Universal Credit

Lord Kirkwood of Kirkhope Excerpts

Wednesday 21st December 2016 Lords Chamber

[Lord Kirkwood of Kirkhope (LD)]

My Lords, the noble Lord, Lord McKenzie, is quite wrong in characterising the noble Lord, Lord Freud, as the Captain Kirk of universal credit. He is the Mr Spock of universal credit and that is how I will always think of him. I too am looking forward to the contribution of the noble Lord, Lord Macpherson of Earl’s Court. He might tell us where we can find some money in future to deal with some of the problems.

I have been an enthusiastic supporter of the concept of universal credit since the heady days of 2008 and Dynamic Benefits; the noble Lord, Lord Farmer, was right to recommend that because it was a very ambitious policy. At that stage it was a poverty reduction programme. What we are scaling up in the next few months is, unfortunately, a scaled-down poverty reduction programme —but it is still the right thing to do, because when it works it is transformational. I have seen it work; the conditions have to be right for it to work and, in many parts of the country, these conditions are not in place. That is why the debate proposed by the noble Lord, Lord Farmer, this afternoon is particularly relevant.

I want also to pay tribute to the noble Lord Freud, for the intelligent way in which he introduced test and learn into the 2012 Act. It is progressively an innovation that could pay real dividends if his heirs and successors make positive use of it, which I encourage them to do.

We are looking at the progress of the rollout of the policy. All I have time to do is to list four areas of concern that I did not foresee in 2012 when we passed the Act. The first I do not need to spend a lot of time on, because I am delighted to see that the noble Baroness, Lady Donaghy, is speaking further down the list. She has been a doughty fighter in terms of the needs of the self-employed community, which has increased enormously since 2012. I would bet a monkey to a mousetrap that she will spend all of her three minutes on that subject, and I do not need to say any more—except to say that, if we are not careful, that cohort of the working-age population will slip into the grey economy, which is in no one’s interests.

In passing, I note the hollowing out that has occurred in local government since 2012. The safety net provision of universal credit locally delivered is embedded in local government. There is no capacity to do that properly—and I was reminded of that by our recent visit to Coventry with some colleagues, where we looked at a properly run and good authority struggling very hard to make things work.

Thirdly, there is the question of sanctions, which I am sure will be raised by other noble Lords in the course of the debate. Sanctions are essential to the proper prosecution of this policy, but they have to be appropriately applied. A gentle nudge is a work incentive; a sledgehammer sanction is counterproductive and costs the public purse more in the long run.

Finally, I would have looked differently at the 2012 Act if I had known that we would be withdrawing from the European Union, which will be detrimental to the poor in this country. We have to find resources to make more generous the thresholds and tapers in future—and I hope that the noble Lord, Lord Macpherson, will show us how to do that in the course of his maiden speech.

I hope that the House will return to these matters. I want to say to the noble Lord. Lord Freud, that I have been working in this policy area in both Houses for 30 years, and there have been two Ministers who have made a significant difference in this social policy area—and actually they are both Conservatives, which you might not expect. Tony Newton was one and the noble Lord is the other; he has made a lasting difference, and it has been a privilege to work with him. I wish him well in future and look forward to his contributions as this policy develops.