Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Tuesday 13th September 2011 Lords Chamber

[Lord Kirkwood of Kirkhope]

My Lords, it is a pleasure to follow the noble Baroness, Lady Turner of Camden; her experience is always of great value to the House. I also congratulate the noble Lord, Lord Feldman, on his powerful maiden speech, which will repay careful study.

I arrived at this debate with a 15-minute speech as is allowed under the Companion but, as the noble Lord, Lord McNally, announced that we only have seven minutes I have cut the first eight minutes of my speech. Unfortunately, that was the half of the speech that was a paean of praise to the Minister of State, so I am left with seven minutes which will look really quite critical. That is not my fault; it is the business managers wot did it.

This has been a very good debate. It is a shame that we are only getting seven-minute contributions, because it is a very complicated Bill. I acknowledge, as others have, the energy and enthusiasm of the Minister of State. He really has put an enormous amount of his own personal time and energy into this, and so have the Bill team. I concur with others who say that we have all been able to get access to some of the complications and technicalities because of the efforts that they have made in making information available, and I hope that will continue.

I hope that we will take this Bill into Grand Committee. In Grand Committee we would have a much better chance of looking at the relative benefits between gross and net tapers—some of us spend time thinking about these things—and we could have a much better quality of consideration, particularly of the technical aspects of this Bill. However, we need time: there is no equivalent of seven-minute speeches in Committee. We have got to do this seriously, so I look to the Minister of State for support when he is confronted by the business managers to get the time that we need. If he does not give us the time, I promise him we will just take the time, so it is better to continue with his idea of co-operation, which he has been absolutely splendid in fostering so far. However, if he starts to close down debate, particularly in Committee, I for one will not take kindly to that.

I agree with the noble Baroness, Lady Hollis, when she said that she detected the fingerprints of the Treasury all over this; we have both been in this business for a long while. I agree that the structure and the architecture of the Bill are perfectly defensible—I will say a word about that in a minute—but it is at risk of being prejudiced because of the degree to which these cuts have come on the back of it. I perfectly well understand that the Treasury needed cuts because the universal credit proposed in the Bill needs funding to pump-prime it. It has not got as much money as dynamic benefits. The dynamic benefits report of 18 months ago was very compelling: it is a very robust argument about what can be achieved if you invest in the system and have tapers that really make a difference and make work pay. It is marginal as to whether this Bill will actually achieve its objective the way it is currently cast. It is open to other Governments of course, and as my noble friend Lord German was saying we have some expectation that once we get through this period of austerity, which you cannot ignore, then we might get into a better position where we can make the Bill even better than it is at the moment. The Treasury’s influence is malign, and while I myself am in favour of supporting the architecture I will do everything I can within the Committee structure to mitigate some of these cuts.

I have a word in passing about the pressure group community, which has been very good at supplying information to us in a very useful way. I counsel them to think about mitigating this Bill. Understandably, some of them are taking very high-flown positions, as if there was no economic difficulty and this was all dead easy. That is what they are there to do, and I do not criticise them. I have read all their briefings, but I have not been able to respond to them all because they have been coming at me like stuff out of a cement mixer for the last two or three weeks. I am sure that is not unusual and that all my colleagues are in the same boat. However, I counsel them to spend some time thinking about how they might help the Committee mitigate some of the worst features of the Bill in how it bears down on benefit expenditure.

This point has not been mentioned before: while it is of course a simplification to collapse benefits into the universal credit—I support that—because of its technical difficulty the benefit system will not be simple after it. I implore the Minister to make sure that he takes full advantage of the capacity of the Social Security Advisory Committee when it comes to the regulation-making stage of this Bill, because it has great knowledge in length and in depth. It has a wealth of experience, is objective and does excellent work. I have some amendments in mind for the Committee where we might think about how to integrate the work of that social security committee even better into our considerations of the Bill, because it is not just the Committee stage that we are dealing with. We will be having regulations and affirmative debates for many months and years, and the SSAC has a track record which we ignore at our peril.

I counsel the coalition Government about overclaiming. I do not really mean the Minister of State, but there are people talking about a revolution. However, integrating working-age benefits between those in work and without it is dead obvious. It is said that this is all a great revolution but people such as Professor Roy Sainsbury at York have been talking about it for years. There are a number of different ways of doing it, so there is actually nothing new about any of this. Universal credit plus the work programme is very important but let us just keep the heid, as my granny used to say in Glasgow, and not get too carried away with it.

I want to talk briefly about how we capture the volumes of money that are being spent in the welfare system. It is sensible to invest in social protection. The well-being of our population is something that I am prepared to spend money on but we talk about it in the abstract—in billions of pounds. If it is looked at in terms of the public sector percentage spend or indeed as a share of national wealth, I do not think that the spending is out of control. It has certainly ticked up in a way that Governments cannot ignore and therefore I support some bearing down on the current levels. However, when we talk about it we should be talking about the percentage of public spend. The number of pound notes in every 100 that we spend on welfare should be looked at more carefully because that gives us a much better idea of what these systems are costing. The public know nothing about the relative costs of the different benefits, so public opinion is not a helpful guide on that matter.

The IT situation concerns me; I have said that to the Minister of State privately. I have been involved in some of the past reforms and they have all fallen over when they go up in scale. The pilots always work and the professionals who design these things are always very clever and convincing. However, when it goes United Kingdom-wide—when you scale it up from a few hundred thousand cases being put through a computer to 60 million—it falls over. Doing this over the next two years is impossible. That is my view and I hope I am wrong. I have said that to the Minister in spades and his enthusiasm is still undimmed. I am lost in admiration for his confidence in what he is doing but I think it is wrong. If it all works by 2017, I will buy him a drink and apologise—and from a Scotsman, a drink is actually quite something.

I want to finish with a single thought. The noble Baroness, Lady Sherlock, my noble friend Lady Tyler and others made impassioned pleas about the benefit cap, which is a step too far for me. I give the Minister fair warning that I cannot support the benefit cap as it is currently cast and I hope that he will look at it very carefully. There are lots of reasons: for example, 70 per cent of those people are in social housing and 206,000 children will be the people who will carry the can for it. However, for me it is actually a question of principle. We have a system of entitlements in our social security system and, if you have the entitlements, you get the benefit. Here is an arbitrary system coming in and overlaying that by saying, “Well, you may well be entitled to it but we think it's too much”. Parliament should not let that pass without some comment because it cuts straight across everything that we have known in the social security system since I started coming to Parliament, when I was thinking about the supplementary benefit system, which shows your Lordships how long ago that was. That cap is not fair and is an idea which I struggle with. I understand the need for deficit reduction but I cannot follow the Minister in the direction of a household benefit cap as it is currently cast. I want there to be no doubt about that but I am happy to continue the discussion and look forward to the debates in Committee.

This is an important Bill. We have to be careful how we implement it. We are looking at an economy that is performing poorly, with inflation and people's household domestic costs rising. The social rental sector is getting worse, not better. Yet there is one situation for households in this country that would be worse than dependency, and that is hopelessness. If we are not careful, some of the low-income households in our country will be subjected to hopelessness as a result of some of the measures in this Bill.