a breathing space allows those responsible for paying benefits to untangle the complexities, calculate entitlements in relation to tax credits and other exemptions and handle the administration. With local authorities continuing to look after housing benefit during the interim period before the universal credit arrives—at least six months—there is already enough opportunity for delay in handling these claims. The period of grace would help those paying the benefits as well as those receiving them. I am confident that the Minister will be able to respond positively on this one, as it seems in no one’s interests to deny families the breathing space in receiving the benefits that sees them through a bad patch, rather than forcing themselves into a crisis—into homelessness and, in all likelihood, into long-term worklessness.

My second amendment in this group, Amendment 99AB, seeks to exempt homeless households in temporary accommodation from the overall benefit cap. Again, this would be redundant if my earlier amendment to exempt all housing benefit from the cap was accepted. It is therefore a fallback amendment. It seems anomalous for those placed by their local authority in temporary accommodation, quite often outside their own borough and already in the cheapest neighbourhoods, to be penalised for paying too much for their housing. Such households have no choice over the accommodation that they occupy and therefore cannot seek to reduce their housing costs or cut their cloth to suit their means. Local authorities are already restricted in their choice of where they can put those deemed to be homeless by restrictions on the housing benefit payable for temporary accommodation. The housing benefit subsidy will not cover more than the local housing allowance, less 10 per cent, using the previous marker of the 50th percentile. Councils then charge an administrative fee of £40 a week in London or £60 elsewhere, which is added to the household’s housing benefit claim. The total rent payable in relation to the homeless household will be higher for temporary accommodation of this kind and therefore, alongside the family’s ordinary benefits, is more likely to take them over the proposed total housing benefit cap.

An additional complication is that at present the Government’s Homelessness Code of Guidance for Local Authorities prevents councils from arguing that a homeless household should use other benefits to top up the payment for their rent. This is an understandable restriction, since the state believes that the income of families for their subsistence living should not be reduced below a minimum level. This means, perfectly reasonably, that councils securing accommodation in the private rented sector for workless homeless families cannot turn to the families themselves to meet any part of the rental shortfall caused by the extra cap.

Already inner London authorities such as Westminster City Council are exporting homeless households to outer London boroughs. They will have to work within tougher constraints in future, but it is hard to see the sense of placing an overall benefit cap that reduces the benefit for housing costs for these homeless families. They are already being moved away from support networks—friends, grandparents et cetera—and penalising the family by cutting their income to the point when they cannot afford the accommodation to which they have been sent would seem to place both them and the council that sent them in an impossible position.

Is the idea that the local authority, having accepted responsibility for the homeless household, will be expected to support the family financially to stay in the temporary accommodation to which they have been sent? While such an arrangement would enable the family to remain there, the extra costs falling on the local authority would seem a very unfair transfer from the DWP to local councils. Or is the intention that the local authority must make arrangements to ship homeless families still further away, with all the logistical problems that implies?

Wherever families are sent, the costs of temporary accommodation are going to be high in relation to mainstream private renting and considerably more than social housing rents. Those placed in bed and breakfast accommodation cost an average of £325 per week back in 2008-09 across the whole of England, so moving people long distances may not achieve very great savings in these particular cases. It will certainly make it more difficult for people to find work in areas where they do not have local knowledge and contacts. The move is bound to disrupt children’s education; Shelter has found that 43 per cent of parents in temporary accommodation said that their children had missed some school and one in 10 had children who had lost out in a school place entirely. Moreover, because the maximum level does not rise according to the number of children in the family, as we have heard so clearly today, it is not clear that there is anywhere in the country to which the local authority could send a homeless family if it comprised several children. I know that the Government are planning changes to temporary accommodation funding for 2013. I hope that this presents an opportunity to overcome the incompatibility between the high cost of procuring temporary accommodation and the new overall benefit cap. Perhaps the Minister could reassure us of the position on that.

Amendment 99D in my name seeks to exempt people living in supported or sheltered housing from the extra benefit cap. This seems a fairly obvious exclusion when one thinks about it. Specialist housing for individuals and couples with support needs, usually provided by housing associations or charities, is clearly much more expensive than plain housing with no extras. Service charges will push up the total that is eligible for housing benefit. However, this housing has been created specifically to help those with particular needs in a cost-effective way. If people had to leave, it is improbable that they could be accommodated more cheaply elsewhere. No purpose would be served by imposing a cap that forced out vulnerable people who would have to be rehoused immediately at higher cost somewhere else.

This change seems an essential measure. For example, it would cover couples in sheltered housing where one person is below pension age, even if the other is well above it. It would also cover those younger people who are not eligible for disability benefits of any kind but who have experienced a range of traumas and vulnerabilities and who are being helped to seek training or employment, but who are not yet work-ready and need the continuing help of specialist supported housing for a little while longer. Once again, this small amendment would become redundant if the overarching principle was accepted that housing costs, which vary considerably from one household to another, should be taken out of the calculation of the cap.

I conclude where I began: the benefit cap is very often about cutting support for housing costs. However, housing benefit and local housing allowance have already been the subjects of serious reductions, and the imposition of the additional total benefit cap seems likely to have grave consequences. Removal of the housing component would address a good number of the unforeseen circumstances and represent a triumph of good sense. I look forward to the Minister’s response to my amendments.

[Baroness Tyler of Enfield]

My Lords, I add my support to the two amendments in this group to which I have added my name. I shall speak to Amendment 99AAA, which stands in my name, on the issue of kinship carers.

Amendment 99ZB, already moved very cogently by the right reverend Prelate, would remove child benefit from the calculation of the cap. There is much that I should like to say on this but in her recent contribution the noble Baroness, Lady Lister of Burtersett, made a very powerful case about the unfairness of including child benefit in the calculation of the cap. Frankly, there is little that I can add other than to say that if the Government were to accede to this amendment, there would be not just huge applause but real consensus around this table that children should be protected, whatever happens to adults. Whatever is thought—and probably not shared—about the perceived shortcomings of adults, children should always be protected.

Amendment 99C deals with the exemptions of particular groups from the benefit cap. This is the subject of Amendment 99AAA in my name regarding kinship carers. I will be very brief but I want to say a few words about why kinship carers are so important. A kinship carer might, for example, be an uncle, aunt or grandparent who takes in children from other members of the family to avoid that child going into council care, with all the trauma and expense to the state that that creates. The purpose of this amendment, which is essentially a probing amendment, is to see whether the Government indeed intend to exempt family and friend carers from the cap. The architecture is already there; Clause 93(4) provides for the introduction of regulations to make exemptions to the cap, and the amendment would include family and friends carers among those exemptions.

Welfare Reform Bill

Baroness Tyler of Enfield Excerpts

Tuesday 13th September 2011 Lords Chamber

[Baroness Tyler of Enfield]

My Lords, I support many of the objectives of the Bill, in particular the Government’s stated aim of simplifying the current, highly complex welfare benefits system and increasing fairness within it. I fully accept that for most people work is the best route out of poverty and that work must pay and be seen to pay. Therefore, I welcome the simplification of the system that will result from the introduction of universal credit and congratulate Ministers on the progress that they have made so far.

That said, I have a number of serious concerns about the impact on families and children of the changes to the benefits system, particularly the hardship that they will create for some of the neediest and most vulnerable. As with any changes to a hugely complex system, some of the consequences may be unintended, but—from my reading of the Bill—others are part of the policy intent. For this reform package to achieve widespread support it must both look and feel fair. I want to highlight, therefore, some areas which I think are socially unjust and seem to fly in the face of the Government’s other commitments to be family-friendly, to reduce child poverty, to tackle intergenerational disadvantage by early intervention and to promote social mobility.

There are many areas that I should like to talk about but in the limited time available I shall focus primarily on the impact of the benefit cap on children and families. This policy is designed to ensure that a household on benefits does not receive more income than the average working household. I understand the arguments for this, including the importance of creating incentives for work and promoting fairness between those in work and those receiving benefits, as well as the need to reduce the rapidly growing benefits bill. As we have already heard, the cap on benefits for out-of-work households is expected to be set at around £500 per week per household for couples and lone parents. The Government estimate that approximately 50,000 households will be affected by the cap, losing some £93 per week on average in benefits.

At the level at which the cap is currently set, there are serious risks in the policy which may not be properly understood and which have so far received too little public debate. What are the facts and figures? Of the 50,000 households whose benefits will be reduced by the policy, the majority will be families with children—often large numbers of children—and those who live in areas where housing costs are high. The Children’s Society, whose work is highly respected, recently estimated that the number of children affected could be more than 200,000, and that 80,000 children could be made homeless. Thus the cap will have a disproportionate impact on children. How can this be fair?

It is instructive to look at the nature of the households most likely to be affected. Broadly speaking, they are one-third couples and two-thirds single women—generally single mothers. Ninety per cent have children and 60 per cent will have more than four children. What type of communities will be most affected? Certainly, people living in places such as London, where housing is more expensive, will be affected, as will some religious and ethnic groups, as they tend to have larger families, and people in private rented accommodation. What is likely to happen as a result of the cap being set at this level? Families will be far more likely to have to move abruptly to cheaper areas, which risks children having to move school, possibly in the middle of the year, thereby disrupting their education and their current support networks. Families could end up splitting up—they may indeed decide to create two households instead of one, as both parents would then be entitled to up to £26,000 in benefits.

Two groups yet to be mentioned are foster carers, who perform such a socially valuable and vital role, and kinship carers, who might be an aunt or an uncle taking in a child from another member of the family to avoid the child having to go into care, with all the trauma and expense for the state that that creates. These people, too, may be disadvantaged. I understand that the Government are planning to make special provision for foster carers to recognise their unique role, and I look forward to hearing the details from my noble friend the Minister, particularly in relation to housing costs.

Families who can will continue to pay their rent, of course, but they will have less money to spend on food, clothes and other essential items. Families who will not be able to pay the rent may be evicted and become homeless. Children are a priority group for council housing, so that will lead to pressure on temporary accommodation. There is also a very real danger of at-risk children simply disappearing from the scene. That, as we all know, has real child protection and safeguarding issues. I would very much welcome hearing from Ministers what plans the Government have to ensure that that does not happen and that we do not have another tragedy as a result.

Finally, there will be a reduction in mixed communities, as poorer families are moved out of expensive areas. That is particularly likely to be the case in London. That may lead to social segregation between the rich and the poor which would be worrying in terms of social cohesion and pressures on public services in some poorer areas.

In summary, the cap as currently set impacts disproportionately on children, large families, women and various black and ethnic minorities. The last two groups, as we have already heard, are already having a tough time in a tough jobs market. A little discussed fact that has not been raised so far is that the benefit cap will affect couples substantially more than lone parents. Indeed it could damage incentives to enter into new relationships—for example, for two new lone parents thinking of living together and setting up a household—and it could risk breaking up families, a matter very close to my heart as chief executive of the charity Relate, which is a declared interest, and to the heart of the Government. Surely this couple penalty is an unintended consequence of these reforms. I welcome hearing the Minister's response on that point.

Like others, I am deeply concerned about the reduction in financial support to an estimated 100,000 disabled children under the universal credit, to young carers where a child is trying to look after a sick or disabled parent and the proposed reduction in support for childcare. There is no time for me to go into any detail. I would simply say, as other noble Lords have said, that support with childcare is a hugely important issue, particularly for those on benefits who need to enter the jobs market at this difficult time.

There are a number of ways in which we can mitigate some of the concerns that I have highlighted in relation to the benefit cap, particularly the level at which it is set. Those would include calculating the figure using average earnings of families with two or more children, various grace periods and transitional arrangements, perhaps linking the cap to levels of conditionality set out in the work-related requirements of the Bill and perhaps exempting certain benefits from the calculation of the cap. I look forward to hearing my noble friend's response to these points.

Social Mobility and Child Poverty Commission

Baroness Tyler of Enfield Excerpts

Thursday 23rd June 2011 Lords Chamber

Asked By

[Baroness Tyler of Enfield]

To ask Her Majesty’s Government what progress has been made in setting up the new Social Mobility and Child Poverty Commission; and whether a forward work programme for the commission has been established.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, the changes required to establish the new commission are included in the Welfare Reform Bill and we will be able to discuss them during the Lords stages of that Bill. The commission will be established as soon as possible. Until then, the Government’s Independent Reviewer on Social Mobility, Alan Milburn, will incorporate child poverty into his remit. He will then serve as acting chair of the commission until a permanent chair is appointed.

[Baroness Tyler of Enfield]

I thank my noble friend the Minister for his reply. Is he aware of the OECD research published last week that shows that the UK is faring badly in international league tables in terms of pupils from disadvantaged backgrounds succeeding at school against the odds? Will he give an assurance that the commission will look critically at these sorts of issues to see whether the current measures are sufficient to improve the situation?

[Lord Freud]

Yes, my Lords. The OECD report was another useful wake-up call for us in an area in which we have not been doing as well as we should. That is precisely why we have combined our child poverty and social mobility strategies. We need to make sure not just that there are fiscal transfers to address poverty but also that the life chances of children are improved.