Welfare Reform Bill
Baroness Hollis of Heigham Excerpts(14 years ago)
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Lord Lester of Herne Hill
My Lords, may I ask the Minister a couple of questions, as a member of the Joint Committee on Human Rights? As I am sure he will have been briefed, the committee made a report on the Bill in which it raised a couple of questions which are in harmony with the points made by my noble friend Lady Walmsley about the effects on children.
The first proposal was to suggest to the Minister that instead of calculating the cap on the basis of all households, the fairer thing to do is to calculate on the basis of the income of households with children. Since we raised that in the committee, I would be grateful to know whether that idea has been pursued, and if so with what result. This proposal was in paragraph 1.59.
The second proposal that was made was to suggest that, where benefits are earmarked for children, this should be done in order to make sure that they are treated fairly. For example, it was suggested that,
“the Bill could be amended to allow payments intended for children to be labelled as such and be paid to the main carer”.
That was in paragraph 1.82. Again, I would be grateful, on behalf of the committee, to know whether that idea has been pursued.
Baroness Hollis of Heigham
My Lords, I will be very brief, but I cannot resist the effrontery of trying to challenge some of the assumptions made by two people whose views on social security I very much respect, the noble Lords, Lord Fowler and Lord Newton.
The noble Lord, Lord Fowler, said that the social security bill is pushing £200 billion and needs to be contained and cut. He is correct, but the biggest single group driving that increase in costs are of course pensioners. There is an increased number of pensioners, who are living longer, sometimes with poor health. These cuts do not—in my view, rightly—impinge on them at all. We are making other people pay for the demographics that are not their fault.
The second point I would like to address comes from the noble Lord, Lord Newton. He says that there is a big prize in this: universal credit. He is absolutely right. I defer to nobody in my support for universal credit and my support for the Minister on the structure of universal credit. However, that structure is being contaminated by where some of the cuts fall. If we can keep those two things separate in our minds, we can fully support the Minister on his structure, as we do, while trying to protect those who are most vulnerable and affected by where the cuts fall.
At the end of the day, it is about political and moral choices. Noble Lords, including the noble Lord, Lord Hamilton of Epsom, said that we face a deficit and must bring it down—these cuts have to fall. May I gently suggest to him that I rather doubt that any of the cuts have affected him? Not one of them has affected me. Indeed, my council tax is being frozen at a cost of nearly £1 billion a year, which is very nice. Over five years, that equates to the very £5 billion that the noble Lord, Lord Fowler, cited. I get my council tax frozen while disabled children, cancer patients and vulnerable children at risk of homelessness carry my bills for me, even though we in this House have broader shoulders on which to carry the cost. It is about choices and the choice of every Member in this House today. I hope they will make a choice that most of us would regard as the decent one.
Baroness Butler-Sloss
My Lords, I say bluntly that I came here uncertain as to which way I should vote on this amendment today. I remain uncertain but I endorse the suggestion that the Minister should explain what will be done for the most vulnerable by way of the transitional provisions. Like others, I strongly support the cap. The amendment goes too far in my view but it has a nugget of enormous importance. Like the noble Baroness, Lady Walmsley, my main reason for being here today is because I support children. The transitional provisions may provide the answer but can the Minister tell us how the most vulnerable people will be protected? I should like to know that because it will have an enormous effect on which way I vote.
Welfare Reform Bill
Baroness Hollis of Heigham Excerpts(14 years ago)
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Baroness Hollis of Heigham
Can I ask the Minister whether “before too long” would be before Third Reading? We have had lots of debates in Committee on the words “too long”, “too soon”, “soon”, and “very soon”. Could the Minister help us? What sort of timescale does he have in mind on that?
Lord Freud
No, that will be beyond the Bill becoming an Act, so we are looking at how we do this in regulations.
Baroness Hollis of Heigham
Given that we are expecting a localism Bill next year—I guess—would it be incorporated in that, so the House would have a chance to amend? The trouble with regulations is that you cannot amend, whereas with primary legislation you can.
Lord Freud
My Lords, we are going to spend a lot of time on getting this right. It is not something we want frozen in primary legislation. In fact, it would be very uncomfortable to freeze these items in primary legislation. Regulation is the right place to do these things. We have a consultation paper out on how we may move forward with temporary accommodation. There are some very obvious solutions within that—I touched on them earlier this evening—comprising separating out service charges and housing costs rather than bundling them up; that is where the temporary accommodation becomes so expensive. We need to get a solution to this so that we do not have a ludicrous go-round of people moving into expensive temporary accommodation which they can no longer pay for because of the cap. We are absolutely aware of this and have measures in train to get a solution in the round to that issue. However, it is not a simple set of issues.
Baroness Hollis of Heigham
If the noble Lord were to combine child benefit, for example—given today’s decision by this House—with the guardian’s allowance, having each of those as a per capita sum for each child coming in through kinship caring, and take that out of the benefit cap, it would get him there.
Welfare Reform Bill
Baroness Hollis of Heigham Excerpts(14 years, 1 month ago)
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Lord Freud
We are very much trying not to make people fit into boxes. We are not saying, “Because you have that condition, that’s your relevant position”. We are trying to look at people as individuals. Clearly, you go through all these criteria very carefully and reach a judgment. It is almost impossible for me to say whether a particular person would hit the assessment criteria or not. You just have to go through it and see. However, we clearly expect someone to get a payment who has genuine needs for coping with life because of their disability. That is what it is designed for. I cannot answer the specific question, but I can tell the noble Baroness the principle—where that person needs that support as a result of their disability, they should get it.
When we develop an assessment for PIP, we have to balance a range of factors. A complete model should include all the perspectives and important interactions between an individual, their health and the environment. That is what the biopsychosocial model does. There are limitations in considering only a single perspective, and this is a much more holistic approach.
I do not accept the criticism that our proposals do not truly reflect the extra costs faced by disabled people. As I have tried to explain, it would not be feasible to assess the actual costs without something hugely intrusive to disabled people and very complicated. We therefore have to assess other factors as a proxy for these costs. We are using “care” and “mobility” in DLA, which we do not think are broad enough. So, in our draft assessment criteria we have a range of everyday activities for PIP that we believe are a good proxy for the impact of impairments, the overall level of disabled people’s needs and the extra disability-related costs. We will go on refining those; we will not just stop when we finish the consultation in April.
The proposals have taken into account many of the key drivers of cost that Scope and others are obviously concerned about. For example, individuals who have difficulty getting out are likely to have higher utility bills, while those who need support planning a journey and moving about are likely to have higher transport costs. The proxies and associated criteria should therefore allow us to prioritise spend on those who face the greatest challenge and expense. In answer to my noble friend Lady Thomas’s point on the tick-box assessment, the proposals, which have been around since May, are very much not a tick-box approach; they are trying to look at people’s functional capability.
We have changed the assessment very considerably as a result of the enormous amount of engagement that we have with disabled people and their organisations. We will go on doing that. However, if we had fundamentally to revisit our approach in the way in which the amendment would require, we would have to go back to the drawing broad, spend more time developing and testing, and have greater consultation. It would push back the start of PIP by at least a year and reduce savings over the reassessment period by £1.4 billion. This is, I think, the priciest amendment yet.
Lord Freud
This is about doing the right thing for people and focusing money on them; it is not about playing silly games—by which I mean that we are not playing silly games here and we are determined to get this right. We are consulting widely and know that we have the right approach with the model that we are using. I understand the noble Baroness’s position, but we do not think that the Bill should specify that the assessment should consider social and environmental factors. That approach would be inappropriate and unworkable, because we need the assessment to be straightforward, objective and consistent. We would lose £1.4 billion of savings. For that combination of reasons, these amendments are not acceptable to the Government. Just for the avoidance of any doubt whatever, I confirm that the Government see Amendments 50ZJ to 50ZQ and Amendments 51A and 52A as directly consequential upon Amendment 50ZH. On that basis, I urge the noble Baroness to withdraw her amendment.
Lord Freud
That is an assessment based on the delays that we anticipate from this amendment, which is actually similar to the previous amendment where I used the same figure. It would have the same effect of delaying the whole process. That is the Government’s position, having worked through the implications of the amendment.
I remind the House of where the Opposition have got to with their amendments. We estimate that as a result of the votes on amendments so far, over five years they have imposed £3.8 billion-worth of extra costs, and this amendment will take that figure to £5.2 billion.
Baroness Hollis of Heigham
I am sorry to see a Minister, whose integrity and respect for evidence has been apparent to the whole House, going back to the box-ticking, false assumption that there are no political choices available to this House. There are plenty of political choices if the Minister wishes to use them—for example, freezing council tax, increasing council tax bands, looking at some of the things that go on in pensions tax relief and so on. It is not clear to me that the economic growth of this country depends on taking away DLA from some of the most disabled people in the country.
Lord Freud
My Lords, I do not want to debate where alternative cuts would be found by the Opposition if they were in government and needing to balance the budget. All I can tell you is that the effect of the amendments that the Opposition have supported comes to that figure. It is amazing how, given an amendment here and an amendment there, pretty soon you are talking serious billions. I am afraid that this is another amendment which involves a serious amount of money and, for that reason, it is not acceptable to the Government. I urge the noble Baroness to withdraw her amendment.
Welfare Reform Bill
Baroness Hollis of Heigham Excerpts(14 years, 1 month ago)
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Baroness Hollis of Heigham
Has the Minister learnt from this that the best way to encourage more sweetness and light is to agree with the amendments from all around the House?
Lord Freud
There are some other constraints that I do not think I need to spell out. On the point made by the noble Lord, Lord Rix, we are picking up the same arrangements for DLA including those for residential schools and colleges. On that basis, I beg to move.
Baroness Hollins
My Lords, I rise briefly to support the amendments in the name of my noble friend Lord Rix. I suspect that, after days of assessing the increased cost implications of the amendments already discussed, there will be a genuine expression of relief on the Minister’s face at proposals that will almost certainly reduce overall costs and the administrative burden on the department. I have already declared my personal family interest—I have two disabled adult children—and my professional experience of working with people with severe learning disabilities and autism over 30 years.
I should point out that an annual or short-term assessment would almost certainly be a waste of time and money. This is true not just for people with learning disabilities, but would be true for people with other conditions such as some 69,000 with multiple sclerosis who are currently in receipt of disability living allowance and, on a smaller scale, those with motor neurone disease. After an initial assessment by experts confirming the diagnosis and the degree of severity, it is surely better to leave things as they are but to respond, on the application of carers or the individual themselves, to any deterioration in their condition. That is then the time for further examination, when it may well be found that the person may need greater support.
It is also important to recognise that annual reviews may only increase the anxiety of those undergoing them and will do nothing for their morale. I think with horror of the time—currently scheduled for 2014—when my son will be due for an assessment. I hope I will have the opportunity to go with him and that I will actually know about it. It is not that there would be any intention that I would not know, but rather because he cannot read and his supporters do not always realise the importance of involving me in certain aspects of his support. I hope to be with him when that review is done, but I also know how challenging it would be for him to be reassessed. For quite a lot of people, this constant reassessment would be costly in more ways than you can imagine. I look forward to hearing the Minister’s measured reply to these very modest and cost-saving proposals.
Baroness Hollis of Heigham
In quite a lot of the publicity run in some newspapers preceding today’s debates, there has been—how can I put it—synthetic outrage about the number of DLA awards that have been made for life, as though they are somehow fraudulent, negligent or erroneous, thus apparently besmirching the entitlement of the holder of that lifetime award to it as of right, as though they have somehow manipulated or cheated the system and that the previous Administration has colluded with them at the taxpayer’s expense. That publicity has been extremely ugly and extremely unfair. Whether or not the Minister feels able to accept the amendments—and I hope he does—I hope he will accept that some conditions, on which the noble Baroness, Lady Browning, spoke so eloquently and movingly and of which two other Peers in your Lordships’ House have had intimate experience, do not change except for the worse and for which a lifetime award is a decent, sensible and cost-effective way of proceeding. Could he therefore ask his press hounds to lay off those people who have had them in the past and who ought, in all decency, to go on to enjoy them in the future?
Baroness Browning
There has been a suggestion that people with disabilities adjust to their condition. It is true, if you take the meaning of those words at face value, that people do adjust to their condition. For example, in one of the case studies shown in the paper produced by the Government yesterday, there is an account of a woman with epilepsy who did not meet the PIP qualification. It said that it was dangerous for her to use a cooker but she got round it because she used a microwave and therefore does not need to use a cooker. That may be a very practical suggestion—apparently when a cooker was needed her husband did the cooking on a proper cooker—but we have, in a way, failed to address what we mean by people with a range of disabilities coping or adjusting to their disability. Yes, there is an adjustment and yes, there are practical and psychological ways in which people cope with their disability, but it only requires something that is really unsettling to someone with a lifelong disability for those very important building blocks that have been put in place at the bottom to be disturbed or taken away and for the whole thing to disintegrate and come down like a house of cards.
Therefore, while I can understand why reassessment is necessary in some cases, a judgment has to be made about identifying those for whom reassessment, with the associated costs that have been mentioned, will add to their stress. Stability, as I said earlier, is important in these cases. If their stability is unsettled, there are consequences. The Government must make some sort of judgment about this. They will not save money and it is compassionate to recognise the types of disabilities that will present themselves when there will clearly be no improvement and degeneration is more likely. Quite frankly, if in some cases people adjust to their disability, are they not to be applauded for having made that adjustment, not penalised for it?
Lord Freud
My Lords, I first want to put absolutely on the record that we are not talking about the constant assessment of everyone. That is simply not how it is going to work. To the extent that there is concern about people being dragged in to face assessors every year, that is simply not how it is going to work.
When we talk about having another assessment for some people who have deteriorating conditions, noble Lords have to remember that they might have started on the lower rate of PIP and that in practice the assessment will move them to the higher rate at that time. DLA is an understudied phenomenon. It was studied by the previous Government in 2004-05 and it was found that £630 million was overpaid. That was not as a result of fraud; it was just that people no longer fitted the rather easier criteria of DLA that were in place when they applied, although we do not know where they fitted when they did apply. Just as worrying was the finding in that year that £190 million was underpaid. We want to make sure that the money goes to people in the right way in both ways.
Baroness Hollis of Heigham
My Lords, I was the Minister responsible for those reports at that time, and I have to say to him that they did not apply to people with lifetime conditions. People with lifetime conditions should get lifetime awards. Clearly, if someone deteriorates, they or their carer may apply further, but the information on DLA that the Minister referred to was either about people with fluctuating conditions or about people who had become better but had not realised that they might no longer qualify as a result, and so on. We had no argument with the need to continue to review DLA for people whose conditions may change quite rapidly over a period of time, particularly if they have been recovering from an accident, and so on. We are talking here about lifetime conditions in which it is therefore decent to give lifetime awards. I can assure the noble Lord that the statistics to which he referred do not refer to that group.
Lord Freud
As I understand the statistics, they refer to the whole group and we clearly need a system that we can apply to everyone, within which there will be groups with lifetime conditions. Let me come back to my main point, which was my concern about the underpayments. People with lifetime conditions deteriorate, and they need to be caught at the point of deterioration in order to be paid the extra funds they need to cope with the higher level of disability or higher inability to do things.
Welfare Reform Bill
Baroness Hollis of Heigham Excerpts(14 years, 1 month ago)
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Lord Freud
My Lords, where they have other resources, as they move into young adulthood, clearly they have to be resources of their households at that stage and their own capital and household income. The reality is that very many of this small group of youngsters are inheriting very substantial sums of money; that is why they are in the position that they are in. That is a decision in principle over whether we should support people who have very adequate resources of their own. We will continue to support those who have deteriorating conditions even when they have a high income. They just go back into the support group.
Let me just go into the rather complicated position with European law and the specific judgment here, which I am looking at. I do not know whether the noble Lord, Lord McKenzie, will regard it as recent enough—this is the Lucy Stewart case on 21 July last year. It is within half a year, so I think that is recent. We have a code for soon and sooner or whatever; recent is within half a year. That judgment made it clear that we cannot use the past/present test to deny access to a benefit if a claimant demonstrates a genuine link to the UK in other ways, which may include consideration of the relationship of a claimant and the social security system of the competent member state or claimants’ family circumstances. The past/present test requires that a claimant must be present in Great Britain for 26 weeks out of the last 52 preceding a claim for employment and support allowance. We still lost the case, even though we had lots of powers on residence. Clearly, the view of this Government is that it should be a matter for the Government of this country to decide how people qualify for benefits. The effect of this judgment is that young people can qualify for a benefit even when they have not lived in this country for many years.
I cannot be absolutely hard and fast on the European benefit-shopping issue; I can tell your Lordships only that this is causing us enormous concern at a number of levels and we are currently challenging Commission lawyers on it. The issue, at the simplest level, is that if you can call something social support it is much less likely to be abused and taken abroad than if it is a contributory right. That is where the battleground is and your Lordships can clearly see what we are doing here. When we are asked for a concession and whether we can get round the European law, what we are looking at is a system that basically provides the support for the vast bulk of the youngsters whom we want to support without opening our doors wide to current and future dangers of this kind of benefit exportability. That is the approach that we have adopted to try to get round this problem.
Baroness Hollis of Heigham
It is a dilemma. I think that the entire House sympathises with the noble Lord. Many of us have been faced with this dilemma in the past. You are eligible for benefits in the UK if you are ordinarily resident. Much of the protection has been about whether you are allowed to go away for extended periods of holiday and still continue to claim. That is secure, but the problem of contributory benefits is that which flows out of the free movement of labour and, as a result of that free movement, generates you a right to a contributory benefit whichever state you may subsequently live in.
We understand the Minister’s dilemma very well, but I would have thought that there is a route out, which is of course to recategorise this as a special non-contributory benefit. That has a long pedigree in social security and European Union co-ordination of benefits and would therefore take it out of the label “contributory”. It would take it out of the labour market eligibility, because these young people have never been in the labour market. We are trying to apply a label to them that is not appropriate. By relabelling this, perhaps along the lines suggested by the noble Baroness, Lady Meacher, we should in my view be secure.
Lord Freud
My Lords, I do not think that we ought to spend a huge amount of time on this—it is really difficult and moving very fast. The principle is that it is the automatic entitlement that makes us vulnerable. If it is for income supplement and social support, it protects us. Your Lordships can see that the change that we have made here is to cover the vast bulk of the youngsters with support, but it is not automatic. That is precisely the safety that we are going into with this European legislation. I do not think that the precise workaround from the noble Baroness, Lady Hollis, works or that we should sit round this Chamber and work something out. All I can tell your Lordships, for your consideration, is that this is the way that we have found to get round it while, as I say, covering 90 per cent of those youngsters.
I ought to hurry along, but let me move to giving your Lordships the figures on Amendment 45. The reduction in the cumulative benefits savings by 2016-17, over five years, would be around £70 million, which we would need to find elsewhere. A little bit here and a little bit there—it is a very hard thing finding bits of money.
Baroness Lister of Burtersett
My Lords, I want to make a very brief point in support of the amendments. The Government say that time-limiting ESA is not based on an estimate of a typical recovery time—it is not evidence-based—but on the principle that these are people who have other means of financial support, which of course is exactly the same principle that the Minister raised earlier to justify removing the ESA youth condition.
This other support is of course income-related ESA, and the Government point out that 60 per cent of people affected will be able to claim it. That means that 40 per cent of those affected—roughly one-third of men and nearly half of women—will not be able to. We are talking here about an erosion of their financial autonomy. Many noble Lords have received many letters from people saying that they are shocked and anxious at the implications of this.
An article in today’s Guardian summed up very well what this erosion of financial autonomy means. This quotation is from a man who is going to be affected by this:
“The satisfaction of being able to contribute to the family budget with a benefit that has been earned and paid for will be removed. The last shred of dignity will be stripped from people who have already lost a great deal in life and who may already feel a burden on those who care for them”.
Disabled people should never feel that they are a burden on those who care for them, and it is terrible that they are being made to feel that way by this clause.
Baroness Hollis of Heigham
I shall be very brief and respond, if I may, to the noble Baroness, Lady Thomas of Winchester, who over the years has been a doughty champion for disabled people. However, I have never before heard her make a speech based on the sole proposition that because the House of Commons might reject an amendment, it should not be moved in this House. That is not a sound base for policy, as the noble Baroness will accept. That does not mean to say that at Third Reading there may not be compromise or fallback amendments and so on, but this House has never walked away from its proper duty to scrutinise because it feels that the other place may not accept what we are doing. I hope that the noble Baroness will not run up that sort of argument again.
Baroness Thomas of Winchester
My Lords, I shall respond to that. What I said was that noble Lords may think that we will go into ping-pong: that the House of Commons will say one thing and we can come back to the debate and have a dialogue. That does not happen with financial privilege. There are many new Peers in the House who will not realise that financial privilege is imposed by the Commons, which it may be—it may not, but it probably will be because this is going to cost around £1 billion over the next few years. People outside will be given a false sense that we have done something and scored a great victory by defeating the Government and so everything will be all right. No, it will not be. That is what worries me. This is not like ordinary ping-pong; it is quite different.
Baroness Hollis of Heigham
My Lords, almost everything passed in this House has financial implications. The House of Commons is entitled to and regularly will dismiss every amendment passed in this House under financial privilege. There is nothing new in that. We do indeed then go into ping-pong because this House will offer an alternative amendment for the House of Commons to consider. Should we reach that situation, some of the fallback amendments mentioned by the noble Baroness could then be considered.
Lord Blencathra
My Lords, it is with some trepidation that I intervene briefly in this debate in view of the learned comments that one has heard from both sides. I seldom contribute to debates of this nature because it is outside my areas of expertise, but I am prompted to do so as the result of a speech made yesterday. I heard the leader of the Opposition say that,
“in these times, with less money, spending more on one thing means finding the money from somewhere else”.
He went on to say that:
“When someone wins, someone else loses”.
I have looked briefly at the amendments before your Lordships’ House today and I had not intended to say anything on them because I knew that they had considerable spending implications, but I am tempted to speak out because of what the leader of the Opposition said yesterday.
The noble Lord, Lord Patel, has made a powerful and compelling speech, and it would be easy for me and no doubt for other noble Lords to vote for his amendment and feel morally good. But the sting lay at the tail end of his remarks when he said, I think, “Of course, this could have some enormous cost implications”, and then he came up with not what I would say is a formula but a suggestion, which I must admit I did not quite understand, about how one could try to save on some of those considerable costs. However, I am informed that his amendment as it stands has serious cost implications. I believe that it would cost up to £200 million next year, maybe £400 million the year after and again the year after that. I hope that my noble friend the Minister has the correct figures, but I believe that it will be around £1 billion of expenditure over the next three years. The House needs to know exactly what those figures are.
Perhaps I may turn to the Opposition and say this. If the Opposition are tempted to support this amendment —I hope that I am not being too political here—I hope, in view of what the leader of the Opposition said yesterday, that they will spell out where the money is to come from. At this stage I am not concerned about whether the Commons will reject the amendment or whether there will be ping-pong, although that is a valid debate to have in due course, but it is incumbent on the Opposition or on those who are arguing for this amendment to say where the £1 billion, if indeed it is £1 billion, is to come from. Is to come from higher taxation or from a cut in public spending somewhere else? Is it to come from increased government borrowing? Someone somewhere will have to pay for this.
Welfare Reform Bill
Baroness Hollis of Heigham Excerpts(14 years, 1 month ago)
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Lord Freud
My Lords, I do not think that I can do that. We need to take a view now on this. All I can say is that Third Reading is probably not the time anyway for some of this stuff to come to a head. It is not the point at which my noble friend is thinking about it coming to a head. This kind of thing will probably come to a head when we have the debate between the Commons and the Lords. That is when some of these issues need to be looked at, so it is not helpful or productive to think of it happening at Third Reading. This kind of thing may become more relevant at a later stage, but not at Third Reading.
Baroness Hollis of Heigham
Does the Bill contain power by regulation, or would the Minister welcome an amendment to introduce it so that at some point down the line, possibly after further consultation and so on, he can make the changes which at the moment he is minded to make but is not yet in a position to introduce?
Lord Freud
Without having those in my ever helpful Box right behind me to respond to that—I hope that they are writing—my strong impression would be that I would have powers in regulation. No, my strong impression is the opposite. I am on my own.
Lord McKenzie of Luton
The Minister has not made this easy. I have been trying as best I can to avoid having a vote on this today.
Baroness Hollis of Heigham
If my noble friend will allow me, would the Minister be content if we were to introduce such a power by regulation at Third Reading, which would commit him to nothing or everything, according to how he wished to play it in future?
Lord Kirkwood of Kirkhope
Before whoever it is who is speaking sits down, I should say that I think that the Minister is making life difficult for himself. If he cannot take the advice that he is getting from all sides—and I, too, concur with what has been said—I, too, will look to get an expression of opinion from the House, which I really do not want to do. The suggestion that has been made about regulation-making powers is an easy out. I do not care what the Box thinks, actually; the Minister has the knowledge and the wisdom to take that decision right now, which would be a beneficial outcome for everyone.
Lord McKenzie of Luton
Forgive me—are we not dealing here with Amendment 46, which the Government have accepted is consequential on Amendment 36A?
Baroness Hollis of Heigham
My Lords, I was the person who drafted Amendment 36A. The noble Baroness, Lady Meacher, clearly introduced it as the paving amendment to Amendment 46. So the Government cannot do as they are now suggesting.
Lord Freud
My Lords, let me read out what I said in my speech. I said that I confirm that the Government see Amendment 46 as linked to Amendment 36A, but separate Divisions will be required on all amendments in this group.
Lord McKenzie of Luton
My Lords, the noble Lord does not make that happen just by asserting it. One amendment is consequential on the other. We have had a very clear and substantial vote on this, and it is quite disgraceful that the Government are seeking to undermine that.
Baroness Hollis of Heigham
I am sure that the noble Lord, Lord Freud, does not wish to appear to be subverting the view of the entire House, which was expressed in the full knowledge that the amendment which we voted on was devised—I devised it—as a paving amendment to a substantive one, so that we could debate it in good time. Most of the population of the House has gone home, believing in good faith that the previous vote has established the principle—as it has. However, the noble Lord is trying to renege on that by forcing a vote despite the late-night keeping of the roster. That would be quite improper and quite unprecedented, and I strongly suggest that he think again.
Lord Freud
My Lords, I cannot understand this. I was extremely clear, and have been really clear all the way through, about which amendments relate to which, and which have to be taken separately. I read out what I said. I said it quite loudly and all noble Lords heard it. I cannot feel that it is right to accuse me of anything but absolute clarity in the House.
The Lord Bishop of Bath and Wells
My Lords, it is often said that we read the world from the position we occupy in it. In particular, users of the Social Fund are unlikely to be very visible and able to hold local councils to account. Recent analysis of some 500 discretionary Social Fund applications has revealed that 12 per cent involved someone leaving institutional or residential care, 20 per cent involved someone who had experienced a period of homelessness and 8 per cent involved someone leaving prison. These groups are much less likely than others to be able to demonstrate local connections, and without crucial assistance from community care grants to buy essential items such as cooking equipment and bedding, they may struggle to sustain and maintain a home. That puts those who have been offenders at risk of reoffending or of moving back into temporary or institutional accommodation, which is far more costly and means they lose their newly found independence. The issue of vulnerable groups and local connection is recognised in housing legislation where people with no local connection must be assisted by the local authority to which they originally applied. I believe that similar provision should apply to protect such groups in the absence of a standard national Social Fund, especially as the Welfare Reform Bill also abolishes the independent review service that reviews refused Social Fund applications. I hope that we can take note of this amendment.
Baroness Hollis of Heigham
My Lords, I, too, support my noble friend’s amendment. The whole point about the Social Fund is that all the other elements in the social security system are nationally determined and demand-led—AME-led. The Social Fund has always represented an element of flexibility, of discretionary judgment, for those who do not fit tidily into categories and need only income. When, for example, people needed a modest amount of capital for a fridge, an oven or whatever, they could go to the Social Fund. If they needed to set up after a flood or a fire, they could go to the Social Fund in ways that you cannot cover within a national framework, except by a discretionary local grant.
That is fine, but the problem with the Government’s current proposal to send it to local government is threefold. First, there will be no necessary standards across local government so that similar circumstances are met in similar ways by different local authorities. For good and for bad, there will be a postcode lottery, and we know that demand will almost certainly be greatest in some of the inner cities and least, perhaps, in some of the more prosperous suburbs. There will be no consistency of standards.
Secondly, when that happens, and in the absence of identified funds, people who need that money will go not just to payday loan companies, because they do not have the security, or to pawn shops but to the forms of debt that we are all appalled by. One of the very good things about the Social Fund is that repayment, with no more than £5 or £10 per week of your income going out, is effectively interest-free. By pulling the Social Fund away from people who are most in need of some element of credit to get them from here to there, we are sending them into much more costly spirals of debt and very real problems of repayment. The third problem associated with this proposal is the guarantees we need to have that the money will be spent on the people for whom it is ordained.
The Minister can help us in this if he makes it very clear that local authorities will have no wriggle room to spend the money on anything other than the groups of people whom we are identifying. The firmer he can be in making clear to the House the statutory nature of that guidance, the more he will ease some of our concerns. He also needs to make it clear to the House what elements of the Social Fund will remain AME-demand-led and how much of it will be recycled and capped within a cash grant, what the situation will be in a local emergency—a factory explosion, a major flooding disaster or the like—and whether the local authority, as opposed to central government, has the capacity to respond to that in its social fund.
Therefore, can the Minister tell us first, how he can absolutely guarantee—short of ring-fencing, if that is not where he is prepared to go—that that is reported back to Parliament? Secondly, how he will manage the mixture of AME and DEL expenditure that currently goes into the Social Fund to ensure that local need is properly met?
Lord De Mauley
My Lords, I absolutely understand what the noble Baroness’s Amendment 50 is trying to achieve. I assure your Lordships that we are equally committed to ensuring that this money is targeted on and reaches the most vulnerable people. We appreciate the importance of this money to vulnerable people, as the noble Baroness, Lady Hayter, has just explained.
As noble Lords have said, ring-fencing was debated in Committee and the Government have thought carefully about the valuable points that were made. We share the desire of noble Lords to ensure that these funds are used in the way intended and are not lost in the general pool of local authority funding.
We have concluded that the most appropriate way to make clear to local authorities the purpose of the funding is by setting it out in a settlement letter from the Secretary of State that will accompany the funding that is sent to each local authority. This letter will set out clearly what the funding is to be used for and describe the outcome that must be achieved. It is important that local authorities are not constrained in how they achieve that outcome, so the letter will not prescribe the method that should be used.
Baroness Hollis of Heigham
Obviously this letter has not yet been sent; I presume that it has been drafted. Would the Minister be willing to circulate to Members of this House taking part in the debate the draft of the proposed settlement letter that he expects to send, so that we can be reassured? I am sure that his intentions are entirely beneficent in this regard, but it might assuage some of our concerns were we to see a letter in draft before it was sent out. If we had comments on it, we could then feed them back to him.
Lord De Mauley
My Lords, the letter is not yet in draft. If it is possible to do something along the lines that the noble Baroness asks, I will do it, but I hope she appreciates that I will make no commitment on that.
The letter will ensure that the money intended for vulnerable people goes to vulnerable people without curtailing the freedom of local authorities to tailor provision and, for example, pool funding, without imposing a one-size-fits-all approach that does not take account of the different needs faced by different areas. Furthermore, to underline its purpose, the funding will be distributed to local authorities through a specific revenue grant, rather than including it with the rest of their general expenditure in the main revenue support grant.
Lord De Mauley
My noble friend Lord Kirkwood asked about the structure of what is being transferred. The current Social Fund AME allocation of £178 million will fund the new local provision. It will be distributed based on spend at the point of transfer nationally between England, Scotland and Wales. In England, the funding will be devolved to upper-tier local authorities. Again this will be based on Social Fund expenditure. The AME funding splits £141 million to replace community care grants and £36 million for emergency provision. The first year of the new system will be 2013-14 and the funding will be the same as the amounts in 2012-13.
My noble friend asked about the Social Fund Commissioner. The Independent Review Service changed 20,886 decisions in 2010-11. The number of crisis loans, budgeting loans and community care grant decisions made was 5,595,000. The IRS makes decisions on cases that can go one way or another depending on the discretion of the decision-maker. All decisions on the discretionary Social Fund are also first subject to an internal review in Jobcentre Plus.
My noble friend asked about the possible substitution for cash and white goods and indicated that he thought it might not meet the needs. There will of course still be national provision of advances of benefit through the new payments-on-account scheme that will replace budgeting loans and crisis loans for alignment.
The noble Baroness, Lady Hollis, asked how the mixture of AME and DEL will be managed. All the money is AME. There will be, of course, additional admin funding on top to cover the cost of the new burdens.
Baroness Hollis of Heigham
Is the Minister therefore saying that if local authorities represent that there is increased need based on the criteria in the letter of guidance, the Government will respond with increased expenditure because AME, of course, means that it is demand led?
Baroness Hollis of Heigham
I thought that the noble Lord would not. I do not think that we can say that it is AME, in that case, if it is not. The point about AME within DWP is that it responds to demand. If it is going to be a cash grant, it is not going to be demand; it will effectively be DEL.
Lord De Mauley
Historically it has been AME. The funding for the year 2012-13 will be the funding that is transferred in 2013-14. It will not increase by that amount. However, there are the budgeting loans to which I have referred as well.
The noble Baroness, Lady Hayter, raised a question over benefits. Short-term advances will replace crisis loans for alignment as part of a national payments on account scheme. These advances of benefit will cover those in financial need as a result of waiting for an increase in benefit or for a benefit claim to be dealt with.
On the question asked by the noble Baroness, Lady Sherlock, the policy is developed taking account of all relevant rights. We did not take specific legal advice.
I hope that what I have said will enable the noble Baroness to withdraw her amendment.
Welfare Reform Bill
Baroness Hollis of Heigham Excerpts(14 years, 2 months ago)
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The Lord Bishop of Ripon and Leeds
My Lords, I have added my name in support of the amendment of the noble Lord, Lord Best, because of my concern, and that of those of us on this Bench, for the needs of children as we pursue the move towards universal credit. I am fully aware that that concern is felt on the government Front Bench as well.
This is an area where a small change to the Bill will bring about help for a significant number of children who are under the most pressure in social housing. What is proposed by the noble Lord in the amendment—whether or not it is itself amended—is a definition of underoccupancy in line with that of Communities and Local Government and which simply reflects the reality of family life. Under the definitions of the Bill, a family with an eight year-old boy and a nine year-old girl in separate bedrooms would be deemed to be underoccupied. That cannot make sense.
There is every reason to discourage genuine underoccupancy. When people think about underoccupancy, on the whole, they think of where a single person or a couple are left in a larger house, probably because their children have moved away. Surely that should not apply to a disabled child, for example, who needs care during the night and therefore needs a separate room. It should not apply to a room used for access visits by children following marital breakdown. It should certainly not apply to foster carers between placements. There is real concern that the Bill, if unamended, will discourage foster caring because the carers will not be able to retain rooms in which to place foster children if the need should arise.
We—or, at least, the Members on this Bench—are going to hear a good deal over the next fortnight or so about there being no room in the inn. The amendment will provide the flexibility so that families can live the sort of lives that most of us take for granted. I hope that we will be able to enable this to happen by the pursuit of this or a similar amendment.
Baroness Hollis of Heigham
My Lords, I declare an interest as chair of Broadland Housing Association. I am delighted to support this amended amendment. DCLG says that you are underoccupying if you have two or more spare bedrooms; DWP, in the Bill, if you have more than one spare bedroom—a very tight definition. If you then do not move to somewhere smaller, you will be fined by having your housing benefit cut by 15 per cent.
As my noble friend has said, this is not about finding homes for the 3 per cent of families who are overcrowded in this country. We could solve that tomorrow if we built bungalows or suitable flats for the pensioners who are queuing up for them—full stop. No, this is about cutting the housing benefit bill, by telling a third of our tenants in social housing, most of them disabled, that they have to find somewhere smaller to live. A middle-aged couple with health problems who therefore need that second bedroom will be entitled to only one bedroom. The family of four with two teenage daughters in a three-bedroomed home must move to a two-bedroomed home even though the girls will then have nowhere to do their homework. A disabled woman who sometimes has a carer staying overnight in her two-bedroomed flat must move to a one-bedroomed flat. A couple in their 50s, in a two-bedroomed house, who care for their grandchildren when their daughter with mental health problems cannot—in other words, they are occasional kinship carers—will have to move to a one-bedroomed flat, possibly some distance away, and the whole fragile family arrangement will collapse.
In theory, all the people in these examples are expected to move. The children are expected to change school one year before GCSEs, the middle-aged woman is expected to move away from her mother whom she is keeping out of residential care by her support, the disabled woman to move away from the friends who help her cope by doing her shopping and laundry. Six hundred and seventy thousand families—between 30 and 40 per cent of all tenants in social housing, two-thirds of them with a degree of disability—are supposed to go on the move if they can. Fine, if they can; but for most, even if they want to downsize, they cannot. Even though they may be pensioners who cannot heat their homes, they cannot downsize, and the DWP knows it. The smaller flats are simply not there to move to and all the fulminations of the tabloid press—that Ministers expect them to downsize when the same Ministers know that they cannot—are therefore cruelly irrelevant.
The National Housing Federation says that 180,000 households in two-bedroomed flats would have needed a one-bedroomed flat last year, but just 68,000 such flats—about a third of the number needed—became vacant. In future, the needs of pensioners who really want to move can never be met because, as the noble Lord, Lord Best, said, absolutely rightly, any smaller place that becomes available will have to be offered to much larger families who, however, do not want to move, rather than to the single pensioner who does. It is a cruel nonsense.
The department admits that, in its own words, there is a mismatch, and that the smaller properties that people are expected to move to do not exist. The department expects that 85 per cent of all of these tenants will stay put and take the cut in housing benefit because they have no alternative, as the impact assessment admits at the bottom of page 2. The Government are counting on people not moving, despite telling them that they should. So the Government’s savings are going to come not because people do what the Government tell them to do, but because people do not do what the Government tell them to do: they stay put, because they have no option, and then they are fined for doing so.
What do the Government suggest that they should do to cover the shortfall? They should find work. Well, of course, if they could they would, and we welcome the support given for finding work within the universal credit system. Alternatively, it is suggested that they could take a lodger; but with small children I do not think that that will happen. The other suggestion is that they use—actually, use up—their savings. As the noble Lord, Lord Freud, reminded us on Monday, the average savings are only £300. That will last for four or five months of shortfall. After that, what then? It will be debts, arrears and pass-the-parcel. To pay the council tax, because their council tax benefit is being cut by 20 per cent, they will raid their housing benefit. However, that now does not pay the rent, so to pay that, they will fall behind on their utility bills, which are also on the rise. Threatened with their gas and electricity being cut off in winter, they will cut back on food, until ultimately the whole Ponzi debt pyramid created by this clause of the Bill will collapse. They will then face food parcels and eviction.
However, as the eviction is not their fault, as the Minister agreed in Committee, they will not be intentionally homeless, so they will be put into highly expensive B&B at taxpayers’ expense with all its cost and all its misery, as, with a history of arrears, they will not be accepted by any private landlord. In time, they will be rehoused—quite probably, if my housing association is anything to go by, in a house that is still too large, because that is all we have—and the whole vicious spiral one year on will start all over again, taking disabled adults and children through a relentless cycle of cuts and evictions.
The alternative, of course, is that housing associations such as mine carry the arrears because we know the social and financial costs of eviction and the awful stress that it involves. Then what? Over time, the housing association goes into the red or, alternatively, we stop building and save the debt charges on erecting new homes, the money being spent instead on debts that come from cuts in housing benefit, thus guaranteeing that the shortage of social housing that is undermining the housing market continues for the next decade.
It is so unfair. Let us take JSA as an example. If people break the rules on job search, we cut their benefit to change their behaviour. However, if they observe the rules and, after a proper job search, cannot find a job given the unemployment figures, we do not cut their benefit because it is not their fault and they cannot change their behaviour. That is the social contract of social security. You sanction people when they break the rules and should change their behaviour; you do not sanction or fine them but support them when that is not possible. It is what we do with JSA. The DWP is, in this clause, breaking that social contract with these changes to housing benefit. In all my time in the social security field, I have never known that contract to be broken in this way.
Grant Shapps said that we should not bully people out of their homes. He is right. Yet in this Bill we are saying to people who have lived in their homes all their lives, done what was asked of them and behaved responsibly—two-thirds of them having some disability—that their benefit is being cut from underneath them through no fault of their own but just because we in Westminster are changing the rules. We tell them to downsize while knowing that they cannot do so, so we fine them instead for what is not their fault and for what they cannot change. It is morally wrong to punish people for something that is not their fault and to punish them when they are innocent. That is not decent, it is profoundly unfair, and we should not do it. If noble Lords agree, they will support the amendment today.
Lord Freud
I am pleased to clarify that that is an annual figure that starts in the year 2013-14, when the actual provision comes in.
Next, I would like to clarify the rates of reduction to be applied under this measure. In setting the percentage reduction rates, we have considered the sorts of rent differentials seen in the social rented sector alongside the question of affordability for the taxpayer. We intend to set the percentage reduction rates at 14 per cent for underoccupiers with one additional bedroom, and 25 per cent for underoccupiers with two or more additional bedrooms.
We think that the average cost to affected claimants, in terms of reduced housing benefit entitlement, will be around £14 a week in 2013-14. The majority of claimants affected—just over three-quarters of the total—are underoccupying their accommodation by just one bedroom. For this group, the average reduction will be around £12 a week. For those underoccupying by two or more bedrooms, the average reduction will be around £22 a week.
I would like to assure noble Lords that discussions within the coalition Government in designing this measure were thorough and productive, and these will continue through implementation. My officials are working closely with the Department for Communities and Local Government, the Department for Education, and the devolved Administrations.
It is worth picking up the issue, which my noble friends Lord German and Lord Stoneham raised, of whether we can make the transition easier. It is technically possible to stagger implementation arrangements, based on the anniversary of the claimant’s tenancy, but this move is not cost-neutral, and the planned savings will be reduced, albeit modestly.
I must be clear that, principally, I am more concerned about the ability to deliver the proposal because it might be very difficult to police and monitor. I am concerned that some landlords will offer new tenancy agreements to existing tenants, so that implementation of this change is delayed, and then the costs would spiral very substantially.
We are, however, determined to make maximum use of the time available between now and the measure coming into force to help prepare local authorities and social landlords for the changes, which in turn will benefit those who are affected. I am sorry if I rather loosely used the term “two years”, on which my noble friend picked me up.
Amendments 14 and 49, from the noble Lord, Lord Best, would exempt claimants from the measure where they underoccupy by just one bedroom. Amendment 12 would appear to tie Amendment 14 in with the housing costs calculation for universal credit.
There is a tension here between the bedroom standard, which is a widely used standard which views underoccupation as having two or more extra bedrooms, and the local housing allowance size criteria, which we propose to use for housing benefit purposes and which we already use for the private rented sector.
Our size criteria take a more generous view on the age at which someone is entitled to their own bedroom. Since the deregulation of rents in 1989, we have been using 16 as the adult threshold in size criteria for housing benefit purposes. The bedroom standard, on the other hand, sets the threshold at 21. Against these stricter criteria, however, the English Housing Survey and other similar surveys then consider the household to be underoccupying their accommodation only if they have more than one additional bedroom above the bedroom standard, a point the noble Lord, Lord Best, made. The size criteria that we propose to introduce into the social sector consider any number of spare bedrooms to be underoccupation. Neither approach is right or wrong. In some cases, the bedroom standard plus one will be more generous than the local housing allowance size criteria, in some they will work out the same and in a few cases the LHA size criteria would actually prove to be more generous.
On the point made by the noble Baroness, Lady Hollis, about the person who needs an overnight carer, I need to make it clear to the House that where someone needs an overnight carer we allow an additional bedroom for that non-resident carer, and we have done so from June this year.
Baroness Hollis of Heigham
My Lords, I said that she would “occasionally” need—in other words, the assumption is that she would not normally need an overnight carer but occasionally might. The Minister has not covered that.
Lord Freud
I suspect that we can look at the difference between “occasional” and “regular” in detail outside the House. Maybe we can exchange letters on the matter.
In Grand Committee, the noble Lord, Lord Best, spoke of the experience of owner-occupiers, explaining that 83.9 per cent would fail against our definition of underoccupation. I put it on record, however, that a similar proportion of working-age owner-occupiers, 86.7 per cent, are in work. We are not suggesting that households in the social rented sector should live differently. We all share the aspiration for a home in which our children can thrive, concentrate on their homework or leave to study or find work, but still have the option of returning home sometimes. To realise that, though, must the taxpayer be expected to pay in full for those extra rooms just because those people live in the social housing sector? The Government believe that it is reasonable to ask for a contribution toward the rent where there is, by definition, some degree of underoccupation. It is not a change to the allocation rules; it is a measure for housing benefit purposes only.
The research from the Housing Futures Network explores how those claimants affected by the measure might respond. As well as the 29 per cent who were likely to try to find work or increase their earnings, around 15 per cent thought that they would take in a lodger or ask another family member to move in. Another sizable group, perhaps 20 per cent to 25 per cent, thought that they were likely to seek help to pay the rent from someone within or outside the household—someone they know. Around 25 per cent thought that they were likely to downsize. There were also those, as some noble Lords have pointed out, who feared that they were likely to get into arrears; that figure was around 35 per cent. We will do our utmost between now and the measure coming into force to minimise that risk. This is what we are looking at as part of our work with the implementation group.
That said, we cannot ignore the financial position. I emphasised at the beginning of my response that the introduction of size criteria is fundamentally about savings. Without the inclusion of those who underoccupy by one bedroom, we would not achieve the £500 million savings expected from 2013.
The noble Lord, Lord Best, challenges our savings estimate. As I have set out in the evidence, though, a majority of people will pay the additional amount for the larger property. The cost of renting in the private rented sector may generally be higher but those who choose to move out of the cheaper social housing into private housing because they are underoccupying will by definition free up accommodation in social housing that can be offered to those on the housing waiting list or those living in expensive temporary accommodation. That argument from the noble Lord simply does not stand. If we excluded one-bedroom underoccupiers, we would lose around £300 million of the estimated savings. The fiscal case driving this measure forward must not be underestimated.
“(4A) Regulations shall provide for a relevant change in circumstances to include a change in the claimant’s actual rent.”
Baroness Hollis of Heigham
Amendment 15 is a simple, genuinely probing amendment to get further clarity on the draft regs, given that they have now been published. Currently, a claimant’s housing benefit entitlement is reviewed on the anniversary of the claim or when there has been a material change of circumstances. The normal review would be 1 April annually. At the moment, if the rent is raised by the landlord between these annual reviews, the tenant must report this to the local authority as a material change of circumstances. Usually, although not always, the housing benefit would be raised to cover it. Under the new system, if the claimant’s tenancy is renewed and the rent increases at any point after April, then even though the rent would still be within the local housing allowance or the housing benefit cap, the claimant’s housing benefit will not be adjusted until the following April. It means, in other words, that they could go for 11 months with not enough housing benefit to cover their rent, even though they are entitled to it, and even though they would have got the full year’s increase in HB had the rent increase occurred a month before. Because of the timing of the accidents—of the rent increases, in other words—a tenant and his family could face real shortfalls and potential hardships: rent arrears and possible homelessness, with the usual problems that would result.
This amendment would require an increase in rent to be considered a relevant change in circumstance, which would be a simple way to avoid any potential hardship. It would ensure that housing benefit would continue to be reviewed in the light of a rent rise, as has occurred in the past. I am hoping that the noble Lord can give us that assurance.
Although Amendment 16 is on a different topic, I have grouped the two amendments to avoid going on for too long. In Committee, I ran an amendment because I was worried about the increased deduction that would come from housing benefit if a middle-aged couple had their adult son—a non-dependant adult, in the jargon—living at home with them. We noted then that the couple could face all of their housing benefit being wiped out because a son over the age of 18, who is perhaps on modest earnings, would be expected to contribute up to £90 a week. No deductions, of course, are made if he is in full-time education or on JSA. If he is in a minimum wage job, his parents could face losing virtually all their housing benefit, as he is expected to pay for his parents’ rent himself, even though he is not the tenant and even though he has no security of tenure. We feared either that he would drop out of work for their mutual financial advantage or that his parents might propose that he leave home and find a small place of his own to save their housing benefit, while leaving his parents underoccupying and being fined with a cut in their HB in turn. Either way, the family is damaged. Obviously the most satisfactory option would be for him to live at home, make the best use of the housing space and contribute—though not unreasonably so—to their housing costs. But can he do so if that is the sensible choice?
I have some questions for the Minister. In future, will the son, as a non-dependant, be counted as part of the household when DWP works out the space that the family are entitled to have for their HB? I would love to think that the amendment we have just passed has made that question redundant—touch wood that it has. As a couple, in future, will his parents be deemed to be underoccupying by one bedroom because of their adult son? Hopefully—touch wood—that question may now be redundant. However, there is a problem of the interplay of underoccupation and adult non-dependant deductions which the family could face. The Minister recognised this when we talked about it in Committee. He said:
“We need to look at the treatment of non-dependants … Furthermore, we need to ensure that there is some sensible fit with the provisions for underoccupancy … We want a scheme that provides incentives for tenant and non-dependants to work and at the same time preserve incentives for households to stay together”.—[Official Report, 20/10/11; col. GC113.]
The Minister was absolutely right. Could he clarify what his intentions would be in that situation? I beg to move.
Lord Freud
I thought that I would be self-deprecating and leave the “very” out.
The noble Baroness asked me to keep the House briefed on the thinking here and return at Report. The best that I can do now is to say that we have not changed our views. There is a lot of active work, and I know that the noble Baroness, Lady Meacher, also took a great deal of interest in this issue. The universal credit will recognise the general principle that adults who live in the household of people getting help with their housing costs should expect to make a contribution towards those costs. Not to do so would, in effect, mean that taxpayers would subsidise non-dependants through the benefits system. I think that that is common ground around the House.
It is also common ground that a reformed welfare system must make work in comparison to dependency benefits pay and be seen to be paid, and the current treatment of non-dependants can work against employment incentives for both the claimant and non-dependant. As I said, there are various factors that we have to juggle between decisions on non-dependants—the “touch wood” factor, taking in a lodger, and so on. These factors mean that the issue of non-dependants is complex.
I accept that the amendment is a probing one, but it would not work. However, we are considering it in detail, and it is an important area. It really goes to the heart of the simplicity agenda that we have, and I hope that as we flesh out the detail noble Lords will have something to which the expression “very intelligent” remains applicable. On that basis, I ask the noble Baroness to withdraw her amendment.
Baroness Hollis of Heigham
I am happy to withdraw my amendment. I absolutely understand that this is a work in progress, but we now have the draft regulations, which we did not have in Committee, which is why we are trying to probe to see where this goes. The problem could be that, were it not for the earlier amendment being passed, a couple in a two-bedroom place with an adult son could be regarded as underoccupied if the adult son was not counted as eligible for the room, whereupon their housing benefit would be cut—but, because he was in the House, he would be expected to cover not just their housing benefit but the cut as well. It is that Catch-22 situation that I am seeking to avoid.
It is not straightforward, and I understand that. I am grateful for the Minister’s response. I look forward to an appropriate, acceptable and welcome solution to these dilemmas. I beg leave to withdraw the amendment.
“(4A) Regulations shall provide for—
(a) the frequency with which reviews of the relationship between increases in the rental market and the CPI will be conducted;(b) the circumstances in which increases in the rental market and CPI will be deemed to have diverged;(c) the circumstances in which there will be considered to be a critical lack of affordable housing;(d) the circumstances in which this will lead to a change in the method used to uprate the housing component of universal credit.”
Baroness Hollis of Heigham
I have a series of amendments on housing. This amendment calls for periodic reviews of the interconnection between CPI and rent levels. This is an issue that has concerned the whole House at different stages, including on the CSR Statement as well as in Committee.
We know now that the proposed deficit reduction programme, according to the Chief Secretary, will extend for a further two years at least beyond the general election. This amendment now takes on the added urgency that perhaps did not exist at the time when we discussed it in Committee. Local housing allowance, which I will call housing benefit, in the private rented sector is based on the 50th percentile of private rents, which should mean that half of all private rents are affordable on HB and half are not. It is a median. The HB, in other words, covers the average rent. We also know that the Government are reducing that 50th percentile to the 30th percentile, which means that 70 per cent of properties would be unaffordable but 30 per cent should still be so. We have argued that and resisted it, but the Government have insisted on their proposals. That is bad enough and will make it much harder to find a private rented home. But, in addition, HB to cover your rents up to the 30th percentile will rise only by CPI, not by the actual increase in private sector rents. Yet according to Savills rents are rising at the moment by more than 7 per cent a year, and CPI is only half of that—not this year but we expect it to be. Rents are rising on average at double the rate of CPI, mainly because of additional demand for private flats from young people for whom originally the flat would have been a transit tenure but who now stay there while they seek to save their deposit for a home of their own.
The Minister used to argue that capping HB would drive down rents. That is not happening, nor will it, because no longer do landlords have to let to HB tenants. Just as there are eight people after every job, there are eight tenants after most lets. HB tenants will get only what no one else will take: the substandard, the squalid and the downright unsafe. Any complaints and you are evicted after six months. Tenants will be forced into poorer and poorer accommodation. Worse, as I say, rents are rising at double the rate of CPI, so whereas now your HB may theoretically cover 30 per cent of available rents, in three years’ time it may cover only 20 per cent, and in five years only 15 per cent. In more expensive towns such as Winchester, it is estimated that there will be nothing available to rent for anyone on HB within the next few years.
This amendment is very simple. It requires that the Government's original policy intent—that HB in the private sector will allow the tenant the choice of the bottom 30 per cent of properties—continues to be respected and that the widening gap between the CPI uplift in HB and the actual rise in private rents does not invalidate the Government's intentions. In other words, this amendment simply asks the Government to ensure that they do what they say they want to do—no more, no less—and that we keep clear the policy intent, and that it is delivered.
In the past, the Minister has decorously brushed this aside by saying that it is outside the CSR period, but given the Chief Secretary's remarks, it is not any more. He also helpfully said in Committee on 20 October that,
“if local housing allowance rates are clearly out of step with rents, they can be reconsidered”.—[Official Report, 20/10/11; col. GC 146.].
It would be very helpful to know how this would be done, given the vagueness of the draft regulations. The Government should confirm whether reviewing the operating method will occur periodically or, if not, what will trigger it. This amendment seeks to get greater clarity in the regulations in order to protect the Government’s own policy intent: that 30 per cent or so of private lettings should be affordable and available to those on local housing allowance. I beg to move.
Baroness Meacher
My Lords, I support Amendment 17, to which I added my name. As always, the noble Baroness, Lady Hollis, has comprehensively covered the issues and I will therefore take only a few moments of your Lordships’ time to express my personal concerns about the issue.
The Government have a policy to reduce over time the percentage of GDP paid out in benefits to those on low incomes and those out of work. Perhaps the main mechanisms by which this will be achieved, though by no means the only ones, are the range of housing allowance controls to which the noble Baroness referred and the linking of housing allowance to the CPI, rather than to the rate of increase of rents themselves. The problem I have with the CPI link in particular, along with all the other controls, is that it is beyond the control of government how this plays out; hence the importance of these monitoring mechanisms that the noble Baroness has spelt out.
For example, if the euro collapses—it seems ever more likely that it may—and we have several years of recession or, indeed, deep depression with falling prices, do the Government have any idea how rents will respond in that situation? Because of the pressures of a growing population with more and more single-person households, as well as the limited stock of properties, particularly in London and the south-east, it is possible that rents may remain static, or even rise in the south-east, while other prices are falling. The Government assume that the downward pressure on housing allowances will ensure that in fact rents fall as well, but I am not at all confident about that. There is a huge private rented sector out there and as fewer young people can afford to buy, more and more of them will indeed move into that rented sector.
A very different scenario will be that once the years of fiscal tightening are over inflation could return with a vengeance, leaving a soaring gap between the RPI and the CPI—the prices claimants will have to pay in the shops on the one hand, and the CPI which will determine their housing allowance levels on the other. Of course, all these uncertainties will be there alongside a benefits cap, which may or may not be inflation-proof, and the need for many vulnerable people to adjust to a move from higher ESA to lower-level JSA. The Minister knows that I fear many vulnerable people will be included within that group, going down the slope towards the cheaper JSA. There is also the loss of disability benefits for children, the loss of tax credits and so forth, and the move to monthly payments if we cannot persuade the Minister that this will be the last thing that people are going to cope with. For all these reasons, I agree with the noble Baroness, Lady Hollis, that the House needs some assurance that there will be systematic and regular monitoring of the consequences of linking rents to CPI and on how the situation will be assessed and in what circumstances a change of policy would be regarded as appropriate.
I would also be grateful if the Minister could inform the House on a particular aspect of this issue. Shelter and the Chartered Institute of Housing estimate that the link between local housing allowances and the CPI will, by 2030, result in 60 per cent of local authority areas being unaffordable for LHA claimants. Undoubtedly, these will be the areas with jobs. Can the Minister say whether the Government accept this estimate and, if not, what the Government’s estimate is? Whether or not he accepts the estimate, has the DWP undertaken an impact assessment of the housing allowances/CPI link on employment in this country? What particular impact on employment will this have?
If households have no option but to move to areas with very few employment opportunities, how much higher will unemployment be year on year than would otherwise be the case and what will be the costs of that higher unemployment for the taxpayer? These sorts of issues need to be incorporated within the ongoing monitoring and assessments of the impact of these policies, year by year. Within the Minister's response to this amendment, I would be most grateful if he could include some reference to the employment impact.
Lord Freud
Noble Lords will be aware that we propose to limit increasing the local housing allowance in line with the CPI index from April 2013. The aim here is to ensure that we continue to exert downward pressure on rents while looking at rent levels in local markets. The limit will apply only in areas where local market rent increases, at the 30th percentile, exceed the annual rate of CPI inflation. We have said that we are committed to making savings from this measure up to 2014-15. If it then becomes apparent that local allowance rates and rents are out of step, they can be reconsidered.
To prepare for this change, the Minister for Pensions set out in the uprating Statement the arrangements for fixing rates. The first uprating will be in April 2013. We have taken this step to ensure that CPI rating can commence from April 2013, but that nobody will see their ongoing award fall at that point as a result of LHA rates being uprated. As the annual rates will be set well in advance, we will be able to provide clarity and certainty to claimants and landlords. We will continue to monitor the path of market rents until 2015 and the Secretary of State will be able to review the LHA rate, or uprate it by some other method, should the need arise.
As the noble Baroness, Lady Meacher, pointed out, the future is uncertain. Clearly, you can draw any scenario you like; the point is that we need to watch it and we will watch it very closely. In particular, we may need to increase LHA rates if growth in rents and the CPI are so out of sync that there is a critical lack of affordable housing. To pick up on the noble Baroness’s other point on extrapolating out to 2013, clearly we all recognise that over any kind of longer-term run rents tends to move with average earnings, not with average prices. Any extrapolation out that long will have a big gap, but we are not talking about that here. We are talking about a measure which is locked in for that two-year period at a time of great difficulty when we are trying to bear down on prices. Therefore, I do not think it is relevant for me to hypothesise about employment levels. That is not what is happening here.
On the point about data and monitoring and what Parliament can expect from us, we will provide to Parliament on an annual basis from late 2012 the relevant CPI data and the data on the 30th percentile of market rents. In addition, noble Lords should be aware that the Valuation Office Agency currently makes available quarterly data on market rents by local authority.
I should point to the major piece of independent external research that is already underway to evaluate the impact of the reforms to housing benefit announced at the June Budget and the spending review. Indeed, I need to thank the noble Lord, Lord Best, for the way that he shaped that research effort. The research will be comprehensive and will be presented to both Houses and the public alongside a ministerial Statement. The department is currently considering how this research could be extended—subject, of course, to funding—to allow it to look at the impacts of changes to local housing allowance uprating over a longer period.
I hope that I have reassured noble Lords that we are committed to monitoring and evaluating this change really thoroughly. On that basis, I urge the noble Baroness to withdraw her amendment.
Baroness Hollis of Heigham
I am grateful to the noble Baroness, Lady Meacher, for her support and her additional probing and questions. I am more than satisfied with the Minister’s reply, apart from one word. I wonder whether I could invite him to change that one word. He said that if the two tests, rent levels and CPI, are out of step, then they “can be reconsidered”. I want “will be reconsidered”. I invite the Minister to strengthen his position on that point. Everything else was lovely.
Lord Freud
On the basis that the noble Baroness is going to be incredibly helpful to me in all the consequent amendments in the Bill, I will change the word from “can” to “will”.
Baroness Hollis of Heigham
I am very grateful and with great pleasure withdraw the amendment, knowing that our policy intent and the Government’s policy intent will now be met. Thank you.
Baroness Anelay of St Johns
My Lords, I shall respond in the same helpful measure. I am grateful to the noble Lord. The Chair put this as moved formally; that was the improper thing. I hasten to add that I know that the Chair was not trying to be improper.
Of course, I have to put on record that this is a separate matter. If the Opposition wish to press this to a Division, that is their absolute right, and I recognise that. However, the Government cannot accept Amendment 17A because it is not consequential, and the Minister clearly has not accepted it. I hope that that is an explanation which is a little clearer than mud.
Baroness Hollis of Heigham
My Lords, I am sorry to press this, but I understood that when the noble Lord, Lord Best, moved his original amendment, he accepted the additional amendments in the group as amendments to his amendment. He did this to ensure that his original intent regarding the one spare bedroom was modified by the extent to which there was available accommodation. If there was not, his standard would apply, but if there was, we would expect the tenant in due course to move. That was the debate.
Baroness Anelay of St Johns
May I very rudely interrupt the noble Baroness, Lady Hollis? I am reminded, of course, by those who know the rules well, that if we are to debate this amendment—which we are, albeit very briefly—it is right that the noble Lord, Lord McKenzie, should move it. I will, of course, be able in procedural terms to reply to the noble Baroness, Lady Hollis, and explain the position. However, perhaps the noble Lord, Lord McKenzie, for the sake of the formalities, might quickly like to move the amendment, and then we can deal with the process.
Lord McKenzie of Luton
If it has not been moved already, then I beg to move.
Baroness Hollis of Heigham
My Lords, my case then stands, in other words. I had understood that when the noble Lord, Lord McKenzie, spoke immediately after the noble Lord, Lord Best, he moved the additional amendments, which the noble Lord, Lord Best, had previously indicated he would accept as part of the position.
Baroness Anelay of St Johns
My Lords, I know that this is becoming an aficionado’s debate, and obviously we have to make sure that we understand what is going on.
The noble Lord, Lord Best, made claims about what he considered to be consequential, and I know that he did so in good faith. However, it is not for the noble Lord, Lord Best, to tell the Government what the Government believe is consequential. As a matter of fact, Amendment 17A is not consequential. The noble Baroness, Lady Hollis, might find that I am about to be helpful, so she might wish to hesitate for just one moment. At least, the noble Lord, Lord Bassam of Brighton, the Opposition Chief Whip, might find that I am about to be a little more helpful.
Clearly this is not a consequential amendment. The noble Lord, Lord Best, may want to accept it as such, but it is not procedurally. The Government’s view, if I can make it clear, is that the amendment is not consequential. We do not accept it as being consequential, and will not do so when these matters are debated in another place.
However, the Government have also seen the result earlier on. It is not the Government’s intention to try to unpick some of the debate that occurred earlier. During that debate, at no time did the Minister accept that Amendment 17A was consequential. The position is clearly that when the matter was debated earlier on, other noble Lords felt that if the matter were put to a vote, they might wish to vote along the same basis, but that did not happen.
I am sure it will be to the confusion of noble Lords opposite, but the position, quite simply, is that the Government will not call against Amendment 17A when it is put. I hope that is helpful. The important thing is on the record; I make it clear that the Government will not accept this in another place. I hope the noble Lord, Lord Bassam, finds that useful.
“(6) Regulations shall provide that where the award for housing costs is restricted to the shared accommodation rate, this shall not apply for a period of 52 weeks for any claimant aged between 25 years and 35 years, who is not an existing claimant of housing benefit.”
Baroness Hollis of Heigham
I would like to continue the argument with the Chief Whip, but we will move on. Perhaps we will have this discussion outside on the difference between consequential, and the mover of an amendment accepting an amendment to the amendment. That is where the confusion may arise. The noble Lord, Lord Best, certainly did do so.
We discussed shared accommodation rent in Committee, and I have to say that one’s worries remain. At the moment, if you are under 25, you are eligible for Housing Benefit for a room in a shared house. If you are over 25, you are eligible for Housing Benefit for a one-bedroom flat. The Government are proposing that from next month, if you are aged up to 35 rather than 25, after 13 weeks you will get housing benefit only for a room in a shared house, a house in multiple occupation. Some 62,500 people will be affected, losing on average over £40 a week—in London, over £100 a week.
Lord Freud
My Lords, Amendment 19 from the noble Baronesses, Lady Hollis and Lady Meacher, deals with a subject that we have debated at considerable length—the shared accommodation rate. In case there is any doubt, let me be clear: the shared accommodation rate is what we pay people to share accommodation, not to share rooms, as some people think. We do not expect people to share one room or a bedroom, but to share accommodation.
Baroness Hollis of Heigham
My Lords, I do not think anyone disputes that, but at the bottom end of the market it will be a room in a shared house, which means sharing a kitchen and bathroom, as we have discussed.
Lord Freud
My Lords, it is rather interesting to look at the actual rates. If you take two people, each with their own shared accommodation rate of housing benefit, that covers or exceeds the two-bedroom rate in 60 per cent of localities. We are not talking about a dramatic cut in much of the country. Indeed, if three or four people choose to share a house, taking their own shared accommodation rates, the amount of money that they get would cover the rate for three or four-bedroom properties in 90 per cent of localities. We are not talking about a hugely draconian cut in that context.
If we look at the amendment itself, it is not altogether obvious what rate of housing costs the noble Baronesses are proposing should be paid during the 52-week period of exemption. Since the amendment applies to new claims only, perhaps it seeks to ensure that new claimants have their full contractual rent met for the first 52 weeks, rather than being paid the local housing allowance. If it is the latter, we covered those points in Committee. We debated whether the current 13-week exemption from rent restrictions for claimants who could afford their rent when they first took on that commitment should be extended to 52 weeks.
I need to make clear that rent can be met in full for up to 13 weeks for those who could afford their rent when they first took on the tenancy and have not been in receipt of housing benefit in the past year. This means that those claimants who experience a short spell of unemployment are not forced to move, and it gives others time to consider their housing options. Around 40 per cent of JSA claimants aged between 25 and 49 have been claiming for less than three months, and around 60 per cent for less than six months. For completeness, I should add that there is a 12-month protection for people who have recently been bereaved.
As I said at the time, most claims for housing benefit are for short periods. The 13-week exemption protects a person’s ability to pay their rent during that time. Half of jobseeker’s allowance claimants aged between 18 and 24 have been claiming for less than 13 weeks and less than 5 per cent have been claiming for more than 52 weeks. We already know that more than a third of those who claim housing benefit choose shared accommodation. These are people who could be in either separate-bedroom accommodation or shared accommodation and choose the shared accommodation rate. Of the people who are not on HB, 40 per cent of 25 to 34 year-olds share. I am excluding students from this. This is not a form of housing that is unusual or imposed on people; it is an absolutely normal form of housing.
I accept that there is real concern about the impact of the shared accommodation rate and particularly about the availability of accommodation. I said in Committee that the market will not remain static and that I believe it will respond in time to the increased demand for this type of accommodation. The feedback that I had from officials following their recent meeting with a Methodist housing association suggests that this is already happening. The association is already converting some of its property into shared accommodation. I am also reassured by meetings that I have had with stakeholders that a number of support organisations are helping to match tenants to shared accommodation.
Baroness Hollis of Heigham
I thank noble Lords for taking part. There are very real concerns, not just for women who are going into an HMO where there may be people who appear to them threatening, but also for those who appear to be the threatening ones, for whom it is also difficult. Both sides find this unacceptable. I am also grateful to my noble friends Lady Lister and Lady Hayter who helped to spell this out.
To some extent, the Minister missed our point. None of us has any problem whatever with people who choose to share. It is fine when you choose to share with people you know or when you have gone through an ad in the local paper and gone in to see them. It is fine if it is a salubrious flat and together you can pool your resources. Some may be in work, some may not, but you can manage the rent. That is fine. That is not what we are arguing about. We are arguing about someone who has lost their job and is in a one-bedroom flat for which they are currently able to pay. After 13 weeks, their HB expires and they are only entitled to LHA at a shared room rent. They are forced, against their will, to move into accommodation with strangers at the very same time as we are expecting them and needing them—and they want—to prioritise their search for a job. It is simply silly to undermine their work ethic and their work efforts. Instead, we are diverting and deflecting them into the search for a home which is safe, salubrious and affordable. This is silly and stupid, which is not a charge I would normally address to the Minister, because he is neither of those things.
On cost, I put it to the Minister that it would be reasonable to assume that a woman who had lost her job as, say, a secretary in a firm that had closed would get back to work within six months if her housing position was unaffected. If her housing situation was affected and she had to go in search of new accommodation, possibly ending up in another area, it might take her 12 months. That is not an unreasonable supposition; six months if we accept my amendment, 12 months in the existing situation. The cost of the extra three months of HB is £1,300, based on the assumption of an extra £100 a week. If, however, she did not spend a further six months on benefit, because she got back into work within six months as opposed to a year, she would save the DWP £3,900. Subtract those two, and the additional savings to the DWP, by supporting this amendment, for that one individual person, is £2,500, and that is before you get money from taxes and national insurance. Multiply that by, say, 15,000 people out of the group of 62,000 and the Government would save an additional £40 million. That is where the savings lie.
You can challenge my behavioural assumptions—that you go back to work within six months if you do not have to find another home and that it takes you 12 months if you do—but, from what I know in my city about how long it takes people to find work as the situation worsens, I do not think they are unreasonable. If the assumption is right, and 15,000 of that client group come into that category, the Government will save an additional £40 million, not halve the savings as the Minister suggested. That is nonsense on any behavioural assumptions. He is assuming that what he is doing will make no difference to people’s propensity or ability to come back into work. That is simply untrue, particularly as the economic situation gets worse, and he must know it. He can make savings from the amendment if he chooses to work it through further.
My final point is about safety. A member of my family was in a room in such a situation. There was thumping at his door and he opened it. This person in my family—who is six feet tall and strong—faced, as he opened the door, somebody who was naked with a knife in his hand. Do not tell me it cannot happen, because I know it has and it does. I therefore suggest, on grounds of decency, safety and cost effectiveness, that the Minister consider this amendment further, even if he is not willing to do so today. I beg leave to withdraw the amendment.
“(6) Within one year of these regulations coming into force, an independent research review of their impact shall be laid before Parliament, and such a review to include the effects of such measures on the reduced incomes of social housing tenants and their families, the security of the rent roll of their social landlords, the depletion of tenants’ savings, levels of arrears, levels of eviction, any increased homelessness and use of temporary accommodation, the reduced prospects of pensioners for rehousing, and the likely availability of housing stock to meet the new underoccupancy standards, and related matters.”
Baroness Hollis of Heigham
My Lords, I will be very brief. The amendment indicates our very real concerns about the effect of all these cuts to housing benefit. We fear that if there is any reverse in our decision today on underoccupancy, housing associations will face mounting arrears, and spend more time and employ more staff chasing deficits in rent. As a result, there will be even less chance for those housing associations to build the new housing stock we badly need. I know the Minister thinks my fears are exaggerated. I hope he is right. The House has alleviated most of my concerns, but we cannot properly calculate the behavioural effect of all these changes on tenants. The Minister is evidence based—something we all welcome and respect—and he wants UC to work, as we do. I therefore hope that by the time the Bill has gone through its full passage in both Houses he will, if it is appropriate, find the resources to ensure that we have the research to undertake an independent review of its effects on tenants in social housing. Frankly, if we do not have that protection, I fear the worst. I beg to move.
Lord Best
I support the amendment. We already have up and running, thanks to the good work of the Minister, a really first-class piece of research looking at the impact of the housing benefit changes on families, poverty and a whole range of issues. I strongly congratulate him on taking that suggestion seriously and bringing forward a significant piece of research. It engaged a consortium of the top people at Oxford University, Sheffield Hallam University, Ipsos MORI polling and the IFS. I wondered whether that team might have its work somewhat extended to embrace the research suggested by the noble Baroness. It would not involve quite as much work because it would examine the 150,000 or so households that will now be affected by the underoccupancy arrangements. There is much important research to take place.
Baroness Hollis of Heigham
I am grateful to the Minister and to our noble colleague—I was going to say our noble friend—the noble Lord, Lord Best. If I may say so, the Minister enhances an already high reputation by his openness to the information that will come from research. We should give him credit for that and I am very grateful. I beg leave to withdraw the amendment.
Baroness Hollis of Heigham
My Lords, I would prefer housing benefit to be part of UC and to be paid to the tenant, because I think that that strengthens UC and makes it easier for one simple calculation to be made for the family. However, I support the amendment because, until the Government have rock-solid arrangements in place to ensure that the rent element in UC is immediately paid to the landlord, both tenant and landlord will, as the noble Lord, Lord Best, said, suffer.
Why would the tenant suffer? He may have to pay transaction costs. If it is looped through his bank account and there are any outstanding overdrafts, debts, or whatever, his UC, including the housing element, will be top-sliced. That is when there is no temptation to spend it on other things. I checked with my housing association. Even with direct debits from tenants in work, those direct debits go astray—deliberately or otherwise—and intensive work has to be done in housing management to reconstruct them again. Tenants can risk losing their home if rent payments are not made automatically to their landlord. For some tenants, that will be a real struggle. If tenants wish to have their rent paid directly to their landlord, but that choice is being denied them, they will suffer.
Why will the landlord suffer? Arrears will undoubtedly arise. I have doubled the amount in my housing association accounts because of potential arrears that I suspect will follow from this change, as have other housing associations. We will then also have to increase staff resources to try to collect those arrears. Private landlords, already reluctant to take DWP tenants, will certainly refuse. One reason for extending direct payments in the first place was to make it a more attractive option for landlords in the private sector, who have been notoriously reluctant since the 1950s to make accommodation available. They used to say, “No Irish, no blacks, no DSS, no dogs”. Versions of that scrutiny, that winnowing out, I fear regrettably still apply.
Ultimately, landlords may need to face evicting tenants. As many of those who cannot manage their money will be vulnerable, they may or may not be regarded as intentionally homeless. If they have children, they are a real problem for all parties, including social services.
Furthermore, housing associations, including mine, are seeking to raise money from private sources, from banks—even, we hope, from pension funds, which is under negotiation at the moment—for building programmes. Our asset is the security of our rent roll. If tenants instead have money paid to them which is not rock-solidly paid immediately to the housing association or the local authority, that rock-solid asset base will no longer be as valued. We estimate that the proposal will cost us something like 50 base points extra on all the loans we raise. We become a worse risk and, as a result, fewer homes will be built. An amendment putting the decision in the hands of not the DWP or landlords but in the hands of tenants is surely the right way forward.
Baroness Lister of Burtersett
My Lords, I shall speak briefly in support of the amendment moved by the noble Lord, Lord Best, from a slightly different perspective, and repeat what I said in Grand Committee. In Grand Committee, I congratulated the Government on their research, Perceptions on Welfare Reform and Universal Credit, which sounded out various stakeholders about what they thought about some of the reforms. One thing that came from that from people who will be affected was that although they welcomed the one-stop shop approach of universal credit—to the extent that it is a one-stop shop—there were real fears about putting all the eggs in one basket. If all the money goes together in one lump sum, if anything goes wrong, people are left insecure—high and dry. If some of the rent payment is going to the landlord, where the tenant wishes it, that is mitigated. That is why that choice should remain
Not expressed in this research but by a number of outside organisations is the worry about what happens to the money in the family. I know that the Minister argues that budgeting accounts will sort this out. I hope that they will, but I think that he knows that I am still slightly sceptical about the magical powers of the budgetary accounts. There are fears that the money may not be paid into the account of the person responsible for paying the rent and that they may not then have control over how the money is spent by their partner. That is a slightly different perspective from that of the noble Lord, Lord Best, who understandably and powerfully is relaying some of the concerns about housing providers, but we have to think about the extra burden that this might be placing on some families.
Welfare Reform Bill
Baroness Hollis of Heigham Excerpts(14 years, 2 months ago)
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Lord McKenzie of Luton
My Lords, I will be brief on Amendments 27, 30, 31 and 29, which deal with sanctions. However, given the hour, there is just one particular point I wish to pursue.
We have already had the assurances of the noble Lord and his colleagues that there will be no target set in respect of sanctions. That is clearly on the record in Committee. We might like one more go at it, but we need not spend any more time on that. In the other place we made the argument for reducing the maximum sanction from three years to one. Given where we are, I do not see merit in going over those arguments again; we will just have to differ on that.
The point that I wish to pursue is the opportunity for people to mitigate that longer-term sanction. My noble friend Lady Hollis touched upon this briefly in Committee. If someone is sanctioned for three years, your leverage to encourage them closer towards the labour market is very limited. Three years is a long period of time; people change and perhaps understand the consequences of what they have done. It seemed a reasonable proposition that they should have an opportunity of mitigating and reducing that three-year period. That is the point that we wanted to pursue in this amendment. I beg to move.
Baroness Hollis of Heigham
My Lords, I strongly support my noble friend on his last point. The whole point of sanctions is not just to punish but to change behaviour. If someone does so and therefore, having learnt their lesson, is willing to comply, they should get rewarded for that, so to speak, otherwise there is no incentive for them to change their behaviour. I hope that the Minister will hear my noble friend’s wise words, otherwise the sanctions regime will not work or stick—and, I suspect, will end up being judicially reviewable.
Baroness Meacher
My Lords, I shall speak extremely briefly to Amendment 28, which is in this group, but I would not wish the House to take the brevity of my remarks as an assessment of the importance that I attach to it. The amendment concerns thousands of people up and down the country with mental health problems, mental impairments and learning difficulties and would affect whether they are fairly treated or denied benefits unfairly because of misunderstandings and a failure to understand why those people have failed to comply with the conditionality requirements and then have their benefits removed or cut.
I emphasise that it is not sufficient, as I believe the Minister said in Committee, that if a matter is drawn to the attention of the officials, they will take that matter into account. Many of these people will not be aware that they need to make that clear; they will not even necessarily have the capacity to make it clear that their disability, handicap or learning difficulty prevented them satisfying the conditionality requirements. They may indeed be lying in bed, not opening their post, not answering the phone, not responding to requests to come for an interview and so on.
The Minister is very familiar with these issues, but I was concerned in Committee that he seemed simply to suggest that a person can point out that they have a problem. I would be interested to know whether he can assure the House that specific actions will be taken by officials to ensure that they have considered and checked whether a person has a mental health problem or a learning difficulty, and whether that has in fact affected their capacity to respond.
The other issue in the amendment has to do with reasonable adjustments. Of course there are people who cannot get to the office and attend an interview or assessment, such as people suffering with agoraphobia. Many others are also sufficiently unwell in a mental health way that they simply will not be able to perform as others might. Reasonable adjustments have to be made for those claimants if they are going to be fairly assessed and not sanctioned unreasonably. I will be very interested to know what the Minister has to say in response to these issues.
Lord Freud
My Lords, I will also try to be as brief as possible. We had a very good discussion on this area in Committee, and I can make clarifications which have been informed by some of that discussion. One of those clarifications is that we will limit the sanction amount to three years, so we will not have it compounding above that level.
The second relates to the parable of the prodigal son. From the argument of the noble Lord, Lord McKenzie, there has got to be a way back into the system. We are trying to change behaviour: where someone has come back and got a job for six months at his job goal level, we will take away his sanctions at that point. I thank noble Lords for the very informed debate that we had.
Baroness Hollis of Heigham
Did the noble Lord say that if the person got a job, after six months in the job the sanctions would be removed?
Baroness Hollis of Heigham
I do not think that is good enough. That means that coming back in and searching for the job—in other words, conforming to the sanctioning conditions—is not enough. He also has to be successful, which will depend on the lottery of what jobs are available, and so on. I would have thought that providing he is conforming to the work conditionality regime in searching for a job, that ought to be enough. You should not be able to punish him just because he lives in Merthyr Tydfil and the jobs are not there, whereas in central London they may be.
Lord Freud
My Lords, we thought about this matter very deeply and thought that it was very hard to genuinely measure compliance if there was not a hard result. We decided that the hard result was taking a job and holding that job for six months, and then we would take away the sanctions. That is where we are. It is a lot better than where we were.
Baroness Hollis of Heigham
But if that means that he was previously on JSA and HB as part of his universal credit, and he has now gone into low-paid work, so is getting a wage, then presumably if the sanctions still apply he would fail to get the housing element going into his universal credit, and he would not have enough to live on.
Lord Freud
No, my Lords, the sanction regime does not work like that. It takes away the equivalent amount of the JSA, so you keep getting your housing credit, but have this amount taken off, which will be a proportion of the total universal credit.
Lord Freud
I think I can safely say that we are not saying that. We are just saying that we want real proof of a change. The prodigal son must do more than turn up and warm his hands on the fire as the fatted calf is slaughtered. I am saying that he has to take a job and hold it for a minimum of six months.
Baroness Hollis of Heigham
Could the noble Lord perhaps move from the Old Testament to the New Testament?
Lord Freud
I thought it was the New Testament. It is definitely a New Testament matter. I am shocked that the noble Baroness—
Lord Freud
I am utterly shocked. Let me keep going; the hour is late and I am forgetting what I am talking about very quickly.
Turning to Amendment 28, we will impose reasonable requirements, taking into account the claimant’s particular circumstances, including any health condition or disability. Universal credit claimants with a health condition or disability that limits their capability for work will not be required to look for work. There are specific safeguards in this area. Decision-makers must consider any relevant matter raised by the claimant when considering whether there is good reason for a failure.
Lord Freud
My Lords, when we discussed a similar amendment to this in Grand Committee, I explained that we intend to retain the existing practice in the benefit system whereby claimants can be treated as having income or capital in cases of deliberate deprivation. However, we believe that different issues arise in relation to self-employment. We think that it is right in principle to apply a minimum income floor to claimants who choose to be self-employed but whose earnings do not make them financially self-sufficient. I confirmed in Committee that the floor will not be based on the hours claimants work. We assume that claimants’ earnings are at a level that we would expect from claimants with similar circumstances in employed work.
Claimants will not be forced to take reduced benefit payments by accepting the minimum income floor. Self-employed claimants will have the choice in universal credit. Some will choose to continue solely with their existing activity with the expectation of increasing their earnings. They will accept the minimum income floor. Those who do not will need to satisfy conditionality requirements. The conditionality regime will aim to guide the claimant towards the most appropriate form of gainful work. For some claimants, this would combine their self-employed activity with part-time employed work. In other situations, the regime may very well encourage the self-employed to keep going in their self-employed efforts. We will need to build a quite sophisticated regime to manage this.
This approach differs from tax credits, which allow claimants to receive maximum support so long as they declare that they are working a minimum number of hours. However, in 2009-10, for example, around 60,000 of the households claiming tax credits that received some or all of their earnings from self-employment declared earnings of under £2,500 a year—less than £50 a week. While this is legitimate under current rules, we believe that some intervention to guide claimants towards increasing their income is justified in return for state support.
Baroness Hollis of Heigham
Can the Minister explain what he expects here? The old enterprise allowance scheme, which was very effective, used to give people a top-up of £40 a week to start a business, and as far as I recall this ran for up to two years to give people a chance to establish a small business. How long will someone be allowed to have low earnings while they try to build up a business, and how quickly will guidance from young people in Jobcentre Plus, who frankly have never tried to start a business, steer them back into sanction and conditionality?
Lord Freud
I do not automatically think that we will use the example of young people in Jobcentre Plus to deal with some of the more complicated issues here. We acknowledge that the real issue is that we need to create an environment that encourages entrepreneurship. We need to balance the exact rules about the interrelationship between the new enterprise allowance and the time that we will allow. I do not have the exact figures yet, as we are still currently elaborating them. We are looking through all the details of employment earnings. Clearly, the HMRC is expert in this area and we are working closely with it to develop our proposals. I must say to the noble Lord who said that it was a straightforward matter that on that basis he can come and help us to do it.
We are aiming to get the reporting requirements aligned as closely as possible with the tax system. However, in our view, it is reasonable for claimants to provide clear information on their income in return for state support. We are looking at a number of rules within the current benefit and tax credit systems to see what the most appropriate approach is for universal credit. We will then prepare regulations that will set out clearly the way in which earnings from self-employment will be assessed. This House will have the opportunity to debate those regulations in due course, and I think that that will be a fascinating discussion.
In today’s debate we should focus on principles. We clearly need to avoid requirements that will add unnecessary burdens, especially for people who are starting out in business—the people whom we really want to encourage. However, we cannot have a situation where people can be treated as being in full-time work for conditionality purposes, but because they declare no earnings they receive as much benefit as though they were not working at all. That is taking it to the absolute extreme. I hope that this explains why the Government cannot support Amendment 32 and that the noble Baroness will feel able to withdraw it. I know that we will be discussing this area again.
Baroness Hollins
My Lords, in speaking to the two amendments in this group, I want to mention a personal interest in the issue that I shall be talking about, as some years ago a member of my family was affected by it.
As noble Lords know, the capital of a claimant is taken into account when assessing the level of benefit to be received. If the amount of capital is greater than a prescribed amount—I think it is currently £16,000—then the person’s benefits are adjusted accordingly. There are several exceptions to what is counted as capital and these include any funds held in trust. This is clearly outlined in the 2009 Housing Benefit/Council Tax Benefit Guidance Manual, which states that certain types of capital should be disregarded in full, including the value of any funds held in trust and the value of the right to receive any payment under that trust following payments made to the claimant as a result of a personal injury, such as vaccine damage payments or criminal injury compensation. The value of these funds is not taken into account when calculating the capital of the claimant. Therefore, any payment made into the trust as a result of a personal injury, such as criminal injuries compensation, will not count when the claimant’s benefits are considered.
These amendments seek to apply the principle that claimants who have received criminal injuries compensation should not lose benefits, regardless of the form in which it is received or kept. A year later, the 2010 Housing Benefit/Council Tax Benefit Guidance Manual states that officials should treat lump sum compensation payments as capital. Examples given include lump payments, such as those made by the Criminal Injuries Compensation Authority. However, the manual then reminds officials to disregard the value of any compensation payment for personal injury which is held in trust. I believe that criminal injury compensation payments should not be considered as capital at all when assessing the levels of benefit, regardless of whether this is a £1,000 payment for 12 weeks of blurred vision or the maximum of £500,000 which is paid out for injuries leading to indefinite loss of earnings. Recipients of larger sums are likely to put this into a trust, but recipients of smaller sums are not. They may intend to use it for a holiday—some recompense for the injury that they suffered. One of the purposes of criminal injury compensation is to give recipients the opportunity to improve their quality of life after their trauma.
These amendments would benefit some victims of crime, particularly people with mental health problems or learning difficulties. Not only are they more likely to be in receipt of benefits, they are also more susceptible to being victims of crime. The benefits that they receive are provided to cover essential costs, and any payments made as criminal injuries compensation are made in recognition of pain and suffering that the victim has gone through and perhaps for the purpose of making up any lost earnings.
The idea that the benefits that the person is receiving and the criminal injuries compensation provide for two distinct purposes is very important. It is for this reason that allowing one to influence the level of the other would be unfair. The Minister may consider that Clause 5 would have been a better place for these amendments. I hope that he will accept these amendments or undertake to bring them back at Third Reading in a more appropriate form. I hope he will reassure me that these simple amendments would be acceptable. I beg to move.
Baroness Hollis of Heigham
My Lords, I strongly support the amendment. I had the privilege many years ago of being responsible for vaccine damage payments within the department and always tried to make a distinction between payments that were in lieu of earnings, which tended to be of the incapacity benefit sort, and payments which were a lump sum. Sometimes there was a structured payment of capital over a period of time as compensation for suffering and injury as opposed to an earnings replacement. We always excluded that second element from coming within the debiting of benefit. That distinction has been well drawn by the noble Baroness, Lady Hollins.
I hope that the Minister can respect the ethics as well as the long history of making a distinction between getting an income replacement benefit—ESA, for example—and getting an element of compensation for damages, for suffering, for pain and so on. In my understanding that has always been protected and has not been debited against your rent. Otherwise it is not worth anything to you at all. That was never the intention of the law. I hope that the Minister can support the proposals of the noble Baroness, Lady Hollins.
Lord McKenzie of Luton
My Lords, the noble Baroness has brought an important point to our attention. I have only two questions for the Minister. Can he explain the extent to which the current rules are going to be translated and taken up in universal credit? The position at the moment is that the compensation recovery scheme does not apply to criminal injuries compensation. Can the Minister say whether that would continue under universal credit?
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Lord McKenzie of Luton
My Lords, I do not want an endless wrangle on this. I think that that is being a little tough on the calling of amendments. My noble friend did not immediately realise that the noble Baroness, Lady Meacher, was not in her place, so it perhaps took her a little while to move the amendment on the noble Baroness’s behalf. Frankly, if we are denied the opportunity to proceed with Amendment 1 today, we will simply bring it back at Third Reading. However, I do not think that that is in anyone’s interest.
Baroness Hollis of Heigham
I support my noble friend on this. Some of the difficulty may have been caused by the noble Baroness, Lady Hollins, kindly agreeing not to move her opening amendments, Amendments A1 and A2, so that we could have enough time to debate this matter fully. This has arisen because of the time required for the European Council Statement, which has thrown out all the expected timings. As a result, the noble Baroness, Lady Meacher, was not in her place, as noble Lords would expect, because she had assumed that the other amendments were being debated. So I hope that the House will be sympathetic to my noble friend’s request, which makes good sense. The House is self-regulating. If the House thinks that this is a reasonable thing to do, we can do it. I very much hope that the noble Lord, Lord Freud, will respond to my noble friend in the manner indicated.
Lord Wigley
My Lords, I was under the impression that when the noble Baroness, Lady Lister, got to her feet to speak, she said that she would move the first amendment and speak to the second. As she has her name on the first amendment, I would not have thought that there was an issue.
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Lord Freud
Yes I do, and I will come back to that if I may, because a whole series of questions was raised about transitional protection, which I need to deal with comprehensively.
Our impact assessments made clear that, overall, families are more likely to be better off on universal credit. In addition, departmental modelling estimates are that the impact of the reform of disability payments on the number of disabled children living in relative poverty will be negligible. We must remember that support for families with disabled children is provided by the universal credit package as a whole.
On the absolute figures of support, under universal credit, an out-of-work family with a disabled child will receive just over £8,000 a year in benefits for their child once universal credit has been introduced. That compares to just over £4,000 for an out-of-work family with a non-disabled child and about £1,000 for a family who receive only child benefit. The figure for a child on the severely disabled level is £12,000. That is the order.
Let me now turn to the really important point raised by many noble Lords about taking money away from families who have learnt how to build their lives around it. That is exactly why we have introduced transitional protection. My noble friend Lord Boswell has referred to an assurance on no losses for years one and two. The way transitional protection works is that where circumstances remain the same, people’s payment level is protected on a cash basis. That means that families currently receiving child tax credit will not see a cash reduction at all as a result of the move to universal credit, and we will provide cash protection for as long as the universal credit award is less than the previous benefit entitlement. I hope that represents a level of ring-fencing that the noble Baroness, Lady Turner, will recognise.
Baroness Hollis of Heigham
Perhaps I may ask the noble Lord about cash protection. Does that mean it will or will not be inflated each year by CPI?
Lord Freud
No, clearly there is an erosion factor. Cash protection does not also inflate it. But the point about the universal credit is that it is structured to provide adequate support for families overall, and on top of that where there are differences we have a reasonably long period of transitional protection.
We simply cannot maintain the existing rates for disabled children if we are going to increase the rates for severely disabled adults. I know it is hard to absorb lots of figures at once, but let me just try and capture it. What we are looking at is fundamentally paying a severely disabled child or adult £77 once the universal credit is introduced. That is a big leap for severely disabled adults today who are on £32.35. That is where we are trying to move to, and that is where we are trying to put our resource.
Baroness Hollis of Heigham
My Lords, I am moving this amendment precisely because I strongly support universal credit. If the House agrees with me in supporting universal credit, I suggest in all decorum that it should also support this amendment.
At the moment, council tax benefit is a social security benefit—a national benefit—which responds to local need. The DWP reimburses local authority spend. If, for example, a factory closes, the need for council tax benefit in that community may increase, and that need is met because the benefit is national and needs-led. Sensibly, therefore, it should be part of universal credit, along with JSA, housing benefit, ESA and so on, because the need for council tax benefit runs alongside those other benefits and should be related to family need, as universal credit will be. Instead, the DWP’s need to include CTB within universal credit appears to have been trumped by the demand of the DCLG and other departments that it form part of a completely separate agenda—the localism agenda. These agendas—universal credit versus localism—clash, and so far the wrong decision has been made.
What is DCLG proposing? In future DCLG will award a fixed-rate grant to local authorities from which it will have to construct its own council rebate scheme. What is wrong with that, your Lordships may think? Quite a lot, and there are three reasons in particular. First, instead of one national scheme that is common across the country, understood by everyone—claimants, local authorities, staff and advice centres—there will be 400 different schemes. There will be a separate and different scheme for every local authority in the country. Norfolk, for example, will have seven schemes that are all different.
Think of the staff resources involved, when we are trying to save money, in constructing and running such schemes, especially when local authorities already outsource much of their work. Think of the complexity of giving advice to people who come into, say, the Norwich Citizens Advice office from all over Norfolk, trying to understand UC and then having to add on seven different taper arrangements according to which district council they come from within Norfolk. All of the admirable simplicity of UC goes out the window. Think of the possibility of underpayment, overpayment, error or even fraud because there is no standard scheme. Given that there will not be enough money to go round, why would any local authority encourage take-up? They will not.
We in this House are rightly building these problems out of universal credit, and the Minister is to be congratulated on that. But we will be building them back in again if this amendment is not accepted. DCLG has balkanised council tax benefit in the name of localism. It recognises this, and now DCLG urges local authorities to do the opposite of what it was calling for—to share common schemes—in which case, why balkanise it in the first place? It will be financed by a fixed grant and will not be needs-led in future. If a factory closes and local need increases, the grant will not go up. Presumably everybody gets less. Or, it will have to be topped up by the council tax that is already suffering 30 per cent cuts in services and a freeze. Think, my Lords, for a moment if that applied to jobseeker’s allowance, and that what you have if you are unemployed in your district depends not on your needs, or on any national standard, but on the needs of everyone else in your district. Your payment would go up and down according to local employment or unemployment figures in your district.
DCLG in its consultation paper recognises this risk, so it suggests—hopefully, idealistically—that local authorities should voluntarily help each other and bail each other out. Oh yeah? Why balkanise, as DCLG requires, if local authorities are too small to bear the risk, as DCLG recgonises? Worse, that fixed grant will be cut by the DCLG by 10 per cent, perhaps more in future. There will be a 10 per cent reduction in council tax benefit per head, but pensioners are to be protected, so the cuts that fall on others will be 20 per cent. However the council, under pressure from local charities, could decide to protect, say, disabled people—I could understand why they would—and give them the full CTB. The more vulnerable families you protect in devising your own local scheme, the more that families in low-paid work—the last man standing, so to speak—carry the cuts.
The Association of North-East Councils has calculated that once vulnerable families are protected, other working-age claimants will face cuts of up to 50 per cent in their council tax benefit. Then work will not pay and universal credit will be a waste of time. Severe cuts in other words are being smuggled in under the drapery of localism but are they essential? At the same time DCLG is spending £250 million on reinstating weekly bin collection or £800 million to freeze council tax, so that my council tax bills are protected while those with much lower incomes on council tax benefit will face cuts of 50 per cent.
Finally, what you will get in CTB will, of course, be determined by your income. Families facing the means test of universal credit will now find that they also face a second means test—that of CTB. How on earth will the value of moving into work be calculated, which is what universal credit is all about, when people face two means tests, two tapers—one with national rules and one with 400 separate local rules—that are layered on top of each other? As the noble Lord, Lord German, rightly said in Committee,
“if you believe in a universal credit, and you have a postcode lottery for what that amount of money might mean to you, how on earth are you going to be able to judge whether or not work is beneficial for you?”.—[Official Report, 6/10/11; col. GC 381.]
Exactly so; I could not have put it better.
UC was designed to bring all working-age benefits together into one so that every one of us would know what we would get and why work paid. Under the localism agenda, council tax benefit—a social security benefit—is being plucked out of UC, thereby destabilising it and balkanising the system. Forgive me, but this is administrative madness. All of this is being proposed in the name of localism but do local authorities want it? City authorities, like the one I used to lead in Norwich, hate it, as they will see some of their poorest citizens unable to pay their council tax and facing arrears and debts. Equally, some small rural districts are now wondering where they will get the staff resources to devise and run their own in-house schemes. East Devon district council’s cabinet has said that the scheme means: “costs, costs, costs”. A councillor said:
“This should be strangled at birth. It is a disgrace . . . We haven’t got the resources and we haven’t got the time”.
Nearly 6 million people receiving council tax benefit will in future not know what they will get because they will have no entitlement—just a handout from the local authority whose generosity or meanness will vary from district to district, from factory opening to factory closure, and from year to year. We took social security away from local authorities when we finally abolished the Poor Law after the Second World War. Now one of the worst effects of the Poor Law—the postcode lottery—is being reinstated for council tax benefit under the name of localism. That is wrong. To add extra means-testing on top of universal credit’s means-testing is insane. It will undermine universal credit without a shadow of a doubt. I and almost every other Member of your Lordships’ House want to see it working, so what then is the point of this Bill? Worse, this guise of localism will make poor people poorer, and local authorities, in whose name this is being done, will be powerless to help them. Council tax benefit needs to be brought back within UC. I beg to move.
Lord Newton of Braintree
My Lords, I shall be brief because I know that the House wants to get on. I am a supporter of the universal credit, so I am opposed to anything that is inimical to its success, and the exclusion of council tax benefit is exactly that; it is totally inconsistent with the Government’s proposals.
It is an open secret, although I do not expect the Minister to confirm this from the Front Bench, that the DWP does not want council tax benefit to be excluded, that there has been a battle with the DCLG and that for the moment, although heaven knows why, the localism agenda has prevailed. When anyone asks about 400 different social security systems, we are told that it will not be allowed to happen—so the localism agenda, we are told, will not be allowed to be localism because the local systems will be made to come into line in some sensible way. That is daft, but it is what we are confronted with.
I have two or three points to make. This is said to be cash limited, and indeed a cut. What is going to happen in an area where there is a big factory closure and the money has already been spread out? Does everyone already on council tax benefit have to take a cut in order to finance those who have just come on to it? In areas where, say, a big Tesco opens and 400 new jobs are created, does everyone get a bonus because a lot of people have been taken off council tax benefit? It is mad.
My first constituency boundaries straddled a parish boundary; number 36 Havengore was in Braintree and number 34 was in Chelmsford, but the houses were semi-detached. Can we really have totally different benefit systems for the people living in those two houses? Again, this is mad. Do the local councils want it? The answer is no, it is a nightmare for them. We should stop it, and if this amendment is pressed to a vote, for the first time today I shall not be able to vote for the Government.
Lord Freud
I am afraid that I do not have any more precise detail but, although I do not think that in the consideration of the Welfare Reform Bill I can say soon, I can probably say that it will be between January and May or June, or something like that. I have no more precise information.
Baroness Hollis of Heigham
My Lords, I thank everyone who has taken part in this brief expedited debate. I beg your Lordships on the government Benches to hear the words of the noble Lord, Lord Newton, in their ears; namely, that 400 schemes are inane, insane, unwanted and unwelcome, and that council tax benefit should be brought back to where it belongs in social security in order to make universal credit work. The Minister tried to suggest—I would say manfully—that it is too late to change. I do not believe that. That is why we have this House of Lords and this Report stage. Universal credit will not come online until two years’ time in 2013. If your Lordships today support what I believe is the real view of everyone in this Chamber—that council tax benefit should be part of social security—they will support this amendment today. I should like to test the opinion of the House.