Welfare Reform Bill
Debate between Lord Freud and Lord Newton of Braintree(12 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
I think it is clear that the way that maintenance direct works is that the two parents have to agree on it. That is the point of maintenance direct. Under that system the Government calculate how much child maintenance is payable, but the payments themselves are made directly by the non-resident parent to the parent with care. If the payments are made in that way, no collection charges apply. It is a mutual decision.
The Government will ensure that a service is provided that enables maintenance direct to be used without the need for any contact to be made or personal information to be divulged. By using this system, the parent with care has the security of knowing that where it is established that payment has not been made in full and on time by the non-resident parent, the case will be moved into the collection service and swift action can be taken to reinstate payments. They can switch back and forth into that system. I take my noble friend’s point that there is a lot of attraction in that system and it may be underpublicised. To the extent that it is, we need to do something about it.
Where the payments move back into the collection service, charges will then be imposed for its use and they are heavily weighted on the non-resident parent. That acts as a real incentive for non-resident parents to pay in full and on time, and indeed by the charge-free method of maintenance direct. On the question of some non-residents wanting to go on punishing their ex, the parent with care, that would be a very expensive way of doing it—it costs the non-resident roughly twice as much as it does the resident.
I want to come back to the noble Baroness, Lady Sherlock, who said that she would deal with my argument piece by piece. I did not particularly agree with her. I was adding up the benefits system but also the tax credits system, which presumably many of the others who were not on the benefits system would have been on. Tax credits were invented in the early 2000s. I am talking about what it was like in the 1990s. The process by which the state supplied money for lone parents grew gradually through the 2000s until there was a total disregard. Early on, that was in the form of tax credits. From 2008, a proportion was in the form of benefits. The full disregard came in 2010. Therefore, I do not particularly buy the dismantling of the noble Baroness, Lady Sherlock.
I want to go into the costs. We estimate that the cost of Amendment 73C would be around £190 million, although it would depend on the exact level of the collection charge. There are assumptions around that. Therefore, in response to the question of my noble friend Lord Higgins, I say that it would be only a little less than the cost of the original amendment tabled by my noble and learned friend Lord Mackay, which was £220 million.
I also acknowledge the serious and considered concerns that have been set out by noble Lords both today and in our previous debate on this. I am prepared to make some specific commitments to the House on the development and oversight of the regulations, along the lines suggested by my noble friends Lord Boswell and Lord Newton. Later this year we will bring forward the regulations. At that point, other Ministers and I would like to offer Peers the opportunity to meet in a special session in Parliament to gather their views. We envisage an agenda based around the regulations, covering those that relate to the key concerns expressed during the passage of the Bill. I will of course take direction from interested Peers—there are a lot of them—as to the structure of that session. We will set that up as required.
We will also conduct a public consultation on the regulations. Following the finalisation of regulations after consultation, we will bring them back to the House. At that point, we will again offer a session for Peers to complement consideration by the committees of the House. That will not be the last time that the House debates charging; we will bring the affirmative regulations forward for debate.
We also acknowledge the need to evaluate and review constantly the impact of charges on parents. In respect of that, we have already amended the Bill to ensure that the review is published within 30 months of its introduction. Again, I here commit that we will seek the input of Peers during the course of that review in advance of a report being laid before Parliament.
Let me also be specific about what we intend to look at as part of that review. We will want to look at the impact of the application and collection charges on the behaviour of both parents and at the outcomes in terms of establishing effective maintenance arrangements. In our report to Parliament, we will make clear our intentions, including a specific view on the position of the poorest parents.
Lord Newton of Braintree
Briefly, may I just—in the form of a question, as I think is appropriate—ask my noble friend whether he is aware that I think that is a significantly generous response to my request for proper, genuine consultation and a real opportunity for the House to have a say?
Lord Freud
I am very grateful to my noble friend for that. In that spirit, I turn finally to my noble friend Lord Boswell’s Amendment 73BA. In doing so, I thank him for his contribution to today’s debate, which, as one would expect, was thoughtful and wise, as many other contributions have been, even those I have not necessarily agreed with.
We absolutely acknowledge the concerns around vulnerable groups, particularly parents with care. Although we will not further amend our current proposals, we want to ensure that, going forward, especially at the time of the review, we have the powers to evolve charges in line with evaluation. As I have stated, we especially want to consider the behavioural responses of parents and the outcomes they reach as part of our review. If in the light of evaluation and review we need to change our approach, I believe that Amendment 73BA clarifies that we would have the ability to do so under the 2008 Act. Therefore, I welcome Amendment 73BA and the Government wish to accept it.
Welfare Reform Bill
Debate between Lord Freud and Lord Newton of Braintree(12 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
My Lords, Clause 129 enables relevant information to be shared between DWP, local authorities and others for prescribed purposes relating to the operation and administration of welfare services and social security benefits. As thinking has developed in relation to new data-sharing arrangements, it has become apparent that we may want to supply social security benefit information to local authorities in connection with the administration of localised council tax schemes. These amendments will enable that, and will allow local authorities to share such information between and within themselves for the purposes prescribed. Making social security information available in this way will help local authorities design and deliver schemes that provide appropriate financial support to residents who are unable to meet the full cost of their council tax. I beg to move.
Lord Newton of Braintree
My Lords, I just want one penn’orth. I completely support these amendments, but they give me the opportunity which I missed earlier in these proceedings to record on the Floor of the House that the single silliest thing in this whole affair is the determination of the Department for Communities and Local Government to have separate council tax benefit systems in every corner of the country. That is a battle to be fought again on another day. I had devised an amendment that could have brought it up today, but I decided that discretion was the better part of valour at this stage. However, there is a local government finance Bill coming down the path. My noble friend—and, above all, his noble friends in the DCLG—should know that some of us are going to go on worrying away at this total absurdity, which I know is not supported in the DWP itself. These amendments may help to mitigate the effects but they will not completely eliminate them, and I shall go on trying to eliminate them.
Welfare Reform Bill
Debate between Lord Freud and Lord Newton of Braintree(12 years, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newton of Braintree
I can understand that; that is where the noble Baroness is more up to date than I am. The Minister must be the most up to date of all.
Lord Freud
My Lords, I apologise that the information about the second draft criteria was not available earlier and I apologise for ruining a lot of weekends. What is the reason? We had a large volume of feedback to our informal consultation and we have made a significant amount of changes. It took some time—rather longer than we hoped—to work through it all. It is crucial that we get this right. One of the reasons—as noble Lords have pointed out already—is that there is a lot of sensitivity around this. If we put things out that are not right, we will create concerns where we should not. Misleading impressions here are very dangerous.
As I said, we aim to have the thresholds available for the Report stage of our consideration of this—not before the whole of the Report stage, but in good time for when we reach these matters at Report.
Welfare Reform Bill
Debate between Lord Freud and Lord Newton of Braintree(12 years, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newton of Braintree
My Lords, I will say a brief word to defend myself against this onslaught. I do not think that there is a lot between us. I do not disagree with a word spoken by either of the two noble Baronesses about what our objectives should be. I hope that I indicated that. I simply do not think—this is my attempt to curry favour with the Minister—that the amendment achieves the objective in a satisfactory way. Can we be friends again?
Lord Freud
On that note, I shall take this opportunity to respond. My first point is that we are all in general agreement that it is vital to balance the requirements placed on claimants with any childcare responsibilities they may have. The amendments raise the concern that we will not take these responsibilities into account. I hope that I will be able to reassure noble Lords that this is not the case.
As is the case now, legislation will provide clear safeguards. We are committed in particular to ensuring that the same safeguards exist for lone parents as are currently in place. Our legislation will ensure that no claimant who is responsible for a child under five can be made to look for or take a job. These claimants will be required only to attend work-focused interviews. If they fail to meet this basic requirement for no good reason, they will be subject to the lowest level of open-ended sanction. The sanctionable amount for this group will be capped at 40 per cent of the sanctionable amount for other claimants.
No claimant with a child under 13 will be required to look for a job that does not fit in with their child's school's hours, including a reasonable allowance for travel time. Such restrictions will mean that a claimant will not be required to apply for or accept a job that would mean that they could not care for their child outside school hours. Advisers will take into account the care needs of older children so that work search requirements can continue to be restricted where this is appropriate.
Lord Freud
That would be done through a conversation between the claimant and the adviser. Clearly, what is a reasonable amount of time is not that complicated an issue when you know where someone works and what their route should be. I am sure that they will be able to reach a reasonable agreement on that.
To the extent that childcare may be needed to help claimants meet work availability requirements, for example in school holidays, advisers will work with parents to help them identify childcare options. Currently, this would include referring claimants to the local family information service.
I take the important point raised by the noble Baroness, Lady Hollis, on the role of relatives in caring for children. Clearly their role is important as it allows parents to work and supports them. My best response is that we will keep it very much in mind as we develop our thinking and put the system into a state of implementation. We agree with the principle that childcare must be acceptable to the parent and even the child, despite what my noble friend Lord Newton said.
Baroness Hollis of Heigham
If they have good reason, we should listen to them.
Welfare Reform Bill
Debate between Lord Freud and Lord Newton of Braintree(12 years, 7 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newton of Braintree
Before my noble friend sits down, since this seems to be the time for Tory interventions, and his remarks just now seemed to lead straight into this one, if variation between local authorities in what they do in respect of Armed Forces pensions is a problem in the way that he described, although we are all no doubt very supportive, what will happen if we have 400 different council tax rebate social security systems all varying wildly between 400 local authorities? I have a lot of sympathy with his line of argument. He may even be sad to know—I hope that he will be pleased to know this—that I think he is right to resist these amendments. He is right to put the emphasis on assessing what happens once all this is in place. However, we will need to take into account the effect of what is happening as regards council tax benefit as well as all the other things.
Lord Freud
My Lords, I will just have to take that point on board. After our previous session, I know that—
Welfare Reform Bill
Debate between Lord Freud and Lord Newton of Braintree(12 years, 7 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newton of Braintree
Having been restrained by my noble friend Lord Kirkwood from what would have been some inflammatory remarks at an earlier stage, can I ask two questions at this stage before my noble friend sits down? First, if we are to go down this path, can we also have an obligation imposed on the devolved Administrations to consult on legislation they pass that has a significant knock-on effect in England, of which we have just heard another example in the housing field? Secondly, and quite separately, could he say a word about Northern Ireland, which to my recollection did not accept UK legislation but passed the same thing through its own procedures? Is that going to be the future situation as well?
Lord Freud
Yes, my Lords. In Northern Ireland they have a system of what they call parity. In practice they pick up Great British legislation.
Lord Newton of Braintree
It is not an exempted issue but they do the same thing.
Lord Freud
They do the same thing. It is a different arrangement. I have gone to Northern Ireland particularly on this matter. I am anyway, as you might imagine, not in a position to offer duties of this or that either way. However, I would not want to go back and try to do it under any kind of pressure because we are talking about the implementation of a very complex set of changes. Having a bureaucratic to-and-fro process is exactly the wrong way to do it. The right way to do it is the way that we are doing it, which is in intense dialogue and working it through. If noble Lords are interested in practical implementation of complicated transformative changes to our social welfare, they should allow us to do it this way because that is the best way that it will be achieved to time, to budget and to the betterment of the people in all the countries that we are talking about. I beg the noble Lords to withdraw the amendment.
Lord Freud
The impact assessment that I am talking about is the one on universal credit and how it will respond to the exclusion of council tax. We will not have an impact assessment from DCLG available for some time. I do not know when we will have that impact assessment, but I will write to the DCLG and find out.
Lord Newton of Braintree
That means that this impact assessment will not be an impact assessment of the effect of these proposals on poor people.
Lord Newton of Braintree
I am not going to press my noble friend further, but that is what it means.
Lord Freud
I think noble Lords will be somewhat relieved at the approach and will get quite a lot of information from the impact assessment on universal credit on its own. If it comes out soon, as I expect, there will be an opportunity to debate it again, perhaps around Clause 11, or possibly Clause 8, when we can look at the taper, so there will be a chance reasonably soon to look at the implications again.
Welfare Reform Bill
Debate between Lord Freud and Lord Newton of Braintree(12 years, 7 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newton of Braintree
I wonder if I could intervene from a sedentary position. I think all that the noble Baroness, Lady Meacher, was seeking was a simple assurance: if at some stage it becomes clear that the next bit will not work, will Ministers change the timetable? That is not a “beating your wife” question. It is simple and straightforward.
Lord Freud
It is never that black and white. When you build a system in stages, the issue is how partial or complete the system is. There is a decision to be taken around the level of partiality. If there were to be a delay—and as I say, there is not—clearly, one would have to be realistic. If there were some other problem and it did not work at all, again one would have to be realistic.
Lord Freud
I am most grateful to my noble friend. I shall continue dealing with the questions. My noble friend Lord Kirkwood was interested in the interrelationship with the Social Security Advisory Committee, which, as he pointed out, has a statutory duty to examine all social security regulations. Any regulations for universal credit that rely on existing legislation—for example, those relating to claims, and awards and payments to joint claimants—will therefore be subject to full SSAC examination. I accept that there are large parts of the Bill that introduce new regulation-making powers. In these areas, the committee may not have its former role, but I assure noble Lords that we will continue to talk to the committee and use the arrangements currently in place allowing us to provide it with information on new powers and the regulations made, within six months of the commencement of those powers.
On the question raised by the noble Lord, Lord McKenzie, on how the system will cope with, for instance, a self-employed and an employed member of a household, any earnings received through the PAYE system will automatically be taken into account even though they may be from one or more PAYE sources. We will clearly need to take assessment of non-PAYE earnings through some other tool, and we are looking at developing a self-reporting tool to provide us with earnings information.
A number of noble Lords raised the issue of language, including my noble friends Lord Kirkwood and Lord Newton and the noble Baronesses, Lady Hollis and Lady Campbell. I have to agree that language is extremely important. There are quite a few issues around it; some involve European legislation on exportability, so sometimes there are some constrictions. I see universal credit as a support for those who need it, whether they are unemployed, disabled, a lone parent or working for a relatively low income. We want universal credit to support as many people into work as possible.
I will come to the language issue around the name “universal credit”. One of the things about the word “credit” is that it carries with it a sense of entitlement, and I know that a lot of noble Lords are concerned about that. There is some language around that, and that is why the term was chosen in the case of tax credits. There is a sense in which it is a credit; there is an entitlement there.
I was asked by the noble Baroness, Lady Meacher, about allowances for training of staff—clearly, one does not have a transformative project such as this without having properly trained staff. The total budget that has been set aside to fund the transition, including administration costs, is £2 billion. Training is a crucial element of that.
Amendment 1, raised by my noble friend Lord Kirkwood, would rename universal credit. His title, “working age entitlement”, is a straw man, as he said. It is fair to ask where “universal credit” comes from. It has its origins in the financial dynamics paper, although the noble Lord will know if he remembers that paper well that there were two different credits. In this case, they were boiled down into a single credit for all people on working-age, means-tested benefit. That is where its universality resides: it captures everyone in that category.
One of the attractions of having one word to capture all working-age benefits is that we have two systems today, an out-of-work benefit system and an in-work tax credit system, and the differentiation between them has made it harder to move from one to the other. That is where the discrimination and the differentiation are; that is where the apartheid—if one wants to use an ugly word—lies. That is the gap that we are trying to remove. There is not a real gap, as noble Lords have pointed out today, between those who are unfortunate enough to be out of work, or those who have a disability or fluctuating condition that means that they cannot reliably go into work, and those in work. There is no hard line between the two, nor do we want there to be. We want people to be able to flow across easily. It is because we have two different systems that we have made it so much harder. That is what we are doing with the universal credit, and that is what lies behind our reason for calling it that. As the noble Lord said, what’s in a name? It may seem rather a wide name—“universal”—but it reflects the fact that a whole range of needs will now be met through a single payment rather than by a piecemeal and confusing jumble of benefits and credits. I therefore urge the noble Lord to withdraw his amendment.
Baroness Hayter of Kentish Town
I have two questions arising from what the Minister has said. The first is on the current impact assessment—we look forward to the new one soon—of the number of children who will be helped. I think that the figure was 350,000. Was that figure reached before other changes to the benefits system were taken into account, given that the IFS has estimated that child poverty will rise in 2013? The second question, briefly, is on IT. I was involved with some of the IT systems for automatic enrolment with NEST. I should like the comfort of knowing that these two will also be well connected.
Lord Newton of Braintree
Before the Minister responds to that, may I chip in? The one thing that has not been touched on—I noticed that the noble Baroness, Lady Howe, was a bit agitated about this as well—is childcare costs. There was no comment on this.
Lord Freud
The noble Baroness, Lady Hayter, asked two questions. The child poverty impact that I cited from the impact assessment refers to the universal credit alone. It does not incorporate the other changes that there may be. On IT, we are working very hard to make these systems work together smoothly. The third issue, raised by my noble friend Lord Newton, was on childcare. I have had a supportive word from the Box, which I shall seize and use: I hope to be able to inform him and other noble Lords soon about our childcare arrangements.
Lord Freud
I think we have developed a code for “soon”, which I need not go on about again.
Lord Newton of Braintree
On this occasion I will accept not just realism but good will.
Lord Kirkwood of Kirkhope
I am grateful to all colleagues who have taken part in this debate. I hope it has fulfilled its purpose of scoping out exactly where the Committee is going. I understand that colleagues want to finish at 7.30 pm. I cannot but welcome my mentor, the noble Lord, Lord Newton, who was Secretary of State for Health and Social Security under Margaret Thatcher and succeeded in spite of all these things. It is a particular delight. I should like the Minister of State to pay particular attention to what the noble Lord says because he knows what he is talking about. I know this because I have followed his career for many years.
We obviously need a code for this. An Enigma machine might be purchased so that we can understand what “soon” really means, and issues of that kind. That will help the Committee. I certainly want to sign up for the demonstration of Yasmin and Liam when it comes. Apart from anything else, I have a drink riding on this. If this system works, I owe the Minister of State at least a double whisky or whatever his poison is. I want to be deeply involved in all these processes related to IT.
I have two other very quick points. It is true to say, and reassuring to hear, that SSAC has that role, and that the Minister clearly understands its importance in this process. He will know that it has never had the same formal process of review over tax credits that it had over the benefits system. We need to be careful about that. If the Government are not careful and start hiding behind that technicality, it may be more difficult for SSAC to look at the successor benefits to tax credits and working tax credit, which would be a shame. I would not mind some reassurance on that.
Just for amusement, I discovered that the word “regulations” appears 380 times in the Bill.
Autism: Disability Living Allowance
Debate between Lord Freud and Lord Newton of Braintree(13 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
My Lords, clearly that would be a desirable outcome. However, in practice, particular requirements apply that make it hard to travel from where we are today to the ideal.
Lord Newton of Braintree
My Lords, I ought to declare an interest as the Secretary of State under whom DLA was introduced. That is not to say that I want to defend every dot and comma but I would like to associate myself particularly with the concerns expressed by my noble friend Lady Browning and the noble Baroness, Lady Pitkeathley. I hope that the Minister’s department will continue the sensitive way in which he has sought to answer these questions.
Lord Freud
My Lords, one of the issues around DLA is that it is concentrated far more on physical, rather than mental, impairment. As we start assessing how to make personal independence payments, we are learning about the importance of properly factoring in mental impairment. That will be one of the main differences between the personal independence payment and DLA.