Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Monday 28th November 2011 Grand Committee

[Baroness Hollis of Heigham]

I support my noble friend’s amendment. Following on from what the noble Lord, Lord Skelmersdale, said, I would say that the test of fraud is normally—I think I saw a former Lord Chancellor who would know much better than I—associated with intent and ignorance of the law and is not a defence, but I think in this case it is because we are dealing with the interlocking of very vulnerable people and a new and very different system for people to understand.

There are three or four matters on which if I were asked now whether people needed to declare things, I could not guide them, and I like to think I have some nodding acquaintance with this Bill. For example, a lone parent has a boyfriend who works away. He stays with her overnight one or twice over the weekend. As a result, is she no longer a lone parent? Clearly it will not depend on their sleeping arrangements but on what contribution he makes to their financial arrangements. On a weekend basis, would that be sufficiently substantial to make her no longer a lone parent but part of a couple and therefore falsely declaring if she claims to be a lone parent? I am not clear what would happen in that situation under the Bill. Perfectly reasonably she might regard the fact that as she is getting universal credit she is not a lone parent and he is somebody who comes in as a boyfriend but not a partner.

With housing benefit, you could have a family with a student son who is living at home, going to the local university and working part-time. Should he be declared for housing benefit as a potential contributor to the rent so that non-dependent adult deductions come into play? I do not know. I think it would be quite difficult for that couple to assess.

Let me give another example that we discussed at considerable length and about which the Minister was rightly sympathetic—kinship carers. Conventionally, kinship carers are entitled to claim for child credit and so on if they have the equivalent of the child benefit book, which normally takes about eight weeks to come across. In future, given that child benefit will not necessarily be a separate benefit entitlement, if there is a rotating relationship in which the child goes back to its birth parents for a few weeks and then, because the father or the mother may be an addict of some degree, goes back to the grandparents, at what point and for how long a period of continuous care are the kinship carers entitled to claim the child elements in universal credit? I do not know.

In those three cases—and I could elaborate another six on disability benefits that are becoming clear to us—I would not be able to advise somebody on what they should declare on their forms as being relevant for the consideration of UC. It would be natural for them in those quite complicated situations not to declare things that appear to work against them. They would not be doing it with an intent to deceive. They may think it is a perfectly proper statement of their position as they see it, yet under this clause they could be caught for negligence and fined. That is completely unreasonable.

The one piece of advice I would give the Minister is that whatever he does, whether he claims that this is needed as a reserve power or not, he should not touch it for at least three years until after the Bill has come into practical effect because of the bedding-down issues that it will have. The Minister has to make only one mistake, such as his department suing somebody for penalties for negligence when the department was wrong—and there will inevitably be departmental error; there always is when you introduce new systems—and the whole of the good will behind this Bill will disappear overnight.

[Baroness Lister of Burtersett]

My Lords, my noble friend gives some very good examples of how easy it might be to make mistakes, particularly when the universal credit is quite low. I remind noble Lords that on 24 October the noble Lord, Lord Boswell, told us how easy it is to make mistakes. When he applied for his retirement pension, he got it wrong. Was he being negligent? No. It was an example of how easy it is to fill in a form wrongly. It is not necessarily negligence.

Apart from that little reminder of how any noble Lord could easily make a mistake, I also wanted to pick up a point made by my noble friend Lady Drake about the expectation that 80 per cent of claimants will be claiming online. Recently a piece of research, Increasing Digital Channel Use Amongst Digitally Excluded Jobcentre Plus Claimants, found that one group of those claimants were what the authors call the “uninterested”. The researchers said that this group will,

“require persuasion or compulsion before they will use digital services, possibly with the threat of a benefit sanction for non-use”.

I would be very grateful if the Minister could assure the Committee that there is absolutely no intention to sanction people for not using online procedures. Some people have a mental block against using computers and we do not want yet another sanction in the system. I know that it was researchers who said this, and not the department, but if he could give us that assurance now, that would be very helpful.

[Lord Touhig]

My Lords, my noble friend Lady Drake has made some very powerful points this afternoon, which the Government need to take on board or we will get into a mess when this is finally introduced. They should be indebted, too, to the noble Lord, Lord Skelmersdale. His point is that there is an implication that the person who makes this sort of mistake has been deliberately negligent. That would mark people out as trying to defraud the system. It puts them in the wrong to start with, when these things can happen by accident.

Noble Lords will forgive me if I remind them of a point I made in one of our earlier debates. When I sat in the other place, I had a constituent who came to see me because she had been overpaid a certain benefit, and the department was pursuing her strongly for repayment. When we got the papers, we discovered what had happened. There were some boxes she had to tick. One of the boxes asked, “Have you received income support?”. She ticked “Yes”. However, she had stopped receiving it about six months before, and so beneath her tick, she wrote, “But this stopped”, and she wrote in the date on which it stopped. When we got to the bottom of this we found that when the form was sent in to the department, its computer could not scan in anything that was not in the box, so it continued to overpay her. She was in a terrible state. A large amount of money was involved, and there was a huge problem as a result. It will go wrong.

Noble Lords will forgive me if I repeat something that I mentioned in the Chamber a little while ago. In the case of universal credit, a lot will depend on a new IT system. Every major IT system that the Government have introduced in recent years has gone wrong. I know, because I sat on the Public Accounts Committee in the other place for a number of years and we had to look at some of these issues as a result of inquiries to the National Audit Office.

My noble friend Lady Drake also made the point, as others have, about people filling in these forms online. Thirty per cent of the poorest families in this country have no access to a computer. It has been possible to claim jobseeker’s allowance online for 20 months. The take-up is 17 per cent. The idea that we are going to get to 80 per cent of people claiming benefits online will cause a huge problem for the system.

My noble friend Lady Hollis has just made the point that a lot of the good things that this Bill will seek to introduce will be damaged because of the kind of approach that this particular clause takes. The Government should really think again and take note of the points made by the noble Baroness, Lady Drake.

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The noble Baroness, Lady Lister of Burtersett, referred to the question of encouraging people to use online services. I assure her that we absolutely will not use the civil penalty to encourage people to go online.

[Baroness Lister of Burtersett]

Is that also the case with any other penalty, not just the civil penalty? Is it a benefits sanction?

[Lord Freud]

We absolutely will not do that. The noble Baroness drew a comparison with current levels of JSA usage. The online facility that we offer claimants is so markedly inferior that people would not want to use it. We need to make sure that people will want to use the online provision, and we are taking a lot of active steps to look at how to encourage and help people to use it. Indeed, this is one of the discussions that I am currently having with the various groups and charities that are trying to get the most disadvantaged in society online, because that is one way in which they become a full part of the economic life of the country, and indeed of the whole life of the country. They and I see that this could be an immensely powerful force for getting that inclusion. As I said, we will work very hard to encourage people to use it. One does not encourage people to do something that could be life-transforming for them through some of the things which the noble Baroness suggests I might be doing.

The aim of the civil penalty is to reinforce the importance to claimants of providing accurate information that we require in order to administer their claims and awards in advising us when they have a change of circumstance. It is a different issue when someone does something knowingly. That is fraudulent, and we will target that behaviour by looking at tougher punishments than the one for missing a dental appointment—I had better not talk about my teeth. We want claimants to take more responsibility for overpayments and to encourage a positive change in claimants’ future behaviour so that they take proper care of their benefit claims and awards.

The noble Baroness, Lady Drake, made an important point about mental health. We will take that into account. Indeed, that is why we require the claimant to have acted negligently and to have no reasonable excuse. The department must satisfy itself that the claimant has failed to take appropriate care. Each case will be considered individually by the decision-maker, and the penalty will not be imposed if a claimant’s state of health or mental health is considered relevant to the error that has been made.

Amendment 147ZA would mean that a civil penalty could be imposed only on those who failed to notify us of changes of circumstances and the failure resulted in an overpayment, while a claimant who incurred an overpayment by virtue of their negligence and who failed to take reasonable steps to correct the error would evade a penalty. We already help claimants in Jobcentre Plus and, as I have said, we will reinforce that. We believe that everyone should take responsibility for the accuracy of the information they provide in order to receive a benefit, whether that be at the start of their claim or during the life of their claim when there has been a change of circumstances.

As for the question asked by the noble Baroness, Lady Drake, on legal aid, information on benefits and the conditions of entitlement for them is readily available to the general public. If claimants remain uncertain of which benefit is most applicable to them or have a question about their benefit entitlement, they can and should seek further advice from the department. New Sections 115C and 115D will therefore act together to remind claimants that it is just as important that they correctly report their circumstances at the start of the claim as well as report changes that occur within the life of a claim.

I will aim to answer the remaining three questions, having been bowled out on the fourth. On the ability of local authorities to impose fines, we consulted local authorities on the detail of the initiatives in the strategy and on our plans to implement them. Local authorities have provided input to the various projects that we have set up to implement the strategy. We have local authority staff collocated with the DWP and working on the strategy. That includes the sanctions and penalties project, which is doing the work on civil penalties. We will support local authorities in their work to implement the new penalty, which will include providing clear instruction and guidance on how to operate the new scheme. On the £50—

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[Lord Freud]

Let me quickly pick up three issues. First, when I talked about clusters, I meant that, where there are clusters and mistakes, something is clearly going wrong with the way in which we are presenting universal credit. In those circumstances, we would look very hard at fixing that problem and we would not be able to accuse anyone of negligence.

Secondly, I shall look very closely at the run-in to operating the universal credit system. I agree with the noble Baroness, Lady Hollis, on lots of things. She is absolutely right that we cannot have a system that demonstrates problems in its run-in phase.

Thirdly, on targets, I need to write to noble Lords. I would not mind forbidding the DWP from ever using those targets in that way—and I could offer it as a deal any day—but a future Government might not want to be so constrained.

[Baroness Lister of Burtersett]

I thank the Minister for his clarification about clusters. How many £50 fines would there need to be before there was a cluster? If it was then accepted in the department that the problem lay in universal credit or in the way in which the form was designed, would the department then consider paying back any £50 fine?

[Lord Freud]

No, I meant a cluster of mistakes. When we begin to see a cluster of mistakes around a particular set of questions, it clearly means that we have not got it right and need to do something about it. But we will know very fast.

[Baroness Lister of Burtersett]

I accept and quite understand that, but the point is that, before the department realises that there is a cluster, a number of people might have been fined.

[Lord Freud]

My Lords, I buy the point about the delicacy of the run-in. I have a tool with which to monitor it very carefully. However, we must have a system that tells people that they must take care with their application. This is an application on which tens or hundreds of thousands of pounds are riding. It is no good people just putting in slapdash figures and not caring; this is really important information and it must be put down carefully. That is what we are trying to ensure with this relatively modest civil penalty.

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I would be more than happy to discuss this with the Minister and his officials and look forward to his response. I beg to move.

[Baroness Lister of Burtersett]

My Lords, I have happily added my name to this amendment because I think it is very important. The noble Lord, Lord Ramsbotham, has moved it so ably that I wish to make only one point.

The Minister constantly evokes responsibility on the part of claimants and, similarly, everything that is written about the Bill emphasises the responsibility of claimants. The amendment would help to ensure that officials exercise their powers in a responsible manner. There needs to be a quality in the contract between claimants and officials. I am not suggesting that officials should be fined or receive a civil penalty if they get it wrong. However, the amendment would help to ensure that officials consider the impact on living standards and the knock-on effects of likely debt and exercise their power as responsibly as possible.

[Lord Mackay of Clashfern]

My Lords, there is, in my view, a principled reason for having something of this kind. However, I am not sure whether the noble Lord has necessarily got it right and obviously he wishes to discuss the detail with the Minister and his officials. For instance, I wonder whether the amendment would have caught the two examples that he gave. Subsection (1)(f) states that the Secretary of State shall consider,

“evidence of the impact that a sanction or penalty may have on the ability of the claimant to fulfil obligations to third parties including those relating to the fulfilment of benefit entitlement conditions”.

We are saying that before imposing a sanction you should ascertain whether the obligations to third parties,

“including those relating to the fulfilment of benefit entitlement conditions”,

prevented the attendance or whatever it was that is being sanctioned. It is not the sanction that does it; it is the fact that the sanction should not be imposed because of the obligations the claimant already had.

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[Baroness Tyler of Enfield]

My Lords, I will speak briefly to Amendment 113B. In so doing, I declare an interest. I am currently the chief executive of Relate, which provides a wide range of services to separating families. I am also part of an advisory group of people from the voluntary sector which advises DWP Ministers on what a network of integrated support services might look like. From that point of view, it is important that that is clearly stated on the record.

I want briefly to support the case that has been put forward by my noble friend Lord Kirkwood as to why it is important that we incentivise non-resident parents to engage in the gateway process, as well as parents with care. There are two points I want to make. First, the gateway and the application charge—and I know that we will come to the charge in a later grouping—bite at the moment on parents with care wishing to use the statutory child maintenance system. The aim of this is to incentivise them to try to negotiate a voluntary agreement with the other parent instead. I support that. It is right and proper, where it is practical, that incentives to do so are built in. But there is no equivalent mechanism pushing the non-resident parent actively to engage in the process of trying to reach a mutually agreeable arrangement. As the legislation is currently constructed, it is only after a parent with care has paid an application fee of £100 and a statutory calculation has been made that any incentive will be given to the non-resident parent to reach a private agreement. That is basically very unfair.

My second point is a more positive one: the gateway stage is an opportunity for meaningful conversation between both parents. It aims to explore the scope for reaching collaborative arrangements, to assess what help either or both parents might need in order to arrive at such arrangements and to signpost and refer one or both parents—and, indeed, the children involved—to suitable provision and the help that exists for separating parents and families. Non-resident parents who are responsible for paying child maintenance should, I feel, be especially involved in this process.

I conclude by saying a couple of things that come very much from my experience at Relate. It is very important to children that both parents after separation continue to be involved as co-parents of those children. The relationship between the adults may be completely and utterly at an end, and indeed new relationships may well have been formed; but for that child, the active involvement—of course, where safe—of both parents is absolutely critical, emotionally, in practical ways, financially and in a range of other ways. It is critical that these new arrangements, however they are finally constructed, put the maximum possible incentive on both parents to see how they can discharge their responsibilities to be effective co-parents after separation—a responsibility which I think that most of us think is for life.

[Baroness Lister of Burtersett]

My Lords, I, too, shall speak in support of Amendment 113B, although what I have to say is also relevant to Amendment 113DA in the next group. I, too, thank Gingerbread for its help.

I want to concentrate on how Clause 131 in particular, coupled with the wider government proposals to charge parents for use of the statutory child maintenance scheme, will disproportionately impact on women who, according to the Government’s own analysis, make up around 97 per cent of parents with care who are eligible for child maintenance. It seems very surprising that, at a time when the Government are worrying about the erosion of their support among women, particularly so-called C2 women, they should be proceeding with a policy on child maintenance which will unfairly impact on this group.

The Government say that the new gateway and the proposed charges are intended to drive behavioural change—yet again—yet in the brief circulated last week, the DWP acknowledges that a significant proportion of parents will not be able to collaborate and that there are circumstances where there will be no reasonable steps that they could take. Therefore, echoing a question I asked last week in relation to the benefit cap, what behavioural change are they trying to achieve in such cases? Is it really fair to subject this group to charges, particularly in the name of behavioural change?