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House of Lords

Wednesday, 27 January 2016.

3 pm

Prayers—read by the Lord Bishop of Worcester.

Religious Hate Crime

Question

3.06 pm

Asked by Lord Pearson of Rannoch

To ask Her Majesty’s Government what assessment they have made of the risk that Christians could be recorded as having committed an anti-Muslim hate crime from April 2016 by preaching the divinity of Christ or by reading aloud sections of the Bible in public, such as 1 John, Chapter 4, verses 1 to 3.

The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con): My Lords, reading texts from the holy Bible in public or preaching the divinity of Christ is not a crime, and never will be in this country. The Government’s counterextremism strategy makes it clear that we will protect free speech and the right to profess, practise and propagate any religion, or indeed none.

Lord Pearson of Rannoch (UKIP): My Lords, I am grateful to the noble Lord for that reply. I must say that I thought it was brave of the Prime Minister to say in his Christmas message that Jesus is the only son of God, because that will not have gone down all that well with the Islamists. Will a Christian preacher be committing this new hate crime if he goes a little further and denies the supremacy of the Koran, and thus the divinity of Allah? Secondly, I assume that the Minister agrees that the serious hatred is coming from the jihadists, against non-Muslims and against those brave Muslims who oppose the jihadists’ evil creed and form the large majority of the thousands whom they have slaughtered. So how can anyone be guilty of hate if they preach their own religion, even outside a mosque, and take part in much-needed debate about Islam?

Lord Ahmad of Wimbledon: My Lords, the Government are clear that anyone who preaches any kind of hate has no place here, and I believe that all of us across this House unite on that. Bigotry has no place and any kind of hate, be it based on race, sexual orientation or religion, has no place in British society. The Government, our legal system and our police will stand against that. The noble Lord made brief reference to the Prime Minister’s message. My right honourable friend mentioned the holy personage of Jesus Christ, whom Muslims celebrate because, as the noble Lord well knows, Muslims also regard and revere the Prophet Jesus as a prophet of God.

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Lord Polak (Con): My Lords, today is Holocaust Memorial Day—a day to remember those who perished and the brave soldiers who helped to liberate the camps, and to remember and pay tribute to the depleting band of survivors who spend their days educating young people. I also commend the Prime Minister for his announcement today that a fitting memorial will be erected adjacent to this House, in Victoria Tower Gardens. Does the Minister agree that, today of all days, we should acknowledge where hate crime can lead? Does he further agree that the vital task of the Prime Minister’s Holocaust foundation should be to concentrate on educating young people as, sadly, there will soon be no survivors to tell the story?

Lord Ahmad of Wimbledon: I join my noble friend in the sentiments he expressed. Indeed, I believe I speak for every Member of this House as we come together on this poignant day, when we remember those who passed away in the Holocaust—the victims of the biggest crime of genocide against humanity that we have seen in the world. We must work together, including on education. I am therefore proud that on entering my office in the Home Office, if you look to the right, the first certificate you will see is for the Anne Frank Trust UK, which does an incredible job in promoting Holocaust education. I praise the efforts of all organisations and the work of my noble friend in this respect.

The Lord Bishop of Worcester: My Lords, does the Minister agree with me that Questions phrased in this manner are not conducive to building positive relations between faith communities, in particular with Muslim communities, as we are endeavouring to do in the church at a time when Muslims are feeling unfairly stigmatised? Does he further accept that Muslims, and people of all faiths, greatly enrich our society and make a significant contribution to the common good?

Lord Ahmad of Wimbledon: I agree with the right reverend Prelate, but I also believe very strongly that adversity is an opportunity and that Questions such as this present an opportunity to all of us in this House, across the political spectrum, to speak with one voice and unite against bigotry in all its ugly guises.

Lord McConnell of Glenscorrodale (Lab): My Lords, will the Minister agree with me—

Lord Singh of Wimbledon (CB): My Lords—

Noble Lords: Cross Bench!

Lord McConnell of Glenscorrodale: I think it is this side. Will the Minister agree with me that the idea that bigotry and hatred are confined only to the extreme elements in the Islamic religion in this country is absolute nonsense? Historically, bigotry and hatred have been inflicted on both Catholic and Protestant communities right across the United Kingdom by alternative Christian religions. Will he join me in

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consistently condemning all forms of religious sectarianism and bigotry? If we do that in this House, we will perhaps have a stronger message to tell the country.

Lord Ahmad of Wimbledon: I totally agree with the noble Lord. One other point I would add is that whenever we face such bigotry, the resilience of our country and our historic legacy shows that when we face those challenges, we come together as a more united nation going forward.

Lord Singh of Wimbledon: My Lords, when religions claim competing exclusive truths, the end result is conflict. Is it not better to go along with the proposition that the one God of us all is not in the least bit interested in our different religious labels but in what we do to make life better for those around us?

Lord Ahmad of Wimbledon: I totally agree with the noble Lord, who speaks with great poignancy and expertise in this area. I regard religion very much as a route: we all have the same beginning and the same end, and the religion we follow is but a different path towards that end.

Lord Paddick (LD): My Lords, can the Minister tell the House what research the Government are doing into the causes of the genuine and alarming increase in both anti-Muslim and anti-Semitic hate crime and whether the increasing anti-Muslim rhetoric in some British media—and elsewhere—might be the case?

Lord Ahmad of Wimbledon: The noble Lord is quite right to point out what is being done. He will be aware from his own previous profession that the Government are working with the police and with communities to ensure that any kind of religious hate is formally recorded and that people are educated that they should report hate crime. From April this year, as the noble Lord will be aware, the Government will ensure that anti-Muslim hatred, along with other religious hate crime, is formally recorded by every police force across England and Wales.

Lord Maginnis of Drumglass (Ind UU): My Lords, is the Minister aware that we have already had a case in Northern Ireland, where a Christian Minister was literally persecuted for months before eventually being brought before our courts, tried and acquitted? Do we still have British law in Northern Ireland, or is that now being adjusted to suit sectarian interests in my part of the United Kingdom?

Lord Ahmad of Wimbledon: I, for one, am very proud of our justice system across the United Kingdom. Despite every challenge and diversity, there is great faith in our justice system. As we have seen previously, our justice system even stands up for those who seek to divide us or promote hate in our society.

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Thames Barrier

Question

3.14 pm

Asked by Lord Harris of Haringey

To ask Her Majesty’s Government what assessment they have made of the length of time for which the Thames Barrier will be fit for purpose.

Lord Gardiner of Kimble (Con): My Lords, the current and future performance of the Thames Barrier has been assessed as part of the Thames Estuary 2100 plan. This plan, produced by the Environment Agency and stakeholders along the estuary, sets out how to manage tidal flood risk up to the end of the century. The plan is reviewed every five years. Based on these projections, the Thames Barrier is expected to protect London to its current standard up to 2070.

Lord Harris of Haringey (Lab): My Lords, I am grateful to the Minister for that response, but he will be aware that the Thames Barrier was raised twice per annum on average in its first 10 years of existence and is now raised, on average, eight times per annum. It reached a peak of 48 times in 2014. As a result, in 2012, the Government decided that it was appropriate to extend the life of the Thames Barrier from 2030 to 2070. Despite concern about freak storms and rising sea levels, we know that the Government have been complacent over flooding in the cities of York and Leeds and the county of Cumbria. Why should we have any more confidence in their decision to extend the life of the Thames Barrier by 40 years?

Lord Gardiner of Kimble: My Lords, I reject the noble Lord’s accusation about the good will of this Government. To compare expenditure, this Government propose capital expenditure of £2.3 billion in the next six years. That compares with the previous Labour Government spending of £1.5 billion, a real-terms increase. It is a symbol and shows the record of the Government on flood defences.

Interestingly, the Thames 2100 plan started in 2006, under the previous Labour Administration. There have been 300 components to it, it is reviewed every five years and, from looking at it and having met the Thames Barrier manager and the Environment Agency officials, I am clear that it is a very strong plan. It involves climate adaptation, which is being reviewed consistently. Having had these meetings, I am confident that they have this in good order.

Lord De Mauley (Con): My Lords, it is often helpful to get the perspective of others who face similar problems. What discussions have the Government had with other countries which face similar problems?

Lord Gardiner of Kimble: My Lords, I am pleased to say that the Thames Barrier officials were the founder members of I-STORM, which is the International Network of Storm Surge Barriers professionals. Four very important barriers in the Netherlands, Venice

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and New Orleans all peer-review each other. Next year, all those professionals will be peer-reviewing the Thames Barrier. That is really important, and I thank all professionals around the world who will come to help us.

Lord West of Spithead (Lab): My Lords, I am normally a great believer in as much salt water as possible, but there is a slight element of complacency here. I know that a lot of work has gone into this—I was involved in the resilience work—but the speed at which things are changing is such that to say categorically that we need to do nothing with the Thames Barrier until 2070 seems a little over-hopeful. Does not the Minister agree that we may have to do something well before that, and that it will take a considerable time to put it in place?

Lord Gardiner of Kimble: My Lords, I apologise if I in any sense suggested that this would wait until 2070. As I said, the review will be every five years; it is essential that we keep up to date.

The plan is based on a range of sea-level rise scenarios in the estuary to 2100 from 0.9 metres to 2.7 metres; a lot is being factored in. I assure the noble Lord and your Lordships that this is being looked at rigorously. There are three sections of time period to the plan, so that varying work can be done at different stages, but the important thing is the protection of London.

Lord Higgins (Con): My Lords, as a Treasury Minister I was much involved in the original decisions on the Thames Barrier. I very much wanted to make it part of a hydro-electric scheme, but my officials said that that would cause delay, the Thames would break its banks, the London Underground would be flooded and then asked whether I wanted to take that responsibility—so we are where we are. Will my noble friend consider whether in the plans which he has rightly set out a moment ago one should consider the possibility of using the tidal flow of the Thames to generate electricity, given the increasing claims for non-carbon-based fuel?

Lord Gardiner of Kimble: My Lords, I shall certainly raise this with my noble friend in the Department of Energy and Climate Change. Clearly it is important that in this country we use many sources of alternative energy supply, and that is a very interesting concept.

Baroness Jones of Whitchurch (Lab): My Lords, is it not the case that the barrier is increasingly being used to protect properties in the Thames valley to the west which are being threatened by rising river levels due to the unprecedented rainfall and not for its original purpose, which was to stop tidal surges from the river mouth to the east? It is now performing a very different function. Given the concerns that have been raised around the Chamber, there is concern that we are being complacent and that there is a further need to evaluate the risk if anything should go wrong. The national flood resilience review that has just been announced is to be chaired by Oliver Letwin. I thought that it was to review all our flood defences. Will it

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include a specific look at the Thames Barrier? If we are not careful and follow the line the noble Lord has taken there will be one review of the Thames Barrier and everything else will be looked at elsewhere whereas what we need is a concerted response to the whole attack.

Lord Gardiner of Kimble: My Lords, I am very pleased to confirm to the noble Baroness that with the Thames Barrier being a very important part of our national resilience infrastructure it will form part of any consideration chaired by Oliver Letwin to ensure that we are secure.

The noble Baroness is right that the Thames Barrier is used for tidal and fluvial reasons, but last year it was used only once and that was for tidal. It was used a lot during the big floods of 2013-14.

Bilateral Aid Review

Question

3.22 pm

Asked by Lord McConnell of Glenscorrodale

To ask Her Majesty’s Government when they will publish their Bilateral Aid Review.

The Parliamentary Under-Secretary of State, Department for International Development (Baroness Verma) (Con): My Lords, we expect to publish the outcome of the bilateral aid review by the spring. The BAR-MAR and DfID’s other reviews aim to build the most effective foundation on which to deliver the new UK aid strategy and respond to the new global goals. Together, they will ensure that we allocate our budget in the right places in the right way and deliver the best possible value for money.

Lord McConnell of Glenscorrodale (Lab): My Lords, I am grateful for that Answer. If we are to achieve the global goals or make progress towards them by 2030, surely we need to invest in the capacity of national institutions to deliver services and to raise revenue domestically in the developing world. Will these bilateral aid programmes include significant investment by the United Kingdom in capacity-building and institution-building in the developing world, rather than simply in the provision of services by us and other donors?

Baroness Verma: My Lords, the noble Lord raises some really important questions. That is why we are looking at all our programmes and the programmes we do with the multilaterals to make sure that ultimately, we capacity-build in those countries where the need is greatest. While we are undertaking these reviews, it would not be prudent of me to comment further.

Lord Bruce of Bennachie (LD): My Lords, in the light of the current unrest in Burundi, do the Government think it was right to close the UK’s bilateral programme

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in the last bilateral review? In the light of the Government’s commitment to spend 50% of DfID’s budget on fragile states and the intervention of the African Union as a peacekeeping force, is it not time that the Government reopened our bilateral programme in Burundi?

Baroness Verma: My Lords, of course we are extremely concerned about the ongoing political unrest in Burundi and its humanitarian consequences. The UK is the second largest bilateral donor to the regional appeal, after the USA. We are monitoring the situation closely, and we may consider additional funding for the region. As I said to the noble Lord, Lord McConnell, we are reviewing everything we are doing to see whether we are best placed as we currently are or whether we need to increase or decrease in certain places.

Lord Collins of Highbury (Lab): My Lords, with DfID increasingly working in fragile and conflict-affected states requiring complex programmes, the department is likely to rely increasingly on contractors and local partners. Is the Minister satisfied that the department has the capacity to manage such projects? The danger is that we will end up with consultants managing contractors, thereby risking vital lines of accountability.

Baroness Verma: My Lords, the noble Lord is of course aware that most of the work is delivered through DfID staff and DfID programmes on the ground in the countries concerned. Of course, we also work with multilaterals where they have a specialism that enables them to deliver better as a multilateral force rather than individually, on bilateral terms. However, where we do need specialist advice or information, we reach out to consultants, and that is right and proper. But it would be discourteous to say to all DfID members of staff that they did not have the right capacities. We of course need to build on those, but we should not be discourteous about their actual strengths.

Baroness Northover (LD): My Lords, do the Government recognise that many of the poorest people in the world are in some of the fragile lower-middle income countries? They, too—especially if they are going to stay where they are—need to have hope and help.

Baroness Verma: Yes, my Lords, and the noble Baroness is absolutely right to say that, when we are working in places where there is conflict—and they are incredibly fragile places—we should work to ensure that people living in those circumstances are seeing signs of hope. That is why we took the decision to work very closely in the region when we were dealing with the Syrian crises. I am really pleased that the Syrian conference is coming up on 4 February, where countries such as Kuwait and the UK are coming together to make sure that we actually address the needs of the people, particularly in the region.

Lord Collins of Highbury: My Lords, I was not suggesting for one moment that DfID staff do not have the capability: my question related to capacity.

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Clearly, given the reviews that have been undertaken, the number of DfID staff is being substantially reduced. My question relates to the capacity to deliver management to these programmes, particularly in difficult states. That is what I want the Minister to address.

Baroness Verma: My Lords, the noble Lord is assuming that he knows the outcomes of the reviews. Those outcomes have not yet taken place.

NHS: Junior Doctors’ Pay

Question

3.27 pm

Asked by Lord Harries of Pentregarth

To ask Her Majesty’s Government what assessment they have made of the remuneration of junior doctors.

The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, the review body on doctors’ and dentists’ remuneration stated, in its 2015 report, that total pay for junior doctors compares favourably with comparator groups. This will remain the case under the proposed new contract. Average total earnings range from £31,000 in the early stages of training to £53,000 for those in the later stages when they have specialised.

Lord Harries of Pentregarth (CB): My Lords, I thank the Minister for his Answer and declare a personal interest with a wife and son who are doctors. As the Minister will know, medical students do three years after they graduate before they obtain their first job at the age of 24, at which point they will have accumulated between £100,000 and £120,000-worth of debt, and their starting salary will be about £20,000 a year. I heard recently of somebody newly graduated being offered a job in computers for £60,000 a year, and another person newly graduated—at the age of 20 or 21—being offered £60,000 for a job in management consulting. Do the Government agree that there is something fundamentally out of balance in this system, and is the Minister convinced that the Government are doing all they can to ensure that junior doctors get a fair settlement, not just for themselves but for the whole future of the NHS?

Lord Prior of Brampton: My Lords, I should also declare a personal interest, as my son is in his fourth year as a medical student. It is actually two years after undergraduate training when you qualify fully. The base salary is about £23,000—the noble Lord said £20,000—but the average is more like £30,000, when you take into account the supplementary pay that they receive. I, too, see what other people are being paid in other sectors, but the fact of the matter is that, when a young man or woman opts to go into medicine, pay is not their main motivation: there are all kinds of other things as well. One has to take into account the whole package that is offered, not just the salary.

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Lord Turnberg (Lab): Is not the reason why young doctors and not-so-young doctors are threatening to go on strike not so much the pay but because this is the last straw in a continuing series of alienation, and of feeling undervalued and underappreciated by the management from the Secretary of State down?

Lord Prior of Brampton: I agree. I do not think that this dispute is fundamentally about pay; it is much more profound than that. It is about a feeling among many junior doctors, which is shared by many senior doctors as well, that they are not properly valued and fully appreciated. That is the underlying cause of the problems we are facing.

Lord Mackay of Clashfern (Con): Can my noble friend say what the Secretary of State, his Ministers and the senior members of the department are doing to promote the morale of junior doctors in the light of what he has just said? There must be a very important job to be done in that connection.

Lord Prior of Brampton: My Lords, yes; the Secretary of State takes this matter incredibly seriously, and as part of the contract that is under negotiation with the BMA at the moment we are looking very much at the number of hours that junior doctors have to work. Many have worked for too many hours in the past and we want to put a cap on the number of hours they will work in future.

Lord Walton of Detchant (CB): My Lords, I declare an interest as in 1950 I was elected chairman of the BMA’s Registrars Group, the predecessor of the present Junior Doctors Committee. I express the fervent hope that the current negotiations between the BMA and the Government will quickly be concluded to the satisfaction of both parties. In my view and in the view of many doctors it is a matter of considerable concern that there is a suggestion of further industrial action, which is inimical to the ethos of a caring profession. Will the Minister accept my view that the alleged threat by the Secretary of State to impose a new contract of employment on all junior doctors without agreement is outrageous?

Lord Prior of Brampton: My Lords, I think the whole House will agree with the noble Lord that we all very much hope to avoid another strike. The Secretary of State has asked David Dalton, the very distinguished chief executive of Salford Royal—the noble Lord, Lord Turnberg, will know him extremely well—to head up those negotiations with the BMA, and we are very hopeful that a conclusion to this dispute will be reached before there is any more strike action.

Baroness Brinton (LD): My Lords—

Lord Winston (Lab): My Lords—

The Lord Privy Seal (Baroness Stowell of Beeston) (Con): My Lords, I am sorry to intervene, but I know that the noble Lord cannot see that the noble Baroness, Lady Brinton, is trying to get in.

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Baroness Brinton: I am very grateful to the noble Lord for giving way. Pay is only part of the problem for our doctors in this country at the moment. The NHS is increasingly kept afloat by overseas-trained doctors and over 40% of our hospital doctors are now from overseas. In certain specialities such as obstetrics and gynaecology the number is currently over 56%. Can the Minister say what the Government are doing to understand why some specialities struggle to attract enough UK-trained doctors, and, further, what they are doing to increase the number of medical training places for UK-based students?

Lord Prior of Brampton: The noble Baroness raises a very important point that we are highly dependent in a whole range of medical specialties on overseas doctors and of course overseas nurses as well. Health Education England is expanding the number of training places, in particular for GPs; we hope to have an extra 5,000 GPs in place by the end of this Parliament.

Lord Winston: My Lords, I apologise for interrupting the noble Baroness. The Government’s stated objective is essentially to cover NHS hospitals 24/7—that is, with weekend working. Many hospital managers—for example, those in Birmingham—have pointed out that they are perfectly able to staff their hospitals fully under the existing contract. Can the Minister tell us how many NHS hospitals in the United Kingdom have closed as a result of inadequate staffing at weekends?

Lord Prior of Brampton: My Lords, it is not a question of hospitals closing at weekends because of inadequate staffing; it is a question of whether hospitals are able to offer high-quality care throughout the weekend. Some hospitals can but some cannot. We have seen, for example, the reorganisation of stroke care in London. Providing high-quality seven-day services for stroke care can have a significant impact on the quality of patient care. This seven-day issue is not just about junior doctors by any means; it is a question of having diagnostics, senior doctors and a whole range of other specialties on duty over the weekend.

The Lord Bishop of Chester: My Lords, I, too, declare that I have a daughter who is a junior doctor. She is in her fourth year since qualification. To get to the level of remuneration that the noble Lord mentioned—from £23,000—junior doctors have to work jolly long and unsocial hours. But my specific question is: what is the comparator with other developed western countries for the remuneration of our younger doctors?

Lord Prior of Brampton: My Lords, I cannot answer that question as fully as I would like but I shall certainly write to the right reverend Prelate on that. I think that from 2004 to 2007 British doctors were extremely well remunerated by any international comparison but that, over time, that has eroded. But I will write to the right reverend Prelate with those comparisons.

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Baroness McIntosh of Hudnall (Lab): My Lords, I think that the House will have been very interested to hear the Minister say, in terms, that seven-day working is not just about junior doctors but about a lot of other healthcare professionals who also need to be able to bring their services to bear at those times. Does he not think that it is a great pity that the dispute, as it has been conducted politically, has focused entirely on junior doctors and that this point has not been brought out? Will he do his best to make sure that it is brought out hereafter?

Lord Prior of Brampton: My Lords, discussions are going on with senior doctors and consultants at the same time, so I can assure the noble Baroness that it is not just with junior doctors that we are having these discussions.

Legal Services Act 2007 (Claims Management Complaints) (Fees) (Amendment) Regulations 2016

Motion to Approve

3.37 pm

Moved by Lord Faulks

That the draft regulations laid before the House on 17 November 2015 be approved.

Relevant document: 10th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 18 January.

Motion agreed.

Welfare Reform and Work Bill

13th and 19th Reports from the Delegated Powers Committee

Report (2nd Day)

3.37 pm

Relevant documents: 13th and 19th Reports from the Delegated Powers Committee

Clause 11: Changes to child tax credit

Amendment 35

Moved by The Lord Bishop of Portsmouth

35: Clause 11, page 13, line 12, at end insert “, or

(c) an exception applies under section 10(4A) of the Welfare Reform Act 2012, as inserted by section 12 of the Welfare Reform and Work Act 2016”

The Lord Bishop of Portsmouth: My Lords, I shall speak also to Amendment 36 in my name. I express my gratitude to the noble Baronesses who have added their names to these amendments.

The amendments would add further exemptions to the two-child limit of the child element of tax credit and universal credit, and the exemptions that I propose are limited and specific.

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The Lord Privy Seal (Baroness Stowell of Beeston) (Con): I apologise for interrupting the right reverend Prelate but many noble Lords are leaving the Chamber and cutting across him. I remind my colleagues that it would be more courteous to the House if they were to exit without walking in front of him.

The Lord Bishop of Portsmouth: I am grateful to the noble Baroness. At Second Reading and in Committee I, along with others in this House, indicated our regret that these proposals as a whole might be seen as signalling that not every child is precious and deserving of love and support not only from parents and families but from communities, society and nation. Nevertheless, I recognise the intent of the Government.

I do not intend to rehearse the detailed arguments, numbers and costings used in Committee. The Minister and your Lordships are aware of them and of the perspective of mine and other faith traditions. Whether personally supportive or not of the Bill’s provisions as a whole, noble Lords will see that my amendments do not challenge the main thrust of this part of the Bill: that decisions about family size should be made with responsibility and care and that any decision to have third or subsequent children should be made without expectation of benefit support. The exceptions I propose do not challenge the central plank of the policy, which seeks to influence parental behaviour.

I was grateful, as I know others were, for the opportunity to meet the Minister last week. I was grateful for his courtesy, candour and understanding, which I hope might be shown today in his response.

The Bill incorporates exemptions for multiple births and after rape, an exemption on which I hope the Minister can provide clarity about the procedure, judicial or otherwise, to be used in relation to that. The further exemptions I propose relate in the same way to specific circumstances or vulnerability. All relate to the common good of society, to an understanding of what is just, right and compassionate, and to characteristics and behaviour that we wish to encourage and enable, sometimes in legislation.

The first three exemptions relate directly to unforeseen circumstances that could not have been planned for when a decision was being made about family size. However carefully and responsibly consideration took place, these circumstances could not have been reasonably expected. The death of a parent drastically changes family circumstances. The death may remove the principal source of income, or increased childcare demands may compel the surviving parent to reduce their working hours or stop working. I hope that the Minister and the Government will, as they have previously, show understanding and accommodate these distressing circumstances at least for a transitional period. Will they indicate some provision here so that the deep sadness of bereavement is not exacerbated cruelly by financial penalty? Parental death is unforeseen when family size is decided.

A parent suffering domestic violence is often driven, as a last and desperate resort, to flee the family home. Everything is left behind as parent and children lose home and security and, sometimes, their main source of income. The Government have boosted refuge provision

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to support such vulnerable victims of violence. I hope the Minister agrees that it would be consistent to recognise the vulnerability of these children in relation to this Bill. The threat and danger of domestic violence is not chosen or sought. To penalise children taken out of a dangerous situation cannot be right and does not reflect well on the concern we all have for the security and protection of vulnerable young people.

No parent either plans for a disabled child, yet we know that the impact on previously anticipated patterns of work and childcare can be hugely significant. A realistic and rational decision to have a third child can lead to a massive change of circumstance if the child is disabled. I recognise, of course, that a disabled child will, in some circumstances, attract some additional payment, albeit hugely reduced under universal credit. The impact for that family on their employment patterns, on childcare priorities and costs would be exacerbated by the strict application of the two-child limit.

Two of the exemptions I propose relate to the behaviour and decisions which I and, I believe, the Government wish to encourage and which policy and legislation can enable through these amendments. Kinship carers and those fostering and adopting step in to care for children with love and commitment when many would otherwise be in the costly care system. Around and across your Lordships’ House there is a desire to welcome, enable and encourage such generosity, which benefits the children themselves and our society. Surely, when kinship carers or fostering or adopting families take third or subsequent children, often to keep siblings together, we should be supportive of that, not really because it saves money for the public purse and the Exchequer—though it does—but because it is the right and good thing, to be welcomed by this House, Parliament and the Government.

3.45 pm

Two single-parent families each with two children will potentially receive benefit for all four children. Should the parents make a commitment to form one family or marry, they will be eligible for benefits for only two of the children. The policy driving this Bill is intended to change behaviour. I fear that, perversely, the result of these provisions at present is to discourage the formation of committed relationships and families which are good for children. The amendment I propose gives substance to the words we speak about wanting what is good for children.

These amendments seek to build on the two welcome exemptions already in the Bill. They do not challenge the Government’s policy, which intends parents to take responsible decisions. They recognise that unforeseen tragic or life-changing circumstances arise which cannot be predicted or planned. They further encourage, not only by word but by policy and action, the sort of societies and communities we surely want to be, where stable relationships and families are encouraged, where generous parenting by kinship carers and foster and adoptive parents is valued, where disabled children are not a source of regret, where domestic abuse and violence is never tolerated and where the wounds of untimely death are not deepened by financial anxiety. I beg to move.

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Baroness Sherlock (Lab): My Lords, I rise to speak to Amendment 40, in my name and that of my noble friend Lady Drake, and to support the other amendments in this group in the name of the right reverend Prelate the Bishop of Portsmouth, to which I have added my name. I thank him for introducing this group of amendments with what we are coming to see as characteristic clarity and compassion.

I shall say a word first about the two-child policy, which I regard as a regressive piece of social policy. In Committee, we found it hard to get Ministers to put up any kind of cogent argument for the policy as a whole, so why is it being done? Whatever one may hear behind the scenes, this is not about the small number of unemployed parents with lots of children. They would already have been caught by the benefit cap, which we now know would hit a couple with two children living in a modest house in Leeds or Plymouth. This is about a family with three children who are working but struggling anyway. It is about all those who had children confident that they could provide for them until, as the right reverend Prelate pointed out, something went wrong. Perhaps their spouse died, they got sick and could not work, a parent lost their job and so on. Those are all the things that the welfare state is meant to protect against. The nearest we got to a case was in the impact assessment which states that it is about,

“ensuring those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work”.

So it is about choice, and my suggestion is that we should use that as a yardstick by which we test these amendments.

Let us take first disabled children. Parents may have felt that they could manage a third child, but then they find that the child is born, or becomes, severely disabled. The disabled child element of tax credits will still be paid, but it does not begin to cover the extra costs. The charity Contact a Family states that it costs three times as much to raise a disabled child as one who is not. It is also much harder for the parents of a disabled child to raise their income through working, because it is difficult to find suitable childcare and more expensive if you can. Did the parents really make a choice to be in that situation?

What about the situation, described so powerfully by the right reverend Prelate, where a family is happily married or settled and the very worst happens, in that one of the parents dies? He described clearly what would happen to that family. As well as the trauma, the finances are going to get worse, especially if the deceased parent had been the main earner. This is almost a classic example of a family that probably did not need benefits or tax credits before, but suddenly finds that it is catapulted into a position where it needs to rely on the welfare state. This is exactly the kind of thing that the welfare state is meant to protect families against. Where was the choice there?

The right reverend Prelate mentioned stepfamilies. Perhaps it is not so dramatic, but what if the relationship breaks up? If the children deserved support when they were living apart, why do they stop deserving it because they are living in the same house?

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Then there are the people who literally did not make a choice at all—cases of domestic abuse. Sadly, a child may have been conceived under duress rather than as a clear choice. Abuse can include the refusal to allow a woman to use contraception. It can include pregnancy as the result of rape, which may never have been reported to the authorities because of fear of the partner. Moreover, the fear must be there that the two-child limit will make it harder for a parent to leave an abusive relationship. Too often, they end up fleeing in the clothes they are standing up in. They are homeless and they have to hide from the former spouse, which means moving to a new area, away from jobs, schools and families. It is tough enough anyway to rebuild a life without added financial pressures.

On the subject of rape more generally, I hope that the Minister is now able to explain how the proposed exemption for women who have been raped will work. I hope that he can address the questions I asked in Committee. Will the exemption apply only when a woman has made a complaint to the police, or when someone has been charged or convicted? If not, will she have to give evidence to the DWP, to whom and what kind of evidence, and can the Minister assure us that this process will remain confidential?

We come now to the subject of my Amendment 40, which would exempt children who enter a household as the result of adoption, kinship care or private fostering. I hope very much that the Minister can accept this amendment, as the arguments are completely compelling. Children raised by kinship carers are typically unable to live with their parents because of parental abuse or neglect, perhaps due to alcohol or drug problems, or because the parents are in prison or indeed have died. A grandparent, and sometimes an aunt or a sibling, will then step in and take the children in, often in a case of emergency. There is clear evidence that children in kinship care settings do better than those in unrelated care, even though they have often had similarly adverse experiences in early life.

But kinship carers pay a huge price for their kindness. They face significant additional costs when their family size increases, and sometimes it can double in size overnight. A Family Rights Group survey found that almost half of kinship carers had to give up work permanently to take on the children, thus pushing them into reliance on benefits. The state should not be putting financial barriers in the way of families willing to take on often vulnerable children. It also makes no financial sense. The average child tax credit claimed by families with three or more children is £3,670 a year; it costs £40,000 a year to keep one child in foster care.

A similar argument applies to adoption, particularly of sibling groups. It is the Government’s policy, and I welcome it, to increase the number of children being placed for adoption and to remove any unnecessary barriers to the speed of the process, but this measure will directly undermine that policy objective. Adoptive parents often already have a child or children, so there is a clear disincentive to adopt if it would mean that they would not get payments for each child, and a particular disincentive to adopt

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sibling groups. There is already a shortage of parents who are willing to take on sibling groups, and this will only make that situation worse. If it delays adoptions, that becomes a vicious cycle. Children grow older and it is harder to place them, and therefore it is even less likely that they will be adopted at all. The only alternative is to break up sibling groups, which damages the children because that is often the only remaining bond they have. I hope that the Minister will consider this carefully.

If we judge the Government by their own yardstick, have they passed or have they failed? Have the families we have described today, who are covered in the amendments tabled by the right reverend Prelate and myself, been reckless in having children or taking on additional children without understanding the consequences? I do not think they have. Even if we accept the premise behind the two-child policy—and I confess that I do not—the Government’s own rationale simply does not work. These amendments make absolute sense both financially and in terms of the Government’s policies, and above all they are right for the people affected.

Baroness Manzoor (LD): My Lords, we on these Benches have added our name to Amendments 36 to 38. We also support Amendment 40. The amendment is similar to the one that we put down in Committee when it was debated at great length. Noble Lords will be pleased to know that I do not intend to rehearse that contribution again today. Excellent reasons have already been given by the right reverend Prelate the Bishop of Portsmouth and the noble Baroness, Lady Sherlock, as to why exceptions should be made to the two-child limit on receipt of tax credits and the child element of universal credit.

I want to pose a few questions. For those who did not sit through Committee stage, I will read out the exemptions we seek. Under Amendment 38, we seek an exemption if,

“the claimant responsible for children in the household is a single claimant as a result of being bereaved of their partner”—

I ask the Government, where is the choice in that?—

“the claimant has fled their previous partner as a result of domestic abuse”—

where is the choice in that?—

“the child or qualifying young person has a disability”—

where is the choice in that?—

“the child or qualifying young person is in the household as a result of a kinship care arrangement, private fostering arrangement, or adoption”—

where is the choice in that?—

“or … the claimant was previously entitled to an award for the child or qualifying young person and has re-partnered creating a household with more than two children”.

Of course, there is a little bit of choice in that. It is love, which we can believe in or not, but sometimes we do not choose who we want to partner.

Effectively, these circumstances are beyond the control of the claimants. This amendment attempts to demonstrate that the first responsibility is to the child. It must be so, otherwise what kind of society are we really creating? I was, and I remain, particularly concerned that, despite the Government’s laudable commitment to exclude women who have had a child as a result of

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rape from the two-child limit policy, the Minister did not explain to my satisfaction how this exemption would operate. I will not go into that debate again. It is such a sensitive area. Perhaps he will explain today. Should this amendment be voted on, we on these Benches will wholeheartedly support it.

Baroness Butler-Sloss (CB): My Lords, I have not taken part in the debate on this Bill before but I was chairman of the Select Committee on adoption. I have been very concerned by the Government’s concerns, which I share, that not sufficient children have been adopted. This is a current problem. We need more adopters. It seems utterly astonishing to have a situation where those who are prepared to take children out of care or take, perhaps, members of the family whom they then adopt when they already have children, will be penalised for doing something that is entirely in line with what the Government have said in their adoption policies.

It seems to me quite extraordinary that the Government do not exclude adoption and kinship care. The noble Baroness, Lady Sherlock, has set it out very much better than I could and in greater detail, so I do not want to reflect on it. As she said, it is very expensive to keep children in care. There are practical financial reasons for the Government to look at kinship care and at adoption. They use the Bill as an opportunity to deprive these families of a comparatively small amount of money, put against the cost to the taxpayer of keeping in care children who could otherwise be living in a family of which they are truly members. That is why I support Amendment 40 in particular, and Amendment 38.

4 pm

The Earl of Listowel (CB): My Lords, very briefly, I support these amendments as vice-chair of the parliamentary group for young people in care. Having followed this issue through the whole Bill process so far, I was grateful for the opportunity to meet with the Minister last week and for his careful consideration of our concerns on these matters.

Over the course of 10 years of listening to young people in care and hearing about what is important to them, they tell us that the most important thing is that someone sticks with them through the care process. That is why the Government have been so keen on supporting adoption: so that children who have been traumatised go on to have the continuity of care and relationship that helps them to recover. That is where the Government invested in and legislated for “staying put”, to allow children in foster care to remain with their carers to the age of 21.

I am sure that the Minister will give a sympathetic response to this as it is at the heart of government policy. I look forward to his response.

Baroness Drake (Lab): My Lords, I shall speak to Amendment 30 in the hope that the Minister has been persuaded by the arguments made in Committee that kinship carers and adopters should be exempt from the two-child limit. I also thank him for the very constructive meeting that he held with us.

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We have enunciated many times the valuable contribution that kinship carers and adopters make, supporting as they do more than 200,000 children, many of whom have emotional difficulties because they have been living with parents who are drug abusers or who have abused or neglected them. They save the taxpayer the alternative cost of placing a child in care, which is £40,000 a year, and care proceedings of £25,000. The savings that 132,000 kinship carers deliver by voluntarily caring for these children runs into billions. Yet, significant costs fall directly on the carers themselves. Many have to give up work or reduce their hours—a requirement frequently set by the social worker—to settle what is often a traumatised child for a good reason. The need for such carers is not going away. The number of looked-after children has increased steadily over the last seven years, as has the number of care order applications.

The Government’s reasoning for limiting benefits to two children is set out in the impact assessment. It is to reduce welfare costs and introduce a behaviour-related measure that will encourage parents,

“to reflect carefully on their readiness to support an additional child”,

which could have,

“a positive effect on overall family stability”.

It continued that,

“people may respond to the incentives that this policy provides and may have fewer children”.

The policy is intended to deter people having more children where they cannot afford to support them.

The Minister reported in Committee:

“The average number of dependent children in families in the UK in 2012 was 1.7, so … it is fair and proportionate to limit additional support provided by the taxpayer through child tax credit and the child element of universal credit to two children”.—[Official Report, 7/12/15; col. 1328.]

Even if one were to accept that reasoning when applied to birth parents who are considering having more children—I accept that there are many in this House who do not—it is a non sequitur when applied to kinship carers and adopters. It lacks common sense. There, the need is not to get kinship carers and adopters to reflect carefully on their readiness to care for an additional vulnerable child. To the contrary: public policy needs to support carers in their readiness to do so. That is better for the children and their family stability, and secures savings for the state by not placing them in the care system.

Kinship carers and adopters are not the birth parents of the children but they voluntarily embrace them. They are not making a decision to become pregnant; they are making a decision to care for an existing vulnerable child who cannot be raised by their parents. For adopters and kinship carers, the behavioural disincentive in the two-child limit is directed at their taking on responsibility for that existing vulnerable child. Imposing the two-child limit will deter adopters or kinship carers from coming forward to take on a sibling group, or a child if they have dependent children of their own, undermine the child’s interest and potentially increase the number in care. This is inconsistent with the Government’s commitment to ensuring that families are stable and create the best possible environment for children to flourish.

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The two-child limit applied to adopters and kinship carers does not even stack up in cost terms. Exempting carers from the two-child limit would cost an estimated £30 million but the limit needs to deter only 200 kinship carers from caring for three or more children in the future before the £30 million saving would be wiped out, as the taxpayer would then have to face the cost of placing a child in care—£40,000 a year—and the cost of care proceedings, which is £25,000. I asked the Minister what behavioural response the Government were seeking to achieve from potential kinship carers and adopters with the two-child limit on benefits but I never had a reply. I returned again to the impact assessment but I could find no answer there either. Indeed, I could find no assessment of the impact on potential kinship carers, adopters or the children.

For kinship carers and adopters, the choice is whether or not to embrace an existing vulnerable child—a different choice to a parent choosing to become pregnant. The Minister advised in Committee that,

“there is a difference between the voluntary and involuntary taking on of children, whether they are your own or anyone else’s. That is what our exemptions are for. We are seeking to try to draw the line between where it is involuntary, as in the case of rape, and where it is not”.—[

Official Report

, 7/12/15; col. 1332.]

However, taking a behavioural measure into the benefits system for one purpose, then applying it to carers of children who might otherwise enter the care system without an explanation of the behavioural response being sought and with no assessment of the negative impact on the carers or the children is not good public policy.

I hope that the Government have deliberated further on where to draw that line and that they will exempt kinship carers and adopters from the two-child limit. In doing so, they would avoid building a perverse disincentive rather than positive support into public policy on people caring for vulnerable children, avoid undermining the interests of the child and avoid failing to recognise the real savings that these kinship carers and adopters provide.

Baroness Tyler of Enfield (LD): My Lords, I rise briefly to speak in support of Amendment 38 and the other amendments in this group, having spoken on the matter in Committee. In the interests of time, I will focus on two of the proposed exemptions set out in Amendment 38, but I make the point that I consider all five exemptions equally deserving.

On the issue of disabled children, which has already been set out powerfully by the right reverend Prelate the Bishop of Portsmouth, the Government have framed the two-child limit as being about choice, but no parent makes a conscious choice to bring a disabled child into the world—a point already made powerfully in the debate today. It not something you plan for. If that unforeseen event happens, however, surely that child deserves our help to ensure that they can be a fully functioning member of society. Research has shown that raising a disabled child can cost three times as much as raising a non-disabled child. Surely that is part of the rationale for this exemption.

Turning to the proposed exemption when new families are being formed, in a speech last year to the Relationships Alliance the Prime Minister thanked relationship support

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organisations which help to keep families together and, critically, to bring new families together. I declare an interest as vice-president of the charity Relate. The Prime Minister said that,

“government should do everything possible to help support and strengthen family life in Britain today”.

In fact, he even criticised the welfare state, saying that it was,

“incentivising couples to live apart”.

How, then, can it be that the Government have brought forward a Bill which says that if two lone parents come together to raise a family—one of them having possibly suffered bereavement—their child tax credit will be cut? Surely, creating that incentive in the benefits system would accomplish exactly the opposite of what the Prime Minister wanted to achieve, as I understand it—that is, giving children the right to live in a two-parent household and providing the stability that that often achieves. In saying that, I do not mean any detriment to single-parent families, who do a very good job of raising their children. However, we know that half of all single-parent families find a new partner within five years of their previous relationship breaking up, indicating that cuts in this area could affect as many as 500,000 people. This is not an insignificant matter.

To conclude, we have heard much debate on how these proposed changes will impact vulnerable groups. I think we can all agree that it is better to be pound wise than penny foolish. As such, we need to look at changes holistically and ask whether they help individuals who can work to seek work and whether they help to ensure that the next generation is healthy and ready to contribute to society. How do we ensure that the vulnerable in our country do not start behind and get left further behind? Amendments 38 and others in this group are necessary to ensure that the vulnerable, especially children, do not start behind because of their failure to choose the right parents.

Baroness Armstrong of Hill Top (Lab): My Lords, I want to intervene briefly. I spoke in Committee about kinship carers. Therefore, I support Amendment 40, which relates to kinship carers and adopters. One reason I take such a strong interest in kinship carers is that the north-east, where I come from, has one of the highest proportions of kinship carers in the country, along with London. I meet, and have met, numerous kinship carers in the region who will be affected by this measure.

Some very powerful arguments have been made today and in our previous debates on this topic. If I were the Minister, I would want to take account of two issues. First, the best outcomes for children are undoubtedly achieved when they are with kinship carers or adopters. Secondly, the Government would show that they are on the side of taxpayers if they exempted kinship carers and adopters from these provisions. I could say a lot about the other proposed exemptions but I have concentrated on kinship carers and adopters in the past and therefore, for consistency, I shall do so again today. When we last discussed this issue, it seemed that the Minister listened to the very strong arguments that were made. My noble friend Lady Drake has reiterated many of those powerful

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arguments. I felt that after our previous debate the Minister was thinking about those arguments. Therefore, I hope he will have better news for us today.

4.15 pm

Baroness Howarth of Breckland (CB): My Lords, I am going to be extremely brief because the arguments have been powerfully made. Because I have supported some of these issues and do support the amendments, I want to make two points.

I hope the Minister is able to come back with better news than we have had hitherto. I am sure that he will have gone back and looked at the issue. He very often says that this is a manifesto commitment and it links to many other Conservative commitments. The present focus of the Conservative Party on the family test and family life fits very much with the arguments that have been made around the House. If he is not able to come back with better news, I would like to ask him two questions. First, how does he see the family test moving forward, considering my colleagues’ arguments about how more secure families are achieved? Secondly, what discussions has he had with his colleagues in other departments, particularly those who are promoting children’s policy issues and pressing forward further adoption, fostering and kinship care? Do they understand this issue? In my discussions with some people in the other place, concern has been expressed that this will undermine some of those strong, clear and positive Conservative Party policy commitments.

The Lord Bishop of Durham: My Lords, I would like to tell two stories that illustrate why I believe two of these exemptions are important.

A good friend of mine and his wife were unable to have children, and they put themselves forward as adoptive parents. They went through the rigorous process—this was a few years ago—and with great pride entered a room with several of us who had our own children and presented a piece of paper that said, “I have been authorised to become a parent in a way that none of you ever have”. This was a great joy. They were then asked if they would take three children, because those children had been born to the same mother and had experienced serious abuse living in a home with addiction. The absolute conviction of all concerned was that it was vital that these three children remained together. We, as a society, asked them to care for those children. They took up that responsibility and have exercised it for many years. They have, on our behalf, saved an enormous amount of money through those children not going into care. Also, a much longer-term point is that those children are healthy, well-educated and will be fantastic contributors to society. That is one of the reasons why adoption needs to be exempted.

The second story is of another two friends. When their first child was born, they had to come to terms with a severe disability. They had a second child who was fine and healthy. They chose to have a third child. That child also turned out to be disabled. Under the current proposals, without the exemptions they would not be given any support for that child other than the extra disability support. These are the children and

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the families we are dealing with in considering these exemptions. I sincerely hope, like others, that the Minister has had time really to consider such situations and has better news for us.

Baroness Hollis of Heigham (Lab): My Lords, I do not want to add to the extremely powerful speeches we have had but I would like to ask the Minister a straightforward question. On Monday, when we discussed the benefit cap, we raised the issue of the guardian’s allowance. As noble Lords who were present at the time will know, the guardian’s allowance goes to those at the very sharp end of kinship care, looking after children who are not just neglected but orphaned and traumatised as a result. That benefit cap obviously interlocks very much with the issues of kinship care. In the light of that, has the Minister been able to think further on the arguments that were put during that debate and reconsider the guardian’s allowance issue? It is a subgroup within kinship care but a few may be affected by a benefit cap, which would have disastrous effects on their capacity to care for some of the most distressed and grieving children society is likely to see.

The Minister of State, Department for Work and Pensions (Lord Freud) (Con): I thank the noble Baronesses, noble Lords and right reverend Prelates for their amendments, and all those who contributed to the debate. The amendments all relate to exemptions in certain circumstances from the policy which limits the child element in child tax credit and universal credit to a maximum of two children or qualifying young persons from 6 April 2017. I think we have gone through those exemptions so I will not go through them in the normal way but take them as read.

We have been clear since the summer Budget, when this policy was announced, that we will exempt a third or subsequent child or qualifying young person who is one of a multiple birth where there were previously fewer than two children in the household, and we will exempt a third or subsequent child born as a result of rape. These exemptions will be developed and brought forward in secondary legislation, as subsections of Clauses 11 and 12 permit. We believe that secondary legislation is the right approach for specifying exemptions, to allow for flexibility and engagement with stakeholders. It will be important to get the detail right and we have time to do that before bringing forward regulations for April 2017.

I recognise the deeply felt concern in this House, the other place and more widely about how this exemption will work—something the noble Baroness, Lady Manzoor, pinpointed just now. We all recognise that this is a difficult and sensitive issue and I would like to provide the House with further information. Clearly, we need to establish a way of making this assessment that is sympathetic and responsive to the claimant and timely in determining entitlement to benefit. Our intention is not to focus on or pre-empt criminal justice outcomes but to ensure that mothers receive the help they need at the time they need it, using clear criteria that are straightforward to apply and not overly intrusive, but which secure the system against fraud and error.

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While we continue to look at the detail, our thinking is that a third party evidence model offers the most promising approach to striking the balance we need to achieve. This approach would not be new for the benefit system. For example, we use a third party evidence model in universal credit for the temporary relaxation of the requirement to be available for work in cases of domestic violence. The evidence required is the reporting of the abuse to a third party acting in an official capacity, such as a GP or social worker. This model was developed with input from stakeholders.

Of course, a significant amount of work is needed to take forward and develop the detail of the model. I also want development of the model to include working with stakeholders to help ensure that the process is as compassionate and supportive as possible for claimants in these circumstances, while providing the right assurance to government that the additional support is going to those for whom it is intended. We will be getting in touch with organisations with an interest in this policy shortly to seek their input, and I encourage any other stakeholders who would like to be a part of this to let me know. While there is a significant amount of work to do and detailed questions to be answered, I hope this helps reassure the House and stakeholders that we are thinking very carefully about how we respond to this difficult and sensitive issue.

We have been clear since the summer Budget that we will bring forward further exemptions for exceptional circumstances, and we will be doing that today. I am grateful to those who have suggested amendments and contributed to the debate. As a number of noble Lords pointed out, I have been talking to Peers on this matter. We have carefully considered those affected by this policy and the options available, while taking into account the fact that one of our objectives for universal credit is that it will be part of a simpler and workable welfare system that benefits everyone. I know that noble Lords will remember my muttering about adding carbuncles every now and then.

Regardless, I am pleased to announce today that in recognition of the important role which family and close friends can play in caring long term for children who are unable to live with their parents and could otherwise be at risk of entering the care system, we are in favour of an exemption for children in such circumstances. The noble and learned Baroness, Lady Butler-Sloss, and the noble Baronesses, Lady Sherlock, Lady Drake and Lady Armstrong, have made persuasive speeches on this issue not just today but in Committee—so it is worth putting the effort into those speeches. We recognise that in these cases such carers, often referred to as kinship carers, are not in the same position to make choices about the number of children in their family as other parents are. I am grateful that the noble Baroness, Lady Drake, is now taking my distinction there in a positive rather than a non-positive way.

As I have already mentioned, the Bill provides the necessary powers to make regulations to provide exemptions to this policy, and we intend to use regulations to provide for this exemption. In developing the regulations, we will need to ensure that we get the definition right to make sure that the exemption applies to the children to whom it is intended to apply. We will

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work with stakeholders in developing the regulations to deliver a solution which meets the needs of vulnerable children, while protecting the Government from the potential risk of fraud and error.

Baroness Butler-Sloss: If the Minister will forgive me for interrupting, I am having slight difficulty in understanding. I am delighted to hear about kinship carers but adopters are generally not family. One of the great points about adoption is that they come from outside, so the Minister’s suggestions to the House about kinship carers would not cover the majority of adopters.

Lord Freud: That is a timely intervention because I am now going to move on to the very eloquent arguments for exempting adopted children. We think that where a single child is being adopted, it would not be fair to treat the parents adopting more advantageously than other parents. However, where children need to be placed for adoption and have siblings in the same position—this was the example that the right reverend Prelate the Bishop of Durham used about one of his, I suspect, many friends—we recognise that it is often in the best interests of the children for them to be placed in their sibling group. Therefore, I am also able to announce that we are in favour of an exemption where there were previously fewer than two children in the household and the adoption of a sibling group causes the number of children to exceed two. Again, we intend to use regulations to provide for this exemption.

This is a good point at which to respond to the question of the noble Baroness, Lady Hollis, who on Monday night discussed guardian’s allowance—very eloquently, as usual. I am in a position to say that I will continue to explore that particular issue with her and whether it is possible to bring forward something at Third Reading.

In relation to disabled children, the Government are committed to making sure that disability benefits work for these families, so we will continue to support families with disabled children through the disability elements of child tax credit and the equivalent in universal credit. I must point out to the right reverend Prelate the Bishop of Portsmouth that the figure is not reduced in universal credit: the absolute figure reads across from the tax credit system into the universal credit system. That will be payable for all disabled children, even when they are a third or subsequent child, so support for families with disabled children will still be reflected in universal credit and tax credits following the introduction of Clauses 11 and 12. There is of course other support for disabled children within the DLA system to recognise the extra costs which, as noble Lords have pointed out, parents with disabled children need to carry. In addition, we are exempting disability benefits such as personal independence payment and disability living allowance from the uprating freeze.

4.30 pm

The noble Baroness, Lady Howarth, asked about the family test. I can give the assurance that we are committed to improving family stability, with government spending for family, parenting and relationship support standing currently at £6.5 million.

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I am not able to give as much pleasure or satisfaction to Peers on other issues. To exempt bereaved parents and those fleeing domestic violence would raise a number of practical questions. For how long would the exemption be in place? Would it be permanent or just for a period of time? If it is the former, it places claimants in a very favourable position to other claimants even when they have managed to get their lives back on track. If it is temporary, there will be a temporary increase in benefit for existing claimants which will fall away again. This raises, again, questions on how long it should apply. Such exemptions would treat parents in these situations more favourably than other lone parents, which again would introduce unfairness in the system. We are modernising bereavement benefits, and those with dependent children will receive nearly £10,000 over the course of a year.

In response to the question from the right reverend Prelate the Bishop of Portsmouth, one of the things about universal credit is that it responds quickly to changes.

The Lord Bishop of Durham: Could I ask for some clarity on what the Minister has just said? It sounded to me as though there was concern about the length of time that might be involved and so on and so forth, but his tone of voice sounded as though there might be willingness to at least explore the possibility. I am just teasing out whether he meant that he really was not willing to consider this, or whether there may be a possibility of exploring it further, particularly around domestic violence.

Lord Freud: We have a regulatory process where these exemptions will be gone through in detail. I can make a commitment today where I can do so, but I assure noble Lords, including the right reverend Prelate, that the machinery of government is not in a place which allows me to say anything more about anything else at this stage. However, the process of setting out regulations will take place some months from now, and we will be exploring in great detail how they work. If the right reverend Prelate is asking me whether there are going to be more opportunities to put pressure on the Government, I would imagine that there will be.

Baroness Hollis of Heigham: In which case, given that helpful and tactful response by the Minister, will he help us even further by agreeing to publish draft proposed regulations before the formal procedure of “take it or leave it” in both Houses, thus allowing various participants to discuss those proposed draft regulations with the Minister before they are formally submitted?

Lord Freud: In practice, I think that what I have said produces that outcome. I have said that we will consult very widely with stakeholders to get this right, because these are very sensitive issues. The rape exemption is very difficult. Getting kinship caring and adoption right is not straightforward. In practice, there will be consultation, but I do not want to overformalise that process. I have committed to a much more open process than you might see in some other regulations that we issue.

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The next complicated case is the formation of new households through re-partnering of single parents, which we have looked at very closely and which produces a number of difficulties. First, it would be perceived as unfair by those families with three or more children who stay together and receive a maximum amount of child element or child tax credit in respect of two children, whereas other families who have formed more recently could receive more. Secondly, there is a risk that families may try to manipulate the benefit system by breaking up and re-forming, or even claiming to have broken up and subsequently re-formed in order to increase the amount. Thirdly, there would be a practical issue in assigning children in newly formed families to a particular parent. We have not done that before. Your Lordships will hear me muttering the word “carbunclising”. That is not to mention the intrusive nature of that process.

Finally, I looked at the numbers involved. The reality is that, whether we like it or not, the bulk of children stay with the mother. The number of fathers with children joining mothers with children is not many. Once the measure is fully rolled out, we expect that only 7% of single men will have children, so it is not that substantial a problem. The noble Baroness, Lady Manzoor, talked about half a million. That is just not the reality. I reiterate what I said in Committee about the way it is introduced in 2017 for child tax credit and universal credit. Any household which has claimed within the past six months will also be protected. For those reasons, I urge the noble Baronesses and the right reverend Prelate not to press their amendments.

The Earl of Listowel: Before the Minister sits down, given the fact that, as a nation, increasingly our children are growing up without a father in the family—according to the OECD, in the 2030s, we will overtake the United States in the proportion of children growing up without a father in the family—will he think again about his last statement? It may be a small proportion of fathers who bring children into these mixed families, but surely we want to encourage those larger families, especially, to have a father. The benefits that that father brings to those two children, or whatever, from the mother’s family is important. Will the Minister keep that in mind?

Lord Freud: We have looked at this very sympathetically, but in practice we found it too difficult. We have heard from this Chamber about the kinship and adoption issues, and those are the ones that we want to get absolutely right.

The Lord Bishop of Portsmouth: My Lords, I am grateful to the dozen or so Members of your Lordships’ House who have contributed in the course of these exchanges as we have considered these amendments. I am sure that we have all been touched and moved by the strength of feeling and clarity of argument that have been brought. I am particularly grateful for the Minister’s response a few minutes ago. In my opening remarks, I spoke of the candour and courtesy he showed when a number of us met him last week, and we have been grateful for that again.

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We heard very clearly the indication from the Minister of the importance of consideration of the regulations that will be brought forward relating to these measures, and I am grateful for his sensitivity about that. I assure him that we on these Benches and, no doubt, others, too, will certainly engage in the way that he suggested. We are also grateful for some clarification about the reporting model he has in mind to be used where a third child is born as a result of rape. Again, I know that many people will wish to engage in further consideration about that.

I think it is fair to say that we are delighted by the position he has outlined about kinship carers and adoptive parents and are very grateful indeed for that on behalf of the children themselves and of wider society.

On areas where the Minister was not able to satisfy us as much as we might have hoped, I draw his particular attention to circumstances in which children and a parent flee domestic violence. I said at the beginning that violence is never justified in circumstances such as that. I hope that the Minister will understand how difficult it is for me and others to accept what sounds at the moment like a policy which gives a financial incentive to risk staying in a situation where children might be in danger of abuse or in physical danger. It is a very serious matter and I hope that there may be some flexibility in the conversation to which he has pointed.

With grateful thanks to the Minister and to those who have contributed in this conversation and this debate, and welcoming the advances that have been made and the indications of some further changes in the future, I beg leave to withdraw the amendment.

Amendment 35 withdrawn.

Amendments 36 to 38 not moved.

Amendment 39 had been withdrawn from the Marshalled List.

Amendment 40 not moved.

Clause 13: Employment and support allowance: work-related activity component

Amendment 41

Moved by Lord Low of Dalston

41: Clause 13, leave out Clause 13

Lord Low of Dalston (CB): My Lords, I have been sitting here listening in amazement as the Minister has been shelling out goodies right, left and centre. It is a quite unfamiliar experience. I just hope that his bag is not now empty; I hope that he has not completely run out of goodies to dole out.

Amendment 41 would leave out Clause 13. It is tabled in my name and those of the noble Baronesses, Lady Meacher and Lady Manzoor, and the noble Lord, Lord McKenzie of Luton. I shall speak also to Amendment 44, which would leave out Clause 14, which is tabled in my name and those of the noble Baronesses, Lady Sherlock, Lady Meacher and Lady Manzoor.

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Clause 13 would abolish the work-related activity group component of employment and support allowance —which I shall call ESA from now on—for new claimants from April 2017. Clause 14 abolishes the equivalent component in the new universal credit, which will replace ESA and a number of other benefits. If Clauses 13 and 14 were to remain in the Bill, the effect would be to reduce income for those in the work-related activity group, which from now on I shall start calling “the WRAG”. It would reduce income for those in the WRAG from £102.15 to £73.10 a week—the same level as jobseeker’s allowance—which would be a reduction of £29.05 a week. Existing claimants would be protected but would be affected if they moved into work and then returned to claiming ESA in the WRAG. Furthermore, as the noble Lord, Lord Patel, showed in Committee, anyone initially placed in the support group, but who subsequently moved into the WRAG, would drop from £109 to £73.10, a reduction of £35.90 a week.

4.45 pm

We debated the impact of these cuts that the Government are proposing in depth and at great length in Committee for more than two hours. In addition, with the noble Baronesses, Lady Meacher and Lady Grey-Thompson, I carried out a review of the potential impact of the cuts, which was made widely available to noble Lords at the time of the Committee. We were supported in our review by a number of disability charities: Leonard Cheshire Disability, Mind, the Multiple Sclerosis Society, the National Autistic Society, RNIB, the Royal Mencap Society and Scope. As a vice-president of RNIB, I declare my interest here, but, as someone who did not personally write a word of the review, I can perhaps say what an excellent report it was and commend it to noble Lords for their attention.

Of course, I extend huge thanks to the charities concerned, led by Rob Holland of Mencap, who managed to complete the review in six weeks flat from start to finish—an astonishing feat. Some 30 organisations responded to our call for evidence, as well as 200 disabled people who gave us often very personal and moving accounts of their lives and aspirations and the hardships that they faced. I am also very grateful to the Minister for finding time to discuss the review with us before Committee at very short notice.

We have also had the benefit of briefings for this debate from the Equality and Human Rights Commission and the Disability Benefits Consortium. The DBC’s briefing actually contains a good summary of our review, so noble Lords have not run short of information to support this debate. In these circumstances, I do not propose to detain the House too long by going through the arguments in detail, but will simply do my best to summarise them as briefly as I can. I hope it will not be necessary to press these amendments to a vote, but if it is, I propose to treat them as consequential in the interest of saving the House’s time, as they relate to the same principle. I hope that the Minister would be agreeable to that approach.

Essentially I want to make five points. The first relates to the hardship that these changes would cause to substantial numbers of disabled people. A drop of £1,500 a year in their benefit income from £5,300 to

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£3,800 would be catastrophic for many disabled people. It would exacerbate poverty among the disabled; a third of working-age disabled adults live in poverty already, compared with only a fifth of those who are not disabled. The Government’s proposals would push many further towards, or actually into, poverty. The EHRC expressed concern that the proposals would cause unnecessary hardship and anxiety to people who have been independently assessed as unfit for work and that the measures were likely to have a disproportionately adverse impact on disabled people.

ESA is the main benefit for people who are unable to work because of illness or disability. In November 2014, nearly half of the 490,000 ESA claimants placed in the WRAG were suffering from mental and behavioural conditions; a further 529,000 ESA claimants were in the assessment phase. The number of ESA claimants in the WRAG is expected to increase to 537,000 by 2019-20. Considerable numbers of disabled people will be adversely affected by these changes if they go through.

For all these reasons, the cut to ESA and the limited capability for work component of universal credit are the aspects of the Bill which are most feared by disabled people and the organisations which represent them. A 38 Degrees petition against the cuts was started about a week ago and at the last count had already attracted nearly 100,000 signatures. Some 36 disability organisations have written an open letter to Iain Duncan Smith calling for the cut to be halted.

The mitigation set out in the Government’s impact assessment is that someone moving into work could, by working around four or five hours a week at the national living wage, recoup the notional loss of the work-related activity component of limited capability for work element or universal credit. However, as the EHRC points out, this is not an option for those unable to work because of disability. As Parkinson’s UK says,

“This is not a realistic possibility for anyone with a progressive condition who has already been acknowledged as too unwell to work”.

Secondly, the Government say that the ESA WRAG premium acts as a disincentive for people to look for work. Our review found no evidence to support this assertion. The 2005 study on which the Government rely deals only with general unemployment, not unemployment among disabled people, which is very different, as evidenced by the so-called disability employment gap and its persistence. Only half of disabled people are currently employed, compared with nearly 80% of non-disabled adults. This has proved intractable over many years to the point where it is almost a structural feature of the labour force. When challenged on the OECD study, officials managed to come up with an article in the Journal of Epidemiology and Community Health from 2010, which said that,

“there was some evidence indicating that benefit level was negatively associated with employment”.

We had some discussion of this with the Minister in Committee but I think even he would agree that the only conclusion to be drawn is that the evidence is rather weak. The authors comment:

“Policy and researchers need to address the lack of a robust empirical basis for assessing the employment impact of”,

recent welfare reforms.

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Thirdly, the claim that disabled people are more likely to get a job if their benefit is cut just does not stand up. In fact, our review found that the precise opposite is the case. The barrier to employment for disabled people is not any financial disincentive created by the ESA premium. What stops disabled people getting jobs are things such as employer attitudes, their health condition, illness or impairment, difficulty with transport, and lack of qualifications, experience, confidence and job opportunities.

Fourthly, the Government aim to halve the disability employment gap, which is very welcome, but our review found that the proposed cut would hinder people’s ability to look for work. They would struggle to pay for well-being activities that help recovery and enable them to feel more confident about considering paid work. The thought of such a drastic reduction in income makes people more worried and stressed—would your Lordships not feel the same?—and this impacts on their mental health and has an impact on work-related activity, such as travelling to appointments, volunteering or obtaining smart clothes for interviews. One thing that particularly struck me was people’s ability to maintain internet and phone connections, which are so important for identifying job opportunities and submitting applications. It would also be harder to attend training courses and work-focused interviews if people were already struggling to meet their basic needs.

Fifthly, it was clear from those who gave evidence to our review that they encountered a wide variety of barriers to work that could not simply be removed by providing generic support. The overwhelming message was that personalised support tailored to the individual’s particular needs is the key.

Our review contained 11 recommendations, chief of which were to reverse the cut of the ESA WRAG component and the equivalent payment under universal credit, and to conduct a thorough impact assessment of the proposed changes to ESA WRAG, plus a raft of other measures to promote the employment of disabled people. This cut is estimated to save £640 million a year by 2020-21 but, as we have seen, this is at the cost of considerable further hardship for disabled people who are already poor and, by definition, unable to work. Furthermore, no assessment has been made of the additional costs to the NHS and social care services as a result of these changes, as well as other DWP benefits. Clauses 13 and 14 are all about making savings for the Treasury and have nothing to do with the interests of disabled people. They should be resisted. I beg to move.

Lord Lansley (Con): My Lords, your Lordships will recall that, as the noble Lord, Lord Low, said, we had a very full debate, in which I participated, in Committee, so I shall simply summarise the contrary argument to that of the noble Lord. As I did then, I very much welcome the report that he and other noble Lords contributed to because it has many recommendations, some of which are in themselves very important for the delivery of future policy, and I hope that the document will be used in the future.

The essence of the argument is that the effect of Amendments 41 and 44 would be substantially to leave things as they are. However, things are not

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satisfactory as they are. Contrary to what the noble Lord, Lord Low, said, it is not just about saving money, although needs must. We have to have regard to the necessity to reduce the overall welfare budget but, in truth, this is fundamentally about the benefit of those who have an albeit limited capability for work actually finding work.

The status quo is that we have a substantial number of people in the work-related activity group, 61% of whom want to work, but each month only 1% are moving off benefits. That is not good enough—it is what we need to move from, and we have to do all the things that are calculated to assist in that. Some of it I know we can agree on. The improvement in the availability of access to work, the extension of work choices, the development of the health and work scheme through to 2017, and the Government’s commitment of £100 million to support that programme are all very important. They are designed to help in the delivery of the objective that we share of halving the disability employment gap, which we also discussed fully on Monday.

5 pm

Beyond that, there is also the question of whether, under those circumstances, we should leave the position as it is with regard to the relationship between out-of-work benefit income and in-work income. The findings of the 2005 study looking at employment generally are, on the face of it, pretty straightforward to understand and evidentially attested: the bigger the gap between income in work and income through benefit, the greater the likelihood of people seeking and finding work. It is, effectively, a kind of economic law of gravity. That being the case, we are dealing here with people who have a limited capability for work. We should not elide the assessment that they are not able to work—if they were not able to work at all they should be in the ESA group and not the WRAG. We all agree that there should be a robust form of assessment, and there is a debate to be had about that, but abolishing the WRAG does not preclude, and in fact might advantage, the process of ensuring that the assessment of the criteria for people being in the ESA group is properly pursued.

So where does that leave us? We should be assisting people into work and the Government need to improve on that. At the same time, we need to make sure that both the support and the incentive structure are fully aligned and not working against each other. That requires change, and change is what undoubtedly Clauses 13 and 14 will bring. It is devoutly to be wished for that we achieve this because the fundamental point, to me, is that we should be looking for people who have a capability for work, albeit limited, to actually be in work. It makes an enormous difference.

It is precisely because so many of those people in the WRAG have mental and behavioural difficulties and problems they have to overcome that the sooner they can be in work, the greater the support for them to be in work or, if they fall out of work, to return to work as quickly as possible—again we discussed this on Monday—through the rollout and access to the IAPT, the greater the benefit that we will give them. The biggest benefit we can give them is to enable them to be in work. Contrary to what I recall the noble

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Baroness, Lady Lister, saying, work is not a cul-de-sac; work is a route. It is a valid route out of poverty, a route to dignity and a route for people to be no longer dependent on benefits—and they do not want to be dependent on benefits. Frankly, we have to use the opportunity in Clauses 13 and 14 to change the current situation and make that happen. Taking those clauses out would, I am afraid, simply leave us in the unsatisfactory position that we have been in for too long.

Baroness Manzoor: My Lords, I have added my name to Amendments 41 and 44. I have listened very carefully to what the noble Lord, Lord Lansley, has said and will try to give some answer to the question that I think he is putting forward, which I fundamentally disagree with.

I thank the noble Lord, Lord Low, the noble Baroness, Lady Meacher, and others for the very good report they undertook. I read it with great interest. I also thank the noble Lord, Lord Low, for making a very comprehensive statement regarding these two amendments.

I do not want to spend too much time on this because we have, as the noble Lord, Lord Low, said, already discussed it for over two hours in Committee. However, I want to say a number of things. I was very disappointed to see the BBC news over the weekend state that government sources had said that people who were concerned about the cuts to ESA and the WRAG were “scaremongering”. This really is not the case. The facts speak for themselves. As I said, we had an extensive debate in Committee, which highlighted the research that has been done and the impact that these cuts would have. I do not want to repeat that research, but it is there. This is not scaremongering.

We on these Benches are opposed to the ESA and WRAG cuts, which will affect people when they are at their most vulnerable—when they are sick. These are people who have been independently assessed by government-appointed assessors—not by their own GPs who they have perhaps had a lifetime relationship with, but by independent assessors—as having limited capacity for work or as being able to return to some form of work in the future. As has already been outlined, over 50% of people in this group have mental health problems and it includes people with disabilities, people with progressive diseases, such as MS and Parkinson’s, and people who may be undergoing cancer treatments.

It is interesting to note that the Government have enshrined in law that there is to be parity between acute services and mental health services in the Department of Health, which is laudable. However, another department—the DWP—is penalising people with mental health problems on ESA and WRAG by cutting their benefit as though this will improve their health and will make them better sooner. That is not true, and there is no research which demonstrates it. The Department of Health and the DWP should at least try to have a dialogue to complement respective government policies. If there was more joined-up thinking between departments the taxpayer could save significant sums of money. There is no evidence that cutting £30 a week from the benefit to that of a jobseeker’s allowance will improve these claimants’ ability and fitness to work. Indeed, it may have the opposite effect.

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On the point made by the noble Lord, Lord Lansley, it is unthinkable that we should put it in the Bill that these benefits should be cut from ESA and WRAG without reviews and without putting into place some of the things that noble Lords have suggested. We and the Government could do those reviews first and then implement a policy. To implement a policy that will have such dire effects first, and then consider that, whatever falls out of it, something will happen, is not right or fair. The Government have to undertake research, think about the policy, consider its impact and then implement it in a fair and considered way.

The Government should strengthen the support that is given to ESA and WRAG claimants by ensuring that specialist advice and support is available to these people. Work coaches should also be given the appropriate training to understand and meet the needs of these claimants.

I look at this issue through the prism of work. The Government must also tackle the thorny issue of employer discrimination—which, although against the law, still exists, sadly, in places—and identify exactly what kind of support they will give to employers to enable them to employ more people with disabilities.

Clauses 13 and 14 should be removed from the Bill. They have no place in a caring and compassionate society.

Baroness Meacher (CB): My Lords, I support the proposal to leave out Clauses 13 and 14. I was disappointed in the comments of the noble Lord, Lord Lansley. Of course, we all want people to be able to return to work, and employment is incredibly helpful if people are well enough to take it on. On the idea that, somehow, if we are not in favour of cutting these benefits we are content that people should remain out of work for an indefinite period unnecessarily, the crucial point is: can these people return to work, is it reasonable, and will these cuts facilitate that return to work or drive people further from the labour market? That is issue and we have all the evidence we need to raise serious questions about it.

I want to avoid repeating the arguments so ably put by my noble friend Lord Low but to endorse the view that these clauses will not achieve the Government’s objective of increasing the numbers of sick and disabled people moving into and remaining in jobs. It is remaining in a job which is absolutely crucial, because there is no point in getting a job for two weeks and then finding that you are so ill you have to drop out. Then, you will spend months trying to restore the benefits you have been receiving. In fact, it is a very dangerous thing for most people on benefits to take a job, which is one of the big issues the Government need to tackle. Until people feel freer to move in and out of work, we will not achieve the results we want. I know that that is the aim of universal credit and I applaud the objective. The reduction of £30 a week in the incomes of these vulnerable groups will undoubtedly cause the most incredible misery and hardship for a lot of already very vulnerable people.

I want to avoid duplicating the comments of other speakers and rather to draw the Minister’s attention to the four key points made by the Royal College of Psychiatrists about Clauses 13 and 14 and the cuts.

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First, as others have mentioned, more than 50% of people affected by this cut will be suffering from mental and behavioural disorders. These people find it particularly hard to get into work and, indeed, to maintain a job for reasons that have nothing to do with their benefits but more to do with fears about employers, health problems, travel problems and so on. Secondly, a survey by the Disability Rights Coalition found that almost seven in 10 disabled people say that the cuts to ESA will cause their health to suffer. To judge by my experience of some 25 years in mental health services, mentally ill people’s health will suffer most severely—if I dare say that in front of colleagues who know about other disabilities far better than I do. When faced with severe financial hardship, people with psychiatric and psychological problems will find it extremely difficult to function at all. Common sense tells us that someone with an anxiety disorder or depression will find rising debts and the prospect of eviction from their home impossible to cope with. Are these people really going to be able to search for jobs effectively? Of course not.

The third point made by the Royal College of Psychiatrists reinforces this. It points out that there is no evidence that cutting the amount of benefit someone with mental health problems receives will make it more likely for them to find work. This point has been made in respect of disabled people in general, but given the sizeable number of ESA/WRAG clients with mental health problems, the view of the psychiatrists should not be ignored. Finally, and most important from the point of view of the Government, these cuts could lead to an increase in demand for NHS mental health services. According to a Rethink Mental Illness survey, 78% of respondents said they will need more support from their GP, community services or in-patient mental health services if their benefits are cut. I do not believe that these services have the capacity to deal with an influx of demand from these groups.

Macmillan Cancer Support has made the point that success in finding a job and moving off ESA is related to the quality of back-to-work support offered, the availability of jobs, and the health of the individual rather than impoverishment. Surely these realities should drive the Government’s policy. Macmillan’s argues that its own research proves the correlation between financial deprivation and poorer health outcomes. In the case of cancer patients, too early a return to work can be dangerous and may drive people into the support group. That is detrimental to them and, of course, to the taxpayer.

The third group I want to mention briefly is the 8,000 ESA/WRAG claimants with progressive and incurable conditions including Parkinson’s, multiple sclerosis and motor neurone disease, as already mentioned by the noble Baroness, Lady Manzoor. Does the Minister believe that anyone currently unfit for work due to Parkinson’s or motor neurone disease will become fit for work in the near future—or ever? These illnesses are relentlessly, tragically and depressingly progressive. Does not the Minister regard it as quite immoral—I do not often use that word but I feel I need to in this context—to treat such clients in the same way as young, fit people looking for work? I would be grateful for his views on this point.

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In conclusion, I find Clauses 13 and 14 immoral in certain respects, as well as counterproductive even in achieving the Government’s own objectives of cutting the costs of sick and disabled people to the taxpayer through driving them back into work.

5.15 pm

Baroness Lister of Burtersett (Lab): My Lords, in responding to the noble Lord, Lord Lansley, I do not want to go over the debate we had last time, although I pointed out then that in the survey to which he referred, the policy implication it was drawing out more was the need to improve in-work benefits. Since that debate, it has been drawn to my attention that the loss of the limited capability for work element of universal credit will cut the benefits received by disabled people in work. I cannot believe that this is the intended consequence.

This matter was brought to my attention by Sue Royston. I will simply read out what she sent me, as otherwise I could get it wrong—welfare rights can get a bit complicated. She wrote:

“Under Universal Credit, the main additional financial support for disabled people in work to cover their extra costs in work is the limited capability for work element. Any person requiring additional support because of a health condition/impairment will therefore have to take the work capability assessment … and be placed in the limited capability for work group (WRAG group) even if they are working more than 16 hours a week. Anyone on Universal Credit who qualifies for the limited capability for work element currently receives an extra £30 in their Universal Credit regardless of the hours they work.

The limited capability for work element and for some disabled people additional support through the disabled person’s work allowance is meant to replace the additional support disabled people in work of 16 hours or more receive in the current system through the disabled workers element of working tax credit …

Removing the limited capability for work element in Universal Credit will … reduce substantially the additional support a disabled person in work can receive to help with their additional costs … 116,000 disabled people currently receive the disabled workers element in tax credits”.

I cannot believe that this is an intended consequence.

I support the amendment but I hope that, if it is unsuccessful, the Minister will look at this matter. It completely flies in the face of what is said to be one of the purposes of these provisions. Perhaps we need to come back to this on Third Reading because we did not look at it properly in Committee. Only the experts in welfare rights pick up something like this and draw it to our attention. It is a very important point that rather undermines the argument that this is all about improving work incentives, which the noble Lord, Lord Low, had already pretty well destroyed as an argument.

Finally, I do not think that I have ever said that paid work is a cul-de-sac. I have said that the danger is that it becomes a cul-de-sac and that depends on what happens to people who are in paid work. If I said it, I certainly did not mean it. It is the danger that we cannot assume that paid work is a route out of poverty. It certainly will not be a route out of poverty for disabled people if we cut their income by £30 a week.

The Lord Bishop of St Albans: My Lords, as I said in Committee, if this reduction in benefits for the disabled is about incentivising work rather than simply

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cutting costs from the benefit budget, I support the Government’s intention. However, the way in which they are going about the task to cut ESA WRAG and its universal credit counterparts is misguided. Clearly, other noble Lords agree with that. For that reason, I am inclined to support the removal of Clauses 13 and 14.

A number of noble Lords have spoken about this stubborn disability employment gap—this sad indictment on a society that has perhaps for too long been willing to ignore the aspirations of the disabled to engage fully in society through work. Reference has already been made to the Government’s impact assessment, which found that 61% of those in the work-related activity group want the opportunity to earn a living. It is quite right that the Government have committed to halving the disability employment gap. The problem is that this is a complex issue. Some have a physical disability, others a mental disability. As the noble Baronesses, Lady Manzoor and Lady Meacher, said, people with chronic illnesses are also lumped into this group.

I declare an interest, in that my sister works for the motor neurone disease charity, which has met with me about this. It is deeply worried about this. This is a disease the progression of which is so rapid that many people would be way beyond any possibility of doing any work even before they get any sort of assessment. It is vital for people with this devastating diagnosis—many are young with children—to have all the support that they need immediately.

However, if this cut continues under the Government’s strategy, I fear that it will be a poor strategy. Indeed, I fully concur with the review into these clauses, published by the noble Lord, Lord Low, which found that,

“the Government’s impact assessment of the removal of the ESA WRAG component is lacking in depth and quality”.

It may be that the case for a cut in benefits will act as an incentive to encourage the fully able to find employment, but I have still to see the evidence that that will apply for the disabled. By removing nearly £1,500 from the future budgets of those who join ESA WRAG or those receiving universal credit limited capability for work, it seems that all the Government are likely to succeed in doing is push more disabled people into poverty, and, as others have said, probably destroy what little confidence and hope that they have as they want to get back into work. Those in this group are not in the same position as fully able JSA claimants and should not be treated as such; many are likely to remain in the WRAG for an extended period and their benefits situation must reflect this reality.

Like many noble Lords, I have met people who are disabled who are longing to get back to work. I do not believe that the basic problem is one of incentivising them. It really is a different problem—one of perception. I remember when I was an archdeacon many years ago and we made some major steps when legislation first came through to get ramps for every one of our churches. We looked at these problems and thought, “How on earth are we ever going to do it?”. Actually, there was a massive change of attitude, partly because we insisted that some of the people who argued against

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it got in wheelchairs and got themselves into churches. They discovered just how difficult it was. I have to confess that I had a change of perception; I had not got my mind around it.

I believe that we have an even bigger leap to take now. The vast majority of disabled people will need customised, individual help. That is part of the issue and the problem. What is needed is not so much carrot-and-stick incentives, but a wider strategy that helps disabled people to overcome the many challenges that they face in entering, or re-entering and staying in, the workplace. We need programmes and interventions designed to help these groups into employment, not arbitrary cuts to the living standards of some of the most vulnerable people in our society.

Baroness Campbell of Surbiton (CB): My Lords, I also support the amendments in the name of my noble friend Lord Low and other noble Lords. I will concentrate on an aspect that I do not think has been fully recognised in the Chamber today.

It is important to remember that the cuts to ESA proposed in the Bill are happening not in isolation, but in a certain context. I respectfully disagree with the noble Lord, Lord Lansley, who said that we cannot let things remain the same. They are not remaining the same; I am afraid that they are getting worse. For example, I have spoken in the Chamber regularly about the desperate situation in social care, where disabled people are having their support drastically cut. This leaves them no alternative but to fund the shortfall personally or to go without and face the consequences. There are other areas of disabled people’s lives where the extra expense of living with a disability is rising year on year and month on month. My own annual bill comes to just over £12,000, which is checked and verified by my social services department—£12,000 a year. Please do not imagine that DLA or PIP covers this; it simply does not.

We know from the spending review last November that the Government plan to bring forward a new White Paper which is expected to announce further changes and reforms to ESA and benefits to disabled people, as well as to the WCA. Disabled people are fearful that the assault on their personal finances does not end with today’s proposals, and I think that they are right to be anxious. Today, the Minister will ask the House to decide whether to follow my noble friend Lord Low’s amendment on financial support for disabled people who have been assessed as unfit for work. In a few weeks’ time, the Minister will again announce plans to reform the whole system further in the White Paper. Today we are being asked to make decisions on proposals that will soon be impacted by further government changes. This is not joined-up government. It is not the joined-up approach that we have been promised by this Administration.

Frankly, disabled people are worn down by the relentless changes and cuts to their support arrangements and are right to be afraid of what is to come. Their personal finances are not in a good state. I speak for all of us, including some others here today—we should be afraid on their behalf and should support my noble friend Lord Low’s amendment today.

27 Jan 2016 : Column 1310

Lord Berkeley of Knighton (CB): My Lords, I ask for a little clarification. I was somewhat astonished by my noble friend Lady Meacher referring to patients with multiple sclerosis, motor neurone disease, Parkinson’s, and diseases that can in fact be terminal. I understand that there is a distinction between the point at which people are diagnosed and the point at which they might be assessed as being able to work, but these are progressive diseases and the danger is that these people could very quickly become not able to work and indeed very ill. It is on this point that I would welcome some clarification.

Baroness Grey-Thompson (CB): My Lords, I rise to speak to Amendment 44 in this group but I also have some comments that relate to Amendment 41. Like many in previous sections of this debate, I have been looking at disabled people getting into work, not what will happen, under Clause 14, to disabled people who are in work. There are some shocking and severe implications for this. The noble Baroness, Lady Lister, was absolutely right that 116,000 disabled people who currently receive the disabled worker element in working tax credit will lose £60 a week. I cannot believe that it would be the intention of the Government to affect disabled people in work in this way. However, if Clause 14 stays in the Bill, that will happen.

In numerous debates, we have talked about universal credit being more simple; quite frankly it is not. I apologise for the somewhat technical nature of what I am going to say, but this is going to affect hundreds of thousands of disabled people. We have been told that a similar amount of additional financial support for disabled people in work would be available in universal credit and would be accessed through the work capability assessment even if the person was working full-time. Any disabled person who is working and requires additional financial support because of the extra costs, which have already been mentioned, would have to take the WCA. If they still qualified as having a limited capability for work, they would receive the £30 element in their universal credit, regardless of the hours that they worked. They would also receive the disabled person’s work allowance. For single people in rented accommodation it is worth a further £30 a week. Together, the limited capability for work element and the work allowance would replace the additional support offered in the current system through the extra element in working tax credit. Removing the limited capability for work element will therefore reduce by about £30 a week, or £1,500 a year, the additional support available to many disabled people in work once universal credit has rolled out. Only those who are working but qualify for the support group will receive an additional element.

5.30 pm

For disabled parents who are in work, the position is even more serious. There are 43,000 households with at least one disabled parent who is receiving the disabled worker’s element of working tax credit. Under universal credit, disabled parents do not get any advantage from the work allowance for disabled people because they get a work allowance as parents, and, unlike in the current system, you can have only one or the other.

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This means that, if this measure goes through, a disabled parent who is working and qualifies as having limited capability for work will, under universal credit—the flagship element of government policy—have no extra support in work compared with a non-disabled parent in otherwise the same circumstances. What will this mean for a disabled parent? Single disabled parents working 16 hours or more, living in rented accommodation and making a new claim for universal credit in 2017, will receive about £70 a week, or £3,500 a year, less than they would receive now on tax credits, despite the rise in the minimum wage.

Disabled single parents with a mortgage who make a new claim are likely to have an even lower disposable income under universal credit compared with under tax credits, amounting to about £100 a week, or £5,000 a year, less. Couples making a new claim where the disabled parent is working more than 16 hours are also likely to be entitled to less under universal credit in 2017 than they are under tax credits now, even though some households in similar circumstances, but where no one is disabled, may be better off under universal credit. Couples with two children and both parents working more than 16 hours a week, but with one parent needing additional help for the first time because they have become disabled, could receive about £3,000 a year less on universal credit in 2017 than under the current system.

I have had numerous examples from the public, charities and from 38 Degrees about how this measure will affect people. I checked two minutes ago and so far 98,477 people have signed the 38 Degrees petition. Therefore, some 98,500 people do not believe that this cut is fair.

There has been a lot of discussion on the evidence around cutting ESA and encouraging people into work. The Government’s evidence to support the proposed cut is now being drawn from an OECD report entitled, Sickness, Disability and Work: Breakingthe Barriers. A Synthesis of Findings Across OECD Countries. However, the previous report on getting disabled people into work, which has often been cited in this Chamber, did not look specifically at the situation of sick and disabled people and the unique circumstances around that. My noble friend Lord Low covered many of the issues. However, at this stage, it is very important to note that the OECD report that was used so many times to justify this cut looked at 13 countries but the advice of a number of expert organisations in the UK has been refuted. The advice of the Equality and Human Rights Commission, which looked at specific proposals in this context, has been turned down, and inconvenient findings and caveats in the OECD report appear to have been disregarded. We have to question how valid and reliable this report is in the context of what we are trying to do in the UK.

For hundreds of thousands of disabled people, keeping Clause 14 in the Bill will be devastating. It means that far from there being an incentive for disabled people to get into work, find work and contribute to society in the future, those with deteriorating conditions will be less likely to stay in work.

I ask the Minister just one question: is it really the intention of the Bill to make it so hard for hundreds of

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thousands of disabled people to get into work? Frankly, I cannot see where the incentive is: far from there being an incentive, I see a huge disincentive.

Baroness Thomas of Winchester (LD): My Lords, cutting the benefit of those who are fit for work but unemployed might act as an incentive but it will really not work for those who are found not fit for work. It is likely to have the opposite effect, pushing some in the WRAG further from employment. One fact that has not come out is that it will surely increase enormously the number of work capability assessment appeals—it will probably overload the system.

Muscular Dystrophy UK has found that the extra £30 a week is invaluable to fund those disabled people in the WRAG who, for example, need to get to interviews or to volunteering work, perhaps with a support worker, or to work experience for which Access to Work is not available. Often, suitable work, volunteering or work experience is some way away from where the disabled person lives, so the cost of transport has to be taken into consideration. As for their DLA or PIP taking up the slack, that is not, unlike ESA, an income replacement. It pays for the extra costs of being disabled, and is all too often spent on topping up a disabled person’s direct payment. Another expense common to many disabled people is the need for extra heating because of their condition. Putting an extra sweater on simply is not the answer.

I am sure the Minister will tell us that this is all about trade-offs, and that for all those people made poorer by this cut, there are other things that mitigate their situation, such as increases in the personal tax allowance and the national living wage, and better support in finding a job. But none of these things will help those disabled people who are nowhere near paying tax now, and who want to volunteer or try work experience in order to build up their CV.

Turning to Clause 14 and the impact on universal credit, we have heard extensively from the noble Baronesses, Lady Grey-Thompson and Lady Lister, about how this particular cut is not well enough understood. It is also not well enough understood that universal credit has taken a huge hit from the Treasury since its inception several years ago. We ought to hear more about that and I think we will when we come on to the work allowances, which reflect this, in the next amendment.

Currently, disabled people working more than 16 hours a week are entitled to the disabled workers element of working tax credit. It is currently payable to those who have a disability or condition that makes it more difficult for them to find and sustain employment and can be claimed, not by taking the work capability assessment, but by being passported from DLA/PIP. Under the changes in the Bill, anyone who requires additional support because of a health condition will have to take the WCA, even if they are working more than 16 hours a week. It really does not make sense. If they are found to have limited capability for work, after 2017 any new claimant will not receive this additional support. No wonder it is commonly agreed that disabled people, many of whom are living in poverty, are yet again being hit hard by the Government.

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Baroness Hollins (CB): My Lords, since Committee I have spoken to a number of people with learning disabilities about their aspirations for work. I want to remind noble Lords that the proportion of people with learning disabilities in paid employment has remained stubbornly low, at around 7% of people known to social services. Most people that I have spoken to—and I think most people with learning disabilities—want to work. They do not want to be assessed to be in the support group. They really want help to find work. But the truth is that the vast majority of people with learning disabilities have never worked: back-to-work support is not what they need. Nor do they need a massive cut to their income, which will further marginalise and isolate them. Will the Minister specify exactly what evidence-based support is being planned for this group and how and where it will be delivered? It seems that personalised support in looking for suitable jobs and making written applications—recognising the low literacy levels among people with learning disabilities—and ongoing support to ensure they succeed in work in the longer term, might help a number of people to increase their chances. But will the Minister also acknowledge that people with learning disabilities will be particularly badly affected by a drop in income, given the difficulties they often have with financial management and making the most of a limited income? This group of people is going to be so adversely affected by this change that I feel the need to emphasise again and again that this policy has not been thought through for this group particularly and will affect it really badly.

Lord McKenzie of Luton (Lab): My Lords, we have added our names to Amendments 41 and 44. Yet again, we have heard compelling arguments why Clauses 13 and 14 should be removed from the Bill.

I should say, compelling arguments bar one—I say to the noble Lord, Lord Lansley, that if we pass these amendments today it is not tantamount to leaving things as they are. The task from now on in is to do something the Government have genuinely started to do: to look at and tackle the barriers that disabled people face when they are trying to get into work. Surely that should continue and accelerate if the closing of the disability employment gap is to be achieved. I think the noble Lord said it was axiomatic that the bigger the gap between income in work and income out of work, the bigger the incentive. If the noble Lord thinks about it, if you took that argument to its logical conclusion, you would not have any benefits at all, and that cannot be right.

The noble Lord, Lord Low, took us through some of the detail of the report: the hardship that these changes would cause; that somehow recouping the benefit by a few hours’ work simply is not practical for people who have been assessed as not fit for work; and the need to tackle the barriers to work, which was a strong strand of that report. The noble Baroness, Lady Manzoor, made a very strong point when she said that we are doing this the wrong way round: we are cutting the benefit without addressing the issues that need to be addressed to help people into work.

The noble Baroness, Lady Meacher, reminded us that 50% of people with a mental health condition are in the WRAG. She raised the issue of people with

27 Jan 2016 : Column 1314

progressive conditions—how on earth can we expect such individuals to access work? My noble friend Lady Lister, and the noble Baronesses, Lady Grey-Thompson and Lady Thomas, focused on the impact of Clause 14 and some of the extremely disagreeable consequences that could flow for people in work under universal credit. As has been said, that simply cannot be what the Government intended.

The right reverend Prelate the Bishop of St Albans reminded us that the disability employment gap is a stubborn one and we need to address it not in a generic way but in an individual, focused way. The noble Baroness, Lady Campbell, gave us just a glimpse of what the cuts to ESA will mean for people, pointing out that the extra expenses for disabled people are rising and are not effectively covered by DLA and PIP. The noble Baroness, Lady Hollins, focused on those people whom it has been particularly difficult to help into work—those with learning disabilities. These are fundamental parts of the analysis that underpins why these amendments are so important and why we should not allow these provisions to stay in the Bill.

Of course, the arguments have come not only from noble Lords today and in Committee but from a range of organisations that work day in, day out, with the very disabled people whom these clauses will hurt. Since Committee we have had more time to absorb the report, Halving the Gap, produced by the noble Lord, Lord Low, together with the noble Baronesses, Lady Meacher and Lady Grey-Thompson, which reviewed the Government’s proposals. The report could not have been clearer in concluding that,

“there is no relevant evidence setting out a convincing case that the ESA WRAG payment acts as a financial disincentive to claimants moving towards work, or that reducing the payment would incentivise people to seek work”.

Indeed, as we have heard, there are concerns that reducing the WRAG component would have the opposite effect and push people further away from the labour market. This is why we support Amendments 41 and 44. Frankly, we do not take lightly the prospect of removing whole sections of proposed legislation, but it would be no more significant than the effect these clauses will have on hundreds and thousands of disabled people.

5.45 pm

The positive benefits of work—good work—on individuals and families is not in question but the fundamental issue is that people in the WRAG have been assessed as not fit for work. Yes, they should be expected to move closer to the job market where they can, but this requires that they be supported in a way which recognises the individual barriers they face and the help they need. This was another clear message from the report of the noble Lord, Lord Low. I thought that even the Government had accepted that current support programmes are inadequate if progress on halving the disability employment gap is to be achieved.

It seems to us that there is something inherently cruel in seeking to push disabled people into work by reducing their financial support without addressing the fundamental reasons why they are out of work in the first place, and why accessing the labour market

27 Jan 2016 : Column 1315

can be so challenging for them. The reason for extra support being given in the first place is that we recognise that they are likely to be unemployed for a longer period than those receiving JSA. We should also recognise that for many disabled people, the current strains of daily living involve extra costs—they are not all in receipt of DLA or PIP—and that the fear of losing the WRAC is creating stress and anxiety among many. The case has been overwhelmingly well made today and we will support these amendments in the Lobby, if that is where the noble Lord, Lord Low, takes us.

Lord Freud: My Lords, these amendments seek to remove Clauses 13 and 14 in order to prevent the proposed changes to the ESA work-related activity component and the universal credit limited capability for work element. Clause 13 amends existing legislation to remove this additional payment for new claims to ESA and aligns the amount of benefit paid to claimants with limited capability for work with that paid to jobseeker’s allowance claimants. I think I need to clarify that although some Peers have mentioned a loss of £60, the work-related activity component is just under £30 a week. Clause 14 is designed to introduce a similar outcome for UC claimants. The measure will save £640 million over the long term but in 2017-18, it will save £55 million while we will invest £60 million into additional practical support.

This change does not affect the support group component, the UC equivalent or the premiums which form part of income-related ESA. Existing claimants in the support group will be entitled to the work-related activity component if they are reassessed into the WRAG. We aim to protect existing ESA claimants who temporarily leave the benefit to try out work and then return to ESA, an issue which the noble Baroness, Lady Meacher, was concerned about.

ESA was set up by a previous Government to support people with health conditions and disabilities into work but it has unfortunately failed the very people who it was designed to help. Despite spending £2.7 billion this year on the WRAG, currently only 1% of people in this group actually move off the benefit every month. As a Government, we want to ensure that we spend money responsibly in a way that improves individuals’ life chances and helps them to achieve their ambitions, rather than paying for a lifetime wasted on benefits.

Currently, those in the WRAG are given additional cash payments but very little employment support. As the Prime Minister recently stated, this fixation on welfare treats the symptoms and not the causes of poverty. Over time, it traps people in dependency. That is why we are proposing to recycle some of the money currently spent on cash payments, which are not achieving the desired effect of helping people to move closer to the labour market, into practical support that will make a genuine difference to people in these groups.

The additional practical support is part of a real-terms increase that was announced at the Autumn Statement. How the £60 million to £100 million of support originally set out in the Budget will be spent is going to be influenced not only by Whitehall but by a task force of representatives from disability charities, disabled people’s

27 Jan 2016 : Column 1316

user-led organisations, employers, think tanks, provider representatives and local authorities. I thank the noble Lord, Lord Low, and the noble Baronesses, Lady Grey-Thompson and Lady Meacher, for their work in Committee in this area.

The new work and health programme will provide specialist support for the very long-term unemployed. We are committed to supporting everyone who is able to work to do so. The forthcoming White Paper is aimed at ensuring that we offer the best possible support to those with health conditions or disabilities, a point raised by the noble Baroness, Lady Campbell, and the right reverend Prelate the Bishop of St Albans.

There have been ongoing discussions with the noble Baroness, Lady Hollins, about learning difficulties. Mencap’s website points out that despite the fact that research shows that 65% of people with a learning difficulty want to work, and the fact that with the right support they make highly-valued employees, only one in 10 people with a learning disability known to social services is currently in paid work. The Autumn Statement announced a real-terms increase in funding of almost 15% for those with health conditions and disabilities.

In Committee, some noble Lords raised concerns that we are expecting claimants who have been found “not fit for work” to be able to work. Although this was discussed then, it is important to stress once again that claimants in the work-related activity group have been found to have “limited capability for work”, which is very different to being unfit for any work. That is an important distinction, as this misconception helps drive people further away from the labour market and perpetuates the benefit trap.

As for returning to work and improved mental health, this Government are committed to ensuring that people with mental health conditions receive effective support to return to and remain in work. The noble Baroness, Lady Meacher, was concerned about this issue. We are investing £43 million over the next three years in trialling ways to provide specialist support for people with common mental health conditions. I have trawled the international evidence, and I know that we are going to build up a very substantial body of knowledge in this key area.

The noble Baroness, Lady Meacher, also raised the issue of deteriorating conditions. People with Parkinson’s who are currently getting the work-related activity component will not lose it, and will continue to receive ESA at the same rate, but any claimant who reports a deterioration in their condition can request a WCA to assess whether they may be eligible for the support group. As all Peers in the Chamber will acknowledge, some of these conditions can take a very long time indeed to develop, and there are times when people in the early period of those conditions are able to work, and indeed really want to.

Another area discussed at length in Committee was the evidence to support the Government’s view that the work-related activity component, in some cases, acts as a financial incentive to remain on benefit. I went through that evidence in some detail then but will summarise the points now. The findings of the OECD report, which we have touched on today, covered the whole population. Although the report does not

27 Jan 2016 : Column 1317

specifically focus on the disabled population, it does not indicate the incentives would not apply there. We have the paper by Barr et al in 2010, which found that,

“eight out of 11 studies reported that benefit levels had a significant negative association with employment”.

It also noted that, “The most robust study”—by Hesselius and Persson—

“demonstrated a small but significant negative association”.

I have already mentioned the Norwegian study of the impact of financial incentives.

It is important to also recognise that the changes to ESA and universal credit work together and cannot be taken forward in isolation. Universal credit will replace income-related employment and support allowance once fully rolled out. We want to ensure that we build on what is working in universal credit to help those with health conditions and disabilities move into work. We have invested a lot in universal credit to make sure that we keep people connected to the labour market from the outset of their claim. Unlike under ESA, UC claimants with a health condition or disability are offered labour market support, where it is appropriate to do so, at the very start of their claim. This helps them to remain closer to the labour market, even if they are not immediately able to return to work.

The noble Baroness, Lady Lister, said that about 116,000 people in the whole country benefit from the disability element of tax credits. The smallness of that number illustrates how the current system is not working. That is why universal credit gets rid of the hours rules that stop people entering the labour market. It makes every hour—every fluctuating hour—pay and gives people the work coach support they need to find and then retain work. I have to say that some of figures from the noble Baroness, Lady Grey-Thompson, do not accurately reflect the situation. The point is that universal credit will make smaller, regular hours pay. Rather than dealing with a lot of very complicated sums, I will write to her and set out our response.

The findings from Universal Credit at Work show that universal credit is making a real difference in getting people closer to the labour market. It is easier to understand. People are earning more, they say they have better incentives to work and, indeed, they are working more. Universal credit is a step towards modernising the welfare system to one that improves individuals’ life chances, but we intend to go a lot further than that. We will publish a White Paper in the new year that will set out reforms to improve support for people with health conditions and disabilities, including exploring the role of employers, to further reduce the disability employment gap—to which we are committed —and promote integration across health and employment.

As for the impact of another budget, I should point out to the noble Lord, Lord Low, what we spend on disability benefit: it went up by £2 billion in real terms over the last Parliament. We spend £50 billion every year on benefits to support people with disabilities or health conditions, which is rather more than we spend on defence and police combined—6% of government spending.

Clauses 13 and 14, together with the additional practical support announced in the Budget, provide the right support and incentives to help people with

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limited capability for work move closer to the labour market and, when ready, into work. I therefore urge the noble Lord to withdraw his amendment.

Lord Low of Dalston: My Lords, I thank the Minister for his very full and careful reply. I knew that it was too much to hope that his generous spending spree would continue into this group of amendments, so we will deal with the case that has been made on its merits. I also thank all those noble Lords who have spoken. The amendment has attracted support from right across the House: I made it 10 speeches in all and 9:1 in favour of the amendment.

6 pm

I want to deal with the points that have been made as quickly as I can—I cannot deal with them all—under four headings. The first two concern the intervention of the noble Lord, Lord Lansley, which was a thoughtful and serious contribution and deserves to be taken seriously. I agree that there are lots of things that should be done to help disabled people into work; the only point is that cutting benefits is not one of them.

The Minister talked about the impact of benefit support on people in the WRAG. Obviously, it varies. People in the WRAG are not a homogeneous group; they are on a journey towards work. People are put in the WRAG because they are assessed as possibly being able to work at some point. Obviously, some will, but many remain on the journey. We should not hobble them in making that journey by cutting their benefit, with all the deleterious consequences for seeking work that I mentioned in moving the amendment.

My noble friend Lord Berkeley, who is sitting behind me, extended the point about the heterogeneous nature of those in the WRAG. The noble Lord pointed out that some, particularly those with progressive conditions, will become less able to make the journey into work. We need to be very mindful of the consequences of cutting benefit for them.

I can make my second point more briefly. It concerns the OECD report of 2005, to which the noble Lord, Lord Lansley, referred and on which the Minister relied. I have to repeat the point I made in moving the amendment: it is not to the point at all. It is not about disability. It does not deal with disability employment or unemployment; it is concerned with the general employment and unemployment of non-disabled people, so it is not to the case.

The noble Baroness, Lady Meacher, referred to the fact that it was counterproductive even in the Government’s terms to cut the ESA premium. I remind noble Lords of the point that emerged from our review: the finding that Clauses 13 and 14, far from helping, will actually undermine the Government’s ability to get disabled people into work and halve the disability employment gap. No one could be more excited than I am about the possibility of getting people into employment and halving the employment gap, but it is very disappointing to see the Government going in precisely the opposite direction to what is needed to fulfil their objective.

Finally, it defies logic and common sense, surely, to say that you will help disabled people to get into work by cutting the money that they have to engage in

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work-related activities. The right reverend Prelate the Bishop of St Albans got it in one when he said that the problem is one not of incentivising people, but of mobilising the job opportunities and giving disabled people the support they need to get into them.

With those points, I am left feeling that the case for the amendment is even stronger than when I moved it, and that it has not really been answered by the Minister, or anyone who has spoken against it. That being the case, I beg to test the opinion of the House.

6.03 pm

Division on Amendment 41

Contents 283; Not-Contents 198.

Amendment 41 agreed.

Division No.  1

CONTENTS

Aberdare, L.

Adams of Craigielea, B.

Addington, L.

Ahmed, L.

Allan of Hallam, L.

Alli, L.

Alton of Liverpool, L.

Andrews, B.

Armstrong of Hill Top, B.

Bach, L.

Bakewell, B.

Bakewell of Hardington Mandeville, B.

Barker, B.

Bassam of Brighton, L.

Beecham, L.

Beith, L.

Benjamin, B.

Berkeley, L.

Berkeley of Knighton, L.

Best, L.

Bhatia, L.

Bilimoria, L.

Blunkett, L.

Boateng, L.

Bonham-Carter of Yarnbury, B.

Borrie, L.

Bowles of Berkhamsted, B.

Bradshaw, L.

Bragg, L.

Brennan, L.

Brinton, B.

Brooke of Alverthorpe, L.

Brookman, L.

Browne of Belmont, L.

Bruce of Bennachie, L.

Burt of Solihull, B.

Campbell of Pittenweem, L.

Campbell of Surbiton, B.

Campbell-Savours, L.

Carlisle, Bp.

Carter of Coles, L.

Cashman, L.

Chandos, V.

Chester, Bp.

Chidgey, L.

Clancarty, E.

Clark of Windermere, L.

Clement-Jones, L.

Clinton-Davis, L.

Collins of Highbury, L.

Colville of Culross, V.

Condon, L.

Corston, B.

Cotter, L.

Coussins, B.

Craigavon, V.

Crawley, B.

Cromwell, L.

Cunningham of Felling, L.

Darling of Roulanish, L.

Davies of Oldham, L.

Dean of Thornton-le-Fylde, B.

Dholakia, L.

Donaghy, B.

Donoughue, L.

Doocey, B.

Drake, B.

Dubs, L.

Durham, Bp.

Dykes, L.

Eames, L.

Elder, L.

Erroll, E.

Falkland, V.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Featherstone, B.

Finlay of Llandaff, B.

Foster of Bath, L.

Foster of Bishop Auckland, L.

Fox, L.

Freyberg, L.

Gale, B.

Garden of Frognal, B.

German, L.

Giddens, L.

Glasman, L.

Golding, B.

Gordon of Strathblane, L.

Goudie, B.

Gould of Potternewton, B.

Greaves, L.

Grender, B.

Grey-Thompson, B.

Griffiths of Burry Port, L.

Grocott, L.

Hain, L.

27 Jan 2016 : Column 1320

Hameed, L.

Hamwee, B.

Hannay of Chiswick, L.

Hanworth, V.

Harris of Haringey, L.

Harris of Richmond, B.

Hart of Chilton, L.

Haworth, L.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Hollick, L.

Hollins, B.

Hollis of Heigham, B.

Howarth of Newport, L.

Howe of Idlicote, B.

Howells of St Davids, B.

Howie of Troon, L.

Hoyle, L.

Hughes of Woodside, L.

Humphreys, B.

Hunt of Chesterton, L.

Hunt of Kings Heath, L.

Hussain, L.

Hussein-Ece, B.

Irvine of Lairg, L.

Janke, B.

Jay of Ewelme, L.

Jay of Paddington, B.

Jones, L.