Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Tuesday 14th February 2012 Lords Chamber

[Lord Newton of Braintree]

My Lords, having been a serial good-behaviour person this week, I thought that I ought at least, in fairness to myself and the noble Lord, Lord Best, to join in on this, as I was in my serial offending mode at the time the previous amendment was discussed. I am not going to repeat everything I said then, but I am tempted, not by every line of argument that the noble Baroness, Lady Hollis, or indeed anybody else, deployed, but by two of the points. First, part of the problem here is that we have not got enough social housing, which is highly relevant to this. I declare an interest in that my wife is responsible for it in Braintree District Council—for action on housing, not for the shortage. The effect in rural areas was the main point of my speech on the last occasion, and it has been well illustrated by points made by the noble Lord and the noble Baroness in the past few minutes.

I am not sure that the amendment, because of its genesis, is the right way now to tackle this. I am reserving my position on that until I hear the Minister. However, I do think, as a practising politician and as an MP who used to have constituents complaining about this kind of thing, that the Government are playing a very dangerous political game, without quite knowing what will hit them when this comes into force. I will give some possible illustrations. I do not know the answers for any of them, but the Minister might like to bear them in mind. For example, a 16 year-old in north London is killed, by a bullet or a knife, by a gangster. His parents have a spare room, and soon after the inquest, somebody turns up and says, “You’ve got to move. You’ve got a spare room”. A carer looks after an elderly parent for 20 years. The parent dies and somebody turns up and says, “You’ve got a spare room—here’s the penalty” or, “You’ve got to move”. We can think of a lot of such potential cases. My concern is that the Government should not charge down this path in a mechanistic way without thinking what they are going to do at the point of transition and in relation to the numerous hard cases that will arise. Otherwise, as I said in my previous speech, this will not last five minutes. I would like to hear the Minister on those points.

I am slightly scarred by one bit of experience. As part of the social security reforms in which I played a modest part alongside my noble friend Lord Fowler in the mid-1980s, we proposed some fairly draconian changes in housing benefit, which were, to be blunt, forced on us by the Treasury. They were introduced happily. Two years after I ceased to be Minister for Social Security, I was Minister for Health—another bed of nails. In my recollection, although I have not checked the books, the impact of those changes was such that the then Prime Minister ordered their reversal within a month because the flak simply could not be withstood. That is the risk the Government are running here, and I hope they will think about it very hard.

[Lord Kirkwood of Kirkhope]

My Lords, the noble Lord, Lord Newton, has made a very important point about the lack of social housing. Amendments and policy changes of this kind should only really be—and can only be—safely embraced if they are taken in the context of a wholesale housing policy review for this country. That will take some time and it needs to be started. It should have been started earlier. In the context of that, it is possible to deal with some of the anomalies and contradictions that we now have in our housing benefit system. There is no doubt that it needs to be reformed, but I have serious doubts about it being reformed at this scale and at this rate because I think it will hurt people. It will hurt people for one reason more than any other: it all happens at once.

On 1 April 2013, everyone who is caught by this will be looking for smaller properties which in many cases do not exist. It is worse than that, because there is a geographical and spatial dimension to this policy which must not be underestimated. It was the noble Lord, Lord Best, who pointed out that in the north of the country underoccupation is prevalent in a way that we all understand. I come from a social background in which I was raised in a council house and someone made a point about Northern Ireland. There is an in-built residual and unavoidable underoccupancy. On 1 April 2013, people are going to be hit and they are going to be hit hard.

I understand the concessions that we have been able to suggest to the Minister. The £30 million of discretionary housing payment is welcome, although I did not know that it was being found by topping up the housing benefit cut. That is news to me, and not particularly welcome news. With the discretionary housing payment of £30 million applied even to the north of the United Kingdom—the north-east, the north-west, Scotland and Northern Ireland—I do not think we have begun to look at the difficulties that this policy will face in year one. I assume the £30 million is annually recurrent, but I do not know the answer to that. Certainly, if it is not annually recurrent, then we will have even bigger problems in year two.

There is another difficulty that lies behind the policy which concerns me greatly. It will disrupt social and family ties in a way that it is impossible for local authorities receiving or trying to downsize people or social landlords to deal with. Unless folk are moving across the street or moving around the block or moving in the same village—it is admittedly working-age populations that we are talking about here as people beyond the state retirement age are not included—they will have a different set of problems to face outside their envelope of family, friends, doctors and all the rest of it. The effect particularly on disabled people was referred to in the powerful speech made by the noble Baroness, Lady Hollis. She drew my attention to this; I had this as a lower priority when we started this process. In parentheses, I think the 17 sessions of Grand Committee were one of the best periods of my parliamentary experience in terms of developing the points and getting ministerial responses. To say that I enjoyed it would be a slight exaggeration , but it was valuable time because we had a Minister who knew what he was doing, who listened, who was accessible and who was able to respond. I know why he cannot respond to this today, because this is Treasury clawback. This Bill is a perfectly good Bill and it will serve the country well in the fullness of time, but the Treasury clawback that has been demanded by Ministers in another department is potentially going to cause the reputation of the incoming reforms to be tarnished by measures exactly like this.

This is a modest amendment proposed by a man who knows more about housing than anyone else in this House. Speaking for myself, I will trust his judgment, and if he thinks that he gets a ministerial response that enables him to withdraw this amendment, I will say amen to that; but equally, if he gets a ministerial response that he does not think measures up to this modest amendment, I will happily follow him into the Lobby.

[The Lord Bishop of Ripon and Leeds]

My Lords, I support the amendment. I thank both the noble Lord, Lord Best, for his persistence and the way in which he has dug deep into the issues concerned with the bedroom tax, and the Minister for the way in which he has listened and responded.

I want to contribute to the debate because of the danger sometimes that, amid the plethora of words, we will cease to be moved by the situation of and the fear felt by those who will suffer because of elements of the Bill, particularly those with disabilities and those who care for children with disabilities. The day before yesterday could be observed as Autism Sunday, an observance that is apparently supported by the slightly curious trio of the Prime Minister, the Pope and Sir Cliff Richard. That occasion gave me the chance to listen again to those who are fearful about the results of the Bill’s dealing with the bedroom tax. People spoke to me of the way in which their disabled children and their whole family life would be affected by the bedroom tax. They have come to contribute to our society by caring for their own disabled child, perhaps with a disability that many would not regard as being one of the most serious that people face, but nevertheless one that for people in that situation can be a very frightening experience as their young people grow up.

This modest amendment would not solve all the problems of those who came to talk to me on Sunday, those who go to their parish priests with the issues of looking after children with disabilities or those children themselves, who are often members of our congregations. I hope that we shall be able to hear their voice as we respond to need in this area. I look forward to the Minister’s response, and hope that he can find a way through this tangle. Then I, too, will be reliant upon the skill and experience of the noble Lord, Lord Best, as we consider whether and how to vote on the amendment.

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[The Lord Bishop of Ripon and Leeds]

My Lords, I have listened very hard to the Minister as he has sought to explain the rejection of your Lordships’ amendment on children and the benefit cap. I remain regretful at the loss of the principle of child benefit for all and especially for those in most need. It is sometimes said that, although in this House we have a good many experts in fields such as health, education and the Armed Forces, we lack experts on poverty, because so few of us are actually in a position now of poverty. Maybe some of us can throw our minds back to times when we were not as comfortably off as we are now and remember the importance of child benefit in our own lives. My own experience was certainly that it was a lifeline in bringing up our own children. I have seen this repeated time and again in my ministry—both for those in employment and for those who have the misfortune to be unemployed. The almost total take-up of child benefit demonstrates for me the value of a benefit that is available for all and can carry no possible stigma for those in need of help.

I also remain puzzled at the failure to understand that children are expensive. Bringing them up costs money. Whatever the rights and wrongs of the particular levels of the cap—and the figure of £26,000 was never a part of our amendment; it was always a government figure—it seems self-evident that the cap should be higher for a family with children than for a childless couple. I presume that we are not saying that a young couple who are not able to find work should be barred from conceiving any children. However, they—and they alone—will receive no child benefit if they have a child and their benefits are to be capped.

All of that said, I am very grateful to the Government in general, and to the Minister in particular, for listening so carefully to the concerns of this House on the effect that the cap is likely to have on those in most need. I am grateful for the transitional arrangements that the Minister for Employment has announced. The nine-month period of grace, costing some £30 million, for those who lose their jobs is extremely welcome and should reduce the numbers of households capped by some 10,000. I am not quite sure whether Motion G1 is another example of sweetness and light between the two Front Benches, but they seem to be saying exactly the same thing on this matter and so I rather take it that the Minister is likely to accept Motion G1.

Then there is the additional discretionary housing payment for local authorities of up to £80 million for 2013-14 and £50 million for 2014-15. That is also extremely welcome, as is the assurance that claimants made homeless by the cap will not be considered intentionally homeless. I am grateful for the way in which in Motion G2 we have at last in today’s debate tackled the question of homelessness. We have not actually talked about this before, but it is one of the key elements in deciding how a welfare system should work. Already in Yorkshire—no doubt in Rotherham as well as in Leeds—there is an increasing amount of homelessness on the streets. That can only get greater as a result of increased unemployment and we need to be very careful in this Bill that we are not increasing the amount of homelessness.

I look forward to more detail on the ring-fencing of the £80 million, including on how that support is going to be delivered and whether families will be able to apply directly for that support. I hope that this provision will enable there to be real support for those in most need. I am very grateful for the Government’s expression of support and the financial commitment to the poor that it involves. However, I have to say that it still seems odd that the Government were so opposed to your Lordships’ amendment on financial grounds, when the cost of their provision is apparently almost identical in 2013-14, at £110 million rather than £113 million, or whatever the figure was that we were using in relation to our earlier amendment.

I remain concerned about kin carers. I have not yet heard a satisfactory explanation of how we avoid the burden that the cap puts on those who take other people’s children into their homes. This happens time and again in our society, for a whole host of reasons, such as the death or illness of a parent, or the parents’ inability to bring up children. Carers are often grandparents. Kin carers preserve family life for children in distress and save the state a considerable amount of money—maybe some £119 million a year, according to a Children’s Society estimate that has been given to me. It would be tragic if people were discouraged from this selfless contribution to family life because there was inadequate funding for them. I look for reassurance as to how this issue is being tackled through the various provisions dealing with the cap.

Finally, but importantly, I am very grateful for the Minister’s assertion of the importance and value of the benefit system and for his rejection of any demonising of those who are on benefit. This debate about the cap on benefits has produced, in some sections of the press and maybe of society more generally, an apparent assumption that those on benefit are deliberately sponging off the state. In a few often-quoted cases, that is no doubt true, but already those who are unable to work because of disability are reporting that they are being regarded as work-shy, when they would desperately love to work if they were able. It is crucial that we affirm the importance of the benefit system in providing support for those unable to work. The numbers who cannot find work are rising and there will always be those who are not capable of paid work because of illness or disability. It is crucial that we do nothing to exacerbate suspicion between those in work—often low-paid and struggling—and those who cannot find jobs.

I hope that the Minister in his response will be able to renew the conviction that benefits for those in need are crucial in a civilised society to provide for those who have fallen into hardship as a result of illness or disability or simply not being able to find a job, which is tragically not uncommon in some of our cities now. Many of those on benefit contribute to our society—as kin carers, for example, or in encouragement of those who are disabled, or in voluntary work, which helps to create a good society. Benefits are not a drain on society but a contribution to the common good. I hope that the Minister will be able to affirm this.

I am very grateful for the substantial government response to the earlier amendment, not least for that promise of an evaluation of the cap after a year of its operation. I look forward to that report in 2014, to a serious examination of any unintended consequences and to the continued work by the Government to do all that they can to protect children from damage at a time of financial stringency. I am happy to support Motion G1.

[Lord Kirkwood of Kirkhope]

My Lords, I would like to intervene briefly in this debate. I think that a household benefit cap is a wholly reprehensible policy device. I am absolutely and implacably opposed to it. However, I know when I am licked and I think that the Government have come a huge way in easing the path of the 67,000 families, although I still have fear and concerns for them. My purpose in intervening is to ask my noble friend to assist me by reassuring me that, with the extra spending envelope, he now has the capability—working closely with local authorities and Jobcentre Plus—to track the destinations of these families over the next few years. Colleagues who have been following debates on social security internationally know that, in America, the changes made in 1996 by President Clinton meant that people fell off the lists in droves and no one could find out where they went. The social security system then spent years trying to pick them up.

The fact is that 67,000 is 1 per cent of the case load; it is not a big number of people. I am reasonably assured now that, with the finances available to local authorities and Jobcentre Plus, it should be possible to get a report. When we get this important report—and I, too, agree that that is an important concession—the House will be able to be confident that none of these families has disappeared. I do not want any of these families to be “disappeared”. I hope that my noble friend can give me that assurance.

I do not want this benefit cap to be anything like an accepted part of the landscape in future. I think that it is a sticking plaster and that an entitlement override is wholly wrong. However, I have enough confidence in my noble friend to know that if we get universal credit up and established and running well, and if he switches his attention—as I hope he will—to housing benefit in the context of a proper housing policy, and I would support him in doing that, we can trade our way out of needing a benefit cap. That is the way forward. I accept, however, that in the short term we are stuck with this. I hate it and will be pursuing it in regulations as aggressively as I can. However, as I said at the beginning, I know when I am licked and I hope that the Government will get on and do this properly.

I hope that the noble Lord, Lord McKenzie, will not press this idea of having an independent body on the benefit cap. I want nothing to do with independent bodies or anything else of any kind that has to do with the household benefit cap. Therefore, if he presses his amendment, he will find me—unusually, perhaps, in this case—in the opposite Lobby.

[Baroness Butler-Sloss]

My Lords, I would like briefly to take up a point made by the right reverend Prelate the Bishop of Ripon and Leeds in relation to kinship carers. I spoke previously on this and I remember that the Minister was sympathetic. I would be very glad to get some reassurance as to where his sympathy lies and how he proposes to endorse it.

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[Baroness Anelay of St Johns]

My Lords, I hesitate to interrupt at this point and it is extremely unusual to do so. I do so with no hostile intent. There has been extremely generous use of time today on the important subject of the Welfare Reform Bill, on which some progress has been made. The generous time taken by the House on this matter, when we knew that the Scotland Bill had been programmed to start after it, has put those who have been waiting some time for the Scotland Bill in some difficulty. I know that the whole House will apologise to colleagues who have been waiting.

I have had a discussion in usual channels and it has been thought a better way of treating those who are awaiting the Scotland Bill to announce now that it would be better if the business on Scotland did not proceed this evening but continued as scheduled on Tuesday 28 February. Therefore, once the business on the Welfare Reform Bill has concluded, the House will rise. I know that, with the help of the Clerk of Parliaments, that information will be put on the annunciator. I apologise again for intervening at this stage.

[Lord Kirkwood of Kirkhope]

My Lords, I am sure that is for the convenience of the House and I am grateful to my noble friend for making that clear. I could see the long faces on some of my Scottish colleagues getting longer by the moment. It is only fair to them that I apologise to them, because I have an interest in the Scotland Bill as well. However, I am sure it will wait until next Tuesday.

At this time of night I want to make a suggestion rather than a speech. Before I do that, I will say that I agree with the analysis of the noble Baroness, Lady Sherlock, about the money. I was a little dismayed at the way my noble friend opened this debate, because dealing with quantums of money and global amounts does not make an awful lot of sense unless there is some context. I much prefer to look at percentage shares of the benefit spend over time, and look at trends, rather than global amounts, because they sound like colossal sums of money. I agree with the noble Baroness on that point. It does not help the debate, because any of us who have been studying these things know that many single parents struggle on low incomes.

That point has been made and I will not pursue it, but I want also to make clear that in terms of the budget impact—which we have seen and which was referred to a moment ago—only 20 per cent of the cuts have attached themselves to household domestic spending and income. That will get worse. The Institute for Fiscal Studies, which has been quoted, has done some valuable modelling work that suggests there is going to be downward pressure on household incomes in single-parent families in future. That has to be borne in mind. Indeed, the Government’s own impact assessment on the ultimate rollout of universal credit from 2013, as I read it, shows that 500,000 working single-parent households will have a lower entitlement under universal credit. It is wrong to say that we are dealing with a category of rich people. There is a mixture, which I want to come on to in a minute in the main question I want to ask.

I have always been against charging. I was against it when the noble Lord, Lord McKenzie, was considering it. Along with the noble Lord, Lord Skelmersdale, we spent many a happy hour trying to resist charging, simply on the basis that it is a disincentive. I still believe that is likely to be the case. All developed western European nations now have various iterations of state-sponsored collection and enforcement services. We should—and will—have a new one, and one that will actually be cheaper as we will be using HMRC data. As my noble friend said, the service will be better and more efficient. There will be annual reviews and the data will be cleaned up as people are asked to come off the existing system and reapply—although that will be a much bigger undertaking than I think people imagine, and I hope that the department is prepared for that. However, it will be a cheaper and better service—£93 million cheaper, if my memory serves in respect of the impact assessment statement and other bits of information. It is important that we cherish the role that it plays and the impact that it has on lower-income families.

Looking at the figures, there are two dimensions to this—the low-income one and the high-income one. I remember an exchange when we last discussed this and have been reflecting on it since. The Government’s position is absolutely arguable for those who have an income of £50 or more per week via Child Support Agency maintenance. Twenty-two per cent of the case load gets 50 per cent or more, per week, of the maintenance delivered through the CSA. That is a big amount of money and gives us some options. Those kinds of families and households have much more flexibility in terms of options and choices. In those circumstances, it is perfectly reasonable to try to affect behaviour. The point I want to make is that 40 per cent of single parents receiving maintenance via the CSA receive less than £10 per week.

It is that category of transfer payment recipients that I am really concerned about. They do not have any options; they are in a very difficult place. The Government’s attempt to get behavioural change is much harder to argue reasonably in that context. I support the amendment of the noble and learned Baroness, Lady Butler-Sloss, but if we are stuck with charges and are reviewing them in 13 months’ time, would the Minister look urgently and robustly at the case for variation in the charges? If somebody is getting £10 per week, 12 per cent of that is quite a load of cash. If there were some way of getting the £75 million that the Government believe they need to fund the system going forward from fees, then they could do that by taking a little bit more out of households and families with a better take and a better return from the CSA than those who are at the bottom of the income distribution pile. If some thought could be given to that—and it is a bit of an ask at this time of night to get a reaction to that idea without notice—or even if the Minister were prepared to say that he would take it away and consider it in the course of the review, I would be happier about the results of the debate. If the noble and learned Baroness is thinking of taking her case to a vote—and that would also be a difficult ask at this time of night—her case has merit and I would support it. If we are stuck with charges, however, we should be looking at variations to try to cushion the effects on some of the low-income households that I think will suffer as a result of the imposition of these charges as currently cast.

[Lord McKenzie of Luton]

My Lords, I shall be brief. I agree with pretty much everything my noble friend Lady Sherlock said about the proposed charging arrangements. We certainly support the amendment of the noble and learned Baroness, Lady Butler-Sloss, because it does the right thing. It is dealing with those people who have no choice but to use the statutory system and cannot now use maintenance direct of their own will, because that depends on the non-resident parent applying to use it and on compliance by the non-resident parent. They have no other choice, and it is therefore wrong that they have to suffer a collection charge.

Will the Minister confirm—in respect of the reduced application fee of £20, which is welcome—that it is not going to be recycled to produce increased collection charges from mothers as well? It is important that we have clarity on that. To the noble Lord, Lord Newton, I would say that we will be in touch with our honourable friend Anne McGuire and tell her that she has misunderstood you. I am sure she would welcome that. The noble Lord, Lord Higgins, said that he thought the amendment of the noble Lord, Lord Boswell, had no cost. If that were right, I would be very worried about it because it presumably means that it is not going to affect the proposed arrangements, and I would not agree with that.

I say to the noble Lord, Lord Boswell, that I am disappointed in a sense with the proposition before us. I understand it is done with good intentions; I accept that because I know his commitment to these issues. However, if at the end of the day that is what is on the table, then that is what we would go with.

I say to the Minister that I do not think it was helpful to have some of those early statistics. Comparing the figure of £16 billion, which I understand is benefits and tax credits paid to all lone parents, with the fees that might be derived by those who use the statutory system of CSA is a nonsense idea. It does not make any sense at all. It is almost as though the assumption was that maintenance was money provided by the state. Maintenance is money that flows from non-resident parents—and we hope in increasing amounts in the future—to the parent with care. It is their money, not money provided by the state. So we probably have limited choices before us tonight. I hope the noble Baroness will feel able to press her amendment, but understand if she does not. If she does not, with a degree of reluctance I think we would support what is on the table from the noble Lord, Lord Boswell. Looking at it, though, I am not sure that it actually achieves anything that cannot be achieved from the existing framework of regulations. If it does, perhaps the Minister can tell us, but if we did not have that amendment, I am not sure that anything the noble Lord seeks to do under it could not be done anyway under the 2008 Act.