Local Authorities: Relationship Support Services

Earl of Listowel Excerpts

Wednesday 5th April 2017 Lords Chamber

[Lord Henley]

My Lords, anyone who has been involved in family matters will know that money is one of the major causes of conflict in parental disputes, and that can be true at all levels of income. I do not accept that the changes and reforms we have made to the benefit system, which will continue to roll out this year, are making any difference in this respect.

[The Earl of Listowel (CB)]

My Lords, is the Minister aware that at the beginning of this decade the OECD found that one-fifth of children in this country were growing up without a father, compared with a quarter of children in the United States and one in seven children in Germany? We were performing poorly against our European neighbours. I welcome the funding that the Government are introducing. Does he agree that it is hugely important that children see their parents in harmony together and that, as far as possible, their fathers stay in contact with them and stay in their lives? Do the Government plan to put additional funding into this area in the future?

[Lord Henley]

My Lords, I agree with most of what the noble Earl says. How much the Government can do to solve all these problems is another matter. However, there are things that we can do and that is why I was grateful for the opportunity to respond to this Question and just deal with this one small scheme. As I say, other things can be done—that is why we published our policy paper, Improving lives: Helping Workless Families, yesterday—and we will continue to see where we can help in all areas.

Child Poverty

Earl of Listowel Excerpts

Thursday 17th November 2016 Lords Chamber

[The Earl of Listowel (CB)]

My Lords, I am grateful to my noble friend for calling this important debate. I am also grateful for his life experience, both of working in this area and, on a personal level, of growing up in poverty, which he brings—uniquely, perhaps—to this House.

Over the past 12 months, I have been following the journey of a mother living in temporary accommodation. I had been acquainted with her for several years before she became homeless. We have spoken on the phone on 10 or so occasions since she became homeless, and she has sent me photographs of the various rooms that she and her two daughters, aged 16 and one, have lived in. Over the years, I have seen her physical and mental health gradually deteriorate, but the period in temporary and bed-and-breakfast accommodation has accelerated that decline. Finally, a fortnight ago, I learned from her that she has been settled in a central London borough and, although she and her daughters all still share the same room, they now have a bed apiece, a large kitchen and a bathroom. She is overjoyed that, at least for the next six months, she has a decent home. A month ago, when she was living in a bed and breakfast, she expected to be whisked away to Manchester at any time. More and more, London local authorities are moving homeless families away from London, sometimes as far afield as Manchester, to places where they know nobody and nobody knows them. It was difficult enough for this mother to share a room and a bed with her 16 year-old daughter; I cannot imagine what stress it must put on a couple when they live in such cramped conditions with their children. I wonder what effect housing and income poverty is having on the relationships of couples with young children.

I began working with children in my teens, worked with children in inner-city housing estates in my 20s and have worked with children and young people intermittently since then. Often, when working with boys and young men, I have thought that it would be far better if their fathers were doing for them what I was doing. I remember taking a nine year-old ice skating for the first time and wishing that his father might have been there teaching him to do that. Whether it was taking boys to Chessington World of Adventures or skiing on a dry ski slope, I often wished that it was their fathers, rather than me, introducing them to these experiences. Of course, some of them did have a father teaching them to ride a bike, kicking a football around with them or taking them swimming. But for many, there was no such man. I could feel the ache of some of these boys and young men for a father. That ache might manifest itself in gifts to me. I particularly remember one boy gave me presents of the crickets that he bred on a daily basis.

The OECD research from 2011, led by Professor Melhuish at Birkbeck, University of London, highlighted that one in five of our children were growing up without a father in the home. That was significantly worse than in France or Germany. The United States stood at more than one in four, but the research projected that we would overtake the United States and in a couple of decades a third of our children could grow up without a father in the home.

I am most concerned that austerity, rising numbers of families living in temporary accommodation and cuts to benefits may contribute to this family breakdown. While many single parents cope admirably and there are means of mitigating the loss of fathers, or mothers, and while some fathers may be violent or have difficulties with alcohol or drugs and are best out of their child’s life, at least until they have received help and are reformed, I am sure that the Minister—who takes these issues of family support and stability very seriously—will want to take all steps to minimise the risk of exacerbating couple breakdown.

I note the helpful report from the Centre for Social Justice in 2013 looking at this particular issue and highlighting the large numbers of children growing up without fathers and family. I am concerned that this matter is not often talked about. I recognise that it can be difficult, but I ask the Minister: is the effect of poverty on family breakdown being monitored? I know that a lot of poverty arises from family breakdown, but I am interested to know how far poverty—income poverty and housing poverty in particular—is leading to family breakdown. Have Her Majesty’s Government modelled rates of family breakdown with different rates of poverty? Have they examined the relationship between family homelessness and living in temporary accommodation—120,000 children will live in temporary accommodation this Christmas—and family breakdown? What is the current rate of children living without a father in the home in this country? What is the rate anticipated in 10 years’ time?

I look forward to the Minister’s response.

Benefit Cap (Housing Benefit and Universal Credit) (Amendment) Regulations 2016

Earl of Listowel Excerpts

Tuesday 8th November 2016 Lords Chamber

[Lord Shipley (LD)]

My Lords, I thank my noble friend Lord Kirkwood of Kirkhope for moving this regret Motion. He has raised a very specific issue about the need for additional support to be made available to help those affected by the cap to find work. But, as we have heard, the issue is broader than this. The Government need to get to the heart of the problem, which previous speakers have identified, which is that they have not been building enough new homes, and as a consequence prices have been rising steeply, whether for owner occupation or for rent.

Crucially, the Government’s emphasis on subsidising owner occupation has left the social rented sector seriously short of funding and therefore of supply. Those who cannot afford to buy are increasingly forced into the private rented sector, with its high rents in most parts of the country. We heard from the noble Lord, Lord Best, about the implications for the private rented sector and the likelihood that the availability of homes in the private rented sector will decline for those who are on housing benefit.

Building more homes will help to hold down rents, which in return can reduce the Government’s revenue costs in terms of housing benefit. I understand that there is to be a White Paper on housing supply shortly. That is welcome, but can the Minister confirm whether the purpose of that White Paper is to address the lack of social rented accommodation? Might it also address the absurdity of calling a home “affordable” when for many people such homes are nothing of the kind?

Meanwhile, the impact on homelessness of lowering the cap could be severe. The Government are already committed, as we have heard, to supporting the Homelessness Reduction Bill, but their support for the Bill seems to sit oddly with this cap, which will actually increase homelessness. We have heard a whole set of disturbing figures, from the right reverend Prelate the Bishop of Leeds and others. I understand that Shelter has estimated that there will be more than 120,000 children in temporary accommodation at Christmas. I find that disturbing. Also disturbing is the fact that since the original cap was introduced, around 70% of those affected have not found work. So doubling the number subject to the cap and worsening it for those already subject to it means that many more people who are already poor are going to be made poorer.

When the Prime Minister took office, she declared that his was a Government for all the people. But this is a dubious claim when poor people are being made poorer. The Government must show that they are prepared to invest further in helping people back into work, at decent rates of pay, thus overcoming the barriers so many can face daily in their attempts to do so. If the Government do not do that, they are simply widening social and financial inequalities in our country, which is unacceptable.

[The Earl of Listowel (CB)]

My Lords, I support this Motion to Regret, over three issues in particular. First, the noble Baroness, Lady Lister, referred to the 17% of mothers who have a child under the age of one. I would add pregnant mothers to that. Can they not be exempted, or can that at least be looked at? The Maternal Mental Health Alliance report published last year highlighted to all of us the terrible bane of post-natal and pre-natal depression and the risk that if a mother’s mental health deteriorates, her relationship with her young infant is damaged. This costs society huge amounts in the long term.

My second concern is about more children being taken into care. We were reminded earlier by the noble Baroness, Lady Lister, that most children coming into care come from poverty. Has the Minister examined this policy to look at whether it increases the risk of children being taken into care?

Thirdly, the noble Lord, Lord Shipley, alluded to the fact that we face having 120,000 children in Britain in temporary accommodation this Christmas. There has been an 18% rise in the past year in the use of bed and breakfast accommodation for such families. I followed a woman’s journey through temporary accommodation last year. First, she was in a domestic refuge and then in a very small single room with her 16 year-old daughter and one year-old child. She was distressed by that, but most distressed by the uncertainty of where she would go next. She was evicted from there to another, even smaller room and then there was the fear that she might be moved away from London, as far afield as Manchester, where she would know no one; she was in despair about this situation. Finally there was resolution. She has, at least for now, a larger and quite comfortable place for the next six months, for which she is so grateful. But one cannot overestimate the impact on the mental health of families and children of being put into homeless temporary accommodation.

I recognise that the Minister may be limited in how far he can help the House today, but I hope he will take very much to heart the concerns that have been raised. I share my noble friend Lord Best’s gratitude to the Government for supporting the current homelessness legislation, the Homelessness Reduction Bill. I look forward to the White Paper on housing supply, and to the Minister’s response.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I support my noble friend Lord Kirkwood of Kirkhope and thank him for raising this important topic. As we have heard, the original rationale for the benefit cap was that it would give people an incentive to seek work, yet evidence shows that only 30% of those who have been hit by the cap left the benefit cap as a result of finding work.

A lot of the support that the Government claim will help people into work clearly is not there. For example, they made great play of how the troubled families programme would provide the answer, but evidence from the National Institute of Economic and Social Research recently showed that there is no evidence it has had the impact that the Government intended.

Prior to being reduced, the benefit cap at its current level mostly affected large families in areas with high rents, as my noble friend said. The new lower thresholds mean that some single-person households are likely to be hit by the cap for the first time, and there is considerable concern from Crisis and others that by affecting a far greater number of households the cap will have a more significant impact on homelessness. As the noble Lord, Lord Best, illustrated, private landlords are likely to stop taking families who are currently in receipt of benefits.

Analysis by Crisis examining the cap in relation to London housing allowance rates shows that the new cap will affect single jobseekers in most parts of inner London. Existing single claimants in the work-related activity group for employment and support allowance are likely to be affected in areas of inner and outer London, as well as in high-rent areas such as Guildford and Oxford. This is because they will still be eligible for the work-related activity component, which is due to be removed for future claimants but will still be subject to the cap.

The Government have acknowledged that these reduced benefit thresholds are lower than average earnings, arguing that the policy will encourage more claimants into work. However, to date the benefit cap has not performed well enough in encouraging people into work to justify that. According to the Government’s own evaluation, just one in 10 of people affected by the cap in February 2014 had found enough work to become unaffected by the cap by the summer of the same year. The vast majority, 78%, were still capped, including a significant majority with barriers to employment, including poor health and/or skills gaps. All the figures that I am quoting today come from the DWP’s own statistics.

Households that are capped have responded by cutting back on household essentials, including skipping meals, while a significant proportion—45% in summer 2014—were in rent arrears. As we heard from the noble Lord, Lord Best, people in rent arrears are unlikely to be allowed to continue their accommodation with private landlords. Many find that they cannot move house to reduce their housing costs because they are already living in the cheapest available accommodation in their area.

In recent months the Government have set out a clear agenda on homelessness prevention, which is to be welcomed. As we have heard, this includes a new funding programme and support for the Homelessness Reduction Bill, the Private Member’s Bill that is about to go into Committee in the other place. The lowering of the benefit cap risks undermining this important agenda by putting newly capped households at risk of homelessness.

We heard from my noble friend Lord Shipley about the effect that a lack of housebuilding is having on homelessness. The Bill includes a new duty on other public bodies to make referrals to local authority homelessness teams if they are working with people who are homeless or at risk of homelessness. There are already some examples of good practice from local authorities in response to the existing benefit cap in joining up employment support and housing teams to help capped households into work. This should result in their coming off the cap. It is to be hoped that the new duty to refer in the Homelessness Reduction Bill will promote even more collaborative working between different local authority departments to prevent capped households reaching crisis point.

We heard from the noble Baroness, Lady Lister, and the right reverend Prelate the Bishop of Leeds of the terrible plight of children: 800 families affected rising to 5,000. That is a terrible increase in the number of children who will be affected. Where is the family test in this policy, or the voice of the child?

Pensions: Women’s State Pension Age

Earl of Listowel Excerpts

Wednesday 2nd November 2016 Lords Chamber

[Lord Freud]

I can only repeat that we have made it clear—and the Pensions Minister went as firmly on the record as he could—that there will be no further moves in this area.

[The Earl of Listowel (CB)]

My Lords, can the Minister help me? Would it help if more fathers were encouraged to work part time so that they spent more time with their children, building stronger families and stronger relationships with their children? At least one result would be that fewer women would be disadvantaged, spending less time out of the work market because they would be sharing the care of their children with their partners.

[Lord Freud]

One of the transformations in recent times is that women and, indeed, men are paid for caring responsibilities so that their pensions are not affected by that.

Welfare Reform and Work Bill

Earl of Listowel Excerpts

Monday 29th February 2016 Lords Chamber

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I have been studying these figures for as long as anyone. I start by acknowledging that I do not think the change would have happened without the direct personal intervention of the noble Lord, Lord Freud. I am very grateful to him, as the whole House should be, because he has the weight to be able to do these things and has the knowledge and understanding of what it means to people.

This gives me a lot more confidence that policymakers within the Conservative Government are not running away from the extent of this problem. I never really believed that that was the case, but this change means that they are not giving the impression that they do not want to see any of these figures published. Individually, these figures—they are relative, and there are well-recognised problems about relative measures—establish trends over time. That is important. Sixty per cent of national median income is perfectly well understood. It is a bellwether figure which we must all bear at the front of our minds as these policies unfold in future.

I remind colleagues that in the last figures the HBAI produced, in 2013-14, something like 17% of British children were in poverty. That is a ballpark figure of 2.3 million in all. That is a serious situation. If that is not difficult enough looking back, looking forward, the best estimate that I can find—the most accurate, up-to-date figure—is the projection that that figure might rise from 2.3 million to 3.8 million by 2020. That is the biggest increase in my generation and an issue of some concern. Obviously there are very difficult financial circumstances, and austerity has to be factored into the policy mix, but it struck fear in my heart when, speaking from Hong Kong, the Chancellor of the Exchequer said that he is looking for further savings in public expenditure. Looking forward to 2020, I think the pupil premium will help a lot in England, and the educational attainment and childcare provisions will help, but I do not think that the Government’s life chances strategy, as currently set out and planned, will deal with the projected increase in child poverty. That is serious and it is what we should be spending time on.

Having said that, reassurance will be provided by the Government accepting these figures and adding persistent poverty, which is a particularly important indicator, although it should be rebased, and I understand the technical need for that. This is a good and welcome step but, more than anything else, I want to acknowledge that it would not have happened without the intervention of the noble Lord, Lord Freud.

[The Earl of Listowel (CB)]

I thank the Minister for bringing forward these amendments. I was delighted to see them tabled. I agree with him that employment and education are the most important ways out of poverty. I am also delighted to keep reading the employment figures and seeing that we have the highest records of employment on record, I believe.

I thank the Child Poverty Action Group, which has briefed me on this and introduced me to the First Love Foundation, a bank providing food to hungry families in east London, and, through it, to Lorna, a mother of three boys—two, I think, with disabilities—who was working 16 hours a week. Two-thirds of children in poverty live in working families. It was so helpful for me to meet her and hear about her experience and that of her family, and the difficulties she faced living on such a low income.

I am also very grateful to my Cross-Bench colleagues, who listened very carefully to the debate on Report. I am most grateful for their attention to this matter. I thank the Minister again.

Welfare Reform and Work Bill

Earl of Listowel Excerpts

Wednesday 27th January 2016 Lords Chamber

[Lord Shipley (LD)]

My Lords, I will not detain the House that long, but I want first to pay tribute to the noble Lord, Lord Best, in particular and to other colleagues for the progress that has been made in discussions with the Minister on this important matter. Some associations would find it difficult to manage properly with such a reduction.

I received two letters this morning. One was from the Minister, the noble Lord, Lord Freud, explaining the policy the Government are now following, which is a welcome change and I thank him for that. I hope it will prove to be a durable, long-term solution to the problem. I also had a letter from the noble Baroness, Lady Williams of Trafford, also dated 27 January. I had asked a question about the cost of supported housing being exempt from the 1% rent reduction, and I had been told that the total sum involved was around £75 million a year. There has not been clarity about that sum. I am surprised that the Government do not seem to know the cost they will have to meet, given the decision not to implement the measure for one year and, hopefully, for longer. Is there a figure to which the Government are working? I look forward to the Minister’s reply because when we are discussing policy in your Lordships’ Chamber, it is important that we have some idea of the sums involved. If it proves to be true that the figure is £75 million, that is not in fact a significant sum.

As I say, I look forward to hearing the Minister’s reply. I welcome the progress that has been made on this matter, which will be very gratefully received by many people outside your Lordships’ House.

[The Earl of Listowel (CB)]

My Lords, having six weeks ago spoken to a mother who had just moved into a refuge with her daughter and granddaughter, and heard from her about the years of abuse she had experienced in her family home, I am very grateful to my noble friends, noble Lords and the Minister for the announcement that he has made today.

[Lord Kerslake (CB)]

My Lords, I declare my interest as chair of Peabody and president of the Local Government Association. I support Amendment 50 and wish to speak specifically to Amendments 53, 61 and 63. I will keep my comments brief as I am conscious of the hour.

I add my welcome to the movement and the moratorium referred to by other noble Lords. This is a demonstration of the Government listening and acting, which I welcome. I reinforce the importance of taking early decisions and not using the whole year for the review process, not just because of the uncertainty for existing schemes but for investment in new schemes that are so desperately needed.

Amendment 53 follows on from the debate we had in Committee, when we debated the very abrupt move from the 10-year plan of CPI plus 1% for rent increases to a four-year period when there would be a 1% reduction per annum. We had a considerable debate on what the impact of that change of policy would be. In tabling an amendment in Committee, I was ever hopeful that after the four-year period the Government might return to the original 10-year plan. However, the noble Baroness, Lady Williams, made it clear that that was not the Government’s intention and that they would take a decision on future rent movements in four years’ time. Given the difference of view on this issue, with the Institute for Fiscal Studies clearly saying that there will be a loss of housing association new build as a result of this policy and the Government’s view that the figure will be absorbed through efficiencies and reductions in surpluses, it seems to me imperative that an evaluation is undertaken before policy is set in four years’ time. I emphasise that it should be an evaluation, not simply monitoring the existing policies, and that that evaluation should be independently commissioned.

There is plenty of precedent in government for doing this—for example, with the new homes bonus, where such an independent evaluation was produced and published, and, indeed, influenced government policy on the bonus going forward. It is good practice for government when they introduce such a significant change to not just monitor the impact of that change but to evaluate its impact in the widest sense. That is why I think this amendment is so important. I would like to hear from the Minister what the Government’s view of this is but also how they expect to assess this impact.

Amendments 61 and 63 come together because they relate to social rents and affordable rent. I take very seriously the debate we had yesterday on the Housing and Planning Bill, and particularly the Minister’s view that we should do everything possible to maximise new housebuilding in this country. I endorse that view, whatever that new housing happens to be. This issue is specifically about new build schemes and the flexibility there has hitherto been for setting rents at the commencement of those schemes. This relates not to the viability of the housing association but to the individual schemes. It is why I have tabled the amendments which perhaps require a bit of elaboration.

When a housing association considers its investment programme in new supply, it looks at two things. First, it looks at its wider viability as a housing association and the risks attached to the scale of the programme it is undertaking. The second thing is to look at the viability of the individual scheme before it commits to it. In some cases the scheme will be highly viable and profitable and would go ahead regardless of this rent reduction. In other cases there will be schemes that were not viable before and with the rent reduction would most certainly not be viable now.

However, there is a small but important group of schemes which are on the margin of viability, with risks that are evenly balanced. Having the flexibility to start the rent at a slightly different point at the time the scheme starts will crucially influence whether those schemes go ahead and whether they do so now. This is the particular issue that I am focused on. It will not be a big cost but the numbers could be important. Given the crisis that we face on housing, “every little helps”. I hope that Ministers will hear this point and retain that flexibility. The small cost that is involved will be far outweighed by the confidence it gives to housing associations to go ahead with their schemes. I urge the Government to consider this carefully.

Welfare Reform and Work Bill

Earl of Listowel Excerpts

Wednesday 27th January 2016 Lords Chamber

[The Earl of Listowel (CB)]

My Lords, very briefly, I support these amendments as vice-chair of the parliamentary group for young people in care. Having followed this issue through the whole Bill process so far, I was grateful for the opportunity to meet with the Minister last week and for his careful consideration of our concerns on these matters.

Over the course of 10 years of listening to young people in care and hearing about what is important to them, they tell us that the most important thing is that someone sticks with them through the care process. That is why the Government have been so keen on supporting adoption: so that children who have been traumatised go on to have the continuity of care and relationship that helps them to recover. That is where the Government invested in and legislated for “staying put”, to allow children in foster care to remain with their carers to the age of 21.

I am sure that the Minister will give a sympathetic response to this as it is at the heart of government policy. I look forward to his response.

[Baroness Drake (Lab)]

My Lords, I shall speak to Amendment 30 in the hope that the Minister has been persuaded by the arguments made in Committee that kinship carers and adopters should be exempt from the two-child limit. I also thank him for the very constructive meeting that he held with us.

We have enunciated many times the valuable contribution that kinship carers and adopters make, supporting as they do more than 200,000 children, many of whom have emotional difficulties because they have been living with parents who are drug abusers or who have abused or neglected them. They save the taxpayer the alternative cost of placing a child in care, which is £40,000 a year, and care proceedings of £25,000. The savings that 132,000 kinship carers deliver by voluntarily caring for these children runs into billions. Yet, significant costs fall directly on the carers themselves. Many have to give up work or reduce their hours—a requirement frequently set by the social worker—to settle what is often a traumatised child for a good reason. The need for such carers is not going away. The number of looked-after children has increased steadily over the last seven years, as has the number of care order applications.

The Government’s reasoning for limiting benefits to two children is set out in the impact assessment. It is to reduce welfare costs and introduce a behaviour-related measure that will encourage parents,

“to reflect carefully on their readiness to support an additional child”,

which could have,

“a positive effect on overall family stability”.

It continued that,

“people may respond to the incentives that this policy provides and may have fewer children”.

The policy is intended to deter people having more children where they cannot afford to support them.

The Minister reported in Committee:

“The average number of dependent children in families in the UK in 2012 was 1.7, so … it is fair and proportionate to limit additional support provided by the taxpayer through child tax credit and the child element of universal credit to two children”.—[Official Report, 7/12/15; col. 1328.]

Even if one were to accept that reasoning when applied to birth parents who are considering having more children—I accept that there are many in this House who do not—it is a non sequitur when applied to kinship carers and adopters. It lacks common sense. There, the need is not to get kinship carers and adopters to reflect carefully on their readiness to care for an additional vulnerable child. To the contrary: public policy needs to support carers in their readiness to do so. That is better for the children and their family stability, and secures savings for the state by not placing them in the care system.

Kinship carers and adopters are not the birth parents of the children but they voluntarily embrace them. They are not making a decision to become pregnant; they are making a decision to care for an existing vulnerable child who cannot be raised by their parents. For adopters and kinship carers, the behavioural disincentive in the two-child limit is directed at their taking on responsibility for that existing vulnerable child. Imposing the two-child limit will deter adopters or kinship carers from coming forward to take on a sibling group, or a child if they have dependent children of their own, undermine the child’s interest and potentially increase the number in care. This is inconsistent with the Government’s commitment to ensuring that families are stable and create the best possible environment for children to flourish.

The two-child limit applied to adopters and kinship carers does not even stack up in cost terms. Exempting carers from the two-child limit would cost an estimated £30 million but the limit needs to deter only 200 kinship carers from caring for three or more children in the future before the £30 million saving would be wiped out, as the taxpayer would then have to face the cost of placing a child in care—£40,000 a year—and the cost of care proceedings, which is £25,000. I asked the Minister what behavioural response the Government were seeking to achieve from potential kinship carers and adopters with the two-child limit on benefits but I never had a reply. I returned again to the impact assessment but I could find no answer there either. Indeed, I could find no assessment of the impact on potential kinship carers, adopters or the children.

For kinship carers and adopters, the choice is whether or not to embrace an existing vulnerable child—a different choice to a parent choosing to become pregnant. The Minister advised in Committee that,

“there is a difference between the voluntary and involuntary taking on of children, whether they are your own or anyone else’s. That is what our exemptions are for. We are seeking to try to draw the line between where it is involuntary, as in the case of rape, and where it is not”.—[Official Report, 7/12/15; col. 1332.]

However, taking a behavioural measure into the benefits system for one purpose, then applying it to carers of children who might otherwise enter the care system without an explanation of the behavioural response being sought and with no assessment of the negative impact on the carers or the children is not good public policy.

I hope that the Government have deliberated further on where to draw that line and that they will exempt kinship carers and adopters from the two-child limit. In doing so, they would avoid building a perverse disincentive rather than positive support into public policy on people caring for vulnerable children, avoid undermining the interests of the child and avoid failing to recognise the real savings that these kinship carers and adopters provide.

--- Later in debate ---

[Lord Freud]

In practice, I think that what I have said produces that outcome. I have said that we will consult very widely with stakeholders to get this right, because these are very sensitive issues. The rape exemption is very difficult. Getting kinship caring and adoption right is not straightforward. In practice, there will be consultation, but I do not want to overformalise that process. I have committed to a much more open process than you might see in some other regulations that we issue.

The next complicated case is the formation of new households through re-partnering of single parents, which we have looked at very closely and which produces a number of difficulties. First, it would be perceived as unfair by those families with three or more children who stay together and receive a maximum amount of child element or child tax credit in respect of two children, whereas other families who have formed more recently could receive more. Secondly, there is a risk that families may try to manipulate the benefit system by breaking up and re-forming, or even claiming to have broken up and subsequently re-formed in order to increase the amount. Thirdly, there would be a practical issue in assigning children in newly formed families to a particular parent. We have not done that before. Your Lordships will hear me muttering the word “carbunclising”. That is not to mention the intrusive nature of that process.

Finally, I looked at the numbers involved. The reality is that, whether we like it or not, the bulk of children stay with the mother. The number of fathers with children joining mothers with children is not many. Once the measure is fully rolled out, we expect that only 7% of single men will have children, so it is not that substantial a problem. The noble Baroness, Lady Manzoor, talked about half a million. That is just not the reality. I reiterate what I said in Committee about the way it is introduced in 2017 for child tax credit and universal credit. Any household which has claimed within the past six months will also be protected. For those reasons, I urge the noble Baronesses and the right reverend Prelate not to press their amendments.

[The Earl of Listowel]

Before the Minister sits down, given the fact that, as a nation, increasingly our children are growing up without a father in the family—according to the OECD, in the 2030s, we will overtake the United States in the proportion of children growing up without a father in the family—will he think again about his last statement? It may be a small proportion of fathers who bring children into these mixed families, but surely we want to encourage those larger families, especially, to have a father. The benefits that that father brings to those two children, or whatever, from the mother’s family is important. Will the Minister keep that in mind?

[Lord Freud]

We have looked at this very sympathetically, but in practice we found it too difficult. We have heard from this Chamber about the kinship and adoption issues, and those are the ones that we want to get absolutely right.

--- Later in debate ---

[Baroness Manzoor]

My Lords, I support the noble Baroness, Lady Lister, on this amendment. Once again, we had a very good debate in Committee, and, in her usual fashion, the noble Baroness has laid out a very comprehensive argument with which I concur absolutely. I can therefore add very little to that argument except to press the Minister again to say why the well-being of children is not being factored in when it already has been. For noble Lords who were not in the Chamber earlier, I will read what the amendment says. This is all is says—which is why I have difficulty in understanding why it cannot be in the Bill. The amendment states:

“In preparing a claimant commitment for a claimant, the Secretary of State shall have regard (so far as is practicable) to its impact on the wellbeing of any child who may be affected by it”.

What is so wrong with that?

[The Earl of Listowel]

My Lords, I will briefly support this amendment. Before doing so, however, I have not had an opportunity to thank the noble Lord, the Minister’s colleague, for the assurance and commitment that adoptive parents, kinship carers and others will be kept out of the two-parent limit. I was very grateful to hear that from him.

The amendment, which I support, brings to mind two questions. If a child has had, for instance, pneumonia, and subsequently gets ill on a regular basis, what mechanism is in place to allow for the fact that the child has been and continues to be unwell on a periodic basis, which will allow the parent to give the child the care they need to recover fully from this issue?

The other question—perhaps I am stretching a little—is with regard to dealing with mental health. There has been a great deal of concern about perinatal mental health, and clearly this is an opportunity to spot perinatal mental ill health, including post-natal depression, and to do something about it. I may have missed other debates during the course of the Bill—perhaps the Minister can refer me to them or just drop me a line—but I know that information about the health of welfare claimants cannot be shared with the health service directly. Are the Government thinking of doing what they do in police stations, which is to station a mental health professional in the jobcentre itself so that they can help spot any issues of this kind and ensure that the parent and child get the support they need to deal with that?

[Baroness Meacher]

My Lords, I will contribute briefly to this debate in support of the amendment. The issue here is that we are in a very different benefits culture from the one we had maybe until 2010—I am not sure when exactly. The point is that the claimant commitment is the basis for sanctioning. If a parent fails to comply with a claimant commitment, that is when they will be sanctioned. If the claimant commitment is completely unrealistic and the parent cannot comply with it—for example, if it requires the parent to travel 90 minutes each way and they manage to have childcare for only five or six hours a day, or whatever it is—it will be physically impossible for them to satisfy that claimant commitment.

We know, certainly from the Fawcett Society inquiry I was involved with, that there is quite a need for training for these staff. That of course goes back for as long as I have ever been involved with welfare matters, which is probably some 40 years. Staff are very poorly paid, they tend to be rather inadequately trained and there is always a rapid turnover of staff, so you always have new staff who are trying to learn the rules, and so on. So this claimant commitment takes on a far greater significance in this day and age than it would have done 30 or 40 years ago.

That is why I ask the Government to take this very seriously. They need to accept that they have low-paid staff, a rapid turnover, poor training, and therefore that sanctions happen utterly inappropriately. The claimant commitments are wildly unrealistic in the experience of the inquiry I was involved with, which is very dangerous for the children. The parent goes along on a Friday to pick up their benefit and is told, “Oh, sorry”—or probably not even “sorry”—“your benefit has been stopped”. Is there any supper for the children? No, sorry, no food in the house—and so on. It is very serious for children affected by sanctions following the claimant commitment. That is why, although this sounds like a fairly innocuous amendment, believe me, it is very important.

Welfare Reform and Work Bill

Earl of Listowel Excerpts

Monday 25th January 2016 Lords Chamber

[The Lord Bishop of Durham]

My Lords, I start, as I began my speech in Committee, by recognising that everyone in this House has a shared commitment to tackling child poverty in this country. We all want to see the end of child poverty; I am sure that no one in this House would want deliberately to keep children in a state of poverty. This debate is, therefore, not about the ends but about how we monitor progress towards that goal. Previously, I expressed my agreement with the Government that to maintain that income poverty alone is an adequate way to measure child poverty is no longer sustainable. I agree that there are other root causes, such as lack of work, low skills, poor housing, family instability and addictions, which must be recognised and tackled. But then we must also remember that many children in poverty are in families where a parent is in work; these children are currently trapped in poverty. I, along with the many organisations that work in this area, remain convinced that financial poverty is a crucial matter that must be recognised and reported on adequately.

It is, of course, possible to overstate the importance of material well-being alone. Many other things matter in children’s lives, including loving parents, good schools and safe neighbourhoods. They are all needed for children to thrive and achieve their potential. But it is also possible to understate the importance of income, or the lack of it—especially among those of us who have plenty, and perhaps take such things for granted. According to the latest deprivation statistics, 1.7 million children live in families that cannot afford to heat their homes properly, 1.3 million children lack the funds to take part in at least one organised activity each week, and 1.1 million children cannot afford to have their friends around for tea or a snack once a fortnight.

We know that money matters, because this is the experience of people in poverty, and of the many organisations and charities that work with them daily. There is also a wealth of academic evidence pointing to the damaging effects that income poverty has on children’s well-being, including their health, education and future employment prospects. We know, for example, that low income impacts on children’s cognitive ability, educational attainment, conduct problems and mental health, with serious implications for their future life chances.

Does the Minister accept that low income is an important influence on children’s outcomes and life chances, as his own department’s review of the evidence concluded in 2014? Can he explain why the Government are studiously ignoring the views of nearly everyone who responded to the consultation on child poverty measurement in 2013? According to a recent analysis by the London School of Economics, 202 out of 203 respondents to that consultation believed that income should be included in the poverty measures.

If I have heard the Minister correctly, the Government’s concern about the current child poverty measures is that they have encouraged an overdependence on income transfers, diverting attention from policies that tackle the root causes of poverty. However, the amendment does not seek to reassert the primacy of the existing child poverty measures: it simply requires that income-based measures of poverty be reported on alongside, and on a level footing with, other life chance indicators, such as worklessness and educational attainment, in order to acknowledge the significance of family income for children’s well-being and future prospects.

Furthermore, the amendment is about indicators for monitoring progress, not about targets or deadlines, so there is not the same risk that it could drive policy in an unhelpful direction. And with all due respect, the temptation to place too much emphasis on income transfers as a means of reducing child poverty is not one that the current Chancellor appears to struggle with. I agree that it is important to tackle the underlying drivers of poverty, but that can be done without abandoning all the existing income-based measures of poverty. The real issue is committing to, and resourcing, an effective long-term strategy to reduce child poverty, rather than finding alternative ways to measure it.

No economic or social indicators are perfect. Let us take the employment statistics. I note that recent trends in employment are encouraging, but those statistics do not allow for the quality of employment, and hide substantial levels of underemployment. Similarly, GDP statistics give equal weight to desirable and undesirable economic activities, and take no account of many priceless commodities. It is no surprise that existing poverty measures have flaws too.

The relative income measure, in particular, has been criticised for showing a decline in poverty during the recent recession. But that is precisely why there are three other measures of poverty in the Child Poverty Act. The absolute poverty measure is not affected by annual variations in median income in the same way. The deprivation measure, which focuses on the affordability of basic necessities, has the added benefit that it captures people’s living standards more directly than low-income measures. Nor can it be manipulated—if that is the right word—by targeted government transfers to low-income households. I therefore encourage the Minister to consider seriously the adoption of a deprivation-based measure of poverty as a way of recognising the importance of material poverty within the proposed set of life chance indicators.

The biggest gap in the proposed set of life chance indicators is that the existence of in-work poverty is completely ignored, even though nearly two-thirds of children in poverty have at least one parent in paid employment. We all agree that work is usually the best route out of poverty for those who are able to work but at present, sadly, it is not sufficient for many parents in low-paid or insecure employment. It seems inconsistent that, while introducing a national living wage and in-work conditionality to encourage people to look for better-paid jobs, any reference to in-work poverty in the indicators is omitted from them, and they will be used to monitor progress. This is why I also support the amendment in the name of the noble Baroness, Lady Lister, to introduce an indicator of in-work poverty alongside the worklessness indicators.

I anticipate that the Minister will respond by saying that the existing poverty measures will continue to be published and will be available for everyone to scrutinise each year. However, without a statutory reporting requirement, there will be nothing to stop a future Government or the Office for National Statistics, if it is its decision, from ceasing the annual production of the HBAI statistics at some later date. Dropping these measures also sends a clear message that income-based poverty does not matter to this Government, which, unless I am mistaken, is not their view or the Minister’s view.

In conclusion, first, I thank the Minister for offering to meet with me. My apologies: I could not make it but my daughter’s graduation trumped him. I note that consistently in response to our previous debates, the Minister has argued that the Bill is but one part of the Government’s programme to move towards a society with more people in work, on higher wages and paying lower taxes. He has noted other measures, such as the national living wage, the increasing thresholds for paying tax, and others, stating that these measures combined will raise the living standards of many. Of course, this is disputed by others. However, my point here is that since the Government are confident that their measures will be successful, they need have no fear of a statutory duty to report these income figures. Indeed, they should welcome it as a clear statement measuring their anticipated success. I commend the amendment and beg to move.

[The Earl of Listowel (CB)]

My Lords, I support the right reverend Prelate and thank him for moving this amendment, to which I have added my name. I will mention two principal reasons for my doing so. One is a concern that I think and hope is shared around the House: the changing nature of a Parliament and the experience of families that grow up in poverty. It is very easy to avoid meeting families in poverty. Many of the leaders of this country will perhaps have been educated privately from a young age, and there may have been few reasons for them to come into contact with families in poverty. They may never have worried about where the next meal will come from or whether they can afford to heat their homes, and they may not mix with people who have those worries. My personal experience of course is that I and my family have never had to worry about whether our home could be heated or whether there would be enough money for the next meal. However, the families we are talking about worry about whether they can feed their children and whether they will have to go without a meal to feed their children.

I recently met with Ms Lorna Sculley, who is a 36 year-old and has three boys: the oldest is 15 and the youngest is fairly new-born. She works for 16 hours a week and lives in poverty, so she is one of the “working poor” that the right reverend Prelate described. During her last pregnancy and maternity leave, there were difficulties with her benefit payments, which meant that she got into debt and had difficulty in meeting her rent. She became increasingly desperate. Fortunately, there was a food bank local to her. With the help of the education welfare officer, she was referred to the people running the food bank and she sought their help. Not only did they provide much-needed food for her and her boys but they gave her advice about how to negotiate with the benefit system and to catch up as much as possible. Unfortunately, I think that it is possible to get only a three-month rebate if one has had these sorts of slips, so she could not gain all the money that she needed. She also told me that, because she is working, her boys are not entitled to free school meals and it can be particularly difficult to get severe hardship payments. Her two older boys had destroyed their mattresses by jumping up and down on them but it was hard to get the money to replace them.

--- Later in debate ---

[Lord Northbourne (CB)]

My Lords, on this kind of issue I am usually very much on the side of those who are sorry for those who have problems. But I think a much stronger case would be made if the amendment could be rephrased so as to take into account the possibility that, at times, the family themselves ought to do more to create the income that they so desperately need. I have not come prepared with any evidence but, being involved in issues around child poverty, I hear a good deal to suggest that a number of families prefer to live on benefits rather than go to work. I do not blame them for doing that, but I think they should share their responsibility in providing that income which, indeed, is so essential.

[The Earl of Listowel]

My Lords, I wonder whether my noble friend is aware that of the children in poverty who we are discussing at the moment, two-thirds have parents who are in work. The majority of the children we are discussing have parents who are in work.

[Baroness Hollis of Heigham (Lab)]

My Lords, very briefly, I support the amendment in the name of the right reverend Prelate the Bishop of Durham.

I am puzzled. When we considered the 2012 Welfare Reform Act, the Minister rightly commanded the respect of the entire Committee and allowed the proceedings to be lengthened from the original 10 or 11 days to 17 days, in the process of which he negotiated, discussed and shared information because he was determined that the introduction of universal credit would be, as far as was possible, evidence-based. That was something that we all responded to: we were not being motivated by the latest piece of journalism or an ideological twist; it was evidence-based.

What puzzles me about the Government’s position is not that they are seeking to get analysis of the impacts of poverty in terms of well-being measures, adult worklessness, child educational attainment at 16, and so on—it is perfectly sensible to have information about that. But this is not an either/or situation. We all know that we need to know about the income going into a family as well as about the impact of that lowered income on the outcomes that affect the family and the children, as the noble Lord, Lord Northbourne, said. This is not an either/or situation. We need both because, above all, government need to know where they can most effectively intervene to ensure that, as far as possible, children and their families have good, strong, decent and well-funded lives. We cannot know that unless we collect the information on both income and on what the Government believe to be the impact. It is not a question of which comes first, which drives one or the other, or which is the gateway. That does not matter—we need both. On the basis of that evidence, we, as a House and as Parliament, can come in behind government to see what levers are most effective in addressing the issues that that evidence has identified.

The Minister is an evidence-based Minister, which is why he has our respect. Therefore, in the light of that and all the work that he did on the 2012 Bill, I urge him not to sabotage it by ignoring crucial evidence of how best the Government should use the resources at their disposal. I hope that he will accept the right reverend Prelate’s amendment.

Welfare Reform and Work Bill

Earl of Listowel Excerpts

Monday 25th January 2016 Lords Chamber

The free early education for the most deprived two year-olds is welcome. But the Marmot Commission pointed to the importance of parents’ involvement with their child’s learning—such as reading stories at bedtime and other basic activities, which some parents may lack the confidence to do. The monitoring and reporting required in these amendments will make sure that the policies are really working. It may be that investing in two year-olds’ education will achieve little unless we go the extra mile and help parents become involved, if necessary by offering them some help with basic skills. I regard these amendments as non-political but essential for a Government of any complexion.

[The Earl of Listowel (CB)]

I support these amendments. I too am most grateful to the Prime Minister for his recent announcements on maternal depression during and after pregnancy. I attended the launch last year of the Maternal Mental Health Alliance report on maternal depression and other mental ill-health issues. It found that the nation loses about £1 billion a year through maternal perinatal mental ill health. The main cost is incurred because the relationship between mother and child is impoverished by the mother’s mental ill health. I therefore strongly support the amendment tabled by my noble friend Lord Ramsbotham, and I look forward to the Minister’s response.

[Baroness Manzoor (LD)]

I too support the amendments tabled by the noble Lord, Lord Ramsbotham, particularly Amendment 4. I tabled an amendment in Committee on reporting on attainment at key stage 1. I felt that was imperative, because that is the age at which early measurement of children, when they are going to school, can take place. I do not want to say any more now, because we had a very full debate in Committee; I just want to lend my support to these amendments. As an ex-health visitor—that was many years ago, I hasten to add—I recognise the importance of the health and well-being of both mothers and children. Measuring those factors in children at the age of five is imperative, rather than leaving the measurement of educational attainment, as the Bill now does, until the age of 16. We on these Benches therefore support the amendment.

--- Later in debate ---

[Lord Freud]

The whole point is that these reports are published. It is a forcing mechanism to make sure that the relevant Secretaries of State and the relevant departments of government work together to tackle the fundamentals that produce these outcomes.

Returning to the educational issue, if we made this change to the Bill, it would increase the burden on primary schools and send a signal to schools that Parliament does not trust them to carry out their core functions. That is why I cannot support this amendment.

Amendments 5 and 6 look to expand the reporting duty placed on the Secretary of State so that his annual report containing data on children living in workless households and long-term workless households in England must include data on the health and well-being of these children.

It goes without saying that the Government want the best for our children. We want all children to have the opportunity to have fulfilling lives and to realise their potential, and clearly their health and well-being is an integral part of that. However, we can achieve this aim, which is one that we all share, only by tackling the root causes of child poverty, and I will not parrot what I have already said on this point. Our evidence review shows clearly that worklessness and educational attainment are the two factors that have the biggest impact.

We recognise that, as the evidence review pointed out, child ill-health is also a driver of poverty. We are absolutely committed to reducing health inequalities in terms of access and outcomes, and we are working across government to ensure that ill health does not hold our children back from fulfilling their potential. The Government have already put in place a well-developed reporting framework—the public health outcomes framework—that supports health improvement and protection at all stages of life, especially in the early years. The framework includes a large number of indicators on children and young people’s health and, along with the NHS outcomes framework, sets a clear direction for children’s health that allows anyone to hold us to account.

We are committed to improving access to better services and to promoting early intervention to address children and young people’s mental health issues before they worsen. We are investing £1.4 billion in that over the next five years, and we have invested more than £120 million to introduce waiting time standards for mental health services—the first time that we have done that.

If we concentrate our actions and resources on the root causes of child poverty, such as worklessness and education, that will be the springboard from which everything else will follow. While the Government recognise the importance of tackling child ill-health, these amendments would ultimately distract the Government’s focus and finite resources from what is most important for our children’s future life chances. For these reasons, I cannot support the amendments of the noble Lord and the noble Baroness.

Amendment 7, tabled by the noble Lord, Lord Ramsbotham, would require separate reports for measures of worklessness and educational attainment. We are already committed to reporting on these measures and believe that it is sensible to deal with them together as they are jointly fundamental to improving life chances.

Amendments 9, 10, 12, 13 and 14 are consequential on Amendment 7 and therefore, in the Government’s view, unnecessary.

Once again, I thank noble Lords for their contributions but, on the basis of what I have said, I urge the noble Lord to withdraw his amendment.

[The Earl of Listowel]

Before the noble Lord sits down, will he reassure the House about the future of health visitors? Clearly, they have a very important role in the welcome things that he has just said. The Government have done a great job in recruiting and developing the workforce, but now that responsibility for health visitors has been moved to local authorities, which must fund them, there has to be a concern that in the current atmosphere for local authorities we may go backwards and health visitors will not be commissioned to do the work that is so necessary in relation to what we have just been discussing. Perhaps the noble Lord would consider writing to noble Lords who are interested in this area about the mechanisms that exist to ensure that that does not happen.

[Lord Freud]

I shall be happy to write.

--- Later in debate ---

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I support the case that has been powerfully made by the noble Baroness, Lady Lister. We have been discussing for what seems like years what should be done to help low-income families in work, and she has made a very good case. I cannot understand why the Government do not see the force of monitoring carefully the circumstances and environment in which these children will live, admittedly in England, in low-income households.

The Minister referred—and I know the work well—to the Waddell and Burton concepts of the sustainability and well-being that derive from work. That study was done in the early 2000s, and it was a changing experience for me as well—it was new to me. He also referred to the work that he then went on to do with the Labour Government in his important report. It all suggests that low-income working families are struggling to get to the kind of rewards that Waddell and Burton were talking about in their biopsychosocial model, which was so instructive in changing the terms of the debate.

I agree with the noble Baroness, Lady Lister, that the evidence is that we are in a very precarious employment environment. It is particularly true, and becoming more so, of self-employment. Single-parent families in low-paid work suffer increased and increasing stress, and all the other well-known elements that lead to deprivation in terms of the indicators of disability. Large households and some ethnic groups have historically had challenges relating to making work not just something that pays a wage but leads to a fulfilling life. This whole area will become more, rather than less, important in future, as the precarious employment environment increases.

There are big regional differences to which, as policymakers, we are at the moment blind. There are geographical areas and differences within England—as the amendment refers only to England—that would be instructive for policymakers looking at children in low-income working families and to which we do not have access at the moment. We could so easily have it if this amendment were adopted by the Government.

Finally, the universal credit change that is coming in this direction is quite new. Not only does it require families on universal credit under the claimant commitment to get themselves ready and able for work but, once within work, they are under pressure under the new system to go for longer hours and higher-level wage contracts of employment. That is all backed by sanctions. That is something that, once universal credit eventually rolls out across 7.7 million households, we will have to watch very carefully in relation to the trends. I am not saying that there is anything wrong with trying to get people into higher-level jobs, because that is important for low-income families, but that element of universal credit is quite new, to me certainly, in relation to how the social security and social protection systems that we have in the United Kingdom work.

I would be much more comfortable if the Government were to agree to these amendments. We would be better informed and, as legislators in the future, we would be in a much better position to protect the interests of children in low-income families who struggle with poverty in this country. It is time that we tried to do something about that.

[The Earl of Listowel]

My Lords, I support these two amendments. In the family to which I referred earlier, Ms Lorna Sculley has three children; the oldest and youngest sons have a disability, and she is a working mother. She works 16 hours a week as a dinner lady at the First Love Foundation—the food bank—and she discussed the prospect of getting more work. She calculated that if she worked seven more hours a week, she might get only another six pounds. It just was not worth her while to progress along a work route. I welcome very much what the Government have said about introducing the new, much higher, minimum wage, but the actual effect on families’ incomes might not be as positive as we would all hope, so I hope the Minister will consider accepting this proposal.

I would like to raise another point about a further complication for Ms Sculley. She depends on housing benefit and lives in Tower Hamlets. Her benefit has not been sufficient to pay her rent, so she has to subsidise it from her other income. She says that she cannot move from where she is because of her eldest son’s disability: he is at a school that is good at meeting his needs. That is what I understood from what she said, so that is perhaps relevant to others in our discussion.

My final point in relation to Ms Sculley is that she was offered a parenting class because of her two sons’ disabilities, but it took place on a Thursday, which is when she has to work at the school. She is therefore, in a way, disadvantaged by being in work because she cannot take up the opportunity of attending the parenting class. There is a lot to be said for these two amendments, and I look forward to the Minister’s response. Before I finish, however, I would like to thank him for the time that he took last week—an hour—to speak on the needs of children as they relate to this Bill. I certainly appreciate that very much.

[Baroness Hollis of Heigham (Lab)]

My Lords, I very much support the amendment of my noble friend Lady Lister, which was supported so ably by the noble Lord, Lord Kirkwood. I will be puzzled if the Government propose to resist the thrust of this amendment. The Government know perfectly well that, although the incidence or percentage of poverty among workless families is high, and higher than that among working families because the number of working families is so much greater than the number of workless families, as has been mentioned already, two-thirds of children who are in poverty live in a family where an adult is in work. Part of that might be that the parent, if a lone parent, has restricted hours, but we know that, with insecure contracts and the minimum wage and so on, the key lever to get that family out of poverty is not just to get the single adult into work but, where there are two adults, to get the second adult into work as well. We know that that is a function of the age of the youngest child and the size of the family. Child poverty might well be for a temporary period until the second earner—let us say, for this purpose, the mother—is able to go back into the labour market along with her husband or partner in order to amplify the family income. The need to support those children may be a temporary issue.

Given that the Minister today has put so much weight on the strain being carried by the new minimum wage and given that he will want to know, as we will all want to know, the interaction of that with the benefit bill, and the extent to which, therefore, that helps to address the levers of child poverty, above all of which is getting the second earner into part-time work, I do not understand why he would not want to track the information that my noble friend has called for. We all support the Government’s move to increase the national minimum wage. If he is right, this hopefully will have repercussions that we would all accept and support for the benefits system. But do we need to do more than that? We do not know. It may be about the size of sibling groups or the need for a second earner. We need to know what levers to pull. Unless the Government track that information, we will not know. I am sure that the Minister does want to know, so I hope that he will think very carefully about this amendment.

--- Later in debate ---

[The Lord Bishop of Durham]

My Lords, I support this amendment. Yesterday, I spent a delightful evening with a small number of academics after preaching at Evensong in an Oxford college—Worcester College. It was a very pleasant evening. However, as I sat there, I kept coming back in my mind to today’s debate because I was reminded of the extraordinary privilege of being in an Oxford college and the elite nature of it. This is not to criticise it or put it down; I had the privilege of studying in a private hall in Oxford when I trained for my ordination. However, I found myself thinking about the vast number of children and young people I meet in schools and colleges around the north-east, and have met in other parts of the country over the years, for whom such privilege is not their aim. Most of those I meet do not talk or think about being socially mobile. They do talk, however, about wanting a decent home and growing up and finding a good job on a decent wage. They also talk about having a stable, loving family through their childhood and wanting to create stable, loving families in the future. Those are the hopes and dreams of most of them. I believe that we have a lot more work to do on aspiration levels. I would love more of them to dream that one day they could go to Oxford or Cambridge, and that they can be significant players in their own communities and transform them, because that is where most will do it. Of course, we all know people who make huge impacts on their local community because they believe in it.

Social mobility is simply too narrow a focus. I absolutely support the move to the term “life chances” as a better expression of a broader base on which to think about these matters. I am not a great sociologist, but I went back to Max Weber, who was the first person I could find who talked about life chances and who introduced the concept of social mobility. In that, he talks quite clearly about social mobility being only one of the factors. He also talks about social stability, social cohesion and social integration. These are at least as significant and, for large numbers of people, they matter as much as, if not more than, social mobility.

Life chances around worklessness, educational attainment and, indeed, income are a broader-based way of assessing poverty. They will tell us more about the health of society than simple social mobility. Changing the name of the commission will absolutely reflect more closely the intention of the Government and offer a way of monitoring progress and feeding into it through the commission’s work. It matters and it would be nice to have a commission with a title that children themselves recognise, understand and could talk about and debate in their schools. How much they would, I do not know, but the idea of a title that they relate to is very valuable. This is intended to be helpful. To call the commission the Life Chances Commission fits absolutely with what the Government are aiming at and will help serve that aim better than the simple, narrow focus of social mobility.

[The Earl of Listowel]

In listening to this debate, I find myself sympathetic to the notion of social mobility but I also think of the play “Macbeth” and of Macbeth and his wife. There is a risk, I suppose, if one puts too much weight on social mobility, of a society which is red in tooth and claw. The addition of the words “Life Chances” balances that. Your Lordships may also remember the series “Seven Up!”, which I think started in the 1970s and followed 10 children through their lives into adulthood. To my mind, the happiest life in the group was that of a young black boy who grew up in foster care and then went on to become a butcher, marry and have a family. He seemed the most contented of the lot. To be able to achieve a stable and loving family is also important to society, so it would also be helpful to measure that.

[Lord McKenzie of Luton]

My Lords, this amendment has been moved very comprehensively by my noble friend Lady Lister and spoken to by the right reverend Prelate the Bishop of Durham, to whom I should say that the closest I got to Oxford on Sunday night was watching “Endeavour” on television. This is a re-run of an amendment moved in Committee as part of a wider group covering life-chances strategies. The Minister’s response then, as reported in col. 1598 of Hansard on 9 December 2015, was clear on a commitment to publish a life-chances strategy, as well as the annual report as set out in the Clause 4 obligations, but there was no commitment to make this a statutory obligation. As my noble friend Lady Lister has argued, the concern which has been expressed about the commission is that, for the future, it has no obligation explicitly to promote the tackling of child poverty. Although there is a commitment to report on life-chances data, and a statement on the record that there will be a life-chances strategy, the role of the Social Mobility Commission seems somewhat removed from this.

As my noble friend Lady Lister pointed out in Committee, promoting social mobility is a narrower ambition than tackling poverty and promoting life chances: it is not a substitute. It is, of course, a not unreasonable ambition, but a commission focused on life chances would naturally encompass the prospects of social mobility. The reverse is not the case. We therefore support my noble friend’s amendment. It seems odd that the Government are keen to have a commission reporting on progress on improving social mobility but not on life chances.

Welfare Reform and Work Bill

Earl of Listowel Excerpts

Tuesday 12th January 2016 Lords Chamber

[Lord McKenzie of Luton]

My Lords, Amendment 105 stands in my name and that of my noble friend Lady Sherlock. We are pleased to note that it has the support of the noble Earl, Lord Listowel, and the noble Baroness, Lady Manzoor. The amendment calls for the Secretary of State to come forward with a plan to address the impact of lower social rents on housing associations and local authorities within 12 months of the rent reduction provisions coming into effect. It mirrors a debate which took place in Committee in the other place and follows on from much of what we have just debated.

The rent reductions amount to some £3.5 billion by 2020 for housing associations and are estimated by the Local Government Association to amount to some £2.6 billion for local authorities by that date. However, their impact will of course extend beyond 2020 because even if CPI plus 1% is restored after four years, it will be applied to a lower base than would otherwise be the case. LGA figures show that the rental loss for local authorities is equivalent to 60% of the total housing maintenance budget each year or 19,000 new homes over four years. London Councils points to a loss of rental income for London of £800 million up to 2020, but also, the cumulative impact looking across the 30-year business plan, assuming rents at CPI plus 1% after 4 years, is £13.3 billion.

The Government recognise that these reductions will have an impact on the finances of housing associations and local authorities but effectively say—we have heard it again tonight—that these can be managed. This amendment seeks clarification of how the Government think this can be accomplished. Effectively, it restates the question posed by my noble friend Lady Blackstone. Various estimates have been made of the loss of rental accommodation which might ensue, and it is recognised that this will obviously be influenced by what exceptions and exemptions are to be made available. We will come on to these in following groups. The National Housing Federation estimates that 27,000 fewer homes will be built over the next four years, although the OBR has different figures.

The Government have cited a number of factors in support of their view that everything is going to be all right. These include the accumulated surpluses of housing associations and HRA reserves, the latter totalling some £2.2 billion. They also point to the prospect of higher rents arising from social tenants with a household income of £30,000 to £40,000, which the impact assessment suggests could produce,

“hundreds of millions [of] pounds per year”.

Can the Minister give us a breakdown of this estimate, saying how much relates to London and how much to outside London, how many households are likely to be affected and what level of rent is expected to be levied and garnered from this process? Is it correct that the rent standard does not currently apply to rental accommodation where household income is £60,000 or more? Presumably this will have to be adjusted.

As for the reserves of local authorities and housing associations, the Government should be wary of making judgments by looking at the aggregate position. London Councils, for example, cites a loss of rental income of £800 million but reserves of stock-holding boroughs of only £700 million. There is an assumption that reserves can be used effectively without cost. What guidance, if any, is given to housing associations and local authorities generally about maintaining prudent reserves?

If the Secretary of State were to publish a document under Clause 23(12) about measures a local authority might take to avoid financial difficulties, what would his approach be in considering the running down of reserves? The impact assessment explains that the regulator is currently collecting information from large providers and requiring a revised financial forecast return reflecting updated policy announcements. Is this exercise complete and what is the outcome? The impact assessment also makes it clear that the Government are continuing to engage with the housing association sector and,

“remains confident that they will be able to find the necessary efficiencies to manage this change”.

Will the Minister please share with us what specific factors underpin this confidence? What is the Government’s current assessment of the shortfall in social housing for rent which they consider will flow from the operation of Clause 21? In addition, what is the estimated impact on housing waiting lists?

We can exchange statistics about the housing performance of this Government and will doubtless hear, among other things, proposals to develop 275,000 affordable homes over the course of this Parliament. If we do, can we be clear on the definition of affordable housing being used, and how many homes will be available for rent? I beg to move.

[The Earl of Listowel (CB)]

My Lords, I support the amendment. I am very concerned about the rise in child homelessness and the number of homeless families living in insecure accommodation. I am concerned at the possibility that these changes will reduce the supply of housing and contribute to further child homelessness. Will the Minister look at the possible impact on child homelessness of the reduction in rent over the next four years?

I welcome the extra investment, announced yesterday, that the Prime Minister has made in perinatal mental health care so that during and immediately after pregnancy mothers get support if they have mental health issues. I understand that he is doing that because it is increasingly recognised how crucial it is for children to have a good start in life. The noble Lord, Lord Horam, spoke earlier about productivity. I suggest to your Lordships that if we do not do everything possible to give children the best start in life, we will be shooting ourselves in the foot as regards productivity. We know that if they get a good start, they will do well in school and will probably also do well in employment. That is why I particularly support the amendment.

Living in insecure accommodation is also obviously very troubling for children as they may have to move from school to school and may be separated from their friends. I know that, like me, all your Lordships are very concerned about the increasing number of children who are homeless, and I look forward to the Minister’s reply.

--- Later in debate ---

[Baroness Hollis of Heigham]

I wonder whether the Minister could rephrase her comment about social rents being out of kilter with the private rented sector. She has heard the evidence in previous discussions: first, that those social rents rose because government required them to rise; and secondly, that social rents are on average about 40% or less of private sector rents. Therefore, the pressure on the housing benefit bill has come very substantially from the increase in the number of properties in the private rented sector. That is completely at odds with the position that the Minister keeps painting: that the justification for increasing social rents is that they are somehow out of kilter.

[The Earl of Listowel]

That is certainly my understanding too: that more and more the poorest people are being pushed into using the private rented sector as the supply of affordable social housing has dwindled. This has led to more insecure housing and, unfortunately, more and more homelessness. Of course, many of these people are parents, and therefore their children become homeless too. Perhaps the Minister might think of writing to me before Report, because I have not given her notice of my question. However, I am listening to what she has to say.

[Baroness Williams of Trafford]

I am very happy to write to the noble Earl. I do not make a judgment about why social rents have, in percentage terms, increased out of kilter with those in the private rented sector. The quantum might be different but, in percentage terms, they are out of kilter with the private rented sector.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, Amendment 110 stands in my name and that of my noble friend Lady Sherlock. We welcome the support of the noble Earl, Lord Listowel, who has added his name to it. The amendment moves us into somewhat different territory. It is about the adequacy of the local housing allowance system and the quarterly review of the extent to which at least 30% of private rented properties in each locality are made affordable by the LHA. It is an opportunity, in particular, to review the effect of the four-year freeze on the LHA.

Whereas the Government have sought in the Bill to ameliorate the costs of housing benefit for social housing by reducing rent levels, their efforts and those of the coalition Government have taken a different approach in the case of the private rented sector. For the PRS, the Government have progressively reduced the level of support provided by the LHA. This started by moving the LHA rate down from the median rent in any given area to the 30th percentile and was followed by national caps on categories of property, limited uprating, initially to 1% a year, and now a four-year freeze. As well as changes to the LHA which effectively substitute for the rent level in any calculation, there have been changes which affect the calculation of housing support itself: the abolition of the family element, the two-child policy and cuts to work allowances, not to mention, where appropriate, the benefit cap. That is happening at the same time as more people are looking to the PRS for housing and rents are increasing.

The private rented sector is growing out of all proportion to the UK’s housing stock, and is expected to comprise more than one-third of the total stock by 2032. This growth has been stimulated in particular by the deregulation efforts in the Housing Act 1988 and the continuing shortfall under successive Governments of new housing provision. Research by Shelter highlighted that a third of renters are now families with children—those most affected by the volatility and uncertainty of the rental market. Nearly three-quarters of families who rent are in work and would overwhelmingly like to own their own home but believe that they will never be able to afford it.

In a release just last week, Shelter set out recent findings of an online survey which showed that 32% of private renters have had to cut back on either heating or winter clothing to meet housing payments and 56% are struggling or falling behind with their rent. An earlier study by Shelter highlighted that more than half of local authorities in England have a median private rent for a two-bedroom home which costs more than 45% of median take-home pay in the area. Eight per cent of authorities have median rents that are 50% or more of median full-time take-home pay. This is before the 1% freeze begins to operate.

The test the amendment sets down is whether 30% of private rented properties in each locality are affordable to people whose housing support is based on the LHA. It implies that the 30% would be the lowest cost, the 30th percentile, because that was the central test considered appropriate before uprating was decoupled from actual rental levels, a change which has been deepened by the LHA freeze which, as we touched on, is to be visited on social rented housing in 2018.

As I said, the extent to which private sector rents are affordable depends on how the broad rental market area operates in practice, as well as the details of the current social security system, but the starting point is the actual level of the allowance, the rent equivalent. There is no doubt that at times of growing demand, inadequate supply and rising rents, a freezing of the LHA is likely to widen the gap between actual costs and the level of housing support.

Indeed, this is already happening, particularly in London, where London Councils recently published an analysis of the likely effect of the freeze which demonstrates that already less than 30% of private rented properties are affordable at the LHA rate. It suggested that only 5% to 10% of properties in some high-value parts of inner London might be affordable and that this could spread more widely around the capital. For 2015-16, a gap is already opening up between LHA rates and the 30th percentile. Based on government figures, in two-thirds of the broad rental market areas the 30th percentile rents for two-bedroom properties, for example, are already above the April 2015 LHA levels.

Does the Minister accept those figures? Unless rents are to come down, this shortfall will only grow. A clear consequence of this is that more and more people will uproot and move to cheaper areas, with all the consequences of that upheaval for families and their communities, both old and new. For some, the benefit cap will further make properties unaffordable, leading inexorably to homelessness and poverty. We cannot allow this to go on. This is a deepening crisis, which the Government need to address. The noble Lord, Lord Kerslake, has two amendments in this group. I may respond to them when I wind up. I beg to move.

[The Earl of Listowel]

My Lords, I am concerned that the Government’s proposal may reduce the supply of housing or cause what housing is available to be of poorer quality. I go back to my earlier concerns about the poorest families. In her response, will the Minister give an assurance that this will not have the effect that I am concerned about, will not make more families homeless and will not lead to poor families living in poorer conditions and less well-maintained homes? I look forward to her response.

[Lord Kerslake]

My Lords, I shall speak to my Amendments 110A and 110B. I am conscious that we are reaching the end of a long process, so I shall keep my remarks short. These amendments go to a specific issue that needs addressing. They focus on giving flexibility and excepting social rent reductions for two types of new supplier: affordable rent suppliers and social tenancies. That does not address the whole of the issue that I spoke about earlier because the social housing model involves cross-subsidy. When housing associations look at new supply, they look at two things: their investment plan’s overall viability and the viability of individual schemes. For schemes that are less profitable and more marginal, rent is crucial.

There is shared recognition in this House about the need for new supply of all types, including social housing. By giving flexibility by excepting new supply from the rent reduction policy and giving flexibility in the starting rates for these properties, it is very likely that some schemes that would have been put on the back-burner because of viability will go ahead. These amendments will cost very little because new supply is less than 2% of existing stock and therefore the cost in terms of benefits is very small, and the gain, in terms of new supply at the margin, will be considerable. These are two small amendments that will address the issue of new supply, give flexibility at local level to make decisions on rents and tip schemes that would otherwise not have been viable into viability and enable them to be built.