Extension of Franchise (House of Lords) Bill [HL]

Baroness Sherlock Excerpts

2nd reading (Hansard): House of Lords
Friday 19th July 2019 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Naseby, for opening this debate and all noble Lords who have contributed. The noble Lord, Lord Norton of Louth, was quite right; it may be a small debate, but it was a quality one for all that. I have certainly learned a lot this morning. I should say at the start that it is an unexpected treat to be here this morning, but I would have much preferred that my noble friend Lady Hayter was standing here covering this brief. Her gifts are rather greater than mine and she would have done a much better job. I fear she is a loss to the Front Bench and your Lordships will have to make do with me.

I am with my noble friend Lord Dubs and the noble Lord, Lord Sherbourne: I love voting. I love everything about it. I love the sense of responsibility, the sense of hope and the deep secrecy of the polling booth. I even love the pencils on strings. I often give thanks for those who fought so that I would have the right to vote and I have always used it. I voted in a general election for the first time in 1979, when I was still at school. If I am honest, the result was not all I had hoped for. However, I kept voting and by and by it got better. By about 2010, I had got the hang of it, but then I was not allowed to do it any more. In the middle, in 1997, it went really well for a few years. It went up and down.

I confess that I now miss voting in a general election. The last time I went to vote locally, there were two clerks on the polling desk. One asked the other what the “L” next to my name meant. She whispered, “Lord”, looked quizzical and just said, “Well, because…”. Then she looked at me and waited for me to move away, I suspect before intoning the list of Peers, felons and so on, because it seemed faintly rude.

In the last general election, 48,324 people voted in the city of Durham and 55% of them voted for my wonderful honourable friend Roberta Blackman-Woods. Obviously, I would have been happy if I had been able to vote, but it would not have made a difference to her election. I take the point from the noble Lord, Lord Naseby, that there are times when it does. Had it been on a knife-edge, and my vote had tipped the balance, I am not sure the people of the city of Durham would have welcomed that with open arms. They may not have felt happy about it, if that had made a difference. Fortunately, it did not. My honourable friend’s standing was so great that the people of Durham came out to back her in great numbers.

My noble friend Lord Desai made the point that, traditionally, the view has been held that we pay a price for being here. Although I hear very clearly what my noble friend Lord Dubs thought of that analogy, it has seemed to me personally that if I had to trade the chance to vote in the city of Durham to be able to stand here to amend Bills and change legislation, that is at least a fair swap. As my noble friend Lords Dubs will know, although he may not approve of it, the view of the Labour Party has long been that if we are to look at this question, we should look at it in a broader sense. We have long had a view that there should be a constitutional convention which should look at the composition and role of the House. This could be swept up in that.

Despite the steely stare of the noble and learned Lord, Lord Brown, I want to talk briefly about other ways of extending the franchise, something raised by the noble Lord, Lord Rennard. The noble Lord, Lord Norton, is right: there is a question about priorities. If I were going to start extending the franchise, I do not think I would start with us. I would want the opportunity to give 16 and 17 year-olds the chance to vote. Then the rather impressive 17 year-old described by the noble Lord, Lord Naseby, would not have to wait for the next election, should it happen to come along sooner than currently planned. I look forward to seeing him take up the former seat of the noble Lord in due course—possibly not very long, based on that comment. However, I would send one comment back to him. If we get rid of all the archaic laws on our statute book, it might look a little different from how it does now. He might want to give some thought to that.

I will share one thought in passing on young people voting. Can the Minister let me know whether it is true that members as young as 15 have a vote in the Tory party elections to choose the next Prime Minister? If so, is it not ironic that they can effectively choose the next Prime Minister but cannot vote for their local MP?

Alternatively, as the noble Lord, Lord Rennard, said, we could extend the franchise to long-resident EU nationals in this country after we leave the EU—or before, since some were denied the chance to vote in May. Or we could address the difficulty in voting faced by people in rented accommodation, young people on the move, or indeed homeless people, of whom there are, I am sorry to say, more than there are Members of this House. Can the Minister share any thoughts from the Government on that?

In parenthesis, before I close, one of the interesting things about our current system is that we are Members of the UK Parliament and remain so even during a general election. Should there ever be a crisis—God forbid—while the Commons was not sitting, at least our being here permanently means that we have the opportunity not only to express a view on questions, but to challenge and bring to account Ministers on the decisions they may take. Maybe that is a slight benefit to our being slightly aside from the fray.

For now, notwithstanding the very strong views expressed around the House, it is our view that this is not the biggest priority to tackle. It is not the biggest injustice before us. I am not sure that it is even the biggest injustice in this House. The hereditary by-elections, with their in-built bias on grounds of sex and race, frankly call to be addressed ahead of this. As fortune would have it, we have an opportunity to do precisely that on 6 September when my noble friend Lord Grocott brings his Bill before the House. That is something to look forward to.

Universal Credit

Baroness Sherlock Excerpts

Thursday 16th November 2017 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, this has indeed been a powerful debate. I am indebted to my noble friend Lady Hollis for opening it with her characteristic combination of passion and mastery of detail. I am also grateful for the contributions of all noble Lords, who, between them, have told the story of universal credit, from the original dream, the plans, the delays and the stumbles, to the reality of the gap between the dream and what now is.

On 13 September 2011, the noble Lord, Lord Freud, stood at that Dispatch Box for the Second Reading of the Welfare Reform Bill. He described universal credit as,

“the most radical reform of the welfare system since its invention”.

He told us:

“It will be simple to understand and access”.—[Official Report, 13/9/11; cols. 628-9.]


He also assured us that everyone would be on it by 2017.

He described a seamless system that would ease the passage into work, make people better off and ensure that work always paid. He claimed that UC could lift nearly 1 million people out of poverty. Those promises were the basis on which Parliament voted to adopt universal credit, so to ask whether the system meets those promises is not to play politics, it is to judge the Government by the standards that they set for themselves.

If any noble Lord opposite ordered a hire car and were expecting a Rolls-Royce, and what they got was a battered old Morris Minor with a flat tyre and a broken back window, I do not think that they would be very happy if the company said, “You don’t really want to go home. If you wanted to drive, you would just get in it and go”. We are merely asking that the Government deliver what they promised, and that is what is not happening.

It does not help to get into a political game of pretending that tax credits were all dreadful and universal credit is all perfect. I worked as a special adviser in the Treasury alongside my noble friend Lord Livermore. We were all trying to do the same thing: to make work pay, to lift people out of poverty and to have a system that works for everybody. Let us try to work together to get this right.

The noble Baroness, Lady Stroud, described what universal credit was meant to do. Of course, in that conception, it was a much more generous system. It had a 55% taper; it had more support; it had full universal support; it was a very different creature. We have to work out what is happening now, but it has been subject to repeated cuts from the Treasury, a point made by many noble Lords, including my noble friend Lord Livermore in a very powerful speech, the right reverend Prelate the Bishop of Durham, the noble Lord, Lord Low, and many others. We have heard many noble Lords demolish the idea that universal credit, as it is now constructed, always makes work pay: it clearly does not, and we need to get to a place where it does. My noble friend Lady Hollis made that very clear.

I am also sorry to say that we do not yet know if it works to help people to move into work, because the only evidence is research done before the work allowances were cut, back in the days when most people on universal credit were young single people, not those with kids or disabilities. We just do not know; the jury is out.

As for supporting people into work, the idea is meant to be that the claimant and their work coach work together to produce a personalised claimant commitment. That was the original vision, but I am hearing too many complaints about the variable quality of work coaches. The Government’s own research shows that most claimants feel that they are given a one-size-fits-all demand that does not meet their circumstances.

Although the carrots have been taken away, my worry is that the sticks are still there and the Government will have to lean on them. We have heard concerns about inappropriate sanctions on universal credit claimants, a point also made by the Trussell Trust. The trust also flagged up the problems emerging with in-work conditionality. In this new system, getting a job is not enough: if you do not earn enough money in that job to get off universal credit completely, you can be pushed to get more hours, or a second job, or to ditch your secure job for a better paid job. That is not very easy if you have kids or caring responsibilities. The system has to work before those sticks are wielded at people, and I do not think that they should be wielded that way anyway.

My noble friend Lady Donaghy made a very powerful case about the problems facing self-employed claimants. If the key argument for universal credit is a response to changes in income in real time, how can it be right to penalise self-employed people who are, across a year, earning the amount of money that the Government require, simply because they have good and bad months? That is what happens in business, even if they are not in seasonal work. Why can you get penalised if your profits drop one month because you have to pay the insurance bill? That simply cannot work, and I hope that the Minister will address this point.

Is universal credit working to lift 1 million people out of poverty? Sadly, as many noble Lords have said, it is having precisely the opposite effect. That is not surprising when we see the level of cuts in support that have been given, compared to the previous system. The CPAG shows that a lone parent earning £150 a week from working 18.5 hours would be £2,336 a year worse off than under the 2010 tax credit system. How is that progress? We have heard from the noble Baroness, Lady Meacher, the noble Lord, Lord Low, and my noble friend Lord Beecham about the problems for people with disabilities. The cuts in the severe disability premium and the challenges of using the system were well described by my noble friend Lord Touhig. I am very grateful to my noble friends Lady Armstrong and Lady Drake for highlighting the impact of the two-child policy on some kinship carers, despite the vote in this House to exempt them.

None of this will be offset by the tax cuts that get mentioned every now and again. As we have heard, they do not help the poorest. Even if the personal tax allowance were increased next week, somebody on £80,000 a year would get the whole benefit of that. A single mum working 35 hours a week during term time would not benefit from any of it, because she wouldn’t be earning enough.

The IFS used its gold-standard TAXBEN model to look at the impact of all of the fiscal changes that the Government have made. Its projections show that unless changes are made by 2021-22, 37% of our children will be living in relative poverty, the highest percentage since modern records began in 1961. For shame.

Is the system simple and easy to access? I need hardly go there, with all the stories that we have heard today. It clearly is not. I hope very much that the Government will address the long wait. I hope that Ministers will remember that, when the Bill was going through Parliament, noble Lords from all around the House pointed out that this would be a problem. That was in 2011, and I am sorry to say that almost every problem that has happened to universal credit was mentioned back then, during the passage of the Bill. The Government have had years to address this and they have failed to do so, so I hope very much that they are listening, but I am getting a little nervous, because now, in 2017, the problems are still here and are not yet being addressed.

The six-week wait clearly has to be addressed, but that is not a delay, it is a target. It is built into the system, and people simply cannot manage, as my noble friends have pointed out, without being supported much earlier. I am worried about how the system will affect vulnerable people—a point made by my noble friend Lord Cashman and others. I worry, too, about the implicit consent rule. I am also worried about the need to do this online. An advisor told me about a man suffering from severe depression who cannot leave the house, has no computer or internet skills and cannot manage an online account. The DWP has not helped him at all. His sick notes are now rejected by the jobcentre because he has to enter them online.

It is not working. We have heard descriptions of chaos, failing systems and problems. This has to stop. The problems with housing, mentioned by the noble Lord, Lord Kerslake, my noble friend Lady Warwick and others should be enough to ensure that it does. My noble friend Lady Andrews described the problems in Wales and other parts of the country, as did the right reverend Prelate the Bishop of Durham. I worry that the Government have not realised how serious this is. I do not blame the noble Baroness, Lady Buscombe. She has been gracious to deal with and generous with briefings, but she inherited this mess and she simply has to help her department sort it out. I worry that the Government have been complacent about the scale of the problems, and I have not been encouraged by some of the contributions from those sitting behind the Minister today. Either the Government believe that the problems are not very serious or they have decided that they are collateral damage—a price worth paying. Either of those is mistaken; and the second is, frankly, unacceptable.

It is not too late. This system is in serious trouble. As the noble Lord, Lord Cormack, said in a very powerful and helpful speech, what happens here results in human misery, and we need to address it. I urge the Government to take a deep breath now and stop. As my noble friend Lord Cashman said, leadership is not about ploughing on regardless; it is about stopping, pausing, listening to every word said here today, reading 650 pages of evidence given to the Select Committee and getting the system right before pressing on. That is the very least that this country demands.

Working-age Benefits

Baroness Sherlock Excerpts

Thursday 16th November 2017 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I commend the right reverend Prelate the Bishop of St Albans for choosing this subject and for managing to get it debated the week before the Budget, which I think is a very coveted spot indeed. In doing so, he has highlighted one of the greatest and most overlooked scandals of the austerity policies pursued in recent years. With apologies, I am going to go through some of the history to this and what I think is wrong with this approach to deciding benefits and then look at why I think it is being done.

Previously the default position was that social security benefits and tax credits were indexed to inflation so they would keep their value. Before 2011 they were linked to the retail prices index or ROSSI—a variant on RPI which excluded housing and some council tax costs. From 2011 they were linked to the consumer prices index and, as the noble Lord, Lord Kirkwood, pointed out, that was contested but did at least preserve the stated intent of ensuring that benefits and tax credits remained in real terms at the level at which Parliament had decided to set them. It meant that Parliament knew what it was voting for when it approved changes to benefit levels.

That changed when the coalition Government decided to limit most working-age benefits to a 1% annual increase for three years from 2013-14. This Government went further and froze those benefits at their 2015-16 cash levels for another four years so they will not rise again in cash terms again until 2020. The frozen benefits include payments on which the poorest families in our society depend. I suggest there are two major problems with this change: one of process and the other of impact. First, it means that Parliament has no idea what it is signing up to—a point made by the noble Lord, Lord Kirkwood—when something is set for four years at a time. The impact assessment for the Welfare Reform and Work Bill, which brought this policy in, showed a projected saving to the Treasury of £3.5 billion by freezing the benefits as opposed to uprating them by CPI, although it noted that:

“These savings will continue in future as increases will be from a lower base”.


But of course inflation changes so the exact saving to the public purse and the corresponding cost to those who get the benefits and tax credits are variable quantities. So the Government asked Parliament to adopt a policy when they could not know the precise impact on the people who would be affected by it.

That is the second problem—the impact has turned out to be severe. This freeze cuts in real terms the incomes of affected households year on year. Inflation is now higher than when the Bill was passed. The impact assessment helpfully cited the OBR inflation forecasts for CPI inflation for every year of the freeze period. They varied between 0% and 1.9%. The forecast for this year was 1.2%. In fact, the CPI 12-month rate last month was 3%. That is good news for the Exchequer which scores a saving much higher than predicted. As David Finch of the Resolution Foundation points out, by 2020 the estimate is that the freeze will have saved the Exchequer some £4.7 billion, a full £1.2 billion more than previously forecast. With CPI at 3%, that makes year three of the benefit freeze alone worth £1.9 billion to the Treasury.

The bad news is, of course, that it is £4.7 billion which would have gone into the budgets of those who get benefits and tax credits and use them to feed their children and pay their rent, and now they will not. As the right reverend Prelate the Bishop of St Albans pointed out, it is worse for the poor because they have to spend more of their income on essentials, such as food, and the inflation rate for food and energy is higher than the 3% general inflation rate. Most forecasts suggest that it will get worse. My noble friend Lord Beecham has revealed the effect of that in his area, and also the significant impact on housing.

CPAG analysed the effect of the freeze before the latest rise in inflation and found that in a universal credit system, the four-year freeze to UC and child benefit uprating will cost the average single-parent family £710 a year and the average couple with children £430 a year. I commend the concern for families of the noble Lord, Lord Elton, for whom I have a great deal of respect, and I admire him for it. One of the reasons I am most worried about this freeze is that it affects most families with children, and that is where the damage is being done. I appreciate his raising that issue.

What will this do to inequality? That was set out in painful detail in a recent report by Hood and Waters of the IFS, Living Standards, Poverty and Inequality in the UK: 2017-18 to 2021-22—there have been catchier titles, I grant you. It uses Treasury and OBR data and macroeconomic forecasts to model the impact on household incomes. Its projections showed this: inequality will rise over the next four years; the official rate of relative poverty after housing costs will rise by two percentage points, driven entirely by child poverty, which will rise by seven percentage points; absolute poverty will remain the same, but pensioner poverty will fall and absolute child poverty will rise by four percentage points. Children must be looking enviously at the triple lock enjoyed by pensioners.

Prices are rising but the real incomes of poor households are falling, and most of those had nothing to spare in the first place. What does the Minister think those families should do? More to the point, why are the Government doing this? We know, because on 30 October, my noble friend Lady Lister asked the noble Baroness, Lady Buscombe, the Minister’s colleague, to describe the Government’s reasoning. The noble Baroness said:

“The benefit freeze is part of a package of welfare reforms that is designed to ensure that the system remains sustainable and to incentivise claimants into work. These reforms are working, and we have not had a lower unemployment rate since the 1970s. The changes we have made to the benefits system allow us to target the support we provide to those who need it most”.—[Official Report, 30/10/17; col. 1156.]


Let me take that Answer apart. First, it is part of a package of welfare reforms. The benefit freeze is not a reform: it reforms nothing; it is simply a cut every single year on year. Secondly, it is designed to ensure the system remains sustainable. Ministers often complain about rising social security spend without giving any context, or referring, for example, to the rising levels of age-related disability, or even without mentioning that spending on out-of-work benefits rises during recessions which, of course, is the safety net kicking in—automatic stabilisers, as economists put it, kicking in. A much better test of sustainability is the cost of social security as a percentage of GDP which has changed remarkably little in recent decades. However, if these cuts go ahead, the OBR Welfare trends report said that by 2020-21 social security spending in support of children and working-age people would be at its lowest share of GDP since 1990-91.

Thirdly, it is to incentivise claimants into work. But this benefit freeze affects people claiming ESA who have been deemed not fit to work yet. It affects mothers of children under one, whom even this Government do not think should work. It affects working tax credit and child tax credit which go to people in work. The same people whose incomes from wages have been squeezed are now finding the system that is meant to top up their household income is being slashed just when they need it most. Fourthly, the changes are to allow us to target the support to those who need it most. Yet the biggest losers overwhelmingly are families with children and especially single-parent families. How is that a good target?

Ministers keep telling us the country cannot afford to pay benefits at decent levels. The coalition Government famously said that,

“those with the broadest shoulders should bear the greatest burden”.

Yet a detailed study by Ruth Lupton et al of the coalition’s social policy record found that,

“the poor bore the brunt of its changes to direct taxes, tax credits and benefits”.

With the exception of the richest 5%, those in the top half of the distribution were net gainers from the changes. The study said:

“Perhaps surprisingly, overall the ‘welfare’ cuts and more generous tax allowances balanced each other out, contributing nothing to deficit reduction”.


Yes, those austerity cuts were not needed to cut the deficit but to pay for tax cuts for the richer.

There we have it. This policy hits the poorest who had no spare cash anyway. It hits low paid workers as well as those who cannot work. It hits children hardest. It will increase poverty and inequality, especially for children. Its impacts will be felt well into the future as these new, lower levels form the basis for any future increases. Every increase in inflation represents a windfall for the Exchequer at the expense of the poorest families in our society. This is unjustifiable. The Government should abandon it now.