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The Deputy Chairman of Committees (Baroness Gibson of Market Rasen): My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
"(zza) an order under section 115A(3B);"."
Baroness Drake: My Lords, I shall also speak to Amendment 104AA. In Clause 113, we see the Government's intention to introduce a civil penalty for negligence in providing incorrect statements for all categories of universal credit claimants. The penalty will also apply to the failure to disclose information. This is a probing amendment to understand why and how these penalty powers will be applied.
The civil penalty will be awarded where an error is not being dealt with through fraud action. The power to award will not be restricted to the Secretary of State but given to any authority that administers housing or council tax benefits, so it is quite a significant power.
Although there is an existing tax credit civil penalty regime, such a principle will now be extended to all universal credit claimant communities, many of whom are very vulnerable, such as those with disabilities or illness. What exactly is the offence and how will it impact on the population of claimants?
In response to a question from my noble friend Lady Hollis and me, the department has kindly advised that "negligence" should be construed in accordance with the everyday meaning of the word: that is, not exercising the care that the circumstances demand-in this context, being careless about, or paying insufficient attention to, the accuracy of any statement or information given in a benefit claim. Not exercising care and not paying sufficient attention are not actions that can be assessed for negligence without having regard to the capacity and the capability of the individual when providing that information.
More than 4.2 million adults lack the basic, day-to-day competences of functional literacy, 6.8 million adults lack functional numeracy, and I understand that it is estimated that two-thirds of claimants on income-related JSA have the functional literacy of an 11 year-old. There will therefore clearly be a higher concentration of adults with limited numeracy and literacy skills in the claimant population. As I have said, many claimants will also be vulnerable for other reasons-disability, illness or whatever. All these characteristics add up to a greater propensity for errors to occur and mean that the most vulnerable will be disproportionately hit by the civil penalty.
However, my arguments do not stop there. The Government are assuming that 80 per cent of claimants for universal credit will fill in their application forms online, but evidence from charities suggests that a much lower number will be able to do so without error; a more realistic figure may well be 40 per cent. What plans will the department put in place in the event that it becomes clear that the percentage of applicants who can fill in their forms online is significantly below that forecast?
Universal credit will also bring a new set of rules and people will not always understand what is expected of them. People have complicated lives, and even if someone is sitting next to them they may still get it wrong. Even when individuals want to get it right but are not competent, cuts to the funding for legal advice and the winding down of the local authority-based benefit services will mean that those who would otherwise have helped the claimant to fill in the form will not be there. Claimants may want help from face-to-face contact at Jobcentre Plus, but many centres are being closed and they are likely to be in urban areas and so they are remote from rural claimants. Yes, call centre staff will be available, but they may not be sufficiently experienced in the new rules, certainly in the early years of universal credit, and their guidance may lead to errors in the filling in of the form.
We have layer upon layer of capacity, capability and complexity considerations that, once added together, reveal why non-fraudulent errors will occur in statements and information provided by vulnerable claimants. This indicates a systemic series of reasons for errors that will not be addressed by exhorting the most vulnerable to be more personally responsible and hitting them with civil penalties. The most vulnerable claimants are often scared of filling in their forms, but now we have the potential to make them petrified. One can imagine their anxiety at receiving some heavy-handed departmental letter telling them that they are about to be fined. Their ability to know that it is a civil penalty rather than a criminal one may be a subtlety that misses them when they receive such a letter.
Let me ask the Minister three questions. First, can he give an assurance that civil penalties will not be introduced before transparent criteria are set out to ensure that claimants are not penalised for making innocent errors and failing to understand the need to report changes within a required timetable, and that definitions of "reasonable excuse" will take account of a claimant's individual circumstances? Secondly, how will decisions about when to issue a civil penalty be made, and how and when will good cause be considered? Thirdly, how does the Minister expect to ensure that the most vulnerable and the most prone to make errors will not be unfairly penalised by the civil penalty-not the exhortation that the most vulnerable will not be hit but how he expects to ensure that that exhortation is met?
The reason given for the extension of the civil penalty power is to reduce claimant error and increase personal responsibility. The savings from introducing the civil penalty power will be £19 million over the three years to 2014-15, but the application of that power could have a considerable impact on some very vulnerable people. I understand that the Government's estimate of the volume of civil penalties is just under 600,000 a year, which seems very high given that, first, universal credit is intended to be a simpler, more transparent system; secondly, that the number of penalties for tax credit claimants last year was, I understand, 1,221; and, thirdly, that there were 7,249 administrative penalties for the benefits service.
That leaves me concerned as to how these civil penalty powers will be used in practice, because in the impact assessment, fraudulent and criminal activity is lumped together with non-fraudulent and non-culpable-or potentially non-culpable-error. However, they are clearly not the same thing. The same community of people is not being addressed, but they are being considered in an almost holistic way in the impact assessment.
It worries me that the department appears to be applying a common mindset to both, which in part is my reason for tabling Amendment 104AA, which seeks to prevent the Secretary of State allowing any targets to be set that would prove an incentive to increase both the number and the value of civil penalties issued. The stated purpose of these civil penalties is to improve claimant personal responsibility. However, we know over time from our own common sense and experience that organisational cultures can result in
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In a world where there is increasing competition for access to tax revenues, civil penalty powers will be vulnerable to abuse. They could end up being deployed more aggressively to improve revenues or to be punitive. One can think of examples of where ordinary people think that this may have happened. For example, are the approaches to catching people speeding and the margin of tolerance over the speed limit determined by a desire to incentivise good behaviour and avoid bad, or has it become a means of raising revenue? Did some local authorities deploy surveillance techniques against ordinary citizens for reasons never intended by legislation? Whatever the validity of people's thoughts on these matters, they are an indication of concerns as to how civil penalty powers can be deployed in a way that was never intended.
I would prefer the civil penalty not to be there, but certainly I want to ensure that the powers to impose civil penalties set out in Clause 113 of the Bill are never abused. The recipients of that abuse are most likely to be vulnerable people who easily make mistakes, and who could come to fear the department's staff as a sort of form of police force that is free to hand out fixed civil penalties at will. Any targets set would almost certainly be set by reference to national standards, and this amendment seeks to prevent the Secretary of State from ever allowing such standards to be set. The population does not conform to national standards. There are differences in localities, in regions, in demographics, in educational attainment, language skills, level of employment, labour market characteristics, which all have an impact on the volume of forms likely to be completed incorrectly. There will be a concentration of impact from these civil penalties if targets are applied.
In summary, I am a strong believer in public service and support, but I have a great antipathy to the deployment of bureaucratic power that frightens or abuses people. I have real concerns about the deployment of this civil penalty and I look forward to the Minister's response to my questions.
Lord Skelmersdale: My Lords, I am glad that the noble Baroness, Lady Drake, has called attention to Clause 113, because it is easy enough for some people not to understand the form that they are filling in, even sometimes in the presence of a member of the Minister's department in the jobcentre. My real problem with this clause is that it talks about negligence. If you fill in a form in a slapdash manner, that is negligent. I would far prefer something like "knowingly": in other words, designing to commit some sort of fraud. That would be a much happier arrangement.
Baroness Hollis of Heigham: I support my noble friend's amendment. Following on from what the noble Lord, Lord Skelmersdale, said, I would say that the test of fraud is normally-I think I saw a former Lord Chancellor who would know much better
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There are three or four matters on which if I were asked now whether people needed to declare things, I could not guide them, and I like to think I have some nodding acquaintance with this Bill. For example, a lone parent has a boyfriend who works away. He stays with her overnight one or twice over the weekend. As a result, is she no longer a lone parent? Clearly it will not depend on their sleeping arrangements but on what contribution he makes to their financial arrangements. On a weekend basis, would that be sufficiently substantial to make her no longer a lone parent but part of a couple and therefore falsely declaring if she claims to be a lone parent? I am not clear what would happen in that situation under the Bill. Perfectly reasonably she might regard the fact that as she is getting universal credit she is not a lone parent and he is somebody who comes in as a boyfriend but not a partner.
With housing benefit, you could have a family with a student son who is living at home, going to the local university and working part-time. Should he be declared for housing benefit as a potential contributor to the rent so that non-dependent adult deductions come into play? I do not know. I think it would be quite difficult for that couple to assess.
Let me give another example that we discussed at considerable length and about which the Minister was rightly sympathetic-kinship carers. Conventionally, kinship carers are entitled to claim for child credit and so on if they have the equivalent of the child benefit book, which normally takes about eight weeks to come across. In future, given that child benefit will not necessarily be a separate benefit entitlement, if there is a rotating relationship in which the child goes back to its birth parents for a few weeks and then, because the father or the mother may be an addict of some degree, goes back to the grandparents, at what point and for how long a period of continuous care are the kinship carers entitled to claim the child elements in universal credit? I do not know.
In those three cases-and I could elaborate another six on disability benefits that are becoming clear to us-I would not be able to advise somebody on what they should declare on their forms as being relevant for the consideration of UC. It would be natural for them in those quite complicated situations not to declare things that appear to work against them. They would not be doing it with an intent to deceive. They may think it is a perfectly proper statement of their position as they see it, yet under this clause they could be caught for negligence and fined. That is completely unreasonable.
The one piece of advice I would give the Minister is that whatever he does, whether he claims that this is needed as a reserve power or not, he should not touch it for at least three years until after the Bill has come into practical effect because of the bedding-down issues that it will have. The Minister has to make only one mistake, such as his department suing somebody
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Baroness Lister of Burtersett: My Lords, my noble friend gives some very good examples of how easy it might be to make mistakes, particularly when the universal credit is quite low. I remind noble Lords that on 24 October the noble Lord, Lord Boswell, told us how easy it is to make mistakes. When he applied for his retirement pension, he got it wrong. Was he being negligent? No. It was an example of how easy it is to fill in a form wrongly. It is not necessarily negligence.
Apart from that little reminder of how any noble Lord could easily make a mistake, I also wanted to pick up a point made by my noble friend Lady Drake about the expectation that 80 per cent of claimants will be claiming online. Recently a piece of research, Increasing Digital Channel Use Amongst Digitally Excluded Jobcentre Plus Claimants, found that one group of those claimants were what the authors call the "uninterested". The researchers said that this group will,
I would be very grateful if the Minister could assure the Committee that there is absolutely no intention to sanction people for not using online procedures. Some people have a mental block against using computers and we do not want yet another sanction in the system. I know that it was researchers who said this, and not the department, but if he could give us that assurance now, that would be very helpful.
Lord Touhig: My Lords, my noble friend Lady Drake has made some very powerful points this afternoon, which the Government need to take on board or we will get into a mess when this is finally introduced. They should be indebted, too, to the noble Lord, Lord Skelmersdale. His point is that there is an implication that the person who makes this sort of mistake has been deliberately negligent. That would mark people out as trying to defraud the system. It puts them in the wrong to start with, when these things can happen by accident.
Noble Lords will forgive me if I remind them of a point I made in one of our earlier debates. When I sat in the other place, I had a constituent who came to see me because she had been overpaid a certain benefit, and the department was pursuing her strongly for repayment. When we got the papers, we discovered what had happened. There were some boxes she had to tick. One of the boxes asked, "Have you received income support?". She ticked "Yes". However, she had stopped receiving it about six months before, and so beneath her tick, she wrote, "But this stopped", and she wrote in the date on which it stopped. When we got to the bottom of this we found that when the form was sent in to the department, its computer could not scan in anything that was not in the box, so it continued to overpay her. She was in a terrible state. A large amount of money was involved, and there was a huge problem as a result. It will go wrong.
Noble Lords will forgive me if I repeat something that I mentioned in the Chamber a little while ago. In the case of universal credit, a lot will depend on a new IT system. Every major IT system that the Government have introduced in recent years has gone wrong. I know, because I sat on the Public Accounts Committee in the other place for a number of years and we had to look at some of these issues as a result of inquiries to the National Audit Office.
My noble friend Lady Drake also made the point, as others have, about people filling in these forms online. Thirty per cent of the poorest families in this country have no access to a computer. It has been possible to claim jobseeker's allowance online for 20 months. The take-up is 17 per cent. The idea that we are going to get to 80 per cent of people claiming benefits online will cause a huge problem for the system.
My noble friend Lady Hollis has just made the point that a lot of the good things that this Bill will seek to introduce will be damaged because of the kind of approach that this particular clause takes. The Government should really think again and take note of the points made by the noble Baroness, Lady Drake.
Baroness Meacher: My Lords, I, too, support the excellent contribution of the noble Baroness, Lady Drake. I am sure that we all understand that if someone really has filled in a form negligently and as a result has received extra pay, that needs to be dealt with. My problem is how on earth you word such a clause. There are people who clearly are incapacitated and so cannot work things out-they cannot read adequately or have had to have some help from somebody else who does not quite understand their situation. You can imagine all sorts of situations in which things would go wrong, certainly when it comes to people with severe learning difficulties, major mental health problems and so on. Unless the official dealing with these things really understands the individual and how they might have come to make these errors, it seems to me that the most appalling injustices will result, which I am sure the Minister would not be happy about at all. Will he think about the wording of Clause 113 and try to generate wording that distinguishes between people who have in some way been negligent or perhaps on the edge of fraud but you cannot quite prove it? One can imagine a lot of people who might fall within that clause but who perhaps belong in a clause that relates to fraud. They are quite different from a large number of people who are struggling, whether with literacy or other problems. I am sure the Minister would wish to make that distinction clear and fair. It was helpful to have this amendment, and I look forward to the Minister's reply.
Baroness Turner of Camden: My Lords, I do not want to add much to what has been so well said already in support of the amendment. On the other hand, we have been talking about other Bills while discussing this one, and I note that some of the information that we have from, say, Citizens Advice, indicates that it gets a lot of applications from individuals
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Moreover, it does not say in the Bill exactly what the prescribed amount of penalty will be, so apparently in addition to giving back the overpayment a penalty would be involved. That would mean that somebody who is already very vulnerable and who has no money could be in difficulty on paying both the penalty and the overpayment. I suggest that the Minister looks at this part of the Bill as it could do with a bit of rewriting in line with what a number of Peers have had to say this afternoon.
Lord McKenzie of Luton: My Lords, my noble friend Lady Drake has opened an important probe on these provisions, and other noble Lords have emphasised some of the practical difficulties that they create. I hope that the Government will reflect on the intent, the wording, the timing and some of the practicalities that these provisions throw up.
I want to add to the questions in a modest way. The "appropriate authority" that can levy the penalties includes those that will administer council tax benefits. We know that in future several hundred authorities will be levying council tax benefits unless we can get some amendments to the Bill. There is a real issue of consistency and the systems themselves possibly being markedly different and administered in a different way. Precisely how is it proposed that consistency in council tax benefit will be achieved? What sort of value to engagement will there be with all those authorities? Indeed, is there capacity within the DWP to undertake that effectively?
I have two more questions. The briefing suggested that the penalty levy would be £50. What was that figure benchmarked against? Can I also have clarification of "due process" and whether rights of appeal are attached to this? It would be helpful to hear from the Minister. Subject to that, and to the many pertinent questions asked by my noble friends, I shall not raise further points. We have not heard the Minister's amendments yet, so subject to that, those are my questions.
Lord Freud: My Lords, Amendments 104A and 104B, tabled in my name, are similar in intention to an earlier suggested amendment to Clause 102. These two amendments will ensure that where a claimant's benefit is paid to a third party, usually a landlord, recovery of any civil penalty, along with recovery of the associated benefit overpayment, may be made by making appropriate deductions from that benefit payment. Currently, there is a slight difference in the wording used by this clause and Clause 102 when specifying that amounts are recoverable. This was unintentional.
Amendments 104A and 104B remove that difference and ensure a consistent read across. This will mean that, in the limited circumstances in which the third party benefit payment is the only one from which we can make a recovery, we can ensure that whenever a
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In every civil penalty case there will always be an overpayment of benefit and we intend that the civil penalty will be added to the overpayment and recovered in the same way. Being unable to recover the civil penalty in the same way as the overpayment would mean that some claimants could evade the consequences of their negligence or failures to provide accurate and timely information and unnecessarily limit the methods of recovery available for civil penalties.
We want to make it clear that the civil penalty is always recoverable from the person at fault, even if in practice the claimant's benefit is being paid to a third party. The process for recovery of the civil penalty needs to fit appropriately with debt recovery processes. Aligning the wording in new Sections 115C and 115D with that used in Clause 102 helps us to do that.
Amendments 104AA and 104ZA seek to prohibit the setting of targets for the civil penalty and limit our ability to impose a civil penalty to cases in which there has been a failure to provide information. The noble Baroness, Lady Drake, and my noble friend Lord Skelmersdale asked about negligence. We consider that the requirement of negligence in new Section 115C already implies that there is no reasonable excuse for the failure to take care of their award or claim. However, new Section 115C(1)(b) ensures that if reasonable steps to recover the error have been taken, the penalty will not apply. I certainly understand the possible ramifications if targets were attached to a penalty such as this. It is for exactly those types of reasons that we are not attaching penalties.
Perhaps I may update the noble Baroness, Lady Drake, on the figures in the impact assessment and the number of penalties. Last week, on 22 November, a revised impact assessment was issued that reflects updated estimates relating to the new civil penalty. We are assuming that the changes based on assumed overpayments of above £65, rather than the overpayment of £15, which was part of the earlier working assumption, has led to a substantial revision, and the number of penalties that we will consider moves down to 400,000 a year. We expect to make only half of those, 200,000, which is a substantial decrease on the figures mentioned by the noble Baroness.
Lord Freud: Let me make this absolutely clear. There were concerns that we would have a kind of speed camera situation here. This is about behaviours and making sure that people pay real attention when they are filling in their forms. The actual figures-
Lord Freud: "Negligence" and "reasonable steps" are legally bound words. There is a huge case law about what they imply. One needs not to be negligent when filling in an application and to take reasonable steps to correct mistakes. If you do not know that you have made a mistake, you cannot expect to be able to correct it. That would not be a reasonable step. However, there is a legal framework around these words. I go back to the point I was trying to make about the incentives on the system as opposed to on the individual. On the penalty rates that I gave noble Lords, we expect that the amount collected in a year, for example 2014-15, will be roughly £9 million and the cost of delivering that system of civil penalties the same figure, £9 million, so there is no incentive in the structure to have unnecessary civil penalties. That is not the point. The point is to-
Lord Freud: That is as I would expect from the noble Lord. It is such a wicked question that I am baffled as to the answer. I think everyone is baffled. It is a magnificent question. It has bowled me out on my middle stump. I will have to find out the answer. I will not even hypothesise about where the different funds go. The right analogy for this is when you go to the dentist, having made an appointment, and you fail to attend. The dentist will charge you an amount in many cases in order to discourage that behaviour. When you are giving out a free good, it is very easy for the recipient to abuse it. You counterbalance that by making that somewhat expensive. When you go beyond a free good and you are giving out a positive good, that is even more the case.
Baroness Hollis of Heigham: My Lords, the point is that, on any reasonable analogy, the simpler it is for the individual to make an appropriate response such as telling the dentist they cannot come, the more reasonable it is to have a penalty if they fail to do so. The more complicated quantum of knowledge that they are expected to have about their entitlement, and therefore the easier it is to make a mistake or to have a misunderstanding, the more unreasonable it is to have a penalty. Would the noble Lord care to share with us an analogy in civil life as complex as knowledge of this Bill is for the complainant or applicant, rather than the dentist analogy?
Lord Freud: My Lords, I hope that it will be as simple as the dentist analogy. The whole point of introducing universal credit is that we get something as simple as saying yes or no with regard to your situation. The existing position is much more complicated than that. As some noble Lords will have seen when I
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Baroness Meacher: The Minister said that if something is complex, you will not have negligence. Does he accept that what is complicated for one person might be not complicated for another? Certainly what is perfectly straightforward for somebody of average intelligence, for example, might be incredibly complex and difficult to follow for somebody with an IQ well below average. Is there any intention to check that sort of thing out? I know there is a later amendment on this, but it is relevant to this discussion.
Lord Freud: It is very relevant. One of the things that we are going to be monitoring as we look at the system is clusters of mistakes because, by definition, the system is not working properly where we are in that position. We will need to work this system in carefully. The noble Baroness, Lady Hollis, who is right on a lot of things, gives a warning, which is right. We cannot use this in an arbitrary way. We must have something, just as the NHS, HMRC and the train companies-I suppose everyone has boilingly paid the extra train ticket surcharge when they were on the wrong train-have systems to encourage people to comply with particular rules. It is particularly necessary where you have a system that is not even a free good. You are giving money out, so you have a positive incentive to shade a few inaccuracies without being fraudulent. We just want to keep people straight.
Baroness Hollis of Heigham: I thought it was very revealing when the Minister said the answers are yes/no. Most of these questions are binary-yes/no-but all the difficult ones, the ones people are going to appeal on, are not yes/no; they are shades of grey. When is a lone parent no longer a lone parent? Does a boyfriend stay one night, two nights or three nights? Does he contribute £20 for his weekend food or £50? Is he on the tenancy agreement? In that case, there is no question. That is a shade. It is a judgment call, not a negligence call. It is the same with the student son. It probably would not occur to parents in social housing that their son, who is at the local university and doing bar work at night, could be in the non-dependent adult deduction range. Why should they think so? It is a line, but they do not know where those lines are drawn.
The Minister is right that if somebody deliberately says, "I am not working and I want JSA", but is actually earning £200 or £300 on the side in the building trade, that is a yes/no, but most of the issues that go to appeal-most of the difficult issues-are shades of grey, and many of us around this table
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Lord Freud: I do not think that we disagree on this. It would not be reasonable where there is clearly a lot of grey in the assessment, and I do not think a court in the land would allow us to say that someone was being negligent. That is not what negligence means. Negligence means not caring at all and just slamming down the wrong information or having information that you did not bother to put down. That is negligence. Getting something wrong on shades or "It didn't occur to me" are not negligence and would not be construed as negligence in any court in the land. A lot of this is concern about things that the language does not support.
Lord Touhig: In my experience over years in the other place of dealing with cases in which people had been overpaid and the department sought to reclaim money, the department always took the line that the claimant was at fault and had been negligent. If we do not get away from that, we are storing up a huge problem. The line of the department has been that it is the fault of the claimant who has deliberately got this wrong, is in the wrong and therefore must repay some benefit they have had.
Lord Freud:I do not think that that is what is happening with overpayments, which are a separate category from these civil penalties. On overpayments, the department has taken the view that if people have received money they were not entitled to, that money should come back to the department, and there is no fault or blame attached in that requirement, so it is quite different from the civil penalty.
We have turned our back on targets in many areas, as your Lordships know, and I can assure noble Lords that for the civil penalty there will be no setting of targets either for the numbers or for the monetary value of the penalties imposed. The aim of the civil penalty is not to set targets for catching out claimants.
The noble Baroness, Lady Lister of Burtersett, referred to the question of encouraging people to use online services. I assure her that we absolutely will not use the civil penalty to encourage people to go online.
Lord Freud: We absolutely will not do that. The noble Baroness drew a comparison with current levels of JSA usage. The online facility that we offer claimants is so markedly inferior that people would not want to use it. We need to make sure that people will want to use the online provision, and we are taking a lot of active steps to look at how to encourage and help people to use it. Indeed, this is one of the discussions that I am currently having with the various groups and charities that are trying to get the most disadvantaged in society online, because that is one way in which they
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The aim of the civil penalty is to reinforce the importance to claimants of providing accurate information that we require in order to administer their claims and awards in advising us when they have a change of circumstance. It is a different issue when someone does something knowingly. That is fraudulent, and we will target that behaviour by looking at tougher punishments than the one for missing a dental appointment-I had better not talk about my teeth. We want claimants to take more responsibility for overpayments and to encourage a positive change in claimants' future behaviour so that they take proper care of their benefit claims and awards.
The noble Baroness, Lady Drake, made an important point about mental health. We will take that into account. Indeed, that is why we require the claimant to have acted negligently and to have no reasonable excuse. The department must satisfy itself that the claimant has failed to take appropriate care. Each case will be considered individually by the decision-maker, and the penalty will not be imposed if a claimant's state of health or mental health is considered relevant to the error that has been made.
Amendment 147ZA would mean that a civil penalty could be imposed only on those who failed to notify us of changes of circumstances and the failure resulted in an overpayment, while a claimant who incurred an overpayment by virtue of their negligence and who failed to take reasonable steps to correct the error would evade a penalty. We already help claimants in Jobcentre Plus and, as I have said, we will reinforce that. We believe that everyone should take responsibility for the accuracy of the information they provide in order to receive a benefit, whether that be at the start of their claim or during the life of their claim when there has been a change of circumstances.
As for the question asked by the noble Baroness, Lady Drake, on legal aid, information on benefits and the conditions of entitlement for them is readily available to the general public. If claimants remain uncertain of which benefit is most applicable to them or have a question about their benefit entitlement, they can and should seek further advice from the department. New Sections 115C and 115D will therefore act together to remind claimants that it is just as important that they correctly report their circumstances at the start of the claim as well as report changes that occur within the life of a claim.
I will aim to answer the remaining three questions, having been bowled out on the fourth. On the ability of local authorities to impose fines, we consulted local authorities on the detail of the initiatives in the strategy and on our plans to implement them. Local authorities have provided input to the various projects that we have set up to implement the strategy. We have local authority staff collocated with the DWP and working
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Baroness Hollis of Heigham: Perhaps that would not work. For example, in two side-by-side authorities, a family with two siblings lives with one sibling in each borough. One local authority may decide to exempt in such cases. They have to make 10 per cent cuts and are required to exempt pensioners, which would make 30 per cent cuts. One local authority decides to exempt disabled people all together, so they would have nil. The other does not and the matter is worked out on income. In that situation, how will two disabled siblings who live in two side-by-side boroughs work that out? How will the local authority work out what they should declare, what they should not and what the appropriate penalty could be? It is a complete minefield.
Lord Freud: Clearly, there are always difficult and special cases. I suspect that an old lady would not be eliminated entirely. The answer is that there is support for people with particularly tricky circumstances. We will work with local authorities that will be collocated in many cases, especially with the single fraud operation being set up. The shades of grey, which will start to rule out negligence, will be very evident in most of those cases.
In justification of the £50, that sum was chosen because we believe that this is a sufficient amount that will act as a punishment and make claimants more personally responsible for the overpayments they incur and encourage a positive change in their future behaviour. We have also set a significantly lower amount than the harsher punishments available for fraud offences, which reflects the fact that it is directed at the failure to take proper care of a benefit award and is not about fraudulent behaviour. Under the appeal process, the claimant will be able to appeal against the overpayments decisions, the civil penalty or both.
Baroness Drake: I thank the Minister. Perhaps I may address some of the points that he raised because I still feel deeply concerned. I probably have slightly more concerns now than I did previously. I do not say that provocatively and I will try to say why. First, it should be made clear that this is a civil penalty that does not deal with fraud issues. There are separate clauses for that. The stated purpose of this civil penalty is to improve people's behaviour in the accuracy of their form-filling. The concept of introducing the civil penalty worries me, particularly for a community of people with a greater concentration of the vulnerable and lower levels of numeracy and literacy, and when we are taking this means of a civil penalty to address behaviours, some of which are systemic and cannot be dealt with simply by handing out civil penalties here, there and everywhere-notwithstanding that the Minister said that that is not the intention.
The Minister said that Clause 113 goes on to say that there will be no penalty if you take reasonable steps to correct the error, but the point is that someone cannot take reasonable steps to correct an error if he does not know that he has made it. That is the problem. Someone could face the civil penalty before having the chance to put it right because he does not know that he has done something wrong. A concentration of people will be increasingly in the category of not knowing that they have made the error when filling out the form.
The Minister also said that I should not be worried about how the powers will be deployed, but he gave me one of the reasons why I am concerned. Quite rightly, and I do not disagree with him, he said that a civil penalty always comes at the same time as recovering an overpayment. If you issue a civil penalty, you have confirmed that there is an error, so it must follow that there is the recovery of an overpayment. If ever an incentive were articulated, that is it. You do not have to exercise discretion on overpayments; the awarding of a simple penalty puts you straight into going for that overpayment. No other considerations come into play. You make the easier decision to award a civil penalty because you do not then have to make the more complex decision about how to apply a discretion to an overpayment.
Lord Freud: My Lords, let me make this absolutely clear. It is the other way round. You can charge a civil penalty only when there has been an overpayment and you would not necessarily charge a civil penalty when there was an overpayment unless you associated that overpayment with negligence.
Baroness Drake: That is my point. If civil penalties and overpayments are inextricably linked, you would not award a civil penalty unless there had been an overpayment. You can almost produce an incentive to put something into the category of an error attracting a civil penalty because it makes it easier to justify chasing the overpayment.
Lord Freud: My Lords, I must make this absolutely clear-it is my third go at this. An overpayment happens when someone is paid something they should not have been paid. A civil penalty will be charged only when there is both negligence and an overpayment. I forget the logical post hoc, or whatever. We need to get it round the right way.
The Countess of Mar: Let me get this absolutely clear. The department finds that there has been an error. Does it then tell the claimant that there has been an error, who says, "Oh dear, I'll put it right", and that is it, or does the department say straightaway that it is negligence? Is there a step in the middle when it goes to the claimant?
Lord Freud: My Lords, in practice it will depend very much on the circumstances. Clearly, if one had a blanket rule it would be possible every time an error was uncovered to say, "Oh, just a mistake, I'll put it right", or, "It was negligence". There will have to be
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Baroness Drake: I am still not persuaded. I will stay with my point; I still remain concerned about targets. The Minister says that he has turned his back on targets. I accept that, but his assurance does not bind future Secretaries of State, who may not turn their backs on targets. Once this provision is in the legislation it is there for future Ministers and Secretaries of State to use.
I come back to the point that one cannot take reasonable steps to deal with an error unless one knows that one has made an error. This is the weakness with the example of the dentist appointment. With that example, you know that you have an appointment and therefore are in trouble for failing to meet that appointment. You do not necessarily understand, comprehend or know that you have made an error, or you may not necessarily have intended to make an error, in the form that you have filled in.
The Minister says that the Government have amended their figures by raising from £15 to £65 the level at which overpayment action would be triggered and that the number of penalties has been moved down to 400,000. I still think that that is a very large number. The Minister expects that penalties will apply to only half that number-to 200,000. I still think that that is quite a large number. That is his expectation, but once that power is awarded who knows what the figures will become, how the guidance in the department will be enacted and what the resultant figures may be? I do not think that noble Lords can be asked to express their approval or otherwise of a clause in a piece of legislation simply on the expectation of how a Minister would choose to deploy that power. One has to stand back and ask what the power is that the Government are taking to themselves. I am still left with concerns.
The Minister said that the Bill provides the powers but that you do not have to use them. That is not a compelling argument for not worrying about this clause. I am no lawyer, but I thought that one of the points of having rational legislation is that it protects the citizen against irrational political behaviour. An argument based on a disposition to use or not use a power at any particular time by a given set of Ministers does not really address the merits of whether there should be such a clause in the Bill.
The Minister made the point that there will not be a scattergun approach to the civil penalty but that there will be clusters of mistakes on which the focus will be. That is good. If there are clusters of mistakes, it sounds dreadfully efficient to concentrate on them, but that is no reason for introducing a civil penalty; it is a reason for looking at managerial action or process or procedure, or focusing resources to address those
28 Nov 2011 : Column GC17
With all due respect, we have clusters of errors by the department and by local authorities. There are significant errors. I cannot believe that there would in the same way be penalties on staff who make those errors, and I would be completely opposed to that too. Errors often occur in the system for systemic reasons. That is different from fraud or from somebody knowingly tweaking their form or deliberately filling it in incorrectly in order to tip the benefit advantage in their favour.
Lord Touhig:Could my noble friend say-perhaps in response to the Minister's answer to the noble Countess, Lady Mar, when he said that it would depend upon the circumstances, and following on the point just made by my noble friend-whether she thinks it would be helpful if the Minister, before Report, could provide us with the number of cases in which the department has accepted that an overpayment has been its fault and has not pursued it, and the number of occasions on which it has found that it has been the client's fault and pursued that?
Baroness Hollis of Heigham: I think that the power exists for tax credits but not for other benefits. At a briefing session, I asked one of the Minister's officials- I shall not land that person in it-how often it had been used. Their answer was that they were not absolutely sure. I asked whether it was 20 or 2,000 times. Nearer 20, came the reply-in which case, I wonder where that figure of 200,000 would come from and whether it suggests that a lack of clarity is expected in the forms rather than negligence on the part of the people filling them in.
Lord Freud: Let me quickly pick up three issues. First, when I talked about clusters, I meant that, where there are clusters and mistakes, something is clearly going wrong with the way in which we are presenting universal credit. In those circumstances, we would look very hard at fixing that problem and we would not be able to accuse anyone of negligence.
Secondly, I shall look very closely at the run-in to operating the universal credit system. I agree with the noble Baroness, Lady Hollis, on lots of things. She is absolutely right that we cannot have a system that demonstrates problems in its run-in phase.
Thirdly, on targets, I need to write to noble Lords. I would not mind forbidding the DWP from ever using those targets in that way-and I could offer it as a deal any day-but a future Government might not want to be so constrained.
Baroness Lister of Burtersett: I thank the Minister for his clarification about clusters. How many £50 fines would there need to be before there was a cluster? If it was then accepted in the department that the problem lay in universal credit or in the way in which the form was designed, would the department then consider paying back any £50 fine?
Lord Freud: No, I meant a cluster of mistakes. When we begin to see a cluster of mistakes around a particular set of questions, it clearly means that we have not got it right and need to do something about it. But we will know very fast.
Lord Freud: My Lords, I buy the point about the delicacy of the run-in. I have a tool with which to monitor it very carefully. However, we must have a system that tells people that they must take care with their application. This is an application on which tens or hundreds of thousands of pounds are riding. It is no good people just putting in slapdash figures and not caring; this is really important information and it must be put down carefully. That is what we are trying to ensure with this relatively modest civil penalty.
Lord McKenzie of Luton: My Lords, I am very happy for the Minister to write to us on this rather than to spend more time today, because we need to make progress. This is about the practicalities. He has already indicated that the system could cost £9 million a year to operate. If a local authority seeks to collect both an overpayment and a penalty, the overpayment presumably reverts to the local authority. We do not know whether the penalty reverts to the Consolidated Fund or the DWP, but I presume that it is not to the local authority. The Minister will see that, in those circumstances, which may be quite common, one needs rules about how what is collected in respect of the two components is allocated between them. That presumably creates some administrative costs as well.
Baroness Drake: On the clusters point, clusters will presumably arise by type of error or a particular demographic of those filling in the form erroneously. I come back to my point that that issue should be dealt with not by civil penalties but by taking a more focused look at how one deals with those types of problem. I welcome the Minister saying that he is absolutely for the forbidding of targets. As to whether a future Government would be so constrained, no doubt noble Lords can argue with a future Government if they want them to be so constrained. We are trying to constrain this Government, so I certainly welcome any offers to constrain the way in which this civil penalty is used, although my preference is for it not to be there. I worry about the concept of a civil penalty and its deployment in the community of people whom we are discussing.
Finally, the Minister said that information is readily available, but you need to be able to understand it. No doubt he would say that if you do not understand it you should seek further advice from the department. However, I come back to the issues around the numeracy and literacy skills of this community of claimants. My point is that a new system of civil penalties is
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"(zzb) regulations under section 115C(2) or 115D(1) or (2);"."
(1) In respect of the imposition of an overpayment or sanction under the Jobseekers Act 1995 or any other provision or in the case of a penalty imposed under section 115C of the Social Security Administration Act 1992, the Secretary of State shall consider-
(a) evidence of the physical condition of the claimant and his or her state of health;
(b) evidence of the psychological state of health of the claimant;
(c) evidence relating to the means and income of the claimant;
(d) evidence relating to the accommodation occupied by the claimant and the effect that the imposition of a sanction or penalty may have on the right to occupy such accommodation;
(e) the family circumstances of the claimant and the impact that it may have on other family members and dependants;
(f) evidence of the impact that a sanction or penalty may have on the ability of the claimant to fulfil obligations to third parties including those relating to the fulfilment of benefit entitlement conditions,
before deciding whether to impose a sanction or penalty and shall only do so where, having considered all the relevant circumstances, it is reasonable to do so.
(a) the income of the claimant;
(b) the capital of the claimant;
(c) the expenditure of the claimant.
(a) arrange for a medical examination of the claimant;
(b) obtain information from any agency holding relevant information on the income and resources of the claimant;
(c) receive evidence from any other person or persons with a knowledge of the circumstances of the claimant.
Lord Ramsbotham: My Lords, in many respects this amendment, which stems from the Zacchaeus 2000 Trust and 16 other organisations and groups, including Mind, Save the Children and the Church of England bishops, is complementary to the amendment in the name of the noble Baroness, Lady Drake, and the subsequent debate that we have just had. Its purpose is to propose that the duty on officials responsible for making decisions on sanctions or penalties against benefit claimants, or the enforcement of overpayment recovery, takes into account the facts and circumstances of the claimants in each case, and that that duty should be in the Bill. My list of what that evidence-gathering might include may seem long, but the facts and circumstances are as many and varied as the lives of the claimants themselves.
"The more we prescribe and write into primary legislation and the more we say, 'You have to take into account these 10 conditions before you decide whether somebody should be sanctioned or not,' the more likely we are to end up with a decision that flies in the face of common sense".-[Official Report,Commons, Welfare Reform Bill Committee, 24/5/11; col. 1161.]
Sadly, common sense is so lacking from many decisions on sanctions and penalties that I beg to differ. I have two examples of this. Last week the main concern expressed throughout the Second Reading of the Legal Aid, Sentencing and Punishment of Offenders Bill was its denial of access to justice, particularly-to quote the noble Lord, Lord Bach-by its decimation of,
The possibility of similar injustice in sanctions and penalties enforced against poverty incomes in the Welfare Reform Bill begins unintentionally in Clause 14 with the claimant commitment and the work-focused interview requirement. Claimants are required to sign a commitment that includes the prescriptions that they must look for work and attend a work-focused interview. When the Minister replied to the debate on Clause 14 he said:
"Even for claimants who have work-related requirements placed on them, certain requirements are simply not open to negotiation. A claimant in the 'all work-related requirements' group must look and be available for work. A claimant in the 'work-focused interviews only' group must attend work-focused interviews. These very basic requirements are not open to negotiation".-[Official Report, 24/10/11; col. GC 208.]
Workers in the field report that such a rigid requirement to attend work-related interviews, say once per week, whatever the facts and circumstances, is creating unnecessary sanctions that should be stopped now and not carried forward in the Bill.
"On the issue of numbers, over the last year, the number of sanctions and disentitlements rose by around 270,000 from approximately 490,000 in 2009-10 to around 760,000 in 2010-11",-[Official Report, 1/11/11; col. GC 419.]
My first example is Harry, who having recently left prison was desperate for work and finding it hard to make ends meet on an unemployment benefit of £67.50 per week. His record made finding employment difficult. He duly signed a claimant commitment requiring him to attend the jobcentre once a week, before he was taken on by a provider who sent him on a course. Attendance on this course meant that he could not attend the jobcentre as required, for which he was sanctioned by officials, against the advice of the provider and the police. He was fortunate that Zaccheus took up his case, appealed against the sanction and won,
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My second example is an ex-sergeant in the Royal Corps of Signals, not an ex-offender, who was similarly desperate for work. He was sanctioned when he forgot about his interview at the jobcentre because he was studying on a course that the self-same jobcentre had recommended. Again, where was the common sense?
I could give noble Lords many other examples that all reinforce my submission that reductions of statutory minimum incomes by the state, through the application of sanctions and penalties to poverty incomes by countless officials in jobcentres and local authorities, cannot just be left to their presumed common sense. What are needed, as with sentencing in the courts, are guidelines laid down to ensure that the standard of justice in the imposition of welfare punishments, and the enforcement of welfare debts, is no less than that required of the courts. My amendment is supported by the department's own research, Perceptions of Welfare Reform and Universal Credit. One of its key recommendations about sanctions is that,
It is also reported that claimants saw it as important that sanctions struck the right balance between toughness and fairness and that they protected the innocent, such as children in a household, as well as taking account of the knock-on effects of increased crisis loans, family breakdowns and crime.
Concern about the enforcement of overpayments has been heightened by the Government's abolition of the legal bar, which has existed since 1971, on enforcement when the claimant could not reasonably be expected to know that he or she was being overpaid. Again, something more than common sense is required to ensure that the Government's commitment to the application of that rule, even though it is no longer a legal rule, is carried out in practice.
There is even greater concern about the hazards associated with the entry of real-time information about pay by employers into the IT system, as has already been mentioned, which will pay the universal credit. One slip by the employer or an IT failure could result in large overpayments that are in no way the fault of the claimants. As the noble Baroness, Lady Hollis, has pointed out, this makes it even more important that all relevant evidence should be taken into account.
I put it to the Minister that an organisation as large as the department, with thousands of officials spread throughout the country dealing daily with vulnerable and impoverished people struggling to keep their heads above water, cannot afford not to lay down clear rules and guidelines to which they can refer when trying to settle cases of sanctions, penalties and overpayments. I suggest that the removal of legal aid from social welfare, as set out in the Legal Aid, Sentencing and Punishment of Offenders Bill, to which I referred earlier, makes it even more vital that the duties with which those officials must comply should be set out in the Bill in the interests of maintaining the bare minimum process that justice demands.
Baroness Lister of Burtersett: My Lords, I have happily added my name to this amendment because I think it is very important. The noble Lord, Lord Ramsbotham, has moved it so ably that I wish to make only one point.
The Minister constantly evokes responsibility on the part of claimants and, similarly, everything that is written about the Bill emphasises the responsibility of claimants. The amendment would help to ensure that officials exercise their powers in a responsible manner. There needs to be a quality in the contract between claimants and officials. I am not suggesting that officials should be fined or receive a civil penalty if they get it wrong. However, the amendment would help to ensure that officials consider the impact on living standards and the knock-on effects of likely debt and exercise their power as responsibly as possible.
Lord Mackay of Clashfern: My Lords, there is, in my view, a principled reason for having something of this kind. However, I am not sure whether the noble Lord has necessarily got it right and obviously he wishes to discuss the detail with the Minister and his officials. For instance, I wonder whether the amendment would have caught the two examples that he gave. Subsection (1)(f) states that the Secretary of State shall consider,
prevented the attendance or whatever it was that is being sanctioned. It is not the sanction that does it; it is the fact that the sanction should not be imposed because of the obligations the claimant already had.
Baroness Sherlock: My Lords, I would like to add just one point for the Minister to think about in his response. The noble Lord, Lord Ramsbotham, made a very powerful case. If the Minister does not like this way of doing things, could he help the Committee to understand how he can guarantee that his officials will undertake what seem to me to be the eminently reasonable strictures contained within the clause? If this is not the way, then what is?
Amendments moved by the noble Lord, Lord Kirkwood, and others in Committee have drawn the attention of the Committee to the fact that many of the people who will be receiving this benefit are living on the breadline. They are living on incomes which are so tight that what may seem to be relatively small sanctions can tip somebody into misery, as the classics will tell us. Could the Minister therefore consider how we in this Committee and in the House can have the confidence that nobody in that situation will be plunged potentially into despair by having a sanction applied
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Lord McKenzie of Luton: My Lords, as has been said by my noble friend Lady Sherlock, the noble Lord, Lord Ramsbotham, has made a powerful case in principle. Like the noble and learned Lord, Lord Mackay, I am not quite sure that the formulation set down here is quite right, as it lumps together sanctions, penalties and recovery of overpayments, and there might be arguments for unpicking those. It would be helpful, in any event, if, following this debate, we could have in writing a note as to what information decision-makers would routinely have in front of them when they make the decision with regard to each of those various categories. That would help us as we move to Report.
We debated issues around the claimant commitment earlier, as has been said. My noble friend Lady Lister made the important point again about that being more about co-production rather than something that is delivered and given to the claimant. That is an important point. As my noble friend Lady Sherlock said, we are dealing with people whose resources are, almost by definition, incredibly stretched. In many cases they are on the edge. If we are going to further reduce the means that they have, then we ought to be very clear that we do that in the knowledge of all of the circumstances and the impact on their well-being.
Lord Freud: My Lords, I agree that it is right and proper that a decision-maker gives full consideration to all the relevant facts provided by a claimant when deciding whether to impose a sanction or penalty. It is also important that claimants have appeal rights when sanctions and penalties are imposed. I believe that the amendments are unnecessary because we have adequate protections in place, but I am very happy to meet the noble Lord on this matter. Let us go through it, because it is important that we get it right.
The essential difference between us-although, as the noble Lord, Lord McKenzie pointed out, we need to tease out three different things here-is that the noble Lord, Lord Ramsbotham, is looking for a specific process, whereas we are aiming, in the legal framework as it stands, at a general process of cover. The noble Lord will be aware that, if you have a whole load of specific things, you have a problem when you get the special case that is not covered, whereas if you have a general protection you are covered. I think there is a fruitful discussion to be had around that, and I would welcome a discussion to see that we have the right protections because, again, I do not think there is a huge difference between us here. We want to have the right protections for a vulnerable group. We do not want arbitrary behaviour; we want common sense. It is just a question of looking through. I will circulate the note on this matter to the noble Lord, Lord McKenzie, as well.
We are training decision-makers on a number of areas: retaining impartiality; identifying what constitutes evidence and where the burden of proof lies; on the
28 Nov 2011 : Column GC25
The starting point for overpayment recovery will be that almost all overpayments of working-age benefits within the scope of Clause 102 will be recoverable. This follows the basic premise that a benefit recipient should not be allowed to keep money which they should not have received. Future overpayment recovery will provide greater returns and better value for money for the taxpayer than at present. The code of practice that will support the application of the recovery provisions will ensure that decisions about when recovery action is taken will be consistent and considered. The department already has well established considerations in place about the maximum rate of recovery. If a claimant cannot afford the suggested repayment rate, DWP will discuss an alternative repayment rate, or exceptionally, where it is warranted, not pursue recovery. That will also cover a civil penalty.
Noble Lords sought an assurance around the appeals process for sanctions. There is a well established appeals process in relation to the imposition of sanctions which will be taken forward into the new regime. A civil penalty may be appealed against. Indeed, as it will be notified to the claimant at the same time as the overpayment decision, this will make it easier for the claimant to appeal against either or both.
Baroness Hollis of Heigham: I trust this information is reliable, but in today's press there were quite a lot of stories about how long appeals are taking and that the department-or, rather, following Leggatt, the tribunals system-is having to appoint a further 85 judges to sit on appeals tribunals because of the backlog, which is up to 12 months. Can I have an assurance-I am sure that this must be the case-that, while waiting for an appeal, no interest is ticking up on sanctions, penalties, overpayments or anything like that?
Secondly, checking with the law on tax credit as opposed to what may be the case on UC, I think that nearly all the difficulties with tax credits were not at the initial point of claim but were changes of circumstance and nearly all of them were associated with childcare changes. Half of all lone parents had more than a dozen changes of circumstances in a year, the system never caught up with itself and the computer nearly toppled. How is this going to work in this situation? People's childcare circumstances inevitably change over half-term, a Baker day, Easter and Whitsun. By the time you keep reporting them or not reporting them-or feeling that you do not need to report them because there has been no reply to the previous report-you could be in a complete mess. I do not see how the Minister is going to manage this.
On the second question, I share the noble Baroness's concern about how the present childcare system works on reporting, which is why we are producing an entirely new system with a monthly report and a monthly
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Lord Freud: I would be utterly delighted to invite noble Lords, but not too many. Perhaps the noble Lord, Lord Ramsbotham, will give permission for the Official Opposition team to join him. If he does, I would be delighted to see you all.
Lord Kirkwood of Kirkhope: If there are invitations floating around, could I add my name to the list? Two things worry me that we have not touched on. I support the amendment. I do not think that any of us really understands the full consequences of localism as it is finally rolled out. In terms of the public purse as generally described, if we do not have sensible means inquiries within the DWP provisions, we may just be handing on costs, charges and families in distress to our local government colleagues. That does not take us very far.
Lord Brooke of Sutton Mandeville: My Lords, I reassure my noble friend the Minister that I am not asking to come to this meeting, but, as somebody who has sat through long hours in Grand Committee, I would diffidently make the suggestion that both matters might be treated at the same meeting.
Lord Freud: Yes, my Lords. I think, actually, I withdraw my offer of a meeting, because, given the level of interest, it is probably not appropriate. We should rather have a little seminar where the noble Lord, Lord Ramsbotham, is the leader, but I must welcome anyone who wants to attend that, because it does not make much sense to be too exclusive. Does that suit? Let us sit down and see whether there are any cracks in this, as some noble Lords are concerned about.
Baroness Hollis of Heigham: Sorry, if somebody puts the same information into their applications for universal credit and for localised council tax and the information is negligent or erroneous, though not fraudulent in both cases, are they exposed to two penalties?
Lord Ramsbotham: My Lords, I was not quite certain what we were going to end up with after all that. I was very grateful to the noble Lord, Lord McKenzie, for pre-empting me in suggesting that others should come to that meeting, not just those who put their names to the amendment but also those who have spoken, because I suspect that there is quite a lot to be done. I think that it might be sensible also to include some of the groups that approached me in the formulation of the amendment to hear from them on the ground as they have a great deal to contribute. I found it encouraging that the Minister agreed that this was an issue that really has to be tackled so we all start from a common ground.
As always, I am grateful for the wisdom of the noble and learned Lord, Lord Mackay. I absolutely accept what he says and indeed, I have looked at this process in Grand Committee as being a way of refining what we were saying. It was getting something done that needs refining, which I saw as the purpose of the Grand Committee. I entirely take the Minister's idea that we take this on with a seminar. It is too important an issue not to be explored in detail. The noble Lord, Lord Kirkwood, has introduced the issue of localism, and so on, so there are other issues, as well as the Legal Aid, Sentencing and Punishment of Offenders Bill on the impact on legal aid and access to justice, which should all be taken into account. On that basis, and in thanking everyone who has taken part, I beg leave to withdraw the amendment.
(a) the Director of Public Prosecutions;
(b) a person appointed under section 5 of the Prosecution of Offences Act 1985 (conduct of prosecutions on behalf of Crown Prosecution Service).
(a) the institution or conduct of criminal proceedings which relate wholly or partly to social security matters;
(b) the giving of advice to any person on any matter relating to criminal proceedings, or criminal offences, which relate wholly or partly to social security matters;
(c) the exercise in relation to social security matters of functions assigned to the Director of Public Prosecutions under section 3(2)(g) of the Prosecution of Offences Act 1985;
(d) the exercise of functions of the Director of Public Prosecutions under Part 2, 5 or 8 of the Proceeds of Crime Act 2002.
(a) social security (including the payments and allowances referred to in section 124(8)),
(b) tax credits, and
(c) schemes and arrangements under section 2 of the Employment and Training Act 1973."
Lord De Mauley: My Lords, this group of amendments deals with the sharing of data between the DWP and the Crown Prosecution Service on the one hand and the DWP and local authorities on the other. They build on the good practice and precedent that has been developed in the department and debated regularly by your Lordships to ensure that DWP information is used and reused efficiently, effectively, legally and securely.
Amendments 107A, 107B and 118A relate to data sharing between the DWP and the CPS and set out the legal basis for sharing information with the CPS in order for it to prosecute social security fraud. They also set out the manner in which the CPS can use that information. The DWP fraud and error strategy was published in October 2010 and the single fraud investigation service originated from that strategy. This will have two effects. First, it will bring together all elements of local authority, DWP and HMRC fraudulent benefit investigations. Secondly, it will result in an increase in the amount of DWP prosecutions handled within DWP's prosecution division. This increase in the number of cases to be dealt with, the need for us to react flexibly to new requirements emerging from new social security benefits and provisions, and the emergence of the single service have led our prosecution division to review its capability. This in turn has led to the conclusion that the service would be provided more effectively if it were to be transferred to the Crown Prosecution Service.
Specifically, there are three data-sharing amendments that relate to this. Amendment 107A sets out what information may be shared and what restrictions will apply to the CPS when using that information. Amendment 107B places the same onus on CPS staff as exists for all DWP employees when handling personal data and imposes a penalty clause that may be invoked in cases of unlawful disclosure. Amendment 118A deals with
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Examples of the information that will be exchanged between the DWP and the CPS include files for consideration for prosecution and the execution of those duties. However, the DWP has a very wide range of legal requirements that relate to investigating and prosecuting fraudulent offences. To bridge the information gap that arises because the work was previously wholly contained within the DWP, the staff currently employed in the department's prosecution division will be redeployed into the CPS. I assure your Lordships of our continuing commitment to handling personal information with the same level of protection that is currently standard within DWP.
The provisions in Amendment 107B replicate the legislation in the Social Security Administration Act 1992 for all DWP employees and guarantees that the level of confidentiality with which the DWP handles the personal information of its customers is extended to those who will be handling and disposing of prosecutions on behalf of the DWP in the future.
In making these amendments, the DWP has consulted and negotiated with officials in the Attorney-General's Office and the Crown Prosecution Service to ensure that the provisions are not unduly onerous. The CPS agrees that these amendments are necessary to provide it with a formal legal basis and to support the roles that each department will play in meeting the Government's continued commitment to drive down fraud and error in the benefit systems.
The remaining amendments in this group, Amendments 108 to 112A, to Clauses 126 and 128, replace and expand existing data-sharing provisions between the Department for Work and Pensions, local authorities and others such as the service providers of local authorities. Current legislation allows social security data to be shared between the DWP and local authorities for housing benefit or certain welfare services purposes without requiring individual consent. By widening the category of welfare services, local authorities will be able to make it easier for those with particular needs, such as people on low incomes, or elderly and disabled people, to receive the services to which they are entitled. We intend to use this provision to share data in relation to schemes such as blue badge parking permits, disabled facility grants and the provision of domiciliary and residential care services.
As our thinking on new data-sharing arrangements has developed, it has become apparent that we may want to exchange information about any social security benefit, and so the amendments to Clause 126 will remove the need to list every individual social security benefit separately. By amending the definition of "relevant information" to include "any relevant social security benefit" it will be easier to understand the benefits that the new provisions cover and will avoid the need to make amendments in the future should the list of benefits change.
The amendment to Clause 128 removes the definitions of income-based jobseeker's allowance and income-related employment and support allowance, as neither of these is required following the amendments to Clause 126. I beg to move.
Baroness Hayter of Kentish Town: My Lords, I thank the noble Lord, Lord De Mauley, for moving the amendment. It is never quite as welcome as his normal Motion, which is that we should have a tea break.
There is nothing between us on the amendments. As the Minister said, and as was contained in the helpful note issued by the DWP, it is anticipated that the volume of cases that the DWP wishes to prosecute will substantially increase. What additional resources are being committed, first, to the CPS to enable it to deal with the substantial increase in prosecutions; and, secondly, to advice agencies, which will inevitably face an increase in demand as claimants seek to understand why they are being prosecuted and what their rights are in this area? Given the absence of legal aid in future for many such cases, as we have already heard today, such generic funding will be vital.
As the Minister said, the second group of amendments relate to information-sharing between the Government and local authorities and sensibly use the generic term rather than the specific ones for each particular benefit. However, can the Minister clarify whether there are any duties on local authorities to share information in the other direction-that is, with the department-because, as we have seen and has been mentioned again in the case of the benefit cap, understanding the amount of help with council tax that the claimant is receiving may be critical to ensuring that the system proposed can be made to work.
(1) A person to whom information is supplied under section (Information-sharing between Secretary of State and DPP), or an employee or former employee of such a person, may not disclose the information if it relates to a particular person.
(a) a disclosure of a summary or collection of information so framed as not to enable information relating to any particular person to be ascertained from it;
(b) a disclosure made for the purposes of a function of the Director of Public Prosecutions, where the disclosure does not contravene any restriction imposed by the Director;
(c) a disclosure made to the Secretary of State, or a person providing services to the Secretary of State, for the purposes of the exercise of functions relating to social security matters (within the meaning of section (Information-sharing between Secretary of State and DPP));
(d) a disclosure made for the purposes of a criminal investigation or criminal proceedings (whether or not in the United Kingdom);
(e) a disclosure made for the purposes of-
(i) the exercise of any functions of the prosecutor under Parts 2, 3 and 4 of the Proceeds of Crime Act 2002;
(ii) the exercise of any functions of the Serious Organised Crime Agency under that Act;
(iii) the exercise of any functions of the Director of the Serious Fraud Office, the Director of Public Prosecutions for Northern Ireland or the Scottish Ministers under, or in relation to, Part 5 or 8 of that Act;
(iv) investigations or proceedings outside the United Kingdom which have led or may lead to the making of an external order within the meaning of section 447 of that Act;
(f) a disclosure made to a person exercising public functions of law enforcement for the purposes of the exercise of those functions in civil proceedings;
(g) a disclosure which in the opinion of the Director of Public Prosecutions is desirable for the purpose of safeguarding national security;
(h) a disclosure made in pursuance of an order of a court;
(i) a disclosure made with the consent of each person to whom the information relates.
(a) that the disclosure was lawful, or
(b) that the information had already and lawfully been made available to the public.
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine or both, or
(b) on summary conviction, to imprisonment for a term not exceeding twelve months or a fine not exceeding the statutory maximum or both.
(9) In relation to an offence under this section committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (increase in maximum term that may be imposed on summary conviction of offence triable either way), the reference in subsection (7)(b) to twelve months shall have effect as if it were a reference to six months."
""relevant information" means information relating to-
(a) any relevant social security benefit, or
(b) welfare services;
""welfare services" includes services which provide accommodation, support, assistance, advice or counselling to individuals with particular needs, and for these purposes "assistance" includes assistance by means of a grant or loan or the provision of goods or services."
In section 173(5)(a) of the Social Security Administration Act 1992 for "coming into force of the enactment under which those regulations are made" substitute "enactment under which those regulations are made receiving Royal Assent"."
Lord Kirkwood of Kirkhope: My Lords, this amendment is tabled in my name and that of my noble friend Lady Thomas of Winchester. I think I can dispatch this with as much speed as possible. It is an important probing amendment to try to persuade the Government to clarify the position of the Social Security Advisory Committee beyond doubt in the context of this Bill.
As we all know, the Social Security Advisory Committee sheds light on some of the more obscure regulations and regulatory powers that flow from primary legislation and has an important additional duty to give advice and assistance to the Secretary of State. I know that the noble Lord, Lord Freud, who I think is the responsible Minister, is very careful in his duty to the Social Security Advisory Committee, which is welcome. It is welcome as far as the committee is concerned as well.
After Royal Assent, there is a process that has been going on for some time. Members of the Social Security Advisory Committee-they are technical experts, in the main-can self-refer pieces of secondary legislation where they feel there is an important point to make, to explore or to advise Parliament of. They sift every statutory instrument, and they use their discretion to self-refer. It all works rather well. As far as I can recall, until the Social Security Administration Act 1992 primary social security statutes were much more expansive and descriptive and most had their own time limit at which the Social Security Advisory Committee could take charge of regulations and self-refer. It was usually after a period of something like six months, but sometimes different statutes made different arrangements.
After 1992, there was an understanding that six months was the most appropriate period because Parliament could in theory be considered to have introduced all the salient facts, discussed them and come to conclusions that would not change much in six months. I think things have changed since then, because we are now dealing with skeletal primary statutes. This Bill is no exception. There must be up to 200 regulations in here. In the past we have seen some regulations being scrutinised by the Social Security Advisory Committee only after six months of the implementation of the provisions in the individual clauses.
This is a probing amendment. I hope that the Government will go away and think carefully about this. In this Bill in particular, because it is a significant change of direction, regulations will start pouring out of the department, so we will have many hours of happy discussions downstairs in secondary instrument debates almost as soon as this Bill gets Royal Assent. I want to be clear about exactly where the SSAC fits into the future of that. The implementation of the Bill and the rollout of provisions will, in any case, take a long while, so circumstances could change quite dramatically not just financially but socially, culturally and in others ways as well. I for one would feel safer if we had an assurance-even if it was in the Bill-that there was no doubt in anyone's mind that, six months after Royal Assent and when the ink was dry after Her Majesty's pen had scraped the official signature- if that is what happens these days-across the goatskin, the Social Security Advisory Committee would immediately thereafter have access to the regulation-making power that flowed from the universal credit and all the other provisions in this particular legislation.
Obvious questions flow from that. Does the SSAC have the discretion, authority or interest in picking what regulations to concentrate on? Speaking for myself, I trust its judgment in doing that. If, for every 10 secondary instruments that it looked at, it said that Parliament
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I am not even going to ask for more resources. I would like to, but in these straitened times it would be hard to say that as we could double the workload we need to double the staff. I am not saying that. I am asking for clarity about when its remit commences. I think that we will all need help in trying to understand. I know that the Minister has done his best to provide the Committee with draft regulations as soon as they become available, but there are still huge gaps. We are taking a lot on trust. As legislators, we could feel more confident that we were on top of what was being done in Parliament if the Social Security Advisory Committee had unfettered access to discretionary self-referral of statutory instruments after six months after Royal Assent. I beg to move.
Baroness Thomas of Winchester: My Lords, my name is also on this amendment. My noble friend has explained the six-month rule. I would say that the DWP has recently interpreted it creatively. The rule was originally brought in partly to allow for the quick implementation of regulations and partly to stop the wasteful duplication of the same evidence being produced for the statutory consultation undertaken by the SSAC as for the parliamentary debate on the Bill. It dates back to 1973 and the predecessor committee, the National Insurance Advisory Committee, but that reasonable rule has been stretched beyond reason when a year, say, after Royal Assent, whole sections of Acts can be activated, at which point the DWP starts the clock to begin the six-month exclusion period.
Not only is the SSAC barred from examining regulations brought in within the six-month period but the DWP itself is also exempt from consultation on certain matters, particularly those relating to pensions. This means that for many social security regulations, there is no consultation requirement with key interest groups at all, which is completely counter to best practice in governance nowadays. By this creative interpretation of the six-month rule, the DWP does not seem to mind that Parliament is in effect being kept in the dark about the most up-to-date evidence on the policy that it wishes to introduce by way of a statutory instrument, by preventing the SSAC from evaluating the pros and cons of the policy in the light of prevailing circumstances.
As my noble friend has pointed out, the SSAC is a statutory consultee, and it has proved its worth time and time again. Its reports on important social security regulations, for which it carries out a wide consultation with key players, are invaluable to parliamentarians and to the welfare sector in general, as are its occasional reports on other social security matters. Its independence from government is all important and is laid down in
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My noble friend has dealt with the argument that this amendment might be no good simply because the SSAC might be overwhelmed by the sheer number of SIs that it will now have to examine. However, as he said, it does not choose to call for evidence on a lot of SIs now. It always has to make a judgment on the ones that it will look at and those it decides not to examine. At least under this amendment it will have a proper choice and will not be frustratingly barred from this judgment by the dodgy interpretation of the six-month rule.
I will finish with the report on The Management of Secondary Legislation: Follow-upin 2008 by the Merits Committee, of which I used to be a member. It was very critical of the whole six-month exemption. It said:
Lord McKenzie of Luton: My Lords, we have a good deal of sympathy for the amendment of the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Thomas. My understanding is that draft regulations-or proposals for regulations-have to be submitted to the SSAC except in certain circumstances. One of them, which has been mentioned, is that regulations made within six months of the enactment of primary powers do not have to be submitted.
This amendment seeks to say that the six-month clock should start when the Bill becomes an Act, not when the particular provisions are drawn down. That could widen the scope of what the SSAC should review. I support that. It is sometimes uncomfortable as a Minister being on the receiving end of a report from the SSAC, but in a sense that is part of the process that we need to engage in. Clearly there would be issues of capacity if this change were to happen overnight, particularly given the Bill that we are now considering. It seems that Bills of this nature will inevitably be framework Bills. Our Bills were. There is always tension between working on the basis of draft SIs, trusting to luck or assurances as to what eventually comes through, and having a degree of certainty.
It is not our official position but it seems to me that one way round this would be for Parliament to be able to amend SIs. It would take us away from some of the debates that we have about trying to get stuff into primary legislation, but that is probably a debate for another day. We should take seriously the prospect of the SSAC looking at SIs more widely and not being
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Lord Freud: My Lords, I am not alone, I know, in acknowledging the vast knowledge of my noble friend Lord Kirkwood in this area. He was, of course, chair of both the Social Security Advisory Committee and the Work and Pensions Committee in the House of Commons-I think I can say that now, if I am not pre-empting. His involvement in this important subject stretches much further than that. I welcome the probe and hope that I will be able to persuade him that the amendment is unnecessary.
The SSAC provides a valuable function and goes about its work very effectively. From my perspective and that of my ministerial colleagues, the relationship between the department and the committee is productive. We enjoy a similar relationship to the one that the noble Lord, Lord McKenzie, had. More specifically, the SSAC is currently working on a major study of passport of benefits in the light of the impact of these reforms. As my noble friend acknowledged, this is really the most significant ad hoc study by the committee that Ministers have commissioned for many years. It is a wish to look at situations in the widest possible way.
The committee's current remit does not include the scrutiny of draft regulations made under powers recently enacted by Parliament. As my noble friend pointed out, this is for a period of six months, beginning from the commencement of the relevant enabling power. The amendment would therefore set the clock ticking from Royal Assent in all cases rather than from the commencement of the relevant enabling power. It follows that if an enabling power was commenced at a point more than six months after Royal Assent, regulations under that power would automatically be referred to the committee. I believe that that would be unnecessary. Informal arrangements are already in place in this area. As I explained when we debated Clause 1, we will continue to talk to the SSAC as we move to the implementation stage of this Bill and use the arrangements that are currently in place and that allow us to provide it with information on new powers and regulations made within six months of the commencement of those powers.
Noble Lords are aware that when the Government implement major welfare reforms, the relevant primary powers are sometimes commenced at different times, reflecting the staggered implementation process that can apply in such circumstances. Under the amendment, some of the regulations brought forward in this scenario-those brought forward within six months of Royal Assent-would not be subject to the committee's scrutiny, but others brought forward subsequently would be, even though Parliament would have approved the primary powers applicable to the reform as a whole. That inconsistency would be undesirable and we do not believe that adding to the committee's former role in this way would be warranted. Implementing the reforms in this Bill is an enormous undertaking.
A huge number of officials in the department are working on it, and others are working on changes to a very challenging timetable. It follows that the weight
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I have emphasised that we already have effective informal processes in place in this area. I also believe that the application of the affirmative procedure to, for example, the first core set of universal credit regulations is another safeguard, making it less necessary to consult the SSAC on a formalised basis in respect of those regulations in particular.
Baroness Hollis of Heigham: I think we would all accept that there is a difference between this Bill and, for example, a pensions Bill and its draft regulations, on which the Minister, his officials and his staff need to consult what I would call the professional organisations. These are quasi-technical and may be associated with the process; they have their own exchange and interchange of information and of what they flag up, and so on. In other words, there is a professional body of interested but skilled parties who can negotiate with a department on an equal base, and, as a result, draft regulations may be improved before they subsequently become full regulations.
The trouble with welfare reform and a Bill such as this is that, apart from the charitable organisations and lobby groups that have a wealth of expertise, for the most part there are not the bodies that the noble Lord and his staff would expect to negotiate with in the same way as he would expect to negotiate with business organisations or the NAPF about pension structures. Therefore, the very fact that there might be 200 regulations coming our way means that Members too find that they have no input from professional bodies that are equivalent to those pension bodies but that deal with welfare, in order to help shape our thoughts and give us an extra resource of experience.
This is not necessarily appropriate for Bills for which there are bodies that can serve that function, but for framework Bills and where bundles of regulation are likely to cluster in a particular field-housing here, or the benefit cap there-it would be very helpful for all of us seeking to scrutinise those regulations in due course to have had the input of the SSAC before we commence, because otherwise there is nothing between us, the draft regulations and the framework Bill, and we will not get the appropriate input that we need.
Lord Freud: My Lords, what we are designing here is a massive undertaking. I know that I set a considerable challenge for the SSAC in the passporting arrangement alone. The noble Baroness and my noble friend ask whether adequate information flows are coming through to Parliament as we consider the regulations. We are in regular contact with the stakeholders on a wide range of issues. We have published a series of detailed policy notes. We are trying to have a very open process.
Baroness Hollis of Heigham: My issue is that there are no stakeholders as there are in other types of legislation. My argument hinges on that fact. In pensions
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Lord Freud: I accept the point. In practice, we face lobbyists and stakeholders, although one could argue that the pensions industry is also facing lobbyists, albeit slightly better resourced ones who are more interested. The core issue is what the SSAC can do with this Bill in its scale and size. The SSAC is a relatively small organisation. It has a secretariat of three or four, internal to the DWP. It has 13 or 14 members. When you look at the literally thousands of people who are creating this, it is very hard to imagine an ability to take this in its entirety, with all those regulations for the SSAC to deal with.
The SSAC has two functions. It deals with a regulatory rolling process, which is outside the major revolution that we are talking about. I hope that it will apply itself to particular issues on which we would really value its help. The first example is passporting. It was very much my own view that this would be a good way in which to start this process.
Lord Freud: It never failed in the past. They also underplay their ability to gather the views of stakeholders that have been coming and do come to them directly. I suggest that a major expansion of the powers of the SSAC, which this would represent in practice, is not appropriate. Any regulations for universal credit that rely on existing legislation relating to claims, awards, payments and joint claimants will still be subject to SSAC examination. I ask the noble Lord to withdraw his amendment.
Lord Kirkwood of Kirkhope: I do not know whether I am more frightened now than I was previously. I accept that there is a capacity issue, but I am looking for the comfort that I have heard in the past that significant matters will reach our desks as legislators faster. None of us can keep up with the flow of things. If you are just a guerrilla opposition Member, which I used to be, the default position was to table negative prayers against everything.
The Minister has to be careful that we do not get back to that safety default position where you could just give the Minister of the day a bit of a kicking at the Dispatch Box and go home. Sometimes you might hit lucky on something that the Government did not want you to know about, but that is not where we want to be. I absolutely accept that the Minister in particular has been transparent to a fault. You can see straight through him on things that are coming down
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I would like the SSAC to say, "Of this batch, if you want to concentrate on anything, this is what you should concentrate on". That would be massively reassuring to me. I would go home at the weekend thinking that I was earning whatever it is that we get to come here. Obviously, I will withdraw this amendment, but I hope that the Minister will reflect on that point. This is a probing amendment. I understand capacity issues and the importance of him using his expertise within the Government to get to a better place. I will read the record and try not to worry more than I did before I tabled the amendment. I beg leave to withdraw the amendment.
(1) The main objective of the Secretary of State in applying the provisions of this Act shall be to maximise the number of those children who live apart from one or both parents for whom effective maintenance arrangements are in place.
(2) The Secretary of State shall prepare and lay before Parliament a report on a bi-annual basis giving details of the progress achieved under subsection (1) above in maximising the number of children who live apart from one or both parents for whom effective maintenance arrangements are in place.""
Lord Kirkwood of Kirkhope: My Lords, given the hour and the fact that we are turning to a completely fresh, but very important, subject, perhaps I can be allowed to introduce skeletally the first clutch of four amendments. Amendment 113B, which stands in my name and the names of other noble Lords, inserts a new section into the Child Support Act 1991 to maximise the maintenance payment of money to children separated from their parents.
I would like to get to the second group of amendments as fast as we can. In trying to contrive a debate that made sense, it was necessary to tease out some of the important themes relating to child support, and the only way I could sensibly do that was with these four
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I do not know why I am so personally wrapped up in child support legislation. I think it is partly because I was around in 1991 when the first Act was introduced, and I have seen it through all its stages: the 1995 Act, the 2000 Act, 2007, 2008 and here we are in 2001-
These two or three clauses have deep significance, and they have to be read. I took the trouble to reread them at the weekend. They differ quite substantially in tone from the rubric and narrative that the Government are advocating for this change. They insert quite dramatic hurdles, particularly for parents with care. They introduce a new level of fiscally driven tension between getting the savings that CMEC and the department are looking for and the maximisation of the flow of benefits to parents with care and their children.
This is the new, new CSA-CSA 2.5 or CSA 3-that we are heading for in 2012. I will go to the great Parliament in the sky a very unhappy bunny if this one goes wrong as well. It is not a question of allocating blame; I am as responsible as anybody. I thought that the provisions that were introduced early on were fit for purpose. However, there is a huge gap between policy creation and the implementation of this very difficult area of public policy. It is a deeply troubled area and we need to be very careful that what we are doing is apposite and right for the people it is designed to serve.
It is important to mention the staff who laboured under the introduction of these provisions. I think that the Minister in the Commons, Maria Miller, mentioned them rather glancingly in the Public Bill Committee. She said that the actions of the staff resulted in the measure not falling flat on its face, particularly around 2003 when everything was going wrong. If it had not been for the dedication of the professionals who ran the CSA centres and worked through the stuck cases that went into manual administration, the whole thing would have collapsed. I want to make clear that although I think that in the past the policy has been totally inadequate, I do not mean in any sense to criticise the professionals who were asked to administer it. By and large, they played a great game and without them we would have been in a much worse situation.
The background political context to this is slightly worrying as well. It would be helpful to be told why there has been no response to the Select Committee report that was published in July. As colleagues know, Governments have to respond to Select Committee
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My noble friend has now been invited to enter the trench of child support and maintenance. I cannot think of anybody more appropriate to man a trench than my noble friend Lord De Mauley. I welcome him to the task. I hope he is not considered to be expendable infantry-perhaps the noble Lord, Lord Freud, has neatly side-stepped the graveyard pass. Can we be told what is happening with the Select Committee report? Furthermore, the draft regulations were supposed to be made available to the Committee by the end of 2012. Perhaps we will get them soon, very soon or very, very soon, but there are only days left before these regulations are due. I am picking up in the corridors here at Westminster a general political unease-this unease crosses parties and is felt not just by one side or the other-about the family implications of some of these changes, particularly around charging which we will come to in a minute. Some of us are old enough to remember when a £44 charge was introduced in 1995, which did not last very long. I wonder what has changed. I think that that £44 charge lasted about 18 months before it was realised that it cost more to collect than it brought in and the whole thing collapsed, but here we are again with charging. I ask myself what is different.
My next question impacts on all four of the amendments we are discussing. Is the 2012 CSA 3 or CMEC 3-or whatever the new, new system is being called-on track? The annual report of the CMEC/CSA that was produced earlier this year noted that the major projects authority was asking some very searching questions, and raising doubts, about challenges that were being faced with yet another new computer system. I do not know whether the system is in Warrington or whether it is an agile system. I hope that it is both, but I hope that it works. If we could get an assurance about the readiness of the 2012 relaunch, it would be valuable in our consideration of all three groups of amendments around this policy.
I also want to ask about costs. I looked at the Work and Pensions Select Committee report on the rest of the comprehensive spending review period and am puzzled about what exactly the costs are. At paragraph 75, the report states:
over the CSR period. We all know that the previous annual report, for 2009-10, indicated that the CMEC was spending £572 million. At paragraph 76, Noel Shanahan is quoted as saying that the transition to the new system in 2012 would cost,
Could some clarity be introduced as to over what period that refers to? How is that money being spent and how does it measure up to the 30 per cent reduction
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We have all had the benefit of the excellent work that has been done by Gingerbread and other groups that have been briefing us. Amendment 113B would make sure that the principal objective available to CMEC in its previous non-departmental-public-body status, to maximise the number of those children who live apart from one or both parents for whom effective maintenance arrangements are in place, was enshrined in law. CMEC is being abolished as a non-departmental public body and being taken into an executive agency, and therefore does not have that objective. All we have now is assurances from Ministers. The Minister, Maria Miller, gave rather a weak assurance to the Public Bill Committee, saying that we could rely on ministerial assurances. I am sure that we can, but that is not my experience with all Ministers all the time. I should like to hear what the Government have to say about the prospect of trying to put back that basic overriding objective into the work of the commission. As a consequence, a two-yearly report on progress on meeting that objective would be valuable.
I wonder whether we could use Amendment 113C to ask the Minister to explain to us a little bit about how the new support services will be rolled out and, again, how much money is involved in their provision. A £30 million fund is available through the Department for Education, which oversees a range of grant-funded relationship and family support services.
However, of course, that funding runs out between 2011 and 2013. We need to replace that money by 2013; otherwise we might face an effective net reduction in the amount of money that is available. We know that £5.6 million a year is available through the Child Maintenance and Enforcement Commission's option service. Will that be continued through the CSR and beyond, and how are we going to co-ordinate all the charities, the mediation services and the advice from family lawyers that currently exist into a way that makes sense? Can we, at the same time, understand-because I do not understand at the moment-what the differences and the relationships are between the gateway process and the co-ordination of the services? They are different functions and I do not understand how one will relate to the other in order to make sure that people do not get signposted to the wrong door.
Perhaps the Minister can give us a little background about the support services that are and will be in existence. A footnote in the briefing that I have seen refers to the long-term vision for the service being completed by 2020. I am in favour of these things being done in a deliberative way but this will start becoming critical to some of the households it will affect by 2013. It is a big gap to leave in place,
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Amendment 113D deals with evening up the treatment in the gateway between parents with care and non-resident parents. The way it is currently cast is unfair and there will not be a positive outcome for anyone.
My Amendment 113F deals with legacy cases. Everyone understands that the longer a case has been in operation-sometimes three, five or even 10 years-the more likely it is to have recourse to the statutory provision. Inviting all those legacy cases to opt in to the new service in 2012 is obviously a way of filtering out people who do not need the money or have lost interest, but that risks losing a huge amount of the £1.14 million case load in that category. We need to look at that issue very carefully. I would be much happier to leave such cases alone because the authorities already have all the information on the money that is in existence and would not need to go through the process of applying again and facing the charges and fees we will discuss later.
There are four or five important themes which are a precursor to the next group of amendments, which deal with charging, and if the Minister could give a brief indication to signpost what the Government and the department have in mind in relation to some of these important matters I would grateful. I am sure the Committee would like to share that information.
Baroness Sherlock: My Lords, I rise to support and speak specifically to Amendment 113B, to which my name is attached. In doing so, I remind the Committee of the interests which I have in the Register, in particular that I was a non-executive director of the Child Maintenance and Enforcement Commission, having stood down from that position shortly after my introduction to the House. I am also a former chief executive of the National Council for One Parent Families, which has now merged with Gingerbread. I am very grateful to Gingerbread and other organisations for their briefing.
It is a huge disappointment to me that this issue has come at the end of the Bill because, along with the noble Lord, Lord Kirkwood, and many other noble Lords, this is one of my favourite subjects. Frankly, I could happily talk about child support for a very long time. However, as the noble and learned Lord, Lord Mackay, is looking sternly at me, I shall limit my remarks to only one of the amendments and then speed on to allow him to offer an infinitely more informed view.
The noble Lord, Lord Kirkwood, has explained why the amendment is necessary. In particular, it would re-establish the notion of the objectives that are currently the main objectives of the commission, which will disappear as a result of its being abolished and brought back inside DWP as an executive agency. No doubt in due course these will become objectives of the Secretary of State, but I want to explain why it will be a problem if they vanish altogether from legislation.
At the moment, the commission's main objective is to maximise the number of children who live apart from one or both of their parents for whom effective
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That is welcome but I should like to explain why it is not enough. When I was a member of the board, we discussed and debated the priorities of the commission, what we should do and how we should do it. We came back repeatedly to the objectives set out by Parliament. Those were very much in front of us at all times.
If we were tempted to forget them, the very able civil servants who worked for the commission and the department would remind us of them at relevant moments, which they were right to do. They carried considerable weight. In fact, they carried far more weight than the assurance of the Minister of the day-distinguished though he was, of course. It is right that the objectives set down by Parliament should carry more weight than the views of any Minister who happens to hold office on any particular day. That is what Parliament is for. There is a big diminution in weight in moving from having clear objectives set out in legislation to having simply the assurance, however welcome, of the Minister of the day.
CMEC was beginning to make some significant improvements. It was created in 2008. Last year, 970,000 children benefited from child maintenance, including more than 100,000 from private arrangements, which must be due considerably to the CMEC option service and the fact that the commission had a statutory obligation to go out and pursue private arrangements. In March 2008, the figure was 750,000, so there was quite a big jump.
The noble Lord, Lord Kirkwood, mentioned possible cost reductions of the order of 30 per cent. This is important because-I am sorry to bring this to the attention of noble Lords-there are people with suspicious minds who fear that the Government's primary aim is to save money, rather than to move to a better system of child support. Like other noble Lords, I would not dream of having any truck with such a notion. But perhaps the Minister could help Members of the Committee to make sure that they are in a position to understand and to rebut these claims when they are made by people outside this Chamber.
It is important because, if there is no broader objective to maximise the number of effective arrangements in place, Ministers might feel that they have done their job simply by deterring people from using the statutory system of child maintenance. They
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I am delighted that the noble Lord, Lord Freud, has given the noble Lord, Lord De Mauley, the opportunity to step into the breach on so important an occasion. Should the noble Lord, Lord De Mauley, hear at any point someone saying, "I am right behind you", I suggest he takes a look behind him to be sure that that is true. I am delighted to see him at the Dispatch Box on such an important occasion. Perhaps he will take the opportunity to reassure the Committee, first, on whether the Government accept the content of the amendment. Are they committed to maximising,
Is the principle acceptable? If it is acceptable, is he happy to put this into legislation? After all, it is likely that the Official Opposition are supportive since it was their Bill which brought these words into legislation in the first place. If we are all in agreement, perhaps this happy outbreak of unanimity can be celebrated by having an amendment accepted in Grand Committee. I look forward to that. If he is not able to do that, will he explain why not, what he believes the consequences will be and how else we can go out and give assurances to the cynics in that difficult world?
Baroness Tyler of Enfield: My Lords, I will speak briefly to Amendment 113B. In so doing, I declare an interest. I am currently the chief executive of Relate, which provides a wide range of services to separating families. I am also part of an advisory group of people from the voluntary sector which advises DWP Ministers on what a network of integrated support services might look like. From that point of view, it is important that that is clearly stated on the record.
I want briefly to support the case that has been put forward by my noble friend Lord Kirkwood as to why it is important that we incentivise non-resident parents to engage in the gateway process, as well as parents with care. There are two points I want to make. First, the gateway and the application charge-and I know that we will come to the charge in a later grouping-bite at the moment on parents with care wishing to use the statutory child maintenance system. The aim of this is to incentivise them to try to negotiate a voluntary agreement with the other parent instead. I support that. It is right and proper, where it is practical, that incentives to do so are built in. But there is no equivalent mechanism pushing the non-resident parent actively
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My second point is a more positive one: the gateway stage is an opportunity for meaningful conversation between both parents. It aims to explore the scope for reaching collaborative arrangements, to assess what help either or both parents might need in order to arrive at such arrangements and to signpost and refer one or both parents-and, indeed, the children involved-to suitable provision and the help that exists for separating parents and families. Non-resident parents who are responsible for paying child maintenance should, I feel, be especially involved in this process.
I conclude by saying a couple of things that come very much from my experience at Relate. It is very important to children that both parents after separation continue to be involved as co-parents of those children. The relationship between the adults may be completely and utterly at an end, and indeed new relationships may well have been formed; but for that child, the active involvement-of course, where safe-of both parents is absolutely critical, emotionally, in practical ways, financially and in a range of other ways. It is critical that these new arrangements, however they are finally constructed, put the maximum possible incentive on both parents to see how they can discharge their responsibilities to be effective co-parents after separation-a responsibility which I think that most of us think is for life.
Baroness Lister of Burtersett: My Lords, I, too, shall speak in support of Amendment 113B, although what I have to say is also relevant to Amendment 113DA in the next group. I, too, thank Gingerbread for its help.
I want to concentrate on how Clause 131 in particular, coupled with the wider government proposals to charge parents for use of the statutory child maintenance scheme, will disproportionately impact on women who, according to the Government's own analysis, make up around 97 per cent of parents with care who are eligible for child maintenance. It seems very surprising that, at a time when the Government are worrying about the erosion of their support among women, particularly so-called C2 women, they should be proceeding with a policy on child maintenance which will unfairly impact on this group.
The Government say that the new gateway and the proposed charges are intended to drive behavioural change-yet again-yet in the brief circulated last week, the DWP acknowledges that a significant proportion of parents will not be able to collaborate and that there are circumstances where there will be no reasonable steps that they could take. Therefore, echoing a question I asked last week in relation to the benefit cap, what behavioural change are they trying to achieve in such cases? Is it really fair to subject this group to charges, particularly in the name of behavioural change?
Yet there is a major and glaring flaw here in plans to encourage both parents-here, I reinforce the point already made so well by the noble Baroness, Lady Tyler of Enfield. The gateway stage-with its signposting to sources of family and relationship support-and the application charge will apply to just one party: the parent with care, almost always female. No equivalent pressure will be exerted by the Government at this stage; for example, a low-income working mother has to scrape together £100 to put herself within the statutory system to bring the father to the negotiating table and to get him to engage in sorting out an agreement to pay.
These proposals exhibit profound misunderstanding of the dynamics of child maintenance, where there can often be considerable inequality of bargaining power between the parent with main care of the children, in need of financial support towards the cost she has-both directly in supporting the children and indirectly in wages foregone as a result of their care-and the non-resident parent who has the money, and who has to make the decision as to how much to contribute, at what intervals, or indeed whether to contribute at all. This is another instance of the unequal gender power relations that we have discussed on a number of times in this Committee.
As the Prime Minister recognised in his well-known Father's Day article, sadly there is a minority of fathers out there who are not prepared to accept their role in contributing in a realistic manner to what it costs to raise their children. A 2005 study carried out for DWP of non-resident parents who paid their maintenance via the Child Support Agency noted, for example, that many non-resident parents appeared to be unaware of the true costs of bringing up children; others felt that if a parent with care was being supported by benefits she did not need maintenance-conversely, if she was working, there was again no need; and some admitted that they would put the children they lived with in a subsequent relationship before their own children.
In terms of taking responsibility, arguably the Fatherhood Institute got it right when giving evidence to the Work and Pensions Select Committee. Its representative was clear that rather than putting pressure on a parent with care to sort out child maintenance for herself with the other parent,
"The one who matters in child support is the payer. The payer is the person they need to be talking to, in whatever ways they do it, to address his reluctance, his needs, his anger-whatever it is-his poverty that is getting in the way".
In his Father's Day article the Prime Minister did not shrink from calling pretty bluntly for society roundly to condemn fathers who refuse to face up to their obligations towards their children. Yet this sits uncomfortably with government plans to dissuade mothers from using the commission to enforce that
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The Minister, Maria Miller, perhaps dismissed rather too lightly the plight of women left to bring up children without proper financial support from the non-resident father, when she wrote in the Guardian in defence of the Government's proposals that,
Of course they are not. However, while it may sound old-fashioned, there are in fact many hundreds of thousands of women in just that position, in the sense that the fathers are not prepared, unless we as a society insist upon it, to contribute towards their children's upkeep. It is the mother abandoned when she is pregnant by a father who says he is not ready to have children; it is the mother where the father has started a second family and focuses his attention on his new children; it is the mother where the father has moved out, changed his address and phone number, and refuses to communicate. A number of noble Lords have probably received examples from Gingerbread which illustrate this. I just quote one of them:
"I have tried to talk to my children's father about maintenance, he does not agree that my children need money, he will not even provide clothes or shoes for them if asked. I have asked for small payments of any kind to help with the things my 5 year old needs for school. I know their father is working and earning a good wage, so money isn't a big issue for him. I have said to him that even 5 pounds when he has it would be better than nothing."
Of course, many fathers are there for the children, whatever happens to the relationship with the mother. However, there is an uncomfortable reality to the plight of such mothers and the children they are trying to raise, which the Prime Minister drew attention to, and which the statutory maintenance service is there to address.
That is why I also support Amendment 113DA, which would abolish charges for those with no alternative but to use the new agency, as well as Amendment 113D, which would at least force the commission to engage with the attitudes and resistance of those non-resident parents who were directly responsible for paying child maintenance.
Baroness Hollis of Heigham: My Lords, the speeches that we have heard so far have been extremely powerful and I very much supported the amendment moved by the noble Lord, Lord Kirkwood. I shall refer to Amendment 113B in the name of my noble friend Lady Sherlock, as well as Amendment 113DA in the name of the noble and learned Lord, Lord Mackay. I feel strongly that structures should follow the objectives and not that we should adapt the objectives to be the outcome of whatever structures we think we can best achieve, which is what is going on, I fear, in Amendment 113B. Amendment 113DA is simply wrong and I am frankly amazed that the DWP has come forward with this proposition. It is morally offensive and I do not know from where it has come.
Like others we have the CSA engraved on our hearts. The 1992 legislation was a catastrophe primarily because it insisted on overturning existing court objectives
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The moves established by my noble friend in 2008 to allow women to keep all their maintenance was a triumph, but the problem with voluntarism, which also accompanied it, meant that it became a charter for bullies who did not want to pay, as indicated by my noble friend Lady Lister. We know that the people who pay are the men who need to pay most, not the men who need to pay least. They are the men who have been married, divorced, are older, earn more, have a profound attachment to their children and expect and want to pay. They are honourable and decent men and they are the ones who pay most. They pay and behave admirably. We also know, however, the ones who do not pay. They are the young, feckless men who have never actually lived with the child, who is perhaps the result of an overnight relationship, if we can dignify it with that term-a casual sexual act. They think that they were trapped.
There are the chaotic self-employed who never get their accounts right and never find the money to pay for their children. A group that surprised me are the men in uniform who are often very bitter, judgmental and followers of the language of fault-"She had an affair so it is her fault and I don't pay"-with little regard for the children. Finally, there is the group mentioned by my noble friend Lady Lister-the men who have remarried, with second families whose new partner is often very hostile to any payment. These men change their address, their job, their name, and even their country to avoid paying.
Add to those problems a flaky computer and the problems of HMT, which is not only unwilling for women to keep their money but refuses to share key information so that NRPs can be tracked through their current records. We were not allowed to deduct even a £5 benefit payment at source. It would have been obvious for HMT computers to talk to DWP computers, but that was not possible either. It is no wonder that there has been a struggle ever since.
I fear that increasingly-with these measures, I am convinced of it-the concept of child support has taken a wrong turning in this country. Unless we accept the amendments moved so ably by the noble Lord, Lord Kirkwood, and my noble friend Lady Sherlock, that wrong turning will become a highway down which the failure to pay child maintenance will rapidly escalate. I strongly believe that statutory payment should be not the last resort but the first. That is how we establish the appropriate level of money that should be paid; you establish a speedy pattern of payment. We know from Australia and all the international research that unless you establish payment early and ensure that it is paid regularly for at least a year, it dies within 18 months or two years. Establish payment
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Having voluntary payment in which the father can bully his way out of payment, as he too often has done, means that it never gets established. If instead we had statutory payment to begin with and then after six months or a year following regular, reliable payments the reward was voluntary negotiations, that would be wonderful. That would combine the best of all worlds. You would establish the pattern of payment, and then, if the father co-operates in that activity, you could allow that couple to make their own future arrangements. That way the child does not suffer. This way, I fear that the rights of the child to income and support from the father-it is the father in all but 3 per cent of cases-are going to get lost in what I have to say is the department pursuing cost cutting rather than ensuring adequate support for children.
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