Welfare Reform Bill

Lord German Excerpts

Tuesday 18th October 2011 Grand Committee

[Baroness Wilkins]

My Lords, as my noble friend Lord Wigley suggested, I will leave the arguments about disabled people until our debate on the next group of amendments, and talk first about people who are not able to move because of a lack of supply. The Riverside housing association says that for those who stay put, the loss of benefit,

“will have a very significant impact on household income at a time when tenants face huge pressures from rising fuel and food prices”.

Social landlords house,

“some of the poorest households in the country … Such losses would enforce difficult choices between subsistence items such as eating well, clothing the children and, of course, paying the rent”.

Riverside points out that two-thirds of its tenants have,

“a net household income … of less than £10,200 per annum”.

This will cause devastating hardship.

[Lord German]

My Lords, I support my noble friend Lord Stoneham in his case for transition. My argument is that if we are going to introduce a policy of this sort, we have to ensure that the social and public housing sector is capable of meeting the changes that are being demanded by the policies of this Bill. Three policy ambitions underpin these clauses. The first relates to the inefficiencies in our social housing sector at the moment and the need to make better and more efficient use of our housing stock, bearing in mind that 7 per cent of homes in the social housing sector are overcrowded and 11 per cent are underoccupied. Already, there is a big mismatch. The second is that we want to increase mobility and strengthen the incentives to ensure that people can move within social housing in order to transfer into work. The third is the ambition to reduce the cost pressures on an ever increasing housing budget. We should remember that in today’s terms the budget has, over the past decade, increased from £14 billion to £22 billion a year, at the equivalent rate today.

My question for the Minister is: how prepared is the social housing sector to meet these changes in policy? If we follow the logic through, we see that there are only three choices that a tenant can make. The first is to pay the increased rent, which we know will on average be £13 a week for a one-bedroom overoccupier. The second is to occupy the spare room, which means either taking in a lodger or having the children back. I guess that some people would not mind having their children back but that others would not want them back at any cost. Whatever the circumstances, is that a realistic choice for many people?

The third choice that people will have is that they can move. In those three choices, what modelling has been done on how many people will make choice one, two or three? The only modelling I have seen has been from the National Housing Federation survey, which is only for part of the country, and they surveyed only 452 people. Clearly, if you are going to have a policy of this sort, the Government must be able to say that they have sought these solutions to ensure that their policy will work.

[Lord Foulkes of Cumnock]

Can I ask the noble Lord a number of questions since he is asking the Minister a lot of questions? He seems to accept the policy in the Bill but only wants it postponed, so what is his attitude to the amendment proposed by the noble Baroness, Lady Hollis? What is his response, particularly to the point made by my noble friend Lady Turner that this should be done by agreement and not be forced on people?

[Lord German]

I think if the noble Lord would wait a few moments, he will see what I am proposing. It is on this piece of card, which I can pass to him, but if he just bears with me, I will give him three things which I think are essential in order to make this section of the Bill work. That is why I am posing the questions, because it seems to me that the solutions are not given in any of the documents.

The document from the DWP about what these choices will be and the three questions that people will have to answer says:

“it is unclear how this”—

the policy—

“will affect the choices of claimants that are likely to be affected by the measure”.

In other words, the Government do not know; or do they? If they do know, we need to ensure that we have those figures in front of us. If we are to avoid unintended consequences, we are going to have to look at the levers that ensure that the housing stock is accurate, and if the housing stock can, over time, match the needs of this particular policy.

As we know, there are 670,000 claimants, presumably of working age, which means that a third of a million non-working age claimants are underoccupying—the noble Lords, Lord Stoneham and Lord Wigley, have talked about elderly people underoccupying. Maybe there is an answer to that which the Minister and the Government have already thought about. There are no figures that I have seen in any of the documentation that indicate how we are going to manage to create a housing stock to match the changes. First, we need to know how many of the 670,000 are going to move and the modelling figure behind it. Until we have the answer to that, we cannot answer the question about how many houses we are going to need.

[Baroness Hollis of Heigham]

The Government’s own impact assessment says:

“Estimates of Housing Benefit savings are based upon the current profile of tenants in the social rented sector, with little tenant mobility assumed”.

[Lord German]

I am grateful for that quotation, which of course goes against the other one that I gave from further on in the document, which says that we do not know what claimants’ choices are likely to be. The noble Baroness’s quotation has the word “little” in it. We have often reached the point where we have quoted from different sections of the same document, and that is why we need answers. We need to know which of the three choices people are going to make so that we can determine whether the homes are available for them. There are three solutions, which I put to the Minister and which we need answers about, at the very least after his answer to the fundamental question of whether we have the housing stock.

I ask the Minister, when replying, to talk not about the DCLG but about the three government departments that are responsible for these matters in this country, because three levers have to be pulled for the DWP to be able to answer that single question. What is the solution? I would like to know what the three government departments feel about how they can match housing demand. I must say that I am not particularly encouraged because, for many of us, moving house is probably the worst thing in the world that you could probably do. In fact, my noble friend Lord Kirkwood told me this morning that we ought to exchange our rubbish with our neighbour’s because our neighbour’s rubbish is much more interesting than our own. I have found moving house to be a very uncomfortable exercise, and I am sure we have to be careful of this. The Government say that they are working in England to develop a team of advisers who will work to help people to make better use of our housing stock, which is a laudable aim, but they also say that they will work with the devolved Administrations to see what can be done in Scotland and Wales. What can be done about the housing stock across the whole of the country where this policy impacts?

It seems to me that there are three potential solutions when we have the answers to the figures, one of which is that we must have housing money—discretionary housing money, or whatever—to ensure that the money reaches the particular groups that will need it in order to be able to make the adjustment. The second is about exceptions. We will come to that in the next set of amendments, but where the cost to the public purse can be demonstrated to be larger—and many of the amendments coming up now will demonstrate that—we must ensure that we have exceptions. The final point that has been made by many noble Lords here today is that we must have transition time for the social housing sector in all three parts of the country where this Bill applies to make the changes in order that this policy works. We cannot achieve the original purposes of these measures, all of which I think are right, without achieving those three things and without ensuring that we have a sector that can—

[Lord Foulkes of Cumnock]

I have listened very carefully, and the noble Lord’s Welsh eloquence—what do you call it, hwyl?—is impressive, but he has still not made it clear to me whether his speech is in support of the amendment by my noble friend Baroness Hollis.

[Lord German]

My speech, my Lords, is in favour of the policy proposals that are behind this measure, but in order to achieve that this amendment has given us an opportunity to explore the issues that need to be satisfied in order that we can proceed. And hwyl, by the way, is spelt H-W-Y-L, for the record.

[Baroness Hollis of Heigham]

Does that mean, therefore, that the noble Lord supports the DWP definition of underoccupancy in which there can be, except for special groups, no spare bedroom, as opposed to the DCLG one, which I outlined, which allowed at least one bedroom more—and in the latest Parliamentary Answer from Grant Shapps is two bedrooms more? Is that what the noble Lord was saying? We need to be clear where he is coming from on this.

[Lord German]

I cannot answer that question until such time as we have the answer to what our housing stock is, how many are going to move, and for those who are going to move whether there is available housing for them. That was the answer to the question, and the one I will give if the noble Baroness asks me again.

[Baroness Hollis of Heigham]

This is an “in principle” question: what definition of overcrowding or underoccupying is the noble Lord assuming such that the transitional arrangements must seek to meet and adapt to?

[Lord German]

I will repeat the answer that I gave the noble Baroness just now.

[Lord Foulkes of Cumnock]

I have still not had the answer to my question. I do not want him to repeat it, just to clarify it. It was the pronunciation of hwyl I had problems with, not the spelling.

For all his bluster and eloquence, I think the noble Lord has confirmed that he still supports the coalition Government’s dreadful proposals in the Bill. All his questions to the Minister are really just to cover up that fact.

[Baroness Thomas of Winchester]

The noble Lord, Lord Foulkes, is bullying my noble friend, which is outrageous. My noble friend is exploring the issues around this question, which is perfectly valid in Committee.

[Lord German]

If the noble Lord wants me to answer the question, I can answer it, and will answer it in this way; I believe that the three underpinning policies behind this section of this measure are correct, but in order to achieve those we have to answer some of the fundamental questions, which the noble Baroness, Lady Hollis of Heigham, raised earlier on today. I have also tried to seek answers to those questions, because I have not found them. That is what we are here to do, and that is what the Committee stage of a Bill is about, it seems to me, but I am new to this particular Parliament. In the one I have come from, that is what we would do: explore these issues.

[Lord Kirkwood of Kirkhope]

My Lords, I am provoked into joining this discussion, which I was going to leave until the next group of amendments.

First, underoccupation is one of the most serious concerns in this Bill, and I think that those concerns are shared across the Committee. I do not think that it helps to start picking away at the positions of individual members of the Committee at this time. What I think we are trying to do is to make it clear to the Government that the current proposals are unacceptable. They are unacceptable to me for two reasons. One is process—and we touched on the discussion about transition. On 1 April 2013, between 5 per cent and 10 per cent of the case load, which is arguably 67,000 working-age families, will be tipped into debt. It is a brick wall that they cannot avoid. It is very unusual for a social policy change of this magnitude not to have built in a transitional provision.

With a little bit of application and consideration, we might be able to address the issue of overoccupation, which it would be sensible to do in the long term. Speaking for myself, I think that Amendment 44 is close to doing that, although Amendment 40 is not far away. I got a very interesting note from Moat housing the other day, which suggested that:

“Two bedroom properties or below should never be regarded as ‘under-occupied’”.

It is as simple as that. That is another way of expressing it. I do not know what it would cost, but the Committee is right to explore some of these circumstances, which have ramifications for social landlords as well as everyone else. What worries me more than anything else is that on 1 April—that may be an appropriate date—in 2013, that change will be made, and people have very little protection or room for manoeuvre.

The other very interesting suggestion that Moat housing made to me, which I had never heard before, was that a “soft start” could be adopted when people were demonstrating that they were taking steps to address the underoccupation that they were allegedly facing at the time. They could continue to get the full support until they had made the appropriate arrangements. It would probably take 18 months or two years to work out in the wash; that may be too tight a period—it might take longer than that to do safely. As a Committee, we are looking for a safe transition process and a way of limiting the brick wall of debt that 670,000 of our social tenants in the United Kingdom will face on 1 April 2013. That is a matter of concern across the Committee, which I think we should represent to the Government in a way that will occasion constructive change on Report.

--- Later in debate ---

[The Earl of Listowel]

My Lords, before I speak to my amendment in this group, perhaps I may follow the noble Lord, Lord Best, in his concerns about the impact of this move to an underoccupation penalty, particularly on families. It was encouraging to hear from the Minister the results of his survey and some positive outcomes to the changes whereby people will look for work, or think of getting a lodger. However, what concerned me about his comments were the large numbers who might go into arrears. I have observed from my experience of young people leaving care and of other families that people leading chaotic lives tend to think from day to day.

Therefore, given the example given by the noble Baroness, Lady Hollis, if a family in bed and breakfast accommodation were offered a three-bedroom house that seems to suit them but may be too large, they may say, “We will take it and deal with the arrears when they come. We will not think of the future”. Then they end up in arrears and in serious difficulty because they are not able to cope with the worry of being in debt and they do not know what to do. I am grateful to the noble Lord, Lord Best, for highlighting the fact that this issue needs close attention from the Government, and I look forward to learning more about it. He has a good point. This is a serious worry with the underoccupation penalty.

The noble Lord also raised the question of foster carers. Under the current absurd arrangement, foster caring and providing a room to a foster child would not count as a room and in this scenario would count against one. I am not expressing that very clearly, but I think your Lordships understand what I mean. I suppose it might be argued that this will be an incentive for some people to foster if they have a spare room. If the Bill is changed to be made sane, they would not be caught by this part of the legislation.

However, I have two further thoughts. First, there is a real question as to how far one should professionalise foster caring. People should go into foster caring because they love children and want to provide a good home to a child. I know that there is a debate about the professionalisation of foster care but, in principle at least, people should be motivated by caring for children, not making a bit of extra money or saving some money. Secondly, the harms that may arise from this proposal by far outweigh any potential benefits of that kind. If such families get into arrears there is perhaps the cost to the mental health service as the family breaks down under stress. There is the cost to the education system as their children fail. One needs to look at the bigger picture rather than just think about short-term savings.

Perhaps I may sum up. I apologise for using my laptop on this occasion; however, I cannot get internet access today and I was unable to download my notes and print them out. My Amendment 85 is modelled on the previous amendments of the noble Lord, Lord Kirkwood, and I apologise to the Committee because I drafted my amendment rather poorly. I should have referred to children looked after by local authorities rather than those cared for by them. My intention is to gain an assurance from the Minister that families who have their children looked after by a local authority may retain a room for that child to return to when he is ready. While a few children are adopted from care, most return home sooner or later, and it is right that they should have a room when that happens. It is important for the parents to retain a sense that their child remains their child and that they remain the parents. That is important because their children will normally still love their parents, however they have been treated, and will need to feel there is a place for them in their parents’ home. It is important also because the child will eventually return. Generally, we should strongly encourage these parents to retain their sense of responsibility for their own children. An experienced child and family social worker has reminded me that it will also be important for the child to know that his parents will be keeping a room for him. He will need to feel that he is still wanted and there is still a home for him with his parents.

In the year ending 31 March 2011, 3,050 children were adopted out of a population at that time of 65,520 children who were being looked after. Very few children, then, were adopted. Children who are subject to residence orders, or are being cared for informally by the Ryder family, are all the more likely to return to their families. Barnado’s has expressed concern about these children. This matter was also raised by the noble Baroness, Lady Tyler of Enfield, at Second Reading. There is a separate amendment in this group, which I support, on those particular groups of children.

I would be most grateful if the Minister could reassure me that families whose children are looked after by a local authority would not normally be subject to the underoccupation penalty. I apologise if the problem with my drafting has made it more difficult for him to reply. I would certainly find a letter acceptable if that seemed more appropriate in the circumstances.

I will not speak to my Amendment 86 because my understanding is that the benefit arrangements for care leavers are such that the concern I had is not an issue. I look forward to the Minister’s response.

[Lord German]

My Lords, I speak to Amendments 48C, 48D and 86ZZZA in my name. It is appropriate that I should speak after the noble Earl, Lord Listowel, because the issue he raised about care and children coming back from care is crucial. The three amendments in my name all relate to children and are intended to make sure that the suite of amendments here, which I have looked at very carefully, does not miss out one or two crucial groups relating to children.

Amendment 48C and Amendment 86ZZZA relate to disabled children. Amendment 48D relates to families with children in temporary care—and I echo much of what the noble Earl has just said about that matter. First, I turn to Amendment 48C and Amendment 86ZZZA. Families with a disabled child may have an adapted property that has a spare bedroom, but that spare bedroom may be needed for a carer to stay the night, or for a time when it is too disruptive for another child to share a room—that is a very crucial group of children. Disability comes in many forms. It is important that we reflect upon the nature of disability and how that might impact upon particular groups of children. I ask my noble friend the Minister to look at the issue of what having disabled children actually means in terms of the nature of their disability. It could mean not just that a family needs a carer, or equipment or a spare bedroom; it could be that the nature of the disability is such that disruption affects another child in the family in a way that they require a separate room.

The impact assessment carried out by the DWP says that for claimants themselves, or their partners, a bedroom for a carer who provides overnight support will,

“be taken into account in determining the relevant size criteria”.

I wonder whether there has been an error, because it seems very strange to me that the same provision does not apply to claimants’ children. I hope that the Minister can reflect that it is not just the claimants, but claimants’ children, who are important when it comes to disability. Many families with disabled children will have expensive adaptations to their homes. Forcing families with a disabled child to move from an adapted property—as we have already heard—in any field could be extremely expensive. As we know, disabled facilities grants often take a long time to organise. Forcing families with a disabled child to move could be very disruptive for both the child and their family.

The issue that the noble Earl talked about, which is the subject of another amendment in my name, Amendment 48D, is that of children in care for a short period. The noble Earl reflected carefully on an important group for whom the children’s home—that family connection—is still important. We need to avoid their home being taken away from underneath their feet. Parents whose children are in care for a short period will need to retain that spare bedroom to prevent additional barriers to their children being returned to them when the care period ends, for whatever reason. Where children are in short-term care, their parents will have that spare room as soon as their children are put into care when their children will not be living with them, but the room may be vacant for only a short period. It is impossible for anyone in the housing sector to second-guess when the child will be returned home, because the reason for them returning home will remain with the other agencies. It is important that we should not block that out and that it should not be treated as underoccupancy, because that will impact on those vulnerable children and their families who live in social housing at a time when they need intensive support to ensure that we do not encourage family breakdown.

Again, I wonder whether that is an unintended consequence of the Bill: that it will prevent families from having their children returned to them after they have been in care for a short period. It is not in the amendments, but the noble Earl talked about the fact that many children in longer-term care will also return home. The average length of time for longer-term care for children is only just over two years, so there is a wider group who are not reflected in this pair of amendments.

I also wanted to say a few words about foster carers. The danger is that this policy shift may force some foster carers to give up their roles, as well as discourage new foster carers from coming into the system. It will make it very difficult for social workers to place children in an emergency, which is what we need for many children. We have a national shortage of foster carers. About 10,000 are needed across the whole of the UK, and we need spare capacity in the system because many foster carers are short-term carers looking after some of the most vulnerable children, who are often children who have been abused.

I know that the Government do not collect data on the number of foster carers who live in social housing and that there is no breakdown of the number of foster carers claiming welfare benefits, but I am concerned that, because they do not have the figures, the Government do not understand the impact that this change may have on that group. If the Government have the figures, it would be useful to know them. I understand that they do not. The estimate is that about 2,000 foster carers will be affected. When we consider that we are short of 10,000 foster carers, we should not affect 2,000 in this way.

--- Later in debate ---

[Lord German]

My Lords, I was talking just before the break about the number of foster carers who will be affected by the proposal. We do not have the figures because the Government do not collect the right data, but the 2010 survey commissioned by the Fostering Network found that 6 per cent of all families lived in private or social housing. We know that the split between private and social is 32 per cent to 68 per cent. As there are roughly 45,000 foster families in the UK, if we take that figure, there would be approximately 2,700 fostering families in private and social housing and 1,836 in social housing, but those are extrapolation figures. I would be grateful if the Minister could assist us in that matter.

What is critical in this suite of amendments about children is that the Government do not jeopardise our caring for children with disabilities, and particularly our fostering system, by introducing measures that would penalise those groups of children. I hope that the Minister will be able to tell me that that is an unintended consequence, if people believe that we will impact on such groups of children. I hope that the Minister can assure us that those particularly vulnerable groups of children will not be affected by the Bill.

[Baroness Hayter of Kentish Town]

My Lords, I, too, shall speak briefly to Amendment 40 and Amendment 41, which stands in my name and that of my noble friend Lord McKenzie. As has been said, Amendment 40 seeks to ensure that the restrictions on the size criteria for social housing cannot leave a foster carer unable to meet their rent. As has been suggested, as currently drafted, the social sector size criteria and related benefit cuts would hit foster carers who claim benefit. As has been said by the noble Lord, Lord Best, that is because foster children are not counted as part of the household. Therefore, any bedroom that they sleep in is defined as being empty and underoccupied. The Fostering Network has warned that the failure to exempt foster carers from the penalty could lead to a number of them leaving fostering altogether.

As was suggested by my noble friend Lady Hollis in her earlier question, it is indeed a necessity that to be accepted for fostering, carers are required to have spare rooms in their homes for such children. Indeed, if you look at any advertisements for foster parents, they say that a spare room to foster is necessary. In addition, it cannot just be any old room; it is expected that most foster children will have a room to themselves from the age of three upwards, as specified by the minimum standards issued by the Department for Education and Skills. That age is well below the underoccupation rules for birth children who live with their parents.

We all know that social housing can provide a stable, high-quality environment in which to care for children who, for whatever reason, cannot live with their birth families. I am sure that none of us would want to exclude the occupants of social housing from acting as foster carers. I cannot believe that the Government intend that foster carers should face the underoccupation penalty. It is fairly obvious what impact that that would have.

Foster carers can claim housing benefit for the housing needs of their families, but the ones that they look after are not taken into account, which would mean that, just as with any other family, the rooms would count as being underoccupied, despite the fact that children sleep in them, and the foster carers’ benefit could be reduced by 23 per cent for the use of two rooms or 13 per cent for the use of one room used by a foster child. Many foster carers look after two or more children, especially those carers who deal with emergency needs, when a whole family can arrive together, and the availability of not just one but two spare rooms is crucial.

Most foster carers do not receive financial compensation for housing costs at present. They receive allowances towards the care, which include household running costs but not housing per se. Last year, the Government changed the law to exclude foster children from housing benefit claims. The Minister will recall that he wrote that this is because fostering allowances are intended to cover all the costs of looking after a foster child, including housing them. However, that statement is inconsistent with official information about the purpose of fostering allowance. The minimum fostering allowances set by the Governments in Northern Ireland, Wales and England do not include housing costs. In any case, the levels for recommended minimum allowances are far too low to provide realistic compensation for housing costs.

In case it is thought that discretionary housing payments may be available, it is true that foster carers are entitled to apply, but even if this concession was awarded it would be only to a small minority. As other noble Lords have said, there is already a significant shortage of foster carers. If there was a penalty for keeping a room in order to foster, some experienced carers might have to quit altogether. This could have a significant impact, especially in major towns and cities and other areas where rents are particularly high. Accommodation is in short supply, yet the demand for such carers is great. As the noble Lord, Lord German, said, there are about 2,700 fostering families claiming housing benefit. One thing being asked for through the amendments is that the cost of permitting it would be more than offset by the cost involved in losing foster carers, with children therefore having to be kept in care.

It is very hard to overemphasise the value of the work done by foster carers. I should like to take a moment to talk about two families I know, who between them have had more than 120 children through their doors. They have mostly been children who either have difficulties or disabilities themselves, or whose birth families are, for whatever reason, unable to provide a home for them. They do not always arrive in a nice planned way. They can come in the middle of the night, after the death or illness of their only parent, as the result of an assault or, as in one case that one of these families dealt with, when one of the child’s parents had been murdered by the other. The need for a home in the middle of the night and a room for those children cannot be stressed too much. These families are ready to take someone in, often very distressed small children. It is something of which we all need to be aware.

The Local Government Association is particularly concerned that if the proposal should remain unamended, and therefore reduces the likelihood of fostering, as carers are forced to give it up to avoid the penalty, it will be local authorities who pick up the cost, at a time when we are already short of foster families. It is fairly obvious that particularly vulnerable children make up a large proportion of those who are placed in emergency or short-term care. Therefore, we hope that the amendment will get a very warm response.

Amendment 41, in my name and that of my noble friend Lord McKenzie, is there to assist the Minister. It would make an exemption for foster parents to prevent their being subject to any accusations of abuse. I do not believe that there is such abuse, but certain papers like to run scaremongering stories about benefit claimants living in mansions, while there are blogs that talk about people living in enormous eight-bedroom houses in Chelsea, paid for by housing benefit. I have yet to find one. Amendment 41 seeks to protect foster carers from any such accusation. It includes defining,

“the type of property reasonably required for a household which is providing or routinely provides foster care placements”.

So it is to try and help the noble Lord in a very simple way.

The guidelines for good fostering are that there must be a spare room, and that no child over the age of three should be asked to share a bedroom. That is what we would call a suitably sized property, so I very much hope that the Minister can respond positively on the issue of foster care.

Welfare Reform Bill

Lord German Excerpts

Thursday 6th October 2011 Grand Committee

[Baroness Turner of Camden]

My Lords, I hesitate to intervene in what seems to me a very complex and quite difficult discussion, but are we talking about a discount or a benefit? I remember some time ago I was approached by a number of organisations that told me that people were not applying for something called a council tax benefit because they did not want to look as if they were appealing for a benefit. I therefore tabled an amendment to the legislation at the time not to call it benefit at all, but instead to call it discount. Discount suits the description rather well. I myself get a discount from the council, not a benefit, because I am a widow and I live on my own. I do not call it a benefit. When we discussed this and I got acceptance for the idea to call it a discount, the organisations concerned were very pleased because they thought that a number of veterans who did not apply for the benefit would now apply for the discount. Whether or not that happened I do not know, but that is what we went ahead with. I think there is a difference between a benefit and a discount. Which are we talking about here?

[Lord German]

My Lords, I would support this amendment regardless of whether it was related to a cash change in Government. It is the policy issue that is most important here. I favour a national scheme, locally delivered, and I worry very greatly about the proposals before us for reasons which I will outline. Largely, the Bill will not be able to meet the principles on which it is set. I have one disagreement with the noble Baroness, Lady Hollis: I found that all four principles—not five in my copy—in Paragraph 5.2 can be criticised equally, because they cannot be delivered through a national scheme.

Earlier this afternoon we heard a passionate plea from the noble Lord, Lord Foulkes, about the need concentrate on the United Kingdom. In his reply, the Minister talked about our benefits structure being a system reserved to the United Kingdom. I want to point out to noble Lords that we try to be consistent in what we do in Government. We ought to recognise that the Scotland Bill is proceeding through Parliament at present. The origin of that Scotland Bill was a commission chaired by Sir Kenneth Calman which looked at which aspects of our society make it worth having a United Kingdom and at what holds the United Kingdom together. Apart from foreign affairs and defence, the one key thing which he said was holding this country together was our social security system. As a reflection on what we have heard this afternoon, I ask why it is that we want to damage that system of reserved powers which works for the United Kingdom as a whole. We have heard how it works in Northern Ireland, but it works in the same way and with the same outcome, so it is therefore a United Kingdom system.

We are going to take £5.8 billion, whether it is cash-reduced or not, out of this system for the United Kingdom, and put it into a system which, quite frankly, will not work according to the principles laid out in the document which is being pursued by DCLG. I am reading from paragraph 5.2, just so we can get some consistency; we may be on a different page, but I am on page 13. It says, “We therefore propose,” that is, the DCLG,

“the following principles to underpin local schemes:

Local authorities to have a duty to run a scheme to provide support for council tax in their area”.

This Parliament and this Government can deliver that in England, nowhere else. It then says:

“For pensioners there should be no change in the current level of awards, as a result of this reform”.

This Parliament and this Government can deliver that only in England, not in the rest of the United Kingdom. It says further:

“Local authorities should also consider ensuring support for other vulnerable groups”.

This Parliament and this Government can deliver that for England alone, not the United Kingdom. Finally, it says:

“Local schemes should support work incentives, and in particular avoid disincentives to move into work”.

This Parliament and this Government can make sure that that works in England alone. Therefore, the principle upon which I believe the United Kingdom is based is being breached by this Bill and the change that we have before us.

Welfare Reform Bill

Lord German Excerpts

Tuesday 13th September 2011 Lords Chamber

[Lord German]

My Lords, your Lordships might expect me to take a slightly different tone about a Bill which has at its heart a universal benefits structure designed to help those who are trapped by no work and a dependency on benefits. Alongside the work programme, this is a transformational Bill—one where an alternative cannot wait. There are those who would argue that it is not an appropriate time because of the state of the economy to introduce such a Bill and to enact such changes. However, there is never a right time to make changes, but there is always a right time to ensure that better principles are put in place.

The DWP describes the current system in the documents that it has circulated as “Byzantine”. I reckon that that is a bit of an insult to Byzantium, which was, by comparison, a well ordered society. For example, there are currently seven different parts to the benefits and tax credits associated with disability. Each of those seven parts is paid at a different rate, has different qualifying conditions and is for different purposes. That is why I welcome the transformational elements of the Bill. We have a very complex system at present and we aim to make work always pay. Those are the Bill’s laudable objectives.

I congratulate the Minister on securing, at a time of great financial hardship, extra new money from the Treasury to ensure that universal credit is put in place. That is a real accomplishment in a tough economic climate. However, the question is whether the Bill provides an architecture that works, and will work for the future, to provide levers that can be pulled to improve the financial envelope as times get better.

As we change a complex system such as this, we need to be wary of two things. First, the end objective must never be forgotten. It is to reduce poverty, as the Minister said—he has given us the figures—and to increase hope and aspiration and to provide opportunity. We should not forget that those are the challenges at the basis of the Bill. Secondly, it is worth remembering that, in a complex structure, changing one part of a system could have negative effects on other parts of the system, and there are many places where that could happen. Shaping a system architecture that will stand the test of time, meet the demands of the modern economy and be a basis for a sound, compassionate and caring society is the challenge that we face.

One of the levers that I would like to see pulled as the economic system improves is the 65 per cent taper rate. That would make it even better for people to work and would be an even better challenge for them. People have suggested 60 per cent or 55 per cent—all very laudable objectives—and when the time is right that should be the first lever to be pulled.

The Bill covers a wide range of issues and touches so many individuals and families across the country. I do not recall the exact figure, but I think about 18 million people will be affected directly by the decisions that we make. It is rather like the most complex signal box that can be imagined, where you have 18 million people travelling on a journey, virtually all at the same time, with about 8.5 million places to which they can go.

A fundamental test of the Bill will be whether it can actually deliver the end goods. That is why I ask the Minister to reassure us about the technology, which is the biggest transformation of the IT system that any Government have seen and one that engages with the private sector payments structure in a way that has not been seen before. Will it really deliver the goods? Nothing could be worse for people than if they find at the end that they have not got the payments that they deserve.

Fundamentally, the Bill must support the broader, gender equality, children and family policies of the Government. That is a test that we will be making during the course of its passage through the House. Arising from that is one of the questions about the payments to households that my noble friend the Minister has already mentioned. I am grateful that he is considering this issue. One of the things that we did during the passage of the regulations on the local housing allowance was to extract a concession from the Government that they would seek to pay some tenants’ rent directly to the landlords. There will be circumstances in which rents should be paid directly. We made that commitment already once, and I hope that the Minister can assure us that that will happen in the future.

As well as looking forward to the Minister’s review of that issue, I look forward to the review of the mobility element. I believe that there is nothing wrong with the mobility element except that there may be some overlap. If there is overlap between two payments for the same thing, that should be eradicated, but we do not want to see that part of the measure lost altogether. That is why there is a need for the draft regulations, guidance and notes. I am grateful to the Minister for providing us with a great deal already, and I look forward during the scrutiny of the Bill to seeing far more.

One key issue at the heart of the family and gender equality issue must be that of childcare. I am glad to see that we will end the cliff-edge of the 16-hour working rule, which has bedevilled many people who could work for a few hours but no more. But we will need to find additional resource. The benefit of a universal credit and benefits system is that universally it becomes available to anyone without having to ask for it. There will be a bigger take-up from people who will have this element at their disposal. So far, we have had to make the current envelope of money stretch further. If we are now going to have to pay it to more people, we will need more money in the pot to make that happen. I would be grateful if the Minister could explain what he expects the additional gap to be between the current financial envelope for childcare and the extended financial envelope once universal credit is in place.

The Minister has confirmed that work will always pay, so the transitional support will be essential as well. My understanding is that “no cash losers” means that people will hold their cash benefit until it is overtaken by the increasing rate of benefit under the new system. I wonder whether there has been any modelling by the department on how long it will take for those “no cash losers” to become beneficiaries of the new system as the benefits increase.

It will be of no surprise to noble Lords that those of us on these Benches are very concerned about Clause 93(7), on the benefit cap. This is one of the examples of intended, or maybe unintended, consequences. It is clear that the clause has a sense of the vague about it. It just says that it is up to the Secretary of State to determine what the cap figure might be. Of course, I do not have any problem with the cap; the principle is fine, providing the cap fits. The problem is that the figure of £26,000 is taken as the median.

The latest data from the Family Resources Survey are as follows: the median income for households without children is £21,320 per annum; for households with children it is £30,680 per annum; and for all households the average is £27,300 per annum, whereas the Government have said £26,000. I would be grateful for an explanation from the Minister about where the figure of £26,000 has come from. What should be apparent from those figures is that £30,680 is the median income for households with children and yet we are likely to affect those families by some £3,380 if we take the £27,300 figure, which is in the Family Resources Survey data.

Of course, the differences between households are very varied across the country. Depending on where you live, there is a gap between the highest and the lowest of £12,000 per annum, which is an enormous gap between family incomes. If there is to be a move to allow people to move on to the new system, we need a cap which fits and one which is properly established and allows a period of transition. I hope that the Minister can confirm that that is his intention.

I move on to issues relating to council tax benefit and housing benefit. The Calman commission, which was the underpinning for the Scotland Bill which is before the House at the moment, says that social security benefits are the social glue which holds together a compassionate nation. I am an ardent supporter of devolution, as one might imagine, but is our social security system the one which should be universally available across all parts of our land, including Scotland, Wales, and Northern Ireland? If it is, you have to question the devolution proposal in the Bill, which is to local authorities in England, over whom this Government and this Parliament have some influence as regards the purposes for which that money might be spent. If these moneys are simply to be handed over, as the Bill suggests, to Wales and Scotland as part of the Barnett formula, for them to do with as they wish, they will have no obligations to the purposes of the Social Fund or council tax benefits, and this Government cannot insist upon them and neither can this Parliament. I believe that there is a fundamental point here about what holds our United Kingdom together. If you believe that these aspects of our system should be universally available across our country, the Government will have to find appropriate and perhaps alternative mechanisms—I might even suggest leaving them as they are.

A linked issue is the prospective changes to the housebuilding programme and household provision in our social housing sector. The new housing benefit regime outlined in the Bill presumes a change to the payments of households based upon the level of occupancy. Claimants who are in accommodation which is too large will have only three alternatives: first, to pay the extra above what the bill would be for a smaller property; secondly, to fill the spare space with a family member or a lodger; or, thirdly, to move either to the social housing sector elsewhere or into the private sector. However, housing associations have not geared up for this third choice. They have focused on providing two and three-bedroom properties. If the result of these changes is an increased demand on housing associations for smaller units of accommodation, they will need time to adjust. I would be grateful if the Minister would explain what modelling has been done on the changes to our housing stock for the social housing sector that will be needed as a result of the Bill.

I started by saying that this was a transformational Bill. The desired outcome is the lifting out of poverty of a significant proportion of our society. For me, that is an ambition worth pursuing. That is why I support the principles of the Bill: they are much needed. What we now need is to make the principles work.

Retirement Age

Lord German Excerpts

Monday 5th September 2011 Lords Chamber

[Lord German]

My Lords, a woman born this year will have a one in three chance of living to the age of 100, whereas a woman born in 1931 would have had only a one in 20 chance. Given the acceleration of the change in life expectancy and the results of the consultation that the Government have just concluded, is it not right that there should be an accelerating change in the connection between the state age of retirement and life expectancy, which is growing all the time? We cannot expect this to be something that is predicted for 20 or 30 years hence. It has to be predicted on a much more regular basis.

[Lord Freud]

My Lords, clearly that is the issue: life expectancy is growing rapidly. It is hard to set the figures many decades in advance. The responses to the consultation show that most people think that a period of around 10 years seems appropriate, although other countries have used shorter periods. It is right that we should look at a number of factors when we move the retirement age. These include not just longevity but healthy life expectancy and regional and other variations.

Pensions Act 2007 (Abolition of Contracting-out for Defined Contribution Pension Schemes) (Consequential Amendments) (No. 2) Regulations 2011

Lord German Excerpts

Monday 27th June 2011 Grand Committee

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

I shall set out the general context for these draft provisions. Contracting out of the additional state pension was first introduced in 1978. Initially, contracting out was restricted to defined benefit or salary related occupational pension schemes but, in 1988, it was extended to pension schemes contracted out on a defined contribution or money purchase basis. The scheme members and, in the case of occupational pension schemes, their employers, receive a national insurance contributions rebate in place of the state benefits forgone.

At this point I should explain to noble Lords the terms “money purchase” and “defined contribution”. A money purchase scheme is defined in legislation as one where all the benefits that may be provided are money purchase benefits, which in turn are calculated by reference to payments made by the member or by any other person in respect of the member and which are not average salary benefits. The term “defined contribution scheme” is not one defined in legislation but is the term commonly used throughout the pensions industry for money purchase schemes.

In 2005, an independent pensions commission, chaired by the noble Lord, Lord Turner, recommended the abolition of contracting out on a defined contribution basis. The commission’s view was that the contracting-out/contracting-in choice added complexity to the UK pension system and was poorly understood. Its application to personal pensions helped to generate the pensions mis-selling problems of the 1990s. The then Government accepted the commission’s recommendation and the Pensions Act 2007 provided for abolition, with some further consequential changes in the Pensions Act 2008.

During the passage of the legislation, there was widespread support in Parliament for abolition. In March 2010, the then Government announced that abolition would be on 6 April 2012, and that date has been confirmed by the present Government. For the purposes of this debate we are only concerned with contracting out of the additional state pension via a defined contribution pension scheme. We are not proposing changes here to contracting out via salary-related schemes.

In the case of a defined contribution occupational scheme, both the member and the employer pay lower rates of national insurance contributions. The employer pays a minimum payment to the scheme which is equal to the member’s and employer’s reduction in national insurance contributions. In a defined contribution contracted-out personal pension scheme, the full rate of national insurance contributions is paid by the employer and employee, and the rebate is provided by HMRC through an annual payment into the pension scheme at the end of the tax year. These reductions and payments are collectively known as the contracted-out rebate.

Under the current defined contribution contracting out system, special rules are applicable to protected rights, the collective term for the rebate, tax relief and investment return which abolition will remove. These rules include restrictions on the type of scheme in which protected rights can be invested or to which they can be transferred, a requirement to purchase a unisex annuity, and a requirement to make provision for a survivor benefit where the member is married or in a civil partnership at the point of annuitisation.

The affirmative draft order and regulations now before the Committee make consequential changes to the primary legislation by amending or revoking various pieces of legislation that will be redundant following abolition. They amend or repeal, where appropriate, all references to “contracted-out money purchase schemes”, “appropriate personal pension schemes” and “protected rights” in existing legislation. The order and regulations are part of a package of consequential changes and should be read in conjunction with the negative statutory instruments that were laid on 16 June 2011; namely, the Pensions Act 2007 (Abolition of Contracting-out for Defined Contribution Pension Schemes) (Consequential Amendments) Regulations 2011, and the Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) Order 2011.

Turning to the affirmative provisions which are the subject of this debate, I do not propose to explain the minor amendments contained within these statutory instruments. I will, however, highlight the main provisions. The Pensions Act 2008 (Abolition of Protected Rights) (Consequenial Amendments) (No. 2) Order 2011 is split into three parts. Part 1 contains commencement provisions. Part 2 introduces a de minimis or minimum payment provision for late rebate payments and recoveries, and a transitional period that is necessary for the administrative tidying-up of late rebates. Part 3 deals with rebate payments made after the transitional period. By way of background to late rebates, rebate payments are made by HMRC to contracted-out DC schemes at the end of each tax year by means of automated payments.

In some instances, HMRC may need to amend an individual’s national insurance record because of the changes notified to them after the end of a tax year— for example, where an employer discovers an error in the amount of earnings paid by an employee in an earlier tax year or where an incorrect date of birth is recorded and has to be revised. These adjustments to the national insurance records can sometimes result in an additional contracted-out rebate payment, or overpayment, becoming due. Analysis shows that the bulk of late rebate payments fall to be paid in the three tax years following the tax year to which the rebate relates. The transitional arrangements in this legislation will ensure that adjustments to rebates for periods prior to April 2012 are paid to individuals’ pension schemes up to April 2015 by an automated process. Following the end of the transitional period of three years, payments will be made from 6 April 2015 to individuals who will be advised to pay the amount into a pension scheme.

The de minimis provision introduced by the order makes provision for a limit below which HMRC will not be required to make a rebate payment. This limit will correspond to the cost of paying the rebate clerically by HMRC—that is, the rebate will not be paid where it costs more to administer the rebate payment than its actual value. The limit is expected to be in the region of £15 where the payment is made clerically. Payments which are made during the transitional period through the automated payment system will, as now, not be subject to a minimum limit.

We have been working closely with the pension industry in developing the abolition legislation, including the transitional period. The legislation was subject to a full consultation and the industry is satisfied generally that it can all be implemented. However, there is one point that I need to draw to the Committee’s attention. Article 3 of the Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No. 2) Order 2011 makes a minor consequential amendment to the Insolvency Act 1986 but it has recently become apparent to us that it will not be possible for this provision to have practical effect. The article amends provisions which currently provide that any pensions payments which derive from protected rights are not taken into account as income when a court considers making an income payments order for a debtor. The amendment seeks to provide that any pensions payments which give effect to protected rights before the abolition date will continue to be exempt from counting as income for these purposes.

We now consider that it will not be possible for schemes post-abolition to be able to identify such protected rights payments as schemes will no longer be required to track protected rights. As such, this part of the amendment will have no practical effect as the courts would not be able to identify pension payments which give effect to protected rights. While we have discovered this issue, we consider that it does no harm. We will therefore press ahead and make these sets of amendments to provide the industry with certainty over the substantive changes to be made to implement the abolition of DC contracting out. We will undertake to amend Article 3 of the order before 6 April 2012—the abolition date—to clarify the intention on that particular point.

To conclude, I am satisfied that the order and the regulations are compatible with the European Convention on Human Rights and I commend them to the Committee.

[Lord German]

My Lords, I welcome these statutory instrument. It is important to note that the so-called amendment instrument No. 1—I will not read the whole title out—have been laid by negative resolution at virtually the same time as these instrument for affirmative resolution. That is good practice for the House because it means that noble Lords will be able to understand and see the whole picture, and be able to work on them together. I commend that action from the Government.

Secondly, concerning the transitional arrangements, clearly this is a commitment made by the last Government being enacted by the present Government and so has a great deal of political support right across the boundaries, as it did when it first came before your Lordships’ House at the time of the Pensions Act in 2008. I wonder, though, what would happen should there be an amendment needed or an error found outwith the three-year period. It might be, for example, that something was discovered beyond the three-year period. Is there any measure by which that can be dealt with?

I am pleased that the Government are introducing this measure because it will of course mean that small amounts of money will not need to be paid where the cost of administration is greater than the amount paid out. I hear what my noble friend says about the online methodology that will not be affected. However, when it comes to mechanical methods by which sums below £15 would be encountered, I dread to think what it will cost to administer a payment of £15: I am sure that it will be considerably more than the cost. Therefore, it is welcome that that area is covered.

Social Mobility and Child Poverty Commission

Lord German Excerpts

Thursday 23rd June 2011 Lords Chamber

[Lord Freud]

We are not weakening the commission’s independence in any way; we are strengthening it by requiring the commission to hold the Government to account. The fact that we are not insisting that the commission sets the strategy for the Government means that the Government now have that responsibility and the commission can then hold them to account. I shall of course meet the group at any stage; I am sure that it is in my diary anyway.

[Lord German]

My Lords, the OECD report, which places the UK 28th out of 35, paints a picture of poverty of aspiration for many of our people, particularly our young people. It suggests, however, that peer mentoring and mentoring of all sorts are a way of improving that position. Will my noble friend ensure that mentoring of all types will be part of the work of the commission that is being established?

[Lord Freud]

My Lords, there needs to be a massive programme to improve both poverty and social mobility. It needs to be done right the way from foundation years, through school years and the transition period, and even to adulthood. The particular programmes that we will see will come out of this general approach. I cannot give any assurances on any particular approach at this stage, although I am personally most sympathetic to the concept of mentoring.

Employment and Support Allowance (Work-Related Activity) Regulations 2011

Lord German Excerpts

Thursday 19th May 2011 Lords Chamber

[Lord German]

My Lords, I welcome these regulations. As the Minister said, they have been in train for some time. Progress on the process of helping people into work has been going on for several years now, so this is part of putting flesh on the bones of a project that clearly needs to be accelerated. As always when it comes to detail of this sort, it is the delivery that will cause the most anxiety in people who are trying to anticipate the conclusions that result from the implementation of these regulations. I would sum this up in an overarching phrase, that of fairness and even-handed treatment in the personalisation process about which my noble friend has spoken.

It is important to note that this marks a cultural change for Jobcentre Plus, particularly as regards how the staff have worked in the past. I approve of that because it is important to empower advisers so that they can make choices and decisions in order to be able to help people towards what will suit their individual circumstances. The consequence of that is that the advisers will have more flexibility that will enable them to treat people in different ways. That will be a considerable shift. Some months ago we observed that there was absolute direction from the centre to Jobcentre Plus offices. That resulted in different interpretations being made on, for instance, the number of job applications you could have before you were sanctioned. That was not envisaged by the Department for Work and Pensions and the Government. That largely came down to the strict top-down instructions being given. Now that we are offering freedom to Jobcentre Plus advisers, it is essential that they have the appropriate skills and training to be able to deal with the vast range of people coming before them. The questions of training and capacity are crucial. We know that the Department for Work and Pensions is not exempt from the overarching cuts that have to be made to budgets, so I wonder if my noble friend can assure me that these advisers, who are going to be so important in helping people get back into the workplace and thus productive in the British economy, will not be affected by the number of jobs available at the sharp end.

Personalisation, if we are going to take this perfectly appropriate approach, raises the spectre of a variation of views being offered to the same kind of people in different places. That is a consequence of offering freedoms. There are two counterbalances to that. The first is a lighter touch, but certainly some form of strategic approach set out in guidance from the centre to Jobcentre Plus advisers. Secondly, each Jobcentre Plus office should have some form of check and balance. People who feel that perhaps they have been treated unfairly should not have to go through a whole rigmarole, so advisers should themselves be subject to a check and balance to ensure that the decisions they take meet with the accord of their colleagues as well. In that light, words are very important. We have the word “appropriateness” to which I shall return later, and the term “good cause”, which covers a subjective decision but is important because it provides the flexibility needed when looking at a case that has been made by a customer which stands up and therefore needs to be tested. Clearly, if this is going to be left open to advisers, we must note that one person’s interpretation may be different from that of another. It is therefore important that a check and balance is available and that a sense of direction is given, but not in too heavy-handed a way that derives a distinct interpretation of good cause.

The personalised approach that these regulations give vent to will be more helpful if advisers themselves are able to access the full range of information about their customers. Why will the work capability assessments not be provided for the advisers? If they need to know about someone’s abilities and disabilities, something is already written down about it. Surely it would be more sensible to provide advisers with access to that information so that they can have a full picture before them when they speak to the customer. Only “some” discretion exists for this information being available to Jobcentre Plus advisers. Why will they not have that full level of knowledge, which one presumes will be available online anyway?

There are some lessons to be learnt from the processes—they have been going through very recently. Professor Harrington’s review pointed out that some considerable changes needed to be made to the way in which we handle customers. Those recommendations were accepted and are presumably being implemented as we speak. I should like an assurance from the Minister that those customers will be approached in the same way as customers who are carrying out their action plans for work assessments. I am anxious to ensure that no guidance is in any sense being misinterpreted or too literally taken. That is the test of getting it working.

I have a number of specific questions on the regulations. The regulations seem to say that there will be discretion for lone parents with children up to the age of 13, which seems to be the cut-off. Will that level of discretion be afforded to lone parents who have children between the ages of 13 and 16? I can think of two distinct examples. The first would be where a lone parent has a child who has some form of disability and needs to be at home when the child comes back from school. The second is the lone parent of a child who has come home from school. Despite their having told the child, “You are going to be on your own at home and you’d better look after yourself”, somebody complains to the school, and the school comes back to the Jobcentre Plus and says, “Why have you forced this lone parent not to be able to look after a child properly?” Discretion should be given in this area so that account can be taken of the fact that some lone parents of children between 13 and 16 need to be at home when their children get home.

The data provided with the regulations show a heavily weighted spread of people who will fall into this group in different parts of the United Kingdom. I come from Wales, which is likely to have the most people wanting help, and I wonder whether my noble friend could indicate whether the support given to advisers will be related to the number of cases that they are likely to take up.

I have two final points on the regulations. The first relates to review and evaluation. Professor Harrington’s work makes it clear that a continuing, rolling review of what has been done and whether objectives have been achieved is very important. This suite of regulations should not be exempt from that review either. Will the Minister consider extending the role of Professor Harrington to look at the impact of these assessments as well? The annexe to the impact assessment states:

“The evaluation is likely to include qualitative and quantitative approaches, alongside internal monitoring”.

I hope that the Minister will assure us today that the evaluation will, rather than is likely to, include some form of support for the regime of reviewing and making sure that it is absolutely correct.

Secondly, the Minister has just said that a big package of financial help will be provided for those who are furthest from the job market. He quoted the figures for the respective ESA groups: £3,700, £6,500 and £13,700. Those are large and sharp shoulders. In this discretionary and personalisation world in which we live, there are bound to be people who will fall just outside those boundaries on one side or the other. My noble friend referred to the issue of incentivisation payments: will they help to smooth out those shoulders? They are very steep steps and if you fall into one category it will be very difficult to get out over that shoulder.

My noble friend outlined particularly well the way in which these regulations will work but safeguards will be needed. The safeguard of reasonable behaviour by both the customer and the adviser is crucial. Will the advisers now have expert support, particularly when dealing with fluctuating conditions, mental health conditions and so on, in order that they can properly advise and be certain that that advice is of the best kind to meet the broad range of conditions they are likely to see?

In general, I am pleased to support these regulations as they appear.

[Baroness Thomas of Winchester]

My Lords, I, too, welcome this short debate about what the state now requires ESA claimants to do in order for them to receive the full benefits they are entitled to. If what happens on the ground is what we are told will happen in the regulations, in the Explanatory Memorandum and in the papers that my noble friend kindly sent us, then everything should go relatively smoothly and the results could be extremely encouraging and very welcome.

However, I fear that for many of us the elephant in the room is still the work capability assessment. I agree with my noble friend that this is not the place to discuss this because the regulations are about activity at least six months after the assessment will have taken place. However, the elephant is still there, lurking in the background, and I, too, look forward to Professor Harrington’s report on how the assessment deals with the two most difficult but commonest causes of people not being able to work—that is, mental health conditions and fluctuating conditions. I have been reminded this week about two fluctuating conditions which hardly get raised at all. They are both quite different from each other and make one realise how wide this field is: one is congenital heart disease, which is comparatively rare and completely hidden on the surface but can make someone feel fine one day and completely exhausted the next; and the other is Crohn’s disease and ulcerative colitis, where a person can be fine for a month or five years and then, without warning, have a severe flare-up which can make regular and demanding employment difficult. Incidentally, today is World IBD day—that is, inflammatory bowel disease day.

I was pleased to see in one of the documents that there is flexibility around the timing of a claimant undertaking work-related activity, which is extremely important. I was also pleased that the Minister in another place reassured our colleague, Stephen Lloyd, that decision-makers in Jobcentre Plus have the power to seek medical advice, if they need it, for people with particular conditions. This is extremely important because, as my noble friend Lord German said, decision-makers do not have access to the result of the work capability assessment. I assume this is for reasons of confidentiality, but it does seem perverse.

I endorse what my noble friend said about more training for JCP staff. I am pleased that they are being given more autonomy and flexibility and I am reassured that the Minister in the other place said that he was looking for ways in which the quality of training for JCP staff could be improved. This is an urgent matter if these new regulations are to be brought in very soon. Can my noble friend tell us which groups are advising him about this new and improved training and when the new guidance will be available?

To follow on from what my noble friend said on the culture at Jobcentre Plus offices, the attitude of personal advisers and decision-makers is as important as their knowledge of various conditions. A sympathetic adviser will do a great deal to reassure an anxious claimant who may be extremely fearful of trying to find work for the first time in a long while. What is the current role of disability benefit advisers in Jobcentre Plus offices? Do they have any specialised training in medical conditions? We heard some weeks ago that quite a lot of Jobcentre Plus offices are being closed, although it sounded as though the staff were being deployed elsewhere. Can my noble friend say a word about that?

Finally, one way to know if these regulations are working is that the number of appeals against a sanction will be low and the number of ESA claimants being helped into work will be high. I hope for a good result.

Social Security (Electronic Communications) Order 2011

Lord German Excerpts

Thursday 19th May 2011 Lords Chamber

I therefore seek approval for this order and commend it to the House.

[Lord German]

My Lords, I thank my noble friend for such a detailed explanation. He has taken away the need for most of my questions, which were all about electronic signatures, but now that I have more information it gives rise to more questioning. However, I should say that this is about welcoming in the 21st century. First, there was the horse, then there was a car with a man with a red flag in front, and then there was a computer, and people went on to learn about what was inside it. Now, your Lordships are able to use iPads, iPods and, of course, Android devices in the Chamber. We are moving to a change that has to come; and it is one that of course is to be broadly welcomed, because all of us accept that IT should release people. It gives you an ability to do more, to do it more swiftly and, I hope, more securely.

Can the Minister readdress his remarks about electronic signatures and security to this House in the way it votes? After all, my noble friend has given a brilliant explanation of why electronic voting would be absolutely secure in this House. That is a debate that we can have for some considerable time. It may not be appropriate, but it would work.

My questions are twofold. One is about the level of take-up that is likely. Has the department taken any soundings of what sort of numbers of people will want to use these services? What flows from that is therefore the provision that the department might need to ensure that it provides the right level of support for customers and, perhaps, equipment for customers to use. If so much more can be done online, insufficient points will be available in Jobcentre Plus offices. People will want to spend more time on them, and clearly the demand for an increase in the amount of equipment will motor ahead.

My second question relates to security. I think I heard the Minister say—perhaps he can confirm this—that once you have set up an account, access to that account will be by PIN alone. That is slightly worrying because there have been instances of people leaving themselves logged on to a public computer in, say, a library, with the next user simply taking over. Of course, there are very clever people who can identify PINs. That is why we are all asked to do more than simply enter our PIN. If you want to do online banking, you certainly have to do more than just enter your PIN. I wonder whether a double check will be there to ensure that people’s data are secure.

Thirdly, in the previous debate we talked about people’s action plans for their activity in this work-related group. Will those action plans be available to customers online so that they can review them and perhaps engage in some sort of dialogue with the adviser in a Jobcentre Plus online, thereby freeing up time but also giving them much more instant availability?

We are all aware of electronic signatures because the whole postal voting system in this country depends on a signature being scanned and being kept electronically as the test of whether people have voted correctly and are who they say they are in casting their vote. Technology has moved on, and I welcome the opportunity to move forward in this area. I hope that my noble friend will be able to answer my questions, but I am pleased to support the order.

[Lord Elton]

In his reply, will my noble friend include a word about whether the arrangements for blind or severely visually handicapped people will change as a result of this system and, if so, how they will be catered for?

Disabled People: Disability Living Allowance

Lord German Excerpts

Wednesday 11th May 2011 Lords Chamber

[Lord Freud]

My Lords, let me take this opportunity to make absolutely clear what is happening, in particular to DLA funding. The funding for all DLA, in real terms on 2011-12 figures, was £12.1 billion in 2009-10—the last year. At the end of this Parliament in 2015-16, the funding will be slightly higher—£12.3 billion. The talk of cuts relates to the projections on a benefit that was rising very sharply. What we are doing is bringing it under control. As I say, in absolute terms—in real terms—it is not being reduced; it is roughly the same. There is a slight decline in the working-age DLA from £6.7 billion to £6.5 billion. I am talking real terms.

[Lord German]

My Lords, I welcome the news that the budget will not be reduced over the lifetime of this Parliament, but I am sure that my noble friend understands that many recipients of DLA are very worried about the proposed changes before them. Further to the question asked by the noble Lord, Lord Low, what words of comfort does the Minister have for those who are about to be reassessed, to ensure that the assessment process treats them fairly and honestly, and that those who are in need of help will get it?

[Lord Freud]

My Lords, we are going through a very complex and thorough process this summer to examine what is the right test for receiving the personal independence payment. A lot of things are coming out of the early research, and one of those is that people who have done less well out of DLA are those who have various mental conditions and learning disabilities, and we are trying to recast it so that those people who need support will get it. There will be some changes; it is not going to be the same as DLA; but it is going to be a far more transparent, clear and consistent test.

Housing Benefit

Lord German Excerpts

Tuesday 3rd May 2011 Lords Chamber

[Lord Freud]

My Lords, I am pleased that we have a stunning consortium to do this work. It is led by Ian Cole from the Centre for Regional Economic and Social Research at Sheffield Hallam University, with other key team members being Peter Kemp of the Oxford Institute of Social Policy, Carl Emmerson of the Institute for Fiscal Studies and Ben Marshall from IPSO Mori. It is a stunning group and is going to build an understanding of the impacts of the housing benefit changes right the way through from people who move to those who stay—the noble Lord was concerned about them—at national and local levels, and it will integrate that with wider housing and labour-market evidence. A lot of this will be econometric analysis. The group will report the findings to me finally, as agreed, in spring 2013, but there will be interim reports next year.

[Lord German]

My Lords, I congratulate the Minister on such a comprehensive independent review. Will he indicate the geographic spread of areas which will be covered? Will it include hard-to-let difficult areas as well as rural and urban areas in the whole of the country?

[Lord Freud]

My Lords, I am really pleased that we will have a lot of review for the amount of money that we have. We will cover no fewer than 19 carefully selected case study areas, which will include three each in Scotland and Wales, and 13 in England. Clearly, there will be a concentration on the key area of London and the south-east but we will cover representative areas right through the country.