§ 3.36 p.m.
§ Baroness Hollis of Heigham
My Lords, I shall not take the exodus from the House too personally. Indeed, I am delighted to see how many noble Lords have shown an interest in social security by putting their names down to contribute to the debate today. The list of speakers is longer than that which usually graces social security debates. I am sure that I speak for the noble Earl, Lord Russell, and the former Social Security Minister, the noble Lord, Lord Mackay of Ardbrecknish, in welcoming new recruits to the territory of social security reform.
I beg to move that this Bill be now read a second time. Reforming the welfare state to meet the needs of the 21st century is one of the biggest challenges facing this Government. With our first Social Security Bill, we are taking an important step towards meeting that 1139 challenge. The Bill puts us in a position to be able to tackle the problems we inherited when we first came into government.
I am delighted that the former Secretary of State for Social Security, the noble Lord, Lord Newton of Braintree, is making his maiden speech today. He is remembered with affection by those in the department—I asked them—apart from his smoking. Officials were always puzzled why only the Secretary of State was exempt from the no-smoking rule. Actually, they were not puzzled at all! I asked officials whether they had any amusing anecdotes of the noble Lord's time in the DSS. They assured me that there were plenty, but, unfortunately, none was suitable for me to repeat or for your Lordships to know.
We inherited a system full of rules that are difficult to understand or apply, forms that are difficult to complete correctly, and processes which are so complex that they lead to double handling and inefficiency. The system is difficult for staff to administer and mistakes are easily made which can lead to unnecessary hardship for customers and cost to taxpayers. We want to change that and make the system work better so that we get things right, and get them right first time.
We want to build a system that enables us to break through the barriers of inefficiency and waste. We want a system that allows us to focus on investing in people's opportunities and success instead of staff being tied to administering outdated procedures and customers being tied into the system.
Service delivery is essential to our approach to welfare reform. Our services must actively help people to move off welfare and into work. They must be focused on what customers need, and they must ensure that help goes to those who need it and not to those who try to rip off the system. They must be efficient services that offer the best deal to customers, taxpayers and staff.
We want—and I am sure the entire House wants—an active, modern service that delivers all those things. The difference that an active service will make for our customers is that the work of staff will change from passively paying out benefits to actively helping people into work where they can be better off than they could ever be on benefits. We are already finding some of that success coming through for our new deal for lone parents where, with the help of a personal adviser, lone parents receive support, guidance on job search, training and after-school childcare and job action plans tailored to their circumstances.
I shall give your Lordships an example of the feedback from one lone parent who said:It feels good to he back at work. I haven't had a proper job for 14 years and I wouldn't have had the confidence to go out and look if it wasn't for the jobcentre. They really helped me".
But the current legal structure ties us into the current problems. That is why this Bill is necessary to lay the foundations for modernising the service. The Bill paves the way for the reforms which I believe all Members of your Lordships' House will agree are broadly necessary. It is a large and complex measure and it may help the 1140 House if I start by briefly describing its structure before I talk in more detail about the measures contained within it.
There are three major parts of the Bill, together with a miscellaneous section. The first major part of the Bill, some 47 clauses, encompasses change to benefit processes. These measures will streamline the decision-making process, set up new arrangements for appeals and allow us to introduce automated decision-making and sharing of information where it is suitable to do so. My noble and learned friend the Lord Advocate will take personal responsibility for that part of the Bill, and I am extremely grateful to him. I am sure that the House will be much enriched by the legal experience which he will bring to bear on those issues. Perhaps I may encourage your Lordships to take up any particular legal issues in relation to that part of the Bill directly with the noble and learned Lord if it is felt appropriate to do so.
The second part of the Bill. Clauses 48 to 65, covers changes in the national insurance contributions regime to introduce a new penalty and enforcement regime for the Contributions Agency; to close loopholes which will allow people to avoid paying national insurance contributions, whether it is payment in gold bullion or payment in vouchers; and to cut red tape through more alignment between the rules on tax and national insurance contributions.
My noble friend Lord Haskel, as a former major employer, has forgotten more dodges than most of us could invent. I hasten to say that of course he never practised them. He will assist my noble and learned friend the Lord Advocate and I on that part of the Bill.
Part III, Clauses 66 to 74. makes a number of changes to benefits. Most of the changes are minor, tidying-up measures but some, including Social Fund decision-making and child benefit for lone parents—a matter already aired at Question Time today—I shall talk about, with your Lordships' permission, in more detail later.
As I said, the Bill seems large and complex—indeed, it is large and complex—and there has been some comment on the number of regulatory-making powers in it. Because we want the legislative framework to be easier for people to understand, we have replaced parts of the existing law which are not being changed so that it will now be clearly set out in one place. That means that about one-third of the total 100 or so regulation-making powers are in fact re-enactments of existing powers in existing legislation. They are not new powers but are included for completeness and ease of reference.
Other regulations simply repeat the same provision in a number of areas, because we want to have a unified decision-making and appeals system across the range of the department's business rather than the confusing differences that exist now between various parts of the department's business.
The main point is that this Bill will create a robust framework for the administration of the new system. But we aim to replace a cumbersome and rigid legal 1141 framework with one that is flexible and able to respond quickly to change. Much of the detail will therefore be set out in regulations rather than on the face of the Bill.
One of the themes that echoes through the Bill is that it is important that we get things right at the beginning, at the initial information-collecting and decision-making stage, rather than to seek to correct it later by an elaborate, lengthy and cumbersome review and appeals procedure. I am sure that the House is agreed on that. Therefore, the first part of the Bill will pave the way for a modern, integrated service to customers. We shall introduce changes to the department's processes which will help us to get the all-important first stages right.
At the moment people are often asked to provide the same information, or report the same change in their circumstances, several times over to different parts of the social security system, and they risk being overpaid—and having to pay back the money—if they tell one part of the department and not others. That wastes time for the public and the department; wastes money for the taxpayer; and can put the claimant in serious financial difficulties.
People have responsibilities to provide us with accurate and up-to-date information. Our aim is for each person to be able to give us that information just once, in a way that is convenient for them, and for us to then be able to advise them how that affects all of their dealings with the department and other relevant bodies. In other words, this Bill enables us to devise modern business processes and maximise the benefits of future developments in information technology, so that we can offer a straightforward, simple and fair service.
It may be useful to consider an example of what currently happens when a parent who is in receipt of income support and housing benefit reports that they have found employment, First, they must contact the income support section of the Benefits Agency to report the change and provide details of their job. The income support clerk will input the details to the income support computer system, which will recalculate benefit. If the parent is no longer eligible, the clerk will terminate income support.
The parent must also notify the local authority that income support has ceased. If he thinks he may still be entitled to housing benefit, he must complete a new application form for housing benefit, again providing details of the job, and submit the form to the local authority. The local authority clerk will input details into the local authority computer system and a letter will be issued to the parent notifying him of any future entitlement.
The parent may then wish to claim family credit to supplement his earnings. In that case, he will complete another form, again giving details of employment, and send the form to the Benefits Agency in Preston.
Typically, a new employee may work up to a month before receiving his first wage. If this is the case, the parent may need to claim a Social Fund payment and will complete another form with details of earnings. If any maintenance is in payment the parent must report his changed circumstances to the Child Support Agency.
1142 Finally, the parent's new employers will, of course, deduct any national insurance contributions and notify the Contributions Agency.
In that example the lack of a common spine of information about employment details means that it is not possible to provide an integrated service to the parent. Information about the employment has been received by up to five clerks and entered into up to five different computer systems, which may or may not talk to each other. Each clerk will have access to his own computer system and although some of these clerks may be authorised to access another system, they do not have access to all systems and action is invariably duplicated, often building in errors on the way.
The Bill will create a much simpler process for deciding customers' claims. At the moment the system is incredibly complex. Currently there are 13 different types of decision taken by six different types of decision-maker—I could list them should your Lordships be interested. Each follows different guidance; several may be involved in the determination of a single claim. Again, I could take your Lordships through the different stages. But too often, because so much information is being processed from one to another, it is easy to make mistakes and it is difficult to correct those mistakes when they are made at that initial stage, even if they are the result of a simple error, without going on to a lengthy appeals process.
§ Lord Morris of Manchester
My Lords, can my noble friend say a brief word about the heavy emphasis on fraud in today's reporting of the National Audit Office's report, more especially in view of her most helpful statement to me on Tuesday (Hansard, col. 936) when she said that in the tens of thousands of cases of disabled people so far dealt with in the benefits integrity project, not one case of confirmed fraud has been discovered?
§ Baroness Hollis of Heigham
My Lords, I am happy to take my noble friend's intervention. Indeed, I stand by everything that I said in that Hansard report. The report of the National Audit Office, which is published annually, is based on old information from the benefit project inaugurated by the previous government, who produced those figures of 12 per cent. suspected or confirmed cases of fraud and up to 20 per cent. error. I repeat what I said to my noble friend on Tuesday; namely, that in the benefit integrity project, which does not deal with the 1,200 cases from the previous administration's project, we have, so far, in the 35 per cent. of cases that we have examined, not found a single case of confirmed fraud.
I was talking about the problem of correcting error when my noble friend asked me to confirm that, when we are talking about disability benefits, we are talking about error and not fraud. We want decisions on customers' claims to be provided quickly, correctly and in a way that is easy to understand. The Bill before the House will reduce the number of different types of decision-maker from six to just one. All decisions will be made on behalf of the Secretary of State. Those decisions can be processed automatically and that will 1143 lead to quicker receipt of the accurate amount of benefit, while allowing staff to make decisions which require the exercise of judgment.
Perhaps I may give the House an example. A claim for benefit, such as income support for a single person, can be decided and awarded quickly by a computer "reading" the factual information shown on the claim form. However, if, for example, there is a question as to whether that person is living with someone in a husband-and-wife relationship, staff would first need to use their judgment to make a decision on the living-together aspect before the person's entitlement to benefit can be considered. That will also allow staff to take an early second look at disputed decisions and, if appropriate, revise them there and then without affecting the customers' right to appeal to an independent tribunal if they are still not satisfied.
One particular area where decision-making is unnecessarily complex at the moment is the determination of applications for budgeting loans from the Social Fund. The current system is confusing for customers, and time-consuming for staff. For example, let us take the situation where a claimant—I shall call her Miss A—wants £150 to purchase a range of clothing items for her four children for the winter, and wishes to apply to the Social Fund for a budgeting loan for that amount; in other words, she wants to apply for a budgeting loan not a grant. She has to complete a 20-page application form, answering questions which may have nothing to do with her application and which require precise details about each item needed, probably down to the last pair of socks. This is because the application form is designed to cover both loans and grants, each of which have different requirements for award and Miss A has to provide enough information for a discretionary decision to be made on each item applied for.
When Miss A receives the decision on whether she is to be offered a budgeting loan, she will also receive notification that her application has been considered under the other parts of the discretionary system—such as a community care grant and crisis loan—even though she has not applied for either of them. That only serves to confuse her further.
The Bill will enable the current confusing system to be replaced with a modern fact-based approach, allowing staff to reach quicker decisions which are easier for customers to understand and enabling them to know where they stand. In line with our overall strategy of helping people move off benefits and into work, we will remove the exclusions from budgeting loans coverage, one of which is help with costs associated with trying to find and start work. I am sure that we shall extend in a decent way the budgeting loan procedures of the Social Fund.
So far I have been talking about decision-making, but perhaps I may now move on to appeals. The Bill will enable us to provide a streamlined and straightforward system for customers to appeal against decisions to an independent tribunal. At the moment the system is slow, complex and cumbersome. On average, appeals take up to six months to be resolved, by which time the person's 1144 circumstances may have totally changed. Many cases take a year, while others take two years or more. That is simply unacceptable. Moreover, 20,000 people appeal against a decision on their claim each year at a cost of £5 million when it is clear at the outset that they have no possibility of succeeding with what I would call a "meritless appeal", simply because the law does not permit it. They go right through the system only to be told that they never had a chance to begin with because the law was applied correctly to the facts of their case right at the start.
Perhaps I may give your Lordships some examples in that respect. A parent may appeal for a disability living allowance mobility grant for his or her three year-old child, only to find on appeal that no child under the age of five is eligible by law. Nevertheless, such a parent would have to go through to appeal. I was recently made aware of an appeal which was lodged following a decision to refuse a claim for invalid care allowance (ICA). The application form showed that disability living allowance, which goes to a disabled person, was in payment but only at the lower rate of care. The law is clear that you receive ICA only if a disabled person has middle or higher rates of DLA care. The claim was correctly refused. In confirming the adjudicating officer's decision, the tribunal stated that,(the claim) to ICA cannot succeed because he does not meet the required criteria".
Such claims are "meritless appeals" simply because they cannot be successful given the law on fact. They are time-consuming, frustrating for customers and a waste of taxpayers' money.
There is currently no independent right of appeal on national insurance decisions, except to the High Court on a point of law. We want people to have access to a quick and straightforward process for appealing disputed decisions. The Bill will rationalise and clarify the appeals procedure and significantly reduce waiting time. It will replace the five separate tribunal jurisdictions that we have at the moment—namely, social security, child support, medical appeal tribunals, disability appeal tribunals and vaccine damage tribunals—with a single unified tribunal.
I know that some noble Lords have concerns about tribunals, so perhaps I may spell it out a little further. The Bill will also remove the rigid requirement for all cases to be heard by three-person tribunals. Instead, it will tailor the constitution of the tribunal to the needs of the particular case. Indeed, I know that that point worries those who are concerned about appeal systems. An example of an appeal requiring a three-member tribunal would be one on either the care or mobility components of DLA. The tribunal would require legal and medical expertise, together with disability expertise.
Examples of a tribunal requiring two members would be in the case of appeals involving the all-work test in incapacity benefit or labour market conditions in jobseeker's allowance. In the first instance, legal and medical expertise would be required; in the second instance legal expertise and someone with a knowledge of the local employment conditions would be required. An example of a tribunal requiring only one member would be in appeals involving the amount of capital 1145 affecting a claim for either, say, family credit or a Social Fund-funeral payment. In both examples, a legal expert would be required because we are dealing with straightforward facts of the law.
The Bill will also allow tribunals to correct their own mistakes, thus cutting out the time wasted when cases go to commissioners unnecessarily. For the first time—and I am sure that noble Lords will welcome this—it will introduce a new right of appeal against decisions in respect of national insurance contributions. The proposals in the Bill will also enable those "meritless appeals", like my ICA example or a case where a parent is seeking mobility allowance for a child under five, to be dealt with quickly. A tribunal panel member will give an explanation of why the appeal should not go to a full hearing and the person concerned will have the opportunity to dispute, check and correct any of the facts involved—for example, the child concerned may not be three but five and therefore is entitled to the benefit. Not only will these processes streamline the current system but the Bill will strengthen the essential independence of the current system by separating out the administrative from the judicial functions.
The Secretary of State will assume personal responsibility—at any rate she will assume responsibility; personal responsibility might be pushing it—for the administration of appeals through a new DSS executive agency established for that purpose. Demanding targets will be set to speed up the time it takes for people to get their appeal dealt with and know the outcome. The targets will be published and the results reported on. The noble and learned Lord the Lord Chancellor, as head of the judiciary, will continue to appoint the president of tribunals. He will also make all appointments to the panel of persons from whom tribunal members will be selected. All of the measures I have just outlined will help us to rationalise our dealings with customers and produce a fairer system.
Secondly, we are also dealing with major unfairnesses in the national insurance system, which is based on rights and responsibilities. It provides people with rights to benefits. We in turn expect individuals and employers to meet their responsibility to make fair contributions. At the moment a minority of employers are deliberately shirking their responsibilities. This Bill will make them pay up. It will, for example, make them pay national insurance contributions on non-cash payments given to employees through "restrictive covenants" which have become an increasingly common method of avoidance. For example, a director of a well-known takeaway restaurant chain was paid a bonus of £10 million. He entered into a legally binding agreement not to compete against his employer. The bonus was paid to him in gilts. Because he was paid in gilts and because of the restrictive covenant the company avoided paying NICs of more than £1 million on the bonus.
This Bill will also replace the outdated criminal offence for non-compliance with cash fines and align it with an Inland Revenue system. It will provide for new and tougher criminal penalties for deliberate cases of evasion and fraud and it will allow the Contributions Agency the power to take distraint action to recover debts. We shall be charging national insurance 1146 contributions on the provision of non-cash vouchers by employers—I refer to the ASDA scandal—as payment to their employees, thus bringing national insurance into line with tax. That way we shall not jeopardise the right of lower paid employees to obtain their full benefit rights because they are being paid below the national insurance level but their pay is topped up by vouchers in kind. However, childcare vouchers will remain exempt. We are making it easier for employers to pay their fair share by this alignment. That is what we hope the Bill will do. We have already consulted employers on the principles of these national insurance changes and we intend to consult them further on the detail.
Thirdly, the Bill also provides for some changes that were announced in last year's July Budget, and a number of other minor changes. The first is the measure in Clause 70 on lone parents which has been the subject of debate today. I shall set out quickly what it will do. This clause enables us to make regulations to align the rate of child benefit that is received by lone parents for their eldest child with the rate that is currently paid to couples for their eldest child. A lone parent on family credit who is receiving the higher rate of child benefit will currently have more absolute net income than a couple family with the same number of children on the same wage. The Government's intention is to focus help on the specific problem that lone parents face, that is childcare, while equalising the support available through child benefit. It will apply only to lone parents making new claims. There will be no cash losers among existing lone parents. Those who are not currently claiming because they are on income support or jobseeker's allowance will be able to make a subsequent claim when they move into work. This measure in the Bill deals only with child benefit. Noble Lords will recall that the House has already debated the package of regulations which equalised the family premium in income related benefits.
The Bill also sets a common time limit for backdating benefit claims of one month. Good government means setting the right priorities within limited resources. Where savings need to be made we believe that our priority must be payment of benefit to meet current entitlement. Yes, we have restricted the time period for backdating claims to benefit, but hand in hand with this is our commitment to ensure that people are aware of their entitlements and to streamline the processes involved in making claims. We want an active system which helps people to make claims at the right time and not just belatedly to recover the position after the due date. We are already looking to see whether the process for claiming specific benefits such as child benefit and widow's benefits could be made more straightforward to encourage a higher take up. The Benefits Agency is currently consulting a large number of organisations on ways to improve the information available to claimants. That consultation involves some 80,000 outlets.
This is a sensible and realistic approach. However, we have made special cases exemptions which will be covered in regulations. The first type of exemption will include cases where entitlement to a benefit is dependent on the claimant's, or another person's, entitlement to another benefit; what we call passporting. It is obviously 1147 unreasonable for administrative delays in awarding one benefit to deprive a person of entitlement to another. That relates particularly to invalid care allowance.
The second group of exceptions to the backdating rule will be for income-related benefits where special reasons exist, for example, where the customer has difficulty communicating because he has learning difficulties, is deaf or blind or there is no one to make the claim on his behalf. The third group of exceptions concerns customers who are forced to delay claiming because of difficulties in administration such as benefit office closures or where their personal circumstances such as recent separation or bereavement make it difficult for them to claim immediately.
I apologise to the House for the length of time I have taken in discussing the Bill but it is an extremely complicated and technical one. When we came into government we inherited a system that we believe is unacceptable and unsustainable. Social security spending is set to break through the £100 billion barrier. That is £25 billion more than the total amount collected in income tax in any one year. Too much of that money is being spent on paying the bill for social division. We want to use public resources wisely by investing in opportunities for people to support themselves through work and to reduce the bills of economic and social failure and thus to invest more adequately in education and health. With your Lordships' help we believe that this Bill will allow us to create an active, secure and integrated system of welfare delivery. I commend the Bill to the House.
Moved, That the Bill be now read a second time.— (Baroness Hollis of Heigham.)
§ 4.7 p.m.
§ Lord Higgins
My Lords, I was somewhat surprised that the noble Baroness in introducing the Bill did not point out that a number of its proposals were put forward by the previous government. That is rather a strange omission. Therefore we not only welcome the Bill but we shall take credit for a number of the improvements in the procedural side of social security to which the noble Baroness has rightly drawn attention. In the light of that, we do not propose to vote against the Bill as such.
Nonetheless one feature of it is certainly not something that the previous government put forward; namely, the restriction on the backdating of social security payments. We regard the restriction now proposed as excessively draconian—not least the period of one month—for someone recently bereaved who wishes to make a claim or for someone who has been involved in a serious road accident. We shall wish to pursue that as we shall a number of other important amendments which it is right that your Lordships should act upon, given our role as a revising Chamber.
The most controversial clause in the Bill is, of course, Clause 70 which eliminates the child benefit premium for lone parents. That was proposed by the previous government and was fiercely attacked by the then Opposition. Indeed, the present Prime Minister, when 1148 interviewed on radio, and the present Secretary of State for Social Security, when interviewed for a newspaper article, said in categoric terms said they would not eliminate the child benefit premium for lone parents which the previous Government were proposing to do. Today the noble Baroness puts forward precisely the measure which she attacked in the most forthright terms when in opposition. I shall return to that point later.
The reality is that the Bill comes before your Lordships' House after a Third Reading in another place which resulted in a rebellion by the Government's Back-Benchers on a scale which, had there been a government with any normal majority, would have totally wiped them out. The reason for that rebellion is not surprising. Many of those in another place who had fought the election on the basis that they were not going to eliminate the provisions for lone parents felt that they had been misled, that they had misled the electorate, and that their own Government were now letting them down. It is a most remarkable U-turn to which I wish to return in my later remarks. Considerable electoral benefit was clearly gained from the attacks launched on the previous government. Now the present Government are reneging on what they then said.
The noble Baroness dealt with the first part of the Bill in great detail. I shall be brief because my noble friend Lady Anelay of St. Johns, who is to speak later, is, like many in your Lordships' House, a great expert on these issues. I have no more than 30 years' experience dealing with the issue from the front end. My noble friend has served on tribunals and knows what it is like at first hand. Therefore I am sure that the House will value her comments.
We have severe reservations about how impartial the appeals procedure may now be, with the Secretary of State and her officials taking the decisions rather than the existing independent panel. Secondly, we are concerned about the possible lack of anyone with legal qualifications when many of the issues involved are of an extremely complex legal nature. We are also worried that some of the decisions, determinations and assessments may be issued by computers, which also have no legal qualifications and may well get out of hand. It is right that we should press these matters in Committee.
There is a topical issue that we should raise. It relates to whether there is a right for an individual to appeal against the composition of the panel and whether the lack of that right to appeal is contrary to the European Convention on Human Rights. The same point has been raised in representations with regard to Clause 27. In another Bill we propose to incorporate the European convention into British law. It is suggested that there would then be a certificate of compatibility in effect if nothing in a Bill was in contravention of that new legislation. This Bill is going through at the same time as the Human Rights Bill. Perhaps I may ask the noble Baroness whether any provision in the Bill is incompatible with the Human Rights Bill. It would be foolish to pass provisions in this Bill which were contrary to the other Bill.
1149 The issue of backdating gives grave cause for concern. I think it is universally recognised among the various organisations outside this House which represent the disabled, the poor, and so on, that this is quite simply a Treasury cost-cutting exercise. No other justification has been put forward. If we consider the Bill carefully. and, as a revising Chamber, decide that one should give an opportunity for another place to consider it again, that is an issue which, while overclouded previously by the lone parent issue, should be reconsidered carefully.
The proposals on backdating are to be made by regulation. Far too much in the Bill is to be provided by regulation. The trouble with legislating by regulation is that when regulations appear one has no ability to discuss the issue and amend them. Therefore we shall need to consider carefully at Committee stage whether we should incorporate on to the face of the Bill—but with suitable provision for altering again by regulation at a later stage—the exemptions to the backdating provisions which the Minister in another place set out clearly but was not prepared to put on the face of the Bill. We should beware of passing legislation of this highly complex kind involving matters which are emotional and affect many of the poorest members of our society and leaving it to the Government to produce in unamended form a formula which we have not had a chance to discuss and amend in detail.
As regards backdating, the provisions are draconian. My noble friend Lord Blackwell is concerned about them in the context of housing benefit and rent allowances. We should consider carefully whether it is right that these backdating provisions should be as stringent as they are and whether it is appropriate for them to be imposed purely as a Treasury exercise.
Another problem has been raised. For want of better jargon I call it the "in-out" problem. I refer to the problem of the lone parent who at present receives the higher rate of benefit. He then goes into a job. If that job does not work out, he comes back on to benefit at the lower rate. Last weekend, the Sunday Telegraph had the remarkably paradoxical headline, "Welfare to Work hits job prospects". The article raised the point that I have just made; namely, that single parents will be on benefit at the higher rate, will go into a job which may not work out, and then find that they return to the lower rate of benefit.
The matter has been dealt with in two ways: in the Bill, and in the statutory instrument we discussed before Christmas. The noble Baroness was kind enough to clarify the position for me. As regards the Bill and child benefit, that is not a problem. I am told—no doubt the noble Baroness will be able to confirm it—that on that aspect there is not an "in-out" problem. If someone goes into work, and comes out of it, he will receive the higher rate of benefit. That is not true as regards the statutory instrument which we passed before Christmas. How on earth can the noble Baroness justify that? Surely the 1150 statutory instrument is totally incompatible with the situation where the Government are trying to get people on these benefits to take the risk of going into work.
§ Baroness Hollis of Heigham
My Lords. I am grateful to the noble Lord for giving way. I should like to reply to his questions. He made the point at the beginning of his speech that he claimed credit for much of the Bill. If he has such strong objections to the proposal, why did the former government first propose to introduce it'?
§ Lord Higgins
My Lords, I make it clear that we stand our ground. It would be quite wrong for us now to do what the Government have done and make a U-turn. In the Commons, Mr. lain Duncan Smith made it absolutely clear in a speech yesterday that we shall be consistent.
§ Baroness Hollis of Heigham
My Lords, in that case why are the former government criticising the position of the present Government?
§ Lord Higgins
My Lords, we criticise them simply for the fact that they totally misled the electorate, including single parents and organisations representing the disabled, by saying that they were not going to do what we thought it right to do. But we shall not renege on the view which we took. We shall continue to take the view that what we proposed originally was the right way to deal with these matters.
§ Baroness Hollis of Heigham
My Lords, am I to understand the noble Lord to say that he is in favour of the cuts but that he is not in favour of the Labour Party introducing them?
§ Lord Higgins
My Lords, I am saying that we have maintained a consistent position on them. We put forward arguments we thought were right at the time, and we shall stick to them. What the noble Baroness did I shall spell out in detail. Over some two years, time and again in opposition, the noble Baroness put forward arguments which were against what she is now doing. Let us look back at November 1995. I was astonished that in her introductory remarks the noble Baroness skipped over the matter very quickly. Indeed, she dealt with it so rapidly that, being interrupted for a moment as a message was delivered to me from outside, I found that she had already mentioned it. In November 1995, she described the measure she is now introducing as "vindictive, punitive and utterly wrong". That was her description of precisely what she has just proposed under Clause 70 of the Bill. I give way to the noble Baroness.
§ Baroness Hollis of Heigham
My Lords, I am grateful to the noble Lord. Does he also intend to quote later comments I made on a number of occasions when I said that, had we continued in opposition, we should have continued to oppose the measures in the context in which they were proposed. But in government we are introducing for the first time—which the previous 1151 administration failed to do—a national childcare strategy; a reform of child support in order to ensure that parents receive reliable maintenance; and, in due course, a minimum wage. In that context, the opportunities and possibilities for lone parents have been transformed.
§ Lord Higgins
My Lords, that may all be so. But it does not in any way justify the fact that the noble Baroness has gone back on what she said. There is quotation after quotation. I shall not burden the House with them. There was the absurd statement on 25th February, when the noble Baroness described the proposal as "batty". Time and again she has opposed it. I do not in any way dispute that the Government are introducing other measures which will help lone parents, and if it is appropriate we shall support them. But that does not transform the situation. At no stage in criticising the previous government did the noble Baroness say, "If we do this, that or the other, it will be all right".
This is a very serious problem. I hope I have made the position of this Front Bench clear. We have not once received from the Government any explanation as to why they have reneged on their previous position. The only explanation we have received is that the measure is necessary because they are committed to retaining the previous government's spending limits. They knew that to be their commitment when they continued to criticise the previous government.
There have been other opportunities for the Government to put the matter right. Let us take, for example, the Chancellor's Statement just before Christmas. He suddenly found that he had a further £400 million as a result of changes in the European situation. That is vastly more than will be saved by this measure. Did the noble Baroness take the chance to say, "We must stick to our promises; we now have the money that we need?"
Or let us examine the situation regarding employment. Almost half of the money proposed need not now be spent, because the number of people in that category, as a result of the previous government's policy coming to fruition, is halved. A huge amount of money was therefore available compared with the very small amount that will be saved by this measure. The fact is that the Department of Social Security has not fought its corner with the Treasury to justify the position taken by the Government in opposition, and that is worrying.
I have spoken for much longer than I had expected; I have lost count of the number of times I have given way. I wish to make one final point. Yesterday, my honourable friend Mr. Iain Duncan Smith, shadow Secretary for Social Security, made a very fine speech, which was very little reported in today's press. He set out the way in which we believe the social security system should be reformed. It is complete common ground between both sides of the House that there is a need for reform. However, as the noble Lord, Lord Marsh, pointed out at Question Time, it needs to 1152 be done in a reasonably comprehensive way, and on principles. Yesterday, my honourable friend set out what we believe those principles ought to be.
I thank the noble Baroness for informing me in advance that the Government have today published a number of documents—"focus files"—setting out the principles which they believe should be the basis of the reforms. To the extent that those principles overlap, we shall most certainly support the Government. We do not dispute in any way the need for reform, and we think it important that it should be done. However, I am slightly surprised that the Prime Minister is apparently to tour the country putting forward the case for reform, but not saying what he intends to do about it. It is an empty box. We have received "focus files". We thought we should receive—and have expected week after week—a Green Paper that would set out the Government's intentions. When I posed the question to the noble Baroness on Tuesday, she did not answer. Perhaps today, in replying, she will tell us when she expects the Green Paper finally to be published. It has been delayed time and time again—no doubt as a result of disputes between the Minister for Welfare Reform and the Social Services Secretary. It now appears that it has been put on the back burner. Meanwhile, we are left with an empty box and no policy whatever except a minor Treasury cut here and there and a few odd bits and pieces apart from the measures in this Bill which, as I say, broadly speaking, we welcome.
We certainly hope to improve the measure in Committee and on Report. That is what your Lordships are here to do. The Opposition will do everything they can to ensure that the matter is dealt with, and that the social security framework is improved for the future to the benefit of our people.
§ 4.26 p.m.
§ Earl Russell
My Lords, I rather enjoyed that little pantomime. The noble Lord, Lord Higgins, talking about the Prime Minister's tour, reminded me of the favourite quotation of the noble and learned Lord, Lord Simon of Glaisdale. He refers to the gentleman who, at the time of the South Sea Bubble, formed a company for which he invited investment, "for a purpose hereafter to be disclosed".
I should like to begin by touching on slightly less contentious matters. I look forward warmly to the maiden speech of the noble Lord, Lord Newton of Braintree. It seems a very short time—though it is doubtless longer than it seems—since the noble Lord congratulated me on my maiden speech in the Oxford Union. It is about time that I had the chance to return the compliment. I look forward to doing so.
I also thank the Minister and, through her, her officials for the trouble they took over the briefing meeting in the Moses Room last Tuesday. It was extremely interesting and useful. I thank her especially for making available to us, much earlier than we should otherwise have received it, the department's memorandum to the Delegated Powers Scrutiny Committee.
1153 We have no trouble with the principles of the national insurance parts of the Bill. We shall examine them in detail in Committee. There may be a matter which needs attention; I have not yet found it. There, the uncontentious part of my remarks must end.
I wish to take up a point made by the noble Lord, Lord Morris of Manchester, about fraud. I welcomed the Minister's reply to him. I am glad about the benefit integrity programme's findings. It confirms the point that I made many times in the previous Parliament; namely, that lumping together confirmed fraud and suspected fraud, and arriving at a category of total fraud, is a misleading procedure. I did not know how misleading it was, and I am rather pleased to find out. I thank the Minister.
I think the House knows perfectly well my views on the question of single parents. I shall return to the matter at considerable length in Committee. Meanwhile, we thought on these Benches that the House was entitled to a fresh voice. Therefore the person who will speak for these Benches on the subject is my noble friend Lady Williams of Crosby. The House is entitled to new arguments for the views that we have in common. I look forward with great pleasure to listening to her. My noble friend Lord Goodhart will exemplify points that I may make about the appeals system, and my noble friend Lady Ludford on the subject of backdating.
When I look at the general theme of the first half of the Bill, I am reminded of a quotation from 1974:All social security law rests on the concept of entitlement".
That was said by the noble and learned Lord, Lord Scarman. It is a remark which is now sadly out of date. When one thinks how out of date it is, one sees how much the social security system and the power relations within it have changed during that period. Within the noble and learned Lord's vision, the law which came from Parliament was a binding framework on the Department of Social Security. Claimants—not "customers" in my mouth, I am afraid—have rights. Those rights were defended by law. But what we are getting now is a Department of Social Security armed with regulation-making powers which increasingly instinctively assumes that it makes the law. Like the proverbial absolute monarch who existed in the imagination of many kings and the reality of very few, the department thinks that of its own mere will and motion, it decides who is to be given benefit and who is not. So what is happening is that both the claimant and Parliament are being downgraded equally and those two downgradings are interdependent.
We have before us now a memorandum, which I hope the House will take extremely seriously, from Judge Bassingthwaighte, the President of the Independent Tribunal Service. It is an unusual step. He quotes the noble and learned Lord the Lord Chancellor speaking at the Mansion House on 23rd July saying that it is right that the Government should be aware of judges' views on proposed legislation well before final decisions are taken. It is offered in that spirit and, I think, constructively. Judge Bassingthwaighte said:this is a Bill which was largely drafted under the auspices of the previous administration, yet completed and presented by the current one. May we, therefore, suggest, with due respect and deference, 1154 that a Bill which enjoys such hi-partisan support paradoxically needs to be challenged more strenuously in order to test its effects: that is what we seek to do".
It is what we seek to do also. That passage explains why it is vital that there should always be an effective third party in both Houses of Parliament and also why in any reform which may happen to this House I very much hope that a place will continue to be found for Cross-Benchers whose presence here is vital.
One is reminded occasionally, looking at the department's attitude to claimants to benefit, of the open testimonial produced by the servant who said: "Look, it says: 'During his period of service with me, Mr. Singh discharged his duties entirely to his own satisfaction—. There is a running down here of the entitlement. Judge Bassingthwaighte said:we … raise the question of whether the current plans take adequate account of what we see as a self-evident proposition: that change should be implemented with an awareness of possible detrimental effects upon the rights of the individual, the more so when those rights arise from an individual's relationship, contact and dispute with the State".
He might have added: "when in some cases the individual's very chance of life may depend on the resolution of those disputes".
The concept of right in the claimant is being slowly eroded. It is something of a contrast with the Human Rights Bill which I warmly welcome and which is going through this House at the same time.
To begin at the beginning, I have some misgivings about Clause 1 which ends the independence of the adjudication service. It makes it answerable to the Secretary of State instead of remotely to the Lord Chancellor. The Minister has made an argument for a single decision-making service, but that argument is not valid if the decisions are not of the same type. Whether or not a person was driving at 50 miles an hour is not the same kind of decision as whether one needs more photocopiers at the Old Bailey. I see no logic in saying that these types of decisions should both be made by the same type of person. Indeed, when there is so much confusion in the mind of the department between judicial and administrative decisions, I cannot see that decisions are likely to be better made when the department does not understand better what is being decided. It is taking the department into areas where its competence may be questioned.
For example, the Independent Tribunal Service points out that in Clause 25(2), the Secretary of State is empowered to decide what is a test case. That is, if anything ever was, a legal decision. The Secretary of State is not necessarily legally trained. There is substance in the question asked by Judge Bassingthwaighte: how should such a decision be challenged? As I see it, it can only be challenged by judicial review.
The noble and learned Lord on the Woolsack on 5th June 1996 expressed considerable anxiety about the prospect of things included in statutes being challenged on judicial review. I understand his concerns, but it is therefore important not to lead Her Majesty's judges into temptation. There is a wide open area of law here.
1155 It is an area in which I have no great appetite to have my curiosity satisfied. I would much rather have the Bill properly drafted.
Clause 2 provides that decisions shall be made by computer. I understand what the department is after, but computers cannot be held accountable for decisions; a person has to be. Perhaps I may take an example that happened to my wife last week. She bought a new dishwasher. The computer recorded that she had bought three dishwashers. She observed that it had done so. The salesman said that the supplier had at that minute closed, it was on the stroke of half-past five and he would put it right the next day. For whatever reason, three dishwashers arrived with a certificate that my wife had paid for all three. It sounds just like a housing benefit overpayment case. She was invited by the delivery man to take and keep all three of those dishwashers. She resisted temptation, but if she had not, who would have been answerable?
I am concerned also, like the noble Lord, Lord Higgins, about the amount being done by regulation. I always want to ask not only what is the policy intention—and I am extremely grateful to the department for the care it has taken to explain that—but also, since we are leaving things on the statute book like minefields, waiting for those who come behind us, what other governments, whom perhaps we have not yet imagined, might do under these vires. For example, Clause 6 deals with qualifications for appeal tribunals. Could one whittle down the qualifications to nothing? I am reminded of the previous Home Secretary changing all the qualifications for the probation service. That is the kind of thing we would have said 10 years earlier that no government could possibly do. There is no such animal as a thing no government could possibly do. So if something can be done under the vires and we do not want it done, then we should narrow the vires.
Clause 22 creates powers to disentitle to benefit, but again there is no indication of the extent of these powers. I would welcome some clarification from the Minister on that. In particular, does the clause allow the Secretary of State in effect to create new grounds for disentitlement? Creating new grounds for disentitlement is on a level with creating new criminal offences. They are equally serious to those at the receiving end.
The department's memo to the Delegated Powers Scrutiny Committee simply says that this is necessary to protect the integrity of public expenditure. Of course that matters. But there is a balance to be held between the integrity of public expenditure and the rights of the claimant. By being concerned only with one of those two, the department risks sounding a little like Mr. Singh waving his testimonial saying that he has discharged his duties entirely to his own satisfaction. That aspect will need probing.
The end of the inquisitorial powers of tribunals is ground for concern. The noble Baroness talked about the meritless appeal, one refuted by the straightforward facts of the law. But it is not quite as simple as she thinks. There is a case to which again Judge Bassingthwaighte called attention of somebody who 1156 appealed against refusal of a social fund grant for the costs of a funeral outside this country. There was a direct statutory prohibition on what he was asking for. It seemed like a meritless appeal. But on inquisition, investigation into the full facts, it appeared that it was discriminatory between the countries of the EU and therefore contrary to Article 7 of the Treaty of Rome. So that apparently meritless appeal succeeded. Until one looks into the whole facts of a case one does not know where cases of that kind might arise.
One-person appeals are a matter of concern to me. Again, the concern has been expressed, especially if that one person is not a lawyer, whether it might be contrary to Clause 6 of the European Convention on Human Rights—the fair trial provision. I am not a lawyer; I am still in the process of collecting legal advice and since it is a matter of case law, the legal advice is absolutely vital. But I shall wait for that legal advice with a great deal of interest and I shall listen to what other noble and learned Lords have to say on this subject with equally great interest.
What is being done on the anti-test case rule particularly concerns me. Clause 27 (2)(b) says that they should treat previous decisions as though they had not been made. That in effect repeats a provision in the 1990 Social Security Bill on which I had the House counted out and I was in the doghouse, until the Court of Appeal said that the Secretary of State's interpretation of the provision was so unreasonable that Parliament could not possibly have intended it.
I was then reminded of the story of the judge's children who saw crate after crate of champagne being carried into the House and they said, "Mummy, what is it all for?" "Daddy has been upheld in the Appeal Court". I was upheld with very great relief. Judge Bassingthwaighte suggests that Clause 26(4)(b) about postponing cases that may bear on test cases, is in effect an Executive direction to a judicial authority of what it should do. I shall listen to others on that point.
On Clause 72, on backdating, I agreed with a large part of what the noble Lord, Lord Higgins, said—in fact, practically all of it, and that is something to which we must return. The idea that the claimant knows all social security law is absurd. Is there anyone in this House who, outside this Chamber and without their papers, knows all social security law? I know that when I am asked about it by members of the public, I do not. I do not believe I am unique in that. People have rights and especially when there are cases of ill health, they may not be able to claim at once.
This Bill has been referred to as the "Peter Lilley memorial Bill". In the light of that description and in the light of the complete lack of change in it since the change of government, one might be induced to wonder whether the funeral baked meats do coldly furnish forth the marriage feast.
§ 4.45 p.m.
§ Lord Newton of Braintree
My Lords, first, I express my gratitude for what I took to be kindly remarks from the noble Baroness, Lady Hollis, and the noble Earl, 1157 Lord Russell, with whom, as he indicated, I have been sparring for at least 40 years. With the noble Baroness the sparring may only be beginning this afternoon.
A number of people have said to me in the past few weeks that a maiden speech here should hold no terrors for me in view of my experience elsewhere. I do not feel like that at all. I feel no better today than I did when I first spoke at the other end of the building nearly a quarter of a century ago. The main difference is that on that occasion I spoke about agriculture—a subject on which I then knew little except what the local farmers wanted me to say—whereas today I speak on a matter in which I have been involved as a Minister for a large part of the intervening period.
One thing that makes me nervous is that I am conscious even more than when I came that this is a very different place from the one which I left. I ought perhaps to confess—provided nobody whispers it down the corridor—that there were a number of occasions during the previous Parliament, especially on the days when I had to answer Prime Minister's Questions, when 1 had a sneaking feeling that my temperament was better suited to this end of the building than the other. Having said that, I suppose I ought also to admit that had I prayed on the way to the count last May, the prayer might have been, "Please make me a Lord, but not yet"! But here I am, and very pleased to be so. I thank your Lordships for all the help and kindness I have been given since I arrived.
There is one other curiosity for me, revealed in research which the Library kindly and helpfully carried out for me, about when I last spoke in any part of this building as a Back-Bencher. It turned out to be in April 1979 when I asked a Question of the Minister who is now the noble Lord, Lord Morris of Manchester, and was in his place until a moment or two ago. In other words, this is the first speech in this building that I have made for the better part of 20 years in which I have spoken for myself alone and can say whatever I like. It also follows of course that it is the first speech that I have made for 20 years which I have had to do entirely for myself.
However, I hasten to assure your Lordships that even if I am unmuzzled—a word once used in respect of Mr. Gladstone, with whom I would seek to be compared in no other way—I understand that it is not the practice here, whether muzzled or not, to savage anyone and certainly not in a maiden speech. In any case, I would not be well placed to savage this Bill since, as has been clear, much of it bears a remarkable resemblance to proposals which emerged from discussions which I either chaired or took part in during the last administration. However, I should say that that is not the same as having no reservations about some parts of it. It is in the nature of collective responsibility—I hope perhaps this may be of some comfort to the noble Baroness, should she by any chance need a bit of comfort—that one finds oneself endorsing propositions that one might not have wished to put forward alone and unaided.
Having said that, I am conscious that there are many others wishing to speak and I do not want to trespass too much on the time of the House. But I should like to 1158 say a word about what I take to be, and the Minister's speech confirmed this, the main elements of the Bill, the first two of which have origins before the election.
The first element relates to lone parents. It is obviously difficult to say anything on this subject without risking a degree of controversy, though it is helpful to me that there is no controversy on the main points between the two Front Benches. I can perhaps best illustrate my attitude by referring to something I did around seven or eight years ago in the year when we resumed the uprating of child benefit. I did not take the opportunity at the same time to increase the rate of one-parent benefit, as it was then known. The plain fact is, and I ought to make this clear to the House, that the conclusion I had reached was that over the past quarter of a century or so, under governments of both colours and for reasons which seemed perfectly good at the time and probably were, we had ended up with a balance as between one-parent families and families of the more conventional kind which had become unduly favourable to the former by comparison with the latter. I therefore have no objection in principle to a move in the direction contained in the Bill though there will no doubt be a great deal of debate about whether it goes too far and about much of the detail. However, that is not something in which I would want to engage today.
However, I would add that there is a related and wider question which needs to be addressed either in the context of this Bill or in the context of the Government's broader reviews. It is the question of whether, whatever the balance between different kinds of families with dependent children, we have the right balance between what we do for those who have dependent children and those who do not. If I may use an old-fashioned phrase, I am firmly of the view that our system should clearly recognise that the taxable capacity—that is the old-fashioned phrase—of those with children is significantly less than for those without. It used to be recognised through the tax system; more recently it has been recognised through the benefits system; but I have a feeling—in fact, I am fairly clear in my own mind—that in the past quarter of a century or so, again under governments of both colours, we have allowed the balance to move against those who have dependent children by comparison with others and that that may need correcting.
I turn briefly to the Bill's second main thrust, the reform of the appeal system and its administration. Again I have to register a track record. As a more junior Minister, I was responsible for the relevant part of the cumbersomely titled Health and Social Services and Social Security Adjudications Act 1983, which sharply increased the independence of the appeals system, and was at that time seen as an important step forward. Your Lordships will therefore understand that I have some reservations about what is in the Bill, as indeed I had some reservations when moves along these lines were discussed at an earlier stage in the last Parliament. Nevertheless, I accept that there continues to be criticism, particularly of delays, and that it is right to look again at ways of reducing those and streamlining the system.
1159 As always, the problem is how to strike the right balance. I shall be surprised if we do not find ourselves looking carefully not at whether Ministers are convinced that what they propose is right, or even that your Lordships are convinced in due course that what is proposed is right, but whether those who will be subjected to it will think that it is fair and reasonable and sufficiently independent. It is a question that we must look at with care.
I come thirdly and lastly to the other ingredient on which I wish to comment, which is the only one entirely added by the new Administration. I ought to say quite clearly that it is the one which at present gives me the greatest difficulty. It is the backdating proposal, and confining it to a month. Obviously I shall look very carefully at what has been said, and no doubt will be said, about exceptions, and it may be that I can be reassured. But, as has already been said, we need to be very much aware that to very many people the social security system is not at all familiar. Of course there are people who know it very well and are frankly adept at playing it. It may well be that a month is quite long enough for them.
However, there are a whole lot of others, particularly since the introduction of SSP, whose dealings with the system, until a crisis occurs, are confined to the relative simplicities of child benefit at one time and retirement pension at another. When the crisis does occur—the disabling accident, the sudden first-time unemployment or the bereavement—they may well be far too preoccupied with the immediate trauma to have the time to start researching the mysteries of DLA and housing benefit. We need to look very carefully at that part of the Bill as well.
I conclude with a comment on the wider context into which the Government have sought to set the Bill; namely, their concern to modernise and reform the system, to constrain its costs and to improve incentives. I have no problem with those objectives at all. Indeed, I hope it may be acknowledged that, as a result of the efforts of the past 18 years, we are already much better placed than most other comparable countries in Europe and elsewhere. Undoubtedly, our problems would be much worse than they are but for the change in uprating conventions at the end of the 1970s, the reforms of the mid-1980s, including the modification of SERPS, the introduction of family credit, the introduction and subsequent extension of SSP, and many other changes.
Nevertheless, the world moves on, and in social security there is always more to do. It remains the most powerful single engine of growth in spending, it remains more complex than we would wish and it remains the case that for some people it makes it hardly worth working. To the extent that the Government's aims can be translated into workable propositions, while maintaining the support for those in need which a civilised society should provide, it will deserve, and I think will get, support. I was glad to hear what my noble friend Lord Higgins said on that front. For my part, I look forward to playing a part in your Lordships' consideration of these matters, both on this Bill and no doubt in due course on others, in what I hope may be a constructive way.
§ 4.56 p.m.
§ The Lord Bishop of Bradford
My Lords, it is with a considerable sense of privilege and no little pleasure that I rise to congratulate the noble Lord, Lord Newton of Braintree, on his speech. Many noble Lords have looked forward to the speech and those of us who have not had the privilege, or otherwise, of being in the other place are now fully convinced that those noble Lords were right. The noble Lord has considerable experience in this field and has also contributed in a notable way to the life of our nation and government. Your Lordships' House will be greatly the richer for his presence and his contributions.
I should like to congratulate him on his humour and on the very modest and gracious way in which he speaks and also on combining two qualities which are often felt to be impossible to combine. He is clearly a man of compassion and has been a Government Whip. I only wish that one could say that Bishops and Archdeacons had a similar combination of compassion and firmness of hand. Perhaps the noble Lord's prayer will at some time change to, "Lord, make me a Bishop, but not just yet".
I note that the noble Lord had a brief foray into Yorkshire—to Sheffield, Brightside indeed—in 1970. As a Yorkshire Bishop, I welcome that and only regret that it was for a brief time. I hope that he has returned, and will return, many times, unhindered by a general election, to enjoy a real and sustained Yorkshire welcome. I hope also—and this is no convention—that the noble Lord will speak many times in the House on this and many other subjects. He will be listened to with great respect and appreciation.
The Church recognises the complexity of the issues to be tackled in this thorough-going review and the Bill obviously represents only some aspects of the review. I would not presume to comment upon the technical aspects but I wish to come at this issue from a different angle. My wish is to speak as a pastor and to reflect the comments and experiences of pastors and others who live among people whose lives will be affected and indeed perhaps changed by the provisions of the Bill.
In Bradford between 1993 and 1995, a review took place under the aegis of the Bradford Faith in the City Forum called Powerful Whispers. Key decision-makers in the Bradford metropolitan district were called together on four occasions to listen in total silence to people who lived in four of the most deprived areas of that district so that they could hear those people speaking for themselves and saying, "This is what it is like to live here". I assure noble Lords that for the great and the good of Bradford—I fear that I was one of them—this was a very novel experience indeed. We sat there for two hours, with no argument and the only questions were ones of clarification. That was a very salutary experience.
I raise this and echo, I believe, the noble Lord, Lord Newton, in wondering just who has been listening to the people who will be affected, as it were, at the grassroots by the provisions of this Bill. It is not difficult for the great and the good of any community, with the best of intentions, to legislate for others. I fully take the
1161 point made by the noble Earl, Lord Russell, about the place of the judiciary. From a pastoral point of view I would suggest also the place of the people, as it were, on the receiving end.
It is clear that many of the people to whom we spoke and to whom we listened were convinced, rightly or wrongly, that their views had not been heard. That included not being heard by those who represented them locally and nationally in government. Of course, they may have been quite mistaken, but that is the way in which they presented their position. I shall be grateful if the Minister tells us something of the processes by which the claimants who are most affected by the Bill have been listened to and how their voices have been heard.
I accept, of course, that there can never be unlimited resources available for provision for the poorest and most vulnerable in our society. Therefore, priorities and choices have to be made. The resources available inevitably affect those choices. However, I suggest as one of the underlying principles that in any healthy society the importance of inter-dependence is recognised and appreciated. In some measure we are all dependent on others for our survival and fulfilment. Yet we all strive to sustain a degree of independence. The notion of inter-dependence—mutual responsibility, if one wishes to put it that way—must challenge any society which allows and encourages the independence of some at the expense of others and which reinforces high levels of dependence and restricted responsibility for the poor, the disadvantaged and the vulnerable members of society. So there is a need to have a correct balance between inter-dependence and independence. That should govern our thinking on welfare provision.
I echo other noble Lords in expressing concern about the lone parent provision. People in that position speak frequently and say, "We do not understand and we are fearful about what is happening". Respected and very notable advice organisations produce papers to say that they too are fearful. I was very grateful to hear some assurances from the Minister earlier this afternoon. The need to support children must be paramount. Lone parents must be given a very proper provision.
I declare, if I need to, my own conviction that the basis of the well-being of our nation is the family, which is understood to be a lifelong and exclusive relationship in marriage of a man and a woman. I stand by that with no apology. But we all know that life is not like that; it is not tidy. Life is many faceted in terms of our relationships. That is why I stress as one of the great principles underlying this Bill that children must be supported as being of paramount importance. That is one of the great anxieties which I wish to reflect to your Lordships today, as expressed by those people in the poorer parts of Bradford.
I understand that, for example, single parents who get a Christmas job in order to earn a bit more money to provide presents for the children and who then lose the job will not now be punished by being treated as new claimants and therefore coming in at a lower rate. If that is so—I hope that I shall be corrected if I am wrong£it is something that needs to be spelt out loud and clear 1162 because there is considerable anxiety expressed by people that if they take on a brief, short-term job they will in due course be penalised. The more clarification there is—and I hope that the Minister will do that—the better.
Finally, I would like to take up the concern about what this exercise is for and the principles behind it. The Minister mentioned the word "inefficiency". That rang some alarm bells. I suggest that there is an important distinction between being efficient and being effective. To be efficient one may take an existing system, organisation or process and improve it so that it is quicker and there are fewer delays. To he effective means that one must have some underlying principles as to why one is going into the exercise and what difference it is going to make to the people on the receiving end. One will be judged as to one's effectiveness not by how quickly it is done, but by how well those changes are effected. I believe that the principles are being published today. I hope that we shall have more put out about exactly why the exercise is necessary. Is it just a question of cost cutting? There is a great deal of cynicism around reflected when one talks to people in the poor parts. Why is this exercise being taken and where do we hope to get?
When I was a vicar and had curates we had a wonderful time on a Monday morning going through the sermon preached on the Sunday, whether by the vicar or whoever. The final question was, so what'? It was said, "Now, vicar, you preached all those words; you went through that detailed exposition and produced that wonderful set of words that lasted for 20 minutes. So what? What difference have you made; what were you trying to achieve and where do we look to see the difference?" I ask the Minister whether she will very graciously accept the question, so what, in that spirit.
§ 5.8 p.m.
§ Baroness Kennedy of The Shows
My Lords, I join in congratulating the noble Lord, Lord Newton, on his maiden speech and welcome him to this House. It was a pleasure to listen to him today. I hope that the noble Lord will enjoy this new section of his career and that it is as fruitful as it has been in the past.
I turn to Clause 70 in the Bill, which deals with the removal of the child benefit premium for lone parents. My noble friend began her address to the House by saying that the project of welfare reform is one of the most challenging projects facing this Government. That is certainly true, as most of us would agree. I hope that a time will come when we can all say that this Government's reform of the welfare state was one of its great successes.
But in order to go along that route and to ensure that that great project results in a just society, I urge the Government, in facing that complex project, to welcome thoughtful contributions from well-wishers who are concerned, as the Government are, to ensure that a just society is indeed the outcome.
It is in that spirit that I should like to put a number of suggestions to the Government. I do so based on, I should like to think, a wealth of experience as an 1163 advocate in the courts and as one who has spent a great deal of my life involved with cases relating to women and children. I address this House also as someone who has recently taken on a new mantle in that I am the president of the National Children's Bureau, a body familiar to many of your Lordships because my new role was formerly carried out by one of the great favourites of this House, Lady Lucy Faithfull. I cannot pretend to be as knowledgeable or as wonderful as she was, but it is in memory of her that I now raise some of the matters that I am sure that she would have raised today on behalf of children.
I ask the Government to consider creating an exemption for parents with children under school age. I do so because I know that this Government are concerned about good parenting and that they recognise the importance of the early years in creating well balanced, well functioning and fulfilled adults. We all know—all the research shows it—that if there is good bonding and good attachment in young children to their carer or parent, those children will grow up less likely to have a mental illness, more likely to succeed in education, more likely to be in employment, and more likely to be productive members of society and active citizens. So, in the spirit of John Bowlby, that great expert in child development, I should like to recommend to this House the issue of good attachment as being a principle which should be the basis of our politics. The politics of attachment will ultimately be the politics of good citizenship. We should think of the precious resource that we have in our children and of the importance of giving them the best in their early years.
I am concerned, as are the Government, I am sure, that parents of very young children are able to do their very best for them. There should be recognition that that is harder for single parents. In answering a Question at the beginning of today's proceedings, my noble friend the Minister said that there was no evidence that life was harder economically for sole parents. I suggest that there is a body of research to show precisely that and that the Family Policy Studies Centre could produce it for her. However, even without research we know as sensible human beings that, of course, life is harder for single parents. Think about it in practical terms: if you are on your own with young children under school age, it will not be easy to get them on a bus and down to a supermarket some distance from home to avail yourself of the less expensive food there. You may have to resign yourself to shopping at the local corner store where food is likely to be more expensive. Lone parents are also likely to find that their household bills, such as heating, are likely to be as expensive as those for two adults who are bringing up their children on benefit. We know that. There is an old adage that two can live as cheaply as one and it is certainly true with regard to some of the bills facing young families. So, a parent bringing up children on her own—I use the female pronoun because it is usually women who are in this position—experiences special hardship. We know that from the use of our common sense as well as from personal contact with those who face that arduous business.
1164 We also know that in order to be a better parent every adult needs social connections with other adults and sometimes they need precious time (albeit only a little) to meet other adults. Those without a partner to give them that space in which they can, say, visit a friend have to pay for babysitting, which is not always readily available inexpensively or without cost. We must recognise that bringing up children alone is hard, tough and demanding. There will be times when it will be easier to shop locally than to trail the children miles to find cheaper purchases. That is why it is important that we recognise the particular problems facing lone parents.
All of us know that quality childcare is difficult to find. As a professional woman with young children, finding quality childcare has been one of the things that has exercised me most about conducting my professional life while fulfilling my role as a mother. I have always been anxious about the quality of the childcare that I can obtain yet I do not face any financial problems. If professional women like myself are concerned about that and find it difficult, what must it be like for a young mother on her own, seeking and wishing to work but knowing that she is the best person to look after her children because she cannot afford a suitable substitute? Are we really thinking of young children when we put measures such as these in place? Perhaps we should be a little more far-seeing in approaching this reform.
I have had some research carried out into the number of children who will be affected by these measures. The research made available to me by the Library in your Lordships' House, which has contacted the Department of Social Security, states that there are 216,740 such children under five. The bill for them is meagre at £68 million per annum. Are we concerned about the costs here? Is this a cost-saving exercise? If so, I urge the Minister to consider the figures. I am relying, of course, upon the differentials which have been presented to us by the department. I urge some consideration of the figures to appease those who are concerned about the finances.
My second suggestion for my noble friend is that there should be a period of grace for those who suddenly become sole parents. I raise this matter because it is important to recognise the pain of children who are suddenly bereft because one of their parents leaves. When a child's security is suddenly threatened by one parent leaving home, it is often the reassurance of the other parent which provides that child with the well-being to enable him or her to continue functioning and developing well in the years that follow. That is why I am asking the Government to consider a period of grace for those parents who are suddenly abandoned or left or who suffer a breakdown in their relationship.
I am particularly concerned about cases involving domestic violence. Over the years, I have conducted many cases involving domestic violence where the woman has felt that the only way in which she can survive is if the abusive partner leaves home or if she leaves, taking her children with her. Whatever the circumstances—whether the abusive partner is forced to leave by the obtaining of an injunction or whether the 1165 woman leaves and sets up home elsewhere with her children—those women should not be expected immediately to seek employment. I strongly urge the Government to take into account the experience of some of us who have worked for many years with those facing such extreme circumstances and who know the desperation of such parents.
I am married to a doctor and so have access to the British Medical Journal. There was an article in that publication which I have used in the past quite out of the present context. However, I believe that it may he useful to the Government. The article was written by a number of researchers and published in the BMJ in April 1994. Its purpose was to ask what happened to the children of single parent families. The research was able to demonstrate that in many cases they did just as well as other children, but some did not. Therefore, the researchers looked at the factors which made the difference between a child not performing as well as another child with two parents. Why does the child end up having educational problems and become anti-social, or whatever it may be that creates the discrepancies?
Two main factors emerged: financial hardship and disruption. One key factor that reduced the performance of a child from a single parent family was real financial hardship. My noble friend may say that if the parent is in employment the family will be better off. However, all of the research suggests that, particularly in the early years, children require real nurturing and continuity, especially if they have one parent. I understand that financial hardship is very much on the Government's agenda. The second factor—disruption—feeds into the issue of providing a period of grace for those who suddenly face separation. It was found that the children of lone parents—whose single status had been created by their partners leaving the home with an unpleasant separation or divorce—were likely to founder at school and in their development. What was required was some kind of security created by the presence of the single parent. All I say to the Government is: please bear that research in mind when looking at ways to ameliorate the situation of those with very young children and those who face a crisis in their lives. The period of grace that I suggest may be in the order of 12 months.
I should like to put a final suggestion to my noble friend. I know that she will listen to these suggestions with good will. At the moment a lone parent in work receives family credit and is able to keep £15 of the maintenance from her former partner before she loses that family credit. Pound for pound the maintenance recouped from a former partner will be taken from her family credit save for fl 5. However, if she is not in work but is on income support she is not allowed to keep any of it. Therefore, there is a real discrepancy between those in work who benefit from the recovery of money from a partner and those who are on income support. Surely, that inequity is a matter to which the Government should have regard. In trying to reform the welfare state—I know that my noble friend is involved in reform of the Child Support Agency—I ask the Government to consider a maintenance disregard for women on income support. This is another method by 1166 which the Government can try to assist lone parents given the special privations that they face in bringing up their children.
At the beginning of this debate I was saddened to hear the sneering from the other side of the House. I spend a lot of time saying to my children that sneering is one of the ugliest ways of behaving towards others. I find it unpleasant to come to this House and see it occurring here. The temptation in the face of sneering is to dig in one's heels and believe that one cannot be seen to be considering creative suggestions. I ask the Government to ignore that kind of uncreative, unhelpful sneering from other Benches and listen with understanding and good will to those who from experience and good will make suggestions to them about how to reform the welfare state to achieve the just society that we all so earnestly want.
§ 5.25 p.m.
§ Baroness Williams of Crosby
My Lords, I should also like to express my congratulations to the noble Lord, Lord Newton of Braintree, on his maiden speech. He obviously has great knowledge of the subject and is also a politician with a reputation for great integrity. I believe that it is as much an honour for the House to receive him as it is for him to join it. I very much look forward to his further contributions to our debates because I know that everything he says will be informed by both knowledge and honesty which is a very powerful combination. It is also a great pleasure for me to follow the remarks of the noble Baroness, Lady Kennedy of The Shaws, whose speech showed both insight and courage, and the right reverend Prelate who reflected concern for a poor community strained by the circumstances of single parenthood, child poverty and the desperate effort to make ends meet.
Like the noble Baroness, Lady Kennedy, I fully understand that all of us will have to undergo the process of recognising the need to modernise the welfare state. In so far as the Government have two major objectives I can safely say that we on these Benches accept and recognise the importance of them.
As I understand it, the first of those objectives (which I commend) is that there should be a challenge to the dependency culture and that it is not a good thing for people to be dependent on benefits if they have the means and the ability to support themselves and their families. We all recognise that there are dangers in a dependency culture. Secondly, I believe that many in this House recognise the importance of helping people to return to work and that there are particular difficulties confronted by lone parents and disabled people in that respect. No doubt this is an issue to which we shall come later. In so far as the Government are able to ease that transition through provision for training, childcare and assisting people in the difficult problem of suiting themselves to jobs, none of us finds difficulty in commending what they seek to do.
But the whole of the attempt may founder if there is a lack of compassion and understanding for what it is like to be poor, lonely, to have very little information and to feel that in the end the bureaucracy is not on your 1167 side. I profoundly fear—I speak much more in the spirit of sorrow than in trying to make some cheap party point—that for lack of a sufficiently carefully thought through policy, the Government are in great danger of being seen widely in the country by many of those who voted for them with hope in their hearts as having fallen short and, in extreme cases, to have betrayed them.
In following the comments of the noble Baroness, Lady Kennedy, I should explain briefly why I say that and why I hope and pray that the Government will think further about some of the ways in which they may modify their present policy in order to modernise the welfare state with the sincere and broad support of those who wish it well. We have a situation in which benefits are to he cut by April 1998 for lone parents, both those on income support and those drawing child benefit and currently in work, long before the provisions of welfare-to-work are to be put in place. Even the announcement of the provisions of welfare-to-work predate the achievement of them by many months. Childcare is not in place and the childcare experts, or young people, have not been trained. The skills are not yet available to those who are to seek work. All that means, as the noble Baroness, Lady Kennedy, pointed out, is that there is a space for the individual family between the cutting off of its benefits and when it might be able to benefit from welfare to work. Into that year, many of them will tumble, with nothing to look forward to but despair.
Secondly, in addressing the issue of the poorer section of the community—lone parents, 59 per cent. of whom fall into the poverty area, according to the DSS's own statistics—the Government are giving encouragement to those who seek to scapegoat lone parents, and that frightens me. One of the objects of reforming the welfare state must be to accept its inclusivity, and not to exclude some parts of our society from that society. The social exclusion unit established by the Government is intended, I believe, to avoid such an outcome.
Thirdly, the Government rely too heavily—I suspect that they know that—on the argument that lone parents would be better off if they worked. They point to the limited PSI study, which argues that there should be a benefit of a net £50 a week. That study was flawed in two ways: first, 79 per cent. of those in the study paid nothing for childcare; and, secondly, they paid less than £5 a week for transport. Both are deeply unrealistic figures. I made some inquiries about childcare costs in London and outside. The range of what one might describe as decent childcare for children not yet at school was £80 to £160 a week.
Let us suppose that our single parent is lucky enough to obtain a job; that that job pays her £4 an hour; and that she works 40 hours a week, which would be a heavy burden for a lone parent. She would earn the equivalent of what she will pay for childcare for one child in London, and probably gain only a few pounds once she has paid for childcare outside London.
I was a fortunate single parent because I had a substantial income as a Minister of the Crown. It is difficult to begin to describe the strains, emotional demands and difficulties that lone parents face. One 1168 adds to that the terrible problem of just trying to make ends meet, of worrying about whether you can pay for the television licence; whether you can pay for a decent school meal; what you do when you wake up and one of your children suddenly has an asthma attack. Do you go to work, or do you risk losing your work—much low paid work falls into this category—because you stay at home with the child? It is a desperate agony of conscience with which to face tens of thousands of our fellow citizens.
I strongly support the plea, so reasonably made by the noble Baroness, Lady Kennedy, that we look again at the position of lone parents with children under five—they form the most vulnerable group in society and the most vulnerable section of that group—and ask whether we have to take lone parent premium away from them. My honourable friend the Member of Parliament for Newbury pointed out that by the simple device of freezing employer thresholds, the Government will already have brought into their revenues an additional £125 million next year. That is more than twice what will be saved by cutting lone parent premium. That is only the beginning of it. There have been references to reductions in employment benefits and other areas, which mean that the Government do not need to make that cut to save public expenditure.
There is one other possible argument. It is the moralistic argument. It is that single parents are, in a sense, immoral, and therefore should be punished: 1.7 million of the 2.5 million children living in poverty in single parent families come from families where the parent is widowed, divorced or separated. I hate using that argument, but it needs to be put because, as several noble Lords have said, those of us who have been constituency Members or family lawyers have met many families where the spouse has just walked out—sometimes without notice. They have met many families where the children are being sexually abused by their parent. How can we suggest to such a family that it should also be punished by the state?
I hope that the Minister, for whom I have great respect, will be able to answer in precise terms the question put by the right reverend Prelate about whether single parents, if they take a job and subsequently lose it, or if it is a temporary job, will thereby lose the single parent premium. It is a crucial question. I am still not clear about the answer, because all the briefing that we have received from the charity bodies says that it does mean that. It was not clear from the answer to the noble Lord, Lord Higgins, what the outcome is. I shall not attempt to answer it myself.
I fear that the Government—I say this with respect—are besotted by the American example. I know of what I speak, because, as some noble Lords will be aware, until recently I spent half my time teaching at Harvard—the very university from which much of the expert advice upon which the Government rely has been drawn. I am terrified that the next step in modernising the welfare state will be the replacement of child benefit by earned income tax credit—a system well-established in the US. It has two great drawbacks. The first is that 1169 it requires family taxation and the abandonment of individual taxation. That is a battle which women have fought for years and years.
Secondly—and this is more troublesome—the scheme requires that the EITC be paid to the head of the household, which—I do not say this with any prejudice—is normally a man. All the research evidence shows that that is much less likely to be spent on the children. I pray and hope that the Government will give profound thought to that point, because in the US at present the proportion of national income going to the bottom fifth of families with children—I have the figures drawn from the latest statistics available, the so-called population surveys of March 1997—is 3.91 per cent., and, after EITC, 4.37 per cent., whereas the top fifth has 45.51 per cent. of national income, and, after EITC, 45.31 per cent.
I do not want to see us emulate that. That is moving in the direction of extreme inequality and profound poverty among children. Before the Government move further along those lines—I accept the two major principles about which I have already talked and with which we agree—perhaps they will look at Denmark, where the level of child poverty is 5 per cent., or Holland where it is 12 per cent., and consider whether the model that seems to have so much influence on the Treasury in particular is the best model to follow. I hope that the Government will pause to think again about those elements in their plan—not the whole plan—which might jeopardise the enterprise, because it will be seen by the country as a whole as lacking human compassion and understanding.
§ 5.40 p.m.
§ Baroness Turner of Camden
My Lords, I, too, welcome the speech made by the noble Lord, Lord Newton of Braintree, who I am sorry is not in his place. I found it witty and informative. I look forward to hearing from him again because I know that he has wide experience of the subject which we are discussing today.
I welcome the intentions of the Bill as explained by my noble friend the Minister. Rightly, the Government are attempting over a period to reform the welfare system and this Bill is part of that. I do not dispute that the system requires reform. The social security system is immensely confusing and there is some justification for the often voiced criticism that it does not benefit adequately those most in need. It is, or should be, the prime concern of politicians to protect the vulnerable. It is my belief that that is part of the Government's agenda and I welcome that.
However, I wish to raise several points in connection with the Bill. I do so constructively because I respect the intentions spelt out today by my noble friend the Minister. For a number of years I was a member of a social security tribunal in East London. It was a three-person tribunal with a legally qualified person in the chair. Most of the people we saw were very poor, sometimes not very literate and mostly unrepresented. We did our best to put them at their ease. We explained our function and the legally qualified chairperson explained in simple terms the legal framework in which 1170 we operated. We then did our best to ascertain from the appellant the elements of his or her case, utilising the inquisitorial method. Even if we did not eventually find for the appellant, I think that all believed that they had fair treatment.
What concerns me about the proposals in the Bill is that there would appear to be an intention to depart from that structure in regard to appeals. Apparently, a legally qualified chairperson will not always be required. Three-person tribunals could be abandoned. It is apparently thought necessary because there are currently long delays before appeals are heard. The Minister pointed that out today.
Will the Government reconsider that matter? Three-person tribunals have operated successfully for a long time. Tribunals are respected by the people who appear before them. It is possible for the wing members, of which I was one, to play a vital role in putting an appellant at his ease and helping him to tell his story. No one wants long delays, but I question whether the way to deal with that is by altering the present system as proposed.
One way forward would be to improve substantially the manner of conveying decisions to claimants. If greater care were taken at that stage there would be fewer appeals which did not stand much chance. The machinery would not become so clogged up. The Council on Tribunals has stated that it does not consider it appropriate to move from the present system of three-person tribunals. It states that improvements should be made first in tackling the unsatisfactory nature of the decision-making. Therefore, I hope that the Government will decide to look again at that aspect of the Bill.
I am also a little worried about the cut in the time limit for appealing. Currently, claimants have three months in which to appeal to an appeal tribunal. I understand that that is to be reduced to one month. I do not understand why that is thought to be necessary. Some claimants may require longer, particularly if they seek independent advice. As we know—and everyone has said so today—the law in relation to social security has become increasingly complex over the years. Claimants may not know what their entitlement is. I do not see that much is to be gained administratively by reducing the period to one month. Apparently, the Government have stated that where there is genuine difficulty in making an appeal within the time limit, regulations will provide for late references to be accepted. It is not clear what those special circumstances will be. Will they be bereavement, marriage breakdown or illness? That is bound to lead to arguments about what is and what is not exceptional. Will the Minister explain why the alteration has been felt necessary?
There are similar arguments about the issue of back-dating. Many noble Lords have addressed that problem. The Bill makes provision for benefits to be backdated only for one month. I believe that that could penalise people, particularly elderly people who may not understand what entitlement is available. They may not be very well or they may live alone with no one to 1171 help or advise. It seems unfair to penalise them in this way. If they are entitled to benefit should they not receive it?
What about widows? As several noble Lords have said—and I can attest to it—being a widow or becoming widowed is a traumatic experience. Should widows lose benefit because they have not made application within a month of their husband's death? Suppose widowhood occurs as a result of an accident in which the widow herself is injured? Will she lose benefit if she does not claim within one month?
Again, what about people who later in the day find that their illness relates to an industrial condition? Asbestosis is a case in point, or it could well be silicosis or a similar disease. Are people to be limited in their claim for benefit if they do not claim within one month? I cannot believe that the idea is simply to save money on benefit which will not in future be paid. That would be most unfair. Surely, if there is an entitlement the benefit should be paid and I believe that the savings would be minimal. Will the Minister be kind enough to respond to that point?
As regards lone parent benefit, I share the views which have been expressed today by my noble friend Lady Kennedy and by the noble Baroness, Lady Williams. A great deal has been said about that today by people who have much experience. I support the Government's declared intention to get people into work, including lone parents, if that is a feasible possibility. However, I am worried lest the new legislation giving entitlement will start to bite before the structures are in place to provide that work and the childminding agencies to enable women to work. There will be women who, for various reasons, will not be able to work. The blanket approach envisaged in the Bill will mean that they will be substantially worse off.
I realise that it is not the intention to remove benefit from those already receiving it and that the proposed measures will apply to new claimants only after the date set out. As has already been asked, what if the women who decide to try to work find it unsuitable for various reasons? Perhaps transport is non-existent or very poor, or the child or other members of the family become ill, or the work is not suitable. From my reading of the Bill, I understand that a woman could return to benefit but at a reduced rate, just like a new claimant. Today, the Minister indicated that that issue will be dealt with in some way, but that is not obvious to me from the Bill. I should be grateful if she could comment further in response. I shall be pleased to hear that that is the case and that there has been a misunderstanding on the part of the agencies, which appear to have written to everyone about the problem.
Generally speaking, the women will be able to obtain only low paid employment. The minimum wage is not yet in place. We must remember that many lone parent families consist of women and children who have been abandoned. The noble Baroness, Lady Williams, made that point most strongly. I understand and applaud the intention of the Government to ensure that the Child Support Agency does its job of ensuring that absent fathers pay towards the maintenance of their children.
1172 But, as we all know, that is not always plain sailing. Many absent fathers may have employment problems and others may have second families. Complex issues are involved and some of the problems raised today have not been answered. I urge the Government and the Minister to look again at some of the representations that have been made on that very difficult and complex issue.
As I said, I know that the intentions are good but there are areas of the Bill which I am sure would profit from being given a second look. That is one reason that we have scrutiny in your Lordships' House. I look forward to hearing the Minister's response to the points that have been raised.
§ 5.50 p.m.
§ Lord Archer of Sandwell
My Lords, this week in particular it is a great pleasure not only to follow my noble friend Lady Turner but to declare that I am wholly in agreement with every word that she said.
This would be a wholly unrealistic debate if we failed to place it in the context of the situation which my noble friend inherited and which she seeks to address. First, we have poverty and despair to a degree which should induce in us a sense of crisis. According to a recent report Breadline Britain in the 1990s, one-fifth of Britain's population is living in poverty, defining that word as most people would define it. One-quarter of the European Union's poor are living in this country. More than 100,000 people are dependent on means-tested benefits.
I remember some 10 to 12 years ago when we were shocked to see homeless people reappearing on the streets of London for the first time, as I recollect, since the 1940s. There are now 150,000 people deemed to be homeless. Perhaps worst of all, there are 5 million people in workless households. At last we have an Administration who offer young people an opportunity to work and seek to create a climate where a workless, aimless, hopeless existence is not seen as normal and inevitable.
Secondly, we have a system of social security administration where some 68 per cent. of all benefit decisions are open to criticism; where each annual report of the Chief Adjudication Officer gives rise to further reasons for anxiety; and where we have developed a culture of not accepting adjudications, irrespective of their contents, purely because they are more likely to be wrong than right.
It was said by the noble Lord, Lord Higgins, that the Government's proposals are largely economy-led. I am sure he would agree that that is not necessarily a reason for rejecting them. Annually, we spend about £4 billion to administer social security benefits. Therefore, we should be irresponsible if we did not reflect that some of that money might be directed to the pockets of those who need it. If the Government's efforts to improve the standards of decision-making at first instance are successful, that will go far towards solving the problems of overloading in the appeal system.
That leads me to the third factor in the crisis situation. The noble Lord, Lord Newton, in a speech which was as entertaining as it was well informed, referred to 1173 delays in the appeals system. Anyone with experience of visiting tribunals in the ITS system will be familiar with the constant fight against delays because they are dealing with people for whom each day's delay is another day's hunger and possibly another day wearing shoes which let in the rain. Noble Lords will appreciate—and I am sure the noble Baroness, Lady Anelay, will agree with me—the frustration of members of tribunals when a hearing cannot take place because the appellant does not arrive, because a necessary report is not available or because it transpires that there is not an issue to be decided. That is not always because the appellant has got it wrong but is frequently because the department has not properly reviewed its own decision. Therefore, there is great need for a government whose approach to social security goes beyond considering what benefits can be reduced or eliminated.
One aspect of the background which should not be overlooked—while any attempt to generalise must ignore a substantial number of counter examples in a system which received more than 290,000 appeals in the last reporting year—is that ITS tribunals are fair, for the most part well informed, careful, hard-working and dedicated. Those involved in the administration are troubled about the future of their jobs; are frequently overworked; but they are trying hard to cope in difficult circumstances. It would be remiss if we did not pay tribute to the president, who was referred to by the noble Earl, Lord Russell, Judge Bassingthwaighte, whose term of office is unhappily about to terminate, for his work in bringing a worrying situation under some form of control and in particular for the annual reports which he has initiated. They are a model of open and transparent administration. He has helped to identify some of the changes in administration which need addressing.
Therefore, I applaud the concern of my noble friend and her colleagues, at the very outset of the new government, to turn the tide. It is sad that I now come to the word "but". Yet again, I must declare an interest. I am privileged to chair the Council on Tribunals. It was a standpoint from which, more than once, I found myself supporting my noble friend when she spoke from the Opposition Benches. I am sure she will understand if I am not necessarily reduced to silence by a change in government.
Indeed, it is something of a disappointment to me, although not necessarily to the noble Lord, Lord Higgins, as he indicated, that some of the proposals in the Bill were ventilated by the previous government in their consultation paper. The council responded to that paper and we were grateful to those officials from my noble friend's department who were prepared to come to discuss the proposals with us. We welcomed some of the proposals. We expressed anxiety about some of them. Good and bad, some have remained substantially unchanged by a change of government.
First, we welcomed the attempt to improve the standard of first instance decisions. As my noble friend Lady Turner said, we added. "If you are thinking of improving the appeals system, would it not be better to wait to see how it works when fewer decisions need to he appealed and when the reasons, explanations and 1174 general paperwork available to tribunals has improved?". We were not saying, "If it ain't broke, don't fix it". Rather, we were saying, "Before you think about mending it, see how it functions in conditions where it has an opportunity to function properly".
I echo the words of the noble Earl, Lord Russell, in saying that it may have been better if, before the legislation had been introduced—making changes in the appeal system—some thought had been given to the relationship between the judiciary and the administrators. It is always a difficult problem. Administrators must deal with resources which are not always sufficient to produce an optimum solution. The judiciary are concerned to ensure standards of justice. Sometimes there must be a compromise as to how differing concerns are to be resolved.
I know that the Minister's burdens are already fairly substantial but perhaps I may add to them. I recommend to my noble friend a recent report by the Council on Tribunals called Tribunals: their organisation and independence which addresses some of those questions and which seems to have attracted a wide welcome.
Paragraph II of Schedule I to the Bill empowers the Secretary of State to make regulations enabling administrative officers to make some determinations. Indeed, reference has already been made to that fact. For myself, I would not necessarily quarrel with that provision in principle. However, when my noble friend the Minister comes to reply—or, if not, at some subsequent stage before Committee—perhaps she will be able to enlighten us as to the kind of determinations that the department has in mind, who will appoint the administrators for the purpose of those determinations, and will they be answerable to the president.
There are two other questions which may have to await the Committee stage for their resolution, but I believe that they are sufficiently fundamental for me to raise them now. One of them was referred to a moment ago by my noble friend Lady Turner. There is deep disquiet about the erosion of the right to a three-person tribunal. The Government recognise the value of bringing a diversity of experience to bear. That is true not only in different cases but also in the same case. Where the issue is one of fact, one of need or one of judgment, or, indeed, one of what is reasonable, a cross-fertilisation of backgrounds may be of great value. It can certainly reinforce the confidence of litigants in the combined wisdom of the tribunal. It is not necessarily a question of which expertise is essential to the precise issue; it is a question of dialogue between minds who are trying to make a positive contribution to a solution.
Where the issue is purely one of law, or where the tribunal is dealing with certain interlocutory questions, there may be no objection to having a single-member tribunal—perhaps even to deal with hopeless appeals if that expression is taken to mean asking for something which the tribunal has no power to give, but we all remember the research of Professor Kathleen Bell on the question. Moreover, we know that in response to the Green Paper there was a strong preponderance of replies urging the merits of the three-member tribunal.
1175 Incidentally, when my noble friend the Minister replies, perhaps she can tell us what became of the analysis of Professor Roy Sainsbury of the responses to the Green Paper.
Where the proposal for single-member tribunals is combined with abolishing the need for legal qualifications, either in respect of the single member or where the tribunal consists of more than one member in respect of the chairman, our anxieties are exacerbated. I do not suggest that there is no room for different forms of expertise; indeed, quite the reverse. However, the process of sharing a tribunal, construing and applying regulations, drawing out what someone is trying to say and, above all, ensuring that the procedural safeguards necessary to justice are observed is in itself an expertise—an expertise for which medical skills, accountancy skills, counselling skills or personal management skills are no substitute. It is an expertise which is essential to a judicial hearing, and it is an expertise which is more likely to be found among lawyers. That fact was recognised in 1973 and I do not believe that it has subsequently been questioned until now. If my reading of the Bill is accurate, that is to be achieved by regulations under Clause 8(3). It seems from Clause 75 that those regulations are to be subject only to the negative form of parliamentary control. It would be enlightening—it is to be hoped before the Committee stage—if we could see the observations of the scrutiny committee on that proposal.
I have one further matter to raise which I believe to be of fundamental importance. Clause 13 provides for appeals against decisions of the Secretary of State. Subsection (2) refers to a wide spectrum of appeals and then provides that,nothing in this subsection shall confer a right of appeal in prescribed circumstances".That appears to mean that, in relation to any appeal in that subsection, the Secretary of State may prescribe circumstances in which the right of appeal shall not apply. Therefore, by regulation, the Secretary of State may deprive any class of person of any right of appeal. I am glad to see that the noble Lord agrees with me. There is a similar provision in relation to other classes of appeal in paragraph 8 of Schedule 2. I am not suggesting that that power should be subject to stricter parliamentary control. I am suggesting that that power is wholly unsuitable for any form of subordinate legislation. The creation of a jurisdiction, and still more the abolition of a jurisdiction, should be done by primary legislation.
Like most legislation, much of the virtue or the vice lies in the details. When my noble friend accepted governmental office she probably renounced hopes of a quiet life. I think that we can promise her an interesting Committee stage.
§ 6.5 p.m.
Lord Campbell of Croy
My Lords, most of the Bill seems to be aimed at carrying out some streamlining of the benefit system to make it more efficient. I welcome those intentions and I hope that they will prove to be effective in practice. In many of the proposed changes 1176 the Government are continuing what the previous Conservative Government had started. At the beginning of the new Parliament, with a change of the political party in office, that is sensible and time saving where non-contentious proposals are involved. I have witnessed and taken part in such shared measures in both Houses at times of change in government over a period of many years. What is unusual in this case is the fact that the Bill contains proposals criticised and opposed by the present Government Front Bench when in opposition which were certainly not non-controversial. Pre-eminent among them is Clause 70 on single parent families.
Lengthy debates took place in the other place, so I will not go over the ground again. However, I must point out that many Labour Members of Parliament and Labour supporters in the country were astonished, disappointed and upset at those proposals. They had reason to be. Opposition spokesmen had appeared to be champions of the opposite policy only months before the general election in May, in particular the present Secretary of State for Social Security who said in the other place on 28th November 1996:The way to get lone mothers out of poverty and cut spending benefits for them is not by cutting the amount on which they have to live year by year and plunging them further into poverty".— (Official Report, Commons, 28/11/96: col. 500.)And in an interview in the Independent on 22nd January 1997, only a year ago, she said categorically that she would not introduce legislation then being considered by the Conservative Government to cut single parents' benefits.The evident changes of mind, and perhaps of heart, have given rise to much concern about benefits and allowances for the severely disabled members of the British public. Their concern has not been allayed by leaks to the media of changes being considered, including the whole of a letter which the right honourable gentleman Mr. David Blunkett wrote to the Chancellor of the Exchequer, a letter which contained, if I may say so respectfully, some very sensible and critical comments and which also outlined what was being suggested within the Government. The leak took place after this Bill had left the other place. On one particular point of the letter I agree totally with Mr. Blunkett, He apparently wrote:Where we are strongly opposed to the thrust of DSS's thinking on [disability living allowance] is in the proposal for localisation. If localisation is to mean handing the well-being of disabled people, through DLA, to local authority social services departments it will he a recipe for confusion, impoverishment and inequity".Well, he felt strongly about that and that was not a "scare story". Indeed, a government press statement today, broadcast on radio, talked about scare stories on this subject. It was a Minister's opinion expressed in the letter and one which I can quite understand.
Within social security programmes I believe that it is the subject of disabled people which is likely to prove most controversial and difficult for the Government. It is the area in which I have most experience. Indeed, I was a member of the small Parliamentary Disablement Group deputation led by the noble Lord, Lord Ashley. which had a meeting with the Secretary of State for 1177 Social Security on the day when this House went into Recess: namely, 18th December 1997. I am glad to note that the noble Lord, Lord Ashley, is to speak later in the debate. I am afraid we received no reassurance or message to allay the apprehensions of severely disabled people from the right honourable lady, Ms Harman. as the noble Lord, Lord Ashley, made plain to the media after the meeting. 1 made clear at that meeting, and reiterate again as I have on previous occasions, that 1 am in favour of rationalising the present structure of disability benefits and allowances. I do not criticise, but would encourage the Government to embark on that. However, in the field of disablement it has to be done with the greatest care and discretion and not simply to save money.
The right honourable gentleman the Prime Minister suggested in another place yesterday that welfare reform would not be under discussion if there had not been failure in government over the past 20 years. That, of course, was a political sally during Prime Minister's Question Time: one recognises that. But where disablement is concerned, as distinct from other welfare administration with which I am less familiar, it cannot be a serious allegation.
Disabilities are of very different kinds. They cannot all be catered for by a few simple uniform measures. Improvements have continually been made. When I entered the other place 39 years ago there were virtually only two categories of disabled who received official financial help. The first were war disabled, of whom I was one, being partially disabled—I again declare that interest—and, secondly, those disabled due to industrial injury. Other disabled people, however severe their disabilities, and their families, had to depend on what was called national assistance if they were in need. That was seven years before the noble Lord, Lord Ashley, became a Member of Parliament and joined me in the other place.
Since those days the situation of disabled people has been greatly transformed for the better, with the notable help of concerned parliamentarians in all parts of both Houses. But let us remember, in 1959, 10 years after National Insurance and the National Health Service had started, virtually nothing was being done for disabled people except those disabled in war or through industrial injury. Lord Beveridge, in his study and ensuing proposals, concentrated on providing for citizens when they were unemployed or when they were to become unemployed. The national insurance benefits which were then introduced were all associated with employment. Of course Lord Beveridge and his colleagues had the appalling previous unemployment of the 1930s uppermost in their minds.
Since the 1960s the system concerning disabled people has developed in stages. New elements have been introduced from time to time over the years, by Conservative and Labour governments, to meet particular disabilities and circumstances, and they have been welcomed by the recipients and by their carers. Disabilities take many forms and require different measures. However, it is now a more complex system than it need be and it is confusing for the public. For example, some benefits are contributory, some are not.
1178 Some are means tested, others are not. Some are tax free, others are not. The resulting complicated collection of financial help and services is difficult for the public to absorb and for the authorities to monitor and control.
I am in favour of careful consolidation of benefits for disabled people, having myself taken part in the past both as a Minister and as a Member of Parliament in the introduction of some of those benefits designed for particular categories of disabled people. Where disability benefits are being examined I suggest rationalisation and consolidation are the appropriate words so that severely disabled people do not find themselves worse off.
§ 6.15 p.m.
§ Baroness Pitkeathley
My Lords, it is a privilege to speak in a debate which has seen so many wise and well informed contributions. It is a particular pleasure for me to speak in the same debate which has seen the maiden speech of the noble Lord, Lord Newton of Braintree. To use his words, he and I are old sparring partners, he as Minister and Secretary of State at the DHSS and subsequently the DSS and I as a campaigner pressing the cause of carers. I, and indeed carers, had good reason on many an occasion to be grateful to him for his understanding and his commitment to doing what he could, often I think in the face of opposition, to support disabled people and their carers. We now find ourselves on opposite sides of your Lordships' House but I think we may frequently be, as we were in the past, on the same side of the fence.
In the interests of brevity and mindful of the important contribution made by so many well informed Members in this House, I wish to make a contribution on only one part of this Bill; namely, Clause 72, the backdating of benefits, and to draw particular attention to the problems faced by carers who claim invalid care allowance because of the proposed changes. I must first register my opposition and that of Carers National Association, the organisation of which I am chief executive, to the idea of reducing backdating from three months to one month and to remind the House and the Minisfer that the previous change, cutting the period for which one might claim backdating from 12 months to three was brought in with somewhat unseemly haste by the previous government, against the advice of all the groups with whom they had consulted and, most significantly, against the advice of the Social Security Advisory Committee.
We certainly do not dispute the DSS statement that the correct time to claim ICA is when caring begins but most people do not know when caring begins. You become a carer in one of two ways, either it creeps up on you gradually so that it is difficult to identify the point at which you passed from just helping out your mother to becoming the person without whom she cannot manage at all. Or you become a carer suddenly, as the result of your wife having a stroke for example. In this circumstance you are so distressed, so shocked and so confused that even if advice about claiming benefits is offered to you, which usually it is not, you would have great difficulty in taking it in anyway. I Moreover, most people do not readily identify 1179 themselves as carers. "I am a wife, a mother, a son," is what they say and they see what they do, vital contribution though it is, as merely the obligation which arises out of an existing family relationship and has its origins in concepts of love, duty and mutual responsibility. As a consequence they do not realise that a benefit may be available, let alone that they should be quick off the mark in claiming it.
It was therefore very helpful to many carers when they could claim 12 months' back pay when they finally discovered that they were eligible since it enabled them in certain cases to have a small lump sum which helped to cushion the effects of the financial loss which almost invariably follows taking on the caring role. I remind your Lordships that many people give up paid employment to become carers and that taking on caring responsibilities often means—in fact usually means—not only loss of income but also extra costs in the form of heating, laundry, and so on. Lest anyone should be concerned about the excessive amounts of money which back payments might produce for carers, can I remind you not only that carers are estimated to save the nation over £30 billion annually by what they provide freely and willingly, but also that invalid care allowance stands at the princely sum of £37.35 a week, so we are hardly talking golden handshakes here. If anyone is concerned about the figure of 7 million people, I also remind your Lordships that because ICA is so hedged around with restrictions, only about 370,00 people claim it anyway.
There is another important fact about invalid care allowance which is relevant to this debate and to the backdating issue. That is that it is of course dependent on the receipt of another benefit, the DLA care component at the middle or higher rate, or the attendance allowance. It is good to hear from the Government that they have recognised some of the difficulties. I am sure the Minister will be able to assure the House again that delays in paying DLA or attendance allowance will not result in the loss of ICA since it will he backdated to the date of the original claim.
However, there are some practical problems which must be addressed. What happens at present is that both the carer and cared for make their relevant claims. The claim for ICA is processed quickly—and I must record my appreciation of the greatly increased efficiency of the ICA unit in recent years. It has made a huge difference to the efficiency of processing those claims. But the claim from the carer is turned down because the claim of the cared for person has not yet been processed. So far this is not too much of a problem because the claim can be reviewed within three months and if the claim for DLA or AA is then agreed, all is well. However, it is unfortunately the case that many such DLA/AA claims are refused on first application and go to appeal. On appeal, over 50 per cent. are then successful. If the appeal process takes over three months, which it often does, the carer may then have to reclaim and go through the whole process again. This would be irritating enough for anyone, but for a carer often with no time at all, often exhausted, and almost always reluctant to claim the benefit in the first place, 1180 the result is that many feel like Winifred, a carer to whom I spoke yesterday. She said to me, "I couldn't find the energy to go through all those forms again. I know that I'm entitled, but somehow it makes you feel as though you are going cap in hand to ask for something they don't want to give you."
In view of the situations I have outlined, I should like to put three specific and, I hope, simple proposals to the Minister which I believe will find sympathy in this House. The first is that the Department of Social Security should include in the original DLA and AA claim packs a leaflet aimed specifically at carers. Ask any carer what he found most difficult at the start of his caring role and he will say, "Lack of information. Why does no one tell you anything?" Information about benefits is available in many places, but it is not one person's responsibility to give the carers the information needed; and most of the 20,000 or so people who contact annually our carers line at Carers National Association have never realised that they may be eligible.
The second proposal is that all claims for ICA should be kept open and able to be reassessed when DLA or AA is finally decided, whether that takes one month or 10. I submit that no carer should be expected to have to go through that process twice.
The third proposal is that the DSS should run a take up campaign encouraging carers to apply for invalid care allowance. Though the benefit itself is far too low—I remind noble Lords that it is £37.35 a week; and I shall continue to press in this House and any other appropriate forum for an increase—it is nonetheless of great importance to carers and may in some cases make the difference between a family being willing to take on the caring task and not being able to contemplate it. I am sure that this House needs no reminding of how dependent our nation is for the provision of community care on the vital contribution of carers.
I very much hope that the Minister will he able to offer a positive response to the suggestions. They will not wipe away the distress that many carers feel about the proposed changes to the backdating, but it may show that the Government are concerned not to increase that distress.
§ 6.24 p.m.
§ Lord Ashley of Stoke
My Lords, I wish to begin with a tribute to the noble Lord, Lord Newton of Braintree, on his maiden speech. He is an old sparring partner from another place. I thought he made a smashing speech, very finely tuned to this House. We look forward to hearing from him on other controversial occasions, when more at home battling against each other on the many issues we have in common.
I wish also to say what a pleasure it is to follow my noble friend Lady Pitkeathley. She and I worked for carers. My contribution was very modest. The noble Baroness's contribution to carers is well known throughout the land. I greatly enjoyed her speech.
1181 I am tempted to follow the splendid remarks of the noble Lord, Lord Campbell, about disability. I do not propose to do so because I do not believe that disability comes within the strict confines of the parts of the Bill on which I wish to concentrate.
All three parts of the Bill involve matters of interest and concern to noble Lords. They were explained succinctly by my noble friend Lady Hollis, someone whom I greatly admire and for whom I have great respect despite what I am about to say. I wish to speak about Part III and the changes to benefit rules.
The provision in Clause 70 enabling the Government, through regulations, to end the higher rate for one parent families is a measure conceived by a Tory Government. It is being implemented by a Labour Government and it is aimed at cutting the benefits of people who are poor. That should be rejected out of hand. This Government have many splendid policies to their credit but this is not one of them.
In the Second Reading debate in another place, the Secretary of State said,It is important that we listen to what is being said by Gingerbread and the National Council for One Parent Families".—(Official Report, Commons, 22/7/98; col. 788.)Both those organisations have condemned these proposed cuts. The National Council for One Parent Families states unambiguously that it is "vital" to retain the lone parent rate of child benefit. We cannot misunderstand that message. That is what it said. There is no point in making a song and dance about listening to organisations and then completely ignoring their views—in fact, doing the opposite.
The noble Baroness, Lady Williams, said that she spoke with sorrow on some aspects of the Bill. That is not for me. I speak with real anger, never mind being sorry, my Lords. The Government are pushing through this Bill which will hit very vulnerable people. There is no doubt about that. There is no point in being sorry; we should he really angry. They are continually claiming that they have to make some tough decisions. What a shame that Ministers have to make these tough decisions. But hitting at one parent families is the opposite of being tough. It is easy, it is simple. Any fool can do that kind of thing. Those people are among the weakest and the most vulnerable of all. It is the one parent families which have to make the tough decisions as to whether to keep the children fed, clothed or warm. That is what I call tough. And for this Government to make it tougher still by taking a crucial £6 plus other passport benefits from them is simply callous. There is no other word for it. It is a calculated policy. It is callous.
If the Government are short of petty cash—and we are talking about petty cash—they should focus on millionaires, top tax earners, racketeers, bookmakers, pop stars, landowners, and landlords. The list is endless. There are bags of easy targets which they could not miss even if they were blind and had a blunderbuss. Any move in that direction, tackling the really tough guys, would have the outstanding merit of leaving the one parent families in possession of the pathetic £6 extra instead of making them desolate without it. So why are the Government putting forward these proposals?
1182 Ministers justify their U-turn on lone parents by highlighting the welfare to work proposals. In principle they are welcome. Expenditure and incentives to help people back to work are splendid. But Ministers should not pretend that these proposed child benefit cuts would help lone parents into jobs under the welfare to work scheme. When the Secretary of State was challenged by Audrey Wise during the Second Reading debate in the other place to explain the reasoning behind the move—Clause 68 as it then was—the Minister spoke of welfare to work and providing opportunities for one-parent families to work.
The idea is fine; the only trouble is, it is nonsense. The provision in the Bill—as anyone who has read it will realise, and the Secretary of State ought to have read her own Bill—is a disincentive to work. The cut in child benefit will apply only to single-parent families in work. Those on income support have child benefit, whatever its level, deducted pound for pound. So most do not even bother to claim it. Even the Secretary of State herself declined to justify the cut on any rational basis.
Do the Government genuinely believe in even-handed treatment between one-parent and two-parent families, even though their formal view to the Social Security Advisory Committee is that the evidence is "inconclusive"? If so, it may mean that Ministers suffer from myopia. Most of us see clear and obvious differences between the lifestyles of the two types of family. In every area, in every setting, and by every measure, lone-parent families are below two-parent families. That is obvious.
The Government should listen to some of the evidence provided by lone-parent organisations. They should also ponder the call of the SSAC for a wider review before adopting changes that will affect the lives of over 2 million children in lone-parent families.
The Government's excuse that existing claimants are protected and that the measure applies only to new claimants—the point referred to by my noble friend in her answer to me at Question Time—is a feeble one. Of course the benefit of existing claimants should not be cut. But applying the cut to new claimants is a means of dampening down any outcry. Such an outcry is inevitably reduced if the current benefits of existing lone parents are preserved. But a policy change should be judged on its merits—is it a good policy or a had one? That should be the test. Those who are to become lone parents are just as important, just as valuable, as existing lone parents. The Government should be considering new lone parents as well as existing ones.
If the welfare to work programme is successful—as I hope it will be—there will be lone parents moving from benefit to jobs. Should those jobs fail, and they have to return to income support, presumably they will face the new lower rate of family premium. I say "presumably" because my noble friend the Minister has rather muddied the waters today. We look forward to her explaining with her usual clarity when she replies whether we are right in reading the briefs in this way. Will lone parents return to a lower rate of family premium if matters go wrong?
1183 If that is the case, what is the message coming loud and clear from the Government? It is that life is becoming more risky. You have to avoid becoming a new claimant, either of child benefit or income support. Moving in or out of work could be damaging. If you are on income support it is best to stay on it, unless you are very sure of a well-paid, secure job one that gives you a £50 net gain, not the £50 gross gain quoted so frequently by Government Ministers. Is that the message that the Government really want to give? I really cannot believe it.
The plain and simple fact is that there is no justification for this proposed cut in benefit. The Minister has heard a wide variety of people saying, "We beg you to do this. We urge you to do that. We ask you, rationally and reasonably, please consider the issue". The noble Baroness is a fine Minister. All those requests have been put in the other place. All the reasons for not going ahead with the cut have been put forward. But despite the views of the so-called rebels, the Government bulldozed the cut through.
The House of Lords is now faced with the possibility of doing something about it. We cannot vote now, but I hope we shall have the opportunity later on. This measure will damage families; it will damage work incentives; it will damage the Government; and it will damage a society that permits it. I urge the Government to think again.
§ 6.36 p.m.
§ Baroness Ludford
My Lords, like the noble Lord, Lord Ashley of Stoke, to whom I listened with great interest and respect, my feelings tend towards the "anger" rather than the "sorrow" end of the spectrum. The particular experience that I bring to the debate, unlike other noble Lords, is not that of a social security specialist but of a local councillor in the fourth most deprived borough in the country—Islington. That statistic sometimes evokes surprise because of Islington's image as the home of yuppies consuming "shaved parmesan and rocket" lunches. But it comes from the Government's index of local conditions measuring socio-economic deprivation.
I am therefore contacted by many people with benefit problems. Often in my ward surgery they are in tears of frustration and despair. I often find myself acting as an advocate for them in trying to get some sense out of the council or the Benefits Agency. I have found that it is an immense help to be pushy, articulate, educated and middle-class, which, often, my constituents, though intelligent, are not. I marvel at times at the courage and persistence displayed by those who keep going even though "dumped on" by the system. It is far from user-friendly.
That is why this Bill is misconceived. As a Liberal Democrat, I support sensible reform of the welfare state, and the broad objectives of welfare to work. There should of course be firm action to prevent and punish benefit fraud although a little more even-handedness in the publicity and rhetoric as between benefit fraud and the vastly more costly tax evasion would be welcome.
1184 We heard today from the Minister how there is less benefit fraud in relation to disability than is popularly supposed. I should have expected the top priority of a Labour Government to be the introduction of management and administrative changes to ensure that claimants receive the money to which they are entitled and are treated with maximum dignity and respect. It is often people who are physically or mentally ill, or feeling demoralised or defeated, who are the clients of the DSS and the council housing benefits sections. They are less able to cope with the hassle, delay and incompetence of what is an excessively complicated and form-laden system, as indeed the Minister remarked.
As an illustration, I could show any noble Lord who is interested and who is not familiar with such a document, a seven-page computer-generated letter of notification of housing and council tax benefit. I cannot understand it myself; perhaps other noble Lords are more intelligent.
What the new Labour Government have done is to take over lock, stock and barrel a Conservative Bill. The Official Opposition have at last carried through the logic of that by announcing that they will not oppose the Government on their social security measures. That leaves these Benches opposing those aspects of the Bill which unfairly load the dice against honest and struggling benefit claimants and in favour of the Treasury.
I find it—and here my anger shows—truly obscene that the poorest and most vulnerable in our society should be made the fall guys for new Labour and Treasury machismo. I use that word deliberately because there is a distinct whiff of playing the gender card against poor women and children when rich men seem to be immune to onslaught.
It was Robert Peston in the Financial Times who referred to the "boys at the Treasury", a department he described as,the last bastion of unreconstructed male dominance",in which the Chancellor "shows a testosterone preference". I cannot comment. They are not my words. But many women and children will be the victims of this apparent virility test. Married women voters will be watching with interest—they will be especially watching women MPs and Ministers—to see whether the heralded working family tax credit means loss of independent taxation for women under a Labour Government.
It has also come to a sorry pass when a Labour Government would rather risk weakening the attachment of the middle classes to the welfare state through taxing child benefit and abolishing the universal state pension than risk alienating those earning over £100,000 a year by a 50 per cent. top tax rate. I was interested to read an Observer report that the City chief advising the Government on tax and benefit reform had an 18 per cent. pay rise last year to £936,000. on which a top rate of 40 per cent. was payable.
Instead of measures designed to achieve efficiency, fairness and dignity, we are presented with a Bill designed purely to make savings for the Treasury when there is no budgetary need. That has been brought out in the remarks of other noble Lords. The ways chosen are not only mean and counter-productive in penalising directly the poorest and most vulnerable, such as the lone parent benefit cuts; 1185 they are also sneaky and unfair in the provisions on appeals. test cases and backdating. It would surely have been better to scrap this inadequate and dishonourable Bill and address the wholesale reform of the system of social security in conjunction with reform of its structure, for which we await the Green Paper. I am not quite sure how the Bill fits the Prime Minster's ambition, quoted in the press today and I think to be discussed tonight, for long-term, thought-out principled reform.
There are likely to he matters of policy reform where Liberal Democrats support the Government if genuinely designed to facilitate opportunity, self-reliance and independence. But for this Bill standing alone there is hardly a good word to be said. The measure not only does nothing to tackle the poverty trap. the most urgent of the welfare system problems, although that is perhaps understandable as we await the Green Paper, but it also reinforces two other traps which could be called the "risk trap" and the "bureaucracy trap".
I take the example of Miss J, a single parent who was anxious to come off benefit. After reading a leaflet entitled Help for single mothers to get back to work, she decided to take a two-week job trial she had been offered. On 23rd March last year she completed in her benefits agency office a form for housing benefit extension which eases the transition by continuing to pay housing benefit for eight weeks. The next development, however, was that she received a notice from the council saying that £600 was owing on her rent account. She discovered that the form had gone astray between the Benefits Agency and the council's housing benefit section. The council told her to contact the Benefits Agency—not offering to do it themselves—so I can at least say a good word for the Government's proposals for a one-stop shop. Miss J rang the Benefits Agency which confirmed that it had sent the first form. The council still refused to acknowledge the fact. Miss J filled out a second form, also mislaid. Eventually in June, the council accepted that it had received a third form completed by Miss J. But guess what? After writing several letters and spending hours on the phone, she is rewarded with the notification that her application, on the third copy of the form, is out of time.
The Benefits Agency is unable to provide any proof from its records—that is to say its computers—that she filled out the original form in March. I have this personally from the manager of the Benefits Agency. So Miss J now faces court proceedings for eviction. That is an example of the "bureaucracy trap".
It is hardly surprising that this enterprising and efficient young woman, who is very well organised in her paper work, feels that it was hardly worth trying to get off benefit. None of the saga was her fault, but she has ended up with £600 rent arrears which she did not have before. If, in future, she needs to re-apply for lone parent supplement she thinks she would not get it. We await clarification from the Minister. That is what I mean by the "risk trap".
We are told that the Secretary of State and the Prime Minister see their reforms as a way to direct benefits to the people who need them most. That will be the message of the Prime Minister's welfare roadshows, starting tonight. But it makes various provisions in the Bill even 1186 more difficult to understand. How will a one-month cut-off for benefit claims, including widow's benefits, help the poorest? How would a one-month cut-off be compatible with a government take-up campaign for poor pensioners to claim income support which the Prime Minister hinted at in press reports?
Is a widow's first thought in the four weeks after bereavement a visit to the DSS office? Is a person struggling with severe clinical depression and the likely havoc it has caused in his working and personal life to be caught out by a failure to claim housing benefit within one month? Will the eviction notice that follows help his recovery or send him into fatal despair'? I apologise for being absent from the debate for a while. I was attending the newly formed All-Party Group on Mental Health. The Minister in the Department of Health, Mr. Paul Boateng. talked about the Government's genuinely sincere commitment to mental health. I asked how that squared with the one-month cut-off. His answer was that we should all help people fill out the forms. I hope I do not parody it. He seemed to think that we live in a more perfect world than we do, where officials are efficient.
I move on to the changes in the appeals process. They will also undermine the stated ambition of directing help to the most needy. The reduction in independence of appeals tribunals, the removal of the obligation on them to have a legally qualified chair and to investigate other matters than the strict case before them, as well as the Secretary of State's power to suspend appeals, may well disadvantage the claimant.
At the end of the seven-page housing benefit letter which I mentioned earlier, the applicants are invited to make contact if they think their benefits have been incorrectly assessed. Is it either realistic or fair to expect a claimant to be able to identify the clause in the regulations that has been misconstrued and put it in writing, knowing that the letter will define the scope of the tribunal's inquiries? I suggest that it is neither fair nor realistic unless we expect claimants to hire the services of top silks. Today's National Audit Office report says that one in five of the Benefits Agency assessments is inaccurate. So there are likely to be many claimants who lose out.
Finally, why should the Government, in the Bill's provisions on errors and test cases, seek to limit the scope of the correction of injustices, if not to cheat people out of their rights? Does the state in this country regard its poorer residents as enemies against whom massively high defences have to be built or as citizens who deserve respect and fair treatment?
I believe the objections to the Bill which have been voiced on all sides of the House deserve real answers and not platitudes. I hope we will get those answers. In particular, I ask the Minister to address the issue of backdating in cases of mental health. She referred the other day in a reply to "joined up policy". Perhaps I may ask whether she will consult her colleagues in the Department of Health to see whether there is a contradiction in the Government's policy between helping people with mental health problems and the backdating provisions in the Bill.
§ 6.50 p.m.
§ Lord Rea
My Lords, my noble friend Lady Hollis mounted a persuasive defence of the contents of the Bill and I would not have expected less from her. Like most political stars she combines clear and effective oratory with considerable Thespian talent. She presented her case so well that at first I thought I would be kinder to the Bill than I had originally intended. However, since then I have listened to all the other speakers and come hack to my original critical position.
It is interesting to notice that of all the speakers so far, every single one from the Government Back Benches and those from the constructive Opposition have been highly critical of the Bill. The only support has come from the Official Opposition, which is not surprising since they originally drafted it. As with the Education (Student Loans) Bill, I remain unhappy that my Government are introducing this Bill a long time before the publication of the Green Paper which will review the whole of the welfare system.
My noble friend said that the Bill is part of the welfare-to-work programme. But, as noble Lords have already shown—particularly the noble Lords, Lord Higgins and Lord Campbell of Croy, from the Opposition Benches—the reality is that it is a cost-cutting and streamlining package largely drawn up by the previous government. As such, it is part of that self-punitive commitment that we made to continue the previous government's spending plans, luckily now for only another 16 months, eight months having passed. We are persevering with it, despite the virtual certainty that if the previous government had retained power they would by now have changed those plans in the current rather better economic climate (though they would probably have retained this specific measure and further cut income tax, which at least we are not doing).
Some of the measures in the Bill qualify as the "tough choices", mentioned by my right honourable friend the Prime Minister from time to time. It is sad that some of the consequences of these tough choices will fall upon those who have little or no choice—lone parents and their children, many of whom, as my noble friend knows well, are living on the edge of poverty, so well described by the noble Baronesses, Lady Williams and Lady Ludford, as well as my noble friend Lady Kennedy.
My noble friend Lady Hollis may well say that single parents have a choice of going to work. Fine, if the work is available, sufficiently well paid to cover all the benefits that will be lost, and where adequate childcare is available and affordable, disregard or not. I completely agree that for mothers of young children, going out to work, preferably part-time initially, can be beneficial not only financially but also as a relief from the sometimes solitary and onerous job of childcare. Both mother and child (and society as a whole) benefit, particularly if the childcare can include proper nursery education.
My noble friend would probably say that the single parent New Deal schemes, including childcare, will be up and running by the time the effects of this Bill begin to be felt. I hope that that is so. But would it not be better to wait until they are up and running before 1188 introducing this Bill, if it has to be introduced at all? Can she say whether jobs or training places will be available in all parts of the country and whether sufficient public transport will always be available? There are many housing estates in the country where those facilities are not available, particularly jobs which would be well enough paid to make it worth while for a single parent, especially one with more than one child, to exchange her benefits for wages from which transport and at least part of her childcare costs have to be met.
In the post office in Kentish Town last week I met three of my former patients who were waiting in the queue for benefits. One was a single mother with three children of school age whose partner had recently left (to her relief in that case). She is a former telephonist of good intelligence and therefore could obtain a reasonable salary. But she said that it was not worth going back to work because her salary would be little greater than the benefits she would lose. She would be even less likely to go back to work if she knew that her single parent family premium would be cut if she subsequently returned to welfare for any reason—that was a regulation which we passed before Christmas almost without noticing it.
My main sadness about the Bill is that it goes in the wrong direction. It does nothing to start the uphill and necessary task of reversing the unacceptable inequity of income distribution in Britain, so well described by the noble Baroness, Lady Williams of Crosby. If anything, it will make matters slightly worse. This Bill will not help single mothers on benefit to find work. Other measures—for example, the new deal for single parents mentioned by my noble friend—will do that and the minimum wage, when it becomes law, will be a great help if it is set at a level which makes work rather than welfare attractive.
However, most of those measures are on the "supply side". They will, one hopes, improve the qualifications and incentives of the workforce but will do little to create employment. If lone parents and partially disabled people are to be attracted back to work—the great majority want to work—the jobs must be there. The Government are depending on the present moderate growth in the economy to provide them. I suggest that that is not enough. particularly as we may see a downturn in the economy relatively soon, perhaps when the waves of the crisis in South-East Asia start to reach Europe.
Any new deal should have some of the features of that famous original New Deal in the Tennessee Valley 60 years ago, which kick-started the world's climb back into prosperity after the depression of the early 1930s. There are some areas of the country where much greater government assistance is required to create the employment opportunities which are needed to encourage people to move from welfare to work. In that regard I should like to read from an article by Will Hutton, the editor of the Observer, in his newspaper of 21st December when he said:It is not moral fecklessness and high marginal tax rates that arc generating worklessness in places such as Merseyside, Strathclyde and Tyneside. It is that the local economy has disintegrated—there 1189 is no work. Poverty in those areas is not caused by the welfare state: rather it is the inadequacy of the welfare state that is causing poverty".This Bill will tend to make matters worse rather than better. However, I was delighted to read in this morning's Guardian that the Chancellor of the Exchequer intends to mount a serious attack on poverty. But I was disappointed that there was no mention of more resources being allocated to job creation. I applaud the Government's intention to reduce the welfare bill by getting people back to work; but to achieve that, macro-economic policies must be applied to create the incentives for industry to invest and create the adequately paid jobs which will attract those receiving social security benefits to leave their poorly paid but at least safe welfare havens.
It has to be said that of the £90 billion spent on social security—it is a huge sum—it is actually a smaller proportion of our GNP than the social security budgets of most other industrial nations other than the United States. Again, the Hutton article said:Nor is social spending high and out of control … The total budget only represents some 13 per cent. of GDP, well below comparable spending elsewhere";for instance, Italy 20 per cent., France 22 per cent., Germany 18 per cent. and Canada 16 per cent. Of comparable countries, only the United States and Japan spend as low a proportion on welfare as Britain. The way to reduce the size of the welfare budget is to achieve high levels of employment and not by nibbling at the edges of the welfare bill, as this parliamentary Bill. inherited from the party opposite, tries to do.
§ 7 p.m.
§ Lord Blackwell
My Lords, like other noble Lords on this side of the House, I welcome the intent behind the Bill to continue efforts made over recent years to tackle welfare dependency. It is the impact on trying to tackle the culture of welfare dependency that is as important as any of the financial consequences of the issue.
There has been a dispute in some of the discussion about whether or not the policies in the Bill are in line with the policies put forward in the manifesto, so I should like to start by referring back to the manifesto. It stated clearly:To ensure that taxpayers are willing to go on paying for our social security system, we need a social security system that we can afford. We will do this by focusing benefits on those most in need and helping people off welfare into work".The manifesto went on to say:We will always help those in genuine need. In return, the unemployed will have a responsibility to look for work and accept a reasonable offer. We will ensure that no one can refuse reasonable work opportunities and remain on benefit".It promised:We will give special help to lone parents who want to work and assist with childcare in work".Those were, of course, policies from the Conservative Party manifesto, and I stand behind those policies and support them. I welcome the Labour Party's conversion to those principles. But intent is not enough. What is 1190 important is how one goes about it. I want to raise two points about how the Government are approaching the task.
The first is a general point and one of principle. The noble Baroness said that any set of reforms on benefits needs to be considered within the context of other government policies. Welfare reform cannot stand alone without also addressing the issue of how to replace welfare support by encouraging support from stronger families, families that are helped to become more self sufficient.
Thirty years ago, when welfare spending was a fraction of what it is today, there were many cases of hardship. However, on the whole, those people now dependent on welfare were not, by and large, roaming the streets. The reason was that the family network was much stronger. There were ties to help and support. People had somewhere to turn. We cannot hope to turn back the clock, at least in a short period of time. But there are practical steps that can and should be taken to try to encourage that network of support as a replacement for the welfare dependency culture.
The same Conservative Party manifesto I quoted earlier had a number of policies to support families that I would urge the Government to look at. Perhaps I may give two examples that I think are worthy of consideration. The first is a proposal for transferable tax allowances within families to provide additional support to families where one partner is not working because of carer responsibilities. At the moment, when one partner is not working, the tax allowance is lost. It would be a relatively simple change in tax law to allow that tax allowance to be transferred to the other partner.
A second practical step that can be taken to support care within the family which was in the Conservative Party manifesto was the respite care policy to provide support to carers who desperately need a break and at the moment go on for years without the ability to have a break from their families. This was proposed in response to a number of representations from carer organisations. There are a number of things that can be done that will not turn back the clock 30 years but will help to strengthen family networks which have to be there if we are trying to wean people away from state dependency. I should like to ask the Minister whether the Government will consider those points as part of the context of welfare reform.
My second point is one of detail, but it is in a policy area where detail is often critically important to ensure that the weakest and most vulnerable are not unintentionally damaged by the way proposals are enacted. It expands on a point made by the noble Baroness, Lady Ludford. The Bill contains provisions to reduce backdating of benefits to one month. The proposals from the last Government to reduce backdating of benefit from 12 months to three months left an exemption for housing benefit, which remained at 12 months. There was a good reason for that exemption. If the old or vulnerable are taken off housing benefit, it may take several months before they realise that the landlord is not getting the money. The money is typically paid direct to the landlord. It may then take 1191 several more months before housing benefit is reinstated. Yet the law allows landlords to evict tenants in assured shorthold tenancies if rent is not paid for two months. So the effect of the Government's proposals could lead to many old people being evicted and needing rehousing.
I wish to illustrate this point with two examples which have been given to me by an advice worker from the citizens' advice bureaux. He states:I recently dealt with a case whereby a woman aged 95 was discharged from hospital following a stay of 5 months. She didn't have anyone to look after her affairs and her housing and council tax benefit ceased 6 weeks after she entered hospital, when her income support was withdrawn. However the current rules allowed me to apply for the backdating of the missing benefits on her behalf and she was awarded £1,760.00 in backdated benefit".That money was used to clear her rent arrears. However, it would not be there if the backdating was limited to one month.
He goes on to mention a second case. He states:An 85 year old woman living alone and suffering dementia, (not surprisingly) failed to complete and return her annual housing benefit review form. As a consequence the department withdrew her benefit and ceased benefits to her landlord. During the intervening seven months between then and now, arrears of rent amounting to £1,600 have accrued. The landlords were about to begin possession proceedings but have accepted my assurances that the arrears will he cleared because on the grounds of 'good cause' …she can apply for her benefit to be backdated for up to a maximum of 52 weeks … It must be pointed out that had the client been evicted, the local authority would have been responsible for providing another home for her, as a vulnerable older person, and the public purse would have to bear the cost".That is in addition to the mental anguish caused to someone put in that position.
The letter concludes:The two examples … are not unusual or exceptional cases"—many of those who have spoken in the debate could confirm that—In fact I receive such referrals on a fairly regular basis".I should like to ask the Minister to clarify, either now or subsequently, whether the Bill as drafted would prevent backdating of housing benefit in these and similar cases beyond the one month; and, if so, whether the Government would accept an amendment to allow discretion to retain the current 12 month backdating in these and similar circumstances.
As in many of the areas other noble Lords have raised, it is the detail that matters. The Government will ultimately be judged not by their intent but by the way in which they deliver. I hope that many of the points raised in the debate will be picked up and taken on board by the Government.
§ 7.10 p.m.
§ Lord Borrie
My Lords, the first part of the Bill has the admirable objective of overhauling the decision-making and appeal processes right across the social security field. It seems to me that clauses in the Bill designed to reduce the number of separate decision-makers and to eliminate the need for claimants to submit the same information over and over again to 1192 different bodies or parts of the system and those parts of the Bill which enable officials and appeal tribunals to correct their own errors are all welcome.
So, too, and slightly more cautiously, is the reduction of five separate appeal jurisdictions to one and the recognition of the flexibility of tribunal composition, which can assist in reducing the shocking delays that can now occur before appeals are resolved. I say that with a little more caution than my first compliment on the objective of the first part of the Bill because Clause 8 allows one or two-member tribunals to be appointed as an alternative to the traditional three-person tribunals. While I do not disagree in principle with the new flexibility, it is a significant change and deserves to be examined very closely indeed. The noble Earl, Lord Russell, is not here at the present moment. He asked about one-person judicial bodies. There are stipendiary magistrates, circuit judges and High Court judges sitting alone besides a number of single decision-makers of that kind.
But in the tribunal field the three-person tribunal has been standard and a well-regarded feature of administrative justice since unemployment insurance was introduced by Lloyd George in 1911. That model was widely approved. It was followed by the Attlee Government in 1946, when a more comprehensive system of social insurance was introduced. It involves shared decision-making, which has a lot of merit. In recent years it has invariably included a legally qualified chairman. We worked up to that, as it were, over the years. I believe that most people find that beneficial.
I accept that not all cases require a three-person appeal tribunal. During the Committee stage of this Bill in another place the Parliamentary Under-Secretary, Mr. Bradley, seemed to have a little difficulty in providing suitable examples as to when a one-person tribunal would be suitable. He referred to whether a person qualified for benefit. He gave the example of when an appeal simply concerns the amount of the benefit. That can be of some significance, but, nonetheless, that was an example that he gave.
The difficulty is that a case which may at the outset appear to be relatively straightforward and be sent to a one-person tribunal may turn out to be more complex when the one-member tribunal is listening to the case. I trust that the aim of flexibility which the Government in both Houses have emphasised for this Bill can be brought to bear in the circumstances by way of a rapid assignment of other members to the particular tribunal if that kind of situation arises.
Forty years ago tribunals were brought in out of the cold. I hope that my noble and learned friend Lord Archer of Sandwell, who is chairman of the Council on Tribunals, will forgive me. The tribunals were brought in out of the cold and made part of the judicial system by the same legislation in 1958 that set up the Council on Tribunals. Following the report of the Franks Committee of the previous year, they were no longer to be merely adjuncts of government departments. The stature of tribunals was emphasised; the role of the Lord Chancellor was meant to give not just greater 1193 dignity, but greater appreciation that they were to follow the principles of fairness, openness and impartiality which were seen as the vital guiding principles.
I mention that kind of history because of the well-earned and increasing respect for tribunals that has grown up in the past 40 years, leaving aside delays for the moment. That owes a lot to the devoted and largely unsung work of the members, which include at any rate two Members of your Lordships' House speaking this afternoon. I hope that the changes which are being suggested will not in any way put in jeopardy that greater regard which tribunals have received in recent years. I hope that the Minister can reassure the House that three-person tribunals will continue to be the norm and departed from sparingly and only where clearly justified.
We all want more efficiency in decision-making. There is no necessary dissonance between efficiency and the interests of justice. I suggest something which has not been mentioned this afternoon. If we want more efficiency in reducing delays, which have undoubtedly marred the tribunal process, what about the fairly obvious conclusion of appointing more people to tribunal panels? If the word "expense" comes to mind, I am not talking here about the expensive appointment of full-time, pensionable judges but of part-time tribunal members paid only for the time they sit. I am sure the Minister will agree that they are people who at the moment give extremely good value for money.
The most controversial clause in the Bill is what is now Clause 70. I hope noble Lords will forgive me for referring to it because that has been done many times. I wish to say one or two things about it. It is the clause which enables regulations to be made for the reduction of child benefit to lone parents and in effect lone parents in paid work of some kind.
The Secretary of State, in response to the lengthy debate on this clause in another place on 10th December, explained that, while single parents in work or new claimants will no longer receive a lone-parent premium, they will instead receive the benefit of affordable childcare and will still obtain family credit. She said that these items will more than compensate for the loss of £6 a week or thereabouts on child benefit. However, she admitted (Hansard, col. 1088.) that only "some" lone parents will receive more benefit help in work than they currently receive.
I believe that it would be a broad generalisation, which I am prepared to risk, that every single Labour Member of Parliament in the other place is a strong supporter of the New Deal, the welfare-to-work programme, whether it is applicable to young, unemployed or single parents who are able and willing to do paid work full or part-time. Why then was the loyalty of so many Labour MPs—not just those who voted in a certain Lobby, but many more—so sorely tested on 10th December?
I believe that that was principally for two reasons. The first is a matter of which we may get further clarification from my noble friend the Minister this evening. That was the understanding that, if a lone parent on income support obtains a job but loses it and 1194 goes back on income support, because of the preceding abolition by statutory instrument of the lone parent premium on income support, she would receive less benefit for her child than she would at present. Many Labour MPs said and wondered how that could be an incentive for her to seek a job, particularly if it was part-time or seasonal, in the first place.
The second and broader reason why the loyalty of so many Labour MPs was tested on 10th December was the failure on the part of Ministers to communicate effectively government policy in respect of those who were unable to work because of age, disablement or parenthood. I pick up something that was emphasised earlier today by a number of speakers, particularly by the noble Baroness, Lady Kennedy; namely, the parents of very young children.
Parliament is being asked to contemplate reductions in benefit to people who may well be in need—I put it no higher than that—before Parliament can be satisfied as to the effectiveness of the welfare-to-work programme and before it knows what is to happen to those who fall outside the programme.
I very much welcome the Prime Minister's words in today's Times. I quote just one sentence:To many people benefits are a lifeline and work is not an option".Recognition of that is exceedingly important.
When Ministers contemplate Clause 70 and the other so-called "hard choices", I commend to them the words of the chairman of the Parliamentary Labour Party. Mr. Clive Soley, someone who in the weeks just before and after Christmas has been in the midst of the concern, puzzlement and anguish of so many Labour MPs. Writing in the New Statesman just before Christmas, Mr. Soley said—he had loyally gone through the Lobby to support the Government in the vote on 10th December:Whenever we apply the welfare-to-work policy we need to think through the needs of those who cannot benefit from it. Incorporating tax and benefits should be a key part of the strategy. as it enables us to claw back the universal benefits that go to higher income groups".It seems to me that the Government have not yet given their supporters, let alone the general public, a coherent picture of how the provisions in this Bill—or some of them—and other particular proposals to reduce benefits fit into the larger canvas of modernising the welfare state and furthering the cause of social justice.
§ 7.22 p.m.
§ Lord Evans of Parkside
My Lords, at the outset I should like first to congratulate the noble Lord, Lord Newton of Braintree, on his maiden speech. I do so particularly because we were both elected to the other place in February 1974 and I crossed swords with him on many occasions on many issues over the years. In the past three years of the old Parliament I worked closely with the noble Lord on the Select Committee on Standards and Privileges and I got to know him very well indeed. I admired him for his hard work and dedication to his difficult task as Leader of the House 1195 of Commons. I am sure that noble Lords will benefit from his speeches and knowledge for many years to come.
Eighty-five per cent. of the Bill can be described as highly technical. The thrust of its technical changes is to seek to improve the social security system. Any improvement in the social security system is certainly welcome to me. but it would be even more welcome to the millions of people who have to claim benefits from the system. Many claimants who have to tangle with the system often have appalling experiences. When one makes a claim, one has to complete long, obscure and complex forms. Indeed, as a Member of Parliament I used to believe that many of the forms had been drawn up by experts in obfuscation and that their objective was to confuse the individual so that he or she could never submit an absolutely accurate claim. A regular feature of many of my surgeries was a poor, bewildered soul walking in, clutching the forms and asking me to help to fill them in.
Mistakes are often made in the assessments, resulting in appeals. The appeals procedures can be inordinately lengthy and it can often take more than 12 months for a claim to be resolved. Too often, it is a bureaucratic nightmare. Indeed, the DSS staff are often confused about the system, to say nothing of the poor, inarticulate claimants who can often be crushed by it.
This is a lengthy Bill. It contains 77 clauses and seven schedules. I am sure the House will appreciate the fact that I do not intend to speak this evening to all 77 clauses! Indeed, I shall address my remarks to only two clauses, which are in no way technical but which are highly political. It is the first of those two clauses that gives me the first of my two problems with the Bill. My first problem is, of course, that this is a Tory Bill. There is no doubt that if the Tories had won the election they would have introduced this Bill. Indeed, Mr. lain Duncan Smith, speaking from the Opposition Front Bench in another place, dubbed it "the Peter Lilley Memorial Bill". If the Tories had introduced this Bill, I am sure that one or two more Labour Members of another place and of this House, including myself, would have bitterly opposed Clause 70.
My second problem is why we have this Bill at all. The Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Social Security have all proclaimed their absolute determination to reform the welfare state. Indeed, the Prime Minister is launching a country-wide tour to rally the country behind his determination to reform the benefits system and the welfare state. They have regularly proclaimed how the system is not working properly despite consuming billions of pounds of taxpayers' money. They have said that it does not provide proper support for the poorest and most deserving cases. They have pointed out that the more affluent receive benefits which, frankly, they do not really need. Anyone with any knowledge of the social security system would be in total agreement with those statements.
For quite some time we have been promised a no-holds-barred Green Paper. That was promised many months ago by the Minister for Welfare Reform.
1196 I understand that when he was appointed, he was charged with thinking the unthinkable. However, we are still waiting for that Green Paper. Surely we should have had the Green Paper first, followed by consultation and discussion, of which the Prime Minister's tour would have been a leading aspect. Instead, we now have this Social Security Bill which may subsequently have to be changed following the consultation. Surely that is a strange way to proceed. I must advise my noble friend on the Front Bench, for whom I have the greatest respect and admiration, that I believe that we have adopted an odd approach. It appears that we have alarmed, if not terrified, almost every benefit claimant in the country right at the outset—and the debate has not yet started.
The real purpose of two or three clauses of this Bill is to cut public expenditure. That leads me straight to Clause 70, which will remove the extra £6 per week benefit that a new claimant lone parent receives for the first child. The official reason given for that unpleasant action is, we are told, to get those lone parents (mainly women) back into employment. There is, of course, the rather difficult task of finding a few hundred thousand jobs.
On Monday, I received an Answer to a Written Question about the number of individuals in the United Kingdom in receipt of the lone parent premium element of child benefit. The Answer was that an estimated 1.1 million families in the United Kingdom currently receive the lone parent element of child benefit. When one considers the programmes to get the under-25s and the long-term unemployed back into work—all of which I applaud wholeheartedly—one must ask oneself where the jobs will come from. Speaking only for my own part of the country, I can assure my noble friend that there are not many jobs available—at least, I have not noticed many jobs on Merseyside in the past 18 or 19 years.
Even if the jobs were available—I do not know where they are—the most significant question remains. I refer to the morality of inducing or, dare one say it, coercing a mother with small children to go out to work and leave her children in the care of someone else.
I have some personal knowledge of what it means to be part of a one-parent family. When my mother was young my father went out to work one morning and never returned. He was killed in a mining accident. My mother was left with three children under seven years of age, of whom I was the eldest at six-and-a-half. Putting on one side the abject poverty into which we were immediately pitched, the impact I recall most vividly was that for a number of years I and my two sisters would never let our mother out of our sight. We would not even stop with loving relatives who wanted us to stay with them to give my mother a break. I suspect that many small children whose homes are broken up in this way suffer similar trauma. If one parent suddenly disappears without any explanation or the child having any understanding of it, he or she will be bewildered for many years to come.
The Secretary of State insists that only new claimants will lose the £6 extra benefit. There is a tendency for some to talk in terms of feckless young single women who have children out of wedlock. Perhaps that may 1197 happen in some cases. However, the new claimants will include women who have been suddenly widowed, like my mother, and women—almost always it will be women—who have been deserted by husbands or partners. I believe that they would include those who had had the £6, obtained a job and forfeited the benefit. lost the job for whatever reason and were subsequently reclassified as new claimants and thus refused the extra benefit. Almost every other noble Lord who has spoken so far appears to be as confused as I am. I hope that my noble friend will clear this up once and for all. As far as I am aware, everyone who has considered this Bill suffers from the same delusion.
Six months have elapsed since this Bill received its Second Reading in the Commons. In the other place there was a substantial revolt of Labour Back-Benchers at Report stage last December. Surely, the Government have had second thoughts about the wisdom of some aspects of this rather dubious cut. I suggest to my noble friend that she should consider maintaining the lone parent element of child benefit for all lone parents with children under five. If the answer that I received from my noble friend during the course of this week is correct, such a move would hardly break the Bank of England. I asked my noble friend:What would he the annual cost to the Department of Social Security if all lone parents with children under five years of age were allowed to retain the lone parent element of child benefit?".I received the following answer:Existing recipients will continue to retain entitlement to the lone parent element of child benefit. The estimated additional annual cost of allowing all new lone parents with children under five to receive the lone parent rate of child benefit is set out in the table (below)".— (Official Report, 12/1/98; col. WAI45.)For 1998-99 the saving is £2 million; for 1999-2000 the saving is £8 million; and for 2000-01 the saving is £12 million. I do not believe that in terms of national finances that would break the Treasury.
I turn now to Clause 72 which deals with the restriction on the back-dating of benefit. I have great difficulty with this clause. To be frank I am rather ashamed of it. The principle of reducing the right to back payment from 12 months to three months was introduced by the previous Tory government. It was introduced during the course of the general election. The impact of that change has never been discussed by Parliament. We now have a Labour Government who proposes to reduce it to one month. Why? I understand that the purpose is to save £57 million. The clause also has an impact on local government housing benefit and council tax, which I am sure we will return to at Committee stage.
I have a particular interest in groups of industrial workers who late in life suffer disease, serious illness and often death through materials that they have used during their working lives. I worked in the shipbuilding and ship repairing industry for 25 years until I was elected to Parliament. In that industry the indiscriminate use of asbestos was widespread. I have seen many former colleagues over the past few years die agonising deaths from asbestos-related cancers. The asbestos was implanted into them when they were young men, and in some cases into their wives, because it was carried home 1198 on boiler suits. Twenty-five or 30 years later, usually after three or four years of painful and crippling illness, they have been diagnosed as suffering from asbestosis or mesothelioma, with death by then close at hand. I have great difficulty in supporting this clause. Those individuals who once could have back-dated their claim by 12 months would be restricted to one month. I believe that that is quite disgraceful.
I said that I would have the greatest difficulty in supporting the clause. I beg my noble friend to look particularly at industrial workers who suffer later in life because of the materials in the industry in which they have worked and are crippled by killing diseases and often die in agony. I hope that she will consider this particular aspect and return to it at Committee and Report stages.
§ 7.36 p.m.
§ Lord Goodhart
My Lords, I should like to begin by adding my congratulations to those of others to the noble Lord, Lord Newton of Braintree, for delivering, as I would have expected, a most distinguished and interesting maiden speech. Unlike my noble friend Lord Russell, I have not crossed swords with the noble Lord, Lord Newton. My wife sat alongside him on a committee of Oxford University Conservative Association until within a few months she discovered that she was not a Conservative.
I note that there have been only two other Back-Bench speakers from the noble Lord's party. Although they do not deny it, the Conservatives are clearly not very anxious to call attention to their paternity of this particular unloved baby. The Government are being left to act as a lone parent. Even more striking is the fact that every single one of the much larger number of speakers from the Government's Back Benches has attacked either Clause 70 or Clause 72—or in most cases both. I was particularly impressed by the speech of the noble Baroness, Lady Kennedy of The Shaws. Her speech was all the more powerful for being both restrained and moderate. We on these Benches have always been opposed to Clauses 70 and 72, and we shall continue to oppose them as long as it is possible to do so. As a party we are completely united on that issue.
I put two questions to the noble Baroness, Lady Hollis of Heigham. First, I should like to read an extract from the Child Poverty Action Group briefing:Lone parents already on income support on 5th April 1998 will keep the premium provided they do not break their claim. If they move off income support, they will not get the premium if they have to claim income support again in the future".Can the noble Baroness tell the House whether that extract correctly describes the position?
Secondly, does the noble Baroness accept that the only fair way to treat those who are now lone parents is to guarantee that they will continue to receive the higher rate of child benefit or family premium at any time, whether they move in or out of work, so long as they remain lone parents?
As a lawyer I should like to concentrate on the appeals procedure. As to that, I agree with everything that the noble and learned Lord, Lord Archer of 1199 Sandwell, said. He speaks from a great wealth of experience as chairman of the Council on Tribunals. I also agree with the noble Lord, Lord Borrie. The Government should listen to both of them. There are some good things in the Bill. The unification of a number of different existing tribunals is a welcome reform. However, I have four particular objections. First, I object strongly to the removal of the requirement that the appeals tribunals should have a legally qualified chairman. Until 1984, the chairmen of tribunals were not required to have legal qualifications. That, unquestionably, caused problems. There was a report by a distinguished professor, Professor Kathleen Bell, who condemned the use of non legally qualified persons to chair tribunals. As a result, in 1984, the law was changed to require the use of legally qualified chairmen. The reasons why in 1984 it was desirable to have legally qualified chairmen of tribunals are every bit as valid today.
Social security law is complex and becoming ever more so. There are many statutes involved. Indeed, they take up an entire volume of Halsbury's Statutes of England. There is an even more enormous mass of regulations. Interpretation of statutes and regulations is an essential part of the role of tribunals. That is, primarily, the role of a lawyer. Chairmen must know about principles of natural justice. They must understand how court proceedings should be conducted. They should know what evidence is relevant and what evidence is irrelevant. They will, from now on, have to be aware of Article 6 of the European Convention on Human Rights. They must know how to write decisions. A well-drafted decision is central to the process of appeal. They must set out the facts, record the findings of the tribunal on disputed facts, and record their decisions on issues of law. That, again, is very much part of the professional skills of a lawyer.
The abolition of the requirement for a legally qualified chairman has been opposed by the CAB, the Child Poverty Action Group, and many other organisations. I ask the Government to think again on that. I noted that when the Minister was giving examples of matters that were suitable to be heard by three-, two-, or one-person tribunals, she indicated in each case that a legally qualified member would be involved.
My second criticism relates to Clause 13(7), which states:In deciding an appeal… a tribunal need not consider any issue that is not raised by the appeal".That is wrong. The great majority of claimants will not have any detailed knowledge—very little knowledge at all—of social security law. Very few of them will have, or will have had, legal advice or representation. They will need all the help that they can get from the tribunal. If the tribunal thinks that the claimants have overlooked something that might help their claim, then the tribunal should be under a duty—not just have a power—itself to raise that issue. That point reinforces the need for legally qualified chairmen who have a broad knowledge of social security law.
1200 My third criticism relates to Clause 27. That clause raises complex issues, but it raises also an important question of principle. The question of principle is that if claimants are denied benefit because a decision maker has made an error of law, then when that mistake is corrected the claimant should receive the benefits that he or she would have had if the decision had been correct to begin with. That principle applies whether the error is made in the claimant's own case or in some other case which has been used as a precedent. That principle was, I regret to say, seriously infringed by the previous government in Sections 68 and 69 of the Social Security Administration Act 1992. I shall not go into the detail about the effect of those sections, as it is not appropriate to do so on Second Reading. A further infringement is now being made by Clause 27.
The Notes on Clauses say that Clause 27 clarifies Sections 68 and 69. However, it does a good deal more than that. Where what I might describe as a corrective decision is made, all pending claims depending upon that decision will now receive benefit only from the date of the corrective decision, and not, as previously, from the date of submitting their own claim, or one month before, if Clause 72 comes into effect. The deprivation of rights of claimants to have their claims backdated at least to one month before the date of their own claim is wrong in principle, and is arguably inconsistent with the European Convention on Human Rights.
My fourth and final point on the appeal procedure is one that has not been made before. It is that I regret that there has been a missed opportunity. I welcome the introduction by the Bill of a right to appeal on questions of contribution. The misfortune is that the opportunity was not taken to give jurisdiction to hear those appeals on contribution issues to the tax system; that is, to the general or special commissioners of income tax. Those issues are those listed in Part II of Schedule 3. Those issues are likely to come up to the appeal tribunals relatively infrequently. When they do come up. they will raise questions which are entirely different from the questions normally coming before the appeal tribunals under social security legislation.
Those questions will often be similar to cases which are decided by the tax tribunal; for example. the question whether someone is employed or self-employed is of the greatest importance both for liability to tax and to national insurance contributions. In each case there is an entirely different system of taxation or payment of contributions. It clearly makes sense in such a case for the same tribunal to be deciding the same issues, whether technically they come up as tax issues or national insurance issues.
The Tax Law Review Committee, of which I am a member, is a body set up by the well respected Institute for Fiscal Studies. It includes politicians from all three of the main parties, leading tax practitioners, judges, people from business, and former Inland Revenue officials. That body takes a strong view that contribution appeals should not go to the social security tribunals but should go to the tax tribunals.
As is inevitable, this is a highly technical Bill. There are many other points which are too detailed for Second Reading but which need to be taken up in Committee.
1201 It needs to be made clear that cuts in benefits for lone parents, and the reduction in the period of back-dating, are not the only defects in the Bill, although they are those which have attracted by far the greatest public attention. The changes in appeals procedure, though less high profile, also suffer from serious defects. The Government will need to be pressed on them in Committee.
§ 7.50 p.m.
§ Baroness Anelay of St. Johns
My Lords, on behalf of myself and my noble friend Lord Higgins, I congratulate my noble friend Lord Newton of Braintree upon his maiden speech. I hope that he will forgive me if I remind him of the first time that we met, which was in 1989. I was part of a delegation from a national charity which visited him in his ministerial capacity. I went back into my files—they are not empty files like the Focus files about which we have heard—and looked up the report that we wrote about him. It stated that we had found him to have intellectual acuity and to put forward robust arguments, and that he had absolute integrity. I promise that we did not write that report merely because we obtained everything we wanted on that day. I was acting on behalf of a national charity which prides itself on being independent of any political party. I consider myself fortunate to be in the House and able to listen to his contribution to our debates.
Unusually, today I can give more than one congratulation. I can congratulate the Minister because she has presented a Bill which the Secretary of State lifted almost, but not quite, lock, stock and barrel from the work of my right honourable friend Peter Lilley. As my noble friend Lord Higgins said, we do not oppose most of the changes proposed in the Bill. Most of them are ours and we stand by them. However, we have reservations about some of the details and we will examine them rigorously in Committee.
The noble Earl, Lord Russell, mentioned the cautionary note contained in the briefing circulated to this House by His Honour Keith Bassingthwaighte, the President of the Independent Tribunal Service. He cautions that a Bill which enjoys such bi-partisan support paradoxically needs to be challenged more strenuously in order to test its effects. I, too, believe that he is right.
The Minister referred to the need to increase still further the speed and accuracy of decision making within the benefits system. While we were in government, we took considerable steps to achieve that objective and we support measures to continue that work. When I was a member of the Social Security Advisory Committee I had the opportunity to visit centres such as Tyneview Park to see at first hand the way in which modern technology was being used effectively in order to speed up decision making and the accurate revision of records. I pay tribute to those in the various agencies who have worked so hard during the past years to meet the targets set. However, it is vital to bear in mind that when we try to increase efficiency we should consider carefully the impact on the fair treatment of both the claimants and the taxpayers. At 1202 times their interests may coincide. The Government have introduced proposals of their own into the Bill which jeopardise the fair treatment of claimants to an unacceptable degree.
Clause 8 will change the constitution of tribunals. As has been explained by several other speakers, they consist of three people, one of whom is a legally qualified chairman. The Bill proposes that in future the panel will consist of one, two or three people and there will be no requirement for the chairman to be legally qualified. I, too, see several dangers in that measure. If you make it possible to select one person as the composition of a tribunal you could be making it almost inevitable that the practice will develop of calling up one person as a matter of administrative convenience and cost saving. This means that the appellant will not be able to benefit from being heard by people who have a variety of experience and expertise which might be vital to the proper consideration of the case.
Like other Members of this House, I have sat as a lay member of a social security tribunal and a child support appeal tribunal. The quality of the experience and deliberations of lay members such as myself was variable, but in that diversity, underpinned by excellent tribunal training, lay one of the strengths of the tribunal system in treating appellants fairly and examining their evidence in an informed manner.
Another reason for the success of the system in hearing cases fairly is the presence of a legally qualified chairman. In the analysis of the responses to the Green Paper consultation on improving decision making and appeals in social security, Roy Sainsbury writes:A return to non-legal decision makers was seen as an undesirable and retrograde step. Legally-qualified decision makers had the advantage of training and experience in judicial methods, of considering and weighing the evidence, establishing facts, identifying the relevant law to be applied in the case and making a decision based fully and only on the facts and the law".The Government's case appears to be that it is more important to call cases on quickly by reducing the number of people on the tribunal and dropping any requirement for legally qualified members, even though that could compromise the fairness of the appeal hearing. The paper recently prepared by the presidents of the Independent Tribunal Services for Britain and Northern Ireland makes a persuasive case for the retention of legally qualified members, in particular on those occasions when a single decision maker conducts an oral hearing alone. What is the Government's justification for ignoring that informed view?
The changes to the composition of the tribunal and attempts to speed up the hearing of cases raise other questions which I would like the Minister to address. Most of them I will keep for examination in Committee, but there are two which I would like to raise briefly today. Earlier today, my noble friend Lord Higgins referred to the situation where the tribunal comprises just one person. What is the position if the individual appellant considers that he or she will not receive a fair and impartial hearing from that one person? He or she may, for example, say that the case requires a particular expertise not possessed by that individual member. As was pointed out by my noble friend Lord Higgins, there 1203 is to be no right for the appellant to challenge the composition of the tribunal. Can the Minister say whether the changes to the composition of tribunals proposed under the Bill offends Article 6 of the European Convention on Human Rights? If so, how much delay will occur in the system if appellants seek a remedy via recourse to the provisions of the European Convention?
Secondly, the Secretary of State has taken personal responsibility for setting time limits within which appeals will be heard. What will those time limits be? How will they accommodate the delays which can occur when appellants and Benefits Agency staff have to obtain information from third parties which can go back over years? Why is there no provision in the Bill for the Secretary of State to report to Parliament upon the operation of the appeals system and, in particular, the standards of adjudication? Why does it seem that she is seeking to avoid direct parliamentary scrutiny in this matter?
I turn to Clause 72. It was not proposed by us in government. It was added to the Bill by the Labour Administration. It proposes to reduce the maximum time limit for backdating all benefits to one month before the date of claim, including retirement pensions, widows' benefits, war widows' pensions and several benefits for disabled people. My noble friends Lord Newton of Braintree and Lord Blackwell argued forcefully and persuasively against these backdating provisions. The question must be: why were those provisions added to the Bill by the Government? The answer surely must be that it is a cost-cutting measure demanded by the Treasury with little regard to individual circumstances and difficulties faced by individual claimants.
During the Committee stage in another place, the Minister gave what he termed as a list of exceptions to the very harsh backdating rules which the Government are introducing. Yet he refused to put those exemptions on the face of the Bill. Why is that? I find the reason advanced by Mr. Keith Bradley in another place unconvincing at this stage. This is an issue to which we shall wish to return in Committee and I look forward to hearing the Minister's explanation either today or at that point.
Many noble Lords on all sides of the House have exposed the Government's hypocrisy in bringing forward clauses which contain provisions which they opposed tooth and nail while they were sitting on this side of the House. In particular, reference has been made to the policy to reduce the rate of child benefit for lone parents to the level of that of couples. It is a move towards more even-handed treatment of one parent and two parent families by reducing the additional child benefit of just £6 to the same level as that being paid to a couple with a child.
When that measure was announced in the Budget in November 1996, the current Secretary of State opposed it in another place. When asked by Polly Toynbee, the journalist, whether she would implement the measure if in government she said, "No, of course not". I congratulate the Secretary of State on realising now that she was wrong and we were right.
1204 Finally, I look forward to the Committee stage of this Bill, which will give us the opportunity to take the advice of the president of the Independent Tribunal Service and examine the Bill rigorously. We shall take the opportunity to improve some clauses of the Bill, in particular those clauses which we should not have introduced. But where the Government prove the case for change, and if they make constructive efforts to reform the social security system, then they will find that we support them.
§ 8.1 p.m.
§ Baroness Hollis of Heigham
My Lords, this has been an important, interesting and extremely full debate. Like so many of your Lordships this evening, I particularly welcome the maiden speech of the noble Lord, Lord Newton, which, as we expected, was both elegant and distinguished. I join with the whole House in genuinely congratulating him and I truly urge him to allow the House to share his thoughts on social security matters on future occasions. I do not doubt that he will wish to take advantage of precisely that invitation. We shall all be the beneficiaries.
Our commitment as a government is clear: to develop an active welfare system which supports work, savings and honesty; and to reduce the bill of failure and social exclusion. To achieve that we need to build on solid foundations. We need a modern, efficient system for welfare delivery which operates sensible, streamlined procedures supported by the right information technology. That will help to free staff from cumbersome bureaucracy and allow them to focus on actively helping their customers.
We need also a national insurance scheme—I do not believe that anyone has mentioned it this evening—which balances properly people's rights and responsibilities. And we need to manage our limited budget effectively by accepting the right priorities. Those are the key foundations for the future. We believe that this Bill will set them in place.
There have been many contributions to the debate and I suspect that if I spent even one minute on each point it would take me about one hour and a half so I hope that your Lordships will forgive me if, given the pressure of time, I am unable to answer every point although 1 shall of course write to noble Lords. I shall concentrate my remarks on four major areas of concern: first, decision making and appeals; secondly, the child benefit changes; thirdly, backdating; and fourthly, wider issues of regulation. I believe that those were the major issues raised in the debate.
I deal first with the appeal system and the degree to which its independence is to be protected. Those matters were raised by my noble and learned friend Lord Archer of Sandwell, my noble friend Lord Borne and the noble Lord, Lord Goodhart. I do not accept that the Secretary of State's responsibility for administration will compromise the independence of the appeal system. On the contrary, this Bill enhances it. Independence flows from the nature of appointments to the panel and the way in which the tribunals reach their decisions.
1205 First, all appointments to the panels will be made by my noble and learned friend the Lord Chancellor, not the Secretary of State, and by my noble and learned friend the Lord Advocate. Secondly, responsibility for the functions of appeal tribunals will be placed squarely upon the president. Therefore, tribunal members and their decisions will be wholly and properly independent of the department. Regulations will provide the framework for the allocation of appeals to appropriately constituted appeal tribunals. For example, they will specify that a tribunal hearing on incapacity benefit will require a medical practitioner and so on. The president of the tribunals will be consulted on those regulations and on the guidance which will flesh them out.
Importantly—and this matter has not been raised this evening—the president will approve individual panel members for their areas of expertise or their suitability for handling particular cases; that is, the president, not the Secretary of State or an administrative officer, will determine which individual is qualified to serve on either three-member, two-member or one-member tribunals. I was asked in what situation I could conceive a non-legally qualified person handling a single-member tribunal. That will be unusual but it could be the case that a qualified accountant might be the best person to look at a contributions issue, which could be an accountancy matter. But the president will determine the appropriate qualifications of that person and his functions.
Then, in the light of that, administrative officers will allocate cases to particular types of tribunal according to the criteria set out in regulations and guidance prepared in consultation with the president. A legally qualified member of the panel will be able to give advice on handling a particular appeal if necessary. Tribunal clerks will then summon from the panel people identified by the president as having the right expertise. We believe that that will benefit appellants, will reduce the potential for delay and will remove the need for more than one tribunal to decide different issues in a single case. We do not believe that it will in any way subvert the proper independence of the tribunals. If your Lordships' fears have not been met in what I have said this evening then we shall wish to explore the matter in Committee. It may be that we can enlarge further on those points or consider further movement.
The noble Lord, Lord Higgins, and the noble Baroness, Lady Anelay, asked whether the appellant will have any right of challenge as regards tribunal membership. The information provided will tell people how their appeals will be handled, including what kinds of people will hear which sort of cases. It will always be open to appellants to suggest which type of expertise may be relevant and if new information or facts emerge the hearing could be adjourned. But it is estimated that there will be no right of appeal to commissioners against the constitution of individual appeal tribunals.
The noble Lord, Lord Higgins, asked about ECHR, as did other noble Lords, and whether there is anything in our proposals which is incompatible with ECHR legislation and plans for incorporation into domestic law. The department has looked carefully to ensure that our proposals are consistent and we shall continue to do 1206 so. We shall take account of proposals for incorporation as those are developed to ensure that decision-making and appeal arrangements are compatible. Indeed, in introducing for the first time, as the noble Lord, Lord Goodhart, mentioned, an appeal right on contribution matters, we are moving closer to complying with the requirements of ECHR.
The noble Lord, Lord Higgins, asked how the sifting process sat with people's rights under Article 6. Appellants will still have the right to appeal to an independent and impartial tribunal established by law.
The noble Earl, Lord Russell, asked what qualifications would be prescribed in the regulations made under Clauses 6(3) and 7(3). He asked in particular whether a future government—far be it for him to consider that it might be this one—could construct a panel comprising all unqualified people. Even with the fertile imagination of the noble Earl, Lord Russell, for which I have the greatest respect and admiration, having enjoyed, benefited front, and experienced it for many years now, I believe that it is inconceivable that any future government or Lord Chancellor would wish to set up a panel of people who have no qualifications and thus are ill equipped to maintain a fair and independent appeal tribunal.
§ Earl Russell
My Lords, I thank the Minister for that assurance. It may be inconceivable but is it infra vires?
§ Baroness Hollis of Heigham
My Lords, if inconceivable does not cover intro vires, I shall write to the noble Earl. He asked also in relation to Clause 25 about test cases and whether the Secretary of State should have the power to interfere and how look-alikes would be identified. We believe that it is sensible to have proper arrangements which maintain appeal rights but which prevent double-handling and confusion for claimants. The Secretary of State will be responsible for providing instructions in guidance for staff about identifying those cases. She will issue that guidance on a case-by-case basis, making clear the specific point of law in the lead case. That guidance will he checked by lawyers and other experts in the department.
The noble Earl also raised an issue which I suspect will strike a chord with many noble Lords who, like me, have only recently moved from typewriter to word processor, although we did at least abandon our fountain pens a year or two ago. The issue concerns computers and whether they could make decisions which removed responsibility from the Secretary of State. As I suspect the noble Earl knows perfectly well, the Secretary of State will be accountable for all decisions made on her behalf either by staff or by computer. It is people, not machines or processors, who have responsibility for outputs and outcomes. Neither the agency staff nor Ministers will hide behind any excuse which suggests that, "It was the computer's fault and is nothing to do with me." I suspect that if I tried that, the noble Earl would be the first to pin me to the point.
My noble and learned friend Lord Archer asked about the removal of rights of appeal under Clause 13(2) and paragraph 8 of Schedule 2. Schedule 2 sets out decisions that have no right of appeal. They are all matters which 1207 currently do not have that right, and paragraph 8 enables that list to be extended. As we made clear in the delegated powers memorandum, we intend to use it to exclude, as now, decisions made under Regulation 4 of the social security claims and payments regulations. These are largely administration matters, such as whether a claim has been properly made. The power allows sufficient flexibility to accommodate any future changes to social security which perhaps require new processes for administration but to which it would not be sensible to attach appeal rights. We do not intend to use that power to remove existing appeal rights, nor do we intend to introduce any new welfare provision without appropriate appeal rights.
Clause 13(2) complements Schedule 2. It allows us to prescribe those administration issues on which there will be no right of appeal. If my noble and learned friend wishes further to expand that point, I am sure that my noble and learned friend the Lord Advocate will do so.
My noble and learned friend Lord Archer also asked who would appoint officers under paragraph 11 of Schedule 1 and what sort of things they would do. The provision would allow the Secretary of State, who will be responsible for administration of appeals, to designate certain officers to carry out some functions. I tried to explain earlier that the administration will be handled by administrative officers but the judicial functions will be carried out by proper independent tribunal staff. The clerk will not be able to determine any appeal application or act as referee as paragraph 11(1)(a) makes clear. Again, if there are further points that need to be dealt with in that respect, I am sure that my noble and learned friend the Lord Advocate will be the better person to follow them up in Committee.
My noble friend Lady Turner said that what was really needed was better and clearer explanation of decisions. She is absolutely right. That is exactly what many of the clauses in the Bill seek to achieve. My noble friend also asked what would be accepted as special reasons for late appeals. There are current arrangements for accepting appeals made out of time. In future, claimants will need to be clear about their appeal rights and how a decision has been reached. Notifications will be improved. However, as has been pointed out today, we need to ensure that an individual's appeal rights are not prejudiced and that vulnerable groups are not disadvantaged. While most claimants do appeal within a month, we want to discuss the details of the new arrangements with interested parties, including claimant representatives, to ensure that we get that aspect right.
Still on the subject of claimants' rights, I turn to a point made most forcefully by the right reverend Prelate the Bishop of Bradford. He asked whether we had been listening to the views of claimants and in what sense they had been consulted. We have issued a consultation document to something like 18,000 outlets asking people to consider whether our processes of information—that is, our leaflets, and so on—were adequate and appropriate. We are in the process of receiving those replies and studying them. I am entirely 1208 at one with the right reverend Prelate. Benefits require clear, simple and accessible information if people are to enjoy rights to which they are entitled.
The noble Lord, Lord Goodhart, raised a question which he also put forward at the meeting that took place before today to brief noble Lords on this very technical Bill. Under Clause 13(7) tribunals need not consider all relevant issues. I believe that the briefing may have been somewhat misleading in that respect. I repeat: tribunals are still able to investigate any aspect of a disputed decision that they think is relevant. What we are not doing is requiring them to consider every aspect even if it is not relevant on all occasions. It means that appeals should be far more focused and faster.
The noble Lord also asked about national insurance and tax and queried why such matters should not go to tax commissioners. We have considered the matter. Sometimes a contribution issue first comes to light when a claim is made for benefits and is disallowed. Until now it has been impossible to take that to appeal. At present, the current process through social security tribunals would not be a proper way to resolve contribution matters because they frequently require special expertise. The new arrangements will give us the opportunity to construct panels which contain such expertise—possibly accountancy—including the use of people, for example, who currently sit as tax commissioners. None of these precludes in due course finding a common route of appeal for tax and contribution matters should that seem the right way forward.
I realise that I am speaking at breakneck speed, but it is important for me to cover as much of the Bill as possible before the Committee stage so that your Lordships will know where to come back to as regards the responses with which they are less than satisfied tonight.
I turn to the second major issue. It was obviously a matter of particular concern to my noble friends sitting behind me. I refer to the issue of child benefit and the effect on lone parents. Perhaps I may join the noble Baroness, Lady Williams, my noble friend, Lord Ashley, and indeed so many speakers tonight, including my noble friend, Lady Kennedy, in paying tribute to lone parents and the gallant work that they do in bringing up their children. I am sure that I speak for all of your Lordships when I say that I shall play no part in any scapegoating of their role or their responsibilities.
One of the difficulties expressed in tonight's debate has been the fact that lone parents are affected by two different sets of changes. Quite understandably, because it is very technical, the debate has moved rather freely between those two sets of changes. Therefore, with the leave of the House, I shall do my best to explain the position.
The first set of changes affecting lone parents are those which have already been passed by regulation through this House. They even up the situation for new lone parents in terms of the income support family premium. Concern has been expressed that although those new lone parents—especially those with children under five—would now be at the same level of income 1209 support proportionately as workless couples, they would, nonetheless, be poorer than is currently the case. Those regulations are not the subject of this Bill. They have already gone through the House.
I should like to repeat the position quickly. I do so especially in the light of the proposals made by my noble friend Lady Kennedy and the noble Baroness, Lady Williams, regarding the position of children under five. Perhaps I may share with the House the problems that one faces on that issue. I understand where both my noble friend and the noble Baroness come from on that issue. First, if we retained an additional premium on income support for those lone parents with children under five there would, initially, be the problem of what happens when the child reaches the age of six. At present, income support allowances for children increase as the child grows older because children become more expensive. We would be turning that on its head. In other words, we would be reducing the benefit as the child gets older—for example, from the age of five to six—rather than increasing it as we currently do by steps up to the age of 11, and so on.
§ Baroness Williams of Crosby
My Lords, I am sorry to interrupt the Minister, but is not the point the fact that when the child reaches compulsory school attendance age it is much easier for the mother to have time to undertake work and thereby increase the family's income? The consideration that we were asking the noble Baroness to address was that parents with children under the age of five should not, perhaps, spend a great deal of time out of the home working? That was the major point we were trying to make.
§ Baroness Hollis of Heigham
My Lords, there are obviously several responses to that question. First, I suspect that the point about children at the age of five and full-time education is now one that is shifting back, given the commitment of the entire House to nursery education, and so on. Therefore, lone parents may well choose—and, in my view, quite properly—the right to go to work when the child is much younger. The second point is one made by my noble friend Lord Evans; namely, that the latter is conditional on finding work. Is the noble Baroness arguing that, even if the lone parent cannot find work when the child has reached the age of six, the benefit should be cut? That seems to me a dilemma that we would face were we to introduce an age-related premium which runs contrary to the current structure of income support.
Moreover, in terms of the under fives, there is also the consistency with workless couples to consider. At the moment there are twice as many workless couples—some 600,000 of them—as there are lone parents, the number of which is about 300,000, in the bottom income decile. It seems to me to be quite difficult to argue that we should restore it for lone parents with children under five but not for workless couples with children under five. One then starts talking about very significant sums of money.
What this Bill does is to address the second set of changes which affect lone parents which are the child benefit changes, as the noble Lord, Lord Higgins, rightly 1210 identified. What this Bill does is to align the rate of child benefit paid to new lone parents with that paid to couples. At the moment a working lone parent with one child who receives family credit and the higher rate of child benefit receives a higher net income than does a couple with one child on the same wage. The lone parent receives more money from child benefit even though both she and the couple are in work, they both earn the same wage and they both receive the same family credit. Is one really saying that a lone parent plus child requires a higher income than two adults and one child?
§ Earl Russell
My Lords, does this not rest on the same principle as disability living allowance; namely, that the situation necessarily involves extra costs?
§ Baroness Hollis of Heigham
Yes, my Lords, but the extra costs are associated with childcare. That is precisely why we are addressing a childcare strategy and the more generous treatment of childcare disregard. I am entirely at one with the noble Earl on that.
These changes apply only to new lone parents. The noble Lord, Lord Higgins, waxed eloquent on perverse incentives and these changes. I am not sure that he is right. I wonder whether he has fully understood them. These child benefit proposals are not affected by the work status or the level of income of the lone parent. We are saying that a lone parent on income support who currently enjoys the higher rate of child benefit can move into work with the higher rate of child benefit unaffected and move back from work on to benefit with the higher rate of child benefit protected. In this Bill there are linking rules. She can lose that higher rate of benefit only if she ceases to be a lone parent.
§ Lord Higgins
My Lords, I am most grateful to the noble Baroness; she is explaining matters extremely clearly. However, on the point I was seeking to make—and what I dubbed an in-and-out question—the noble Baroness is now reassuring us as regards the Bill. What I am not clear about is whether the same is true as regards the previously passed Statutory Instrument. Is it or is it not the case that as regards those provisions if someone starts work having received the higher rate of benefit, when he or she goes into work and comes out again, that person will go on to the lower rate of benefit? In other words, are the two things consistent?
§ Baroness Hollis of Heigham
My Lords, the noble Lord is entirely correct in his understanding. The linking rules apply to child benefit, which is what we are talking about in this Bill. The linking rules do not apply to the income support family premium which has already been discussed and accepted in this House when we discussed regulation.
§ Lord Higgins
My Lords, surely then the situation with regard to the Statutory Instrument is inconsistent with the Government's policy because, as the Sunday Telegraph article pointed out, this is a deterrent to someone taking the risk of going into employment?
§ Baroness Hollis of Heigham
My Lords, the point we are making here is that 50 per cent. of lone parents 1211 have one child. At the moment large numbers of them stay on benefit because they are trapped in benefit even when their child has gone to school. We are seeking to assist through childcare measures and the like, as well as the national minimum wage, to produce a positive incentive and the positive "carrots" to persuade them to go to work. We believe that that is the best and most appropriate way to focus our expenditure.
We have a linking rule on this Bill. I believe that the previous government did not propose a linking rule on child benefit. The noble Lord said I had said that the child benefit proposals were perverse and batty. That was precisely because the then government did not propose a linking rule. It was therefore a disincentive for those lone parents with higher rate child benefit to go into work. We are now producing that linking rule for child benefit. Given that linking rule, our proposals for childcare, our proposals for the minimum wage, and our proposals for turning around the Child Support Agency, we firmly believe that our priorities in aiding lone parents into work are right.
My noble friend Lady Kennedy referred to a maintenance disregard for those women on income support to enable them to keep some of the maintenance from their former partners. I greatly welcome her suggestions and I shall ensure that they are brought to the attention of those conducting the review of the Child Support Agency. If we can get fathers to pay the maintenance for their children that they should pay, and get that flow of money going to the lone parent, whether that lone parent is on income support, or is on family credit and is in work, that is clearly an appropriate and important way to sustain children at home.
The noble Baroness, Lady Williams, regretted that the Government were not aligning these changes in benefit with welfare-to-work proposals. She was right to suggest that we should do so. That is precisely why we are aligning these changes. We are unrolling the New Deal proposals nationally in April 1998 at the same time as the changes in family premium come into play. We are unrolling the additional disregard on family credit and extra help in June which is the time at which the child benefit changes come into play. I believe we have met her point on that.
The noble Baroness also said that freezing national insurance re-rating would increase revenues by twice the amount of the savings from Clause 70. I have no reason to challenge her figures but that is the national insurance fund which is hypothecated for other purposes. What we are talking about here is a benefit sustained by general taxation and therefore there is no "read across" between the two. The noble Baroness also mentioned the PSI report and said that a figure of £50 a week was unrealistic. I do not disagree that lone parents because of their childcare costs face higher and additional costs than do couples, although not necessarily proportionately with regard to their day-to-day living in terms of food, clothing or heating. That is why we are focusing on addressing that additional childcare cost when the lone parent does not have the support that a married couple or a cohabiting couple would have where two adults share the childcare between them.
1212 The noble Lord, Lord Newton, mentioned that the balance of taxation has moved against families with dependent children. That, of course, is one of the reasons—he will not need me to elaborate on this—the Taylor Committee is considering the integration of the tax and benefit systems. I note, however, the concerns that the noble Baroness, Lady Williams, expressed about some of these implications. I know that that has formed part of the evidence submitted to the Taylor Committee for its consideration.
I now turn to backdating. My noble friend Lady Turner spoke on this, as did many other of your Lordships who have a wealth of experience. I wish to clarify the points that I believe were made by the noble Baroness, Lady Ludford, and the noble Lord, Lord Blackwell, on housing benefit and council tax benefit. If I have not answered those points fully, I hope that they will contact me and I shall do my best to satisfy them. Housing and council tax benefits will be brought into line with other income related benefits. There will be no backdating but where one of the special reasons set out in the regulations applies, there may be backdating for up to one month. The clock starts ticking when the claim is received. If there has been administrative delay, arrears will be paid in full. If, for example, the Benefits Agency did not pass on the forms or mislaid them, that would not affect a claimant's rights. If a local authority is confident that the claimant had submitted the forms at the proper time, that claimant's full rights would be protected.
My noble friend Lady Turner asked about exceptions. I tried to cover those in my opening speech. One of those concerned passporting and the second concerned special reasons as regards literacy, language and learning difficulties and poor health. The third concerned cases where delay arose as a result of administrative error or where circumstances such as recent separation or bereavement came into play. Those circumstances have all been set out. My noble friend also pressed me about widow's benefit. I realise that my noble friend speaks from fairly recent experience. I suggest that a widow would normally be prompted to claim widow's benefit when the death of her husband is registered as there is a question about widow's benefit on the form registering the death. The death has to be registered within five days. We therefore normally hope and expect that the date of registration would trigger the date of claim. The widow's benefit would be backdated to that date of claim.
First on ICA and backdating, my noble friend Lady Pitkeathley raised a number of issues. I was glad that she was able to give me prior notice of them. We accept that information about ICA should be included in the DLA claim form. I am pleased to say that officials are looking currently at ways of doing so, as urged by my noble friend.
Secondly, we are aware that the system of double claiming is cumbersome. However, it is there to protect the interests of carers who could lose benefit if they delayed claiming until the qualifying benefits were settled. We hope to streamline that. We are also looking at ways of ensuring that those who identify themselves as carers take up their rights as quickly as possible.
1213 Finally, various points were made about regulations. I am running out of time, even with the points that I have taken, quite properly, from your Lordships, so I shall be brief. However, with regard to the structure of the Bill, the point has been made that it contains a large number of regulation-making powers. There are a number of reasons for that. First, it is important to have a clear grasp of how the legislation is structured. About a third of the powers will be re-enactment. Secondly, we want to introduce unified decision-making and appeals arrangements across the range of the department's business, so some powers need to be repeated for benefits and child support. Thirdly, and most importantly, we want to be in a position to respond over time to operational issues which will inevitably arise during implementation. It may be that we shall find better ways of doing that as the Bill works its way through and comes into effect. We wish to be able to respond to innovations and working practice, developments in technology and from lessons learnt from practical experience and from what claimants tell us. That is why we have the regulatory powers.
My Lords, I have done my best. If I have omitted any points of substance, I apologise to the House. I hope that noble Lords will allow me to write to them. As a result, I hope that the House will allow the Bill to have a Second Reading.
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.