I turn first to those amendments which seek to ensure that universal credit is removed from the scope of the Bill. I have tabled them for four key reasons. First, the baseline amounts for universal credit have only just been established by the Government. It surely is reasonable that these are now increased with cost of living. Secondly, the majority of households protected in this way in the long term would be working households. The measure would promote work incentives, about which I will say more in a moment. Thirdly, the measure would protect 6.7 million children from some level of impact once universal credit is fully introduced. Finally, the cost of the change would be relatively low over the next two years as a result of limited levels of migration to universal credit.

A number of benefits have been substantially revised as part of the introduction of universal credit. For example, the lower disability addition for children, comparable to the disability element of child tax credit, has been halved in value. Personal allowances for those aged under 25 have been changed so that lone parents under 25 will no longer receive the same rate of personal allowance as single adults aged over 25. The severe and enhanced disability premiums present in the current benefits system are being removed. These are major changes to the system and, since we have only just established a new baseline for support provided through the welfare system, it is surely reasonable that that support should be increased to keep pace with rises in the cost of living to ensure that the situation for families remains comparable over time. Inclusion of universal credit in the Bill amounts to a

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cut to the new scheme before it is even introduced. This surely cannot make sense. At this stage, we do not yet know what the impact of these changes to the structure of support will be. We should at least wait and see what the implications of these changes are before initiating cuts to them.

So how much will this cost? With my proposal, the Government can still make savings, but they can also help to ensure that the success of universal credit is not undermined. Based on a migration rate of 10% of claimants by the end of 2014-15 and 30% of claimants by the end of 2015-16, the additional cost of removing universal credit from the scope of the Bill would be £90 million in 2014-15 and £510 million in 2015-16. This would mean that the Bill would still make savings of £810 million in 2014-15 and £1.2 billion in 2015-16. In fact, since many households migrated across will have a lower entitlement under universal credit and so receive transitional protection, the costs may be significantly lower than this. Does the Minister agree that, having only just set the rates of support for universal credit, it would be reasonable to increase these in line with cost of living?

Secondly, I turn to work incentives. A key objective of the current welfare system and of the future system in the form of universal credit is to ensure that work incentives are maintained. The Government rightly identify work as an important way for families to lift themselves out of poverty, and we all accept that. However, this can succeed only if the right work incentives are provided through in-work benefits and tax credits. The Government estimate that around half of the total number of households affected by the Bill are working households—a total of 3.25 million working households, including working families from all walks of life.

The impact will be reflected in children in poverty in working families. The Government have admitted that they expect it to push 100,000 more children in working families below the poverty line. The amendments in this group in my name explicitly safeguard work incentives. The amendment ensures that the allowances provided through working tax credit, personal allowances within housing benefit and work allowances in universal credit are increased in line with prices. Doing so explicitly improves work incentives and ensures the principle that work pays.

Working tax credit will be affected by this Bill as it stands. It is notable that the basic and 30-hour elements of working tax have already faced a three-year freeze, from 2011-12 to 2013-14. This means that, in total, these elements will increase by just 2% over the course of half a decade, a period in which prices have risen by eight times as much. On top of this freeze, as a result of the Bill, a lone parent working 30 hours per week would receive the basic, lone parent and 30-hour elements of WTC and, as a result, they will have a WTC entitlement which is up to £132 per year lower.

The amendments also seek for the personal allowances within housing benefit to be increased in line with inflation. The personal allowance rates for adults are included within the scope of the Bill. This will mean that households moving into paid work keep less of their earnings before additional earnings are withdrawn from their housing benefit entitlement.

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5.45 pm

Finally, with the passing of the welfare Act last year, the future of the welfare system is focused through the universal credit. A key aim of this credit is to promote work incentives through work allowances, but it is notable that these work allowances are not mentioned within the Bill. Failure to increase these in line with inflation will have a very substantial impact on the actual value of the allowances. For example, the higher work allowance—the rate provided to households not claiming for help with housing costs—for a lone-parent family is £734 per month, worth up to £477 per month for working families. The Children’s Society have calculated that, were this uprated in line with inflation, this would be expected to be £770 by 2015-16, worth up to £500 per month for working families. As a result, failure to uprate work allowances within universal credit would cost working lone parent families £23 per month, in the value of this allowance alone. Does the Minister agree that in-work benefits and tax credits help to ensure that work always pays? Secondly, will she confirm that the reason that the work allowances within universal credit are not included within the scope of the Bill is that the Government intend to increase them at least in line with inflation?

In conclusion, the Bill as it currently stands seriously fails to protect working families, and will cast children into poverty. It simply does not go far enough to promote work, so that work always pays, particularly for the lowest earning working families. My amendments go some way to mitigate these deficiencies, and I beg to move.

Lord Kirkwood of Kirkhope: I am happy to support these amendments and have added my name to most of them. The House owes a debt of gratitude to the right reverend Prelate the Bishop of Leicester for raising these points. I particularly support his concerns about lone parents. Over the whole systematic process of change, my concerns are getting greater and greater about the compounding effect of all these changes that we see in the social protection available in the United Kingdom. Lone parents, who are mainly women, are struggling already, and we need to watch their situation with great concern in future.

My heart absolutely sank when I saw that this Bill was being applied to universal credit, because universal credit should be the future; it is the architecture around which we as a country should and must have serious consideration about provision for low-income households. We need to have a discussion with people such as my noble friend Lord Forsyth of Drumlean as well, between now and the next election. I hope that there will be a grown-up discussion about how the United Kingdom, as a poorer country, accommodates some of these new pressures, and I am willing to engage in that to the best of my ability. However, what is wrong about applying these two years of locked-down 1% increases is that they risk prejudicing the whole new future, as I see it, of how we cope.

In my experience, the administrative cuts in the health service prejudiced the view of a lot of people towards some of the NHS reforms. My real fear is that people will not know that the cuts are being introduced by the uprating Bill and will think, in the early years of

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universal credit, when they are transitioned across into the new system, that they are being sold a pup. That will potentially damage the public’s understanding of what universal credit is about and that is a real shame. I understand perfectly well all the arguments that the noble Lord, Lord Forsyth, makes, and we have to put up with them in the best way we can, but we should have isolated universal credit for the reasons that I have explained.

Further, I do not think that we know how universal credit will work out when it is in steady state, and it will take a long time to get there. I come back to the costs that will be saved by applying this uprating Bill to universal credit because I am a bit confused about exactly what the Government think they are going to save. Therefore, I make my first complaint—it is another moan—with conviction. The noble Lord, Lord Freud, bless him, has worked very hard to try to get universal credit to stand up. I read a worrying story in the Financial Times, which said that the self-employed have not yet been told that there is a real-time HMRC system heading in their direction. Not many of them know about it. That is more than slightly worrying—it is very worrying, because the computer system is essential to that measure working sensibly. However, we must try to do the best we can to make it work in future.

Secondly—again, the right reverend Prelate was right to give this priority—one of the best elements of universal credit is the way it deals with what used to be known in the old language as income disregard. Some of us have fought for years to do something constructive about income disregard. It is a very intractable problem and universal credit has given us an opportunity to get hold of that and provide incentives to get into work. Universal credit does that, but the first thing that the Government do after bringing in this new progressive reform is to cap it at 1%. How that is supposed to meld with everything else that has been done in connection with the Work Programme makes no sense to me. It will save relatively small amounts of money in terms of the big picture savings that the Government are trying to lock in, but for the life of me it seems a counterproductive, silly cut to introduce and it compounds my first point in that it makes the universal credit system look worse than it is.

The right reverend Prelate the Bishop of Leicester made eloquent and important points about child poverty targets. I concur with everything that he said, so I do not need to elaborate on that. My final point is about costs because I am struggling to understand the savings that have been alluded to. I do not expect the Minister to be able to do this off the top of her head but it would be helpful to me if, before Report, I could be told what the universal credit cost savings are in this measure because I cannot make any sense of the impact assessment. I agree with the noble Baroness, Lady Hollis, that it is—

Baroness Hollis of Heigham: Perfunctory.

Lord Kirkwood of Kirkhope: Indeed. I am looking at the Treasury Autumn Statement 2012, Table 2.1, which has a category headed, “Exchequer savings resulting from 1% uprating of benefits and tax credits”.

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This is over the three years, not just the two years in the Bill. The table also has a category headed, “Universal Credit: finalise disregards and increase by 1% for two years from 2014-15”. The figure given suggests that the saving for 2015-16 will be £640 million. However, my honourable friend Steve Webb, in a Written Answer to Stephen Timms on 13 February, identified universal credit additional savings as £20 million in 2014-15, £100 million in 2015-16 and £150 million in 2016-17. I am not sure how these figures relate to one another. I may be misreading the statistics and the tables may be drawn up using different bases, but between now and Report I would like to understand how these figures are worked out.

As the noble Baroness, Lady Hollis, said, the assumptions about how many people will be translated on to universal credit are best guesses, to put it mildly. I think the roll-out programme will take much longer, for the reasons that I explained earlier, and the story in the Financial Times compounds my anxieties in this regard. I think the figures that the right reverend Prelate gave of 10% of claimants being on universal credit by 2014-15 and 30% by 2015-16 are ambitious, to put it mildly, so can we have some greater clarity?

This is an important Bill. I understand the significance of the situation in which the Government find themselves. If I did not believe that before this weekend, all the financial circumstances of the past few days have confirmed the difficulty of the situation. However, before Report, we must try to get a better fix, in particular on the savings related to the universal credit inclusion in the Bill, because it is unclear to me. It is important and, from where I am sitting at the moment, I do not think that the savings are worth the candle. I would be much happier leaving universal credit out of the Bill. Let it be the future and let us all work on it, try to protect it and build on it in the best way we can. The Bill is a retrograde step as it affects universal credit, and I support these amendments for that reason.

Baroness Howe of Idlicote: My Lords, I want to say a very brief word about two groups—children and families. Before I do so, I congratulate the right reverend Prelate the Bishop of Leicester on his excellent briefing on these very important areas. I agree with a great deal of what the noble Lord, Lord Kirkwood, said.

We know that the Government are not on target to meet the Child Poverty Act commitment to eradicate child poverty by 2020. The right reverend Prelate referred to that. We are told by the Institute for Fiscal Studies that there can be almost no chance of eradicating child poverty, as defined in the Child Poverty Act, by 2020. It predicted that there would be an additional 500,000 children living in absolute poverty by 2015. However, that leaves out a further 200,000 children who will be pushed into relative income poverty. How on earth will this Bill help the Government to meet their commitments under the Child Poverty Act?

I am even more concerned about the disproportionate impact that all this is having on women. The Bill disproportionately affects women, including through the cap on child benefit payments and statutory maternity pay. Furthermore, those in low-paid work, who are more likely to be women, will lose the most. It is

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estimated that 300,000 nurses and midwives, 150,000 primary and nursery school teachers and 1.14 million admin workers and secretaries will be affected by the cap. Some 98% of child benefit payments are paid to women. Child benefit has already been frozen for three years, meaning that over five years there will be a total of a 2% increase; for the same period, CPI will have risen by 16%. Of different family types, lone parents, who are mostly women, as we know, will lose the most: £261 a year by 2015.

6 pm

There we are: those in low-paid work will lose the most as a result of this Bill; 71% of the families affected are at or below average income. The IFS estimates that the combined impact of all the tax and benefit changes introduced between 2010 and 2015 will reduce the incomes of the poorest fifth of families with children by around 7%. Will that really do what the Government want to do? I get increasingly worried by all the evidence that is sent to us, and it is evidence from people who are working on a daily basis with the families about whom we are most concerned. I really hope that the Government will think again on some of these areas.

Lord McKenzie of Luton: My Lords, I start by thanking the right reverend Prelate, the Bishop of Leicester, for these amendments. I hope he will understand that, should he press them to a vote tonight, he would present us with a little difficulty. I doubt that will come as a surprise. The difficulty is that the strictures under which we are operating mean that we cannot at this stage make commitments in respect of the next Parliament. Clearly, an uprating in the tax year beginning 5 April 2015 would operate in the subsequent year, which crosses that particular line.

Having said that, there is much to support and sympathise with in the case made by the right reverend Prelate and the noble Lord, Lord Kirkwood. We on this side wish universal credit well and hope that it will deliver that which is promised for it. However, we know that there are a number of teething problems; we think the Government have been right to extend the introduction way beyond the original intention. It therefore seems to me that very important questions have been raised about why we should at this stage include universal credit within these provisions. We on these Benches want to see everything outside this Bill; we think that would be the right way forward, but certainly the universal credit would be a start.

The issue of work incentives is very important. Although we probably do not espouse it often enough, I think we have a shared view around this Chamber about the importance of work, which is the route out of poverty for most people. It generally seems to be better for their health and well-being and all those things. Therefore, it is crucial that any measures such as this support the proposition that we should try to get people into work when they can work, and help them get closer to the labour market when they cannot.

The noble Baroness, Lady Howe, widened the debate to discuss the broader impact of this Bill on child poverty. The figure of 200,000 is the one that was identified by the Minister in the other place. That comes

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on top of IFS figures, which suggest that another 800,000 children are going into poverty as a result of measures since 2010—in a sense, reversing the gains of the past decade for children and women, too. Therefore, without being able to support the wording of the amendment formally tonight, there is much for us to reflect on and support in the right reverend Prelate’s proposals. I hope that between now and Report—particularly picking up the points made by the noble Lord, Lord Kirkwood—we could end up in a position where we were not only in sympathy but were marching through the same Lobby.

Baroness Stowell of Beeston: My Lords, we have covered a lot of ground with these amendments tabled by the right reverend Prelate the Bishop of Leicester. I will do my best to cover that ground. It is probably worth starting by noting some common issues raised by this group of amendments. They come under the headings of their impact on savings from the Bill, their impact on certainty—as I have already talked about—and the inclusion of in-work benefits. I will then refer to some of the points related to housing. Before I begin, however, I note that the right reverend Prelate has added his name to Amendment 13, which removes housing benefit and personal allowances from the schedule, but Amendment 13 is to be discussed later as part of a different group.

Lord McKenzie of Luton: I should have said when I got up to speak that Amendment 13 was originally part of this group but unwittingly got moved to be grouped with two later housing benefit amendments in the names of my noble friends. I apologise to the right reverend Prelate for that.

Baroness Stowell of Beeston: I was going to say that because Amendment 21, which inserts housing benefit and personal allowances into a different part of the schedule, and Amendment 5, which places a duty to uprate by at least prices, are reliant on Amendment 13, I will speak to the amendments in this group as if Amendment 13 were assumed. I hope that makes sense. Hopefully, we are all following each other in respect of these different amendments.

Noble Lords have already outlined the effects that the amendments would have on the Bill. In broad terms, the legislation would revert to the existing annual exercise of discretion by the Secretary of State. To remove these benefits and payments from the Bill would reduce savings by around £800 million in 2015-16: that is, around £600 million that year from removing universal credit, which would increase over time as more households moved to universal credit; around £160 million that year from removing working tax credits; and, under Amendment 13, around £60 million that year from removing housing benefit and personal allowances—in total, an £800 million reduction in the Bill’s savings in the final year, which is about 40% of the Bill’s savings.

I have to disagree with the right reverend Prelate and say that it would simply not be affordable to give up those savings. If we look at the two years of the Bill together, we are talking about a loss of £1.1 billion in savings. As I have said before, none of these decisions

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is easy, but we have to recognise that if we do not take the savings that this Bill provides in the way it does, this money will have to be found elsewhere.

While I am talking about general matters, it might be worth responding to a point made by the noble Lord, Lord McKenzie, either just now or in an earlier debate—I cannot remember—about the wide range of changes that the Government are introducing in welfare reform. The noble Baroness, Lady Hollis, is not in her place, but she also made the point in an earlier debate. We are making a lot of changes to the welfare system. We absolutely believe in those changes; we think that we are doing the right thing and that those changes will result in a much more effective system. It is safe for me to say that in broad terms most of those changes have received support from the House. There has been recognition on all sides that the welfare system as it stood needed to be reformed. As we move into 2013-14, a lot of those changes will be implemented, so it will no longer be a discussion in theory; it will be real in practice. Of course, as we go through the implementation phase, we will ensure that all changes are implemented in a way that we designed them to be made and that they have the effect and the outcomes that we set out in the legislation. This is not something that we will not be closely involved in to make sure that things operate in the way that we intended.

While talking about general issues, it is perhaps worth responding to points raised about cumulative impacts and assessments. I know that my noble friend Lord Newby referred to this in his response to the first group of amendments, but the matter having been raised again it is worth making a couple of points. The Government introduced a new system of greater transparency around impacts and we publish the impacts of government policy every time there is a fiscal event. The last time we did this was in the Autumn Statement. That cumulative impact includes information about changes to all tax, welfare and public spending policy that can be modelled since the June Budget of 2010.

So far that analysis has not included universal credit, and a separate analysis shows that 75% of the gains from universal credit goes to the bottom 40% of the income distribution. It is worth adding that the IFS has acknowledged that the effects of reforms, such as those to DLA and housing benefit, cannot be precisely modelled, but as I say we are producing quite a lot of information. It is there and publicly available, but let us not forget that all those assessments are against the previous Government’s plans for this period—this Parliament, had they come into power—and we have acknowledged that those plans were not affordable. We are assessing something against a benchmark that we have already acknowledged we cannot afford.

A key principle of this Bill is the certainty that it gives as part of the Government’s fiscal plans. I have said that before, and said then that I hoped noble Lords would not tire of me saying it. I will not tire of saying it to the House as it is important. By taking these benefits out of the Bill and thereby restoring the annual exercise of discretion in relation to prices, the amendments would undermine the key principle of certainty. Amendments 4 and 5, if taken with the others, would make it a requirement to uprate universal

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credit, working tax credit elements and housing benefit personal allowances by at least prices. I am not sure whether that is the intention, but the amendments would take us further than existing legislation, while not giving a firm commitment to addressing the deficit that the Bill provides.

Noble Lords have talked about the inclusion of in-work benefits and questioned whether these should be included. We cannot escape the fact that some working households will be affected. I am not seeking to suggest for one moment that they will not. Tax credits, for example, account for around £30 billion of expenditure this year. Tax credit spending rocketed under the previous Government by an extraordinary 340% compared with the benefits they replaced. Eligibility for tax credits was extended to nine out of 10 families with children, so it would be unrealistic to exclude the benefits received by working people from these decisions that we are taking. For my part I think people understand that. There is a general recognition that this element of spending could not be excluded, particularly when those in work are facing tight restrictions, if not freezes, to their own pay.

6.15 pm

The Government have, however, taken real steps to support working families with the cost of living. The noble Baroness, Lady Meacher, who sadly is not in her place, talked about families being really concerned about the money they receive rather than percentage increases in this, that and the other. I absolutely agree, and that is why it is important when debating these changes that we also make sure that we take account of the other measures that the Government have introduced that provide some benefit to families. For instance, in the Autumn Statement we announced a further increase to personal tax allowance, and taken together, increases to the personal allowance brought in since this Government came to power will benefit 24.5 million individuals, providing a real-terms gain of £443 for the most basic taxpayers in the next financial year. These changes will take 2.2 million individuals with low incomes out of tax altogether.

We should not knock important measures such as fuel duty and the fact that we cancelled the January fuel duty increase. That means that pump prices are about 10% per litre lower than they would have been had that measure been implemented. We have also provided an extra £450 million to help freeze council tax bills in England, which means that somebody in a band D home will save up to about £72 on a 5% rise in council tax. All those measures mean that an average working family will be £125 better off next year and better off on average no matter where they sit on the income distribution scale.

The Government believe that work is the best route out of poverty. Noble Lords have said this in today’s debate, which is a point that we all agree on. Universal credit lies at the heart of coalition policies to combat child poverty and transform the lives of those who most need our help. The simplicity of universal credit means that people will clearly understand the improved work incentives it creates, allowing them to keep more of their income when they find a job or increase their

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earnings. That simple point should never be underestimated. I find the benefits system a complete minefield to understand, and the changes that we are introducing are incredibly important. More than 3 million people will gain from universal credit, with an average gain of about £168 a month, and we estimate that up to 300,000 more people will enter work as a result of the introduction of universal credit through improved financial incentives alone.

At this point, I should respond to one of the questions that the right reverend Prelate the Bishop of Leicester asked about work allowances. Committing to uprate the work allowances goes beyond the legacy system that saw no routine increases to the less generous disregards. It is also worth responding now to a point made by the noble Baroness, Lady Howe of Idlicote, who referred to statutory maternity pay. We will be debating that later on as there is a group of amendments specifically about that. She talked about the impact on women. There was quite a lively discussion online on the Mumsnet website about statutory maternity pay. One of the points made on the blog that was echoed by quite a lot of people is that for those who are in a relationship or marriage, their husband or partner benefits from maternity pay just as much as they do because all their household income is pooled. We undermine the intelligence of people if we argue that people are not clear about the impact of what we are doing and manage their finances in the strict way that the noble Baroness suggested.

Finally, I turn to housing benefit personal allowances. I should make it completely clear that the Bill does not uprate every aspect of housing benefit by 1% over the period in question. It uprates by 1% the housing benefit personal allowance. This figure is used in the calculation of housing benefit. I refer noble Lords to our previous debate. The personal allowance is a block of money that is consistent across all benefits. For single people it is £71 a week. That is what the Bill refers to when it talks about housing benefit.

As housing benefit is particularly complicated, I will make two things clear. For those who continue to satisfy the income test for all income-related benefits, including housing benefit, their eligible rent will continue to be covered by housing benefit, as it is now. There will be no change for them. Secondly, work will continue to pay for those on housing benefit. Renters in low-paid work will still be better off than they would be on out-of-work benefits.

Baroness Hollis of Heigham: When the Minister talks about housing benefit, does she include local housing allowance? I think not.

Baroness Stowell of Beeston: No, I do not. The Bill relates to the personal allowance element of housing benefit. The noble Baroness refers to another announcement in the Autumn Statement. This Bill concerns the personal allowance component of housing benefit.

Baroness Hollis of Heigham: What about the personal allowance in local housing allowance?

Baroness Stowell of Beeston: I do not think that it is included, but I will check.

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Baroness Hollis of Heigham: Perhaps the Minister would write to me.

Baroness Stowell of Beeston: I think I am clear that the Bill refers just to the personal allowance for housing benefit. If I am wrong, I will of course correct that.

As I said, if we were to change the personal allowance for housing benefit, we would introduce inconsistency to the way in which this part of in-work benefit is calculated. There would no longer be consistency between the different kinds of personal allowances that apply to different benefits. In addition to increasing the complexity of the system, this would lead to additional costs.

Before I conclude, I will respond to a question from my noble friend Lord Kirkwood, who asked about costing methodology. I confirm that costs have been modelled and presented in a way that is consistent with the Autumn Statement. I will be happy to provide further details to the noble Lord before Report.

The Government are supporting working households. One of the key ways in which we are doing that is by taking tough decisions to reduce public spending, reduce the deficit and restore economic growth. The amendments tabled by the right reverend Prelate the Bishop of Leicester, including Amendment 13, would reduce the savings of the Bill by about 40%—or £800 million—in 2015-16 alone. Not including in-work benefits in the Bill would be simply unaffordable. Therefore, I ask the right reverend Prelate to withdraw his amendment.

The Lord Bishop of Ripon and Leeds: Perhaps I might ask the Minister about work allowances, which were referred to by the right reverend Prelate the Bishop of Leicester. The Minister’s response left me unsure whether, as time goes on, they will be increased in line with inflation. They are a major element of support for those who are in work.

Baroness Stowell of Beeston: I am sorry, I should have been clearer. Work allowances will be increased by 1% in 2014-15 and in 2015-16. That was announced in the Autumn Statement.

The Lord Bishop of Leicester: My Lords, I am grateful to the Minister and to noble Lords who contributed to this debate. The noble Lord, Lord Kirkwood, underlined my concern about lone parents and reminded us that the effect of the Bill compounds the effect of so much other legislation that is going through at the moment. In particular he made the point that universal credit is the central architecture of welfare for the future and reminded us that, in his view, the savings are not worth the candle, and the effect of including universal credit in the uprating provisions will be to prejudice so much that is good about it. The noble Baroness, Lady Howe, passionately expressed her concern about more children being tipped into poverty, and about the very wide margin by which it is now clear we will miss the 2020 children in poverty targets. The noble Lord, Lord McKenzie of Luton, indicated that his party shared concerns about universal credit and work allowances.

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I am grateful to the Minister for her response. She reminded the House that my proposals for excluding universal credit simply cannot be afforded. I hope she will hear that it is very clear that many people in this House doubt whether the argument that we cannot as a nation afford to provide enough to keep the poorest out of destitution sits at all comfortably with the House. I continue to have many concerns about restricting the uprating of benefits to 1%, especially for families, children and the many in work who receive benefits. As others have said, I hope that the Government will continue to reflect carefully on the direction of the Bill, and I look forward to their response on Report. In the mean time, I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Amendment 5 not moved.

Amendment 6

Moved by Lord Kirkwood of Kirkhope

6: Clause 1, page 2, line 2, at end insert—

“( ) Subsection (1) does not apply in relation to a tax year if, on the review in that tax year under section 150(1) of the Social Security Administration Act 1992, the Secretary of State determines that the general level of prices, measured by the Consumer Price Index, for Great Britain has increased by 3% or more over the period under review.”

Lord Kirkwood of Kirkhope: My Lords, it is a pleasure to move Amendment 6, standing in my name and that of my good friend, the noble Baroness, Lady Lister of Burtersett. This is a probing amendment. It is something about which I feel very strongly. It is a modest proposal that does not seek to disrupt the certainty of which my noble friend made so much earlier in the course of these important debates. The amendment simply disapplies the 1% uprating in Clauses 1 and 2 in the event of inflation reaching 3% in 2014-15. In those circumstances, we would revert to the default position of the annual uprating mechanisms that we all know and love. We would achieve the savings without exposing clients on benefits in future to the risks of inflation above and beyond the government estimates on which the savings will be made.

It is important to remember that the Bill deals with two years of annual uprating. However, we must factor in to the totality of the situation we face the already accepted £505 million that the Autumn Statement estimated that the 1% uprating would yield in this current year. I am sure that we are all looking forward to the uprating statement later in the week. In addition, the saving from the 1% uprating of local housing allowance is being dealt with through separate legislation. Both these reductions have already been made for the current year, 2013-14. We must not forget the reductions this year, in addition to those of the two years for which the Bill provides.

What will the Government do if the OBR estimates are too low? We know that the Budget Statement is a few weeks away. No doubt the Office for Budget Responsibility will discharge its duty to make available to the Chancellor, and subsequently to the rest of us, its best evidence and estimates about the inflationary

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risks that we face. However, we all understand that the Bill is based on the CPI and inflation forecast of the OBR, which at the moment stands at 2.6% in September this year, to be followed by 2.2% in September 2014. Those are the estimates on which the savings of £1.2 billion in 2014-15 and £1.9 billion in 2015-16 are posited.

6.30 pm

My colleagues have been as concerned as I have been over the past few days. I am no economist but I am now more nervous about inflationary pressures increasing. The Governor of the Bank of England designate, Mr Mark Carney, has already signalled that he might take a different view and so the strategy may change. If he goes for growth—I hope he will consider that seriously because it is an element of economic policy that we need to explore in the immediate future—it will almost certainly have inflationary consequences. The fall in the value of the pound and exchange rate concerns will all increase prices. I am a well known pessimist—I am rarely disappointed—and I think that things will get worse before they get better. Food and fuel prices, and rents in certain parts of the United Kingdom, particularly in London, will certainly increase. To be confident that the figures of 2.6% in September 2013 and 2.2% in September 2014 are going to stick is not a safe basis on which to establish this policy.

As I said at Second Reading, the way the Bill is contrived at the moment is a one-way bet for the Chancellor because he locks in his savings but banks everything else if inflation goes beyond 2.2% and 2.6%. I do not think that is fair. It produces government certainty but, sure as anything, it will produce uncertainty for the benefit claimants in 2014-15 and 2015-16 if inflation breaches the OBR’s estimates. The Government need a plan B to deal with the increasing risk that the price that will be paid by benefit cuts in future will be higher than the Government really need.

The value of the lost purchasing power of these benefits is very sensitive to inflationary increases and I asked the Library to look at what some of these measures would mean. It is difficult to make sense of tables in a speech because it is hard to speak in tables but if the OBR estimates for 2014 and 2015 increase by 1%, the savings will not be £1.1 billion and £1.9 billion but £1.8 billion and £3.3 billion. A 1% increase on the OBR estimates would change the cut in the value of the benefits from 4% to 6%. The next line in the table tells me that if the OBR estimates are underestimated by 2%—not 1%—in 2014 and 2015, the savings to the Chancellor will be £2.5 billion and £4.7 billion. That is a cut in the real value of benefits of 8%. I could go on—and, rather obviously, it would get worse—but we can all pay our money and take our choice about what the inflation rate will be. I have got a table, which is freely available, which shows its effect on the cuts in benefits.

There is no certainty of any kind about where inflation will come to rest in September 2014 and September 2015 and there is nothing in the Bill, as it stands, that gives any protection whatever to benefit claimants. For me, that risk is far too great. The purpose of the amendment is to try to get on the record—I will look at it very closely—the Government’s

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suggestions about what will happen if the OBR estimates are underestimates. I look forward to hearing from the Minister about that.

I was encouraged to receive support from a rather surprising direction. In Committee in the Commons, a Mr John Redwood—of whom noble Lords may have heard—argued that,

“every action should be taken to get inflation down. If inflation suddenly took off, this would become a much tougher and crueller policy than Ministers have in mind”.—[

Official Report

, Commons, 21/1/13; col. 66.]

I agree with Mr John Redwood.

Baroness Lister of Burtersett: My Lords, I am pleased to be able to support the noble Lord, Lord Kirkwood of Kirkhope, who, given his stance on these issues, has to be considered a noble friend. I am grateful to him for tabling the amendment, which I regard very much as a bottom line amendment as he put it, a modest amendment. Support for it does not in any way imply acceptance of an uprating of up to 2% less than inflation, which would still happen even if the amendment was passed. Citizens Advice has calculated various scenarios assuming 2.2% inflation and taking account of any gains from the rise in the tax threshold, regularly waved as a fig leaf by Ministers. These show that for some families, in or out of work, the net loss could be as high as around £13 a week by April 2015. This is an enormous sum to lose for someone on a low income. The amendment would not prevent these losses if inflation is less than 3%. It is a damage limitation exercise designed to ensure that benefit and tax credit recipients are not required to bear an even greater burden should prices rise by 3% or more.

I, too, was going to quote the right honourable John Redwood MP—perhaps an even stranger bedfellow. As he said, it is a tough and cruel policy—and it is. He said that if inflation did go up by more than expected it would be extremely difficult. It will be extremely difficult for those affected. Inevitably, I shall be making some of the arguments that the noble Lord, Lord Kirkwood, made in his powerful opening speech. I hope that this will be to reinforce rather than simply to repeat.

The Bank of England has predicted that inflation could peak at 3.2% in the second half of this year. Given that the 2014-15 uprating will be based on the previous September’s CPI rate—that is, the rate in the second half of this year—this could mean an increase in benefits and tax credits 2.2% below the actual inflation rate rather than the 1.2% below inflation upon which the impact assessment is based. As the noble Lord, Lord Kirkwood, said, given that the incoming Governor of the Bank of England is making noises about possibly easing inflation targets and the loss of the AAA rating’s impact on import prices, it is quite possible that the 2% inflation rate predicted as the basis of the 2015-16 uprating could also be an underestimate. Indeed, many economic commentators are talking about inflation remaining in excess of 2% for at least the next two years.

A more relaxed inflation policy may well make sense in terms of stimulating the economy, but we should not leave the poorest members of the community to bear the burden—hence this amendment. My colleague,

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Donald Hirsch of the Centre for Research in Social Policy at Loughborough University, has calculated the likely impact of the Bill on a two-earner couple with two children on combined low earnings of £20,000 a year and in receipt of child tax credit and child benefit. Over the next three years, if inflation is on target at around 2%, they will lose just under £300 a year in real terms. To repeat the point, that is a cut. If it runs at 3% a year over the period, they will lose as much as £500 a year.

When we talk about inflation rates with reference to benefit upratings, we must remember two things. First, the switch from the RPI to the CPI is already expected to significantly depress benefit rates over the long term. The House of Commons Library cites the OBR’s long-term assumption that the annual increase in the RPI will be 1.4% more than the CPI. The Library calculates that such a difference will result in benefits being worth, after 10 years, 86% of the amount they would have been had they continued to be uprated by the RPI. That is quite a big difference. Secondly, even the RPI does not provide an accurate measure of the impact of price rises on low-income recipients of social security benefits and tax credits at a time when the prices of the essentials upon which they spend a disproportionate share of their budget are rising faster than prices generally. Recent work by the IFS shows that the general trend in recent years has been for higher than average CPI inflation rates for those on low incomes. Again, Donald Hirsch has calculated the increase in the cost of a minimum basket of necessary goods and services between 2001 and 2011. This shows that someone whose benefits were uprated only by the CPI during that period would have a shortfall of around 11% as opposed to if they had been uprated by the cost of the minimum basket. He warns that,

“there is every reason to believe that similar trends, in which the cost of a minimum budget rises faster than general inflation, will continue in the future”.

Analysis of the global influence on prices suggests that a long-term increase in commodity prices will have a knock-on effect on essentials such as food, fuel and clothing, and could mean that someone on basic benefits in 2020 would be at least 20% worse off relative to the minimum requirements in 2000—and that is before taking account of the long-term effect of three years of legislated cuts in the real value of these benefits.

It is not surprising that the Office for National Statistics reported in December that spending is falling fastest among the poorest, with an average reduction of 9% on the previous year among the bottom 10%. A number of noble Lords argued at Second Reading and earlier today that it does not make economic sense from the perspective of stimulating growth to depress demand in this way among a group with a greater propensity to spend than to save.

In the Second Reading debate, the Minister responded to the concerns raised by a number of noble Lords about what will happen if inflation soars. I guess he was trying to be reassuring when he said:

“We will continue to monitor the rate of inflation closely … and the impact that it has on the cost of living for families. This will continue to be a key consideration for this Government’s policies in the future”.—[Official Report, 11/2/13; col. 553.]

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If I were, say, the parent of a young disabled child and had little prospect of getting a job by 2016, I would not take much comfort from that assurance. I would want to know what the Government will do if their monitoring shows that inflation is on the rise and is having a highly damaging impact on the cost of living for low income families. The noble Lord, Lord Kirkwood, asked a very direct question: what will the Government do? I do not know whether the noble Lord who is to reply can give a more precise answer than simply that the Government will monitor the situation. In other words, I would want an element of certainty, which this amendment seeks to provide.

The need to provide certainty was a theme of the remarks from the Government Front Bench at Second Reading and has already been emphasised during this debate more times than any of us care to say. The point has already been made, but as the noble Baroness said, she will continue to repeat the point about certainty and we will continue to repeat our point about certainty. The Minister was concerned only about certainty for taxpayers and the markets and said nothing about certainty for those affected by the Bill. But they too are taxpayers, even if not all of them are direct tax payers.

The Minister said:

“We believe it is only right that we set out our plans in advance and give as much certainty as possible”.—[Official Report, 11/2/13; col. 553.]

However, as other noble Lords have said, in the face of the very real possibility that prices could rise by more than the anticipated 2% or so during the uprating periods covered by this Bill, the application of an arbitrary 1% cap, regardless of the actual rate of CPI inflation, provides total uncertainty for people living in poverty who will be affected by this legislation. That is a point that we have to repeat over and over again. At the very minimum, I believe that we have a responsibility to support the noble Lord, Lord Kirkwood, in order to inject a modicum of genuine certainty for those affected and a modicum of justice.

6.45 pm

Lord McKenzie of Luton: My Lords, we should be grateful to the noble Lord, Lord Kirkwood, and my noble friend Lady Lister for this amendment and the manner in which they have spoken to it. I start by reiterating that obviously our overall objective is to get rid of the 1% uprating cap throughout the Bill. Obviously, if we were successful, the protection that both speakers are seeking here would be unnecessary, but if we are not able to do that, we have to consider a range of mitigations to these cuts. The aspect identified by the noble Lord, Lord Kirkwood—the bearing of inflation risks much in excess of OBR forecasts—is certainly one that should concern us all. As it is, on the basis of the OBR forecast, by 2015-16 the 1% uprating will imply a real cut of some 4%. Depending on what happens to inflation, that real cut could be much higher. We have heard a range of figures from both speakers that could flow from that.

We need to recognise that these real cuts lower the base for whatever the uprating may be for the future. Studies point to the rate of inflation for what might be

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termed as essential items being higher than the overall rate, with essentials for this purpose including such items as food, heating, transport, fares and water charges. These are costs which are largely inescapable for low income households. The briefing we have had from USDAW records electricity prices rising by 3.9% and gas by 5.2% up to December 2012, with the poorest 10% of households spending 17% of their income on food, which rose by 3.8% in the period to December. As it stands, this Bill places the whole of the inflation risk on benefit and tax credit recipients, irrespective of the size of the risk. However, if inflation is less than 1% the Government can take the benefit of that and, if they so choose, uprate by less than 1%.

It was the noble Lord, Lord Kirkwood, and his noble friend Lord German who demanded of the Government at Second Reading that there should be no further cuts beyond those set out in the Bill. Of course they got a dusty answer from the Minister, but the problem is that we do not know the level of the real cuts which flow from this Bill because we do not know the rate of inflation. The point made by my noble friend Lady Lister is that inserting an upper rate of 3% should not be taken to imply that real cuts up to this level are acceptable, but that automatic cuts above that level are certainly not.

I hope that the noble Lord will not press his amendment at this stage—I think he said it was probing in nature—because we believe that the right course of action is to eliminate the 1% cap in its entirety. But if we are unable to do that on Report, the type of backstop being sought by this amendment is something which deserves our support—subject to only one exception, which is that the Minister can give assurances about how poor people are to be protected from inflation, a phenomenon over which they themselves have absolutely no control.

Lord Newby: My Lords, the effect of Amendment 6 would be that if inflation as measured by the September CPI was to rise to 3% or above in 2014-15 or 2015-16, Clause 1 would not apply. Amendment 10 would do the same for Clause 2.

As I set out earlier today, a key purpose of the Bill is to deliver clear and credible plans for our public finances. It is only through having these plans that we can maintain confidence and keep interest rates at near-record low levels. We have clearly stated our intentions on uprating policy for the next three years, but the plans for 2014-15 and 2015-16 are made possible only by this Bill. Adding conditions to the Bill would remove that certainty and weaken the credibility of our plan to reduce public spending and tackle the deficit.

The Autumn Statement operating decisions were taken on the basis of the Office for Budget Responsibility’s CPI forecast. As the noble Lord, Lord Kirkwood, explained, the OBR does not forecast inflation to reach 3%. The CPI forecasts for the purpose of uprating in 2014-15 and 2015-16 are 2.6% and 2.2%. The Bank of England’s Monetary Policy Committee is committed to maintaining price stability, which is defined by the Government as an inflation target of 2% as measured by the 12-month increase in the consumer prices index.

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Inflation is forecast by the MPC and the OBR to be above the 2% target in the near term but is forecast to fall back towards the target in the medium term. The inflation target is not set by the Governor of the Bank of England. The inflation target is set under the terms of the Bank of England Act 1997 on an annual basis by the Chancellor, and that will continue to be the case whoever the Governor of the Bank of England is.

As I said at Second Reading, and as the noble Baroness, Lady Lister, helpfully reminded me, these are forecasts and targets. External factors and unforeseen events can produce a different outcome—on the upside or the downside. Nobody can say with absolute certainty what inflation is going to be two years from now.

Baroness Lister of Burtersett: Both the noble Lord, Lord Kirkwood, and I referred to economists and people who are suggesting that the inflation rate might be higher. Can the Minister quote the people who are saying it might be lower?

Lord Newby: My Lords, economists say all kinds of things. For every economist who says one thing, I guarantee that I can find you an economist who says the other thing. There will be a new inflation forecast from the OBR at the time of the Budget. It would be completely inappropriate for me to speculate on what that might say and I am certainly not going to do so today.

As I said at Second Reading—and I repeat—we will continue to monitor closely the rate of inflation and its impact on the cost of living for families and the wider economy, as we always do. Again, as I said at Second Reading, the Government have taken action in response to the changes in the cost of living, including cancelling the January fuel price rise, providing further funding for local authorities to freeze council tax and, of course, for virtually everybody in work, implementing the largest ever increase in the personal allowance in April 2013.

The Government believe that what really matters to families is the impact of our policies as a whole and this will continue to be a key consideration for our policies in the future. However, that does not mean that we believe that we should add conditions to the Bill, and I am certainly not going to agree to that this evening. People have seen very significant restraint in their pay across the private and public sectors without the comfort of a safeguard against increases in inflation. Noble Lords have said a lot about certainty today. The truth is that no one has certainty, whether they are in or out of work, about their future real income. As noble Lords know, many people in the public and private sectors have not been getting pay increases linked to inflation and have been falling behind in real terms. This is exemplified by the difficult decision we took to freeze public sector pay at a time when inflation was rising to 5.2%. It is also borne out by the fact that, according to the latest figures, over the past year average earnings have risen by only 1.3%—not very different from the increase that is being proposed in the Bill. This means that on the best available forecasts—those produced by the OBR in November last year—even with the effects of this Bill, by the end of the financial

25 Feb 2013 : Column 903

year 2015-16, out-of-work benefits will still have risen faster since the start of the financial crisis than if they had been linked to average earnings, which many noble Lords are concerned about.

It is vital that we set out clear and credible plans to reduce welfare spending, tackle the deficit and secure the economic recovery. Adding conditions to the vital savings delivered by this Bill would remove that certainty.

Lord Kirkwood of Kirkhope: My Lords, I am very grateful to my noble friend. These are very difficult issues. I do not think that his response takes us any further forward from the Government’s position at Second Reading. I hope that he will do me the favour of reflecting carefully on what he has heard today. I am grateful to my noble friend Lady Lister for her wise counsel and support, as always.

I am seriously interested in this issue. I think it is a modest proposal. I will go away and think carefully about what my noble friend has said today but we may have to return to this at later stages of the Bill. On that basis, I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

Clause 1 agreed.

Amendment 7

Moved by Baroness Hollis of Heigham

7: After Clause 1, insert the following new Clause—

“Review of housing welfare benefits

(1) The Secretary of State must undertake a review of the current relationship between the amounts of housing welfare benefits in each local authority area and market rents in the same area during the relevant period.

(2) The relevant period in subsection (1) shall be each period of twelve months starting on 1 April 2013 and ending on 31 March 2016.

(3) A review under subsection (1) shall include an analysis of the effect of the levels of housing welfare benefits on the amount of private sector housing which is currently affordable by those in receipt of or entitled to such benefits.

(4) The Secretary of State shall cause to be published at twelve monthly intervals starting on 31 March 2014 a report of the evidence and conclusions of each review undertaken under subsection (1).

(5) The Secretary of State shall publish a response to each report under subsection (4) within three months of its due date, and shall take steps to amend the method used to uprate housing welfare benefits if there is shown to be a significant divergence between rent levels in the private rented sector and housing welfare benefits.

(6) In this section “housing welfare benefits” means housing benefit in the form of the local housing allowance or (as the case may be) the housing component of universal credit and “significant divergence” within the meaning of subsection (5) is to be defined in regulations.”

Baroness Hollis of Heigham: My Lords, as others have said, this is a modest amendment, so modest that I hope it is not only going to be acceptable to the Government but it might even be welcomed by them—you never know—as it only specifies how the firm undertaking given on 14 December 2011 by the noble Lord, Lord Freud, on Report of the Welfare Reform Bill will be followed through.

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The noble Lord, Lord Freud, agreed:

“If it then becomes apparent that local allowance rates”—

that is, private sector HB—

“and rents are out of step, they can be reconsidered”.—[

Official Report

, 14/12/11; col. 1324.]

After I pressed him, he agreed to,

“change the word from ‘can’ to ‘will’”.—[

Official Report

, 14/12/11; col. 1325.]

So the substance of this amendment has already been agreed. This amendment is merely about process. The commitment made by the noble Lord, Lord Freud, needs to be embedded in primary legislation with follow-up regs so that we can have an agreed timetable and we can all enjoy what the Minister referred to as the certainty that would follow—certainty for the markets, should they be so interested, for the public, for the recipients and, above all, of course, for Parliament.

The noble Lord, Lord Newby, and the noble Baroness, Lady Stowell, did not have the considerable and extended pleasure of being active in the Welfare Reform Bill—how wise of them—so it might be helpful to them and the House if I retrace our steps a little. Why, first in Committee and then on Report, did we press for this review, which the noble Lord, Lord Freud, agreed to? The noble Lord, Lord Best, had already persuaded the noble Lord, Lord Freud, of the need for a high-powered independent review of the full housing implications of the Welfare Reform Bill for families. I pay tribute to the noble Lord, Lord Best, for persuading the Minister, and to the noble Lord, Lord Freud, for the open-minded, evidence-based way he responded, which was to agree to the review.

None the less, a partial and particular problem seemed to many of us to persist: the connection of the private rented sector—PRS—rents and local housing allowance; that is, LHA. Why? It is clear that we have three housing tenures—owner-occupation, PRS and social housing—but we have only one housing market and that housing market works effectively and efficiently only if there is a rough match between supply and demand, which there is not. We can all see that the housing market is currently in crisis.

Burdened with student debt and unable to build a deposit for owner-occupation while and because they are paying very high rents in the private rented sector, people in their 20s are now living in that sector not for five years but for 15. It is no longer tenure of transit but a permanent tenure of long stay. Rather like in the 19th century, when people consumed more potatoes whenever their price went up, as more people unable to afford to buy remain in the private rented sector, the more they push up demand and push up rents—which absorb more of their income and make it impossible for them to afford a deposit, move out and buy. So the higher the rent, the longer you stay in the private rented sector.

7 pm

The result is that we are building fewer than 100,000 houses this year—the lowest number for 30 years—at a huge cost both to those needing homes and to those needing construction-related jobs. We need 250,000 houses—two and a half times the number being built.

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New households are forming three times faster than new homes are being provided, so the existing stock, especially in the PRS, soars in price. Those seeking to move out and up into an occupation cannot do so; those seeking to move out and sideways into social housing cannot do so either as local authorities and housing associations have seen their building programmes devastated—as in my housing association, in which I declare an interest as its chair.

An increased number of prospective tenants entering the PRS push up their rents as a result. This has a double whammy on the LHA bill—higher rents, pushed up by the greater number of those who cannot buy, while those same higher rents and reduced access to social housing increase the housing benefit bill for the neediest. Just at the point when government, understandably, wants to bear down on HB costs, it finds its efforts destroyed by the shortage of housing supply in the market. I sympathise, but the Government’s folly lies in their response. Housing, like potatoes, is not a discretionary item—its consumption cannot be reduced except by illegal overcrowding in illegal slums—yet it is being treated by government as though it were rather like going to the cinema. People cannot choose not to have any housing unless they sleep rough or in cars or on cathedral doorsteps. They must live somewhere and must pay for it. The Government, instead of seeking to increase the supply of housing substantially—which is the only answer apart, possibly, from rent control—have chosen to drive down the HB bill by fixing it to below average rents.

Until now, HB has always been tied to real, actual rents, precisely because rents vary from place to place and by type of property. Local housing allowance was in each area placed at 50% of the median local rent and adjusted monthly—that is how sensitive it was to local rent levels—so that half the houses or properties in the private rented sector should be available and affordable to a tenant on HB. The Government have now brought that 50% figure down to 30%—that is, less than a third of properties will now be affordable—believing without any evidence, and we have pressed the Minister on that on many occasions, that this would press down HB and rents would fall. They have done so because they seem to think that it is a tenants’ market. They have no evidence for that, understandably, because the evidence does not exist, and because it has not been a tenants’ market—it is not and it will not be. If housing-benefit tenants dominated the private rented sector then we would have seen rents begin to fall during the past year. But they have not, and they do not, because tenants on HB are only 20% of the PRS, so they do not have the leverage that government attributes to them. Tenants are now being punished for the fallacies, failures and folly of government policy. Do you remember those notices in landlords’ windows: “No Irish, no blacks, no dogs, no DSS”? I do. Well, that is reappearing. According to the National Landlords Association, nine in 10 private landlords say that they are reluctant to accept HB tenants because they do not have to. With five to eight tenants after every flat, it is a landlords’ market, not a tenants’ market, which is why cutting HB will not do anything to help drive down the bill.

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By tying HB to 30% instead of the 50% median, all government is doing is subsidising the landlords of the least salubrious, most squalid property. However, HB tenants will now, Lord of the Flies style, compete savagely to occupy that property. Complain and you are out.

That is bad enough, but we have a second whammy occurring. Not only is the proportion of PRS property available to HB tenants being nearly halved, but HB will no longer rise even sufficiently to meet their needs. HB will in future be tied to inflation—this year, CPI—and not as in the past to what is happening to rents. For the first time ever, in other words, HB is being detached from what is happening to real rents in the market, whether at 50% or 30%. In the past decade, however, PRS rents have risen in real terms by more than 11%. As rents in London are rising by 7% a year and by 3.4% elsewhere, and as CPI is currently running at 2.7%, then HB, which is supposed to cover 30% of available properties, will instead cover only 20% in about five years and perhaps 10% or less in 10 years. Shelter estimates that in a third of the country the private rented sector will be inaccessible to all would-be tenants on HB. A third of the country will become a no-go area for tenants on housing benefit.

It gets worse. Local housing allowance will be uprated by CPI this year—as the Minister said, the Bill does not cover it this year—but thereafter, for the next two years, it will be uprated under the Bill by only 1%. London rents are rising by 7%. The Government’s own impact analysis expects rents to rise overall by 4% while the benefits to fund it are rising by only 1%, and these are benefits fixed to only 30% of rent levels.

The result of this double whammy is an increase in the number of people needing housing benefit as rents soar and an increase in the number of people finding that even the housing benefit that they receive will not cover the ever smaller proportion of properties that they can access to rent. Rents will be too high, housing benefit too low and landlords too reluctant. What is the result? Either tenants will seek to make up the difference out of their benefit income, thus increasing severe child poverty, or they will not. If they do not, they may face eviction and end up homeless. If they have children, they may ultimately end up in bed and breakfast before—with the lack of available social housing—probably being recycled into the private rented sector for the same sorry cycle to be repeated another year down the line. As all the housing dominos fall over, misery cascades down the tenures, and the Government are choosing for this to happen because it is a policy choice—not a necessity but a policy choice.

Homelessness is already on the rise, having increased by 22% in the past two years, and so is rough sleeping, which is up 31% in the past two years. All this is happening before the indecent bedroom tax takes effect for some of the sorry occupants of the private rented sector. The Government may tell us that a third of the expected savings from all this will be recycled to help those areas with the highest rents, and that is welcome. However, as with the discretionary housing allowance, they will end up trying to cover gaps and holes in

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provision which I estimate will be five or 10 times larger than can be covered. Hence I offer this modest amendment.

The noble Lord, Lord Freud, accepted that that there could be a problem, though he argued that he expected the policy to work. However, he was open-minded enough to agree that there should and would be a review of what was happening to market rents and the adequacy or otherwise of local housing allowance to ensure safe and secure housing for those in need.

If rents and housing benefit diverge significantly, the Government must change the method of operating. That was the policy intent, and that was what the noble Lord, Lord Freud, accepted. I ask the Minister not whether the Government agree with the policy—they have already agreed the policy intent of this amendment—but how their delivery of the commitment of the noble Lord, Lord Freud, is to be secured. I beg to move.

Lord Best: My Lords, I shall speak to Amendment 12A, which entirely supports Amendment 7, so eloquently moved by the noble Baroness. In fact, I think that I prefer her speech to mine. However, my amendment has a slightly different take on the same set of issues, as it has been prepared by the Residential Landlords Association, which represents its member landlords. I have no interest to declare as a member of any landlords’ association, but I draw attention to other housing interests in the register.

It is important to note that the amendment’s call for a review of the impact of capping rent increases in local housing allowances at 1% next year, rather than at the consumer prices index level, comes from the landlord side as well as from those excellent bodies Shelter, Crisis and the others representing tenants. If the case made from the perspective of tenants does not win the argument, perhaps the points made by the landlord representatives will prove convincing.

Why is there a need for a special review of how rent increases in the private rented sector in comparison with increases in help with rent from local housing allowance are likely to work out in the years ahead? I suggest that there are two distinct reasons why the capping of local housing allowance at 1% per annum irrespective of levels of real rent increases in the marketplace is critical. First, the local housing allowance can represent half or even more of the total benefits received by those out of work and can represent most of the support which many of those in low-paid jobs receive from the state. That means that there are huge repercussions for tenants where a gap opens up between the actual rent that must be paid and the local housing allowance received to cover it. Cutting housing support means the tenant finding the money to meet the shortfall on the rent out of income intended for food, heating and other essentials.

High housing costs greatly increase the level of child poverty—the issue of concern to my noble friend Lady Howe. Department for Work and Pensions statistics analysed by the Joseph Rowntree Foundation this month show the child poverty rate in England at 19% before housing costs are factored in, but at 28% afterwards. Where housing costs are lower, that

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huge impact does not show up. In Scotland, for example, the child poverty rate is the same as for England excluding housing costs, at 19%. It rises to 21% when housing costs are taken into account, far short of the 28% figure for England because of England’s high housing costs. Help with housing therefore makes a very real difference to the number of households in relative poverty.

Not providing enough money to pay the rent for those who rely on income from benefits simply means a cut to the other benefits that they receive. For tenants in the private rented sector, the reduction in living standards in real terms resulting from the Bill could well be doubled: first, from the gap in direct help with income between 1% and whatever inflation turns out to be and, secondly, from the gap in housing help between 1% and whatever rent increases over the next three years turn out to be.

Secondly, there are consequences where support for housing costs is cut not only for those receiving benefits but for the housing market—the availability of accommodation. Obviously, it affects the attitude of landlords towards providing accommodation for those on modest incomes if they are subject to tough rent controls. In most parts of the UK, there are plenty of other people desperately keen to find a rented home—students, mobile single people who share, and, as we know from excellent new research by the Building and Social Housing Foundation, increasing numbers of working families with young children who would have bought a home in times past but now cannot afford the deposit and mortgage costs. The acute housing shortages in so many parts of England mean that landlords are most unlikely to reduce rents to assist those in receipt of local housing allowance. Rather, as the Residential Landlords Association survey cited by the noble Baroness, Lady Hollis, shows, landlords will avoid lettings where LHA rent controls could apply, and will go for lettings on the open market.

7.15 pm

Gradually squeezing out that part of the rented sector puts more pressure on the social housing sector—housing associations and councils. Of course, that stock was diminished by right-to-buy sales of council housing. The building of social housing in the past 30 years has been at one-quarter of the level of the preceding 70 years. Now those landlords have massive waiting lists. There are consequences for the taxpayer if private landlords do not house lower-income households: the cost to local authorities of stacking families in temporary accommodation—hostels and bed and breakfast hotels. One London borough now has 2,320 families in temporary accommodation. In 2010, the figure was 610. That is an increase of more than 350% in less than three years, and expenditure will escalate wildly if we have to return to using those temporary solutions, including bed and breakfast hotels, at costs far higher than for private rented sector renting. I do not need to add that the social consequences for families of homelessness and having no fixed abode are horrendous.

As from April 2012, a cap on rent increases at the consumer prices index level was introduced in place of using the retail prices index or, indeed, the increase

25 Feb 2013 : Column 909

applicable in the wider market. That change came in combination with other restrictions on rents eligible for the local housing allowance. The noble Lord, Lord Freud, explained that the Government’s hope was that landlords would set rents that reflected those new constraints, but he made clear that the cap on rent increases at CPI levels would be for just two years initially and agreed, as the noble Baroness, Lady Hollis, explained, to review the position at that point to assess any impact on the rental market.

Sadly, although we are less than one year into the new regime, it is clear that the measures are not driving down rents. Rents have been rising in most areas by more than RPI inflation, despite the tough downward pressure on rents through LHA caps. It seems extremely unlikely that the Bill’s extension of the controls—not just to extend the limitation of increases to CPI levels beyond two years but to enhance the squeeze by the 1% limit, probably well under half the likely CPI increases—for three years makes a requirement for a thoroughgoing review much more significant.

The amendment, echoing the sentiments expressed by the noble Baroness, Lady Hollis, would ensure that that review will take place and that the Government will be encouraged thereby to act on the results. If present trends towards homelessness and, consequently, higher costs are revealed, the Government will have the mechanism to lift the 1% cap.

I have one last point. Can the Minister explain the Government’s intention in relation to the special case of London? We have been led to understand that one-third of the gains from the 1% cap on LHA payment increases are to be recycled to support the higher rent increases in the London area. We know that London rents have been increasing by twice the level of inflation—6.7% last year, for example—and excluding London from the 1% cap would ease pressures there. However, it would be more than helpful if the Minister could explain how this arrangement, which would of course make the housing position of the capital even further out of step with the rest of the country, be implemented in practice.

I am sure that we should take note when landlord groups and tenants’ groups are unanimous, and I look forward to hearing from the Minister on whether her department, not just to save tenants but to prevent further diminution in supply of accommodation, with its costly consequences, will be able to respond positively to my amendment.

Lord Bates: My Lords, I wish to comment on the amendment, in which I find a lot to support, particularly the idea of a review. Before I do so, I owe the noble Lord, Lord McKenzie, an apology because in my earlier intervention I made a point about higher-rate tax and said that it had decreased, when of course it had increased. I apologise for impugning his tax-raising credentials. It was a low blow that was not intended. I take this opportunity to correct the record and hope that he might accept my apology.

This is an interesting amendment to consider because we are dealing with a significant crisis. There is no doubt that housing benefit itself needs to be focused

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on: how it has increased from roughly £11 billion, circa 1997, to a predicted £25 billion in 2015. Clearly, no one could sit in the Treasury, not have a view on that trend and not say that it needs to be looked at carefully.

My second point is that private rents have been increasing at an alarming rate when compared with the rest of the housing market. One needs to consider the increases, which, according to the National Housing Federation, have been something like 35% over the past three years. Over that same period, we have seen an 86% increase in the number of those claiming housing benefit, from 485,000 to 905,000. This is happening at a time when, outside certain sections of the London property market, house prices are actually falling. This is happening when interest rates are at historically low levels, and mortgage rates are at levels whereby 1.99%, two-year fixed rates are being offered. There are very low mortgage rates while house prices are falling, yet at the same time private rents are increasing by not only the rate of inflation but in many cases by twice the rate of inflation. It does not take a great economist—and I note that there are some in the Chamber—to work out that there might be some correlation between housing benefit and a potential inflationary effect on the private sector. I therefore understand that that is one of the issues that my noble friends would look at with some care.

I also note that one of the solutions to the problem is to ensure that there is a greater housing supply through housebuilding. This is an area on which I would pitch to my honourable friend in his pre-Budget purdah and ask him to reflect on how additional funds could be made available. I do not say that the Government have done nothing in that regard. They have put up £10 billion in guaranteed loans to try to stimulate the market, and they have introduced shared ownership schemes through FirstBuy and NewBuy to try and increase house purchase. That is an important element. We do not want, as a society and for the health of our society, to divert people into a life in private rented housing. We want to encourage people to have an ownership stake in society and to own their own home. For them to do that, there need to be enough homes coming on to the market.

There is a competition because, as people are coming on to the market and wanting to own their own home, investors who are experiencing low rates of return in other asset classes are finding, according to Rightmove, that there is a yield of 5.8% on private rented properties—the figure is 6.5% in London—which represents extraordinarily good value in the present market. Capital is therefore flowing into the buy-to-let market, rather than the build-to-buy market. There needs to be some step back from this approach and one needs to ask what is actually happening and how it all connects with changes in benefits.

We are, I assume, taking an approach whereby we believe that capping the local housing allowance and housing benefit will lead to a slowing down of the increases in rents. The noble Baroness is shaking her head, but that is the assumption. We have certainly seen how rents have increased when housing benefit and local housing allowance have increased. Perhaps

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we should test this out, but that is difficult because we are talking about affecting lots of very vulnerable people. However, there is a case to be looked at. Some annual or periodic review of how this is working and impacting on the housing market would be welcome, and I encourage that part of the amendment. I am delighted to note that my noble friend Lord Freud had been supportive of the idea, and I very much hope that my colleagues on the Front Bench will also be supportive.

Finally, perhaps I may take this opportunity to raise one further question about the way in which benefits are to be paid to the tenant rather than to the landlord. I know that various demonstration projects are undergoing trial in Edinburgh, Oxford, Shropshire, Southwark and Wakefield involving direct payment, and that they have some time to run, but I should be grateful if my noble friend in her response can provide some assessment of how they are going. There are some concerns that paying benefits directly to tenants, particularly when that may represent the largest component of their income, might put them in an invidious position, and some people might get into greater debt as a result. I know that such schemes are being trialled and I should be grateful for some comment from my noble friend on the Front Bench in her winding-up speech.

Lord McKenzie of Luton: My Lords, this has been a good but short debate, as any debate around amendments of my noble friend Lady Hollis and the noble Lord, Lord Best, on housing would be. You cannot do better than that in your Lordships’ House. I am grateful to the noble Lord, Lord Bates, for his earlier comments. I thought that he had got it the wrong way round but was not quite sure whether I had misheard. I think that my problem is that I am not confident to challenge him; however, I am grateful for his clarification.

My noble friend and the noble Lord, Lord Best, are on the same page on this matter and we are happy to support the amendment, which calls for a review of housing welfare benefit, especially regarding the affordability of private sector housing. My noble friend and the noble Lord made a particularly powerful case in their analysis of the consequences of a growing divergence between levels of private sector rents and levels of support. We know and recognise why there is a growing divergence—the 30th percentile, the individual cap, CPI uprating, and now the proposed 1% cap. It will be made worse by direct payments when universal credit comes in. There are certainly causes of the pressure on rents, with growing numbers of households and insufficient new builds, but no evidence—indeed, quite the reverse—that the restrictions on housing support are driving rents in the opposite direction. It remains to be seen, as the noble Lord, Lord Bates, suggested, whether there will be any slowing down with the further ratcheting down of housing support.

7.30 pm

Another consequence of the Bill is that there is a growing gap between rent levels and support. I think the noble Lord, Lord Best, made this point at Second Reading. That has to be met from income which is

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itself, as a result of this Bill, coming under increasing pressure because of the real-terms cuts. The amount of housing support in the private rented sector has been determined by family type and the rent distribution in the local area. In the future, the link will be with the historical levels of local rents; that seems a slightly illogical basis on which to build a sensible system. The demand of my noble friend and the noble Lord, Lord Best, for a review of the current and changing relationship between local market rents and levels for housing support is no more than a reasonable search for the data to monitor what is going on. We hope that, on the basis of the commitment that the noble Lord, Lord Freud, has already made, there will be no difficulty with this so far as the Minister is concerned.

I would like to pick up a point that the noble Lord, Lord Best, raised about the uprating for 2014-15 and 2015-16 at a maximum of 1%, which is being dealt with by orders under the Housing Act 1996. As I think has been stated, 30% of the saving under this measure, or £140 million, will be made available to help with particular pressures on affordability. The noble Lord, Lord Best, asked whether we can get some more information on that and I should be grateful if the Minister could give us some further detail. If £140 million represents 30% of the Government’s saving from this measure, I compute that the total gross saving—the total further amount being ripped out of support for housing—is something to the tune of £500 million.

I conclude by emphasising the point that has been made about what happens when there is pressure on the private rented sector and social housing, and who bears the consequences of that. There was a report in the Guardian on 18 February about the use of bed and breakfast to house homeless families beyond the legal time limit, which has risen by 800% since this Government took office. It said that,

“a third of the country’s councils”,

have unlawfully housed homeless families in bed and breakfast,

“for more than six weeks since government took office”,


“local authorities across England … spending on average up to £650 a week to keep people off the streets”.

The report went on to say:

“These emergency measures are expensive for the taxpayer. Councils are spending in some cases more than a thousand pounds a week to house people in hotels. Tory-run Wellingborough spent £1,961 in one week for a family. Lib Dem-controlled Eastleigh”—

it was written this side of Thursday—

“spent £1,932 for a family with seven children for a seven-day stay. Labour’s North East Derbyshire district council shelled out almost £700 for a week. Tory-run Dartford said it spent £616 for one week for a family of five”.

If there are consequences for the taxpayer, there will certainly be consequences for those individuals and families who have to endure bed and breakfast accommodation until we begin to get this housing policy right. The review that is requested by these amendments will be a step along the way and I would hope that the Government will fully support it and commit to delivering on it.

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Baroness Stowell of Beeston: I thank noble Lords very much for this debate. I should say at the start that although Amendment 13 is caught in this group, as I covered quite a bit of it in the previous discussion I will not go over it again, except to say that since the noble Lord, Lord Best, referred to the personal allowance of housing benefit, it is worth me repeating this for clarity’s sake. First, eligible rent will continue to be wholly covered by housing benefit for those who continue to satisfy the income test for all income-related benefits, including housing benefit. Secondly, renters in low-paid work will still be better off than they would be on out-of-work benefits. Work will continue to pay. Although that relates to the previous discussion, I wanted to say that again because the noble Lord, Lord Best, had raised it.

I turn to Amendment 7, tabled by the noble Baroness, Lady Hollis, and Amendment 12A, tabled by the noble Lord, Lord Best. As they have explained, their amendments seek to specify how the Government should monitor and review the uprating of local housing allowance. It is probably worth my saying from the outset that, as noble Lords know, I am new to this policy area and on housing I very much bow to the long-term experience and expertise of the noble Baroness and the noble Lord. I know that they have a huge amount of knowledge in this area.

Noble Lords should be aware that the uprating of local housing allowance is not covered by this Bill. Reference has been made to that; it is made under separate secondary legislation, providing independent rent officers with a remit to set rates under specified rules. None the less, I will try to respond fully to the issues that these amendments cover. Now might be a good point for me to reconfirm a point that I made in response to the noble Baroness, Lady Hollis, about personal allowance in LHA. What I said to her in response to the previous debate is correct: the local housing allowance simply sets the local maximum for eligible rents, and calculation of housing benefit to meet that eligible rent is not part of the Bill.

Baroness Hollis of Heigham: Can the Minister help me on the point that she made slightly before saying that it was not covered by the Bill, et cetera? It is certainly the case, is it not, that housing benefit and local housing allowance in the forthcoming year will rise by CPI? It is not caught by the 1% figure that other benefits are but thereafter, for the following two years, it will be capped by 1%. Is the Minister saying that that will not happen, or that it will but that it will done through the route of looping it through advice or instructions to rent officers by regulations?

Baroness Stowell of Beeston: Absolutely; it is the second. I am not disputing the fact that it will be capped at 1% for 2014-15 and 2015-16, but that will not be done via this Bill. That is just a point of process.

As noble Lords will know, the total bill for housing benefit has doubled in cash terms over the past decade and if unreformed by 2014-15, it would cost us more than £25 billion. This is why we are taking a number of measures to reduce housing benefit expenditure, including limiting increases in the local housing allowance to 1%

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for two years from 2014-15, as we have just discussed. This change will make a crucial contribution to the essential deficit reduction strategy but it will do more than that. As the Government are a major player in the private rented market, it will also exert downward pressure on rents—a point made by my noble friend Lord Bates. Where rents are increasing rapidly, there should be no presumption that the taxpayer should pick up the bill.

Noble Lords referred to the need to monitor affordability of accommodation for benefit claimants during the period where the limits are in place. The noble Baroness, Lady Hollis, paid tribute to my noble friend Lord Freud and his response when this matter was discussed during the passage of the Welfare Reform Bill. I certainly agree with what she described; I also agree with his decision. That is why we have already put in place a strong monitoring and evaluation plan. I reassure noble Lords that this is in place in light of that discussion that took place during the passage of the Welfare Reform Bill. My noble friend has honoured his commitment made at that time.

The Government have introduced a number of changes to the way that local housing allowance rates are calculated, including a cap on rates.

Baroness Hollis of Heigham: I am sorry to interrupt the Minister again but, before she goes on, she is saying that she confirms that the noble Lord, Lord Freud, made the commitment and that that commitment is now in the process of being delivered by a current review. Is she referring to the original review that was established by the noble Lord, Lord Best, is she saying that the terms of reference of that original review have been extended or, thirdly, is she saying that there is a further review for this particular aspect in order to deliver the pledge made by the noble Lord, Lord Freud, that he would keep under review any possibility of significant divergence between market trends and housing benefit?

Baroness Stowell of Beeston: I hope that as I continue to respond to the debate I will answer the question that the noble Baroness has just asked.

We have commissioned a consortium, led by Ian Cole of Sheffield University, to carry out an independent review of these changes. The interim report is due to be published in spring this year and the final report in early 2014. In addition, to monitor the specific effects of LHA uprating we have put in place a process for publishing on an annual basis a comparison of local housing allowance rates and the 30th percentile of market rents.

The first annual publication of these data took place in November last year and was carried out independently by the rent officers who set LHA rates and collect the most authoritative data on market rents. The noble Baroness, Lady Hollis, asked for some evidence. The published data show that only one-quarter of LHA rates have been subject to the CPI limit and more than one in 10 rates have actually fallen in line with local rents, to answer the point that my noble friend Lord Bates raised. At this moment we are not seeing a general divergence between LHA rates and market rents.

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The noble Lord, Lord Best, and the noble Baroness, Lady Hollis, referred to several different potential outcomes from the changes that we have made. A couple of things were proposed, suggested or estimated during the passage of the Welfare Reform Act, one of them being a suggestion that 42% of landlords would scale back on housing benefit tenants. The reality is that the housing benefit caseload has actually risen in London by 5% in, I think, the past year.

The noble Baroness, Lady Hollis, suggested that no properties would be available to benefit claimants. Private sector landlords are not turning away housing benefit claimants. Since April 2011, when we introduced our first reforms of the LHA, the PRS caseload, as I just said, increased, and that includes London and the south-east.

The noble Baroness also made reference to rent control and suggested that that might be the way forward. We absolutely dispute that; we say that it would not make more homes available at rents that people could afford. We experienced regulated rents in the private sector some decades ago and they shrank from 55% of households in 1939 to 8% by the late 1980s.

Baroness Hollis of Heigham: I was not recommending rent control. I was merely saying that if you are not going to increase the supply and rents continue to rise—and all the evidence is that they are—then that is one possibility. It is not one that I support because I would much prefer the Government increasing the supply of stock.

Baroness Stowell of Beeston: I think that I have just provided the noble Baroness with some evidence to show that rents are not actually increasing in light of the changes that we have made. Rents are actually coming down. We are having some success in downward pressure on rents.

We have taken care to retain some flexibility to react if problems with affordability emerge along with the need to take action should significant divergences emerge between LHA rates and market rents. We have set aside £140 million over two years from 2014-15 to help people most affected by the new 1% limit. The noble Lord, Lord Best, referred specifically to effects in London, and I can confirm that the funding that has been set aside will be there to address areas precisely such as London and the south-east. Our intention is to increase the local housing allowance rates by more than 1% in areas where rent increases are causing a shortage of affordable accommodation. Rather than specifying the details in legislation now, however, we plan to develop our approach in spring this year before making final details available in the autumn so that we can reflect the views of key stakeholders and take account of the most up-to-date evidence before making decisions.

7.45 pm

My noble friend Lord Bates made the point that it is important to ensure that we reflect at all times that when we are talking about housing we are talking about people who are often very vulnerable; the fact that they are in this kind of housing means

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that we should be very conscious of the effect of our decisions. I hope that I have been able to reassure him that the measures that we are taking very much address that kind of concern, but we are committed to making savings from this measure until 2015-16. Subsequently, a future Government have the opportunity to reconsider the policy design in view of the balance between local housing allowance rates and market rents.

The noble Baroness, Lady Hollis, and my noble friend Lord Bates spoke about increasing the supply of housing. I shall respond to a few points on that. First, the Government have committed £4.5 billion, along with £15 billion of private investment, to deliver 170,000 new affordable homes over this spending review period. Almost 58,000 affordable homes were delivered last year. That is one-third more than the average delivery in the 10 years between 2000-01 and 2009-10. Secondly, the Government will provide up to £10 billion in debt guarantees to support private investment in the private rented sector and in new affordable housing. Thirdly, in last year’s Autumn Statement the Government announced a new local infrastructure fund of up to £474 million to support key projects. This includes accelerating delivery of large housing sites and enabling quicker disposal of surplus public land for new homes.

In the wider context of the changes that we are making to housing benefit, my noble friend referred to direct payments and how the trial is going in terms of its impact on claimants. I would say two things in response to that. First, these are very early days for the trial and it is too soon to give a properly informed response to that question. However, there are certainly no immediate signs of any serious problem. It is worth reminding the Committee that this change is part of the wider reforms of the welfare system where we are trying not only to help people to prepare and, for those who are out of work, return to work but to help people to take control of their own finances. While I understand the risks that people point to in making that change, we should not ignore the importance of ensuring that we give people the opportunity to have control of their own budgets. This is an important initiative.

I hope that I have addressed the points raised by the noble Baroness, Lady Hollis, on Amendment 7, and the noble Lord, Lord Best, on his Amendment 12A, and have demonstrated to all noble Lords that our existing plans show that we are ensuring that there is proper monitoring and review of the arrangements we have introduced, and that it is not necessary to include these in the Bill.

Baroness Hollis of Heigham: My Lords, I thank all noble Lords who have contributed to this small debate. The noble Lord, Lord Best, emphasised that housing benefit was a high-ticket item. He is right, so any percentage cuts to that benefit are highly significant in terms of the income as it affects tenant recipients. He also emphasised, and he was absolutely right to do so, the folly as well as the cruelty of sending thousands of families into higher cost temporary accommodation. I agreed with every word he said—I hope that that does not damn his speech.

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I thank the noble Lord, Lord Bates, for a thoughtful contribution to the debate supporting the review. I am delighted that he agrees with the commitment of the noble Lord, Lord Freud, that such a review is desirable and necessary. Contrary to what the Minister was saying, he is right that private sector rents are alone among the housing triple tenures in rising fast. They are rising faster than inflation. That, as I tried to argue, means that it is impossible to leave that sector because by paying those higher rents you cannot afford to save for the deposit that takes you out of it. In turn, that raises rents still higher because nobody is leaving that sector but other people are trying to enter, which makes it even more impossible to leave it in the future. It becomes a vicious upward spiral in which people are trapped. The noble Lord, Lord Bates, is absolutely right that that is exactly what is happening. Poorer tenants are also faced with that higher increased pressure on rents with only housing benefit to help them cope with it, and that housing benefit is being cut three times over—first by being connected not to the 50th percentile of rents but to the 30th percentile, secondly by being capped by CPI for the forthcoming year instead of actual rent levels, and thirdly, in the subsequent two years, by a further cap of only 1%, which the Minister has confirmed to us. That means that more tenants will follow the desperately sad route that the noble Lord, Lord Best, emphasised.

As my noble friend Lord McKenzie said, quoting the Guardian article that I missed, that will mean more families with children being uprooted and spending longer periods in bed-and-breakfast accommodation. Many years ago, as a former chair of a housing committee, I saw how long it took those children, who were often traumatised by those events, to get over them. They had had to move home, move school and lose connection with their friends. At the age of seven or eight, they were reverting to bedwetting and the rest. That is what we are now going to be imposing on thousands more children because of the folly of this policy.

Finally, I come to the Minister’s comments. She emphasised that she thinks the policy is working and that according to her figures rents are already being driven down as a result. I listened carefully and I would very much like to see the evidence she has because it runs contrary to what the noble Lords, Lord Bates and Lord Best, and the National Landlords Association are saying; it runs contrary to my brief from Shelter and my experience of the housing market. It may be that the Department for Work and Pensions has a unique insight and extra special information denied to the rest of us, but it does not conform to what I know. Certainly it is the case that so far the CPI cap has applied for only something like 10 months of the current year. None the less, for the years thereafter—not next year, but two years thereafter—it is going to come down to 1%, so there is going to be an accelerating effect, a depression, on rent levels as a result of the rent benefit and housing benefit caps arising from the Government’s policy.

The Government are banking absolutely everything on the fact that by pressing and cutting down on HB, even though only 20% of those in the market have HB,

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you will reduce the overall level of rents and therefore tenants will not suffer. There is not a shred of evidence that I have seen or that has been offered tonight to support that contention. The Minister is gambling on the lives of children going into bed-and-breakfast accommodation in the ideological hope that 20% of those in the market can affect the rents that the other 80% will pay. They will not do it because landlords do not have to let, and they will not let, except those who have substandard accommodation that people who do not need housing benefit will avoid. That is a form of Russian roulette that none of us should be party to.

I hope that the Minister will write to me with her evidence because it does not conform to anything that I am aware of. In the light of that, I would like to reflect on what she has said and on what evidence she can send me. I will also reflect on whether what she is saying means that the Government are continuing adequately to keep under review the possible divergence that, from all the evidence we have, is already beginning to occur between rents and housing benefit. I beg leave to withdraw the amendment.

Amendment 7 withdrawn.

House resumed. Committee to begin again not before 8.55 pm.

Health: Anorexia

Question for Short Debate

7.55 pm

Asked By Lord Giddens

To ask Her Majesty’s Government what steps they are taking to reduce the prevalence of anorexia and other eating disorders.

Lord Giddens: My Lords, what a pleasure it is to be able to introduce this debate. I shall start by saying how I got interested in anorexia and other eating disorders some while ago. It happened one Sunday when I got two newspapers—I was feeling flush at the time—and each had a colour supplement. On the front of one colour supplement there was a starving black teenager in Africa, emaciated and on the point of death, suffering from malnutrition. On the front of the other colour supplement there was a starving white teenager in the United States who looked identical in terms of her emaciated frame. It seemed to me that the dynamics of those two things must be completely different. In the first, there was a person dying from traditional starvation: not enough food to go around; in the second, there was someone dying in the middle of probably the first society in world history where there is far too much food to go around.

After that, I started looking fairly intensively at the history of anorexia and other eating disorders, especially bulimia. It is very interesting that there is a history. It goes back some way. We do not know the details, but anorexia seems to have been very uncommon historically and was mainly associated with fasting to death, especially female saints who fasted to death in pursuit of the greater glory of God. Bulimia has some analogues in

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history, but it was not even named until the 20th century. You can say that anorexia, bulimia and other eating disorders are essentially, in their mass form anyway, illnesses of our time. They started to spread rapidly in the 1960s and from beginnings in the industrial countries they then spread around the world.

As everyone knows, anorexia and bulimia are most frequent among teenage girls, but interestingly there is now a kind of extension through the lifecycle. There are children as young as seven who are already suffering from anorexia symptoms and there are cases of women in their 70s suffering from anorexia and bulimia combined. Male eating disorders have been called the hidden epidemic or silent epidemic. They are not out in the open to the same degree, although there is stigma associated with all forms of eating disorder. The latest stats we have on the UK suggest that one in five children in this country with a serious eating disorder is male, which is a substantial and seemingly growing proportion.

Anorexia may have a physical basis, but this cannot explain the spread of these phenomena. You find an interesting thing in some parts of the world where, in the same society, some people are starving to death from classical starvation in remote regions, and in the affluent cities people are starving from anorexia. It is a global phenomenon. This cannot be explained by physical reasons. Why did it happen?

I think that it is primarily because of the rise of supermarket culture; I do not simply mean the rise supermarkets themselves. Once you have the rise of supermarket culture, you have all forms of food available. You have to choose what to eat, and there is a sense in which everyone has to be on a diet, with a barrage of information about their bodies, their health and so forth. In the case of young women, as we know, they are also bombarded by images of what a desirable body is like. These are powerful images. We now see through the advent of the internet very young children picking up the image of the slim body as the embodiment of attractiveness. These two things come together and, like many other aspects of our culture, they develop an addictive, compulsive character. Anorexia is a compulsive cycle from which there is often no escape without specific medical and other help.

In our society we have a variety of food problems and problems with the relationship between food and the body. Therefore, anorexia and bulimia are the tip of the iceberg in terms of what has become normality. In our society, over 90% of women have been on a diet at some point in their lives. The figure for men is now over 50%. Interestingly, over 60% of women who have no history of weight problems are on a diet, which shows how extensive these characteristics are. We are dealing with a pervasive phenomenon in our society, rooted in a compulsive relationship to food. There is a sense in which, at the other end of the continuum, all of us have to wrestle with what to eat and drink in relation to our health.

Anorexia, as we know, can be treated. Bulimia can be treated but normally demands intensive treatment. About 20% of female anorexics who are diagnosed before the age of 20 die before the age of 40. It is a lethal affliction.

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I ask the Minister four sets of questions. First, do the Government have a coherent policy on anorexia and eating disorders? If so, what is it? I found it difficult to locate, having been through the government websites. Do the Government recognise the connections between eating disorders and obesity? One linked factor is binge eating, which is characteristic of bulimia and some forms of obesity; all problems of the body, plainly.

Secondly, what are the Government doing about male eating disorders specifically? These still do not receive the same degree of attention as female eating disorders. One of the main agencies involved in analysing male eating disorders says:

“Nationwide, there is simply a massive deficit in programmes that specialise in men with eating disorders”.

Are the Government taking some steps to address this?

Thirdly, what is the Government’s attitude towards pro-anorexia and pro-bulimia websites? As the Minister doubtless knows, they have proliferated in recent times. They are connected with the social media whereby these ideas become propagated. Essentially, these websites argue that to be extraordinarily slim is a desirable thing, and they do so in a forceful way. The websites themselves can become addictive. There are many precepts and so forth on these websites, but I will mention just one. Supposedly, Kate Moss once said:

“Nothing tastes as good as skinny feels”.

You can see the lethal impact that that might have on a young person who is absorbed into these websites. Is there some way in which the Government can intervene to help control them and the impact they have, especially on young women and, as I have said, increasingly, young men?

Fourthly, what is the Government’s reaction to the case of Laura Willmott which has been extensively debated in newspapers this weekend? She suffered from anorexia and died recently aged 18. She was apparently making good progress under care. When she turned 18 she was treated as an adult and essentially fell through the system. A headline from one of the Sunday papers read:

“At 17 years and 364 days, she is a sick child. At 18 the NHS can watch her die”.

What is the Minister’s reaction to that?

8.06 pm

Lord Alderdice: My Lords, I express my appreciation for the noble Lord, Lord Giddens, obtaining this debate. I note that there have been a number of debates on this issue; there was a debate recently in Westminster Hall at the other end of the Building. It is something in which I have been interested for some time. It is almost 30 years since I first published a paper on anorexia nervosa. At that stage I was of course interested in the psychological aspects of things: in individual and family therapy, and cognitive behavioural therapy. The papers I was publishing were on zinc, trace elements and gastro-intestinal hormones in anorexia nervosa, trying to see if we could understand a little better this devastating disturbance and the other associated eating disorders to which the noble Lord has referred.

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Of course, as the noble Lord rightly says, these disorders did not appear in the past century. In fact, the first description of the disorder was in this city by Doctor Morton in 1689. He described a patient he had treated five years earlier: a young lady who had a disorder if this kind and died after a few months. The name itself was described by William Gull in London in the late 1800s. It is not a recent phenomenon, but it has become much more pervasive.

What is really striking looking back over the past 30 and more years is how little has changed except for the prevalence of the disorder. Most of the ways we have of understanding and treating these disorders have not changed terribly much. We have not really come much closer to understanding in an evidence-based way what we are dealing with. We can see some of the resultant phenomena. I came to the conclusion with gastro-intestinal hormones, for example, that most of what we were seeing, which was not very clear anyway, was probably consequential. It is clear that when a young person’s—or even an older person’s—body weight gets down to a certain level, their capacity to judge their body image changes. They become impervious to any kind of psychological intervention. It is necessary to get their body weight up to a certain level. In the case of young women, their periods start to return and their thinking begins to change. This is not simply a psychological phenomenon. It is not simply a biological phenomenon.

As the noble Lord, Lord Giddens, has also indicated, there are also sociological aspects to this, which we can think and postulate about. I guess we do that a lot in your Lordships’ House. One of the difficulties is trying to ensure that we have research that takes us forward in understanding these things in a scientific way. That is one of the reasons why I was a little disappointed when my honourable friend Tessa Munt asked of another honourable friend, Paul Burstow, who was the Minister in February 2012, what the Government’s guidelines were for the prevention of eating disorders. What targets exist? What is the departmental budget for the prevention of eating disorders? The answer was that there are no specific targets in respect of the prevention of eating disorders. Nor has the department set aside a specific budget.

I find that disappointing because it seems clear to me that after decades, during which a good deal of research has been done, mostly in specific areas—people will take a biological approach or a psychological approach and a few perhaps even will take a sociological approach, although not very many—it is very difficult to get a multidisciplinary research project put together without substantial backing from the Government, a major foundation or whatever. That is why I am a little disappointed that resourcing does not seem to be coming forward from the department. I hope that my noble friend the Minister will be able to say that that is not true and that resourcing is available.

I am disappointed that it has not been possible to put together the kind of multidisciplinary approach to research, a bio-psycho-sociological approach, which might take us a little further forward. As the noble Lord has said, this is a difficult problem to get

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people out of and to understand. It has proved to be a very difficult problem on which we can make any progress at all. The figures tell us that it is getting worse.

8.11 pm

The Countess of Mar: My Lords, I, too, am grateful to the noble Lord, Lord Giddens, for introducing this topic for debate tonight. The simple definition of anorexia is a “lack or loss of appetite for food”. Too often, we hear of awful cases of anorexia nervosa. I will leave the discussion on that and on bulimia nervosa to other noble Lords. The noble Lord, Lord Alderdice, has given us a very good grounding in them.

Numerous medical conditions give rise to the loss or lack of appetite for food. I think immediately of the many people with CFS/ME who are too exhausted to chew and swallow food and must be tube fed, either nasally or by a tube connected directly to their stomach. I think, too, of young girls who have had a bad reaction to the human papilloma virus—HPV—vaccine and who suffer fatigue, feverishness and an acute loss of appetite, with the accompanying weight loss. Some other conditions, including viral infections, hormonal imbalances, neurodegenerative diseases and brain tumours, have in their initial stages been labelled as CFS/ME because they present with the extreme fatigue, pain, digestive problems and other symptoms associated with that condition.

From the reports that I have had, there are many people with genuine intolerances to foods and drugs whose symptoms are profound after eating. The symptoms, which may be diverse, are a reflection of a disturbance of the autonomic nervous system and may include nausea, vomiting, bloating, abdominal distension and diarrhoea. Because they occur after meals, these people try to ascertain which foods cause their problems and they assume a restricted diet. This can occur after, for example, gastro-intestinal infection or HPV vaccination. These people, instead of being respected, as all patients should for their observations of themselves, often find themselves castigated. They are wrongly diagnosed as being anorexic, forced into psychiatric facilities and made to eat those foods that they know have provoked their symptoms. Historically, the same fate befell people with coeliac disease until the 1940s, when researchers realised that their symptoms of diarrhoea and malabsorption were caused by wheat, which was accepted by the medical profession. Interestingly, during the war, they were given bananas instead of bread.

I am particularly concerned that young people, mostly girls, are wrongly being diagnosed with anorexia nervosa. Too frequently, their parents are accused of causing their child’s illness and care proceedings are initiated. Several youngsters have been obliged by social services to be confined in mental health units and are subjected to harsh “treatment” before their medical consultants realise that they do not have the condition. In other cases, the young person is blamed for failing to co-operate and not wanting to get well. I am sure that their prognosis would be much better if they were treated with more compassion.

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The mother of one young girl wrote:

“After the HPV vaccine she lost three stones in three months. When admitted to hospital the professionals’ first concern was that she was anorexic or bulimic. I even tried to say that she normally loves her food and she actually eats more than normal. Before vaccination her attitude to food was positive. (Her worst nightmare was someone stealing the fridge). Whilst in hospital she was shadowed by a nurse 24 hours a day for seven days to check if she was really eating or making herself sick. The final conclusion was that she doesn’t suffer either from anorexia or bulimia”.

This child and her mother have now been abandoned to the nightmare of CFS/ME. She continued:

“After this diagnosis was made we were pretty much left on our own as there is no ME specialist covering our locality”.

Another mother wrote:

“After … vaccination and since becoming unwell her appetite has fluctuated massively. Some days she eats very little, other days she eats constantly. She suffers constant nausea and vomiting and has to eat what she feels will keep down, which isn’t the healthy choices she would have made. Eating disorders have been mentioned because she often vomits after eating but that is far from the truth. She still has a healthy attitude to food but her body is too broken to make it possible for her always to eat healthily”.

Another mother whose daughter suffered badly from CFS/ME wrote:

“She did not have the energy to eat food and sadly did not get the help she required. So when food is not eaten they assume she does not want to eat. They do not face the reality that she has not got the energy to eat. Therefore they put her into a psychiatric unit for eating disorders”.

I know that this young lady was discharged several months after being admitted in a worse condition than before she was admitted.

I cannot stress enough the importance of getting the diagnosis right, of listening carefully to the patient, of taking a proper history, and of ensuring that the right treatment is given early. Young lives can be ruined, family relationships destroyed and huge amounts of taxpayers’ money wasted when this is not done. I ask the noble Lord the Minister what measures are in place to ensure that these awful histories that I have been hearing for years are no longer repeated.

8.16 pm

Baroness Crawley: My Lords, the House is grateful to my noble friend Lord Giddens for bringing this desperately sad medical condition to our attention again this evening. While reliable statistics are a problem at the centre of this debate, and one that I shall return to, we understand from the National Institute for Health and Clinical Excellence that 1.6 million people in the UK are affected by an eating disorder, of which 11% are male, the vast majority being young women. Hearing and reading about the case studies of some of these young sufferers is a sobering experience. The self-loathing, hugely distorted body image and seeking after some control—any control—over their bodies, is enough to make one ashamed of the societal pressure that we have put on these mainly young people. The cycle of bingeing as a self-punishment for not losing enough weight, as they see it, is often accompanied by self-harming and, in extreme cases, a spiral into sectioning and force-feeding. Children, parents and the whole family are affected as the young person tries every device possible to starve themselves. Trust is replaced by fear and worry.

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Why, we ask ourselves, should a significant proportion of our young people want to starve themselves in 21st century Britain in order to have some control over their lives? Is it the pressure put on them through advertising and the media to attain someone else’s idea of the perfect body? Is it the connections made by society between thinness, worth and value? Is bullying on the internet exacerbating the problem, and does the easy access to internet pornography reinforce a falsehood about the way young people, especially young women, should look? We should do all we can to reinforce young people’s confidence and sense of their worth. In a time of austerity, we should think once, twice and three times before applying cuts to young people’s services.

In conclusion, there is at present a lack of data detailing the number of people in the UK suffering from an eating disorder. Although the Department of Health provides hospital episode statistics, they include only those affected by eating disorders who are in-patients being given NHS treatment. Those figures leave out those being treated in the community, as out-patients and privately, and those who have not been specifically diagnosed with an eating disorder. Could the Minister ensure that the Department of Health conducts reliable surveys to provide us with accurate statistics in future? This condition can blight a young person’s life for years and years and, in extremis, kill them. We have to reinforce our work in this area and our commitment to our precious young people.

8.20 pm

Lord Carlile of Berriew: I congratulate the noble Lord, Lord Giddens, on initiating this debate. I agree with everything that has been said so far. This is an extremely important subject, which we should address more often, both in this House and in another place. In a very densely packed sentence in its College Report 170 of 2012, the Royal College of Psychiatrists said:

“Eating disorders are serious mental disorders with high levels of physical and psychological comorbidity, disability and mortality”.

It is not just a free-standing condition, in other words.

Anyone who has ever been close to a serious eating disorder knows that it can prove extremely debilitating to the whole family in which the sufferer lives. Indeed, it is an ordeal for families that can lead to permanent effects, even if the person concerned appears to recover, although there can be and sometimes is good recovery. If there is to be good recovery, it is vital that there should be early interventions, which must be the right ones—not just any intervention. In too many parts of the country, the wrong intervention is provided because the services needed for that person are simply not available. If a sufferer from anorexia needs cognitive behavioural therapy, it may damage them to give them drugs, and vice versa. It is a very subjective illness.

My perception of how the illness is treated throughout the United Kingdom is that it is very unevenly dealt with. For a number of years, I was a Member of another place for a constituency in rural Wales. Today, as then, the services available in rural Wales—in an area affected by its rurality—are far less clear and certain than in many urban areas.

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In opening the debate, the noble Lord referred to the internet and I agree with him entirely about its effect. There are far too many sites on the internet that worship the slender. I am shocked, too—for I still sometimes see teenage magazines in my household—by the primacy given to thinness in magazines. These are everyday, perfectly respectable magazines, purportedly edited by responsible people. With my children, stepchildren and grandchildren, who regard me as quite a decent sort of shopper, especially if there is a credit card in my pocket, I sometimes go into well known clothing stores. Some barely have anything larger than a size 10, yet that is a very small size which probably truly fits a minority of young women in their undieting state. It seems shocking that we are not capable of addressing in a more realistic way the natural state of our young women and young men.

I also believe that there is a complete failure in outcome monitoring, as the Royal College of Psychiatrists has said. We would have more consistent services if we knew the results. We even talk about paying for prisons by results but we do not pay for psychiatric services by results. It seems to me that one way of disciplining the relevant providers of services would be to judge their results. If they do not perform properly, someone else is available to do the job. The principles applicable to child safeguarding standards, which include removing child safeguarding from local authorities in certain circumstances, should also be applied to psychiatric and psychological services, especially those affecting eating disorders.

There are some innovative ideas around which really are not all that innovative. In some respects, it is a case of returning to what happened in the past. However, I suggest to your Lordships that annual medical examinations of every schoolchild, up to and including year 11, could be introduced. Looking around the House, those examinations were certainly undergone by everybody who is here today. Very simple and rudimentary checks, such as weighing, measuring and looking at teeth and feet, tell you an awful lot about a young person, especially if the figures can be compared with those taken a year or a term ago. I do not understand why we have abandoned these rudimentary measures, apparently on the grounds of cost, when any cost-benefit analysis shows that this kind of examination saves a great deal of money further down the line.

Finally, I wish to say a word in favour of school nursing and school health services. They seem to have been abandoned in an awful lot of educational institutions, yet the rumour mill that takes children to the school nurse saves lives. I wish we could look at that more closely for the future. There is a great deal to do and we do not seem to be doing it.

8.26 pm

Lord Brooke of Alverthorpe: My Lords, I, too, am grateful to my noble friend Lord Giddens for promoting this very important debate. I commence by declaring an interest as a trustee of the charity Action on Addiction, which provides day and residential accommodation for people suffering primarily from drink and drug addiction, but additionally we have

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many people who are cross-addicted. We deal with people with eating disorders, gambling difficulties, sex addictions, nicotine problems and a whole list of difficulties. Invariably, it is unusual to find a person with just one addictive issue that we have to address.

Anorexia nervosa is an extraordinarily difficult disease to deal with. The level of success when people leave at the end of treatment is often fairly small by comparison with the progress that can be made when dealing with people with drug and alcohol addictions and indeed, to a degree, with those with obesity. It is on the obesity side—the other eating disorders—that I wish to address my remarks. I address them as a founding member of the All-Party Parliamentary Group on Obesity, which is due to be launched in Parliament on 16 April and is long overdue. I hope that there will be a good response to it from the Government.

Last week, I was moved when I read the report highlighted in the Guardianwhichreferred to the UK asthefatmanof Europe. The full-page coverage of the report from the Academy of Medical Royal Colleges referred to the almost unstoppable growth of obesity and said that the number of people falling ill with it is almost beyond what can be coped with by the NHS. The Academy of Medical Royal Colleges is united—as are many other people—in seeing obesity as a problem of epidemic proportions and one of the greatest public health crises currently facing the United Kingdom.

I wish to pose a number of questions to the noble Earl on that topic. Does he agree with what the Academy of Medical Royal Colleges stated last week? What do the Government think about the report? The academy wants a dramatic increase in efforts to counter obesity and has made 10 recommendations for action. Time does not permit me to go into those tonight, but I specifically ask the noble Earl to address one of them. It asks the NHS to spend at least £300 million over the next three years to tackle the serious problem of the shortage of weight management programmes so that more patients can be helped in a supportive and sensitive manner. Since reading this, it is difficult to find the extent to which support is currently being given. As I will tell the Minister in a moment, people indicate that that support is declining rather than increasing.

I also heard in the course of my inquiries last week that an estimate has now been made that more than 70% of the million people employed by the NHS are classed as obese. Could the Minister please make an observation on that? As the principal person responsible for employing them, could he say what he intends to do about it, as it is an area in which the Government have a degree of responsibility?

Secondly, last week, prompted by the prospect of this debate, I went to visit an outfit in south London called Discovery. It is an organisation in the private sector, verging on a charitable operation, which provides two levels of service: contracts with the NHS to provide direct weight management programmes for individuals who are obese and in real trouble; and training for people in the NHS and related bodies who are endeavouring to start weight management programmes for those who are classed as obese. Discovery tells me that it is extraordinarily fearful about what the future holds for it under the changed arrangements set out in

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the Health and Social Care Act, which comes into force on 1 April. It says that the PCTs, which previously provided funding and contracts, are now disappearing. The contracts are also disappearing and not being renewed anywhere. Many weight management providers are facing the possibility that, although we have this growth in obesity, unless something happens in April, they may well go out of business later in the year. This is apparently a fear held not just within the organisation I mentioned but elsewhere as well. Therefore, I would like to know what the Minister intends to do about the immediate problem faced by people in this arena, when all the calls are for greater investment, not less.

8.32 pm

Baroness Gale: My Lords, I also thank my noble friend Lord Giddens for bringing this important debate before us tonight. As others have said, it is well known that the majority of those who suffer from food disorders are women, but there is a growing problem now among men. Many people who suffer from food disorders turn to websites for help, but often these websites glory in anorexia, giving tips on how to eat even less or avoid eating for long periods. Chatrooms are available to give more encouragement to continue not to eat.

I looked at some of these websites yesterday. They show photographs where all one can see are young women with their bones showing through their skin; they are horrific. One site even had the “Thin Commandments” for eating less. I will mention just three:

“Being thin is way more important than being healthy…Thou shall not eat fattening foods without punishing yourself accordingly… Losing weight = Life, Gaining weight = Death”.

Only last week, the Sunday TimesStyle magazine featured the fasting diet, which advocates the “5:2 diet”, which involves fasting for two days every week and then “the pounds will disappear”. This new fasting trend has been widely reported this month, with another national paper even working its way through an all-month diet plan, including a list of recipes for 200-calorie “fasting suppers” to help us on our way. The Sunday Times article encouraged people not to overlook the importance of rigidly counting calories and cutting down to one meal per day. It quoted a woman teacher at the University of Illinois, who said:

“If you are having more meals, be very careful about measuring exactly what you eat. Don’t guess. People don’t realise how calorie-dense certain foods are. You can blow 100 calories in less than a minute, which, in this scenario, is not good”.

It also includes advice from a woman professor at the University of Surrey’s psychology department, who said:

“If I get through the next two fast days, I can buy a new lipstick or treat myself to a massage. If I stick to four fasts, I can buy that new pair of shoes”.

Frankly, it is absolutely disgraceful to suggest that if you give up food you can buy yourself a new lipstick or a new pair of shoes, especially these days when people have to go to food banks. Yet, a national newspaper tells us to give up food and buy a new pair of shoes.

These articles tell women that it is okay to fast. Whether they are overweight or underweight, they are being told that it is okay not to eat and that body

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shape is the most important thing about them. It is well known that body image and low self-esteem affect many teenage girls. There is social pressure in which the fashion and advertising industries play a part. There are many ways in which responsible behaviour within these industries can be promoted.

My noble friend Lady Kingsmill, who I am pleased to see in her place tonight, produced a report for the British Fashion Council in 2007 called the Model Health Inquiry, which made 14 recommendations, including one that no model should be aged under 16 and that the ban should be rigorously enforced. I believe that that recommendation has been accepted. Will the Minister say whether the Government are working with the fashion industry to implement all 14 recommendations in the report, especially the one which says that Ministers and British fashion industry sponsors should review the level of financial support to the BFC as a matter of urgency, to allow it to sustain the wider role proposed in this report? I appreciate that the report is six years old but perhaps the Minister can say something about working with the fashion industry on this matter.

How do we get the message across to vulnerable teenagers and those who need help? Where do they go for help? Is the information on food disorders advertised in GPs’ surgeries? What support is given to schools and further education colleges to advertise on the premises? Is there a case for teachers learning how to look for the signs and then offering practical support? Left to themselves, sufferers may seek help on websites and get the unhelpful advice that I spoke of. We know that advertising works and I hope that the Minister will be able to give some idea of what help the Government can give in the places where young teenagers are.

8.38 pm

Lord Collins of Highbury: My Lords, I, too, thank my noble friend Lord Giddens for initiating this debate. As we have heard, the causes of eating disorders are both complex and multifaceted. At times of stress many of us resort to what is euphemistically called comfort eating, and the consequential results impact on self-esteem that can cause a very negative spiral.

Whatever the physical or psychological factors are it does not help that in our modern society we are constantly urged on the one hand to look sleek yet on the other to consume fattening foods. More often than not the food industry through its advertising campaigns manages both in one ad. Why is it that only on television does the person stuffing a bar of chocolate down their mouths appear to be so thin?

The excellent work of the All-Party Parliamentary Group on Body Image has shown that the constant portrayal of the man with the perfect six-pack or a young woman in a bikini does have an impact. It has highlighted the growing evidence that body image dissatisfaction is high, and on the increase. It is associated with a number of damaging consequences for health and well-being. We should contrast this with the way we are encouraged to eat foods packed with calories and made up of saturated fat and simple carbohydrates, the two food types most likely to make us put on weight. I remain concerned that so many so-called low-fat products are packed with sugar and calories.

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Eating disorders can stem from a combination of issues, including distorted body image and low self-esteem. As I know from personal experience, someone with an eating disorder is very good at hiding the fact, often using a great deal of deception to fool the person or people to whom they are closest. This partly explains why there is a lack of data on the number of people who suffer from eating disorders. However, as we heard tonight, the numbers are great and the costs to the individual, their family and society can be devastating. Although eating disorders are considered to be a young girl’s disease, they can affect anyone at any stage in life, and up to 20% of sufferers are male.

It is clear that early intervention is vital. However, that relies on greater openness and understanding of the issues on the part of all of us. The excellent campaign launched by the eating disorder charity Beat just two weeks ago used as its theme, “Everybody Knows Somebody”, to flag up the fact that these illnesses are far more common than most people think. The Minister for Women and Equalities, Jo Swinson, in supporting the campaign, highlighted the fact that we are bombarded with all kinds of images, and that we need to equip young girls and boys to be more resilient to these pressures.

The Government’s Body Confidence campaign has worked for the past 18 months to identify non-legislative solutions to tackle the causes of low levels of body confidence. It is a great initiative that includes representatives from the health and fitness, fashion and retail, youth and education, media and advertising, and beauty sectors. That is to be welcomed, but we still have a fashion industry that portrays extremely thin women and girls, and we have also heard that we face a proliferation of websites promoting images of anorexic girls. What assessment has been made of the impact of the Body Confidence campaign? What action will the noble Earl’s Government take against these appalling websites? What action are they taking about the growing number of eating disorders among men?

The NICE guidelines on the treatment of eating disorders, published in 2004, are due for review in 2014. Many excellent services exist—we have heard about them tonight—but what impact will the new commissioning arrangements have on the fragmentation of these services? In my own area there is now a six-month waiting period for the first appointment for someone referred by a GP. Will the Minister ensure that best practice is maintained and that the gap between youth and adult services is addressed? Is it not time for a more coherent government strategy that encourages us all to understand better that what, when and how we eat really matters?

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, perhaps I may begin by thanking the noble Lord, Lord Giddens, for securing this short debate on eating disorders, not least because it affords us a twofold opportunity: first, to let sufferers and their families know that their voices and experience are influencing what we do at the highest levels of government; and, secondly but no less importantly, to give prominence to a range of disorders that so often are hidden.

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The noble Baroness, Lady Crawley, described eating disorders as desperately sad. I agree with her. The statistics are grim. Anorexia nervosa has the highest mortality rate of all psychiatric conditions. It disrupts education and quality of life, and in 20% of cases continues to create difficulties in independent living for up to 10 to 20 years after the onset of illness, as a number of speakers said.

Although relatively little research has been done into long-term outcomes for bulimia nervosa, binge-eating disorders and other less well known conditions, anecdotal evidence suggests that these disorders can, for a significant cohort of patients, have equally life-limiting, long-term consequences. These disorders can affect anyone at any time, regardless of gender, but most cruelly the peak age at onset for the majority of sufferers is the mid-teens.

The noble Lord, Lord Giddens, asked what the Government’s policy is in this area. The answer to that has several strands to it. Early intervention is vital, and that is why it is a key national priority for the Government. Our cross-government mental health outcome strategy, No Health Without Mental Health, takes a life course approach, recognising that the foundations for lifelong well-being are already being laid down before birth and that there is much we can do to protect and promote well-being and resilience through the early years, into adulthood and on to a healthy old age.

The strategy’s implementation framework, published last July, sets out that public services intervening early is one of the 10 key changes that will be needed to turn the mental health strategy into reality and the specific actions which local organisations can take to achieve this, including: children and their parents receiving evidence-based health promotion from birth; public services, including GPs, recognising people at risk of mental health problems and taking appropriate timely action; and schools taking a whole school approach to supporting all pupils health and well-being, including both universal approaches and targeted services for those at risk of developing mental health problems.

We are investing £54 million over the four-year period 2011-15 in the Children and Young People’s Improving Access to Psychological Therapies programme to drive service transformation, giving children and young people improved access to the best mental health care by embedding evidence-based practice and making sure that whole services use session-by-session outcome monitoring. In February 2012 the Government announced a further £22 million over three years to the CYP IAPT programme. Some of this money will be used to extend the training offered by CYP IAPT to two further therapies—systemic family therapy and interpersonal psycho therapy. These therapies are invaluable in addressing some of the major mental health problems of adolescence, including eating disorders, as well as providing much needed support for the families of those affected.

The noble Lord, Lord Giddens, mentioned the tragic case of Laura Willmott. I, too, saw that coverage. I know that transition can be a huge issue, often pitching sufferers and their families into crisis at a critical time. Sudden changes in treatment and services

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can be bewildering and dangerous for patients and their families, and parents can find themselves excluded from decisions about care. I was very struck by the powerful remarks of the noble Countess, Lady Mar, on this theme. Charities such as Beat and Anorexia & Bulimia Care, which do so much to raise awareness as well as provide support and advocacy in action, are working with experts in the field on the feasibility of improvements to the care system, with a specific focus on introducing the option for students to receive care wherever they are.

It is this kind of grass-roots action that will make the difference the Government envisage when we have freed up health and social care services from micromanagement, empowering localities to make vital decisions that are tailored to meet the needs of their communities.

My noble friend Lord Carlile referred to the variation in services. I recognise his concern. New arrangements for the commissioning of services for eating disorders should also result in better planning and co-ordination of specialised services, greater equity of access, care and outcomes for patients, and a more proactive and systemic approach to service development, research and innovation. The child and adult specialised eating disorder services will be commissioned by the NHS Commissioning Board from April this year.

Within the board there will be a central team that will have a clear focus on specialised services organised around programmes of care. The team will develop a national service specification for each service while at the same time ensuring that it is sensitive to local needs. Work on eating disorders services has been underpinned by expert clinical reference groups on eating disorders and child and adolescent mental health services. The groups have explicitly recognised that targeted work is needed on the issue of transition.

However good our intentions, beneficial change does not always keep pace with the urgent desire of patients and families to feel the impact of those changes, but there are areas where direct action can yield swift dividends. The Time to Change programme, England’s most ambitious programme to end mental health stigma and discrimination, now has the potential, with funding from the Department of Health and the Comic Relief fund, to reach 29 million members of the public with its vital messages on mental health. As is so often the case, it is the courage of individuals as evidenced recently in a debate in Westminster Hall in which Mr Brooks Newmark spoke. Events like that do much to challenge stigma and secrecy, and I think the honourable Member is to be commended for shining the light on an underreported aspect of eating disorders. The fact is that they are not simply the preserve of teenage girls. Male sufferers are growing in number, and I shall have something more to say about that in a moment.

The noble Baroness, Lady Gale, asked what we are doing to work with the fashion industry, a question echoed by the noble Lord, Lord Collins, and the noble Baroness, Lady Crawley. I commend the assiduous work of the All-Party Parliamentary Group on Body Image under the expert chairmanship of Caroline Nokes. The Government’s own Body Confidence campaign has made great strides over the past two

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years in encouraging a more open and public conversation about body image. Working with a range of representatives from health and fitness, fashion and retail, youth and education, media and advertising, and the beauty sectors, we have been active in a number of areas: research, parent education, resources for teachers, industry awards and promoting public debate.

The noble Lord, Lord Giddens, my noble friend Lord Carlile and the noble Baroness, Lady Gale, spoke powerfully on the theme of websites. I am aware of the growing evidence of pro-eating disorder websites. They attract impressionable young people and intensify weight/shape anxiety as well as, disturbingly, introducing users to new methods of losing weight, as the noble Baroness, Lady Gale, told us so graphically. What can the Government do about this? Legislation is not the answer. Many of these websites are set up by young people with an eating disorder and we would not want to criminalise an already vulnerable group, while other websites are hosted overseas. However, we are committed to joint working with charities and the internet industry to speed up the reporting of damaging web-based content and the blocking of harmful websites. In January, my honourable friend Norman Lamb hosted a round table with key stakeholders on this very issue where, encouragingly, the development of a concordat was discussed. The Government will support this joint endeavour in whatever way we can.

The noble Lord, Lord Giddens, asked whether we recognise the link between these disorders and obesity, while the noble Lord, Lord Brooke, also spoke on that theme. The answer is that we do recognise it and we are doing a whole host of things to combat obesity, some of which I have referred to in your Lordships’ House before. Weight management funding will in future be addressed through the new public health system, but most data on eating disorders come from charities such as Beat, particularly in its report on the costs of eating disorders in England, as well as surveys and reports from the royal colleges and other professional bodies. The Health and Social Care Information Centre published its annual mental health bulletin last Tuesday. It provides information on eating disorders for the first time, and I commend it to noble Lords as a reference point.

The mandate to the commissioning board makes it clear that the NHS should measure and publish outcome data for all major services by 2015, broken down by local clinical commissioning groups. To support that, the Government will strengthen quality accounts, which all providers are legally required to publish.

I have a great deal more material, but signals are being sent to me that my time is running out. I would like to address all these issues in letters to noble Lords, particularly those concerning men with eating disorders; my noble friend Lord Alderdice’s question on research that we are helping to fund; and the role of schools, which my noble friend Lord Carlile and the noble Baroness, Lady Gale, asked me about.

In my own researches in this area, I have been much struck how many of those affected talk about how worthless and disempowered they feel. I think it is appropriate for me to use this opportunity to send a

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clear message to them: you are valued, you are not invisible, and with the right, targeted support, recovery is not only possible but probable.