Arcadia Pension Fund

Lord Blencathra Excerpts

Tuesday 8th December 2020 Lords Chamber

[Baroness Stedman-Scott (Con)]

As always, the noble Baroness raises an important point for people who are in difficult positions. Since January 2018, following its work on the British Steel pension scheme, the Financial Conduct Authority has been working closely with the Pensions Regulator and the Money and Pensions Service to ensure that they monitor pension transfer activity in defined benefit pension schemes that may be subject to increased transfer activity. The three organisations have increased the frequency of their meetings during Covid-19 to consider schemes at risk of higher transfer activity.

[Lord Blencathra (Con)]

My Lords, let us be blunt. Debenhams collapsed after three ruthless vulture funds loaded it with debt and then cleaned it out to the tune of £1.2 billion in dividends. Arcadia was legally robbed by the Greens to the tune of another £1.2 billion in dividends. In the United States, the regulator would have gotten back every cent and they would all be serving life without parole. When are we in this country going to get some proper regulation and legislation to tackle people whose behaviour is de facto criminal, but at the moment technically legally okay?

[Baroness Stedman-Scott (Con)]

I and the whole House absolutely agree that we need to ensure our legislation can deal with those who would plunder pension schemes. That is why we currently have a Pension Schemes Bill going through Parliament. Let me be clear. Where there is mishandling of a pension scheme, the Bill extends the Pensions Regulator’s sanction regime, introducing the power to issue civil penalties of up to £1 million and three new criminal offences, including a new sentence of up to seven years in prison for bosses who run pension schemes into the ground or plunder them to line their own pockets.

Pension Schemes Bill [HL]

Lord Blencathra Excerpts

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 30th June 2020 Lords Chamber

There is much in the Bill, and particularly in the government amendments which my noble friend has so eloquently spoken to today, that I support. My main concern is to ensure that the issue of women entering the pensions market is addressed in the Bill and in the enabling regulations.

[Lord Blencathra (Con) [V]]

My Lords, I will speak to this group and pass observations briefly on other issues raised by the Delegated Powers Committee that are covered by other amendments, so that I do not have to speak again and take up the time of the House.

I begin by saying how nice it is to see my noble friend and roommate Lord Naseby back in the Chamber. I also see that we share the same non-barber. In contradiction to the noble Lord, Lord Foulkes, I want pensioners, not youngsters, on my pension board.

As chair of the Delegated Powers and Regulatory Reform Committee, I give a very warm welcome to these concessions from the Government in Clauses 11 to 17 and Clause 25. As noble Lords will know, our report was highly critical of a number of delegated powers in the Bill, and it would be churlish of me not to acknowledge that the Government, and particularly my noble friend the Minister, have listened to quite a bit of what we recommended. I am sure that the whole committee would be delighted if the Minister would go one step further and accept our remaining recommendations, but that might be a bridge too far for her.

The government amendments to Clauses 11 to 17 now mean that all regulations, and not just the first ones, made under the provisions will have to be affirmative. We said in our report that the Government had failed to justify the first-time affirmative regime. We accept that there will be measures where the first regulation is major and should be affirmative and that subsequent ones might be just little tweaks where the negative procedure might be appropriate. However, that is not always the case, and we see a growing tendency among government departments, in addition to bunging highly inappropriate Henry VIII clauses into every Bill, to use this ploy of applying the first-time affirmative procedure and then the negative procedure for all subsequent regulations. The subsequent regulations here could be as important as the first regulation and I thank the Minister for making the change. The same reasoning applies to Clause 124, and I regret that the Government will not make that affirmative too.

We all accept that speed is often essential, but there is an alternative to the negative procedure which is just as speedy: the made affirmative procedure, whereby the Government lay the regulation, it comes into force immediately and then Parliament has 40 days to confirm it. That is a far better procedure than the Opposition having to put down a Motion against a negative resolution. This procedure would deal also with the amendment of the noble Lord, Lord Sharkey, on the negative procedure. I pay tribute to my illustrious predecessor, my noble friend Lady Fookes, as chair of the Delegated Powers Committee. Today, she made very telling points on the made affirmative procedure and first-time affirmatives.

I welcome the government amendment to Clause 25 too. We generally deplore Henry VIII powers, and for very good reasons: they deprive Parliament of the opportunity to scrutinise properly legislation that should go through all the procedures applied to Bills and Acts of Parliament. It is quite wrong to use the negative procedure, where there is no discussion whatsoever, for Henry VIII powers. At least with the affirmative procedure there is 90 minutes of debate.

As for the government amendment to Clause 47, we said:

“The fact that the Government have not yet worked out how multiple-employer collective money purchase schemes should be regulated has led to very wide powers being conferred by clause 47(3) to (5). Subsection (3) confers a power on the Secretary of State to make further provision in regulations about multiple-employer collective money purchase schemes. Although specific things are mentioned in subsection (3) as to what the powers may be used for. These are not exhaustive of the things which may be dealt in the regulations.”


We therefore recommended that the delegation of powers was inappropriate.

My noble friend the Minister’s amendment goes some way to flesh out the details of the plans, but we are still concerned that they give extensive powers to the Secretary of State. I was going to award the department and my noble friend eight out of 10, but in view of her generosity of spirit, graciousness and courtesy today, I will upgrade that to nine out of 10. While I would have liked all our recommendations to have been accepted, I congratulate the department and my noble friend for moving on so many of them when other Ministers and departments have obstinately refused to budge on anything.

[Baroness Bennett of Manor Castle [V]]

I thank your Lordships’ House for allowing me to speak. I apologise for the earlier confusion. I also apologise in particular to the noble Lord, Lord Balfe, for upsetting the rhythm of his speech. I thank him and other noble Lords for providing an introduction to Amendment 33. I must pay tribute to the campaign group ShareAction, which has done a lot of work on the amendment. I know that it has informed other noble Lords about it.

I moved the amendment in Committee. In response, the Minister pointed to the consultation on the future of trusteeship, which concluded that, due to a lack of consensus on how to address the issue, it would look at setting up, and is setting up, an industry working group to look at the diversity of pension boards. While this is welcome, we need the data to inform that work. I ask the Minister to consider incorporating this into future versions of the Bill.

A further development has happened since we last debated the Bill. There has of course been a great upswelling of frustration and understandable anger, represented by the Black Lives Matters movement. The issue of ensuring that all voices in our society are heard and have decision-making powers is particularly pressing. I urge Members of your Lordships’ House to consider it.

In response to the amendment in Committee, the Minister stressed that she wanted the pensions dashboard to focus on the provision of basic information. That is why the amendment has been amended so that it does not refer to this information being on the pensions dashboard, but rather that it would simply be reported. Information on diversity could be published elsewhere. That might be on the Pensions Regulator’s website, or as an annexe to its planned SIP repository.

Other noble Lords have referred to the level of inequality in our society and the lack of diversity. I will finish by reflecting on what the noble Baroness, Lady McIntosh, said, and the fact that a 2016 survey showed that on average 83% of pension boards are male and that a quarter are all male. That reflects another crucial disparity: we all know that there is a very large pay gap between men and women, but the pensions pay gap, at 40%, is double the pay gap. These inequalities have to be tackled in our society along with levels of inequality and poverty. We have had a lot of discussions about intergenerational fairness, but we must not forget that there are already a lot of people at pension age now who really are struggling to get by in this difficult world.

I thank your Lordships’ House for the debate that we have had thus far and I look forward to further debates.

Unemployment: Support

Lord Blencathra Excerpts

Thursday 21st May 2020 Lords Chamber

[Baroness Stedman-Scott]

The issue of care leavers is very important. We are providing a range of support. I am not aware of any changes to our position on universal credit regarding them, but I will take the matter back to the department and write to the noble Baroness.

[Lord Blencathra (Con)]

My Lords, I am concerned about young people, so I ask my noble friend what tools are available to help young people looking for employment to match their skills to current labour market vacancies.

[Baroness Stedman-Scott]

The Government have announced a National Skills Fund of £2.5 billion so that we can continue to upskill young people. Jobcentres are continuing to support them through these difficult times: they have started to re-engage with new and existing claimants and are reviewing all measures at their disposal. The DWP is in discussions with local partners, national partners and the Youth Employment Group set up by the Prince’s Trust. More importantly, we are working with all departments across Whitehall to make sure that a range of appropriate support is available to young people, including those from complex backgrounds, as raised by the noble Baroness, Lady Janke.

Automatic Enrolment (Offshore Employment) (Amendment) Order 2020

Lord Blencathra Excerpts

Tuesday 19th May 2020 Lords Chamber

[Lord Blencathra (Con)]

My Lords, I am grateful to my noble friend the Minister for setting out the rationale for these instruments, which I support. However, I rather like sunset clauses: they force Governments to come back to Parliament to justify the continuation of the legislation under review.

The impact assessment accompanying the instruments says:

“UK legislation which came into force on or after April 2011 had to include a sunset clause where that legislation imposed a net burden on business or civil society organisations. The secondary legislation which extends automatic enrolment … into a workplace pension … contains such a clause which expires on 1 July 2020. Without government intervention, the AE … will fall away, contrary to the Government’s policy intention, as most recently set out in the 2017 AE Review: Maintaining the Momentum. Unless this legislation is renewed … workers commencing employment on or after 1 July 2020, or those existing workers who opted-out of being automatically enrolled into a qualifying workplace pension before this date, would not benefit from the legal obligations that apply to their employers to automatically enrol them.”


I agree entirely with the Government’s policy on this, but I understand that the Government considered two options. One was not to legislate, but that was a bizarre option and a non-starter. The second was to scrap the sunset clause for all time, as these regulations do. What was not considered, it seems, was a new time limit. I simply ask my noble friend the Minister: why not renew it for a further five or eight years and then let Parliament have another look at it then, as we are doing today? That is the only point on which I want clarification from my noble friend.

Finally, I went out on to oil rigs in my younger days, when I lived in Aberdeen, which the noble Lord, Lord Foulkes, referred to, and I can tell the noble Baroness, Lady Burt, that it is not a great working environment and that they deserve every penny. They deserved that even in the good days, as they do now in the bad days.

I apologise—I have one final point. I congratulate the noble Baroness who has intervened today to remind speakers of the time limit. I call on Lords authorities and Lords Deputy Speakers to cut off and mute all Peers who exceed their time limit by 30 seconds.

Family Relationships (Impact Assessment and Targets) Bill [HL]

Lord Blencathra Excerpts

2nd reading (Hansard): House of Lords
Friday 23rd February 2018 Lords Chamber

[Lord Blencathra (Con)]

My Lords, it is a pleasure but a rather daunting task to follow the two such erudite and knowledgeable speeches made so far on this Bill, and I congratulate the noble Baroness for bringing her wealth of knowledge and teaching to bear on it. I strongly support my noble friend’s Bill and the dedication that he has shown to this issue over many years.

I want to work backwards in the Bill and start with Clause 3, which sets targets for family stability and asks the Government to publish objectives and targets and proposals and policies to meet those targets. I assume that by targets my noble friend does not mean numerical targets—that X% or Y% of families must reach certain goals—but targets more in the sense of objectives. I want to take a step back behind the Bill and ask why it matters. What is the point of having strong and stable families? Why is it important?

I discovered many years ago in the Home Office, as Criminal Justice Minister, some fascinating statistics on how the level of criminality among young people depended on the strength of the family relationship. I am absolutely certain that that has not changed one iota over the last 20 or 30 years; we still get the same statistics and trends coming through. I choose my words very carefully here, as I do not want to be misconstrued, but it would seem that in a strong family certain factors are present, while in a weak family certain factors are lacking. A weak family is one where a single parent is trying to bring up children on his or her own. Usually, that single parent will be a woman, not through any fault of her own, but because the father has cleared off and abandoned his responsibilities. A more difficult factor is when the person is trying to bring up two or three children who, increasingly, may have different fathers, and she is struggling on her own.

The statistics also show that, if a factor is present where one or more of the parents or close relatives have been engaged in criminality, the children of that family face another uphill task to be on the straight and narrow. When there is one or more person unemployed, that is another, additional factor bearing down on a family. When the children are truanting and no one is doing anything about it, or when they are not in a loving or caring relationship, those are further negative factors.

I am not suggesting for one moment that, in any family where one or a couple of those factors are present, the children inevitably will go on to a life of criminality, but all the statistics bear out the facts that, the more of those negative factors are present, the greater the chance that the children of that family will themselves not have stable families in future, and the children themselves may go on to a life of criminality. I am making no judgment at all on the sex of the parent; that is irrelevant for these purposes. Two people bringing up children is more than twice as good as one person trying to bring up children. That is why strong and stable family relationships are important and why my noble friend’s Bill is important.

I move on to Clause 2. I am so pleased that my noble friend has suggested in the Bill that the Secretary of State must carry out an assessment before extending it to local authorities. That is the right thing to do. I am worried that we should get this right in central government first, before we extend it to local authorities. We all know that there are some excellent and brilliant local authorities out there, but there are some pretty daft ones as well—and I can imagine some of them carrying out a family impact assessment when it is quite unnecessary, wasting money and discrediting the whole thing. I can imagine, when a local authority decides to change the colour or shape of the recycling bins or boxes, it could waste months doing a family impact assessment that is not necessary.

However, in housing policy a family impact assessment is absolutely vital, as it is with planning policy. I am appalled with the number of houses that are built without gardens these days. It is bad for the environment—no food for the hedgehogs or blackbirds—but it is appalling for the children to have no play space. I have seen that around the country. So, yes, planning policy impacts families, not just whether you have bungalows for older people or enough bedrooms for children but whether you have a play space as well. So that is an area where it may be appropriate.

That brings me on to suggest that, before we extend this to local authorities, we would need a sort of checklist for them—things to think about that may impact on families. If there is just a general obligation for local authorities eventually to carry out a family impact assessment, that could damage the policy because they would be missing out in some areas and doing it improperly in others. So a sort of checklist may be helpful. Obviously, it should include education policy, social security and housing policy, as well as health policy when it is done locally. But what about care homes for the elderly? What does that have to do with families? Well, if they are separating a married couple who have been together for 50 years, that is a family. That is a grey area that needs to be thought about. So it is worth while doing an assessment and carefully thinking it out before we extend this to local authorities.

That brings me on to central government. In the briefing I read, I was surprised to see that only three departments—the Department for Work and Pensions, the Department for Education and the Ministry of Defence—referred to specific instances in which the family test has been applied. Noble Lords may ask what it has to do with the Ministry of Defence. There are two very important issues. First, the Ministry of Defence faces a problem at the moment with a shortage of money—it will always be short of money—and of recruitment. You cannot have an Army based on young, single men and women. We are losing married people from our Armed Forces at a rate of knots. Why are we losing them? Because the Ministry of Defence housing for our soldiers, sailors and air men and women is an absolute disgrace. It always has been and, at the moment, it looks like it always be.

In the press this morning, I read two Ministry of Defence stories—the first about the disgraceful treatment of a brave and heroic Army major who has been investigated for the seventh or eighth time for alleged offences in Iraq. It is an absolute disgrace that we have not stopped that. But the bigger story was about the number of people resigning from the Armed Forces because the accommodation in Aldershot—and Aldershot is not any worse than the rest—was so deplorable. As one woman said, “My tent in Afghanistan was better than the housing I got from the Ministry of Defence in Aldershot”. Without going further down that route, I would love to see the Ministry of Defence’s assessment of its housing and an impact assessment on families. If it could get it right for families, it would solve an awful lot of its other military problems.

Five departments said that they produced tailored guidance or tools for applying the family test, which I take to be a sort of checklist, and that brings me on to my point about a checklist for central government. If these departments have produced a checklist—which I assume will say, “If you are going to have a policy in areas X, Y and Z, apply the family test; these other areas are irrelevant and nothing to do with families, so you do not have to do the test”—that would be a very worthwhile tool and would make it more difficult for the Government to refuse my noble friend’s Bill.

I was delighted to read this morning that my right honourable friend Michael Gove is planning to put in place a deposit scheme for plastic bottles. He is going to tackle the plastic bottle scourge, and rightly so, but I hope that he would not have to do a family impact assessment on that, because it is an area that seems quite irrelevant to families, although I remember as a boy making a lot of pocket money—threepenny bits at the time—collecting glass bottles, the ones with the screw tops. I hope that Michael Gove’s scheme will allow kids to collect all these bottles and get 20 pence for them; that would really clean up the countryside.

I am being slightly facetious there, but we need to make sure that central government does not obviate its responsibilities here by saying, “The Bill is too wide-ranging; we cannot have a family test for everything—some things are irrelevant to families”. Yes, some things are irrelevant to families, but let us come up with the checklist of things that are relevant, so that government departments cannot get round them. The Bill can of course have a regulation-making power to make sure that, if a new area crops up in future, it can be added to the checklist of things that government departments must do. We could make the case that a whole range of things tangentially affect families—cycling, climate change, overseas aid—but let us concentrate on the key areas and the key departments first.

It is vital for the Department of Health, social security and the Home Office. The Home Office has apparently not done any of this, but it must do family impact assessments. With its policy on law and order, crime and policing, it is one of the key departments affecting families. I had not thought of transport until the noble Baroness mentioned it. Getting on and off buses with prams and pushchairs and so on affects families. We should find the key government departments that make the biggest impact on families and make sure that, through this legislation, they are doing family impact assessments in the areas where families are affected. Then, if we get it working in the key departments of central government, in due course it can be extended to the other departments and then to local authorities.

With those little caveats, I strongly support my noble friend’s Bill and I wish him all success. I know that the Minister will have to give the sort of generic speech that every Minister gives, probably rejecting the Bill—as we heard for the last Bill a few moments ago and as I heard for my Private Member’s Bill; there is a market for coming up with a generic ministerial rejection speech—but I hope that is not the case today. I hope I am proven wrong.

Welfare Reform and Work Bill

Lord Blencathra Excerpts

Monday 21st December 2015 Lords Chamber

[Baroness Lister of Burtersett (Lab)]

My Lords, I shall speak to Amendments 74 and 93. I am grateful to the noble Lord, Lord Kirkwood, for his support for both, and the noble Earl, Lord Listowel, for his support for Amendment 93. The aim here is to ensure that we debate the human rights implications of the cap, particularly regarding children and women. I am grateful to CPAG for its help with these amendments, and I declare an interest as its honorary president. I also support the other amendments in this group.

Amendment 74 would require the exemption of households from the benefit cap where necessary to avoid a breach of convention rights within the meaning of the Human Rights Act 1998. It would send a clear message that Parliament intends a cap to be implemented in a human rights-compliant way. It would enable tribunals and courts to exempt families from the operation from the cap so as to avoid a breach of human rights without having to make a declaration of incompatibility. This is necessary because by incorporating the list of benefits included in the cap in primary legislation in Clause 7, which was not the case before, rather than leaving them in regulations as now, it appears that the Government are trying to avoid legal challenge under the Human Rights Act other than by way of such a declaration.

Amendment 93 would require the Secretary of State’s review of the cap to take into account the need to safeguard and promote the welfare of children. The phraseology echoes that in Section 11 of the Children Act 2004 and Section 55 of the Borders, Citizenship and Immigration Act 2009. In ZH (Tanzania) the noble and learned Baroness, Lady Hale, found that this effectively incorporated Article 3 of the UN Convention on the Rights of the Child, which requires the welfare of the child to be treated as “a primary consideration”.

[Lord Blencathra (Con)]

The noble Baroness quoted the noble and learned Baroness, Lady Hale, which I presume was from the Supreme Court case which ruled just a few months ago. However, the noble Baroness will be aware that the Government were taken to court on this very point of not implementing the UNCRC, the court ruled by three to two against Lady Hale and the judgment was that the Government were perfectly correct. The court went on to say, quoting some other distinguished noble Lords in this House, that it would be quite inconceivable for an unincorporated charter like the UNCRC to be given force in English law.

[Baroness Lister of Burtersett]

I am grateful to the noble Lord. I will come on to that case; I was talking about an earlier case that the noble and learned Baroness, Lady Hale, was involved in. I am quite aware of the outcome of the case heard earlier this year, but I thank the noble Lord for providing a trailer for what I will say later.

These amendments are prompted in part by the inadequacy of the Government’s own assessment of the human rights implication of the cap and in part by the judgment in the Supreme Court case that the noble Lord mentioned on the cap earlier this year. Both the Joint Committee on Human Rights, of which I was then a member, and the Office of the Children’s Commissioner have emphasised that child poverty is a human rights/children’s rights issue. Lowering the benefit cap clearly has implications for the number of children living in poverty. An internal assessment leaked to the Guardian in May suggested that if parents are unable to avoid the cap through paid work, it could plunge a further 40,000 children into poverty.

The impact assessment says nothing on the subject of child poverty, yet when I tabled a Written Question to ask what the impact on the number of children in poverty would be, I was referred to that impact assessment. As I said in our first session, I consider that rather insulting, as the implication was that I had not read it. I remind the Minister that the Companion makes it clear that Ministers should be as,

“‘open as possible’ in answering questions”,

as this is,

“inherent in ministerial accountability to Parliament”.

I therefore ask the Minister now, what is the department’s estimate of the impact on child poverty of reducing the cap, given that we know from the Guardian that such an estimate exists? I am quite happy to accept any provisos about possible behavioural responses but this is not a good enough reason for refusing to provide Parliament with such a crucial piece of information. Also, can the Minister tell us how the Government responded to the questions from the UN Committee on the Rights of the Child on whether a proper child rights impact assessment had been conducted and,

“the measures being taken to mitigate negative impact on the enjoyment of the rights of children, particularly those in vulnerable situations”?

The impact assessment has a section entitled “What are we doing in mitigation?”. I could summarise the contents by saying, “Not very much”. It says nothing at all about mitigation of the negative impact on the rights of children, despite the request from the UN committee. The Equality and Human Rights Commission, too, has criticised the impact assessments and the human rights memorandum which accompany the Bill for failing fully to assess the impact on equality and human rights. It warns that there is a risk to the UK’s compliance with its obligations under national and international human rights law, particularly with reference to children, women and disabled people, and therefore it gives its firm support to these amendments.

The impact assessment does at least acknowledge that women are more likely to be affected than men, as 64% of claimants who have their benefit reduced are likely to be single females—mainly lone parents. Sixty-three per cent of households capped to date have contained a child under five, and in total more than twice as many children as adults have been hit by the cap.

In the human rights memorandum, the Government note the Supreme Court’s decision, which I shall come to now. They assert that they have fully considered their obligations under the UNCRC—in particular, Article 3, which concerns the duty to treat the best interests of the child as a primary consideration. However, their analysis of the best interests of the child seems to rest on the proposition that it is in the best interests of children overall to have parents in work and that work remains the surest route out of poverty.

That would be laughably inadequate if it were not for what is at stake. As the EHRC observes, it betrays a particular lack of understanding regarding compliance with the UNCRC. It may well be in the best interests of many children for parents to find work but it will depend on the work available and on the circumstances—as has already been discussed on earlier amendments, work can represent a cul-de-sac rather than a route out of poverty. Moreover, this bald statement ignores the fact that, as my noble friend said, the great majority of those who were already subject to the cap did not find work as a result. Is it really in the best interests of children to have their standard of living reduced even further when a survey, reported in the first-year review of the operation of the cap, found that more than a third of those affected had already had to cut back on household essentials and many had incurred debt?

In fact, the Government’s position pretty much ignores the judgment of the noble and learned Baroness, Lady Hale—echoed by the noble Lord, Lord Kerr— that it,

“misunderstand[s] what article 3(1) of the UNCRC requires”.

The final decision does not alter that fact. She continues:

“It requires that first consideration be given to the best interests, not only of children in general, but also of the particular child or children directly affected by the decision in question. It cannot possibly be in the best interests of the children affected by the cap to deprive them of the means to provide them with adequate food, clothing, warmth and housing, the basic necessities of life. It is not enough that children in general, now or in the future, may benefit by a shift in welfare culture if these are also the consequences. Insofar as the Secretary of State relies upon this as an answer to article 3(1), he has misdirected himself”.

She also pointed out that the children affected suffer from a situation which is none of their making and which they themselves can do nothing about. Can the Minister now give a more convincing response to the weighty charge that the cap, and therefore these clauses, are not in the best interests of children? As it is, the failure to give proper consideration to the best interests of the child could leave this measure vulnerable to a further future legal challenge.

In his judgment, Lord Carnwath referred to a point—mentioned by my noble friend—made during the passage through this House of the Welfare Reform Bill, which became an Act in 2012. That point was that most of the savings from the cap resulted from the inclusion of child benefits and child tax credits, even though these will be received by the great majority of those on median earnings. I shall return to this when I speak to Amendments 76 and 77. Although ultimately, Lord Carnwath sided with the judges who did not allow the appeal, he still considered that the cap did not comply with the UNCRC, and he expressed the hope that the Government would address the implications of this when it came to reviewing the cap. Even Lord Reed, who spoke for the majority in disallowing the appeal, linked the proportionality assessment to the fact that the cap was set at median earnings. Now that, as my noble friend has made clear, there is no clear rationale for the level of the cap, as it is pushed to be below median earnings, that proportionality judgment might start to look rather different.

I have focused mainly on the implications for children’s human rights, but, as I said, the human rights of women and disabled people are also at issue. I am sure we will hear more about the more recent High Court case that found indirect discrimination against disabled people through the impact on carers, but I will not go into that now. These wider implications are another reason for my amendment to Clause 7, which requires general human rights compatibility.

I believe that these amendments should be uncontroversial. After all, if the Government are so confident that the cap is compliant with human rights instruments, they have nothing to fear from them. I hope, therefore, that the Minister will be willing to take them away and consider them.

--- Later in debate ---

[Lord Lansley]

The point I was answering was in relation to people in work, so that is a slightly different point. In relation to that point, too, as the noble Baroness has brought it up, the structure of the benefit cap is designed to ensure that people who are in a support group under the employment and support allowance, those in receipt of personal independence payments, and so on—there are number of exceptions—are not covered by the benefit cap. Those households are not covered by the benefit cap. We are focused, to a large extent, on those who have a capability for work even if that capability may be restricted in some ways.

I did not complete the point I was making in response to the noble Baroness, Lady Lister. Many years ago I was deputy director-general of the British Chambers of Commerce— and I do not think it has changed in the slightest—and I know that what matters to employers is that people have been in work and have all the attributes of somebody who has been in work. The longer one is out of work the less likely one is, as we know, to have those attributes. Therefore, the entry into work, even if it might not necessarily be the right job or be regarded as suitable or appropriate, will by its very nature make someone more likely to have those attributes necessary for work.

That is just one of the reasons why the benefit cap is needed. It is also needed because of a sense of the fairness between those who are in work and those who are not. The noble Baroness, Lady Sherlock, said there was a relationship with average earnings. That was true when the benefit cap was introduced, but to assert that it is some kind of mechanistic or scientific relationship is misleading. It is a judgment. A judgment was made, when there was previously no benefit cap to try and establish a benefit cap at a level that was regarded as fair.

I have to tell noble Lords—again coming from recent experience of fighting elections and being in the other place—that the public support the benefit cap. They regard it as still generous—too generous in many respects. When one looks at the relationship with those who are in work—the four in 10 households, broadly speaking, as was mentioned—who are not earning any more from their work than would be available through the benefit cap by the accumulation of benefits, they do not regard it as fair or reasonable for people to accumulate more by way of benefits than they are able to access by work.

[Lord Blencathra]

My noble friend has just said that from his recent experience in the other place he found that large numbers of the public supported the benefits cap. Can he tell us what Members of the Labour Front Bench in the other place were saying about the benefit cap, until quite recently?

[Lord Lansley]

Until recently—I do not know what the most recent experience is, but certainly until September this year—the Opposition Front Bench in the other place said that they supported the principle of the cap. I suppose they would say that they support the principle of the cap but at the level that it is currently set.

That brings me to the third reason why we have a benefit cap—namely, that we have to decide our priorities for distributing any given level of public expenditure. Of course, we know that Parliament has supported an overall cap on the welfare budget. Frankly, it is better for it to be distributed in relation to specific need than for some households to accumulate it to a greater extent.

If one were to seek to sustain the benefit cap at the level at which it currently applies, rather than apply it at the level proposed in the Bill—I hope that this House would not go down that path—that begs the question of where that money is to come from. Where else in the welfare budget can that saving be made because this step is still part of a necessary process of reducing the deficit over this Parliament? Where there is public support for this measure, where jobs are available in the economy and where there is scope to deliver an additional step towards reducing the deficit and heightening incentives for work while at the same time focusing the available resources on giving support—as we debated earlier in Committee—to those who we want to assist into work, and giving specific targeted support to the maximum extent we can where people have identified specific needs, Ministers are right to say that we should be doing that rather than allowing this benefit to be accumulated by some households to a greater extent.

--- Later in debate ---

[Lord Blencathra]

My Lords, it is a pleasure to follow the noble Baroness, Lady Hollis. She said at one point that the public do not understand how social security works. That is very true; I spent many years as a Member of Parliament and understood only a fraction of it, and I believe that very few people understand the details of the 70,000 regulations. However, what the public do understand is that when they have to move to another part of the country and cannot afford a mortgage on £26,000, or if they have to live in a house which they would ideally like to be bigger, better or different, or in a better street, and they cannot afford that, but then they see someone else or a family getting £26,000 or more in benefits, they feel it is unfair. You do not have to know how the regulations work to have that instinctive feeling. That is why all parties strongly supported the benefits cap when it was introduced by the previous Government. I appreciate that the Labour Party now has some reservations about it and I will comment on that later.

I had intended to talk only about the level of the cap and how it was fair. However, in view of the comments of the noble Baroness, Lady Lister, on the UNCRC, which I thought I would be dealing with on another amendment, perhaps I could make those comments in this speech in answer to her and I will not speak again on UNCRC matters. On the level of the benefits cap, as politicians we have different views but this was part of a case before the Supreme Court last year. It was just decided a few months ago and five of the noble judges ruled in the Government’s favour that the benefits cap was not contrary to the rights of the child and not in breach of the ECHR.

In looking at the level of the cap, Lord Reed for the court said that:

“In relation to the related criticism that children in households affected by the cap are deprived of the basic necessities of life, that argument was rejected by the courts below, and I see no basis for reaching a different conclusion. As I have explained, the cap for a household with children is equivalent to a gross salary of £35,000 per annum, higher than the earnings of half the working population in the UK, almost three times the national minimum wage, and not far below the point at which higher rate tax becomes payable”.

That was of course in relation to the level of the cap then and we are now talking about a reduction of 12.5%—but, based on the strong views of the court, I can see no reason why it would come to a different conclusion if the cap were lowered by 12.5%.

In looking at how families had been forced to move, the learned judge went on to say:

“In relation to the argument that households with children cannot reasonably be expected to move house … Millions of parents in this country have moved house with their children, for a variety of reasons, including economic reasons. It is, in particular, not uncommon for working households to move out of London in order to find more affordable property elsewhere. It is also necessary to recognise that transitional financial assistance is available for households affected by the cap who cannot move until suitable arrangements have been made in relation to the children, as I have explained”.

Those views were taken from a 95-page report of the Supreme Court, having heard days and days of argument.

[Baroness Lister of Burtersett]

I may have misheard, but I think that I heard the noble Lord say that all five judges said that the cap complied with the UNCRC on the rights of the child. Is that right or did I mishear?

[Lord Blencathra]

If I said that, I misspoke. It was three out of five: a majority verdict of the Supreme Court.

[Baroness Lister of Burtersett]

So some of the five said that it did not comply but the fact is that the UNCRC is not incorporated into UK law, and therefore that was not sufficient for the appeal to be allowed.

[Lord Blencathra]

I take the noble Baroness’s point but that was not the view of Lord Reed, which I read. I can see nowhere in his judgment where he said that we did not comply with the UNCRC but that nevertheless, because it was not incorporated, he was going to find in the Government’s favour. That is not my interpretation of reading those pages whatever.

Let me move on to the UNCRC, since we have got there. First, the judge made the point:

“As an unincorporated international treaty, the UNCRC is not part of the law of the United Kingdom (nor, it is scarcely necessary to add, are the comments upon it of the UN Committee on the Rights of the Child)”.

Then comes the crucial point:

“‘The spirit, if not the precise language’, of article 3(1) has been translated into our law in particular contexts through section 11(2) of the Children Act 2004 and section 55 of the Citizenship, Borders and Immigration Act 2009”.

The judge was making it very clear that although the exact wording of the UNCRC was not applicable in the UK, the Government, through legislation, had incorporated the principles of it and were therefore complicit.

The judge went on to say that,

“it is therefore inappropriate for the courts to purport to decide whether or not the Executive has correctly understood an unincorporated treaty obligation”.

He then quoted Lord Bingham of Cornhill’s comments from a famous judgment, which I will leave aside, before noting:

“Lord Brown of Eaton-under-Heywood expressed himself more emphatically … ‘It simply cannot be the law that, provided only a public officer asserts that his decision accords with the state’s international obligations, the courts will entertain a challenge to the decision based upon his arguable misunderstanding of that obligation and then itself decide the point of international law at issue’”.

The noble Baroness, who I greatly respect and who is very knowledgeable in this matter, quoted extensively I think from the noble and learned Baroness, Lady Hale, who took a rather more fundamentalist view of incorporating the UNCRC into English law. She has held that position for some time, but it was not the view that the court collectively took.

I will conclude taking extracts from these turgid 95 pages shortly. The judge went on to say:

“Finally, it has been explained many times that the Human Rights Act entails some adjustment of the respective constitutional roles of the courts, the executive and the legislature, but does not eliminate the differences between them: differences, for example, in relation to their composition, their expertise, their accountability and their legitimacy. It therefore does not alter the fact that certain matters are by their nature more suitable for determination by Government or Parliament than by the courts. In so far as matters of that nature have to be considered by the courts when deciding whether executive action or legislation is compatible with Convention rights, that is something which the courts can and do properly take into account, by giving weight to the determination of those matters by the primary decision-maker”.

That decision is,

“relevant to these appeals, since the question of proportionality involves controversial issues of social and economic policy, with major implications for public expenditure. The determination of those issues is pre-eminently the function of democratically elected institutions. It is therefore necessary for the court to give due weight to the considered assessment made by those institutions. Unless manifestly without reasonable foundation, their assessment should be respected”.

In conclusion, the judge says:

“Many of the issues discussed in this appeal were considered by Parliament prior to its approving the Regulations … Furthermore, that consideration followed detailed consideration of clause 93 of the Bill, which became section 96 of the 2012 Act. It is true that the details of the cap scheme were not contained in the Bill which Parliament was debating, but the Government’s proposals had been made clear, they were challenged by means of proposed amendments to the Bill, and they were the subject of full and intense democratic debate. That is an important consideration. As Lord Bingham of Cornhill observed in R (Countryside Alliance) v Attorney General … ‘The democratic process is liable to be subverted if, on a question of moral and political judgment, opponents of the Act achieve through the courts what they could not achieve in Parliament’”.

He went on to say:

“The same is true of questions of economic and political judgment”.

I apologise for quoting extensively from those bits of the judgment. I shall not speak again on UNCRC issues, but the noble Baroness provoked me in the sense that she relied heavily on the UNCRC to somehow suggest that the Government were acting improperly or illegally and had something to fear from the Human Rights Act. That was not the view of the majority of the court.

[Baroness Lister of Burtersett]

I do not want to provoke the noble Lord any further, but would he not accept that Lord Carnwath, in accepting that the appeal was unfounded—whatever the legal term is—and that the issue was one for Parliament, specifically asked the Government when they reviewed the benefit cap to consider what the judges had said about Article 3.1 of the UNCRC? That was my point—the Government have reviewed the benefit cap, and it will be even less in the interests of children than it was at the higher level.

[Lord Blencathra]

I thank the noble Baroness. I think that the comments of Lord Justice Carnwath are what the lawyers would call obiter dicta—they did not go to the heart of the judgment. He was making an observation that it might be nice if the Government considered it, but there was no suggestion that the Government’s action in imposing the benefits cap was somehow contrary to the European Human Rights Act because we had failed to look after the interests of the child, as set down in the UNCRC.

[Lord Beecham]

The noble Lord, Lord Lansley, prayed in aid the state of public opinion about the benefits system. My noble friend Lady Hollis rightly corrected that. In addition to opinion polls, which have proved less than infallible in recent times, we should have a fact poll. We could then gauge what people really know about the issues that the country and individuals face. As my noble friend pointed out, there is a wide misapprehension about this issue as well as many others affecting the benefits system.

We are moving from a position in which the cap was related to average earnings to a different system. By sheer coincidence, perhaps, that move is taking place at a time when, after a long period in which average earnings have not risen, they have at last begun to rise. I suspect that this overdue rise in incomes, which would otherwise have affected benefits, has triggered the change that the Government are proposing. As other noble Lords have pointed out, and as we shall no doubt hear again during the Bill’s proceedings, one of the principal problems that families face is the very high level of rents in the private sector and the difficulty of obtaining alternative accommodation at a reasonable rent. So these incomes are very much under pressure, with or without benefits. We are not talking about excessive amounts of money; £20,000 for couples and lone parents outside London is not the kind of money that enables people to live a life of luxury—far from it.

These amendments do not destroy the system but try to impose some criteria by which the benefits cap should be assessed. What on earth can be wrong with the suggestion in Amendment 92 that the Secretary of State must take into account,

“the relationship between the level of benefit cap and median household income”,

the impact of the cap on households, local and public authorities and registered social landlords? What is there to object to in that proposal being a matter for consideration?

--- Later in debate ---

[Lord Blencathra]

I rise briefly to oppose the noble Baroness, Lady Meacher, because her amendment would remove the ESA part in Clause 7(4)(e). I do not think that removing it will serve people with disabilities well. To be fair, when the Labour Government introduced the ESA back in 2008, they had a noble aim: to help support many people with disabilities into work. I commend them on that. The work-related activity group—WRAG—within ESA was originally intended to act as an incentive to encourage people to participate in work-related activity and therefore return to work quicker.

Previously in Committee, noble Lords suggested that people in the WRAG have been declared not fit for work, but that is not the case. They have been declared to have “limited capacity for work”, which is not the same thing, as most noble Lords will understand. That is an important distinction, for the purpose of this group is to encourage people into work. Indeed, when the Labour Government introduced the benefit White Paper, Raising Expectations and Increasing Support: Reforming Welfare for the Future, published in 2008, they stated that they aimed to reduce the number of people on incapacity benefits by 1 million by 2015. I am making no criticism or political comment. It was a wise and noble aim, yet the reality is that we have failed and only 1% of people in the WRAG leave the benefits system each month.

It is good that the Department for Work and Pensions is currently looking to reform this area and I look forward to seeing my noble friend’s White Paper in the new year. It would be a backward step to remove the ESA. We have already discussed this, and my noble friend has already stated today the tremendous success that the cap has in getting people into work. Removing the ESA would be slightly counterproductive.

[Baroness Meacher]

Very quickly, I just want to raise the question of whether the noble Lord, Lord Blencathra, thinks that there is a problem with the work capability assessment or with the ESA WRAG. I am aware that people with Parkinson’s are already assessed as having limited capacity for work. The idea that their capacity will grow is frankly inconceivable.

[Lord Blencathra]

The noble Baroness makes an interesting point. We addressed the capacity for work test at an earlier stage. There are concerns and it may not be perfect. It is very difficult to assess. We can have 100,000 people with MS and every single one is different, so it is very difficult to come to a firm conclusion. I know that the Government are continually improving it. Labour improved it. The coalition improved it and the current Government are trying to improve that test. I hope that my noble friend will continue with that.

[Baroness Sherlock]

My Lords, I rise to speak to Amendments 87 to 90 in our name, and to comment briefly on the other amendments in the group. Ours are probing amendments designed to encourage the Minister to talk to the Committee a bit more openly than he has been able to do so far. What behavioural responses are being sought from some of the groups of people affected by the cap?

I thank the noble Earl, Lord Listowel, for talking about kinship carers so powerfully. I shall be listening very carefully to what the Minister says at the end, and I hope to hear him engage rather more substantially with the issue than I feel he did when this came up in earlier stages, particularly in relation to the two-child policy.

Amendment 87 would exclude from the cap anyone claiming carer’s allowance. I am very happy to press pause on that and come back to it on Report. The Minister should be aware that expectations are now running exceedingly high in this House. I am sure that what he has to say when he comes back will be a delight to all of us, and I very much look forward to that.

There are two things from the judgment that he might still take, even if the Government decide to accede to the very small number of people who were there. The first goes to a point made by the right reverend Prelate the Bishop of Durham. At the opening part of the judgment Mr Justice Collins said that,

“to describe a household where care was being provided for at least 35 hours a week as ‘workless’ was somewhat offensive”.

That was a very good point and one we could all do well to remember.

The other point that Mr Justice Collins made, which is of wider relevance, was that what often seemed small capped sums for the DWP could be such a loss to these families as to “tip them into destitution”. One of the cases he gave as an example was of somebody who was losing £11 a week. These may seem small sums to the department but they can make the difference in Dickensian terms between happiness and misery to individual families. I hope that we will all bear that in mind.

Amendment 88 would exempt from the cap those who are claiming universal credit and are not subject to all work-related requirements. Amendment 89 would exempt people in receipt of ESA in the WRAG group, which was just addressed by the noble Lord, Lord Blencathra. Amendment 90 would exempt claimants of income support. In the impact assessment, the Government talk about reducing the levels of the cap for those not making a “behavioural response” by an average of £63 a week. That is a lot of money.

These amendments require the Government to explain what behavioural responses are being sought. The Minister says that this is hugely successful in getting people into work. In fact, as we have already heard from the IFS, the majority of people affected are not responding by either moving house or moving into work because 85% of them are not required to work as a condition of receiving benefits. Therefore, the cap will try to push into work certain people who would otherwise not be required to do so because they are on ESA, or they are the parents of very young children, or they are carers—a point made very strongly by my noble friend Lady Hollis on an earlier amendment.

The only ways to escape the cap are to move into work of at least 16 hours a week—to open a working tax credit claim, or be on the minimum wage while on UC—or move home. In the case of people on ESA—the point made by the noble Lord, Lord Blencathra, notwithstanding—does the Minister accept that some people in the ESA WRAG group will either not be capable of working at the moment, or will not be able to sustain 16 hours’ work a week, or will not be able to work consistently because of the nature or their illness or disability? If that is the case, can he explain to the Committee what behavioural responses he wants from them and, if they are not capable of making any of the available responses—working or moving house—does he think it fair that they should simply have their income cut because they are incapable of doing the thing he wants them to do?

In the case of parents who are capped, the normal work requirements do not apply, so a single parent or main carer could have two children, including a very young baby, and be expected to work if the cap means that they could not otherwise afford to pay their rent. Whenever we talk about single parents or parents working, the Minister tells the House that the Government are putting lots of extra money into childcare and that parents of three and four year-olds will have extra childcare, as will disadvantaged parents of two year-olds, but here we are talking about children who could be one or two years old. There is no free entitlement to childcare when a child is under two. Even the provision of childcare for disadvantaged two year-olds is for only 15 hours in term time, which would not match the requirements of someone moving into a job for 16 hours a week throughout the year to escape the benefit cap.

Research undertaken by the Family and Childcare Trust found significant gaps in provision for young children in 136 local authorities surveyed in England and Wales. The evidence bears this out. It shows that single parents with younger children are already less likely to move off the cap than other groups, presumably because they are struggling to find suitable flexible jobs and suitable childcare while combining them with minding very young children.

The impact assessment also talks about the aim being to improve work incentives, but I wonder whether the Minister has read the report from the Child Poverty Action Group, which showed just how strong work incentives were, even for families who might be getting significant amounts of benefit. It gives the example of a very rare occurrence of a lone parent with four children, who would be better off by £105 a week working just 16 hours a week on the minimum wage. Therefore, work incentives already exist so, if parents are not working, something else may be going on.

When the Minister responds, I hope that he will address these probing amendments by talking about individual cases. He has talked a lot about how he wants to move to a much more personalised situation so that advisers can engage with individuals and understand that their circumstances differ, yet this measure feels like a very blunt tool, indeed. Therefore, could he tell us a little more about what it might mean in practice?

Welfare Reform and Work Bill

Lord Blencathra Excerpts

Wednesday 9th December 2015 Lords Chamber

[Lord Blencathra (Con)]

My Lords, in introducing his amendment, I think that the noble Lord, Lord Patel, said quite early on that he wanted to put the proposal on hold until the Government could demonstrate that it would work. I think, therefore, that the problem with Amendment 50 is that it simply asking for the Secretary of State’s best guess or estimate. I suggest that we cannot demonstrate that it will work until it is implemented in practice.

The Government have already given an assessment of the policy change. In his Budget speech, the Chancellor said that ESA,

“was supposed to end some of the perverse incentives in the old incapacity benefit, but instead it has introduced new ones. One of those is that those who are placed in the work-related activity group receive more money a week than those on jobseeker’s allowance, but get nothing like the help to find suitable employment. The number of JSA claimants has fallen by 700,000 since 2010, while the number of incapacity benefits claimants has fallen by just 90,000. That is despite 61% of claimants on the ESA WRAG benefit saying that they want to work”.—[Official Report, Commons, 8/7/15; col. 333.]

I simply say as someone with a little bit of experience of politics that, if that is the judgment that the Chancellor of the Exchequer has already made, I cannot see any assessment by the Secretary of State coming to radically different conclusions. Also, even if the Government employed 20 experts, I think we would end up with 40 different opinions of how it might work in practice. I believe that the policy is right in principle but it is crucial to make sure that it works in practice.

As far as saving money is concerned, I would simply say the following, although it may not be popular in all quarters. When I see, participate in and indeed benefit from some of the extraordinary medical improvements that are being made daily, I cannot understand why expenditure on disability benefits has risen so much—by £2 billion in the last Parliament. I cannot believe that as a country we are becoming more disabled, but maybe we are.

It is clear—and everyone agrees—that most people who are disabled want to work if they can. We have to ensure that they are correctly assessed and given the right incentives and help, and that employers are constantly reminded of their responsibilities. Despite some criticisms of the WCA, I think that it has been getting a little better under each Government. I know nothing about cancer or mental health but I have some experience of progressive illnesses, where one can move from being fit to work and able to do practically anything to having limited capacity for work or work-related activity, to being completely unfit for work.

Let us take as examples Parkinson’s disease and MS. I have been pretty lucky. Some people go downhill very quickly but there are huge variations, and we cannot have a policy of one case fits all. Some people may be able to walk okay but are hit by terrible fatigue, rendering them unfit to work, although they otherwise seem physically capable.

I had to retire as an MP in 2010 because I no longer had the stamina to do the phenomenal 80-plus hours a week which MPs have to do and are expected to do, as well as completing a phenomenal amount of travelling. Even though I got round all the flooded areas of Cumbria in 2005, I would not have managed it last weekend because I do not have the energy for that now. Of course, I accept that parliamentarians are not a very good test group for people in the country; nevertheless, there are tens of thousands of people who can work in some way but need to drop down a gear or two and do lesser work than they did in the past. Those in the WRAG must not be left to fester until they move inexorably on to the support group. Of course, there are many tens of thousands with a disability who have limited capacity but will not progress to the unfit-to-work-at-all category.

Finally, I want to comment on employers and their responsibility. I support the work of the Disability Confident campaign but we have to educate and pressure employers more. I do not think that employers are institutionally prejudiced against disabled people but they are a bit afraid—they are not quite sure what to do. The same could be said of many of your Lordships. When those of us in wheelchairs approach a door, most noble Lords want to jump and help to open it for us, but then they are slightly afraid. Will we get stroppy that they have tried to help us, because we want to be independent and do it ourselves? It is also a bit like men opening a door for a lady. Is it a nice gentlemanly gesture or is it some sexist put-down?

Employers are in a similar position. They want to help but they do not quite understand disability. They are afraid that there may be a drop in efficiency in the business or that their other employees will complain that they are “carrying” the disabled people. They are afraid that they may be more subject to industrial relations disputes or be taken to a tribunal if they have not tweaked the facilities in exactly the right way. They know that there is a wide range of disabilities but they think, “We’ll put in a wheelchair ramp and we might be able to employ someone who’s deaf, though we’re not sure we can employ someone who is blind or partially sighted”. It is much easier to find an excuse not to employ disabled people. I believe that we can do a huge amount more to educate employers that it is a safe risk to take and that people are capable of doing certain things—not every task in the company, but certain things.

I conclude by setting an example. I have a little bee in my bonnet about Parliament. We in this House are protected by the most wonderful doorkeepers, who will throw themselves in front of a speeding bullet to save our lives. However, there are guys and women coming back from Afghanistan with no arms or legs. When we see them running and winning marathons, it is clear that they are as fit as fiddles. We should employ some of those people in this House as well—perhaps as doorkeepers and in other capacities—because, if we in Parliament do not set an example and show that you can take on people who are apparently severely disabled but can do either a full-time or a part-time job, then we cannot harangue employers that they are failing in their responsibilities.

Without going into all the details of the work incentives and the £30 reduction—those have been given by the experts on all sides who have spoken today—I simply say that I think we can get the incentives right. If we can achieve the end result of making employers recruit more disabled people, then this policy is worth testing in the medium term.

[Baroness Doocey (LD)]

My Lords, reading the text of Clauses 13 and 14, as with so much legislation, does little to reveal the huge impact that this change is likely to have, but the impact is going to be very severe for disabled people. The argument that cutting benefits for disabled people will incentivise them to work is, frankly, insulting. As many other noble Lords have said, disabled people want to work if they can. People with progressive illnesses would love to feel remission and resume their careers, and people struck down with serious illnesses or mental ill-health would give almost anything to be well again.

That is why it is so iniquitous to claim that this cut in support will somehow incentivise a return to employment. Surely it would be more honest for the Government simply to say, “If £73.10 a week is enough for people on jobseeker’s allowance, it’s enough for people on employment and support allowance with limited work capabilities”. But that is not correct.

First, if you are fit and healthy, unemployment is expected to be short-term, although for many sometimes it is not. For the majority it is possible to scrimp by on subsistence living for a few weeks or months while looking for a job, but if you are not fit for work and have a debilitating long-term condition, then it could, sadly, be years and years before you get back into work, if at all. Scraping by without buying clothes or replacing worn-out household items becomes increasingly difficult, as does dealing with increased prices. The further impact on physical and mental well-being is extraordinary and depressing for many people.

There are also costs associated with being sick or disabled: the costs of travelling to medical appointments, of extra heating, of specialised diets and of mobility aids—all the things that are required because of your illness or disability. These extra costs significantly impact on disabled people’s savings, which makes managing on low incomes for very long periods incredibly difficult.

Finally, there are the huge barriers faced by disabled people who try to find work once the Government have assessed them as able to return to work or to enter the workforce. The vast majority of employers, whether meaning to or not, look at disabled people and see only a problem. They seldom see the opportunity to benefit from their determination and talent. The Government have recognised this problem with their commitment to tackle the disability employment gap. Sadly, in Clauses 13 and 14 that commitment has been translated into a snatch-and-grab raid against sick and disabled people, who need support to find work when they can, not the threat of no food on the table if they cannot.

I sincerely hope that the Government will reconsider this proposal, which would have the most severe consequences for some of the most vulnerable people in our society.

Welfare Reform and Work Bill

Lord Blencathra Excerpts

Tuesday 17th November 2015 Lords Chamber

[Lord Blencathra (Con)]

My Lords, what a privilege to be present today for the maiden speech of my noble friend Lord Lansley. When I looked at the alphabetical list of speakers last week and saw my noble friend’s name, I hoped that I would not be following him since he would show up the gross inadequacies of my contribution. Naturally, my silent prayer to the Chief Whip went unanswered.

We have just seen a splendid example of how this noble House benefits from the addition of Peers such as my noble friend, who are experts in their subject and have considerable experience of government and the other place. My noble friend has told the House that he was Principal Private Secretary to my noble friend Lord Tebbitt. I assure your Lordships that he did not inherit all the views held by that noble Lord. In fact, although my noble friend was the Bernard of his time, rising to become the Minister, he often had to say, “No, Minister”, so he also did a Sir Humphrey act with my noble friend Lord Tebbitt. In addition to what he has told us today, the House will have discovered that my noble friend has brought a disarming and quiet style of delivery. I have always found this to be persuasive in the past and I am sure your Lordships will find it so in the future. We shall all look forward to his further contributions on a range of subjects. However, as a former Chief Whip, I hope my noble friend will not range too widely with the freedom he intends to exercise.

I support the Bill, which has to be seen in the context of what the Government have achieved on the economy since 2010. Employment is now at a record high of over 31 million, up 2 million since 2010. That represents a record employment rate of 73%. Crucially, the number of workless households is at a record low, down nearly 700,000 since 2010. The best thing that any Government can do to help people on welfare is to get them into paid employment and off welfare. I will touch on a few aspects of the Bill, first of which is apprenticeships. I like the idea of reporting annually on this. Apprenticeships are absolutely crucial for individuals and the economy and they are the best way to boost employment chances for young people. I am delighted that the Government have delivered over 2 million new apprenticeships over the past five years and plan to deliver 3 million more over the next five. It was wonderful to read of the brilliant A-level student who turned down Oxford or Cambridge to take up an apprenticeship with Rolls-Royce. Of course, not all apprenticeships are of the calibre of Rolls-Royce and, although we need to make sure that all apprenticeships do offer genuine skills training, we must not let cynics rubbish the less glamorous and technical end of the scale.

I am thinking of catering, for example, which is often scorned as low-grade work. I suppose that an apprenticeship to serve a skinny latte at Starbucks would be a bit thin, but what about the 15 kids Jamie Oliver took and trained to be really good chefs? That was quality training in cooking which we should not scoff at—if your Lordships will pardon the very bad pun. In 1980, when I was Food Minister, the splendid Albert Roux came to see me. He said: “Everyone, especially we French, mock English food as just roast beef and sticky brown gravy; but within 25 years English food will be regarded as the best in the world. We are training brilliant young apprentices who will one day be among the finest chefs in the world, but it all depends on training apprentices”. How right Albert turned out to be.

I welcome Clause 3 and the duty to report annually on the troubled families programme. If we are to add to the 117,000 families already helped by getting children back in school, and significantly reducing youth crime and anti-social behaviour, then we need as much information and as many facts as possible. All the research I have read shows that, when children come from a home with one or more parents who are unemployed or who have a criminal record, or from a home with absent, uncaring fathers where there is no support or encouragement to attend school, the chances of those children going bad are greatly increased. That is not making any moral or social judgment. It is a simple fact that the fewer positive factors are present during a child’s upbringing, the less chance he—and it is usually a he—has to succeed. So information is vital, and then policy can be revised accordingly.

Similarly, I like the clauses on life chances, although the phrase sounds a bit trendy. This reform is long overdue. The existing statutory framework in the Child Poverty Act, set around the four income-related targets, is a nonsensical way to measure real poverty. As the Prime Minister said,

“we are in the absurd situation where if we increase the state pension, child poverty actually goes up”.

If we focus on the number of children living in workless households and their educational attainment by the time they get to 16, and we incorporate family breakdown, problem debt and addiction, we will get a real measure of poverty, will be better informed and will be able to devise proper policies to tackle it.

The benefit cap restores fairness to the welfare system and has incentivised work. I will not bore the House with the statistics; we shall no doubt hear a lot more today. Lowering the cap emphasises the message that it is not fair for someone on benefits to be receiving more than many people in work, and better reflects the circumstances of many working families. Tens of millions of people in work and paying taxes would love to live in a bigger house, in a better street or in a house with a nice garden, but they cannot afford to. They have to settle for what they can afford. No wonder all the polls suggest that they are outraged to see people on benefits being paid to live in housing which they, as hard-working taxpayers, simply cannot afford.

Clauses 11 and 12 will limit child tax credit and universal credit to two children from April 2017. As we have heard, this is controversial, but it has to be right. Families in work have to make tough decisions on how many children they can afford. It is probably the most difficult decision any parent can make. Therefore, families on benefits should be encouraged to make the same financial decisions as families supporting themselves solely through work. It is not fair to the working families who can afford only two children that they have to pay taxes to support those who decide to have more, on the basis that the taxpayer will pay. Some will say that this is inconsistent with child benefit paid for any number of children. Yes, it is, but in politics one has to accept political reality: no Government have dared to tackle it. There are inconsistencies in many policy areas, such as the state pension being paid to the poorest and to multimillionaires, but that does not mean that we should perpetuate, or create new, unfair regimes. We are where we are and must make incremental changes where we can.

Finally, I will mention the welfare budget generally. We have heard a lot, and will hear a lot more today, about those who may have their benefits reduced because of the Chancellor’s Budget. I pay tribute to Gordon Brown for keeping us out of the euro: it was the right decision. No doubt, at the time, he considered his plan on tax credits and child tax credits to be right also. However, that was when it was set to cost £4 billion; but it has rocketed to £30 billion and applies to nine out of 10 households. So who are all the people who were not in his original plan but became included later on? Who were the unexpected beneficiaries? Did Gordon Brown never intend some or all of those who may lose out now to be winners in the first place? I simply do not know, but I cannot imagine that he intended the costs to rocket as they have, and for so many other people to be included.

There have been intriguing suggestions about where the Chancellor could get alternative funding so that there are no losers. However, the whole point is that welfare spending is out of control and has to be cut. Taking away what has been given, even if it was not justified or intended in the first place, is never easy but we all know what the long-term sustainable solution is. It is a big hike in the minimum wage until it eventually becomes the real living wage. We cannot reduce welfare dependency while large multibillion pound companies are paying poverty wages and depending on the taxpayer to pay their employees what they should be paying them in the first place. I make no apologies for returning to this theme for the fourth time this year. We have the fastest growing economy in the G8. Business is flourishing and businesses should pay their workers a lot more than the present minimum wage. I urge the Chancellor to increase the rate still further next year and ignore the usual sob stories of the CBI. We will reduce the welfare bill when people working 40 hours per week get sufficient pay on which to live, without other taxpayers having to top it up. We have a long way to go but the Bill is another step in the right direction, and I commend it to the House.

Welfare Reform Bill

Lord Blencathra Excerpts

Wednesday 11th January 2012 Lords Chamber

[Baroness Hollis of Heigham]

My Lords, almost everything passed in this House has financial implications. The House of Commons is entitled to and regularly will dismiss every amendment passed in this House under financial privilege. There is nothing new in that. We do indeed then go into ping-pong because this House will offer an alternative amendment for the House of Commons to consider. Should we reach that situation, some of the fallback amendments mentioned by the noble Baroness could then be considered.

[Lord Blencathra]

My Lords, it is with some trepidation that I intervene briefly in this debate in view of the learned comments that one has heard from both sides. I seldom contribute to debates of this nature because it is outside my areas of expertise, but I am prompted to do so as the result of a speech made yesterday. I heard the leader of the Opposition say that,

“in these times, with less money, spending more on one thing means finding the money from somewhere else”.

He went on to say that:

“When someone wins, someone else loses”.

I have looked briefly at the amendments before your Lordships’ House today and I had not intended to say anything on them because I knew that they had considerable spending implications, but I am tempted to speak out because of what the leader of the Opposition said yesterday.

The noble Lord, Lord Patel, has made a powerful and compelling speech, and it would be easy for me and no doubt for other noble Lords to vote for his amendment and feel morally good. But the sting lay at the tail end of his remarks when he said, I think, “Of course, this could have some enormous cost implications”, and then he came up with not what I would say is a formula but a suggestion, which I must admit I did not quite understand, about how one could try to save on some of those considerable costs. However, I am informed that his amendment as it stands has serious cost implications. I believe that it would cost up to £200 million next year, maybe £400 million the year after and again the year after that. I hope that my noble friend the Minister has the correct figures, but I believe that it will be around £1 billion of expenditure over the next three years. The House needs to know exactly what those figures are.

Perhaps I may turn to the Opposition and say this. If the Opposition are tempted to support this amendment —I hope that I am not being too political here—I hope, in view of what the leader of the Opposition said yesterday, that they will spell out where the money is to come from. At this stage I am not concerned about whether the Commons will reject the amendment or whether there will be ping-pong, although that is a valid debate to have in due course, but it is incumbent on the Opposition or on those who are arguing for this amendment to say where the £1 billion, if indeed it is £1 billion, is to come from. Is to come from higher taxation or from a cut in public spending somewhere else? Is it to come from increased government borrowing? Someone somewhere will have to pay for this.

[Lord Boswell of Aynho]

I am most grateful to my noble friend for allowing me to intervene. Having listened to the debate this afternoon, does he not acknowledge that whereas the previous amendment, which was supported by noble Lords, was in comparative terms a relatively small matter of cost, this is of a different level and magnitude of costs—at least 10 times as great? Whatever might have been said about the previous amendment being comparatively trivial, this could not be possibly be so described.

[Lord Blencathra]

My noble friend is correct. The last amendment would cost around £70 million, and no doubt the Government will say that that is going to hurt and that the money will have to come from somewhere. But if the costs of this amendment are £700 million, £800 million or £1 billion, as I have read somewhere, we need to know that before we go into the Lobbies in support of the powerful speech made by the noble Lord, Lord Patel, in which he spelt out some of the difficulties that a large number of people will face if this cut is made.

I conclude with these remarks. It is easy to feel morally good because we have done something to help those who will be affected, but we have to bear in mind the others who will lose £1 billion of expenditure, or wherever that £1 billion will come from.

[Lord Wigley]

My Lords, we went into this matter in considerable detail in Committee and the Minister withstood the pressure at that point on the basis of it being so expensive. Perhaps I may repeat the point made from several different directions in Committee. If it is indeed £200 million plus £400 million plus £400 million, that is money that is coming off vulnerable disabled people. There are other priorities which I believe are not as pressing as the needs of these people.

It has been said that some will lose £90-odd a week. That is a considerable amount of money for those who are dependent on help such as this. If they are indeed fit to work and can hold down a job, they would earn considerably more than that, so there is an incentive to go to work, but the disability itself might well prevent them being able to take up opportunities, and indeed the psychological effect of the uncertainty of waiting out the 12-month period might add to the lesser likelihood of their being able to work. In a civilised society it is not the disabled people at the end of the queue who should be bailing out successive Governments for the economic mess that we are in. If we need to share it out, as the noble Lord said a moment ago, there is such a thing as taxation, which shares out the burden more equally. Why put the burden on the shoulders of the most vulnerable in our society?