As your Lordships may be aware, there has been some recent press comment relating to a letter, now made public, which I wrote in 2007 on a private matter of a business nature. I accept that although the business interest to which the letter referred was correctly entered in your Lordships' Register of Interests in 2003, it was removed in 2005, which was clearly premature. I also accept that the use of House of Lords writing paper was inappropriate. I apologise to your Lordships for these errors for which I take full personal responsibility.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, the Government acted swiftly to set up a range of measures to support those businesses affected by the recent disturbances. Our immediate priority has been to get local communities back on their feet and to get high streets and businesses up and running again as quickly as possible. The response has been amazing. Businesses have been helping each other and there has been a great spirit abroad. My colleagues, Mark Prisk from BIS, Crispin Blunt from the Ministry of Justice, Damian Green from the Home Office and Bob Neill from the Department for Communities and Local Government, wrote to all MPs on 6 September updating them on the support for communities and businesses. I have arranged for a copy to be sent to my noble friend, as I recognise his involvement, over many years, in the concerns of small businesses.
Lord Cotter: I thank the Minister for her reply. It will take some time for businesses and communities to recover. I hope that the Minister will continue to monitor the situation. However, on a broader point-not just in relation to the recent riots-two-thirds of businesses nationally have been a victim of crime over the past 12 months. Can a higher profile be given to policing crimes against business, to remove the perception,
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Baroness Wilcox: I am only too delighted to confirm to my noble friend that this is something that the Government are looking at. These are not victimless crimes, particularly for small, family businesses, which are almost afraid to open up again. A lot of work is being done in this area. I have spoken with my noble friend Lady Browning, the Home Office Minister, who has responsibility for crime prevention. In the next few weeks, the Home Office will be releasing an improved self-assessment tool for businesses to identify their vulnerabilities, providing practical advice for how those can be overcome. That will be available through the Business Link website and, to comfort my noble friend, I shall stay in contact with him on any other areas that develop well
Baroness Royall of Blaisdon: My Lords, when the commission, which was appointed by the Prime Minister, and of which my noble friend Lady Sherlock, I am proud to say, is a member, goes round the country, will it take evidence from businesses as well as from those who were affected in other ways by the riots? Does the noble Baroness know whether the commission will be going to areas which were not themselves affected by the riots but which potentially could have been affected? Many people up and down the country will have views on the reasons behind the riots and it is important that their views are listened to.
Baroness Wilcox: Pretty well anything that the noble Baroness could suggest today that we might do to reassure people all around the country, particularly in small high streets where the businesses are not run by great consortiums but by people who have been made very nervous, I will take away. I do not know whether they are looking at all of that at the moment. However, at the core of everything that we are doing is an understanding. We have been called a nation of small shopkeepers, and this is what the Question is about. We will make sure that we do our best for them.
Baroness Hussein-Ece: My Lords, many small businesses that were damaged or that have closed down as a result of the recent riots may have lost, or have a lack of, complete financial records. This may prohibit them from taking advantage of the compensation that has been made available. Will the Minister reassure me and these small businesses that they will be treated fairly and with sympathy, particularly at local level?
Baroness Wilcox: Yes, I can assure my noble friend of this. First, all 35 affected local authorities have now indicated that they will provide support for affected businesses through the high street support scheme. Companies without insurance can seek compensation from their police authority under the Riot (Damages) Act. Her Majesty's Revenue and Customs is delaying tax payments for businesses needing help. Companies House has agreed to an extension for affected companies unable to file accounts or other documents, and a
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Lord Elystan-Morgan: My Lords, the Minister referred to the Riot (Damages) Act 1886, under which claims can be made against the police for damage to property. While it is entirely appropriate that innocent persons' property that has been damaged in that way should recover, does she not consider that now it may be appropriate that such payments should be made by the Treasury rather than by the police, bearing in mind that that Act was passed 125 years ago in circumstances very different from those prevailing at the moment?
Baroness Wilcox: We will look at the lessons that we can learn from this. As the noble Lord says, it is the Riot (Damages) Act 1886 that applies. It does not include vehicles: we have had a little difficulty with people who have had their vehicles damaged. However, we can always refer them on to other areas and other ways in which they can claim damages. We will learn lessons from this, as we do from all these bad things.
Lord Cormack: My Lords, following that supplementary question, will my noble friend assure the House that the resources made available to the businesses that have been so wantonly destroyed will be sufficient to ensure that the legacy of the riots does not include one single destroyed family business?
Baroness Wilcox: Yes, I can assure my noble friend that £20 million has gone into the high street support scheme. If we discover that not all the money has been used, it will not be taken back: local authorities will be able to use it to cheer people up. If any noble Lord has a good idea, I urge them to let me know. We think, as it is getting near Christmas, that any money left over could go towards the Christmas lights.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, the National Transitional Council has made a sincere commitment to a political settlement where human rights, fundamental freedoms and the rule of law are respected. We welcome its constitutional declaration which sets out a programme for conducting Libya's political transition in a spirit of unity, moderation and
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Lord Hoyle: I thank the Minister for that considered reply. Could I press him a little further about the people who are forming the Libyan Government? Many of them were members of the terrorist organisation, the Libyan Islamic Fighting Group. Although they have renounced violence, can we be sure that that they will not go back to their old ways?
Lord Howell of Guildford: The leaders-the chairman of the council, Mustafa Abdul Jalil, and the prime minister, Mr Mahmoud Jibril-are strong and remarkable people. Mr Jibril served under Colonel Gaddafi and was part of that regime, but he moved over. There are others who have had associations with other groups in the past. There is one prominent case, which I suspect the noble Lord has in mind, of someone who appears to have been involved in terrorist activities-that was certainly the case, so one can never be totally sure. However, there are wise heads leading the NTC and we believe that with careful pressures and support from outside we can proceed in a way which avoids the intrusion of extremism, which in Tripoli yesterday morning the prime minister was warning that he did not want to see in the new Government.
Lord Chidgey: My Lords, three weeks ago, the BBC reported that the joint FCO, MoD and DfID stabilisation unit had identified five long-term objectives for Libya, which included a conclusive political settlement ensuring security, the rule of law and restarting the economy. Can my noble friend say whether the Government will set out in a Statement how they intend to achieve those objectives, what resources will be deployed and what provisions have been made for a multilateral response to stabilisation from the three departments involved?
Lord Howell of Guildford: Those are indeed the objectives, as my noble friend acknowledges, and we will pursue them. How will we do it? We want to see the UN take the co-ordination role. A lot of co-ordination is needed, with wide international efforts for stabilisation, reconstruction and general social improvement, and recovery from the horrors of the last few months. Alongside that, we will work with all the agencies and through our own contribution to achieve these aims. I do not think that I can be more specific at this stage. In addition, as my noble friend knows, the Department for International Development is providing considerable funds to help with the reconstruction.
The Lord Bishop of Hereford: My Lords, I understand that Article 6 of the draft constitution emphasises the equality of citizenship before the law, but I am also aware that the constitution refers to Islam as the principal source of its jurisprudence. The two positions are not incompatible, but it would be helpful to learn
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Lord Howell of Guildford: The right reverend Prelate is absolutely right. These are very important issues, which we are raising all the time in our discussions and in the support that we are seeking to give. We do not want to cross the borderline between support and reinforcement of the new Libya, if that is what is going to emerge-the business is yet unfinished, as noble Lords know. We do not want to cross the line into telling the Libyan people what to do, as they own the procedure. However, they do respect these values, and we will certainly make those points to them in our continuing dialogue.
Lord Triesman: My Lords, the Libyan Prime Minister Mahmoud Jibril said on Monday that the National Transitional Council has mapped out a path forward and he added that this is no time for revenge. I note today that Donatella Rovera of Amnesty reports widespread systematic violence perpetrated by former rebel forces, including in the areas that they have controlled for over six months. It is an alarming report. Will the Minister tell the House in rather more detail what has emerged in discussion with the NTC about the main planks of its plan, whether he believes that the resources exist to deliver that plan and what the United Kingdom is saying to the NTC about violent crimes being committed by the NTC's forces?
Lord Howell of Guildford: We have noted that report and the reports from the UNHCR about allegations of atrocities. We think all these things should be investigated. It is worth remembering that the International Criminal Court is remitted fully by UN Resolutions 1970 and 1973 to investigate these allegations, and we understand that it is doing so. If it is necessary, we will certainly encourage it to do so, but I think it is going ahead with the job anyway.
Lord Avebury: Can my noble friend say what is being done about the difficulties that the Tuaregs are having in gaining citizenship in the new Libya and whether any representations have been made on that subject by us?
Lord Howell of Guildford: No, I cannot. Whether the Tuaregs have come up in detailed discussions, I am not briefed to say, but I will write to my noble friend if the position of the Tuaregs has been discussed. I cannot add anything at the moment.
Lord Anderson of Swansea: Does the Minister agree that Libya enjoys one considerable advantage over many of its neighbours, which is that it is not in need of financial assistance? However, it is in need of massive technical assistance, particularly in ensuring that the vast oil resources go to help the many and not to oligarchs and so on. What are we doing to assist the Administration, particularly in the area of petroleum and gas resources?
Lord Howell of Guildford: The noble Lord is absolutely right. There will be some technical support, and we are encouraging oil experts to go back in and restart the industry. There are political and technical difficulties to overcome, but we are certainly going that way. As for resources, we have unfrozen a large number of assets which are now available to the new Government. The Libyans are the owners of this process, and it is for them to decide how to distribute the funds and resources of, I hope, a modern, democratic and settled Libya, which we all pray lies ahead.
To ask Her Majesty's Government what is their latest assessment of the effect of logging operations in the rainforests of Africa, Asia and South America; and what is the likely impact on the indigenous human, plant and animal life.
Baroness Verma: My Lords, more than 1 billion people depend in varying degrees on the forests for their livelihoods with many more depending on the ecosystem services they provide. Some 350 million people who live within or adjacent to dense forests depend on them to a high degree for subsistence and income. Degradation and deforestation cause a loss of between $2 trillion and $4.5 trillion per year in ecosystems goods and services.
Lord Eden of Winton: Does my noble friend share my concern that while good intentions are being declared across the world, rainforest logging operations continue at a higher rate than before? Is it not just possible that funnelling loads of money through the World Bank is the wrong way to go about things? My fear is that in relying on REDD-plus and so-called sustainable forest management, fund providers are being hoodwinked? Would my noble friend and her colleagues therefore give much greater support direct to NGOs and the like which know what is happening on the ground and are much better placed to achieve early practical progress at the grass roots, where it really will make a difference?
Baroness Verma: My Lords, my noble friend is to be congratulated on raising this issue again. It is true that these issues will not be dealt with singly by the UK or by Governments who are not prepared fully to accept that there is a lot of work and persuasion to be done, by rule of law, that illegal logging must be stopped. However, I reassure my noble friend that we work with NGOs and are a founding member of the Global Partnership on Forest and Landscape Restoration. We are working very closely with countries such as India to help restore and recover forests. My noble friend Lord Henley has just recently participated in the Global Partnership on Forest and Landscape Restoration in Bonn. Governments can do their part and NGOs can do theirs. However, countries where this is happening also have to respond with severe penalties.
Lord Blencathra: Does my noble friend agree that biodiversity and loss of species are even more important than climate change? With a huge amount of resources and tremendous effort, it is possible eventually to reverse climate change, but once a species is lost, it is gone for ever, and the damage could be irreparable. Does she also agree that this is not just a matter of polar bears, tigers or even red squirrels, but that many of the boring little unsexy species that could be lost by deforestation could actually be valuable to human life and existence?
Baroness Verma: My noble friend has put the case perfectly for why we need to work incredibly hard. That is why the UK has supported developing countries to participate in the United Nations study on the economics of ecosystems and biodiversity which estimates, as I have said, that the financial cost is immense but the cost to species is even greater, and the initial long-term impact will be on us.
Lord Clark of Windermere: My Lords, does the Minister appreciate that one of the largest single sources of global emissions is actually deforestation, often illegal logging? The British Government took the initiative a number of years ago to push for reforestation, and we are one of the few countries in the world with experience of it. Can we have an assurance from the Government that they will redouble their effort for reforestation as well as stamping out illegal logging?
Baroness Verma: The noble Lord is absolutely right. It is about working with other countries, which we are doing aggressively. We have worked very closely to get all our partner countries to sign off the new EU timber regulation that came into force last December. It is about being persistent in our argument. I agree with the noble Lord that it is really a devastation to all countries if we do not tackle this issue right now.
Lord Chidgey: Is my noble friend aware that the Democratic Republic of Congo officially produces more than half a million cubic metres of timber each year, and illegally produces about the same amount each year? Is she also aware that British technology is now available to the DRC that tracks the entire supply chain of timber from standing forest trees to the wholesale timber market? What action will the Government take, therefore, to help facilitate the DRC Government's efforts to complete negotiations with the European Union to enter into traceability agreements?
Baroness Verma: My noble friend is right about Congo. However, as with the previous question, it is about all partner countries being able to respond with severe penalties when they see illegal timber coming through their borders. Of course, the important thing is that these are conversations that continue. They are not had at one conference-it is a continuous conversation at many conferences, and it will arise again at the Durban conference in December.
Lord St John of Bletso: My Lords, can the noble Baroness give any indication as to whether our Government will be following the moves by Switzerland
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Baroness Verma: The noble Lord talks about a specific case, which I will not refer to. In a more general response, I would like to say to noble Lords that we are ensuring that we respond proactively to the difficulties we are all facing with this issue. The multinational companies that deal in illegal logging will find that the penalties for this will be severe. That is the agreement we are trying to get from all our partner countries so that it is not just a small group of countries that are willing to apply severe penalties, but that the penalties will be severe at every border that illegal timber comes through. It is about greater partnership but it is also about recognising that we are only a small cog when it comes to dealing with these issues and it is really for the whole world to respond collectively.
Lord Avebury: My Lords, what does my noble friend think about the UN-REDD initiative mentioned by the noble Lord, Lord Eden? Is it cost-effective, and how much does the United Kingdom contribute to it annually?
Baroness Verma: I cannot give my noble friend a figure on the contribution at the moment; I will write to him on it. However, I repeat that we may think that some systems are weak, but we have to strengthen those systems-review and revise them-and make countries where deforestation and illegal logging take place responsible for responding positively.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, we have been clear that a Palestinian state is a legitimate goal and the best way of achieving this is through a comprehensive agreement between Israel and the Palestinians. Palestinian action at the UN looks increasingly likely. We are working with partners to build a consensus on a way forward that recognises the progress the Palestinians have made in their state-building efforts, that meets Israel's legitimate security concerns, and that avoids confrontation in the UN. Whatever action is taken in New York it is important that this increases the prospects for a return to negotiations. This is our goal and it is President Abbas's goal as well. We have reserved our position on outright recognition and will take a decision nearer the time if needed.
Lord Wright of Richmond: My Lords, I thank the Minister for that reply. Does he accept that giving Palestine statehood does not in itself-and would not in itself-preclude future negotiations with the Israeli Government? Given that there is widespread acceptance of the concept of a two-state solution, with shared capitals in Jerusalem, is not recognition of a Palestinian state entirely logical? I also ask the Minister whether he accepts that whatever decision our European, American or quartet colleagues take on this matter, Britain-the governing power of Palestine until the time of partition in 1948-has a particular moral duty to support the revival of a recognised state for the Palestinians living in peace and security with the state of Israel.
I hope your Lordships will allow me to add a very short, sad but highly topical postscript to this Question. Some of you may have read in the Timesthis morning an obituary of the wife of the Palestinian ambassador in London, to whom I offer my condolences. That obituary states that Mrs Hassassian, who was a permanent arguer for Palestinian rights, was not allowed to open a Palestinian stall at the international diplomatic fair in Kensington a few years ago because Palestine was not a country. I hope that nonsenses of that sort are now in the past.
Lord Howell of Guildford: I am grateful to the noble Lord and, of course, I share and we must all share in the condolences which he touches upon. As to his earlier questions and propositions, I agree with most of them. However, the question hangs in the air, and I hope it will be resolved, as to whether action at the United Nations will enable that move to statehood to take place. That is what we all want and that is what must proceed. We hope that action at the UN will open up a better pathway to negotiation, but if it was the opposite and it led to confrontation-if more business there closed down negotiation-then it clearly would not be such a good thing. We just have to wait and see what the texts are, how the matter is going to be approached-whether through the General Assembly or the UN Security Council-and then we will take our decision.
The Lord Bishop of Exeter: My Lords, while the recognition of statehood might alter the negotiating parameters and the Minister has affirmed the importance of negotiations towards achieving a final settlement, will he also affirm the important role in any ongoing negotiations of the wider Palestinian diaspora, including those who have the recognised status of refugees? Will he say what the Government are doing to ensure that the rights of such refugees are not compromised or taken away by any recognition of statehood, including their legitimate right to be heard in international fora such as the UN?
Lord Howell of Guildford: These are very important issues. Clearly, they would have to be included in any advance towards statehood, which we want to see, which in turn depends upon a successful negotiation, which in turn depends upon the agreements that have so far eluded us between Israel and Palestine. The question of how this UN development fits into that
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Baroness Ramsay of Cartvale: My Lords, does the Minister agree that if such a bid by Palestinians is made to the upcoming General Assembly, they should be asked if they accept the United Nations General Assembly resolution-I mean "General Assembly"; it was not a Security Council resolution-of 1948 which set up the state of Israel?
Lord Howell of Guildford: I am not so sure about the exact content of that but certain conditions, which are parallel and relevant to that and may be embodied in that resolution, would go with any proposition before the General Assembly. Two-thirds of the General Assembly would then have to vote on it. It might also be qualified by the requirement that Palestine would take the role of observer-state membership rather than full membership. That is a possibility. I can give the general assurance that, certainly, conditions would be attached.
Baroness Falkner of Margravine: My Lords, does my noble friend accept that, in deciding the UK's position at the General Assembly, we would do well to bear two things in mind? One is the formulation of our relationship with the United States, which the Foreign Secretary has described as an essential relationship rather than a special relationship, denoting a degree of independence on our position on this matter from the US. The second point is our relationship with our European partners. Does my noble friend accept that where our European partners such as Germany may wish for historic reasons to abstain, we have a special responsibility, as the noble Lord, Lord Wright of Richmond, has pointed out, to do the right thing by the Palestinian state? Will he therefore assure the House that he will keep an extremely open mind on the position we take on both those fronts?
Lord Howell of Guildford: The short answer is yes. Obviously we listen to the views of the United States but my noble friend will remember that, in a recent debate on settlements, we did not find it necessary to be on the side of the US. In fact, we voted on the other side. We are perfectly capable of asserting our independence and our interests as a nation, and as a contributor to Middle East peace, by ourselves. As far as the European Union is concerned, I am afraid that there is some difference of view between the members and it is hard to get a united European Union view, although, by working over the next week, it would be a good thing if we could do so.
Lord Touhig: My Lords, I beg leave to present a petition from Community Housing Cymru, on behalf of the United Kingdom housing federations and other Welsh charities. The petition prays that the House urgently call on the United Kingdom Government to reconsider the cuts to housing benefit and local housing allowance, which your petitioners believe will
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That, notwithstanding the Resolution of this House of 21 June, it be an instruction to the Joint Committee on the Draft Financial Services Bill that it should report on the draft Bill by 16 December 2011.
That the draft orders and regulations laid before the House on 27 June and 5 July be approved. 26th and 27th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 September.
The Minister of State, Ministry of Justice (Lord McNally): My Lords, before we move to the Welfare Reform Bill, I point out that 51 speakers are signed up for the Second Reading. If Back-Bench contributions are kept to seven minutes, the House should be able to rise this evening at around the target of 10 pm.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, I do not think that a single Member of this Chamber could stand up and say they truly believe that the welfare system is working. Personally, over the course of the past four years, I have been struck time and again by the sheer scale of the system, and therein the task we face bringing forth these reforms. Today's benefits balance sheet tells a story of unfairness, dependency, and waste.
There are nearly 5 million people on out-of-work benefits. In 2010-11, the Government spent £201 billion on welfare and pension payments, compared to £38 billion on defence, £91 billion on education and £121 billion on health. Within that we spend £22 billion on the key out-of-work benefits and the same again on housing benefit. Working-age welfare spending has increased by over 40 per cent over the past decade, Housing benefit spend is up almost 50 per cent.
Of the 2.6 million people claiming incapacity benefits, over half have been on benefit for at least five years, and a third have been on benefit for 10 years or more. Spending on welfare has been allowed to get out of control. This Government have taken some tough decisions to restore affordability to the benefits budgets for both now and the future. Of course, welfare is about more than just numbers. Ineffective management of the benefits system has not just led to ever-increasing spending. It has also affected people's lives. So, there are people who want to work but find they are better off on benefits, people who want to work but do not get the specialist support they need, and people who want to work but are actually hindered from doing so by the current rules. In the mean time it is the poorest and most vulnerable who suffer.
Welfare reform is first and foremost about refocusing the resources we have to help the people who need it most. This Bill contains a number of measures to address specific problems within the welfare system, to end benefit dependency and redress the balance by restoring fairness and affordability. These measures lay the groundwork for the main purpose of this Bill, the creation of universal credit, the most radical reform of the welfare system since its invention. With the creation of universal credit this Bill does not just allow for the development of a new benefit, it creates the conditions for attitudinal and behavioural change. It bridges the gulf that has opened up between unemployment and work, and delivers a benefits system that is about people not process, one that is flexible and responsive. As we debate this Bill today and in Committee over the coming weeks, we may disagree on the detail, but we must all agree on the need for reform. I know that noble Lords have a great deal of interest in these reforms. Many have been to briefing sessions on specific policies contained within this Bill and I hope this can continue throughout the Committee stage.
I shall also be publishing a great deal of detailed information provided for the Committee stage in the other place. This will include one-page notes relating to every regulation-making power in the Bill, illustrative draft regulations for some areas, and policy briefing notes. Some of these, as noble Lords may have seen, were published only yesterday. To inform our discussions, I also expect to publish updated impact assessments to reflect various announcements that have been made during the course of the Bill's passage through Parliament.
Following further work my department has done, and the helpful report from the Delegated Powers and Regulatory Reform Committee, I am planning to bring a number of technical amendments during the Committee stage. I will ensure that noble Lords are made aware of these in good time to prepare for the debate. Today, I wish to set out for you some of the principles behind our approach and the rationale for some of the key measures included in this Bill.
At the heart of our reforms, indeed at the heart of this Bill, is the creation of universal credit. This will be a single income replacement benefit for working-age adults. It will be simple to understand and access, and crucially it will bring together in and out of work support, simplifying the current system of benefit payments and tax credits into a single payment for those out of work or on low pay. Universal credit will provide a more consistent system of support. For example, under universal credit, people remain registered with the system for two years after their claim has ended. So, someone can get a full-time job and leave universal credit completely, but if they lose their job or perhaps cannot work for a period because of a health condition, they will be able to start payments again almost instantly, ensuring that they do not have to wait for vital support.
Universal credit will also provide a more responsive system of support, because as part of these reforms we are developing a real-time tax and benefit system. Access to real time information means that we can deliver a more responsive system based on actual earnings, making the transition between benefits and work much easier. By basing support on financial need, not crude measures of employment status, we will remove some of the barriers preventing people returning to work and will provide the security of a minimum income while retaining and in fact, for many, restoring the financial incentive to work. Real-time information means that universal credit payments can be gradually reduced as earnings increase. Even for those at the bottom end of the pay scale looking to take on extra hours or a modestly paid job, there will be real financial gain. This is an important point; under the current benefits system some people can experience an immediate and almost total loss of benefits for working just a couple of extra hours a week. Under the old system, some households could lose as much as 96 pence for every extra pound they earned. Universal credit reduces this to around 76 pence for modest earners and 65 pence for low earners. This directly improves work incentives for around 700,000 people by putting extra money in their pockets if they do extra work.
The broader impacts of introducing universal credit make the argument for reform even more compelling. The original impact assessments published alongside
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We anticipate that more people will take up benefits once the system is simplified, with the combined impact of take-up and entitlement potentially lifting 600,000 adults and 350,000 children out of poverty. The combined effects of welfare reform could lead to up to 300,000 fewer workless households. Taken together, these changes will help to end benefit dependency by creating a more active regime, which encourages people into work by making the financial gains clear and real for hundreds of thousands of people. The introduction of universal credit will restore affordability by creating a simpler benefits system, focused on those in the greatest need; and it will restore fairness for both taxpayer and claimant. A more transparent system will be more accountable to the public. A more effective system will deliver more for those who need it most.
This Welfare Reform Bill is not just about those who are claiming benefits, it is also about those who are paying into the system. We know that taxpayers want a benefits system that is fair. They want a system that does not abandon those at the bottom and a system that they can turn to if they need it. However, taxpayers also want a system that is not wasteful; a system that does not pay benefits to those who can work but choose not to; a system that is not open to abuse; and a system that is affordable and effective.
I believe this Welfare Reform Bill will deliver that system. Universal credit will generally be just one monthly payment per household, making it easier for people to understand what they are entitled to and manage their own finances. This is an important point. Currently, the experiences of unemployed people in this regard, particularly for the long-term unemployed, are very different from those of people in work. We must ensure that as many people as possible are empowered to manage their own finances and make the choices that people in work must make. We must close the gap between being out of work and having a job, so it is not such a major shift for people leaving benefits. Payments to tenants must be the default position under universal credit. That said, I am alert to the sensitivities that exist in relation to the supply of affordable housing and in particular for the social rented sector and its lenders. I am prepared to explore options that will provide some protection for this industry and I shall announce how I plan to do this in due course.
For the moment, let me say this: I am convinced that we can deliver a system that puts the full universal credit payment into a claimant's hands, empowering them to manage their own budgets and narrowing that gap between the experience of being in and out of work. At the same time, I believe we can build safeguards into the system to minimise the impact on social
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With the passing of this Bill, we anticipate the first new claims for universal credit will start in October 2013, with all existing customers moved to the new system by 2017. In the meantime, this Bill also includes some reforms to the current system. These changes will amend some of the existing rules and regulations and start to bring them into line with universal credit. One such change is the proposal to time limit employment and support allowance-ESA-to one year, paid on the basis of national insurance contributions, to people in the work-related activity group.
The basis for this change is to bring ESA rules closer to the contributory jobseeker's allowance rules, which currently pay six months' jobseeker's allowance on the basis of national insurance payments. This change also supports the intention that ESA should be a temporary benefit for the vast majority of people-which indeed it is. This is particularly true of those in the work-related activity group, who are assessed as likely to recover and make an eventual return to work. There remain a number of options for the minority of people who do reach the time limit: a return to work if able; a move to income-based benefits if appropriate; and for those whose condition worsens, potentially continuing payments through the support element of contributory ESA. This is a change of principle more than convenience. Allowing people to become dependent on benefits when they do not need to be is neither fair to them nor to the taxpayer, and it is no longer affordable. This is not about removing support; it is about making sure people get the right kind of support.
This is also the case for people who have cancer. We have already amended the rules, put in place by the previous Government, so that people awaiting or in between certain chemotherapy treatments receive the support they need, and we have specifically asked Professor Harrington to look at this issue in his next review, which he has done in partnership with Macmillan Cancer Support. I know that many noble Lords are particularly interested in this subject and I can tell the House today that we have received Professor Harrington's second report and we are considering it carefully. I will update noble Lords again in due course.
We do not underestimate the impact that this change will have on claimants. As a result, we have asked Jobcentre Plus to send out a letter to all ESA customers who could be affected by the change. The letter will be
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We must apply the same principles of fairness, affordability and ending benefit dependency across the welfare spectrum. This is why we must reform support for disabled people. Current provision of disability living allowance, or DLA, is confusing and inconsistent. Too many people think of DLA as an out-of-work benefit. In fact, DLA's purpose is to provide financial support to contribute towards the extra costs incurred by disabled people as a result of their disability, irrespective of whether they are in or out of work. DLA awards have become inconsistent and subjective, and spending on this benefit has started to spiral out of control.
More than two-thirds of claimants receive one or both of the two DLA components indefinitely, with no systematic checks to see if their condition has changed. This is no longer acceptable. We must support people properly and that means more accurate and more regular assessments to see if their condition has changed and ensure they are receiving the right level of benefit. This means being prepared to pay more for those whose needs have increased as well as reducing the benefits of those who no longer need them. To that end, this Bill allows for the abolition of DLA and its replacement with the personal independence payment, which like DLA will be available to disabled people both in and out of work and will be non-taxable.
The key changes will be an end to automatic entitlements based on having a certain health condition or impairment, a more objective assessment, and the introduction of more regular check-ups. These reforms are designed to deliver a more responsive and sustainable benefit and to ensure support is focused on those who face the greatest challenges to take part in everyday life. They are not about taking support away from those who truly need it.
Many of you have raised with me the issue of DLA mobility payments to care home residents. We have listened to the concerns raised about mobility provision in care homes and will consider the needs of disabled people living in residential care and receiving DLA as we develop personal independence payment for introduction in 2013. Our aim is to treat disabled people fairly, regardless of their place of residence, not to reduce their ability to get out and about. We will continue to gather and consider the evidence about existing provision as we develop our plans.
The introduction of personal independence payment will restore fairness in disability benefit provision by providing support on the basis of ongoing need, and replacing DLA will bring spending in this area under control, making sure the system is affordable both now and in the future. But this is not about cutting spending. The funding for all DLA, in real terms on 2011-12 figures, was £12.1 billion in 2009-10. At the end of this Parliament in 2015-16, the funding will be slightly higher at £12.3 billion. The talk of cuts relates to projections on a benefit that was rising sharply. What we are doing is bringing it under control.
I hope that noble Lords can agree today that the spirit of these reforms is right: that it is right that we do not put people on any benefit and just leave them there, as has so often been the case with DLA; that it is right that we design a more objective assessment, one which can better take account of those with mental health conditions and learning disabilities who may also incur extra costs but which DLA is so ill designed to support; and, wider, taking this package of reforms as a whole, that it is right that we act now to reform the benefits system, restore fairness and affordability in welfare and end benefit dependency.
The reforms contained within this Bill will mean some of the poorest people in the country will benefit from more than £4 billion in welfare payments, as set out in the previous impact assessment, through increased entitlement and take-up. These reforms will lift as many as 950,000 individuals out of poverty, help 700,000 households keep more of the money they earn and cut the number of workless households by up to 300,000. These reforms will bring real change in both attitude and behaviour. This Bill marks the end of the something-for-nothing culture we have seen so recently on our streets. It is a new dawn for welfare-one of fairness, responsibility and effective support. This is something I believe we should all welcome and I commend this Bill to the House. I beg to move.
Baroness Hayter of Kentish Town: My Lords, I thank the Minister for opening the debate and I look forward, as does the rest of the House, to the maiden speech of the noble Lord, Lord Feldman of Elstree.
Given our support for the objective of the Bill, which is to make work pay and to simplify the system, it is deeply regrettable that it fails to achieve this. It fails partly because, despite the words we have just heard, it is taking place alongside a commitment to cut benefit expenditure and partly because it is work in progress, with far too many unanswered questions. In the previous speech, I think we heard the words "in due course" more than any other.
First, however, as vice-chair of the Webb Memorial Trust, perhaps I may quote three principles from Beatrice Webb's 1909 minority report on the Poor Law, when she said that poverty has structural causes-it is not the fault of the individual-that the state has responsibility for preventing and alleviating poverty and that dependency should be avoided. I have no trouble with a no-dependency model of welfare, but Beatrice Webb also believed that the state is responsible for tackling the causes of poverty: the lack of jobs. Today, with 2.5 million unemployed there are six people chasing every job and in places such as Merthyr Tydfil, 84 for each vacancy. There is a responsibility on government to grow the jobs market because unemployment costs each of us-it is perhaps £500 per household-because we need jobs to enshrine a culture of work in every community, recognising the injury to childhood of a home without work, and because without jobs parents cannot return to work, no matter how hard they try.
We must help those who cannot work through age or infirmity but also assist those who have been out of work back into employment. The Work and Pensions Select Committee in another place goes further, calling
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while the Government, I have to say even just now, seem to suggest that there is a "them and us"-taxpayers and the rest. I see it differently: we are all taxpayers, if only through VAT, and we are all potential recipients. Yes, the welfare state should reward work, but it must be there in times of crisis, where there is illness, unemployment or disability. It should be there for the vulnerable and it should be there to support families with young children, sharing the cost of the next generation throughout our life stages. We want to see a welfare system that is fair and straightforward, without the need for specialist help from hard-pressed Citizens Advice, especially with the threat to legal aid for welfare advice. We want a system that does the job, provides what is needed when it is needed and, yes, a system that is affordable. The Bill fails those tests. It is not fair or transparent, it does not help some of those most in need and it will not be affordable if it leads to homelessness, poverty, disincentives to save or family break-up.
I touch upon some of our concerns; first, childcare, especially in London, where it can cost £11,000 a year -perhaps a quarter higher than elsewhere. Childcare is key to whether parents are better off in or out of work, but in extending it to those working under 16 hours within the same fixed budget, there will be losers, with existing recipients getting less. On the savings cap, claimants will start losing universal credit with £6,000 in savings and will lose all of it with £16,000. While most claimants will never have such savings, this new rule will hit in-work families for the first time, as there is no such savings cap for tax credits. The savings cap undermines incentives to save, whether for a mortgage, tuition fees, social care or to top up one's pension. The IFS has warned that the savings cap will give some families a strong incentive to lower their capital below £16,000.
Then there is the abolition of the discretionary Social Fund's community care grants and crisis loans, devolving responsibility to local government, but without ring-fenced funding for cash-strapped councils-what the CABs have warned could be a return to the Poor Law. These safety nets-for cookers, beds, cots-help some of our most vulnerable in times of crisis, often as a result of family break-up. Family Action has warned that, for women setting up home after fleeing domestic violence, such financial support is precious to them and their children. Meanwhile, 22,000 people per year leave prison without accommodation. They need early help to prevent them falling into debt, with all the associated temptation to return to crime. As Sir Richard Tilt has said:
What will replace these half a million grants and 3 million loans? Food parcels instead of cash? A postcode lottery of handouts? Loan sharks instead of
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I turn to housing. Londoners' rent is already 50 per cent higher than the national average and 80 per cent of housing benefit recipients in private rented homes in central London face cuts in housing benefit. I have to tell the Minister that London landlords will not reduce their rents in response to this. There will be a flight from high-rent areas, regardless of the needs of the family or of children or, indeed, of the local economy; because who will do the jobs that they leave behind? Meanwhile, there are few jobs in low-rent areas. Westminster Council estimates that 5,000 households will be affected and,
which leads to the so-called underoccupation of social housing. Some 600,000 housing benefit claimants are deemed to need a one-bedroom property but only half that number of such properties exist. What if that family were helping to look after an ageing parent or perhaps were getting grandparent help themselves? How is this to be replaced if they are forced to move? Meanwhile, the household cap on benefit ignores variations in housing costs or, indeed, family size. The head of the Roman Catholic Church in England and Wales, the Archbishop of Westminster, identified these cuts as being likely to force thousands of poor families out of their homes. We know the likely effect of the changes to housing benefit, the underoccupation rule and the benefit cap because Eric Pickles's private secretary helpfully told No. 10 about it, warning it that 40,000 families were likely to be made homeless. I remind the Government that even Dame Shirley Porter managed to move only 500 families when she tried her form of "social cleansing" from Westminster.
The £500 a week benefit cap will reduce the benefits of perhaps 50,000 families. This will hit carers as, unlike war widows, they will not be exempt. However, some carers will be forces' wives whose injured husbands were fortunate enough to survive, but their carer's allowance could go if they hit the cap. Will the Minister explain why the cap figure, mostly affecting families with three or four children in the south-east, has as its comparator the national average earnings for all families, including those with no children and those in low-wage areas? Furthermore, the comparator £26,000 income does not include child benefit, whereas the £26,000 cap does. Will the Minister agree to exempt child benefit from the new cap?
I believe that the change from DLA to the personal independence payment was probably aimed at improving the system, but-there are a lot of "buts"-it is taking place against a background of an arbitrary 20 per cent cut for some of our most vulnerable. There is as yet no decision on which rates of the daily living component of carer's allowance will be due, but the words,
tend to suggest that other carers will be excluded. The qualifying period will be doubled from three to six months, but it is the first months of disability when one has lost a limb or is suffering from the effects of a stroke or serious illness when costs are highest and income falls as the ill or injured often give up work. Without PIP entitlement their carer similarly cannot qualify for carer's allowance. The Minister suggested that he had heard concerns about the loss of mobility component for local authority-funded residents in care homes-I am not sure that he responded to them-which will make them virtual prisoners in what is, after all, their own home. How will they afford to go to weddings, funerals, shivas, christenings, bar mitzvahs, Eid prayers, the cinema, the pub, bingo or to shop for clothes without that mobility allowance? I recognise that Ministers have agreed to review this but with no terms of reference, no timetable, no involvement of disabled groups and no publication of the outcome. Will the Minister confirm what Maria Miller, the Parliamentary Under-Secretary of State for Disabled People, said:
Cancer has been mentioned. We hope that the Government, particularly the Prime Minister, have now understood the concerns of Macmillan and have heard its three "asks": first, that those on oral chemotherapy should get ESA without being reassessed; secondly, that support for cancer or stroke victims should kick in when their needs are greatest rather than having to wait six months; and, thirdly, that those taking more than 12 months to recover should not be penalised if they are not ready to return to work. After all, it is meant to be a contributory payment, often earned as a result of many years of contributions by today's cancer sufferers. Without movement from the Government on this matter, someone's health catastrophe will turn into a financial catastrophe.
The Bill is an assault on ambition. Without childcare support, how can parents return to work and proceed up the income ladder? The threatened cut in childcare, added to the reductions already made, will undermine the very purpose of the Bill, just as the savings cap will undermine incentives to save. This Bill is an assault on compassion. It risks watering down child poverty targets; it will force cancer patients into poverty or to seek work too early; and it risks trapping many disabled citizens in their care homes by the removal of mobility payments.
The Bill is still work in progress. It is not yet fit for purpose, yet your Lordships' House is being asked to scrutinise without the answers to some fundamental questions. We await details of the crucial element of making work pay: childcare. On PIP, the Government's silence on the review of mobility payments has forced the Disability Alliance to launch a judicial review. The passporting of PIP to carer's allowance will be decided only later this year. The loss of free school meals is perhaps the biggest cliff-edge disincentive to work and a blow to tackling child poverty. Council tax benefit will be localised, so its taper will be unrelated to the universal credit regime and it could vary across boroughs-a real postcode lottery.
The Bill is a leap in the dark for millions who rely on childcare to work, for the disabled and for the Government-for their IT project and their reputation-and because it appears to have no answer to the myriad questions that so worry the sick and the disabled. We support welfare to work, but for too many disabled and vulnerable people the question is: from welfare to where?
Lord German: My Lords, your Lordships might expect me to take a slightly different tone about a Bill which has at its heart a universal benefits structure designed to help those who are trapped by no work and a dependency on benefits. Alongside the work programme, this is a transformational Bill-one where an alternative cannot wait. There are those who would argue that it is not an appropriate time because of the state of the economy to introduce such a Bill and to enact such changes. However, there is never a right time to make changes, but there is always a right time to ensure that better principles are put in place.
The DWP describes the current system in the documents that it has circulated as "Byzantine". I reckon that that is a bit of an insult to Byzantium, which was, by comparison, a well ordered society. For example, there are currently seven different parts to the benefits and tax credits associated with disability. Each of those seven parts is paid at a different rate, has different qualifying conditions and is for different purposes. That is why I welcome the transformational elements of the Bill. We have a very complex system at present and we aim to make work always pay. Those are the Bill's laudable objectives.
I congratulate the Minister on securing, at a time of great financial hardship, extra new money from the Treasury to ensure that universal credit is put in place. That is a real accomplishment in a tough economic climate. However, the question is whether the Bill provides an architecture that works, and will work for the future, to provide levers that can be pulled to improve the financial envelope as times get better.
As we change a complex system such as this, we need to be wary of two things. First, the end objective must never be forgotten. It is to reduce poverty, as the Minister said-he has given us the figures-and to increase hope and aspiration and to provide opportunity. We should not forget that those are the challenges at the basis of the Bill. Secondly, it is worth remembering that, in a complex structure, changing one part of a system could have negative effects on other parts of the system, and there are many places where that could happen. Shaping a system architecture that will stand the test of time, meet the demands of the modern economy and be a basis for a sound, compassionate and caring society is the challenge that we face.
One of the levers that I would like to see pulled as the economic system improves is the 65 per cent taper rate. That would make it even better for people to work and would be an even better challenge for them.
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The Bill covers a wide range of issues and touches so many individuals and families across the country. I do not recall the exact figure, but I think about 18 million people will be affected directly by the decisions that we make. It is rather like the most complex signal box that can be imagined, where you have 18 million people travelling on a journey, virtually all at the same time, with about 8.5 million places to which they can go.
A fundamental test of the Bill will be whether it can actually deliver the end goods. That is why I ask the Minister to reassure us about the technology, which is the biggest transformation of the IT system that any Government have seen and one that engages with the private sector payments structure in a way that has not been seen before. Will it really deliver the goods? Nothing could be worse for people than if they find at the end that they have not got the payments that they deserve.
Fundamentally, the Bill must support the broader, gender equality, children and family policies of the Government. That is a test that we will be making during the course of its passage through the House. Arising from that is one of the questions about the payments to households that my noble friend the Minister has already mentioned. I am grateful that he is considering this issue. One of the things that we did during the passage of the regulations on the local housing allowance was to extract a concession from the Government that they would seek to pay some tenants' rent directly to the landlords. There will be circumstances in which rents should be paid directly. We made that commitment already once, and I hope that the Minister can assure us that that will happen in the future.
As well as looking forward to the Minister's review of that issue, I look forward to the review of the mobility element. I believe that there is nothing wrong with the mobility element except that there may be some overlap. If there is overlap between two payments for the same thing, that should be eradicated, but we do not want to see that part of the measure lost altogether. That is why there is a need for the draft regulations, guidance and notes. I am grateful to the Minister for providing us with a great deal already, and I look forward during the scrutiny of the Bill to seeing far more.
One key issue at the heart of the family and gender equality issue must be that of childcare. I am glad to see that we will end the cliff-edge of the 16-hour working rule, which has bedevilled many people who could work for a few hours but no more. But we will need to find additional resource. The benefit of a universal credit and benefits system is that universally it becomes available to anyone without having to ask for it. There will be a bigger take-up from people who will have this element at their disposal. So far, we have had to make the current envelope of money stretch further. If we are now going to have to pay it to more people, we will need more money in the pot to make that happen. I would be grateful if the Minister could explain what he expects the additional gap to be
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The Minister has confirmed that work will always pay, so the transitional support will be essential as well. My understanding is that "no cash losers" means that people will hold their cash benefit until it is overtaken by the increasing rate of benefit under the new system. I wonder whether there has been any modelling by the department on how long it will take for those "no cash losers" to become beneficiaries of the new system as the benefits increase.
It will be of no surprise to noble Lords that those of us on these Benches are very concerned about Clause 93(7), on the benefit cap. This is one of the examples of intended, or maybe unintended, consequences. It is clear that the clause has a sense of the vague about it. It just says that it is up to the Secretary of State to determine what the cap figure might be. Of course, I do not have any problem with the cap; the principle is fine, providing the cap fits. The problem is that the figure of £26,000 is taken as the median.
The latest data from the Family Resources Survey are as follows: the median income for households without children is £21,320 per annum; for households with children it is £30,680 per annum; and for all households the average is £27,300 per annum, whereas the Government have said £26,000. I would be grateful for an explanation from the Minister about where the figure of £26,000 has come from. What should be apparent from those figures is that £30,680 is the median income for households with children and yet we are likely to affect those families by some £3,380 if we take the £27,300 figure, which is in the Family Resources Survey data.
Of course, the differences between households are very varied across the country. Depending on where you live, there is a gap between the highest and the lowest of £12,000 per annum, which is an enormous gap between family incomes. If there is to be a move to allow people to move on to the new system, we need a cap which fits and one which is properly established and allows a period of transition. I hope that the Minister can confirm that that is his intention.
I move on to issues relating to council tax benefit and housing benefit. The Calman commission, which was the underpinning for the Scotland Bill which is before the House at the moment, says that social security benefits are the social glue which holds together a compassionate nation. I am an ardent supporter of devolution, as one might imagine, but is our social security system the one which should be universally available across all parts of our land, including Scotland, Wales, and Northern Ireland? If it is, you have to question the devolution proposal in the Bill, which is to local authorities in England, over whom this Government and this Parliament have some influence as regards the purposes for which that money might be spent. If these moneys are simply to be handed over, as the Bill suggests, to Wales and Scotland as part of the Barnett formula, for them to do with as they wish, they will have no obligations to the purposes of the Social Fund or council tax benefits, and this Government
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A linked issue is the prospective changes to the housebuilding programme and household provision in our social housing sector. The new housing benefit regime outlined in the Bill presumes a change to the payments of households based upon the level of occupancy. Claimants who are in accommodation which is too large will have only three alternatives: first, to pay the extra above what the bill would be for a smaller property; secondly, to fill the spare space with a family member or a lodger; or, thirdly, to move either to the social housing sector elsewhere or into the private sector. However, housing associations have not geared up for this third choice. They have focused on providing two and three-bedroom properties. If the result of these changes is an increased demand on housing associations for smaller units of accommodation, they will need time to adjust. I would be grateful if the Minister would explain what modelling has been done on the changes to our housing stock for the social housing sector that will be needed as a result of the Bill.
I started by saying that this was a transformational Bill. The desired outcome is the lifting out of poverty of a significant proportion of our society. For me, that is an ambition worth pursuing. That is why I support the principles of the Bill: they are much needed. What we now need is to make the principles work.
Baroness Hollins: My Lords, there are winners and losers in life. Usually it is those who already have most who are the winners, perhaps because they are better able to advocate for themselves, and also because their needs are better understood in government. I am particularly concerned about two groups of disabled people who often lose out: people with learning disabilities and people with fluctuating mental health problems. I want to ensure that the welcome introduction of universal credit is adequately sensitive to their needs, and that they will gain from the changes.
Many mental health charities, including the Royal College of Psychiatrists, of which I am a past president, are concerned about a number of aspects of the Bill. It needs to be considered alongside other new legislation, the effects of which may be cumulative. I am thinking, for example, of the Localism Bill and the debate about housing tenancies. The Welfare Reform Bill has a heavy focus on increasing the use and severity of conditionality and sanctions. Mental health charities believe that this will be ineffective and potentially damaging for many people with mental health problems and learning disabilities. They fear that it could exacerbate the problems and have huge knock-on costs for health and social care services.
It is vital that mental health is a key consideration in the welfare reform process. Up to 40 per cent of all claimants are claiming primarily because of mental
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I will explain my concerns further by giving two examples. The first concerns those with mild learning disabilities who achieve some independence from their parents and who, despite a lack of educational qualifications and limited literacy and numeracy, may be found fit for work and put in the work-related activity group. However, it is notoriously difficult for people with a learning disability to find work. Only 7 per cent of those known to social services are in employment. The paradoxical worry is that if they are found fit for work, they could lose their independence. This is a concern that I have had much correspondence about.
What about someone with a mental health problem? A person with a mental illness may be more likely to obtain employment after a period in the work-related activity group than a person with learning disabilities, but the recurring nature of their condition may make it harder for them to stay in employment. People with less severe mental impairments can often derive huge benefit from relatively minor financial assistance. Focusing resources only on those with the most substantial and tangible impairments may seem intuitively acceptable, but the risk is that many with less obvious or less severe impairments will lose benefits which have helped to prevent relapse or social deterioration.
Understanding the variable impact of fluctuating conditions in mental health is important when considering each individual's eligibility for benefits. For example, one person with a mental health problem may find that for part of the time at work, their mood is low, that at other times they cannot concentrate or may be irritable, or that they may have to withdraw from their work setting to deal with auditory hallucinations. None of these experiences on their own may be severely incapacitating, but together they could be sufficient to affect their overall functioning in the workplace. There are real concerns about Jobcentre Plus and Atos assessing staff's knowledge and understanding of mental health conditions. Can the Minister reassure the House that staff will have sufficient training in mental health?
More than 40 per cent of current decisions from the work capability assessment are being overturned on appeal. We could ask whether this is the fault of the appeals process or, perhaps more likely, of the original
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You can imagine how difficult is it accurately to predict the sustainability of a work placement. Will the companies winning tenders to support individuals into employment, such as those that I have described, have a sustainability clause built into the contract? Without a commitment to sustainability, I think that the Government will find that this policy will prove to cost more in the longer term.
The Bill also looks to introduce regulations laying out how housing benefit costs can be integrated into the universal credit and how mortgage costs would be covered. Until recently, support for mortgage interest, the housing cost payment that people could receive under certain circumstances, enabled individuals with a learning disability, for example, to buy a property via the HOLD scheme-home ownership for people with long-term disabilities. Mencap is aware of around 1,000 people with a learning disability who have so far bought their homes through this route, but since last October this has in effect been closed down. I have brought to the attention of the Minister one case of a man with autism-there is no time to describe his circumstances-but the support for mortgage interest payment needs to continue to be available in the long term for those on income support or the equivalent under universal credit. I would welcome the Minister's assurance that the regulations will address this.
I urge the Government to think very carefully about the impact of these proposed reforms on the wealth of some the most vulnerable in our society. My concern is upheld by the recent Institute of Fiscal Studies report which shows that the effects of the reforms will hit the poorest in society the most.
The Lord Bishop of Leicester: My Lords, it was Archbishop William Temple, one of Beveridge's key associates, who first coined the term "welfare state". He asked how one could justify an individual giving up some of his or her autonomy to the state. He contrasted the welfare state, in which Government gained legitimacy from their commitment to the welfare of the people, with the power state, epitomised by the fascist and communist totalitarianisms of his day.
These concerns remain in the minds of many today, not least those of the clergy of a diocese such as mine in Leicester and on the outer estates, who daily see desperate people turn up on their doorsteps. The church is the last resort when the inflexibilities of the welfare system have proved insurmountable. They know that many are often in the position of needing help not because of inadequacy, stupidity or fecklessness, but because they have made a mistake, lost their job, become ill or because they are children. They also know that, as the most reverend Primate the Archbishop
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We on these Benches recognise the principles behind this Bill: they reflect a desire on the part of the Secretary of State to see true welfare reform improving the lives of the most vulnerable children and families. We understand the department's desire by means of universal credit to simplify a system that has become so complex that it is open to unintended mistakes and intended fraud. We endorse the principle that people's well-being is more effectively enhanced when they are in work, but today we must put the question: how far do these reforms measure up to a national moral responsibility to ensure the well-being of the most vulnerable? In that sense, what is at stake here is the legitimacy of the state because well-being means more than cash benefits: it is about social inclusion, the bonds of strong communities under severe strain in the recent riots and the ability to live fulfilling lives.
My primary focus today as a bishop and a former chair of the Children's Society will be on the effects on children who, by almost any measure, will be disproportionately affected by this Bill. We cannot go into a period of reform claiming to be all in this together while having our eyes closed to those who could be made homeless or could drop into the most severe poverty.
Let me raise, as other noble Lords have, some particular areas of concern. First, I underline what has been said about childcare costs. The Government want families with children to take responsibility for them by working their way out of poverty, yet it seems to me that these proposals will effectively make this impossible for many low-income families. Under the current system, the childcare element of working tax credit provides parents with support covering up to 70 per cent of eligible childcare costs up to a maximum of £175 for one child or £300 for two or more children. Significantly, because childcare costs are currently disregarded for the purposes of calculating entitlement to housing benefit and council tax benefit, some households receive help for up to 95.5 per cent of their childcare costs. The Government have presented a number of possible options outlining how to help with childcare costs, which will be integrated into the universal credit. We surely must have serious concerns that these options will leave working families facing substantial cuts to the help they receive for the childcare costs, leaving them worse off in work than under the current system. Can the Minister explain how he can guarantee that work pays for all families in view of the option to halve the current cap on eligible childcare costs?
Secondly, the proposed changes in support for disabled children will result in children with all but the most severe disabilities having their maximum level of support halved, leaving those families up to £1,400 per year worse off. Can the Minister help us clarify how the Government propose to support these families? Thirdly,
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Finally, there is the effect of an overall cap on benefits entitlements and on how local housing allowance is calculated for out-of-work households. The Government have estimated that this cap will cost those families affected an average of £93 per week. The DCLG has suggested that the cap could lead to 20,000 families being made homeless. Furthermore, the Children's Society has made it clear that the primary impact of this cap is not on adults but on children, with more than 200,000 of them affected. Can the Minister explain how this will help rebuild our communities and help people take responsibility for themselves and their children by getting back into work?
Time prevents the raising of other points today. We on these Benches have concerns about the aggregated effects of this legislation, taken alongside other changes to the National Health Service and to the legal aid system. The risk is that the reduction of financial deficit will threaten a huge social deficit, especially for the young. I hope this House will speak not just for the marginal people of so-called broken Britain but for the much greater numbers who fear the spectre of illness, unemployment and misfortune, who pay their taxes and rightly trust the state to prevent destitution. It is their voice, their fears, their understandable concerns that I hear regularly as a bishop and which I hope the Minister will attend to today.
Lord Brooke of Sutton Mandeville: My Lords, I congratulate my noble friend the Minister on the clarity with which he introduced and explained this remarkable measure, just as I thank his officials for the way that your Lordships' House has been briefed throughout, including in their information packs. I welcome the noble Baroness, Lady Hayter of Kentish Town, to the Front Bench on this auspicious occasion and I congratulate her too on her own notable speech. Finally, it is a pleasure to follow the right reverend Prelate the Bishop of Leicester. It is not the first time I have followed him on a matter about which he knows much more than I do, but we share an affection for cricket and his county and mine are currently inextricably involved in the concluding matches of the County Championship, which is a happy bridge.
Now, nearly half a century of Back-Benchers have a handful of minutes each to analyse and also to celebrate the principle of a Bill whose complexities necessarily are legion and yet whose central purpose is the achievement of maximal simplicity. So here goes, and the thread of my speech will be the case of a single individual, our late immediate neighbour in rural Wiltshire. There is a symmetry to this spotlight because I also mentioned him in my maiden speech 10 years ago next month, to which I shall return shortly.
For the first five years we knew him, in the last decade of the last millennium, he was an agricultural labourer in a tied cottage on our mutual hill, working for another farmer neighbour. He had left school at 14 and was a true countryman, not just in terms of wildlife and country lore, but also in knowing the names of all the fields and precisely when they had changed hands down the centuries. When I entered some damsons at our village show, he quietly told me that they were not damsons but really rare plums, but I was not to worry as the judges would not know the difference. He was the oldest man in our hamlet to have been born there.
Disaster struck when he was 56 and was let go by his employer on grounds of disability at the shortest of notice. He came to us with all his affairs to help sort out what next he was due and how he would cope. The reason I alluded to him in my maiden speech, which was in a debate on financial services, was that 30 years earlier, on a loan to buy a car, he had been mis-sold insurance to protect him against unemployment, which he was still paying off. That was rapidly sorted out without my ever guessing that there were another, as we now know, £200 million of other such cases lurking in the financial woodwork.
Wrestling with pages and pages of material from a social security office 12 miles away revealed cruces of opaque ambiguity sufficient to perplex someone who had been a Treasury Minister and an inner-city MP, let alone a troubled man who had left school 42 years earlier. Happily, another neighbour brought in a public-spirited farmer from 25 miles away, acting for the Royal Agricultural Benevolent Institution, who sorted the benefits out as swiftly as I had sorted out the loan, and between us we were modest if unconscious forerunners of the big society. However, it all took a lot of time, and I can think of many of my former constituents who would have been defeated by a similar predicament to that which he faced. In our local case, the outcome was resources to help him in his disabled retirement, which were comfortable and reassuring. The principle of this Bill is to achieve the same result in a more streamlined and comprehensible way and, in the process, incidentally to create savings which can in the fullness of time be invested in public benefit.
Of course the battery of briefing we have received from outside honourable interested parties would make a colander of this instrument if all the concessions necessary for perfection were to be made. I appreciate that some will say that it is the wrong moment to try when financial resources are short, but we British are over-good at thinking of reasons for not doing something, the doctrine of unripe time being deep in our own DNA. Yet there is an obverse to that converse, since simplification will bring savings that in turn will bring nearer the time when we can afford the extra to do more. In the mean time, the Committee stage lies ahead of us for constructive ploughing. We shall not enjoy the sad dilemmas we are going to be told about, but I hope that we can treat as our watchword-as I sought to do when our neighbour was in the toils-that which the late noble kinsman of the noble Viscount, Lord Slim, who was here earlier, sagely repeated again and again in his remarkable Fourteenth Army tome, Defeat into Victory, that no news is ever as good or as bad as it first appears.
I would like to ask my noble friend the Minister to expand in his wind-up-in this respect I am following my noble friend Lord German-on the plusses and minuses of the computer scenario in support of this legislation. I chaired the government working party planning the government data network back in the 1980s, and I appointed the man who was Oflot to choose the architects and contractors of the National Lottery. I was always sorry that his initials were not AER, as he could have become Aeroflot. I remark on the bonus that we derived from the fact that the man we chose to lead the building of the government data network was later chosen by Oflot, with zero involvement of myself, to build the lottery, so we had the advantage of his having been through the previous experience. I am not pressing my noble friend for more than an update, but I think that your Lordships' House will be the beneficiary if he were to do so. In the mean time, I shall not seek to be a barometer of his progress or of the legislative process, always remembering the moment when Anthony Eden's father, an irascible rural baronet, came down to breakfast one morning when it was sheeting with rain outside, tapped the barometer which was set at "very fair", and threw it through the French windows with the words, "Go out and see for your something self".
Finally, I return to our neighbour, who in due course went into hospital and into sheltered accommodation, where we continued to visit him until he died. His tied cottage's status was properly liquidated and its site value on the top of the hill went for nearly £300,000, which I hope my noble friend the Minister can regard as a happy omen. My one regret is that he did not live long enough to hear this modest narrative about him. Of course this Bill warrants profound scrutiny, but its principle also deserves our thorough support.
Baroness Hollis of Heigham:My Lords, I very much support the principle of universal credit. It was put in the "too difficult" box when I was a Minister and I think we can all see why. The benefit system was built in the Beveridge world where, as long as the man held on to his full-time job and his wife held on to him, the family was insured. To his contributory benefits were added, over time, category benefits for disabled people or children; means-tested benefits for emerging groups such as lone parents or emerging needs such as housing benefit; and, more recently, the different structure of tax credits.
The result is that most benefits and credits have different income thresholds, different taper rates, different back-dating rules, different eligibility criteria, different linking rules, different passporting arrangements, different savings caps and different payment patterns. Not surprisingly, therefore, we have error, fraud, underclaiming and overlapping built into the system, to say nothing of complexity, confusion and high administrative cost. The result is that it is a full-time job being poor. We need a robust, easily understood structure that reduces the risk while increasing the reward of working as the most effective route out of poverty. I am hoping that the universal credit will deliver this.
The issue is not the unemployed, three-quarters of whom are back in work within a year, but the economically inactive-the lone parents, people with some disability-who linger far too long on benefit. Will universal credit make it easy for them to work? You need self-confidence, resilience and a modest cushion of security to afford risk. Most lone parents and many disabled people quite sensibly prefer the security of a guaranteed low benefit income to the risk and uncertainty of somewhat higher wages should either their job or their health fold, which would then require an exhausting struggle to get back on to benefit while only two tins of baked beans remain in the cupboard. We must reduce risk. We do not need to whip people back into work. That is a complete fabrication. We need to strengthen their confidence to risk work and to seek it by removing the penalty for failure. I believe that universal credit can do this.
Obviously, we must make work worth while. Any work must pay, not as now when so many lone parents find that working between three hours and 16 hours on minimum wage loses every pound-even though a 10-hour job cleaning caravans, picking mushrooms or working in the launderette may be just what she and a would-be employer want. Beveridge's world of either "work and wages" or "not in work and contributory insurance benefits" has now become one where many people much of the time, and most women most of the time, will need both work and benefits-dials, not dichotomies. Again, universal credit's structure can do this for us.
I very much support the concept of UC. Like the noble Lord, Lord Brooke, I thank the Minister particularly for the care that he has taken in his seminars and his briefing papers. In best "Yes Minister" style, I congratulate him on his bravery, as well as his tenacity, in bringing it this far. It needs doing-it really does. We must reduce the risk as well as increase the reward for work by simplifying and recasting the structure. But, and alas it is a big "but"-this reinforces the point made by my noble friend Lady Hayter, in her admirable speech-the architecture is being undermined by the cuts agenda and we risk UC failing.
I shall give some examples. First, as regards second earners, we know that in one-third of poor families he is in work and she is not. Her second wage could lift them all out of poverty and, in a world of increasing flexibility and part-time jobs, it is misguided to use UC to get him to work even longer hours, which are probably not available, or to discourage her from work because UC has higher deduction rates for second earners. It is not sensible. It keeps them in poverty. It does not fit the labour market and discourages a better work-life balance between them. UC needs to follow the choices, not constrict them. Incidentally, any lone parent in part-time work who repartners is relegated to second-earner status and loses money. Either she will not declare it, which is fraud territory, or she will not repartner and her lone-parent status continues. It is not sensible.
A point on childcare has been made by several noble Lords. Helping more people is good but, within a cut or a capped budget, those working longer hours will find that their work is unaffordable. I accept that
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As regards the changes to housing benefit, HB must be regularly reconnected to the 30th percentile of market rents because rents are rising far faster than CPI. I care particularly about the shared room rent housing benefit. A woman of 33 living in a one-bed flat who loses her job will potentially lose her home. It will double her stress as she spends time looking for a room which is safe, rather than searching for a job, which she needs. That, too, cannot be sensible.
Let us take savings, which several people have mentioned. Today, you lose JSA if you have savings over £16,000. With tax credits there is a notional income instead from your savings and no cap. With UC, the Government are going for the lowest common denominator, as in so many fields. If you are new to part-time work, you will get no help from UC until your savings have been run down to £16,000, and probably lower than that. So why save? Instead of savings giving you resilience and protection against risk, we have made saving itself risky-the exact opposite of what we are rightly doing with pensions. That is not sensible either.
ESA is to be means-tested after a year-not just on a man's income and savings, but on that of his wife, who perhaps is a part-time carer and part-time worker. What would noble Lords do, if they were her? You would either cut your hours or drop out of work altogether, rather than see his benefit withdrawn. Then, you would both enter retirement the poorer. We have increased the risk of her not working, which is the reverse of what UC intends. That is the trouble with a household means test for UC. It makes entirely good sense for the young, unemployed couple on HB but, if a member of the household becomes disabled, after a year financial support for him is almost literally paid for by other working members of his family. That can destroy families, which no one wants.
Finally, there is the helpful input of the DCLG, requiring social landlords to fund the new building programme by increasing rents substantially, thus probably adding £2 billion to the DWP's housing benefit bill. At the same time, the DCLG is undermining the work incentive by pushing out better-off tenants. We have increased rents, increased insecurity, reduced work incentives and a higher HB bill-really helpful of the DCLG-and then it is a complete idiocy for it to localise and cut council tax benefit, undermining universal credit rules. It sends an Exocet through UC. With friends like the DCLG, who needs an Opposition? I suggest that the Minister explores a useful trade-off-that he drops the benefit cap, which the DCLG and most of us do not want; and the DCLG in return drops the localising of council tax, which the DWP and no one wants. The Minister would have the better bargain.
I want UC to work, but unless we can rectify these issues in Committee, we will have badly damaged the two drivers behind UC: removing the risk and increasing the reward of working. Then we will be back exactly where we are now.
Baroness Thomas of Winchester: My Lords, I begin by saluting my noble friend Lord Freud and his colleagues, who have been determined to take the issue of making work pay for benefit claimants out of the "too difficult" in-tray and to create the universal credit, which is the engine driving the rest of this seven-part welfare reform train. To mix my metaphors, I just hope that the ship will not be spoilt for a ha'p'orth of tar and that some crucial matters will be addressed, such as childcare and children's disability additions.
In view of the number of speakers in today's debate, I shall concentrate on the personal independence payment, although I would like to have touched on the time limiting of ESA and the benefit cap, two matters about which I have profound concerns. Turning to PIP, as I shall call it, I do not intend to say anything at this stage about those in residential homes because we know that there is to be an internal review. In general, to say that many thousands of disabled people are fearful about the replacement of DLA with a new and supposedly better targeted benefit would be the understatement of the year. This is not surprising given the Government's stated aim of wanting to save £1.45 billion in DLA/PIP expenditure by 2014-15.
I have been as critical as anyone about the process for claiming DLA, which involves the completion of a long self-assessment form-here I declare an interest because I receive the benefit. Although supporting reports from a doctor or consultant are supposed to be taken into consideration, they often seem to be ignored-I can give chapter and verse on that. The Government believe that the cumbersome process of self-assessment has meant that a great many people who should not be receiving the benefit are managing to claim it. However, I do not believe that anyone knows the true position, which presumably is why the Government want to reassess everyone. What we do know is that the vast majority of people who receive DLA find that it has made all the difference to how they live their lives, and I think that the Government are in danger of overstating the negative aspects of DLA. The form certainly needs to be overhauled and I am in favour of more face-to-face assessments, as long as they are undertaken by well-qualified and sympathetic people.
What is more than a bit chilling is, in the Government's own phrase, that PIP is to be "better targeted". That has the ring of means-testing about it, which we know is not the case. It also smacks of having a rather crude pecking order of disability, which could mean that people who genuinely need the benefit will be excluded. If we are living longer and more independently with our disabilities-hurrah for that-it is inevitable that spending on disability benefits will rise. DLA started in 1992 for in-work as well as out-of-work claimants, so year by year more people will be eligible as more disabled people live beyond retirement who started claiming well before retirement. There is no question that fraud, or even semi-fraud by people overstating their incapacity, is completely unacceptable and must be rooted out, but I fear that in future too many genuinely disabled people are likely to fall through the net because of the narrower criteria for PIP.
I find the whole question of aids, appliances and adaptations in relation to PIP puzzling. If you use an aid of any kind, does it mean that you do not need any extra funds to help you live your life? While you may have adapted to your situation by having, say, a manual wheelchair to get about, you cannot wheel yourself for miles-although perhaps the noble Baroness, Lady Grey-Thompson, can-and you might still need to lease a Motability car to which you are entitled using your higher rate mobility component, or you may need the money for adapted taxis. Many trains are still not fully accessible to wheelchair users and will not be so for many years. Underground stations are inaccessible, as are many other train stations throughout the country. As for buses, the service is so hit and miss that it has to be discounted. I know there are many adaptations which have nothing to do with mobility, such as hearing aids and guide dogs, but I shall concentrate on mobility aids because I know that there is a view that some manual wheelchair users may not get PIP, and because I know that the new rules for the work capability assessment are able to take mobility aids into account-quite misguidedly, I think, because of the lack of facilities for disabled people in many workplaces. I should be interested to hear why the aids, appliances and adaptations a disabled person uses might disqualify them from receiving PIP.
On assessments, I fear I may part company slightly from some of the disability organisations that have briefed us. Of course, it is vitally important to the DWP to use the social model of disability in its assessments, which, quite rightly, means that disabled people are not defined by their disability but assessed by how they live their lives. However, I also think there is a place for a person's medical condition to be acknowledged during the assessment. For example, one of the characteristics of muscular dystrophy is tiredness, particularly towards the end of the day; another very different disability with distinctive characteristics is autism, which could be mistaken for an unco-operative attitude during an assessment. If medical experts write reports drawing attention to the particular characteristics of certain conditions, those should be taken fully into consideration during an assessment. I do not think contracts have yet been awarded to a company to carry out the assessments, but some recent reports of current DLA assessments are not encouraging. The Muscular Dystrophy Campaign has told me that, in the last month, 43 per cent of all advocacy cases that it received were about unfair DLA decisions, which are having to be appealed. I am not speaking at this point about the WCA-the two assessments are quite different, although a lot of people think there is a read-across.
Finally, I urge the Government to consider two other matters. First, PIP should be available in certain circumstances to those who become disabled after the age of 65, for example as the result of amputation. Secondly, PIP should be granted after three months rather than six. Many people suffer from sudden-onset
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I am grateful that PIP will still be a non-means-tested and non-taxable benefit. I know the Government are still listening to our concerns and that the Minister is as good a listener as anyone. I look forward to the future stages of the Bill.
Lord Rix: My Lords, it is important for the Government to recognise that any reform of the welfare system and tackling of the deficit should not be at the cost of undermining the ability of disabled people to live independently. The concerns I will refer to during my speech will be applicable to many disabled people but particularly to those with a learning disability, and I think at this moment it is appropriate to mention that I am the president of the Royal Mencap Society.
I intend to focus my comments on the Government's proposals to replace working-age disability living allowance with the personal independent payment. The Government have declared that PIP will remain a benefit to support,
However, I and many disabled people fear that this most welcome announcement may be somewhat economical with the truth. Prior to the decision to reform DLA, your Lordships may recall that there was an announcement in the June 2010 Budget that the Government intended to make significant savings on future spending on the benefit of some 20 per cent. George Orwell's gloomy prediction in 1984 may be true after all:
In February 2010, Mencap published the findings of a survey it conducted, which asked people with a learning disability how they use the DLA and the difference it made to their lives. Some 84 per cent of nearly 1,000 respondents spent some or all of their DLA on paying for various forms of care and support, including help around the home and support for leisure activities and transport needs. Seventy-one per cent of all respondents also said that DLA made a huge difference to their lives in providing them with the support they needed.
The tightening of eligibility criteria for social care means that many people with a learning disability who currently claim DLA receive no support from their local social services-a situation that is getting worse as even more local authorities decide to reduce the numbers eligible for support. My particular concern is for those people who may be hit twice, missing the threshold for social care and potentially losing eligibility for PIP at the same time.
The Government have also stated they will focus on those with the greatest need, which on the face of it seems perfectly laudable and a worthy intention. However, as I wrote to the Prime Minister on 24 June:
"The Government's focus on those disabled people with the greatest need also risks excluding many disabled people who still face additional costs associated with their disability. People accessing
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Although the figures remain unclear, Disability Alliance UK has estimated that over 750,000 disabled people could lose support as a result of the 20 per cent cut in expenditure, based on the assumption that care support for the lower rate will be abolished.
I trust that the PIP assessment will be better, for the work capability assessment has already proven to show disadvantage towards less apparent or hidden disabilities, particularly for people with a mild or moderate learning disability, whereby the level of help and support they need for day-to-day living can be difficult to determine.
However, like many other noble Lords, my principal concern with this Bill is the proposal to remove the mobility component of the PIP from those people living in local authority-funded residential care. While the Government's announcement that they intend to delay the implementation of this policy until March 2013 is a step in the right direction, I do not feel it goes anywhere near far enough. Under Clause 83-which I and others, I am sure, wish to see amended-disabled people living in residential care could have their mobility payments taken away. As regards the way in which mobility needs in residential care homes are met, the Government claim that the rationale for removing PIP mobility is,
However, while this may seem welcome, your Lordships should be aware this is an internal review, with no terms of reference, no call for evidence, no sessions in public and no opportunities for the public and interested parties to submit evidence. The Government have also announced that their findings will not be published in public and there is no publicly available information about the review and its remit. I fear that the era of open, transparent and accountable government in the heart of Whitehall is still in Never Never Land. Fortunately, my noble friend Lord Low is conducting his own independent review into this proposal, with the secretariat provided by Mencap and Leonard Cheshire Disability. No doubt the noble Lord will explain all
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While there are many other areas of the Bill on which I could have expressed my concerns, including housing benefit reforms, I am going to finish-especially as my voice is going. However, I am sure that your Lordships will refer to some of these during your speeches. It is clear that as matters stand, unintended consequences of the Bill could have severe implications on the quality of life for many disabled people in this country. I therefore urge Ministers to listen to these concerns and, of course, to respond accordingly.
Lord Mackay of Clashfern: My Lords, I have great admiration for the Secretary of State and his Ministers, not least for my noble friend who is the Minister in this House. I am delighted that they have tackled the difficulties of the welfare system and glad that, in principle, the noble Baroness, Lady Hollis of Heigham, who has great expertise in this matter, has embraced that principle. However, there are of course many details in the application of that principle which demonstrate why it may have been wise in her day to have it in the "too difficult" section.
I intend to speak about a matter that is only marginally connected with the Bill. It depends primarily upon inherited legislation. My right honourable friend the Prime Minister recently roundly criticised people who were non-resident parents-he referred to them as "runaway dads"-and who simply refuse to face up to their responsibilities to their children, leaving single parents who, as the Prime Minister acknowledged,
to manage alone. Their plight is not new. In my early years as Lord Chancellor, now rather a long time ago, I received many calls for help from mothers who had court orders for maintenance for their children but could not enforce those orders because they could not find the defendants.
Eventually, in association with my noble friend Lord Newton of Braintree, legislation was introduced and passed as the Child Support Act 1991, which set up the Child Support Agency. Sadly, it did not perform well. After the change of Government, I happened to be travelling with Alistair Darling, whom I regard very much as a friend. He said that the formula which we were using was too complicated and that it would work better with a simpler formula. Over the years, successive Secretaries of State have tried to improve the performance of this vital service. My understanding of the present Government's policy, as exemplified by Clauses 131 to 133 and inherited legislation in force, is that demand for this vital service should be reduced and that, to this end, charges should be made on those who resort to the service-both initially and if they use the collection system.
I am entirely in favour of parents who have encountered difficulty in their relationships, for whatever reason, trying really hard to resolve the maintenance of their children amicably. Any support that the Government can make available to that end is to be welcomed. Sadly, there is a hard core of parents who will do
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Debating the Bill will give us an opportunity to bring in amendments which deal with this, but I cannot see that the present policy is fair to the parent left with the responsibility. For that reason I hope that we will have an opportunity of reviewing this matter in Committee, because, of course, the idea of charging is not exactly new. We have to deal with something that is, to a certain extent, already legislated for.
Baroness Morgan of Drefelin: My Lords, like many in this House, I, too, support welfare reform. I accept that it is very difficult indeed and I am keen, like others today, to do what I can to promote an important debate on the Bill and to ensure that, following the passage of the Bill, there are no unintended adverse consequences for the quality of life of those that it seeks to serve. In particular, like the noble Baronesses, Lady Hollins, Lady Hayter of Kentish Town, and Lady Hollis of Heigham, and, of course, the noble Lord, Lord Patel, in his very important letter in the Times yesterday, I am very concerned about the intention to introduce a one-year time limit on contributory employment and support allowance for those in the work-related activity group and the proposed increase to a six-month qualification period for the personal independence payment, alongside an additional six-month prospective test, which is, of course, as we know, an increase on the three-month qualification period for DLA. For the record, I declare an interest as chief executive of the research charity Breast Cancer Campaign and, like many here, I have a very strong personal interest, as a carer myself, in the welfare of cancer patients.
When considered together, the introduction of a time limit on contributory ESA alongside the six-month qualification period for personal independence payment seems almost to create the perception that there is, perhaps, only a brief window of time in which disabled people not in the very tightly-drawn support group require support. This, I believe, is very far from reality. These are two vital benefits with the time limits or the requirements being either introduced or becoming more significant at different ends, time limits for which it is hard to comprehend the rationale and where there appears to be limited understanding of the implications.
On looking at the limit on contributory employment and support allowance, the Minister has said that he believes it is not appropriate for employment and support allowance to be a long-term benefit for those in the work-related activity group. As the replacement for incapacity benefit, it was intended to be so only for the most severely ill or disabled people placed in the support group, for whom work is not a viable option.
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As we have already heard from noble Lords in all parts of the House, Macmillan has done an excellent job in setting out the barriers which people with cancer face and which impact on their ability to return to work, although, of course, many try very hard to do so. The physical and psychological effects of cancer and its treatment are well known in this House and include pain, fatigue, often nausea and fever as well as all the additional costs involved in living with cancer, such as the costs involved with treatment, attending hospital, parking, which is expensive, and transport to attend hospital to undergo radiotherapy. These costs are all well understood by noble Lords. The majority of cancer patients need continuing support beyond a year, so who will miss out in the future? Macmillan Cancer Support has said that 75 per cent of people with cancer need the support provided by ESA for longer than 12 months and that a cancer patient could lose their employment and support allowance benefit when it becomes means tested if their partner earns more than £7,500 a year. These are very worrying points.
In addition, the initial qualifying period will increase from three months under disability living allowance-many noble Lords have touched on this-to six months under the personal independence payment scheme. Are we saying to people that they will not be considered sufficiently in need of help with the extra costs arising from disability to qualify for the personal independence payment within the first six months of the need arising despite there also being a requirement to meet a six-month prospective test? What is the purpose of extending this qualifying period from three months for DLA to six months for PIP? The Government have not been very clear about that, although I will read the Minister's speech very carefully. The Government have suggested that the rationale behind extending this six-month wait is to bring eligibility in line with the long-term definition of "disability" under the Equality Act 2010. However, if we look at the definition of "disability" under the Act and the subsequent regulations, this justification does not stand up. While it is the case that for the majority of disabled people covered by the definition of "disability" in the Act there is a need to meet a long-term test, paragraph 6 of Schedule 1 to the Act, headed "Certain Medical Conditions", states:
That is a strict definition. This provision by which people with cancer are automatically deemed disabled in accordance with the Act is confirmed in the guidance to the Act as well. That guidance states:
"The Act states that a person who has cancer, HIV infection or multiple sclerosis (MS) is a disabled person. This means that the person is protected by the Act effectively from the point of diagnosis".
Will the Government review the eligibility for PIP for people with cancer and other sudden onset conditions? If there must be a qualifying period, at the least a move towards a three-month initial qualifying period followed by a nine-month prospective test seems more humane and more people focused. As the Minister said in his eloquent opening remarks, our aim should be to focus less on arbitrary process.
Finally, I wish to raise a concern that has been raised with me by CLIC Sargent about the impact of the disability living allowance reform on 16 to 18 year-olds. We must not lose sight of the needs of young people in this age group with cancer. Can it be right that young people in this age group are being treated as adults in the move to the personal independence payment? We need to remember that DLA is at present the only benefit available to young people with a health condition such as cancer, whatever their situation. They, of course, are much less likely to have the financial independence that adults may have. I hope that the Government will think very carefully about reviewing the position of young people with cancer.
Baroness Tyler of Enfield: My Lords, I support many of the objectives of the Bill, in particular the Government's stated aim of simplifying the current, highly complex welfare benefits system and increasing fairness within it. I fully accept that for most people work is the best route out of poverty and that work must pay and be seen to pay. Therefore, I welcome the simplification of the system that will result from the introduction of universal credit and congratulate Ministers on the progress that they have made so far.
That said, I have a number of serious concerns about the impact on families and children of the changes to the benefits system, particularly the hardship that they will create for some of the neediest and most vulnerable. As with any changes to a hugely complex system, some of the consequences may be unintended, but-from my reading of the Bill-others are part of the policy intent. For this reform package to achieve widespread support it must both look and feel fair. I want to highlight, therefore, some areas which I think are socially unjust and seem to fly in the face of the Government's other commitments to be family-friendly, to reduce child poverty, to tackle intergenerational disadvantage by early intervention and to promote social mobility.
There are many areas that I should like to talk about but in the limited time available I shall focus primarily on the impact of the benefit cap on children and families. This policy is designed to ensure that a household on benefits does not receive more income
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At the level at which the cap is currently set, there are serious risks in the policy which may not be properly understood and which have so far received too little public debate. What are the facts and figures? Of the 50,000 households whose benefits will be reduced by the policy, the majority will be families with children-often large numbers of children-and those who live in areas where housing costs are high. The Children's Society, whose work is highly respected, recently estimated that the number of children affected could be more than 200,000, and that 80,000 children could be made homeless. Thus the cap will have a disproportionate impact on children. How can this be fair?
It is instructive to look at the nature of the households most likely to be affected. Broadly speaking, they are one-third couples and two-thirds single women-generally single mothers. Ninety per cent have children and 60 per cent will have more than four children. What type of communities will be most affected? Certainly, people living in places such as London, where housing is more expensive, will be affected, as will some religious and ethnic groups, as they tend to have larger families, and people in private rented accommodation. What is likely to happen as a result of the cap being set at this level? Families will be far more likely to have to move abruptly to cheaper areas, which risks children having to move school, possibly in the middle of the year, thereby disrupting their education and their current support networks. Families could end up splitting up-they may indeed decide to create two households instead of one, as both parents would then be entitled to up to £26,000 in benefits.
Two groups yet to be mentioned are foster carers, who perform such a socially valuable and vital role, and kinship carers, who might be an aunt or an uncle taking in a child from another member of the family to avoid the child having to go into care, with all the trauma and expense for the state that that creates. These people, too, may be disadvantaged. I understand that the Government are planning to make special provision for foster carers to recognise their unique role, and I look forward to hearing the details from my noble friend the Minister, particularly in relation to housing costs.
Families who can will continue to pay their rent, of course, but they will have less money to spend on food, clothes and other essential items. Families who will not be able to pay the rent may be evicted and become homeless. Children are a priority group for council housing, so that will lead to pressure on temporary accommodation. There is also a very real danger of at-risk children simply disappearing from the scene. That, as we all know, has real child protection and safeguarding issues. I would very much welcome hearing
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Finally, there will be a reduction in mixed communities, as poorer families are moved out of expensive areas. That is particularly likely to be the case in London. That may lead to social segregation between the rich and the poor which would be worrying in terms of social cohesion and pressures on public services in some poorer areas.
In summary, the cap as currently set impacts disproportionately on children, large families, women and various black and ethnic minorities. The last two groups, as we have already heard, are already having a tough time in a tough jobs market. A little discussed fact that has not been raised so far is that the benefit cap will affect couples substantially more than lone parents. Indeed it could damage incentives to enter into new relationships-for example, for two new lone parents thinking of living together and setting up a household-and it could risk breaking up families, a matter very close to my heart as chief executive of the charity Relate, which is a declared interest, and to the heart of the Government. Surely this couple penalty is an unintended consequence of these reforms. I welcome hearing the Minister's response on that point.
Like others, I am deeply concerned about the reduction in financial support to an estimated 100,000 disabled children under the universal credit, to young carers where a child is trying to look after a sick or disabled parent and the proposed reduction in support for childcare. There is no time for me to go into any detail. I would simply say, as other noble Lords have said, that support with childcare is a hugely important issue, particularly for those on benefits who need to enter the jobs market at this difficult time.
There are a number of ways in which we can mitigate some of the concerns that I have highlighted in relation to the benefit cap, particularly the level at which it is set. Those would include calculating the figure using average earnings of families with two or more children, various grace periods and transitional arrangements, perhaps linking the cap to levels of conditionality set out in the work-related requirements of the Bill and perhaps exempting certain benefits from the calculation of the cap. I look forward to hearing my noble friend's response to these points.
Baroness Campbell of Surbiton: My Lords, we have a mighty task on our hands. I apologise for not staying for the marathon of this debate and I thank the House, and especially the Minister, for letting me go home to bed early.
None of us are in any doubt that the welfare system is in need of reform, but we must do it with care. We have to do it with wisdom and, more importantly, reliable information-people's human rights depend on it. It is my greatest hope that this noble House will do its very best to scrutinise and amend the Bill away from ill considered political demands and media pressure.
The Minister, the noble Lord, Lord Freud, has definitely demonstrated his desire to create a welfare system that enables all kinds of people to live with
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I should declare an interest as a DLA recipient. During the past 30 years, DLA, which in the olden days was called attendance allowance and mobility allowance, has enabled me to pass many milestones. Without it I would not have attended university. I used it to pay the cleaner to get me up in the morning and to put me to bed at night. That was the only allowance I had. I used it to get a job and to stop living with my parents-in short, to live independently. Along with millions of other disabled people, I will be affected by this Bill. The allowance was given to me for life and I am about to have my assessments again-I already have 25 other assessments. That is something to look forward to.
If disabled people are to be independent and take on responsibilities like work, they must be given an equal playing field. Equality legislation alone will not provide this. Providing financial support to disabled people to be equal citizens has been a fundamental principle demanded from successive Governments over my lifespan. It has lifted us from being passive recipients of care and welfare to independent people with life opportunities. It is a cultural shift that has resulted in fulfilling relationships, education, work and greater happiness for millions of British citizens.
Something must be desperately wrong to cause these same citizens to write so many letters and e-mails to Members of this House, begging us-yes, begging us-to reconsider the proposed replacing of DLA with personal independence payments. We reform to make people's lives better. So are they right to feel so scared? To be honest, I still do not know. There is so little detail regarding this reform.
Last week, I joined colleagues on the Joint Committee on Human Rights for a visit to Essex Coalition of Disabled People. The visit was part of our inquiry into independent living for disabled people, which will provide a good measure for this reform.
ECDP is a large, regional, disabled membership organisation, a centre for independent living. It has a remarkable record of involving and listening to large numbers of disabled people. It tailors its services to respond to the needs, wishes and experiences of those disabled people. One if its members, Hazel, was able to give the JCHR insight into the fears produced by the changes proposed in this Bill.
Hazel described her life as funded by a fragile construction of different benefits, a personal budget and voluntary support. She believes she is in danger of losing her higher rate DLA under the new proposals. She told us, "My life is like a house of straws. Once
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Let us start with the term "personal independence payment". What does this mean? Can the Minister tell me whether his Government see independence as a medical barrier for assessment or a socioeconomic barrier? From what I have gleaned so far, the PIP assessment is largely a functional assessment of one's medical condition. It bears little relation to what many disabled people need to live independently, and largely ignores higher costs of living.
Physical or mental capability has only a small bearing on whether a disabled person is dependent or independent. For independent living to be a reality, a person needs choice and control in their life. Disabled people make choices about how to spend their DLA, demonstrating maximum control over their lives and thus becoming independent. For instance, the mobility component is not just about physically getting from A to B. The money might be used to pay for travel insurance, which can be astronomically more expensive for disabled people than for the non-disabled traveller, thereby inhibiting their mobility. Who on these Benches paid £1,500 for travel insurance to go on holiday this year? I did. That is the average extra cost that people with severe respiratory impairments must meet to go abroad. Assessing functionality can never determine economic inequality.
I ask the Minister to reconsider comments that he made during the 11 May debate on the new PIP assessment. He said that a person climbing Mount Kenya on prosthetic limbs should not be treated as disabled, for they are doing something that many of us cannot do. That is an extreme example, but it can be understood in two entirely different ways. I am sure that it was intended as a compliment and an acknowledgement of personal achievement. However, it tells us nothing about the additional costs of disability that people living with amputations must meet. Some amputees experience periods of excruciating phantom pain during which they are unable to work. Others experience extra costs in the form of transportation and housing adaptations. I am not sure whether the Minister believes that one can cease to be disabled by physical prowess alone.
Many consider appointment to this House to be evidence of accomplishment. Is that sufficient for the Minister to determine that I, too, am not disabled and therefore do not need DLA? Of course not-but that is what the assessment is in danger of leading us to. I do not wish to embarrass the Minister, but I will assure him that DLA has been, and continues to be, vital in enabling me to live independently and work towards my goals. Personal achievement must never be a yardstick against which we measure entitlement.
From my mailbag, it is obvious that many disabled people expect to lose their independence. Do the Government believe that returning disabled people to levels of dependence last seen 30 years ago makes good economic sense? Disability Alliance and other
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DLA reform, including the review, has not been co-produced with experts such as the National Centre for Independent Living. The Government have elected to revert to old forms of consultation, merely inviting contributions from such organisations rather than working together. The noble Lord, Lord Rix, expanded on this. I ask the Minister to read again the Government's independent living strategy. Disabled people know better than anyone the solutions to overcoming barriers to independent living and providing a good assessment framework. I ask the Minister to consider re-establishing the DLA/PIP advisory group that was sacrificed during the bonfire of the quangos. Noble Lords will remember the Government's disability rights task force that developed the most successful and significant disability legislation of this century: namely, the Disability Discrimination Act. Without the structure of co-production, I fear that we will be locked into arguments rather than shared solutions.
As I have run over my time, I will finish by saying that the term "personal independence payments" is disingenuous and should be discarded. It is obvious from the PIP proposals so far that the Government know very little about independent living. "Disability living allowance" describes the benefit well. It is about living. Let us keep the title-and keep living.
Baroness Wilkins: My Lords, I, too, declare an interest as I have received DLA since its inception. Luckily, having reached the age of 65, I will escape the Government's proposals for the time being. When I became disabled in the mid-1960s, just about the only disability support on offer to take part in everyday life was an invalid trike-the blue Noddy car. For me, that symbolises what was then the extent of expected integration. Little was expected of disabled people and unless your family had money and resources you led a very limited life. Disabled people had low expectations and were not much in evidence.
Over the following years, political pressure slowly increased with the rise of the disability movement and the range of support needed by disabled people to become contributing citizens began to be addressed. The Noddy trike morphed into the mobility allowance, then into DLA, which added personal care, and that developed into incorporating people with communication needs and learning difficulties, lacking arm movement and so on, until most recently when blind people became entitled to the high rate for mobility and care.
That support is what has enabled disabled people to work and contribute to their communities. It is why you see disabled people on the streets, living independent
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That awareness is sadly lacking from this Bill, as we heard from the noble Baroness, Lady Campbell, just now. As all noble Lords' post bags and mail boxes have shown, disabled people live in great fear of it being enacted. There are many issues concerning the introduction of PIP which we will need to return to in Committee. For now, I draw attention to just one, in Clause 79. That proposes to double the current qualifying period for eligibility for support from three to six months. The Disability Benefits Consortium is concerned that this will diminish the preventive impact of DLA, pushing many more people into debt as they try to manage the costs of their impairment. As the noble Baroness, Lady Morgan of Drefelin, so eloquently pointed out, Macmillan Cancer Support and other cancer organisations are particularly concerned that it will have a devastating impact on disabled people who have sudden onset, long-term conditions such as cancer, stroke and spinal cord injury.
The first six months of these conditions can be the period when extra costs, especially for travel and parking for treatment and family visits, are greatest. Specialist treatment centres are often far from patients' homes. Macmillan Cancer Support cites a cancer patient in Devon who regularly had to travel 125 miles for radiotherapy. The Minister for Disabled People has made it clear that the proposed change in the qualifying period is not financially driven but to align the definition of long-term disability in the Equality Act. Will the Minister reconsider allowing people with certain conditions, who face the sudden onset of a disability and immediate additional financial costs, to receive an early assessment for PIP?
There are so many aspects of this Bill which will have a disproportionate impact on disabled people and I hope to take a full part in Committee in trying to alleviate them. For now I will concentrate on the proposals for housing.
The Bill's proposal for a household cap on benefits comes in addition to the local housing allowance caps being introduced from this year. As we have heard, according to leaks from the DCLG, officials estimate that this will make 20,000 families homeless, forcing people to move away from their support networks, moving children from school and pushing families to places with lower rents-lower rents because there are fewer jobs.
This second wave of cuts to housing benefit will undermine the housing safety net for people who lose their jobs and need temporary financial help so that they do not lose their home as well. It will affect people who are working, but who are on very low incomes, as well as those unable to work, and that, of course, means that it will disproportionately affect
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There are harsh new size criteria on all working-age tenants in social housing who receive housing benefit. The Bill allows the Government to reduce the amount of housing benefit to people of working age in social housing if they are considered to be underoccupying their property. The callousness of these criteria is chilling. Each person or couple living as part of a household would be allowed one bedroom, except for under-16s of the same gender and under-10s of different genders who would be expected to share bedrooms. If the household is judged to be underoccupying its home by one bedroom it would lose 13 per cent of its housing benefit, but it would lose almost a quarter- 23 per cent-for two or more bedrooms.
Think what this means for couples who are in ill-health and are having disturbed nights from severe pain, constant coughing or laboured breathing, when the only thing that keeps that relationship from breaking is the possibility of a night's sleep. Two-thirds of the people who will be affected are disabled, which is almost 500,000 people, according to the equality impact assessment. With disability come large items of vital equipment: mobile hoists, bulky wheelchairs and their spares; exercise equipment; oxygen storage; and boxes of incontinence supplies. Where are they to be put if a couple has just one bedroom? What of disabled people who need an overnight carer? Is the carer expected to sleep on the floor? It is estimated that 100,000 of the disabled people who will be affected currently live in homes that have been specially adapted for their needs. If they are forced to move, new adaptations would have to be paid for, if they are not to be homeless, so what saving would the Government be making from this measure?
I believe that disabled people have every reason to fear this Bill. Its most alarming aspect is the Government's willingness to risk the consequences of such a massive change. With their heavy reliance on secondary legislation, they cannot know the full impact of their proposals or how they interact with each other. We know from the equality impact assessments that disabled people will bear a disproportionate amount of the cuts and that no mitigating action is proposed. I hope that we can take that action in Committee.
Lord Wigley: My Lords, I hope the Minister heard and took to heart the two immensely informed contributions from the noble Baronesses, Lady Campbell and Lady Wilkins, that we just heard. I declare an interest as vice-president of Mencap Wales. Colleagues who served in the other place at the same time as me will know of my involvement with disability issues. Those initially arose because of the disability challenges that we faced as a family. I know that many noble Lords have similar and even more far-reaching experiences at first hand, as we have just heard. In our case, it was the experience of losing two sons, Alun and Geraint, who suffered from physical and mental handicap and died at the ages of 12 and 13. I know that some noble Lords have the ongoing challenge of supporting disabled
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It is this background that affords me a little insight into the desperate concerns of disabled people and their carers at the implications of the Welfare Reform Bill. We were lucky in that both our children qualified for the highest level of the then attendance allowance and mobility allowance, and that enabled us to employ a young, full-time care assistant who lived with us as a family. Without that facility, it would not have been possible for me to undertake my work or for my wife to keep in touch with her career as a professional musician, which helped both of us to bear the pressures we were under and enabled us to give our other children, Eluned and Hywel, the support they needed. After we had lost both boys by the spring of 1985, I came to realise the enormity of the cost of coping with disability. Although we had by then naturally lost the income from the various allowances to which we were entitled, I found myself for the first time in a decade able to pay my way. That is the reality of disability. Implicit with it is a very substantial day-to-day cost in coping with its consequences. That is why so many disabled people and their carers are petrified-yes, sick with worry-about the implications of this legislation.
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