Jobseeker’s Allowance (Supervised Jobsearch Pilot Scheme) Regulations 2014

Baroness Sherlock Excerpts

Tuesday 1st July 2014 Grand Committee

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am grateful to my noble friend for the lucid way in which he introduced these important regulations. I declare an interest as a non-executive director of the Wise Group in Glasgow, which works in JSA service provision.

I am grateful also to the Secondary Legislation Scrutiny Committee, which looked at these regulations. It does excellent work; it is hard to overestimate the value it brings to some of these very complicated schemes. The committee came to the conclusion that it was not impressed. There are two issues here: the policy behind the pilot and the structure of the pilot—whether that is worth the candle. I want to rehearse some of its concerns, because they are self-evident to anybody who has studied these things. Pilots are very useful; they have played an important role in the past in developing policy and I am sure the Scrutiny Committee accepts that. But how do we expect to get real value out of something that starts on 6 October and ends on 15 April, when we are dealing with the possibility and the opportunity that these regulations provide, as the Minister rightly described, in helping people into sustainable work? In my book, sustainable work is a 12-month contract, with support that a jobseeker can take advantage of from being on benefits into that sustained job outcome. I have severe doubts, as does the Scrutiny Committee, that we will get anything of value in what I think is insufficient time. Why are we stopping on 15 April? Obviously, there is an election. I can see that coming—I am not that stupid. However, it is more important to get this policy right than to have niceties about purdah or any other technicality of that kind. I have serious doubts about what value we will get from the shortness of the period of the pilot. Indeed, client groups of 3,000 are not that useful, either. Before the debate started the Minister helpfully handed us a long list of exclusions of clients who cannot be included.

We have a very limited pilot here, and I think we could have had a much more useful opportunity to test some of these things. We have very minimal information about what will actually happen. Jobsearch is something that, if people have been in the Work Programme, should have been deployed for two years—and intensively, I would like to have thought. Now we have supervised jobsearch, which comes six months after two years so it will be really intense. The new system of Universal Jobmatch—which I have seen; it is very good—takes only about half an hour to prospect for jobs across the United Kingdom, because it is so efficient. This is a full-time commitment. People are being mandated to come in for 35 hours a week. How many hours will they spend over a Universal Jobmatch machine? They can get the full value out of it in half an hour, in my experience. It would help me to understand the value of these pilots better if the Minister could flesh out what would be done over this extended period of 13 weeks at 35 hours a week. What on earth are they going to do? We are told at paragraph 7.19 that:

“On day one, the provider must: assess the claimant’s skills and experience”,

et cetera. Then we are told:

“In week one, the provider must: carry out a number of activities with the claimant … On an ongoing basis, providers must: review and update the claimant’s portfolio, CV and action plan”.

These are things that I always assumed would be taken account of in the Work Programme anyway. Now they are doing it full time, for 35 hours a week for 13 weeks. I am in favour of providing support for people, but I do not know how that intense job-searching activity will look different from what they are supposed to have been doing for the previous two years.

I am interested in the pre-Work Programme group, because I do not understand where it came from. There is a logic to involving people who have been in the Work Programme. In any commonsense view, if someone has been unemployed for two years despite being in the Work Programme, in which they get a lot of help, it would suggest that more than their CV needs fixing. I do not know if it is possible to translate those people into the Troubled Families Programme; I hate that term, but the programme is interesting. It takes a holistic view, going beyond the front door of the family home, looking not just at the CV but at everything that is going on. Somebody who has been unemployed for two years despite the Work Programme’s assistance has got some serious issues behind the front door of the family home. It would be much more sensible for some of these people to at least be offered the option of taking a different route from that of looking at a Universal Jobsearch machine for 35 hours every week. That would drive me crazy.

The Scrutiny Committee says that there is scant information about the cost-benefit ratio for this. We have been told that there is a cap of £5,000 per head. I understand that if this is to be competitively tendered for, the department has got to be a bit canny in determining costs for contracts which will be bid for. However, Parliament requires a little more information, particularly given the department’s straitened circumstances, with departmental expenditure being squeezed so ruthlessly.

In passing, the whole-time staff equivalent costs are being substantially reduced. I looked at the annual report which came out a couple of days ago. In 2012, there were over 100,000 whole-time equivalent staff in the DWP. It fell to 98,000 in 2013. It is now 88,000. We are laying extra layers of responsibility on to a smaller cadre of hard-pressed staff. These job coaches will have their work cut out to do the work they already do on top of this pilot. The Minister was helpful in his introductory remarks, but any more information we can have about what will actually be done during this intensive period of job searching would certainly help me a lot.

I am looking at the Autumn Statement 2013, where the Chancellor said that,

“the Government will invest £700 million over 4 years in a new Help to Work scheme”.

He went on set out what that would do. He said it would,

“require all JSA claimants who are still unemployed after 2 years on the Work Programme to undertake intensive, often daily, activity to improve their employment prospects”

Is this part of that? Is this part of the £700 million four-year programme that the Chancellor set out in the Autumn Statement? I would like to know about that because, if it is, it would make it possible to place this pilot in a wider context. I must sit down. I have just realised how long I have been talking for.

My view about conditionality and support for getting people off welfare into work is captured accurately in the study that Paul Gregg did in 2008 for the previous Government. If the Minister will promise to read it at the weekend, I will say no more about it. That is a deal that he had better accept because, otherwise, it will take me another 20 minutes to explain its detail.

There are some opportunities here. I understand that. I am not against sanctions. I think sanctions should be restricted to a much smaller band of people than the 800,000 or 900,000 that we are headed towards. I am prepared to look at this. I know the Explanatory Memorandum states that the results of the evaluation will be published. I hope the Minister will confirm that on the record because that would give it some solidity and be an assurance. I hope this pilot produces something useful. I have great doubts that it will, but I understand why the Government are taking the powers they are taking. I wish the pilot well and I hope it works.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his introduction to this order and the noble Lord, Lord Kirkwood, who should not have worried about going on too long. I should apologise because I intend to go on for a great deal longer than that, I fear. My speech will be composed mostly of questions to which—like the noble Lord—I struggled to find the answers. The Secondary Legislation Scrutiny Committee, the noble Lord, Lord Kirkwood, and I have been together wandering around the Palace hunting. I was so much driven by desperation that I even went to watch the House of Commons Delegated Legislation Committee debate these regulations yesterday. I have to admit that that the exercise was slightly more entertaining than it was informative—and it was not actually that entertaining, in truth. It was an attempt to try to find out what was behind it. Yesterday, the Minister did not manage to answer many of the questions, but I have confidence in our Minister who I know will answer them. If he cannot, I ask him to write on any questions that may be outstanding at the end.

The noble Lord, Lord Kirkwood, mentioned the report by the Secondary Legislation Scrutiny Committee. It was interesting reading. It might be worth reading a bit into the record. It commented rather drily:

“While the Committee has in the past commended well-structured pilot exercises as a means of informing policy development, it is unable to do so on this occasion due to a lack of information on how the scheme will work in practice. The Explanatory Memorandum provides minimal information on the pilot scheme and none at all on the cost of the exercise. We found virtually no material in the public domain about this proposal. No evidence is offered on why DWP expects the format and 13 week duration to be more successful than the existing interventions or why a shorter intervention might not be more cost-effective. We understand that the pilots will cost more than the existing programmes to run but not how they are expected to provide value for money, particularly when the candidates selected will be those who have failed to engage with the Work Programme”.

Apart from that, it loved it. It goes on:

“We therefore suggest that, before the House is asked to approve these Regulations, DWP offers … a revised Explanatory Memorandum”.

I discovered this morning that DWP had produced a revised Explanatory Memorandum which was put on the website last Thursday. Will the Minister take back a thought, which is one for all sides to consider? In circumstances such as this, where a department revises an Explanatory Memorandum very late in the day, he might reflect on the best way to bring that matter to the attention of Members of the House who might be interested—which I say, for the purposes of the avoidance of any doubt, would include Her Majesty’s Opposition on occasions such as this. I wonder whether he might consider whether there is any way we could make the communication process work better.

The noble Lord, Lord Kirkwood, asked about context. These pilots were first announced by the Secretary of State for Work and Pensions, Iain Duncan Smith, at the 2013 Conservative Party conference. Their aim was made clear when he said that,

“alongside the Mandatory Work Programme and our tough sanctions regime, this marks the end of the something for nothing culture”.

That is the context. To understand what this is about, it is worth looking at those two other bits of the package because what is happening here is connected directly to the Work Programme.

Its record, as noble Lords will know, is not hugely encouraging. Its performance is inconsistent and it has helped primarily those who are already closest to the Labour market. In another place the Minister of State, Esther McVey, responded on this point by talking about unemployment levels. Thankfully, I know that we have in the noble Lord a Minister who is better able to distinguish between the level of employment and the contribution made to it by the Work Programme, which is carefully evaluated.

While it is good news when anyone gets a job, there are significant gaps in the Work Programme. Over 1.5 million referrals have been made to it but fewer than 300,000 job outcome payments have been made. The success among disabled people is particularly bad, and not much more than one in 20 people on ESA are getting a sustained job outcome. However, the key point is that that means that 477,480 people have gone back to Jobcentre Plus after two years on the scheme. This is over two-thirds of participants who have completed their allotted time. Can the Minister tell the Committee if it is the intention to roll out this scheme, should it be deemed successful, to all of those 477,000 people?

It may be the case—given the piece of paper he handed to us at the start—that once those 11 categories of people who will be excluded are taken out, the number is smaller. If so, by how much? What is the size of the population who would potentially experience this, should it be rolled out? If so, what would that cost? My back-of-envelope maths suggests that at £5,000 a head, the cost will be about £2.4 billion. Are the Government really considering spending that on rolling out this programme to 477,000 people? If not, why are they piloting it?

I am sure that the noble Lord, Lord Kirkwood, is of a more generous spirit than me—which I confess is not always hard—but I am ever so slightly suspicious that it was announced that the Work Programme was not doing well but there was nothing to say what you do to people who get to the end of it. Labour had suggested all kinds of things such as compulsory job guarantees. This scheme is not a good thing, but it is a thing. I will wait for the Minister to correct me, as he often does.

In relation to sanctions, the other part of the package, we have heard a lot of complaints repeatedly from people concerned that jobcentres are being pushed to sanction too many people, or inappropriately. As regards communication, the Minister has a job to do in reassuring the Committee about how the Government will make sure that anyone who is sanctioned is sanctioned appropriately.

There is, however, a serious issue behind this, as the noble Lord, Lord Kirkwood, pointed out. We need to do something to redress the position of those who are still struggling, even after having received considerable amounts of help. The Government could usefully look at a more effective process of assessing jobseekers right at the beginning. Also, the Government’s proposals are not ambitious enough for the long-term unemployed. The Minister knows the Labour approach. We would offer a compulsory job guarantee to any young person out of work for a year, and to anyone else who was out of work for more than two years; basic skills tests; a more devolved model of commissioning; and different support for young people. However, these regulations are what the Government have produced, so I should be grateful if the Minister would tell us why their proposal will make a difference that our kind of schemes will not.

I have some specific questions, and I apologise for their number. As the noble Lord, Lord Kirkwood, asked, can the Minister tell us what people will do for 35 hours a week for three months? Will they all be doing the same thing as one another? Yesterday in the House of Commons, Esther McVey said that the Government were refining and tailor-making support for individuals. How individualised will the programme be? Will all the participants from any one provider be doing the same thing or different things? What range of things will they be doing?

The Minister there also suggested that they would vary according to client need and provider inclination. How then will the Government ensure that provision and supervision will be of good quality? If a provider bids low and does only what the noble Lord, Lord Kirkwood, suggested and keeps claimants in a room with a computer screen and Universal Jobmatch for 35 hours a week, will that pass? It might be value for money because it would not be very expensive, but would it pass the quality threshold? The noble Lord is wrong to think that he would go completely mad; he could probably read the adverts for careers at CosaNostra Holdings several times to amuse himself before he became too bored with Universal Jobmatch; so he need not do it down too much.

Regulation 3(a) states that the scheme is to provide support,

“for up to 35 hours per week over a period of up to 13 weeks”.

Is it the intention to test varying periods and durations, or will everyone be expected to be there for 35 hours a week for 13 weeks?

--- Later in debate ---

[Lord Bates]

I begin by thanking my noble friend Lord Kirkwood and the noble Baroness, Lady Sherlock, for their scrutiny, which compared and contrasted interestingly to the sparks flying and a lot of heat and not much light that took place in the other place when it considered these regulations. I totally accept their spirit of genuine inquiry and the need to flesh out the important issues and details, which we need to get on to the record. At the same time, I ask them to recognise the fact that what we are bringing forward here is a pilot, which in its nature is going to have areas of ambiguity that will be resolved as it takes effect and is rolled out. So a tolerance of that would seem fair.

Another thing should be said and needs to be put on the record. I accept that there is criticism of the Work Programme—but the noble Baroness will accept that there was criticism of the New Deal and even of the Flexible New Deal. The IPPR report came out just last week; it is not normally a champion of government social policy, but it actually said some very positive things about the way in which the Work Programme is going. Of course, 294,000 outcome payments have been paid to providers on the scheme, which suggests that something is happening in the labour market. In addition, at the risk of slightly straying into the territory of the other place, we need to put it on record that there is a changing employment environment. We have employment at record levels in this country and we seeing the number of vacancies increase quite dramatically; it is up 100,000 at 600,000. We are seeing a lot of people getting off benefits and into work; unemployment is down 27%, while youth unemployment is down 33% and long-term youth unemployment is down 39%. So in the interests of balance, one ought to put that record out there, to say that what Her Majesty's Government are doing in trying to help people is not without effect. Therefore, it is progressing.

I turn to the specific points. First, I recognise the sterling work of the Secondary Legislation Scrutiny Committee, which looked at these regulations and commented in a fairly detailed way. It asked that the Explanatory Memorandum be enhanced and updated with a lot more detail, and the department did that. That Explanatory Memorandum was published last week ahead of the scrutiny which is now taking place in Parliament.

The noble Baroness raises a very interesting point about whether there ought to be a mechanism. Whether it is for the House or the Secondary Legislation Select Committee, there should be something that says that when a report makes a recommendation there should be some mechanism for ensuring that people who have a close interest in this—certainly, perhaps, the spokesmen of the respective parties or groups—are systematically made aware. I will take that back to the department, and we will certainly try to respond to it.

Many points were raised. My noble friend Lord Kirkwood and the noble Baroness, Lady Sherlock, referred to many of the same issues, and I will work my way down them. On why the power is for 13 weeks and whether that is too long or too short, this is a new initiative and that is why we are testing it. The evaluation will help inform us about whether it is the right length of time to refer claimants to this more intensive activity. The length of the programme gives sufficient time for claimants to adapt and benefit from the enhanced jobsearcher’s routine. It also gives providers a reasonable amount of time to work with claimants to ensure that the support is effective.

I was asked why claimants will be on the programme for a maximum of 13 weeks. We will track them for as long as it takes after they have left the programme, typically for at least six months, to establish the impact of the pilot. I confirm that the pilot is being run on a randomised control basis, which is regarded as the gold-standard methodology for evaluation. I confirm that we will publish the results of the evaluation.

At this point, I turn to my colleagues behind me because the noble Baroness made a very interesting point when she focused on selection and randomised control and asked about the predominant methodology. The pilot we are talking about is a randomised control trial. The type, category and number of individuals will be the overriding methodology that will be used.

[Baroness Sherlock]

Something is either a randomised control trial or it is not. I am going to try to help the Minister here. It is not impossible that what the department is trying to do is select people to go into the pool, and then people from that pool of those deemed to be eligible will randomly be chosen to go into the programme or a control group. If that is what the department intends to do, will the Minister explain how people get to be in the selection pool in the first place? If I have got that wrong, he will of course correct me.

[Lord Bates]

The normally impassive officials behind me are nodding sagely to say that that is indeed the methodology that has been adopted. Advisers will have discretion on those who are eligible for the pool. Let me make a little further progress and perhaps some further inspiration will be on its way.

I was asked how claimants can possibly look for work for seven hours a day and what a typical day will look like. The Select Committee, the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Sherlock, all asked this. A typical day will be tailored to meet the needs of each individual participant. While there are generic skills that underpin jobsearch activity, participants will have tailored work plans that address their specific needs. They may include work on IT skills, interview techniques and job application skills, which do not just involve visiting the jobsearch website, looking at this person who has been on the Work Programme and has applied for up to 100 jobs without success for two years, and asking what are they lacking that would ensure that they get off benefits and into work, which is the outcome that we all seek. The Government have introduced the principle that looking for work is a full-time job, as has been said.

--- Later in debate ---

[Lord Bates]

We can certainly look at that. One of the reasons why it needs to be tailored, rather than just having a letter generated, is that a lot of those people will have literacy or numeracy problems. They cannot comprehend it, whatever form of English it happens to be delivered in. Therefore the ability to talk that through with someone in person, so that they can explain it at the meeting while giving claimants the formality of the letter, would seem to be the right way to do that.

In terms of how we will ensure quality of service throughout the contract, the majority of the payment made to providers will be based on service delivery. The standards of service delivery will be monitored throughout the contract and payment will be related to providers consistently meeting the required minimum service levels outlined in the specifications. In terms of what will happen if the work coach ignores the claimant’s view that they are not suitable, at the point of referral claimants will be able to make representations if they feel that a pilot will not be appropriate for them. The work coach would take this into account before making a referral. Where the work coach decides that a referral should nevertheless be made, the normal appeal route will be open to the claimant who refuses to attend and is sanctioned as a result.

In terms of varying periods and whether they will all be 35 hours, everyone will be attending for 35 hours unless they are not able to do so because of restrictions. That is the point that was made earlier. We acknowledge that people are caring for other people; for instance, there are parents caring for young children and they might have other responsibilities that are entirely legitimate and need to be built around. Again, that is the reason why it is a tailored and individual approach.

[Baroness Sherlock]

I thank the Minister for answering a great many of my questions. I shall flag up one or two that I think he may have missed. One is the question of childcare and travel costs. Can he confirm that those will be available up front—that people will not have to find the money to pay for childcare and then reclaim it from the provider? On the same point, will the Minister clarify the answer he has just given to the noble Lord, Lord Kirkwood? Is he saying that an individual judgment will be made about whether somebody does not need to do 35 hours because they have other needs or responsibilities, or is he—as I suspect—saying that if somebody is not required to be available full time for work, in a comparable manner they will not be required to be available full time for this programme? Perhaps the Minister can clarify that for the record.

I do not think that he answered the point about whether somebody was engaged in doing something at the suggestion of the Child Poverty Action Group, or if somebody is already engaged in doing something that in fact makes it more likely that they will get a job. With that, can he clarify that anyone doing voluntary work will therefore not be covered by the programme, because that is what the list seems to say?

Finally, will he clarify his answer about the randomised control trial? One of the biggest problems that can befall a randomised control trial is if the selection pool from which people are chosen is itself biased. One of the difficulties in having what is essentially a subjective judgment made by coaches about referring people into the pool is that it does not matter how rigorous the randomisation is from the pool if entry into the pool itself is not biased. Can the Minister say whether the Government have been thinking that through? Do they have any concerns in that direction?

[Lord Bates]

I am grateful to the noble Baroness for saying that there are only one or two issues to cover, which suggests that I have worked my way through the list. I feel as though I am doing well, or, rather, the wonderful officials behind me are doing well.

The point about childcare is a serious one and I want to get my reply on the record. As regards childcare travel guidance, extra costs incurred by claimants will be provided. This is not currently published but has been stipulated in the terms and conditions. The provider is encouraged to consider claimants’ circumstances when awarding this and, if possible, to do this in advance. Good reasons are always considered before applying any sanction, and whether travel costs had been issued would be taken into account.

As regards how the randomised control trial will work, for the pre-Work Programme strand of the pilot, the Jobcentre Plus adviser will first identify suitable claimants, after which they will be randomly allocated to a treatment or control group. I think that I have mentioned that already. The 35-hour period is currently part of the claimant commitment, so that would apply.

As regards the Child Poverty Action Group’s view on charitable or voluntary work, perhaps the noble Baroness would be good enough to send us more information on that group’s recommendation on that.

[Baroness Sherlock]

That group simply asked whether, if somebody was already doing something that made it more likely that they would get a job than by going on the programme, that would do. I am sure that it was not thinking about work experience at a high-level cultural institution, for instance, but I give that by way of example.

[Lord Bates]

I thank the noble Baroness for that very helpful further intervention, which enables me to confirm that those engaged in voluntary work will not need to participate. A work coach will consider any other activity in which the claimant is engaged before deciding what action is taken. I again thank my noble friend Lord Kirkwood of Kirkhope and the noble Baroness, Lady Sherlock, for their scrutiny. I hope that this debate has been helpful. I believe that it will make a positive contribution to understanding how we can help some of the hardest to reach people in our society and give them employment, hope and a future.

Housing: Underoccupancy Charge

Baroness Sherlock Excerpts

Tuesday 24th June 2014 Lords Chamber

[Lord Freud]

My Lords, for obvious reasons, I have not seen the report. It will be published but I am not aware of that kind of detail at this stage. Clearly once the report is out we can look at the issues that remain uncovered. There will be a full report, which will be published next year in 2015.

[Baroness Sherlock (Lab)]

My Lords, the Minister has often complained about councils underspending the discretionary funds that mitigate the effect of the bedroom tax. Did he see the report in Inside Housing last week which stated that £7 million of the extra £20 million allocated by the Government last July remains unallocated to councils by the Government? An FoI request showed that 27 councils did not get the money they asked for mostly because the department decided that this would allow them to buy out the effects of the bedroom tax. So people asked for money, were turned down because it would have the effect that was wanted, and then it is claimed that the underspend shows that they did not need any more money in the first place. How can the Minister explain that to the thousands of people affected by the bedroom tax?

[Lord Freud]

My Lords, some of my more sharp-eyed colleagues here will have seen the information we put out on the discretionary housing payments for last year. That showed that there was a £13 million underspend by 240 councils and that of the £20 million bidding fund, £7 million was not spent. The £20 million was not applied for in its entirety. However, we allocated that money on the basis of parity of requirement. There was an extensive process to make sure that we gave the appropriate amounts of money to those councils.

Personal Independence Payment

Baroness Sherlock Excerpts

Tuesday 24th June 2014 Lords Chamber

[Lord Freud]

My Lords, the Government remain committed to maintaining support for disabled people. We spend roughly £50 billion a year, every year, and that is held in real terms. That is a fifth higher than the EU average. The overall spend on incapacity benefits has remained roughly flat in real terms over the life of this Government, and indeed the benefits about which we are talking—PIP, DLA—have actually been going up in real terms over the past four years.

[Baroness Sherlock (Lab)]

My Lords, the Minister’s assurances would be rather more encouraging were it not for the fact that, as well as this shambles of the WCA and the 42-year backlog, employment and support allowance has been delayed and proved not to be succeeding; the Work Programme has a 94% failure rate; the bedroom tax is not meeting its objectives; and at current speeds, universal credit will take 1,052 years to roll out. Is the Minister proud of these achievements?

[Lord Freud]

My Lords, we are transforming the welfare system in this country. We are doing it across the piece. It is all very well for the Opposition to complain about the speed at which we do these programmes. These programmes are difficult to do. They were shied away from by the previous Government. I think that Peers all round the House will be pleased to see these transformational changes go in and transform the way in which this country operates at a fundamental level. There is a level of cynicism about what is always a difficulty: getting difficult, complicated programmes through exactly to timetable. People who know how difficult projects are know that process, but this is critical work for our country.

Universal Credit (Transitional Provisions) Regulations 2014

Baroness Sherlock Excerpts

Wednesday 18th June 2014 Lords Chamber

Maybe it is a slight abuse of procedure to seek an explanation of this kind from the Minister today, as statutory instruments of this kind do not really admit of general debate. However, if the Minister can find some way of reassuring the House that in the coming months if not years, as these programme rollout problems unfold, he will ensure that he comes to the House and explains what is going on, what it is necessary to put right and what the Government are doing about it, he will find himself getting more support from the House than he otherwise would. I hope he will think about that carefully, and I hope I have not spoilt his evening too much by getting him here at such short notice. This is an important subject and I am looking forward to hearing what he and other colleagues have to say in the rest of the debate. I beg to move.

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Kirkwood, for that speech and indeed for this opportunity to question the Government on the progress of universal credit. I do not think that he need worry too much about whether he strayed from the regulations. The points that he made were precisely the areas that I too had zoned in on from the regulations, so it is certainly my view that his questions are within the spirit, and clearly the content, of tonight’s business.

Before I turn to the content, I want to ask the Minister a process question. Could he explain to the House what the rush was for the consideration of this Motion? I saw these regulations appear on the green sheet certainly no more than two or three sitting days ago, and it was only yesterday that it was confirmed that this debate would take place tonight. There may have been other noble Lords with an interest in this subject—there were certainly plenty of us during the passage of the Welfare Reform Act—who wanted to participate in the debate.

[Lord Kirkwood of Kirkhope]

I have to leap to the defence of the Minister. This is my fault: I tabled the debate and was offered a slot, and the Government were very generous in giving me a slot on the Floor so I took it early. That is entirely my fault and was nothing to do with the Government or the Chief Whip.

[Baroness Sherlock]

I thank the noble Lord for that intervention and for leaping to defend the honour of the Minister. The only point that I make is that it may not be widely understood outside the House that no one consults, for example, the Opposition to see whether a spokesperson is available. This gave me 24 hours to get these regulations out, read them and understand what they were about in order to be able to hold the Minister to account. The process should allow for that. I was not suggesting any conspiracy on the Minister’s part—I know that these matters are far above his pay grade and mine by some considerable distance—but I simply place that point on the record. I think that we would get better debates if we all had a bit more notice when things of this complexity were coming forward. It is not as though universal credit is in a rush. It is not about to be rolled out across the country next week or next month.

The noble Lord, Lord Kirkwood, raised the question of the speed of transition. I think he was rather generous to the Secretary of State. On 1 November 2011 Iain Duncan Smith promised that 1 million people would be claiming universal credit by April 2014. So how does it look now? The noble Lord pointed out that the case load now, far from being 1 million, is 5,610, and the signs are not promising. In January this year, 1,010 people started claiming universal credit, in February it was 630 people and in March it was 560 people. Only 6,550 people have claimed anything at all since the scheme began. That is an enormous difference.

The Secretary of State has insisted repeatedly that universal credit would meet its deadlines of first national rollout from October 2013 and final replacement of housing benefit, child and working tax credits, income support and non-contributory JSA and ESA by 2017. I am with the noble Lord, Lord Kirkwood, on this; I would not bet the DWP pension pot on that deadline being met at the moment.

The noble Lord asked a question about what “reset” means. He is right not to believe everything he reads in the papers, but the papers were pretty much of the same view that the reason the project had to be reset was that it had previously had an amber/red rating from the Major Projects Authority and was probably about to get a red rating, so in order not to get a red rating it was reset so that it did not get any rating at all. I very much hope that that is scurrilous suspicion on the part of the media and that the Minister can correct it and explain the process to us.

However, it is not the first time. Whenever criticisms are made of the project, the department comes back and Ministers say that those criticisms are not fair because they do not take account of changes that have recently been made. There comes a stage when, if problems keep arising and changes are made, it is legitimate to say: how can you persuade people outside, never mind the House, that the department has learnt enough from previous mistakes to have any confidence in the next level of management development that has been put forward? I hope the Minister will be able to give us some reassurance on that front.

Recently, there have been even more worrying reports about problems in the pilot universal credit areas with claims that administrative errors and computer glitches had led to increases in personal debt, rent arrears and evictions.

The noble Lord, Lord Kirkwood, raised the question of value for money. In four years, more than £600 million has been spent and, as he pointed out, the Government admit that £40 million has been totally wasted and a further £90 million “written down” because the IT bought was not fit for purpose. That is a lot of money for 5,610 people to be claiming universal credit. That context means that the Minister will understand why there is nervousness about the fact that these regulations seem to give the Government considerable discretion in deciding how the rollout should take place in future.

First, as the noble Lord pointed out, unlike the 2013 transitional regulations, these regulations give that discretion to the Government. They no longer contain proposals for categories of people to be brought on to universal credit. Rather, “gateway conditions” for universal credit claimants will in future be spelt out in commencement orders which, as the Joint Committee on Statutory Instruments points out, are not subject to parliamentary scrutiny. Secondly, the regulations permit the Secretary of State to stop taking universal credit claims altogether either for certain categories of people or in certain parts of the country. That is a really significant shift in powers from Parliament scrutinising or passing regulations to the Secretary of State. Will the Minister give us some indication of whether there is any limitation to those powers? Could he, for example, decide not to include several benefits? Could he decide not to do Wales? Could he decide not to do the north of England? Is there any limitation to that discretion? If so, what does that mean for our understanding of what the transition timetable will be, a point pressed very effectively by the noble Lord, Lord Kirkwood?

The questions I would like to ask the Minister are these. First, why are these changes necessary? What was wrong with things that were done previously when regulation was used? What is necessary? What is it about the process and, more importantly, what do the Government think the process is going to look like in future that means they need these powers?

Secondly, how will Parliament be enabled to scrutinise the decisions taken by the Secretary of State to control who is entitled to universal credit? The noble Lord, Lord Kirkwood, flagged up one of the points made in defence of universal credit, which is that it will give various benefits to categories of claimant. If that is the case—certainly the Government have used that defence in explaining why they had to cut existing benefits—that is a considerable power. How can Parliament hold Ministers to account for deciding who is and is not entitled to access a system created by Parliament with an expectation that it would by now have been experienced by 1 million people and would be entirely rolled out by 2017? That is a very serious constitutional question.

Housing: Discretionary Housing Payment

Baroness Sherlock Excerpts

Wednesday 9th April 2014 Lords Chamber

[Lord Freud]

My Lords, my noble friend draws attention to the point that we have introduced a cap on the amount of housing benefit to stop the very large amounts that were paid on local housing allowance.

[Baroness Sherlock (Lab)]

My Lords, 500,000 people are affected by the bedroom tax, most of them disabled. If the Minister wants some figures, two-thirds of tenants hit by the bedroom tax are currently in arrears and, of those, 40% have been issued with a notice seeking possession. This is a serious crisis, and I think that the Minister should acquaint himself with all the figures, including those on evictions.

The House knows that a Labour Government would abolish the bedroom tax. The Minister told the House on 12 December that,

“the interim review is due to be published in the spring of 2014. I will be most pleased to discuss the findings of that review with Members of the House, who I suspect will be keen to have that dialogue”.—[Official Report, 12/12/13; col. 907.]

I am very keen to have the dialogue. When does it start?

[Lord Freud]

The noble Baroness need not persuade me about the savings—she needs to persuade the OBR, which has scored down in the Budget £490 million. The noble Baroness talked about the fact that a Labour Government would abolish the spare room subsidy. We will produce an interim report later this year, as I said, and we will bring forward next year the full report on what has been happening with the bedroom tax, as you would call it.

Pensions Bill

Baroness Sherlock Excerpts

Tuesday 8th April 2014 Lords Chamber

[Lord Turnbull (CB)]

My Lords, when I heard mention of the Minister in the other place, two words came to mind: “kitchen” and “sink”. Indeed, the Minister claimed that there were 17 logical flaws in the case the Lords had put forward. However, it was not clear to me which were the objections of substance and which were the makeweight arguments. Of course, the problem is that there are not that many people in this category. Is it a problem that is going to be solved by universal credit, or is it not a problem because people have time to catch up later on? That is a very poor argument because you never know whether you are going to have time to catch up. Is it a problem of information? Is it a problem that in the fixing of it would create other problems? Lastly, there were arguments about drafting. For good measure some bad statistics were thrown in that referred to average numbers of people on average hours and average earnings, when you really need to look at the median if you are trying to calculate the numbers.

However, I welcome the statement from the Minister today because he appears to have conceded that there is an issue to address. As a matter of principle, I think it is not acceptable that someone earning £120 in one job can get credit, while someone earning two times £60 a week cannot. We have a duty to address this issue if it turns out that significant numbers of people fall into that category. I also welcome the review, and like other noble Lords I hope that it will be addressed with some urgency.

I think that one further assurance is needed. If it turns out that the Government do not have the powers, they should be introduced quickly. Opportunities to do that in social security legislation seem to arise every few weeks, so I do not think that it will be a problem.

[Baroness Sherlock (Lab)]

My Lords, as the opposition winder, I have rarely felt more redundant. If the Minister had seen the nodding of heads going on from all Benches, including those behind him, he might begin to think that accepting the amendment would have been the easier path in the long run. I was quite disappointed to find the amendment returning to this House, as it had a number of things to commend it. First, it identified a problem which clearly needed attention. If there were any doubts about that, my noble friend Lady Hollis has cleared them up today. The case is compelling.

When we debated this amendment on Report, Ministers seemed sceptical that there was a problem at all. However, since then, we have had some new figures from the Office for National Statistics, specifically on the prevalence of zero-hours contracts. The figure that was used on Report was 183,000 in 2010. The new ONS report, based on the Labour Force Survey, shows that there are 583,000 people currently employed on zero-hours contracts. I fully accept that some of those people will of course be earning enough to bring them into the system, but the point made by the noble Lord, Lord Turnbull, about the use of average figures when this was debated in the other place is very well made. If some people are earning very high salaries, for example as IT contractors, a mean figure is never going to be any help at all in working out the impact of this.

In addition to those on zero-hours contracts, there is the broader issue of those doing more than one mini-job, as described so effectively by my noble friend. Concern has been expressed across the House throughout the passage of the Bill about the asymmetry of the system crediting-in those who earn all that money in one job or those who are unemployed, including those who are unpaid carers, but not crediting-in people working hard in more than one job.

The other thing the amendment had to commend it was that it was wholly permissive: it simply enabled the Government to take action if and when they were ready but mandated them to do nothing. The amendment also had no financial implications, and I was surprised as well as disappointed to see financial privilege being cited for such a permissive amendment. Frankly, I really find that incomprehensible.

However, the Government still seemed unpersuaded. Ministers, both in the other place and here, have posted a series of objections to the amendment. Some are minor, such as complaints about the drafting, but, as my noble friend Lady Hollis pointed out, those could have been easily resolved by the Government bringing forward their own differently worded amendment at Third Reading, so we have to assume the problem is bigger than that. When we sweep away some of the flannel in the debate in the other place, the options are these: they do not believe there is a problem; they believe there is a problem but do not know the scale; there is a problem but universal credit will solve it; or there is a problem but the Government do not know how best they want to address it.

Both in debates in another place and, indeed, today, we have had smatterings of all of those. The Government seem unpersuaded that there is a problem, or at least not one of a size to merit intervention to tackle it. They want to do research—lots of really thorough and careful research. I am a great believer in research but want to understand what it is the Government think they could learn that would make a difference to the decisions they would take. There are many noble Lords in this House who may not be biologists but who, as mentioned by my noble friend Lady Dean, can spot long grass when they see it. Frankly, I can smell it from here.

As for the universal credit defence, my noble friend Lady Hollis has taken that apart at different stages of the Bill. The Minister said again today that 800,000 people will be credited-in as a result of universal credit. The new pension system is due to come in in under two years, and I am personally not willing to bet the house that UC will be fully rolled out by the time it does. Even if it is, that leaves out all kinds of people. Single people on even very modest incomes will not be covered by universal credit. A married woman affected by this problem could find that her husband’s earnings float her off universal credit but she can no longer, as a result of this Bill, get a pension based on his contributions, so she is cut out both ways.

Finally, it may be that the Government are eventually persuaded that there is a problem, but they want to address it in a different way from that favoured by my noble friend Lady Hollis. Of course, the amendment allowed them to do that. In addition, the Government could have brought back their own amendment, had that been what they wanted to do. But this must leave the House nervous that the Government are not really supportive in the way that they sound at the outset, however warm their words of welcome. The Minister has a job to do to reassure people on all sides of the House.

First, do the Government accept that there is a problem that needs addressing? Secondly—and this was the killer question posed by the noble Lord, Lord Forsyth—are the Government satisfied for any worker to be excluded from the new single-tier pension just because his or her hours are spread across more than one employer? Is it a question of principle? Is it a question of scale? If so, what is the magic number? Thirdly, as the noble Lord, Lord German, said, if the Government do accept that there is a problem, will the Minister confirm that they are committed to taking action to address it? The only outstanding question, therefore, is how best to do that.

Finally, many noble Lords asked about the timescale and the process. If the forum is to be held by the summer, when can the House expect a report back, and what form will the action take? My noble friend Lady Hollis pointed out that even though this Bill has not yet completed its passage through the House, the entire pension system is to be revolutionised still further. If that means further primary legislation, do the Government intend to take advantage of that legislation to enact whatever decisions they take as a result of the review? If not, what other mechanisms will they choose and how will the Minister report back to the House?

Health and Safety Executive

Baroness Sherlock Excerpts

Thursday 3rd April 2014 Lords Chamber

[Lord Bates]

That is a very good point. I certainly endorse what the noble Baroness said about the Olympics. There were 46,000 people working on that site and to have not one fatality is exemplary. That gives me the opportunity to point out that that is one thing that the UK does extraordinarily well. Fatalities in the workplace are much lower in the UK, at 0.71 per 100,000 workers, compared to an equivalent rate of 0.81 in Germany, 1.57 in Italy and 2.49 elsewhere. That is an important record, showing that the HSE is working correctly with contractors in major projects, and this will ensure that that work continues in future.

[Baroness Sherlock (Lab)]

My Lords, one question raised in discussion of the review was the desirability of increasing commercial income for the HSE. Notwithstanding the Government’s view of that, will the Minister take this opportunity to assure the House that they have no plans to privatise the HSE?

[Lord Bates]

Yes, I can very quickly do that. There is absolutely no question of privatising the HSE, but Martin Temple, himself a businessman with a distinguished background in engineering and manufacturing, recognised that there were great opportunities, because the Health and Safety Executive is genuinely admired around the world. A lot of people are coming to look for good-will advice as to how to operate their systems, and I think it is absolutely right for the taxpayer that the HSE ought to be free to exploit those commercial opportunities to enable it to continue doing its excellent work around the UK.

Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014

Baroness Sherlock Excerpts

Thursday 3rd April 2014 Lords Chamber

Moved by

[Baroness Sherlock]

To move that this House regrets that the Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014 are being introduced without Her Majesty’s Government’s full understanding of the numbers of those affected; regrets that confusion and uncertainty are being added to an already unjust policy; deplores that Her Majesty’s Government’s mishandling has resulted in households being unlawfully charged and further pushed into hardship; and regrets the likely disproportionate impact of the Regulations on the most vulnerable (SI 2014/212).

[Baroness Sherlock (Lab)]

My Lords, this Motion relates to an order brought forward by the Government to address a loophole that they have belatedly discovered in enacting what they call the social sector size criteria and everybody else calls the bedroom tax. The loophole means that people claiming housing benefit continuously for the same home since 1 January 1996 are exempt from the bedroom tax. It emerged recently, as noble Lords may remember from the discussion on a recent Urgent Question, that the group may be even wider as it may affect some people who have inherited this protection from a former tenant who enjoyed it.

People covered by this exemption have unlawfully had their housing benefit cut. When this matter was discussed in the other place, a number of examples of people affected were given. For example, there was a widower in Staffordshire suffering from mental health problems who had to find an extra £14 a week to stay in his home. There was a 56 year-old women from Rotherham with health-related problems who paid over £700 in additional rent, which we now know was unlawful. In Greater Manchester, a woman who cares for her granddaughter paid £200 extra in rent as a result of the bedroom tax, fell into arrears and was threatened with eviction from the home she has lived in for 26 years. Incidentally, Grandparents Plus notes that kinship carers like her are more likely to be affected by the bedroom tax, because they are older and more likely to have spare rooms, technically, because their children have grown up and moved on.

These people and many others like them are now due a rebate but, rather than apologise for the distress that they have been caused, the Government now want to apply the bedroom tax again to these people and thousands like them. Because local authorities in most cases do not have electronic records which go back to 1996, they are finding themselves having to waste time and money trawling through paper files looking for affected cases. Meanwhile, the Government have brought forward this order to close the loophole, despite having no idea how many people are affected by it.

The Opposition have tried very hard to find out how many people are affected by asking Ministers. On 13 January, the Employment Minister, Esther McVey, gave a Written Answer in the other place. She said simply:

“This information is not available”.—[Official Report, Commons, 13/1/14; col. 449W.]

On the same day, the Secretary of State for Work and Pensions told the other place that,

“the number is likely to be between 3,000 and 5,000”.—[ Official Report, Commons, 13/1/14; col. 577.]

The very next day, the noble Lord, Lord Freud, told this House that,

“the numbers involved in this anomaly are small and the amounts are modest”.—[Official Report, 14/1/14; col. 106.]

However, early reports coming from the ground suggested that the numbers could be rather higher than that. Therefore, under the Freedom of Information Act, the Opposition asked local authorities how many people they believed would be affected. The resulting figures already show that over 23,000 are likely to be affected, even though a third of councils have still to reply and many said that they could not give complete answers because they could not include housing association tenants. Not only is this a mess, but the Government seem to have no idea how many people are caught up in the mess.

We should not be surprised. The bedroom tax was a bad policy in the first place, incompetently executed, with the heaviest price being paid by the poorest and most vulnerable. More than 500,000 households have been hit. Two-thirds of those affected are disabled. Of those affected, 35,000 disabled people have had their homes specially adapted with, for example, wheelchair ramps, wider doors, stair lifts or accessible bathrooms. If they are forced to move, it is estimated that the cost of repeating those adaptations in new properties could reach £234 million.

Some 60,000 of those affected by the bedroom tax are carers. More than 200,000 families with children are affected. On average, people are paying an extra £14 a week—the equivalent of losing all of your child benefit for the second child. Most depressingly, so many of the problems predicted by noble Lords from all Benches during the passage of the Welfare Reform Act have come to pass. According to the National Housing Federation, on average two-thirds of tenants affected by the bedroom tax are currently in arrears; of those, three-quarters have seen their arrears increase since the bedroom tax came in. Of those tenants hit by the bedroom tax who are in arrears because they cannot make up the shortfall, 40% have been issued with a notice seeking possession.

The impact on landlords is also huge. Nearly three in five housing associations say that they have been affected by the bedroom tax either a great deal or a fair amount. That hides huge regional problems, as I know only too well. About 90% of housing associations operating mainly in the north-east and 80% in the north-west report that they have been significantly affected.

What a mess, and for what? What has been achieved by all this chaos and misery? Has the bedroom tax achieved its aims? Ministers have not been able to explain whether the policy is supposed to reduce overcrowding or to save money; it cannot do both. If tenants stay put and accept a cut in their benefits, the state saves money but no houses are freed up. If tenants are forced to move, no money is saved. The costings assumed that people would not move. During the passage of the Welfare Reform Bill, when the matter was voted on in this House on Report on 14 December 2011, the noble Lord, Lord Freud, explained the Government’s position, saying:

“The introduction of size criteria into the social rented sector from April 2013 is essential to reduce housing benefit expenditure”.—[Official Report, 14/12/11; col. 1300.]

So it was indeed about savings. The Minister explained that it would save around £500 million per annum.

I wonder whether those savings really are materialising as Ministers had hoped. Last Friday, Esther McVey was asked on a BBC Radio 5 Live programme how much money the Government had saved through this policy. She began by saying:

“It was never all about saving money”.

The interviewer interrupted just to ask how much it would save. She came back to the question. The interviewer asked her repeatedly whether there would be savings and how much they would be but could not get an answer.

There is now a real risk that the bedroom tax will end up costing more than it saves. Research from the University of York suggests that the policy could save significantly less than the DWP predicted. The National Housing Federation has said that the savings claimed by the Government are “highly questionable”, partly because those forced to move to the private rented sector will end up costing more in housing benefits. Housing associations say that tens of millions of pounds are likely to be lost through the build-up of arrears. I ask the Minister today to tell the House precisely how much of that £500 million savings per annum has been realised in the first year of the bedroom tax. After taking into account the cost of discretionary housing payments, the cost to local authorities and social housing providers and the payment of higher housing benefits to those who had to move, what is the net saving to the public purse? If it was not about saving money, as Esther McVey has said, what was it about?

The Government have since changed tack and claimed that it is about tackling overcrowding or dealing with the waiting lists. They say that people need to be pushed to move out if they have spare rooms so that others can have their houses. At various times, noble Lords from all Benches have pointed out that, in fact, many of these are not spare rooms, and, even if they were, there were nowhere near enough spare smaller properties available in the areas hit by the bedroom tax. Now we know what has happened. A recent BBC investigation showed that, after the first year, just 6% of tenants have moved.

This entire episode should shame this Government. Half a million people have been affected, most of them disabled, losing an average £14 a week from their already meagre incomes. Instead of bringing forward an order to make the bedroom tax apply to up to 40,000 more households, the Government should announce today that they will scrap this unfair, cruel and unpopular tax. I beg to move.

[Lord Touhig (Lab)]

My Lords, I thank my noble friend Lady Sherlock for securing this debate. Of all the Government’s reforms to welfare, it is hard to find another more cruel, more callous and more mean-spirited than the bedroom tax. The policy was dreamt up by people who have no need for housing benefit themselves and probably do not even know anybody who depends on it. While it may make sense in theory, in practice it is having a devastating effect on the lives of vulnerable people. Additionally, the very ideas and theory behind the policy are, I believe, wicked and wrong. Ministers have stressed that the policy is designed to fix a broken system of housing benefit and encourage behavioural change among recipients of housing benefit. This is sheer nonsense. The system is broken, though not because of the behaviour of those who use it; the cause is the housing stock itself. In England, there are 180,000 tenants underoccupying two-bedroom homes but only 85,000 smaller homes available.

The Catholic charity Caritas Diocese of Salford has been working with Michelle. She has three children and lives in a three-bedroom home. Originally she cared for her brother, who has now moved into supported accommodation. Her 13 year-old daughter now uses the so-called spare room. Michelle is trying for a home swap, looking for a two-bedroom home, but nothing is available. The £12 she loses each week means that she now regularly resorts to food banks. This is the reality of the bedroom tax. The only economy left for families to make is on food. When that cannot be done, they have to resort to food banks. In Merseyside, social landlords have referred 553 tenants to food banks.

The cost of the bedroom tax is horrific, but the attitude that it displays towards social housing is also wrong. No longer can people regard where they live as their homes. Housing benefit and social housing appear to be something that the Government begrudgingly provide. My local newspaper, the South Wales Argus, recently reported the story of Kevin Reeve, who has occupied the family home for 50 years and cared for his mother and father, who have both now sadly passed away. He is now underoccupying, losing between £35 and £45 a month and has been forced into trying to move.

The local housing association, Bron Afon, has catalogued the effects of this tax on the local community. It discovered that one person affected is a former solider suffering from post-traumatic stress disorder and depression. He lives with his daughter, who is hoping to go to university. They already underoccupy by one room. They are already cutting down on heating their home and eating. His daughter is now questioning whether she should go to university. He is resigned to trying to move. His current home is the one in which he raised his children, the home that he shared with his wife, who, sadly, has now died. He is proud of that home, and we should be proud of him, a veteran who has served our country. Is this the way we repay our servicemen?

The bedroom tax is another example of the chaos, confusion and poor implementation of chronically ill conceived policies by the Department for Work and Pensions. It is clear that this policy is unjustly penalising vulnerable people for something beyond their control. It is causing immense hardship and devastating people’s lives. It shows complete callousness towards those who rely on housing benefit. Many good people who rely on housing benefit feel that they live not in prosperity Britain but in poverty Britain, thanks to this Conservative and Liberal Democrat Government. Those responsible for this policy should hang their heads in shame.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, I will not test the patience of the House by going over ground that we have covered many times in recent weeks and months. On the general nature of the policy, one issue that is worth my dealing with is the recent BBC estimate that 6% of those affected by the spare room subsidy, or 30,000 people, moved during the first 11 months of its operation. Noble Lords opposite may see this as a sign of failure, but we do not. It is an example of the behavioural response that this policy is successfully driving. We have seen further evidence of this again today in the announcement by Housing Partners Ltd that in the past year it has increased by a quarter the number of successful mutual exchanges for social tenants. Its experience also shows that there is a steady supply of smaller one and two-bedroom properties available, which is at odds with some of the claims made today from the Benches opposite.

There are another couple of points on our general position that I have not dealt with before. One, raised by the noble Baroness, Lady Sherlock, and amplified by the noble Lords, Lord Taylor and Lord Low, was about money-saving, so let me be precise on that. We know, and have stated in our impact assessment, that some people could downsize, some could move into the private rented sector and others could get discretionary housing payments. However, savings remain estimated at £500 million per annum and this did not change in the Budget, so the party opposite will not be able to argue—unless it can persuade the OBR—that this policy should be got rid of on the basis of cost because that is not what the OBR has calculated.

On the point about kinship carers, they will be treated as foster parents where they do not have a child placed with them or the child is not treated as occupying their home. However, where a carer is responsible for a child and the child is therefore treated as a member of the claimant’s household, they will be treated the same as other claimants under the size criteria.

I shall restrict my remaining comments to the Motion and the amendment to the regulations, explaining first what these regulations do. The instrument amends paragraph 4 of Schedule 3 to the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006. These provide transitional protection for certain housing benefit claimants. The amendment removes the transitional protection from social sector tenants. This means that their housing benefit will be determined using Regulation 13 of the Housing Benefit Regulations 2006, which sets out the maximum rent in the social sector.

This transitional protection was provided for private sector tenants when local reference rent rules were introduced in 1996. These restricted the amount of housing benefit that could be awarded through private landlords charging high rents. Currently, fewer than 40,000 private sector claimants, mostly pensioners, are still covered by this protection. In answer to my noble friend Lord German’s question, it was never required by, or intended for, people living in social housing. Transitional support has already been provided for those affected by the removal of the spare room subsidy through discretionary housing payments. Unlike the loophole provision, this is available to those who claimed benefit after 1996.

Let me go through some of the specific issues raised about the loophole. My noble friend Lord German asked about numbers. The cost of the loophole will be so small that it will not impact on our forecast of housing benefit expenditure of £23.9 billion for the year. The claims that our estimates of the size are wrong are based on FoI figures that are at best speculative and at worst misleading. The claimants have 13 months to make their claims.

Regarding who will be expected to meet the costs—a question raised by the noble Baroness, Lady Nye, and my noble friend Lord German—these will be met by the DWP through the normal subsidy arrangements. At the moment, we have £2 million of additional administrative funding to distribute.

My noble friend asked whether those covered by the loophole who received discretionary housing payments would have to repay it. The answer is no; the award was made when there was a need and reimbursing the housing benefit would not change that.

Let me pick up the point on inheritance, which we dealt with at some length during that recent Urgent Question from the noble Baroness, Lady Sherlock. When a claimant dies, anyone living in a household who both takes over the tenancy and is awarded housing benefit within four weeks of the death can inherit the loophole protection. That was a process we already allowed for when we were looking at our costs. As my noble friend inquired, we are working on a major review of this for next year as well as an interim review, and I think I will stick with my “later this year” rather than “soon” at this point.

Turning now to what the Motion itself says, the noble Baroness’s Motion makes a series of unsubstantiated assertions. First, it states that the regulations cannot be amended without the precise number affected by the loophole being known. That simply is not true. It is not about numbers; it is a matter of principle. Parliament never intended that this transitional protection should apply to this group of claimants or to this policy. The regulations have been amended to restore that original policy intention.

Secondly, there is an accusation in the Motion of government confusion and mishandling. There is no confusion. As soon as the loophole was identified, we were clear that we would close it and that is exactly what we have done. Guidance was issued to local authorities. Arrangements were put in place to ensure that central Government met the costs of the loophole—both the benefit costs and the additional administrative costs.

The final claim in the Motion from the noble Baroness is that there is a disproportionate impact from the regulations on the most vulnerable. It is the loophole as it stood that was arbitrary and unfair. This transitional protection was never intended for this policy. As a result, it has protected a random group of claimants without a meaningful test or reason.

The removal of the spare room subsidy has now been operating for a year and it is working. The latest data show that the numbers facing a reduction in their housing benefit dropped by around 50,000 between May and November last year. Discretionary housing payments are funded and working: only £13 million of the £20 million reserve funding that we set aside has been allocated to local authorities. Revised DHP guidance was published yesterday, promoting longer-term awards where appropriate. The Court of Appeal has confirmed that the Government are meeting their human rights obligations and public sector equality duty. This year, we are saving about £490 million a year from the housing benefit bill.

In conclusion, the policy is working. The loophole has been closed. Arrangements are in place to support local authorities and those affected by the loophole. Finally, claimants have up to 13 months to make a claim that the loophole applied to them. For these reasons, this Motion should be withdrawn.

[Baroness Sherlock]

My Lords, I am in the unusual position of saying that I am not sure whether I agree with a single word that the Minister has just said. It was in fact the second most disappointing speech of the day.

The Minister has put forward three broad arguments. First, that it does not matter how many people are affected. But it matters to me, it matters to them and it matters to the local authorities, which have to deal with the mess that the Government have created.

Secondly, there is the question of savings. I noticed that the Minister failed to answer my question on what the net savings would be. Clearly, these savings are vanishing before us like a will o’ the wisp. The Minister also failed to explain how the savings remain the same, despite the Government having had to increase the money allocated for discretionary housing payments from £20 million to £190 million. The Government seem determined to ignore the costs and problems created for councils and other housing providers. If there is any doubt about that, let us remember that the National Audit Office said that the Government’s costings do not take account of,

“the full scale of potential impacts”,

and do not include the additional costs faced by local authorities. We have heard so much about those costs today from my noble friend Lord Beecham and the noble Lord, Lord Taylor.

There is then the question of overcrowding. As my noble friend Lady Hollis pointed out, this argument is frankly specious. There are not enough smaller homes to move into, a point underscored by my noble friend Lord Beecham, and where they are they are in the wrong places. They are not in the places where people are being asked to move. People have not moved because there is nowhere to move to. During the passage of the Welfare Reform Act, the noble Lord, Lord Best, and my noble friend Lady Hollis put an amendment to this House which said that the bedroom tax should not apply if someone could not be offered somewhere else to move to. The noble Lord, Lord Taylor, had the courage to vote for that amendment at the time and I commend him for his consistency. Other noble Lords did not and the government Benches voted it down. Let us not therefore pretend that what the Government are really worried about is overcrowded houses. They had every opportunity to correct that and they failed it.

We have heard so many powerful speeches today about the misery and desperation caused by this policy. If the noble Lord, Lord Freud, really believes that this policy is a success, I would hate to see what his failures look like. If he feels that he is getting the right behavioural effects, what are they? Are they in the family described by the noble Lord, Lord Touhig, who are not eating? Are they the families who are going without or giving up bedrooms needed by carers or disabled people? No: the handful of people who have moved are doing so out of desperation, not because they were responding to a behavioural stimulus.

I found the speech from the noble Lord, Lord German, very disappointing. I was delighted to read the reports of Tim Farron saying that the Liberal Democrats were going to withdraw their support for the bedroom tax.

[Lord German]

When I asked my honourable friend in the other House whether that is what he had said, he said that he had not. I have his speech with me and I can also tell the noble Baroness that my honourable friend was interviewed by ITV on this matter but that ITV news decided not to broadcast his comments because they did not substantiate the allegations that the noble Baroness is now making, nor did they substantiate what the Guardian had said. Both of those sources are incorrect; the source is here in front of me and I invite my noble friends to listen to it.

[Baroness Sherlock]

My Lords, I am very grateful for that clarification. I take from it that the Liberal Democrats are in fact supportive of the bedroom tax and I thank the noble Lord for making that clear. If I have got that wrong again, the noble Lord has a very clear way of demonstrating it. They can join us in the Content Lobby today and the nation will judge them by that. If enough noble Lords were willing to come behind us today to stand up and say that this House does not believe that this is a good policy, or that this cruel, vicious, unfair and inefficient tax should be allowed to stay, a start would be to regret these regulations today. I urge noble Lords to do that and if enough people do, maybe the Government will think again. Maybe this House could start a process that would lead to the bedroom tax being repealed in this Parliament. However, if the Liberal Democrats will not do that and the Minister will not relent, let the country be in no doubt: the Labour Government will repeal this when they come to office. In the mean time, let us send a message today. I beg leave to test the opinion of the House.

Housing: Inherited Social Housing Tenancies

Baroness Sherlock Excerpts

Monday 24th March 2014 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for that Answer—I think. Obviously, this House has not discussed the regulations concerned, although a regret Motion is coming up. I want to ask the Minister two questions, the first on numbers. He has told the House previously that the number of people affected by this loophole in the bedroom tax is small—the DWP says 3,000 to 5,000—but figures obtained under FOI by Labour show that, with more than a third of councils still to reply, already well over 23,000 people are likely to be affected. The new guidance, to which I think the Minister referred, may increase the number still further. Can he therefore tell the House precisely how many people will be affected by the loophole?

Secondly, I want to put to the noble Lord the following statement:

“I worry about what Labour chooses to call the bedroom tax, because so often what is a spare room is in fact a vital part of looking after an elderly person. It enables their relatives to come, it enables carers to be there … I think we introduced that rather without thinking it through very well, and I think that’s costing us”.

It is costing all of us, in discretionary housing payments, in rent arrears and in human misery. Surely the Minister agrees.

[Lord Freud]

My Lords, as I have said in this House previously, the numbers involved with this particular loophole are small. This particular inheritance issue does not change our estimates. A figure of around 5,000 has been attributed to the DWP in defining “small”.

On the FOI figures, it is worth making the point that local authorities are now getting to grips with the actual numbers. The Birmingham figures were quoted quite extensively. It was reported that Birmingham alone had 2,100 cases, the significance being that they make up a large proportion of the figure that we have been looking at. More recently, Birmingham put out a clarification, saying:

“We haven’t finished identifying them at Birmingham so can’t give you an exact number, but the number of possible cases has dropped substantially below the 2100 that was reported in the papers.”

So we can see that some of the FOI responses to which the noble Baroness referred—if that was an example—may be clarified.

We have a process for supporting local authorities and people to make the adjustments through discretionary housing payments, which we have increased in recent years from £20 million to £180 million in the current year—indeed, the signs are that that figure will be underspent. The number of people being affected is coming down reasonably rapidly; it is now below half a million.

Employment

Baroness Sherlock Excerpts

Thursday 20th March 2014 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, this is another wonderful debate. It is one of those times when it is impossible to be the opposition person responding because if I responded to all the things I wanted to today I would be here twice as long. I was beginning to wonder if it would be a job better suited to one of the robots my noble friend Lord Giddens told us about. If they can do stand-up comedy, I am sure that they can respond to a House of Lords debate rather better than the average human.

I have a growing list in my back pocket of noble Lords who I want to one day have a cup of tea with and pick their brains about things that are nothing to do with the subject under discussion. The noble Lord, Lord Shipley, puts more passion into exports than anyone I have ever heard. I would love to talk to the noble Lord, Lord Bilimoria, about beer one day or the noble Lord, Lord Holmes of Richmond, about the Olympics. He increasingly has a speaking style so engaging that I forget that half the time I disagree with him—sadly I do—but I commend him on keeping us awake while offering up subjects for disagreement.

The temptation at this point is for all of us to take the latest labour market statistics, cherry pick them nicely and then throw them across the Chamber in suitable fashion. Obviously, I will do a bit of that because noble Lords would be disappointed if I did not but I will try not just to do that. I want to try to pull out some of the ongoing problems that we all—I hope—accept and acknowledge across the House, on which, while we may disagree on the reason for them and the prescription, we are able to send a signal to those listening to this debate or reading about it outside that all of us in this House take seriously the challenges facing British workers and are committed to doing something about them.

I welcome the rise in the employment rate. It might be small but it is a positive move and one in the right direction, and I am glad to hear about it. However, I want to look a bit underneath that rise at some of the issues that remain. First, an unemployment rate of 7.2% means that 2.3 million of our citizens are unemployed. I thank my noble friend Lord Haskel for reminding us that behind these numbers are human stories—there are 2.3 million individual crises that we need to take seriously. We all need to guard against ever sounding complacent even as things improve. I am also conscious that the number of people unemployed for more than two years has risen and we need to think quite carefully about the question of long-term unemployment—of which more in a moment.

We also still have a serious youth unemployment problem, as highlighted by my noble friends Lord Monks and Lady Donaghy. Some 912,000 young people are unemployed. That is virtually one in five of all young people. The Minister offered up the caveat that that includes people in further education. At this point I am tempted to quote from the ONS footnotes which explain that, in accordance with international guidelines, people in full-time education are included in the youth unemployment estimates if they have been looking for work in the past four weeks—I will stop myself there not to bore the entire House. The guidelines are quite clear as to who is included. Even if young people in full-time education are excluded, and even though many of them may actually be looking for work, we still have the significant number of 628,000 unemployed 16 to 24 year-olds. It is really serious. The Minister said that we are not where we should be when we come to NEETs. A million young people are not in employment, education and training. That is a tragedy for our country. The number of young people claiming jobseeker’s allowance for more than 12 months has doubled under the Government, so we have a significant issue. Last year, long-term youth unemployment rose to its highest level for 20 years and there are still more than 226,000 young people unemployed for more than a year.

I, like many noble Lords, worry about the regional variation. I do not want just to look crude north and south but if I go down the road from Durham, where I live, to Stockton, the number of young people claiming JSA for more than 12 months has nearly trebled under this Government. However, it is not the worst. If I go down to Yorkshire or Lancashire, in Dewsbury and Burnley, long-term youth unemployment is 10 times what it was in 2010. It is not just a northern problem. In Wiltshire, the north of Swindon has seen long-term youth unemployment increase more than fivefold. There are areas where there is a really significant problem. If we cannot offer hope to young people then what do we have to offer them? It is a tragedy not just for the country, which misses out on all their gifts, but for each of those individuals. As the noble Lord, Lord Sheikh, described, the depression and mental challenges that can come from being out of work are very serious and we must therefore all take it seriously.

In terms of prescription, is the Minister ready yet to accept that it was a mistake by the Government to abolish the highly successful Future Jobs Fund, established by the previous Labour Government, which helped more than 100,000 young people into work? After all, his own department evaluated it positively, showing that it had produced net benefits of £7,750 a head after taking account of tax and benefit changes. What about the Youth Contract that replaced it? That was supposed to generate 160,000 wage incentive payments by the spring of next year. The scheme started in April 2012 and by last month there had been just 10,030 payments. Can the Minister tell the House what plans the Government have for getting the Youth Contract back on track? The mainstream youth Work Programme, which has been referred to by many noble Lords, is also having some fairly serious problems. New figures out show that just one in five people who has been on the Work Programme for two years finds a job. In fact, people are more likely to end up back in Jobcentre Plus than they are to end up in work.

As for the sick and disabled people that the Minister referred to, performance for people on employment and support allowance is pretty terrible. Today’s figures show that job outcomes at the 12-month stage are consistently around one in 20, or 5%. According to the Work Programme invitation to tender, that is what you would expect if there were no programme at all. Do we have a programme that is no better than doing nothing at all? Can the Minister tell us what the Government are doing to address that?

The second issue I want to focus on, raised by many noble Lords, is the state of the labour market and the rising insecurity faced by many of those who are lucky enough to be in work. Too many people are still stuck in temporary jobs or in short or zero-hours contracts that make it harder to get a mortgage or save for a pension. All these add to pressures on our social security system. My noble friend Lord Haskel mentioned the issue raised by my noble friend Lady Hollis about people in more than one job who cannot get into the pension system. When we debated the Pensions Bill last month the noble Lord, Lord Freud, indicated that there was some uncertainty around how prevalent zero-hours contracts were. Under pressure from the shadow Business Secretary, the ONS has now revised its figures and now estimates that there are 583,000 people on zero-hours contracts, up from 183,000 in 2010, which is a more than threefold increase.

I can confirm that the next Labour Government will outlaw the exploitative use of zero-hours contracts by banning employers from insisting that zero-hours workers be available even when there is no guarantee of work, by stopping zero-hours contracts that require workers to work exclusively for one business and by ending the misuse of zero-hours contracts where employees are in practice working regular hours over a sustained period anyway. We will put in place a new code of conduct for their use. Workers are feeling seriously insecure and I am sorry to say—as my noble friend Lady Turner pointed out—that government action has made them in practice less secure by watering down many of the protections workers have enjoyed in health and safety, against unfair dismissal and in other areas.

We then come to the point raised by many noble Lords: the cost of living crisis and the problems of low pay. This year marks the 15th anniversary of the national minimum wage, which I regard as one of Labour’s great policy successes—it boosted pay at the bottom without leading to a loss of jobs and it has wide support. I was talking to a couple of students in Durham recently over coffee, and when I explained about the days before the minimum wage, they were staggered. They had no idea that relatively recently you could just pay somebody whatever you wanted. They were amazed. In 15 years it has now become so commonplace that no one can imagine what happened previously. I know that the Government have changed their position, and I acknowledge that they have accepted it was a mistake to oppose the introduction of the minimum wage, but it is worth remembering that before the minimum wage people were being paid as little as a pound an hour. The Low Pay Unit found a worker in a chip shop in Birmingham being paid 80p an hour and factory workers earning £1.22 an hour. This was really serious. However, unfortunately, low pay has got worse under this Government. Working people have seen the value of their wages fall by an average of £1,600 a year, while the value of the minimum wage has fallen by 5%.

The challenge here, I suggest, is that the Government have not ensured proper enforcement of the minimum wage. Some 5% of jobs pay below the minimum wage, according to the Low Pay Commission, but only two employers in four years have been prosecuted. What are the Government going to do about that? Labour has called for a tenfold increase in penalties for companies that do not pay the minimum wage, and we want to see better enforcement, including giving local authorities new powers in this area. We have launched a review of low pay, led by Alan Buckle, deputy chairman at KPMG International. A Labour Government would encourage employers to pay the living wage through new “Make Work Pay” contracts, under which firms who sign up to be living wage employers in the first year of the next Parliament will benefit from a 12-month tax rebate of up to £1,000 and an average of £445 for every low-paid worker who gets a pay rise. In replying, could the Minister tell the House what the Government’s strategy is for tackling the problem of low pay in Britain? I would also be very interested to hear his response to the questions from my noble friend Lady Donaghy and other noble Lords on the gender pay gap and those from a number of noble Lords, including the noble Lord, Lord Giddens, on inequality.

We also have the problem of underemployment. Record numbers of people now want to work full-time but can get only part-time jobs. According to the latest statistics, 1.5 million people are approaching that position. That kind of insecure, irregular and low-paid work adds to social security bills, so that the Government are now on course to spend £15 billion more on social security and tax credits than they budgeted for in 2010. In particular, the total cost to the Exchequer of those working part-time but who want to be full-time is estimated to be £4.6 billion. While I am on techy numbers, I have another question for the Minister. I am sure that he, like me, has dug into some of the small print in the new labour market statistics. I would be fascinated to know what he thinks about the reasons for a couple of things. It seems that the number of hours worked by both full-time and part-time workers has fallen, but that the hours worked in second jobs have gone up. As far as I can tell, the increase in employment seems to be accounted for by self-employment. Could the Minister tell the House what he thinks that is telling us? Does it raise any alarm bells, either about people having to take second jobs to be able to feed their families or about the kind of drift to self-employment of the unattractive kind described by my noble friend Lady Donaghy in her excellent speech?

It would be reasonable to ask me to talk about what Labour would do instead, so I will finish by doing that. First and foremost, the challenge is to ensure that everyone who can work and should be working is in a job. The centrepiece of Labour’s economic plan is a compulsory job guarantee for young people and the long-term unemployed. Anyone over 25 who has been receiving JSA for two years or more, or anyone under 25 for a year or more, would get a guaranteed job paying at least the minimum wage for 25 hours a week and training for at least 10 hours a week.

As with the Welsh Assembly Government’s Jobs Growth Wales programme, we expect many of the jobs to be in small firms. Experience there has shown that once a company has invested six months in a new recruit, the chances are they will want to keep them on after the subsidy has ended. I was very interested by the speech made by the noble Lord, Lord Bilimoria, and I encourage him in a sprit of bipartisanship, given his own experience of entrepreneurship, to engage with us to think about how we can make this work best for small firms. I was very struck by the need to help young people as well to think about what their entrepreneurial skills could bring to the economy. When I sat on the commission on the riots, I met a number of young people who were in prison for riot-related offences. Many of them were very entrepreneurial indeed—just not in the way that we would want them to be. It was not directed. There is so much talent out there which we could capture and direct. It is important to give people a chance to be out there and to make sure there is a limit to how long they can spend disconnected from the world of work.

The investment in the compulsory jobs guarantee would be fully funded by repeating the tax on bankers’ bonuses—which, I note from the figures, are rising again—and by a restriction on pension tax relief for those on the highest incomes. We also need those young people to be able to move on and progress in the labour market, so Labour would take action to tackle the serious skills gaps that are holding back individuals and, indeed, our economy. A number of noble Lords made some very interesting points, including the noble Lord, Lord Shipley, and my noble friend Lord Soley about the skills challenge and how that is tacked in schools as well as in the economy. At its very simplest, almost one in 10 people on JSA does not have basic English and more than one in 10 do not have basic maths. If you do not have those skills, you are much more likely to make repeat claims for benefits and we need to do something about that.

I say to my noble friend Lord Soley that we do not have a problem just with coding skills but with IT skills as a whole—nearly half of those on JSA do not have even basic e-mail skills. If they are going to make job applications, not just online but to any employer, they need to have basic IT skills, and it is up to us as a country to make sure that we help them to do that. Labour would require jobseekers to take training if they did not meet those basic standards of English, maths and IT—not down the road when they fail to get a job but alongside their job search. I would also be interested to hear the Minister’s response to the broader and very important issues about productivity and skill levels raised by my noble friend Lord Haskel and other noble Lords.

There are some very serious issues here. We have some good progress being made, at least in headline figures, but some very serious problems in long-term unemployment and youth unemployment and in an economy with insecure jobs, poor pay and instability. We need to tackle these. Labour would pledge to get people into work, guaranteeing jobs for the long-term unemployed and the young unemployed. We will tackle the crisis in living standards and the scourge of low pay, address the skills gap and make work pay. We believe it is possible to get Britain working again, with decent jobs that pay enough to feed a family, not just at the top and in the rich areas but right across the country—in Stockton, Dewsbury, Burnley and Swindon. People deserve nothing less.