Moved by Lord Forsyth of Drumlean That the Grand Committee takes
note of the Report from the Economic Affairs Committee Universal
Credit isn’t working: proposals for reform (2nd Report, Session
2019–21, HL Paper 105). Lord Forsyth of Drumlean (Con) My Lords, I
rise to introduce the Economic Affairs Committee report Universal
Credit isn’t working. In the first paragraph of their response to
the report, the Government say that they are “surprised by...Request free trial
Moved by
That the Grand Committee takes note of the Report from the
Economic Affairs Committee Universal Credit isn’t working:
proposals for reform (2nd Report, Session 2019–21, HL Paper
105).
(Con)
My Lords, I rise to introduce the Economic Affairs Committee
report Universal Credit isn’t working. In the first paragraph of
their response to the report, the Government say that they
are
“surprised by several of the Committee’s observations with regard
to Universal Credit … In particular, in contrast to the title of
the report, the effectiveness of UC as a comprehensive benefits
system has been admirably demonstrated in response to the
pandemic.”
I pay tribute to the department for the way in which it dealt
with the Covid outbreak and the speed with which it was able to
put people on universal credit, but I have to say that the rest
of the response from the Government shows that they are
remarkably tin-eared.
In introducing the report, I begin by thanking our outstanding
clerk Adrian Hitchins and our policy analyst Will Harvey for the
splendid support that they gave to the committee to enable us to
produce this report, which at long last has been given time to be
debated. So much time has passed that I am no longer the chairman
of the committee, but we have an excellent new chairman in the
noble Lord, , from whom I am looking
forward to hearing later in the debate.
When the Government announced plans to introduce universal credit
in 2010, the scale of their ambition was largely greeted with
approval in Parliament and among commentators. However, support
seeped away as universal credit was rolled out. The way that
universal credit has been designed and implemented appears to be
based around a kind of idealised claimant and it has features
that are harming many of the most vulnerable people in our
country. It is certainly linked to the exponential growth in food
banks and it is probably also linked—although rent rises are a
feature—to the dramatic increase in rent arrears. Many claimants
reported to our committee that they find the system
incomprehensible. Overall, it is fair to say that universal
credit’s reputation has nosedived.
The Government’s response indicated that they were surprised by
the title of the report, as I said. A couple of recommendations
were accepted, although one of them was actually rejected and has
now been accepted. Indeed, this very afternoon, the Government
have been taking credit for reducing the taper for universal
credit, which is a welcome measure. Nevertheless, during our
inquiry, which was completed in July 2021, most witnesses thought
that universal credit should not be abolished because of the
severe disruption that this would cause for millions of people
and thought instead that substantial reform was required in order
to make it fit for purpose.
Change cannot come soon enough as far as I am concerned. The
country is facing a major assault on living standards as a result
of soaring inflation, tax increases, rising mortgage costs and
savage fuel and energy price increases. The Chancellor’s decision
to cut universal credit by £20 a week at this moment is simply
indefensible. Conservatives believe in securing a safety net
below which no one can fall and it is hard to see how millions of
families in this country will manage in the months ahead. The
conflict in Ukraine is forecast to put up energy and food prices
substantially. Inflation is expected to rise to 8% this spring
and perhaps even higher later in the year according to the Bank
of England, which has consistently underestimated the rate of
inflation and the impact of its policies of quantitative
easing.
Of course, the basket of items used to calibrate CPI inflation
does not begin to measure the actual inflation that many of the
poorest families in the country experience. Scandalously, many of
these very poor families have higher electricity charges through
pre-paid meters. Benefits are due to rise by 3%, resulting in a
substantial real-terms cut to income as essential bills escalate.
Since our report was published, the Government have increased the
work allowance and reduced the taper rate, as I have alluded to,
to ensure that working universal credit claimants can keep more
of their earnings. This is very welcome, especially since it
supports the original purpose of universal credit to incentivise
work. It still means that some of the lowest-paid people in the
land are facing an effective marginal rate of tax of 55%—I note
that the Chancellor has started to call the reduction of the
taper rate a “tax cut” but, if it is a tax cut, it is an
effective marginal rate of tax of 55%. That is 10% higher than
people earning over £150,000 in taxable income. As if things were
not tough enough, deductions from universal credit awards have
left some claimants with an income that is substantially lower
than their essential needs. Surely the DWP should be required to
conduct affordability assessments before making deductions from
awards.
Scandalously, universal credit is being used by the Government as
a vehicle through which to recover debt. Most of this is
comprised of around £6 billion of historic tax credit debt. Many
people who owe this money are unaware of it. Certainly, the
original receipt of an overpayment may have been outside of their
control. The recovery of the money is leaving many households
with an income that is well below what is needed to get by on,
even before the current cost of living crisis. We called on the
Government to write off historic tax credit debt that is owed by
universal credit claimants. It should be treated as a sunk cost.
Who really believes that this money is ever going to be repaid?
Why create so much misery and anxiety among people who are
extremely vulnerable in many cases?
The five-week wait for the first universal credit payment is the
main cause of insecurity for claimants. Many people have nothing
on which to fall back during this period, when their needs are
most acute. The wait entrenches debt, increases extreme poverty
and harms vulnerable groups disproportionately. The Department
for Work and Pensions has introduced some measures to mitigate
the most harmful effects, but these fall well short of what is
needed. In the view of the committee, the DWP should introduce a
non-repayable, two-week initial grant for all claimants. This
would provide some security to claimants, mitigating the timing
problems in relation to housing costs, and would make repayments
of advances more manageable.
The way in which universal credit payments are calculated is
based on a monthly assessment period and is designed to mimic the
world of work. I ask the Committee: on which planet are these
people living? Most people about whom we are concerned here are
not used to be being paid on a monthly basis with index-linked
pension plans, like the civil servants who have produced this
scheme. However, it can result in substantial fluctuations in
income month to month, which makes it extremely difficult for
claimants to budget. This is impractical and fundamentally unfair
and it should be resolved. We recommend that the DWP fixes the
level of awards at the same level for three months. If claimants
experience significant falls in income or disadvantageous changes
in circumstances during this time, a mechanism should be
introduced to enable them to have an early reassessment.
Paying awards on a monthly basis does not reflect the lived
experiences of many claimants. It forces them to fit the rigid
requirements of the system and causes unnecessary budget and
cash-flow problems, both for those out of work and for those who
are used to receiving wages more frequently. All claimants should
be able to choose whether to have universal credit paid monthly
or twice monthly.
Moreover, the way universal credit is paid as a single household
payment should be revisited. Access to an individual income is
important for maintaining balanced and equal relationships and,
in more distressing cases, for reducing the risk of financial
coercion and even domestic abuse. The DWP should review the
option of a separate payment by default, drawing on the review
carried out, I am pleased to say, in Scotland.
The conditionality requirements on claimants who can look for or
prepare for work should be rebalanced. The extent of
conditionality has increased significantly over recent years, too
often to the detriment of claimants. Less emphasis should be
placed on obligations and sanctions. Instead, there should be
more support to help coach and train claimants to find jobs or to
progress in their current roles.
The UK has some of the most punitive sanctions in the world, but
there is very little evidence that they have a positive effect.
Removing people’s main source of support for extended periods
risks pushing them into extreme poverty, indebtedness and
reliance on food banks. Furthermore, there is a great deal of
evidence that sanctions, and the threat of sanctions, are harmful
to claimants’ mental health.
We recommend that the Government publish an evaluation of the
impact of conditionality and sanctions on mental health and
well-being. Furthermore, we recommend that the DWP evaluates how
the current length and level of sanctions facilitate positive
behaviour change and how they lead to sustainable work outcomes.
The DWP should also expedite its work on introducing a written
warning system before the application of a sanction. Sanctions
should always be a last resort.
Our report was an appeal for the Government to act now. That was
in July; it is now even more important. Universal credit needs an
immediate increase in funding to match the cost of living crisis,
reform in its design and implementation, and improved support for
claimants to find and prepare for work.
In his Mais lecture last month, the Chancellor quoted the opening
paragraph of Adam Smith’s Theory of Moral Sentiments, which I am
sure everyone in the Committee will have read. I will remind them
of what it says:
“How selfish soever man may be supposed, there are evidently some
principles in his nature, which interest him in the fortune of
others, and render their happiness necessary to him, though he
derives nothing from it except the pleasure of seeing it. Of this
kind is pity or compassion, the emotion which we feel for the
misery of others, when we either see it, or are made to conceive
it in a very lively manner.”
In the difficult months ahead, may these words be his guiding
light. I beg to move.
4.28pm
(Lab)
My Lords, I congratulate the committee on a first-class report
and commend its then chair for having championed some of its
recommendations, even today, notably concerning the withdrawal of
the £20 uplift. The departmental response was, though,
depressing, with what the then chair described in a letter to the
Secretary of State as “perfunctory replies” to some of its “most
urgent recommendations”. Although I noted numerous “do nots” and
the occasional “acknowledge” or “note” in the response, the word
“accept” was notable by its virtual absence. Thus, over one and a
half years on, the problems identified by the report remain and
some have got worse.
I have frequently quoted the report, in particular with reference
to the benefit cap, which has still not been reviewed; the
two-child limit, which is dragging more and more larger families
into poverty; the already referred to five-week wait, which is
not solved by repayable advances, especially given the level of
other debts recuperated from weekly benefit; and the
implications, especially of the single household payment, for
victims and survivors of domestic abuse, ignored in the Domestic
Abuse Act.
I will highlight just two areas now that stem from two of the
valuable sets of principles framing the report, which were
ignored in the DWP’s response: that universal credit should
“provide claimants with adequate income”
and
“provide security and stability—income must be predictable”.
These principles, and many of the report’s criticisms, were
echoed by participants in two more recent studies but were found
sadly lacking in their experiences of relying on UC. One
participant in the Covid realities research, to which I referred
yesterday in my OQ, said that
“the title ‘social security’ is laughable. We have never felt so
insecure”
and the report referred to
“chains of insecurity and uncertainty”.
Likewise, an ESRC-funded study of couples on UC, carried out by a
team that included the committee’s specialist advisers, found
that in particular the monthly assessment of earnings, the
whole-month approach to changes of circumstances—under which
circumstances on a single day decide entitlement for a whole
month—and monthly payment all contributed to insecurity,
instability and lack of predictability. These issues were all
raised by the report, as the noble Lord said, but given short
shrift in the department’s response.
With regard to adequacy, the report argues that UC should be
set
“at a level that provides claimants with dignity and
security”
and pointed out that the £20 uplift
“shows the original rate was not adequate”.
Well, the evidence of its inadequacy was mounting even before the
cost of living crisis, but, despite that, as we have heard,
claimants now face a cut of more than 4% in the real value of
these inadequate benefits over the coming year. Women as the
shock absorbers and managers of poverty will bear much of the
brunt of this cut. As the Minister knows, I feel strongly that
there has to be an additional uprating, preferably in April but
failing that in October. If a second uprating requires emergency
legislation, so be it; this is an emergency. Additional funds to
local authorities for discretionary support, announced today, are
no substitute for the security provided by weekly benefits that
meet people’s needs. In the longer term, we need a proper review
of the adequacy of benefits—as the report sort of calls for.
I hope that the noble Lord will excuse me if I spend the rest of
my time on an issue that is not explored in the report but is
highly relevant to its recommendations on support with claiming,
namely migration to UC. I recently attended a meeting of the UC
all-party parliamentary group, of which I am an officer, and we
heard evidence about the issue of migration that made me realise
that I for one had taken my eye off the ball of migration, which
now threatens to hit and bruise badly many claimants. I am
grateful to the Child Poverty Action Group, of which I am
honorary president, for its help on this.
First, the CPAG reports growing concerns among advisers about the
“lobster pot” aspect of natural migration, which means that there
is no going back once a UC claim is made, even if it proves to be
to the claimant’s detriment. It and other charities recently
called on the DWP to allow test claims so that the many
households—including, for instance, many of those with disabled
children—that turn out to be worse off on UC after making a
voluntary claim can return to the legacy benefits system.
Alternatively, they suggest that they could be covered by the
transitional protection that will be available under managed
migration, now called Move to UC. Could the Minister give us the
department’s response to this recommendation?
Turning to Move to UC, the process of managed migration was
supposed to be based on the outcome of a three-stage pilot. This
was, understandably, paused at the start of the pandemic after
just eight months, during which I understand that fewer than 13
households were confirmed as having made the move to UC. The
purpose of the pilot was, according to of the DWP, to develop a
“measured approach to roll out, ensuring the system works for
everyone.”
But, instead of continuing the pilot as originally promised, the
DWP now says that it has gleaned a “considerable amount of
learnings”, sufficient to proceed. Those learnings have not been
made public and it is hard to be confident that the department
has the necessary information from such an attenuated pilot.
Proceeding without the level of testing originally envisaged, or
proper reflection and scrutiny, puts claimants’ well-being at
risk. As the DWP has acknowledged, those who fail to respond to
an official notification about migration will have their benefits
stopped, threatening increased vulnerability and possible
destitution. To ensure that this will not happen, can the
Minister assure us that further piloting will take place so that
the DWP can design a process that we can be confident will work?
Will she publish the evaluation of the pilot, such as it was,
without further delay and give an assurance that the department
will fulfil the commitment to publish the evaluation strategy for
the pilot? Finally, can she also assure us that Parliament will
have the opportunity to scrutinise the managed migration/Move to
UC regulations before the cap allowing no more than 10,000
claimants to be migrated to UC is lifted?
I can understand why the department wants to get on with it after
the time lost during the pandemic, but surely it is more
important to get it right. I therefore support the CPAG’s call
for a pause in the Move to UC programme until it has been
properly piloted, the evaluation has been published and
Parliament has had a chance to scrutinise the plans. Can the
Minister also say when the department envisages being able to
publish take-up figures for UC, because, as the report points
out, the promise of increased overall generosity rests on higher
take-up? This higher take-up has been promised to flow from the
supposed simplification of combining most means-tested benefits
into a single award. The response to the report’s recommendation
on publication of take-up figures simply said that
“The Department does not publish estimates of UC take-up
rates”
and implied that there were no plans to do so. Well, I hope I
read that wrong and that there will be plans to do so. We need to
know when that will be possible. I understand why it may not be
possible now, but it has to be possible at some point.
Finally, what is the Government’s response to the principle
enunciated by the committee that UC
“must … reflect the lived experience of claimants—they must be at
the heart of its design and involved in devising solutions to
problems”?
This is a principle that was raised in yesterday’s OQ and that
the Scottish Government have taken to heart, but I have yet to
see evidence that the UK Government have.
4.37pm
(LD)
My Lords, I am very grateful for the opportunity to discuss this
report from the Economic Affairs Committee. The contributions we
have heard from the former chair of the committee, the noble
Lord, Lord Forsyth, and the noble Baroness, Lady Lister, have
explained the detail of what has actually gone wrong with the
universal credit system.
First, I am very concerned that the report was issued in July
2020 and that we are discussing it in this Chamber only in March
2022. Given that the Government’s formal response was sent 18
months ago, it is very hard to see what has held up such a
debate—and, inevitably, some facts and figures have changed. When
the Minister replies, perhaps she might just explain why we have
had to wait this extraordinary length of time to have a debate on
this absolutely vital matter for so many.
However, we should be very grateful to the noble Lord, Lord
Forsyth, for enabling a Private Notice Question to be placed on
the Order Paper of your Lordships’ House on the very day of the
Spring Statement. Doing so has drawn out a number of facts. One
is that, as I interpreted the Minister’s response in the Chamber
a few minutes ago, the Government have done no affordability
assessment, and nor has anything been done as an impact
assessment more generally. That is very serious, as in most cases
impact assessments are part and parcel of what the House of Lords
is asked to consider.
Many responders to the committee’s inquiry said that universal
credit was not necessarily broken. The noble Lord, Lord
Forsyth—indeed, the report—says that it commands broad support in
principle as a structure, but it does need reform. It is hardly
surprising to me that some things went wrong, simply because it
was such a major change to the benefits system. Inevitably, some
things do not work as well as you want them to. However, as the
noble Lord, Lord Forsyth, identified in his introduction, the
rise in the use of food banks is a direct consequence of what has
happened with universal credit. The noble Lord was absolutely
right in his initial remarks to comment on why the Government
said that they were surprised by the recommendations in the
report—because so many of those recommendations are absolutely
justifiable. So I will add my own surprise that the Government
were surprised in their response to the committee’s
recommendations.
As the committee said, universal credit should not undermine
“the security and wellbeing of the poorest in our society.”
I understand, as I guess we all do, that the report was issued at
a very worrying time for a lot of people as the pandemic
threatened their livelihoods. Like the noble Lord, Lord Forsyth,
I recognise that the Government produced temporary and permanent
welfare measures to the value of around £9 billion during the
pandemic. In the Budget last October, low earners were able to
keep 8p more for every £1 earned, and the work allowance
increased by £500—and the pressure on the taper issue did have an
impact.
The report congratulates DWP on its response to the pandemic and
the huge increase in workload that the department had to manage,
helped by digital working and automated processes. However, as
the committee said, the underlying problems with universal credit
remain. Some new claimants are not used to monthly pay. A
fortnightly payment option would help them. The five-week wait
for new claimants is too long and creates insecurity. The
committee’s two-week grant recommendation seemed to me to be a
very wise and helpful proposal, but the Government have turned it
down. I still do not fully understand the audit reasons they have
for so doing, because there are ways around that, which the
committee proposed.
The Government say that an applicant may be able to get a
universal credit advance if they are unable to manage during this
five week-period. I hope that the Minister might be able to tell
us in her reply what evidence from research undertaken by the DWP
the Government have that that advance system is working fairly
and reasonably for those who receive universal credit. As the
committee rightly identified, the principle at stake is that the
system should not cause shortfalls in income for individuals. As
the noble Lord, Lord Forsyth, said, sanctions should be applied
only as a last resort. The DWP should do affordability
assessments before making deductions from awards. As a principle,
someone’s income should never be lower than their essential
needs.
We have heard about the cut of £20 per week; there has been a
huge amount of debate around it. In my view, it was a gross
error. I was hoping that something further might be done about it
today, but I fear that that has not happened. More than 5 million
low-income families lost just over £1,000 from their annual
income, creating severe financial hardship for many people. What
this revealed was that the real problem with universal credit is
low incomes; that issue is fundamental to understanding the
crisis around universal credit. With the current inflation rate
heading towards 10%, an uplift under CPI of 3.1%—the Minister
will recall our discussion of that uplift in Grand Committee a
couple of weeks ago—simply will not do.
Crisis seems an appropriate word to use in this situation. Rent
costs, housing costs, energy costs, food prices and transport
costs are all rising. Food bank use has been rising and is
clearly going to rise further and further. Household finances are
much more difficult for the low paid because they have so little
money. We need a real living wage, not the national living wage.
The Government talk of the national living wage, but they have to
talk about the need for a real living wage. It is true that many
universal credit recipients are in work, but many people see
adjustments being made to their hours of contract. It does not
help when people get their hours cut, never mind a low hourly
rate; in the end, this is about the income they receive.
I repeat that the five-week wait is the primary cause of
insecurity in universal credit as it
“entrenches debt, increases … poverty and harms vulnerable groups
disproportionately.”
Those were the words used by the committee, so there is an
opportunity for the Government here. We will not get more than a
few months into 2022 without needing to do something further.
In that respect, I ask the Minister about the proposal to close
so many DWP offices. I seek an assurance from her that this will
not in any way impact the support of clients who need help. A few
days ago, there was an announcement that 42 DWP offices were to
be closed across the UK. Apparently, 13 will be full closures
while 29 are to be closed and relocated. There are offices being
closed in Stoke, Southend, Peterborough, Chesterfield, Aberdeen,
Kirkcaldy, Barrow, Bishop Auckland, Doncaster and Burnley—taking
jobs out of these communities.
The Minister, , said that the closures
“will not impact on jobcentres and the customer-facing
interactions”.—[Official Report, Commons, 17/3/22; col.
1032.]
Can the Minister explain exactly what a customer-facing
interaction is? What are the implications for the agreement and
contract that the Government have with Citizens Advice, which
comes to an end a year from now, in March 2023? Under the help to
claim system that has been running since 2019, Citizens Advice in
partnership with Citizens Advice Scotland has given people
independent advice. I understand there has been an investment in
that of £21.3 million. If it would be helpful for the Minister to
write later, rather than respond in detail now, I want to be
reassured about the impact on people for whom digital or
telephone contact may be very difficult. If they were able to go
to a local office, will they be able to continue to go to that
office to secure help?
That is all I want to say at this stage, but I think we will come
back to this matter several times this year. I hope the
Government and the Chancellor understand that this issue is
profoundly serious. I said that two weeks ago, when we talked
about the use of CPI at 3.1% for the benefit uplift, when
inflation is heading towards 10% this year. For those on low
incomes, that position is simply unsustainable.
4.48pm
My Lords, I first add my thanks to the Economics Affairs
Committee for producing this excellent report. As is often the
case with a Select Committee report, reading it is not only
enlightening but deeply informative. I have learned a great deal
from it, for which I am grateful.
I too pay tribute to the noble Lord, Lord Forsyth, for his
tenacity, such as when securing the intervention in the Chamber
earlier. It was so interesting that the concerns were being
raised from every Bench. I hope the Government Whips and others
are listening to the profound unease coming from every quarter of
the House; it is not going to go away. I have experience of
working across two relatively well-off counties. I used to work
in the Black Country, but nowadays I have responsibility for
Hertfordshire and Bedfordshire, which are fairly wealthy, by and
large. The concerns coming out of parts of Watford, Stevenage and
Bedford are uniform: we are facing a serious challenge.
I have to confess to noble Lords that some of the material in
this report was new to me. I am ashamed to say that I had not
realised, until reading it, that universal credit is being used
by the Government as a vehicle to recover debt. I was glad to be
able to raise that earlier although I do not think the Minister
understood the point I was making, because we received no answer.
This is deeply disconcerting, not only because it will not
deliver what the Government want. Simply taking pennies off the
poor at a time when Her Majesty’s Government have written off £16
billion in Covid business loans due to errors and fraud—which led
to resignations from the Front Bench in our own House—is quite
extraordinary and unrealistic.
As a general principle, I am absolutely committed to recovering
debts. If the Government deem it necessary to pursue these
historic tax credit debts from UC claimants, I hope they will
broach other debts with the same level of vigour. I think we have
no choice but to support the recommendation that we look for a
Jubilee-style “Reset the Debt” policy, which would be just a
small first step to addressing the serious and growing problem
that we face.
What is true of the notion of pursuing claimants is equally true
of the sanctions regime, which, as the report mentions, is one of
the most punitive in the world. The findings of the report in
this regard largely mirror those of the 2015 study by Christians
Against Poverty, which stated that there was little evidence to
suggest that the UK benefits sanctions regime made a positive
contribution to helping people find work but that it did help in
discouraging those who were unemployed from applying to the
benefits system. I fear that the new shortened sanctions regime
introduced earlier this year is merely an extension of this
logic: an aid to get people off, and further discourage them from
accessing, UC. However, the whole point about UC is that it is
for people who have no other place to turn to. That is why it is
vital that Her Majesty’s Government can categorically prove that
sanctions help facilitate claimants in finding work and that the
Government are open and honest about their purpose and
effects.
I move now to some general points. The most fundamental question
is whether universal credit is enough to live on. Leave alone the
details of the system; there is simply a fundamental, pressing
question when we face the levels of inflation that the noble
Lord, , has just mentioned about
whether it will enable people to weather the current economic
storm. Can the Minister assure us that Her Majesty’s Government
are looking at what would be appropriate increases in universal
credit, as this huge storm comes together? It is simply hitting
people now. I had a meeting this morning with someone from my
diocese who yesterday visited the food bank in Broxbourne. Parts
of Broxbourne are fairly well heeled, but they had seen a
doubling in the number of clients in the past year; it has really
hit them badly.
This report goes beyond a simple discussion of the amounts of
universal credit that individuals receive and details the design
flaws and tensions within the scheme. We all know that it is
hoped that UC should be a transitional pathway to lead people
into stable, long-term employment and financial independence. We
all think that is the best way forward. The problem is that we
are trying to do it at a time when much of this poverty is to do
with in-work poverty, as repeatedly and consistently raised by
different people.
Regardless of the lived circumstances, I echo the report’s
concerns on the substantial fluctuations in month-to-month income
due to the monthly assessment period and the huge difficulties
that that is causing people. When visiting and meeting people in
different parts of my diocese, I have been struck by how much
this has been raised, as if it is almost impossible to make any
plans. That then rolls out in all sorts of areas of public
policy. For example, not being able to plan means that we cannot
do the detailed work needed to ensure that people can live on a
balanced diet, so that we can address the huge problems caused by
eating inappropriate foods and obesity, which have knock-on
effects such as diabetes and other problems.
I totally support the report’s recommendation to fix the level of
awards for three months, to provide longer-term budgetary
stability and encourage people to work without any pecuniary
downside. Extending the assessment period might allow individuals
to experience what one hopes is the dignity of labour as a
platform on which to build their employment prospects. I hope
that the Government will take on board some of the report’s
recommendations so that we can attend to the disparities and
produce a fairer and more just benefits system, which accords
with Her Majesty’s Government’s own vision of a system that will
help people to move into work in the long term and find
themselves in a position where they can be full and contributing
members of society.
4.56pm
(CB)
I am grateful for this opportunity to discuss this important
topic. I will focus on one particular aspect of universal credit:
housing benefit. I should first say that I work part-time for
Business in the Community on levelling up left-behind towns, in
places such as Bradford, Rochdale and Sheffield. Each of these
towns has their own unique strengths and challenges. In passing I
should say that I am delighted that Bradford has just been
shortlisted for City of Culture, which would give the city a
tremendous boost.
The place on which I want to concentrate is Blackpool, which,
according to Zoopla, provides a gross annual yield to buy-to-let
investors of 8.6%, the second best in the country. So far so
good, but now let us look at the living conditions in those
buy-to-let houses. Blackpool has about 4,000 private rented units
in the centre of town, the legacy of bed and breakfasts that did
not keep up with the more modern hotel accommodation that is now
available. Many of these B&Bs have been converted to houses
in multiple occupation and those HMOs are located in eight of the
10 most deprived wards in England. Life expectancy in this area
is the worst in England.
Some 80% of these tenants rely on housing benefit or universal
credit. While tenants in social housing can rely on the decent
homes standard, there is currently no quality assurance for a
private landlord receiving housing benefit. Therefore, if you are
motivated only by money, or indeed absent and unaware of local
conditions, the incentive is to squeeze in as many people as
possible, leading to those profitable yields that I mentioned.
Not only are these people crammed in, but the conditions are
appalling. It is estimated that one in three of these buildings
has a category 1 hazard. This type of hazard is defined as
“the most serious harm outcome … for example, death, permanent
paralysis, permanent loss of consciousness, loss of a limb or
serious fractures”.
I am delighted to say that two Secretaries of State had the
chance to see these dreadful living conditions for themselves
last week, during the Conservative Party’s spring conference. The
Government have now announced a package of interventions. These
include beefing up the council’s inspection and enforcement team
and investing through Homes England to create more liveable
neighbourhoods.
I am truly delighted that the national Government have focused on
Blackpool as an exemplar of how to level up. But the issue
remains that tens of millions in housing benefit goes to these
HMO landlords and, without any requirement for decent standards,
there are plenty in Blackpool who will do everything in their
power to avoid the expense and hassle of upgrading their
properties. It is imperative that, as soon as possible, the
Government bring in legislation which means that substandard
landlords are not eligible for housing benefit payments,
mirroring the decent homes standards that were introduced in the
social housing sector in 2000.
The levelling up paper aims to reduce the number of “non-decent
homes” by 50%,
“with the biggest improvements in the lowest performing
areas.”
I would like to suggest an addendum: “and no non-decent homes
will be funded by public funds provided through housing benefit
or universal credit.”
5.00pm
of Headley (Con)
My Lords, I start by congratulating my noble friend Lord Forsyth
and the committee on their excellent report. I had zero hand in
it and agree with it entirely. It is always difficult to follow
my noble friend Lord Forsyth on occasions such as this, because I
feel that I am repeating everything he has said—he is so eloquent
at summing up reports.
I am not going to go through the entire list, but it strikes me
as an incredibly comprehensive critique of how universal credit
should be improved. Reading the Government’s response, I too was
very disappointed by its tone and substance—and, like the noble
Lord, , I was surprised by the
Government’s surprise.
Something more fundamental than this strikes me. As we just saw
in the Chamber, this entire area of policy, especially the issue
of the £20, is uniting Members on all sides of the House. This
area of policy needs a fundamental reassessment, for reasons that
I will come on to, but especially for the reasons the report sets
out: the five-week wait for the first payment; fixing the level
of awards for three months; rebalancing the sanctions regime; the
abuse of universal credit to recover debt, as the right reverend
Prelate mentioned; and, perhaps most important of all, making the
£20 a week uplift permanent. All these recommendations seem to
make perfectly eminent sense—and that was the case when the
report was published.
Let us remember, as the noble Lord, , said, that the world is now
fundamentally different. Back then we were in the first phase of
the crisis called Covid and inflation was still seen as under
lock and key, or thereabouts. Oil was at $40 a barrel. Today, we
have heard that prices are rising at the fastest rate for 30
years and oil is at $120 a barrel. It really is the case that the
past is a foreign country; we did things differently there.
As we look ahead, we see energy bills rising by 50%-plus in April
alone. As we heard in today’s Statement, households are facing
the biggest fall in disposable income per person since the 1950s.
Meanwhile, the backdrop to this is that the tax burden is on
track to be at its highest since the 1950s, while debt is at its
highest level since the 1960s. It is worth noting, as this is the
backdrop to all the policies that we are addressing, what that
means. As we heard in today’s Statement, interest payments are
set to hit £83 billion in the next fiscal year. That is a record
level—more than is spent on schools, the Home Office and the MoJ
combined.
So wherever I look on the economic dashboard, I see the lights
flashing red. As the noble Baroness, Lady Lister, and the noble
Lord, , said, this is an emergency.
At times in politics we are apt to use the word “crisis” in a
slightly flippant way. But this is a crisis, and it really is one
for those who are on the lowest incomes. I think all of us here
share a sense of responsibility and a sense of wishing to take
real and urgent action to address that.
As the OBR warns today, and as my noble friend pointed out,
benefits are going up by 3.1% in April, but inflation is set to
average at 8% in 2022-23 as a whole. Before today’s Statement,
low-income households face a real-terms cut in income just six
months after the £20 per week cut to universal credit. Let us
remind ourselves what all this amounts to. The Child Poverty
Action Group’s analysis shows that families’ universal credit
will fall in value by £570 per year on average. The Joseph
Rowntree Foundation has calculated that 400,000 people could be
pulled into poverty by this real-terms cut to benefits. Families
with children in poverty will face £35 per month in extra energy
costs even after the Government’s council tax rebate scheme is
factored in.
That is before we get to other issues that we should be concerned
about. One that I am very concerned about is the rising cost of
food. Wheat prices are already up 40% this year alone. That is
before we get to the threat of another hike in energy bills in
October. Citizens Advice forecasts that 14 million households
will struggle with their bills. That is one in four adults. Let
us put all that together: we cannot continue with business as
usual.
I absolutely applaud some of the measures taken today but, as the
document from the OBR makes clear, total tax and benefit changes
in today’s Statement offset only about a third of the overall
decline in real per person disposable incomes. That assumes that
this crisis does not deepen further. Although I welcome some of
the measures in today’s Statement, I cannot help but think that
we are giving with one hand and taking back with the other,
creating a piecemeal system that is extremely confusing.
I ask a simple question, building on what others have said: why
are the Government not taking the simpler and more
straightforward approach of using the welfare system and
reforming it to help those on low incomes and committing to the
policies set out in this report? I know that the Minister will
argue that the increase in work allowance and the cut in taper
are an effective tax cut. We heard that from the Chancellor on
Sunday. But what does she say to the Resolution Foundation, whose
analysis shows that around three-quarters of families—that is 3.6
million—on universal credit in 2022-23 will be worse off under
the new regime than they would have been absent the last Budget
changes but if the £20 per week uplift had been retained? That is
question one.
Secondly, picking up on what my noble friend said, what does the
Minister say to the finding that the overall marginal effective
tax rate for universal credit families earning over the work
allowance will be 70% in 2022-23? This is the same rate as
experienced by families receiving tax credits from 2003-04 to
2010-11. How does this 70% marginal tax rate square with the
Government’s assertion that they will ensure that “work always
pays”?
Finally, as I said in the Chamber earlier, I fear that we have
lost sight of one of the best ways to help those on low incomes,
which is to provide them with jobs and job security. I have to
repeat what I said in the Chamber: the rise in national insurance
is absolutely a hammer-blow to many of the people we are talking
about whom we wish to help and the businesses that employ them.
Of course I welcome today’s announcement regarding thresholds and
likewise I welcome the employment allowance, but I note that
today the Institute of Directors has commented that this measure
is marginal for employers.
We have to consider what the national insurance rise will do, not
just for employees but for employers. Let us consider the sectors
that will be worst hit, which are the ones that have been worst
hit by Covid: distribution, transport, hotels and restaurants.
How will this measure help them create jobs? How does it help
them encourage investment? How does it make them more
competitive? How does it help them to keep their costs low? I
hate and dislike everything about this tax rise. It is taking us
in the wrong direction. But the key point that is relevant to
this debate is that it exhibits a lack of strategy and a lack of
principle that bedevils this Government. It does nothing to help
those on low incomes who need that job security.
The question for my noble friend the Minister, who I fear might
get a bit of a tough time this afternoon, but I know she can take
it, is whether the Government are really doing enough to help
those on low incomes. Are they really rising to the moment? Do
they still see this as business as usual or are they treating it
as the emergency that it really is?
5.09pm
(Lab)
My Lords, I am delighted to follow the noble Lord, , who, as he has just
demonstrated, is an excellent successor to the noble Lord, Lord
Forsyth, as chairman of the Economic Affairs Committee.
We are finally able to debate our report on universal credit, in
the bijou location of the Moses Room, 20 months after its
publication. Other noble Lords, not least the noble Lord, , have remarked on this
unacceptable delay—if not necessarily the relegation of the
debate to the Moses Room. For me, there is perhaps one silver
lining to this cloud, which is that I find myself the only
speaker this afternoon, apart from the noble Lord, Lord Forsyth,
who was an EAC member when the inquiry was held, so I feel that I
can be permitted to say a few words about the chairman as well as
echoing his tribute to the work of the staff, special advisers
and witnesses who guided us through this exceptionally complex
and difficult subject.
The noble Lord, Lord Forsyth, led the committee from the front
and none of us could match the burning sense of injustice about
the Government’s policies that he articulated in the meetings and
subsequently, as his introduction today has demonstrated. It is a
little-known secret that to commemorate Sir Bernard Ingham’s
description of the late as a “semi-detached” member of
the Thatcher Cabinet, the Conservative Whips in your Lordships’
House vote annually on the Bernard Ingham award for
semi-detachment. I am told that the noble Lord, Lord Forsyth, has
won this so many times in recent years that he may well own the
trophy in perpetuity, although I think that there are promising
signs that the noble Lord, , may give him a run for his
money.
It would not be right to thank the many witnesses who gave oral
or written evidence without noting the particular contribution of
Sir John Hills, professor of social policy at the LSE, who very
sadly died not long after the report’s publication.
I will concentrate my remarks on a couple of big-picture
questions; other speakers have already raised highly effectively
many of the specific recommendations in the report and the
universally disappointing response from the Government. First, is
it right to see universal credit as the basis of in and out of
work benefits for the foreseeable future? The report’s summary
states that
“we received overwhelming evidence that Universal Credit should
not be replaced with a new system, not least because of the
severe disruption that this would cause for millions of
people.”
Although I continue to feel a nagging worry that this could be an
example of sunk cost fallacy after 10 years of tortuous migration
from legacy benefits—still not completed—I at least tentatively
support this conclusion. My suspicion is that the digital
platform on which universal credit is based should and will
survive but that, by the time the reforms advocated in the
committee’s report and others from different sources have been
implemented by possibly a more enlightened Government than this
one, the system will be largely unrecognisable from that which
currently prevails.
One of the recommendations of the report was that childcare
should be taken out of universal credit. Picking up on the
remarks of the noble Baroness, Lady Valentine, we had a vigorous
debate about whether housing benefit really fitted within
universal credit. In the end, we concluded that it should not be
moved, but I think that a universal credit system would still
work effectively with four or five of the legacy benefits
incorporated, not the current six.
I turn now to my second main question. Can any system give the
support that the noble Lord, Lord Forsyth, so eloquently argued
that we, as a civilised society, should give to those in
financial distress? I vehemently support the noble Lord’s
condemnation of the Government’s decision not indefinitely to
continue the £20 per week uplift that was introduced for the
period of lockdown when many households’ outgoings may have
decreased.
However, as every psychotherapist might say, “Maybe we should
move on”. I will move on and ask the fundamental question: what
amount is necessary and fair for any household to live on?
Professor , who was the chief
economist at the Department for Work and Pensions from 2002 to
2008, wrote last year:
“The overwhelming case against cutting Universal Credit: not the
pandemic, but the extraordinary cuts to unemployment-related
benefits over the last four decades.”
In the period from 1979 to 2019, average out-of-work benefits
fell from 25% of average earnings—hardly a licence for luxurious
living—to less than 15%. Even if the temporary uplift in
universal credit in 2020-21 and the suppression of some earnings
may have reversed that trend in those years, the relative
normalisation of the economy now will inevitably see new lows
tested.
The furlough measures introduced by the Government in response to
the pandemic and related working restrictions were rightly and
generally praised. These provided for furloughed employeesto
receive 80% of their previous earnings, capped at £30,000 per
annum. Can the Minister explain to your Lordships why she thinks
that, if 80% was the right level of income support under the
furlough scheme, 15% of average earnings is a justifiable level
of support for unemployed people in normal economic conditions? I
am not saying that 80% is a sustainable level in the long term,
but surely 15% is far too low.
It may or may not be a coincidence that today’s debate coincides
with the Chancellor’s Spring Statement, with what I can only
regard as a stunt of an income tax cut in two years’ time—and I
admit that perhaps the inventor of stunts of that sort was my
right honourable friend . The general tone of today’s
Spring Statement seemed to be, “I’m all right, Jack”. Unless and
until the Government reform the system of universal credit in the
way in which the committee has advocated, we will face a period,
to adapt JK Galbraith, of
“private affluence and public poverty”.
5.18pm
(Non-Afl)
My Lords, one of the great advantages of being a non-affiliated
Peer is that I am always placed last on the list. I want to take
a different stance from that taken by most noble Lords. I agree
with all noble Lords that this is an excellent report and I have
learned a lot from reading it. I have studied poverty in various
ways in the UK, India and other places for much of my career in
economics. There is one unfailing thing that one can say about
these things: to those who have, more shall be given, and from
those who do not have, what little they have shall be taken
away.
Debt recovery procedures are much tougher on the poor than they
are on the rich. In 2008, when the stock market collapsed, all
previous discipline of balanced budgets was abandoned and money
was printed like there was no tomorrow to give the banks, which
had lost money, and everybody else lots of money so that they
could re-establish the value of their property. The consequence
was that, when universal credit had to be implemented, there was
no money, surprisingly. It was therefore created in an atmosphere
where it was said, “We don’t have any more money for all this”.
So the poor, as always, were the last in the queue.
I want to take a slightly different stance from that taken by
most speakers. Why is the political economy of welfare, if I may
so call it, so mean to the poor? This is not just about universal
credit, although I would say that it is especially horrible to
the poor. For a long time, we have had a tradition that the poor
should be treated with suspicion. The poor will be suspected of
being lazy and shiftless and if they are ever unable to prove
that they are seeking work, that will immediately lead to some
kind of punishment by taking their benefit away.
It is interesting that the noble Lord, Lord Forsyth, who has
shared with us his committee’s great report, quoted the Theory of
Moral Sentimentsand cited the Chancellor. During the pandemic, I
have written a book about why political economy is so
misanthropic. was all right; he was generous
in his attitude towards the poor and how the whole purpose of an
economy was to create wealth not only for the few but for the
many, if I may coin a phrase. It was with the Reverend Malthus
and Ricardo that economics became very mean. When Malthus
invented his completely fake theory of population growth, it was
to make sure that the poor were not given more money because, if
they were given it, they would breed more people and therefore it
is useless to give people more money. David Ricardo put that in
his theory of how there should be an iron law of wages. We then
had the poor law reform in the 1830s and so it continued.
The logic was simple. There are so-called paupers who cannot work
due to physical reasons, but they are all right. Then there are
the poor, who are to be suspected because they are capable of
working but likely to be lazy and shiftless, so the maximum
meanness ought to be exercised in compensating the poor—you have
to make them work. Finally, under the great and rational
Benthamite rule, workhouses were created so that the unemployed
would be in those, and nowhere else, to be strictly supervised by
the poor law commissioners. Bentham wanted the children of the
poor to be employed from the age of four as apprentices, so that
they would learn that work was their fortune.
We have continued like this. I remember when we had the idea,
before universal credit came, that if a single person was poor
they would get so much but if it was a couple, they would not get
twice that: they get less than twice because somehow the poor do
not need as much money as the rich. That of course led to people
living apart. Then people had to spied on by their local council
in case they were cohabiting, which was not so much a sin as an
economic crime, and so on.
We have this attitude, and it has not gone away. During the 2010
to 2015 Government, corporation tax was cut because cutting
corporation tax or income tax is always good and beneficial to
society. However, as far as the poor are concerned, cutting it is
good for society because that is where we have to save money.
This sort of logic has continued. I do not know how one can move
the political and economic system from appreciating that
announcing a 1p cut in tax in 2024 will get you applauded in
Parliament. However, had he said that he would restore the £20
cut in universal credit, he would have done much more than was
expected of him.
Anyway, I want not so much to ask questions but to make a couple
of points. How does whatever minimum entitlement we have decreed
for universal credit compare with the poverty levels that the
European Union has laid down? The World Bank has a measurement of
poverty for the third world; it is around $3.50 per day per
person. The EU standard is 60% of median income; I may be wrong
by a few percentage points but 60% of median income is the EU
poverty level. Is the universal credit entitlement below or above
the poverty line?
I should also say that, as soon as I started studying these
things, I found these arrangements so complex that you need a PhD
to know what is going on. I remember that there used to be a very
fat book published by the Child Poverty Action Group in the 1960s
to help people make their way through the variety of benefits and
things, with all the conditions and exceptions and this and that.
Why do we make the poor work so hard for the pittance we give
them? Why can we not simplify the matter so that people get their
money in a certain, predictable way? After all, as someone else
said, we are not giving them much money compared with how much we
have lost in fraud. It is nothing; it is a pittance. Although we
were right to give money for furlough, we did not give a similar
amount of money to the poor.
So we need a political rethink of why we do what we do. Why is
the logic always misanthropic in our political economy, or
whatever you want to call it? I hope that reports like this one
will make us think that we have to change our attitude completely
and not expect the poor to be more patient, more frugal and more
rule-obeying. The fault, dear Brutus, is in ourselves and not in
the poor.
5.28pm
(CB)
My Lords, I am grateful for being allowed to speak in the gap. I
apologise for not giving notice; I did not think I was going to
be here. I had not even noticed that the debate was going on.
The report led by the noble Lord, Lord Forsyth, seems excellent.
I am not surprised by the disappointment in the reaction. I was a
member of an ad hoc committee on financial exclusion that
reported in 2017. We did some of it on universal credit, although
we did not go into the same depth. I agree with everything that
has been said.
In the time I have, I want briefly to comment on people and
mental welfare. Mental welfare has become an increasingly
important topic, led by Prince William and others. It really is
important and, as things do not go so well, it becomes more and
more important.
One of the problems is that universal credit is too complicated.
We have just heard that it is so complicated that we do not
understand it. People feel like criminals when they go through
this process; I will come on that in a minute. The five-week wait
puts people in debt. The Government will argue that that is not
the whole reason, but we know that there is an increase in the
number of people who are going into debt, for one reason or
another, as a result of universal credit.
We went to Toynbee Hall, among other places. As noble Lords may
be aware, this is an amazing charity that supports disadvantaged
people. Many things struck me there. One was a lady who I and
others were talking to. She said, “I just pray that you can give
me some help. This is my correspondence about universal
credit”—and it was a full lever arch file. She could not
understand it and we could not understand it. All it said was,
“Thank you for the answer to your last question. Will you please
answer the following? Thank you for the answer to that; will you
please do this?” She was at her wits’ end and felt she was being
criminalised.
The next problem is the wait for money and people going into
debt. This has a far greater effect than the Government ever seem
to accept. The low-income group is an incredibly proud group of
people. They care for their pennies, worry about the food they
buy for their families and manage their expenses in an amazing
way. Then a change in system dictated by government puts them
into debt. They say, “We’ve never been criminals; we’ve always
obeyed everything. But, to me, being in debt is a crime”. It does
not just hit them; they are destroyed by this.
Therefore, when the Government say that they do help but there
will be some people in debt, take a moment to understand the
hundreds of thousands of people who, first, are made to feel like
criminals because they have to fill in so many forms and answer
so many questions and, secondly, feel like criminals because they
are not able to hold their heads up and say, “I have never owed
anybody anything”. Something like 40% of the population are not
able to repair their washing machine out of cash—and we then do
this to them. I ask the Minister whether the Government would
consider this further. It brings you to tears to listen to them,
when you can do nothing whatever to help. We have devised a
system that has taken them away from their careful life planning
—not borrowing, because they hate it, and not stealing, because
they are not criminals. We then put them into this and, in three
weeks, they are in debt—and, as far as they are concerned, they
are criminals.
5.32pm
(CB)
We are debating an excellent report, like all the reports
produced by the Economic Affairs Committee under the dynamic and
effective chairmanship of the noble Lord, . I find that very
annoying, because I was a member of his committee and, after
leaving, have detected no falling off at all in the quality of
the reports it has produced. I have to tell the noble Lord, Lord
Forsyth, that, knowing how dynamic and effective the noble Lord,
, is, I do not expect to see
much falling off in the quality of the reports now, either.
The sad thing about this report is that it has not been
overtaken, although it came out in July 2020. There is an extra
dimension of sadness for me in that something is missing that
could not be there, because it was written in July 2020, before
the energy price spikes started. As the noble Lord, , said, the energy price cap
will go up by 54% next week. That is based on the increase in
wholesale energy prices last autumn. We are now in the next
reference period, which will determine the increase in October.
At present, we are in for a rather larger increase. It looks as
if the average household price, which is teetering at nearly
£2,000 now, will go up to over £3,000, with another increase of
55% or 60% in the autumn.
We all know what a big component of household expenditure heating
and lighting is for the less well off. Is it beyond the wit of
man, or the wit of the department, to consider indexing universal
credit, or an element of it, to the price of heating and
lighting? Next winter could be an extraordinarily bad one for
anybody on universal credit, for all the reasons that were set
out in the report and discussed in the Chamber today, but with
the additional reason, perhaps bigger than most of them, that the
price of heating and lighting will be very much higher.
5.35pm
(LD)
My Lords, I too thank the noble Lord, Lord Forsyth, and the
Economic Affairs Committee. As the noble Lord, Lord Kerr, said,
it is a very august and illustrious committee, as I am sure it
was when he was a member of it. It is of great encouragement to
me, and I am sure to the noble Baroness, Lady Lister, and others,
that we have this support for major changes to universal credit.
I have to say that in the past we have not had a great deal of
support for the kinds of changes proposed in the report, many of
which we have raised. But I am encouraged today, and I hope that
we have two people here who will see some of these fundamental
changes through and campaign for them. I know the Minister; she
is also a campaigner, and I know she will be very good at
understanding the issues raised in the report and their effect on
the people they apply to.
An effective safety net must provide realistic and accessible
support for anyone who falls on hard times, whether through loss
of a job, bereavement, relationship breakdown or other personal
catastrophes. Any of these could happen to all of us in periods
of our lives; they often do. The current system manifestly does
not do this, as the report evidences.
The report identifies and analyses a range of familiar problems,
as well as the lack of confidence, failure to understand how the
scheme works and general feeling of powerlessness experienced by
people who try to use the scheme, and gives practical
recommendations. As many noble Lords have said, there is a need
for a fundamental revisiting of the scheme’s finances. I know
from reading the book Clashing Agendas by the noble Lord, , about the pressures in place
when the Government tried to establish the scheme and set it on
its way. As the report says, now is a timely moment to look at
the fundamental financing of the scheme.
All noble Lords mentioned the crisis we face in energy and
prices. The sticking plaster today in the form of an increase in
the household support fund seems to show contempt for the
suffering of so many people. As I said, I am grateful for the
report because it does so much to analyse with the committee’s
rigour and bring forward firm proposals that are deliverable, so
I am hopeful.
As the noble Lord, Lord Forsyth, said, confidence in the scheme
is extremely low. There is an overall perception of a chaotic
system that is incomprehensible, inaccessible, intractable in its
decisions and harshly punitive of any perceived shortcomings of
claimants. I have written down some of the report’s themes that I
hope the Minister will respond to, particularly the
recommendations, which seem very sensible, as many noble Lords
have said.
As I said, more funding is definitely needed to provide adequacy.
The current level of support is quite rightly said by many to not
be enough to live on. It needs to be a secure and fair scheme
that provides proper support for claimants when they need it. So
the recommendation that the Government should have committed
“to making the increase in the standard allowance permanent”
is very welcome. The recommendation also says:
“To avoid undue hardship and poverty it should also examine the
relative levels of benefits for couples and those with children
and investigate whether there are other claimant groups who do
not receive adequate income.”
Many noble Lords have referred to the delays in the system. The
five-week wait is ruinous for many people. I was encouraged to
see that, during the lockdown, many people who would normally be
in work were made aware of just how awful it is to have to wait
five weeks when you have no money to put food on the table.
The inflexibility of the monthly assessment period has been
fairly well documented—in fact, I think there has been a court
case on it. The idea that people should be paid monthly because
it corresponds to work takes no account of the way people work
nowadays. It takes no account of the fact that people work on
zero-hours contracts and that many need to have two jobs in order
to live. Not only do they have to wait but, worse still, they
have deductions made because they were overpaid because of the
schedule, not because they have too much money. As I have said,
for many people, it is incomprehensible that they should be put
through this system.
The recommendations on conditionality, sanctions and the punitive
approach are welcome. The suggestion of a written warning system
is very helpful, because many claimants do not even know that
they are going to be sanctioned or realise it only when they have
just had their money cut. Similarly, I support the recommendation
that deductions from universal credit be first subjected to an
affordability assessment and made only in accordance with what
the claimant can afford. I would like to see that brought in.
Some elements of the system actually increase poverty, including
the two-child limit—if the right reverend Prelate the were here today, he would
have a great deal to say about that—so I welcome the
recommendation that the two-child limit be reinvestigated. I am
not necessarily sure about the tapered allowance for large
families; I would like to see the evidence that that would
adequately support larger families before I agreed with it.
However, we certainly support the ending of the benefit cap,
which we believe is another direct cause of poverty for many
people.
Many noble Lords, particularly the noble Viscount, , mentioned that the
Government’s response is not surprising. I am sure that the noble
Baroness, Lady Lister, who has been campaigning on this subject
for much longer than I have, was not surprised by it either.
However, we are encouraged that the chilling economic
circumstances described so ably by the noble Lord, , might bring about some
rethinking in the Government and hope that it will be an
incentive. One hates to think that it needs a financial and
economic crisis and a crisis in the cost of living to make the
Government rethink, but if that happens, we will be very pleased
to see it.
As many noble Lords have said, it is the most vulnerable who will
suffer the most punishing circumstances in the cost of living
crisis. The noble Lord, Lord Kerr, referred to indexing universal
credit to the price of heating and lighting. That would be a
welcome measure. The point on cuts in budgets over the past 40
years, made by the noble Viscount, , is, again, one that we need
to take into account. Comparison between the furlough and what
people receive on universal credit is very telling indeed.
This has been a call to arms from the Economic Affairs Committee
and I hope that the noble Lord, , will take the fight forward
as chair. I know that he will have plenty of people who will be
willing to help him. I hope that, as a result, we might see a
real advance. I again thank the noble Lord, Lord Forsyth, for his
strength of purpose and his willingness to take on big
challenges, and hope that he will continue to do so.
5.45pm
(Lab)
My Lords, I am the substitute for my noble friend Lady Sherlock.
I could not even begin to match her wide knowledge and experience
of these matters, but I can match her determination in wanting to
put things right. I welcome the many detailed contributions from
your Lordships. I was particularly struck by the opening remarks
from the noble Lord, , who made salient
point after point about the dire state of the many millions of
people significantly affected by the cost of living crisis.
Indeed, he gave the Government many sensible and strong points to
follow, and I hope they listen to what he said. They would be
wise to act upon his advice and that of his committee. His words
were ably supported by the new chair of the committee, the noble
Lord, of Headley, who provided clear
and concise key points and noted a lack of principles in this
Government.
A lot has happened since the Economic Affairs Committee published
the report we are debating back in July 2020. As a result, some
of its content and recommendations have been superseded—in
particular, retaining the £20 pandemic uplift, which has been
cut, and reducing the taper rate, which went from 63% to 55% in
the last Budget. I will return to these points, but let me
address the content of the report itself first.
Much of the report and the issues that it found with universal
credit still exist and continue to make life difficult for those
eligible for it. As the name of the report says, universal credit
is not working. Temporary and inadequate sticking plasters like
the household support fund are no substitute for a proper social
security system that offers security to families in hard times. I
acknowledge that the Chancellor has doubled that fund in his
Spring Statement today, but, disappointingly, he made no mention
of universal credit.
Although my view and that of the Labour Benches is that universal
credit should eventually be replaced, which the report does not
agree with, I share the report’s overall conclusion that
“substantial reform” is required in the first instance, as in its
current state, the inflexible system is
“harming many, particularly the most vulnerable.”
A big part of this is about complexity. Universal credit was
heralded—I remember seeing the TV documentaries with Iain Duncan
Smith—as a simplified system, making it easier for claimants and
the department alike. Instead, as the report notes, claimants do
not know the support they will receive on a month-to-month basis,
and the use of an arbitrary assessment date and pay date do the
opposite.
Claimants are also on the end of significant shortfalls caused by
the whole-month approach to any changes in circumstance, which in
many cases will be out of their control and in no way reflects
the lives of those in low-income households. A fair system would
reflect the lives of those using it and be flexible enough to
adapt.
As well as reflecting any changes in circumstances, the
Government have said that their intention was for payments to
reflect work, but this is not the reality. The report notes—as
did the noble Lord, Lord Forsyth—that many new claimants have no
experience of monthly pay. Having no flexibility in payment
schemes different from this is detrimental to claimants, who are
being forced to accommodate the system rather than the other way
around. This principle extends to single household payments. As
the report highlights, this simply does not reflect reality, but
more pressingly it is an enabler for financial coercion and
domestic abuse by making it more difficult for sufferers of these
terrible situations to escape.
But the most damaging design flaw is the five-week wait. We know
that the Government are aware of this as they have taken steps to
mitigate it, but they have not gone far enough. Taking an
advanced payment—one of the Government’s favourite tactics to
make it look as if they are doing something when they are really
doing nothing—means claimants choosing between a shortage now or
later. This has left claimants, particularly those in vulnerable
groups, disproportionately in limbo, with increasing debt,
poverty and anxiety. Also, it is a minimum five-week wait. Some
people are waiting even longer—and, even if everything goes to
plan, in this time many people are referred to food banks as they
struggle with debt, rent arrears and the mental health issues
that arise from or are exacerbated by the uncertainty.
Moving on from design issues, there is of course the question of
the adequacy of awards. Since the report was published, the then
newly introduced £20 weekly uplift has been scrapped—in October
last year. That was the second cut to benefits in six months,
which, given the numerous other issues with the system and the
cost of living crisis, was the last thing that claimants needed
and will have achieved little beyond making the wide range of
difficulties faced by claimants harder.
It is welcome that the Chancellor followed Labour’s lead and
reduced the work allowance taper rate at the last Budget, but
that is the equivalent of bailing water from a sinking ship with
a spoon. Over one in four people on universal credit have no work
requirements because they are unable to work due to a disability
or a caring responsibility—a group for which lowering the taper
rate provides nothing.
The committee’s report also highlighted the use of universal
credit to collect other debts, which claimants are often unaware
of, from recipients including
“£6 billion of historic tax credit debt”.
How can the Government look at this and think it is anything
other than entirely against the principles of the system? You
cannot have social security that offers no security.
Ultimately, I think that drifting away from the set of principles
that would constitute a working social security is where
universal credit has gone wrong, regardless of how this point has
been reached. My noble friend Lady Lister expertly noted that, in
the longer term, a review of the adequacy of benefits is needed.
She has a detailed understanding of the causes of poverty and has
provided many solutions for the Government in her academic work,
if only they were willing to listen and learn.
The committee set out eight key principles that it set the
report’s conclusions and recommendations against, derived from
evidence taken during the inquiry, and which it considers reforms
should be shaped by. I hope that very few in this place disagree
with a set of principles that includes dignity and respect,
providing adequate income, security and stability, reflecting
lived experience, and being fair and flexible. But what is clear
from both the committee’s inquiry and the experiences of
claimants that we hear regularly is that the system we currently
have in place does not reflect these principles closely enough.
So I sincerely hope that the Government will turn to them as a
guide and enact the serious reform that universal credit
requires.
5.53pm
The Parliamentary Under-Secretary of State, Foreign, Commonwealth
and Development Office and Department for Work and Pensions
() (Con)
My Lords, I congratulate the committee and my noble friend on the
report that we have been considering today. I will start by
saying that I completely appreciate the depth of feeling and
passion on the issues that have been raised.
I start by disagreeing slightly with something. When it is said
that universal credit is not working, I would have to disagree.
If we had had the legacy system in place and the issues around
Covid-19, I doubt that anybody would have got any money on a
regular basis. There are certainly a lot of elements of UC that
work, but today all noble Lords have raised concerns that we must
take account of, and we must change where it is possible to
change.
The reform of universal credit is an ongoing process. It is under
the leadership of and his team. I congratulate
them on their excellent work.
My noble friend Lord Forsyth mentioned pre-paid meters. At this
stage, let me say that I completely agree about the issues and
additional expense that they cause. This situation rests with
BEIS but I undertake to follow up on it personally, as I agreed
to do in the Chamber earlier this week.
I completely agree with noble Lords that this is a difficult
time. I would like to set the record straight, if I may. On
universal credit and the monthly assessment period, if we had had
the tax credit system, there would have been an annual
assessment. That is why we have the debt we do. A monthly
assessment is far better for the individuals we are trying to
serve.
I thank noble Lords for their contributions to this debate. It is
worth noting, as some have said, that this report was
commissioned prior to Covid-19. In what has been a very difficult
period, the universal credit system has proven its worth through
the invaluable support it has given to the 6 million people who
faced financial insecurity during this time, with the pandemic
seeing the amount of universal credit claims double and many
people—a high proportion of them—being paid on time.
On the cost of living, which all noble Lords raised, the
Government have introduced new measures to help with energy costs
on top of the existing £12 billion of support that they are
providing to help families during this financial year and the
next. We are increasing the national living wage to £9.50 but I
take the point made by the noble Lord, , about whether it is a living or
a thriving wage; however, we have increased this amount as the
years have gone on.
I will come on to more interesting points about housing costs,
but we have helped with the cost of housing. Discretionary
housing payments can be paid and are very flexible. In 2021-22,
the Government made £140 million of discretionary housing
payments available to local authorities. Vulnerable renters
struggling due to the impact of the pandemic will be helped by a
£65 million support package announced by the Department for
Levelling Up, Housing and Communities. The funding will go to
councils in England to support low-income earners in rent
arrears, helping to prevent homelessness.
The noble Baroness, Lady Janke, and the noble Lord, Lord Kerr,
raised the issue of energy bills. The Government have announced
that they will provide significant financial support of up to
£350 to the majority of households, protecting them from half of
the forecast £700 rise in energy bills. This support is worth
£9.1 billion in 2022-23.
There is also a £150 non-repayable cash rebate on council tax for
80% of households, and the Government will provide £144 million
in discretionary funding for local authorities to support
households that would not be eligible for that. There is the warm
home discount scheme, cold weather payments and help with basic
food costs through Healthy Start food vouchers. We are investing
more than £200 million a year in our holiday activities programme
while ensuring that children get food in the school holidays.
Noble Lords have said that our record on the cost of living is
poor. I do not accept that. We have a proud record of being on
the side of working people. Since 2010, under successive
Governments, we have doubled personal tax thresholds, which we
increased again today. We have doubled free childcare, which I
will come on to. We have increased the work allowance and cut the
taper rate; my noble friend was right to say that this measure
was in his report prior to us doing it. Of course, as I said, we
have also extended free school meals.
The robustness of the UC system was evident in dealing with an
unprecedented event, which we could not have foreseen. As I have
said, this would not have been possible under the legacy system.
The digital nature of universal credit allowed for its
adaptability during this period, where we managed to get a record
number of claims processed within the first few months. This
ensured financial security at a very uncertain time, with around
95% of claims being paid at the end of their first assessment
period, despite pressures on the UC system. Regrettably, I must
say that during this period organised criminals and opportunists
sought to exploit the extraordinary circumstances of a global
pandemic for gain.
Last autumn, we announced a 75% uplift in our investment in
counter-fraud, compliance and debt operations, taking our funding
to £1.4 billion over the next three years. With this funding, we
are: setting up a new, targeted review of universal credit
claims; investing in enhanced data and analytics to prevent fraud
and error occurring; increasing our capacity to address serious
and organised crime; and scaling up our existing operations,
through funding for around 2,000 additional trained specialists
to identify and stop scammers. This investment will generate
billions of pounds of savings over the scorecard period.
The noble Lord, , and the noble Viscount,
, raised Help to Claim. We
recognise the challenges that a digital platform may pose for
those who are unable to use this technology. That is why we have
support through Help to Claim, and the alternative of being able
to make a claim by telephone. A £21.3 million investment has been
made available for the Help to Claim provision, providing support
for a further 12 months, following a recent competition. From 1
April 2022, people will be able to access Help to Claim support
online and over the phone through Citizens Advice and Citizens
Advice Scotland. The service will be available at any time until
the first full, correct payment of universal credit is made.
People who are unable to access support, or to make their claim
to universal credit by telephone or online, will be able to go to
their jobcentre, where jobcentre staff will identify the right
support to meet their needs.
The use of assessment periods ensures that we calculate a
household’s benefit entitlement correctly, reducing overpayments
and debt for families who already face financial uncertainty. The
use of real-time information further enables this with accurate
and current earnings information, ensuring the robustness of the
assessment of entitlement.
All noble Lords have raised the issue of advances. I must confirm
that, for those in financial need, the introduction of new claims
advances allows for an eligible claimant to receive their full
benefit entitlement up front, resulting in 25 payments of UC over
24 months. For those looking for work, universal credit works
alongside existing provision to get people back into work, and to
help fill the 1.2 million vacancies available. To highlight this,
the Government’s Plan for Jobs initiative has made great strides
in its bid to help 2 million people back into work. Further
evidence can be seen through Kickstart, which is integrated with
the universal credit system, resulting in over 130,000 young
people getting valuable work experience to assist them to move
forward in their careers. This is complemented by the reduction
of the earnings taper and increased work allowance to ensure that
work does pay, and results in 1.9 million households keeping, on
average, around an extra £1,000 a year.
The department firmly believes that the best way to support
claimants is through empowered work coaches, who engage
proactively with claimants to help them identify the options they
need to help build their skills, increase their confidence and
return to employment. The claimant commitment is a tool for
setting out, and getting the claimant to take ownership of, what
they need to do in return for receiving their UC. In this sense,
conditionality is indeed adapted dynamically with the claimant to
ensure that the requirements for receiving support are
appropriate and proportionate to the claimant’s current
situation.
The claimant commitment is a key enabler to support claimants
into work or to increase their earnings. For staff, it should be
an enabler which supports robust setting and monitoring of
work-related activities, and fair decision-making in relation to
sanctions. The claimant commitment is a living document and is
continually reviewed with the claimant, as appropriate, to ensure
that it reflects their current situation. As such, the department
considers that this meets the needs of the claimant, as well as
our work coaches, in supporting claimants back into work.
When moving into work, there is additional support through the
universal credit childcare offer. I completely understand the
challenges that people face with childcare and that it sometimes
stops them moving back to work. Eligible UC claimants can claim
back up to 85% of their registered childcare costs each month,
regardless of the number of hours they work, compared to 70% in
tax credits. These can be claimed up to a month before starting a
job and eligible claimants can receive help for upfront childcare
costs by applying for help from the flexible support fund. Our
work coaches absolutely love the flexible support fund and will
use it legitimately for anything that helps to remove barriers
for people going back to work. That help is non-repayable and
paid directly to the childcare provider, where it is used for
childcare fees. Additionally, a universal credit budgeting
advance is available to eligible UC claimants to assist with
upfront costs.
The Government are committed to improving the lives of disabled
people and delivering the most ambitious disability reform agenda
in a generation. In 2017, we set a goal to see 1 million more
disabled people in work by 2027. In the first four years of the
goal, between quarter 1 2017 and quarter 1 2021, the number of
disabled people in employment increased by 850,000.
For those unable to work because of ill health or disability,
universal credit provides generous support. A claimant who is
determined to have limited capability for work and work-related
activity is awarded an additional amount of benefit; it is
currently £343.63 per calendar month, which is more than double
the equivalent rate paid in employment and support allowance.
Additionally, claimants who are assessed to have limited
capability for work, or for work and work-related activity, are
eligible for a work allowance and, in couple claims where one is
working, access to help with childcare.
I try to be as respectful to noble Lords as I possibly can in all
these debates. The two areas that the noble Baroness, Lady
Lister, raises frequently—I respect her for it—are the benefit
cap and the two-child policy. There is always a balance that must
be struck between supporting those in need and having a system
that provides a strong work incentive and fairness for
hard-working tax households. This is not a new concept.
I remind all noble Lords that the proportion of households capped
remains low, at 1.9% of the overall working-age benefit caseload.
Exemptions from the cap also exist, such as those for households
with earnings of at least £617 in an assessment period, and for
those who are vulnerable and receiving disability benefits or are
entitled to carer benefits. In addition, it is worth highlighting
that the national cap of £20,000 is equivalent to gross family
earnings of around £24,000, while the London cap of £23,000 is
equivalent to gross family earnings of around £28,000.
The two-child limit is based on statistics from the Office for
National Statistics showing that, in 2020, 85% of all families
with dependent children had a maximum of two in their family; for
lone parents, it was 83%. On the latest figures, 62% of
households with a third or subsequent child that are in receipt
of UC or CTC are not affected by the two-child policy. It is
important to support families, but it is also important to be
fair to the many working families who do not see their budgets
rise when they have more children.
I will come on to some of the more specific points raised. I will
see what I can do within the limits on my time.
A question was asked by my noble friend Lord Forsyth, the noble
Lord, , and others about why it is
paid monthly. Universal credit is designed to top up earnings
from employment, adapting to changes in the amount of earnings
received each month. I must tell noble Lords that the department
has no plans to change either universal credit assessment periods
or payment structures. The current approach reflects the world of
work, where the majority of employees receive wages monthly.
Paying in this manner will encourage claimants to take personal
responsibility for their finances and budget on a monthly basis,
which could save households money. Ensuring similarities between
paid employment and receiving benefits also eliminates an
important barrier, which could prevent claimants adjusting to
paid employment.
I cannot say this with utter confidence but I am quite sure that,
where claimants are in difficulty and hardship, work coaches can
help them. Rather than give information that is not 100% correct,
I will write to noble Lords to confirm the additional support for
when people are in difficulty.
The right reverend Prelate the referred to the monthly
assessment periods. Entitlement to UC is calculated in monthly
assessment periods and the amount paid reflects as closely as
possible the actual circumstances of a household in each
assessment period, including any earnings reported by the
employer in that period. Monthly reporting allows UC to be
adjusted monthly, which I can only say is better than the tax
credit yearly reconciliation. It ensures that, if a claimant’s
income falls, resulting in a rise in their universal credit, they
will not have to wait several months to receive it.
My noble friend Lord Forsyth raised the whole-month approach. As
I have said before, universal credit is assessed and paid on a
monthly basis. It is paid in arrears for each month and the
amount will not vary to reflect the number of days in the month.
To simplify the policy, we took a whole-month approach to changes
of circumstance. This is a fundamental design principle of
universal credit and is more straightforward for claimants to
understand as they can anticipate how much universal credit they
will receive, so can budget accordingly.
I come to the work of the work coaches. From all my dealings with
them, all the visits I have done and all the times I have spoken
to them, I know they are doing a first-class job. Nothing makes
their heart sing more than when people get the right support and
get into work, and where their payments are made correctly. We
have 104 intensive work search claimants per work coach. To meet
the demand for jobcentre services, DWP successfully recruited
13,500 new work coaches by March 2021. If any noble Lord wishes
to meet a work coach, I would be only too happy to make those
arrangements so that they can talk to them and see at first hand
what they do. Whether the issue is money, childcare, personal
circumstances, domestic abuse or anything else, they stand ready
to help our clients.
My noble friend Lord Forsyth and the noble Baroness, Lady Janke,
mentioned written warnings. In 2018, we committed to look at
processes to give claimants a written warning instead of a
sanction, sometimes referred to as a “yellow card”. We have
restarted the work to test issuing a written warning instead of a
sanction for a first sanctionable failure to attend a work search
review. A second proof of concept is testing the operational
viability of a warning system, and a further proof of concept is
planned for later in the year. Once the proofs of concept are
complete, we will assess the results and determine whether a
larger-scale pilot is required. On sanctions, let me just say
that no work coach or person in the system goes to work with a
target to sanction so many people. They go to work thinking, “How
many people can I progress today and get into work?”
Many noble Lords, including my noble friend Lord Forsyth, the
right reverend Prelate the , the noble Lord, , and the noble Baroness, Lady
Wilcox, talked about advances. For UC, new claims advances are
available urgently if a claimant needs support during their first
assessment period and budgeting support is available for anybody
who needs extra help. Advances of 100% of potential UC
entitlement are available urgently. With an advance, claimants
receive an additional UC payment, resulting in 25 payments over a
24-month period. We have reduced the normal maximum rate of
deductions from 30% to 25% and have made numerous improvements to
UC, including ensuring that people get the money they need as
soon as possible through advances.
There was reference to the advances creating debt. I think the
noble Viscount, , mentioned people who
have never been in debt in their life. I understand the delicacy
around this, but we are trying to get money to people who need it
and for them to repay it, which is not unreasonable, over a
period that they can cope with.
My noble friend Lord Forsyth made points about the current system
supporting the long-term unemployed to move from one low-paid job
to another. Our job is to get people into work, a better job and
a career. We are managing to achieve this through our Plan for
Jobs programme, with more news to come on the in-work progression
system when that works.
I have already talked about the five-week wait. Nobody has to
wait five weeks; I can only endorse that again.
We have talked about the benefit cap and the two-child policy.
Through everything they have raised, noble Lords have talked
about fairness in the system, which I understand. For policy
areas that are often open to criticism that are highlighted in
this report, such as the benefit cap and the two-child policy,
there is always a balance that must be struck between supporting
those in need and providing a system that provides a strong work
incentive and fairness for hard-working taxpaying households.
This is not a new concept and one that we will not change.
A benefits structure adjusting automatically to family size is
unsustainable, and the Government have had to take the difficult
decision to stabilise our economy and build a welfare system that
works for those who use it, as well as those who pay for it. The
Government’s view is that providing support for a maximum of two
children in UC and CTC ensures fairness between claimants and
taxpayers who support themselves through work. I doubt that I
could have done anything to placate noble Lords on that issue,
but it is the Government’s position.
The noble Baronesses, Lady Janke and Lady Lister, talked about
the adequacy of the benefits system. All benefit uprating since
1987 has been based on the increase in the relevant inflation
index in the 12 months to the previous September, as happens now.
We all know that 3.1% was used this year.
The noble Baroness, Lady Lister, raised the move to universal
credit. The pilot scheme that had been active in Harrogate was
suspended as the department focused on delivering the
Government’s ongoing response to Covid. Ahead of restarting
activity around the move to UC this year, we want to ensure that
claimants are aware of their entitlements and to support those
who wish voluntarily to move to UC to do so. The department will
make an announcement in due course on the plans for the move to
universal credit. I have no doubt that there will be all-Peers
briefings and meetings for us to discuss that.
(Lab)
Could I ask the Minister about take-up estimates?
(Con)
I will write to the noble Baroness on that.
(Lab)
I asked a number of questions about migration to UC. Perhaps the
Minister could write about that as well.
(Con)
I will cover that in winding up; I am conscious of the time.
The noble Lord, , raised food banks. Food banks
are independent charitable organisations and the DWP does not
have any role in their operation. There is no consistent and
accurate measure of food bank usage at constituency or national
level.
On third-party deductions, benefit debts and social fund loans
can see deductions reduced or deferred as the creditor, DWP, will
always try to ensure that government debt is recovered
effectively without causing undue hardship.
The noble Lord, , talked about an impact
assessment. The Government recognise that the public sector
equality duty set out in Section 149 of the Equality Act 2010 is
ongoing. As such, a full equality impact assessment was completed
prior to the introduction of the uplift to UC, and it was
reviewed and updated prior to the implementation of the temporary
six-month extension announced by the Chancellor at the Budget on
3 March 2021.
I have already covered cost of living issues, fully cognisant of
the difficulties that people are facing. I have heaps of
information here. I try to answer all your Lordships’ questions
and to treat the Grand Committee with respect. I do not want
anyone to think that I am not prepared to answer questions; I
will go through Hansard and through all these questions. I will
write, and all noble Lords will get a copy of that. I thank your
Lordships for the time you have spent listening to me.
(LD)
Before the Minister sits down, I would be happy if she would
write very specifically on the closure of DWP offices, some of
which are clearly closing and not being replaced by
alternatives.
(Con)
I have an extra few seconds: we are rationalising back offices,
and no job centres or face-to-face situations are involved. There
is no desire whatsoever for anyone to lose their job.
6.21pm
(Con)
My Lords, this is an unusual experience for me, because I have
not found anyone to disagree with. On the fact that this
committee is so much in agreement, on 9 March 2021, we did
something rather unusual: we had a joint meeting of the Economic
Affairs Committee and the House of Commons Select Committee
concerned with these matters. We were unanimous in our view, and
we took evidence from Mr Couling and the then Minister, . There was universal
agreement, except with Mr Couling, who thought that we were
interfering with his perfect system. I think he said that making
any changes would make it even more complicated and that he had
devised a system which he thought would be around for generations
to come. It is a classic example of coming up with a perfect
system that everyone has to fit into and then ignoring the
problems that occur.
I pay tribute to my noble friend the Minister. She does a
fantastic job, and we all know that she is very well aware, from
her own background, experience and the care with which she does
her ministerial job, of the kinds of problems that arise. We know
that the real problem here is the Treasury.
(Con)
I could not possibly comment.
(Con)
That reminds me of something from my noble friend : “You may say that, but I
couldn’t possibly comment”.
I very much appreciate the way in which the Minister responded to
the debate, but I know that the noble Baroness, Lady Taylor, has
been very patiently waiting to get on with the debate on the
excellent Constitution Committee report, so I just thank everyone
who has participated. Let us hope that the urgency and severity
of the situation means that Mr Couling, the Secretary of State
and the Treasury will mend their ways. I beg to move.
Motion agreed.
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