My second point is that of course we know that there is a consultation on child poverty measurement. I am taxing my memory here, but I think we were expecting the end of the consultation to be earlier this year—some time in February. If that is the case and my memory is correct, I hope we can be told that the Government’s contribution to the further development of child poverty measurement will be vouchsafed to us sometime soon. It will certainly be important to get hold of this around the time of the Budget, if we can. Some of the Office for Budget Responsibility’s assessments of future policy in terms of the Budget should be seen against the background of the Government’s view about how they will treat child poverty measurement in the future.

I am slightly nervous about some of the things that I have been hearing are being factored into the measurement of child poverty in the future. It may be that I am misreading signals but I hope that we do not lose focus on the fact that, at the end of the day, child poverty can be addressed only with money. Regarding any attempt to dress that up and expand the measurements too widely, while I am in favour of having all the data and metrics that we can access, for the reasons I explained on the last amendment we are facing an emergency situation the extent of which I did not anticipate.

The difficulties are mounting up, as we heard earlier. The decisions to be taken by the Government in the near future on measuring the data on child poverty are very important. If the Minister can help us to understand when we might expect information of that kind, it would help the Committee’s consideration of this Bill not just today but over the rest of its proceedings.

Baroness Lister of Burtersett: My Lords, I am pleased to support my noble friends on this important amendment, which has been moved so ably. The Government have still not explained why they did not include the impact on child poverty in the impact assessment for the Bill, as they promised. A Written Answer in the Commons as late as 30 January wrongly stated that the impact assessment sets out the estimated child and adult poverty effects, but it does not. As it is, the shameful figures had to be dragged out of the Government by a Written Question, as my noble friend said. Nor have the Government explained to the Committee how the anticipated increase in the number of children living in poverty thereby revealed is compatible with their obligations under the Child Poverty Act 2010, to which my noble friend referred. I asked this question during Second Reading, but answer came there none.

Instead, the Minister deflected the question with the Government’s usual line that the child poverty measurement indicators are somehow not fit for purpose —picking up on the point made by the noble Lord,

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Lord Kirkwood. That was followed by a brief discussion about the importance of education, debt and paid work in tackling poverty, but nothing was said about how by enacting this legislation and knowingly adding 200,000 children to the poverty rolls, the Government are fulfilling their obligations under the Act. Those obligations are in addition to the increase in child poverty estimated by the Institute for Fiscal Studies, to which my noble friend referred. I would be grateful if today the Minister could answer the question I asked at Second Reading. What does this mean for the Government’s statutory obligations under the Act? Whatever the Government think about the measures of poverty enshrined in the Act, unless they plan to amend it—perhaps the Minister could tell us if they do—they must face up to their legal obligations as set out in it. What countervailing measures will they take against the increase of 200,000 children living in poverty?

I agree with the Minister that education, debt and work are important factors in any anti-poverty strategy, but it is unclear how reducing real incomes will help with any of them. How, for instance, will making life harder for low-income families enhance the educational chances of their children? Hungry children do not make good learners. Anxious and stressed parents are less able to support their children’s education. Adequate incomes are important to educational chances. Paul Gregg has estimated that around 50% of educational inequalities or attainment gaps between the rich and the poor in the UK stem from differences in income. Similarly, as the Minister said, debt is a major problem for poor families, but I fail to see how reducing their weekly income will reduce that problem. All the children’s charities are predicting an increase in debt as a consequence of this Bill, and a Bill that depresses the incomes of low-income workers is hardly conducive to promoting work as the best route out of poverty. I made the point earlier about what Alan Marsh said: people who are demoralised do not make very effective jobseekers.

As the Government consistently attempt to deflect questions about the impact of the Bill on child poverty by dismissing the measures in the Child Poverty Act 2010 as inadequate I should like to say a few words, if the Committee will indulge me, about their recent consultation on those measures. Noble Lords might have read a letter recently in the Guardian from eight fellows of the British Academy, myself included. The letter argued that the Government’s proposals to measure child poverty in a new way,

“are confused and would meet neither the government’s objectives nor international standards”.

While accepting that,

“it is helpful to track what is happening to the factors that lead to poverty and the barriers to children’s life chances”,

the letter advises that,

“it does not make sense to combine all of these into a single measure. To do so would open up the government to the accusation that it aims to dilute the importance of income in monitoring the extent of ‘poverty’ at precisely the time that its policies will be reducing the real incomes of poor families”.

5.30 pm

I should make clear that I did not draft that letter; nor, I must admit, did I respond to the consultation as, having read the document, I could not face the work

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involved in engaging with what Jonathan Bradshaw, one of the signatories, called the worst paper setting down government policy direction that he had ever read—and he has been around for quite some time. However, I am grateful to my fellow academics who did engage with it. I had to smile when I read that the DWP had dismissed our letter as coming from “a handful of academics”, not least because of course “handful” has two meanings and I am quite glad to be a handful in terms of how the department sees us. I was grateful to fellow academics who then wrote to the


to make clear that the views expressed in the letter are representative. In one of those letters, Professor Adrian Sinfield argued that responses to the consultation should,

“be made publicly available so the government’s own summary of the views can be subject to scrutiny”.

Will the Minister give that assurance?

I have read some of those responses and want to pick out a few key points from a couple of them, to reassure noble Lords that it is valid to continue to use the indicators from the Child Poverty Act 2010, as set out in this amendment, as measures to assess the impact of this Bill on child poverty.

First, the widely respected Centre for Analysis of Social Exclusion at the LSE expresses its belief that,

“the current suite of indicators in the Child Poverty Act does a good job of measuring child poverty as it is widely understood—as income poverty and material deprivation. These indicators play a vital role in holding government to account in progress on reducing income poverty, within a UK and international context”.

It endorses the relative income measure as,

“the most appropriate headline income poverty indicator, capturing the nature of poverty in contemporary society and allowing for meaningful comparison over time and across countries”.

Although it acknowledges—I am sure the Minister will make this point—that this measure,

“can give counter-intuitive results in certain circumstances”,

for instance, as recently, if median income falls, it points out that that is,

“why monitoring the full suite of indicators in the Child Poverty Act is important”,

a point made very strongly by my noble friend Lady Sherlock. It argues that, in contrast,

“the proposed multidimensional indicator put forward in the consultation document is conceptually muddled and would add confusion rather than clarity to current measurement approaches”.

Secondly, the Royal Statistical Society—not one of the handful that writes letters to the Guardian—argues that combining the indicators as proposed in the consultation could conflate,

“causes, symptoms, things associated with poverty, and things which do not seem to be related to poverty in any major way”.

It warns that public trust in statistics could thereby be threatened.

Given that leading poverty researchers and statisticians are endorsing the indicators enshrined in the Child Poverty Act and reproduced in this amendment, the Government should think very hard before changing the measure of child poverty. That is not to say that there is not scope for complementing it with indicators of risk factors and consequences, which is what many of the indicators suggested in the consultation are and which the previous Government published. I hope

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that in responding the Minister will not take refuge in a measurement consultation, which would appear to have received a pretty resounding thumbs-down, but will address the substantive question of the impact of this nasty Bill on the numbers of children living in poverty and the implications of that for their obligations under the Child Poverty Act 2010.

Lord Bates: My Lords, I rise with trepidation following the noble Baroness, who has immense expertise in this area. Even if I had not intended to speak on the technical aspects of this amendment, the claim by the noble Baroness, Lady Sherlock, whose approach is always sharp and pointed in proposing such matters, that this Government is not serious about tackling child poverty would demand a response. Not only is it there for us to read repeatedly in government statements that this Government, as with their predecessor, are committed to the eradication of child poverty, but when we are tempted to get a little too high and mighty about that, one might look at the targets which the previous Government set in respect of halving child poverty by 2010 and how they performed against that measure—they did not tackle it. The commitment is real and is what is driving the whole argument towards universal credit, the raising of tax thresholds, the freeing up of the economy to create 1 million new jobs—which is a pathway out of poverty—the troubled families programme and the pupil premium. This is an immense drive across all departments within government to tackle what we accept is a shame on a country which is still the seventh-richest nation on earth—that 2.3 million children should be in poverty. I just make that point initially.

Baroness Hollis of Heigham: Given the Minister’s very welcome and obviously understandable sympathies and sensitivities towards the issue of child poverty, does that mean that we can expect the noble Lord to table an amendment at Report stage to protect child benefits, including the child benefits within tax credits, from this Bill altogether?

Lord Bates: I will come to that point in a minute because it is an interesting one about the effectiveness of the cash measure alone in eradicating child poverty. The previous Government failed to meet their target of reducing child poverty by the level they set themselves, despite spending £171 billion between 2003 and 2010. Here, in a sense, is something that almost makes the case for the Opposition, were they to take it. Those of us on the government Benches could stand here and point to the fact that, in 2010-11, 300,000 children were taken out of relative poverty. We could say that, but of course we realise that that is not actually happening on the ground. We recognise that those immense pressures are there. I do not dispute the quotes that the noble Baroness has used in introducing this but the Institute for Fiscal Studies, in its helpful analysis, points to the fact that all that happened with that 300,000 was that you had private sector incomes—predominantly—being repressed or flat-lining. I am trying to follow the gestures of the noble Baroness but being a man I can do only one thing at a time. Private sector incomes increased by 10% over the years 2007

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to 2012 while benefit levels increased by 20%. That is one of the arguments that is put. Because it is pitched at median income, you then find that, as the Institute for Fiscal Studies shows in its graph, the measure comes down, the benefits go up and effectively you say, almost like a card trick, “We have reduced child poverty by 300,000”. In fact, you have done nothing of the sort. All that has happened is that, during a recession, private sector incomes have fallen and therefore, as the IFS says:

“If earnings fall relative to benefit levels, then being in work becomes less financially attractive”.

Those are the IFS’s words, not mine.

Baroness Farrington of Ribbleton: My Lords, I apologise to the Committee. I was unable to be present for the beginning and I have obviously missed the explanation of a phrase that I cannot understand. The noble Lord has just repeated that the answer to child poverty is not money. I do not know the explanation for the Government’s view that you do not eradicate child poverty by providing money. I wonder whether the noble Lord could refresh my memory.

Secondly, the noble Lord comes from a different northern region from mine. The biggest problem that people face is poverty when they are struggling to go to work. They are struggling to get extra hours, which the Government are insisting that people have to try to do, when their employers will not give them extra hours; when the only extra hours they can get may be two hours further away from their home and the cost of travel there is impossible. I think that noble Lords opposite are not living in the same world as I am. My only reassurance is that the right reverend Prelate appears to be living in my world.

Baroness Hollis of Heigham: My Lords, perhaps I may add to my noble friend’s comments. The noble Lord perfectly accurately described what was happening to the 300,000 children who were lifted out of poverty because the median income line fell by virtue of the recession and the downward pressure on incomes. Of course, he is completely right, but the other way of stating that was that as a result of what the previous Government did, the incomes of those children—the poorest of the poor—were protected against the effects of the recession, for which most of us are grateful and appreciative, including the noble Lord, I am sure.

Lord Bates: I accept that point. On the first point made by the noble Baroness, Lady Farrington, of course I am not saying that child poverty has got nothing to do with money. It is vastly to do with money, but is that the only thing that impacts on child poverty? If we want to impact on child poverty, do not the quality of housing, the quality of education and the opportunity to work have some bearing on the fact? Does the fact that the parents are in debt or are drug-dependent or alcohol-dependent have any bearing on it? Does living in a one-parent family or with two parents make any difference to the life chances of the child in poverty? One would probably have to say: yes, to a degree. I am simply saying that there is more to this.

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That fact is borne out by international comparisons. I found a report card of child well-being, which was produced while the previous Government were in power. It was undertaken by UNICEF and it is an international comparison. Yes, it looks at cash, although interestingly it looks at 50% of the median, not 60%; it also looks at health and safety, educational opportunities, work opportunities, family and peer relationships, behaviours and risks, and subjective well-being—a broad range of indicators in a basket of trying to assess international child well-being. By the way, if the party opposite is interested, it actually came last: 18.2 was that Government’s average ranking position out of the most advanced countries in the world, but that is not my point.

My point is that we must come back to the median income. The median income is worth looking at in itself because that is the test that we are using to measure all benefits. It relates to a level of income—not an average income but a median income, the most frequent across the distribution. The latest figures I could find on the ONS website showed that median incomes vary quite substantially across the United Kingdom—nothing unusual there; you would expect that to happen. For example, in London the median gross wage is £651.80 per week, but in the north-east the figure is £451.80 per week. These are the latest figures; I accept that there might be a shift slightly in one direction—well, upwards only.

There is a difference of 44% across the range. Therefore, when we are applying a national target of 60% of the median, we need to examine whether that is giving us an accurate reflection of child poverty levels in all parts of the country. It might be that we are understating it in parts of the north, Wales and the south-west; it may be that we are overstating it in London—I do not know. None the less, using that as the sole measure to test median income across a national rating by which we actually assess those in child poverty is worth taking a more careful look at.

5.45 pm

Lord McKenzie of Luton: Does the noble Lord accept that the Child Poverty Act was not looking at just the metrics of the targets? Section 9(2)(b) talks about ensuring that,

“as far as possible that children in the United Kingdom do not experience socio-economic disadvantage”.

We had big debates about that. The Act requires strategies for,

“the promotion and facilitation of the employment of parents or of the development of the skills of parents … the provision of financial support for children and parents … the provision of information, advice and assistance to parents and the promotion of parenting skills … physical and mental health, education, childcare and social services, and … housing, the built or natural environment”.

It was not looking at just those targets; there is a whole range of strategies that this Government should be adopting if they are signing up to this Act.

Lord Bates: That is a more reflective point; it is just not exactly what the amendment before us today actually refers to. It refers to the financial measures of “absolute

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low income”. Is that the one that is based on 1998-99 and uprated for inflation in a direct line?

My point is that there is an absolute crying need, of which we are all absolutely aware. There is child poverty out there and we need to strain every sinew to ensure that we tackle it. Also, we have no doubt that on the current measure there is no question that it is going to increase. The Office for Budget Responsibility’s figures forecast that as the recovery gets under way, private sector earnings will increase by 4.6% per annum. It does not take a great mathematical mind—which is fortunate for me—to figure out that with what we are dealing with today, as well as the likely increase in private sector incomes, we are going to see the gap rising and almost an inversion of what has happened over the past few years happening in the future. But there are more indicators that need to be examined to give us a holistic picture and to ensure that we target scarce resources where they are needed most.

Lord Newby: My Lords, this proposed new clause would require the Secretary of State to lay a report in each of the years in question, assessing the impact of that year’s uprating order on child poverty based on the different measures contained in the Child Poverty Act. I absolutely understand noble Lords’ concern to ensure that we are tracking progress and impacts on child poverty. However, I do not believe that this new clause is necessary to do that.

The Government already publish child poverty figures every year using the households below average income series, which is usually published in May or June and includes details on the areas listed in the amendment: namely, the number of children,

“living in relative low income … combined low income and material deprivation … absolute low income … persistent poverty”.

Moreover, later this year, we will see the first of what will become an annual report from the Social Mobility and Child Poverty Commission, chaired by Alan Milburn. It will report on the Government’s progress towards reducing child poverty, in particular meeting the targets in the Act and implementing the most recent UK strategy.

The noble Lord, Lord Kirkwood, asked a number of questions about that commission. He asked where it had got to and what it was going to say. The answer is that the Government do not know what it is going to say because it is an independent commission. We await its report eagerly, but we are not attempting to pull it up by the roots to find out what it is going say as it is in the process of undertaking its work. I can reassure my noble friend that there is no drift in the work of the commission. It is a very substantive piece of work and it is therefore not surprising that it cannot do it very quickly. We expect that its report will be available in the late summer. It will report to Parliament and I am sure that we will give considerable scrutiny to it in your Lordships’ House when the time comes—we are already looking forward to it on these Benches, I can tell you.

I strongly believe that it is only through such comprehensive reporting, looking at poverty issues in the round, that we can have a meaningful debate about child poverty. As noble Lords have mentioned, we published in response to a Parliamentary Question in

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another place the expected impacts on child poverty of the uprating measures that we have announced. An additional 200,000 children will be in that category by the end of the period covered by the Bill as a result of the measures in it.

The noble Baroness, Lady Sherlock, asked whether we would publish other impacts of the measure. We do not think that it is possible to derive estimates of all the measures in the Bill. For example, impacts cannot be modelled for the persistent low income poverty measure because impact assessments are based on cross-sectional data rather than longitudinal data. In addition, measures based on an estimate of material deprivation are technically complex to model because material deprivation relies on more factors than just income, so impacts have not been modelled for these measures. The noble Baroness asked also about the absolute poverty figure. If she will forgive me, I shall write to her on that separately.

As we have said previously, we believe that we need to be cautious about setting too much store by such individual assessments of impact. These are not predictions of how the child poverty figures will change in the future, as they do not take into account all the other variables which exist. For example, our estimates will change as forecasts of economic growth and average earnings change, and they do not take account of policies which cause child poverty figures to move in the other direction such as universal credit. Universal credit, which has not played much of a part in our debate today, is of course expected to lift up to 250,000 children out of poverty depending on the effect of the minimum income floor. I believe that we can have a meaningful debate about poverty, as we have started to do in the latter part of this debate, only when we accept that poverty goes wider than the measures contained within the Child Poverty Act.

The noble Baroness, Lady Lister, asked a number of questions about the work that we are doing on defining poverty and on the consultation. The consultation is finished. She is quite right that a number of people have been very critical of what the Government are proposing and we are now considering how we respond to those criticisms. It is not the case that the Government have made up their mind about the outcome and are going to ignore everything that has been said—that would be ridiculous. I can give the noble Baroness an assurance that we are analysing all the submissions, of which there have been a number, and we will produce our response to the consultation in the summer.

Baroness Lister of Burtersett: I am sure that the Minister is about to say this, but the assurance that I was seeking was that all the responses would be published on the web. I do not question the fact that the Government are analysing them all—I am sure that they would not ignore any of them—but the public need to know what people were saying about it.

Lord Newby: I am happy, I think, to give that assurance. I say “I think” only because I have not talked to officials. That is the standard practice and, unless somebody for a reason that I cannot immediately think of has said that they do not want their comments

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to be published, I would expect the department to publish all the comments and representations that we have received.

I want to clarify a few matters that have been put to us on several occasions by noble Lords. First, the Government are committed to the Child Poverty Act; secondly, we are committed to eradicating child poverty; and, thirdly, we strongly believe that income matters and will remain a central part of any new measures of child poverty. Our discussion is about what else one needs to do both to measure and deal with child poverty so that all children have a better opportunity when they are living on very modest means.

A number of noble Lords have cited figures from the IFS and the Child Poverty Action Group which suggested that child poverty levels would rise by between 800,000 and 1 million by 2020. I really would caution against setting too much store by those figures. First, child poverty forecasts are an inexact science. For example, the numbers that the IFS produces do not account for future changes to government policy. It is measuring change at a time of immense fiscal challenge for the Government but cannot know what government policy will look like in four or five years. The IFS core numbers also do not take fully into account the dynamic and behavioural changes that will result from the Government’s reforms. Moreover, even in the short term, child poverty forecasting has proven difficult to get right. The IFS, which I accept is a leader in this area, made predictions in October 2011 of a fall of 100,000 in the figure for relative child poverty for the year 2010-11. In reality, the figure fell by 300,000. It is therefore an inexact science and it is very easy for numbers produced by it to be spectacularly wrong. This does not of course detract from the importance of taking action to reduce the level of child poverty, but it serves as a reminder that we should proceed with caution in making forecasts of child poverty, whether based on measures in isolation or changes over the longer term.

It is important to remember that many figures on poverty are based entirely on tax and benefit changes feeding entirely into the relative income measure of poverty. This measure does not capture the full range of issues that poverty involves. It captures a lot, but it does not capture them all. It will not tell us how many children’s lives will have been changed by 2020 but only how many children have circulated around the poverty line. One way of tackling child poverty is to focus on this line, pushing up benefit incomes to lift people from just below it to just above it. We already know that focusing on the relative income line alone yields perverse results, and people have referred in this debate and earlier debates to the fact that, in 2010, 300,000 fewer children were set to be in poverty because the recession had caused median incomes to drop. Children were set to be pulled out of poverty not because anything had changed in their lives but because the rest of society got poorer.

The alternative path that we are trying to follow in government focuses on the interventions that transform lives. That is why we have protected spending on the education budget; that is why we have invested £2.5 billion in the pupil premium for disadvantaged pupils; that is

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why we are spending £1.2 billion on capital investment in schools; and that is why we are investing in making work pay through the universal credit, sending out a clear signal that we believe that work is the best route out of poverty for parents and their children. As part of the universal credit, we are spending an extra £200 million to support families with childcare costs and, for the first time, this support will be made available to families who work fewer than 16 hours a week. This will mean that 100,000 working families will be helped with their childcare costs.

As I have said, the Government are currently analysing responses to their consultation on new measures of child poverty, measures which will attempt to capture the wider reality of poverty in the UK today. The Government already produce a number of detailed reports on poverty. I hope that this will reassure the Committee that we will continue to publish vital information around child poverty and to take our obligations around child poverty seriously. This proposed new clause would therefore be an unnecessary addition to the Bill.

6 pm

Baroness Sherlock: My Lords, I thank all noble Lords who have spoken in this debate, which may be an interesting precursor to the kind of debate we may have when the commission finally reports. I am particularly and genuinely pleased to hear the Minister say two things—first, that the Government remain committed to eradicating child poverty and, secondly, that income matters. They are both important statements, and I welcome them and am very pleased to have them on the record. I thank the Minister for making them so clearly.

The noble Lord, Lord Bates, with whom it is always a pleasure to do battle, took me to task for saying that I did not somehow accept that the Government made clear their commitment to eradicating child poverty. What I was challenging was not that commitment but whether or not the actions were being taken that would make it a reality. That was the point that I was trying to make, and I apologise if that was not clear. My question was really about what one does to make a difference.

A lot has been said about the nature of the measure. I have never thought that the well-being of children was about only money. However, the reason why this amendment is about money is because the Bill is about money; the amendment is about the impact of the Bill, and the Bill is solely about what happens to the tax credits and benefits that go out to people—in this case, children. So it makes no sense for it to be any broader than that.

The second thing that is worth saying is that I made it clear that the relative income measure was, deliberately, only one of four income measures in the Child Poverty Act, and that was for a reason. The Government of the day recognised that we had to take a 3D approach to understanding what poverty was, and no single measure alone would be able to give us all we needed. However, those four points of perspective between them give a pretty good idea of what is happening to incomes across the UK. That is something that we need to understand.

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The noble Lord, Lord Bates, commented on the regional variation of median income. That is true, but the cost of living also varies. As he and I both know, the cost of living in Durham is significantly different from the cost of living in London. So although wages may be different, so too is income—and the measure relates to median incomes.

It is also worth reminding ourselves that the Child Poverty Act does not—

Lord Bates: That is quite an interesting point, if the noble Baroness is prepared to expand on it on the record. I think that she accepts that it is true in Durham, a city that we both love greatly, that median incomes—or, rather, average incomes—are significantly lower, by 44% according to my figures, and that the cost of living is different and lower. So in those circumstances —putting the two together by using a national measure and putting 60% of median income—you would perhaps overstate the level of child poverty in Durham. Does she accept that?

Baroness Sherlock: It might be worth the noble Lord and me sitting down together with the Child Poverty Act. He might find that many answers to his questions are in there. As well as giving the Secretary of State a specific duty to address income measures, because tax and benefits are in the gift of central not local government, with the exception—reprehensible in my view—of the recent move to localising council tax support, the strategy places a duty on local authorities and other players to engage in issues around child poverty, specifically because they have competence in those areas. So if the noble Lord goes back to read it, he will find that there is an awful lot more in it than he perhaps remembers. We may have to come back to that.

It is also worth coming back to the idea that it is not just about money—but it is also not not about money, a point made very clearly by my noble friend Lady Farrington. The noble Lord, Lord Bates, said that the fact that the Labour Government did not meet their target for child poverty reduction means that the measure does not work. I do not think that it means that at all. I pick up again a point that the Minister made. I fully accept that no forecast is a precise measure and no measure is precise, but one reason for keeping a long-term target of 2020 is that what really matters is direction of travel. Over time, how does the income of the poorest relate to the income of the country as a whole? On that, I am proud that our Government lifted 1.1 million children out of poverty. If I had to stand up and say that we had pushed 1 million children into poverty, I would be ashamed of that, and I am very glad that I am not in that position.

If the Government come forward with other measures, we will happily debate them. I am always open to any conversation that focuses the attention of this House and the nation on the well-being of the poorest families, and I am very happy to have the conversation when the commission reports about what that means and what the best means is to assess the impact of policies on that. However, at the moment, the Child Poverty

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Act is law, and it puts an obligation on the Government—a statutory duty—to address child poverty in all these areas. Unless they measure that, I simply do not see how it is possible to satisfy themselves that they have done it.

The Government’s defence has also partly been that the measure is meaningless. It may be worth reminding ourselves even of the relative income measure. The Child Poverty Action Group reminds us that a relative low-income poverty line is, typically, around £12 per family member per day for all spending needs after housing costs. It notes that many families in poverty will be far below that—because that is where the line is, and many families are way below the line. The point of having four measures is to try to understand the impact of policies such as this on all those measures. I accept that other measures are going on. I accept the point that the noble Lord, Lord Bates, made—and he has engaged with the arguments from this side of the Committee most comprehensibly—that other measures are happening and that there are time lags. However, it is impossible to ignore the fact that a Bill that sets out deliberately to cut in real terms the incomes of poor and middle-income families will do anything other than increase child poverty in real terms. That is a real increase—it is not a statistical anomaly.

I do not want to delay the Committee much more, but I remind noble Lords that the amendment simply invites the Government to report before they enact this Bill on what the impact will be on child poverty, using measures already in statute to reflect a duty that the Government already have in statute. That is all that it does; it could hardly be less radical. However, as I am interested in returning to this at a later stage, I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Amendment 12A not moved.

Clause 3 agreed.

Schedule : Meaning of the “relevant sums” and the “relevant amounts”

Amendment 13 not moved.

Amendment 14

Moved by The Lord Bishop of Ripon and Leeds

14: The Schedule, page 4, line 9, leave out “150(1)(i) and (j)” and insert “150(1)(j)”

The Lord Bishop of Ripon and Leeds: My Lords, the three amendments in this group have two specific aims, and both concern the treatment of children under the Bill, which we have discussed under Amendment 12.

Amendment 14 seeks to remove child benefit from the Bill and Amendment 19 does the same for child tax credit, while Amendment 17 concerns the child additions within universal credit. I shall return to Amendment 17 later with regard to children with disabilities.

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Amendment 14 concerns child benefit. Time and again in these debates on welfare reform, we face the challenge that our reforms have a disproportionate effect on children. Overall, some 30% of households are affected by this Bill. Of those with dependent children, 87% are affected; of lone-parent households, 95% are affected. For example, a single nurse on average earnings for her profession of £530 a week would lose nothing at all as a result of the Bill. If she had two children, she would lose £424 a year in 2015-16. Families with lower incomes are those who end up being the worst affected, whether by reductions in housing benefit or the freeze on child benefit, and so on.

I do not for one moment believe that it is the Government’s intention to target children, but it is the result of much that we do in welfare reform, and that is a matter of choice. The most powerful speech at Second Reading was that of the noble Baroness, Lady Hollis, when she spoke of the way in which she and I and the vast majority of Members of this House were not affected by the responses that we make to our fiscal challenges. We could be: my personal allowance, winter fuel allowance or bus pass benefits could be withdrawn or taxed if we took a different line. In this Parliament, £9 billion has been spent on the increases to personal allowances and £4.7 billion on fuel duty—an effective cut by not increasing fuel duty.

When we discuss matters here, I am always deeply impressed by the expertise brought on health matters by doctors and NHS trust chairs, on higher education by university professors and academics, and on defence by senior military officials. When we wrestle with issues of poverty, there is no one experiencing deprivation to tell us what it feels like. Many of us know, because of other people whom we talk to, of the pressures, especially on those in work with low incomes, but we do not experience that deprivation for ourselves.

The extension of the threshold for the personal tax allowance in 2013-14 leaves basic rate taxpayers £47 better off. If you do not pay tax, that clearly has no effect. If you are a working family eligible for both housing and council tax benefit, you will lose benefit so that your net gain is not £47 but £7 in 2013-14. There are alternatives to the pressure on the most deprived families.

I am particularly concerned about the continued chipping away at the value of child benefit. This has been frozen for three years and is now to be capped at 1% for two further years. That is a total increase of 2% compared with an estimated 16% in CPI. Again, the issue is the cumulative effect of the reductions. This is in addition to the cuts in other benefits experienced by those on low incomes. The impact assessment shows that some 60% of the savings from this Bill come from the poorest third of households, with 3% from the wealthiest third. These three amendments would mean a substantial decrease in the 200,000 children pushed into poverty by the below-inflation increases in children’s benefits and tax credits in this Bill.

I wonder whether we realise, and get hold of well enough, the considerable extent to which child benefit in particular is regarded in most families as being specifically for the children concerned. My experience

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in West Yorkshire is of families on low pay struggling to make ends meet but quite clear that child benefit is to be used not for the general household expenses but by the mother to help her children. The points made persistently in debates on this Bill and on the Welfare Reform Act by the noble Baroness, Lady Howe of Idlicote, speak of the way in which it is women—often mothers—who are most disadvantaged by the measures we are taking because they are concerned particularly with the specific help of their children. Child benefit reduction fails to take account of the cultural and social support for children that this benefit provides, in addition to its financial obligations.

Reduction in child benefit specifically is also a disincentive to seeking work, so it is a direct challenge to the Government’s own desire, put forward powerfully by the Minister, to encourage people to return to work. Child benefit, rightly, is disregarded both from household income and in calculating the applicable amount before housing and council tax benefit are reduced. The result is that a low-income working family living in rented accommodation loses both the £4.80 a week in child benefit and a further estimated £4.10 a week because of the disregard rules. A loss of some £9 a week is a serious blow to working families, and that child benefit reduction in particular works against the Government’s aim to get people back into work.

6.15 pm

More specifically, on Amendment 17 and its effect in removing the lower disabled child addition within universal credit from the scope of the Bill, the Government have promised to provide protection for the most vulnerable families, specifically including those affected by disability. Many of the things that the Government have done have had the effect of protecting some of those with disabilities, yet this particular piece of support for disabled children is being subjected to the 1% cap.

There is already the cut in support for these children under welfare reform legislation from £57 a week under child tax credit to £28 a week under the disability addition of universal credit. We discussed that on the first day in Committee. This is in addition to the other reductions faced by all families under welfare reform. The Holes in the Safety Net review carried out by the noble Baroness, Lady Grey-Thompson, demonstrated how hard the changes to welfare benefits will hit disabled children who need specialist aid or clothing, for example. Enabling those children to play as full a part as possible in society benefits them and society as a whole. We must do all we can to achieve that.

In comparison with the Welfare Reform Act, the provisions we discuss today may seem in one sense minor but, again, they are cumulative. They add to the pressure on disabled children and their families. The Children’s Society estimates that if the lower child disability addition were uprated by CPI, the monthly rate in 2015-16 would be £130, whereas if it is capped at 1% it will be £126. The cost of the amendment would be some £4.2 million in that year. It would benefit 100,000 children by some £42 a year. That figure of £4.2 million is tiny in the context of the welfare reforms that we face. It would be a genuine

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mark of support for disabled children if the Government were prepared to move on this particular item of the Bill.

Those in Leeds who work with disabled children, with whom I have discussed this, were as much puzzled as anything else by the inclusion of this particular benefit in the Bill, in view of the Government’s welcome attempts to support disabled people. On Amendment 17, will the Minister avoid this additional pressure on disabled children by looking to uprate the revised entitlement in line with the cost of living?

On Amendments 14 and 19, will the Minister look again at the effects the restriction on child benefit and child tax credit will have on the Government’s aim to move children out of poverty? Will he consider the disincentive to seek work involved in the reduction of child benefit? Will he look at other ways to raise the £0.9 billion that the removal of these caps would cost by placing responsibility on those of us who can afford to pay it rather than on those who cannot? I beg to move.

Lord Low of Dalston: My Lords, the amendments would remove the benefits paid on behalf of children from the scope of the Bill because that disproportionately hits children and families. That is why I have added my name to them. Where 30% of all households are affected by the Bill, nearly nine out of 10 families with children are affected, including 19 out of 20 lone-parent families.

In total, the Children’s Society has estimated that about 11.5 million children are affected by the Bill. As the right reverend Prelate explained, Amendments 14 and 19 would together remove child benefit and child tax credit from the scope of the Bill. That is made particularly necessary by the fact that child benefit has already been frozen for three years before the measures contained in the Bill take effect. That means that child benefit will increase by only 2% over the course of half a decade. Over the same period, prices as measured by CPI will have risen by more than 16%. I say that that justifies the removal of child benefit from the scope of the Bill but, in truth, it would be unjustifiable not to remove it.

These benefits are paid to working families from all walks of life, as well as non-working families. The Children’s Society’s benefits uprating cap impact calculator shows that a couple with two children with one earner working as a primary school teacher and earning £600 a week would lose £424 a year by 2015. A couple with three children and one earner, a corporal in the Army, say, earning £619 a week, would lose £552 a year by 2015, so we can see the impact of having extra children.

As we have heard, Amendment 17 would remove the 1% uprating cap from the lower child disability addition under universal credit. That is particularly justified by the fact that rates of support for children in that group are already intended to be halved under universal credit. At present, families with a disabled child for whom they are in receipt of some level of disability living allowance, may be entitled to receive support through the disability element of child tax credit, currently worth £57 a week. Under universal credit, that support is to be provided through disability additions within household benefit entitlements, but it

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is proposed to cut that support in half to just £28 a week. That change will affect all families with a disabled child unless the child is receiving the higher rate of care component of disability living allowance or is registered blind.

The review of the noble Baroness, Lady Grey-Thompson, Holes in the Safety Net, of the impact of universal credit on disabled people and their families surveyed 1,400 families with disabled children about changes to support under universal credit. The evidence received suggested that, for those likely to be affected by the cut, the impact could be disastrous. Two-thirds of those likely to be affected said that if they received £30 a week less in benefits for their disabled child, they would have to cut back on food. At this point, I cannot resist asking: if the Minister shares other noble Lords’ disappointment at the greater resort to food banks, what does that say about her view of the government policy that she is supposed to be defending, as it is government policy that is leading to people’s greater resort to food banks?

Returning to the review of the noble Baroness, Lady Grey-Thompson, more than half of those surveyed said that the changes would lead to them getting into debt, more than one in 10 that they might even need to move home. One parent told the inquiry:

“My child would have little quality of life and would lose much of the social interaction he needs. It would be like a prison sentence”.

Another simply expressed their desperation, saying:

“This would have such a huge impact on us I really don’t know what we would do”.

The Bill will further compound that cut. For a family with one disabled child, the impact of the change in uprating would be about £42 a year. It should be noted that that impact is on top of changes to the uprating of other benefits received by the family.

The Children’s Society estimates that the cost of uprating the lower child disability addition would be only £2.4 million in 2014-15 and £4.2 million in 2015-16. All this hardship for such a paltry saving. The disproportionate impact of the Bill on children cannot be overstated or justified. It is not the first time that austerity measures have had a disproportionate impact on children and families. In fact, as the noble Baroness, Lady Sherlock, told us, the Institute for Fiscal Studies found last year that, even with universal credit fully in place, taking together all the tax and benefit measures introduced or to be introduced between the beginning of 2011 and April 2014, families with children will lose a higher proportion of their income than either pensioner households or working-age households without children across the whole income distribution.

We have heard a lot this afternoon about the measurement of child poverty, but the IFS estimate of a growth in the number of children living in poverty of 400,000 between 2011 and 2015 and 800,000 by 2020, has been referred to more than once. The noble Lord, Lord Newby, said that we cannot set too much store by such predictions because we do not know what direction government policy may take. All I know is that the last time I heard, the Government intended to take a further £10 billion out of welfare. The Bill can only serve to increase the level of child poverty. Indeed,

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as the noble Lord, Lord Newby, acknowledged, it will add 200,000 to the number of children in poverty; 100,000 of them will be in working households.

Children do not have a vote. If they did, it is impossible to believe that they would be voting for the Bill as it stands.

Baroness Grey-Thompson: My Lords, my name is also attached to all three amendments in this group. I thank the right reverend Prelate the Bishop of Ripon and Leeds for explaining the amendments.

First, I will cover Amendments 14 and 19 together. Households with children are much more likely to be affected by the Bill than households without children. Many families with children will be affected even when someone is working full time. A single person or couple with children obviously have much greater costs than those without dependent children. For this period of their life, the income they need to meet the basic living costs of their household is clearly greater. That means that the amount someone can be earning and still need extra financial support from benefits and tax credits stretches much higher up the income scale than for those without children.

The level of childcare costs and of rents—especially in the private rented sector— combined with the lack of a living wage means that people who can only find work at or near the minimum wage cannot escape from needing that extra financial support, for however much time they work. If they work more hours, they need more help with childcare. Many are already struggling to manage.

For example in a local paper in the north-east of England, where I live, Pauline Chambers, chief executive of Sedgefield and District citizens advice bureau in County Durham, said that the team had encountered levels of hardship not seen for 21 years. Telephone inquiries have increased by 100 per cent in the last two months, with many people struggling to pay for basic food and utilities. That view is repeated up and down the country. Julia Cornelius, manager of Luton CAB was quoted in a different paper. She said:

“Every day we see people who are struggling to keep a roof over their heads or put food on the table as wage squeezes, price rises and benefit cuts wreak havoc on household budgets”.

Those in work and on benefits gain little from their earnings increasing. A single person earning £250 a week who receives a £2.50 rise in their earnings will keep about £1.70 of the increase after deductions for tax and national insurance. If they have children, and so need to rely on benefits and tax credits, they will reduce as their income rises, so they will be left with a net gain of 10p from a rise in earnings of £2.50.

6.30 pm

The increase in the tax threshold gives much less help to families with children. In April, a single person with earnings of £250 will see a rise in their net earnings of £5.12 per week because of the raising of the tax threshold. It is clearly important that single people in this position are helped; they are likely to be near or below the poverty line if they are paying housing costs. However there is no equivalent help for families with children when someone in the household

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earns £250 because they are likely also to be entitled to housing and council tax benefit. They will gain just 76p next April because of the way their benefits will reduce as their net earnings rise.

The cumulative loss due to changes in the uprating of child benefit also decreases work incentives. The real-terms loss between 2010 and 2015 due to child benefit uprating alone is about £6 a week compared with if it had been uprated as it used to be by RPI. However, child benefit also plays a role in determining the level of housing and council tax benefit paid for those on low incomes in work, which means a further loss of £5. So the total real-terms loss between 2010 and 2015, just due to the changes in uprating child benefit, for a family with someone in work but on a low income is almost £11 a week.

Many working families with children are already in poverty. Calculations by Citizens Advice show that a couple, both of whom are working, one full time earning £250 a week, the other part time earning £50 a week, who have two children aged 14 and eight and are living in rented accommodation have an income of £337 a week after paying housing costs. This is already £30 below the after-housing costs poverty line for a family in their situation. This Bill is going to pull them deeper into poverty. A couple with the same household but who are unable to find work will have an income of £259 a week after paying housing costs. This is already £109 a week below the after-housing costs poverty line for a family in their situation.

To summarise Amendments 14 and 19, households with children are much more likely to need to be reliant on benefits because of their extra costs. These families, even if working full time, gain very little from the raising of the tax threshold. Many of these households, whether working full time or unable to work, are already in poverty. This Bill is going to pull many households with children even deeper into poverty. Universal credit will help the family in work, but that will be too late for many of these children. Taking child benefit and child tax credit out of the scope of this Bill would go some way to mitigate the increasing financial pressures on these families in the next couple of years. It is surely time to do something for these families.

I shall briefly turn to Amendment 17. Many parents of disabled children face losses under universal credit. Support for the most disabled children is being halved. In my inquiry into the impact of universal credit on disabled people, the large body of evidence we received from parents of disabled children was that they face substantial additional costs as a result of having a disabled child. They include paying for specialist aids, adaptations to their homes, additional clothing costs and travel costs. Roughly two-thirds of lone parents who had a disabled child receiving the middle rate of the care component of DLA reported that they were unable to work because of their caring responsibilities. Their entitlement under universal credit will be about £28 less than current levels of benefit, as has already been mentioned by the right reverend Prelate. Roughly two-thirds of these parents said they were unlikely to be able to return to work for at least five years. The evidence we received was that these levels of benefit would create great hardship.

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Freezing the disability element will mean an even greater loss. Current parents will receive transitional protection, but their award will be frozen until their entitlement under universal credit reaches that level. These families are facing a very difficult next few years because of the freezing of child benefit and child tax credit. If the disability element does not increase with inflation, these families will face an even bigger drop in real-terms value when they transfer to universal credit. They will face several years with lower-than-inflation rises. Their benefit will then be frozen on universal credit for an even longer period while food, housing costs and fuel prices continue to rise.

Lord Touhig: My Lords, these amendments, to which I have added my name, are essential to protect the basic well-being of the very poorest children. Those seeking to justify restrictions to our social security system have continually argued two things: first, that we must fairly distribute the burden of national economic hardship, and secondly, that we must take tough decisions in order to ensure a sustainable future. Yet driving down the value of child-related benefits achieves neither of those objectives. Instead, it unjustly shifts the burden onto the most vulnerable section of our society and damages the future prospects of hundreds of thousands of young people.

The Government’s own impact assessment highlights that the Bill as it stands will disproportionately affect families, with lone parents experiencing the most significant real-term cut to their income of £5 per week. Noble Lords might think that £5 is not much, so let us put that figure into context: it is the equivalent of half an average weekly heating bill or two lunches for a child. The loss of it is a significant challenge to the increasing number of parents currently struggling to cover utility costs or turning to local food banks for their children’s meals. In practice, the actual shortfall is likely to be larger still owing to above-inflation rises in the cost of necessities such as groceries, fuel and gas and electricity. The net result will inevitably be more child poverty and greater family suffering, making a mockery of any notion that this is a fair or just mechanism for securing cost savings.

As Helen O’Brien, the chief executive of Caritas Social Action Network, said recently,

“it is absurd to suggest that a child going to school hungry or coming home to a cold house is shouldering their fair share of austerity measures; rather they are being deprived of a basic standard of living to which all children are entitled”.

Removing child-related benefits from the scope of the Bill will not completely prevent or reverse this hardship, as low-paid and unemployed families will still face a rapidly widening gap between their outgoings and their core benefit income. However, specific parts of the safety net designed to cover essential costs of caring for their sons and daughters will be crucially safeguarded if these amendments are agreed.

This is particularly important given that the relentless squeeze on the support available for poor families has already left considerable numbers of children not only without the facets of a good childhood but growing up in simply unacceptable living conditions. Reflecting on cuts to local housing allowance and the pending

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introduction of the household benefit cap, Alison Gelder, chief executive of Housing Justice, recently noted that,

“across the country we are seeing increasing numbers of children suffering from a life in sub-standard housing and being forced into overcrowded accommodation”.

Taken in conjunction with this April’s intended ending of council tax benefit and the imposition of social housing underoccupancy penalties on approximately 220,000 families with children, these measures are putting the income levels of the poorest parents under unprecedented strain. On top of this, child benefit is already subject to a three-year freeze, which stands to create a further annual real-term loss of £130 by 2014.

More than ever the most vulnerable families require protected child-related benefits in order to mitigate the most damaging effects of this rapid and extensive cut to their income. At the very least, the Government should allow sufficient time for the impact of recent and pending benefit changes to be properly examined in relation to child poverty. The result of committing to another three years of real-term cuts before many key restrictions have even come into force will be disastrous for children whose parents are struggling to keep a roof over their heads and food on their table.

Ultimately, increased levels of child poverty are not only devastating for individuals and families but stand to have a profoundly negative effect our society. One of the most significant risks is to children’s education, an issue previously recognised in the DWP’s impact assessment on restrictions to housing benefits. It stated that overcrowding resulting from the cuts could hamper children’s ability to do homework and affect educational attainment. Last year, more than half of teachers surveyed reported that financial hardship among families had resulted in children arriving at their classes hungry, with significant consequences for concentration and behaviour. A report from the Children’s Food Trust last week reinforces the picture of children going to school hungry. Of 250 staff surveyed, 84% said they had seen children without enough to eat and 68% said they had seen an increase in this over the past two years. If child-related income is driven down further this is only likely to worsen, jeopardising the potential of even more young people and undermining the prospects of the next generation.

When parents struggle to afford basic necessities for children, there is also the very real risk of running into long-term personal debt. The shocking findings by the magazine Which? last year showed that payday loan companies now spend over half a million pounds targeting cash-strapped mothers and fathers by putting their adverts on television during children’s programmes. This is indicative of the increasingly desperate situation that so many families now face. A growing number of parents are turning to these lenders, while some 25% now use credit cards to meet everyday living costs. The abolition of community care grants and crisis loans in April only stands to deepen this problem by closing the door to interest-free emergency funds.

It is difficult to see how pushing even more parents into debt by slashing the value of child-related benefits will contribute in any way to our future economic

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recovery; yet increased levels of debt are precisely what will result from this Bill. Children still need healthy meals, warm houses, winter clothes and new shoes. When parents are faced with a real-term cut in child benefit and tax credits, alongside above-inflation rises in the prices of these goods, they will have to turn somewhere to make up the shortfall. It is as simple as that.

These amendments are not only right, but imperative. Capping up-rating of child-related benefits at 1% for the next three years will exacerbate the already unsustainable pressure that parents are under. It will cause serious damage to our communities in the long run and, most critically, it will drive down the living standards of millions of children. Protecting the basic level of income required to meet young people’s most intrinsic needs is a fundamental test of our society and one that we cannot afford to fail.

At the general election, the leader of the Opposition, Mr Cameron, now the Prime Minister, said that we lived in broken Britain. I paid little attention to him at the time because I believed he was wrong. However, after two and a half years, we live in a Britain where multi-millionaires are about to receive thousands of pounds a week in tax cuts; we live in a Britain where corrupt bankers who fiddled the LIBOR rate are rewarded with pay-offs when they should have gone to prison; we live in a Britain where those who operate our transport system cannot run the trains on time but get big bonuses; we live in a Britain where energy companies have more than trebled their profits yet require pensioners to pay an extra 6% for gas and electricity; and we live in a Britain where hard-working low-income couples with children will now see their weekly income slashed, the unemployed and poor will have their benefits cut and disabled people will see what help they get now cut or taken away altogether. Now, in 2013, I have started to understand what Mr Cameron meant by broken Britain.

Baroness Massey of Darwen: My Lords, I want to make some very brief comments on the amendments, mainly to follow up some things I said at Second Reading. As my noble friend Lord Touhig just said, these amendments are imperative, crucial and brilliant, and I congratulate the movers on putting them so powerfully. Any amendments that will mitigate against benefits having a negative impact on children are very forceful and follow very well from earlier, powerful speeches about child poverty.

I suggested at Second Reading that anything that might increase child poverty should be removed from the Bill. I say that again and support these amendments. The Government should really think about listening very carefully to the organisations and experts who work closely with children and families and who understand child poverty. These organisations and experts have pointed out the negative implications of this Bill. Surely their analyses should be taken very seriously.

The Government have already announced that the Bill will directly increase relative-income child poverty by 200,000 children, of which 100,000 will be in families in work. Nearly all the highly vulnerable children that

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Barnardo’s works with are receiving in-work or out-of-work benefits. This Bill will impose a real-term cut to their income. One in 10 families will be affected by this Bill, the poorest families most.

6.45 pm

The Government are obliged to drive forward progress on child poverty and it is good to hear that they are committed to reducing it. The action areas that the Government must consider when they provide their national child poverty strategy, as my noble friend Lord McKenzie mentioned, include the employment of parents or the development of the skills of parents; financial support for children and parents; information, advice and assistance to parents and the promotion of parenting skills; physical and mental health, education, childcare and social services; and the promotion of social inclusion. This Bill cuts across all these duties and negates them. I echo the question that my noble friend Lady Sherlock posed about the assessments that have been done on the impact of this Bill.

This Bill cuts not just a hole, but a chasm in the fight against child poverty. I ask again: are the Government listening to those who work with children and, importantly, have the Government considered the long-term effects of child poverty, such as underachievement at school, with all the consequences, potential drop out from education and lack of social mobility? Measures in the Bill are potentially hugely costly, much more than the potential savings proposed, and I hope the Government will think again.

Baroness Sherlock: My Lords, we have heard yet again some very powerful and persuasive speeches and it is a very interesting argument. I commend the right reverend Prelate the Bishop of Ripon and Leeds for provoking such a good debate on so important an issue. As we have heard, this amendment would remove child benefit, child tax credit, and the child addition to universal credit from the scope of the Bill. Since we on these Benches would like to remove all benefits and tax credits from the scope of this Bill, we are pleased to support it

As we have heard from the right reverend Prelate, the noble Baroness, Lady Grey-Thompson, and others, the Bill has a disproportionate impact on children and families. The Government’s own impact assessment shows that two-thirds of affected households are families with children. As the noble Lord, Lord Low, noted in a very powerful speech, the Children’s Society says that while 30% of all households are affected, 87% of families with children are hit.

On one level this is because families with children receive more in state support—of course they do. As the noble Baroness, Lady Grey-Thompson, pointed out, a household without children is rather cheaper to run than one with children; not to mention a great deal quieter. However, while most parents rightly bear the lion’s share of the cost of raising their children, the state has always contributed—not just in extreme cases to try to protect children from the misfortunes that befall their parents but also because, in general, it is always recognised that children are a public as well as a private good. We all have a stake in seeing the next generation thrive.

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Many noble Lords have rehearsed—and I will not repeat them—the concerns expressed to all of us about the impact of these measures on families with children. We have all had briefings from Save the Children, the Child Poverty Action Group, the Children’s Society and others making those points. These are very difficult times to be raising children, as my noble friend Lord Touhig noted in a very powerful speech. As the costs of food and energy have soared, more and more parents are struggling to make ends meet as they spend more of their money on these basic costs.

The right reverend Prelate made a telling point, I thought, when he reminded us that, unlike other areas, we do not have people in here with direct expertise of the matters under consideration. To that end, I liked the quote from Rosemary Keenan, the chief executive of Catholic Children’s Society (Westminster), when she said:

“It is hard for many of us to imagine what it is like for a mother to only have £1 left and know she still has to feed her children before the next payday. Families facing in-work poverty rely upon Working Tax Credits and other benefits to help make ends meet, and will face serious hardship as a result of these restrictions”.

Indeed they will. As we have heard from a number of noble Lords, the Bill comes on top of a series of cuts in the value of other tax credits and benefits. As well as the headline cuts, there have been a series of hidden cuts affecting, for example, tax credits for families with children by changes to taper rates, the treatment of income and the freezing of allowances, all of which sound technical but have in fact saved billions. However, it is not of course money that has been saved, but money that has been taken way from low-income families with children.

I seem to recall that the Government suggested at earlier stages that one of the reasons that so many families are affected is that tax credits go too high up the income scale. The implication, I suppose, is that people would not miss the money. However, the noble Baroness, Lady Grey-Thompson, described some figures from Citizens Advice. It has given us case studies showing that a couple with two children, where one parent is working full-time on just over minimum wage—getting £13,000 a year—will gain just 76 pence from the personal allowance. As a result, however, they will lose £3.46 a week net. By April 2015, that family on £13,000 a year with two kids will be £12.79 a week worse off. Even if we go nearer to average earnings, Citizens Advice suggests that a family earning £26,000 in similar circumstances will be over £12 a week worse off by April 2015. The sums may not sound like a lot, but they are significant to families on those kinds of incomes.

The Bill, as we have heard, will affect primarily working families with children. I was pleased to hear my noble friend Lady Massey of Darwen reiterate the impact of the Bill on child poverty, although I hope to hear something specific about this. I feel that I have probably done it to death, so I shall stop saying it now.

To come back to our core concerns, the Bill is a completely inappropriate way to address the up-rating of state support for families. We have perfectly good mechanisms in place to do that on an annual basis in the light of prevailing economic conditions. To come

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to the specifics, in trying to circumvent those annual mechanisms, the Government have left me slightly confused. I therefore have two questions for the Minister. First, can he tell the Committee what plans are in place for the up-rating of those benefits, tax credits and allowances which are not included within the scope of the Bill? This was raised at an earlier stage, but I do not think that we got a full answer; if we did, I apologise and will look it up. If the Minister does not know, would he mind writing to me before Report stage?

Secondly, other than those mentioned in the schedule and the universal credit work allowance mentioned in the Autumn Statement, are there any other benefits or allowances which the Government intend to up-rate by 1%? Those two questions together sound quite boring but, in fact, their answers will enable us to understand the parameters of the Bill’s impact. Unless we can get that detail, the Committee cannot properly understand its consequences.

Coming back to our core objections, these are poor choices for the Government to be making. The families who will be hit are not responsible for the economic situation, for the banking crisis or for the failure of the Government to get the economy growing again. They are just doing their best to manage in difficult times. Yet the Government are planning to cut the value of the help they get from the state in order to fund a tax cut for nearly 13,000 people earning £1 million a year. We should not be doing this and are pleased to support the amendment.

Lord Newby: My Lords, I absolutely understand and appreciate the desire of the right reverend Prelate and other noble Lords who have spoken on these amendments to protect and support children; of course, we all want to do that. However, our view is that supporting children is not just about increasing benefit levels. One of the most important things that we as a country can do to support children is to tackle the deficit and restore economic growth. In doing so, we create a future of prosperity, opportunity and jobs for the parents of those children in the short-term and for those children as they grow up. Taking benefits out of the Bill, as proposed by the right reverend Prelate, would take away some of what we consider to be the vital savings required to do this.

The amendments which we are debating now would remove from the Bill the child element of tax credit, child benefit and the lower rate of disabled child addition in universal credit. I assume that the right reverend Prelate’s intention in removing those elements is that they would be up-rated with prices, as was the case previously. If that were the case, I need to remind the House that the savings delivered by the Bill would be reduced by nearly £1 billion. In our view, those savings simply have to be found. If we did not do it through the Bill, they would have to be found from somewhere.

I was extremely grateful to the right reverend Prelate for the fact that, unlike the Opposition, he at least set out how he would raise the money. It was a long and credible list. However, it is not a list with which the Government agree. The Government’s view is that tax credits and child benefit account for over 40% of

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working-age welfare expenditure. It is not realistic to think that they can be excluded from the need to make savings.

We are attempting to prioritise resources into reforms which can help children in a variety of ways. To repeat some of the points which I made in my earlier speech, I hope not too tediously, we have since September 2010 entitled all three and four year-olds to 15 hours per week of free early education. This is being delivered flexibly to meet parents’ needs. It will be extended to 260,000 disadvantaged two year-olds from September 2013. We are also helping 100,000 more working families with their childcare costs by spending an extra £200 million in universal credit.

To deal with a point made by the noble Lord, Lord Touhig, we are taking action to deal with exorbitant practices by payday loan companies and loan sharks. One thing that we are grappling with, with which any Government would grapple, is that many families on low incomes have got very high levels of personal debt. This is not new. When I was Treasury spokesman for the Liberal Democrats about seven or eight years ago I appeared, somewhat implausibly, on the steps of the Treasury with my right honourable friend Vince Cable, bearing an outsized cheque at the point when personal debt in the country reached £1 trillion. Most of this, I accept, was mortgage debt; it is not the debt that we are talking about today. However, some of the biggest increases in personal debt over the past decade have been among people on low incomes. This growth in personal debt was not effectively recognised or tackled in the past. Indeed, our appearance bearing this cheque just guaranteed a huge amount of ridicule for Vince Cable and myself, rather than anybody, including the previous Government, taking the slightest notice of it, which was deeply distressing—or, more importantly, taking the slightest action to deal with the culture with which we are now grappling.

However, both in terms of loan sharks and payday lenders, I hope that we are taking more effective measures, not least through the amendments during the passage of the Financial Services Act, to ensure that people requiring access to short-term loans can, at the very least, do so with companies which will treat them half-decently. The other area which we protected, which is vital to families and benefits those at the poorer end at least as much as those at the upper end, is the support they get through the schools system and the NHS, where the budgets are protected.

The right reverend Prelate spoke about child benefit, which he is anxious to protect. I remind the House that, even after the changes that have been made to child benefit, nine out of 10 households are still covered by it. We are taking the entitlement away only right at the top end. Child benefit continues to be paid to many households which are by no means on low income.

7 pm

The other point, which is hugely important in the context of this debate, is that while we have restrained child benefit, in April 2011 we also increased the child element of child tax credit by £180 above inflation to take account of that freezing of child benefit. I hope that all noble Lords will support us in tilting the

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expenditure on families and children, taking child benefit and child tax credit together so that a higher proportion of what is paid goes to children at the lower end of the income scale.

I appreciate that the intention behind Amendment 17 is to increase the amounts paid for less severely disabled children, which is an understandable ambition. Many noble Lords will have taken part in far more debates than I on this subject, not least during the passage of the Welfare Reform Act and the subsequent regulations. I will not repeat those arguments, as I do not believe that anybody would disagree that the current benefits system is too complex, and that welfare reform is much needed.

In universal credit, the disability support package has been restructured to remove much of the current complexity, creating a system that is simpler both to understand and to administer. We have removed many of the disability premiums and complicated entitlement rules, and have created a system that delivers what it is designed to do: to support the most vulnerable and ensure that work pays.

The disability package in universal credit focuses support on disabled people with the greatest needs, who would be less able to provide additional support for themselves through taking up work. This Bill excludes universal credit elements paid to the most severely disabled adults and children. This higher rate, paid to the most severely disabled adults and children, reflects the fact that some people will face longer durations on benefits, and in the case of children there is also an important relationship with the level of care which a parent will need to provide, which itself affects their ability to take up or increase the level of paid employment.

Over the past decade, child payments have increased at a faster rate than adult payments. We firmly believe that aligning the extra amounts payable for disabled children and adults is the right and fair thing to do. This amendment would remove this alignment and set us back on a path towards complexity and multiple rates. That is something we wish to avoid.

I hope that I have gone some way to reassure noble Lords that, while we have restructured the disability support package in universal credit, we have not reduced the funds available, and that maintaining a balance between child and adult payments continues to be the right thing to do.

The noble Lord, Lord Low, gave an example of how much a family with a less severely disabled child would receive under universal credit. However, as we said, transitional protection will mean that existing claimants whose circumstances remain unchanged will not receive less in money terms as a result of moving to universal credit. The amount will be squeezed, but they will not face the kind of cliff edge that he was talking about.

Baroness Hollis of Heigham: My Lords, two sentences ago the Minister said that one of the reasons for bringing the rate of £57 down to £28 was in order not only to align it with the adult rate but to increase simplicity. Will he explain why halving the amount increases simplicity, as opposed to hardship?

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Lord Newby: My Lords, that was not the point I made. I was talking about aligning the uprating of the adult and child rates, not the halving of the amount. I was making a different point.

The noble Baroness, Lady Sherlock, asked about plans to uprate benefits. Benefits not covered by this Bill are subject to existing legislation, so the Secretary of State will review social security benefits annually, after publication of the relevant price figures. He will therefore decide what uprating will take place when he has that information in the normal way. I will write to the noble Baroness with the details of other benefits that are to be uprated by 1%.

As I have said before, the welfare system provides vital support for many families with children. However, government support for children must be about more than benefits. Securing the economic recovery matters to every household in the country, and only by doing that can we create a stable and thriving future for our children. I hope that I have also been able to provide some reassurance to the Committee that this Government are continuing to take action to support families—action that will change the lives of families with children.

The Lord Bishop of Ripon and Leeds: My Lords, I am very grateful to all noble Lords who have taken part in this debate, and not least to the Minister for his response. I am disappointed that he was not able to respond more to Amendment 17, because it is not an expensive proposal. It will help a significant number of children—real children with real disabilities. I know that money is being provided for disabled people in the greatest need, but the disabilities that are felt and known by those who would benefit from Amendment 17 are real. To accept the amendment would provide real support for a large number of children who could thereby have been enabled to play a greater part in our society, both for their benefit and for the benefit of the rest of us.

I accept that together, the amendments in this group would cost a significant amount of money at £0.9 billion. However, it is not fair to argue that welfare benefits cannot be excluded from the work that we have been doing in order to respond to our fiscal crisis. Welfare benefits have been tackled extensively through the whole welfare reform process. This comes over to me as twisting a knife in a wound. I regret that the Government have felt that this is the area where they have to find that £0.9 billion. I will not repeat the argument that there are other areas where we could have found it.

I am very grateful to all noble Lords who contributed examples of a wide range of people: the corporal in the Army with three children, who will lose £520 a year, the primary school teacher, the nurse, and so on. They showed that a wide range of people will be affected and damaged by the Bill. I am grateful to the noble Baroness, Lady Massey, for stressing the organisations that support children. It is good to have all the statistics produced, but however many of them there are, the reality comes home to me, not when I read the Children’s Society’s statistics, but when I go to see its work in Leeds and its projects with children who are hungry, who have to cut back on food, as the noble Lord, Lord Low, said, and whose future prospects

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are being damaged, as the noble Lord, Lord Touhig, said. We need to do something to look at the ways in which we disadvantage children in practice by so much of the work we are doing.

I hope that we will come back to this issue on Report to see whether there is not something we can do to set down a marker and make a real contribution to the lives and vitality of children in our society. However, for the moment, I beg leave to withdraw the amendment.

Amendment 14 withdrawn.

Amendment 15

Moved by Baroness Sherlock

15: The Schedule, page 4, line 10, at end insert “with the exception of statutory maternity pay”

Baroness Sherlock: My Lords, this amendment is in my name and that of my noble friend Lord McKenzie of Luton.

The Telegraph online ran a story on 6 December 2012 headed “Autumn Statement: Osborne Attacked over ‘Mummy Tax’”. The article stated:

“Hundreds of thousands of new mothers will be almost £240 worse off after George Osborne announced cuts to maternity pay”.

A similar story was run in the Mail in January under the headline “True Cost of ‘Mummy tax’”. It is fair to say that the inclusion of statutory maternity pay in the scope of this Bill has not been universally well received. The Telegraph story quoted the founder of Mumsnet and I think it is fair to say that she was pretty unhappy with it. Why are the Government including statutory maternity pay in the Bill? The Telegraph had an explanation. It said:

“The Prime Minister’s official spokesman said it was ‘a personal choice’ for parents to decide whether to return to work after having a child or to stay at home”.

So there you have it—it is a personal choice; at least, presumably it is if you can afford it. But surely it is slightly more than that. Do we not all have an interest in making sure that people have a real choice when they have a baby? Is not one of the reasons the state pays statutory maternity pay that it is seen to be good for babies to have their mothers at home, breastfeeding them where possible and bonding with the child? Therefore, is there not a genuine public policy interest in making sure that we do not unnecessarily make it any harder for women who want to stay at home when they have a new baby?

The growing concern about this and other cuts affecting new mothers prompted this amendment, which seeks simply to remove statutory maternity pay from the scope of the Bill. It is worth rehearsing very briefly how SMP works. SMP is payable only to women who have just had or adopted a baby, or who will do so shortly. They must be in paid work. Indeed, they must have been continuously employed by an employer liable to pay national insurance contributions for them for six months before the 15th week before their expected date of confinement. They must have had average gross weekly earnings at least at the level of

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the lower earnings limit for national insurance and they must have stopped work in order to have or care for the baby. In other words, this is a contributory benefit paid to working women who have stopped work only to give birth or to care for a new baby. SMP gives them 90% of their average weekly earnings for the first six weeks and then, at the current rate, £135.45 a week for the next 33 weeks.

According to a Written Answer from the right honourable Maria Miller in another place on 30 April 2012, at col. WA 1322, the Government estimate that some 232,000 families will claim SMP in 2012-13. Those families could find themselves being seriously short-changed. Using the Government’s own inflation forecasts, the Children’s Society calculates that in 2015-16, SMP will be £145.15, if inflated by CPI. However, the impact assessment indicates that the likely rate is just £139.58—a difference of £5.57 per week. To put that in context, if a woman were on maternity leave now with her first child and had her second child in 2015, she would find that she got about £184 less in real terms during her next maternity leave than she would during this maternity leave. If her earnings were below the flat rate level for SMP, that figure rises to £217.

The period after a birth is a particularly tough time for parents. The Money Advice Service estimates the average cost of essentials for a new baby as some £3,700 over their first year. Of course, just as costs rise, income falls because of maternity leave, and parents are time-poor as well. The £200 may not be much to some people but it is enough to buy a cot and bedding and 17 value packs of newborn nappies.

This amendment focuses on SMP for two reasons. First, I simply do not think we can allow this Bill to go through the House without noting all the impacts on mums of new babies that have happened since 2010. Just since 2010, the Government have done the following: abolished the health in pregnancy grant; abolished the Sure Start maternity grant for all but the first child; abolished the baby element of child tax credit; cancelled the planned toddler element of child tax credit; abolished the Government’s contribution to the Child Trust Fund; frozen child benefit for three years and removed it from higher rate taxpayers; cut the percentage of childcare costs parents can get back through working tax credit; and legislated to introduce hefty charges for using the CSA. Some of those cuts are very severe. House of Commons Library research shows that low-paid new mums are losing £1,300 during pregnancy and the baby’s first year just from cuts to maternity pay, pregnancy support and tax credits, and are losing more from child benefit.

The second reason for tabling this amendment is that during the Second Reading debate, I raised the issue of SMP. I did it specifically to try to find out how that fitted with the Chancellor’s claim that the reason this Bill is needed is to ensure the welfare state is fair to working people, not, you may recall, to those who lie in bed with their blinds down, sleeping off a life on benefit, while others go out to work. However, on the face of it, it is hard to see how targeting a payment made to someone who has just had a baby after being in continuous employment for the requisite period at a level which triggers national insurance contributions

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fits with that narrative. Indeed, I am sure that the Government have a good reason, and I hope it is better than simply saying, “It’s a choice”. However, given that we are in Committee and this amendment is about SMP only, I look forward to hearing the Minister share that reason with us. I beg to move.

7.15 pm

Baroness Stowell of Beeston: My Lords, I start by making it absolutely clear that, contrary to what the noble Baroness, Lady Sherlock, has just said, the United Kingdom has a strong and effective maternity and parental regime. The UK is significantly more generous than the requirements of the EU pregnant workers directive. The directive says that a woman should benefit from 14 weeks’ paid maternity leave; we provide 39 weeks. It also says that a woman should receive at least the amount that would be paid for sickness; our standard rate of maternity pay and maternity allowance is £135.45. This compares very favourably with the current statutory sick pay rate of £85.85 per week.

In addition, the latest available data from the OECD from the previous financial year show that the proportion of our GDP spent on maternity and parental pay is higher than in Germany or France. Moreover, in the past decade, the standard rates of statutory maternity pay and maternity allowance, which is the allowance that is paid to women who are not in work who have children, or who were not in work prior to the birth of their child, have increased by more than 35%, from £100 a week in 2003 to £135.45 currently. So while I accept that the decisions we have taken on statutory maternity pay will mean a slightly smaller increase for people over the next few years, the UK’s strong and effective maternity architecture will remain firmly in place.

The noble Baroness, Lady Sherlock, referred to what she described as a mummy tax and to media reports on it. I am slightly surprised that she referred to Mumsnet because when her honourable colleague Rachel Reeves published an article on Mumsnet on what she described as a mummy tax back in December last year, the blog attracted a lot of comment. It is worth highlighting some of the points that were made. Most of the contributors were at pains to say that they were not supporters of, or spokesmen for, the Government, or supporters of either of the two parties in government. One contributor said:

“I despise this latest Labour ‘Mummy Tax’ campaign. For one, the name ‘Mummy tax’ is hugely patronising and sexist for people in a relationship as my husband benefits from maternity pay just as much as me as all our household income is pooled. And let’s be clear although there is a real terms cut due to the rate of inflation, this change is not a tax”.

The comments continued and attracted quite a lot of support. Another contributor responding to the post on Rachel Reeves said:

“I’ve had no pay rise for the last 3 years and we are getting nothing this year and told to expect the same for the next 2-3 years—is that a tax? No, it’s just the real world and I have to get on with it. I’ve had a child during that time and we had to work around what we could afford with regard to length of maternity leave and to be honest £180 would have made no difference whatsoever. I despise the term ‘mummy tax’—it’s a

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patronising media friendly sound bite, which creates a hugely distracting perception of the middle class having to cut back on cappuccinos whilst on maternity leave which removes debate from the real issue. I would like to see the labour party setting out what it would do in power and challenging the government instead of wheeling yet more spin and inaccurate bluster”.

Baroness Lister of Burtersett: I am sorry to interrupt the noble Baroness. I accept that that must have been said on Mumsnet and I have to admit that I do not particularly like the term “mummy tax” either, but does she accept that while it is the case that the mother who posted on Mumsnet pooled her income, research that I and others have carried out shows that for many women having a benefit in their own right is important to them psychologically? They receive money over which they have control, whether or not they then pool it in the household. Not all households pool their incomes. Some do and some do not.

Baroness Stowell of Beeston: That is a fair point. The people who were posting on the internet at that time were responding to the comments of Rachel Reeves about the proposals having a disproportionate impact on women, and only women.

Away from the debate on Mumsnet, the Government are committed to make this architecture for women stronger. The provisions in the Children and Families Bill, which had its Second Reading in another place last week, will allow working parents to choose which parent takes parental leave and pay to care for their child in the early years. This will give mothers real choice over when and whether they return to work. This is helpful in two big ways—where the woman is the higher earner and in starting to chip away at the inequality that some women face at work just because it is assumed that they and only they will take a break in their careers to have children. Our proposals will start to make a big difference.

It is also important to remember that the Government have introduced other reforms that will help to offset the impacts of these changes. For example, a woman working full time at national minimum wage for six months of the tax year, who then receives statutory maternity pay for the next six months, will still be better off overall as a result of changes to the income tax personal allowance. The introduction of universal credit will also provide a big boost for many mothers and lone parents, with 2.6 million women and 700,000 lone parents expected to gain through increased take-up and improved financial incentives to work. In addition, as part of the introduction of universal credit, £200 million extra is being spent to support families with childcare costs. For the first time, this support will be made available for families who work less than 16 hours a week. This will mean that 100,000 more working families will be helped with their childcare costs. That is important, because it means that even if someone is able to take on only a small amount of work, they will get that support for childcare costs to which they previously would not have had access. In another move that will be helpful to mothers and parents, as my noble friend Lord Newby mentioned, we have committed to introduce 15 hours a week of early education for 40% of two year-olds, starting with the most disadvantaged.

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The Government will also continue to make extra support available for mothers on low incomes to buy the basic goods that they need. We have a programme called Healthy Start, and the Sure Start maternity grant—a lump sum payment of £500—is available to help parents with the costs of having a new child. I know that the noble Baroness, Lady Sherlock, said that this is now available only to parents who have a child and no other child under the age of 16. However, this support is additional to the money that parents receive through their statutory maternity pay. Bear in mind that if there is another child in the home, some of the initial substantial expenses of having a family often are not repeated if they have a second child.

The amendment would reduce savings from the Bill by around £50 million in 2015-16. None of the decisions contained in the Bill are easy. I recognise that the noble Baroness, Lady Sherlock, would prefer that we did not include statutory maternity pay in the Bill. I would like that, too. I would love it if we could say, “Let’s exclude this or that”. However, as my noble friend said in our previous debates, every time we say that we will not include something in the Bill, we have to look somewhere else for the money. That £50 million is not a small sum and is equivalent to more than 20,000 part-time nursery places for three to four year-olds. This is money that will cover substantial support that rightly we provide to mothers and families in other ways.

I hope that I have been able to demonstrate that there is a strong architecture to support women when they have children. I therefore hope that the noble Baroness feels able to withdraw her amendment.

Baroness Hollis of Heigham: My Lords, the Minister regularly makes the point that if we do not have these savings the money must come from somewhere else, such as nurses’ salaries, teachers, the NHS, schools or whatever. I hope that she appreciates that most of us on this side believe that the Government are making a political policy choice. It does not have to fall on children, disabled children or statutory maternity pay. As some of us argued at Second Reading—there were different shopping lists—we are spending £32 billion on tax relief for private pensions, of which £8 billion goes to subsidise the tax relief that higher-rate taxpayers currently enjoy. To continue that is a political policy choice. The money would pay for most of these cuts twice over.

Baroness Stowell of Beeston: As I have said on several occasions, these cuts are necessary because of the financial situation that we found ourselves in. They are not something that we want to have to do, but we believe that these are the right cuts to make because we have made sure that we have, wherever possible, protected those who are least able to increase their income by different means. While these are not cuts that we want to introduce at all, we think that we have done so sensibly and by addressing people in the right way, as anybody would expect us to do. That is the situation that we have found ourselves in and the decision that we have made.

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Baroness Hollis of Heigham: My Lords, I do not think that anyone doubts the Minister’s good will, integrity or concern about these issues. That is not the issue. All that I am saying—and she has not answered this—is that those cuts could fall elsewhere, and she, on behalf of the Government, is choosing for them not to fall elsewhere on people who could afford to pay for them.

Baroness Stowell of Beeston: I would say to the noble Baroness that while she and the right reverend Prelate are willing to put forward their alternatives on where they would target cuts if they were in a position to make those decisions—and I respect them for doing that—her colleagues on her own Front Bench have so far refused to do so. We have made these decisions in this area. We have done so in a way whereby we have protected those who are most vulnerable. We would much rather not have to do this but we believe that it is necessary because of the economic situation that we find ourselves in and because we think that this is, in the end, the right thing to do to secure a strong economy for the future.

7.30 pm

Baroness Sherlock: My Lords, I thank the Minister for her reply and my noble friend Lady Hollis for her telling interventions. I cannot help noticing that the Minister did not answer one of my two main charges. She began to answer the first charge, where I had listed a whole series of benefits and payments—specifically for mothers of children—that had been cut. I was grateful to her for at least recognising that offering up in her defence a benefit that the Government have decided to withdraw for second or subsequent children was at least slightly less effective than it might otherwise have been.

I am more concerned that she simply has not addressed my second charge at all. One reason why I put this amendment down was because of the words from the Chancellor of the Exchequer when he introduced the Autumn Statement, explaining specifically why this Bill was needed. I read them out at Second Reading but to remind noble Lords, he said that the Bill mattered because,

“we have to have a welfare system that is fair to the working people who pay for it”.—[

Official Report

, Commons, 5/12/2012; col. 877.]

According to the Guardian, he told the “Today” programme:

“It is unfair that people listening to this programme going out to work see the neighbour next door with their blinds down because they are on benefits”.

It is clear that the Bill was intended to penalise those out of work to be fair to working people. Why, then, is there included in the scope of the Bill a benefit that is payable only to women who have given up work to have a child or look after a child? The Government do not have an answer to that. I suspect that the noble Baroness would not have expressed it in those terms and therefore is not in a position to defend it.

Finally, in relation to the charge being thrown back at us, I was trying to avoid rehearsing the whole Second Reading, but we have made it very clear that

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we simply would not have made the choices that the Government have made. We would not have set out to give a tax cut to people earning £150,000 a year or more, which will be worth £100,000 to those who earn more than £1 million a year in order to be able to ensure that they benefited, and to cut benefits to the poorest families to do that. I fully accept and understand that she takes a different view. However, it is not reasonable to say that we have not explained where the money would come from. We have clearly made our case; these are not the choices that we would have made. I very much hope the Government will think again, specifically in relation to statutory maternity pay. In the light of those comments, I beg leave to withdraw the amendment.

Amendment 15 withdrawn.

Amendments 16 to 21 not moved.

Schedule: Meaning of the “relevant sums” and the “relevant amounts”

Debate on whether the Schedule should be agreed.

Baroness Lister of Burtersett: My Lords, in opposing the question that the Schedule be agreed, I do not wish to reopen the debates we have already had about the damaging impact it will have on some of the most deprived members of our community. I hope I can take it as read that I oppose this schedule in the same way that I have opposed the clauses. Instead, on the helpful advice of the Public Bill Office, I wish to use this debate as an opportunity to draw attention to the needs of an even more deprived and vulnerable group who cannot even count on a miserable 1% increase in benefits, and that is asylum-seeking families reliant on asylum support.

The right reverend Prelate the Bishop of Ripon and Leeds and I raised this issue briefly during Second Reading. The Minister responded, correctly, that asylum seeker benefit rates are a matter for the Home Office and are not within the scope of the Bill. He kindly said he would draw our remarks to the attention of colleagues in the Home Office. We are, of course, aware that asylum seeker benefit rates are not within the scope of the Bill; that is the very reason why we raise the question. They should be part of its scope and treated in the same way as other social security benefits when it comes to uprating policy. As I have given the Minister’s office notice that I planned to raise this issue in this context, I hope that the Minister will be able to address the substance of our remarks when she comes to respond.

The right reverend Prelate and I, together with the noble Lord, Lord Avebury, remember the all-party parliamentary inquiry into asylum support for children and young people, set up by the Children’s Society. I would like to put on record my thanks to the Children’s Society for all the work it has done on this important issue and for its briefing for today’s debate. That briefing draws on the findings of our inquiry. We found that the current asylum support system is forcing thousands of children and young people seeking safety

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in the UK into severe poverty. We were shocked to hear of instances where children were left destitute and homeless, entirely without institutional support, and forced to rely on food parcels or charitable donations. This cannot be right.

It is estimated that there are 10,000 children living on asylum support. The panel heard powerful evidence of the reality for those living on as little as £5 a day, whose parents are forced to skip meals to feed their children and are unable to buy warm clothing in the winter. Some families find current levels of support particularly difficult, including pregnant women and lone mothers with young children—and families of a disabled child, because asylum support does not offer families any standard additional support when a family member has a disability. With regard to pregnant women, one particularly shocking example brought to our attention was a mother having to walk home from hospital in the snow with her newborn baby in her arms because she had no money.

Just last week, Maternity Action and the Refugee Council published a report which gave more examples of the problems faced by pregnant and nursing women who had insufficient money to meet their most basic needs. Most asylum-seeking parents are not allowed to work, leaving families totally reliant on state support; paid work is not a route out of poverty for them. Asylum support levels differ significantly from income support and other mainstream benefit levels. Until 1999, asylum support was set at 90% of income support, after which levels of support were reduced to 70%, with the justification that asylum seekers in accommodation no longer had to pay utility bills. There is currently no statutory provision to make an annual uprating of levels of asylum support in line with increasing costs of living. I acknowledge that the previous Government did not set a good precedent on the uprating of asylum support. I therefore hope that my own party will at least be open to rethinking our policy on this.

Asylum support rates have not been raised in 2012-13, so they have effectively been frozen without any announcement to justify this. When I asked a Written Question about this, the Answer was that there was not only no statutory obligation to carry out an annual review but no obligation even to make an announcement. There should be, in both cases. As it is, I was told:

“There are no current plans to change asylum support rates”,

although the Government,

“will continue to keep them under review”.—[

Official Report

, 15/1/13; col.




If the rates are frozen for a second year in succession, that will mean a cut of 6.2% in relation to income support payments over the last two years, making it even more difficult for families to survive. Can the Minister please explain which factors are taken into account when keeping asylum support rates under review? What is the actual process for deciding how and when they will be uprated?

The inquiry recommended that asylum support for families also provided with accommodation should be aligned with mainstream benefit rates paid for living expenses. Where accommodation includes utilities, which would normally be expected to be paid from living expenses, it is appropriate to make a deduction. However, such a deduction must be reasonable. The inquiry argued

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that the rates of support should never fall below 70% of income support. As it is, asylum support now bears no relation to income support.

The inquiry was particularly concerned about the situation of families on Section 4 support, which may be provided if a child is born after an asylum claim had been refused but where the family are, for some reason, unable to leave the UK. Almost 800 children are being supported under Section 4, some for many years. Under Section 4, the amount provided is even lower and the use of a cashless system—the azure card, as it is called—can be degrading and wasteful because it can be used only in certain designated shops. The inquiry recommended that this particularly inhumane form of asylum support be abolished entirely and replaced with a single cash-based support system for all children and their families who need asylum support while they are in the UK.

Given that asylum support rates were not increased in 2012-13, they should be raised as a matter of urgency for the 2013-14 financial year and thereafter increased annually, at the very least in line with income support, along with other benefits in the schedule. I would be grateful if the Minister could explain the rationale for treating asylum support differently from mainstream social security benefits when it comes to annual upratings. Ministers frequently refer to the Government’s ongoing review of asylum support when questioned on these issues, including recently in response to a Written Question from the noble Lord, Lord Hylton, which referred to our all-party inquiry. In his Written Answer, the noble Lord, Lord Taylor of Holbeach, said that the Government would consider our findings as part of this ongoing review. Will the Minister please tell us whether the Government will respond to the all-party inquiry’s report? How long will this ongoing review go on, and when can we expect an outcome?

I would argue that a review of the treatment of one of the most deprived groups in our community should be treated with a little more urgency. It is shameful that we are willing to allow children and their parents who are seeking asylum in a rich country such as ours to continue to suffer in this way.

Lord Avebury: My Lords, I agree with the noble Baroness that the payments made to people who have applied for asylum should be treated in the same way as any other benefits and should be subject to review by your Lordships. Instead, as the noble Baroness explained, there is no obligation to uprate the benefits or even to make a statement, nor, in particular, for the Government to explain whether they believe that the payments made to asylum seekers should bear any relationship to those on income support, or whether the two calculations are to be performed on an entirely different basis. If so, what is the underlying rationale behind the amounts paid to people on asylum support?

As the noble Baroness has already said, with her I was a member of the cross-party parliamentary inquiry organised by the Children’s Society into asylum support for children and young people, under the very able chairmanship of my honourable friend Sarah Teather, the former Minister for Children. I join the noble Baroness, Lady Lister, in expressing the concern and

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dismay that we all felt when listening to the stories of suffering and destitution of asylum seekers. The worst-off were those supported under Section 4 of the Immigration and Asylum Act 1999, many of whom were failed asylum seekers who could not be returned to their country of origin because it would not accept them. Under that provision, people have to live in housing and accommodation provided by private agencies, the standard of which often is grossly deficient and lacking in ordinary facilities.

I could not help noticing the contrast with the Statement made earlier today about the arrangements being made for our forces returning from Germany. Quite rightly, £1 billion is being spent on 1,900 new houses for those families, when nothing whatever is spent on the accommodation of people who have applied for asylum.

Section 4 provides support in the form of vouchers which can be redeemed only at certain shops. The value of the azure card, which is intended to provide for all essential living needs, is £70.78 a week, compared with income support for a couple with children of £123.35. Because they have no cash, as the noble Baroness has explained, the recipients cannot do many ordinary things, such as buying stamps, taking a bus or making a telephone call. She gave a particularly lurid example of evidence that we heard about a mother who had to undertake all sorts of physical arrangements with her small child as regards apparatus that was needed. My noble friend Lord Taylor of Holbeach said, in his brief answer to a question on asylum support on 24 January, that he was surprised to find that there were two levels of benefit within the asylum system. Indeed, one cannot imagine the motive for building this level of complexity into it.

7.45 pm

Another iniquitous feature of the system is that asylum support was not uprated like other benefits in 2012-13, as the noble Baroness has said, and there are no plans to uprate in 2013-14. It is utterly repugnant that we should impose extra hardship on people who are already desperately poor, including the estimated 10,000 children in asylum-seeking families. Surely, the policy of keeping this group of children at a level of resources that was already well below what was considered necessary for our own citizens, and to allow that level to be eroded by inflation two years in a row, must be contrary to their best interests, and thus a breach of our obligations under the UN Convention on the Rights of the Child. Perhaps my noble friend the Minister would like to comment on that when she winds up.

Would she also comment on the most astonishing of all the panel’s findings; namely, that although it costs three times as much to raise a disabled child, asylum seekers are not eligible for disability living allowance, carer’s allowance or mobility allowance? How can the Government possibly justify depriving these families, who are by definition even more disadvantaged than settled families with disabled children, of the support that is given to every other such family in the country? Surely, that cannot be anything to do with making every penny count towards reducing the deficit when there are any number of ways of raising

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this sum needed through the tax system. We are talking about a very trivial sum compared with what the right reverend Prelate discussed as regards a previous amendment.

Last week, when the Minister replying to the debate in Westminster Hall was tackled on this point, he said that,

“those with disabilities or complicated medical problems, who might need extra care or equipment … are supposed to be supported … through local authorities using their powers and duties under both the National Assistance Act 1948 and the Children Act 2004”.—[

Official Report

, Commons, 27/2/13; col. 86WH.]

I should like to ask my noble friend again: will they receive the £53.62 per week payable to a family with a disabled child under income support? Does she guarantee that asylum-seeking families with disabled children are receiving that equivalent sum from the two statutory provisions that the Minister mentioned in another place?

Our panel recommended that Section 4 should be abolished and that the whole system of support for asylum seekers should be aligned with mainstream benefit rates, with appropriate deductions for rent and utilities where there is a formula used in calculating the notional amount for gas, water and electricity in housing benefit claims. The more radical overhaul, dictated by considerations of humanity and fairness, may have to wait until we have got the national overdraft under control. However, we should get rid of Section 4 straightaway. Whether or not the Government are using the forced destitution of families concerned as a means of compelling them to return to the countries which have refused to accept them back, Section 4 is seen by NGOs, as one of our witnesses said, as,

“part of a wider hostile environment to which refused asylum seekers are subjected in an effort to encourage them to return”.

One other matter I want to flag up is the treatment of pregnant women and new mothers within the asylum system, which was highlighted by the Refugee Council and Maternity Action in their recent report, When Maternity Doesn’t Matter. My noble friend Lord Howe told me that officials had met the two NGOs to discuss the report and assured them that the care provided by NHS midwives was appropriate and within NHS guidance. But that was not the whole story. The report showed that the UKBA system of dispersal and relocation impacts adversely on the health and well-being of pregnant women and new mothers, as I told my noble friend in a letter dated 26 February.

Women are being dispersed and relocated as many as six times during pregnancy, which disrupts the care provided otherwise by the midwives. We are talking about an especially vulnerable group in relation to maternity care and pregnancy outcomes. These women may have poor overall health and they may have been affected by traumatic experiences in conflict and war zones such as rape, torture, female genital mutilation or trafficking for sexual exploitation. These experiences will adversely affect their health during pregnancy and as new mothers, and the evidence obtained for this report suggests that they have a maternal mortality rate much higher than the rest of the UK population. Will my noble friend provide an estimate of the rate,

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say for 2012, or if the information has not previously been recorded, will she arrange for that to be done from now on?

I suggested to my noble friend Lord Howe that the UKBA’s current policies were resulting in additional costs to the NHS. A woman who is dispersed will need a duplicate booking appointment following dispersal, at a cost of £297. They often need a duplicate scan and follow-up appointment at £281, and there may need to be interpreters at these appointments. The effects on the women’s health of the move itself may also require additional expense, such as days in hospital at £467 per day.

Unfortunately, the total cost to the NHS of dispersing and relocating pregnant women is not ascertainable because no statistics are collected on them. However, according to a freedom of information response, more than 600 women in the asylum system applied for the maternity grant in the first six months of 2011, and the vast majority of these women will have been moved during pregnancy. I have suggested to my noble friend Lord Howe that the Department of Health should hold discussions with the Home Office to ensure that dispersal policies for pregnant women and new mothers are developed that are compatible with NICE guidelines on the maternity care of women with complex social factors. I would like my noble friend, in conclusion, to provide an estimate of the rate for, say, 2012. If the information has not previously been recorded, will she arrange for that to be done from now on?

The Lord Bishop of Ripon and Leeds: I simply want to express my support for the arguments put forward by the noble Baroness, Lady Lister, and the noble Lord, Lord Avebury. Being part of that inquiry was indeed a harrowing experience, although nothing like as harrowing as it is for those who have been on asylum support for two, four or six years and who cannot return to the countries from which they have come. The Government accept that they cannot return to those countries, so the argument that asylum support has to be kept very low in order to discourage people from staying here did not appear to have any weight at all in terms of the evidence that was presented to us.

I was grateful to the noble Lord, Lord Newby, for his promise at Second Reading to pass on the concerns about asylum child support to the Home Office. Have the Government received any response to that request to the Home Office and do they agree that we need to have some idea of what is happening to support the 10,000 children who are on asylum support?

I was grateful, too, to the noble Lord, Lord Taylor of Holbeach, for the expression of his own surprise at the bizarre nature of the provisions being made for that support. The noble Lord, Lord Newby, likes simplicity. I do not know whether you could find anything more bizarre than the provisions under Sections 4 and 95 of the Immigration and Asylum Act 1999. If we could simply move to some way of linking that support to the benefits that the Government believe are rightly paid to those in need, that would be a major act of concern for those who are in the most need of all within our society.

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Lord McKenzie of Luton: My Lords, I thank my noble friend Lady Lister for displaying yet again her knowledge of and passion for a very important subject and I pay tribute to all noble Lords who have spoken in this debate for their work on the cross-party inquiry. Some important issues have been raised, such as that of asylum seekers not being able to access paid work as a route to dealing with the circumstances they find themselves in, worrying reports about 10,000 children and extra costs that are imposed on public services such as the NHS, which were identified by the noble Lord, Lord Avebury. Clearly, that report is a telling report but it is a report currently for Government. However, we, too, will have to reflect on it as well.

The principle here is that we must be able to provide support to those in genuine need but must do so in a way that minimises incentives to economic migrants who could undermine public support for genuine refugees. There is an issue here that we need to be frank about. There is a balance between dealing with the issue of benefit tourism and separating that out from the needs of genuine asylum seekers. It complicates the picture. An important issue has been raised today and an important report has been prepared. It is currently for the Government to give their views on it, but we will have to reflect on its contents.

Baroness Stowell of Beeston: My Lords, the purpose of this schedule is to set out benefits, payments and tax credits to which the Bill provisions apply. Paragraph 1 refers to sums of social security benefits, payments and child benefit covered by Clause 1. Paragraph 2 of the schedule sets out the relevant amounts of tax credits covered by Clause 2.

The debate has of course been about asylum seeker benefits. As the noble Baroness, Lady Lister, acknowledged in her opening remarks, asylum seeker benefits fall under the remit of the Home Office and the UK Border Agency and are not part of this Bill. As has been said, there is an ongoing review of our approach to asylum support. In response to a question as to when this will conclude, we expect to finish conducting our inquiries before the end of the financial year. As the review is ongoing, there are some questions that I will not be able to answer, but I am none the less grateful for this opportunity to lay out how support for asylum seekers is provided.

As noble Lords have acknowledged, there are two types of support. First, there is support provided to those people who have made an application for asylum that has not yet been decided. That is provided under Section 95 of the Immigration and Asylum Act. People in that context are usually described as people under Section 95. Secondly, there are people who have been found by the UK Border Agency and by the courts not to need protection in the UK, but who cannot return home due to a temporary problem. They are provided for under Section 4 of the Immigration and Asylum Act. That is the Section 4 to which several noble Lords have referred today.

As noble Lords are aware, the support provided is expressly intended to meet people’s essential needs. By that we mean their food, toiletries and clothing. As an example, a family of four receiving Section 95 support

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while the decision on their application is pending is given £178 per week to cover these essential costs. The same family receiving Section 4 support is given £151 per week. The levels of support provide for the fact that asylum seekers have, as has been acknowledged by noble Lords, fully-furnished, rent-free accommodation with household equipment, utilities and council tax included. This support is temporary in its nature. It is true to say that the allowance is less than income support equivalents but that is because the recipients do not have to pay for other things such as utility bills or other costs associated with running a household.

Likewise, new mothers receiving asylum support do not have to buy a cot or things of that kind because sterilising equipment and such things are provided. They are given a grant to help pay for a pram and clothing. Healthcare and schooling are also provided. In addition to the weekly subsistence rates, families receive the following benefits. A single one-off payment of £300 may be provided to asylum seekers to help with the costs arising from the birth of a new baby. This is different from the maternity grant provided by DWP as recipients will not need to cover the costs of a new cot, stair gates and sterilising equipment. Pregnant women and young children aged between one and three each receive an additional £3 per week, and babies under one receive an additional £5 per week. Assistance with travel costs to medical appointments is available on application.

For those receiving Section 95 support, children receive between 80% and 90% of the equivalent mainstream benefits. Children on Section 4 support, which is intended to be temporary while their parents arrange travel home, receive over 60% of equivalent mainstream benefits.

8 pm

Lord Avebury: This is the third or fourth time that my noble friend has mentioned that the arrangements under Section 4 are temporary, but will she acknowledge that some people remain on them for many years? In one case that we were told about, I think it was seven years.

Baroness Stowell of Beeston: I was going to refer to the complaints that have been made about delays in dealing with Section 4 cases. These problems have been acknowledged by the department. Efforts have been made to address the causes behind those delays and there have been some improvements.

The noble Baroness, Lady Lister, said that disabled people receive no additional support. If asylum seekers have higher needs, they are supported by their local authority under an old Act, the National Assistance Act 1948. My noble friend Lord Avebury asked whether disabled children would receive higher value support. Again, that is a matter for individual local authorities, which will have considered the needs of the child and conducted a relevant assessment. My noble friend also asked whether these arrangements are compatible with the UN Convention on the Rights of the Child, and the answer to that is yes. The UK Border Agency is bound by its Section 55 duty to consider the best

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interests of children. As I have said, fully furnished free accommodation, education and healthcare are provided, plus an allowance to meet the need for food, clothes and other essential items.

Although I acknowledge the strength of feeling that has been expressed by noble Lords about the difficulties that inevitably are faced by people who come to this country seeking asylum, when comparing asylum support rates across Europe, our research shows that the UK is comparatively generous in family cases, providing more to an asylum-seeking family of four than countries like Sweden or Denmark. Further, as I have mentioned, there is an ongoing review of our approach to asylum seeker support and we expect to finish conducting our inquiries shortly. We are taking account of the views of partners, including the recommendations of the Children’s Society. We will want to ensure coherence with the mainstream benefit system and the financial constraints being faced. The noble Baroness, Lady Lister, asked for further details about the evidence that is being considered in the course of the review. I shall see whether I can write to her with further details on that.

It is worth saying that there is no statutory obligation to carry out an annual review of asylum support rates. Instead, Parliament has set a clear benchmark that the support provided must meet the “essential living needs” of recipients of Section 95 support and that it must provide “accommodation” to recipients of Section 4 support. It would be wrong to raise expectations in this area given the current constraints on the funding available, but we are committed to an approach to asylum support that is fair, reasonable and balanced. No one who has sought our protection need be destitute while waiting for an application to be decided, but if the application is refused and the decision is upheld by the courts, we expect people to return home. Perhaps I may add that if someone is granted asylum, if they are in need of benefits they will transfer on to the domestic regime, which ensures that they receive the same benefits as anyone else in this country under the normal rules that apply.

If I have failed to address all of the detailed questions put by my noble friend Lord Avebury and, indeed, if there are any others, I will follow them up in writing. I am grateful to the noble Baroness, Lady Lister, for the opportunity to set out the support that is provided and I hope that I have been able to reassure her and other noble Lords that the Government continue to take this matter very seriously. I hope that she will withdraw her objection to the schedule.

Baroness Lister of Burtersett: My Lords, I thank the noble Lord, Lord Avebury, and the right reverend Prelate for their powerful support in this debate, and I thank my noble friend Lord McKenzie for accepting that perhaps our side will have to reflect on the findings of the inquiry. That was very welcome. I also thank the Minister for her full reply and for the good news that the review is expected to conclude by the end of this financial year. That is one good piece of news. When she writes to noble Lords, perhaps she will also say whether the review will be published so that we can read the full results.

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I want to make only one point because I am conscious that noble Lords are waiting for the next debate. I turn to the question of “temporary”, which was picked up by the noble Lord, Lord Avebury. I would point out that a Written Answer in the other place last week stated that the average time spent on Section 95—not Section 4—was 525 days. That is a long time to be living on such a low income.

It has been useful to have this debate. Although I cannot welcome everything the Minister has said, I do welcome her acknowledgment of the importance of these issues and the fact that the review is about to conclude. I do not intend to oppose the schedule.

Schedule agreed.

House resumed.

Bill reported without amendment.

Strengthened Statutory Procedures for the Scrutiny of Delegated Legislation: DPRRC Report

Motion to Take Note

8.08 pm

Moved by Baroness Thomas of Winchester

That this House takes note of the Report of the Delegated Powers and Regulatory Reform Committee on Strengthened Statutory Procedures for the Scrutiny of Delegated Legislation (3rd Report, HL Paper 19).

Baroness Thomas of Winchester: My Lords, first, I want to put on the record my thanks for and admiration of the work of the Delegated Powers and Regulatory Reform Committee secretariat in carrying out the research which enabled my committee to produce the report that we are about to debate. I thank in particular Kate Lawrence, our clerk until the end of last year who is now on a two-year sabbatical, and Peter Milledge, our invaluable counsel. I hope that the House will be as impressed as I am by the magnificent Table 1 on page 8 which sets out clearly the variations in strengthened scrutiny procedures that are at the heart of our report. I shall come back to those variations in a moment.

As a committee, we have been increasingly concerned in the past few years at the proliferation of procedures in legislation designed to give Parliament more control over delegated powers. This may sound counterintuitive: surely it is nothing but a good thing for Parliament to have an increased role in scrutinising all powers proposed by the Executive, particularly in the field of secondary legislation, which has always been the Cinderella in the legislative landscape, if I may mix my metaphors a bit. We agreed that enhanced and rigorous scrutiny is a good thing but needed to say to the Government, “Please don’t invent yet another variation on a strengthened statutory procedure without examining existing procedures first, otherwise the complexity you are in danger of creating may lead to confusion and muddle rather than enhanced scrutiny”. We even suggested that the House might consider the case for rationalisation of all these variations by legislation.

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Then there is consistency of language. In seven of the scrutiny procedures, the Government have a legal duty to “take account of”, “have regard to” and “consider” a relevant committee’s recommendations. We wondered whether there are subtle differences in these expressions.

Before going any further, perhaps I should put our report in context by quickly sketching out how our committee came into existence, what has led to these new procedures and what they are. The Delegated Powers Committee was set up only in 1992—very recently by House of Lords standards—because of real disquiet over the way successive Governments were increasingly using order-making powers in Bills, some of which were little more than skeletal. This practice enabled Ministers to be vague about the all-important detail and future secondary legislation as the Bill made its way through Parliament. In justifying this lack of detail, Ministers could always cite flexibility for changing circumstances and, of course, precedent, but the House made it clear that leaving so much important detail to unamendable instruments was no longer acceptable. In many cases the detailed policy had simply not been worked out. The upshot was the Jellicoe report, which recommended the setting up of the Delegated Powers Committee to examine whether the delegation of legislative power in new Bills was appropriate. Eleven years later, the Merits of Statutory Instruments Committee was also set up to look at existing statutory instruments. Both committees have different names now to reflect their additional duties. They have certainly given a higher profile to delegated legislation and have, I believe, over the course of their existence, proved their worth. Governments have always taken the DPRR Committee’s reports seriously, very often acquiescing in its recommendations as Bills go through the House.

It may be worth noting that the other place does not have committees carrying out the same function; indeed, my committee is often asked to comment on draft Bills before a Joint Committee of both Houses. However, the other place does set up a scrutiny committee, under the super-affirmative procedure, if necessary, which issues a report, as does my committee. This might therefore be the right place to question whether having this duplication really makes sense. I gather it is fiendishly difficult to set up Joint Committees for both Houses but should this process not be made easier, and certainly speedier for this purpose, if not for any other?

Our report starts by setting out the different types of statutory instrument before concentrating on those orders which attract some kind of enhanced scrutiny procedure. These orders are all Henry VIII powers, which enable Ministers to amend Acts of Parliament by secondary legislation. Who would have thought that Henry VIII’s name would still be immortalised in quite this way? My late colleague Lord Russell said that the very first time King Henry used this power was to vary the price of wine. Although many Henry VIII powers are limited, there are many others which are much more significant. Nearly all Henry VIII powers are exercised by ordinary, familiar affirmative instruments, which have to come before the House before they can be made. However, there are now order-making powers

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in certain Bills which are subject to the super-affirmative or enhanced affirmative procedure, by which these orders receive much more detailed scrutiny, with many variations, than an ordinary affirmative order. Our report details all the order-making powers in Acts which attract a strengthened scrutiny procedure, and exactly what that procedure is in each case. Perhaps the best example is the Legislative and Regulatory Reform Act 2006, once dubbed the “Abolition of Parliament Bill”, because of the scope and significance of its delegated powers. This Act ticks all the requirement boxes in Table 1. All this may seem quite an undertaking but these safeguards were the price that the then Government had to pay for enabling a Minister to reduce or remove a burden imposed by primary legislation.

At the beginning of my remarks, I said that our report asked the Government not to invent a new variation on a strengthened statutory procedure without examining existing procedures first. The second major point we needed to make to the Government was, “Please make it clear whether legislative reform orders are to be used even if the proposed changes are highly controversial and if proceeding with them is not recommended by the relevant scrutiny committee in one or both Houses”. Just to be clear, the previous Government said that they would not proceed with proposed changes under these circumstances.

Since our report was published, the Government have responded to several of our questions but only to one of those two main points. We now know which committees are to scrutinise which orders. We also know that the Government will use the existing model, if possible, when proposing a strengthened scrutiny procedure in future; if not, they will explain the reasons for inventing a new procedure. They have also undertaken to lay supporting documents setting out the detail of and rationale for any proposed order under Section 19 of the Localism Act 2011.

Several of our concerns have been addressed but we still do not know whether LROs will be used for highly controversial changes and whether the Government will respect the relevant scrutiny committee’s power of veto. Before further legislation is drawn up, it is vital that the House knows the answer to those two crucial matters. For example, we know that the Government are contemplating a deregulatory Bill in which it is quite possible that new rules will be introduced to change the super- or enhanced affirmative procedure by cutting down or cutting out consultation.

The right honourable Oliver Letwin made it clear in his evidence to the Secondary Legislation Scrutiny Committee that some legislative requirements might change so as to,

“reflect the principle of proportionality”.

I am probably not the only person to worry about that word “proportionality”. Governments skip a proper consultative process at their peril. A good example is the lack of consultation on a crucial part of the recent Social Security (Personal Independence Payment) Regulations, which were changed by the DWP at the last minute. To say that the change put the cat among the pigeons is putting it mildly, and at least the Minister apologised for inadequate consultation on that occasion.

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At the end of our report is a paragraph headed “New opportunities”, which I shall now turn to. The question arises that if a strengthened procedure is considered proper for some Henry VIII powers in certain Acts, why do we put up with such a comparatively crude way of considering some very important affirmative instruments that are not Henry VIII orders? What I mean by this is the “take it or leave it” procedure that the House has for considering affirmative instruments. They can either be agreed to or disagreed to, full stop. Non-fatal amendments or regret Motions to the approval Motion, whether agreed to or not, are in effect neither here nor there.

Our report is concerned with delegated legislation that is subject to enhanced procedure by statute, but it is high time that the Procedure Committee turned its mind to considering a non-statutory procedure for consideration of certain important instruments. This might attract, say, two bites of the cherry, by which I mean that noble Lords could be given a chance to have a preliminary debate before the instrument is taken through the House. The Government could be encouraged to table a proposal for an instrument which might then attract one or more suggested amendments on which votes could take place. Even if the Government decided to take no notice of any successful suggested amendments when the instrument was going through the House, at least there would have been the possibility of change, because any amendments would have been suggested before it was too late.

A recent candidate for such a procedure would have been the draft PIP regulations that I just mentioned. We know that the Government were running seriously out of time for them, and I well understand that DWP orders may have that problem, but it might have been a better instrument if the House had been able to have two bites of that particular cherry. In the event, the Government have published amending regulations to take account of the many representations made.

This begs the question of whether the House really has the scrutiny of ordinary affirmative SIs right. All my committee and the Secondary Legislation Committee can do is to recommend and warn. It is up to the House what then happens. Should the House be more robust in voting down instruments? In spite of the recommendation of the committee of the noble Lord, Lord Goodlad, on the House’s working practices, I am not particularly attracted to that course of action because I think it is a bit unrealistic and confrontational. The noble Lord, Lord Filkin, may disagree with me when we hear what he has to say later on; I am very pleased he is to speak. I would prefer the House to allow a genuine draft of the instrument to be debated and voted on, with suggested amendments before the instrument was agreed to.

I am very aware that many Peers believe that there should be a way of amending statutory instruments, but the whole point of delegated legislation is that it is just that: it delegates a power to a Minister to bring in some policy the House has agreed to in principle, and the whole point of my committee is to see that that delegation is not inappropriate. However, there is no reason why the House should not devise some way of improving the scrutiny of important statutory instruments

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without upsetting the whole legislative apple cart. I very much look forward to the rest of the debate. I beg to move.

8.22 pm

Lord Mayhew of Twysden: My Lords, I warmly endorse the tribute that my noble friend has just made to the quality of our staff in the committee of which I hold the honour to be a member. I also warmly endorse the comments with which she concluded her remarks.

I suspect that all Ministers would in their heart of hearts prefer to legislate for as much of their policy as possible by means of an order, rather than undergo the rather more exciting—in Duke of Plaza-Toro terms—of having to succeed by the primary provisions of a Bill. That can be difficult and it can certainly be embarrassing when, for example, on judicial review, an exercise of discretionary power conferred on them is overturned by the courts and you have to come back with a Bill trying to put matters right.

Far preferable for them, therefore, to be able to remedy the setback by exercising a discretionary enabling power deriving from the Bill itself, especially since debate, as we have just been reminded, on the chosen order will be strictly time-limited and the order will not be amendable even if it contains a Henry VIII provision repealing a statute.

Seen from Ministers’ point of view, this is entirely understandable, but from the public’s and Parliament’s point of view, its defective character speaks for itself, and so strongly that it seems extraordinary that it was not until 1992 that the committee whose report we are discussing was set up. It is remarkable that the other place has yet to establish any such committee.

Here, I declare, I suppose, something of an interest, as I am now well into my third stint as a member of the committee, chaired in my first experience by Lord Alexander of Weedon QC and now, delightfully and extremely skilfully as we might expect, by my noble friend Lady Thomas of Winchester. I think that we can claim that the decision to establish the committee was well founded all those years ago. It is important to note that the merits or demerits of policies are outside our remit—that is not for us. We can only make recommendations, whether as to the appropriateness of the order in question for delegated legislation or as to the degree of supplementary scrutiny it should receive. However, year after year, it has proved extremely unusual, as my noble friend has mentioned, for our recommendations to be rejected or, at any rate, not to be accepted by the Government. When that happens, they have to account for it and can expect to receive some criticism in the Chamber.

I suggest that the first point that stands out about the special report that we are discussing is that it relates to a parliamentary success story, and a House of Lords story in particular. It is a story beginning with the recognition of an increasing curtailment by government of the parliamentary right, and duty, to scrutinise proposed ministerial legislation, an increase causing—to quote a 1992 report—“considerable disquiet”. A remedy was then proposed. That report stated that a delegated powers scrutiny committee would,

“be well suited to the revising function of the House”.

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The story culminates in the establishment of your Lordships’ committee, in the sensible limitation of its remit and in the general recognition that the committee is there to address an important need—and that, with the advantage of some 20 years’ experience, the committee generally addresses it well.

The report also demonstrates that the originating problem is ongoing. Rather like a virus, it mutates. Unlike a virus, however, there are already antidotes, which in this report your Lordships’ committee endeavours to prescribe. I must be selective, given the list of speakers whom your Lordships will wish to hear. Let me select the important statement that the report makes that it is the practice of the committee to try to take a consistent approach in its judgments as to whether a strengthened power proposed in a Bill is appropriate to be delegated by Parliament to Ministers at all and whether, if it is, it will be subject to an appropriate level of parliamentary scrutiny, not merely by means of the familiar negative procedure or the affirmative procedure but by the super-affirmative procedure or whatever variant may be proposed. Consistency on the committee’s part is obviously desirable and necessary.

The trouble is that Bills come forward with “marked differences” in their provision for strengthened parliamentary scrutiny, as my noble friend has already said. As the report states, it is that variation that has led our committee to undertake the analysis at its heart. Here I agree with what my noble friend says about Table 1—and I would add Appendix 2—of our report. The contents fully justify that reaction. The detail certainly illustrates the outstanding service that we receive from our clerks. They have led the committee to recommend that—here I paraphrase—when proposing a strengthened scrutiny procedure, the Government should normally use an existing model. I shall explain the basis for that decision. I am personally very glad that the Government have effectively accepted this. It would be helpful to the House if it is brought into practice. That would be highly desirable and helpful to the public.

The Government have so far been less accommodating —my noble friend referred to this, too, so I can be brief about it—about adopting undertakings given by the previous Government, made during the passage of Clauses 12 to 19 of the Legislative and Regulatory Reform Bill in 2006. These are discussed at paragraphs 21 and 22 of our report, and they are of such a character that they would, if generally adopted, have an effective impact on future attempts to legislate in this way. That is a very important matter to consider. I hope that the Government can be induced to agree to adopt the undertakings given in 2006 legislation. It was a little disappointing to find from their report that they are considering this and will report in due course. Our report was published in July and the response is, I would respectfully suggest, rather overdue. I hope that it will be favourable.

I want to end without striking a churlish note. This report and the history leading to it serve to remind us that effective parliamentary scrutiny of delegated power, although it needs nurturing, is now strongly embedded in our governance. Accordingly, those inclined to perceive an irresistible progression of executive power can take heart from this afresh.

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Baroness Andrews: My Lords, it gives me great pleasure to participate in this debate and I congratulate the noble Baroness on having secured it. I support what she said about the excellence of our report and thank her for the comprehensive way in which she set out the background to the report. It is a pleasure to serve under her wise, inclusive and very firm leadership. I must ask the forgiveness of the House if I cannot stay for part of the debate, but I shall be here for the end. The business of the House has gone slightly awry this evening.

Like the noble Baroness, I shall say a few words about the context of statutory instruments and their role in policy. In terms of parliamentary architecture, it is obvious that the DPRRC was a hugely important innovation in the bastion of parliamentary scrutiny. It is a model of scrupulous attention and is unique. It concentrates the minds of Ministers and departments very well. I remember, as a departmental Minister, the collective groan that would go up in the department if the DPRRC recommended that we change a negative to an affirmative instrument. We were always very conscious of the tightrope we trod. We listened, and for good reason, because essentially what impacts upon people’s lives in terms of legislation is not primary legislation but the statutory instruments. I once saw a statistic—I cannot stand it up but others may be able to—that 80% of the laws as they impact on individuals are transported through statutory instruments, whether that is welfare benefits, food safety, planning requirements or competition across the NHS. The trouble is that few people outside Parliament are au fait with the way that statutory instruments work or are debated. We should try to address that obscurity.

Secondary legislation serves government well. It served Henry VIII well and consolidated his powers of dictatorship. It serves his successors well, too. Sometimes, there is no mistaking the Government’s intention. There are those of us who still clearly remember the Public Bodies Bill, where the Henry VIII powers were used so blatantly and deliberately that they shocked the entire cast of the DPRRC to its core. The committee and this House brought the Government to book on that.