Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Tuesday 13th September 2011 Lords Chamber

[Baroness Lister of Burtersett]

My Lords, as a member of the night shift, I will inevitably cover issues already eloquently discussed by other noble Lords, but I shall do so by focusing on some of the Bill’s gender implications and drawing on the work of the Women’s Budget Group, of which I am a member.

First, simplification is one of the main aims of the Bill and has long been the holy grail of social security reform. The Bill bears out an earlier warning from the Social Security Advisory Committee that there is a limit to the simplification that is possible with means-tested benefits. The closer we study it, the more we see how new complexities spring up, hydra-like. While the Minister may be a self-styled revolutionary, in the words of my noble friend Lady Sherlock, I fear that he is no Heracles. Where universal credit represents a welcome breakthrough is in the integration of in-work and out-of-work support, thereby potentially reducing the insecurities associated with the transition into and out of paid work. That is very important. That is about the only positive thing I am going to say, I am afraid.

Means-testing will be extended as a result of the arbitrary time-limiting of employment and support allowance for those in the work-related activity group. A disabled woman who has written to me—one of many—voicing her fears about the Bill’s overall impact on sick and disabled people, asks, “What do we do then?”. The Government’s answer is: claim income-related ESA. However, 34 per cent of men and 46 per cent of women affected will not be eligible. Where they have to depend on a working partner instead, their financial autonomy will be eroded. This matters to people. Indeed, Professor Roy Sainsbury told the Public Bill Committee in the other place that in research with claimants,

“individual assessment spontaneously arose as a thing that people were very keen on”.—[Official Report, Commons, Welfare Reform Bill Committee, 23/3/11; col. 16.]

Women’s financial autonomy is also likely to be eroded as a result of measures that reduce incentives for some second earners, as my noble friend Lady Hollis of Heigham has already talked about. A new separate earnings disregard for second earners would go some way towards addressing this and I would welcome the Minister’s views on that possibility.

We should also note Carers UK’s concerns about the loss of a bespoke disregard for carers. Furthermore, we still do not know what is proposed for childcare costs, which is one of many gaping holes in the Bill that must be filled before Committee. The attempt to fit a childcare quart into a funding pint pot will aggravate the work disincentive for second earners and lone parents, as we have already heard. The disincentives faced by many second earners will encourage what we academics call a male breadwinner model. This sits uneasily with the Government’s very welcome goal of encouraging shared parenting. It is also very short-sighted from a dynamic perspective. If a woman is in paid work while living with a partner, she is better equipped to remain in the labour market should that relationship break down.

Research demonstrates the extent to which women remain the main managers of poverty. This means that women are likely to bear much of the burden of measures such as the abolition of part of the Social Fund and the introduction of a benefits cap. I am concerned about both, but will focus for now on the cap. I have been struck by the number of noble Lords from across the House who have raised very serious concerns about this cap. I hope that the Minister is getting the message. The 50,000 or so households that stand to be affected will receive less than Parliament has decided is necessary to meet their basic needs, as the noble Lord, Lord Kirkwood, has eloquently explained. The Secretary of State has justified the cap in the name of fairness, claiming that it is about those who we believe should be able to go to work but are not doing so. However, it will apply to some groups that are not even expected to work.

In the other place the Minister claimed that the cap is about ensuring that there is a level playing field for everyone, but this is not a level playing field. The benefits and tax credits received by working families are being ignored. If they were all taken into account, official figures show hardly anybody would be affected by the cap. As a number of noble Lords have said, it is particularly unfair that child benefit is not added to the comparator earnings but is treated as income for the purposes of the cap. Could the Minister please explain to the House how this can possibly be justified?

The Minister also assured the committee in the other place that the cap is not about creating hardship, but hardship will be created, as the Centre for Social Justice has pointed out. Hardship could also result from the proposal to pay benefit monthly rather than fortnightly on the grounds that this is in line with the demands of modern life, and we have to prepare people for paid work. However, over a fifth of workers—and a higher proportion of low-paid workers—are still paid weekly or fortnightly, according to the department’s own figures. While the earlier switch from weekly to fortnightly payments may have caused few difficulties, the leap from fortnightly to monthly is much greater.

Nearly two in five families with children—the lowest income fifth—already run out of money regularly. So this is not a problem for a small minority to be solved as proposed by appropriate budgeting support and more frequent payments in exceptional circumstances. Again, it is women, as the managers of poverty, who will bear the main brunt. I hope that the Minister will be open to persuasion on an administrative matter that has significant consequences.

Another payment issue of great concern to many organisations is that the whole of the universal credit will be paid to one partner with, in particular, no routine provision for payments for children to be paid to the main carer, usually still the mother. Not only will this in many cases represent a further erosion of women’s financial autonomy, but also research that I and others have carried out shows that income is not always shared fairly within families and that money labelled for children and paid to the main carer is more likely to be spent on the children. As Fran Bennett of Oxford University warns, payment into a joint account—a so-called “nudge”, as the Minister has said—is not necessarily the answer, because research shows that joint accounts do not guarantee both partners equal access.

We see here an inconsistent approach to public and private dependency which could undermine some of the Government’s own objectives. A driving motivation behind the Bill, as we heard from a number of noble Lords, is to address what in my view is a damagingly inflated problem of public welfare dependency without any regard for the consequences of private economic dependency within the family. This could create a new couple penalty as the fear of a loss of financial autonomy and security could discourage women from committing to a new relationship.

In conclusion, while I was focused on the Bill’s potentially damaging impact on women, this also has implications for children, given the link between women’s and children’s poverty. I hope that in this House we will be able to deliver the concessions necessary to protect women, children and disabled people and achieve the fairness that the Minister assures us this legislation is supposed to be about, but at present signally fails to deliver.