Poverty

Baroness Sherlock Excerpts

Wednesday 29th June 2016 Lords Chamber

[Lord Freud]

That is one of the topics that I and the Schools Minister are talking about. We now have, as a potential option for future use, far more specific measures of real levels of poverty in universal credit which we can use to record poverty, rather than the much cruder measures that we used in the legacy system.

[Baroness Sherlock (Lab)]

My Lords, if the Minister wants to measure poverty he could perhaps look at the official figures that came out this week. They show that while average household incomes are finally back to their pre-crash levels, child poverty has actually gone up by 200,000. It is the first rise for a decade, the largest single rise in one year since 1996, and even more of those poor kids are in working families. Ministers were warned by people around this House that this would be a consequence of government policy but the Minister kept telling us that we were crying wolf. I have rarely been sorrier to be wrong. But now that the warning signs are clear, what will the Government do about it? We have not yet had the effect of the cut in universal credit help or benefits for large families. Will he please urge his new Secretary of State, if he genuinely wants a one-nation country, to go back and reverse that catastrophic decision to cut help for working families on universal credit?

[Lord Freud]

Regrettably, the cry of wolf is wrong in this case. As the noble Baroness knows perfectly well, these statistics are fairly odd on a year-by-year basis. We have had quite a substantial rise in the median income, so the relative figure has gone down—although, I am told, it is genuinely not statistically significant. At the same time, there has been a decline in the number of children living in absolute poverty, with 100,000 fewer. These figures can be pretty odd, and this is another good example of it.

Personal Independence Payment

Baroness Sherlock Excerpts

Monday 6th June 2016 Lords Chamber

[Baroness Altmann]

The noble Lord rightly cites that Motability offers a support package. It has volunteered to do so given its financial position, and very generously offered to help those who lose their Motability car. I stress that although some people lost their cars, overall some 22,000 more people now have a Motability car under the PIP scheme.

[Baroness Sherlock (Lab)]

My Lords, when the Minister wrote to me to put the record straight after the debate in the name of the noble Baroness, Lady Thomas, she conceded that her original statement that there was not a 20-metre rule was wrong. In fact, somebody who could walk 20 metres but not 50 metres could get the enhanced rate of PIP only if there was something else going on; for example, they might have a learning disability and struggle to plan a journey. When we come back to basics, this means that somebody who can walk only a very short distance, the length of two buses, will lose their Motability car simply because they will now fail a test they would once have passed. This test has been used for 35 years, is based on research evidence, and is used for the blue badge, the guidance on the built environment and lots of other tests. The Government got this one wrong. Will they not accept that now?

[Baroness Altmann]

The noble Baroness has significant expertise in this area. Once again, I apologise for the incorrect statement that I read out during the debate. However, I am assured that it is not a strict 20-metre rule and that some people who cannot walk more than 20 metres—of course, the reliability criterion is also important here—will receive the higher rate. I repeat that the aim was to ensure that we support at the highest rate people who are unable or virtually unable to walk. There is no one particular test—the 50-metre test is not a recognised one, either—for someone who is unable or virtually unable to walk. We are keeping this closely under review. It is widely accepted by stakeholders that PIP is now in a settled and improving state.

Life Chances Strategy

Baroness Sherlock Excerpts

Wednesday 11th May 2016 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords who have contributed to this very interesting short debate. I thank the noble Lord, Lord Farmer, in particular, for the very gracious way in which he introduced the debate and for his commitment and evident sincerity about the importance of this issue.

The depressing thing about having only five minutes is that I would love to take up every point that was mentioned. When the life chances strategy comes out, I think I will sit in the Bishops’ Bar and wait for people to come along and buy me coffee. I would like to have conversations about each of the points made—there is something I agree with in each contribution.

I agree with the noble Lord, Lord Holmes, about the importance of character and opportunity, and with the noble Baroness, Lady Tyler, about relationships. The noble Baroness, Lady Jenkin, referred to ambition and culture, which are essential to the chance to move on. Like the right reverend Prelate the Bishop of Truro, I feel very strongly about the dangers of food insecurity and what we can do for families who worry about the most fundamental of things: putting food on the table for their children.

The noble Lord, Lord Fink, made some very important points about health, work and worklessness, which I will come back to. I agree with the comments of the noble Lord, Lord Lupton, on early intervention, although I confess that I disagreed a bit at that point. He runs the risk of one of those irregular verbs, which is that I have common sense and you have party-political propaganda—I may come back to that as well.

The noble Lord, Lord Hodgson of Astley Abbots, made some very important points about the voluntary sector and commissioning to which I would love to come back. The noble Lord, Lord Shinkwin, in a very moving speech about disability, gave some real cause for thought, and I hope his noble friend the Minister is taking very good care of that. I very much thank him for that. The noble Baroness, Lady Stroud, who knows so much about this area, gave us much to think about, as did the noble Lord, Lord Young of Cookham. To the person I am bound to have missed out, I apologise at this point.

I shall focus briefly on just one of those because I do not have much time. I want to talk about work, because a number of us could share the importance of work in trying to tackle the issue of work and life chances. I shall not reprise the occasionally quarrelsome debates we had on the Welfare Reform and Work Bill—for which I take at least half the responsibility, being occasionally a quarrelsome person myself—but one of the questions that came out quite strongly from all sides was concern about the issues of working poverty and work incentives. I want to flag up to the Minister the importance of this and what is happening to universal credit. I do this intentionally in a spirit of friendship. If around this House we support the principles of universal credit, it falls responsibly on all of us to make sure that we protect it from the ravages of the Treasury which, too often, sees it as being a little piggy bank it can raid for other things. So we need to protect it from that.

I should declare an interest, as I was an adviser in the Treasury when Gordon Brown introduced tax credits. The reason why we introduced tax credits was specifically to enable those who wanted to work but who were struggling to afford it to do so. We kept finding people who wanted to work, especially people with children or maybe a disability, who could not earn enough in the hours they could supply to be able to do the essentials, plus deal with the extra costs of disability or childcare. Tax credits were specifically designed to address that problem. I say to the noble Lord, Lord Lupton, that one of the reasons why the tax credit bill rose is because at the same time the bill for welfare benefits for those out of work fell. Money was being transferred from one to the other.

One thing we must do is address making work pay. The Resolution Foundation’s recent report on universal credit did a lot of detailed work on modelling this. It flags up that there is a real danger that universal credit, because of the last round of cuts, will succeed in merging benefits but destroy the very point of UC, which was to make work pay and make progression through work possible. It said that quite specifically. It also said that,

“even some of the welcome progress made over the last 15 years under the tax credit system in reducing worklessness—particularly among single parents—is at risk of being dismantled. Improving financial incentives to start work alongside gradual labour market reform over the last two decades have underpinned the strength of recent employment performance”.

Those are the Government’s stated aims, with which we agree. We want to increase employment, cut the disability employment gap, reduce the number of workless households and make work pay. Universal credit has a real contribution to make but can only do so if properly funded. It was originally going to be able to do that job; I fear it no longer will.

Normally when I raise this, somebody will get up and point to tax cuts or the national living wage, but the Resolution Foundation modelled those as well, looking at those changes alongside universal credit. It found that 3 million working families who get tax credits now, or can do, will not get any help in future. They will lose about £42 a week. Another 1.2 million families will still get universal credit but will lose about £40 a week. Crucially, only around 200,000 families who lose universal credit will still be better off as a result of the tax cuts and increased national living wage. These things are welcome but do not compensate for the cuts and we should not kid ourselves that they do. It really matters, and families notice the difference.

We are tackling problems with the incentives to enter and progress in work. The results are that the gains from work are much lower than anticipated when UC was designed. That is especially true for second earners. Because of the loss of the work allowance in universal credit, if you are the second earner and you are a parent who goes into work and earns £5,000, you will keep only £1,750 of that—and that is before you pay your childcare. It is not worth it. What are we doing?

Some noble Lords might say, “Don’t worry, one parent can choose to stay at home if they have kids”. That is true, but it is only a choice if you can afford to do both. I work with single parents. A lot of them wanted to work part-time when the kids were young and to keep a hand in the labour market so that, when the kids were older, they were able to get back to work. Pre tax credits, I met lots of single parents who, when they got divorced or separated, had to give up their job and then really struggled to get back into work because they did not have recent work experience. I urge the Government to look carefully at this.

The last Budget cut down things specifically aimed at working families. This House persuaded the Chancellor to reverse the cuts in tax credits, but they were not reversed in universal credit. I ask the Minister just two questions. First, what urgent action has her department taken to address specifically work incentives within universal credit? Secondly, will she in due course respond to the Resolution Foundation recommendations? There is a lot of very sensible, thoughtful work in there.

I am sorry I have been able to focus only on one aspect of poverty but it is incredibly important. If work is not a route out of poverty, frankly we are offering a hollow victory to those people who manage to obtain it.

Poverty Programmes: Audit

Baroness Sherlock Excerpts

Wednesday 4th May 2016 Lords Chamber

[Lord Freud]

I am really pleased to confirm that universal credit is now a national programme right across the country. We have real evidence that it achieves its aims: 13% are more likely to be in work at the nine-month point than if they were on JSA. It is already a good benefit by international comparisons. Many more of those in work are looking to do more hours, and many more are looking to increase their earnings than would be the case if they were on JSA.

[Baroness Sherlock (Lab)]

My Lords, I wonder whether the Minister has read the report just out by the Resolution Foundation, which is chaired by the noble Lord, Lord Willetts. Universal credit was meant to tackle working poverty by making work pay. However, the report found that more than 1 million working families will lose all in-work support, and that that will not be made up by tax cuts, living wage rates or childcare. The report said that the cuts,

“risk leaving UC as little more than a vehicle for rationalising benefit administration and cutting costs to the exchequer. Any ambition for supporting and rewarding work and progression looks very hard to achieve”.

It is now rolled out around the country. It has cost billions, and wasted billions. Was it worth it?

[Lord Freud]

I am absolutely confident that the core architecture of universal credit is doing what it is designed to do, which is to encourage people to move towards greater independence. I simply do not agree with many of the conclusions of the Resolution Foundation.

Personal Independence Payment: Mobility Criterion

Baroness Sherlock Excerpts

Wednesday 4th May 2016 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Thomas of Winchester, for moving this Motion and for explaining carefully the nature of the problem that we address tonight. I am also grateful to all noble Lords who have spoken, many of whom I have heard address the same issue repeatedly. It is very good to hear them again tonight and I pay tribute to them and to the noble Lord, Lord Alton—he is in his place but has not spoken tonight—who again has been tenacious in his support of the issues around Motability for some time.

I hope very much that the Minister has come here tonight in a constructive spirit and ready to listen, because she has heard stories from people who know a great deal about this, have a great deal of experience and who know whereof they speak. As we have heard, the shift from DLA with its qualifying threshold of 50 metres to PIP where 20 metres became the new rule for the enhanced component has been very controversial from the outset. The change was hugely unpopular. The Disability Benefits Consortium reminded us in its briefing for this debate that when the Government consulted, 914 of the 1,142 respondents indicated a clear preference for extending the qualifying distance for the enhanced rate from 20 metres up to 50 metres. The arguments were compelling. As my noble friend Lord McKenzie has just made clear, 50 metres was a widely recognised, established benchmark based on research used by many other government departments and other measures around the world. It is clearly a sensible choice. By comparison, no case was ever made for 20 metres. It became increasingly clear to all concerned that in practice what was sought was a criterion that more people would fail, and that would therefore result in less money paid out. It was designed to save money, or more precisely to transfer money from disabled people to the Exchequer.

This is a significant loss. The noble Lord, Lord Low, pointed out that some half a million people could lose money and that this could be over £30 a week. But I want to reinforce the point that this is one of those benefits explicitly designed to deal with the extra cost of disability. We really risk losing that dimension of social security at our peril. This is not simply a handout: it is about recognising that for disabled people to do the things that other people take for granted—to take their children to school, have a social life and have a job—they need access to transport that is not provided for them by the state. There are two ways that we can deal with this. We can make our public transport system dramatically more accessible and cover the entire country or, for a fraction of that cost, we can carry on making payments to enable disabled people who qualify for this to go to Motability or elsewhere to get access to transport.

I pray that the day will come when the noble Baroness, Lady Grey-Thompson, will never have to drag herself on to a train again. Only she could manage it: those who are not Paralympic athletes might struggle. But I hope very much that that will not be the situation for very much longer. In the mean time, people need access to vehicles.

Crucially, we have already heard that some 14,000 people have lost their Motability vehicles after being reassessed for PIP. That is cracking on for half of all the reassessments, so there are some significant losses ahead of us. Also, we have heard compelling cases from various noble Lords, including the noble Baronesses, Lady Grey-Thompson and Lady Brinton, of cases where the assessment has gone spectacularly, farcically wrong. When the Minister comes to respond, I am sure the temptation in the brief at this point will be to say that these are isolated cases and things can always go wrong, but if they can go that wrong, something has gone wrong with the quality process somewhere down the line. It means that something systemic has to be addressed. The reality is that the system is not working. It is broken. Disabled people have suffered significantly already. They have suffered very badly from social security spending cuts in the last Parliament and in this one. While the U-turn in the Budget on PIP was very welcome, the Government are still cutting spending on disability benefits by £1.2 billion by the end of this Parliament.

I have some questions for the Minister. How many people does she now predict will lose the higher rate mobility component by 2020? How many will lose their Motability cars as a result of the PIP reassessment? Is she satisfied with the way that the “moving around” assessments are conducted? Finally, is she happy with the outcomes of the reduction to 20 metres? Is it working as the Government planned? I asked the Minister on 7 March how she felt the loss of Motability cars and other access to support would help the Government to tackle the disability employment gap. She reassured me that the Government were committed to halving the disability employment gap and said that the PIP approach was more consistent and fairer than DLA. The Government, we understand, will produce a White Paper on disability. If they are serious about tackling the disability employment gap and increasing opportunities for disabled people to participate fully in our society, they have to do something about this. I am pleased to support this Motion.

[The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)]

My Lords, I first assure the noble Baroness and the House that this Government have always been, and continue to be, fully committed to engaging with disabled people and organisations such as Disability Benefits Consortium and Disability Rights UK. I know that the Minister for Disabled People met the noble Baroness on 18 April to discuss the very issue raised in this debate. I also echo the sentiments of the Secretary of State during his Statement to Parliament last month. We are a one-nation Government committed to supporting everyone to achieve their full potential and to live independent lives.

Integral to that vision is ensuring that those with the greatest need are supported the most. We introduced the personal independence payment because disability living allowance was no longer fit for purpose. Under DLA, we assessed people purely on the basis of a disability, rather than considering individuals’ needs.

--- Later in debate ---

[Baroness Altmann]

I thank the noble Lord for his question. I can assure him from my own experience that it is important that we have any statistics properly verified before they are released as official statistics. We will release relevant data, and if we have any further information, I will be happy to write to the noble Lord with any other data we can provide.

As regards the information that the noble Baroness, Lady Grey-Thompson, asked for on the amount of money spent on mandatory reconsiderations and appeals, we will provide written details of those costs.

[Baroness Sherlock]

My Lords, when the Minister was describing the 20-metre rule and 50-metre rule, I could see a lot of puzzlement around the Chamber. It may just be that I was not keeping up with her, so will she indulge the House for a moment and clarify that? I understood from the Government’s justification, included in the House of Commons briefing on Motability, that,

“We recognise that people who are unable to reliably walk more than 50 metres”—

and it goes on to say that they will get the standard rate, which will go,

“to those who cannot reliably walk between 20 and 50 metres”,

and the enhanced rate will be for below 20 metres. Therefore, can the Minister explain to us whether what I have described is not true? That is what the House of Commons briefing on this says.

[Baroness Altmann]

To reiterate for the noble Baroness, if a claimant cannot walk up to 50 metres safely, reliably, repeatedly and in a timely manner, they are guaranteed to receive the enhanced rate of the mobility component. Therefore, there is not a strict 20-metre rule. There is discretion, and an individual assessment is made. We take into account whether the person is in pain and whether they can reliably walk or manage on their own.

I can also reassure noble Lords that our door is open. We are happy to engage. The Secretary of State and the Minister for Disabled People regularly engage with disability groups. We would like to continue to do so. Clearly, we want to make sure that this new process is working. As far as we can see at the moment, it appears to be.

Children: Parental Separation

Baroness Sherlock Excerpts

Wednesday 27th April 2016 Lords Chamber

[Baroness Altmann]

My Lords, the department is working with other departments in a cross-government strategy to support children, with a lot more funding for mental health issues and co-operation between the various departments.

[Baroness Sherlock (Lab)]

My Lords, “so far” is a telling phrase. The Minister talked about the CSA but the Government are in the process of shutting down all CSA cases and telling parents that if they want to apply to the new scheme they have got to hand over one-fifth of all the money to the DWP in fees. However, they are allowed to apply to the new scheme only if they first ring a phone line and let someone on the other end of the phone try to talk them out of it and tell them to go away and make a deal with their ex directly. Mrs Thatcher set up the CSA to make sure that parents pay for their kids even if they are separated from the other parent. If there are any grounds to the growing concern that parents will end up paying less money to children than they have in the past, will the Minister accept that the strategy has failed and needs to be reviewed?

[Baroness Altmann]

The noble Baroness clearly has significant expertise in this area, but I have to say that the current system, which was set up in 2012, does not automatically take 20% of the payments. As I say, the point of the new system is to encourage parents to make their own arrangements. It is only if they do not use the direct payment method that they will pay the additional premium for that service.

[Baroness Sherlock]

My Lords, the noble Baroness has reminded me—

[Noble Lords]

No!

[Baroness Sherlock]

My Lords, I am sorry. It is a declaration of interest. I apologise to the House. I should have declared a historic interest in that five years ago I was a board member of the Child Maintenance and Enforcement Commission. That is all I wanted to say.

[Baroness Butler-Sloss (CB)]

My Lords, it is obvious that children who are not informed about what is happening to their parents when they are separating do much less well than those who are kept in the loop. What will the Government do to make this one of the really important aspects? Parents must let their children know, even at an early age, what is actually happening and make them part of the decision-making, or at least give them an understanding of what the future is going to be.

Welfare

Baroness Sherlock Excerpts

Monday 21st March 2016 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Statement and for advance sight of it, and I welcome unreservedly the Government’s dramatic change of heart on this matter. However, I would like to know how we got to this point. Last Thursday, at Questions, I asked the Minister specifically about the fact that the single biggest revenue raiser in the Budget Red Book was a £4.4 billion cut over five years in personal independence payments awarded to people who need aids and appliances to get dressed or manage their continence. The Minister defended it, claiming that those people did not in fact have extra costs and, anyway, it was not really a cut because the total cost of PIP was rising, even though 370,000 people would have lost up to £3,500 each per year as a result of the change. Of course, the total cost of any benefit is a combination of case load, value and running costs. If the total cost starts to rise but a Minister then decides to change the rules so that some people will not be eligible any more, thereby saving £1.2 billion a year on the anticipated bill, that is undeniably still a cut, not least for the 370,000 disabled people affected.

However, everything has changed since our debate last Thursday. What a difference a weekend makes. Since then, the boss of the noble Lord, Lord Freud, Iain Duncan Smith, has resigned as Secretary of State for Work and Pensions, saying that repeated cuts to working-age benefits,

“just looks like we see this as a pot of money, that it doesn’t matter because they don't vote for us”.

I will not even start on what his junior Ministers said about him, or indeed about each other, with the notable exception of the noble Lord, Lord Freud, who has behaved with considerable propriety in this. The House should commend him for that. However, to offer him one small piece of advice, it might be wise to stay indoors during break time over the next week—just until the storm passes. I hope that he is having an entertaining time in the DWP at the moment, if not an easy one. Joking apart, caught in the middle of all this chaos are some confused and worried disabled people, in work and out of work, who depend on PIP, so I hope that we will be able to get some clear answers to questions today.

First, does the Minister now accept that it was wrong to propose taking £4.4 billion from disabled people to fund tax cuts that mostly benefit those on higher incomes and those with much greater wealth? Secondly, disabled people will be relieved to hear that the cut in PIP announced by the Government has been cancelled, but I think we all want to know where the money will come from to plug the £4 billion hole in the budget that it leaves. Can the Minister assure us that it will not be taken from anywhere else in the DWP budget? I am very glad to hear that it will not come from benefits, but will he assure us that it will not come from the department’s budget elsewhere—for example, from the Work Programme, or other important activities the department will undertake? Also, the Minister has been trailing for a long time a major White Paper on disability. Can he confirm that this Statement means that no changes to benefits payable to disabled people will be considered in that White Paper?

The Statement says that support for disabled people rose in the last Parliament. It does not say that spending on disabled people is falling in this Parliament. The IFS says that it has fallen by 3% in real terms, and House of Commons Library research shows that, taking all disability benefits into account, the fall is over 6%.

Disabled people have suffered greatly at the hands of this Government. They remain among the poorest and most disadvantaged people in the country. If the new Secretary of State is indeed a one-nation Conservative and committed to helping disabled people to thrive, should he not start by reconsidering the repeated cuts that his predecessor made to their benefits? Perhaps he could help those who have lost their Motability cars, those suffering because of the closure of the Independent Living Fund, the two-thirds of bedroom-tax victims who are disabled, or those who will get £30 a week less in ESA in future because of legislation that we recently passed. I welcome this change unreservedly, but until those questions are addressed, it is very hard indeed to believe that we really are all in it together.

[Baroness Manzoor (LD)]

My Lords, I wish the new Secretary of State for Work and Pensions every success in his new role—I mean that sincerely—and I am sorry that the Government find themselves in a difficult place. In fairness, however, they have had significant notice that there was much wrong with the way the welfare reforms have been tackled and are to be implemented.

As the Minister knows, we on these Benches have seen the welfare reforms through the prism of work, so we opposed cuts to tax credits, cuts to universal credit, the removal of support for people with disabilities, and measures that increased child poverty. We on these Benches want to ensure that government policy enables a fairer and more compassionate society, where the weak and the vulnerable are protected and people are supported to work, and supported in work when their incomes are low.

The Government have led us to believe that the weak and the vulnerable are being supported, but the events of the weekend say that this is not only about ensuring adequate support for disabled people but has been—as Iain Duncan Smith’s letter says—about unnecessary cuts to hit a politically motivated target. If that is the case, I am sad to say that the Government may have lost their moral compass. Do the Government accept IDS’s criticism, and do they not therefore owe disabled people an apology for being used as pawns in a cynical political game? I am pleased to note that the reassessment for PIPs will now be kicked into the long grass, but that is not good enough. The entire PIP cuts plan should be stopped. Will the Minister confirm exactly what the intentions for changes to PIP are? Are they to be fully stopped, as the Minister indicated, or just paused for the next six months or so?

Finally, given that the Government consulted on these proposals and until last Friday were saying that they were about giving the right support to disabled people, what is the Government’s actual view on the use of aids and adaptations by disabled people? If they have changed their mind for political reasons, does that mean that the foundation for the Government’s original claims was false, and—as IDS says—just an excuse to cut money? I am concerned about how the Government have treated the consultation process. Should there not be a review into whether they have made misleading claims in order to justify the cut, while ignoring the outcome of the consultation process?

We all have a duty of care to protect the most vulnerable in our society, to preserve their dignity and to help them live full and independent lives. All Governments should take that responsibility very seriously. To that end, I am pleased to note that the Statement says that the Government have no plans to make any further cuts in welfare, but can the Minister confirm that this applies throughout this Parliament? I am also pleased that they are re-setting the conversation, which is vital. I hope that this new conversation about welfare, health and social care will benefit the majority.

Employment: Job Creation

Baroness Sherlock Excerpts

Thursday 17th March 2016 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I welcome the rise in employment but I want to ask about the disability employment gap. I was pretty shocked on reading the Red Book to discover that the single biggest revenue raiser was the new decision by the Government to save £4.4 billion over five years by taking personal independence payments away from hundreds of thousands of people who need aids to get dressed or manage incontinence. That is on top of previous PIP cuts, lost Motability cars and ESA cuts. How will that help disabled people into work?

[Lord Freud]

There is a huge misapprehension about the cost of PIP, which has been going up rather than down. These are not cuts: on the present trajectory the figure is moving up to £12 billion, and when we discussed it during the passage of the Welfare Reform and Work Bill there was an expectation that in the key 2019-20 year it would be £9 billion. We are reducing a rapid growth and adjusting how to get PIP because clearly we are getting much higher figures than originally expected through the use of those aids and appliance measurements.

Child Support (Deduction Orders and Fees) (Amendment and Modification) Regulations 2016

Baroness Sherlock Excerpts

Monday 14th March 2016 Grand Committee

[Baroness Manzoor (LD)]

My Lords, I have a couple of questions for the Minister. First, there is no mention of CSA arrears in the new compliance opportunity in these 2016 regulations. Will the Minister expand on how those cases will be dealt with? Secondly, what does the Government’s analysis show about subsequent child maintenance outcomes where cases involving children have closed, particularly as the Minister has mentioned that IT systems were providing much better outcomes?

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her explanation of the draft order. I remind the Committee of my historic interest as a former non-executive member of the board of the Child Maintenance and Enforcement Commission, and my decidedly historic interest as a long-distant chief executive of the National Council for One Parent Families. I am going to raise points very similar to those raised by the noble Baroness, Lady Manzoor, although, I fear, in rather less concise a manner, so the Minister is warned now.

As I understand it from what the Minister said, these regulations are aimed at non-resident parents in segment 5—people whose cases are facing closure on a legacy system but who are the subject of some CSA enforcement action. The idea is that they will get this compliance opportunity, or chance to show willing. These are people for whom, in the past, we have had to use enforcement, but they will now be able to show that they will do it. Their success in doing so will decide whether or not they end up on direct pay or on what is known as collect and pay under the CMS. I can see the Minister nodding, so I know that I have got that much right. I gather this came about because concerns were expressed about the Government’s original plans to move people on to direct pay; this is a way of testing it out. That seems a sensible idea and we have no objections in principle. However, I do have a number of questions.

The first is a really simple question. I found it impossible from the draft regulations or the memorandum to understand what regulation 2 does. It may be that the last paragraph of the Minister’s opening remarks told me that, but I wonder whether she could clarify it. The EM says of regulation 2 that,

“These provisions are likely to attract minimal public interest”.

That may well be because nobody, myself included, has the slightest idea what the regulations are doing, so it would be helpful if the Minister could clarify that. In particular, will the Minister set out for the record what powers the regulation will give the Government that they do not have now and in what circumstances they envisage using them? If the answer is in her last paragraph, she can point to that. Secondly, will the Minister confirm that all the cases covered by these regulations will still have statutory maintenance arrangements, not voluntary or family-based arrangements?

Next, I want to pick up the point raised by the noble Baroness, Lady Manzoor, about arrears under the legacy system. I understand that there is going to be a cleansing process to make sure that any arrears liability that is transferred across to the CMS is solid and accurately recorded. The intention is to move the ongoing liability across first and then to cleanse the arrears; once they have been verified, the arrears will follow. However, the Minister mentioned that the Government have decided to delay the compliance opportunity until the end of the process rather than have it at the start. Therefore, I am worried about whether the Government have considered what will happen. Under the compliance opportunity, the non-resident parent who has previously shown him or herself not to be able to pay without enforcement action will be tested only on their ability and willingness to pay ongoing maintenance liability as determined by the CMS system. Therefore, they will not have been tested on their ability and willingness to pay arrears, which they may or may not be happy to do. Why did the Government make that decision in the light of that? Would it not have been better to leave it right until the end so that, by the time the compliance opportunity came along, the arrears would have gone across and it could then be applied to both? Can the Minister explain that some more?

Will the Minister tell the Committee whether any arrears still within the CSA which are awaiting transfer across at the end of the cleansing process will continue to be collected by the same enforcement method, whatever may be going on with the compliance opportunity? In other words, will that be enforced in the way that it was under the CSA?

If an NRP passed the compliance test, it seems that they could opt to use direct pay to pay any arrears, as well as any CMS maintenance due. Is that correct? However, given that we do not know that they would be willing to pay CMS, would it not have made more sense, when the arrears do come across, for them simply to carry on with the same enforcement mechanism in the new system as was there in the old system? Since there are no fees for the parent with care for arrears collection anyway, that would not have had any implications for him or her.

On a separate point, will the Minister explain what enforcement methods will be used during the compliance opportunity for the bit that is being enforced alongside the voluntary partial payments? She mentioned using deduction from earnings orders, but there would be cases, such as self-employed non-resident parents, where a DEO was not appropriate. What other tools will be used for the enforcement part of that payment if a DEO is not appropriate? For example, will deduction orders or freezing orders or setting aside of disposition orders be available during the compliance period?

This is the first opportunity we have had to question the Minister about the progress of transition to the new system, so I would like to ask her some questions about how that is going. Can she tell the Committee how many cases have been closed in each segment so far? When does she expect to complete the bulk closure of segments 3 and 4? Can she tell us when the programme of closing all the CSA live cases is now expected to finish?

To come on to the point raised by the noble Baroness, Lady Manzoor, about child maintenance outcomes, will the Minister tell us how many parents affected by CSA case closure have transferred to CMS or made a private family-based arrangement or made no arrangement? This is crucial information. We want to be sure not only that people have decided not to move across but that they have some maintenance being paid. The figures in the public domain suggest that, up until the end of December 2015, around a quarter of a million CSA cases had received final notice of the ending of their CSA case. However, figures between January 2015—when the case closure started—to August 2015 showed that during that time only 22,000 applications had been made to the CMS from cases affected by proactive case closure, plus another 6,800 from reactive closure. That means that only 28,800 CMS cases had been started from January to August, when around a quarter of a million had had notice of the ending of their CSA case. I hope very much that does not mean that hardly anybody is using the new service, but the noble Baroness will understand why we would like to know that.

--- Later in debate ---

As I said, the outcomes will be evaluated and are being evaluated for the 30-month review. I hope that my explanation has been helpful, but I will reply to any further questions.

[Baroness Sherlock]

I thank the Minister for answering some of my questions but I confess to disappointment that she was not able to provide any figures at all, given that I gave her office a few hours’ notice that I would be asking for that information, which ought to be in the public domain. However, I shall look forward to the letter expressing the figures in detail.

There are two questions which either the Minister did not answer or I expressed poorly—I take full responsibility for her answering a different question from the one I asked. The first question was on the timing of the compliance opportunity. I was not trying to ask her—I apologise if I did—why she was not doing the compliance opportunity on the existing scheme, as opposed to the CMS. What I was asking was: why did the Government not delay the compliance opportunity until the arrears had been moved across as well as the ongoing maintenance, so that the compliance opportunity could then be done on the entire liability of both ongoing maintenance and arrears? She said that it was testing behaviour, but that tests only the willingness to pay a small amount of that, and the arrears may be significant.

As to the second question, I did not quite understand what the Minister said about why the Government did not want to use the compliance tools available to them on self-employed non-resident parents. What is the reason for assuming that they do not need enforcement in the way that employed parents do? She could, I presume, use deduction orders as they are used now. She did not explain why that would not be the case.

[Baroness Altmann]

I will try to be a little more forthcoming with some figures, but, as I say, I will write to the noble Baroness with a more detailed reply. So far, 700,000 to 800,000 segment 3 and 4 cases have been moved across. When all cases are finished, there will be 800,000 to 900,000 cases expected to come over on to the 2012 scheme. I apologise to the noble Baroness that I may have omitted to answer the two specific questions that she asked me. It is not that she was not clear; it is that I was unable to keep up with all the questions.

The timing of the compliance opportunity is partly to ensure that we can successfully complete the migration of the old cases on to the new system in time to be able to close the existing IT systems before they run out of their usable life. There is a timing issue of requiring to get on with the compliance opportunity for segment 5 so that we can meet the end deadline for closing the 1993 and 2003 IT systems without incurring significant extra cost. If we were to delay until all the arrears had been cleansed on the old system, that might well take us beyond the period. By moving segment 5 across slowly now, we are trying to test how this compliance opportunity is working in a small number of cases, as I described earlier, and how the new system is working for those cases before we ramp up with these significant additional thousands of cases that still need to come across and meet the end deadline. This migration and the new system are being very carefully managed. It is a massive undertaking. We know the problems we have had with IT systems in the past, and we do not want those to happen with the new system.

Also, we would have had to either let everyone have direct pay or charge everyone for their ongoing maintenance. That is why we have not used the tools for the self-employed people. We are giving them the opportunity that we believe we have to give them. We cannot collect arrears until they have not paid. As I understand it, the deduction orders and the lump sum deduction orders will help us collect arrears but we cannot consider arrears from the old scheme as arrears in the new scheme, so we would either have to deem all the self-employed as unreliable payers, and therefore we could then enforce collection and charges, or give them the opportunity to prove that they are unreliable before we then take the fees for the collection and charges.

If further clarification is required, I will write to the noble Baroness. However, as I understand it, those are the bare bones of the issue. We can expand on that.

I thank noble Lords for their contributions to the debate and for their constructive approach to today’s proceedings. This Government are committed to ensuring that those parents who choose to apply to the statutory 2012 child maintenance scheme benefit from a successful and stable arrangement for payments in the interests of their children. Introducing a compliance opportunity will ensure that non-resident parents with a history of non-compliance should not access the direct pay service unless they have demonstrated a change of behaviour. This aims to help parents with care have confidence that their new arrangement will suit their circumstances and work in the best interests of supporting their children. I commend this instrument to the Grand Committee.

Motability

Baroness Sherlock Excerpts

Monday 7th March 2016 Lords Chamber

[Baroness Altmann]

My Lords, the time taken for appeals is being reduced. Certainly the first step is mandatory reconsideration, which in general takes place before the Motability car needs to be returned, as there is a seven-week period. However, the long-standing policy of the department is that if it is assessed that somebody is no longer entitled to a car, it must be removed pending appeal.

[Baroness Sherlock (Lab)]

My Lords, the Minister thinks that the system is working better. One must ask: for whom? The BBC reported in February that 14,000 disabled people had had their Motability cars taken away from them, which is 45% of the 31,000 who had had an assessment. If that scales up, we will see hundreds of thousands of disabled people not having access in future to a Motability car. So I ask the Minister again the question put to her by the noble Baroness, Lady Thomas of Winchester: how does this contribute to the Government’s aim to halve the disability employment gap?

[Baroness Altmann]

The Government are absolutely committed to halving the disability employment gap and we understand that being reassessed for any benefit can be a challenging time. That is why, after discussions with my department, Motability announced a £175 million package of transitional support. Those who lose their cars can get £2,000 for a new one or can buy their old car, and are given time to adjust. But the idea of the reassessment is that the DLA was inconsistent—many people had lifetime awards—whereas PIP offers a more consistent and fairer approach.