Pensions: British Pensioners Overseas

Lord Shipley Excerpts

Wednesday 11th March 2015 Lords Chamber

[Lord Freud]

The noble Lord will be very pleased to know that we now have a system, which has been introduced reasonably recently, of checking that rather more regularly than it used to be done.

[Lord Shipley (LD)]

My Lords, could I add to my noble friend’s example of Australia that of Canada, which uprates the pensions of its pensioners who are living in the United Kingdom? Given also that in some countries in the Caribbean pensioners from the UK have uprated pensions whereas in other countries in the Caribbean they do not, does the Minister not agree that it really is time to get this sorted out and that the partial pensions uplift route is the way to go?

[Lord Freud]

The reason for those differences in Caribbean countries and elsewhere is that we have historic bilateral agreements. Interestingly, to pick the Canadian example, no Canadian pensions were paid in the rest of the world when we were looking to do a bilateral in the 1960s. That is the reason that we do not have one today with the Canadians.

Employment Levels of Older People

Lord Shipley Excerpts

Thursday 5th March 2015 Grand Committee

[Lord Shipley (LD)]

My Lords, I am grateful for the opportunity to discuss this issue and I thank the noble Baroness, Lady Greengross, for initiating this debate. I share her concerns and conclusions. There is an assumption that apprenticeships should be for younger people, but there are advantages in apprenticeships for older people—I think of the example of Barclays, as well as others in the construction industry, which are particularly welcome. The noble Baroness is absolutely right, too, to draw our attention to the needs of the over-50s. Those who, for whatever reason, lose their jobs in their late 40s or early 50s can find it quite difficult to return to the world of work.

It is true that more older people work than used to be the case. There are now more than 1.1 million people aged over 65 who work—an increase in the last year of more than 50,000. I welcome the opportunity for older people to be in work if they wish to be, and I accept entirely that we have to do more to ensure that every individual is enabled to work if they want to be in work. It is also true that younger people can face difficulties in securing employment, in securing employment that pays enough and in securing employment that can lead to career development. However, it does not follow—I am entirely with the noble Baroness, Lady Greengross, on this—that there needs to be an adverse effect on youth employment arising from older people staying in employment for longer.

There are two reasons for that. The first is the growth in the economy that we are now experiencing, together with the huge growth in vocational apprenticeships for young people, both of which will make a big difference. Secondly, older people will still be retiring at some point, so the growth need not be a long-term upwards trend, even if it continues for a few years.

Given the growth in the number of jobs that has taken place in the last five years, with almost 31 million people now in work in the United Kingdom, older people are needed, not least to train the next generation and transfer their skills to them. It is interesting to note that around two-thirds of the growth in employment over the past five years seems to be in higher-skilled jobs. Older people have tended to fill those jobs, and one consequence is that fewer young people get promoted and so start to earn more. As I said, before long that trend should cease.

Not everyone wants to continue working when they are older. Over the next few years, despite the growth in the number of older people staying in work for longer, some 200,000 people are expected to retire from manufacturing and engineering jobs. They will have to be replaced at a time when more are needed anyway. This country has a skills gap. All over the United Kingdom, in manufacturing, engineering and the process industries, there are shortages at level 3 and above. That is why apprenticeships matter—apprenticeships driven by the needs of businesses. We should welcome the huge growth in apprenticeship starts. There have been more than 2 million under this Government, which is twice as high as the figure achieved by the previous Government. That is contributing so much to vocational training and equipping many more young people to undertake skilled work.

Apprenticeships can be of different kinds, and older workers can transfer their skills to younger workers through them. I am impressed by the commitment of businesses all over the country to them—for example, the shared apprenticeship scheme of the Construction Industry Training Board, which enables more young people to be trained because they can be with more than one employer over the three-year period of an apprenticeship. There have been successful pilots in Lancashire, Merseyside and Wales, with several more schemes now offering three-year apprenticeships. Importantly, more than 90% of those who complete their three-year shared apprenticeship by this means secure full-time jobs, which is higher than the average.

As we achieve higher growth, we need to reflect on the fact that just over 16% of young people aged 16 to 24 are still unemployed. That is around three-quarters of a million. Of those, some 40% are in some form of education or training, but that figure is simply too high, despite the significant achievements of this Government. We need much better careers advice for young people when they choose courses at school, to ensure that the courses they take enable them to take up the apprenticeships at a later date. We need careers advice in schools to broker better relationships with employers. Some very interesting research has been undertaken, not least that by IPPR North in January 2014 which explained how that might be done to the advantage of both employers and young people. The reason why all this matters is that the nature of employment is changing and the level of skills needed is higher than it used to be.

It is a welcome fact that unemployment is going down, and has been doing so for some time, but it needs to go down faster for young people, and the pay rates for young people need to rise. None of this needs have an effect on the potential for additional employment opportunities for older people. This week I noticed on Tuesday a report on the front page of the Financial Times and then later comments from the Institute for Fiscal Studies about movements in pay reported by HMRC from the PAYE system over the past six years. It is interesting to see that the regions outside London cut the pay gap with London in the six years from 2008 to 2014, with cash growth in median pay in London half the rate in the United Kingdom as a whole. Interestingly, the rate in London is a quarter of the rate in the north-east of England, where I live. Regionally, from the perspective of the north-east, I strongly welcome that. However, that is a geographical test of course, and we need to go a bit further. By age, the IFS said that median pay for young people between the ages of 22 and 29 is down 9% in real terms in those six years, so growth in median pay is lower in London and it is much worse for younger people. Those two facts relate to each other because in London young people make up a much higher proportion of the workforce: the average age of workers is 34 in London but 40 in the rest of the United Kingdom.

In one sense, this confirms what we already know in terms of intergenerational differences, but we need to be more alert to it because younger people cannot be expected to manage high personal debt as well as cover future debt from government borrowing today. They need secure jobs and jobs that pay enough to meet their essential expenditure. We need to ensure that the overall gains of economic growth resulting from the work that this Government have undertaken so effectively, particularly in the past two or three years, are spread and shared by all—both the older and the younger.

EU: Youth Unemployment (EUC Report)

Lord Shipley Excerpts

Tuesday 17th June 2014 Lords Chamber

[Lord Shipley (LD)]

My Lords, I am glad to speak in this debate. I was not actually a member of the committee but I have a keen interest in issues around youth unemployment and have spoken previously in your Lordships’ House on the subject. As someone who was not involved in the deliberations of the committee, I find the report a very impressive piece of work. It is very detailed and contains a very helpful discussion of all the issues around youth unemployment.

I will mention two things in particular that I like about it. The first is the title—Youth Unemployment in the EU: a Scarred Generation? I think the question mark at the end is important. I think there is a very real danger that we are going to have a scarred generation, but it does not necessarily follow that we will if the right policies are adopted in what appears to be a period of continuing growth from now into the future. The actions suggested in the report that could alleviate the impact of youth unemployment, together with the actions the Government are already taking, mean that we can get more young people into productive employment.

The second thing that I am particularly pleased about is the report’s clarity on the varying definitions around youth unemployment and the associated definitions around NEETs—as we know, those not in employment, education or training—and inactivity, which is not quite the same thing as NEET, because it relates to anyone who is not working at all and is not available or looking for work.

There are many statistics across the EU and within the United Kingdom, but the truth is that whatever statistics you use—for example, whether you categorise students in full-time education—youth unemployment is too high both in the UK and across the EU. We simply have to get more young people into work. The report is right when it states that more control over EU funds should lie locally, and is also right when it acknowledges that the EU’s main role besides funding is to advise on successful innovation and good practice. I support the committee’s view that ESF funding should be assessed on real outcomes rather than just the cost and numbers of participants in schemes.

I hope that we may now be seeing the start of a downward trend in youth unemployment in the UK. It may be too early to say but there seem to be some signs of it. The number of young unemployed people who are not full-time students has now fallen by just under 100,000 since 2010. The number of NEETs is lower than at any time since 2005. One thing we have to do is to continue work closely with small firms because they are responsible for four of every five jobs created between 2010 and 2013. It is important to understand this because this performance by the SME sector in recent months has been impressive—as has the performance of the Government in encouraging apprenticeships.

Since 2010 1.6 million apprenticeships have been created and I welcome the plan to build this up to 2 million apprenticeships by 2015. Many of these apprenticeships are in the private sector. The previous Government created short-term placements predominantly in the public sector, and half the people on them returned to benefits. What this Government are doing is much more sustainable and we need that sustainability because youth unemployment has structural causes. It is not just a recent problem, although without doubt the financial crisis in 2008 and the consequent recession made it worse.

The youth unemployment rate across the EU in 1994—20 years ago—was 20%, very close to the current level. Thirty years ago, in 1984, youth unemployment in the UK was very similar to what it is now. Spain today has very high youth unemployment but in 1987 it actually stood at 45%. Even in 2006 in the UK, following a four-year period of growth, there was still very significant youth unemployment.

I think there is a structural issue, because Germany—which I will come on to in a moment—does not have that same structural problem. There is a cost to the Exchequer in this because youth unemployment costs several billion pounds. Some estimate it as more than the entire budget for further education for 16 to 19 year-olds in England. We would agree that it is better for young people and our economy to spend that money on training and apprenticeships and getting young people into jobs.

The committee has clearly had a debate about the Youth Contract and the Youth Guarantee. Its view on the Youth Guarantee differs from that of the Government. Clearly there is going to be a further discussion around that and I hope it might be possible for everyone to get round a table to have it. The Youth Guarantee is a guarantee for young people leaving school that they will have an immediate opportunity of employment.

My view is that the Government and all their partners must be focused on outcomes, which means that young people need to be suitably prepared to enter apprenticeships, employment or training. That means that they need a pathway at a personal level to enable them to move seamlessly from school to an apprenticeship, to vocational training or to college or university without waiting, and that they are “work-ready” when they enter the world of work rather than being expected to learn on the job.

The Government’s reply is that the Youth Guarantee model would not fit the UK. However, I think it could. What matters in this is the individual—that every individual has a personal plan and that they feel wanted and engaged. The statistics around NEETs and those who are inactive suggest that not everybody feels wanted and engaged. Therefore the principles behind the Youth Guarantee seem very important.

I will mention the role of Newcastle Gateshead, my home city, which is a Youth Contract pathfinder, in helping 16 and 17 year-olds into employment, education or training. It is interesting to note that almost half of 16 to 17 year-olds who have taken part have moved into employment or training; others are in education. That seems to be a sign that the policy is working. If so, that is an example of good practice that can be spread.

There is a very interesting statistic about the north-east in the Library briefing for this debate. It has the highest level of youth unemployment in the UK at 25%, but has a lower rate of youth inactivity than many regions, seven of which—including London—have higher rates of inactivity. I have puzzled over what the cause of that might be and have drawn the tentative conclusion that the Youth Contract is now helping. Over the past two months, 1,124 apprentices were taken on in the north-east. The National Apprenticeship Service has just announced this figure two months into its 100 Days Apprenticeship Challenge. Some 650 regional companies have taken on those apprentices, backed by the North East Chamber of Commerce and training providers, and impressively supported by the region’s press. That is partnership working at its best.

I will say something further about Germany’s youth unemployment. It is under 8%. Germany has high levels of youth employment and almost no unemployment among those in education. It has apprenticeships and vocational training in secondary education. That leads me to the role of our schools. Schools have a statutory duty to provide a careers service, yet a few months ago Ofsted reported that three-quarters of secondary schools were not executing their statutory duties satisfactorily.

Advice and guidance is broader than just careers advice. Students need to understand better the qualifications and skills required to enter an apprenticeship, particularly in science, maths and IT. They need programmes of visits to local employers to experience what the possibilities might be. Schools are central to the development of relationships with local employers through programmes or visits, exchanges and other opportunities.

In conclusion, the UK is doing better than many eurozone countries. Youth unemployment is far too high; we must learn from Germany. However, we have to use every lever within our power and remember that this is everybody’s problem to solve, not just the Government’s.

--- Later in debate ---

[Baroness O'Cathain]

My Lords, I thank everybody who has taken part in the debate. I particularly thank my noble friend the Minister. I gave him a slightly hard time—only slightly. I can be much more ferocious than that. His response was very good but, in listening to it, I reflected how confusing this whole issue is. We have so many different ways of looking at it. If I were 17 years of age with not much educational background, I just wonder how I would react having listened to this debate. Perhaps I would say, “There are the people in suits and dresses saying they are going to do this and that”. The Minister mentioned about 20 different and confusing areas that could solve the problem. Is it not just all too confusing? The final point that my noble friend made about the Youth Guarantee and the Youth Contract did not reflect the letter that I saw, which was much more along the lines of, “Oh well, okay, the Youth Contract is all right”, but people in Brussels were still saying that they really wanted the Youth Guarantee. Perhaps we should have another discussion about that.

In the mean time, I thank everyone who has taken part in the debate. I certainly want to say to my noble friend Lord Shipley that I am sorry he thought that the report was depressing. The fact is that it is a depressing situation.

[Lord Shipley]

I am sorry but I said that it was an impressive report, not depressing.

[Baroness O'Cathain]

I am sorry. That is the second time “sorry” has been mentioned in this House tonight. It is nice to be able to say sorry.

The situation is actually depressing throughout the EU but there are shafts of light coming in. One of the great things about the report is that it is not political. We did not mention parties and tried to work for the good of the youth of the whole European Union. We should, in particular, use the experience that can be observed in the member states and test it out to try to solve our own horrific problem—because it is a horrific problem. I go back to the right reverend Prelate the Bishop of Durham’s analysis in his maiden speech the other day. We have to remember that.

The Minister neatly glided over the situation regarding local enterprise partnerships and did not say whether he was prepared to consider whether they should consult young people, in groups or individually. We received most of our really good evidence from talking to those young people. After all, it is the young people who count. That is why we are doing this and why I hope we have made a difference to the future of these young people by exposing a lot of the stuff in this report.

I thank again all our staff. There are so many thanks going around this Chamber but I could not have done any of this without the terrific support that we received, and the members of the committee have been ideal. If noble Lords want them as chairmen of other committees, look at all of them. They do an excellent job, and I thank them.

Motion agreed.

Employment

Lord Shipley Excerpts

Thursday 20th March 2014 Lords Chamber

[Lord Shipley (LD)]

My Lords, I, too, thank the Minister for enabling us to have this debate because it gives us an opportunity to look at the levels and nature of employment in the UK, not least from the perspective of region and age. The context overall is one in which austerity, inevitably, is still with us, in that borrowing this year will be more than £100 billion. Government debt is still rising so there are limits on what the Government can afford to fund.

I listened very carefully to what the noble Baroness, Lady Donaghy, said. I will simply say in response to the list of criticisms of the Government—which was a self-selected list because it missed out a whole range of things that indicate a trend towards a higher rate of quality employment—one would think that the financial crisis had nothing to do with the Labour Government up until 2010. This Government have had to deal with a huge financial crisis in a very serious recession and the level of employment we have today is quite remarkable given the record of the previous Government and what this Government have had to do.

I say that otherwise one would be led to think that this was a story of entirely bad news and it is not. The green shoots of growth and recovery are there. Figures published yesterday by the Office for National Statistics show that the number of people in employment has risen to 30.19 million and that the level of unemployment has fallen again by 63,000 to 2.33 million in the three months to January this year. Compared with a year ago, the numbers in employment have grown by more than 450,000. That is a very encouraging figure. A higher percentage of the adult population in the UK is now in work than in the United States of America. Unemployment is down to 7.2%, falling well below its peak, and below the current levels in most European countries. The unemployment rate in the European Union is 50% higher than here at 10.8%. It is true that more women are employed now in the UK than ever and that 95% of all jobs created last year were full time. The trend data also show that youth unemployment is now falling and has already fallen to a level lower than when this Government came into office four years ago. That is a very important achievement, and we should say so. However, that is not to say that there is a lot of further work that needs to be done, because it is undeniably the case that youth unemployment remains far too high.

I join the Minister in saying that it is very important that we note the impact of the Budget. I realise there is a debate on this next week, but it is highly relevant to this debate, because yesterday’s Budget is a Budget for employment. It has been described in the media as very much a Budget for savings and pensions, and in one respect that is true, but actually it is a Budget for employment. There are several reasons why I think that is the case. First, it will help to drive exports even more, giving British businesses access to the most competitive export finance support in Europe, because the UK’s direct lending programme has been doubled in the Budget to £3 billion. Secondly, it is cutting energy prices for business, particularly for the most energy-intensive manufacturers, around 80% of which are based in the north of England, Scotland and Wales. There will be increased incentives for companies to return manufacturing from abroad to Britain. Thirdly, there is increased financial support, through the tax regime, for capital investment and for research and development. Fourthly, there is more support for apprenticeships, which I will look at in greater detail in a moment.

I noted the comments by the noble Baroness, Lady Donaghy, about childcare, but we should remember that it was announced earlier this week that as many as 1.9 million working families could benefit from a tax-free childcare allowance worth up to £2,000 per child, up to the age of 12. Taken together, all these measures will help business growth, increase the number of jobs and increase the number of people in work and able to work. The Office for Budget Responsibility has said that employment will rise to well over 31 million by 2018, which seems a reasonable prediction based on what we know today.

I will now focus on unemployment and what will happen there. Unemployment stands, as I said earlier, at 7.2%. I was very concerned early last summer when the Governor of the Bank of England said that the Monetary Policy Committee would look at the case for increasing interest rates when unemployment reached 7%. My concern was that 7% is an average UK figure and that parts of the country would be higher while others would be lower. Some parts of the UK have unemployment rates of over 10% and they need continued low interest rates to encourage investment. I was therefore very relieved when the Governor of the Bank of England revised his view and said that the unemployment rate should drop further before the Bank considers an interest rate rise. A substantial body of opinion thinks there is sufficient slack in the economy to permit this without impacting on the rate of inflation. It will certainly help to encourage growth in those parts of the UK with higher unemployment and will also help to secure more jobs for young people.

It is that issue that I want to take a more detailed look at. In official statistics, young people can be shown as employed full time, employed part time, employed and in full-time education, employed and in part-time education, unemployed, economically inactive, or not in employment, education or training. The detailed statistics can be complex to follow because the categorisations can vary depending on what you are looking at. What is not complex to follow—I agree entirely with the noble Baroness, Lady Donaghy, on this—is that too many young people are unemployed or underemployed. The trend, as I said earlier, is in the right direction and the Government should be praised for that, but I am grateful to the Local Government Association—I should declare that I am a vice-president of the LGA—for pointing out that 1.25 million young people are not working but would like to. Some of course are in full-time or part-time education, 760,000 are in work but would like more hours, and 425,000 are not working to their potential—for example they may be graduates in what are thought to be non-graduate jobs.

The Government are spending around £15 billion a year on young people and I welcome their ambition, which the Minister has explained to the House, to devolve skills and training to local enterprise partnerships and to local authorities and their partners. It is important because we need integrated employment services based on local labour markets. Only local networks can deliver that, as was highlighted by a number of City Deals, in which—as Members of the House might be aware—I have had an involvement.

Crucially, however, we have to remember the role of schools here. Schools have a statutory duty to provide a careers service, yet a few months ago Ofsted reported that three-quarters of secondary schools were not executing their statutory duties satisfactorily. This was followed by IPPR North’s report, published in January, which concluded that secondary school careers services were not equal to the task of helping students navigate the increasingly difficult transition from school to work. That report, entitled Driving a Generation: Improving the Interaction between Schools and Businesses, made a number of very helpful recommendations which I commend to the Minister because it proposed a means whereby schools and businesses could relate much better to each other. My point is that if the huge and worrying mismatch in skills is to be solved, the solution must be started in the place where young people learn in compulsory education, where they need to better understand the qualifications and skills required to enter an apprenticeship, particularly in science, maths and IT.

There is high demand from young people for apprenticeships, but there are still not enough employers coming forward to offer them. The average apprenticeship post receives 12 applications each, but in some sectors the level of demand is twice as high. I therefore welcome the extension in yesterday’s Budget of apprenticeship grants for employers, which will fund more than 100,000 additional incentive payments for employers who take on young apprentices. I also welcome the funding to support employer investment in apprenticeships at degree and master’s level. This will bring more employer engagement into the HE sector and expand apprenticeships at higher levels, where there are currently too few available qualifications.

I have two very brief points in conclusion. First, will the Minister and his colleagues look at the role of UKTI? In many respects it does a very good job. Its role in driving exports upwards is good, but it has a role in inward investment and no regional or sectoral targets to meet. It simply has UK-wide targets. It would help enormously if it actually had to produce an audit of where it has directed inward investment. My second point is about regional and local procurement. I have a constant concern that national procurement contracts are being driven by price and go to national companies headquartered in the south of England. I would like to think that we would always ensure, in all procurement by central and local government, that local people are employed, that local people are trained and that smaller local companies and social enterprises can tender for government contracts. I hope the Minister might be prepared to agree to undertake a constant audit of the outcomes of government national procurement policy and its impact on employment.

First World War: Personnel from the Indian Subcontinent

Lord Shipley Excerpts

Wednesday 18th December 2013 Lords Chamber

[Lord Shipley (LD)]

My Lords, I thank the noble Lord, Lord Sheikh, for initiating the debate. We shall for the next five years be marking the centenary of the Great War and remembering the horrors that it represented. I pay tribute immediately to all those who are planning events to commemorate the war, from the Imperial War Museum, to local museum services and to the thousands of community and local groups.

In the UK, we tend to think of the war in terms of family memories, local war memorials, the volunteers who responded to Kitchener’s call to arms, the Somme, Passchendaele, the war poets, literature, plays and so on. However, the role of the Indian Army in World War I is not as widely understood in the UK as it should be. I hope that the centenary commemoration over the next five years will be an opportunity to redress the balance.

The Indian Army played a critical role in France and Belgium in the early days of the war because it plugged the line on the western front before Kitchener’s army was ready to cross to Flanders and France. As we have heard, it was the first time that troops from the Indian Army had fought in Europe. The Indian Army also played a critical role in Mesopotamia in the early months of the war. In 1914, it was the largest volunteer army in the world and, during the course of the war, over 800,000 volunteered for the army and 400,000 for non-combatant roles. Some 657,000 troops went to Mesopotamia; 144,000 to Egypt and Palestine; 138,000 to France. Troops also went to East Africa and Gallipoli, and there were of course people in the navy and merchant navy. In autumn 1914, troops were moved from India to Mesopotamia to secure the oilfields if Turkey came out in support of Germany. As I mentioned, the movement of troops to Europe at the end of September 1914 was to help hold the western front against the German invasion of Belgium and France.

How do we mark the role of those from the Indian subcontinent and all that they did? There are two ways: places and people. On places, we have to have specific events on the western front. First, the role of the Indian Army in the first battle of Ypres in October 1914 was particularly important. In the first attack, on 26 October, the Indian Army demonstrated huge bravery, with over 200 soldiers killed. Secondly, its role at Neuve Chapelle, 25 miles south of Ypres, two days later on 28 October, when the German troops had driven a gap in the British lines, was marked. Its troops were engaged for six days in house-to-house fighting in Neuve Chapelle: 500 Indian Army officers and men were killed and almost 1,500 wounded. On 23 November, when German troops broke through at Festubert, near Ypres, Indian Army troops were ordered to recover the line by dawn, which they did showing immense bravery. I suggest there should be events at all three of those places, on the relevant centenary dates, to mark their massive contribution in those early days of fighting on the western front.

More troops were committed to Mesopotamia, which was largely an Indian Army campaign. Despite eventual success, by October 1918 11,000 Indian Army troops were killed, with 4,000 more dying from wounds and 12,500 from disease. Some 51,000 were wounded, many of whom were shipped home in inadequate hospital ships because they had to use ordinary troop ships. We should also mark the disaster at Kut, in the spring of 1916, where 9,000 Indian Army soldiers were captured and marched northwards. They were not treated as prisoners of war and 2,500 died on the march. We have heard about the East Africa campaign and Gallipoli, where another 1,700 died in 1915.

Turning to people, we have heard about the award of Victoria Crosses. There were nine on the western front, eight in the first two years of the war and they were won in Mesopotamia, Palestine and Egypt. Is there a case for commemorating the award of those crosses in the towns and villages the recipients came from in the Indian subcontinent or, perhaps, through their descendents? Some practical demonstration of our thanks to them is particularly important.

In conclusion, we have to express our appreciation to the people of the Indian subcontinent. Last year, I stood at the India Gate in Delhi pondering the enormous contribution made by so many individuals. Let us not forget that people from the Indian sub-continent kept volunteering throughout the war. We owe them a very great deal for the sacrifice of so many so far from home.

Housing Benefit (Amendment) Regulations 2012

Lord Shipley Excerpts

Monday 15th October 2012 Grand Committee

[Baroness Lister of Burtersett]

I do not think that either the noble Lord, Lord Shipley, or I want to follow the very powerful case made by my noble friend Lady Hollis. We have rightly focused on the bedroom tax but first I want to refer to the CPI uprating, following a point that was raised with us by Crisis. During the passage of the Welfare Reform Bill the noble Lord, Lord Freud, said that,

“if local housing allowance rates are clearly out of step with rents, they can be reconsidered”.—[Official Report, 14/12/2011; col. 1323.]

That was a welcome statement. I understand that there have been discussions between the department and Crisis, and perhaps other groups, in which it has been suggested that in 2014-15 the Government intend to review the method of uprating used. It would be helpful if the Minister could tell us how this review will take place. Will it be a formal review? Will it be part of the more general review of what is happening to housing benefit? What sort of discrepancy between local housing allowance rates and local rent would be deemed out of step? It would be helpful if the Minister could give us that information.

I turn to the bedroom tax, about which much has already been said by noble Lords. Like the noble Lord, Lord Kirkwood, I had not quite taken on board the extent to which disabled people are disproportionately hit by this measure. In our general discussion, we perhaps lost sight of that at the time. My noble friend Lord McKenzie asked the question, which I hope the Minister can answer: are disabled people expected to use their disability benefits to meet any rent that will not be covered? The briefing we were sent talked about a judgment, Burnip, which I admit I had not heard of before. One of the judges made clear that we should not expect tenants to use disability benefits to meet part of their rent.

The Minister started by saying that the regulations are compatible with convention rights but, as a member of the Joint Committee on Human Rights—I am now but was not then—I refer back to its report on the Welfare Reform Bill in which the committee raised concerns about whether there was a problem here for disabled people. The report said that if such tenants were forced to move into properties unsuited to their needs, this might risk breaching their Article 8 rights—respect for privacy or family life—and potentially be discriminatory. Since then, we have had the announcement, welcome as far as it went, of the discretionary housing payment. However, the noble Lord, Lord Best, has already raised major questions about that payment. During consideration of the Bill, I dubbed it the “loaves and fishes of income maintenance”. It feels as though these loaves and fishes are being stretched ever further, even if there is an extra £30 million there.

As the Secondary Legislation Scrutiny Committee points out, the money is not ring-fenced, and once again we cannot be absolutely sure that it is to be used for the purposes intended. The noble Lord, Lord Best, talked about how the money will be stretched and will help only those whose houses have been adapted, but there may be other disabled people for whom there may be good reasons for why they should not have to move, use other income, take a lodger or go into paid work. The situation is not terribly satisfactory.

The noble Lord, Lord Best, said that this money would last indefinitely. I had not realised that that was the case. It would be helpful if the Minister could confirm that this is an indefinite payment. Can he give a government commitment that that money will definitely be there for the current spending review period and that it will be at the very least inflation-proof, or go up in line with rents? Can he give that kind of assurance? I will be delighted if he can but there is a big question mark over the long-term viability of a policy based on a discretionary payment. Will the individual be able to receive it forever, or will they have to keep re-proving their deservingness in order to continue to receive it? All these questions remain unclear.

I do not think that the Minister will be able to put our minds at rest because of our strong case. We are all very unhappy about the regulations themselves but perhaps he can at least give some assurances that the discretionary housing payment will genuinely go some way to meeting the real problems raised by other noble Lords.

[Lord Shipley]

My Lords, I refer to the Secondary Legislation Scrutiny Committee’s comments at paragraph 13, in which it is pointed out, rightly, that the reduction will apply to,

“the total eligible rent for the dwelling, including any eligible service charges”.

Can the Minister confirm which service charge items will be eligible for universal credit? In consultation, these were different from those covered by the current housing benefit regulations, which provide a list of items that are not eligible. Will the revised regulations prescribe the range of eligible service charges and, in practice, reduce the numbers that may previously have existed? In particular, will the Minister clarify which service charges will be included in the definition of,

“services necessary to maintain the fabric of the accommodation”?

Specifically, will the maintenance of fire safety equipment, lifts, door entry schemes and other communal services be deemed necessary to maintain the fabric of the building and therefore be eligible?

Further, will the service charge currently associated with a furnished tenancy be eligible for housing benefit, as it is now? Finally, on concierge services, which include portering, security, caretaking, CCTV coverage and the cleaning of communal areas, will the service charges for these continue to be eligible? I hope they will because, if they become optional, many tenants will not be able to afford to pay and there will be reduced standards, impacting negatively on communal facilities and health and safety.

[Baroness Grey-Thompson]

My Lords, like other noble Lords, I am concerned about the potentially disproportionate effect these regulations could have on disabled people. It is my understanding that all disabled tenants other than those who need constant overnight care will lose a percentage of their rent if they have more bedrooms than they need. The DWP equality impact assessment, which was updated last June, clearly shows the disproportionate effect that the size criterion measure will have on disabled tenants. Based on the Equality Act 2010 definitions of disability, some 420,000 of the total 660,000 households affected contain a family member with a disability, which makes the housing benefit regulations very much a disability issue, and one that is of great concern to a huge number of people. There is the discretionary housing payments fund for 35,000 tenants with homes adapted for wheelchair access, but that is a small mitigation in terms of the 420,000 tenants who are potentially affected. I feel strongly that long-established definitions of disability do not depend merely on the presence of adaptations or on the outward appearance of a functional disability. I am very concerned that disabled people will struggle with these measures.

Pensions: Britons Living Abroad

Lord Shipley Excerpts

Wednesday 9th March 2011 Lords Chamber

Asked by

[Lord Shipley]

To ask Her Majesty’s Government what help they will give to British pensioners living abroad whose United Kingdom state pensions are not uprated annually.

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

My Lords, we have no plans to make any changes to the current arrangements that allow for the exportability and uprating of UK state pensions. The UK state pension is payable worldwide but is uprated outside the UK only when there is a legal requirement or reciprocal agreement to do so.

[Lord Shipley]

My Lords, is the Minister aware that there are some 500,000 UK pensioners in the USA and the European Union whose pensions are uprated, and a further 500,000 in the rest of the world, notably in Commonwealth countries such as Australia, New Zealand and Canada, where their pensions are not uprated? Many people in those latter countries now receive only £10 a week. Given that we are the only country in the OECD that discriminates in that way, does the Minister think that this situation is just?

[Lord Freud]

My Lords, the figures for non-frozen pensioners are 610,000 and for frozen pensioners 550,000. The difference in payment is currently between £57 for the non-frozen and £32.70 for the frozen. I am satisfied, as are the courts, that what we have is objective and justifiable in this area.

Poverty

Lord Shipley Excerpts

Thursday 22nd July 2010 Lords Chamber

[Lord Shipley]

My Lords, it is with a great sense of privilege, tinged with a certain degree of nervousness, that I rise to make my maiden speech in this debate, particularly after so many distinguished contributions and excellent maiden speeches have been made already. I thank all the staff, all my colleagues and my sponsors for the warmth of their welcome and for their willingness to go out of their way to explain the workings of the House to me. There is much to learn. The support that I have received has been exceptional and I am deeply grateful for it.

I am a Yorkshireman by birth, although not from the town whose name I bear. I was born and brought up on the Yorkshire coast, in Whitby, but have been an adopted Geordie for the past 40 years in Newcastle upon Tyne, where I worked for many years for the Open University and where I have been a councillor for more than 30 years. I would like to concentrate on that latter connection in this debate.

Last year, Newcastle City Council was appointed as one of three beacon councils, along with Cornwall and the London Borough of Tower Hamlets, in addressing child poverty. Forty per cent of Newcastle residents are in the lowest national deprivation quintile—twice the average England figure. Men in that quintile have a 10-year lower life expectancy than men in the least deprived quintile, while women have a seven-year lower life expectancy, so reducing child poverty could have a major impact later in life in terms of life expectancy.

One in three children in Newcastle lives in poverty, according to official definitions, compared to just over one in five in England as a whole, so the need for us locally to take action to mitigate child poverty has been stark. In Newcastle, we have learnt a number of things. The first is that it is important to understand the diverse needs of local communities and to empower all of our partners to go much further than just engagement.

Although child poverty is closely related to financial deprivation, deprivation of experience and of aspiration can both have a massive impact on a child’s future opportunities. Teachers have to work hard to help children in deprived neighbourhoods to reach their age-expected levels of attainment. Imagine, for example, the hurdles that children have to get over in comprehension exercises when what is being described bears no relationship to their experience. That is why personal enrichment through education remains the key to social mobility and it is why a pupil premium proposed for children in disadvantaged areas could be so important. Educational achievement grows from raised aspiration, which in turn results from enriching the experiences of all our children.

Addressing child poverty is not just about the level of benefits or a fairer tax system. Although both of those are crucial, neither is designed as a measure to abolish child poverty on its own. For example, measures to combat fuel poverty and making our homes more energy efficient are of great importance to families on low incomes. In Newcastle, we have had great success with our Warm Zone initiative in cutting fuel costs by more than £3 million a year.

Abolishing child poverty by 2020 is a commitment. That is why employment and skills matter so much and why we in Newcastle have decided that reducing child poverty is the not just the business of children’s services but our core business across the whole of the council and the whole of the local strategic partnership. We have introduced projects to promote intensive multi-agency support to individual families. For example, there has been the Barnardo’s young dads’ project, which engages young men in developing their skills as fathers and promotes their literacy and numeracy and their skills for work. There is family learning in schools, which gives parents the chance to learn new skills and to help their own children to learn. Parents can spend up to a day a week in school with their child.

In Newcastle, Moorside Community Primary School is one example of a school that does not allow deprivation to be an excuse for low expectation. A majority of Moorside’s pupils live in areas within the 10 per cent most deprived nationally, but the school has raised attainment and aspirations of children and has increased opportunities for parents to enter employment, education and training, which has had the effect of reducing benefit claimant rates. Key to that has been the appointment of parent link workers to enhance relationships between school and home. Through family learning at Moorside, several hundred parents have obtained accreditation from courses that they have taken, with awards being presented in front of their children, which has a big influence on raising aspirations of both child and parent. Parents are then supported to progress further through link agencies such as Newcastle Futures, which we set up in partnership with the Government to find solutions to worklessness and which has helped more than 1,000 long-term jobless people into work.

However, research by Barnardo’s has shown that, although work is often seen as the best route out of poverty, low pay can still keep families in financial poverty. That is why taking low-income families out of income tax altogether, as proposed in this Budget and future Budgets, matters so much.

In conclusion, children who grow up in poverty are less likely to attend school regularly, to stay on at school, to obtain qualifications, to go on to higher education or to aspire to well paid employment. The gap in attainment between children receiving free school meals and other children is marked. The obvious follows. Reducing the number of children who grow up in poverty will increase the number of young people with chances to succeed as adults. That success will increase the life chances of their children and in turn promote a cycle of aspiration.

I thank your Lordships once again for the warmth of your welcome and for the opportunity to participate in this debate. I greatly look forward to making further contributions to the work of the House in future.