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Benefit Changes: Vulnerable People - Motion to Take Note

– in the House of Lords at 2:57 pm on 27th June 2019.

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Baroness Janke:

Moved by Baroness Janke

That this House takes note of the impact of recent benefit changes on vulnerable people.

Photo of Baroness Janke Baroness Janke Liberal Democrat

My Lords, I am grateful for the opportunity to lead the debate today. Over recent months, I and others have been shocked by the experiences of people who have been in touch either about their own circumstances or those of others, and the huge difficulties they face in their daily lives. Colleagues, friends, local councillors and members of the public have drawn my attention to the plight of people who are not only suffering extreme poverty but are enduring worsening situations. I know that there are many noble Lords across the House who are deeply concerned and would like to see action taken to address this injustice and misery.

A host of reports provide evidence of a situation that is getting steadily worse, including those by the UN rapporteur on extreme poverty and human rights and by the Joseph Rowntree Foundation. The Children’s Commissioner has published a report on the impact of recent benefit changes on children. The National Education Union reported in May that teachers are buying food, clothing and equipment out of their own pockets for children who are too ashamed to come to school because their families cannot afford clothes and basic needs. Many schools face choices about how much of their scarce cash they should spent on things such as breakfast clubs.

Food banks have faced a huge increase in demand: a 13% increase year on year. King’s Food Bank in Kendal has seen a rise of 18% in a year. It wrote:

“Once again our monthly figures sadden us! So far this year we have seen an increase of 19% on the same period last year. Last year there was an increase of 18% on the previous year and so it seems to continue. It is especially concerning to see the number of children being provided for has more than doubled from March and April 2018 to March and April 2019”.

In the same newsletter, a young boy, Harry, who is featured, asked for items for the food bank as presents for his sixth birthday.

There is record low unemployment, yet 60% of people in poverty live in a household where at least one parent works. Worse still, the support services that used to be the lifeline for those in poverty, such as youth services, community services and debt counselling, have been almost completely removed. Funding for social care has been reduced, dependent older people have found themselves in desperate situations, and libraries have been closed in record numbers.

Again, the most pressing needs are faced by the poorest, the hardest to reach and the people who are simply unable to access the relief they need. There are 4.1 million children—that is, 30%—in poverty, and 70% of children in poverty live in a family where at least one parent works. The reasons, according to the Child Poverty Action Group, include delays in the system; sanctions, as parents looking for work find that the sanctions system punishes them and makes things worse; unrealistic job-seeking conditions; inflexible rules, which stop good causes or reasons being considered; and poor communications, which often leave sanctioned parents unaware that hardship payments could prevent their children suffering severe hardship.

There has been a major increase in homelessness. In November 2018 the figure stood at 320,000. There has also been an increase in the number of rough sleepers, which went up by 15% in 2017 to 4,751. As the housing benefit element has been pared back, there is now a yawning gap between actual rent, often paid to private landlords, and the level of financial support. There has been a four-year freeze on the local housing allowance, and the benefit cap sets a ceiling on rent benefits. The result is rent arrears, debt and homelessness.

Nearly half of those in poverty—6.9 million—are from a family in which someone has a disability. They have also been some of the hardest hit by austerity measures. Changes to taxes and benefits will mean that some families are projected to lose £11,000 by 2021-22—more than 30% of their income. With cuts to local government funding, particularly in social care, many families with a person with a disability have been driven to breaking point. I know that my noble friend Lady Thomas will speak more about the specifics of that.

Single-parent families, of whom 90% are women, are more than twice as likely to experience poverty as any other group. Half of the total number of children in one-parent families are in poverty. Policies such as the benefit cap and freeze, the two-child limit and the introduction of full job-seeking requirements for single parents of children as young as three have had a stark impact. In August 2018, two-thirds of those who had benefits capped were single parents. Single parents in the bottom 20% of income will have lost 25% of their 2010 income by 2021-22.

As universal credit has been introduced, I am sure that we have all been aware of the acute problems that have occurred. Any new system will cause problems, but it seems that these problems have been unfairly and unjustly concentrated on the least well-off. There is little of the social security safety net that served in the past to prevent people becoming destitute, yet there is no shortage of suggestions from think tanks and charities about reviewing problem areas in the benefit system—for example, the five-week waiting period and the impact on indebtedness and destitution. I received a report from the Guildford Borough Council scrutiny committee on food poverty in the borough which found,

“much evidence to support the contention that changes to the system of benefits for people of working age are a major driver of food poverty”.

Research by academics, charities and food providers shows a clear link between welfare reform, austerity and increasing charity food aid provision. The failure of benefit levels to cover essential living costs and issues with payments are common reasons for referral to a food bank.

I hope that as a result of this debate and other material, the Government will look at the evidence and review their policies—for example, the two-child limit. The Minister has already said that the Government intend to end the benefit freeze, but the results of the benefit cap continue. We have also seen the loss of emergency payments. As a former councillor, I am well aware that councils’ emergency payments system and the Social Fund prevented destitution in the past and provided a source of funding that did not leave people absolutely dependent on charity and the good will of volunteers. This has been particularly noticeable in terms of sanctions. We believe that this is an area that needs to be looked at again, along with the evidence of the damage caused to people in terms of destitution and debt. It has been particularly damaging to people with disabilities or long-term health conditions.

Another issue is the treatment of young people, because £250 a month is not enough to live on. That amount seems to assume that all young people have supportive homes and parents and families who can help them. The youth obligation scheme has a 40% drop-out rate, and I hope that the Government will produce a review of its effectiveness.

Many noble Lords have raised the issue of payments to one household and have asked for split payments to be made, so that abused women cannot be kept under the control of their abuser. The whole issue of insecure work and its effect on the payment of benefits is something that we believe needs to be looked at again. With the complications caused by erratic or insecure work, there is a disincentive because of the effect on benefits.

There is ample evidence of the worsening lives of the poor and deprived resulting from changes in the benefits regime, and I am sure that other noble Lords will want to bring other issues to our attention. Therefore, it seems that the Government need to look again at some of the changes. The priorities must be to rebuild an effective social safety net, to restore services in the community so that needs can be assessed locally and support can be provided where and when it is needed, and to address the issues that lead to low pay and insecure employment, so that already disadvantaged and vulnerable people are not driven into deepening despair, humiliation and the desperation of poverty.

Photo of Lord Livermore Lord Livermore Labour 3:08 pm, 27th June 2019

My Lords, I thank the noble Baroness, Lady Janke, for securing this debate and congratulate her on her opening speech.

I should like to focus on some of the benefit reforms introduced in the past decade, the choices that were made about how available resources should be distributed, and the outcomes that those choices created for some of the most vulnerable people in our society.

First, however, by way of context, I should like to look briefly at the choices made in this area by the Labour Governments from 1997. Those Governments had clear objectives to reduce poverty among families with children and among pensioners, and they accorded those objectives the highest priority. Through the introduction of child tax credit, working tax credit and pension credit, spending on families with children was increased by £18 billion a year, and on pensioners by £11 billion. The number of pensioners living in poverty halved, and the Resolution Foundation has calculated that the number of children living in poverty fell from 3 million in 1998 to 1.6 million by 2010.

The Institute for Fiscal Studies has described these measures as “highly progressive”. Its distributional analysis shows a 15% increase in net income for the very poorest 10% of families, and a 5% decrease for the very richest. It shows a 10% increase for the second poorest, and a 3% decrease for the second richest. This was progressive tax and benefit reform, underpinned by principles that remain today both relevant and right: to ensure that work pays more than welfare, and to prioritise support for children and, in so doing, reduce child poverty. It is a tragedy for so many families’ prospects, for our nation’s prosperity, and for the fabric of our society that in the past decade each of those principles has been undermined, with the systematic reallocation of available resources away from the bottom half of the income distribution.

Undoubtedly, in the years after the global financial crisis, a period of fiscal retrenchment was necessary but, even in an era of austerity, there are clear choices to be made about who in society should bear the greatest burden. The distribution of austerity in the years after 2010 hit the most vulnerable in society particularly hard. While money was found to cut the top rate of tax, the impact of the tax and benefit reforms implemented in the five years of the coalition Government meant that the poorest decile of working-age families with children was over 6% worse off, the second poorest over 5% worse off and the third poorest over 4% worse off.

The Institute for Fiscal Studies summarised the benefit changes in this period by saying:

“The cuts to working age benefits made by the coalition government led to significant reductions in income across the lower-income half of households”.

It went on to say:

“Households in the sixth to ninth income deciles were protected from the impact of reforms over this period to a remarkable degree”.

Indeed, whereas the previous Labour Government chose to prioritise support for children, the IFS says that in the years after 2010,

“families with children were affected by benefit cuts to a much greater extent”, than other groups.

After 2015, as austerity continued, with cuts to universal credit and the four-year benefit freeze, we again saw a decision to reallocate available resources away from the poorest in society. If we look at the distributional impact of changes to tax and benefits since 2015, it is strongly regressive. A couple with children, out of work and most in need, is more than £4,000 a year worse off. A lone parent, out of work, is £3,500 worse off every year. Even in work—which the benefits system should reward—the cuts to family incomes are large: a lone parent is nearly £1,500 a year worse off; and a couple with children with one earner, £1,000 a year worse off. Yet while the poorest decile loses an average of £1,100 a year, the richest decile gains £400 a year. While some of the richest working-age families with children gain £1,000 a year, the poorest lose £3,000 every year—15% of their income. These are quite some choices the Government have made about who in society should bear the greatest burden of austerity.

The recent reforms to universal credit announced by the Secretary of State for Work and Pensions are of course welcome. Yet, while many design flaws persist, of particular concern should be the ongoing lack of work incentives and, once in employment, the extent to which work really is now an effective route out of poverty. Recent changes have actually reduced the incentive to enter work at low earnings for many single parents. There is still no incentive to enter work at low earnings for potential second-earners among the 1.9 million couples with children eligible for universal credit, only 600,000 of whom are currently dual-earning. Yet it is precisely these two groups—single parents and potential second-earners in couples with children—who we know are most responsive to work incentives. There are still very weak incentives for all universal credit recipients to progress to longer hours or higher earnings. This is particularly concerning because, while work should be the most effective route out of poverty, for too many people this is no longer the case. According to the IFS, while tax credits prior to 2010 pushed down in-work poverty, cuts since then have increased it. Now, 57% of those living in poverty are in working households. That is 8 million people living in poverty despite being part of a working family: the highest level since records began.

In his most recent Budget, the Chancellor reversed some of the cuts to universal credit. But these changes unwind only a quarter of the welfare cuts announced in 2015—cuts that are still set to reduce household incomes by £12 billion by 2023. These substantial cuts are still in place because, although the Chancellor announced the end of austerity, he made a further choice about who in society should gain. By failing to cancel this final year of the four-year benefit freeze, he did nothing to end the austerity faced by many low-income households. As a result, a couple with children in the bottom fifth of the income distribution will lose £400 a year, while a single parent working full-time on the minimum wage will be £1,940 a year worse off.

To reverse these cuts would have cost the Exchequer £1.5 billion out of a total Budget giveaway of £55 billion, but this was clearly not a choice the Chancellor was willing to make. Instead, he chose to announce tax cuts costing £2.8 billion, from which 90% of the gain goes to the top half of the income distribution and nearly half of the gain goes to the top 10% alone. Looking at the overall effect of the most recent Budget, the richest 10% of households will gain 14 times more than the poorest 10%. Looking just at the policies that came into effect at the start of this fiscal year, the incomes of those in the top fifth of the income distribution will increase by an average of £280, while the incomes of those in the bottom fifth will be cut by over £100.

Now, as for the past decade, we see once again the deliberate reallocation of available resources away from the bottom of the income distribution and towards the top. There can only ever be one outcome from a decade-long choice that the poorest in society shall bear the greatest burden. Child poverty is now projected to rise by a further six percentage points by 2023 to its highest ever level. The proportion of parents living in poverty is also set to hit a record high. Extraordinarily, of children who have a single parent, are in large families, are in a household where no-one is in work, or live in private or social rented housing, the majority will be living in poverty by 2023.

Poverty is rising in this country, not by accident but by design. Poverty is rising because for a decade, with each decision that had to be made, the most vulnerable in our society lost out every single time.

Photo of The Bishop of Chichester The Bishop of Chichester Bishop 3:17 pm, 27th June 2019

My Lords, I too am grateful to the noble Baroness, Lady Janke, for her introduction to this important debate, which touches on a subject that is the responsibility of us all. We should acknowledge that there have been small though welcome attempts by the current Secretary of State to mitigate some of the injustices that have developed in the benefits system in recent years. But I urge that more radical remedial action is needed. In particular, urgent reconsideration is needed of the impact of the two-child limit—a policy which could eventually affect over 3 million children, pushing more than a million who are already in poverty into deeper material and emotional misery.

The introduction of the two-child limit represented a significant shift in social policy. It broke the long-standing principle, upheld by various Governments of all parties, that entitlement to benefits should be linked to need. In its place, no discernible alternative principle underlies the application of the two-child limit. Rightly, the Secretary of State has abandoned the plan to extend the policy retrospectively, on the grounds that it would be unjust to target families who could not possibly have planned or prepared for the introduction of the limit, as their children were born before it was introduced. But that serves only to emphasise a wider injustice. How are parents with more than two children who have since experienced family breakdown, redundancy, the onset of disability or an unexpected pregnancy supposed to have planned or prepared for the two-child limit?

The two-child limit denies families the support that they need from our social security system when they experience hard times, trapping children in poverty. The Church and those representing other faiths have spoken out from the start against this unprincipled and harmful policy. We have spoken out because it affects the communities we serve and members of our congregations and parishes. We have spoken out because in our schools, at our foodbanks and in our night shelters and advice centres we are in daily contact with the families targeted by this policy. That work with vulnerable families is growing all the time. Locally, even at the food bank in the city of Chichester, we have seen a 22% increase in demand since the rollout of universal credit, a pattern replicated across our part of the south coast. Family Support Work, our diocesan charity that provides intensive one-to-one emotional and practical support to families, has seen its case load increase by 100% in the last year.

The initial concerns that the Church and those from other faiths raised about the two-child limit have, sadly but undoubtedly, been borne out. A report published yesterday, produced jointly by the Church of England and the Child Poverty Action Group, presents detailed and disturbing evidence of this policy’s impact after two years. It is based on interviews with more than 430 families. I urge the Minister and all Members of your Lordships’ House to give the report careful consideration. It makes a compelling case for the removal of the limit.

It is estimated that to date, 160,000 families have been affected by the two-child limit. Child poverty is of course already rising. It will rise even more sharply in the coming years, in large part due to the two-child limit. The report estimates that in just five years’ time 300,000 children will have been pushed into poverty as a direct result of this policy, and that 1 million children who are already living below the poverty line will have been pushed even deeper into that misery. Of those families caught by the limit, the majority, 59%, are in work, struggling to get by on low incomes, a point that has already been noted by the noble Lord, Lord Livermore.

Through detailed interviews, the report provides direct testimony of the impact the policy is having on low-income families. The two-child limit means that families are unable to afford bare essentials such as baby milk or nappies. Parents are going without food to feed their children. One said:

“We … pick up the leftovers if they leave anything”, or that they just eat toast. Families are getting deeper into debt and children are sinking into damaging social isolation. In the words of one mother:

“No trips to cinema, no picnics, no treats, nothing”.

Added to the financial deprivation is the social and psychological impact of this policy, generating huge levels of stress and damaging the mental health of parents and the stability of relationships in the home. This is starkly illustrated by the words of one couple:

“It has caused so much stress on our family that it is looking like we are headed for divorce. Instead of enjoying the birth of our baby, we have dealt with hardship and having to scrape together for meals ... We had to borrow money for sterilizer bottles, pram, cot, everything you need for a baby and without the usual income for each child we can’t afford to pay it back. We are at an end in our family life and relationship because of the stress and hardship the limit has caused for us”.

The report even records affected parents saying that they have contemplated terminating pregnancies or taking their own lives. With all that we know about the importance of the early years to human development, the idea of a policy that targets large, poor families by design is at best short-sighted. Every child is a blessing and should have the best possible start in life.

Certain groups of vulnerable claimants are particularly adversely affected by the two-child limit. Families of refugees, coming to this country to seek a place of safety where they can rebuild their lives, are affected by the limit. Even those whom the Government recognise need particular protection—such as those in the Government’s Vulnerable Children’s Resettlement Scheme, which includes child survivors of abuse, violence or exploitation—are subject to the limit.

The report contains a compelling chapter on the impact of the two-child limit on survivors of domestic abuse. The limit increases the barriers that survivors face in leaving their abusers and the financial hardship they face if they manage to do so. One refuge worker said:

“Women have felt … trapped … as there was no available money to help them move and leave”, so they were financially reliant on their partners for help. A resident in a refuge said that while she was pregnant with a third child,

“her ex demanded she have an abortion because he said they could not get any more money for it”, and when she refused,

“he tried by being violent to enforce a miscarriage”.

The two-child limit will exacerbate social division in our country. Unsurprisingly, it is minority communities that will be particularly caught by this policy, particularly Orthodox Jewish and Muslim communities. Research by the Equality and Human Rights Commission has shown that the policy will have a disproportionate effect on those from Pakistani and Bangladeshi backgrounds. Whole local communities where there are significantly above-average numbers of larger and poorer families will be impacted. In one parliamentary constituency, Birmingham Hodge Hill, it is estimated that over half the children living there will be affected. What will the impact of this policy be on those communities, which already face significant deprivation?

The Government need to listen to those whose lives are being damaged by the two-child limit—families seeking to raise their children, struggling with already low incomes and now facing a benefits system that fails to link entitlement with need. Any Government who are serious about tackling child poverty and strengthening the family—any Government for whom building “one nation” is more than an empty slogan—should listen to those affected. It is right to support families when they need it most. The Government should lift the two-child limit and help all children to thrive.

Photo of Baroness Thomas of Winchester Baroness Thomas of Winchester Liberal Democrat 3:27 pm, 27th June 2019

My Lords, I am pleased that this debate enables us to have a calm, rational look at recent changes to benefits. I think the whole House appreciates that powerful contribution from the right reverend Prelate.

I will concentrate on two benefits—universal credit and PIP—to see how they are working in practice for vulnerable claimants, but I will leave the bigger picture to others. As this is a debate, we do not need the shorthand of catch-all, critical phrases that do not always help with the here and now, such as, “Universal credit plainly isn’t working”. However, if we have a rational debate, I believe it is up to the Government to take heed of practical, suggested solutions to problems identified by bodies such as the National Audit Office and the IFS, organisations such as Citizens Advice, and many charities, some of which are being quoted today. What we really do not want is for the Government to close their ears and say there is not a problem right now that needs sorting out.

We know that there is no prospect of any radical change in legislation in this area at the moment, but there must be scope for changes in the way in which benefits are administered. The phrase “test and learn” applied to UC before managed migration sounds sensible, but do we not know already what is and is not working for vulnerable claimants?

I have recently been in touch with two Citizens Advice offices and been told about their experience in helping clients claim UC and PIP. With UC so much can go wrong very quickly, they say, leaving individuals and families without the necessary funds to pay their way. This is why food banks have never been busier. In 2013 there were 400 food banks; there are now 2,000.

The most obvious reason for this is the five-week delay in payment of UC. I know that this was deliberately brought in to mimic a monthly pay packet and to encourage benefit claimants to take more responsibility for their own financial circumstances. However, it is quickly leading many claimants into debt from which they really struggle to recover. We have heard from the Secretary of State that this is being looked at again. Many vulnerable claimants who are or have been in work are used to a weekly pay packet, even nowadays. However, politics is in such a volatile state at the moment that I really hope that a change to the long waiting time is in prospect. I know that advance loans are available, but the strict repayments regime can make matters worse.

I now turn to some of the other problems faced by these claimants. Perhaps the most predictable problem is that many, if not most, claimants are not familiar with digital systems. They may not have a home computer, so the whole digital world is foreign to them. Even with their hands held by support staff, passwords will be forgotten and simple ID checks, which may involve another appointment at a JCP office, will often hold up a claim. The remedy to this surely must be for enough staff to help claimants in person. The DWP may not have budgeted for this but it will just have to find the funding.

Then there are messages from work coaches to which some claimants do not respond. This risks the closure of a claim, with all the problems that that brings. I can see how frustrating this is to a busy work coach, but we are talking about claimants who may find the whole unfamiliar process terrifying. A bit of flexibility may be all that is required. I would like the Minister to say a word about whether a vulnerable claimant will always be sanctioned if an appointment with a work coach is missed, in spite of a claimant commitment having been signed. One adviser said:

“The DWP so frequently demonstrate zero flexibility when a little common sense could make the world of difference”.

Next is the long wait for work capability assessments, with appellants found fit for work being forced on to UC before managed migration because there is nothing else to claim between mandatory reconsideration and appeal.

Finally, there are slightly less common but nevertheless important problems such as the way in which the form deals with migrant workers and the right to reside, and the complicated rules around specified housing.

Perhaps the Minister can tell us whether there is any sense of urgency to try to deal with these issues which are causing such problems. Surely it is important to get these matters sorted out before even the pilot managed migration next month.

Turning now to PIP, it is certainly good news that those who have mental health problems are now being helped much more than under DLA. However, there are still problems with PIP, which is now far more expensive than the Government budgeted for when it was first brought in to save money. I believe it still tops the list of issues in MPs’ mailbags. It is certainly the most common benefits problem that people recently went to Citizens Advice about in Surrey, for example— quite a rich county, I always thought. The chair of Citizens Advice Surrey Research and Campaigns Group said:

“There have been several weeks where we have struggled to cope with the demand from people for help with Mandatory Reconsideration and appeals, we felt like that was all we were doing in our office”.

The reason for this would appear to be the poor quality of many of the assessments, the rubber-stamping of mandatory reconsiderations and the long wait for tribunals.

Tribunal judges have also been very critical of the number of appeals, saying that certain claimants’ entitlement to the higher rate of PIP was so apparent that there should have been no need for an appeal of any kind. Judges have even been heard to apologise to appellants. After all, appeals are expensive and stressful, and many of those seeking appeals are disabled. Nationally, for 81% of people making new PIP claims and 76% of reassessments, the initial DWP decision is unchanged at mandatory reconsideration, while 73% of those who go on to appeal have their decisions overturned by a tribunal judge.

One of the recommendations of Citizens Advice Surrey Research and Campaigns Group was for clarification from the Government about the provision of medical evidence. I have always thought that the purpose of medical evidence was not clear. On the one hand, the Government say that PIP is not a medical assessment but a functional assessment but, on the other hand, they call for supporting evidence from doctors or other healthcare professionals from the outset, although they commission reports themselves only for tribunals. Do assessors always read the medical evidence? Claimants often say that they do not. Obviously, the most difficult assessments to judge are those relating to fluctuating conditions, but the statutory reliability criteria are supposed to address this question.

What would make a difference? First would be a properly trained workforce of assessors who use their common sense. Surely it is time the assessments were brought in-house. Second would be a much more robust procedure for mandatory reconsideration by decision-makers. Third would be for all assessments to be recorded. At least that would be a start. The Government are now thinking of amalgamating the work capability assessment and the assessment for PIP. The first is called a medical assessment, while the second is called a functioning assessment. A rethink of the whole nature and purpose of these assessments needs to be decided.

Photo of Lord Kirkwood of Kirkhope Lord Kirkwood of Kirkhope Liberal Democrat Lords Spokesperson (Work and Pensions) 3:39 pm, 27th June 2019

My Lords, it is always a pleasure to follow my noble friend, whose speeches always repay later reading because of her expertise and experience in these fields. I particularly agreed with one of her earlier remarks when she talked about the difficulty the department has—and I think this is true—in that it seems to be turning a deaf ear to some of the complaints. Now, I do not think that demonstrates anything other than a misperception of how the department works, and I understand the Minister’s perplexity and why she feels the need to defend the professionals in the department, and she is right to do so, because they are excellent people. But it is true that the perception left outside the department is that, because there is so much difficulty in trying to resolve some of these problems, the department keeps founding on the fact it has an 80% approval rating, which it has. People who have work experience, computer knowledge and a bank account in positive balance always get a very good service, from my experience. I have studied this and watched cases being enrolled on to universal credit. It is partly why the employment rate is so high, and I think that will continue.

On the other hand, a benefit change of this kind, where you get six benefits in one payment, is a big change from an array of small payments that had previously been studded through the month. If anything goes wrong with that—whether it is bad process, partly the slightly strange ideology behind it or the lack of generosity of some of the benefit payments—and it does not come through the door on time or it is wrong, the household’s finances are severely affected immediately. The Government would be well advised to confess a bit more readily that, when it is in full rollout to 7.7 million households, payments of this kind will always go astray and there will always be people who will need help.

In satisfaction of trying to deal with that, I think that we should consider some sort of triage system, because there is a lot of data in the department and a lot of clever people who can cross-tabulate it. I cannot help but remember that dynamic benefits—the basis for universal credit—was set up in 2008. A huge amount has evolved about how people can creatively use data to identify cohorts within populations. The department should now be able to identify the vulnerable cases much more specifically, so that work coaches and advisers can be given a case that has a red flag on it that says, “This case needs special treatment because, if something goes wrong with it, children will suffer”—or whatever, because there will be consequences or it is a riskier than normal case. That can be passed on to the housing authorities and anybody acting on behalf of the applicant so that we can be much better prepared to stop people being thrown out of their rented accommodation because their UC payment is late and then sent to Yorkshire from London with three young children—

Photo of Lord Greaves Lord Greaves Liberal Democrat

What is wrong with Yorkshire?

Photo of Lord Kirkwood of Kirkhope Lord Kirkwood of Kirkhope Liberal Democrat Lords Spokesperson (Work and Pensions)

There is nothing wrong with Yorkshire; I was just referring to a programme I saw on Channel 4 last night. I see hard luck stories and bad stories for the department all the time. The department has to understand that, with a rollout cohort of 7.7 million families, it will always have difficulties and bad stories. It will get better as UC rolls outs.

My noble friend also mentioned the importance of getting more flexibility into the hands of the caseworkers. They are not using enough flexibility yet. I noticed that the Secretary of State was in Scotland this morning. There are some really excellent new flexibilities for people coming out of prisons. That is really positive and it was a good news story in the Scotsman today. That is good, but we should have more of it. No doubt the Minister will say that there are all sorts of things going on that we do not know about—and I believe that to be true—but it is perplexing that we are not better at identifying vulnerabilities. That is the point I am making, because if the professionals dealing with the cases had a bit more information of that kind available when they make judgments on the case it would make a significant difference.

I did not mean to say any of that. I meant to start by thanking my noble friend Lady Janke for introducing the debate in an excellent way. Her analysis was really good. It set the scene. The timing of the debate is very important because we are looking at, we hope, a comprehensive spending review and a Budget that might happen sometime in the autumn or maybe even later—if we still have a Government. Departments such as the DWP should be thinking clearly and carefully about what their asks are for the Chancellor of the Exchequer, whosoever that may be. That work would then inform what happens in the next three years. That three-year period has to be used constructively to repair some of the damage that we have seen since 2010, some of which is still with us and some of which still has to be visited on us. The noble Lord, Lord Livermore, was quite correct in identifying that previous Governments have dealt with low income quite deliberately and politically by pouring money into the tax credits system, which saved an enormous amount of extra heartache from the financial crisis of 2008-09. If that had not been there things would have been much worse. The noble Lord was right to say that.

The right reverend Prelate was also right to advert to the two-child limit. I am old-fashioned about adjusting levels of expenditure. In social security, levels of expenditure are enormously high, not in proportion to national wealth but in nominal terms. Social security should be increased or decreased annually by adjusting the rates of the benefits. If money needs to be taken out of child support, there are ways of doing that without adopting ridiculous policies which will almost certainly be overturned by future Governments. There is no security or stability in this policy area. It will continue to fester, it will not prosper, and then it will change, and there will be another level of complication for the people that have to suffer the benefit changes that are the subject of this debate. We need a longer-term strategy. We need to find ways of raising resources during the CSR as well as spending them. I would lean a little more heavily on wealth rather than income to generate extra resources. There are other clever ways of doing that. I understand that extra money has to be found to correct some of these problems.

I want to make a point in passing about housing policy. In both Governments—this is over a longer period of time than just since 2010—housing costs have crept up. For low-income families, they are a significant cause of poverty. I attended an IFS presentation last week. In an article about it for the Times of 24 June, Paul Johnson wrote,

“low-earning households have housing costs a good 50 per cent higher than they were 20 years ago, while housing costs for the highest-earning households have not risen at all, on average”.

That is not easily fixed; it cannot be done overnight. However, it is absolutely insane that we spend £23 billion every year on housing benefit, and it goes to landlords— sometimes housing associations and councils, but mainly private landlords. We cannot go on like this. I do not have an answer—I am not a housing expert—but it is an area that deserves urgent, cross-departmental treatment. We need a housing policy that is worthy of the name. If we could do that, it would take a lot of pressure and some of the costs off these low-income families.

I commend the Government—because not many people do and I do not often get the chance to—on the employment rate that has been achieved, which I think is excellent. I would not have thought it would be high or have stayed that high; with a bit of luck it will continue to stay at that level. But two things flow from that. It is really good news that we have a high employment rate—the noble Lord, Lord Livermore, referred to this as well—but we need to increase hours within employment now, to deal with in-work poverty. We need to start concentrating on that, and it is quite complicated for Government to do, but we need to increase hours available for work. Secondly, we need to have more emphasis on in-work progression. That is really important.

I come back to where I started. As I recall, the National Audit Office report of June 2018 made the comment that the DWP could not really identify the vulnerable cohort particularly of its universal credit caseload. Hopefully, that is something that the Government will do. I hope that when the Secretary of State returns from Scotland, she will also explain how the Scottish child payment of £10 per week, starting in 2021, can be replicated here in the United Kingdom.

Photo of Lord Greaves Lord Greaves Liberal Democrat 3:51 pm, 27th June 2019

My Lords, my noble friend Lord Kirkwood said what a privilege it was to follow such an expert as my noble friend Lady Thomas. I have the privilege of following them both. They are both experts in this area; I am not. I shall make a few general comments from the perspective from which I see this—casework in my role as a humble local councillor, in which I see people who get into real difficulties and need help sorting it out.

The role of jobcentres—Jobcentre Pluses, as they are now called—has changed in the many years since they were set up as labour exchanges. I have two anecdotes. The first is about a mother with two young boys. Her partner had moved out quite some time previously but was now homeless. To get his benefit, he had to put down an address. He gave the address that he used to live at with this lady and her children and, as a result, she had her benefit stopped because they said that he had moved back in. It took months to get such a little thing, which was nothing at all to do with her, sorted out. Clearly he was not living there, but that is what happened. She had a part-time job but was not getting tax credit. It got to the stage where she kept her children off school because she was not entitled to free school meals as she was not on benefits. She could not afford their dinner money or to heat the house properly, so they were being kept in bed all day. It was sorted in the end but it should not have taken so much time and trouble.

The second example is of a fairly elderly gentleman who suffered from mental difficulties and could not get out of his flat. He was not able to admit strangers into his flat and therefore failed to turn up for an interview, so that when people did a flat visit he failed to let them in and lost his benefits for a considerable time. Those are just two examples of how Jobcentre Plus people are now not there to help people. In my view, they are there to control them and, too often, to penalise and sanction them.

When the labour exchanges were first set up in 1909 by the great Liberal Government, they were a tremendous step forward because they meant that jobs could be advertised for free by employers in a central exchange where people could go to find out what there was. Before then, a lot of people simply had to tramp the streets from one mill to another, or to a factory or whatever, knocking on the doors and saying, “Have you got a job, please?” The exchanges were not perfect and faced a lot of political opposition from the Tories and the Labour Party at various times, but overall they were a great success. They were turned into employment exchanges, which was largely a change of name, and then into jobcentres, where the administration of the benefits system and the system of advertising jobs were put together.

I wish any noble Lord who wants to go into a so-called Jobcentre Plus with a client now the best of luck. You would first have to argue your way in—to argue that you are allowed in with somebody to help them. If you overcome that argument, you would then find that the centre is actually a means of administering the benefits system. These centres do two particular things to people. First, they will try to put them on training courses, some of which are on how to apply for jobs. In my experience of talking to friends about them, many of the courses provide training in doing things that those people will never be able to do well. If they manage to understand things such as managing a simple spreadsheet, they will never get a job that requires that kind of training. However, there may be others that are more useful.

Secondly, people have to spend a lot of time applying for jobs online and proving that they have done this. Instead of tramping the streets, as people had to do before 1909, they now sit at computer screens applying for jobs—we all know that people who advertise jobs now get large numbers of applications—which, in most cases, they will never get. There is a huge amount of wasted time and effort in the system. As I said, I do not believe that the fundamental job of a so-called Jobcentre Plus is helping and supporting people any more; it is about controlling and, too often, penalising people.

I agree very much with everything that the right reverend Prelate the Bishop of Chichester said about the two-child limit. I have a copy here of the report that he referred to, All Kids Count: The Impact of the Two-Child Limit after Two Years. I recommend that everybody reads that report and wondered whether I should say a few things about it but he said it all. The only thing I want to add is how ludicrous it is that we invite some of the most vulnerable families in the world—refugees from Syria, for example—to come and live in this country, and then impose something like the two-child limit on them.

Again, looking back in history, the present system goes back to the introduction of the family allowance by the Labour Government in 1946, based on proposals that originally came in the report from that great liberal of the last century, William Beveridge. But when that allowance was originally introduced, it was the other way round. The first child did not get the benefit, as it was assumed that it was the subsequent children who really needed it and that they would be in poverty if a family had more than one child. In my own family, I remember the great glee there was in 1956 when the eldest child in the family—that is, me—became eligible for family allowance. For my mother, that was a great step forward. The point about family allowance was that it went to the mother and was paid in cash every week. That made it an unbelievable addition to the resources that she had. In some families, it meant the children could be brought up—I would not say in relative affluence, but certainly out of poverty in the circumstances of the day.

I am told that only 60% of universal credit now goes to the main carer, who is usually the woman, but not necessarily nowadays, as we know families have changed. But it is not the same benefit it used to be. We had battles over the years on family allowance and child benefit. I go back to battles in the 1960s and 1970s, and I remember working then with the Church of England and Child Poverty Action Group. Some things seemed to go round and round, and never change. We all ought to unite and campaign, across the parties, whoever we are, to abolish this two-child limit. It really is ridiculous, because it undermines the fundamental principle of the benefit, which is that the resources should go to the children. You cannot say that they should go only to the children of families of two and not to families of four, because families of four will clearly be in more difficult financial circumstances. It is a top priority for this to happen.

Photo of Baroness Armstrong of Hill Top Baroness Armstrong of Hill Top Labour 4:01 pm, 27th June 2019

My Lords, I congratulate the noble Baroness, Lady Janke, on securing this debate and thank every noble Lord who has spoken. They have raised many of the issues that I would have liked to. However—and I do not apologise for this—I am going to concentrate on one group of people. Once again in this Chamber, I will speak about the most vulnerable of women: those who are likely to have experienced violence and abuse, and have complex needs.

My last job before I left the Government in 2008 was Social Exclusion Minister, so I spent a fair amount of time on this during that period. Since then, I have been involved with Changing Lives, a charity based on Tyneside, but now working on a wider basis. It started as a homeless organisation, but now works with people with complex needs, both men and women. I chaired the organisation until last December, but still work with it, particularly with Laura Seebohm, who has briefed me for today. She has overall responsibility for the work with women. It runs five services across the north, supporting people involved in what we now term “survival sex” and sexual exploitation. I want to concentrate on that group of people.

Changing Lives and I have a real concern that, in the past few years, the number of women getting involved in survival sex, as a direct impact of welfare policy, is increasing. We find this shocking, as I am sure noble Lords will. The women typically experience multiple and complex needs: mental ill-health, homelessness, drug and alcohol misuse, contact with the criminal justice system, and family breakdown. But childhood sexual exploitation and trauma is also a common experience for the women, and it is often compounded by traumatic experiences in adulthood. One problem faced by the women whom Changing Lives works with is that they are homeless or sofa-surfing. They have limited or no digital literacy, and limited or no access to a computer or smartphone—that will also mean that they have no bank account. They lack all the tools and skills that they are expected to have to claim universal credit straightforwardly. From the moment that they are transferred to universal credit, they are at an absolute disadvantage, with everything from proof of identity—as many of them will not have a birth certificate or passport—to receipt of payment because they do not have a bank account, practically impossible.

Two components of universal credit have especially damaging impacts for women at risk of survival sex. First, because all payments have to be made directly into bank accounts, the women with whom Changing Lives works are at greater risk because of financial exploitation. The majority of clients do not have their own bank accounts. However, Jobcentre Plus is not required to verify third-party accounts when nominated and all our services reported instances of women nominating the bank account of a friend or boyfriend to take receipt of the payment. They were frequently pressed into that—to put it mildly—and the funds were immediately stolen. Such financial exploitation of women who are already vulnerable is directly linked to the likelihood of conducting survival sex work and indirect sexual exploitation.

Secondly, advance payments are very tricky when people have real problems with addiction. Once a universal credit payment is set up, the client can be eligible for backdated awards. That often totals significant amounts, for all sorts of reasons. Staff in the organisation repeatedly reported that this process can have a hugely destabilising impact, because clients will often spend what they see as a reward, which, if they do not get rid of it quickly, somebody will come and take anyway. That leads to all sorts of problems.

Changing Lives staff have also observed an increasing trend of women actively choosing not to apply for benefits at all because of the problems with universal credit. One service manager estimated that around 30% of the women whom her team supported do not attempt a universal credit application because of the direct barriers that I have already talked about, as well as the high risk of sanctions for missed appointments or lack of job search. This indicates that not only being on universal credit but the very existence of universal credit are driving more women away from services and into survival sex because it is increasingly perceived to be their only option.

I recently heard about Changing Lives’ first example of a person placed on indefinite universal credit sanction because of a series of missed appointments. The client, who is now living in a Changing Lives property and receiving support from its specialist sex work project, was placed under indefinite sanction in April this year. Our team advised Jobcentre Plus of the cause of her missed appointment, but the decision to place her under indefinite sanction was upheld. She missed her appointment because she had been raped the night before. As I said, these shocking outcomes, which nobody intends, are happening to real people who are the most vulnerable.

What changes to universal credit could help tackle some of these problems and better protect these women? I will raise some specific ones; there are others. The first is removing the wait for the first universal credit payment, which is very important for this group. The second is greater promotion and awareness by Jobcentre Plus staff that payment by a voucher or at a payment point is possible. Many of the staff said that their clients were totally unaware that that was an option; it is just not being used. The third is verification of third-party bank accounts, so that exploitation is cut down. You know who is going to get the money and that they have a good and proper relationship with the person who is entitled to the benefit. The fourth is optional, managed draw-down arrangements for backdated and/or advanced payments and greater flexibility to ensure repayment of debts and deductions, because a large number of these clients will, inevitably, come with historic debts which are likely to be related to courts, rent and so on. That sort of thing has to be done at a rate which is genuinely manageable for clients.

I know Jobcentre Plus workers who really want to do well. Changing Lives has done courses for some of them. They are really grateful because they begin to understand more effectively the needs of the women and how to identify what might come through their door. Changing Lives tells me that it would be so much better if these clients could see consistent, designated work coaches who stayed with them throughout their time on universal credit. This is impossible in the current system. Training and better awareness by jobcentre staff of the available specialist support services was also recommended to me by Changing Lives staff. I would say, from the work I have done in the last year on women who have experienced trauma and violence, that all our front-line workers must be more trauma-aware so that they recognise and understand that when women who have had this sort of trauma present they are not going to be able to deal with all the things put before them in a calm and logical way. None of us would be “normal” in those circumstances.

The introduction of universal credit has increased the prevalence of survival sex, mostly among women. It is a symptom of poverty and destitution. It is hugely damaging to the individual, their families and the community, and also to society as a whole. The loss of support and prevention services is a key contributing factor to this problem. The women affected by universal credit and engaging in survival sex will be the tip of the iceberg. Deal with them and you sort the rest.

Photo of Lord Low of Dalston Lord Low of Dalston Crossbench 4:14 pm, 27th June 2019

My Lords, it is a great pleasure to follow the noble Baroness, even if it was not always such a pleasure to listen to some of the things of which she spoke. I declare my interest as a vice president of RNIB, the Royal National Institute of Blind People, from which I got much of my information for this debate. The RNIB is the UK’s leading sight loss charity, representing the 350,000 people in this country who are registered blind or partially sighted and the 2 million or so living with sight loss.

This debate is about the impact of recent benefit changes on vulnerable groups. Blind and partially sighted people are a vulnerable group, so I propose to talk about them. The most significant change to benefits since 2010 has probably been the introduction of universal credit, replacing six pre-existing benefits with a single monthly payment for those who are out of work or on a low income. The numbers of blind and partially sighted people migrating to universal credit are so far too small for us to be able to say with certainty what impact the change to universal credit has had on people with sight loss. However, RNIB anticipates that the migration to universal credit will cause issues for blind and partially sighted people and has welcomed the announcement by the Secretary of State that the process will be slowed down to allow concerns to be addressed. RNIB shares the broader concerns of the disability sector about universal credit, including the built-in five-week wait, how the transitional payments will work and the obligation to make a new claim for universal credit, rather than being transitioned automatically.

For blind or partially sighted claimants, there are also some specific issues that need addressing around the accessibility of the process. There are at least 20,000 blind or partially sighted people who have still to migrate to universal credit, and accessibility issues must be resolved before universal credit is rolled out completely. The Government would do well to explore with RNIB how it can help monitor the rollout through RNIB’s benefits helpline. How will the department ensure that the universal credit application process is accessible to the 20,000 blind and partially sighted claimants who have still to migrate to the new benefit?

The process for assessment of benefits is often as important as the benefits themselves. RNIB was very pleased to be involved in a workshop on work capability assessments that took place last January. It was good to see how the views and experiences of a system that was not working for people with sight loss were taken on board by officials. However, the idea that emerged from the Secretary of State at the beginning of March, that the work capability assessment and the assessment for PIP could be brought much closer together, was concerning. While change is needed to better reflect the impact of sight loss, this is not the way to do it. The assessments are carried out for different purposes and use different criteria. RNIB receives too many calls to its advice service from blind and partially sighted people who have received a poor assessment to enable us to have confidence in the system. Some 90% of PIP appeals that RNIB has supported are successful, which makes it clear that much needs to improve with the assessments before they can be brought closer together. How will the department ensure that any rationalisation of the PIP and work capability assessment processes will not have a detrimental effect on blind and partially sighted people?

In its current form, the work capability assessment, which determines a person’s eligibility for work capability within universal credit, and employment and support allowance, unfairly differentiate between blind and partially sighted people who use Braille and those who do not. This is because the ability of a blind or partially sighted person to read Braille can prevent them being eligible for the limited capability for work-related activity component, which puts them in the support group—or, in some cases, from receiving any additional support at all.

Activity 7 has an equivalent under Schedule 3 to the Employment and Support Allowance Regulations 2013, and Schedule 7 to the Universal Credit Regulations 2013. The inclusion of Braille in activity 7 means that the ability to read Braille counts towards a blind or partially sighted person’s fitness for work. No points are awarded to someone who can use Braille to understand a basic message. In practice, this means that someone who has learned Braille could be prevented from meeting the criteria for ESA based solely on their ability to read Braille.

In income-related ESA, which is now incorporated into universal credit, this could mean that the claimant would not be entitled to the support component, worth £163.15 a month, and would be put into the work-related activity group and required to participate in work-focused interviews. Under universal credit, the claimant would not be entitled to a work capability element worth £328.32 a month, and would have work preparation conditionality in their claimant commitment. In new-style ESA, the claimant’s eligibility to contribution-based ESA would be limited to 365 days, after which time their entitlement would end.

RNIB has advocated for the removal of Braille since it was introduced into the work capability assessment in 2012. While it is acknowledged that the DWP has recently started to consult stakeholders on wider work capability assessment reform, this is at a very early stage, and the current assessment framework is likely to be in place for the foreseeable future. Braille should therefore be removed from the work capability assessment now to make it fairer for blind and partially sighted people and to improve future decision-making. I therefore ask the Minister whether the Government will take steps to remove knowledge of Braille from activity 7 of the work capability assessment.

Photo of Lord Shipley Lord Shipley Liberal Democrat 4:22 pm, 27th June 2019

My Lords, it is always a pleasure to follow the noble Lord, Lord Low of Dalston. He made a compelling case in support of blind and partially sighted claimants, and his criticism of work capability assessments for blind and partially sighted people was particularly crucial in that.

I am grateful to my noble friend Lady Janke for leading this excellent debate. She talked about how the Government needed a better safety net for vulnerable people, pointed out that too many cuts have hit the poorest most, talked about high housing costs, and how the freezing of local housing allowance and reducing levels of support for high rents had all made people poorer. She also talked about injustices alongside the rise in in-work poverty and the impact of disability on increasing poverty. My noble friend Lady Thomas of Winchester from these Benches took a calm, rational look at universal credit and personal independence payments and importantly, asked the Government not to close their ears to existing problems.

My noble friend Lord Kirkwood of Kirkhope commented on the scale of the changes to the benefits system and how complex it was, which is indeed the case. He confessed that it might never be a perfect system given the sheer complexity, and I too concede that it will never be 100% perfect. However, as he said, the DWP has not proved itself to be good at assessing vulnerability. There are some excellent staff doing some excellent work there, but I will come on shortly to the conclusions of the National Audit Office, which a year ago produced a report on the functioning of the DWP.

My noble friend Lord Greaves’s contribution from his perspective as a local councillor was particularly important, because he gave practical examples of problems and waste in the system. The noble Lord, Lord Livermore, reminded us of the progressive tax and welfare reform of the Labour Government after 1997 but before the financial crash, and how difficult it is for people to escape poverty today. In an extremely important contribution, the right reverend Prelate the Bishop of Chichester said that the two-child limit traps children in poverty. I could not agree more with that conclusion. The noble Baroness, Lady Armstrong, talked about the excellent work of Changing Lives, but reminded us of the problems for victims of violence or abuse. She gave worrying examples of disadvantage and vulnerability caused by the benefit system.

The Motion refers to recent benefit changes and vulnerability. By recent, I mean post-2015, when the restraining influence of the Liberal Democrats in coalition was removed. On vulnerability, the DWP definition, as reported by the National Audit Office in a report a year ago, related it to mental and physical health, life events, poor skills—with literacy and/or comprehension problems—limited internet access or IT skills, and difficulty with budgeting. I find the last one a bit rich, as those who suffer cuts in their already low income will inevitably have problems budgeting. For reasons that escape me, the absolute lack of money does not seem to be a factor in DWP thinking, let alone that of the Treasury, nor does the impact of increasing poverty.

Across Whitehall, in all government departments, the impact of individual departmental decisions is never factored into the overall impact on a local area. Whitehall does not think geographically; it thinks departmentally, with a silo approach to policy-making. Cuts in Sure Start by two-thirds, deep cuts to neighbourhood services such as libraries, limiting access to IT facilities and help, and cuts to youth budgets all contribute to vulnerability. It amazes me that the Government seem not to understand that. Put another way, one department’s cuts—in, say, youth services—can be another department’s increased expenditure in coping with crime.

Another vulnerability relates to council tax. Many of those in arrears are benefit recipients, according to the Institute for Fiscal Studies. I am grateful to an article in Saturday’s Financial Times for these figures, cited from the Money Advice Trust. In 2016-17, £2.3 million of debts were referred to bailiffs. They can charge a poor person £75 for sending them a letter and £235 for a home visit, so increasing the debt of already poor people. We need to get back to local councillors doing the work themselves through increased advice and support to those in debt.

The context for this debate is one in which we have the second highest level of inequality of any western democracy. There has been too much talk by members of the governing party, particularly those standing for election, about lifting the higher rates of tax, when they should be talking about improving the lives of poor people. In April, we had the start of the fourth—and, I hope final—year of the benefits freeze. That freeze costs poor families an average of £400 in the current year alone, while the tax changes applied in April have overall led to an average of £280 extra income a year for the top 20% of earners but a £100 reduction for the poorest 20%. How can the Government justify tax cuts of that kind while benefits are cut at the same time? I am afraid it is not enough for the Minister to say that the 1 million households on universal credit are gaining up to £630 per year as a result of increases to work allowances—a welcome decision—since most poor households are not yet on universal credit and thus suffer the wider benefit cuts.

I pay tribute to the role of the National Audit Office. When the Audit Commission was abolished a few years ago, I and others were keen to ensure that detailed auditing of the delivery of public services was still done. The NAO’s work on benefits, the implementation of new DWP policies and the rollout of universal credit is, for me, an excellent example of its work. In a report published a year ago, it concluded that the Government should assess the cumulative social impact of their policies. I am sure we all agree that it is staggering they did not. It pointed out that there were significant problems with staff training and that the DWP had underestimated the problems that an initial waiting period for universal credit would cause and seemed surprised when 60% of new claimants needed an advance. It said the DWP had problems identifying and tracking claimants it deemed vulnerable. The comments by my noble friend Lord Kirkwood of Kirkhope add to this; it seems this problem has not been resolved. The NAO also said that the DWP lacked a,

“systematic means of gathering intelligence from delivery partners”, and was making too many late payments. It is a complex system, but these were worrying conclusions.

It was noticeable that in January this year, in their response to the Public Accounts Committee report on universal credit, the Government said that the DWP had,

“made 1,500 changes to processes”, following feedback from partners and its own staff. Clearly, a lot has been learned. I particularly acknowledge the partnership the Government have with Citizens Advice and the work done by Citizens Advice to assist vulnerable claimants today.

There has been discussion in your Lordships’ House in recent days on the work capability assessment. It is generally acknowledged to be unfit for purpose, in that many disabled people are refused benefits when they cannot possibly work. I hope the Government will look at the suggestion a few weeks ago, again from the Secretary of State, that they might link the assessments for personal independence payments with the work capability assessment, since they are assessed using very different criteria. The noble Lord, Lord Low of Dalston, referred to this matter following a briefing we all had from the RNIB, which added that 90% of appeals by people who are blind or partially sighted against a refusal of a personal independence payment are successful. A system in which only 10% of appeals are refused is not a good system.

There has been reference to housing benefit and the fact that it has doubled to £22 billion in 15 years but covers a lower proportion of rents than it used to. The problem is that the Government have not been building enough social homes for rent, which has forced up rents in the private sector. We have to convert the cost of housing benefit to use money to build social homes, which would reduce the amount of money currently used for housing benefit. As Paul Johnson of the Institute for Fiscal Studies said in a Times article on Monday—I think someone referred to it—

“our housing market has rewarded the better off and punished the poor”.

I have some specific points for the Minister to consider after our debate. The Trussell Trust, in its briefing, pointed out that we must rethink government cuts, such as to work-related benefits, for households with inescapable extra living costs. I concur. Might the Minister or staff talk to Macmillan? It said in its briefing that 25% of universal credit claims were not completed because claimants struggled with the application process, and that home visits are not consistently and proactively offered to those too unwell to go to the jobcentre.

As a start, we have to move the wait for support from five weeks to five days. Will the Minister look at removing the two-child limit?

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions) 4:35 pm, 27th June 2019

My Lords, I thank the noble Baroness, Lady Janke, for securing this debate and for the wide-ranging manner in which it was introduced. She referred to the fact that we have seen a host of reports recently, to issues with schools having to buy food for their pupils, to the increase in homelessness and rough sleeping, to universal credit, of course—to which I will return—and to the five-week waiting period and sanctions. It gave us a good start.

My noble friend Lord Livermore gave a powerful critique of where we are on these matters. He challenged the idea regarding the position that we should take in times of austerity. He said that it does not preclude progressive tax and benefits reform; that there are choices even in a period of austerity. He was concerned about the lack of work incentives for low earners, which has still not been addressed, and second earners’ progression to work. He noted with some regret that the Chancellor did not cancel the fourth year of the freeze. Perhaps the Minister will address that issue.

In a moving contribution, the right reverend Prelate the Bishop of Chichester said that we should scrap the two-child policy, and that the Church was speaking out on this and would continue to do so. I am sure many other noble Lords welcome that. He made a compelling case for the removal of the policy. His reference to parents having to eat just toast was a telling part of what he had to say.

The noble Baroness, Lady Thomas, said there is no reason why we cannot change the way in which benefits are administered even if, given the wider political climate, fundamental reform is difficult. She mentioned the growth in food banks and appointments and referred to the PIP assessment. I think I am right in saying that she did not support the merging of the WCA and the PIP assessment; but perhaps that is a little unclear.

The noble Lord, Lord Kirkwood, queried whether a deaf ear was being cocked at some complaints but recognised that that was an unfair criticism. He referred to what happens in Scotland, but I do not know whether we have ready means of tracking that.

The noble Lord, Lord Greaves, referred to his case work as a local councillor. I warmed to that. I can remember hours of council surgeries. Sometimes you got a good result from a query; sometimes you did not, however hard you worked. However, it is a good training ground for knowing what is happening at grass-roots level.

My noble friend Lady Armstrong made a compelling case in referring to her work with Changing Lives and the complex needs associated with childhood sexual exploitation. If the system cannot adequately support the people to whom my noble friend refers, then it is not fit for purpose. How will the Minister respond to that? What changes will be needed? My noble friend referred to removing the wait before payment, the vouchers option and issues associated with the verification of bank accounts.

The noble Lord, Lord Low, explained—powerfully, as ever—that he spoke on the basis of RNIB briefings and referred to partially sighted people and universal credit. His position was that the sample to date is too small for concrete conclusions to be drawn, but there were emerging concerns about accessibility issues. He said that 90% of PIP appeals are successful and commented on the WCA and PIP assessments being brought closer together, which caused him some concern.

The noble Lord, Lord Shipley, defined “recent” as 2015. If he does not mind, I might take issue with that: 2010 seems a more appropriate date of change of government. Whatever their defence, frankly, the Liberal Democrats have to step up to the plate regarding their contribution to the most savage of the cuts that we are enduring.

I now turn to those cuts. In his first Budget, in June 2010—not 2015—George Osborne announced spending cuts of £32 billion, to take place by 2014-15, £21 billion of which was to come from welfare reform. It is a staggering amount. Changes included removing £14.5 billion from social security spend through a combination of restrictions on eligibility and reducing the value of benefits. Protecting pensioner benefits by the triple lock added to the burden falling on working-age claimants and families with children.

I am sure all noble Lords have received extensive lists of the individual changes, which are overwhelmingly detrimental to claimants. Some 3.5 million households were affected by the increase in the tax credit taper. The basic and 30-hour elements of working tax credit were frozen for three years; local housing rates were capped and uprated in line with CPI, and then by just 1%—at a time when rents were soaring; and child benefits were frozen. Further cuts post 2015—I absolve the noble Lord of responsibility for them—included the freezing of most working-age benefits; the reduction of the benefit cap, which was projected to affect 88,000 households; the abolition of the family element of tax credits; the imposition of the two-child limit; restrictive changes to mobility assessment criteria; and restrictions in the Sure Start maternity grant, which was a classic example of how enlightened public policy can make a real difference to people’s lives. These are but some of the changes. Overwhelmingly, these cuts were focused on poor and vulnerable people, and seemingly delivered without regret. They were nowhere near compensated for, as is sometimes claimed, by the national living wage, increases in personal tax allowances and childcare provision.

The issue which has dominated consideration of social security policy, and which to a certain extent has pervaded our debate today, is the introduction of universal credit. Its original concept—the merging of six benefits, smoothing transition into and out of work—seemed entirely reasonable, but more detailed analysis has suggested that payments for disabled people are lower than under the legacy system, and it has suffered an alarming range of cuts since being enacted. The Office for Budget Responsibility has confirmed that, on average, universal credit is less generous than the system it is replacing, that 2.1 million families will lose on transfer to the system and that only 1.8 million will gain. There has been a raft of design and implementation problems with the scheme, which are covered in a range of reports by the PAC, the NAO and the Work and Pensions Select Committee. Many of these problems were predicted when the legislation was in progress. The NAO has concluded that the DWP underestimated the amount of money claimants have in order to manage the initial waiting period, and that one in five claimants are not receiving payment on time. A scheme that is meant to help is pushing more people into poverty. The PAC concluded that the DWP’s systematic culture of denial and defensiveness in the face of adverse evidence is a significant risk to the programme. Does the Minister agree, or does she deny that that is the case?

When we address these matters, we are in danger of talking of statistics in the abstract when we should be focusing on individuals’ lives and how they are affected, as my noble friend Lady Armstrong did. I hope that we can get justice. We should build a system that is fit for purpose to serve all the vulnerable people in our communities.

Photo of Baroness Buscombe Baroness Buscombe The Parliamentary Under-Secretary of State for Work and Pensions 4:45 pm, 27th June 2019

My Lords, I thank the noble Baroness, Baroness Janke, for securing this debate, and I thank all those who have contributed on this important issue. I am particularly pleased that the noble Lord, Lord Kirkwood, is back in his place.

I shall go through this at a bit of a canter because there are a lot of questions and points to cover, so I ask your Lordships to forgive me for talking rather fast.

This Government’s ambitious welfare reforms are driven by our firm conviction that the benefits system must work with the tax system and the labour market to support people into employment and higher pay. This is the only way to deliver a sustainable, long-term solution to poverty, and it is also the best way of giving everyone the chance to succeed and to share in the benefits of a strong economy.

Our record on employment is therefore vital to our success in helping people out of poverty, and we are rightly proud of it. There are now over 3.6 million more people in work compared with 2010. Unemployment is at its lowest rate since the 1970s, having fallen by more than half since 2010, and this has not just happened in London and the south-east: more than 60% of the employment growth since 2010 has occurred in other parts of the UK.

Importantly, around three-quarters of the growth in employment since 2010 has been in full-time work, which, as the evidence shows, substantially reduces the risk of poverty. Wages have consistently outpaced inflation for 15 months—in fact, they are growing at their fastest rate for a decade—and the growth in employment rates has overwhelmingly benefited the poorest 20% of households. Household income inequality is also lower than it was in 2010.

Of course, behind these statistics are people whose mental health and well-being are improved by moving into work and having the dignity and security that that brings. Indeed, 930,000 more disabled people are in work today compared with five years ago, and there are 667,000 more children in working households compared with 2010. Not only are these children less likely to grow up in poverty but their life chances are significantly better. The evidence on this is very clear.

A working-age adult living in a household where every adult is working is about six times less likely to be in relative poverty than one living in a household where nobody works, and a child living in a household where every adult is working is about five times less likely to be in relative poverty than a child in a household where nobody works. Children in workless households are twice as likely to fail at all stages of their education as children in working families. Full-time work in particular dramatically reduces the risk of being in poverty. There is only a 7% chance of a child being in relative poverty if both parents work full-time, compared with 66% for two-parent families with only part-time work.

Universal credit is of course at the heart of our reforms. It is a benefit fit for the 21st century that will remove the structural disincentives to work that were part of the legacy benefits that it replaces. It supports those who need it while providing a springboard into work—every extra hour worked is rewarded and each claimant receives tailored support from a work coach to help them find the right job for their circumstances. I would like to issue a challenge to the noble Lord, Lord Greaves. I invite him to come with me to a Jobcentre Plus, where I will show him a very different world. The “plus” is about the fantastic wraparound support that our staff give.

As the noble Lord, Lord Kirkwood, quite rightly said, mistakes will always be made; we are dealing with 7 million people. Some 1,500 iterative changes in just the last few months show that we are constantly listening and learning. As the noble Lord, Lord Shipley, said, we need a lot of changes—but we are making them and responding. Once fully rolled out, universal credit will cost £2.1 billion more per year than the legacy system it replaces. The Joseph Rowntree Foundation has reported that universal credit is likely to help an extra 300,000 members of working families out of poverty, the majority of which include someone who works part-time.

We have responded to concerns about the early rollout of universal credit by making a number of changes, as I have said. These include changes to remove waiting days, make bigger advance payments available and give extra support to disabled people. In the last Budget we announced a £4.5 billion cash boost that will make a huge difference to the lives of working families. Some of this has not yet filtered through, but it will provide extra support for people moving onto UC. In particular, we have put an extra £1.7 billion a year into work allowances, increasing the amount that hard-working families can earn before the taper is applied. So I cannot agree with the noble Lord, Lord Livermore. There is an incentive to work more; we are making work pay. This means an extra £630 a year for 2.4 million families.

We fully recognise that some claimants lack the digital skills they need to fully engage with a modern system. This is why we offer tailored, UK-wide, practical support to help ensure people receive their first payment on time when they make a new UC claim. Since April, we have partnered with Citizens Advice and Citizens Advice Scotland to introduce Help to Claim, a voluntary service which can be accessed any time until the first full, correct payment of UC is made. The service is available face to face, over the phone, online and through web chat to allow claimants to access support in the way that is right for them.

At the heart of the support that we offer to working-age claimants is an agreement that they commit to certain activities to improve or maintain their employment prospects, such as looking for work or doing work experience. We believe that it is right in principle that there is a system in place to reinforce conditionality, and to support and encourage claimants to do everything they can to move into or towards work, or to improve their earnings.

However, we have listened and taken action to ensure that the penalties for not meeting these conditions are proportionate, particularly for the most vulnerable. Last month, we announced that financial sanctions—which noble Lords have referenced today—for welfare claimants that last for three years would come to an end, and that in future the maximum duration of a sanction would be six months. In addition, there will be an evaluation of the effectiveness of UC sanctions to consider whether further improvements can be made.

Evidence about the effects of poverty is of course vital to tackling it effectively. We have committed to finding new and better ways to analyse poverty in this country. The Social Metrics Commission’s report, A New Measure of Poverty for the UK, made a compelling case for why we should look at poverty more broadly, to give a more detailed picture of who is poor, their experience of poverty, and their future chances of remaining in or falling into it. So we are working with the Commission and other experts in the field to develop new experimental statistics to measure poverty. These will be published in 2020 and, it is hoped, will help us target support more effectively.

But getting people into work at all costs is not the limit of our ambition. We are absolutely not treating that as a panacea for poverty, as has been suggested. Our reforms are about supporting people in work so that they can progress. The Government recognise that childcare costs can affect parents’ decisions to take up work, increase their working hours or remain in paid work. We are doubling free childcare to 30 hours a week for nearly 400,000 working parents of three and four year-olds and introducing tax-free childcare worth up to £2,000 a year per child.

When people move into work, this Government want to ensure that we do everything we can to support them to progress so that they can increase their earnings and build careers. As the noble Lord, Lord Kirkwood, said, in-work progression is really important. We are working and in discussions with the Trades Union Congress and the CBI on how we can take this forward. We are going further, with two national pilots on in-work progression. One will train work coaches to help those in work to decide when and how to switch jobs and focus on achieving that ambitious step up. The other will boost our capability to work with local businesses by creating jobcentre specialists who can encourage local employers to support progression and good-quality, flexible working.

We know that there is more to do to support working people but this Government have already gone much further than previous Governments, while the Chancellor’s Spring Statement set out the ambition of ending low pay across the UK. Low pay is a key area of this subject. I listened to what the right reverend Prelate said about the two-child policy, and a lot of this is about taking responsibility in the same way as those who make really tough decisions about whether or not they can afford to have more children. We have to think about low pay. I think about the Church and other religious institutions that rely on thousands of people who work as volunteers. What are they actually living on? Are they actually being paid, and are they being paid the living wage? This is something where we must all look to our own institutions and places of work and work out what we are doing to ensure that those people for whom we are responsible are properly supported.

Universal credit works alongside other policies introduced by this Government to promote full-time employment as the way out of poverty and towards financial independence. Our national living wage, which is among the highest in the world, is expected to benefit over 1.7 million people. The increase to £8.21 from April this year will increase a full-time worker’s annual pay by over £2,750 since 2016. Our tax changes will make basic-rate taxpayers over £1,200 better off from April compared to April 2010. Taken together, the most recent changes mean that from April a single person on the national living wage will take home over £13,700 a year, which is £4,500 more than in 2009-10. I encourage all those who employ others to look to the national living wage.

The welfare system is not just about providing a financial safety net for those who need it. That is why this Government have taken wider action to support and make a lasting difference to the lives of the most vulnerable, who often face complex barriers to employment. Our department seeks to support and help into work the most vulnerable people in society, people whose ability to work is frustrated by issues such as disrupted education, a history of offending, domestic abuse or insecure housing. We are addressing the barriers specific to different groups and ensuring that universal credit works for all those with complex needs.

Again I reference the noble Lord, Lord Kirkwood. He talked about how we can do more to recognise. That is something that we are working on: we are adding more to the software so that we can recognise people with different needs. In response to the noble Baroness, Lady Armstrong, on the whole question of those sex survivors and so on, they absolutely need bespoke support.

In jobcentres, work coaches are upskilled to recognise and help claimants with a wide range of complex needs. It is easy to underestimate the great work that our work coaches do to support our more vulnerable claimants. There are so many positive stories to tell; in contrast to the noble Lord, Lord Greaves, I do not have time to tell those tales today, but we have worked hard to build trust with these claimants to help them to turn their lives around.

Over 12,000 young people leave care each year and their education, health and employment prospects are poorer than their peers’. By supporting care leavers through their difficult transition into adulthood with a series of safeguards and easements, work coaches can have a real impact on a young person’s life chances. We are also doing more to support ex-offenders in re-establishing themselves back in the community and moving into work, with around 135 prison work coaches based in resettlement prisons across Great Britain who help prisoners to gain employment on release and support benefit claims pre-release. Those work coaches are going in to talk to those in prison five weeks before their release but we are now looking to extend that, possibly to 12 or 13 weeks, so that we can really build a relationship with these people who are particularly vulnerable and help them through the process of ensuring that they have housing and support, and we can help them to think about a future with a job before they leave prison.

We have a proud record when it comes to supporting victims of domestic abuse. Those affected can have their work-search requirements suspended for up to six months under universal credit to enable them to stabilise their lives. By the end of the summer we will have a domestic abuse and homelessness advocate in every jobcentre in England. They will be able to build work coach capability in these areas and make important links with organisations in the community. We recently published two guides outlining the wide-ranging support offer for those experiencing homelessness. For example, you do not need a permanent address or ID to make a claim for universal credit.

With particular reference to survivors of domestic abuse, we are committed to providing the best possible support for all our claimants, including the most vulnerable in society. This includes those who are or have been victims of domestic abuse. As it can be difficult for individuals facing abuse to come forward, all work coaches now undergo mandatory training in how to support vulnerable claimants, including the recognition of signs of such abuse. By the summer of 2019 we will have implemented such a domestic abuse specialist in every jobcentre to further raise awareness of domestic abuse and support work coaches.

I commend the work of the noble Baroness, Lady Armstrong, on Changing Lives. We are listening and learning all the time. We absolutely accept that we have more to learn and focus on. We are looking at the issue of separate payments, for example. We must be aware—and we are doing work on this at the moment—that eight out of 10 claimants are very happy to receive just the one payment from universal credit and that 97% of couples pool their resources. To make a blanket change across the system, which looks as though it would not suit the vast majority of claimants, would be a big and possibly retrograde step. We are therefore looking at other ways in which we can support these women.

Furthermore, we are considering what more we could do to ensure that the main carer more often receives the UC payment direct, although they can actually ask for it. The initial work on this area will be completed this year and will improve the claimant messaging on the service to encourage claimants and joint claimants to utilise the bank account of the main carer to receive their UC payments. I repeat, however, that there is work in progress in this area.

Noble Lords made reference to various reports, including the IFS report, which touched on housing. We delivered over 220,000 additional homes last year. That is over 1.3 million extra homes in England since 2010. We are looking at what we can do cross-government —we have a cross-departmental project on this—to tackle the huge cost of housing benefit. Yes, it is £23 billion a year, much of it going to private landlords. We are ambitious about doing more on this huge issue.

We welcome, however, what came out last week in the IFS report, which stated that while poverty is complex and does not have an easy answer, there are two positive reasons which account for two-thirds of the increase in in-work poverty rates. One reason that a higher fraction of those on the lowest incomes are in work is simply that there are more people in work overall and far fewer workless households. This is something that Paul Johnson of the IFS, writing in the Times, described as,

“a triumph that we celebrate all too infrequently”.

The other reason is that far fewer pensioners are poor than ever before.

I will move on as quickly as I can, because my time is running out. We are continuing to listen and learn. The noble Lord, Lord Livermore, talked about tax credits as being a good idea, but they propelled many claimants into higher tax rates such that they have spiralling debts as a result. Also, in 2010, 20% of all UK working-age households were entirely workless, which was not a great record.

On the two-child policy, as I said, this policy ensures fairness between those supporting themselves solely through work and those receiving benefits. Let us not forget they also continue to receive child benefit, no matter how many children.

On the questions raised by the noble Lord, Lord Low, and the noble Baroness, Lady Thomas of Winchester, we are looking at the workplace assessments quite carefully and at PIP to see how we can make it simpler, easier, more straightforward and fairer. I also say to the noble Lord, Lord Low, that we are doing a lot on accessibility. In fact, two weeks ago I was lucky enough to be in New York with a wonderful man called Victor, who is in charge of accessibility for New York City. What they are doing there is incredible. We were sharing intelligence on more things that we can do to assist people with disabilities, including those without sight.

I now have to wind up. There is so much more that I would like to say, but I conclude by saying that we are not complacent about the challenges we face for those people on the lowest incomes and those who are particularly vulnerable. We constantly make progress, but we also constantly want to listen and to learn. We are spending a record £220 billion this year on welfare. I am proud of the work our department is doing, and I am grateful to all noble Lords who have taken part in the debate.

Photo of Baroness Janke Baroness Janke Liberal Democrat 5:06 pm, 27th June 2019

I thank all noble Lords for their contributions to the debate. Many new issues have arisen, but so have many old ones. I thank the Minister for her energetic summing up and information on the wide range of things that the Government are doing. However, there is a great deal of evidence of flaws and problems in the system. I hope the Government will listen and look at the evidence. I hope they will review it and recognise through the comprehensive spending review that these difficulties need to be addressed, recognise that people are suffering as a result of them, and listen to some of the suggestions they make. Having said that, I thank everyone for the debate today. I beg to move.

Motion agreed.