State Pension: Equalisation

Lord Foulkes of Cumnock Excerpts

Monday 23rd November 2015 Lords Chamber

[Baroness Altmann]

My Lords, I do have sympathy with the women affected. However, I assure the House that they are eligible for the same in-work, out-of-work and disability benefits as men of their age, and for the new state pension.

[Lord Foulkes of Cumnock (Lab)]

My Lords, I declare an interest as vice-chair of Age Scotland. I recall the Minister saying exactly the same as my noble friend Lady Bakewell only a year ago, and arguing that something should be done about it in the most strident fashion. Why has she changed her mind?

[Baroness Altmann]

My Lords, this is about correcting a long-standing inequality. It is also about democracy. We put all the arguments to both Houses of Parliament. This issue was properly and thoroughly debated and the decision was democratically made. To be fair, most of the women affected have accepted this, as have I.

Benefits: Sanctions

Lord Foulkes of Cumnock Excerpts

Thursday 10th September 2015 Lords Chamber

[Lord Freud]

We have done surveys on this and found that people say that the sanctions regime encourages positive behaviour. According to the figures we have, which have been published, 72% of JSA claimants and 61% of ESA claimants say that it impacts on their behaviour.

[Lord Foulkes of Cumnock (Lab)]

My Lords—

[The Lord Bishop of Peterborough]

My Lords—

--- Later in debate ---

[Baroness Thomas of Winchester]

My Lords—

[Lord Foulkes of Cumnock]

My Lords—

[Baroness Hollis of Heigham (Lab)]

My Lords—

Jobseeker’s Allowance

Lord Foulkes of Cumnock Excerpts

Monday 21st July 2014 Lords Chamber

[Lord Freud]

A vigorous debate is going on among economists about what has happened to productivity. The most interesting study that I have seen lately was from the noble Lord, Lord Goodhart, and one of his colleagues, which looked at productivity as a cyclical impact, which we should be able to get through later on.

[Lord Foulkes of Cumnock (Lab)]

My Lords, since this Question and Answer show all the features of very careful preparation, I am sure that the Minister will be able to answer this. What percentage of the jobs that have been created are: first, part time; secondly, minimum wage; and thirdly, zero-hours contracts?

[Lord Freud]

I did not need a huge amount of preparation for this Question because it is a slam dunk. The figures for employment are very good. If you are looking at part-timers, the number who do not want to be full time are down by 1.5 percentage points—the fastest decline on record. Depending on the figures you take, we have between 2% and 4% of people on zero-hour contracts, and the CIPD says that people on those contracts are as satisfied with their jobs as people on other contracts.

Benefit Cap

Lord Foulkes of Cumnock Excerpts

Wednesday 2nd July 2014 Lords Chamber

[Lord Freud]

The cap is doing quite a lot of things. It has an influence on the people who are capped but it also sends out a message. The total number of people who have been capped at one time or another stands at just over 42,000; the current number is just over 27,000. A substantial proportion of those who have moved out of the cap, which they might do for various reasons, have gone into work and taken working tax credit. Others will have taken advantage of the effect that I have just referred to, whereby doing even small amounts of work reduces their cap.

[Lord Foulkes of Cumnock (Lab)]

Would the Minister contemplate for a while how people struggling to survive on benefits will view an aggressive Question being asked by someone who donated £2.62 million to the Conservative Party?

Universal Credit: National Rollout

Lord Foulkes of Cumnock Excerpts

Monday 28th October 2013 Lords Chamber

[Lord Freud]

My Lords, I entirely agree with the sentiment. When you are introducing a large cultural change like this, it is important to do it in a careful and controlled way, and to make sure that it is safe and secure. That is how we have been introducing our series of changes, such as child maintenance, PIP and benefit cap. I am not in a position, until we announce Howard Shiplee’s plans later this year, to give a timetable of when couples and children are brought into the migration strategy.

[Lord Foulkes of Cumnock (Lab)]

My Lords, this is really depressing. Why do the Government not pay attention to Sir John Major? Last week in the Press Gallery he advised the Government not to pay attention to the bean counters and cheerleaders, but to the people working with the disabled, the elderly and others who are suffering. John Major also said that this was going to fail, that all these reforms were going to fail, unless Iain Duncan Smith was a genius, and he saw no proof of that. Does the Minister have any proof? Unless he does, is it not about time that for the sake of our disabled people the Government started to think again?

[Lord Freud]

My Lords, the party opposite is not saying that universal credit is not the right transformation. Although it voted against various aspects, it is actually saying that it is the right way to go. The issue is how to introduce it. We are introducing it safely and securely, and we are doing that exactly for the kind of people to whom the noble Lord was referring. We are making sure that we do not produce shocks by introducing a new system on one day in the way, for instance, that tax credits were introduced and which was a failure. We are doing this slowly and securely.

Housing: Under-Occupancy Charge

Lord Foulkes of Cumnock Excerpts

Wednesday 9th October 2013 Lords Chamber

[Lord Freud]

My Lords, my noble friend is absolutely right. I have talked before about the 250,000 people living in overcrowded accommodation, with 1.8 million people on the waiting list. But the economic signals going on in the social rented sector are very odd. The demand from single people and couples represents each year 61%, for the latest year we have—and it has not changed much. The number of homes provided that have single bedrooms comes to only 13%. Over the past decade, the social rented sector has built virtually no new single bedrooms, at 30,000; that compares with the private rented sector, which has produced in that period 280,000. There is a real economic mismatch going on in terms of what we are encouraging the social rented sector to build, and we need to make sure that we are building the type of accommodation that people in this country actually need.

[Lord Foulkes of Cumnock (Lab)]

My Lords, the Minister is paying no attention to the effects on the people involved. Has he seen the report in the Daily Record, which says:

“The Tory minister in charge of the bedroom tax has told Scots with motor neurone disease to take in a lodger or have their benefits cut.”?

Will he apologise for this insensitivity and rethink this measure, that being just one of its many iniquities?

[Lord Freud]

My Lords, I have not, of course, made any specific recommendations to people. Let me just go through the point. We are monitoring this change very closely. It is in its early stages as people start to adjust. We have put in a lot of discretionary housing payments; the total is £180 million this year. The early returns—and I stress they are early returns—show that local authorities are either managing those well or are underspending at this particular time.

Jobseekers (Back to Work Schemes) Bill

Lord Foulkes of Cumnock Excerpts

Thursday 21st March 2013 Lords Chamber

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

My Lords, this Bill will ensure that, following the recent Court of Appeal judgment in the case of Wilson and Reilly versus the Secretary of State for Work and Pensions, the Government will not have to repay previous benefit sanctions to claimants who have failed to participate in mandatory back to work programmes. It will also enable the Government to impose benefit sanctions where a sanction decision has been put on hold because of the Wilson and Reilly case.

I shall briefly set out the details of the Court of Appeal’s judgment, but let us first be clear on what this case was not about. The court did not cast any doubt on the policy intention behind any of the schemes. In the words of Sir Stanley Burnton, one of the judges, the case was,

“not about the social, economic, political or other merits of the Employment, Skills and Enterprise Scheme”,

and the court noted that the use of mandation was appropriate in such schemes.

The policy intention of our schemes has been clear to all from the outset. I have said that the Court of Appeal judgment was not about the social or other merits of the employment, skills and enterprise scheme, but the judges were not silent on the broad principle underlying mandatory employment schemes. Lord Justice Pill said:

“A policy of imposing requirements on persons receiving a substantial weekly sum, potentially payable for life, is readily understandable. Equally, the means sought to achieve that end are understandable; claimants should be required to participate in arrangements which may improve their prospects of obtaining remunerative employment”.

Again, I say that the case was not about the policy intent of the schemes, which has been clear from their inception.

So what was the judgment about? The judgment centred on the Jobseeker’s Allowance (Employment, Skills and Enterprise Scheme) Regulations 2011, which for brevity’s sake I will from now on refer to as the ESE regulations. These regulations provide for most of the mandatory back to work schemes, including the Work Programme.

First, the court rejected the claimants’ argument that the ESE regulations were contrary to the European Convention on Human Rights—specifically, Article 4.2 on forced labour. Secondly, it rejected the claimants’ argument that the ESE regulations could not be enforced in the absence of a formal published policy.

However, the court found against DWP on two grounds. It found that the ESE regulations did not describe the programmes that they underpinned in enough detail. It also upheld the High Court’s ruling that letters sent to claimants when they were mandated to an ESE scheme were insufficiently detailed to comply with Regulation 4 of the ESE regulations. We have since laid new regulations and issued revised letters so that we can continue to mandate claimants to our schemes and ensure their continued proper functioning in accordance with the principle of imposing requirements on jobseekers in return for paying them benefit.

Your Lordships will not be shocked to learn that the department fundamentally disagrees with the court’s verdict in respect of the two latter grounds, which is why it has applied for permission to appeal to the Supreme Court the Court of Appeal’s judgment in respect of those two grounds. The arguments that we will make before the Supreme Court, if we are granted permission—

[Lord Foulkes of Cumnock]

If the department was so upset and disagreed with the decision, why did it take it so long to bring legislation before Parliament?

[Lord Freud]

I will come on to explain that in a little.

The arguments that we will make before the Supreme Court, if we are granted permission, will not be affected by this Bill. However, we need the Bill to provide certainty that the Government are not in a position where we will have to repay previous benefit sanctions, and can impose sanctions where decisions have been stayed, in respect of claimants who have failed to take part in employment programmes without good reason. We have made it clear that we will take steps to ensure that claimants cannot expect a sanction refund as a result of this judgment, and there is a compelling public interest for taking those steps.

The Bill does not overturn previous appeals that have succeeded on the basis of good cause and it does not prevent claimants from appealing a sanction on the basis of good reason. Instead, it ensures that claimants who have failed to participate with no good reason do not obtain an undeserved windfall payment. We estimate that such a windfall could cost the public purse up to £130 million. That is money that would be better spent on people who take their responsibilities seriously, and it is in the public interest that we ensure this.

There is also an important public interest, as the Court of Appeal recognised, in getting people back to work by ensuring that jobseeker’s allowance is paid only to those who are actively seeking employment and who engage with attempts made by the state to achieve that end, and that those who do not do so face the appropriate consequences. The Bill will protect this public interest by ensuring that those who have not engaged with attempts made by the state to return them to work face the appropriate consequences, rather than receiving an undeserved windfall.

The Government respect the general principle that Parliament should not legislate to reverse the effects of the judgments of the court for past cases unless the situation is exceptional. However, it is entirely proper to enact such legislation if there is a compelling reason to do so. There is a compelling reason here on three grounds: first, the cost involved; secondly, the claimants affected do not deserve a windfall payment; and, thirdly, this is an unusual case in social security legislation where a court or tribunal decision has a retrospective effect.

The Bill will provide that any decision to reduce jobseeker’s allowance under the ESE regulations cannot be challenged on the grounds that those regulations were invalid or the notices given under them inadequate. It makes similar provision in relation to the mandatory work activity regulations in respect of notices given under those regulations.

I have said that we fundamentally disagree with the court’s verdict with respect to the lawfulness of the ESE regulations and the notices given under them. We believe that those regulations were correctly drafted. They were drafted to be flexible enough to encompass a wide range of programmes designed to support jobseekers into work. There was no clear and identified need to go further than the ESE regulations in order to lawfully mandate claimants to our schemes.

The Merits of Statutory Instruments Committee, as it was then called, published a report that covered the ESE regulations on 5 May 2011. The Merits Committee had a number of concerns, including the quality of the Explanatory Memorandum. To go off on a tangent, I want to acknowledge that there was a period when we were not servicing the Merits Committee adequately, and I have taken steps since then to improve that position. The Merits Committee had concerns, but the possibility that the ESE regulations were unlawful was not one of them. The committee drew attention to the fact that the regulations,

“interpret the Act very broadly so that future changes to the Scheme could be made administratively without any reference to Parliament”.

However, it did not go on to suggest that they went beyond the primary powers.

The Joint Committee on Statutory Instruments also considered the ESE regulations at its meeting on 15 June 2011. I am sorry to report that no fewer than three instances of defective drafting were identified, which the department acknowledged. However, the committee did not raise even the possibility that the ESE regulations were unlawful. The Social Security Advisory Committee, whose independent and informed advice we value greatly and with which we have a very constructive relationship, also considered the ESE regulations. Among other issues, it made a point about the breadth of the powers, but it did not suggest that they went beyond the primary powers. Similarly, those primary powers in the Welfare Reform Act 2009 received full scrutiny. The Delegated Powers and Regulatory Reform Committee regarded the delegations in the relevant part of the Act and the associated scrutiny procedure as unexceptionable.

We consider that the primary powers do not require that the regulations set out the fine details of the scheme. We believe that it is undesirable to do so, as a wide variety of possible arrangements could be made, depending on the nature of the labour market conditions in particular parts of the country. We also need to be able to respond to changing conditions and challenges quickly and effectively.

We believe that the flexibility that the ESE regulations provided was rational and desirable, and it must be remembered that the High Court ruled that the regulations were lawful. We therefore cannot agree with the Court of Appeal’s judgment. We also believe that the letters issued to claimants provided sufficient information on the consequences of not participating in our schemes. In addition to the information provided in the letter, claimants would have also discussed the precise details of the scheme with their jobcentre adviser, including what was expected of them and the consequences of not upholding their side of the bargain.

Nevertheless, following the High Court judgment, we revised all referral notices to comply with the judgment and sent letters clarifying the position to the then claimants impacted by the decision. That allowed us to continue to operate the schemes as intended—an intention that has been clear to all from the scheme’s inception, based on principles which the effects of the Court of Appeal judgment undermines and which the Bill is intended to protect.

It is right that we are able to operate our schemes as intended, giving jobseekers the opportunity to improve their chances of moving into work, with appropriate consequences for those who fail to take up that opportunity. It is right that government resources are targeted on those claimants who are actively seeking employment and taking all reasonable steps to improve their chances of securing employment and that resources are not wasted on those who have not met their responsibilities.

To pick up the question asked by the noble Lord, as soon as the judgment was handed down, the department explored all the options and avenues available to it to ensure the protection of the public interest. Once the decision to pursue emergency legislation was taken, that required legal advice, the appropriate consent prior to introduction and preparing the Bill products. We also engaged the Opposition, who rightly gave the matter thorough consideration. I am sure that all noble Lords will appreciate the time that that has taken.

[Lord Foulkes of Cumnock]

As I understand it, this lay in the department without any suggestion of legislation for more than a month. If the department had been really concerned about it, the legislation could have been dealt with through the normal procedure. Instead, both the other place and your Lordships’ House are faced with emergency legislation, which is entirely unsatisfactory for examining such an important Bill in detail. All the subsequent stages will be dealt with on Monday. That is not adequate scrutiny. Does the noble Lord not feel some guilt or embarrassment at having to deal with it in this way?

[Lord Freud]

My Lords, obviously, it is never desirable to have emergency legislation where one can avoid it. It would be desirable to run this through a more normal process, but we are caught by time constraints. The point that the noble Lord made about delay is accounted for by the various steps that we have had to take in that period.

In conclusion, the Bill guarantees some fundamental principles, which are about helping us to move people into employment and protecting the public purse. I commend the Bill to the House and I beg to move.

Amendment to the Motion

--- Later in debate ---

[Lord German]

My Lords, I want to address the Bill itself, but before I do that I want to make a few comments on the amendment before us today. When I first read the amendment’s text last evening, when it was produced, I had a bit of a flashback to earlier student days when you had composite Motions and amendments and the call for separate votes to be able to unpick the various parts. While I acknowledge that there are issues fundamental to this Bill that need to be raised, they are appropriately the issues that would and should be raised in Committee on Monday. I expect that we will deal with those issues, so the amendment as a composite presents a very difficult picture for people to decide upon. However, there is one crucial factor running throughout the amendment: the issues raised by the Constitution Committee of this House on retrospection and fast-tracking. Before I ask my noble friend to comment on that, I refer to two paragraphs in the Constitution Committee’s report—the last in respect of retrospection, and paragraph 12, which says:

“it is incumbent upon the Government to explain to Parliament why they have chosen to proceed by means of fast-track legislation and to reject the alternative options”.

I listened very carefully to my noble friend at the outset, and I hope that he comes back to that matter in his summing-up, when he may be able to give this House an explanation.

Subject to the Government providing those explanations, I support the Bill for exactly the same reasons as the Front-Bench Labour spokespeople in the other place, who said that they,

“do not want to risk an additional £130 million cut to benefit spending over the period ahead … Nor do we want to be in a position in which people who were sanctioned months ago—in many cases, well over a year ago—have to be refunded”.—[Official Report, Commons, 19/3/13; col. 825.]

I agree with the Labour Party Front Bench on those issues and why the Bill is before us today.

I want to say something about the nature of secondary legislation and its scrutiny. It is Parliament that passes and scrutinises regulations, and it will probably be Parliament that has to decide how it does those things in the light of any subsequent changes brought about by the courts. Of course we are not at the end of this process yet, as I have said already. There are important lessons to learn from these problems to see how we can move on in a better way.

The court determined on narrow issues and on insufficient detail and content of the schemes and regulations, and that the notices given to claimants did not specify the range of sanctions that could be used, but it upheld the policy intentions of the Government’s work schemes and backed the right to require people to take part in programmes that would help to set them into work. Up to 1 September last year, 200,000 people found work through the Government’s Work Programme. Appropriate work experience is a good thing, and it helps to build the confidence of jobseekers. Increasing employment levels in our country since May 2010 have meant that since that time nearly 250,000 fewer people now claim out-of-work benefits, in a period of huge economic difficulty. However, I wish to discuss the operation of these schemes. We know that there are no targets and no league tables for Jobcentre Plus on sanctions. Therefore, the key question I want to probe is how we can better undertake these tasks, which is fundamental to ensuring that we get the best out of existing programmes.

We know from the evidence provided by the DWP that the overwhelming majority of those who have been on the Work Programme are satisfied with it, but, of course, there is always room for improvement. Three-quarters of those who attended the programme said that they believed they were more attractive to potential employers and that their personal confidence had increased as a result. That is a powerful outcome for a group of people who are some distance from the labour market. Clearly, the majority think that they have got closer to it. However, the programmes could offer better outcomes in many cases. The first of these areas concerns engagement with the third sector. When the main contractors were appointed to run the Work Programme, there was much discussion about subcontracting to the third sector. I would be grateful if, when he sums up, my noble friend could tell us to what extent that engagement has occurred given the unusual skills of people in the third sector in dealing with individuals who find themselves in difficulty.

The second area that we ought to probe is the change of culture within Jobcentre Plus. There is a balance to be struck between codifying everything passed on to the JCP and giving advisers the discretion to interpret issues in the light of claimants’ circumstances. There is a question to be asked about the level of top-down instruction, which in the past has been very much the way of working. I looked up the instruction manual to ascertain what constitutes good reason or good cause for people not undertaking to do things they have been asked to do. You can read through 16 pages of guidance, plus another chapter. However, if you ask people in general what they would do in such circumstances, they reveal an all-embracing understanding of the issues. It is a very complex area and a vigorous interpretation of the guidance has led to the problems being experienced in some offices, particularly in relation to targets for sanctions, which have been mentioned today.

Ministers have had to come down hard on clear misinterpretation, but have signalled that they are pursuing the empowerment of decision-makers as a critical cultural change. There must be a role in all this for flexibility, discretion and sensitivity. The legal case behind today’s Bill has thrown up other cases. As regards the cultural shift that Ministers have outlined, a basic structure needs to be provided vis-à-vis the way Work Programme claimants are handled. That structure should have three components. First, there should be a meeting with the provider or JCP contractor. Often there is no face to face meeting between the provider and the claimant. However, it is necessary to have an intelligent conversation about their future needs. Those needs should be clearly communicated and agreed. The outcome also needs to be agreed between both parties, rather like the new contracts proposed for universal credit.

Secondly, it is important to try to fit the placement to the person. It is important to establish the work habit, obviously, but an appropriate placement is needed that suits the requirements of both parties. Thirdly, the Government should not get in the way of serious job opportunities. They need to give people space to find their own placements. Just yesterday, I heard a case of someone with a qualification in photography who was offered a job in a do-it-yourself shop but found a more appropriate placement in a photography shop, which was accepted as an appropriate placement. I welcome the independent review process. We now need to see new detailed terms of reference. I always make the plea to my noble friend the Minister that any evaluation, rather than being considered a milestone, should be rolling so that you can learn lessons as information comes before you. I hope that we will hear more about that later. I look forward to hearing the Minister meet the concerns of the Constitution Committee, but otherwise I am happy to support the Bill.

[Lord Foulkes of Cumnock]

Could the noble Lord help me? I remember when the Liberal Democrats were on this side of the House all the handwringing about retrospection and fast-tracking of legislation. I am not clear from what the noble Lord said whether he is in favour of the Constitution Committee’s report or supports the Government on both retrospection and fast-tracking. Could he make that clear to the House?

[Lord German]

Yes, I will. It is perfectly obvious that the noble Lord’s party did the same thing when it was in power. There was retrospection in legislation. I can think of the videogames legislation, which has some very great similarities to this Bill. My plea to the Government is to answer the questions posed to them by the Constitution Committee in this debate so that we can have that explanation. I quoted the two paragraphs of the report. I am sure the noble Lord has that in front of him, so he can look at paragraphs 12 and 15. Those are the two questions I want answered.

--- Later in debate ---

[Lord Freud]

As noble Lords know, we are seeking leave to appeal to the Supreme Court to test that specific matter. I will shortly come on to the point raised by the noble Lord, Lord Pannick, about why we have fast-tracked this Bill. However, we have explored all the avenues and have not taken a decision to fast-track lightly. We have looked at other measures to prevent this course of action but none provides a sufficient guarantee. People have been concerned about the four-week period. We have also spent a significant period discussing, through the usual channels, agreement to expedite this legislation.

Let me make clear why the retrospective legislation is necessary. The Government respect the general principle that Parliament should not legislate to reverse the effects of court judgments on past cases unless the situation is exceptional. However, it is entirely proper to enact such legislation if there is a compelling reason to do so. Perhaps I may spell out the three reasons which make this an exceptional case. First, there is significant money involved—£130 million—in very difficult, austere times. Secondly, the money would go to a group of people who neither expect nor deserve to obtain a windfall payment. These claimants knew exactly what was required of them. They failed to participate without good cause and were rightly sanctioned. Thirdly, this case is most unusual in terms of social security legislation.

[Lord Foulkes of Cumnock]

The noble Lord is repeating word for word what he said in his introductory speech. Why does he not reply and answer the important questions that have been raised? For example, why did he not ask for his appeal to the Supreme Court to be fast-tracked? Can he not answer the debate instead of repeating what he said at the beginning?

[Lord Freud]

I am doing my best to explain the reason why this is exceptional. I did not explain it in detail at the outset, so I am really grateful for the opportunity, reinforced by the noble Lord, to explain the exception.

The third reason why this is exceptional is to do with the nature of social security legislation. In almost all cases regarding social security decisions, the decisions of a court or tribunal are only prospective in nature. That is because the most common way in which to challenge a social security decision, including the underlying regulations, is to bring an appeal to the First-tier Tribunal. If that happens, the normal route is followed and the decision of the tribunal will not have a retrospective effect because of Section 27 of the Social Security Act 1998. It is only because there is an anomaly in the text of Section 27 that it does not apply to judicial review cases. That is something that I suspect that this Government will come back to, to clear up. It is clear from Section 27 that Parliament recognised that wholesale retrospective disruption of the social security system was not desirable. That is even more true in a case like this, when the beneficiaries of that disruption are not deserving of the windfall that they would otherwise receive. That is why this is exceptional.

I turn to the reason why we need to fast-track the Bill. I want to respond to the rather witty way in which the noble Lord, Lord Pannick, put his view that there was no urgency by explaining to him and other noble Lords that we have applied for permission to appeal to the Supreme Court. If we are not given that permission to go ahead—and that could come out any day—we immediately become liable to pay back the sanction money of £130 million. That is why there is particular urgency and that is why we are fast-tracking this legislation. We need to provide certainty to taxpayers that we will not spend this money in this way, unnecessarily. The department will endeavour to process the stockpile cases in a robust, transparent and efficient manner. While there is clearly a trade-off between robustness and speed, we will aim to do that as practically as possible.

Enterprise and Regulatory Reform Bill

Lord Foulkes of Cumnock Excerpts

Monday 4th March 2013 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)]

My Lords, I beg to move that this Bill now be further considered on Report.

[Lord Foulkes of Cumnock]

My Lords, before we move to consideration of the matters before us today, I wonder whether I have missed something. Has this House appointed the noble Lord, Lord Geddes, to adjudicate on matters of order? I ask because my noble friend Lady Turner was interrupted disgracefully by a loud heckling by the noble Lord, Lord Geddes, from a sedentary position, because of his interpretation of what is right and wrong in this Chamber. It is disgraceful that she was treated in such a manner.

[Lord Geddes]

Perhaps I may respond to that. I was merely reiterating what is in the Companion; to the best of my knowledge, those are the rules by which we govern ourselves.

[Lord Foulkes of Cumnock]

My Lords, who gave the noble Lord, Lord Geddes, the individual right to shout from a sedentary position about whether or not one small matter in relation to the Companion has been dealt with? Surely, shouting from a sedentary position is not allowed?

[Baroness Anelay of St Johns]

My Lords, this House is self-regulating, which also means that it conducts itself with self-restraint and follows the guidance in the Companion. I am sure that all noble Lords around the House are keen to do that. It is a good idea to discuss with our Chief Whips how that is best achieved. I know that the Opposition Chief Whip has recently sent to his own Back-Benchers what I consider to be a very helpful guide about what constitutes good behaviour. We should reflect on that. Without pointing fingers, we all should behave in ways that we feel are not becoming of this place. We all want to ensure that we do our job. After all, most people here say that for most of the time we try to do it well.

Benefits: EU Nationals

Lord Foulkes of Cumnock Excerpts

Monday 7th November 2011 Lords Chamber

[Lord Foulkes of Cumnock]

In this particular area, the Minister still has not answered the question put by two of my colleagues. They did not ask whether benefits are going to be uprated by 5.2 per cent, as they should be, but when the Government are going to tell us. It is the time that we want to know; not a definitive statement now. Will he now answer that question?

[Lord Freud]

My Lords, as noble Lords will be well aware, there is an autumn Statement where these things are declared. That is the answer.

Welfare Reform Bill

Lord Foulkes of Cumnock Excerpts

Monday 24th October 2011 Grand Committee

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

My Lords, Amendments 50A and 53 concern couples where one member is above qualifying age for pension credit, and the other below. The Bill provides that such couples will in future claim universal credit rather than pension credit. I should stress that this change will not affect couples already in receipt of pension credit. It will apply only to new cases. The effect will therefore build up slowly and existing cases will not be disturbed.

In response to the point made by the noble Lord, Lord McKenzie, we still need to decide how to deal with cases which move on and off pension credit in future. To pick up on the point made by the noble Baroness, Lady Drake, about the impact assessment, this shows the long-term effect, and not the immediate impact.

I am grateful to the noble Baroness, Lady Greengross, for clarifying that she is not opposed to this change of emphasis in principle. The rationale is that while one member of the couple may be over the qualifying age for pension credit, the other member of the couple is of working age. Since all people of working age who can work should be expected to do so and there are no work-related requirements associated with pension credit, it follows that universal credit is the appropriate benefit. I should stress that the work-related requirements would apply only to the working-age partner.

I am grateful to the noble Baroness, Lady Greengross, for also acknowledging that in some cases the more generous earnings rules in universal credit may mean that it is a more advantageous benefit than pension credit. The disregards and earnings tapers in universal credit will mean that if one or both of the couple does work, they will keep much more of their earnings than they would in pension credit where earnings over £10 a week are deducted pound for pound from the guarantee credit.

The issue is about the rate of universal credit and how this compares with pension credit. Noble Lords will be aware that the levels of support through pension credit are significantly higher than levels of current benefits for people of working age. This is due in particular to the way in which pension-age benefits have been uprated at a faster rate than working-age benefits in recent years.

[Lord Foulkes of Cumnock]

As usual I am not up to speed on everything. Could the noble Lord say exactly what he means in this context by “working age”?

[Lord Freud]

My Lords, I am not often baffled, but by “working age” I mean someone below the state pension age, which is moving currently. But that is a formal definition.

[Lord Foulkes of Cumnock]

I am grateful to the Minister. In other words, as the age of eligibility for a state pension increases, under the definition in this Bill “working age” will increase at the same time with it. Is that right?

[Lord Freud]

Yes, I can confirm to the noble Lord that that is absolutely what is happening here. Clearly, we have debated the changes in pension age. That is to do with the very welcome increase in longevity and the length of people’s healthy lives. Returning to the point, the noble Baroness’s amendment would deal with the difference between pension credit levels and universal credit levels by including an additional amount in universal credit where a claimant is over the state pension qualifying age. I understand the reasoning—and indeed there are currently pensioner premiums along these lines in income support and jobseeker’s allowance. In designing universal credit, however, we have not included any additions specifically for people over pension age. There are two main reasons for this.

First, we think that it could reduce the work incentives for the working-age partner if they are paid a higher rate of benefit simply because they have an older partner. We are already including additions for specific reasons such as caring, or limited capability for work, where people are likely to have longer durations on benefit. Clearly, we are raising some of those levels appreciably. If in a particular case these additions are not appropriate, there ought, in principle, to be as much scope for the working-age partner to work as in any other case, so it is not clear why a higher rate of benefit should be paid.

Secondly, as the noble Baronesses, Lady Drake and Lady Hollis, rightly pointed out, there is a significant programme of change under way for people over pension age. Following the Chancellor’s announcement in the Budget of 23 March, the Government published the Green Paper A State Pension for the 21st Century in April. That paper set out options for reforming the state pension system for future pensioners. In the light of the responses to the Green Paper, we are currently developing proposals for changing the state pension system and at the same time are considering how pension credit may need to change to best meet the needs of future pensioners under any reformed state pension. It would clearly be important to make sure that any arrangements for pensioners dovetail closely with universal credit to ensure a smooth interface and also to ensure that we deal fairly with couples where one person is over pension age and the other is under it. Until our thinking is further developed, we have only one side of the equation. We need both sides of the equation to consider this issue fully. I should just add that clearly once there is a migration on changing pensions the migration strategy into universal credit and the timing of how we take different groups into it will also be hugely relevant. That goes to the heart of the very perceptive question asked by the noble Baroness, Lady Hollis.