Universal Credit

Debate between Lord Freud and Lord Bishop of Chester

Tuesday 7th July 2015 Lords Chamber

[Lord Freud]

One of my purposes today is to find a forum where I can update noble Lords in this Chamber about what is happening in a somewhat more sensible atmosphere than is perhaps seen elsewhere in the Palace of Westminster. On the point about timing we have reset this programme, as I am sure all noble Lords here well remember, and will not be going on to the rather sharp upgrades in the volumes that we were initially looking at. We are now designing it in such a way that we will test different groups and make sure that we roll it out sensibly. That was what the reset was about and, interestingly, it is exactly what the NAO and MPA are saying is the way to roll out big programmes.

[The Lord Bishop of Chester]

My Lords, in his Answer the Minister referred to universal credit as incentivising people to work. Can he give a bit more detail on just what that incentivisation involves? What is the typical marginal effective tax rate for someone who is on universal credit, given that I read recently that it can be more than 70%?

[Lord Freud]

The marginal rate—the rate at which one withdraws benefit—is 65%. In practice, among the incentive effects are that all the constraints about taking temporary jobs or trying part-time jobs have disappeared, as have some of the constraints against people who may be disabled with fluctuating conditions. They would not normally dare take on a job because if their condition came back, they would have to restart the process of getting on benefits. Because universal credit is both an out-of-work and in-work benefit, it means that there is no risk element to being in work.

Construction (Design and Management) Regulations 2015

Debate between Lord Freud and Lord Bishop of Chester

Thursday 26th March 2015 Lords Chamber

[The Lord Bishop of Chester]

My Lords, I have just one brief question for the Minister on the regulations. Paragraph 20 of the impact assessment refers to financial impact. It states that the deemed approach—which is much the better one, I am sure—will cost £1.3 million to homeowners and £4.6 million to contractors. All my experience is that costs to contractors get handed on to the people for whom they are providing their services, so how do we know that the £4.6 million will not simply be handed on to the homeowners to whom the services are being provided? How can one make that distinction?

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

My Lords, I thank the noble Lord, Lord Stevenson, for raising this issue and giving me the opportunity to reassure him and others on both the key points that he raises, which are the implications for domestic owners and for the entertainment industry. In particular, I reassure his plumber and joiner that their responsibilities in practice will not change as a result of the introduction of the regulations.

Since their first implementation in 1994, the Construction (Design and Management) Regulations—let us shorten them to CDM—have facilitated widespread culture change, improved ownership of risk, and a reduction in fatal and major incidence rates by two-thirds. That is a good news story in everyone’s book, and I welcome the chance to spell that out.

The CDM 2015 regulations are reformed and simplified. They retain technical standards to be achieved on sites, enable reduction in industry bureaucracy and improved compliance in small businesses, and address two areas of underimplementation of the temporary or mobile construction sites directive. Overall, the regulations are estimated to generate net savings to business of £121 million over 10 years. CDM 2015 is thus a significant enabler of growth in an industry employing more than 2 million people.

Despite the numerous benefits that the revision brings, the Government recognise that some businesses have raised concerns arising from the consequences of implementing certain requirements of the directive. The Government had no realistic option other than to implement these measures to comply with our European obligations and avoid the consequences of failing properly to transpose the directive, but we have done so in a way that minimises overheads, and at the same time have taken the opportunity to make the significant reforms to the regulations that I mentioned.

Those concerns relate to lower thresholds for health and safety co-ordinator appointments and written health and safety plans, and in application to domestic clients for the first time. The regulations have always applied to construction work wherever it is undertaken and whatever its scale, complexity and risk. Some stakeholders in the entertainment industry have been particularly exercised that unduly burdensome administrative requirements will now arise for minor construction work that is part of their day-to-day business.

The Government and HSE are aware that there is a sometimes a tendency in parts of the entertainment sector for overcompliance with health and safety requirements. Indeed, the HSE’s Myth Busters panel has dealt with a number of cases from the entertainment sector where a disproportionate approach or decision has been made. The guidance supporting the CDM regulations 2015 stresses the need for a proportionate and practical approach to the management of risk, and this of course is the Government’s goal, too. The industry needs to respond appropriately, and I am encouraged that the HSE is fully engaged with entertainment industry stakeholders to produce sector-specific guidance. This will help the industry to understand how its current management arrangements can be applied to comply with the CDM regulations 2015, and avoid overcomplicating matters which could incur unnecessary cost.

The right reverend Prelate the Bishop of Chester raised issues on costs added to homeowners. Clearly, in the end the costs will be added to homeowners—that is how it works. Contractors do work for people and add on the costs but those costs are extraordinarily small in an economy of—what are we, £1.5 trillion? Costs of £4.6 million are extremely small, particularly compared with the costs that homeowners would otherwise have had if they were not able to deem the issue down to the contractor, which is what this structure does.

To pick up the point of the noble Lord, Lord Stevenson, on the way in which this legislation was introduced through the negative resolution procedure, all health and safety legislation is made in this way. As I have explained, this change to the domestic client provisions was required to comply with EU law obligations and, as I say, that is the way that we always do these changes in HSE.

I think that I have dealt with all the questions raised. Let me thank the noble Lord again because I hope that I have provided reassurance all around that this provision is proportionate, saves money and makes sure that we are actually complying with our obligations.

Welfare: Cost of Family Breakdown

Debate between Lord Freud and Lord Bishop of Chester

Tuesday 4th March 2014 Lords Chamber

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

My Lords, I am unable to give an official figure. A number of organisations have produced estimates—for example, the Relationships Foundation, at £45 billion-odd—but there is no consensus. The social security spend on lone parents and collecting child maintenance is just under £9 billion, but we must acknowledge that there are wider societal costs. Government have an important role to play in supporting families and working to ensure stable futures for children.

[The Lord Bishop of Chester]

My Lords, if the figure of £45 billion or £46 billion given by the Relationships Foundation is even remotely accurate, that illustrates the cost of family and relational breakdown, which cashes out at about £1,500 each year for each taxpayer in our country. What more do the Government propose to do to support and strengthen family life and relationships in our country, which must somewhere include supporting the institution of marriage?

[Lord Freud]

My Lords, the Government place the importance of sustaining relationships and families high up on their agenda and have a number of programmes to encourage that, which include extending childcare, tax-free childcare, and flexible working for both parents. We have worked on support for relationships and for parenting and have introduced a marriage tax break. We are looking at this whole area in our family stability review, which will be published later this year.

Pensions Bill

Debate between Lord Freud and Lord Bishop of Chester

Wednesday 8th January 2014 Grand Committee

[Lord Freud]

That is the standard position whereby, if you are in arrears for a year, you can take the provision at the end of that year and that is treated as arrears of pension rather than a lump sum. Some noble Lords are very concerned about the issue of the nest egg. If we drop the distinction between arrears and lump sum, there is a nest egg opportunity in that £7,500, which may go a long way to satisfy the concerns that have been expressed with some vigour this afternoon.

[The Lord Bishop of Chester]

My Lords, I invite the Minister to comment on the more general point as we are getting into specifics, which I recognise are complicated. Do the Government agree that it would basically be a good thing if deferral was encouraged? Is it the Government’s position that in the great scheme of things and income in old age it would be a good thing if the principle of people being encouraged to defer was affirmed?

[Lord Freud]

I am not sure that parliamentary privilege covers me for giving financial advice. Perhaps the noble Baroness, Lady Drake, could advise me on what I should say on that matter.

--- Later in debate ---

[Lord Freud]

I must thank the noble Baroness for keeping me out of jail. Many a seminar that I have been to would have told me that. It is a matter for people to judge.

[The Lord Bishop of Chester]

If I may have another little bite of the cherry, I do not wish the Minister or the Government to give any specific advice to any specific person. I am inviting a general comment upon the desirability of people looking to the longer term, given the parameters around old age and pensions in our society. If in some general terms that is a desirable object, without making any comment about specific cases, surely the more flexibility we build in, the better.

[Lord Freud]

I actually have very strong views on this matter but I think they are personal. I am going to utterly resist putting them on the record in this Committee but I would enjoy having tea with the right reverend Prelate and giving vent to my personal views at full force.

[Baroness Drake]

Could we come too?

[The Lord Bishop of Chester]

My Lords, very few people on the Committee will know that the last time that I had tea with the Minister was in his rooms in Merton College when we were both first years in 1969, so it would be good to have another cup. Given the nature of this discussion, I wonder whether the Minister could at least agree to take the issue away and think about it. There are issues here that may need a bit of teasing out other than in the circumstances of this Committee.

[Lord Freud]

I have to accept that the right reverend Prelate is on a very important and interesting point, on which one could write many a financial essay. I will go back and think about whether there is any generalised approach that we as a Government should take on this. I will resist any indulgence in doing so off the top of my head, though, because this is a huge and difficult issue.

Housing: Under-occupancy Charge

Debate between Lord Freud and Lord Bishop of Chester

Monday 21st October 2013 Lords Chamber

[Lord Freud]

My Lords, my noble friend is right. Our very early soundings are that some local authorities are not spending all their DHP. Clearly, we provide that funding in order that vulnerable people are protected through this transition period and we have been monitoring that very closely.

[The Lord Bishop of Ripon and Leeds]

My Lords, is the Minister aware of the evidence that people who are leaving accommodation to avoid the under-occupancy charge are being rehoused in private accommodation at greater cost? What steps are being taken to monitor this?

[Lord Freud]

My Lords, as I have just pointed out, we are undertaking an elaborate set of research programmes to understand this. If a family moves into private accommodation, which is more expensive, it does not necessarily mean that there is a net cost, because it frees up larger accommodation in the social rented sector to which a family can move from the expensive private sector.