Welfare Reform and Work Bill

Lord McKenzie of Luton Excerpts

Monday 7th December 2015 Lords Chamber

[Baroness Hollins (CB)]

My Lords, I speak in support of my noble friend’s Amendment 34 and focus on the impact of benefit sanctions on people with mental health problems. Mental health professionals are extremely worried about the impact of this, which is why this amendment asks for a report containing data to be published.

The latest statistics around the number of people with mental health problems being supported into work though the back to work scheme are astonishingly low. Just 9% have been supported into employment since the scheme began. There are two key areas where better evidence is needed. We know that more than half of people receiving ESA in the WRAG have a mental or behavioural disorder as their primary health condition, and many more people in the WRAG will have comorbid physical and mental health problems.

We also know that people with mental health problems are being disproportionately sanctioned. Recent Freedom of Information requests to the department revealed that in 2014, on average 58% of sanctions for people in the ESA WRAG were given to people with mental health problems—20,000 in all.

The mistaken assumption is that people do not want to work, and that the best incentive is to threaten benefit withdrawal. Research shows that people with mental-health problems have a high want-to-work rate. I could say a lot more about that, but in view of the time I will not. What are the barriers? We need much more information—hence the request for a report.

I would like to share an example given to me by Mind, the mental health charity. It told me the story of a man who has been out of work for most of his adult life due to his mental health problems and who is currently in the support group. Under conditionality in the work-related activity group, this man felt so fearful and anxious of the threat of sanctions that he forced himself to attend his appointment a couple of days after being hospitalised following an overdose. This is just one shocking example of the pressure claimants are under, the health conditions that people face and, crucially, the level of anxiety and stress reportedly caused by fear of sanctions.

I urge the Minister to take these concerns and this amendment very seriously.

[Lord McKenzie of Luton (Lab)]

My Lords, this group of amendments is largely focused on the non-income issues and seeks to add the matters of worklessness and educational attainment to the measures, which the Government say are focused on the causes of poverty rather than its symptoms. These matters are important because it is asserted that what is measured and reported on will drive the focus of government attention, although reliance on this approach is inherently weaker than having strategy obligation and specific targets. There will be more about that in later amendments.

In considering Clause 4 and these amendments, we should set the context by reflecting on the starting positions, and that has been done by the noble Lord, Lord Ramsbotham, and the noble Baroness, Lady Manzoor. The current Child Poverty Act 2010, as amended in 2012, contains targets to be met in 2020 that relate to: relative low income; combined low income and material deprivation; absolute low income; and persistent poverty. There are four targets, not just one. It provides for the Social Mobility and Child Poverty Commission—formerly the Child Poverty Commission, and soon to lose child poverty altogether—to give advice when requested to Ministers on how to measure socioeconomic disadvantage, social mobility and child poverty and to report on progress on improving social mobility, meeting the targets and implementing the required strategies.

The Act also requires the publication of a strategy to comply with the targets and to combat socioeconomic disadvantage. In preparing the strategy, consideration must be given to measures—we referred to them as the building blocks at the time of the legislation—including: parental employment and skills; financial support; promotion of parenting skills; physical and mental health; education, childcare and social services; and housing and social inclusion. The Act imposes a requirement for local authorities to co-operate to reduce child poverty in their areas and prepare local child-poverty needs assessments.

As well as having income measures and associated targets, this required the Government to produce a strategy which would have regard to a range of factors, including the multiplicity of matters which affect child poverty. Apart from for Northern Ireland strategies, this Bill sweeps away all those provisions—the entirety of them. We will seek to reinstate this with subsequent amendments. Instead, the Bill requires the Secretary of State to publish an annual report containing data on children in workless and long-term workless households in England and educational attainment at key stage 4 for children in England and the educational attainment of disadvantaged children. There is no obligation on the Secretary of State to define these terms until the first report is provided for, in the year 2017 and a veiled reference to developing “other measures” to recognise what is suggested are the root causes of poverty: family breakdown, problem debt and drug and alcohol dependency. There is no statutory obligation to do so.

There is a reference in the briefing notes to a “life chances strategy” in due course, but no commitment on the scope and timing of this. The commission will have a focus on social mobility and no longer on reducing child poverty. Crucially, the Bill removes any income measure and related targets. This is on the basis that income is a symptom, not a cause, of poverty and that the relative income measure can lead to spurious outcomes when medium incomes are falling.

--- Later in debate ---

[Lord Freud]

There have been studies showing the numbers who are addicted to one or the other. I remember producing some figures on that in the debate on the last Welfare Bill. Clearly, one of the points of developing a life chances strategy is to get a better grip both of those areas and, indeed, the figures on debt. As the noble Baroness hinted, the figures are imperfect, and that is one of the reasons we want to get a better grip on it. When we look at the levels of debt, that will tell us about impacts, and we can start to analyse what those impacts are. That would of course include any government measures and the impacts would be revealed.

[Lord McKenzie of Luton]

I am still a little unclear on one fairly key point. When responding to the consultation on the measurement of poverty, the commission recommended almost a two-pronged approach. One was that there should be a multidimensional focus on the causes of poverty, but a clear focus on recording the experience of poverty and dealing with poverty here and now with an income measure. I understand what the Minister has been saying about focusing on the causes. One can see the longer-term impact of that; but what, precisely, are the Government going to do differently in respect of the here and now of people’s actual experience of poverty—people who simply do not have enough income today, and will not tomorrow or the day after, to get by and play their part in society? That is what I find to be missing, so far at least, from the Minister’s response.

[Lord Freud]

I am not sure that the Government would do much different from what they are doing. They have a safety net and there are various measures to support people. We are building at speed now the universal support system in which we are combining with local authorities to help the most vulnerable, but in a very different way from how people have been helped in the past, which was through crisis loans that they went on and on building in a random way, without anyone looking at the root causes of their problems and trying to help them out of them. This approach accords with that. Clearly, we will be spending our money on the root causes of poverty and on life chances. But there will be income measures published, because we have said that we will go on publishing the HBAI. If people want to see what is happening, that gets a lot of publicity every year. That is the change: the money that we will be spending on life chances. Those are some of the mechanisms by which we will do it. Universal support is one of the key things, but there are a lot of other things. Getting mental health right is something that has evaded Governments for a long time, and we are now spending more money on that than any Government have before.

I urge noble Lords not to press these amendments.

[Lord McKenzie of Luton]

Could we perhaps have one more brief run-through of the issue of income? The Minister says that the Government are not doing anything specific to address income poverty other than the application of their current broad benefit regime, with all the cuts that that is now having to endure. Is that it, in terms of actually tackling current poverty? How does the Minister deal with the point that pretty much every expert out there has concluded—certainly the commission has—that we need to have consistent, robust measures of poverty? What the key driver is, and all the other stuff, is subsidiary to that. There seems to be an overwhelming view coming from the experts on that. Is that not a view that the Government share?

[Lord Freud]

No. Every year I stand here because there is a forecast that says that child poverty is going up, has gone up or will go up, but when we actually see the figures we find that child poverty has actually gone down; the Government have been impressed and shocked by that. When you transform the economy, change the culture so that work is what has been driving things, and move up the employment rates and the earning rates in the way that we have, you find that the behavioural impacts are very different from the static analysis that many of the external experts tell us about.

--- Later in debate ---

[Lord McKenzie of Luton]

I will follow up on the point about local authorities that my noble friend Lady Lister raised. The Minister will be aware that we are in the era of devolution deals, particularly with combined authorities—Manchester was the first, and there are others as well. As part of that process, is the department engaged in inputting into the package with a particular focus on child poverty issues?

[Lord Freud]

As noble Lords will be aware, the Government’s emphasis is to put authority into the hands of local authorities, which is what devolution is about. Therefore they cannot have devolution on the one hand and then send a whole series of specific requirements down on the other.