Poverty and Social Exclusion
Debate between Earl of Listowel and Lord Freud(11 years, 6 months ago)
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Lord Freud
Maybe I am not the best person to comment on Liberal Democrat manifesto planning. I can, however, assure the House that the removal of the spare room subsidy remains government policy—and I remind the House that this was coalition policy, which was decided in 2010 at the highest levels of government.
The Earl of Listowel (CB)
My Lords, I warmly welcome the excellent steps that this and the previous Government have taken in improving support for young people leaving local authority care, but may I draw the Minister’s attention to today’s report from the Education Select Committee in the other place, which highlights the fact that too many young people from care are going into bed-and-breakfast accommodation? There is still a lot of work to do, so will he look at that carefully? I also ask him to look at the next iteration of the care leavers strategy, which his department has been involved in, and to ensure that health, particularly mental health, is fully included, so that young people of 16 to 25 leaving local authority care, and the people who support them, have the excellent mental health support they need to avoid those young people entering social exclusion and poverty?
Lord Freud
The noble Earl is absolutely right to concentrate on this issue because this group has traditionally done disproportionately badly. We have taken steps to ensure that these young people are better off in terms of housing than youngsters who are not coming out of care. As regards the mental health issues, it is absolutely correct to concentrate on the fact that a large proportion of people develop long-term disabilities due to mental health issues. We are devoting a lot of energy to consideration of that area.
Employment: Universal Jobmatch
Debate between Earl of Listowel and Lord Freud(11 years, 11 months ago)
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Lord Freud
I do not have to hand how many prosecutions we have made, but I will of course write when I know that information.
The Earl of Listowel (CB)
My Lords, as more people are being encouraged into work, is the Minister aware that unidentified mental health needs are becoming more apparent? How can these people be helped to address their mental health needs so they can benefit from the services of the kind he is discussing?
Lord Freud
The greater intensification of the relationship between the jobcentre and claimants as a result of universal credit and the claimant commitment has begun to unpick some of the challenges and barriers that claimants face. One of those, clearly, is mental health and we are undertaking an exercise to look at how we can help such claimants. That is not easy. No one in the world has managed to achieve this. We are currently looking at doing a series of pilots to find out how best to help people with mental health problems.
Universal Credit Regulations 2013
Debate between Earl of Listowel and Lord Freud(13 years ago)
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The Earl of Listowel
My Lords, I shall share some concerns with your Lordships about the regulations but, first, I underline my support for the principle behind the introduction of universal credit. I recall, when I first entered this House, the work of Louise Casey, who was then the rough sleepers’ tsar, appointed by the then Prime Minister. A key part of her successful programme in reducing the number of rough sleepers on the streets was to find purposeful activity for those who had been homeless. It seems to me such a curse that many people are not finding useful things to do with their time and are allowed to fester, sometimes for generations, without being actively involved and engaged in productive work on a daily basis. I welcome the fact that the legislation will make that more possible for more people.
My concern is about vulnerable families. I recall for your Lordships what my chemistry teacher used to say to me. He talked about dynamic equilibriums. I suggest that vulnerable families are subject to a dynamic equilibrium. If they are given the right support, they can thrive and do well. We saw that recently again with the work of Louise Casey, who has been tasked by the right honourable gentleman Iain Duncan Smith, I think—or at least by the Government—with looking at the 120,000 most troubled families and making a difference in their lives. Through her work supporting those 120,000 families, she has managed to decrease significantly the level of domestic violence in their homes and to increase significantly the number of their children attending school on a regular basis. It is possible to act on the positive side of that equilibrium and make a difference to families.
On the other hand, one can see that if one puts those families under too much stress, they can fail. I was reminded recently of that experience when I visited Feltham young offender institution and spoke to prison officers. I had not visited for 10 years, but the same theme came through: so many of the young men with whom they were dealing had never known their fathers—had never had fathers—and the officers found that they had to adopt that role for those young men.
It is critical to support those vulnerable families in the best way that we can. I thank the noble Lord, Lord Eden, for his speech. In this extremely difficult time, when local authority funding is being cut by 28%—and there will be further cuts to services—which is impacting very heavily on services for vulnerable families and their children, a complex change such as this has to be carefully considered to minimise any adverse impact on those families.
So I welcome the principle, but I have concerns about various issues. They have all been raised this afternoon, so I need not go into detail. I was grateful for what the Minister said about the monthly payment of housing benefit to families. There is the payment exemption scheme, which he described, and he is paying particular attention to drug and alcohol misusing families and those with gambling problems. I welcome that, but I share the continuing concern of the noble Baroness, Lady Hollis, that that may well not go far enough. I found what she said very persuasive: there is a danger of underestimating the chaos in many of those families and their inability to manage their finances in the way that we and the Minister would like.
With regard to childcare, important questions have been raised about significant increases in the cost of childcare to families. The changes to housing benefit and the limit on the number of bedrooms that families can have is clearly putting a lot of stress on some of our most vulnerable families and may cause some of them to have to uproot and move to new areas and communities in which they know no one. They may easily feel isolated and, again, are at risk of collapse. I am particularly concerned about the ability of foster carers to keep a room open for a fostered child. In the past, the Minister has gone quite a long way in reassuring me on that point but I would be grateful if he could go further in reiterating that today.
Finally, the right reverend Prelate the Bishop of Worcester and others alluded to the concern raised by the Children’s Society, and by my noble friend Lady Grey-Thompson in her report, about how this all impacts on children with a disability. He was concerned that these are often the poorest families, struggling to make ends meet. Given that 100,000 of these children will be up to £28 worse off under the new arrangements, that is a very real cause for concern. I hope that the Minister can say something about how he will monitor the situation for these children carefully and that he will go as far as he can in offering me reassurance on this point.
To conclude, in my experience vulnerable families exist in a dynamic equilibrium. Given the right support, many of them can do a lot better and their children may perhaps break through the generational failure that that family may have experienced. Without the right support, however, particularly in such difficult times, one will often find that their children will fail and possibly end up at Feltham young offender institution, costing the public purse well over £40,000 or £50,000 a year to maintain them there. It is crucial that we get this right and I look forward to the Minister’s response.
Lord Freud
My Lords, I give really sincere thanks to everyone who has spoken because I do not often hear a debate where people have worked quite so hard to understand the issues. I might not agree with everything that people have said but the quality of debate has been pretty extraordinary, given the complexity of the issues we are dealing with. I hope that your Lordships all know now that I listen very hard—and I steal or plagiarise as much as I can—so a lot of what your Lordships have said has fallen on fertile ground.
Let me deal with the amendment proposed by the noble Lady, Baroness Sherlock. There are some serious misconceptions in it about what universal credit will do. First, on work incentives, the fact is that universal credit will change them out of all recognition—and manifestly for the better because it will reduce participation tax rates and take away some of the scandalously high rates under the current system, which may be 91% or even 100% in some cases. There are some losers but they are losing, on average, a rather modest 4 percentage points. In many cases, the increased marginal deduction rate is because people are being brought into entitlement for UC, so they are actually better off. They may have a higher marginal deduction rate but have become better off because they have been brought into universal credit.
I do not agree that universal credit penalises savers. In practice, it corrects an overgenerosity in the current tax credit system. It must be right to focus our resources on those households with the fewest resources. Under universal credit, claimants will be able to save up to £6,000 without any impact on their entitlement, in contrast to the typical working-age household, which has £300 in savings.
We are not cutting childcare support; we are investing an additional £200 million in it when we remove the 16-hour rule, which we think will help an additional 100,000 families. The combination of childcare support, higher work allowances and a single taper rate will provide a clear financial incentive that rewards work.
We estimate that around 3.1 million households will have a higher entitlement as a result of universal credit. It is true that, on a static analysis, some households will receive less benefit; however, in practice, we expect that people will adjust their working patterns where they can and will be able to gain—as they can under universal credit. I cannot agree that universal credit is bad for women and lone parents. We know from the experience of tax credits that, in practice, lone parents are among the groups most likely to respond to the financial incentives in the system. In any case, even on a static analysis, in the 3.1 million households that gain there are 2.6 million women. Lone parents will on average gain around £5 per month.
Throughout the passage of the welfare Bill and in recent months, we have debated at length the support for disabled people. We recognise the concern about the impact of the severe disability premium but our aim here is to target additional support on those who have the most severe disabilities or health conditions and who are unable to work, or to work full-time. On average, disabled households will gain by £8 a month. Responsibility for assessing and meeting significant care needs sits with local government. This week, we have set out proposals to put the longer-term funding of such care on a better footing. However, I put on record again my personal commitment to ensuring that we carefully monitor and evaluate the impacts of UC on disabled people.
Universal credit provides appropriate support to self-employed people but only in so far as self-employment is the best route for them to become self-sufficient. As I said in my opening remarks, we have carried out extensive engagement with groups representing businesses and the self-employed, and have responded to their concerns.
In relation to housing, universal credit provides fairness and responsiveness to the housing choices that working families faced already. The best protection against homelessness is a job. Universal credit will provide work incentives and support people in moving into work. Discretionary housing payments are available to help those at risk of being homeless.
The amendment implies that the objective of universal credit is as a savings measure. Nothing could be further from the truth. We are spending more and have huge ambitions to change people’s lives. In any case, we will be monitoring outcomes very carefully. We published a high-level evaluation framework in December 2012, which sets out our proposed evaluation approach and our key aims and objectives. I am happy to reassure the noble Baroness, Lady Lister, that the evaluation of universal credit comprises part of a continuous programme of analysis. It provides real-time evidence and information, as well as a measure of overall impact and success further down the line, although it will take time to assess how different groups experience universal credit and to build up a clear evidence base.
Implementing a system that is dynamic and responsive is at the heart of these reforms. That is why the welfare Act contains a provision to enable the piloting of changes to the system that aim to achieve simplification or change claimant behaviour to improve their labour market outcomes. I am happy to reassure my noble friend Lord Kirkwood that I will personally value continuing the dialogue with this House. I know that this House knows how much it has put into the creation of universal credit.
There were a huge number of points and I will do my best in the limited time to touch on them. The noble Lord, Lord Touhig, requested a lot of detailed figures on IT. I think I will write to him with details, as I have dealt with quite a few of those points in recent PQs, but I will make sure that the noble Lord has an up-to-date list of exactly what we are spending in each year. As I said, I will not go into detail, but we are on time and on budget, we are pushing ahead and we are starting with a pathfinder, to make it work, in April.
The Earl of Listowel
Before the Minister sits down, if it is in order in this procedure of the House, may I ask him a question? I was grateful for his reassuring reply to the noble Lord, Lord Eden, about the great efforts he is making in looking at the administrators and the support and training they need. If he will write to me with some idea of the minimum standards for the supervision of administrators that he might be considering, I will appreciate it.
Child Poverty
Debate between Earl of Listowel and Lord Freud(13 years, 7 months ago)
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Lord Freud
My Lords, one thing on which there has not been enough focus is the importance of behavioural impacts. Income transfers have their place in tackling poverty but they are simply not enough. Behavioural changes are required, and one thing about universal credit is that it brings a change in work incentives, as well as some very precisely targeted income transfers. Vocational education and apprenticeships in this country have just not been adequate, and we have not looked after vulnerable groups—I am thinking of those leaving care and prisoners leaving prison. We need a large number of strategies to tackle this very difficult problem.
The Earl of Listowel
Education is the key route out of poverty. Will the Minister encourage his colleagues to look still more closely at the Finnish education system, where 20 candidates compete for each teacher training place, where every teacher, whether in primary or secondary school, has a masters qualification and where excellent results are achieved in numeracy, literacy and science? With regard to young people in care, will he consider again looking at the continent, where he will see how much more qualified the staff in children’s homes are compared with those in our country? Surely these are the children most at risk of poverty. Their carers and the people around them should have a high level of qualifications—ones that they can aspire to themselves.
Lord Freud
Yes, my Lords, this is an important point. We have a different approach from many of our continental peers. Looking at the figures, we do not seem to be doing well enough in some of these areas. When there are people who need real support, we need to look more closely at the education of the workforce.
Welfare Reform Bill
Debate between Earl of Listowel and Lord Freud(14 years, 2 months ago)
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The Earl of Listowel
My Lords, I support the amendment. Does the Minister think that it might be worth while if he made a few comments on the issues of continuity and supervision of staff? I hesitate to ask because I am unfamiliar with this area but in the areas of the asylum and immigration process, which has some similarities, and in social work and work with vulnerable children and families, the two themes seem to be, first, continuity of relationship wherever possible and, secondly, good quality supervision.
Lord Freud
I apologise to the noble Earl, Lord Listowel, for not responding to that point previously and I intervene to do so. There is a huge difference between a one-off assessment—which you may not repeat for another five or 10 years or never again—and an ongoing relationship in the Immigration Service. It is not a relevant analogy at all.
The Earl of Listowel
I suspected it might not be. For people with fluctuating conditions, where there is a likelihood of their going back on repeated occasions, perhaps one could sort out within a particular group individuals who would benefit from having regular contact with the same person. In the spirit of co-production, some individuals who are going to be assessed on a repeated basis may perhaps like to choose the person they deal with. However, as I say, I do not know how it works in practice at the moment so this may be by the by.
On listening to this debate, the question of the supervision which takes place in the social care arena seems to be pertinent. I am grateful to the Minister for making it possible for a social worker to visit the officials working on this and to discuss matters of supervision. In social care it is very important for front-line staff to receive quality supervision on a regular basis for three purposes: first, to check that they are doing the right job; secondly, to check that they are receiving the right continual professional development; and, thirdly, to ensure that they are not responding inappropriately to the clients.
On the third purpose, we all come to life with our experiences, and some assessors may find it difficult to work with particular clients who rub them up the wrong way. They need to be able to go to their supervisor and say, “Look, I feel really uncomfortable working with this person. I am not sure it is actually anything to do with them. Can you help me to sort this out?” They need a sounding board, if you like. That is one aspect.
On the continuing professional development side, this is a training aspect to check that they are continually building on their understanding of, let us say, autism. They will start from a point of ignorance but, in the course of years of experience, they will learn more and more. They are helped to do so and their supervisor ensures that they get the opportunities for that learning and enrichment. It is a draining job and the people doing it need to be recognised, supported and enriched. I have covered those three points but, as I say, I am not sure it is pertinent.
The proposal for a trial arrangement might allow an opportunity for us to find the most effective kind of supervision we can afford to provide and where there are opportunities to build continuity of relationship with clients.
I have an amendment later in the Bill which relates to how one manages the system and the culture in this area. If the people at the very top of some of these organisations had experience of social care—if one could be confident that there was a senior social worker at the top of the Jobcentre Plus arrangements, or whatever—they would have the necessary insight and the understanding to help people on the front line who will need a system of this kind to assist them in working with vulnerable adults. In that way, even with limited resources, the best outcomes could be achieved in the circumstances.
However, I will come to that amendment later. I look forward to the Minister’s reply.
Welfare Reform Bill
Debate between Earl of Listowel and Lord Freud(14 years, 3 months ago)
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Baroness Howe of Idlicote
My Lords, I had not intended to speak but, listening to the debate, I think that the opposition expressed by the noble Lord, Lord McKenzie, would provide the necessary time to reconsider the effects that the Bill will have in this respect. I also agree with my noble friend that the business about child support is a problem. Quite apart from the cost, the quality has come under quite a lot of doubt recently. The major point that I want to make is about stress on parents. I invite your Lordships to think about how stressed all of you have been by the extensive amount of work we have all had to consider recently, and bear that in mind when you come to consider whether or not to support this amendment.
Lord Freud
My Lords, with regard to the point made by the noble Baroness, Lady Howe, on how we could take it slightly easier, I regret that I cannot apply it to myself because my children have gone way past that age, although they do not seem to be any less stressful.
Our policies for lone parents are based on the key principle that work is the surest and most sustainable route out of poverty. In June last year we announced our intention to align the age at which lone parents could reasonably be expected to work with the time their youngest child enters school. Current legislation, yet to come into force, provides that income support must be made available to lone parents with a child under the age of seven. This clause lowers that age to five so that lone parents with children aged five or over will no longer be entitled to income support solely on grounds of lone parenthood. We would effect this change through regulations, and implement it drawing largely on the experience of having progressively lowered the age from 16. Support for these lone parents will be available through jobseeker’s allowance or employment and support allowance if they meet the relevant conditions of entitlement, or through income support if they qualify on grounds other than lone parenthood, most notably if they are carers.
We want to encourage lone parents to enter work but not at the expense of the crucial role they play as parents. We intend to carry forward the current safeguard that allows those with children aged 12 or under to restrict their availability for work to school hours. It is worth reminding noble Lords of the powerful impact that this policy has. When the age was brought down to 12, 16 per cent of lone parents leaving income support went straight into work and 56 per cent went on to JSA, many of whom will have subsequently gone in to work. We estimate that bringing the age down to five could lead to an extra 20,000 to 25,000 lone parents in work. Children in workless lone parent households are almost three times more likely to be in relative poverty than those where the lone parent works part-time, and five times more likely to be living in relative poverty than children of lone parents working full-time.
The noble Lord, Lord McKenzie, asked about flexible work. The Government are keen to promote flexible working and have a strong commitment to greater family-friendly working practices. We have committed in the coalition agreement to consult on extending the right to request flexible working to all employees. The public consultation process ended recently and we intend to respond to the comments by the end of the year. We understand that stimulating real culture change to make flexible working practices the norm across the whole labour market requires more than just regulatory change on the right to request. There also needs to be help for employers to operate in a more flexible way and demonstration of the benefits it can bring to them and their employees. The Government have a role in leading culture change. This is why we are working with business leaders and employers to promote the business case for flexible working and ensure that employers know where to go to find support to implement practices in their organisation.
This clause also amends Section 8 of the Welfare Reform Act 2009, which relates to the possibility of requiring work-related activity from certain lone parents with children aged under seven. Section 8 as it stands would require regulations in this respect to be subject to the affirmative resolution procedure. This clause lowers that age from seven to five, in alignment with the lowering of the age for withdrawal of income support on grounds of lone parenthood alone. The key question asked by the noble Lord, Lord McKenzie, was whether it is right to make this change now rather than waiting for the introduction of universal credit. Introducing this change before introducing universal credit will help more lone parents into work, with knock-on reductions on child poverty.
A recent evaluation of lone parents’ experiences of moving into work also found that working had had a number of positive effects on their children, both direct and indirect. These range from children having the opportunity to go on school trips because of extra family income to observing the good example of a working parent and greater independence, both financially for the parent, once in work, and for the child, in terms of their role in the household. Help with childcare costs is currently available through tax credits and the flexibilities in JSA mean that childcare responsibilities are taken into account. There are a range of flexibilities available: lone parents with a child aged under 13 can restrict their job search and availability to their child's school hours, while lone parents will not be sanctioned for failing to meet requirements if they had good reason for the failure. Access to appropriate childcare will be taken into account before a decision is made.
On the state of the economy, we have to bear in mind that even in difficult times—which I accept that we are in—Jobcentre Plus holds an average of 275,000 unfilled vacancies at any one time, around a quarter of which are part-time opportunities. Clearly those figures are a snapshot which hides the number of new job opportunities that come up all the time. On average, about 10,000 new vacancies are reported to Jobcentre Plus alone every working day, while many more come up through other recruitment channels. It is not worth getting into a huge debate about the meaning of these figures but, as noble Lords understand, much of our approach to the work programme is aimed at trying to help the people who have not managed to get a job reasonably early back into the market. As the numbers of unemployed get bigger, one factor we are looking at is the average length of time that people are unemployed. As I say, there are flows all the time and many lone parents have excellent opportunities to find a job. Even in difficult times, there are still jobs going. On that basis, I commend Clause 57 to the Committee.
The Earl of Listowel
My Lords, I thank the Minister for his helpful reply. I want to check with him about the question of school hours. Does that really mean “school hours”, and will the adviser take into account that the person will have to travel for an hour or an hour and a half to get to work, and back again at the end of the day, so that it will go over school hours? Does it also mean that if a job requires someone to work in the school holidays as well, that will be seen as an inappropriate job for that person? I would guess that it clearly means that, but I would appreciate a response to my first question.
Lord Freud
On working in school hours, it is quite clear that the working includes the travelling time. It is incorporated in that and it is clear in the legislation. To refer back to the noble Lord’s earlier reading of the e-mail, I could not resist making the point that we still remain grateful to the Egyptians for inventing papyrus. Maybe in another couple of years we will have dumped it.
The Earl of Listowel
My Lords, at the last Conservative Party conference the right honourable Iain Duncan Smith talked about 1 million children in this country being born into families where the parents are either substance misusers or misusing alcohol, so clearly it is key that we address this problem from the point of view of the welfare of children. Perhaps this is a good time to offer my congratulations to the Government’s drug treatment agencies and the UK Border Agency on the reduction in the use of class A drugs in recent years. However, it is still a very significant problem, while of course alcohol figures strongly in incidents of domestic violence, which is terrible for children to experience. So I hope that the Minister can give a strong assurance in his reply that robust mechanisms will be in place to offer help to job applicants who are suffering from these issues because a lot of the current provision is being cut back due to the recession. Particularly, how is capacity in the voluntary sector being harnessed in order to make the best use of those resources? I look forward to the Minister’s reply.
Lord Freud
My Lords, Clause 59 repeals provisions introduced by Section 11 of and Schedule 3 to the Welfare Reform Act 2009. These provisions would have applied to claimants of jobseeker’s allowance and employment and support allowance where their dependence on alcohol or drugs affects their prospects of finding or remaining in work. The regulation-making powers inserted by Schedule 3 to the 2009 Act could have been used to require JSA claimants to undertake a range of activities, including answering questions about whether they are dependent on or at risk of misusing drugs, and attending drug-related assessments or drugs interviews that would involve testing unless the claimant agreed to provide a sample that could be tested. Claimants could then enter a voluntary rehabilitation plan which might involve treatment. If claimants did not agree to enter the voluntary rehabilitation plan they could be required to enter a mandatory rehabilitation plan. Although a mandatory rehabilitation plan would not require a claimant to undergo treatment it could, for example, require the claimant to attend an educational programme or take part in interviews and assessments. These provisions also extended to alcohol dependency. Equivalent provisions were introduced for ESA claimants who are members of the work-related activity group. The mandatory requirements would have been enforced by using regulation-making powers to sanction a claimant’s benefit if they failed to comply.
These provisions, as the noble Lord, Lord McKenzie, suggested, have never been commenced. The previous Government produced draft regulations for a pilot scheme to run for two years from October 2010. Those regulations were considered by the Social Security Advisory Committee in March 2010. The committee’s report, published in May last year, raised significant concerns. It recommended that the pilot scheme should not go ahead as drafted. The committee considered that the pilots were unlikely to be effective, contained a number of significant flaws and would not produce robust results. Having listened to SSAC’s concerns and having undertaken their own work on drugs, in December last year the Government published their drugs strategy, Reducing demand, restricting supply, building recovery. The strategy recognises that work is a key contributor to sustained recovery from addiction, but we also recognise that the previous Government’s approach of mandating drug testing and assessments, and requiring claimants to undertake a rehabilitation plan on pain of losing benefit, is not the right one. We say it is not the right approach in particular for the following three reasons.
First, it mandates claimants to do something, such as being tested for drugs, that is not directly about helping people to approach the labour market. That does not mean that entering treatment is not the right approach to help many claimants who are substance dependent to address their barriers to work, but—and this leads to my second reason—claimants enter treatment for a series of complex reasons, and whether or not they succeed also depends on a series of complex reasons. Forcing claimants to answer, for example, questions about possible drug use, requiring them to attend substance-related assessments about drug use and insisting that claimants enter a mandatory rehabilitation plan if they decline to enter treatment voluntarily would be asking them to do something a large proportion of them would not want to do. If we took the approach of the previous Government, we would create a high risk of those claimants immediately failing these requirements and having to be sanctioned.
Perhaps I could pick a trick that the Opposition have enjoyed using on me on occasion. I am aware that there may have been some differences within the previous Government regarding their attitude to this legislation. I am enjoying watching on the faces of some of the people opposite a similar smile to the one that I sometimes have to use.
Finally, we consider that the previous Government’s approach towards substance or alcohol-dependent claimants would be one that all the evidence from treatment providers and agencies who are experts in this area, as well as SSAC which consulted with those organisations, say would not succeed.
On the question asked by the noble Lord, Lord McKenzie, about our alcohol strategy and what service will be available, the Department of Health will be publishing a new alcohol strategy early next year which will set out what services we plan to have available.
Welfare Reform Bill
Debate between Earl of Listowel and Lord Freud(14 years, 3 months ago)
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The Earl of Listowel
My Lords, I apologise for coming so late into this Committee debate. Earlier in the discussions on the Bill, I referred to research in the United States which looked at the effect of parental employment on educational outcomes for children. It found that within the younger group, five to 12 or so, outcomes were better when parents were in employment, but that in the older age group—and I am not quite sure of the cut-off point—outcomes for children in school were poorer when their parents were in employment.
I do not have the details, and I am sure there is much more context to it than this. Does the Minister know what the research says about the impact of parental employment on children’s outcomes at school, and is there separate research into the impact of lone-parent employment on the outcomes for children in school, post-13?
Lord Freud
The first point I make to the noble Baroness, Lady Sherlock, is to assure her that full-time is not the default setting. The default setting is that we look at the circumstances of the claimant, particularly taking into account their caring responsibilities and available care, and reach a reasonable position. That is the position. On that basis, a lot of her concerns surrounding her point fall away. Of course we are not looking to have latch-key children.
On flexible working, I made the point earlier that we understand that when we look at the value of a job, the monetary implications are not the only measure; and that the gains of flexibility, in terms of how the employer behaves, and the relationship, are key and critical factors and have to be taken into account.
The Earl of Listowel
Before the noble Baroness withdraws the amendment, I want to take this opportunity to thank the noble Lord, Lord Newton of Braintree, and the Minister for their very kind words. If praises are our wages in this House, I feel well paid today—I wish I were more worthy of what has been said. I am grateful to the Minister for his careful response. It is reassuring to be reminded how important it is to children and their success that their parents are in work. Shall I wind up?
Welfare Reform Bill
Debate between Earl of Listowel and Lord Freud(14 years, 3 months ago)
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Lord Freud
There are quite a few moving parts to this. I have talked about the WFHRAs reviewing that and there is also a review coming out on the sickness absence regime in the not too distant future. There are areas that need to be brought together, which impact on this reasonably specifically.
The Earl of Listowel
I thank the noble Lord, Lord McKenzie of Luton, for his support and the Minister for his helpful reply. Clearly, he has a great depth of knowledge of this area and I am grateful to learn from him this afternoon. I have a couple of brief points to raise. I also have an aside which is that his black-box approach sounds very familiar, in terms of the young offender programme for National Grid and Transco, to which I referred. It was developed for National Grid and Transco by Dr Mary Harris, who is an astrophysicist by background. Her approach was very much testing and incrementally trying things out until she got a method that seemed to work very well for young people. Maybe there is some read-across there to what is being discussed this afternoon.
The Select Committee for the Department for Work and Pensions looked at the work programme, and although it welcomed it, it had this to say:
“However, there is a risk that creaming and parking may still take place under this model”—
the work programme model—
“since it remains open to providers to continue to focus on the easier to help participants within each customer group”.
Perhaps the Minister could write to me, or say now to the Committee, whether he is aware of that particular problem and what needs to be done within each of the tranches.
The second issue that I would like to raise with the Minister—and I would like to think more about this—is where he talks about attending being a fundamental requirement. One just has to attend if one is going to get anywhere through this process. I can imagine for some young people that even attending would be a big step to take. I do not want to push it too far, but if you have someone coming out of the criminal justice system who is very oppositional and who has complete distrust for authority of any kind, you might need to woo them a little bit before you can even get them in a meeting—but it would be well worth while wooing them in terms of the outcomes at the end. That is the first point; I will go back and think about the second.
Lord Freud
To save the department writing a letter, I actually think that “creaming and parking” is not desperately helpful, although I know that it is a very popular phrase. I shall explain exactly why. Within a black-box approach, if you are a provider you are clearly trying to spend your money on an outcome that will be successful. Our job is to ensure that we put the amounts of money into the right level. There will be people who are ready and worth while investing in and people for whom it is not the right time—you need to wait. There is quite a sophisticated judgment there, and you can get those judgments too crudely wrapped up with what are basically terms of abuse in “creaming and parking”. That is how I would respond to that, and I hope that that has saved us a letter.
The Earl of Listowel
My Lords, I apologise. I should have put a couple of questions to the Minister. How will care leavers be treated in this system, and what additional support and flexibility might they expect to be shown? Perhaps he might prefer to write to me on those two points.
Lord Freud
Before I start on the amendment formally, it is worth making it crystal clear that the structure of the changes we have made bear in mind some of the real issues that we are talking about. I am particularly conscious of people with learning difficulties and fluctuating conditions, or a nest of other problems. I want to spend one minute on the design of the new welfare system, when it comes out like Aphrodite coming out of the sea near Paphos. The first point is the design of the work programme, where the rewards are not to get someone into a job and to keep them there, as it used to be, for 13 weeks. When you think about it, that is not what we want; we want someone to be in a long-term job. The structure, particularly for the hardest to help, is that the real rewards for the provider are when someone is in work for more than two years—it is two years and three months. You do not get someone into a job for two years and three months if it is inappropriate. That simply is not going to happen so when we are talking about the work programme, the incentive on the providers is to match people up with jobs that they can do in a way that the current system simply does not.
The second structural change that we are making, and which is really relevant in this area, is in how the universal credit works. By pulling together the two systems, the out-of-work benefits system and the in-work tax credit system, you do not have this desperate problem that we have today where if you take a risk and try to get a job and it did not work, you go back to go—and now try to get your benefits again. It is a nightmare but there have been bits of sticking plaster on it.
If you are in a fluctuating condition and this week you cannot work—let us say you have a job where there is a little flexibility—all that would happen would be that you would slide up the taper. Nothing would have changed in the nature of your benefit. There is just an adjustment in your universal credit payment and when you can work more, you get more. Those two things are big structural changes to bear in mind when we deal with these areas. They will help a lot because much of what people are rightly so concerned about are some of the incredible blocks that are in the current system and which make it so difficult for people to partake. It is why we have excluded so many people from having a full life, because in modern western society being part of the economy of the country is having a full life. They have been excluded and there is all the depression that results, so there are some really strong underlying changes that should help.
Welfare Reform Bill
Debate between Earl of Listowel and Lord Freud(14 years, 3 months ago)
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Lord Freud
My Lords, I hope that I am indicating that we are looking very hard at what proposition we can bring forward later on in this process of considering this Bill to deal with that particular set of problems that noble Lords have raised. So I will have something to say later on in the process.
The Earl of Listowel
I am very grateful to the Minister for reassuring the Committee that he will think carefully about the treatment of foster carers. That is welcome. However, I have a strong concern about a number of issues in this area. I have two questions. I wonder if he could drop me a letter on this, if he cannot reply now. Those registered foster carers who may have one, two or possibly even three rooms vacant, who do not have foster children with them at the moment but are waiting for them, and because of that are not getting an allowance and are on benefit, are hit by that—it is a bad situation for them. So reassurance on their position would be good. I am grateful to him for his response with regard to those parents who have their children removed from them. I think he was saying that for a short period it would be acceptable to give those families where the child has been removed an exemption in certain circumstances. I feel very worried about those families, which are very dysfunctional by definition. To have one’s children taken away is a very serious situation, and to lose a child and then to have an extra room or two rooms and to be further hit—that does worry me. Reassurance on that point, what happens to them, would be welcome.
Lord Freud
I will repeat the two points. The first point is exactly the issue that we want to deal with and the one that the foster community is worried about—the voids area. That is something that we are aiming to address. My response to the second point was, and remains, that this is where we would expect discretionary housing payments to come into play. It is exactly the complex set of judgments that need to be made, and local authorities are best placed to make them.
Lord Freud
Yes. I always prefer to answer rather than write, but I think I will on this occasion go to paper. It may be that the noble Baroness prefers paper.
The Earl of Listowel
My Lords, I was grateful, as I said before, that the Minister is giving this issue of arrears careful consideration. I think it might be helpful to the Committee if he could provide some reassurance that by Report we will have considerably more detail on what the plight will be of those who face arrears under the new arrangement. Can he give any assurance on that point?
Lord Freud
By the time we get to this again, I will come back with that answer.
Welfare Reform Bill
Debate between Earl of Listowel and Lord Freud(14 years, 4 months ago)
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Lord Freud
Yes, my Lords, a careful assessment has been done of how it will work in practice, which incorporates those kinds of effects.
The Earl of Listowel
My Lords, I hope that the Minister will forgive me if I ask his help on a point of detail. It may come up during fine-tuning, but it might be helpful to flag it up now. I refer to young people who leave the local authority care system and win an award against their authority because in their time in care they were not properly cared for. Therefore, they have a capital sum that they might need to use for education, therapy or something else. What circumstance will they find themselves in under these arrangements?
Housing Benefit
Debate between Earl of Listowel and Lord Freud(14 years, 9 months ago)
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Lord Freud
My Lords, the key principle behind these housing benefit reforms is that people who are benefit recipients should experience the same kind of pressures as everyone else. That is the way to integrate them back into the world of work, which is one of the fundamentals of our whole welfare reform strategy.
The Earl of Listowel
Is the Minister aware that there is a concern that some families may be moved to different areas, which will put additional pressure on children’s services? Is there a mechanism to give additional support to local authorities if there is an additional burden on those services?
Lord Freud
My Lords, yes, the system works so that, as families move to different areas, funding follows those families. There may however be lags, which clearly is an issue of some concern. The fundamental principle is that funding follows the requirement.
Women: Assistance in Pregnancy
Debate between Earl of Listowel and Lord Freud(14 years, 11 months ago)
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Lord Freud
There are two areas of financial help. The first is the budgeting loans. As I said yesterday, we are encouraging people to look at budgeting loans in the widest possible way. The second area is community care grants. Again, we expect that many people in the most difficult circumstances will be able to take advantage of those. The noble Baroness’s second question concerned what we were doing to help pregnant women. The Department of Health and the Department for Children, Schools and Families are developing a project, Preparing for Pregnancy, Birth and Beyond, which is looking at a renewed model of universal antenatal education and preparation for parenthood.
The Earl of Listowel
My Lords, is the Minister aware that young women in care are two and a half times more likely to become pregnant than their peers and that a quarter of young women leaving care are either pregnant or have a child already? Will he consider asking his colleagues who talk with local authorities whether all best practice in the area of support for such young women is collated and being shared as it should be?
Lord Freud
My Lords, I share the noble Earl’s great concern for children in care and take his point about the relatively much higher rate of pregnancy. I shall look closely at what we can do in that area.
Housing Benefit (Amendment) Regulations 2010
Debate between Earl of Listowel and Lord Freud(15 years ago)
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The Earl of Listowel
My Lords, I apologise. I omitted to declare my interest as a landlord. I do so now.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, this has been an important and interesting debate. I commend particularly the noble Lords, Lord Knight of Weymouth and Lord Best, on bringing forward these Motions and securing this debate. I shall try to answer as many as possible of the points raised, but, since there was an awful lot of them, I may not cover absolutely everything.
Perhaps I may first put the debate into context and explain why the statutory instruments are essential to advance the changes that we have planned. Housing benefit increases have been quite startling, as a number of noble Lords have pointed out. During the last 10 years, housing benefit expenditure as a whole has nearly doubled in cash terms from £11 billion to £21.5 billion in the current year. Only £2 billion of this increase is due to caseload. About £5 billion is due to general price inflation, but, most importantly, £4 billion is due to growth in private and social rents over and above general inflation. Private rents for benefit recipients have risen in real terms 10 per cent more rapidly than rents in the general market. These are exactly the sort of increases that we are seeking to contain. Without any reform, expenditure is forecast to be £24 billion by 2014-15.
It was imperative that we acted swiftly to stop the runaway costs of housing benefit, those costs having been allowed to rise without restriction year after year. As we made clear in the June Budget last year, welfare reform savings play an important role in reducing the overall budget deficit. The changes introduced by the statutory instruments alone add up to £1 billion by 2013-14.
We must be fair to the taxpayer. It is not right that families who work hard to pay their own rent have to pay even more so that those on housing benefit can live in homes that they could not think of affording. Some of the rates are extreme. I know that not a lot of people are taking £2,000 a week for a five-bedroom property in central London, but there are some and the current system allows it. Further down the scale, £500 a week is being paid for two-bedroom properties and £370 a week for one-bedroom properties at this year’s rates. The Government’s measures are designed to take this under some control.
One of the measures that we have announced, and which has been widely welcomed tonight, is providing for an additional bedroom for disabled people living in the private rented sector who need a non-resident, overnight carer.
Noble Lords have gone through the other changes, but I shall summarise them. They include applying an overall cap to local housing allowance rates and setting the maximum rate at four bedrooms. Those rates are £250 for one bedroom, £290 for two bedrooms, £340 for three bedrooms and £400 for four bedrooms. That is a little over £20,000 as the top rate. We are also removing the £15 weekly excess, which the previous Administration would have liked to do but did not. I do not think that anyone argues that it is appropriate that we pay people more than they pay in rent. It was introduced to encourage a process of negotiation between those who are renting and landlords, but it does not seem to have had that effect, so there does not seem to be much point in paying those figures.
The final element that we have been discussing tonight is the adjustment of the local housing rate from the median to the 30th percentile. Overall, there has been a lot of scaremongering generally, and a little of that tonight—and some false reporting about the measures, although there has not been that tonight. Some estimates of the number of people who will be made homeless are, quite frankly, ridiculous. It is simply irresponsible to suggest that thousands on thousands of people will be made homeless and will have to leave the capital in droves, as some have said. I welcome the opportunity to put the record straight and to respond to the concerns raised today.
First, I shall address what is essentially a London issue, surrounding the maximum weekly rates of local housing allowance that we will apply from April. They are still extremely generous rates. It is still far more than the vast majority of people pay out—at the rate of four bedrooms and £400 and more than £20,000 a year, a typical family would need to earn £80,000 a year to be able to afford that kind of rent.
These reforms are not about excluding benefit recipients from the nicest areas, as some have argued. We are simply ensuring a fair deal for the taxpayer. The simple truth is that individuals who claim housing benefit according to local housing allowance rules should face similar choices to those people in low-paid work. There is simply no reason why we should see people moving vast distances, and no mass moves out of the south of the country. In all but three of the most central areas of London, at least 30 per cent of properties will be affordable within local housing allowance rates. I shall just explain that figure, because there has been quite a lot of misunderstanding about it. The survey is based on the properties that are not in large occupied by recipients of housing benefit—so it is 30 per cent at least, except in those three areas, plus whatever elements of the housing stock currently occupied by housing benefit recipients that will go on being affordable. So it is a large proportion, although it is impossible to put an exact number on it, because clearly we are expecting prices to move and more properties to come into that category. But a large proportion of houses will remain affordable.
A small number of people in the most expensive places will, of course, have to move, but they will not have to move far, and we will work with local authorities to give those people the support that they need. In central London, 2.5 million jobs are accessible within 45 minutes of travel. Bus fares, although they went up this month, are no more than £1.30 for a single journey so they can go long distances on a bus. Low-income working households mostly pay a rent slightly lower than the appropriate local housing allowance rate. This group living in private rented accommodation is mobile; 40 per cent of them have been in that accommodation for less than a year. It is not unusual for families to move. Indeed, over a quarter of a million people moved out of or between inner London boroughs in 2008-09, which is a point that the noble Lord, Lord German, made.
On the estimates of homelessness that various bodies have put out, it is important not to rely on those estimates if they are based on what landlords say they will do or on early experience. We must look at the shortfalls. After the reforms, 32 per cent will see no change in shortfall, 450,000 households will have a shortfall of less than £10 a week and 35,000 will have a shortfall of more than £20 a week. Not all of those will have to move, let alone become homeless.
One difficulty in writing an impact assessment when there are behavioural and market-based effects is that it is not easy to quantify those impacts, because they involve a complex interplay of behavioural decisions by individual landlords and individual tenants. We are talking about market forces here. Although economic theory would suggest that if a purchaser of up to 40 per cent of a market reduces the amount that they are willing to spend, it will cause rents to fall, it is only in the end through observation that we will be able to obtain absolutely conclusive evidence.
We have had similar concerns raised about our decision to cap local housing allowance levels at the four-bedroom rate but that reflects the kind of housing choices that are made by larger families who are not on benefit. It builds on the restriction introduced by the now Opposition in April 2009 to cap at the five-bedroom rates. Let us be clear: most families not on benefit cannot afford to live in properties with five or more bedrooms. We are reflecting here the choices made by families everywhere.
These measures have been closely scrutinised. We have made available more data on impacts than has ever been the case. Clearly, some people will receive less benefit as a result of the changes but that does not necessarily mean that all of those people will be drastically worse off. The gap between the 30th percentile and 50th percentile can be quite narrow. On average, it is currently £15 a week for one-bedroom properties and £26 per week for two-bed properties in London. In the outer south-east area, the difference can be as little as £8 a week for two-bedroom properties. Clearly, one effect that will happen is that the 30th percentile and the median can start moving together if we do not get the downward pressure that we are trying to impose on the rates. That would actually be bad news for the Government, because we would not lose some of the gains but see a market response as those medians move together, rather than the wholesale disruption that some people have been forecasting. In practice, setting the local housing allowance rates at the 30th percentile merely reflects the choices of low-income households; we know that from the research that we undertook last year.
The noble Lord, Lord Best, told us about the attitude of landlords. Rather than accept his concerns wholesale—although he is clearly a great authority in this area—I would point out that, in the last 18 months, more than 400,000 private rented sector tenants have been claiming, which shows that landlords are certainly prepared to rent to tenants claiming housing benefit. I repeat my point that, at 40 per cent of the market in not all, but many areas, landlords will have no choice but to reduce their rents and give back some of the excess gain that we seem to have seen in this part of the market. We are also giving landlords an incentive by widening local authority discretion to pay housing benefit direct to the landlord, a point raised by the noble Baroness, Lady Thomas. We are not giving this discretion away for nothing and the complex language here was to make sure that we get something for something: that if we are translating a payment stream from, let us say, a triple-B-rated level to a triple-A sovereign income stream, we get something for our money. That is why that is written so carefully.
Because I do not want to run out of time, I will jump to the key thing and I will come back to whatever I can fit in after that. I want to turn to the important issue of the monitoring and evaluation of these changes. I am very grateful to the noble Lord, Lord Best, for his timely Motion. I am very happy to agree to his proposal for an independent review. I make a firm commitment to the House that we intend to commission independent, external research to help us evaluate the impact of the reforms. This review will cover all the areas that the noble Lord outlined in his Motion. I can assure the House that it will be comprehensive and thorough and, of course, I readily agree that the outcome of the evaluation should be presented to both Houses, together with a written ministerial statement. Among the issues that it would cover—these were points raised by noble Lords—will be homelessness and moves; the shared room rate and houses in multiple occupation; what is happening in Greater London; what is happening in rural communities; what is happening in black and minority ethnic households; large families; older people; people with disabilities and working claimants. That is what this review will cover.