Consideration of amendments on Report resumed.

Clause 25 [Parliamentary control]:

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

moved Amendment No. 51:

Clause 25, page 19, line 12, leave out paragraph (b) and insert—

"( ) regulations under sections 8 to 14;"

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, the amendments in this group are a refinement of those that I tabled for Grand Committee. At that point, I believed that all the regulations flowing from Part 1 of the Bill should be subject to the affirmative procedure. The Minister pointed out that some 400 orders would be consequential on the enactment of the Bill, most but by no means all of them translating orders for incapacity benefit to fit the new regime of the employment and support allowance. Therefore, it would be a complete waste of parliamentary time to have all of them debated again and again as the situation changed. However, as I said at the beginning of today's proceedings, we are dealing with a wholly new benefit, which has not even been piloted very far as yet, although pilots have started—indeed, we were grateful for the report of the first year of the pilots that the Minister provided some weeks ago.

Your Lordships' Delegated Powers and Regulatory Reform Committee did a pretty thorough job in recommending that certain of the orders should always be affirmative, and the Government have acquiesced, putting down amendments to cover those. However, the committee's report stated that it was "not inappropriate" for some of these orders to be affirmative the first time they appear. All the subsequent changes would be, as the Bill states, by regulations subject to the negative resolution procedure. While I have tried to incorporate some of the Minister's concerns about making all the Part 1 regulations subject to affirmative approval by this House and another place, I have not heard any suggestion that the second and subsequent orders would be of such a minimal nature that the negative resolution procedure would be appropriate.

Naturally, I appreciate the Government's attempts to take into account the recommendations of the DPRRC and to make some of the more contentious regulations arising earlier in the Bill subject to the affirmative procedure. I hope that I can persuade the Government to do the same with the regulations that will arise from Clauses 8 to 14, which deal with the meat of the system: they cover how the assessments will be set up, what they will assess and what the results of those assessments will be. Although the Government have attempted to show us as much draft regulation as possible, it is impossible for them to provide us with a full picture, especially as the various pilot stages have yet to be completed.

It is therefore inevitable that quite major changes will be made after the first regulations are made. For example, the pilot could well show that the original method of conducting assessments or a particular facet of them was not working as expected or indeed desired. Only last Thursday, the Minister and I debated a JSA order to give effect to the original policy intention of the pilot. It is therefore crucial that Parliament is given a chance to consider the final ESA system properly, not only when it is fully rolled out, but as it changes. I do not believe that a one-time only debate will do.

Although I originally thought, as I said, that it would be right to make all the Part 1 regulations affirmative, I was, as I also said, gently steered off that by the Minister, who called my proposal "overkill". I agree. However, after Committee, the Bill team helpfully provided me with a table of what regulations each part of the Bill empowered. These clauses cover 15 separate regulations—hardly an enormous burden on parliamentary time given that they are closely associated in many cases and will surely be made and therefore debated together. The amendment would give the House an opportunity to have a fully informed debate on this new and unproven system as it changes—as it assuredly will. It will be of great value in providing further scrutiny of what your Lordships—even the Minister—will agree is a very complex Bill. I beg to move.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I thank the noble Lord for moving his amendment, which would make regulations under Clauses 8 through 14 subject to affirmative resolution. As he acknowledges, that is a restriction on the amendment that he moved in Committee.

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, it is an enormous restriction.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

Well, my Lords, we shall see quite how significant the restriction is. The scrutiny of legislation is a very important subject. However, I continue to disagree with the way forward that the noble Lord's amendment suggests.

As noble Lords are aware, we have provided draft regulations to the House under Clauses 8, 9, 10, 11 and 13. The regulations under Clause 12 are subject to affirmative procedure on their first use; that is quite right, given that mandatory work-related activity will be a step beyond Pathways to Work-style conditionality. On other clauses in Part 1, we have accepted the recommendations of the Delegated Powers and Regulatory Reform Committee on the regulations that should be subject to affirmative procedure. On the clauses covered by the amendment, the committee did not make recommendations and specifically noted in its report the number of draft regulations that the Government have made available.

I do not believe that it is necessary for regulations under Clauses 8 to 14 to be subject to affirmative resolution, given the steps that we have taken and the reassurances that we have given. The amendment goes further and would have all sets of regulations under the clauses now and forevermore subject to affirmative resolution. Small changes in regulations are necessary to ensure that policy is effective and works. When necessary, this can mean learning from experience and altering procedures as appropriate. Making all regulations subject to affirmative procedure would require debates in both Houses on regulations that, for example, made small changes to notification requirements or the test applied before deferring an interview. That could be counterproductive, in delaying changes that were needed to improve service to our customers.

As for the number of regulations that the amendment would cover, we have 15 regulation-making powers, but that could result in something like 100 regulations in all. I am sure that even the noble Lord would accept that that would be a considerable burden on Parliament's time. It is always good fun to be in his company when debating these matters, but one can have too much of a good thing—and I suggest that the 100 regulations subject to an affirmative procedure that would result from this amendment would be a little more than a good thing.

On that basis, I urge the noble Lord to withdraw his amendment. In doing so, I am very happy to sit with him and ask officials between now and Third Reading to take him in a bit more detail through what might be involved with the 100 regulations that he suggests should be affirmative. That might help to engender a broader understanding of the flavour of the regulations and the small movements that some of them might contain.

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, that offer is most gratefully accepted, but I am concerned about the Minister's use of the words "small changes", because with some of the regulations the changes are likely to be far from small; in fact, they might be quite extensive. Certainly, as the Minister says, the Government will learn from experience as this all beds down, which is the point of the five-yearly report that we agreed to a few hours ago. I am surprised to hear that there may be as many as 100 regulations in all, when I cited 15 that would, as I saw it, be involved in this change. As I said, I do not think that 15 regulations would be excessive, given that many would be debated together. Arguably, 100 regulations would be excessive, but I will have to ascertain how linked they happened to be and whether they would be likely to be debated together and available for debate on the same day, which is sometimes another factor in our consideration of regulations. I shall withdraw the amendment, but again reserve my right to raise it again at Third Reading should I feel it necessary. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 4 [Transition relating to Part 1]:

8:45 pm
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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

moved Amendment No. 52:

Schedule 4, page 74, line 23, leave out "an existing benefit" and insert "incapacity benefit, income support or severe disablement allowance"

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I shall speak also to government Amendments Nos. 53 to 68 and government Amendments Nos. 69 to 80. For some reason, they have been degrouped on the amendment list, but they are part of a whole, and I propose to speak briefly to them all at the same time.

This group of amendments is technical in nature and relates to Schedule 4. The amendments clarify the drafting to ensure that we have the power to migrate all groups that we may wish on to employment and support allowance. Their intention is to ensure that we have the power to migrate existing customers who can claim income support as carers or lone parents but who have also demonstrated incapacity for work. The amendments do not affect the policy position that we have taken previously on migration of existing customers. Existing customers will be migrated on to employment and support allowance over time and as resources allow, and will have their benefit levels protected, meaning that nobody will suffer a cash loss under the new allowances. The amendments ensure that the correct powers are in place to follow this policy. I beg to move.

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, as the Minister said, these are extremely technical amendments. Perhaps he would care to look at paragraph 11 of Schedule 4. I have done a little analysis of Amendments Nos. 71 to 78, which totally redraft the paragraph from the beginning of line 5 to the end of line 15. I note that the amendments would insert the words "an award of" three times, in sub-paragraphs (a), (b) and (c). Surely it would be more appropriate for Amendment No. 71 to alter line 5 to state,

"'existing award' means an award of",

followed by sub-paragraphs (a), (b) and (c). This would save six words on the statute book. We all try at all times to limit the statute book to the purposes for which the various Acts of Parliament are designed. I would have no complaint if the Minister decided to remove at Third Reading the whole of paragraph 11 and show us a Keeling schedule, which would make life a lot simpler.

I agree with Amendments Nos. 52 to 56, but I am confused by Amendment No. 57. Why does income support suddenly appear? Amendment No. 58 relates to migration. I have covered the other amendments, except for Amendment No. 69. That amendment will leave out sub-paragraph (4), which defines "existing award", from paragraph 7 of Schedule 4. Why is this necessary?

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I thank the noble Lord for his points. On his suggestions about the drafting of these amendments, in my short time in your Lordships' House, I have learnt to subject myself to the wisdom of parliamentary counsel. I will pass on those comments to see whether counsel wish to offer alternative drafting, but I would not hold my breath on that.

The noble Lord was asking about Amendment No. 57, which provides that the claim for ESA be treated as a claim for incapacity benefit, income support or severe disablement allowance as part of the transition arrangements. I think that that touches on the point about where claims might come in at a point of transition, when there is an opportunity to migrate people on to ESA. That is the thrust of the amendment. However, rather than prevaricating on this matter, I ought to revert in more detail to the text.

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, before the Minister sits down, would he agree to write to me on those various points? I realise that I have rather bounced him. To an extent, I have rather bounced myself in these questions. However, these sorts of amendments often go through without any comment at all. That is a bad precedent to set and I am not going to set it.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, the noble Lord has been assiduous in pursuing these details. He is quite right. I am sure that these technical amendments generally go through on the nod. I am happy to write to him in more detail and to expand on the focus of that amendment—or that part of the group of amendments. Would he specify again whether there are any further provisions, so that we can ensure that those are covered when we write to him?

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, my three questions were about Amendment No. 57, about paragraph 11 in total and about why leave out sub-paragraph (4) on page 76.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I undertake to write to the noble Lord on those.

On Question, amendment agreed to.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

moved Amendments Nos. 53 to 68:

Schedule 4, page 74, line 31, leave out "an existing benefit" and insert "incapacity benefit or severe disablement allowance"

Schedule 4, page 74, line 33, after "claim" insert "for incapacity benefit, income support or severe disablement allowance"

Schedule 4, page 74, line 34, leave out from "day" to "to" in line 35

Schedule 4, page 74, line 35, after "treated" insert "in prescribed circumstances"

Schedule 4, page 75, line 2, leave out "an existing benefit" and insert "incapacity benefit, income support or severe disablement allowance"

Schedule 4, page 75, line 6, leave out "benefit" and insert "award"

Schedule 4, page 75, line 19, leave out from "existing" to "would" in line 22 and insert "award, and

( ) had it continued to be possible to make an award of incapacity benefit, income support on grounds of incapacity for work, or severe disablement allowance, the award which would have been made to him ("the hypothetical award")"

Schedule 4, page 75, line 27, at end insert "hypothetical"

Schedule 4, page 75, line 28, leave out from "award" to end of line 29

Schedule 4, page 75, line 32, leave out "an" and insert "the hypothetical"

Schedule 4, page 75, line 32, leave out "of the existing benefit"

Schedule 4, page 75, line 41, leave out "benefit" and insert "award"

Schedule 4, page 75, line 42, leave out "benefit" and insert "award"

Schedule 4, page 75, line 42, leave out "his award" and insert "it"

Schedule 4, page 75, line 45, leave out from beginning to "would" in line 1 on page 76 and insert "and,

( ) had it continued to be possible to make an award of incapacity benefit, income support on grounds of incapacity for work, or severe disablement allowance, the award which would have been made to him"

Schedule 4, page 76, line 7, leave out "benefit" and insert "award"

On Question, amendments agreed to.

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Lord Low of Dalston (Crossbench)

My Lords, the amendments that we have just agreed to might be technical but I do not intend to let them go through on the nod. Although they have already gone through, I wish to address them none the less. In speaking to them, the Minister referred to the Government's intention to move people on to employment and support allowance with income protection. It is the question of protection that I wish to address.

The Government have made it clear that they intend incapacity benefit and income support claimants to move over to employment and support allowance following its introduction in October 2008. I understand that they intend to begin this migration with the most recent claimants and those with dependent children because the quicker a claimant engages in work-related activity the more likely they are to move off benefit and into work. Helping parents off benefits and into work will also have a positive impact on the drive to reduce child poverty.

This is a probing amendment designed to enable me to raise three issues on migration, which I would be grateful if the Minister would be kind enough to address. First, will there be a loss of income for claimants being migrated, as and when that occurs? Secondly, there is a real danger that many current incapacity benefit claimants will not meet the requirements of the new personal capability assessment and will fail to qualify for the employment and support allowance and therefore be moved on to JSA. Lastly, what will happen to residual, transitional protection for claimants of invalidity benefit and severe disablement allowance, which are both now abolished?

First, on the loss of income for those migrating to the employment and support allowance, the Government have stated that claimants migrating across from incapacity benefit will have their income protected to ensure that they do not suffer any financial loss. Concerns have been raised with me by organisations outside this House that rates of employment and support allowance payable will be significantly lower than those currently paid through incapacity benefit or income support. Those shortfalls will arise because, in the first place, age, adult- and child-dependant additions, currently payable on top of the long-term rate of incapacity benefit, are to be abolished. Secondly, the average rate of incapacity benefit that has been paid is about £20 a week higher than the standard long-term rate, which is the level of protected income on which claimants will be moved across to employment and support allowance. The average rate of incapacity benefit in payment at August 2006 was £91.12 a week, against the standard long-term rate at that time of £70.05 a week. Those figures are drawn from DWP statistics.

In addition, any protection of income levels when a claimant is migrated across will last only while that person remains eligible for ESA. It is the position of claimants losing entitlement to ESA under the new personal capability assessment, which is in the process of being revised or transformed, to which I will now turn. Under the new assessment procedure, the three-point descriptors are being removed, which will mean that existing incapacity benefit and income support claimants, especially those with physical health problems, will find it much more difficult to establish entitlement to benefit once they are migrated. Anyone migrated across to ESA who fails to establish entitlement under the new PCA will lose all income protection and will instead have to claim jobseeker's allowance at £57.45 a week. As well as the substantial loss of weekly income, those claimants will be denied the personalised and individualised support promised for ESA claimants.

Claimants who are migrated across to ESA with income protection and who establish entitlement under the revised PCA will also suffer financially in the longer term, because the income protection effectively acts as a freeze on benefit income levels. On an annual uprating basis, any increase to the rates of ESA will be subtracted from the amount of income protection received, so the Government will effectively be giving with one hand and taking with the other. The overall income will remain unchanged. That will have two effects: first, a person will be driven more deeply into absolute as well as relative poverty, as he will have a static income over a five-year period, while prices, earnings and inflation will all continue to rise throughout the period; and, secondly, it will create complexity of administration and bureaucracy that will be difficult for both the claimant and the DWP to understand in any meaningful way.

Finally I wish to consider the position of those who at present enjoy transitional income: former invalidity benefit and severe disablement allowance recipients who enjoy transitional protection. In addition to the issues to which I have drawn attention, a number of claimants have residual transitional protection in relation to old claims for invalidity benefit and severe disablement allowance, both now abolished. Invalidity benefit was abolished in 1995 and claimants were subsequently moved to incapacity benefit. Invalidity benefit claimants were given transitional protection, which means that their benefit payments are not subject to income tax; they have an entitlement to dependency additions and they do not have any deductions made with respect to private pensions.

Severe disablement allowance was abolished in 2001 and SDA claimants were moved to incapacity benefit. SDA was paid to claimants who had not paid national insurance contributions but had established an 80 per cent level of disability. Those claimants were given transitional protection to enable them to continue to receive benefit even though they failed to meet the entitlement conditions for the new system. SDA has a number of different rules regarding payment rates, earnings rules, entitlement to premiums and so on. What do the Government intend will happen to those claimants, who were guaranteed protection when the respective benefits were abolished? I beg to move.

9:00 pm
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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, this amendment allows me to probe how ESA will affect claimants currently receiving benefits other than incapacity benefit. We have already spoken a little about carers, and the Minister was able to give us some good news on that. My concern now is lone parents. Lone parents who receive income support, with or without a disability premium, are not subject to any conditionality. They are not expected to move towards work readiness, but instead are given the support necessary to be full-time parents.

However, that does not appear to be the case under ESA. We have heard of no exemptions that will apply to lone parents in the work-related group. Presumably that means that a lone parent with a young child will be expected to engage in work-related activities that under other benefits systems would not be required. The options available, therefore, will again presumably be to move on to the higher level of benefit at which we have been assured ESA will be set or to remain on a lower level of benefit but be free from conditionality. Can the Minister confirm whether that will be the case, and, if so, can he reassure us that the decision-maker will be sympathetic to the non-health-related requirements that such a situation may put on a claimant? Will a failure to find adequate childcare be considered a good cause to miss a work-related activity?

As far as I am aware, the draft guidance makes no mention of that sort of situation. It is most important that we hear how the Minister intends it to work. I therefore congratulate the noble Lord, Lord Low, on producing this amendment, which has enabled me to tack on a little extra to what was originally intended.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I thank the noble Lord, Lord Low, for giving us a chance to talk about these important issues and for giving the noble Lord, Lord Skelmersdale, a chance to raise some items in an amendment that he either has not moved or has yet to move. The amendment to Schedule 4 would remove the power to terminate the existing benefit of customers migrating to ESA in particular circumstances. I understand that the thrust of this is as a probing amendment, so that the noble Lord can get the answers that he seeks to the points raised.

I would like to respond to the noble Lord's specific questions around transitional protection. As we have said, all existing customers will have their cash level of benefit protected, provided that they continue to meet the entitlement conditions to the employment and support allowance. That applies to any customer on existing incapacity benefits, whether incapacity benefit, severe disablement allowance or income support paid on the grounds of disability or incapacity, and whatever their original route on to these benefits, such as former invalidity benefit customers.

The noble Lord also asked about those existing customers who could fail to satisfy the new PCA. We are obviously still reviewing and testing the new PCA. Once this has finished we will be in a better position to say what the most appropriate stage to introduce it for existing customers is. We expect that it will be at the first PCA review following migration on to ESA. The new PCA has been designed to assess whether a person has a limited capability for work, which is a condition of entitlement to ESA for all new and existing customers. People who do not satisfy the test will therefore not be entitled to ESA. We believe that this is right and proper. That is because the new PCA has been designed by medical experts to accurately assess people's health conditions. It would be unfair for existing customers not to be subject to the same conditions of entitlement as everyone else.

This amendment to Schedule 4 relates to our powers around migration of existing customers to employment and support allowance. As we have shown in the amendments already debated, we have been considering Schedule 4 very closely to ensure that we have the appropriate powers to successfully achieve our aims for the migration of existing customers over time, and as resources allow. The reason for this is that the migration of existing customers is a large and complex undertaking. Making sure that the new process is bedded down beforehand will ensure that the migration is as smooth as possible and reduce the risks around such a large project. We wish to learn from our operational experience here.

Schedule 4 is designed so that we can respond effectively to changing circumstances—for example, learning from operational experience in the period of transition for existing customers following the introduction of employment and support allowance. Removing powers in Schedule 4 removes our ability to adapt to circumstances that cannot be foreseen. It would not be appropriate for us to remove this power and risk being unable to respond to changing circumstances.

The noble Lord, Lord Skelmersdale, asked whether lone parents would be required to attend work-focused interviews as an ESA customer. The answer is yes, if they were an ESA customer. However, their caring responsibilities will be taken into account by personal advisers when they arrange interviews. They will be able to defer interviews if the deferral test is satisfied. I stress that some lone parents will continue to be able to choose whether they remain on income support. If their only route is incapacity, ESA would be the route available to them. If they wish to access income support as lone parents. they also have that choice. They can make a judgment as to the value of the benefits and the conditionality, and the support that is offered by the two streams.

I reiterate that to the noble Lord, Lord Low. Not unreasonably, his questions focused on levels of benefit, but we should recognise that the new system is one which provides significant support for people which was not there before. We have to look at the balance of the package. That support seeks to enable people to move into work or closer to work, to eventually meet their aspirations as individuals. Those aspirations have been denied and neglected for too long. That is what the new system is about. You have to look at the balance of the allowances together with the support that will come with the new ESA regime.

I hope that that has dealt with the questions from the noble Lord, Lord Low, but I will be happy to answer further if he feels that I have missed some points.

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Lord Low of Dalston (Crossbench)

My Lords, that is encouraging and reassuring. I draw particular comfort in relation to my first and third questions from the Minister's assurance that people will be migrated on a protected income equivalent to their existing cash benefit. The sting in the tail came when he said, "provided that they qualify for ESA", although there was further assurance when he said that the assessment of whether they continued to qualify for ESA would come at the first review after migration. I understood that to mean that there would be migration on existing cash benefit, which would be subject to review at a later stage. These are technical matters, so I will reserve judgment until tomorrow, when I have studied carefully all the Minister's words. For now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

moved Amendments Nos. 69 to 80:

Schedule 4 , page 76, line 38, leave out sub-paragraph (4)

Schedule 4 , page 77, line 44, leave out "under section 68 of that Act"

Schedule 4 , page 78, line 5, leave out "benefit" and insert "award""

Schedule 4 , page 78, line 6, at beginning insert "an award of"

Schedule 4 , page 78, line 6, leave out from "benefit" to end of line 7

Schedule 4 , page 78, line 8, at beginning insert "an award of"

Schedule 4 , page 78, line 8, leave out "under section 68 of that Act"

Schedule 4 , page 78, line 10, at beginning insert "an award of"

Schedule 4 , page 78, line 10, leave out from "support" to beginning of line 11 and insert "made to a person to whom regulation 6(4)(a) or 13(2)(b) or (bb) of, or"

Schedule 4 , page 78, line 11, leave out "8,"

Schedule 4 , page 78, line 13, leave out from "1987/1967)" to end of line 15 and insert "(persons incapable of work or disabled) applies;"

Schedule 4 , page 78, line 15, at end insert—

""incapacity benefit" (except in paragraph 10(a)) means—

(a) incapacity benefit under section 30A, 40 or 41 of the Contributions and Benefits Act, (b) long-term incapacity benefit under regulation 11(4) of the Social Security (Incapacity Benefit) (Transitional) Regulations 1995 (S.I. 1995/310) (former sickness benefit), and (c) invalidity benefit which has effect by virtue of regulation 17(1) of those regulations as if it were long-term incapacity benefit;

"income support" means income support under section 124 of the Contributions and Benefits Act;

"severe disablement allowance" means severe disablement allowance under section 68 of that Act (as it has effect by virtue of article 4 of the Welfare Reform and Pensions Act 1999 (Commencement No. 9, and Transitional and Savings Provisions) Order 2000 (S.I. 2000/2958) (C. 89));"

On Question, amendments agreed to.

Clause 29 [Local housing allowance]:

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Lord Best (Crossbench)

moved Amendment No. 81:

Clause 29 , page 20, line 21, at end insert—

"( ) The appropriate maximum housing benefit shall only vary for those aged under 21."

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Lord Best (Crossbench)

My Lords, this amendment seeks to reduce youth homelessness, remove disincentives for young people to leave hostels and supported housing and to get jobs, and to enable vulnerable young people to obtain and retain somewhere to live. It would achieve those results by moderating the impact of the controversial single room rent, in future to be called the shared room rate, which limits the amount of housing benefit for those under 25 and creates a shortfall between what a tenant must pay in rent and the benefit they receive.

The Government's overhaul of the housing benefit system, with the introduction of local housing allowances after proper evaluation of its Pathfinders, is very welcome but, in respect of younger people, the arrangements continue to be flawed. I hope to demonstrate that the Government's insistence to date on retaining the highly problematic shared room rate is based on a misunderstanding of the ways in which the private rented sector is now working.

The amendment's progress has exemplified very well the revising role of this Chamber. Noble Lords have brought their knowledge and presented expert evidence from concerned organisations outside this House—in this case, Shelter, Citizens Advice, the Scottish Council for Single Homeless, the YMCA, Centrepoint, the Foyer Federation, the British Property Federation and others. The amendment also takes account of discussions in the other place and represents a compromise from the amendment proposed there.

After the Committee stage provided the opportunity for a detailed discussion with a powerful speech from the noble Earl, Lord Listowel, and support from the noble Lord, Lord Oakeshott, and others, and after a helpful meeting with the Minister, I am returning to the issue with some hope of persuading him that it would be entirely sensible for the Government to take this amendment on board. I am encouraged to be optimistic by hints from the relevant government department—the Department for Communities and Local Government—which is responsible for homelessness policy. Earlier this month, that department published its policy briefing, Tackling Youth Homelessness. This draws attention to the problems created by the single room rent and concludes:

"The Government is currently looking at this issue in the context of the Welfare Reform Bill".

In the hope that the Department for Work and Pensions may be able to assist the Department for Communities and Local Government on this, perhaps I could spell out the reasons why I believe that the objections to this amendment are unfounded. It is said that if housing benefit covered the rent for a self-contained flat, those under 25 would reject shared accommodation and go for the more expensive option of their own flat. This would not only cost the state more but would put the individual deeper into the poverty trap, with a level of benefit that they could not match if they got a job. Moreover, it would mean that those on benefit were enjoying higher housing standards than most young people in work, the majority of whom are in shared accommodation.

This analysis misunderstands the realities of the housing market. It is possible for someone on housing benefit to obtain shared accommodation only if landlords let this form of housing to housing benefit claimants. In some areas, there is no tradition of shared lettings—for example, in parts of Scotland and in many rural areas—so such accommodation simply does not exist. Elsewhere, where there are such lettings, these are seldom available to those on benefit. In a recent Shelter survey of landlords in Brighton, only 15 per cent were willing to let to anyone on housing benefit, let alone to those under the age of 25. In most places where landlords are letting shared housing to a group of young people, there are plenty of students and young professionals needing accommodation, reflecting the decline in the number of first-time buyers in today's overheated market.

As a father of four young people who have all occupied shared accommodation in the private rented sector in four different places, both while at and after leaving university, I am very familiar with this market. Landlords like these tenants because parents such as me can be required to act as guarantors of the rent and will often help with a deposit and rent in advance. By contrast, landlords do not want the risky prospect of someone on housing benefit, particularly if that very low income tenant faces a shortfall between his rent and his benefit. Many landlords blatantly declare, "No DSS"— "No DWP" has not yet caught on—while the others are very likely to deploy the same policy without announcing it. There are other factors relating to the supply of shared housing for benefit claimants.

Becoming part of a group of flat-sharers is natural and easy for my children and their friends. It is utterly different for the lone individual—someone leaving prison, leaving a violent partner or leaving specialist accommodation. Where an existing group of tenants is looking for a fellow housemate or sharer, the Shelter survey shows that only 7 per cent would ever consider, let alone accept, a housing benefit claimant to join them.

Meanwhile, there have been big changes in the private rented sector over recent years, as research at York University has shown. The number of lettings in the old HMOs—houses in multiple occupation—has declined; many have been converted into self-contained flats. The Housing Act 2004 is now beginning to bite with its requirements for higher health and safety standards for HMOs, so the current decline is likely to accelerate. Conversely, there has been an explosion in the development of small flats through the phenomenal growth of the buy-to-let market. Saturation has been reached in some towns and cities, with small self-contained flats standing empty but beyond the reach of the under-25 year-olds, however great their needs, because of the shared room rate restriction.

Do the statistics confirm the dearth of available shared accommodation for those on housing benefit? The answer is a resounding "yes". After the introduction of the single room rent a decade ago, the pressure to go into shared housing would lead one to expect a rise in the numbers moving into this kind of accommodation, but the facts show the exact opposite. Numbers have fallen dramatically from 33,000 people in 1997 to about 12,000 today. In part, as the noble Lord, Lord McKenzie, suggested, this may reflect the fall in the number of unemployed young people, but the fall in shared lettings to housing benefit claimants also comes at a time of increased homelessness, which strongly suggests that those at the bottom of the economic ladder simply cannot find any shared housing for which they can obtain the requisite housing benefit.

Helpfully, the definition used for the new shared room rate for the local housing allowance is broader than for the single room rent in the past, but the DWP's research in the local housing allowance Pathfinder areas shows that, in fact, this well intended change has not made any difference. While there are self-contained flats with the level of housing benefit capped in the new scheme at the median, preventing any extravagance by tenants, shared housing, however it is defined, is not there for claimants to find.

What about those who are already in a flat, paying their own way, who lose their job? Because of the shared-room rate, they will be expected to downsize into shared housing while they seek a new job. Since we know that the chances of finding such housing are remote, they will probably have to stay where they are and face shortfalls in their rent, which will virtually halve their income from jobseeker's allowance. This, of course, is a recipe for arrears, eviction, then homelessness. The chances of getting back into work are dramatically reduced by this unreasonable and unrealistic benefit restriction.

What would it cost to sort this out? The Government accept that £20 million is about right for abolishing the single-room rent, provided the change does not increase demand. Out of a total budget for housing benefit of more than £12 billion, this figure is not too significant. However, Amendment No. 81 recognises that the Government do not want to go the whole way yet in removing the limitation entirely, so this amendment goes for a compromise by confining the change to those who are aged 21 or over. The Minister agrees that this reduces the headline figure to £10 million, but he argues that 21 is an arbitrary age.

There are logical grounds for using 21 as the age when the position might change for claimants. The minimum wage goes up at age 22, and at present the single-room rent itself uses 21 as a cut-off for a special exemption that allows those leaving care to go into self-contained housing. Care leavers would not lose this entitlement after age 21 if the amendment were accepted. I would add that using the half-way house of age 21 would limit the Government's exposure to the risk of higher costs. It allows the ground to be tested before moving on to complete abolition of this restriction on benefit if the results are positive.

Even if the change costs more than the £21 million estimate, account must be taken of the savings and benefits as well. Leave on one side the relief of homelessness and an end to the miseries of sofa surfing, which makes getting a job so difficult, purely considering the cost-benefit equation, the amendment would have some significant offsetting gains. Currently the inability of young people to move out of specialist housing, hostels and supported accommodation means they unwillingly engage in bed-blocking—taking up places, which others desperately need when they are ready to move out. As the YMCA has explained to us, it costs £350 per week to retain people in housing with specialist support. The cost to the state of covering in full a rent of, say, £100 per week, would be far, far less. By enabling one person who is ready for independence to move on, the providers of supported housing can take in one more homeless single person to go through the process of support and training. This problem of expensive bed-blocking is affecting many of the organisations taking in homeless young people. The amendment would have the very great value of removing this major barrier to preventing those under 25 moving onward and upward.

I apologise at this late hour for laying out my case in some detail. I tried to marshal the arguments that will lead at last to a reform that will change the lives of many thousands of young people unable to secure a place to live. I know that it is late, but unless the Minister feels able to give some hope of movement on this one, I shall test the opinion of the House. I beg to move.

9:15 pm
Photo of Lord Oakeshott of Seagrove Bay

Lord Oakeshott of Seagrove Bay (Spokesperson in the Lords, Treasury; Liberal Democrat)

My Lords, what a powerful case that was. I have little to add to it. We debated this at some length in Grand Committee, and the noble Lord has drawn to considerable extent, as I would have done in my speech, on the Citizens Advice and Shelter briefing. We also very much welcome the support of the other organisations, some of which I mentioned in Grand Committee. The best estimate is that this would cost £10 million a year. That is a very modest sum to rectify what Tony Blair, John Prescott and John Hutton, among others, agreed was an injustice before they came to power.

I shall probe the Minister in a little more detail on the point made by the noble Lord, Lord Best. In the past few days, the Department for Communities and Local Government—D-CLoG, as it is called—has published a policy briefing that states:

"The Government is currently looking at this issue in the context of the Welfare Reform Bill".

What does that mean? We did not see a hint of concession in Committee. Is the DWP looking at it by putting a telescope to its blind eye? If it is raising false hopes by this, that would be worse than not raising them at all. I shall leave it there, but I encourage the noble Lord, Lord Best, to have the courage of his convictions.

Photo of Baroness Hollis of Heigham

Baroness Hollis of Heigham (Labour)

My Lords, this has been a problem for many years. We have made some movement on the shared room rent philosophy over the years, but there is a problem of supply and demand. We have all had hundreds of cases reported to us of young people who have to top-slice their income support or JSA, let alone their disability benefits, to be able to afford accommodation that is not fully covered by housing benefit. There is undeniably a problem.

I have two difficulties with the solution proposed by the noble Lord, Lord Best, which is to bring the age for going on to housing benefit support, or the new housing allowance support, for self-contained accommodation down from 25 to 21. First, there is a problem of work incentive, partly because housing benefit and its tapers are the elephant in the room on all welfare reform policies by virtue of the very steep tapering effect. This is not particularly germane to the argument made by the noble Lord, Lord Best, but we know that where council estates have gone over to being housing associations on the grounds that in housing associations people are in work, the people who are transferred on housing benefit remain out of the labour market because it is so expensive for people on the minimum wage to leapfrog into making work pay. I would not like to attach a figure to that problem.

Secondly, there is the big-ticket number. The noble Lord, Lord Best, said that the cost of providing for those over 21 to go into self-contained accommodation would be £10 million. My difficulty is that for a lot of social security there is a fulcrum at 25. IS is set at a higher rate for those aged 25 and over, as is JSA. If one were to bring the fulcrum for housing benefit down from 25 to 21, it would be difficult not to argue that IS and JSA rates should follow; otherwise, there would be major disjunctions between rent and income levels and whether a claimant was supposed to be in an independent household. I do not have a clue what the figure would be, but I suspect it would be around £200 million or £400 million. I am guessing because I have done no work on that estimate, but I suspect it would be a big-ticket number to bring the read-across benefits down to the same fulcrum.

Having said that, I do not think any of us would feel comfortable walking away from this amendment, so I shall press my noble friend on the discretionary housing payments scheme. It has existed for a number of years and is a central government grant to local authorities to allow them to top up people's housing benefit and council tax for a good reason, such as because they are vulnerable, pregnant or have a very large family. Very many of the young people to whom the noble Lord, Lord Best, referred ought to count as vulnerable and to be eligible for such a fund. There is no reason why that should not be the case since, as I say, some local authorities spend all their money and some spend only 10 per cent of it. It is completely random and most people do not even know about it.

I do not know whether the noble Lord, Lord Best, and others might feel that this is a reasonable way forward but, as we publicise the new local housing allowance scheme, could we ensure that all the literature makes reference to the discretionary housing payments scheme for those who may be considered vulnerable and that local authorities are circularised with this? Could my noble friend review the adequacy of the fund in the light of that? I cannot remember how much it was; while I have a feeling that it was about £25 million, it could well have gone up by now. That might be a way forward, giving a tailored help to those who need it without it becoming a big-ticket item for the whole field of social security.

We have a real problem, but the solution that the noble Lord, Lord Best, suggested is possibly too big for this amendment, given the implications both for work incentives and the social security budget. I believe that there is another way of dealing with it, so could my noble friend help us on that?

Photo of Lord Oakeshott of Seagrove Bay

Lord Oakeshott of Seagrove Bay (Spokesperson in the Lords, Treasury; Liberal Democrat)

My Lords, the noble Baroness was probably not in Grand Committee when we discussed this exact point. The problem was that this benefit runs out in many areas well before the end of the year. Unless more money is put into it, I do not believe it will be a solution. Perhaps the noble Baroness would comment on that.

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Baroness Hollis of Heigham (Labour)

My Lords, I entirely accept that some local authorities will quickly spend over 100 per cent; others underspend. Yet through this cost-limited and cash-constrained vehicle the local authorities in which there is need could be targeted, as it is known where the need is. The problem could be redressed in that way.

Photo of The Earl of Listowel

The Earl of Listowel (Crossbench)

My Lords, I strongly support my noble friend's amendment. It can be difficult for a young person to find a home. Let us take for example a typical group of young people from Centrepoint. A 17 year-old tells me that when she first moved out of home she moved into a bed and breakfast in Earl's Court. There was no lock on her door, and a man in his 40s kept hanging around immediately outside it. An 18 year-old tells me that he was placed in a bed and breakfast after leaving custody. No support was offered and he soon found himself on the street.

We are discussing over-21s now, yet when the Centrepoints, YMCAs and foyers cannot find move-on accommodation for their older young people then they cannot offer support to their younger ones. They are silted up, as the noble Lord, Lord Best, said. The YMCA states that it cannot find move-on accommodation for 35 per cent of its young people.

I do not wish to patronise young people in their early 20s; three-quarters of those in employment share with other people. Some of those currently out of work will find it difficult to share. For many, that will be due to shortage of supply, while for others it will perhaps be due to a poor upbringing that leaves them ill equipped to co-operate with others. Of those who find a flat, many will have difficulty managing their money. The single room rent will exacerbate those problems; the young person's tenancy may collapse, and they may be crushed by having failed in something in which they had so deeply invested themselves.

Critically, the DWP's own research report No. 243, Research into the Single Room Rent Regulations, published in 2005, highlighted:

"The restrictions that the SRR places on young claimants' ability to access private rented housing is preventing many from finding any private rented sector accommodation within their means. This, combined with the widely reported reluctance of many landlords to let to young people, appears to have resulted in a situation where many young people enter informal lettings or end up using 'friends' floors'".

The noble Lord, Lord Skelmersdale, made that exact point at Second Reading and it has been made again this evening.

We often do a poor job in this country of nurturing our children. The behaviour of some of them leaves our rate of child custody high above those of our neighbours. This February, we have the highest recorded number of children in custody of any February. I strongly support this amendment, which would also benefit young people in care whose exemption runs out at age 22. I am particularly keen to be reassured that the Department for Work and Pensions and the Department for Communities and Local Government are co-operating closely on enabling young people to gain a secure home base so that they can find and sustain work and become fully independent adults. Will the Minister consider meeting the noble Baroness, Lady Andrews, his opposite number from the Department for Communities and Local Government, soon to discuss this matter? Were it helpful, I am sure that my noble friend and I would be glad to attend such a meeting. I strongly support the amendment, and I hope that the Minister will accept it.

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Lord Northbourne (Crossbench)

My Lords, I support the Government in wanting to save the taxpayer money. Indeed, I also support them in wanting to reduce young people's dependence on the state. However, I also support the amendment because, on the evidence, the single room rent, or whatever it is called now, is simply not working. It is also damaging young people, particularly vulnerable and excluded young people. The poor socialisation of young people in this country today is covered by the recent UNICEF report on the well-being of children in rich countries. It cannot be a matter of pride for any of us that this country comes 21st out of 21 European countries which the report looked into. I know that that report has defects, but its findings are confirmed by recent reports by the IPPR and others that have come out in the past two or three years.

Housing is a key factor in the socialisation of young people, particularly the disadvantaged and excluded. Such young people need help, not additional problems. For that reason, I support the amendment.

Photo of Lord McKenzie of Luton

Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, the noble Lord, Lord Best, has no need to apologise for tabling an amendment at this hour, particularly as he spoke on the matter with lots of knowledge and clear commitment. As has been acknowledged, the amendment is something of a compromise between the current rates and the complete abolition of the single room rent, or shared room rate. In Committee, we discussed the rationale for having the single room rent cut-off at age 25, as the lower average earnings for those under 25 limits the type of housing that someone in this age group can afford.

The noble Lord is right to note that the adult rate for the national minimum wage is set for those aged 22 and older. The national minimum wage and the social security system share the same aim of increasing employment. However, it is important to note the difference between the two. The national minimum wage is intended to make work pay, but has a lower rate for those under 22 to ensure that young people are attractive to employers. The social security system, and therefore housing benefit, is intended to reflect an individual's needs but not to create a disincentive to move into work, a point touched on by my noble friend Lady Hollis. This leads us to consider again the fundamental principles behind the single room rent.

In Committee, the noble Earl, Lord Listowel, spoke about the difficulties that some of the most disadvantaged young people in society face. He spoke of the perilous cycle of exclusion that may begin when a young person is denied the safe and secure upbringing from which many people benefit. Last Monday, I had the opportunity to meet the noble Lord, Lord Best, to discuss some of these issues further. I reassure the House that the Government share his concerns for young people. This is the age at which many young people complete their transition to adulthood. It is vital that the Government play their part to help them start adulthood in the best possible way.

One of the principles behind the single room rent is fairness for working people. When 75 per cent of those who are under 25, single, without dependants and not receiving benefit live in shared accommodation, there is the principle that those who rely on housing benefit should expect only the same. More importantly, however, we do not want to put young people into a position in which they become dependent on benefits. If we were to abolish the single room rent for all or part of the group to whom it applies, we would extend the benefit trap for many more people. Those who might previously have found suitable shared accommodation would now be able to live in larger, more expensive self-contained accommodation, which would mean that they would have to earn a greater amount before being able to move off housing benefit and its taper and fully benefit from every additional pound that they earned. So the culture of benefit dependency would be extended. Instead of housing benefit providing an initial levelling platform for young people, it would provide another route of exclusion and dependence on the state, damaging future job and wage expectations.

The noble Lord rightly spoke about the experience of the shared room rate and the local housing allowance pathfinders. We have learnt from this experience, and for national roll-out we will be using a different, broader definition of what can be counted as shared accommodation—I think the noble Lord, Lord Best, acknowledged this—and changing to the use of the median to calculate rates, which will help to address some of the problems of affordability reported.

The noble Lord, Lord Best, suggested that the drop in the number of houses in multiple occupation, with its share of the whole rental sector decreasing from 9 per cent to 6 per cent, was measured over only two quarters and that therefore the time span was too short to link to any policy change. The local housing allowance evaluation has found that the proportion of landlords providing some shared accommodation remained about the same, despite a high degree of churn in the ownership of this type of accommodation. The noble Lord, Lord Best, suggested that landlords are unwilling to let to single room rent customers. There are many factors influencing who landlords let to. Two of the groups which landlords least like letting to are young people and benefit customers, but this is symptomatic of wider stigma and stereotypes. Abolishing the single room rent is unlikely to fix this. However, making local housing allowance payments to tenants is a step in the right direction. There is some indication from the pathfinders that customers on local housing allowance have been able to mask from their landlord that they are receiving benefit.

We should recognise that many more vulnerable customers are eligible for social-sector accommodation, and the groups exempt from the single room rent include certain care leavers under 22. The noble Lord acknowledged, in relation to those who are severely disabled and those in the social sector, that the single room rent has only ever applied to private rented sector cases.

Again, the noble Lord, Lord Best, talked about the cost of changing the arrangements. Twenty per cent represents the cost of moving existing claimants under 25 into the over-25 rate of benefit. If the cut-off point were under 21 the cost would be half of that, but that assumes that there is no behavioural change. In particular, it assumes that one does not have to go further and align the change to the benefits system more generally, as my noble friend Lady Hollis pointed out—the 25 per cent threshold is relevant for income support and jobseeker's allowance.

It was suggested that those who lose their job must downsize, but the data show that 75 per cent of working people live in shared accommodation and therefore many would not downsize. This is the rationale behind the single room rent. My noble friend Lady Hollis raised the issue of discretionary housing payments, which, as the noble Lord, Lord Oakeshott, said we debated at Committee. I am advised that only in the very early years did any local authority spend anywhere near its discretionary housing payment limit. That is the centrally provided bit and the proportion that they can use from their own funding. I can assure my noble friend Lady Hollis that we are updating the guidance on the DHPs to ensure that it continues to assist local authorities to make full use of the discretionary scheme. Obviously we cannot dictate to local authorities precisely how they proceed but working with them is quite important.

The noble Lord, Lord Best, talked about what was happening in the housing market. He said there had been an explosion in the number of small, self-contained flats and a dearth of shared accommodation. Would the impact on market rents not be an equalisation of those two parts of the housing sector? If there is a lot of self-contained accommodation, I presume that, all other things being equal, the price goes down and that, if there is a dearth of shared accommodation, all other things being equal, the price goes up. That must have an impact on the situation. I am sure that we will not readily reach a consensus on this issue tonight, but I have set out the Government's position, which I believe to be the correct one, and urge the noble Lord to withdraw his amendment.

Photo of Lord Best

Lord Best (Crossbench)

My Lords, I am grateful to the noble Lord, Lord Oakeshott, and my noble friends Lord Listowel and Lord Northbourne for their support. I thank also the noble Baroness, Lady Hollis, who is such an expert in these matters. She raised the issue of not opening the door to the big ticket cost of having to shift jobseeker's allowance and income support rates from the age of 25 to 21 as a consequence of allowing this amendment. The Government do not have to change all the benefits because this one stands out in need of reform. It would be possible to change one benefit at a time if that is required by the marketplace.

The noble Baroness, Lady Hollis, made the point that local authorities have discretion to make extra payments to vulnerable housing benefit claimants. It is extremely important that good advice is given to local authorities to make full use of this discretionary housing payments system. I am very pleased to hear from the noble Lord, Lord McKenzie, that such guidance is being prepared. As president of the Local Government Association I know that I should not support ring-fenced funds—I would get into big trouble—and it is probably not a route for this problem that would lead to a satisfactory conclusion.

I am grateful for the response from the noble Lord, Lord McKenzie, but it does not encapsulate the realities of the marketplace. While it would be good for people to choose shared accommodation in preference to a self-contained flat and therefore become less dependent on the higher level of benefit that they would have to accept in a self-contained apartment, the realities are that the people we are talking about will not find flats to share with young professionals and others which they can enter. It is not an alternative or an option. The alternative is homelessness or living on other people's sofas and moving from house to house, which is the predicament in which we place so many people already.

This is a matter of considerable significance and, despite the late hour—

Photo of Lord McKenzie of Luton

Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I am sorry to interrupt, but I was remiss in not responding to the question asked by the noble Earl, Lord Listowel, on whether we could meet my noble friend Lady Andrews and the noble Lord, Lord Best, who I am not trying to deflect from what he is about to do. Notwithstanding the outcome of this democratic process, I would be happy to do that.

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Lord Best (Crossbench)

My Lords, it is very generous of the noble Lord to say "notwithstanding the outcome" of what follows. I should like to test the opinion of the House.

On Question, Whether the said amendment (No. 81) shall be agreed to?

Their Lordships divided: Contents, 22; Not-Contents, 43.

Division number 2

See full list of votes (From The Public Whip)

Resolved in the negative, and amendment disagreed to accordingly.

Clause 30 [Loss of housing benefit following eviction for anti-social behaviour, etc.]:

9:58 pm
Photo of Lord Skelmersdale

Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, I suggest that since we have only four groupings of amendments to go, which will take slightly over half an hour, we continue until the end, as it seems extremely silly to have another day on Report just for a couple of groups of amendment.

Clause 30 is a sanctions clause that allows housing benefit to be withdrawn for anti-social behaviour leading to eviction. In Committee, it was clear that every Member—except, of course, the Minister—was sceptical of the wisdom of doing this. A whole raft of amendments was tabled and, on a close reading of Hansard, it is apparent that the Minister, while criticising them, did practically nothing to defend the clause against the onslaught. We had hoped that our investigations about the clause would satisfy us that the opposition of all the lobby groups, even some local authorities, was misplaced. The only comfort that we received was when the Minister said in Grand Committee:

"Post eviction, when support is offered and the household refuses to engage, an anti-social behaviour co-ordinator will consider whether a sanction is appropriate. This decision will be taken in discussion with relevant agencies. Exactly which agencies become involved will depend on the circumstances of the household and may include the police, social services, mental health agencies, children's services, housing managers, education or the Family Intervention Project".—[Official Report, 1/3/07; col. GC 287.]

That was not enough, so this amendment is considerably tougher than those which we tabled in Committee. I do not like the idea of intervention post-eviction one little bit; indeed, I do not like the idea of eviction per se, because the claimant—it may well be a claimant family, as the list that I have just read out suggests—has to find somewhere else to live. As I said at Second Reading, and as the noble Lord, Lord Best, has just remarked, the amount of private rented housing available to people on benefit is a scarce resource. Moreover, if a claimant is evicted, word soon gets round the neighbourhood, and the only available housing is most likely to be local-authority owned. I cannot imagine many existing local-authority tenants relishing a previously evicted family coming to live next door. Support should therefore be provided before the point of eviction, which is itself a form of sanction. To deprive people of their housing benefit, in whole or in part, is to turn the screw too tightly. It is all very well for Ministers to say that they hope that things will never get to this point. Even if they do, the record shows that they believe:

"In reality, we expect it to be used in very few cases".—[Official Report, 1/3/07; col. GC 291.]

I do not believe that these financial sanctions will be used at all. The Minister in another place implied this. We have heard local authorities which are to operate this power state that they do not want it and will not use it. While I accept that it is optional as far as they are concerned, as subsection (4)(b) makes clear, an option that will not be used is no option at all. This clause is wrong whichever way one looks at it. It is an idea that was first floated in a housing Green Paper in 2000. After serious objections, not least from the Deputy Prime Minister, it was dropped. It has no place on the statute book today. I beg to move.

Photo of Lord Oakeshott of Seagrove Bay

Lord Oakeshott of Seagrove Bay (Spokesperson in the Lords, Treasury; Liberal Democrat)

My Lords, the National Housing Federation, Shelter and Citizens Advice believe that these sanctions would punish the innocent family members of those evicted for anti-social behaviour and that, instead of tackling the problem at its root, the proposed policy would exacerbate social exclusion and lead to greater indebtedness and homelessness. We agree. There are plenty of effective ways to tackle anti-social behaviour—we support them—but this is not one of them. It could visit the sins of the fathers on the children. It is a typical cheap new Labour stunt—not intended to be used very much, but a good headline-grabber. Like the noble Lord, Lord Skelmersdale, we oppose the provision.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, this clause seeks to introduce an incentive to households evicted for anti-social behaviour to take up offers of rehabilitation and support to address the causes of their problem behaviour. The intention is to introduce a sanction of housing benefit for those people who have already been evicted by an order of a court as a result of anti-social behaviour and are refusing to take up offers of help and support. Specifically, the clause will allow us to pilot the use of a sanction in around 10 local authorities, starting as soon as practicable, for two years only.

In Grand Committee, we debated the evidence that providing intensive support and supervision can achieve both positive and significant changes in a person's behaviour. Given the strong evidence that such rehabilitation works, it is justifiable that a sanction of benefit should be linked to the refusal of such help and support.

The provision of support services is now more widespread than ever, and we are continuing to invest in these services, as set out in the Respect Action Plan. I have listened carefully to the points made in this House about the need to protect the most vulnerable. Perhaps I may again list the safeguards that we have built in from the outset.

There would already have been consideration by a judge of the household circumstances and any issues concerning vulnerability before a possession order was made. The local authority would have discretion in deciding the most suitable course of action and this would be discussed with the household concerned. For example, a referral to mental health services might be more appropriate than a benefit sanction. If a sanction is applied, it can be brought to an end at any stage by the local authority—for example, where members of the household are taking action to improve their behaviour. There will be an appeals process and a hardship regime where benefit will be reduced by 30 per cent, as opposed to a full withdrawal. As set out in the draft regulations, specific groups, such as households in which there is a child or caring responsibilities, will be able to claim the hardship rate.

I assure the House that this sanction is not intended to be imposed widely. The scheme will be judged a success if the sanctions are never applied because that would suggest that the households involved would have engaged with rehabilitation. We strongly believe that the welfare state should combine rights with responsibilities. The right to benefit can only come with the responsibility to behave with respect for others. I believe that this proposal strikes the right balance.

We have given assurances about the degree of parliamentary scrutiny which would be necessary for a national rollout under this clause. However, we accept that these assurances have not been enough to allay the concerns expressed in this House and in the other place. We will therefore return to this House on Third Reading with an amendment inserting a sunset clause. This will ensure that to roll out the scheme nationally, we will have to return to both Houses with primary legislation and all the scrutiny that that entails. In the light of that, I urge that the amendment be withdrawn.

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Lord Oakeshott of Seagrove Bay (Spokesperson in the Lords, Treasury; Liberal Democrat)

My Lords, we welcome that announcement. What will be the timing? What is the period before the sunset clause? How long until it lapses, if I can put it that way?

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, the intention is not to be able to go beyond the pilots. The pilots are for two years and we want to get those started as soon as possible. One could not go beyond that to roll out nationally without further primary legislation. That is the intention. If it is different, we will share our intent with noble Lords, perhaps before Third Reading.

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, I am most grateful to the Minister for that. Pressure in both Houses and from outside organisations has had a great effect on Ministers. I was aware of the local authority discretion in this matter. Indeed, I referred to it earlier. All relevant considerations will be made by a judge before the ultimate sanctions are applied.

It is my contention that the pilots will be totally useless. They will not prove what the Government are seeking to achieve. Having said that, I like to think that I am fair and I am quite prepared to give the Government two years to prove me wrong.

As I understand it, if the Minister's amendment means that, after two years, the pilots are over but the evaluation is not yet complete and they do not show that there have been any financial sanctions, it will be necessary for the Government to come back with primary legislation, should they want to introduce this on a national rollout. If I have got that right, I accept what the Minister has said word for word. I am grateful to him for going as far as he has. I will certainly take up the offer of discussing the final form of this sunset clause with him before that amendment is tabled. However, for the moment, I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

Clause 36 [Payment of housing benefit]:

Photo of Lord Skelmersdale

Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

moved Amendment No. 36:

Clause 11, page 9, line 39, leave out "and how" and insert ", how and with whom"

Photo of Lord Skelmersdale

Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, in Committee we had a wide-ranging and reasonably productive debate about housing benefit being paid directly to the landlord, as happens in many cases. We established that housing authorities are expected to investigate whether a claimant can indeed handle their finances if a particular case is brought to their attention. That is clearly a step in the right direction, but it does not go far enough.

The obvious person to identify whether a claimant can manage their housing benefit sufficiently well to avoid falling into arrears is the landlord. However, it is likely that the landlord will not even know that his tenant is in receipt of housing benefit and so will not know that informing the local housing authority might be helpful. How do the Government intend the notification procedure to work without increasing landlord awareness of both the possibility of intervention and who among their tenants is a benefit recipient, the latter being a significant infringement of privacy and therefore impractical?

The amendment would make it the responsibility of the housing authority to make sure that recipients are indeed capable of handling their finances. If they do not, we run the risk of letting vulnerable claimants sink into arrears and face eviction, which is not the best way of introducing them to financial independence, which is the whole object of the exercise and on which we on these Benches agree with the Government. The question then is how best to pursue that policy, given the shortage of available private sector housing for people on housing benefit. I hope that the Government will consider the amendment seriously. The housing authority is the obvious body to monitor the benefits that it pays out. Non-governmental organisations have an important role to play in supporting recipients and highlighting problems, but the responsibility for that should not be placed at their door. We really need to know where we are going and what the result will be. I beg to move.

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Baroness Morgan of Drefelin (Baronesses in Waiting, HM Household; Labour)

My Lords, I am delighted to have the opportunity to discuss the amendment further this evening. Clause 36 provides powers for prescribing the manner in which housing benefit is paid to all types of tenants. We require that power to allow us to specify the payment method for certain categories of social housing. Before I respond to the amendment, I will clarify for the House once again what the Government's intentions are in the social sector. It is a priority for the Government to build financial inclusion and to encourage individuals, where possible, to take responsibility for their own affairs. One way of achieving that would be to enable customers in the social sector to take responsibility for paying their own rent. However, we realise that this may be difficult for some customers. So, as we have publicly committed, we will proceed cautiously with any reform of the social sector, ensuring that proper safeguards and support mechanisms are in place.

In the private sector, we believe that a great many customers are ready to start managing their own payments, which is why one of the key features of the local housing allowance is that, in most cases, housing benefit will be paid to the customer. However, we will not force that responsibility on to those customers who are unable to exercise it. There will be safeguards to protect those customers, so that local authorities can determine whether the housing benefit should be paid to the landlord. This amendment would enable regulations to be made that would require local authorities to put every new customer through a long and potentially complex assessment procedure. The amount of information that all customers would have to provide would greatly increase. Much of the information would have to be of a private and confidential nature. The administrative burden on local authorities would increase and could lead to slower processing times and to all customers having to wait longer for their benefit. Local authorities may also require information from a greater number of sources, thus increasing information sharing between different organisations.

I reassure the noble Lord that the amendment is not necessary. Currently, if a local authority receives notice that a customer might be vulnerable, it is obliged to investigate. The notice may be provided by the customer, the customer's family, welfare organisations or healthcare professionals. The local authority will also pay housing benefit to the landlord if a customer is eight weeks in arrears or more and if that is in the customer's best interest. That helps to mitigate the risk of eviction, about which the noble Lord, Lord Skelmersdale, is so concerned, as it aligns with the point at which a landlord would be able to file for eviction of a customer on rent arrears grounds. In many cases, local authorities will act much earlier than that, so that if customers experience problems they will intervene. In addition, each local authority will have its own procedure to identify those customers who cannot manage their own payments, without having to investigate claims.

Using the evaluation of the local housing allowance pathfinders and comments from the welfare organisations working with us, we will provide comprehensive guidance to local authorities. Our experience from the pathfinders has shown that the procedures in place to identify vulnerable customers are working extremely well. I hope that noble Lords will take comfort from that. Only 4 per cent of pathfinder customers have their housing benefit paid directly to the landlord because they have fallen eight weeks into arrears. A further 12 per cent have it paid to the landlord because the local authority has identified that they might struggle to manage their financial affairs. The remaining 84 per cent of customers are receiving and successfully managing their own payments. Indeed customers in pathfinder areas were more likely to report being up to date with their rent payments than those in the control areas with which the pathfinders were compared.

I know that noble Lords are concerned about ensuring that we have a proper variation in conditions for control areas and a wide variation in locations that are used for pilots. That is an extremely important point. The processes and policies in place are working, and there is nothing to suggest that they will not do so in future. Therefore, I urge the noble Lord to withdraw the amendment.

10:15 pm
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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, I notice that on this occasion the noble Baroness did not use the word "overkill". I agree that the priority should be to build financial inclusion, as I said in introducing the amendment. I accept that the Government are proceeding cautiously on this. I was pleased to hear—I had not heard it before—that 86 per cent of recipients of housing benefit in the pilot areas were operating this successfully. That still leaves another 24 per cent and that is the group that I am worried about—

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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, it is getting late; my maths is never up to scratch but it is even worse than usual. I am clearly concerned about the 14 per cent and the noble Baroness is right about the possibility of their eviction. I am concerned that eight weeks seems to be rather a long time. If a landlord is not paid for eight weeks, it is likely that he will have instigated proceedings for eviction by that stage. It will be interesting to see how the pilots proceed and whether the 14 per cent figure goes down. At this time of night, there is no alternative but to withdraw the amendment—although, even if it had been 3.30 in the afternoon, I would still have withdrawn the amendment.

Amendment, by leave, withdrawn.

Clause 40 [Social security information]:

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Lord Taylor of Holbeach (Shadow Minister (Environment, Food & Rural Affairs), Environment, Food & Rural Affairs; Conservative)

moved Amendment No. 84:

Clause 40 , page 33, line 4, after "information" insert ", excluding patient data,"

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Lord Taylor of Holbeach (Shadow Minister (Environment, Food & Rural Affairs), Environment, Food & Rural Affairs; Conservative)

My Lords, our amendments in this group are twofold. First, I would like to exclude patent data from the information that public authorities may share with each other. Secondly, I would like to ensure sufficient parliamentary scrutiny of the regulations that will govern how these data are to be shared. The aim of this clause is to allow the department to share what information it has on benefit recipients with local authorities. I hope that this will have two positive results. One is that fraud will be tackled more efficiently; after all, if a person is illegally claiming a benefit such as income support, it is possible that he is also claiming other benefits, such as housing benefit, illegally and vice versa.

The clause should also allow a claimant to receive related benefits more easily. If they have established their eligibility for one Department for Work and Pensions benefit, sharing information may well make their eligibility for other benefits, such as disability living allowance, more apparent. However, there must be limits to this information sharing. While we are very happy that the Government are improving their ability to tackle fraud and trying to improve benefit uptake, these measures must not infringe on claimants, privacy or put confidential information at risk.

Our first amendment is designed to ensure that patient data are not shared under this clause. By patient data, I mean health information about a claimant combined with information about their identity. Both pieces of patient data will continue to be able to be shared separately. After all, the identification of an individual as a recipient of ESA might be necessary to combat fraud. Similarly, a Jobcentre Plus in one part of the UK might want to share statistical information with another centre in a different part of the country on how many patients of a certain disability they have managed to move off benefits. What is not appropriate is that these two pieces of information are combined, so that a housing authority, for example, will be able to look at this information and know that a certain recipient of housing benefit is also suffering from a certain disability. This combination of health and identity information would be considered confidential. The exclusion of patient data is a principle that has been accepted by the Government in the Serious Crime Bill, also going through this House. I hope that the Minister will be equally amenable to the principle here. I beg to move.

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Lord Addington (Spokesperson in the Lords (Disability), Work & Pensions; Liberal Democrat)

My Lords, the principle of protecting data is important. The general point that has been raised is important. I hope that the Minister, whose amendment is grouped with these, will be able to give us a little more clarification about what the Government are going to do to address these concerns.

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Baroness Morgan of Drefelin (Baronesses in Waiting, HM Household; Labour)

My Lords, I hope I can do that without going on for too long. First, I will speak to government Amendment No. 86. This is a minor amendment consequential to the government amendments to Clause 40 approved in Grand Committee. Those amendments addressed concerns raised by the Delegated Powers and Regulatory Reform Committee and the Joint Committee on Human Rights on one aspect of Clause 40, which deals with the use of social security information.

The proposal of a new Section 7B in the Social Security Administration Act 1992, which was originally worded to enable the prescription of benefit take-up activity through regulations, was amended so that such activity is now set out in the Bill. Another feature of Clause 40 is that it will enable English county council staff to perform certain social security functions for the first time, including promoting such benefit take-up by using social security information that they hold. It is in this connection that the consequential amendment is needed.

Under Section 123 of the Social Security Administration Act 1992, it is a criminal offence for persons employed in social security administration to make any unauthorised disclosure of information. Clause 40(3) extends the definition of,

"persons employed in social security administration",

in Schedule 4 to the 1992 Act so that it applies to English county council staff. Noble Lords will be pleased to hear that it already covers DWP staff and local authority housing benefit staff. The definition currently in Clause 40(3) refers to:

"A member, officer or employee of a county council who exercises ... any function ... specified in regulations made under section 7B".

However, we need to reflect the fact that the functions concerned—namely, assisting and encouraging persons to claim benefit—now appear in the Bill in new Section 7B(3) and will not be specified in regulations, as originally intended. This consequential amendment therefore brings subsection (3) of Clause 40 in line with subsection (1).

Amendment No. 84 would prevent patient data being used for a relevant purpose. Here, a "relevant purpose" means identifying persons who may be entitled to certain benefits and encouraging, advising or assisting them to make a claim for one or more of those benefits in order to encourage and increase benefit take-up.

I take "patient data" to mean medical information or evidence provided by the customer or obtained with their consent, as these are the only data about a customer that a relevant authority will hold. I shall return to this later.

I appreciate that the use of medical data must be subject to limitations, but perhaps I may offer the following assurances as to why this amendment is unnecessary. Any medical information obtained is classed as sensitive personal information for Data Protection Act purposes and is subject to more stringent safeguards than the use of other personal information.

One function of Clause 40 is to enable local authorities administering housing benefit and English county councils to promote the take-up of benefits administered by the DWP. The benefits, which are listed in draft Regulation 6, paragraph (3), include those where the provision of medical evidence in support of a claim is necessary, such as incapacity benefit, employment and support allowance and disability living allowance. If local authorities were prevented from using medical evidence and information, that would restrict benefit take-up.

Another function of this clause is to support the operation of joint teams. Joint teams bring together staff from the DWP, English county councils and local authorities administering housing benefit. They work together to visit people—primarily pensioners—to encourage and help them to make claims for the benefits and other services to which they may be entitled. Because team roles are interchangeable, patient data may be collected by local authority staff in support of the claims to a benefit administered by the DWP.

Customers are not required to make a claim or provide evidence to joint team staff. Where they do so, it is with their consent and on the understanding that such information may be shared as necessary in support of their claim to benefit. The customers remain in control throughout and can opt to make their claim direct to the DWP or the local authority administering housing benefit if they prefer.

As I mentioned, there are restrictions under this clause on the purposes for which an authority can use the medical evidence that it obtains. The purposes are set out in primary legislation at Section 7B(3) and concern identifying, assisting and advising in relation to making a claim to benefit. It follows that only relevant and necessary medical information and evidence would be collected in relation to such functions.

I can further assure noble Lords that any medical information obtained is classed as sensitive personal information for Data Protection Act purposes and is subject to more stringent safeguards than the use of other personal information. The department, local authorities and English county councils are bound by the principles of the Data Protection Act in their use of personal information. As I have said previously, staff are subject to Section 123 of the Social Security Administration Act, which makes it a criminal offence to disclose information without lawful consent.

I have set out what this clause in part enables, and the safeguards that are and will be put in place. Let me be equally clear about what this clause does not enable. It will not permit relevant authorities access to wider medical information than they have currently. They will not be able to access full medical data such as GP records or NHS databases. I wish to be absolutely clear about that because one or two noble Lords may have hinted at that on Second Reading, so it is important to put that on the record. Nor will the clause allow any patient data to be collected or shared unless they have been provided by the patient or obtained with their consent to support their claim to benefit.

I do not want to speak at length now about Amendment No. 85 because we had a discussion about affirmative regulations. I understand that the noble Lord, Lord Skelmersdale, and the Minister will discuss this issue further. I do not want to keep noble Lords with what I am afraid to say are about three or four more pages of speaking notes. I urge the noble Lord—

10:30 pm
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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, this is a proposed affirmative resolution to a totally different part of the Bill. Therefore, it would be helpful if the Minister would say what she can on the subject.

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Baroness Morgan of Drefelin (Baronesses in Waiting, HM Household; Labour)

My Lords, I am happy to do so.

In that case, accepting Amendment No. 85 would mean that regulations made under new Section 7B(2) would be subject to the affirmative parliamentary procedure. I have mentioned previously some of the aspects of this clause that relate to how information that is shared between relevant authorities may be used. Section 7B(2) is concerned with the processes that should be followed when certain information is received by a relevant authority from a different relevant authority.

The draft regulations available to the House show how the Government propose to exercise the powers in subsection (2) of the new Section 7B. Briefly, the draft provides that if information has been used in relation to a claim to benefit by one relevant authority—a local authority administering housing benefit or the DWP—or has been verified by a relevant authority, including English county councils, a subsequent relevant authority that receives this information must, subject to certain safeguards, use it in connection with a claim for an award of benefit that it administers without carrying out further checks as to its accuracy.

The intention is to ensure that if a customer has submitted information or evidence to one relevant authority, he should not have to submit the same information again to another relevant authority. This will improve the service to customers in making claims to benefit and will improve administrative efficiency.

Making these regulations subject to the affirmative procedure would mean that new Section 7B(2) of the Social Security Administration Act 1992 would be out of line with existing Section 7A, inserted by the Welfare Reform and Pensions Act 1999. Section 7A allows for regulations to be made setting out the processes that are to be followed by, for example, a local authority which receives a claim for state pension credit. The negative procedure applies there. The Government's view is that it would be rather excessive for the regulations under new Section 7B, which are about how local authorities process claims, to attract the affirmative procedure. Certainly, this appeared to be the view of the Delegated Powers and Regulatory Reform Committee, which made no recommendation in respect of this particular provision in Clause 40. I urge the noble Lord to withdraw the amendment.

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Lord Taylor of Holbeach (Shadow Minister (Environment, Food & Rural Affairs), Environment, Food & Rural Affairs; Conservative)

My Lords, I thank the Minister for that full exposition of the situation. Amendment No. 85 has been covered because we have expressed our view that Parliament has a role in scrutinising the way that legislation moves forward. I am satisfied that the Minister has taken on board the need for confidentiality in statistical data. I hope that she is confident that the affirmative way in which people volunteer information will mean that it is safeguarded so that when it is requested people know full well that it will be kept confidential. That can only be done on a consensual basis. There would be considerable concern if this information were passed on through third parties to someone else. It would probably be done in a well-meaning way, but it would not necessarily serve the long-term interests of the confidentiality of the claimant. As we have received those assurances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 85 not moved.]

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Baroness Morgan of Drefelin (Baronesses in Waiting, HM Household; Labour)

moved Amendment No. 86:

Clause 40, page 34, line 26, leave out from "a" to end of line 27 and insert "relevant purpose within the meaning of section 7B(3) of this Act."

On Question, amendment agreed to.

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Baroness Thomas of Winchester (Liberal Democrat)

moved Amendment No. 87:

After Clause 48, insert the following new Clause—

"Social Security Advisory Committee

Social Security Advisory Committee: remit

In section 173 of the Social Security Administration Act 1992 (cases in which consultation is not required) subsection (5) ceases to have effect."

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Baroness Thomas of Winchester (Liberal Democrat)

My Lords, I shall also speak to Amendment No. 88. Both amendments concern the remit of the Social Security Advisory Committee. Under the Social Security Administration Act 1992, draft regulations made within six months of the parent Act need not be referred to the Social Security Advisory Committee. That means that the Secretary of State and Parliament are denied the expertise of that committee when considering such regulations in draft form because many of them are, by necessity, made within six months of the parent Act's coming into effect. Parliament and, I should have thought, the Secretary of State would find such expert views extremely helpful at a critical stage when a new benefit scheme is being set up. Professor Hazel Genn's quinquennial review of the Social Security Advisory Committee recommended that this rule be abolished. In its 19th report, the SSAC stated that it was still working with the department on the implementation of the recommended strengthening of its role in relation to regulations laid within six months of an Act coming into force and that it is able to offer informal comments and advice, presumably to the Secretary of State. However, that does not mean that a report is published for Parliament to see.

Amendment No. 88 relates to the fact that the SSAC's remit used to cover guardian's allowance and child benefit before the administrative functions in respect of those social security benefits were transferred under the Tax Credits Act 2002 to what is now Her Majesty's Revenue and Customs. The amendment would remedy this. Since 2002, this valuable committee has not been able to report to Parliament on draft regulations relating to child benefit and guardian's allowance before they pass into law. I understand that under a memorandum of understanding HMRC may seek advice from the committee but it must remain confidential. Although we would like to see all benefits administered by HMRC brought within the remit of the SSAC, we recognise that the Long Title of the Bill permits amendments to be made concerning child benefits and guardian's allowance only.

The Work and Pensions Select Committee and Professor Hazel Genn's report recommended extending the remit of the SSAC. Can the Minister tell the House why the Government do not think it would be appropriate to extend the SSAC's statutory remit in the way suggested? It would greatly help both Houses of Parliament to scrutinise effectively important delegated legislation in this field before agreeing to it. We should not let this legislative opportunity go by without trying to change the remit of this important committee. I beg to move.

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Lord Kirkwood of Kirkhope (Liberal Democrat)

My Lords, this has been departmental unfinished business for a number of years, as I know to my cost. In a previous incarnation I was part of a Select Committee that looked at this area in some detail. To an extent, it is not just unfinished business but there is credibility at stake in some respects.

In the days of the Social Security Administration Act 1992, statutes of a social security nature were extensive and laid out in some detail. Most of the detail was contained in the primary sections of the primary legislation. Things have changed; the older I get, the more I can see the force of enabling legislation that can be fleshed out in statutory instruments and delegated legislation. The rationale in 1992 was that the department was entitled to six months' respite, if I can put it that way, because the primary legislation contained all the necessary detail to foresee what would happen in the immediate aftermath of the primary statute.

That has certainly changed in this legislation, if it had not done before. I absolutely support the Government's perfectly understandable intention to set out the framework as they have in this enabling legislation and to back it up later with SIs and delegated secondary legislation. The whole way of developing social security statutes has changed, which everyone from the social security committee to the DWP committee and the quinquennial review under Professor Hazel Genn recognised, as did Andrew Smith. When he was Secretary for State in the last Parliament, Andrew Smith gave a clear commitment that he could see the force of how the system had changed, demonstrating a need to remove the protected six-month period to which the department was able to cleave.

The last time that the Social Security Advisory Committee looked at this, in its 19th report, it suggested that it was making progress with the department in getting that principle accepted. It seemed that we were almost getting to the stage of saying, "Don't worry; let's try it this time with this Bill on welfare reform, and in the next social security legislation that comes along we will get the amendment to the 1992 SSAA". That Act needs to be changed to put right the situation.

This amendment, which my noble friend moved so eloquently, makes a clear case, even at this late hour, that we should be making the change and giving the Government time to implement it as and when they feel it appropriate. That would seem the culmination of a series of iterative, evolving discussions with the department. This is the moment when we should take the chance, as it might not come again for some time, which would be a shame.

If we do not take that opportunity, the Government are saying that they do not value the Social Security Advisory Committee's contribution to the legislative process, because some people in the pressure-group community outside are beginning to wonder whether there has been a deliberate attack on the extent of the SSAC's remit. This is one element of that discussion. The Government have to be careful that they do not undersell or diminish the role of the Social Security Advisory Committee. Amendment No. 87 would be an important signal that they understood.

There are conditions in the SSAC's 19th annual report to the effect that if, for example, we take the six-month rule out, we could start in Committee to point to some of the regulations and statutory instruments that could be the subject of scrutiny within the six-month period. This is an important moment this evening for the Government to explain clearly whether they are going to take this opportunity that the amendment clearly gives them. If they do not take it, there will be far-reaching consequences for the Social Security Advisory Committee and all the valuable work that it does.

Briefly, on Amendment No. 88, again the credibility of the department is being tested. The guardian's allowance and child benefit are benefits that are administered quite clearly under the Social Security Administration Act 1992, which is the pin Act of all eligibility for benefits as currently cast. The Tax Credits Act 2002 changed that. I believe that there were some misunderstandings after the 2002 legislation, because there were some very clear assurances that the consultation process with the Social Security Advisory Committee would not be downgraded in any way. Clearly it has been. As my noble friend argued eloquently on an earlier amendment, the new memorandum of understanding arrangements for the guardian's allowance, child benefit and the tax credits, which we cannot technically talk about under the Long Title of this legislation, are simply not adequate for the purpose. They are, as my noble friend said, confidential to the department. The whole model of Social Security Advisory Committee processes has been established so that SSAC members may advise Parliament. They do so through the Secretary of State, but they advise Parliament, and for a memorandum of understanding merely to advise government through HM Revenue and Customs is wholly different. It is totally removed from the ability to ensure that when we deal with delegated legislation in the revising Chamber, we have the advantage in cold print of the views and expertise of the Social Security Advisory Committee secretariat.

Moreover, the SSAC's work is intrinsic to the statutory process. If the Minister tried to introduce secondary legislation without reference to the SSAC, there are circumstances in which delegated legislation, even if the SSAC said that it had nothing to say about it, would be flawed and subject to contest. It is, and always has been, an absolutely intrinsic part of the social security statutory process. The other thing about memorandums of understanding which I do not like is that they are entirely discretionary. They are at the behest of Ministers and cannot be required by anyone outside Revenue and Customs bureaucracy.

Perhaps one of the most damaging things about memorandums of understanding is that they do not admit of external consultation. No one else can do as SSAC members do when they formally consult under the SSAC normal model for social security scrutiny. SSAC members can talk to the pressure-group community, academics and others. Indeed, they have a very good reputation for doing so. People know why they are being asked the questions that the SSAC asks them, and they know that the information is being put to good purpose for parliamentary scrutiny which, under the memorandum of understanding role suggested in relation to the guardian's allowance, child benefit and the tax credits, the SSAC cannot currently do.

Finally, assurances—I certainly took them to be assurances—were given in the aftermath of the Tax Credits Act 2002 that these things would eventually be put right. Assurances were given that the consultation would be at least equivalent to the SSAC social security model through the memorandum of understanding. I do not believe that that has happened.

For all these reasons, the credibility of the department is at stake. I know that the Minister is too tough a cookie to be bullied by his Treasury colleagues, who say, "Hands off tax credits. Customs and Revenue are not having anything to do with this namby-pamby consultation that DWP Ministers are saddled with. Get out of my face; I don't want any of this round my neck". I am sure that he is able—at least I hope that he is big enough—to stand up to that kind of pressure, because this is a serious issue. If this is the shape of things to come and Treasury Ministers move on to higher and better things, the social policy that we may see coming from the Government for the remainder of this Parliament will start taking on that hue, rather than going back to the tried and tested systems.

I do not need to tell the Minister that the Social Security Advisory Committee is a cherished part of the consultation process in social security law, as it has been for years. If the Government do not send out the right signals in addressing these two amendments appropriately, there will be worries out there that that commitment is being eroded, if not being lost altogether.

10:45 pm
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Lord Skelmersdale (Shadow Minister, Work & Pensions; Conservative)

My Lords, inclined as I am to agree with the thinking behind these amendments, it is only fair for me to say that Section 173(5) of the Social Security Administration Act is a sensible procedure in many cases, but not for this Bill. If a regulation is to be enacted within six months of the Bill, it is to be expected that draft regulations and so on will have been fully scrutinised and debated by both Houses and that concerned parties will have had an opportunity to comment. No doubt such words will very shortly be sopken by the Minister. But we have seen from the lengthy and sometimes rather confused debates on certain clauses in Part 1 that there is much about the regulations that is still not clear, despite the best attempts of the Government to give us advance sight of as much material as they can and their helpful attempts to explain the points that we have raised.

It is unfortunate that it is only now—nearly halfway through the Bill's progress, after it has already passed through another place—that we are making any real progress in unpicking the confusions that remain. I therefore think that there is a strong argument for making an exception for this Bill, which, as is repeatedly said, makes extensive changes to the system of benefits for disability, and for the Minister to assure us that all the regulations that are needed to implement its provisions are fully consulted on by SSAC.

As far as Amendment No. 88 goes, the problem is that great chunks of social security have been pinched by the Chancellor of the Exchequer, and the department is a pale shadow of what it once was. The Chancellor and his team have a different way of looking at things. I agree with the noble Lord, Lord Kirkwood, that it was quite wrong at the time to cut out SSAC and it is just as wrong now.

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Lord Oakeshott of Seagrove Bay (Spokesperson in the Lords, Treasury; Liberal Democrat)

My Lords, I wonder whether I could make one brief point, as this is probably my last chance to speak in the late, late show. I want to congratulate Ministers and officials on the constructive, even consensual, approach that they have shown in our deliberations. I ask that the important amendments that they have said they will bring forward—particularly in relation to Amendments Nos. 89, 46, 47 and 82—will be produced as soon as possible, preferably tomorrow. We are almost into Tuesday now, so there is only a week to go. It is essential to give people the widest opportunity to see them before we have to decide whether to support them next week—as I hope we will be able to.

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I start by thanking the noble Lord, Lord Oakeshott, for his kind comments and by trying to address the point that he raised about the timing of amendments. I cannot commit that this will be done tomorrow without talking to officials, but I understand the need to get it done as soon as we can so that people have a real opportunity to focus on them and be satisfied that they address the points that we maintain they will.

The Social Security Advisory Committee does an important job very effectively and my right honourable friend the Secretary of State, John Hutton, and other Ministers meet the committee on a regular basis. From our perspective, the relationship is dynamic and fruitful. The committee's informal and formal scrutiny of the majority of amended regulations before they become law and its meetings with officials and Ministers about proposed policy developments have helped successive Governments make better rules under which benefits are claimed.

Amendment No. 87 would remove the provision in Section 173(5) of the 1992 Act which precludes referral to SSAC of regulations made within six months of a relevant enactment. Following recent dialogue with the committee, Ministers reached the view that this limitation should remain in place. The SSAC's current remit does not extend to scrutiny of draft regulations made under powers recently enacted by Parliament. "Recently" means the long-established period of six months following commencement of the relevant power. Referring such regulations to the committee for further scrutiny would jeopardise the timely implementation of the policy set out in the legislation so recently approved and scrutinised by Parliament. This amendment does not sit very comfortably with this Bill. It follows extensive consultation on our plans for welfare reform where we have published the key draft regulations to which the public, SSAC and the Disability Employment Advisory Committee have had access and where we have updated the regulations document before this Bill was placed before your Lordships' House.

Finally and very importantly, the amendment would pre-empt the outcome of the non-statutory trial which SSAC and the department are currently operating, which aims to provide the committee with more comprehensive information on the Government's intentions. The trial involves the Bill now before your Lordships, the Pensions Bill and the regulations that may be proposed if these Bills are enacted. It offers increased scope for SSAC to make its views known at an earlier stage than in the past. When the trial is complete SSAC will produce a report and the Government will decide what implications there may be for SSAC's future functions. The Government will of course make public their conclusions.

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Baroness Thomas of Winchester (Liberal Democrat)

My Lords, will the report be produced for Parliament or will it be made public?

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I confirm what I have said: the Government will make public their conclusions. I hope that noble Lords will accept that in the context of what is going on, it would be pre-emptive to proceed with this amendment. It is right that this process be concluded and for the Government to publish the conclusions of the report.

Amendment No. 88 would place a statutory duty on HMRC to consult the SSAC on secondary legislation relating to guardian's allowance and child benefit. The fact that SSAC has a statutory role in relation to the benefits system does not read across to the tax system and other HMRC business. The Government have consistently made it clear that it is not necessary or logical to take new statutory powers. The amendment appears to ignore the fact that SSAC already has a channel to put its advice to Treasury Ministers on a range of HMRC business, including guardian's allowance and child benefit. The amendment ignores the existing Memorandum of Understanding, which sets out how HMRC and SSAC conduct their business. I should emphasise that HMRC and SSAC willingly accepted the terms and conditions of the memorandum only after months of discussion and debate between the two parties. The noble Lord expresses some surprise at that contention.

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Lord Kirkwood of Kirkhope (Liberal Democrat)

My Lords, Professor Genn is not an interested party to this. I think her views were slightly different. Would the Minister not acknowledge that?

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Lord McKenzie of Luton (Parliamentary Under-Secretary, Department for Work and Pensions; Labour)

My Lords, I am sure that there are some people who would take a different view. I am expressing the view I believe to be correct. This was entered into by agreement between the two parties. Treasury Ministers are able to obtain the freely and frankly expressed views and the expertise of SSAC. Treasury Ministers take the view that the disclosure of SSAC's advice would be likely to inhibit the free and frank provision of advice or could prejudice the effective development of policy. The confidentiality of that advice recognises that the Chancellor has responsibility to deliver the Government's aims of delivering a single system of support designed to make work pay and of reducing child poverty. He also has to make those decisions in the context of his overall economic responsibility as part of the Budget process.

The proposed amendment would be made to a DWP Bill and ignores the opportunity for HMRC and the SSAC to determine, by mutual agreement, the content of the MoU and the way in which arrangements covered by it will operate. The memorandum is about to be reviewed, with both sides agreeing the terms of that review. It would be pre-emptive to press this amendment in light of that situation.

I hope that these explanations have totally convinced noble Lords and I urge the noble Baroness to withdraw the amendment.

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Baroness Thomas of Winchester (Liberal Democrat)

My Lords, it is clear that not everyone on these Benches has been convinced, but I thank my noble friend for being so enthusiastic in his support for the amendment. The noble Lord, Lord Skelmersdale, was enthusiastic for one of the amendments, at least. We do not want the SSAC to be forced into a private conversation with the Government about these very important regulations. I do not think that the situation is satisfactory. After all, Professor Genn made her views very clear in the quinquennial review. However, at this late hour, noble Lords will be pleased to know that I will not press the amendment to a Division. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 88 not moved.]

Clause 61 [Medical examinations]:

[Amendment No. 89 not moved.]

House adjourned at 11.01 pm.