Report (1st Day)

Welfare Reform and Work Bill – in the House of Lords at 3:07 pm on 25 January 2016.

Alert me about debates like this

Votes in this debate

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

Amendment 1

Moved by Baroness Campbell of Surbiton

1: After Clause 1, insert the following new Clause—

“Disability employment gap: reporting obligation

(1) The Secretary of State must lay a report before Parliament annually on the progress which has been made towards meeting the commitment to halve the disability employment gap.

(2) The report under subsection (1) must set out—

(a) how the Secretary of State has interpreted “halving the disability employment gap”;

(b) the factors that the Secretary of State has used to determine whether progress has been sufficient, including the extent and speed at which progress has been made; and

(c) if progress under subsection (1) has been insufficient, what remedial steps will be taken.

(3) The report under subsection (1) must contain data on—

(a) the overall rate of employment, and

(b) the progress of the rate of employment of people at working age with—

(i) a learning disability;

(ii) autism;

(iii) mental health problems;

(iv) visual impairments; and

(v) any other disability as the Secretary of State may by regulation specify on the grounds that the people with the disability are marginalised from the labour force and require a specific focus.”

Photo of Baroness Campbell of Surbiton Baroness Campbell of Surbiton Crossbench 3:08, 25 January 2016

My Lords, I have returned today to ask the Government again to include this amendment in the Bill. It would impose a requirement to report annually on the progress made towards their manifesto commitment to halve the disability employment gap. If the Government do not have a disability-focused reporting methodology embedded in their strategy, there will be no robust way of analysing what exactly is preventing disabled people from working, and of putting it right.

Once again, the so-called disability unemployment problem will be passed around to some official or some department to resolve. I have seen this again and again throughout my career. We tinker at the edges, running pilots, employer awareness campaigns and support programmes with short-lived funding and we wonder why the figures remain abysmally low. Halving the employment gap is a very ambitious commitment, which has not been achieved by any Administration in my lifetime. It will take a well-informed, cross-government strategy that addresses the barriers specific to different impairment groups to understand what lies behind the barriers to work.

In response to my amendment in Committee the Minister said that,

“as progress against the disability employment gap commitment is a key factor of our overall commitment to full employment, these”,


“amendments are not necessary, as that progress will be reported in the annual report on full employment”.—[ Official Report , 14/12/15; col. 1941.]

I am afraid that I am not confident that generic annual reporting on full employment will receive the detailed attention that is necessary to understand the obstacles that have dogged disabled people since I began work in the 1980s. The employment rate for disabled people is currently 47.6%, while for non-disabled people it is 80.5%. That is a gap of over 30%, and it has remained at that level for over a decade. The Government need to radically think again and put a specific reporting obligation in the Bill. I know that departments will then give it higher priority, and everyone concerned will see that the Government’s commitment in its manifesto is genuine.

In Committee the Minister argued that setting up such a reporting mechanism is costly and will delay universal credit. None of us wants to see this, but I cannot believe that this would further delay its introduction. Reporting is not a difficult task. Indeed, it would help the Government to identify those who encounter the biggest barriers to work, ensuring better targeting of resources for support. It would also give far greater clarity on where the role of academics, disabled people, their charities and employers can help the Government to realise their very exciting commitment. No one sector and no one Government can expect to do it alone.

My experience of working with Governments on challenging initiatives is that they work when they have legislative priority, detailed analysis, appropriate piloting and good reporting mechanisms. The community care direct payment scheme was a prime example. The collaboration between government, social care professionals and disabled people and their organisations turned a culture of formal care dependency into one of independent living and civic participation. The establishment at that time had always maintained that disabled people could not operate their own care—a bit like the way people think that most disabled people cannot hold down a full-time job. Professionals at that time developed an expensive industry telling us how to live a passive life. It took a very bold Government—a Conservative Government—to turn this around. We can do this again with the employment gap—of that I am sure—but not without a whole-system change that is tracked and reported on regularly so that we can all scrutinise it.

The life opportunities survey provided a much-needed insight into disabled people’s lives—but, sadly, the last wave was published in September last year. I know that reassurance from the Minister today about putting a reporting duty on the face of the Bill would further develop what the survey has really begun to reveal.

The Minister must go further than general reporting, which will not identify very complicated disability issues. He needs to set a challenge across government to report accurately on the barriers faced by millions of disabled people who want nothing more than a worthwhile occupation, personal status and a financial reward for working. If the Minister does not accept my arguments, I hope that he can present this House with a credible alternative strategy and not simply tell us again that it will be reported generally and will be highlighted in a White Paper. I am afraid that that generic approach will not work for disabled people—we simply do not fit the generic lexicon. I beg to move.

Photo of Lord Low of Dalston Lord Low of Dalston Crossbench 3:15, 25 January 2016

My Lords, I support the amendment, which my noble friend Lady Campbell moved with great eloquence. After her speech, there is not really a lot that I can add but I will summarise the points that I want to make.

The Conservative Party manifesto set this ambitious aim to halve the disability employment gap by 2020. As we have heard from my noble friend Lady Campbell, this gap has been intractable over many years. It is quite structural and it will not be easy to reduce it substantially, let alone halve it. There is a real concern that, unless the Government actively measure, and are required to report regularly on, progress towards attaining this goal, it may not be achieved and a crucial opportunity to deliver on disability employment will be lost. This is a wonderful opportunity. The Government are much to be congratulated on setting this goal but it will take a lot of work to achieve it. Having targets specific to this objective and reporting regularly on them will be necessary if we are to monitor the progress desired and to take remedial action if required.

There are three other specific reasons why I think we should support the amendment. The first is simply consistency of approach. The Bill introduces reporting requirements on the Government’s pledges to achieve full employment and fund 3 million new apprenticeships but there is no similar reporting requirement on halving the disability employment gap. So simply from the point of view of consistency of approach, it would seem to make sense to have a specific reporting requirement for this objective as well.

Secondly, disability employment presents very specific problems which are not well understood across government, and that is part of the reason why the employment gap has proved so intractable over so many years. The DWP is getting on top of it but I do not think the same can be said of government departments generally. It would provide a departmental and cross-governmental focus on disability employment and reducing the disability employment gap, and help to embed this in the organisational culture if there were specific reporting requirements in relation to this.

Thirdly, simply from the point of view of targeting support, introducing clear reporting on how many disabled people are in employment, separate from scrutiny of other employment statistics, will allow better analysis of how current support arrangements are working and help the Government to better target resources and support where they are most needed. It will also enable data to be disaggregated by such things as learning disabilities, autism, mental health problems, visual impairment, deafness and hearing problems—things such as are mentioned in the amendment.

On all these grounds—consistency of approach, providing an incentive for action across government and targeting support where it is most needed—my noble friend Lady Campbell has made a very strong case for the amendment, and I wholeheartedly support of it.

Photo of Baroness Doocey Baroness Doocey Liberal Democrat

My Lords, I, too, support this amendment. As the noble Baroness, Lady Campbell, has said, in Committee, the Minister said that the amendment is not necessary because a report on progress will be included in the annual report on full employment. However, my concern is that although the Government are very good at proposing big ideas and related targets, they seldom back them up with clear and unambiguous plans as to how they will achieve them. Halving the disability employment gap is a prime example of this.

Amendment 1 will guarantee that the Government must report to Parliament on progress and sets out clearly the form that this reporting should take. It will enable proper public and parliamentary scrutiny, and will provide consistent and thorough data which will give the Government the information that they need to measure the impact and progress of their policies, year on year.

I know from a number of my disabled friends of the enormous barriers that they have to climb through in trying to find a job: being invited to interviews just to ensure that employers can tick a “disability” box; losing out, time and again, to candidates far less qualified than they are to do the job for which they are being interviewed; receiving rejection letters giving reasons for their rejection that simply do not add up; and the heartache of knowing, without a shadow of a doubt, that the real reason they did not get the job is simply because they are disabled. This is all because employers, particularly SMEs, do not understand that somebody who is blind can be every bit as good as, if not better than—at IT, for example—somebody who is able to see properly. These employers running small companies have no idea of the specialist equipment that is available to disabled people. So although they are generally sympathetic, they are just not willing to take a step into the unknown by employing disabled people.

I am very grateful to the Minister that in his letter following Committee stage he answered the questions I had posed to him about the steps the Government were taking to support more disabled people into work. At the moment, the Bill is quite silent on that. I look forward to seeing what the White Paper will say on how the Government plan to improve support for disabled people. However, to significantly close the employment gap, we need to begin now and to raise the game of all government departments on meeting the target. This can be achieved only by giving the exercise a much higher priority.

At a time when so much is happening, a separate reporting amendment will provide cross-governmental focus on the laudable aim of halving the disability employment gap. Placing this requirement in the Bill will demonstrate the commitment the Government have made to improve the employment rate for disabled people. It will also clearly demonstrate to Parliament and the public the priority and importance that the Government place on this goal and ensure efforts to deliver it.

Photo of The Bishop of St Albans The Bishop of St Albans Bishop

My Lords, I, too, support the Government’s aim of getting people out of and back into employment and I am grateful to the Minister for his clarification in Committee that reporting on the disability employment gap will be included as part of the Government’s overall employment reporting. However, like other noble Lords, I fear this commitment may not go quite far enough.

If the Government are to stay true to their commendable aim of halving the disability employment gap, detailed data and thorough reporting are absolutely crucial to achieving it. Particularly important is the breakdown of how unemployment rates differ across disability groups. If the government reporting looks only at the disability employment gap as a whole, it will be extremely difficult to see which disabled groups are making progress and which are not. I am concerned that this would make it possible for the employment gap to drop significantly through government interventions targeting only those with the most limited impairments.

We know anecdotally that those with physical impairments tend to find it easier to return to work than those with mental health problems and learning difficulties. While it might therefore make economic sense to target programmes and interventions at this easier group, I am sure the Minister will agree that this will go against the spirit of the Government’s manifesto commitment. Any government reporting needs to look at the range of barriers faced by those in all disability groups and work to combat these barriers across the board.

We need work programmes that are properly targeted to address the needs of all those who are seeking employment across different disability groups. Statutory reporting of the disability employment gap, using the metrics outlined in this helpful amendment, would put such programmes on a clear footing and will provide a clear rationale for the way forward. Anything less than this would be a missed opportunity for the Government. I hope the Minister will consider carefully the points that have been raised.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, in supporting the amendment so ably spoken to by my noble friend Lady Campbell, I will speak to my Amendment 42, which seeks to make changes to the Welfare Reform Act 2007.

The amendment would much improve the support provided to help people with mental health problems into work. It would add people with mental health problems in the ESA work-related activity group to the list of those currently exempt from the higher levels of conditionality introduced in the Welfare Reform Act 2012.

We all want the same thing: to help more people into work. We are also far more frequently discussing in your Lordships’ House the importance of better supporting those with mental health problems. My amendment speaks to both of these motivations.

The types of conditions that people in the ESA work-related activity group experience are more complex than those experienced by people on jobseekers’ allowance. We can easily imagine how people’s symptoms could be exacerbated when they are required to attend activities in order to qualify for their benefit. However, we also know that many of the activities are not tailored to their individual needs. People with social anxiety disorders can be mandated to attend confidence building classes with 20 other people who do not have a mental health problem, and many people talk of being sent to health and safety courses. Often nothing is offered to address their real barriers to work.

The individual placement and support model is currently being piloted by the department to support people with mental health problems into work. This approach has been shown to work. At WorkPlace Leeds, part of Leeds Mind, 32% of its clients secured employment through voluntary support last year. That is a far higher rate than the 9% achieved through the Government’s Work Programme nationally.

I conclude by highlighting one of the biggest issues with back-to-work support at the moment; it is one on which we really need to make some progress. The whole system is desperately out of date: it is based on an assumption that people with mental health problems lack motivation or the willingness to work. This simply is not the case, and I agree with the Government that people with mental health problems have a high want-to-work rate. My amendment seeks to end this outdated and unhelpful system. It provides a real opportunity to transform the support offered to people with mental health problems. I hope that the Minister and the Government will accept my amendment.

Photo of Lord Wigley Lord Wigley Plaid Cymru 3:30, 25 January 2016

My Lords, I apologise for not having taken an active part in Committee, for reasons outside my control. Noble Lords will be aware of my interest in these areas, and I particularly declare my links with Mencap and Autism Wales. I warmly support the amendment moved by the noble Baroness, Lady Campbell. Attention needs to be given to the matters that she raised for two or three particularly important reasons. All our experience over the past 20 or 30 years has shown that having specific, detailed reports coming forward before Parliament in a coherent manner has enabled a focus to be given to issues relating to disability and, in particular, disability in the context of employment. It has enabled both Houses of Parliament to move forward in making better provision. The recommendations put forward in this amendment are important in that context.

The amendments are timely because, unfortunately, we are seeing a backward movement with regard to the employment of disabled people in many areas. We are seeing, for understandable reasons, the closure of some specific facilities that were available, such as Remploy and other similar organisations, where the argument was that disabled people would be employed within the mainstream and that, therefore, specific provisions did not need to be made in this way. That is fine, provided that that employment in the mainstream is available. However, as we see economic pressure increasing in both the private and the public sectors, the reality is that the number of jobs for disabled people is very often squeezed. I regret to say that in the public sector, jobs that had very often been specifically offered to disabled people because of their difficulties are the first to be cut when financial pressures lead to a reduction in resources and employment. For those reasons, I believe that this amendment, and the one put forward by the noble Baroness, Lady Howe, are important and should be taken on board. The resolution of the issues underlying them should certainly exercise our minds.

Photo of Baroness Thomas of Winchester Baroness Thomas of Winchester Liberal Democrat

My Lords, I, too, am happy to support the amendment of the noble Baroness, Lady Campbell. Although the Bill as drafted requires the Government to report on progress towards their aim of full employment, there is no reference to reporting on the employment of disabled people, even though the Government made a manifesto commitment to halving the disability employment gap, as the noble Lord, Lord Low, has said. This is an ambitious target and, of course, a welcome one, not just for the economy as a whole but for disabled people themselves, whose talents and contributions would otherwise be wasted.

Full employment cannot be achieved without getting more disabled people into work, so why are we not satisfied with the Government’s assertion that the amendment is not necessary because a report on the aim is already in the Bill? It is because we are not convinced by what the Government have told us so far. The current employment rate for disabled people, as we have heard, is about 48%. For those with learning difficulties, it is only 8%, and for those with autism, it is 15%. The gap between the employment rate for disabled people and the rest of the population has remained at about 30% for more than a decade, as the noble Baroness, Lady Campbell, has said.

However, as the recent report Fixing Broken Britain? from Frank Field and Andrew Forsey has shown, existing policies, such as the Work Programme, have not been very successful in finding work for claimants with disabilities. It is estimated elsewhere that only about one in 10 of those on the Work Programme and in receipt of ESA have satisfactory employment outcomes; that is, keeping a job for at least three months. Evidence from Mind indicates that only 8% of people with mental health problems who have gone through the work programme have achieved a long-term job outcome.

The Government originally set a target for contractors of achieving a “job outcome” for at least 22% of ESA claimants. This was then reduced to 13%. Neither target had been met by the end of the last Parliament. The reduction in the number of people supported by the Access to Work programme, the reduction in the number of disability employment advisers at Jobcentre Plus centres and the job opportunities for disabled people in Remploy factories, to which the noble Lord, Lord Wigley, referred, have all played their part in the lack of progress in trying to get more disabled people into work. I fear that other proposals in this Bill will make the situation worse.

While announcements in the spending review on the provision of specialist employment support are to be welcomed, this is going to be offset by a cut of around £30 a week for new claimants in the ESA WRAG. For those whose recovery from, for example, chemotherapy will take some time, this cut in support is likely to push them further from the job market. The

Joseph Rowntree Foundation found no evidence that disability employment rates are improved by reducing benefits.

In conclusion, it is unclear from the Bill, and from what Ministers have told us so far, how the Government intend to deliver on their commitment to narrow the disability employment gap. We need those answers and we clearly need this amendment to the Bill.

Photo of Lord Lansley Lord Lansley Conservative

My Lords, perhaps I may intervene briefly to say a word about Amendment 42 in the name of the noble Baroness, Lady Howe, and Amendment 43 in the name of the noble Lord, Lord Layard. In Committee, we discussed this briefly. While I have previously made it clear that I would seek to minimise those occasions on which we seek in statute to specify the circumstances in which people should access NHS treatment, that principally should be determined on a clinical basis. Past experience has demonstrated the value of the Improving Access to Psychological Therapies programme in providing assistance to people with mental health and behavioural disorders, especially anxiety and depression. Your Lordships will know that the numbers who are in receipt of benefit and who are out of work by reason of those conditions has significantly increased over the last two decades. We need to respond to that.

The IAPT programme, which begun under the Labour Government before 2010, was continued and rolled out during the coalition Government after 2010. I stress that the importance of this will, I hope, give the Minister the opportunity to say that, while not accepting the letter of Amendment 43, the Government are sympathetic to the spirit of it. After 2012-14, there has been a 25% increase in the number of therapists providing psychological therapies through the National Health Service. That rollout is continuing. Health Education England anticipates that the increasing supply resulting from its commissions for training places for psychological therapists should arrive at the point whereby at 2017-18 the demand for such therapy is able to be matched by the supply of trained therapists. We have an opportunity, in the timeframe anticipated for the measures in the Bill, to make it more certain that somebody with anxiety and depression requiring access to therapies while signing on for benefits should be able to access that therapy. I hope that the Minister can give that positive response to these amendments.

Photo of Baroness Meacher Baroness Meacher Crossbench

My Lords, I really was not expecting to speak today on this. We had asked that Amendment 43, on IAPT, be shifted and taken separately on Wednesday. The IAPT programme has now been going for 10 years: we had the first pilot in the mental health trust in east London 10 years ago. The point of that pilot, and of the whole programme, was to help the large numbers of people with mental health problems back into work. I remember talking to jobcentre staff and having great difficulty persuading them to refer people to the programme. Ten years on, we have so much evidence that if people with depression or anxiety receive good therapy quickly, they achieve remarkable results—far better results than any other that I am aware of in the psychological therapies. I stand here completely unprepared, save only to say to the Minister: please make use of what is an excellent programme on the whole—nothing is perfect everywhere, of course not—to help the 50% or so of unemployed people who desperately need precisely such help so that they can quickly get back to work. I make that big appeal to the Minister.

Photo of Lord Kirkwood of Kirkhope Lord Kirkwood of Kirkhope Liberal Democrat

My Lords, I add my support to the opening remarks of the noble Baroness, Lady Campbell. She said that she was somewhat disappointed by the Minister’s response to these amendments in Committee. She is right. He founded his response on a defence that these statistics are already available if you know where to find them and that they will continue to be published. That is only half the story. There is a case to be made for looking at more qualitatively based, specific disability-related data that are not available. It would not cost a great deal of money. The DWP has a capable resource department. Over a period of years, a lot of small but very important disability employment issues could be explored and the trends chased down and studied.

I give the example of the change as we move to universal credit, using work coaches rather than disability advisers. I understand that and I am very supportive of that new environment, but the work coaches are not dedicated specialists. They will have access to people, but I would love to watch how that works—if it does—as universal credit is rolled out. If it does not, we will need to change the setup, as I am sure the Minister will agree. I would like to see that kind of thing in gremio of the other suggestions for the reporting requirement from the noble Baroness, Lady Campbell. I support her in observing the need for what does not currently exist. With a bit of good will, working with the disability communities, we could have better sight of some of these problems.

My second point is that a contract of employment takes two people: you need an employer as well. We must not forget the employers. They try to do the best they can. As was said, physical disability is in some ways easier to address because the solutions are more obvious. Potential employees who suffer from any kind of intermittent condition—it is mainly, but not just, mental illness—are in a different category altogether. I remember feeling sympathy for the Minister when he got into trouble for saying that people with disabilities were not worth the money, or something—I am sure he never said it and that he did not mean it even if he did. However, he is right, in that the one risk that a potential employer fears—if I can put it that way—with regard to a very good candidate with intermittent conditions is that they cannot control their ability to turn up at key moments. Therefore, we need flexible working and to compensate for or take account of that, to reassure employers. You could do it by mitigating NI contributions, for example. We are not yet engaging in sufficient outreach with employers who might otherwise be willing to address this gap.

When all is said and done, this is still a saving measure. According to the briefing I received from the department, £640 million will be saved by 2020, which is a huge amount of money. Of course, we look forward with interest to the Green Paper, through which we will get an extra £100 million a year, which is very welcome. However, if the gap is not addressed by 2020 I, for one, will say—if I do not, the noble Baroness, Lady Campbell, will get there before me—“There is half a billion pounds of savings here”. If we cannot tackle this issue with the money allocated in the Green Paper, we should go back to central Government, or the next Government, and say, “You have saved a lot of money out of this. However, we are still not doing the job with the money and resources that are available, so we want more assistance to get to where we all want to be: to seriously address this gap”.

Photo of Baroness Hollins Baroness Hollins Crossbench 3:45, 25 January 2016

My Lords, I support Amendments 1 and 42. I will not repeat what I said in Committee or what has already been said today. However, I want to emphasise why the reporting duty needs to report on different groups, particularly people with learning disabilities, people with autism and people with mental health problems. The Work Programme and Work Choice just have not worked for people with learning disabilities. The disability employment gap is approaching 70% for people who would like to work but cannot find work and need specialist support to enable them to do that. That is why we need to look specifically and carefully at some groups quite separately from each other. Therefore, I support these amendments.

Photo of Baroness Afshar Baroness Afshar Crossbench

My Lords, I support the comments of the noble Baroness, Lady Meacher. In the case of minorities, mental disability is regarded as a dishonour or as a great failure for the family, and only within the formal context of education, and at early stages, is it possible to intervene. Furthermore, because the intervention adjusts a young person to the requirements of the British community, with which the minority communities are not very familiar, it is essential to bring in these potential talents by catching them early and helping them.

Photo of Baroness Manzoor Baroness Manzoor Liberal Democrat Lords Spokesperson (Work and Pensions)

My Lords, I support the amendment of the noble Baroness, Lady Campbell. I thank the Minister for meeting some of us last week to talk about why we felt that this amendment was so important. I shall outline the four key themes from my perspective. I agree that we need consistency of approach, as outlined by the noble Lord, Lord Low. We need to monitor and evaluate progress on the target. This is the Government’s target and it is laudable and very welcome. However, do they really not want to measure it and evaluate improvement? One could perhaps think that the Government do not want to measure progress towards the target, and consider that it is easier to pick off low-hanging fruit than to assess the great variations in disability and tackle those, so that more people enter employment. As has already been said, this measure is not costly and will certainly help to identify the support that employers need to help people with disabilities.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions)

My Lords, we support Amendment 1 for the reasons advanced with conviction by the noble Baroness, Lady Campbell, strongly supported by the noble Lord, Lord Low, and pretty much every other Peer who has spoken in this debate so far. We heard from the noble Baroness, Lady Doocey, about the importance of proper reporting to the ability to deliver proper parliamentary scrutiny. The right reverend Prelate the Bishop of St Albans raised the very important issue of the need to have data on different groups, otherwise there is a risk that targets will be achieved by dealing just with those closest to the labour market. The noble Lord, Lord Wigley, reminded us about the impact of specific, detailed reports which come before Parliament. The noble Baroness, Lady Thomas, said that we can get full employment only if we make progress on the disability employment gap. The noble Baroness, Lady Hollins, and other noble Lords, talked about the failure of the Work Programme at the moment—a running theme on these issues. I am delighted that the noble Lord, Lord Lansley, and the noble Baroness, Lady Meacher, touched on Amendments 42 and 43. That enables me, in the absence of my colleagues, to address those and I will do so in a minute. The noble Baroness, Lady Afshar, made an important point about tackling the stigma around mental health which, sadly, still pertains in some communities.

We, too, welcome the Government’s commitment to halving the disability employment gap by 2020. We are grateful to the Minister for organising a meeting last week, together with his colleague, Justin Tomlinson MP, although the message delivered was that the amendment would be resisted by the Government. I hope there has been a change of heart in the interim. This is notwithstanding the generally encouraging noises and the promise of a White Paper. We know that the disability employment gap has stayed stubbornly persistent—the noble Lord, Lord Low, referred to it as intractable—for too long and cross-government effort will be needed to deliver on the commitment.

The reasons why we need regular reporting have also been summarised, too, by Leonard Cheshire in its briefing paper and these include, in particular, the incentive for action in that it will provide a departmental and cross-government focus on the gap. As the Minister himself has frequently opined, it is that which gets measured and reported on which gets government attention. That briefing highlighted the somewhat conflicting messages we have received from the Government. The Employment Minister in another place stated that the Government did not see the need to report on disability employment, as the measure was essential to achieving the wider commitment to full employment. However, the more enlightened Minister for Disabled People did promise that the annual report on progress to full employment would include an update on the Government’s progress towards halving the disability employment gap.

We need some clarification on this, particularly considering the comments made by the noble Lord, Lord Freud, in Committee, to which the noble Baroness, Lady Campbell, referred. The thrust of those comments was that the management information which this amendment seeks has not been built into the current plans and would not represent value for money, given the timeline to just 2020. Do the Government have no ambition after that? It would also disrupt the universal credit timeline, wherever that currently stands. If the

Minister rejects the amendment, but promises regular reporting, will he make it clear what that will entail and what the sources of the data will be? The amendment is seeking not just aggregated data reporting but a proper analysis of progress over a range of conditions. If we do not have clarity on this and the noble Baroness, Lady Campbell, is minded to test the opinion of the House, we will support her.

Amendment 42, in the name of the noble Baroness, Lady Howe, seeks, as we have heard, to add people with mental health problems to the list of groups which are exempt from the conditionality element of back-to-work support schemes. We have received a very helpful briefing from Mind which covers this and other issues. It is suggested that conditionality, with its threat of sanctions, has a negative impact on people with mental health problems, that it undermines the relationship between claimant and adviser, removes choice and control, and has no evidence to support it working for people with mental health problems. It seems to us that this is fundamentally about having the right sort of support for people with mental health problems. Mind and others point out that the mainstream back-to-work support is currently often generic, as we have heard today, untailored and does not address the barriers to work which disabled people face. The lack of specialist support is undermining the opportunities for individuals to access work. This is a constant complaint from those who engage with these issues, so perhaps the Minister will tell us how he is to address this in the context of halving the disability employment gap.

Amendment 43, in the name of my noble friend Lord Layard, refers us back to psychological therapies, as we have heard. I am grateful for the interventions of the noble Lord, Lord Lansley, and the noble Baroness, Lady Meacher, so that we can at least debate this a little today. On the matter of drafting, we need to reflect on the reference to “primary medical condition” given that entitlement to the WRAG is determined by a range of descriptors which can be for physical or mental health factors. Drafting aside, my noble friend's objective is to encourage and assist those with a mental health or behavioural disorder to access assessment and, if appropriate, treatment. This is an objective which we wholeheartedly support.

My noble friend Lord Layard has previously made a powerful case in identifying that nearly a million people are on ESA due to depression or anxiety disorders but that only about half are getting treatment. We have heard that improving access to psychological therapies can make a real difference, as the noble Baroness, Lady Meacher, confirmed. The pilots that took place were 10 years ago. My noble friend has previously explained that around half of those treated under the programme last year recovered during treatment. Such results could obviously assist the path for people back to work and we know of the evidence that work—good work—is good for people’s health. His amendment does not mandate anyone for treatment—we have been down that path before—neither is it instructing the NHS to treat in a specific way a group of individuals. But it requires that those with a mental health problem be encouraged and assisted to be referred for assessment and treatment. There is no conditionality attached and no suggestion that such individuals should somehow jump the queue.

If assessment and treatment is key to making individuals well and helping them move closer to the labour market, is that not exactly what the system should be about? This of course begs the question of what the process should be. I hope that the Minister will accept the thrust of this amendment and follow up with my noble friend and others who have been engaged in the past. We used to have mental health champions in Jobcentre Plus; perhaps the Minister could tell us what has happened to this role.

I finish where I started: fundamentally, we are very happy to support Amendment 1, which is very important, and to help the noble Baroness test the opinion of the House if that is her decision.

Photo of Lord Freud Lord Freud The Minister of State, Department for Work and Pensions

My Lords, Amendment 1 would build on Clause 1, which sets out the Government’s commitment to report to Parliament annually on the progress made towards full employment. Producing an annual report which illustrates progress towards full employment across the UK demonstrates this Government’s clear intention and continuing commitment to building a strong economy, growing business and ensuring labour market opportunities for all.

The purpose of this amendment is to require a further annual report to Parliament on the progress that has been made towards narrowing the disability employment gap. The amendment would also require the report to include how the Government have defined the disability employment gap, how they will assess whether progress has been sufficient and what remedial action will be taken if progress is insufficient. The amendment also requires that the report should include data on progress in increasing the employment rates of specific groups of disabled people, including people with autism, a learning disability, mental health problems and visual impairments.

I hereby formally commit the Government to report on our progress towards halving the disability employment gap in the annual report on full employment—no ifs, no buts. Halving the disability employment gap is a crucial part of achieving our full employment aspirations and a key priority for this Government in its own right. I hope also that, following my meeting with Peers on this very subject last week, they are assured of my commitment and that of my honourable friend, the Minister for Disabled People, who was also at that meeting.

There is no need to include a reporting duty in the Bill to drive progress or signal commitment in this area. We have already said that we will publish a White Paper later this year to set out our plans for improving support for disabled people and people with health conditions, to further reduce the disability employment gap and to promote integration across health and employment. Last summer, we established the new work and health unit between the two departments, the DWP and DH, to bring together and drive progress in this area. Clearly, to pick up the point made by the noble Lord, Lord Kirkwood, employers are key in this. That is what the Disability Confident campaign is about, which has shown some good success.

On the detail of the full employment report that we are talking about, the Government have already said that we will use the first annual report to set out a framework for considering full employment in a modern economy. However, I must make a point about specifying the particular groups that this amendment does. The Government are acutely aware that many of the most vulnerable in our society are affected by multiple conditions. Reporting progress against specific groups would draw focus away from others while failing to reflect this nuance. We are committed to enabling all disabled people to fulfil their potential.

The noble Baroness, Lady Thomas, raised a point about the various programmes, voluntary and mandatory, that we put through. We are building our knowledge about how to help people, and the new work and health programme will provide specialist support for claimants with health conditions and disability, including of course those with mental health conditions. Noble Lords will be delighted to know that one of the reasons we are driven in this direction is because we have been so successful in getting people back to work. People with health conditions are now becoming the biggest group and therefore the group we need to concentrate on.

I offer assurance, particularly to the right reverend Prelate the Bishop of St Albans, that our treatment of progress on the disability employment gap will include information that will allow people to understand the key drivers of changes in this vital area, such as changes in the prevalence of disability and health conditions and demographic changes. For this reason, the amendment is unnecessary. We have, I think, encapsulated its spirit in my formal commitments.

I thank the noble Baroness, Lady Howe, for tabling Amendment 42. I clearly need to acknowledge her particular interest in the area of mental health. She knows that I support her in trying to get support for those with mental health disorders, and I hope I can reassure her with this answer. Before I start, I have to say that the intention behind this particular amendment is not entirely clear. I have therefore assumed that it seeks to remove all work-related requirements for claimants with a mental and behavioural disorder within ESA or universal credit, where they are found to have a limited capability for work, although I must point out that this is not quite achieved by the drafting.

I understand the motivation behind this amendment, but I am afraid I cannot agree with it. It is fundamentally opposed to the direction of travel since the publication of Waddell and Burton’s seminal report in 2006, Is Work Good for Your Wellbeing?, which I know has influenced me and, indeed, the department ever since. Growing evidence over the last decade has shown work can help keep people mentally as well as physically healthy and help to promote recovery if someone falls ill. Indeed, NICE guidance recognises that work is a key component of recovery from a mental health condition.

In contrast, there is a strong link between not being in work and poor health, including poor mental health. In recognition of this link, we believe that where appropriate it is right to offer people work-related support. That is why over the next three years the Government are investing £43 million to develop the evidence base on what works for those with mental health conditions. This will be done through a series of voluntary pilots that will test a different approach of combined health and employment support for benefit claimants with or at risk of mental ill health.

Furthermore, the spending review announced an increased commitment to support people with health conditions and disabilities. This is on top of the additional funding announced in the summer Budget of £60 million in 2017-18, rising to £100 million by 2020-21, to support claimants with a limited capability for work. In addition, as I have already mentioned, the Government have committed to publishing a White Paper that will set out reforms to improve support for people with health conditions and disabilities. I certainly look forward to taking advantage of the noble Baroness’s expertise and getting some advice from her as we develop our proposals.

I recognise that there are concerns that some people with a mental health condition or behavioural disorder may not be able to cope with the work-related requirements placed on them. I reassure noble Lords that claimants who are placed in the work-related activity group agree, through discussion with their work coach, steps that are reasonable for their circumstances, taking into account their mental health condition. In a small number of cases where an individual may not agree with the steps their work coach has proposed, there are checks in the system which allow the individual to ask for this to be reviewed. Clearly, to pick up the point made by the noble Lord, Lord Kirkwood, this is an area we are watching with an eagle eye and we will develop processes to make sure this works, whether it is through a work coach, a specialism, support for that work coach, or whatever it takes.

I turn to Amendment 43. I am sorry that the noble Lord, Lord Layard, is not in his place—I think there was a slight mix-up. I have talked to him in great depth on this matter and the noble Lord, Lord McKenzie, was good enough to allow us to debate it today by formally introducing it. He has a long-standing commitment to mental health generally and improving access to services, and I admire him greatly for that. This amendment seeks to put a statutory duty on the Secretary of State to encourage and assist all ESA claimants with a mental and behavioural disorder as a primary medical condition to be referred immediately to treatment in local NHS services as soon as they are awarded a benefit. There are actually technical issues that mean that it would not be possible to implement but, subject to my discussions with him, the noble Lord is interested in the direction of travel here rather than the precise amendment. What he is actually after is timely access to appropriate treatment—a point made by my noble friend Lord Lansley. On this point, I can offer assurance that it is absolutely the Government’s intention to improve the links between health and employment support, recognising timely access to health treatments can help individuals return to work quicker—a point made by the noble Baroness, Lady Meacher.

There are a number of significant measures the Government have taken and are taking to improve that access. I remind noble Lords that we have the national rollout of the IAPT programme: over £400 million was provided by the Government during 2010 for that. More than 100,000 people have been supported to recover since the programme started in 2008, and Department of Health officials are currently working closely with NHS England to build on the success of the programme to date in the light of the recent spending review settlement.

As we have already discussed, we are committed to halving the disability employment gap. That is why we are investing the £43 million I mentioned to develop the evidence base on what actually works. The voluntary trials will test a different approach of combined health and employment support. This includes a trial to test co-location of IAPT within jobcentres currently under way in Canterbury, and we plan to roll this out more widely in a number of still-to-be-determined jobcentres.

On our further commitment to the joint work and health unit, we are spending more than £115 million on the unit, including at least £40 million for the health and work innovation fund—again, to pilot new ways to join up health and employment. I believe that the forthcoming White Paper will address some of the challenges of how we improve access to treatment and provide it earlier. Again, I will take advantage of the advice of the noble Baroness, Lady Howe, and the noble Lord, Lord Layard, in making that work as well as I can.

The amendments cover a lot of ground and touch on some very important issues. I hope that I have been able to assure noble Lords of the Government’s commitment and determination in this area and that the noble Baroness will feel able, on the back of those commitments, to withdraw the amendment.

Photo of Baroness Meacher Baroness Meacher Crossbench 4:00, 25 January 2016

My Lords, before the Minister sits down, perhaps he would help us by explaining what the technical problems are in a simple referral to NHS by IAPT of people who have a diagnosis of a mental health problem.

Photo of Lord Freud Lord Freud The Minister of State, Department for Work and Pensions

Yes. The Secretary of State for the DWP has no power to make referrals into the health system. That is just the way that these things are kept separate, and there is enormous sensitivity in the medical area about data and information flowing around the systems. In practical terms, that makes it impossible to join them up; it must be done in a much more subtle and clever way.

Photo of Baroness Campbell of Surbiton Baroness Campbell of Surbiton Crossbench

My Lords, I thank the Minister for his reply to my amendment, which I shall come to in a moment. First, I thank the right reverend Prelate the Bishop of St Albans, the noble Baroness, Lady Doocey, and of course my noble friend Lord Low for putting their names to my amendment and believing in some of the arguments that I put forward in Committee. I would also like to thank everyone else, but they are too numerous to mention. I am thrilled to get that amount of support for the amendment.

I am fully aware of the Minister’s and the Government’s good intentions towards helping disabled people gain fulfilling employment. They were and, I believe, still are very serious about wanting to halve the disability employment gap. I welcome that, but I remember thinking the day I heard it, “My God, that’s going to take some work!” and, “Goodness me, we are really going to have to understand what lies behind the lack of mobility and movement within the unemployment field as it concerns disabled people”. I am aware that it will be tough—it will be really tough.

I hear what the Minister says about committing to making sure that disability is properly scrutinised in the annual reporting system. He will probably even get them to give a dedicated chapter to disability, but I also know that this will not do what it needs to for disabled people in really beginning to address that 30% gap.

I have been involved in writing and being part of generic reporting many times in my life. I have often been asked to do the work on disability for general reporting on health and social care. One very clear example struck me when the Minister was speaking—from when the Disability Rights Commission and the reports written by it was amalgamated into the Equality and Human Rights Commission, a lovely generic body where we would all work together on addressing the barriers that everyone faces with getting into work, housing, and so on. I am currently sitting on the post-legislative scrutiny committee on disability to see how well it is doing under the Equality Act and the commission. I have to say that we are receiving overwhelming evidence that the generic approach is simply not working. Disabled people are complex creatures; we are all so different, and all our support is different. Understanding why we are not entering the employment market will take something else—something more than a chapter in a generic report. However committed the Minister is that it should reflect the situation, I am afraid that it will not. That is why I was very keen—and I am keen—that something more should be put forward to address this intractable problem, as unemployment among disabled people is probably one of the biggest.

I am very tempted to test the House, but I am not sure that it would work—and, if it did, I am sure it would be overturned. So I am looking to the Minister to go back to the Government and to departments other than the Department for Work and Pensions, which, frankly, will write the report. Who will collaborate with the department across government? Which departments will really throw their weight behind this? I am sceptical, because they have not done very well so far on other issues. I would like the Minister to go back to the Government and say, “Okay, this will be part of the generic report, but I want it to be a substantive part, and I want more than a generic report with a chapter on disability that tells us all the things that we already know”. For that reason, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendment 2

Moved by The Lord Bishop of Durham

2: Before Clause 4, insert the following new Clause—

“Child poverty: reporting obligation

(1) The Secretary of State must lay before each House of Parliament an annual report on child poverty.

(2) The report must include information on the percentage of children living in households where—

(a) equivalised net income for the financial year is less than 60% of median equivalised net household income for the most recent financial year;

(b) equivalised net income for the financial year is less than 70% of median equivalised net household income for the most recent financial year, and which experience material deprivation;

(c) equivalised net income for the financial year is less than 60% of median equivalised net household income for the financial year beginning 1 April 2010, adjusted in a prescribed manner to take account of changes in the value of money since that year; and

(d) equivalised net income has been less than 60% of median equivalised net household income in at least 3 of the survey years.

(3) For the purposes of subsection (2)(d), the survey years are the calendar years that ends in the financial year addressed in subsection (2)(a) and (b), and the 3 preceding calendar years.”

Photo of The Bishop of Durham The Bishop of Durham Bishop 4:15, 25 January 2016

My Lords, I start, as I began my speech in Committee, by recognising that everyone in this House has a shared commitment to tackling child poverty in this country. We all want to see the end of child poverty; I am sure that no one in this House would want deliberately to keep children in a state of poverty. This debate is, therefore, not about the ends but about how we monitor progress towards that goal. Previously, I expressed my agreement with the Government that to maintain that income poverty alone is an adequate way to measure child poverty is no longer sustainable. I agree that there are other root causes, such as lack of work, low skills, poor housing, family instability and addictions, which must be recognised and tackled. But then we must also remember that many children in poverty are in families where a parent is in work; these children are currently trapped in poverty. I, along with the many organisations that work in this area, remain convinced that financial poverty is a crucial matter that must be recognised and reported on adequately.

It is, of course, possible to overstate the importance of material well-being alone. Many other things matter in children’s lives, including loving parents, good schools and safe neighbourhoods. They are all needed for children to thrive and achieve their potential. But it is also possible to understate the importance of income, or the lack of it—especially among those of us who have plenty, and perhaps take such things for granted. According to the latest deprivation statistics, 1.7 million children live in families that cannot afford to heat their homes properly, 1.3 million children lack the funds to take part in at least one organised activity each week, and 1.1 million children cannot afford to have their friends around for tea or a snack once a fortnight.

We know that money matters, because this is the experience of people in poverty, and of the many organisations and charities that work with them daily. There is also a wealth of academic evidence pointing to the damaging effects that income poverty has on children’s well-being, including their health, education and future employment prospects. We know, for example, that low income impacts on children’s cognitive ability, educational attainment, conduct problems and mental health, with serious implications for their future life chances.

Does the Minister accept that low income is an important influence on children’s outcomes and life chances, as his own department’s review of the evidence concluded in 2014? Can he explain why the Government are studiously ignoring the views of nearly everyone who responded to the consultation on child poverty measurement in 2013? According to a recent analysis by the London School of Economics, 202 out of 203 respondents to that consultation believed that income should be included in the poverty measures.

If I have heard the Minister correctly, the Government’s concern about the current child poverty measures is that they have encouraged an overdependence on income transfers, diverting attention from policies that tackle the root causes of poverty. However, the amendment does not seek to reassert the primacy of the existing child poverty measures: it simply requires that income-based measures of poverty be reported on alongside, and on a level footing with, other life chance indicators, such as worklessness and educational attainment, in order to acknowledge the significance of family income for children’s well-being and future prospects.

Furthermore, the amendment is about indicators for monitoring progress, not about targets or deadlines, so there is not the same risk that it could drive policy in an unhelpful direction. And with all due respect, the temptation to place too much emphasis on income transfers as a means of reducing child poverty is not one that the current Chancellor appears to struggle with. I agree that it is important to tackle the underlying drivers of poverty, but that can be done without abandoning all the existing income-based measures of poverty. The real issue is committing to, and resourcing, an effective long-term strategy to reduce child poverty, rather than finding alternative ways to measure it.

No economic or social indicators are perfect. Let us take the employment statistics. I note that recent trends in employment are encouraging, but those statistics do not allow for the quality of employment, and hide substantial levels of underemployment. Similarly, GDP statistics give equal weight to desirable and undesirable economic activities, and take no account of many priceless commodities. It is no surprise that existing poverty measures have flaws too.

The relative income measure, in particular, has been criticised for showing a decline in poverty during the recent recession. But that is precisely why there are three other measures of poverty in the Child Poverty Act. The absolute poverty measure is not affected by annual variations in median income in the same way. The deprivation measure, which focuses on the affordability of basic necessities, has the added benefit that it captures people’s living standards more directly than low-income measures. Nor can it be manipulated—if that is the right word—by targeted government transfers to low-income households. I therefore encourage the Minister to consider seriously the adoption of a deprivation-based measure of poverty as a way of recognising the importance of material poverty within the proposed set of life chance indicators.

The biggest gap in the proposed set of life chance indicators is that the existence of in-work poverty is completely ignored, even though nearly two-thirds of children in poverty have at least one parent in paid employment. We all agree that work is usually the best route out of poverty for those who are able to work but at present, sadly, it is not sufficient for many parents in low-paid or insecure employment. It seems inconsistent that, while introducing a national living wage and in-work conditionality to encourage people to look for better-paid jobs, any reference to in-work poverty in the indicators is omitted from them, and they will be used to monitor progress. This is why I also support the amendment in the name of the noble Baroness, Lady Lister, to introduce an indicator of in-work poverty alongside the worklessness indicators.

I anticipate that the Minister will respond by saying that the existing poverty measures will continue to be published and will be available for everyone to scrutinise each year. However, without a statutory reporting requirement, there will be nothing to stop a future Government or the Office for National Statistics, if it is its decision, from ceasing the annual production of the HBAI statistics at some later date. Dropping these measures also sends a clear message that income-based poverty does not matter to this Government, which, unless I am mistaken, is not their view or the Minister’s view.

In conclusion, first, I thank the Minister for offering to meet with me. My apologies: I could not make it but my daughter’s graduation trumped him. I note that consistently in response to our previous debates, the Minister has argued that the Bill is but one part of the Government’s programme to move towards a society with more people in work, on higher wages and paying lower taxes. He has noted other measures, such as the national living wage, the increasing thresholds for paying tax, and others, stating that these measures combined will raise the living standards of many. Of course, this is disputed by others. However, my point here is that since the Government are confident that their measures will be successful, they need have no fear of a statutory duty to report these income figures. Indeed, they should welcome it as a clear statement measuring their anticipated success. I commend the amendment and beg to move.

Photo of The Earl of Listowel The Earl of Listowel Crossbench

My Lords, I support the right reverend Prelate and thank him for moving this amendment, to which I have added my name. I will mention two principal reasons for my doing so. One is a concern that I think and hope is shared around the House: the changing nature of a Parliament and the experience of families that grow up in poverty. It is very easy to avoid meeting families in poverty. Many of the leaders of this country will perhaps have been educated privately from a young age, and there may have been few reasons for them to come into contact with families in poverty. They may never have worried about where the next meal will come from or whether they can afford to heat their homes, and they may not mix with people who have those worries. My personal experience of course is that I and my family have never had to worry about whether our home could be heated or whether there would be enough money for the next meal. However, the families we are talking about worry about whether they can feed their children and whether they will have to go without a meal to feed their children.

I recently met with Ms Lorna Sculley, who is a 36 year-old and has three boys: the oldest is 15 and the youngest is fairly new-born. She works for 16 hours a week and lives in poverty, so she is one of the “working poor” that the right reverend Prelate described. During her last pregnancy and maternity leave, there were difficulties with her benefit payments, which meant that she got into debt and had difficulty in meeting her rent. She became increasingly desperate. Fortunately, there was a food bank local to her. With the help of the education welfare officer, she was referred to the people running the food bank and she sought their help. Not only did they provide much-needed food for her and her boys but they gave her advice about how to negotiate with the benefit system and to catch up as much as possible. Unfortunately, I think that it is possible to get only a three-month rebate if one has had these sorts of slips, so she could not gain all the money that she needed. She also told me that, because she is working, her boys are not entitled to free school meals and it can be particularly difficult to get severe hardship payments. Her two older boys had destroyed their mattresses by jumping up and down on them but it was hard to get the money to replace them.

My fear is that, unless we include an amendment of the kind that the right reverend Prelate has suggested, or unless the Minister can give a clear commitment to the House at this point that a statutory measure of poverty will be developed on the basis set out in the amendment, perhaps looking particularly at material poverty, this constituency may get lost because it is so alien to the experience of many of us. As is so often the case, the people with the highest needs—those who need the most attention in our society—often have the smallest voices and are the least well represented, so I beg the Minister to give the assurances that the right reverend Prelate has asked for, and I look forward to his response.

Photo of Baroness Lister of Burtersett Baroness Lister of Burtersett Labour 4:30, 25 January 2016

My Lords, the right reverend Prelate has made a very convincing, strong argument for retaining income and, as he pointed out, deprivation measures. We talk about income measures as shorthand but it is important to remember that the measures in the Child Poverty Act include a deprivation measure.

The 2012 consultation, to which the right reverend Prelate referred, said:

“There can be no doubt that income is a key part of our understanding of child poverty … Household income has a significant impact on childhood and life chances … The impact of growing up in a low income household can last a lifetime”.

That consultation was premised on income being one element of a multidimensional measure, and it made it clear that the Government are not playing a zero-sum game with child poverty measurement as between income and multidimensional indicators. It is not clear what has changed since then. Why have the Government changed their view on that? Do they no longer believe that income is important, despite the evidence, as the right reverend Prelate said, from their own life chances review, which made very clear the impact of low-income, low-material resources on life chances, and despite the advice that they received from their own Social Mobility and Child Poverty Commission? Its response to the consultation was that any new multidimensional measure,

“should be supplementary to the existing framework”,

and it looked to the Government to make clear their commitment,

“to maintain the centrality of income in measuring poverty”.

More recently, it said that it is simply not credible to try to improve the life chances of poor children without acknowledging the importance of income on those life chances and that, without an assessment of income, any measure would be inadequate.

As the right reverend Prelate said, the response to the consultation was overwhelmingly in favour of maintaining measures of income and deprivation. That included a response from the Royal Statistical Society, the academic scientific community and civil society organisations. In Committee, my noble friend Lady Blackstone, who is not in her place today, asked what alternative scientific advice the Government had to, in a sense, overturn that overwhelming response, but I do not think that we heard an answer to that.

It may seem rather academic and people may ask: why are we talking about measures; what does this matter? Actually, it matters a lot, and it is quite significant that a petition has been presented. Over 50,000 people care enough about this, and one woman in the country collected these signatures because people do care. If there is no statutory obligation for income and deprivation measures, it looks as though the Government think it simply does not matter if people do not have a sufficient income to live on.

There is no mention of targets in the amendment, unlike the amendment that was put forward in Committee, acknowledging, as the right reverend Prelate said, that the Government are reluctant to sign up to targets. In Committee, all I heard in response to the arguments put was an argument against targets. I did not hear any convincing argument against low-income and deprivation measures. Therefore, I hope that the Minister will think again and respond positively to the right reverend Prelate’s amendment.

Photo of Lord Northbourne Lord Northbourne Crossbench

My Lords, on this kind of issue I am usually very much on the side of those who are sorry for those who have problems. But I think a much stronger case would be made if the amendment could be rephrased so as to take into account the possibility that, at times, the family themselves ought to do more to create the income that they so desperately need. I have not come prepared with any evidence but, being involved in issues around child poverty, I hear a good deal to suggest that a number of families prefer to live on benefits rather than go to work. I do not blame them for doing that, but I think they should share their responsibility in providing that income which, indeed, is so essential.

Photo of The Earl of Listowel The Earl of Listowel Crossbench

My Lords, I wonder whether my noble friend is aware that of the children in poverty who we are discussing at the moment, two-thirds have parents who are in work. The majority of the children we are discussing have parents who are in work.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

My Lords, very briefly, I support the amendment in the name of the right reverend Prelate the Bishop of Durham.

I am puzzled. When we considered the 2012 Welfare Reform Act, the Minister rightly commanded the respect of the entire Committee and allowed the proceedings to be lengthened from the original 10 or 11 days to 17 days, in the process of which he negotiated, discussed and shared information because he was determined that the introduction of universal credit would be, as far as was possible, evidence-based. That was something that we all responded to: we were not being motivated by the latest piece of journalism or an ideological twist; it was evidence-based.

What puzzles me about the Government’s position is not that they are seeking to get analysis of the impacts of poverty in terms of well-being measures, adult worklessness, child educational attainment at 16, and so on—it is perfectly sensible to have information about that. But this is not an either/or situation. We all know that we need to know about the income going into a family as well as about the impact of that lowered income on the outcomes that affect the family and the children, as the noble Lord, Lord Northbourne, said. This is not an either/or situation. We need both because, above all, government need to know where they can most effectively intervene to ensure that, as far as possible, children and their families have good, strong, decent and well-funded lives. We cannot know that unless we collect the information on both income and on what the Government believe to be the impact. It is not a question of which comes first, which drives one or the other, or which is the gateway. That does not matter—we need both. On the basis of that evidence, we, as a House and as Parliament, can come in behind government to see what levers are most effective in addressing the issues that that evidence has identified.

The Minister is an evidence-based Minister, which is why he has our respect. Therefore, in the light of that and all the work that he did on the 2012 Bill, I urge him not to sabotage it by ignoring crucial evidence of how best the Government should use the resources at their disposal. I hope that he will accept the right reverend Prelate’s amendment.

Photo of Baroness Sherlock Baroness Sherlock Shadow Spokesperson (Work and Pensions), Opposition Senior Whip (Lords)

My Lords, we on these Benches are fully supportive of Amendment 2, to which I have appended my name. The right reverend Prelate the Bishop of Durham has made a strong case for his amendment, backed up ably by my noble friends Lady Lister and Lady Hollis, and I will not add a great deal to the fundamental case that they have made. However, I do wish to say a brief word.

The Bill has a lot in it which will have a serious impact on the incomes of millions of families in Britain, particularly families with children and households with disabled people in them. I would love to send the whole Bill packing, as I would love to dispatch various statutory instruments recently passed through both Houses, but that is not what we are going to do; it is not our job. Our job over this week is to send back to the Commons for further consideration parts of the Bill where they have simply not begun to understand the consequences of some of what they have done; where the costs can be significant but often have just been shunted rather than taken away.

The great advantage of this amendment is that it does not cost any money and yet it would be incredibly powerful in holding the Executive to account, something which this House always takes seriously.

I have been struck, not only in listening today but in re-reading the excellent debate on this subject in Committee, that the Minister was signally unable to persuade Peers from around the House of the case that he made. Let me summarise the Government’s case. The report to Parliament by the Secretary of State for Work and Pensions on the drivers of child poverty said this:

“From the range of academic and institutional evidence reviewed we can confidently conclude that”— brief pause—

“The key factor for child poverty now is parental worklessness and low earnings … The other main factors include low parental qualifications, parental ill health, family instability and family size”.

It also highlighted child education attainment as a key factor in increasing the risk of a poor child growing up to be a poor adult.

So what have the Government done in response to that evidence? This Bill guts the Child Poverty Act 2010, removes the requirement to report on income poverty at all and requires Ministers in future to report on only two factors—worklessness and educational attainment. That leaves a couple of key questions.

First, Ministers are not saying that these factors equal poverty but that they drive it. So presumably the Government will seek to address those factors and, if they are successful in addressing them, child poverty will fall—but how will we know? If we do not expect the Government to report on the effect on child poverty of the work they are doing, then how do we know whether their strategies are succeeding or failing? The Minister may point to the fact that data on households below average income are currently published, but, as the right reverend Prelate pointed out, there is no guarantee that that will carry on indefinitely without a statutory routing. If the Government are so confident, why will they not report on the impact of their policies on child poverty and be accountable for it?

Secondly, Ministers have cherry picked some of the factors on their own list and ignored others. In particular, as has been mentioned, why have the Government ignored the key factor of low earnings, which is the first in their line of analysis of drivers for staying in poverty. Is it because, by definition, it must be an income measure, to which there was therefore a political objection? Or is it because, as the noble Earl, Lord

Listowel, pointed out, they know full well that two-thirds of poor children are living in households where a parent is in work. I will return to this issue in a later group but I remind the House that if the Government continue to damage work incentives by attacking universal credit and cutting the value of in-work benefits they can hardly be surprised to find that work is no longer a route out of poverty.

No one is arguing that money is all that matters—the right reverend Prelate the Bishop of Durham expressed that very well. I fully recognise his comment that the idea that money does not matter is often most closely held by those who have plenty of it. I make an exception in the case of the noble Earl, Lord Listowel, who despite, as he said himself, having always been comfortable has shown an impressive concern for those who have not had the benefits to which he found himself entitled. I commend him for that. Nobody is arguing that, but when 202 out of 203 responses tell you that you have got it wrong, it really is time to think again. The odds on that only one being the one that is right have to be pretty small.

The Government’s own statutory Social Mobility and Child Poverty Commission, in its response to the consultation, said this:

“In our view, lack of income is central to the experience of poverty and therefore needs to be central to poverty measurement. However, other things matter too. So a broad approach is sensible”.

Of course it is: how could that not be true? Of course income matters, right from the start of a child’s life. CPAG reminded us that children from low-income families are more likely to die at birth or in infancy, to suffer chronic illness in childhood or have a disability. As the right reverend Prelate pointed out, their experience of everyday life is fundamentally affected by money. If you cannot afford to invite your friends round to tea, that creates social isolation. If your parents cannot afford to heat your house, that makes it hard to do your homework or to sleep or to grow up healthy. These things matter enormously.

Nobody is trying to stop the Government measuring and reporting on educational attainment and worklessness. All this amendment does is to ask them also to report on income measures alongside the others. The data for this are already available, so there is no extra cost in gathering them. I urge the Minister to accept this very reasonable amendment, and if he will not, to explain very clearly to the House why he will not. Otherwise, we can conclude only that the Government are not willing to account to the public and to Parliament for the consequences of their policies. This Bill is full of measures that will drive more children into poverty. If the Government are willing to do that, they should be willing to stand up and account for it.

Photo of Lord Freud Lord Freud The Minister of State, Department for Work and Pensions 4:45, 25 January 2016

My Lords, Amendment 2 seeks to insert a new clause that would expand the annual report to include data on children living in households with low relative income, combined low income and material deprivation, absolute low income, and persistent poverty. It would effectively reintroduce the same income-based poverty measures as set out in Sections 3 to 6 of the Child Poverty Act 2010—measures that fail to tackle the root causes of child poverty. I know that the amendment is well intentioned, but as it is drafted, it is technically faulty and cannot achieve what the right reverend Prelate, the noble Baroness and the noble Earl want it to achieve. For example, the amendment refers to how equivalised net household income is to be adjusted by regulations, but there is no regulation-making power in relation to the life-chances clauses in the Bill.

However, this is not the foundation of my disagreement with the amendment. I firmly believe that the existing statutory framework, set around the four income-related targets, simply does not drive the right actions to transform children’s lives. That is what we are all aiming for, so I think it is important for me to spend some time explaining why income measures are not the way to achieve what we all want to see. There will always be natural variations in income levels in society. However, having less money than someone else does not necessarily mean that an individual is in poverty. Income measures do not take this into account effectively.

Income measures focus on the economics of poverty and ignore the human dimensions: the social causes and the reasons people can get stuck in poverty. But even as economic indicators they are flawed. They are an indirect and imperfect indicator of poverty. They do not account for the full needs of the family or other financial deductions that reflect a family’s true financial situation, such as the amount of debt a family has, or even their non-income based resources, such as the benefits from education, such as the pupil premium. Households that have large savings or capital can still count as being in income poverty. This means that income measures can provide only a partial reflection of a family’s economic well-being.

There are other weaknesses, too. For example, the measures are based on current parental income and do not incentivise action to prevent poor children becoming poor adults. They do not reflect government action on raising attainment and improving life chances for disadvantaged children. These are some of the general weaknesses of income measures. I would now like to speak briefly in turn about why specific measures of relative low income—including persistent poverty, absolute low income and material deprivation—are unhelpful in tackling poverty.

If we first consider measures of relative poverty, the problem is that a household can be moved into or out of relative low income without any change in its circumstances. For example, in a recession, as median income falls, so does the relative poverty line. This means that many households that were previously in poverty will now be above the new, lower poverty line, even though their income and life chances have not changed. This incentive of “poverty plus a pound” does not drive transformative change in the lives of family members who still face multiple barriers to lift themselves out of disadvantage.

Conversely, policies such as raising the personal tax allowance and introducing the higher national living wage that give poor families a higher income could lead to increased average household incomes. This in turn raises the poverty line and brings more children into low income, punishing Governments for doing the right thing. As an example, while the economy grew from 2003 to 2009, income measures incentivised the previous Government to tackle the symptoms of poverty through expensive income transfers, such as spending £300 billion on working-age welfare and tax credits. This strategy did not tackle the root causes of child poverty or make a long-term difference to children’s prospects as the number of children in relative poverty remained broadly unchanged. Given that the proposed persistent poverty measure is based on families being stuck below the relative low-income line, it, too, will suffer from these same weaknesses.

I turn now to the disadvantages of absolute low-income measures. By definition, absolute poverty measures the proportion of children below a fixed income line, which is only adjusted each year to account for changes in prices. The current measure of absolute poverty uses the relative poverty line for 2010-11. However, the decision to use this as the absolute low-income line is essentially arbitrary, in the sense that there is no logic to why this is better than any other reference threshold that could be chosen as the absolute standard of what households should be able to count on in order to meet their needs.

Notwithstanding the clear criticism that this measure is subject to some of the same flaws as the relative poverty measure, it also leads to illogical changes in the level of children in absolute poverty. When the absolute poverty line was rebased to the 2010-11 relative poverty line, the number of children in absolute poverty under this measure went from 1.4 million children under the old baseline to 2.3 million children under the new one. These children saw no material difference in their lives or changes in their circumstances, yet just because the line was being drawn somewhere else they were all brought into poverty.

Finally, measures of material deprivation simply do not capture real material living standards robustly. The material deprivation measure asks subjective questions around whether families think that they can afford a certain set of items. We have looked into the accuracy of what it is trying to measure. Analysis from the IFS shows that almost 50% of children who live in a household that is deemed to be materially deprived have incomes well above the most commonly used relative low-income line. This brings up questions around whether material deprivation measures accurately reflect the true living standards of families. I hope that I have been able to show why the existing income measures are a poor test of whether children’s lives are really improving and a distraction from the aim of tackling the key drivers of child poverty.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

Before the Minister goes on to his next point, I am puzzled. He is going through the individual indicators as though those are the exclusive and sole measurement of child poverty. That is precisely why the previous Government introduced a suite of measures. Each one captured some aspect and together they captured the broad range of issues that determine how we assess child poverty. So deconstructing and challenging each individual measure is not the point: it is the suite of measures that is being dumped, and it is that suite which caught what it means to be in poverty.

Photo of Lord Freud Lord Freud The Minister of State, Department for Work and Pensions

The noble Baroness is making a presumption that the suite of four is self-reinforcing and that the weaknesses of one are balanced by the strengths of the others, but I hope that I have been able to describe that there is no necessary reason why they should be self-reinforcing. In fact, they may be taking us all in the wrong direction. That is the presumption that I challenge.

On the right reverend Prelate’s points, the consultation demonstrated support for a wider range of measures of child poverty beyond income. More than 90% of respondents showed support for measures that drive the Government’s action in tackling child poverty. Our new approach—this is a point that the noble Baroness made—has been informed by our evidence review, which underlies the crucial importance that worklessness and educational attainment play in improving children’s life chances.

Poverty is highly complex and affected by a large number of interrelated factors. The evidence review showed that low income is one of several factors affecting educational outcomes, but worklessness is the most important driver of low income. The evidence also showed that the best way to increase incomes and exit poverty is to enter work. We want to drive the action that will make that difference. That is why the two measures cover worklessness and educational attainment.

On the point about working families with low incomes, work remains the best route out of poverty. Around 75% of poor children in families where parents move into full employment leave poverty altogether. We will return to this on a later amendment, so I will not go into it in any more detail.

The income measures that the amendment would introduce are essentially symbolic. It is important that we recognise this for both sides of the debate. The Opposition have laid out their argument of how these measures are a symbol of where the Government should focus their action. However, to us they are a symbol of the old world—of how easy it is for Governments to be incentivised to push people’s incomes £1 above the poverty line without any real transformation to their lives. This is of huge importance to us as we want to move away from these types of drivers and instead focus on the right type of actions.

In response to the concerns from the right reverend Prelate and the noble Baroness, Lady Sherlock, about the information, the Government have made a strong commitment to continue to publish the HBAI figures. I should add that HBAI is a national statistic. That means that it complies with the Code of Practice for Official Statistics, which states that it must be produced independently of political influence. That may be a stronger position to protect the statistics than a statutory base. It is hard for them to be removed.

Photo of Baroness Lister of Burtersett Baroness Lister of Burtersett Labour

The Minister says that the figures are independent. What if those producing them are under great financial pressure, and they look around and think, “What measures can we stop? What data can we stop collecting and statistics stop analysing?”. They could say, “The Government show that they’re not interested in these statistics, so perhaps we should stop analysing them”. Whatever the Minister says, without a statutory obligation we cannot be absolutely sure that those statistics will continue to be produced and analysed. That is one reason why we had a bit of a debate on this in Committee. The Minister said that he thought that the only real difference between us was the word “statutory”. That is why we believe that statutory accountability is so important.

Photo of Lord Freud Lord Freud The Minister of State, Department for Work and Pensions

We have made this commitment to continue to publish the HBAI figures. They are national statistics and part of what is almost a huge industry of measurement around the world, as countries do it in the same way. It is always conceivable that that outcome could happen, but in the real world it is almost unthinkable.

Photo of Baroness Lister of Burtersett Baroness Lister of Burtersett Labour

If countries around the world are doing it in the same way, does that not suggest that it is the right way?

Photo of Lord Freud Lord Freud The Minister of State, Department for Work and Pensions 5:00, 25 January 2016

We had this debate in Committee. We all measure this in the same way; we are the only country in the world that has put it in an Act. We are now moving to how other countries treat these statistics. The behaviour of other countries supports in practice what we are doing in leaving these as national statistics, with the commitment I have just made to make sure that they continue to be published.

I have spent time on these points because this Government believe that the measures we opt for really matter. Let none of us be in any doubt that there is an important choice to make with this amendment and with Amendments 8 and 11, which follow. Resources are finite and it is crucial that we prioritise the actions that will make the biggest difference for our children. Do we choose income measures which would disincentivise a range of actions which will actually help improve the life chances of children, and incentivise others which will not tackle the underlying factors at play? Or do we put our wholehearted effort into the areas which can help transform children’s prospects—worklessness and educational attainment? Indeed, I was pleased to note that the right reverend Prelate the Bishop of Durham prioritised his daughter’s graduation, showing what he thinks of educational attainment compared with anything else, for which I commend him. This amendment would end up taking resources away from these areas. I firmly believe that it would end up being detrimental to the transformational actions we want to see.

I think noble Lords will agree that these are the key drivers which the Government must focus on. The evidence behind this is set out in our published 2014 evidence review and I have spoken at length on it on previous occasions and now. The statutory life chances measures of educational attainment and worklessness are the right measures that will incentivise government to bring about real change in children’s lives.

I urge the right reverend Prelate to withdraw the amendment.

Photo of The Bishop of Durham The Bishop of Durham Bishop

I thank the Minister for his very full response, for which I am grateful. If the amendment is technically faulty, my understanding is that it could be redrafted, so that is not a reason for not pressing it. I am grateful to the noble Earl, Lord Listowel, for his support and was moved by his story about Ms Sculley. I am also grateful to the noble Baronesses, Lady Lister, Lady Hollis and Lady Sherlock, for their expressions of support and the points that they made. I hope that the comment of the noble Lord, Lord Northbourne, on family was addressed by the noble Earl, Lord Listowel.

I will not go through all the points that the Minister made, because I think that we fundamentally disagree about the importance of reporting on income statistics. This amendment would not in any way detract from the drivers that the Minister wants around worklessness and educational attainment; those would absolutely still be there. This is simply about a reporting mechanism which we believe is important as part of the monitoring. I say “we” because I have consulted with bodies such as the Child Poverty Action Group, the Children’s Society and many others which work with children and families in poverty day in and day out and are still convinced that this is important information to have alongside tackling the other drivers. Therefore, although I know that the Minister will not be pleased with me, I wish to test the opinion of the House.

Division on Amendment 2

Contents 290; Not-Contents 198. [The Tellers for the Not-Contents reported 198 votes; the Clerks recorded 197 names.]

Amendment 2 agreed.

Division number 1 Welfare Reform and Work Bill — Report (1st Day)

Aye: 288 Members of the House of Lords

No: 195 Members of the House of Lords

Aye: A-Z by last name


No: A-Z by last name