Welfare Reform Bill

Lord Bishop of Ripon and Leeds Excerpts

Monday 23rd January 2012 Lords Chamber

[The Lord Bishop of Ripon and Leeds]

My Lords, I have added my name to Amendment 58D for a number of reasons. The figure of 80,000 people who could be made homeless—really homeless—by the cap must be alarming to us all, not least because it comes when homelessness is, in any case, increasing across our country, partly because of the increase in unemployment at the moment. The number of homeless people in west Yorkshire is rising steadily and churches and others in the county are increasingly involved in providing night shelter accommodation for the homeless. Any arrangement which seeks to find accommodation for people is liable, in practice, to see some of them slipping through the net and finding themselves with nowhere to go at all. Just this weekend, churches in Halifax have begun to offer that particular service but those who are providing the service are frightened that an already inadequate service, as they would say, will be made hopelessly so by extensive homelessness as a result of the cap.

In addition, I support Amendment 58D because, at last, it gets children into Clause 94. I retain that major concern for children whose parents are made redundant and become unemployed. Such children are in danger of losing not only their home, but also their school, their friendship groups and their local contacts. Schools are very concerned about the possibility of children being moved from one locality to another as a result of their parents becoming unemployed and as a result of the effects of the cap. There is not only an effect on those children but also on their friends and the whole life of the school. Later, we shall debate the issue of child benefit, but this amendment will defend a significant number of children. It is those who cannot speak for themselves who are likely to suffer as a result of the cap. This amendment will go some way to preventing a spiral of homelessness and it will relieve the pressure on some of those vulnerable people who are affected by the cap. I hope that noble Lords will feel able to support it.

[Lord Hamilton of Epsom]

My Lords, I find it remarkable that the noble Lord, Lord McKenzie, says that the Labour Party in principle supports a cap, but in this particular instance thinks that somehow it should be alleviated. We face a considerable deficit in this country and the social security bill is certainly one of the largest elements of public spending. If we continue to find all sorts of ways of alleviating measures that the Government are taking, no savings whatever will be made to the social security bill.

This is also an opportunity to change attitudes completely. We are privileged in our House to have the right reverend Prelates on the Bishops’ Benches. I think it was Alastair Campbell who said of Tony Blair, “We don’t do God”, but in this House we do not have to be inhibited in that way. We can talk about the morality of a benefits system that encourages single mothers to have more children, because the more children they have the more benefit they get. Is that moral? I have my doubts. Is it moral for a Somali family to move down from the Birmingham area to Hampstead because they wanted to live in a more salubrious part of London where it was extremely expensive to house them? Is it moral to have a benefits system that pins people in their houses and prevents them going out and looking for work, given that underlying this is the Government’s intention that people should be encouraged to go and find work?

Of course people will have to move, but that is what people in the private sector do. I question the morality of having a benefits system that gives people infinitely more money than the take-home pay of people on average earnings in this country. It is the taxpayers who are paying for these very high levels of benefit. I support this cap and I hope that the House will vote against the amendment.

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Moved by

[The Lord Bishop of Ripon and Leeds]

59: Clause 94, page 63, line 25, after “benefits” insert “with the exclusion of child benefit”

[The Lord Bishop of Ripon and Leeds]

My Lords, Amendment 59 would allow families whose benefits have been capped to retain child benefit. It would do no more and no less than that. It does not challenge the basis of the cap. It does not challenge the amount of the cap. It is certainly no threat to the very welcome universal credit of which we have spoken a good deal this afternoon, but it would save some 80,000 children, according to government figures, from falling into poverty.

The Government’s assessment of the impact of the cap is that some 67,000 households will be affected. The Minister spoke of that earlier as not a massive number. It is pretty massive for those involved, but the fact that it is not massive in the overall terms of Welfare Reform Bill means that it ought to be possible for us to pass the amendment without seeing ourselves as fatally damaging the Bill itself. Those 67,000 families will lose on average £83 a week. Analysis from the Children’s Society shows that those households contain around 220,000 children. Three-quarters of those affected by the cap are children, yet Clause 94 says nothing about children at all.

The cap as it stands is not just, because it fails to differentiate between households with children and those without. It makes no provision for the additional cost of bringing up children, which is the purpose of our most successful and well targeted provision of family support: child benefit. The Government have decided that £500 a week should be the cap for a couple, and I have no quarrel with that; but if that is right, it cannot be right for the cap to be the same for a childless couple as for a couple with children. Child benefit is the most appropriate way in which to right that unfairness.

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[The Lord Bishop of Ripon and Leeds]

Thank you very much. The answer to that question is £113 million, which is a minute proportion of the total cost of welfare benefit addressed in the Bill.

This cap is not simply targeted at wealthy families living in large houses. It will damage those who have to pay high rents, because often that rent has increased substantially in the course of occupancy of that house. An out-of-work couple with four children between five and 12 and with £250 a week rent, which is nothing out of the ordinary in many parts of the country, and £20 council tax, currently has an income under present arrangements of some £373 a week after housing costs are deducted. After the cap, that drops from £373 to £230, or £5.50 per person per day—not the £500 of the headlines that we have been seeing. That is much less than 40 per cent of median household income, and I do not understand what a family in those circumstances is meant to do. I do not believe that a child can have a good childhood in circumstances such as that.

I had a letter the other day from someone who disagreed fairly strongly with me and said that surely £500 a week should be enough to bring up a family in normal circumstances. I would not disagree if we were talking about £500 rather than £230. But those whose benefits are capped are not in normal circumstances; they have particular reasons for being in need. Often that will be a substantial rent, and sometimes there will be several children who may not be their own and who may have been taken into the family to avoid their costs falling on the state.

Child benefit is a non-means-tested benefit paid to both working and non-working families. In setting the cap, it has been ignored by the Government. It should also be ignored in calculating benefit income against the cap. Those who are suffering from the cap should be allowed to retain their child benefit. I know that, from 2013, higher taxpayers will not be entitled to child benefit—that is a different issue—but anyone taking home £26,000 will be entitled to it, as will many of those earning a good deal more than that. The intention of the benefit cap is to promote fairness between working families and those who, however hard they try, cannot find a job.

I admire and salute those who bring up families on low pay. I am very aware of poverty in working families and see it through my own working life. We need to defend the interests of those who are poorly paid, but we do not do so by refusing child benefit to those who are out of work. This amendment declares the importance of child benefit both for working families and for the unemployed. Both should receive state support in bringing up their children. Child benefit is paid for the needs not of adults but of children. It has a massively high take-up rate and is used to benefit children whatever their situation. We are rightly proud of its effect in helping the next generation.

This amendment is a compromise between the present situation and the cap as proposed in the Bill. Child benefit is paid at a rate of £20.30 for the first child and £13.40 for every subsequent child. At present, a child born into a family with benefit income of over £500 a week—that is, income over the cap—will receive £62.40 in benefit support through child benefit and child tax credits. Under the benefit cap as proposed, there is no support for that child at all. This amendment restores only £13.40 of the £62.40. In that sense it is an extremely modest amendment, but it does mean that there will be some money coming in for children in this pressurised and often suffering environment, as we discussed in the previous debate. It means that there is some help for children while maintaining the principle of the cap. All of us who have used child benefit or family allowance know just how crucial it has been in our own lives to bringing up our children. It is entirely inappropriate that the only people not allowed to receive child benefit should be those who are out of work and whose benefits are capped.

Quite a number of people have asked, especially over the past few days, why Members on this Bench have been particularly concerned about the needs of children in these welfare debates. Christianity, along with other faiths and beliefs, requires us to think most about those who have no voice of their own. Children who are in most need are one of the most evident examples of that, and the New Testament shows that Jesus had a very special concern for children. Children have no vote in our society; they probably do not answer YouGov questions.

This amendment goes some way towards protecting children by helping two groups especially. First, for children in families that are struggling to pay rent, it will mean fewer face homelessness—especially but not only in London. Secondly, it will help those in larger families. Children do not choose to be in large families and many are so because parents have taken in, and provided love for, those who would otherwise be a burden on the taxpayer. It cannot be right for someone who becomes unemployed not only to lose their job and have their assessed benefit cut but to be told that their children no longer have a right to child benefit.

This amendment declares our support for children, families and the next generation, and I beg to move.

[Baroness Sherlock]

My Lords, I speak in support of this amendment, to which my name is attached. I am grateful to the right reverend Prelate the Bishop of Ripon and Leeds for tabling it, and I pay tribute to both his and the Children's Society's long-standing work in support of children. My concern about this amendment is that the measure has some very poor consequences, whether intended or unintended. Perhaps the Minister can tell us which they are.

I want to suggest three ways in which this cap, as the Government have put it together, is particularly badly constructed and three problems that it will cause. First, as we have heard, this measure will seriously and disproportionately affect children. A new DWP impact assessment came out today, which significantly changed the figures that we were working with previously. I have been able only to skim read it but I see from the headlines that the official impact assessment says that 220,000 children will be affected, and the losses in income those families will face are not small amounts. Initially, 67,000 households will lose an average of £83 a week, while 17 per cent of those affected will lose more than £150 a week. Those are very significant sums, so the behavioural impacts which the Minister wants to see happen will have to be very big indeed to address losses of that size, and I wonder what we can do about them.

I am not clear what steps those parents are meant to take to be able to avert those losses. That impact assessment says that 44 per cent of households affected are already living in social housing—in other words, in the cheapest accommodation available in their area. These are not families who are living it up in Kensington mansions, sipping cocktails by the pool before dinner. Forty-four per cent of them are already in social housing and most of the rest are in the kind of private housing that the noble Baroness, Lady Hussein-Ece, described earlier. As anyone who has had cause to go knocking on doors in London will know, there is housing out there which is astonishingly expensive but of astonishingly poor quality. The nature of the private sector market in London and other very high-cost areas is such that it is depressingly easy to rack up rents of £350 a week if you have two or three children.

What will happen and what are those families to do? In Committee, I put down an amendment which sought to exempt from the cap specific groups of vulnerable children who, for example, had been the subject of child protection orders, and I asked the Minister what those families could do to avoid being forced to move. He gave me three ways in which families could avoid that. The first was that they could negotiate a reduced rent with their landlord, although he had the good grace to acknowledge that may not succeed. The second way that the Minister suggested was that they could move into work, but when we look at the figures, we find that some 60 per cent of the families affected—a majority—are not required to work, either because they have small children or because they are sick or disabled and have limited capacity to work. In fact the Government's own policy of not trying to push sick people or the parents of young children out into work is now suggesting that they do that, which does not seem like a great idea either.

The final suggestion which the Minister made was that families could use their savings to pay the shortfall. I believe that one of your Lordships mentioned in the previous debate that the average family in Britain had just £300-worth of savings. That would not go very far in paying shortfalls of this nature, and one has to suspect that these families are likely to have less than the average amount of savings. We therefore have to accept that what will happen is that these families will be forced to move.

Many children's charities have made representations to me, as I am sure to many noble Lords, saying that they fear that families would be forced to move not just once but repeatedly. If they move to a cheaper area and rents rise faster than the cap, they have to move again. What are the consequences of that for the children? Again, I looked into this in Committee. The initial DWP impact assessment highlighted the possible damage to children forced to move school repeatedly, and the evidence is quite clear of the impact—the negative impact, obviously—which that has on children's academic achievement. As I also pointed out in Committee, forced moves reduce the ability of child protection professionals to keep track of families where children are at risk of abuse. I asked the Minister to write to me on how the Government would address those particular categories, and he did. I am afraid that it was with no very satisfactory encouragement and, again, I hope to give him the opportunity to be more specific when he responds to this.

In research that looks into the case reviews that follow the serious events that happen to children who have faced abuse and sometimes death, certain themes come out again and again. One of them, and I have heard this said by Members of this House, is that when everyone gathers around the table for a serious case review, someone always says, “Do you know, I wish we’d all talked before. Maybe, if we’d all talked to each other, this wouldn’t have happened”. One of the things that make it less likely that that communication will happen regularly is if the families in question move house repeatedly. Are we really going to force more families to do so? I am very concerned about what will happen in that regard, but I can see no way around it. What else can we do? We have to press on.

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I know that the right reverend Prelate feels strongly on this issue but I would urge him to withdraw his amendment.

[The Lord Bishop of Ripon and Leeds]

My Lords, I am grateful to all those who have contributed to this debate and to the Minister for his comments. This amendment is not simply or even primarily concerned with generations of workless people. It will affect a significant number of people who have been put out of work in recent years, months and days. At times, it almost sounded as if the Minister thought that it was a bad thing to bring people out of poverty. But we are talking about children, and child benefit remains one of the great anchors, as the noble Lord, Lord Newton, reminded us, of the whole way in which we work with children and families.

I do not think we have heard any real response to the basic point that the Bill means that a childless couple has the same cap as a couple with a number of children. It does not seem logical to say that we have to put a lot more pressure on families with children than on those who do not have any. I was grateful to the noble Lord, Lord Greaves, in particular, and others, for speaking about the importance of universalism in terms of child benefit. We have ranged widely during these discussions but this matter is about children. As the noble and learned Baroness, Lady Butler-Sloss, and the noble Baroness, Lady Corston, said, this amendment is about children and the women and carers who care for those children. It is those who will be helped if noble Lords are prepared to back this amendment.

On that basis, I appeal to noble Lords to support the amendment or, if they cannot do that, at least to abstain. It would help children and I believe that it is right to test the opinion of the House.