Previous Section Back to Table of Contents Lords Hansard Home Page

There can be no doubt about the contribution made by carers in unpaid care-indeed, there was considerable discussion about this at a previous stage of the Bill and last week. Their contribution has been valued at some £119 billion by Carers UK and is of immeasurable value to the people they care for. Peers from all sides of the House have recognised this contribution with personal accounts of experiences of caring and moving stories from families struggling in what are often very difficult circumstances.

Carers' contribution and the challenges they face set them apart as particularly deserving of support from the benefits system and as clear candidates for exemption from a cap which the Government have said is designed to penalise individuals who are failing to play a full part in society.

9 pm

The Government have already outlined exemptions to the proposed household benefit cap for disabled people in receipt of disability living allowance. However, this will not protect certain groups of carers. Not only does it seem fundamentally unfair for carers to be affected by the cap, but it is at odds with the Government's commitment to protect families affected by disability from the cap.

So which carers will be affected? The DLA exemption protects households including a DLA claimant, but what is considered to be a household for the purposes of universal credit includes children under 18 and partners and not adult children or other adult relatives. This will deliver some real inconsistencies. Families caring for disabled children under 18 will therefore be exempt from the cap, but those caring for adult disabled

23 Jan 2012 : Column 889

children will be subject to it because the DLA claimant, as an adult, will no longer be considered to live in the same benefits household even if they live together. Those caring for a disabled partner will be exempt, but people caring for other working-age relatives-siblings, cousins, neighbours or friends-will be subject to the cap. In addition, all carers supporting an elderly parent or other older relatives in receipt of attendance allowance-the equivalent benefit to DLA for older people-will also be subject to the cap.

It is disappointing that carers do not figure in the impact assessment for the cap, so we cannot know how many of the 560,000 carers in receipt of carers' benefits might be affected. We can, however, know what the financial impact might be. Carers UK modelled what the impact would be on a single mother with three children, caring full-time for her elderly mother who has dementia and lives with them. She would currently receive carers' allowance at £55 a week, child benefit and child tax credit totalling £204, housing allowance and council tax benefit totalling £362 and income support at £42. Technically, she does not live in the same household as a DLA claimant so she will be subject to the cap. Her income of £663 a week will be capped at £500, resulting in a loss of £163 a week, or £652 a month. I should say that these figures are based on estimates for somebody living in a four-bedroom house in London in council tax band C. Needless to say, this will be devastating. For many families it could lead to a breakdown in family care with huge personal costs to those families and great financial costs to local authorities who will have to step in to provide support. Given these risks and inconsistencies, to ensure that carers are not left potentially hundreds of pounds a month worse-off it is crucial that carers' benefits act to exempt carers from the cap. Can the Minister explain the inconsistencies in the groups of carers who would and would not be affected?

Baroness Lister of Burtersett: I will speak briefly in support of Amendment 60A. The noble Baroness, Lady Hollins, has probably not had a chance to see the latest impact assessment, which hit our e-mail accounts only a few hours before this debate. There is now a section in it about carers and I would like to add to what she said. The assessment said that 5,000 carers are expected to be affected by the cap. It is a small number but it is 5,000 too many, in my view. The mean reduction in benefit as a result of the cap is £87 a week; the median is £65 a week. That is a lot of money for carers to lose. Can the Minister tell us what behavioural change the Government are looking for among carers?

Baroness Thomas of Winchester: I have a more specific question about disability living allowance and I think this may be the right place to ask it. If someone living in a high-cost rental area on local housing allowance has a serious accident or is diagnosed with a serious long-term condition, perhaps next March, and is placed in the ESA work-related activity group, they might apply for disability living allowance. They might have had a stroke that was not bad enough to take them out of the jobs market for a very long term but that would require them to take a long period of recovery, and they might have been quite badly affected. This person will have to be assessed and then wait for

23 Jan 2012 : Column 890

a qualifying period of three months. If during those three months the person in the household falls foul of the benefit cap, will they be penalised immediately or will their application for DLA be taken into account, which of course will then exempt them from the cap? This is an important matter which we have not heard anything about. It might be part of the transitional arrangements that we hope we will hear about, but I would hate that person, with all their difficulties, to have to think about having to look for another place to live when they are trying to recover from quite a serious illness.

Lord McKenzie of Luton: My Lords, Amendment 60A seeks to protect carers from the impact of the benefit cap in cases in which they are not living with the person for whom they care. On the last day on which we debated the Bill, the Minister told us of the value that the Government place on carers and their work. However, the Bill is drafted in such a way that this work will be valued only when the carer lives with the person for whom they care and thus excluded from the benefit cap by virtue of that person's eligibility for DLA or PIP. Carers who are not part of the DLA claimant's household, as we have heard, will be subject to the benefit cap. They are therefore likely to lose their carer's allowance, suggesting that the Government place no value on their care.

As we have heard, the latest impact assessment estimates that 5,000 carers will be affected by the cap-that is the number provided by my noble friend Lady Lister-and yet not only does such care save the taxpayer thousands of pounds but the carer will be almost unable to work-or at least full time-by virtue of their caring. So they may face the choice of ending their care role in order to live. This is not theoretical. One in six carers has made the difficult decision to give up work to care, leading to an average loss of £11,000 a year. Many such families struggle to make ends meet as they cope with both a drop in income and the increased costs of caring-for example, through buying extra support and equipment and travelling to hospital and doctors' appointments.

The impact of the cap will be to make this struggle significantly more difficult. Carers affected could lose £87 a week. Indeed, it may mean that some carers are faced with a tough choice between giving up caring-imposing significant costs on health and social care services-or taking a significant financial hit.

The Secretary of State for Work and Pensions told the BBC on Friday that people were "not suffering" as a result of his welfare reforms. Perhaps he would like to reconsider whether carers are likely to suffer if the amendment is not passed.

The Secretary of State might also consider the case of some of our service personnel. War widows are excluded-quite rightly-from the benefit cap, but should a mother helping to look after her son, injured in Kabul or Iraq, and claiming carer's allowance for this, still be subject to the cap? Is that fair? I look forward to the Minister's response.

Amendment 61, which relates to temporary accommodation, was to a degree dealt with in the first amendment we discussed today. It was a component of that broader amendment. We certainly support the

23 Jan 2012 : Column 891

amendment. I took it from what the Minister said in response to that general debate that something was afoot to address this issue but, without having had the chance to read Hansard yet, it was not totally clear what. Perhaps he will take the opportunity of saying it again, expanding, promising to write or whichever of those options he feels appropriate. It sounded as though there was a recognition of the need to address the issue that has been raised by the amendment. I certainly support the fact that there should be a move to address this and I look forward to receiving further information.

We very much support Amendment 60 and a period of grace. We would have been happy to support 52 weeks, but if 26 weeks is what the noble Lord, Lord Best, is pressing for, we would certainly support that should he wish to press the matter.

I say to the noble Lord, Lord Stoneham, that there are two things here. There are issues around transition. I see that the Lib Dem Benches are placing great faith in what might flow from transition and the offers that might come. However, I think that is different from an ongoing period of grace. The purpose of this, as the noble Lord, Lord Best, and my noble friend Lady Drake have enunciated, is to help people who fall out of work and to allow them a period of adjustment or a period of grace before the cap hits. There might be a transitional component to that, but this needs to be something of a permanent feature of the arrangements to make sense.

I suppose that six months corresponds with the contributory JSA period. My noble friend Lady Drake may be more up to date than I am on the data. It used to be 50 per cent back in work in three months and 75 per cent in six months. The data may have moved on. Certainly, given the unemployment figures that are around, I think even the longer period suggested by my noble friend must be somewhat difficult. The arguments in favour of a period of grace seem to be overwhelming. For someone to have to cope with all the traumas of losing their job and at the same time have to face changes in accommodation and moving to a new area, which could be a direct consequence of the cap, would be unforgivable. I hope that the Minister can say something positive on that as well.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, Amendment 60 would require us to provide for a period of 26 weeks during which we could not apply the benefit cap. The period would start from the date that a claimant's welfare benefits first exceeded the level of the cap. It would therefore not only apply to new claimants, but also to existing claimants who have a change of circumstance that results in the level of the benefits that they receive exceeding that of the cap. We have said all along that we would look at ways of easing the transition for families. We do not want families to be taken by surprise by the cap or to create problems that people can avoid by taking appropriate steps. We want to ensure that people who might be affected by the cap know what to expect and can consider the options open to them.

There has been a lot of speculation in the press about whether a grace period is what the Government have in mind. Clearly, a grace period could be a way of

23 Jan 2012 : Column 892

easing transitions, especially for people who have recently been in work and can be expected to return to work within a short period. A grace period would mean that their benefit entitlement would not be affected when they first leave work. This would avoid the risk that they would be prevented from looking for work because of the need to adjust their circumstances because of the cap. That point has been made in the debate.

However, people who have recently enjoyed a high income are better able to deal with temporary shortfall and can and should be expected to have made their own provision if they know that there are limits on benefit entitlement. A grace period also carries the risk that people are likely to stay on benefits for longer than they would otherwise simply because a higher rate of benefit is temporarily available to them, so while the grace period approach is clearly one possible approach, it needs careful consideration. Issues with run-ons and things like that would need to be looked at very carefully. We also need to consider whether other approaches may be just as effective or indeed more effective for some groups. What I can say today, as I said in Grand Committee, is that we are well aware of the issues, we are confident that we have the powers we need to ease transitions and we will consider the case for a grace period along with the other options that might be available.

Amendment 60A seeks to exclude carers from the benefit cap. For carers the benefit system is designed to provide financial support where caring responsibilities prevent carers working full time and, as such, carer's allowance should be treated in the same way for the purposes of the cap alongside other income maintenance benefits. However, households which include a member who is in receipt of DLA, PIP on its introduction, attendance allowance or constant attendance allowance, will be exempt from the impact of the benefits cap. Households where a member receives carer's allowance but no members receive DLA, attendance allowance or constant attendance allowance, will not be so exempt. As the noble Baroness, Lady Lister, who is a fast reader, pointed out, the revised impact assessment states that 5,000 claimants fall into this group. One of the reasons that the number is rather less than one might have expected-or that I suspect the noble Baroness, Lady Hollins, expected-is because we are looking at two benefit units, so the disabled person retains all their disability benefits and the rest of the benefits are received by the other householder. That is one of the reasons why the figures net down to rather a small number.

9.15 pm

I acknowledge and re-acknowledge the vital role that carers fulfil, but I must return to our belief that it is not right that those on benefit can receive more than the average family wage. In response to the question on behavioural change from the noble Baroness, Lady Lister, one thing we are not looking to encourage is a change in the carer's behaviour so that they stop caring. That is absolutely not where we want to go. However, if the person being cared for is in a separate household, there is no obvious reason why the cap should not apply. Many carers of working age want to retain a foothold in the labour market where possible,

23 Jan 2012 : Column 893

not just for their financial well-being but to enhance their lives and the lives of those for whom they care. Universal credit will provide support for carers and improve their opportunities to maintain links with the world of work. Carers who move into work and become eligible for working tax credit will be exempt from the cap.

Amendment 61 seeks to place in the Bill an exemption from the benefit cap for households who are provided with interim or temporary accommodation by a local authority. I have already said in my response to Amendment 58D that it is too early to say how we are going to treat people in temporary accommodation for housing costs purposes in 2013 and beyond. Following our informal consultation with key stakeholders last year, we are considering the policy design for temporary accommodation and will share more details about our plans before too long.

Baroness Hollis of Heigham: Can I ask the Minister whether "before too long" would be before Third Reading? We have had lots of debates in Committee on the words "too long", "too soon", "soon", and "very soon". Could the Minister help us? What sort of timescale does he have in mind on that?

Lord Freud: No, that will be beyond the Bill becoming an Act, so we are looking at how we do this in regulations.

Baroness Hollis of Heigham: Given that we are expecting a localism Bill next year-I guess-would it be incorporated in that, so the House would have a chance to amend? The trouble with regulations is that you cannot amend, whereas with primary legislation you can.

Lord Freud: My Lords, we are going to spend a lot of time on getting this right. It is not something we want frozen in primary legislation. In fact, it would be very uncomfortable to freeze these items in primary legislation. Regulation is the right place to do these things. We have a consultation paper out on how we may move forward with temporary accommodation. There are some very obvious solutions within that-I touched on them earlier this evening-comprising separating out service charges and housing costs rather than bundling them up; that is where the temporary accommodation becomes so expensive. We need to get a solution to this so that we do not have a ludicrous go-round of people moving into expensive temporary accommodation which they can no longer pay for because of the cap. We are absolutely aware of this and have measures in train to get a solution in the round to that issue. However, it is not a simple set of issues.

Lord Greaves: On the same point, the Localism Act 2011, which we recently passed, means that in many cases local authorities will carry out their duty to find accommodation for homeless families by putting them into privately rented accommodation, where they will have to pay the rent. How will that tie in with a benefit cap that might apply to the accommodation, to which the local authority directs them in order to fulfil

23 Jan 2012 : Column 894

its homelessness duty? Will the local authority be under some obligation to top up the rent, or something like that?

Lord Freud: My Lords, one can very easily see circumstances in which a local authority considers that to be a very sensible use of the discretionary housing payments. That is one reason why we have ramped up that amount. I am not saying that it will be every time, but that might be a solution. We are looking to redesign the process of finding temporary accommodation, which is the immediate problem that local authorities are faced with, so that we do not get caught in some Catch-22, which would obviously not be smart at all. That is where we are with that; we are very conscious of those issues and very comfortable that we have the legislative powers to develop effective solutions.

I pick up the important point from my noble friend Lady Thomas on the DLA and how the cap interacts with it. The DLA is there for those in receipt of DLA. That is how we have worded the illustrative regulations. A person whose DLA award is pending and who is serving what is now, and will remain, a three-month qualifying period, would not be covered by the exemption. That is the point in the question raised by my noble friend. It shows why this issue and other similar issues need to be dealt with in secondary legislation, so that we do not have the inflexibility that we would have if it was in primary legislation.

We are conscious of the concerns around the introduction of the cap. I can assure noble Lords that we are listening. We have said all along that we will introduce measures to ease the transition for families and provide assistance in hard cases. We are still considering our plans, and it is essential that we get them right. The clause has been drafted so that we have all the powers that we need to ensure through regulations that we provide the appropriate protections. I hope that that gives the noble Lord, Lord Best, a measure of reassurance.

Before I ask the noble Lord to withdraw the amendment, I would like to make it clear that the Government do not consider Amendments 60A and 61 to be directly consequential on Amendment 60. Further Divisions would be required should noble Lords wish to push those other two amendments in the group to a vote. I apologise for spelling that out, but we had a small frisson the other week. I ask the noble Lord to withdraw the amendment.

Lord Best: My Lords, I am sure talk of further Divisions will be unnecessary at this late hour. I am very grateful to many noble Lords, including the noble Baroness, Lady Drake, for supporting my amendment on the 26-week period of grace. She made the point that we cannot possibly require behavioural change from people who are already desperately seeking work, which is what we want them to do. I was also grateful for the support of the noble Lord, Lord Stoneham of Droxford, in backing this amendment. People with no history of benefit dependency should surely be given a period of grace to find work.

The noble Lord, Lord McKenzie of Luton, made the point that perhaps 52 weeks would be better

23 Jan 2012 : Column 895

than 26 as a period to allow people to get back into work, especially given the statistics we heard-that 50 per cent of people who go on to jobseeker's allowance find a job within six months, but if we want to get 90 per cent back into work it may take a year in the current job market.

This remains a very important ingredient in the use of the cap. The Minister has promised that finding a solution is a priority and that a period of grace to ease the transition is one way of handling this, but there may be an even cleverer way. The Minister says that the issue still needs to be looked at very carefully but is confident that a way will be found. I must take this on trust, but with the expectation that there will indeed be measures that handle this transition and satisfy the House when the regulations, although those cannot be amended, are brought before us.

I am also grateful for noble Lords' support on the amendment to make sure that temporary accommodation does not become a Catch-22 situation whereby homeless people are sent somewhere by the council, only to find when they get there that they are not able to pay the rent because the benefit cap has kicked in. That would be a calamity for them. I was grateful to the noble Baroness, Lady Hollis of Heigham, for weighing in on that one and to the noble Lord, Lord McKenzie, for asking for further clarification.

The Minister explained that we need to find a way, and he is confident we shall find one, of handling this exemption or exclusion, or in some way treating temporary accommodation differently and in a satisfactory way. I trust him to be as good as his word and I have pleasure in withdrawing these amendments.

Amendment 60 withdrawn.

Amendment 60A not moved.

Amendment 60B

Moved by Baroness Drake

60B: Clause 94, page 64, line 5, at end insert-

"( ) Regulations under this section must provide for an exemption from the application of the benefit cap for family and friends carers where-

(a) the child comes to live with the carer as a result of plans made within a section 47 of the Children Act 1989 child protection enquiry or following enquiries under section 53 of the Children (Scotland) Act 1995 and the local authority states that the child cannot remain with the parents in the current circumstances;

(b) a child comes to live with the carer following a section 37 of the Children Act 1989 investigation and the local authority states that the child cannot remain with the parents in the current circumstances;

(c) a carer has secured a residence order, including a residence order under section 11 of the Children (Scotland) Act 1995, or special guardianship order to avoid a child being looked after, and there is professional evidence of the impairment of the parents' ability to care for the child;

(d) the carer has a residence order, including a residence order under section 11 of the Children (Scotland) Act 1995, or special guardianship order arising out of care proceedings;

(e) the carer has a residence order, including a residence order under section 11 of the Children (Scotland) Act 1995, or special guardianship order following the accommodation of a child;

23 Jan 2012 : Column 896

(f) the carer has a residence order, including a residence order under section 11 of the Children (Scotland) Act 1995 or special guardianship order following the death or serious illness of a parent;

(g) the carer is an approved kinship carer under Part V of the Looked After Children (Scotland) Regulations 2009."

Baroness Drake: My Lords, I rise to move Amendment 60B, the purpose of which is to exempt from the benefit cap family and friends carers who are bringing up children whose parents cannot do so. These are children who would otherwise be in care and this community of carers is looking after a population well in excess of 200,000 children.

Family and friends carers may be disproportionately affected by the benefit cap as they are likely to be living in larger households because of taking in a sibling group, particularly if they have children of their own living at home. It is not uncommon for a kinship carer to be looking after four, five or six children. As a result these families could immediately be up against the cap. Grandparents Plus research finds that 10 per cent of kinship carer households consist of five or more people. While in most of the country carers receive benefits that are less than £500 a week, in parts of London people with larger families are already paying upwards of £400 a week in rent. The cap would leave these future kinship carers with less than £100 a week to cover all their family's, including their new family's, needs.

Around one in three kinship carers gives up work to care for children when they move in. Almost half of these children have emotional and behavioural problems or other special needs or disabilities. In about half of cases their parents are misusing drugs or alcohol. Bringing up someone else's children is enormously emotional and a big financial commitment, yet only a minority of carers-around a third-receive an allowance from the local authority. In the present financial climate, local authorities are even more reluctant to pay kinship carers allowances.

No one sets out in life to become a kinship carer. People do it because they do not want to see their grandchildren, their younger siblings or their nieces or nephews, or children who they know well, taken into care. Often, giving up work is not a choice for them. They are told by social workers or by other authorities that the children will be put in care or placed for adoption if they do not do this. Children who are cared for can be of any age, not just in their early years. Kinship carers are not entitled to an employment break when a child or children first move in and can face significant financial disadvantage as a result of having to give up work. If they are older, they may find it difficult subsequently to re-enter the labour market.

An unintended consequence of the benefit cap is that fewer family and friend carers may volunteer in difficult circumstances, increasing the number of children taken into care as a result. This would be more expensive from the point of view of the state and certainly not in the child's best interest. It costs £40,000 for one child to be in an independent foster care placement for one year and I understand that there is already a shortage of 10,000 foster carers.

23 Jan 2012 : Column 897

The argument that imposing a benefit cap on larger families will discourage people from having more children has no resonance or behavioural leverage for family and friend carers, who are taking on other people's children. A benefit cap can have no positive incentive at all. Rather, it is a disincentive to kinship carers, who save the state significant amounts of money and provide a better solution for the child. Which of the three choices identified in the impact assessment do kinship carers take to mitigate the impact of the cap? Do they go to work, reduce their expenditure or move to cheaper accommodation?

Kinship carers may have to give up work as a condition of assuming responsibility for the child. Grandparents Plus has many examples of grandparents being told by social workers that unless they give up work, their grandchildren will be taken into care. They cannot mitigate the cap by going to work because they then hurt the child. Often, kinship carers want to stay in work, but this may not be an option if they want to take over the responsibility for the child. They may have their own children to support and moving to cheaper accommodation would seem to punish those who voluntarily embrace the responsibility for somebody else's children, often in difficult circumstances.

Children moving into kinship care because of serious family difficulties need stability, and if the carer has to move house to reduce housing costs that will be highly disruptive and mean that children have to change schools. It may mean that the local support networks, on which the kinship carers rely, will also be disrupted. This places further strain on carers, who are already under enormous stress because of the family difficulties that the children they are taking on have endured. Even more than for other parents, community links with families, neighbourhoods, friends, churches and community groups provide vital support to carers who are often bringing up children who may be traumatised.

The amendment covers only carers who are looking after children who would otherwise be in care and under a relevant order. There is no possibility that exempting these kinship carers would result in any sort of perverse incentive for people to go round sweeping up children in the hope of claiming that they are caring for them and accruing additional benefits.

At the risk of repeating myself, I will go back to what I said in Committee and quote the Secretary of State, Iain Duncan Smith. If his words are compelling, as I said in Committee, why should I use alternatives? He said:

"The state has become ambivalent about the importance of family structure ... the role of the extended family ... in a context of growing family breakdown, it is all the more important that we continue to support ... and hold together these wider relationships".

Unless family and friends carers are exempt from the effect of the cap, the state will move from ambivalence to antipathy. In referring to exempting people from the cap, the Minister said in Committee on 23 November:

"We have ... been very careful in providing exemptions and deliberately kept the list short".-[Official Report, 23/11/11; col. GC 415.]

I simply ask that the short list includes family and friends carers. That protects the children and certainly makes fiscal sense.

23 Jan 2012 : Column 898

I acknowledge that the Minister has recognised the valuable role that kinship carers fulfil and that he has committed to looking at a range of issues affecting this group-an important commitment that I accept and I know that he will keep to it. But it remains uncertain as to what the noble Lord intends and this may be my last chance to argue the case for this community before the Bill leaves this House. It is important that a decision on whether individual carers are exempt from the cap should not be left to local discretion. People who are thinking of taking on something as significant as the care of vulnerable children need a degree of certainty about the support that they can expect.

In response to the noble and learned Baroness, Lady Butler-Sloss, the Minister used words to the effect that, "Kinship carers are a special case and we need to get it right in regulations. Families need a period to adjust to looking after troubled children". I would like to push him on that sentiment. As I said, this may be my final chance to argue the case for the valuable job that this community of carers delivers. Will he accept the amendment or agree to include an exemption from the cap for family and friends carers under regulation? Not only is the case for the carers and the children compelling, but it also makes fiscal sense to exempt them.

Baroness Tyler of Enfield: My Lords, I support the amendment that has just been moved so powerfully and comprehensively by the noble Baroness, Lady Drake. Having myself moved a similar amendment in Committee, I do not wish to go over the same ground that she has, save to say that there is a powerful case for providing an exemption from the cap for grandparents, older siblings, aunts, uncles and other family members who are raising vulnerable children because of very difficult family circumstances such as parental death, alcohol or substance misuse, imprisonment, severe illness, disability, abuse or neglect-the list goes on and on. Children living in the care of family and friends are often exceptionally vulnerable and have already suffered huge disadvantages and traumas in life.

As the noble Baroness clearly put across, one consequence of the benefit cap that I am sure is unintended is that fewer family and friends may step forward as carers in these difficult circumstances, and the cost to the state, particularly if more children go into care as a result, would be considerable. To amplify that point, I shall mention a few statistics that the Family Rights Group was good enough to share with me from an internet survey that it has just conducted-the largest survey of family and friends carers in the UK-with 500 respondents. The survey's findings show that: more than 16 per cent of respondents were raising three or more children, both kinship children and their own; 11 per cent of respondents were in private rented accommodation and 28 per cent in housing association or council rented accommodation; 29 per cent received housing benefit; 31 per cent had given up work permanently when taking on kinship children while 14 per cent had given up work temporarily; and 20 per cent of the children that they were raising had previously been in an unrelated foster care placement. I think this puts some flesh on the bones of this particular issue.

23 Jan 2012 : Column 899

I know that my noble friend the Minister was very sympathetic in Committee to this issue and has written in very sympathetic terms to the charities which are most involved. I very much hope that he has some reassuring words to give us tonight.

Baroness Hayter of Kentish Town: My Lords, rather like the amendment which we discussed earlier on carers, this amendment will, as has been spelt out, protect another unappreciated group: grandparents and other family members or friends who take on the care of children. As the noble Baroness, Lady Tyler, has just told the House, we know that the Minister is sympathetic to this group, which includes many children who have experienced significant traumas before their move to a new caring family.

The Who Cares? Trust estimates that a quarter of these children have lived with abuse, neglect and violence, and a quarter will have been deserted by their parents, often after drug and alcohol abuse. About 60 per cent go to grandparents after family breakdown, one in 10 after a parent's illness-often mental illness-and one in 10 after the death of a parent. Applying the benefit cap to these families may leave them facing the difficult choices, of which we have already heard, about whether they can simply afford to carry on taking care of the child or children.

As we know, the impact assessment tells us that a family will lose about £93 a week. That is a substantial chunk of income. That may not be very much to Sir, or Mr, Fred Goodwin, but it is a fortune to some of these families. Should any of them decide that they can simply no longer afford to continue looking after the child, that will, as we have heard, create significant costs for the state. With regard to kinship carer allowance, there are estimates that if just 5 per cent of those currently in the care of family or friends were in formal foster care, that alone would add £500 million a year to the cost that the Minister would have to justify to his friends in the Treasury.

The Minister has spoken many warm words about the role played by kinship carers. He has also told us that the benefit cap is primarily intended not as a deficit reduction measure but to change behaviour. Indeed, his right honourable friend the Secretary of State told the BBC that the cap was aimed at making lives better by reducing dependency. We are not talking about dependent claimants here. We are talking about dependent children, who, after some great trauma or difficulty with their own parents, desperately need the kindness, care and homes offered by these grandparents, siblings, aunts or friends. We should be very careful that the Government's laudable desire to reduce dependency for one group does not have dire effects on the well-being of another.

Given that the cap is not about deficit reduction, so we are not sending the Minister off to arm-wrestle with Her Majesty's Treasury, we hope that he will try to turn those warm words into concrete protection. It has been suggested earlier this evening that maybe there is a little bit of movement to come. I look forward to hearing from him.

23 Jan 2012 : Column 900

Lord Freud: My Lords, I ought to pick up the initial remark by the noble Baroness, Lady Hayter, that this amendment was to protect another unappreciated group. I emphasise that, from my perspective, this is a most appreciated group. This is an amendment that I listened to with great interest.

It would require us to exempt all family and friends carers from the benefit cap where they have assumed care for a child in the circumstances set out in Amendment 60B. There are two main groups: those formally approved as a foster carer and those providing care on a more informal basis. As noble Lords will remember, in Grand Committee I discussed and recognised the valuable role that kinship carers fulfil. I have had some very useful and valuable meetings with organisations that represent kinship carers to try to get a handle on their priorities. As I said earlier, one of the main issues they are concerned about is that crucial initial period when a child joins a household. In many cases the carer needs to take time off to help the child settle into their new circumstances.

9.45 pm

On the formal number in foster placements, figures from the Department for Education show that there are approximately 7,500 children in those placements. Although we do not have a precise number for how many of those might have their benefits capped, we believe that it will be very small. These carers are able to receive support for the children in their care through the benefits system since, unlike approved foster carers, they have access to child benefit and child tax credit on the same basis as parents. Any additional payments that they receive from the local authority are then disregarded as far as the cap is concerned. However, the parity of treatment with parents will continue with the introduction of universal credit. Kinship carers can expect equal treatment to parents from the benefits system, but that does not mean that I will not look very closely at the position of kinship carers in the benefits system as a whole to ensure that they are recognised and supported in the most appropriate way.

In the previous debate we discussed one of the options-that of a grace period in the transition. Clearly, as we develop those protections and transitional approaches, we will bear very much in mind how they affect kinship carers. Therefore, rather than have a specific exemption for a very small number in this way, we need to design something. It is not appropriate to put this into primary legislation. The trick will be to design the overall structure in a way that gives kinship carers the kind of protection that they need and deserve. However, as I say, my main interest here is in looking at how we can best fit kinship carers into the benefits system so that they slot in beside formal fostering arrangements and what we do for parents, including single parents.

Baroness Hollis of Heigham: If the noble Lord were to combine child benefit, for example-given today's decision by this House-with the guardian's allowance, having each of those as a per capita sum for each child coming in through kinship caring, and take that out of the benefit cap, it would get him there.

23 Jan 2012 : Column 901

Lord Freud: My Lords, as always, I am incredibly grateful to the noble Baroness for her suggestion. I am thinking of offering her a job. However, let us not redesign the benefits system on the Floor of the House, although we have gone into it on many occasions. Let me ask the noble Baroness, Lady Drake, to withdraw her amendment.

Baroness Drake: My Lords, I thank noble Lords for their support and the noble Baroness, Lady Tyler, who also argued the case for family and friends carers in Committee. I accept that the noble Lord has shown a commitment to looking at the needs of this group and I think the charities would accept that.

My anxiety and that of the charities that articulate the interests of family and friends carers is that the Bill is going through the House without one having achieved clarity over the kind of protection that this community will get under the legislation. The Minister said that this community would be supported in the most appropriate way, and that it was necessary to get it right in regulation. It would be helpful if he confirmed that there will be regulatory provision to protect this group, notwithstanding what the precise solution may be, rather than leave the protection to discretion. It would be helpful if the regulatory route was being taken. I thank my noble friend Lady Hollis, as ever, for coming up with an excellent suggestion.

Lord Freud: Perhaps I may answer that straight on. I hope I made myself clear that when we get the regulations on handling the transitions and the options around it that we discussed earlier, we do it in a way that looks after this group. I am not committing here to specific exemptions for this group, but I am saying that we are looking at how to do it so that we meet its requirements, of which I am very conscious.

Baroness Drake: I thank the noble Lord for that response. In the earlier stages of the debate on this community, my particular concern was that the protection necessary for it is not dealt with solely as a matter of discretion and that there is clear guidance-whether or not as a consequence of dealing with the matter as part of a wider resolution-that it is not left solely to the individual discretion of advisers. I take the response of the Minister as meaning that it will not be left in that way. He is nodding.

Lord Freud:Hansard needs more than a nod. Without elaborating on a lot of transitional arrangements, I am not quite sure how this will work. I am not sure that I can give absolute assurance either way, although I would lean towards setting these things out formally without discretion; but I am not in a position to give any kind of assurance either way. There might be elements of discretion in any set of protections that we develop.

Baroness Drake: Obviously it would have been preferable if the Minister had said unequivocally that this matter will not be left to local discretion, but it is clear that I am not going to get that reassurance. However, the noble Lord has said quite a lot on record that he is committed to trying to resolve the needs of this particular group. Perhaps I may borrow a phrase

23 Jan 2012 : Column 902

from the noble Lord, Lord Newton, in a previous debate: I will hold the Minister's feet to the fire on this issue. On that basis, I agree to withdraw the amendment.

Amendment 60B withdrawn.

Amendment 61 not moved.

Amendment 61ZA had been retabled as Amendment 58D.

Amendments 61ZB to 61A not moved.

Clause 98 : Payments to joint claimants

Amendment 61B

Moved by Baroness Meacher

61B: Clause 98, page 66, line 18, at end insert-

"(b) to determine that payment should be made to whichever of those persons is the responsible carer (as defined in clause 19(6) of the Welfare Reform Act 2011) in the case of any benefit awarded in respect of responsibility for children or young persons or any childcare element, or"

Baroness Meacher: My Lords, the amendment would ensure that within universal credit the elements of benefit awarded for children or young persons, and any child carer element, will be paid to the parent or person who is the primary carer of those children. The amendment is supported by Oxfam, Women's Aid, the Children's Society and Platform 51, whose experience makes clear that for millions of people living in poverty the way in which benefits and tax credits are paid is vital in enabling them to keep food on the table for their children day by day.

Recent government research shows that benefits that are labelled as being intended for children are much more likely to be used for that purpose. A study by Hall and Pettigrew for HM Revenue and Customs showed that child tax credit, for example, is commonly identified as money for children and is spent accordingly. A recent study of winter fuel allowance by the Institute for Fiscal Studies, published in 2010, also found,

of the labelling of that benefit. A study for Save the Children, HelpAge International and the Institute of Development Studies, published in 2005, points to the value of targeting and delivery mechanisms.

Labelling is currently absent from the new system of universal credit. The amendment would rectify that apparently small but profoundly important fault in the system. I and many other noble Lords on all sides of the House have made clear that we support many of the principles behind universal credit. The amendment neither challenges those principles nor would increase the cost of the system, other than marginally, to cover the administrative costs of making two payments to some households or to those with children. I understand that all the amendment would require is a change to a few lines of code in the current IT system to mirror what already happens with child tax credit. It will be much cheaper to do that now, while the IT infrastructure is being constructed, than to leave it until much later to be dealt with under regulations.

23 Jan 2012 : Column 903

Without the amendment, the universal credit system would deter couples from forming long-term, stable relationships, which I think the Minister would accept is an important point. For many single parents considering whether to form a joint family with a potential new partner by living together or getting married, the prospect of the entire benefit for the whole newly formed family being paid into one account will be a strong disincentive to forming a single unit, but the formation of such families holds out the best hope for those benefit claimants coping well with their children, becoming self-sufficient and coming off dependence on the taxpayer.

Another concern is that, once money reaches the household, it is often unequally distributed, particularly in low-income households, as the DWP and Ministers have acknowledged and as the research shows very clearly. Emergency powers in the Bill enable payments to be shifted in the event of abuse. That will not be a sufficient protection. Abuse is often hard to prove; it is often hidden within families and hard for the state to identify. In view of the pervasiveness of the financial vulnerability of primary carers, the aim of the system must surely be to prevent abuse, where it can, to protect children.

The Minister's budgeting products, including jam-jar accounts provided by the financial services industry, might help with different problems, but they will not resolve the problems addressed by the amendment. We are trying here to deal with common family problems where the primary carer repeatedly finds themselves without money to feed the children. As the DWP knows from its research, many parents suffer from alcoholism, drug addiction and gambling addiction, and far greater numbers suffer from unhappy and often abusive relationships. In all those situations, the risks of the primary carer not receiving the money with which to feed and clothe the children are real. Those primary carers will continue to receive child benefit, but for them to receive the child elements of universal credit as well would go a long way to reducing their vulnerability in violent or otherwise abusive marriages.

The Children's Commissioner has expressed concern about the new single lump-sum payment arrangements. The amendment is not about the sex of the primary carer. A growing number of fathers take responsibility for children's welfare if a mother is the one who is abusive, mentally ill or otherwise unable to take the primary carer responsibilities. I make the point that this is not about men versus women or women versus men.

The Government argue that putting universal credit into a joint account could guarantee access to both partners. That is not the answer. Of course, not all couples have joint accounts, especially those who might not have been together very long. In fact, joint savings, investments and debts are decreasing. Often, couples will have individual accounts and will have to opt for one or other for the payment of universal credit. That is our concern. In many cases, a joint account does not guarantee equal access to money for both partners anyway. Often one partner dominates the joint account, and there might be only one chequebook.

23 Jan 2012 : Column 904

It is difficult to imagine that the Minister would disagree with the proposition that the payment of benefits for children to their main carer would be the best way to ensure that the money is spent on the children. I should be grateful if the Minister could confirm his view on that matter. Further, does the Minister agree that for new couples where one or both partners has at least one child and one partner would have responsibility for housing costs-which is likely to be the case if the couple get together-the payment of the whole universal credit to one bank account is likely to be a disincentive to the partners to come together?

Again, I endorse the Government's objective to simplify the benefit system and I realise that this is a tiny fly in the ointment of that simplification process. I hope that the Minister will recognise, however, that the costs and benefits of this amendment would come down very solidly on the side of our proposed small change to the Bill, and I hope that in view of that the Minister will be willing to table his own amendment-no doubt this one would not be perfect-on this apparently small but fundamentally important matter. I beg to move.

10 pm

Baroness Lister of Burtersett: My Lords, I rise to speak in support of Amendment 61B, to which my name is attached, and to Amendment 61C in my name. The amendments have a particular resonance for me. One of my clearest memories when I worked at the Child Poverty Action Group was sitting below the Bar during the passage of the then social security Bill under the Fowler review, of which we heard earlier, and literally jumping for joy when the Minister announced that the then Conservative Government would withdraw their proposal to pay family credit through the wage packet. I was given a severe warning by the attendant.

During my subsequent academic career I conducted Joseph Rowntree Foundation-funded research with Jackie Goode and Claire Callender that demonstrated the importance to the well-being of both children and women of paying benefits for children to the mother who was in all those families the parent with main responsibility for the day-to-day care of the children. This research helped to persuade the previous Labour Government of the error of their ways when they proposed to pay working tax credit through the wage packet. Now here we are again having to persuade the Government why it is so important to pay money for children direct to the parent who has the main responsibility for the day-to-day care of the children and for day-to-day budgeting. This time the stakes are higher, as the noble Baroness, Lady Meacher, has made clear because universal credit wraps up so much in it, including housing costs. The noble Baroness, Lady Meacher, has already made the case very powerfully for why what is colloquially known as "wallet-purse" is such a crucial issue, particularly for children and women.

I want to pick up a couple of the arguments made by the Minister in Committee, some of which I have to admit I was not convinced by. First, I make reference back to a point made by the noble Lord, Lord Lester, earlier when he talked about the report of the Joint

23 Jan 2012 : Column 905

Committee on Human Rights, which came out after our proceedings in Grand Committee. It commented on the reduction in the financial autonomy of women, resulting from the payment of universal credit to only one member in the household. In order to address that, the Committee suggested that the Bill could be amended to allow payments intended for children to be labelled as such and to be paid to the main carer.

One of the points made by the Minister was to try to reassure the Committee that making universal credit as a single payment will not now be a problem because the Government are committed to ensuring that people can access support to manage their payments and help them to budget effectively, including access to budgeting products, such as jam-jar accounts, as mentioned by the noble Baroness. I put that argument to an expert who understands jam-jar accounts much better than me, and who shares the Minister's enthusiasm for them. Her response was that it was a bit of a smokescreen as there is no coherent link between budgeting accounts and the decision as to whom the benefit is paid. Moreover, what is at issue is not budgeting capabilities but financial autonomy. It is about ensuring that the parent with the every day care of children has control over the money allocated for them.

That brings me to another argument used by the Minister that the Government want to enable couples to decide where their payments should go. It is not for the Government to dictate how a family arrangements its finances. The only decision that the couple can make is between payment into one or other single account or a joint account. As the noble Baroness has already explained, joint accounts are not necessarily the answer. Research by Fran Bennett of Oxford University and others shows that the existence of a joint bank account does not guarantee access by both partners to the money held in it.

While I agree that it is not for the Government to dictate how a family arranges its finances, is it not the case that their belief in the power of nudge might point them to supporting this amendment? Presumably, the Government want the money allocated to meet the needs of children to be spent on children. As the noble Baroness pointed out, that is much more likely to happen if the money is clearly labelled for children.

If the Government refuse to countenance that approach, then I suggest that Amendment 61C might be the answer. It provides for a couple to choose for the payment to be split between accounts without earmarking any of the money for specific purposes. This would meet the Minister's concern that universal credit should be seen as a single payment. In this case, it would be a single undifferentiated payment, but split between the two bank accounts when the couple so wished. It would allow for the variety that exists in the ways that couples organise their finances. I acknowledge that it is not a perfect solution for, as the Minister observed earlier in our proceedings, effective choice exists only when the balance of power is equal, and the gender balance of power is still often very unequal, but it would be more consistent with the Government's position on choice and would be better than the only choice offered in the Bill, which potentially puts all the money into the hands of one partner.

23 Jan 2012 : Column 906

As the noble Baroness emphasised, neither of these amendments would cost money, but they would help millions of women and children and address the very real problem of hidden poverty which can result when resources are not shared fairly within families.

Lord Kirkwood of Kirkhope: My Lords, I shall add a few comments to the speeches of the noble Baronesses, Lady Meacher and Lady Lister. I learnt the importance of this subject a long time ago when I was involved in consistorial legal work in a provincial legal office in south-east Scotland. I was surprised by the importance of financial autonomy to people within quite troubled and tense family contexts, as the noble Baroness, Lady Lister, mentioned. I was then persuaded yet again, academically, by the exemplary work that she has done ever since with Fran Bennett and others to make this case consistently over the years. It is as apt in this benefit reform as it was in the Fowler reforms or at any time since. I guess I could be persuaded that this is a debate that needs to be conducted at regulation level and I am certainly up for continuing an interest through the primary legislation until the regulations are tabled. I will be happy to contribute to those discussions.

There is a real question that I want to be clear in my head about. We had some interesting discussions in Grand Committee and I am certainly sympathetic to the Minister's search for innovative financial products. I think it is absolutely correct. However, if you separate out the politics from all this, I would like to understand whether it is factually possible for the agile computer system that we are developing with such care in Warrington to deliver the device suggested in Amendment 61C. That is a separate question from whether the Minister is prepared to deliver it. I want to know that we are not blocking off-this is the point that the noble Baroness, Lady Meacher, made-the opportunity to come back to this. If we cannot persuade the coalition in the short term, either tonight or in regulations, that this is the right thing to do, which I believe it is, it would comfort me if the Minister were able to say that the Government do not believe that this is right because there are other ways of dealing with it. I would go to my bed this evening and rest slightly easier if he were able to say that it is still possible and we would not need to buy a new computer system if we wanted to do this in future.

Baroness Hayter of Kentish Town: My Lords, I am looking forward to the Minister's reply, otherwise we will worry about the sleeping patterns of the noble Lord. These amendments, as has been clearly set out, seek to mitigate the risk of paying the entirety of universal credit to one person and, in particular, to provide protection for women who are more likely to be the main carer in a couple and less likely to have the power in the relationship to determine how money is managed.

The Government's proposals suggest that universal credit payments would not, other than exceptionally, be split between a couple. Instead, they would be paid, as we have heard, entirely into one bank account. The DWP briefing note states that,

23 Jan 2012 : Column 907

However, these amendments are not about how households spend their money but how they receive it. They are about allowing households to decide to whom the money should be paid. This principle is long established in social security policy. Households receiving child benefit can nominate a main carer and those receiving working tax credit can receive child tax credit in the bank account of the main carer and working tax credit in the bank account of the other partner.

Concerns about the shift in policy from this have been voiced by a wide range of organisations, all of which have presented strong arguments in favour of ensuring that the part of universal credit intended for children is paid to the person who has the main care of them. As has already been spelt out, we know that benefits labelled as intended for children are more likely to be used for that purpose. This amendment would enable the Government to identify the parts of the credit intended to help with the costs of children.

Research for HMRC shows that child tax credit is commonly identified as money for children and more often spent accordingly. Again, as has been said, we know that money within the household is frequently unequally distributed, particularly in low-income families. An Oxfam study of black and minority ethnic women in low-income couples revealed cases where,

Benefits for children are sometimes the sole source of independent income for vulnerable women.

As the Women's Budget Group points out,

There can already be exceptions. Sometimes, for example, there will be rent for certain categories of recipients. Support for mortgage interest may be paid to lenders and, as the Women's Budget Group states,

The DWP briefing acknowledges:

"There may, however, be exceptional cases that require alternative arrangements: to ensure safeguards. The Government intends to retain powers to split payments between members of a couple in joint claim cases".

I think that the noble Lord, Lord Kirkwood, will be able to sleep easy in his bed because it seems clear to me that the technology will exist to enable the Minister, if he so desires, to accept either or both of these amendments; that is, either paying the child elements of universal credit to the main carer or, in line with the Government's assertion that they wish to enable choice, allowing families to choose to split their payments.

Resistance to these amendments would suggest that administrative simplicity is seen as more important than either ensuring that women have an independent income or encouraging money which is intended for children to reach them. I hope that the Minister will feel able to accept the argument for these changes.

Lord Freud: My Lords, under universal credit, couples will make a joint claim for benefit payment. We have been clear that claimants will receive universal credit

23 Jan 2012 : Column 908

as a single payment, which will ensure that claimants can clearly see the effect of their decisions about work on total household income. The House debated this issue extensively in Committee. We also discussed direct monthly payments in another context when the House accepted the principle of a single payment. Couples will be able to choose which bank account the total universal credit award should go into. Once universal credit has been paid into that account, claimants will have the freedom to manage their money how they wish. They will have the opportunity to transfer some of that money into another account, or they may choose to have the universal credit paid into a joint account in the first place.

Giving people these choices to manage their money is in line with evidence that suggests that, in today's world, the majority of couples pool their resources-

10.15 pm

Baroness Meacher: I apologise for interrupting the Minister. How does he feel that that will work if the partner into whose bank account the money is paid is an alcoholic and likes to spend most of the money, on a Friday or whenever it is, on alcohol, or a gambler, or somebody with mental health problems who is controlling and dominant and therefore gets the money paid into their account?

Lord Freud: I was going to say that 7 per cent of cohabiting couples and 2 per cent of married couples manage their finances completely. However, we recognise that there are cases-the noble Baroness mentioned some of them-which will require alternative arrangements. The Government intend to retain powers to split payments to couples as a safeguard. We are looking at the precise circumstances of where and how that split will be made and we will produce further detail as we develop the regulations. The obvious example, as the noble Baroness has said, is where there is proven abuse of the money by one partner or where children are considered to be at risk. But there will be other circumstances as well. That general point is accepted. Where an intervention by the state is required, we will make it to ensure that money goes to the right people or is split in the right way.

However, in circumstances where a universal credit award is split, neither party will receive specific elements such as that for child care. They will receive a proportion of the total award and be responsible for their own budgeting. Therefore, in practice, the amendment tabled by the noble Baroness, Lady Lister, Amendment 61C, is much closer to how we will manage such situations.

Universal credit is replacing a benefits system which in practice undermines personal responsibility by separating a person's income into different streams for different circumstances. This does not reflect the world of work or encourage financial responsibility. We must trust that people know what is best for them and for their families, with the exception of those individuals and families who cannot handle that responsibility. In respect of those who can, it is not for government to dictate how a family manages its money. However, we are committed to ensuring that people can access support to manage their payments and help them budget effectively.

23 Jan 2012 : Column 909

We are looking at a wide range of support. As noble Lords may remember, I think that one of the most exciting opportunities offered by universal credit is to enlarge the scope for financial inclusion which has been so lacking for many benefit recipients. We are looking at access to nationally available advice and guidance and at locally delivered, targeted support. We are talking to local authorities, housing associations and other stakeholders about how best to deliver this support. We are talking to the financial services sector about widening access to basic, including joint, bank accounts and developing improved budgeting accounts to help benefit recipients manage their money. We are looking to create valuable support mechanisms for a part of our community that simply has not had them. My aim is to have some quite specific new products that slot right under universal credit and give families much more flexibility to manage their money. I look forward to sharing more detailed proposals with your Lordships in due course.

With regard to my noble friend's sleeping patterns, I think I can allow him to sleep at night. If we find that we need to make more splits than anticipated, the computer system will allow us to do that. We are designing that in. If he is right and I am wrong we will be able to make those changes, albeit more in the pattern of Amendment 61C than Amendment 61B. I can also assure him of a commitment to conduct intensive research on how universal credit works. We will make sure that what we are doing optimises the position for families. I hope with that second commitment my noble friend will not only sleep but sleep like a baby. With these explanations, I urge the noble Baroness to withdraw the amendment.

Baroness Meacher: I thank those who have contributed to this debate and thank the Minister for his reply. I am interested in his suggestion that we are dealing here with normal families who are perfectly capable and reasonable about the allocation of their money. When I ran the Child Poverty Action Group campaign for the introduction of child benefit 40 years ago, I received 2,000 letters, most of them from normal families. The letters were from the wives of all sorts of people-vicars, doctors and members of the Army-whom I would have considered very normal. However, they wrote to say that they depended on family allowance, which was only some ridiculous amount like 90p for the first child, and would often have to survive on it for a week because their doctor husband or their vicar husband gave them nothing, having drank their money away or whatever else they were doing with it. There are too many "normal families" that one might see walking up and down the street who do not treat their other half in a normal and acceptable way, so I am very relieved to hear from the Minister that there will be a computer system that will enable more splits and more complexity and sensitivity in this system. I am absolutely sure that it will be necessary, not only for a handful but for vast numbers of people across this country.

I am also relieved that the Minister will look closely at not only how universal credit in general will work but how it will work in this particular regard. I think I understood him to say that, and I very much hope he will pay great attention to this issue. I am absolutely

23 Jan 2012 : Column 910

certain it is terribly important for an awful lot of families. After my experience of 40 years ago-and I do not think human nature changes in 40 years-I really believe that is the case. I very much respect his new products and I think they will be splendid, but they will not deal with the sort of issue we are throwing up in this debate. I am sad to withdraw this amendment, but I am pleased to have had some assurances that this issue will not be lost.

Amendment 61B withdrawn.

Amendment 61C not moved.

Amendment 62

Moved by Baroness Meacher

62: After Clause 99, insert the following new Clause-

"Benefits payments to prisoners

(1) Regulations shall provide that a person undergoing imprisonment or detention in legal custody who, at the time that imprisonment or custody commences, is in receipt of any of the qualifying benefits, shall be assessed, during his time in imprisonment or custody, for eligibility for those benefits at the time of his release from imprisonment or custody.

(2) For the purposes of this section, the qualifying benefits are-

(a) universal credit;

(b) jobseeker's allowance;

(c) employment and support allowance;

(d) income support;

(e) personal independence payment, to the extent provided for in regulations made under section 84 (prisoners) above; and

(f) any other benefits provided for in regulations made under this section.

(3) Regulations made under this section shall provide that the assessment required under subsection (1) shall commence as soon as a person is received into imprisonment or custody.

(4) Regulations shall in particular provide that a person appointed by the Secretary of State shall record, at the time a person is received into imprisonment or custody, details of any qualifying benefits which are in payment at that time, together with any personal information needed to establish the person's identity, including but not limited to their national insurance number.

(5) An assessment of eligibility under subsection (1) shall be completed in such time as to ensure that the person assessed receives payment of any benefits for which he is assessed as being eligible no later than one week after his release from imprisonment or custody.

(6) Regulations under this section shall be made by the Secretary of State and shall be subject to the affirmative resolution procedure."

Baroness Meacher: My Lords, I rise to move, very briefly, Amendment 62 on behalf of my noble friend Lord Ramsbotham, who apologises to the House for not being able to be in his place. As noble Lords will know, he generally speaks with little in the way of notes, so I shall do my best.

The purpose of the amendment is to ensure that regulations will provide for prisoners who were receiving benefit at the time of their imprisonment to be assessed during their time in prison or custody for their eligibility for benefit on their release from custody. I passionately agree with my noble friend Lord Ramsbotham that the amendment has huge merit. In Grand Committee the Minister outlined the arrangements that have been

23 Jan 2012 : Column 911

made to cover those who claim jobseeker's allowance, which my noble friend accepts, but the Minister did not accept my noble friend's proposal that all prisoners should have claims to other benefits processed before release.

Last week my noble friend had an extremely useful meeting with officials in the DWP, with whom he discussed the situation, reaching the following conclusion-that my noble friend Lord Ramsbotham would now table an amendment to the Legal Aid, Sentencing and Punishment of Offenders Bill, putting the onus on the Ministry of Justice to confirm a prisoner's national insurance number and current entitlement to benefits on reception into prison. Before release, these should be processed in time for suspended benefits to be resumed and necessary arrangements made to cover the gap before any payment could otherwise be made, subject to payment in arrears. This will require protocols between the DWP and the MoJ to be established. The question is whether the Minister will be prepared to support this proposal.

The arguments in support of the amendment were put by my noble friend Lord Ramsbotham most forcefully in Committee and I shall not repeat them. I beg to move.

Lord McKenzie of Luton: My Lords, I shall speak briefly. The thrust of what the noble Lord, Lord Ramsbotham, is trying to achieve has considerable merit. I wonder how some of the detail in the amendment about assessments when people start their sentence would work in practice, particularly if someone is likely to be in prison for some while.

We dealt with regulations about a fortnight ago on the importance of people being able to get into the work programme on immediate release from prison. However, I was a little disturbed that, as the Minister explained, applying for JSA was voluntary but that once on JSA there was an inevitable path into the work programme. That of itself is fine, except that it may not take account of many good programmes that are already around in prisons where people are supported sometimes before they leave prison and certainly supported when they do. The route via the work programme might pre-empt and override all of that. The noble Lord, Lord Kirkwood, was involved in that debate.

The thrust of trying to get as many benefits as possible sorted out for individuals before or at the point they leave prison must be helpful to them. The opportunity for them to have resource-presumably under the advance payment arrangements if it happens immediately, because typically benefits would be payable in arrears-is fine, but there is a concern about potentially damaging those good programmes in prison, where they exist, which help people to adjust to the world of work before they formally finish their sentence.

10.30 pm

Lord Freud: My Lords, it is a shame that the noble Lord is not here to move the amendment. I thank the noble Baroness, Lady Meacher, for moving it so ably. The noble Lord, Lord Ramsbotham, was pretty surprised and somewhat impressed as he heard the developments

23 Jan 2012 : Column 912

that we are making in this area. He has been a long-term campaigner in this area. I think he was worried about the bits that we had not yet caught. I was not able to have a meeting with him on this matter, but he met with my officials, as did his colleagues from Unlock, and we were able to provide a lot of reassurance about positive intent to keep going in this area. There are some differences, which is the reason why we cannot support the entirety of this new clause. That is not because we are in any way against helping in the rehabilitation of prisoners and other detainees but because we are moving along with our own programme. We think that that will prove more beneficial in the long run than introducing this structure, which we think would be expensive and resource, intensive in prison assessments.

Lord Kirkwood of Kirkhope: Perhaps I could concur with the point made by the noble Lord, Lord McKenzie. I support these amendments. As I said in Grand Committee, the key thing-I am a non-executive director of the Wise Group and we run one of these projects very successfully-is that the people who do the work are ex-cons themselves. My suggestion is that more Jobcentre Plus staff should be recruited from ex-convicts in future so that these programmes can be run positively. That is a facetious way of putting it, but this is a serious point.

Lord Freud: My Lords, it is a real point because we know that virtually all addiction treatment centres are manned by people who have gone through the experience of addiction. That is one of the reasons why they are able to help people. There is probably a very similar argument for convicts. Given the way in which we have incentivised the work programme, I would expect that that fairly basic knowledge will be picked up. I am in no position to instruct any work programme to do anything, but I hope that the way in which this has been structured financially will drive that logic.

Baroness Meacher: The Minister was talking about being unable to accept this amendment in full and referred to alternative arrangements. The whole point of this amendment tabled by my noble friend was to have clarity on the Floor of the House about acceptance of it. As I understand it, it seeks to ensure that the processing of claims goes on while prisoners are in custody so that when they come out the benefits can be paid very quickly. The idea is to avoid such people running straight off to recommit crimes. There is tremendous power behind this-logic, sense, cost-saving and so on-in terms of criminal justice costs. Perhaps the Minister could spell out what in the amendment the Government cannot accept and what the Government would put in instead. That would be very helpful.

Lord Freud: Last week, I think, we had a regulation on this. Time does not fly for the noble Lord, Lord McKenzie, as he thought it was weeks ago. We have already announced that we are processing all JSA claimants in prison. It is hard to process everything. Clearly, housing cost is one element that is not there. I know the noble Lord is concerned about what we do with ESA claimants. The issue becomes real because as we move from universal credit, it is not just a

23 Jan 2012 : Column 913

question of not having JSA claimants but having universal credit claimants; we also have to look at how we will do that. We have to do that anyway. However, at the moment we have done JSA claimants and we have the issue of housing. We have support at the prison gate. When we discussed it in Committee, the noble Lord seemed almost shocked that we were doing that. We are moving very fast now. For the record, we will continue to work with the Prison Service, the Ministry of Justice and the other agencies to ensure that prisoners have all the necessary information about claiming benefits on release, and that benefit payments are made as quickly as possible on release. With these assurances, I urge the noble Baroness to withdraw this amendment.

Baroness Meacher: I would like to thank the noble Lord, Lord Kirkwood, but also the Minister for that very helpful reply. It seems that the Government are doing everything they can to resolve what has been a ridiculous situation of prisoners coming out of prison and having virtually nothing to live on for some time. With that, I am happy to withdraw the amendment.

Amendment 62 withdrawn.

Baroness Anelay of St Johns: My Lords, I think that everybody is trying to be very constructive tonight. I see that the noble Baroness, Lady Lister, is ready to move her amendment. It may help the House if I indicate that there is an agreement that we need to be swift to ensure that the House concludes quickly. Therefore, I wonder if the noble Baroness on the Woolsack, the Deputy Chairman, might call Amendment 62ZA. That will, I hope, then be the last amendment and be concluded quite briefly.

Clause 100 : Power to require consideration of revision before appeal

Amendment 62ZA

Moved by Baroness Lister of Burtersett

62ZA: Clause 100, page 67, line 24, at end insert-

"( ) After subsection (8)(b) there is inserted-

"(c) shall consider the extent to which a claimant falling under section 22 of the Welfare Reform Act 2012, and upon whom a sanction has been imposed under section 26 or 27 of that Act, had guaranteed and predictable access to childcare meeting the needs of any child for which the claimant was the responsible carer at the time when the decision appealed against was made.""

Baroness Lister of Burtersett: My Lords, in moving Amendment 62ZA, I shall speak also to Amendment 62B. These amendments focus on the issue of sanctions, in particular where a claimant with a dependent child faces sanctions because they are unable to access work or work-related activity or to sustain work due to a lack of suitable childcare which meets the needs of any child for which the claimant is a responsible carer. Amendment 62ZA seeks to ensure that the appeal tribunal takes into account the extent to which a claimant with a dependent child had access to appropriate childcare when the decision was made to impose a sanction under Sections 26 or 27. Amendment 62B also focuses on this issue and would guarantee that a

23 Jan 2012 : Column 914

claimant would not face sanctions and the loss of benefit where they are unable to access work or work-related activities or to sustain work due to a lack of appropriate childcare.

These amendments are supported by more than 40 very widely spread organisations. The recent child impact assessment statement from the Children's Commissioner for England stated that sanctions should never be imposed on the main carers of children under Clauses 26 and 27 of the Bill, unless accessible, affordable childcare was available that would allow them to take up offers of work or training or attend interviews. These amendments would meet the commissioner's concerns. Providing such safeguards would be consistent with the approach taken in the 2009 welfare reform legislation where at Report, my noble friend Lord McKenzie of Luton confirmed in response to a similar amendment tabled by the noble Lord, Lord Kirkwood of Kirkhope, that the then UK Government would introduce regulations to provide that claimants with a dependent child would not face sanctions in these circumstances.

Most lone parents want to have the opportunity to combine paid work with the vital job of being a parent once their children are old enough, but the Welfare Reform Bill fails adequately to recognise the significant barriers to paid work which lone parents often experience, in particular the availability of appropriate childcare. In Committee, the Minister outlined the kind of safeguards which would be put in place to protect lone parents from sanctions where they are unable to access childcare. I will not reiterate them now. Unfortunately, I have a whole lot of examples which I cannot now read out because of the time constraints. However, in those examples it is clear that lone parents are being put under pressure to work hours which are not consistent with their childcare responsibilities. I believe that the organisations have written to the Minister and I am very happy to provide those examples outside these proceedings.

I know that the Minister will say that it is not appropriate to put in the Bill the safeguards being sought to ensure that no one is sanctioned because of lack of available childcare. I am sure that the House would be very grateful if he could therefore give a commitment on the record to bring forward regulations in the same way that my noble friend Lord McKenzie of Luton did to provide safeguards for lone parents who are doing a very important job raising their children. I beg to move.

Lord Kirkwood of Kirkhope: My Lords, I concur with the noble Baroness, Lady Lister.

Lord McKenzie of Luton: My Lords, for the sake of brevity, I can say that I also concur with my noble friend and with the noble Lord, Lord Kirkwood. My noble friend is simply seeking to have the issue on the record.

Lord Freud: My Lords, I shall speak to Amendments 62ZA and 62B. I could almost do so like my noble friend Lord Kirkwood, but I will speak at slightly greater length.

23 Jan 2012 : Column 915

I would like to assure noble Lords that we are in agreement on the need to ensure that a claimant's childcare responsibilities are taken into account when setting work-related requirements and when determining whether a claimant has good reason for failing to meet a requirement. For the record, let me set out how we intend to do this.

The legislation will provide clear safeguards. When a child is under one, support will be unconditional. When a claimant's child is under five, we will ask the claimant only to attend work-focused interviews. If claimants fail to meet this requirement for no good reason, they will be subject to the lowest level sanction; the sanctionable amount for these claimants will be limited to 40 per cent of the sanctionable amount for other claimants.

Secondly, advisers will take childcare responsibilities into account when setting work-related requirements, and we intend to set out some specific safeguards on this issue in regulations. Regulations will prescribe that claimants with a child under 13 will be able to limit their work search to jobs that fit around their children's school hours. This is key. The best way to prevent the inappropriate application of sanctions is to ensure that requirements are reasonable in the first instance.

Amendment 62B seeks to introduce a blanket exemption from conditionality sanctions for claimants who can demonstrate that they did not have guaranteed and predictable access to suitable childcare. We do not think such a legislative exemption is needed. As I have previously explained, when a claimant fails to meet a requirement, a sanction will be imposed only if the claimant does not demonstrate that there was a good reason. In considering whether there is good reason, we will consider all relevant matters raised by the claimant, which could include the availability and cost of suitable childcare. This flexible, case-by-case approach is the right one, but to be absolutely clear, when a claimant demonstrates that a lack suitable childcare meant that the claimant was unable to meet a work-related requirement, a decision-maker should determine that the claimant has good reason and a sanction will not be applied.

Noble Lords have previously raised concerns about where the responsibilities lie in relation to the provision of good reason. I would like to take this opportunity to clarify the position. We have a responsibility to ensure that claimants understand the decision-making process and that they have an opportunity to explain the reason for a failure to meet a requirement. The onus is then on the claimant to tell us the reasons and provide supporting evidence where necessary. The

23 Jan 2012 : Column 916

department must then determine whether the reasons raised are relevant and whether any of those reasons constitute a good reason. The current practice of visiting ESA claimants with a mental health condition or learning disability before the application of a sanction is a good example of the proactive process required to collect evidence of good reason in some cases. I can assure noble Lords that we will review our approach to collecting evidence of good reason for all claimants to ensure that we get this process right.

The final safeguard is the appeals system. Any decision to reduce an award as a result of a sanction can be appealed to the First-tier Tribunal. Amendment 62ZA seeks to require the tribunal to consider whether the claimant had guaranteed and predictable access to childcare. We do not want to go down the route of prescribing specific matters to be taken into account by an independent body; the existing legislation is clear and sufficient. The First-tier Tribunal must consider any issue or circumstance raised by the claimant that is relevant to a valid appeal, so in an appeal against a decision to reduce an award of benefit because of a sanction where a claimant cites lack of suitable childcare as a good reason for failure, this should be considered by the tribunal because it is plainly relevant to whether the award ought to have been reduced.

Given the safeguards we have in place and the commitment I have made to reviewing our processes for collecting evidence for good reasons, I hope I have provided the assurances on the record that were required by the noble Baroness and I urge her to withdraw this amendment.

Baroness Lister of Burtersett: My Lords, I am very grateful to the Minister for his full response, given the lateness of the hour. I should have thanked One Parent Families Scotland for its help with this amendment. As this organisation has written to the Minister, if there is anything that it wishes to follow up, I wonder whether he would be willing to meet representatives of this and other organisations that have written to him just to go through in more detail what he has so kindly said to the House. I beg leave to withdraw the amendment.

Amendment 62ZA withdrawn.

Consideration on Report adjourned.

Live Music Bill [HL]

Returned from the Commons

The Bill was returned from the Commons with amendments.

House adjourned at 10.47 pm.

Next Section Back to Table of Contents Lords Hansard Home Page