My Lords, I first must congratulate my noble friend Lord Lupton for an outstanding maiden speech, in which he has carelessly set the bar very high indeed for his future performances. I have known the noble Lord for some years, and I know that he is widely respected in the City of London and by his colleagues. To have that combination of wisdom and friendliness is an awesome mixture, which will encourage no end of requests for him to volunteer to help in this House. I predict that we will hear from him those words often muttered in this House, “I wonder why I volunteered for that”.
My noble friend Lord Lupton is clever enough to actually understand the welfare system, while not actually needing it. I recently saw a video on YouTube making the point that it would take the world’s fastest speed-reader more than five days straight to read through the entire UK tax code. The regulations and guidance on the myriad benefits that are available to claim may pose an equally difficult challenge, so much so that I am sure that the ability to really understand the benefits system is a skill that would make anybody employable at a very high level.
I noticed that the benefits cap puts a cap on a total of 14 different benefits. We have a structure so convoluted that I am not sure that anybody who administers it can really control it. Universal credit will do much to simplify the system but there are still dozens more benefits, which keeps things complex.
Perhaps much of the complexity came from a previous Chancellor, Gordon Brown, a man who is reputed to believe that anybody can understand this composite cat’s cradle. I am not sure how many claimants get all 14 benefits, but the sooner we get a simpler system in place, the better.
So, the benefit cap—at £23,000 in London and £20,000 elsewhere—has to be a step forward. I wonder, though, whether future claimants will regard it as a new measure of success to get the maximum rather than anything less. I am sure that we can rely on the benefits system to retain enough complexity to keep people employed.
I wanted to talk about Clause 20, an important clause which manages to take up 38 lines without using the one word which describes the subject of that clause—Motability. Clause 20 takes up those 38 lines, and only manages to improve the Government’s deficit by charging Motability a sum of about £1 million. Every million pounds counts, we are told.
The Motability scheme has been a great success over very many years. Founded by my noble friend Lord Sterling, it has enabled millions of disabled people to get a car—which would otherwise have been impossible. Indeed, it has provided finance to a group who may be described as being about the only big group in our society unable to obtain finance. This is partly because of the well-known fact that poverty is inextricably linked with disability. The regular stream of income from welfare payments is irrevocably diverted to the Motability scheme for the length of the finance term. Because of this, Motability has been able to obtain catering quantities of finance to lend to disabled borrowers. It has then been able to use its buying power, as the largest individual purchaser of cars, to obtain discounts unavailable to other people. Of course, there is a further enormous difference in the VAT position. VAT is not charged on vehicles purchased by Motability, but a second-hand car is generally sold without VAT.
I may have a certain advantage over other noble Lords in that I had the privilege of running a portion of the Motability scheme. That involved financing wheelchairs and scooters, in partnership with a great charity called the Enham Trust, for a period of seven or so years until we sold it back to Motability Finance. So I have no interest to declare, but I do have a certain amount of out-of-date knowledge and a lot of respect for the people who run the Motability scheme. When I took over the powered wheelchair finance scheme, I little realised that I was entering a trade that made the fictional Arthur Daley look like an angel. The scams, rip-offs and downright fraud, with disabled people as the victims, were amazing. We sorted out the book and got rid of most of the bad dealers, promoting the good ones and serving the customers much better.
One thing always puzzled me about the car scheme—the way that the scheme provided the same sort of car, including insurance, everywhere in the UK. That was because the level of benefit was identical throughout the UK, despite car insurance varying widely in price depending on where you lived. Essentially, then, disabled customers in countryside areas, or perhaps with small mileages, were subsidising disabled customers who lived in London or Northern Ireland—places with historically higher insurance rates.
Given the immense problems which disabled people generally face, perhaps one group of disabled people having an unfair advantage over another is not the worst problem that can perplex noble Lords who are trying to do the right thing. Maybe we should try to do something about why disabled people are generally poor, or why poor people have a greater chance of becoming disabled. There are difficulties with both, but I feel that the problems of cross-subsidies could perhaps be ameliorated by the structure hinted at in this Bill—that of introducing more competition into the Motability scheme. If there were a choice of finance providers, such bias in the system would soon disappear. There is a king-sized danger of vulnerable customers being mistreated, as there is in any finance scheme, but competition and good regulation have a way of driving out the bad guys.
The great success of the Motability structure over the last 40-odd years of its existence is that it has really changed the market. It has moved disabled drivers from those horrible three-wheeler Invacare trikes, known to most people as Noddy cars—and usually mistaken for Reliant Robins—into a system where, if you were looking for the group with the highest percentage of new cars, it would probably be younger, mobility-impaired, disabled people. That they have more new cars, financed at cheap rates, is a triumph. So this partnership between a charity and a finance company is a powerful structure.
Why do we limit it to things with wheels? Could it not be widened to embrace parts of the health service and benefit distribution as well? Noble Lords on all sides of this House would encourage the Government to do more of what they do well. Noble Lords on this side would like to stop the Government doing things they do badly. Surely the Motability system is one of the best organisations that we have, so we should look at ways to widen the range of things it might do. I wholeheartedly welcome Clause 20 of this Bill, but I ask the Minister whether it could not go further forward on this point.