My Lords, here we go again with another round of ideologically driven cuts to welfare. I say “ideologically driven” because we do not need all this austerity. This is not the moment to argue the point, but we do not. Even if we did, requiring the poor to bear the brunt of it reflects a highly retrograde sense of priorities. Be in no doubt: this Bill represents a clear government decision as to their priorities, which could have been otherwise. It is the brainchild of people who are on a mission to shrink the state. Welfare can disincentivise work and keep people in a state of dependency, and that is rightly being tackled, but overwhelmingly, welfare benefits are paid to people in need and are the product of a society which increased prosperity and increased state provision has made increasingly civilised. The Bill legislates for a raft of cuts to meet the Government’s target of cutting £12 billion from the welfare budget. That cannot but have a devastating impact on poor people who depend on benefits. We should remember that Tony Blair was reputed to have asked what you had to do to save £1 billion on welfare. He was told that 1 million people have to lose £1,000, so 12 million people will have to lose £1,000, which is an awful lot.
These cuts are likely to have a disproportionate impact on disabled people, which I begin by highlighting. Here I declare my interest as a vice-president of the RNIB. The Government have made a welcome commitment to protect DLA and its replacement, personal independence payment, from the proposed cuts. However, the Bill cuts a number of working-age benefits that disabled people are disproportionately likely to receive, such as ESA, JSA, housing benefit, tax credits and the new universal credit. Households with disabled members in receipt of DLA/PIP or who are in the ESA support group are exempt from the benefit cap. However, many disabled people do not fall into these categories. In particular, those in the ESA WRAG group would be subject to the cap, despite being found unfit for work and despite DWP research showing that only half of those in this group were also claiming DLA PIP.
The Bill freezes a number of key benefits that many disabled people receive, such as JSA, housing benefit and universal credit. Those on DLA PIP are exempted from the four-year freeze, but specific elements targeted at disabled people, such as the basic rate and work-related components of ESA, housing benefit and the limited-capability work component of universal credit, are frozen. These are clearly matters we will want to pursue in Committee. I merely flag them up. I do not propose to pursue the impact on disabled people further this evening because, along with the noble Baronesses, Lady Meacher and |Lady Grey-Thompson, I am carrying out a review, supported by a number of disability charities, of the impact of the cuts in ESA in the WRAG group and it is best that I do not anticipate the review.
Instead, I want to talk about two issues in the context of the Bill: first, how claimants might get the support and advice they need to adjust to the changes; and, secondly, how to protect against the worst effects of sanctions hitting the most vulnerable. For the past three years, I have been chairing a commission on the future of advice on social welfare issues, which has highlighted these issues for me.
Starting with information and advice, every time we debate new measures on welfare in this House, we find that the complexity of the regulations and rules around things such as conditions of entitlement, contributory and non-contributory elements, time limits, disability benefits assessment descriptors and differential withdrawal tapers baffle even the most expert. How much more baffling must the system be to claimants who have to grapple with long and unclear forms, technical language and shifting entitlement rules? For those in insecure employment or in and out of low-paid work, just calculating income accurately can be a nightmare. Even when claimants get all their information right, the system is prone to error. DWP estimates that just as a result of simple administrative errors, claimants are underpaid by £1.4 billion and overpaid by £2.4 billion. Then there is the vast number of decisions that DWP gets wrong. The success rate on appeals runs at more than 56%, despite the introduction of mandatory reconsideration.
Universal credit claims to tackle, and eventually remove, many of the system’s complexities, but, as it proceeds laboriously through stage-by-stage implementation to absorb new rules and aggregate different benefit entitlements, new complexities emerge. For example, there is a misunderstanding of the rules or gateway conditions governing who is eligible to claim universal credit in the first place and whether tax rebates count as earnings under universal credit, and the regulations now differ significantly between digital trial areas and elsewhere. New residency rules and interaction with child benefit and child tax credits are a further source of confusion.
Universal credit implementation and the ongoing impact of the 2012 reforms affecting disabled people’s transition into either the new ESA or PIP regimes are generating additional pressures on advice agencies as more people seek support on how to claim, how changes to benefits calculations affect their household income and how to challenge decisions through the tortuous reconsideration and redress process. All but second-tier appellate tribunal issues have been taken out of the scope of legal aid and local government funding for welfare rights advice has also taken a massive hit. The availability and quality of advice has been adversely affected as demand has rocketed. More than one-third of the issues that present to the CAB network concern welfare benefits. Last year, there were around 1.8 million issues spread over nearly 650,000 clients, overtaking debt as the largest category of individuals that CABs deal with. Our commission argues that a new strategy for advice should be put in place on an invest-to-save basis and on the basis that early preventive rights-based advice, provided through CABs and other agencies, can save resources in other parts of our public sector welfare and support systems as well as in health and criminal justice.
Cabinet Ministers appear to recognise that intermediaries and advice can play an important part in the welfare system. As part of universal credit delivery, local authorities are expected to play a key support role by arranging provision for face-to-face services for those claimants unable to manage their benefit claim electronically or for those with more complex and multiple needs. The universal credit local support services framework, agreed between DWP and the LGA, has followed from a number of pilots. The model is based on partnership working between DWP and jobcentres, local authorities and contracted providers, such as housing associations, including in the voluntary sector, and with money advice agencies as key delivery partners. There is also some specific outcome-based funding support from DWP to local authorities for the programme, which I hope will be protected from the Chancellor’s cuts. Overall, this initiative is very welcome, although the stress is on financial capability, that is to say budgeting on benefits-supported lower incomes, and on supplementing back-to-work support rather than welfare rights, income maximisation and related social need.
How much help is this programme really delivering? How many delivery partnership agreements have been signed? So far the Minister has announced only 11 local partnerships, the same partnerships that were piloting this approach before. If this is the scale of the scheme, then it hardly qualifies as universal support. The Bill should address whether the information and advice support services’ framework for welfare reform should be put onto a statutory and less discretionary footing or should at least form part of DWP’s statutory guidance, perhaps linked to the information and advice strategies that local authorities are having to prepare to meet their obligations under the Care Act 2014. This statutory guidance approach could also make it clear that expectations around delivery must be factored into local commissioning or grant-making arrangements that councils use to support their local advice sectors. The whole universal support process should be one of co-production between statutory agencies and the independent advice sector to underpin the proposed delivery partnership agreements.
The second issue is the growing concern about the use of sanctions in our benefits system. There are protections or safeguards in DWP guidance dating back to 2000 to prevent automatic sanctions applying to vulnerable claimants or to claimants with complex needs, based on social services data and mental health status and, if necessary, home visits. However, as legislation and regulations have become more complex while, at the same time, reinforcing conditionality and sanctions as approaches to encouraging work-seeking behaviours, this guidance is becoming increasingly outdated and weak. This is especially the case in respect of universal credit claims, new JSA claimants and clients of Work Programme providers. There is also often a lack of awareness of the safeguards among DWP and Work Programme provider staff. The Work and Pensions Select Committee report on sanctions after the Oakley review recommended that safeguards should be included in legislation. This Bill gives us the opportunity, and I shall be bringing forward amendments to bring that about.