Benefit Changes: Vulnerable People

Lord Shipley Excerpts

Thursday 27th June 2019 Lords Chamber

[Lord Shipley (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Low of Dalston. He made a compelling case in support of blind and partially sighted claimants, and his criticism of work capability assessments for blind and partially sighted people was particularly crucial in that.

I am grateful to my noble friend Lady Janke for leading this excellent debate. She talked about how the Government needed a better safety net for vulnerable people, pointed out that too many cuts have hit the poorest most, talked about high housing costs, and how the freezing of local housing allowance and reducing levels of support for high rents had all made people poorer. She also talked about injustices alongside the rise in in-work poverty and the impact of disability on increasing poverty. My noble friend Lady Thomas of Winchester from these Benches took a calm, rational look at universal credit and personal independence payments and importantly, asked the Government not to close their ears to existing problems.

My noble friend Lord Kirkwood of Kirkhope commented on the scale of the changes to the benefits system and how complex it was, which is indeed the case. He confessed that it might never be a perfect system given the sheer complexity, and I too concede that it will never be 100% perfect. However, as he said, the DWP has not proved itself to be good at assessing vulnerability. There are some excellent staff doing some excellent work there, but I will come on shortly to the conclusions of the National Audit Office, which a year ago produced a report on the functioning of the DWP.

My noble friend Lord Greaves’s contribution from his perspective as a local councillor was particularly important, because he gave practical examples of problems and waste in the system. The noble Lord, Lord Livermore, reminded us of the progressive tax and welfare reform of the Labour Government after 1997 but before the financial crash, and how difficult it is for people to escape poverty today. In an extremely important contribution, the right reverend Prelate the Bishop of Chichester said that the two-child limit traps children in poverty. I could not agree more with that conclusion. The noble Baroness, Lady Armstrong, talked about the excellent work of Changing Lives, but reminded us of the problems for victims of violence or abuse. She gave worrying examples of disadvantage and vulnerability caused by the benefit system.

The Motion refers to recent benefit changes and vulnerability. By recent, I mean post-2015, when the restraining influence of the Liberal Democrats in coalition was removed. On vulnerability, the DWP definition, as reported by the National Audit Office in a report a year ago, related it to mental and physical health, life events, poor skills—with literacy and/or comprehension problems—limited internet access or IT skills, and difficulty with budgeting. I find the last one a bit rich, as those who suffer cuts in their already low income will inevitably have problems budgeting. For reasons that escape me, the absolute lack of money does not seem to be a factor in DWP thinking, let alone that of the Treasury, nor does the impact of increasing poverty.

Across Whitehall, in all government departments, the impact of individual departmental decisions is never factored into the overall impact on a local area. Whitehall does not think geographically; it thinks departmentally, with a silo approach to policy-making. Cuts in Sure Start by two-thirds, deep cuts to neighbourhood services such as libraries, limiting access to IT facilities and help, and cuts to youth budgets all contribute to vulnerability. It amazes me that the Government seem not to understand that. Put another way, one department’s cuts—in, say, youth services—can be another department’s increased expenditure in coping with crime.

Another vulnerability relates to council tax. Many of those in arrears are benefit recipients, according to the Institute for Fiscal Studies. I am grateful to an article in Saturday’s Financial Times for these figures, cited from the Money Advice Trust. In 2016-17, £2.3 million of debts were referred to bailiffs. They can charge a poor person £75 for sending them a letter and £235 for a home visit, so increasing the debt of already poor people. We need to get back to local councillors doing the work themselves through increased advice and support to those in debt.

The context for this debate is one in which we have the second highest level of inequality of any western democracy. There has been too much talk by members of the governing party, particularly those standing for election, about lifting the higher rates of tax, when they should be talking about improving the lives of poor people. In April, we had the start of the fourth—and, I hope final—year of the benefits freeze. That freeze costs poor families an average of £400 in the current year alone, while the tax changes applied in April have overall led to an average of £280 extra income a year for the top 20% of earners but a £100 reduction for the poorest 20%. How can the Government justify tax cuts of that kind while benefits are cut at the same time? I am afraid it is not enough for the Minister to say that the 1 million households on universal credit are gaining up to £630 per year as a result of increases to work allowances—a welcome decision—since most poor households are not yet on universal credit and thus suffer the wider benefit cuts.

I pay tribute to the role of the National Audit Office. When the Audit Commission was abolished a few years ago, I and others were keen to ensure that detailed auditing of the delivery of public services was still done. The NAO’s work on benefits, the implementation of new DWP policies and the rollout of universal credit is, for me, an excellent example of its work. In a report published a year ago, it concluded that the Government should assess the cumulative social impact of their policies. I am sure we all agree that it is staggering they did not. It pointed out that there were significant problems with staff training and that the DWP had underestimated the problems that an initial waiting period for universal credit would cause and seemed surprised when 60% of new claimants needed an advance. It said the DWP had problems identifying and tracking claimants it deemed vulnerable. The comments by my noble friend Lord Kirkwood of Kirkhope add to this; it seems this problem has not been resolved. The NAO also said that the DWP lacked a,

“systematic means of gathering intelligence from delivery partners”,

and was making too many late payments. It is a complex system, but these were worrying conclusions.

It was noticeable that in January this year, in their response to the Public Accounts Committee report on universal credit, the Government said that the DWP had,

“made 1,500 changes to processes”,

following feedback from partners and its own staff. Clearly, a lot has been learned. I particularly acknowledge the partnership the Government have with Citizens Advice and the work done by Citizens Advice to assist vulnerable claimants today.

There has been discussion in your Lordships’ House in recent days on the work capability assessment. It is generally acknowledged to be unfit for purpose, in that many disabled people are refused benefits when they cannot possibly work. I hope the Government will look at the suggestion a few weeks ago, again from the Secretary of State, that they might link the assessments for personal independence payments with the work capability assessment, since they are assessed using very different criteria. The noble Lord, Lord Low of Dalston, referred to this matter following a briefing we all had from the RNIB, which added that 90% of appeals by people who are blind or partially sighted against a refusal of a personal independence payment are successful. A system in which only 10% of appeals are refused is not a good system.

There has been reference to housing benefit and the fact that it has doubled to £22 billion in 15 years but covers a lower proportion of rents than it used to. The problem is that the Government have not been building enough social homes for rent, which has forced up rents in the private sector. We have to convert the cost of housing benefit to use money to build social homes, which would reduce the amount of money currently used for housing benefit. As Paul Johnson of the Institute for Fiscal Studies said in a Times article on Monday—I think someone referred to it—

“our housing market has rewarded the better off and punished the poor”.

I have some specific points for the Minister to consider after our debate. The Trussell Trust, in its briefing, pointed out that we must rethink government cuts, such as to work-related benefits, for households with inescapable extra living costs. I concur. Might the Minister or staff talk to Macmillan? It said in its briefing that 25% of universal credit claims were not completed because claimants struggled with the application process, and that home visits are not consistently and proactively offered to those too unwell to go to the jobcentre.

As a start, we have to move the wait for support from five weeks to five days. Will the Minister look at removing the two-child limit?