Poverty Programmes: Audit

Lord Freud Excerpts

Wednesday 4th May 2016 Lords Chamber

[Lord Bird]

To ask Her Majesty’s Government whether they will conduct audits of the poverty programmes they support, and publish the results; and if not, why not.

[The Minister of State, Department for Work and Pensions (Lord Freud) (Con)]

We have a range of programmes across government to transform lives, from the troubled families programme and the pupil premium to our flagship reform, universal credit, and we audit the majority of these. Work is the best route out of poverty and this Government are committed to transforming lives by providing people with the support they need at all stages to get into work.

[Lord Bird (CB)]

Is it not a verity of poverty that one of the big problems with poverty itself is that a lot of the support goes to enabling people to live in poverty and very little is spent on dismantling poverty? So I ask the Minister whether it is possible to create a new way of measuring poverty statistics that asks the question: does this get people out of poverty? There is too much emphasis on keeping people in poverty.

[Lord Freud]

My Lords, that question goes along exactly the lines that we are going along in trying to transform the welfare system. We aim to create programmes that promote independence among people and the centrepiece of that is universal credit. Within universal credit we have developed what we call a test and learn approach, which monitors the behavioural responses very closely.

[Baroness Lister of Burtersett (Lab)]

My Lords, the Minister referred to work as the best route out of poverty. Can he explain how salami-slicing financial support for low-income workers, including in the flagship universal credit scheme, is contributing to reducing poverty through paid work, noting that the welcome increase in the minimum wage will not and cannot compensate for such cuts?

[Lord Freud]

The design of universal credit, which the noble Baroness is looking at, is very different from existing legacy benefits. It incorporates real incentives to work more and we are already seeing people who are on universal credit looking to work more, looking to do more hours and looking to earn more in a way that they were not on legacy benefits. At the same time as we have those reductions to which she referred, we are moving the basic national living wage up and increasing childcare very substantially in order to go to a low-welfare, low-tax environment.

[Baroness Manzoor (LD)]

My Lords, the Minister will appreciate the poverty issues that are likely to affect BHS employees if the enormous shortfall in the pension fund is not met. What assurance will the Government give on ensuring that this gap is closed for around 11,000 BHS employees and around 20,000 pensioners?

[Lord Freud]

We have a strong safety net for pensioners in failed companies, as the noble Baroness will be aware. It is important that we have a strong pension regulator behind that. I also observe that this story has shown the importance of having effective pension trustees when there is a change of ownership.

[Baroness Watkins of Tavistock (CB)]

My Lords, what effect does the Minister think the extra health visitors who have been trained under the Prime Minister’s initiative, and the proportion who will actually be employed, will have on poverty in the future?

[Lord Freud]

The key thing in tackling poverty is life chances—in the end, transforming people’s lives—not income transfers. To the extent that the extra support helps children in their early years and in their education, it will be of great value.

[Baroness Stedman-Scott (Con)]

My Lords, now that universal credit is in every jobcentre in the country, how is it helping the poverty agenda?

[Lord Freud]

I am really pleased to confirm that universal credit is now a national programme right across the country. We have real evidence that it achieves its aims: 13% are more likely to be in work at the nine-month point than if they were on JSA. It is already a good benefit by international comparisons. Many more of those in work are looking to do more hours, and many more are looking to increase their earnings than would be the case if they were on JSA.

[Baroness Sherlock (Lab)]

My Lords, I wonder whether the Minister has read the report just out by the Resolution Foundation, which is chaired by the noble Lord, Lord Willetts. Universal credit was meant to tackle working poverty by making work pay. However, the report found that more than 1 million working families will lose all in-work support, and that that will not be made up by tax cuts, living wage rates or childcare. The report said that the cuts,

“risk leaving UC as little more than a vehicle for rationalising benefit administration and cutting costs to the exchequer. Any ambition for supporting and rewarding work and progression looks very hard to achieve”.

It is now rolled out around the country. It has cost billions, and wasted billions. Was it worth it?

[Lord Freud]

I am absolutely confident that the core architecture of universal credit is doing what it is designed to do, which is to encourage people to move towards greater independence. I simply do not agree with many of the conclusions of the Resolution Foundation.

[Lord Roberts of Llandudno (LD)]

My Lords, does the refusal to let asylum seekers work until they have been here for 12 months—and for them to be in poverty during those 12 months—enhance the Ministers?

[Lord Freud]

My Lords, there is a different process for asylum seekers. However, once they have the right to remain, they are entitled to our welfare support.

[Lord Watts (Lab)]

My Lords, will the Minister guarantee that the anti-poverty measures which the Government have put in place will be measured independently, that those independent reports will be published, and that if the Government’s measures are found to be failing, they will change policy?

[Lord Freud]

The noble Lord will be aware that we publish an enormous number of reports, many of which are independent. Indeed, many of them have been developed at the request of this House.

[Lord Lawson of Blaby (Con)]

My Lords, does my noble friend not agree that the fact that we have the lowest level of unemployment of any country in Europe is testament to the success of the Government’s policies?

[Lord Freud]

I think that we have a very flexible labour market. We are developing programmes and a culture that encourages work in a way that we did not have in the early years of this century.