Before I sit down, it may be helpful if I speak to the amendments proposed by the noble Lord, Lord Grocott. Amendment 6 seeks to ensure that a mayoral term of office should be limited to four years. As I have explained, we do not believe that it would be right to restrict the mayoral term in this way. This Bill is very much an enabling Bill, and I believe it is right that this legislation has a degree of flexibility, enabling us to respond to proposals that chime with and reflect local requirements. Hence, we would not wish to rule out the possibility of, say, a five-year term if that is what the area wanted and, of course, if that is what Parliament agreed when approving the order.

With Amendment 7, the noble Lord seeks to limit the number of terms of office that any individual may serve as a mayor for a combined authority to two terms. Some may see that such a provision would serve to re-energise and revitalise the leadership of a combined authority, ensuring that it did not become too comfortable and forcing, in a sense, the injection of new ideas and a new direction, particularly in areas that may have a strong and stable political affiliation that may not, on the face of it, create or nurture the environment for such change.

However, we have concerns about term limits. First, and in a vein that will be familiar from the debate to date, I am concerned that it would introduce a degree of prescription in the Bill that sits uneasily with the devolutionary and enabling legislative framework that we are seeking to introduce. However, and more importantly, any such prescription would start to cut across the rights of local people—local electors—to determine who they should be led by. Imposing on the electorate of an area a requirement that, for example, a strong leader with a clear vision for the future and a record of delivering against that vision should be forcibly stood down, with that decision being taken out of the hands of those who had elected that person in the first place, goes very much against the grain and is unlikely to be welcomed by the people who elected him or her.

We have spoken about accountability. Noble Lords will know my views on the importance of the elected mayor being held to account by his or her electorate. That electorate will continue to have their opportunity to either endorse the incumbent or select a successor. I hope these comments are helpful, and I beg to move Amendment 5.

Lord Grocott (Lab): My Lords, I am grateful for a fair amount of what the Minister said. My Amendments 6 and 7 are, I think, about the shortest and, in many ways, the simplest in the Marshalled List. Amendment 6 suggests that mayoral elections should basically be every four years and Amendment 7 suggests that there should be a maximum of two terms.

On the four years, I think the Minister has probably gone as far as she can. It may not be precisely in her amendment, but in truth the Government seem to be saying that four years is a reasonable, sensible term of office for a mayor. It struck me as very odd indeed—I said so in Committee—that the term of office of the mayor was left entirely to ministerial order in the original Bill. In theory that could provide for a term of

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office of four, five, six, seven, eight or nine years, or any other number you care to think about. It is such a fundamental part of a democracy to know when an election is going to take place that it is essential to have at least some reference to it in the Bill, and I welcome the fact that the Government have put down an amendment. It does not do everything I would like, but in life you do not get everything.

Amendment 7 would effectively limit the mayor’s term of office to two four-year terms. That, the maths will tell us, is a maximum of eight years. I emphasise that the amendment would be in no way retrospective; I do not think that, under the Bill, it could be. It does not say to those people who are directly elected mayors at the moment—I would not dare say this—“Sorry, you’ve had your eight years and you must go”. It would simply apply to the provisions of the Bill.

I submit that this amendment is very important. I have made it plain that I do not like directly elected mayors. I much prefer the parliamentary system to the presidential one, and there are checks and balances built into the leadership of local authorities at present. Leaders can be removed if they are not doing the job properly. It has never inhibited great leaders of local government in the past, as far as I can make out. I must admit that from some of the comments we have heard in earlier debates you would think that local government had been bereft of outstanding leaders. I do not think that Joe Chamberlain did too badly and I thought that Herbert Morrison was not too bad either. Anyway, we have had that debate.

What I know is that the great strength of the present system, prior to directly elected mayors, is that there is a daily check and balance on the performance of the leader, and if they are not good enough they can be removed. We all know that that has happened in local authorities; we probably all have our own examples. The problem with a directly elected mayor, and I do not think that the Bill addresses it, is that once you have elected them—there is one election once, and that is it—there is very little under this system to deal with a mayor who is considered by his or her peers not to be doing the job very well. There is no power of recall.

Perhaps the Minister could spell out what the checks would be if it became manifest that a mayor was not doing the job properly—obviously, short of a criminal offence. The noble Lord, Lord Heseltine, referred in the earlier debate to checks and balances, but as far as I can see there are none. That is why the amendment is important; again, I will stand corrected if other people have better international examples than I have, but I think in most systems where there are direct elections there is a limit somewhere to the number of times that you can be directly elected. There are good reasons for that, not least that there is an inevitable tendency for directly elected mayors to see the job of the administration as basically to secure their re-election; that tends to develop in their minds and in the operation of many of their staff.

At its zenith, the American system decided that eight years was long enough, and if it is long enough for an American President it is probably long enough for the mayor of a city in the United Kingdom. I suggest that this has been a mistake in previous legislation

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about elected mayors; it simply has not provided for limits of terms of office, and it is right that we should do so. I think that the Minister even acknowledged that there are some problems that have not entirely been addressed in that legislation. I submit to the House that this amendment is well worthy of consideration.

Lord Campbell-Savours (Lab): My Lords, in intervening briefly, I make it clear that I am a passionate supporter of the whole mayoral principle. I believe in elected mayors and have done from the very beginning. I saw them in France when I lived there many years ago. I believe that the system works and it is better than other models, so I have no problem with it at all. However, I also support my noble friend’s amendments.

It is more than 40 years since I was in local government but I always felt that very often local government becomes lazy. People do not always get into that position—there are often very good mayors outside the mayoral model that we are discussing, and leaders of local authorities can be there for years doing a perfectly good job—but you often find in local authorities that people simply become lazy, and they should be moved on. However, they have such control over what is going on around them in the local authority that they cannot be moved. The people whom they have appointed are somehow compromised, and they spend more time ensuring that their position is safe than in engaging themselves in the innovation that was talked about by a number of those who contributed to the last debate.

I think that a term of eight years is quite sufficient. It would keep the mayor on his or her toes, and they would want to be seen to be innovative at every stage. In many ways, I think it would avoid the kind of problems that I have heard and read about over recent years when I have looked at what happened in some of the mayoralties. The recent problems in east London in many ways reflect what I am saying: someone had total control and now, fortunately—through the courts, in the end—we have managed to get rid of them. If you have a model that is based on a more limited term, there is less opportunity for those sorts of problems to arise.

Lord Beecham (Lab): My Lords, we seem to be moving on to somewhat more consensual territory after the excitement of the past couple of hours. When I listen to discussions about the offer of devolution being based on a requirement to have an elected mayor, I am rather reminded of Henry Ford’s famous offer that anyone could buy a car of any colour as long as it was black. The mayoral model seems to be that you can have devolution as long as the devolution car is driven by an elected mayor; it is a less than free choice.

However, the Minister’s amendments are acceptable. They certainly incorporate some of the concerns that were mentioned in Committee, particularly with the default position that we are clear as to the limits that would be applied to the length of term. No doubt the Lord Chancellor, Mr Gove, has been sending over memos about the wording, or indeed the grammar, in reference to Amendment 8.

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I was of course interested in my noble friend Lord Grocott’s amendments, one of which is effectively met, I suggest, by the government amendment. I think that four or five years is seen by the Minister as a maximum, and that seems to be reasonable. I am somewhat in two minds about my noble friend’s suggestion of a limit of two terms. I stood down from the leadership of Newcastle City Council 20 years ago and, in reference to the remarks from the noble Lord, Lord Heseltine, about the recognition or otherwise of council leaders as opposed to mayors, I have to say that 20 years on people still remember—I cannot say with what relish—my service as council leader for a period of 17 and a half years before that. It is possible to hold office, be accountable and, I hope, make a contribution for a somewhat longer period than two terms would necessarily imply. For myself, I am prepared to accept the Government’s position.

However, it might be worth keeping this matter under review. I suppose that in any event it would be reviewed over time, and we might have examples in this country, which so far we have been spared, of the kind of conduct in office that sometimes has occurred, particularly in the United States but in other jurisdictions as well, where, frankly, there needs to be some kind of limit. In our political culture, we have not experienced much of that. On balance, I invite my noble friend not to divide the House on that amendment. For my part, I am content with the Minister’s amendments.

6 pm

Baroness Williams of Trafford: My Lords, I will address some of the points made by the noble Lord, Lord Grocott, in the course of moving his amendment. He said that you cannot get rid of mayors. In any elected office that I can think of, you can get rid of leaders or back-bench councillors in two ways: first, through the party’s electoral or selection arrangements, and, secondly, by the ballot box. Therefore, just as with local authorities, so with the office of mayor there is the ability to get rid of the mayor.

The noble Lord also talked about the power of recall. Again, referencing it back to local authorities, there is not a power of recall within local authority arrangements, either. Obviously, they are talking about this in the House of Commons: there is not a power of recall in local government. The build-up is incredible, but later on in the debate we will talk about scrutiny—and there is an ability to scrutinise both local authority leaders and an elected mayor.

The noble Lord’s third point was on limiting a mayor to two terms of office. First, in this country there are no other arrangements that replicate that, but I thought of two leaders, one of whom I will name, the other of whom I will not. Richard Leese is one of them; he has been leader for almost 20 years now, and his continuity within Manchester City Council has enhanced the city greatly. I will not name another local authority leader, who was in power for 35 years; I do not think that a single year of his leadership was beneficial to the local area—which is why I will not name him. Therefore, I can see that that could be true in some areas. However, it is also for local electors and political parties to make that change if they so wish.

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Lord Beecham: My Lords, does the noble Baroness recall the leader of a council not too far away from Manchester who led the council for some 50 years before retiring at the age of 85 to make way for a younger successor who was 76?

Baroness Williams of Trafford: I do not think that we are thinking of the same person, but that is very interesting. I thank the noble Lord and ask him not to press his amendments.

Amendment 5 agreed.

Amendments 6 and 7 not moved.

Amendment 8

Moved by Baroness Williams of Trafford

8: Schedule 1, page 17, line 4, leave out “the” and insert “a”

Amendment 8 agreed.

Clause 2: Deputy mayors etc

Amendment 9

Moved by Lord Beecham

9: Clause 2, page 3, line 4, at end insert “with the consent of the combined authority”

Lord Beecham: My Lords, Amendments 9, 11, 12 and 14 in this group relate to the functions of the elected mayor and his relationship with the combined authority in that context. Amendment 9 requires the consent of the combined authority to the appointment of a deputy. In Committee the Minister asserted that given that the mayor would by definition have been elected, it was only reasonable for him or her to appoint their deputy. However, we are dealing here with very wide powers over potentially sizable geographical areas, as we heard earlier this afternoon, and certainly with large populations.

The amendment does not advocate a sort of “House of Cards” process, as chillingly exemplified by Kevin Spacey in the United States version of the entertaining drama by the noble Lord, Lord Dobbs. However, it is surely reasonable for the appointment of a deputy—even one drawn from the members of the combined authority—to be approved by that body, especially as there is effectively no limit on the character and extent of the powers that might be so delegated. Moreover, of course, the deputy would, in the event of a vacancy, step into the mayoral shoes pending a fresh election. For these reasons Amendment 12 is also relevant, as it requires the consent of the combined authority to the delegation of powers by the mayor to the deputy or, as the Bill prescribes, any other officer or member. After all, neither the public nor the combined authority would have had a say in those appointments.

Amendment 11 seeks to ensure that mayoral functions which the Secretary of State may make exercisable only by the mayor should be assigned only with the consent of the combined authority. That appears to be the position, if I read it correctly, of the Greater Manchester agreement, and if it is right for Manchester, I suggest that it should be for more general application.

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Finally, Amendment 14 reinforces the need for combined authority consent to a Secretary of State’s order as to the delegation made under subsection (3). I beg to move.

Lord Shipley: My Lords, I will speak to Amendments 10 and 13 in this group. Broadly speaking, whereas the amendments moved by the noble Lord, Lord Beecham, are about securing the approval of the combined authorities, ours require the approval of the overview and scrutiny committee. As we said in Committee, it is much better for that committee to do it, for three reasons. First, it is independent of the mayor and of the combined authority. Secondly, it can be objective and can hold a hearing in public to assess the suitability of a proposed person, thus giving real effect to the principles of scrutiny. Thirdly, it can satisfy itself that the person selected can represent the interests of all parts of its combined authority area, which can sometimes be very large.

In a sense we debated this in Committee, and I listened carefully to the Minister’s answer at the time. I am not convinced that it is right to give the powers of what could appear to be patronage to a single individual. Nor am I convinced that the members of a combined authority, who were appointed as opposed to being directly elected to it, should simply be given the power to decide or to agree who the deputy should be. I would be much happier if we had an independent process which the overview and scrutiny process would look after. I therefore look forward to hearing the Minister’s response to the point about how you ensure that those who hold very senior, responsible jobs, which are very well remunerated, can maintain the confidence of the general public.

Baroness Williams of Trafford: My Lords, these amendments are all about requiring members of the combined authority or overview and scrutiny committee to be involved in actions which are, quite rightly, those of the elected mayor.

I will first speak to Amendment 11, which would insert the requirement that the combined authority must consent to functions of the combined authority being exercised by the mayor. I do not disagree with what the amendment seeks to achieve. There are a number of circumstances in which an order could be made to make a function of the combined authority exercisable only by the mayor. Our intention is that in all circumstances the combined authority must give consent—or, if this is at the initial stage of setting up the combined authority, the constituent councils must do so.

First, when an order is made to create the post of mayor and transfer powers to the combined authority, in this circumstance nothing can happen without the consent of the combined authority or the local councils involved. Clearly, consent would not be given if the order proposed to give a mayor powers with which the councils or combined authority were not content. Secondly, when an order is made to transfer further powers to a combined authority, similarly, such an order would require consent from all the local councils.

Finally, and notwithstanding our intention, I accept that there could be, at least in theory, a subsequent order to make an existing function of the combined

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authority a function exercisable only by the mayor. We are ready to accept that any such lacuna in the legislation should be addressed and we are minded to accept this amendment. However, the drafting will need further consideration and, if noble Lords will allow, I will come back to it at Third Reading.

Amendments 9 and 10 would require the mayor to obtain the consent of the combined authority or, in the case of Amendment 10, the overview and scrutiny committee before appointing the deputy mayor. For mayoral governance to be effective, the mayor and the deputy mayor must be able to work together and the mayor must have confidence in his or her deputy. Moreover, the mayor’s choice of deputy mayor is very restricted. As provided for in the Bill, the deputy mayor must be a member of the combined authority, so the mayor is already choosing from a small group of people.

In practice, a mayor will consult some of or all the members of a combined authority about a deputy mayoral appointment, but it would be wrong for the members of the combined authority or the overview and scrutiny committee to have the ultimate say over who the deputy mayor is. The noble Lord, Lord Beecham, talked about Greater Manchester and he is absolutely correct that that is an interim arrangement.

The mayor, with a clear mandate, needs to be able to have the say over who among the members of the combined authority will be the deputy and who will assist him or her in delivering what he or she has promised the voters. Giving the combined authority or overview and scrutiny committee the final say as to whether a person can or cannot be the deputy opens up the possibility of appointments which would hinder the mayor and prevent the mayor and deputy working together effectively and smoothly for a common purpose. These amendments are therefore not a sensible check or balance on the exercise of executive functions and I invite noble Lords not to press them.

Amendments 12, 13 and 14 would require a mayor to consult the combined authority or, in the case of Amendment 13, the overview and scrutiny committee before delegating a general function to the deputy mayor, another member or an officer. The provisions in the Bill relating to delegation align with the policy for a local authority mayor or leader, who may arrange for the discharge of functions by members of the executive or officers of the authority. Although the mayor may delegate functions, he or she remains accountable for any actions taken and is accountable directly to the electorate.

I understand the thoughts behind these amendments—that is, to ensure that a mayor is indeed effectively and transparently held to account and that, while there is the capacity for strong executive action, equally the right checks and balances are in place to give confidence in that respect and ensure accountability. However, such checks and balances will not be delivered if executive and non-executive actions are confused by involving the members of the combined authority in decisions such as how the mayor performs his or her role.

Later, we will discuss the appropriate strong and transparent overview and scrutiny to ensure sensible and robust checks and balances on the actions of the

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mayor and the combined authority. It is entirely right that the mayor is held to account, but he or she must also be able to deliver effectively on the commitments made to the electorate, and these amendments could be severely detrimental to that. With those explanations, I hope that noble Lords will agree not to press their amendments.

Lord Beecham: My Lords, I am most grateful to the Minister for accepting the principle of Amendment 11 and I look forward to working with her to agree a form of words when we get to Third Reading.

I am slightly disappointed at the response to some of the other amendments in my name and that of my noble friend Lord McKenzie—in particular, about the delegation of functions. Given the huge scale of the authorities that we are talking about and the huge responsibilities which it is hoped will be devolved, it seems to me that this is a rather different role from that of a council leader or chief executive or even an elected mayor in the authorities as presently constituted. However, I will not press those amendments and will rely on the noble Baroness’s undertaking to revert to the subject of Amendment 11 at Third Reading. I beg leave to withdraw the amendment.

Amendment 9 withdrawn

Amendment 10 not moved.

Clause 3: Functions

Amendments 11 to 14 not moved.

6.15 pm

Amendment 14A

Moved by Lord Shipley

14A: Clause 3, page 5, line 29, at end insert—

“107F Discharge of functions: access to press and the public

(1) In transferring any functions of the mayoral combined authority to the mayor under section 107D or 107E, the Secretary of State shall make regulations to provide for press and public access to information and meetings of—

(a) members or officers of the combined authority, or

(b) any combination of members and officers of the authority,

concerning how the function is discharged.

(2) Subsection (1) does not apply to access to information and meetings concerning the discharge of these functions governed by Part V of the Local Government Act 1972, the Local Government (Access to Information) Act 1985 or the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012.

(3) For the purposes of subsection (1), “access” includes but is not limited to—

(a) attending and viewing,

(b) taking notes,

(c) taking a visual or audio recording,

(d) prior provision, inspection and copying of agendas, reports, background papers and minutes, or

(e) pre-publicity of any significant decisions to be made or considered at the meeting.

(4) For the purposes of subsection (3)(e), “significant” means significant with regard to the authority’s expenditure or the impact on local communities.”

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Lord Shipley: My Lords, this amendment would require meetings and documents concerning the discharge of functions by the mayor or the combined authority to be accessible to the press and public unless they were necessarily excluded by existing law. This is important to ensure transparency of decision-making. The Minister has said on several occasions this afternoon that an elected mayor would be a single point of accountability. It is therefore important that that accountability is transparent.

The amendment talks about the discharge of functions in transferring any functions of the mayoral combined authority to the mayor under new Sections 107D or 107E introduced by the Bill. New Section 107D talks about the general functions of mayors. It says:

“The Secretary of State may by order make provision for any function of a mayoral combined authority to be a function exercisable only by the mayor”.

New Section 107E, which relates to the policing functions of mayors, says:

“The Secretary of State may by order provide for the mayor for the area of a combined authority to exercise functions of a police and crime commissioner in relation to that area”.

On the face of it, the Secretary of State can require a further centralisation of power to the elected mayor from a mayoral combined authority, and it is clear that the function would be exercisable only by that single person. Therefore, if the power lies with a single person and there is a single point of accountability, it really does matter that that person and the decisions they make are seen by the general public to be properly accounted for.

The aim of Amendment 14A is to allow the Minister to counteract any slide towards behind-closed-doors decision-making. That seems to be all the more important given that, as the Bill stands now, overview and scrutiny applies only once decisions have been made and not while they are being discussed. I have a very serious concern that the Bill could be used to reduce the rights of the press and public to access meetings and information, without which the general public may not be properly informed or engaged. I do not want more and more decisions made behind closed doors. The Minister herself said in Committee in reply to our Amendment 42A that,

“the decision-making has to be in public”,—[

Official Report

, 29/6/15; col. 1810.]

but of course it is not just the announcement of a decision but the discussion that can matter profoundly, in that the discussion can explain how the decision was reached.

I fear that the Bill as drafted runs the risk of encouraging further secrecy outside the scope of the Local Government Act 1972 and subsequent regulations. Therefore, I hope that the Minister will agree that we should have on the face of the Bill the right of the press, the media generally and the public to attend meetings and to receive information, as is currently the standard within local government. I beg to move.

Lord Heseltine: My Lords, I see reference in the amendments to public access to officials of the council. I am opposed to that concept. I have had the privilege of serving in Government after Government and value hugely the advice that comes from officials, but I have never believed that officials always give you agreed

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advice. Some do, but the composition of such advice starts at a relatively low level in the official machine. Committees and dialogues take place and a consensus emerges. That becomes the agreement that officials put to Ministers.

Often, one finds oneself in disagreement with that advice. Some of the most rewarding experiences that I have taken part in are when you get the officials to break down the consensus which has been put to you. You may find that the more-established and long-serving officials have taken a rather conservative view, while some of the younger, more energetic, adventurous or imaginative—you can use any language you like—have a more dramatic option which has been suppressed in the process. In the end, it is for Ministers to take their choice: that is what they are paid to do.

If we were to have full public access to the official process, the consequence would be that Ministers would try to ensure that they got the advice they wanted. The easy way to do that is to politicise the Civil Service or the officials in local government and to ensure that the people providing the advice do not leave you with any great issues of controversy, which will be fanned by the press the moment that they get their hands on them.

Although I am in favour of the thrust towards openness and accountability in local government, as in national government, and of the facts being widely available, I am not in favour of there being exposure of the official debate which takes place in providing advice to councillors or, in my experience, Ministers.

Lord Shipley: Perhaps the noble Lord will comment on the fact that within local government now, officers of councils are required to give advice publicly when full council meetings or council committee meetings are held, so there would be nothing new in that happening. I understand his concern about official advice being given at the point at which ideas are being developed, but will he bear in mind that the amendment states that,

“the Secretary of State shall make regulations”?

Broadly speaking, that is designed to prevent a slide towards access to the press and the general public being denied through the structures now being created.

Lord Heseltine: Unlike the noble Lord, I have never served in local government, so I cannot speak with his experience. As I understand it, officials give advice in public, but I do not think that meetings of officials before they formulate that advice are open to public or press scrutiny. I was addressing that concern when I intervened.

Lord Scriven: My Lords, I have some practical experience of this as a former council leader. When I became leader of the council in Sheffield, we had an economic development agency which met in private. Everything was in private—advice, meetings and papers—because it was deemed to be somehow arm’s length and pseudo public sector. Through a very hard-fought and long battle, I thought that it was absolutely right that that was dealt with in public, because huge amounts of public money were being spent on behalf of the people of Sheffield. The reason to write this in the Bill is to open up the advice and the decisions made.

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I hear what the noble Lord, Lord Heseltine, says, but exactly the same arguments were used in another place when what became the Freedom of Information Act was published. With freedom of information, a lot of the advice given now could be made public. This is just the next step concerning that type of advice. I see no reason why, if someone wishes to understand a decision in the area where they live, where multi-billions of pounds are spent on their behalf to improve their lives, they cannot be privy to some of the advice given before someone makes a decision. It is really important that both the press and the public understand the process that has been carried out to reach a decision, not just the decision itself.

My recent practical experience in local government, in an area of economic development, makes me believe that this is the right thing to do. Open decision-making is good decision-making; closed decision-making is bad decision-making, on the whole. It is really important for the press and the public to be able to understand both the decision and the process of how their taxes are spent—to know how decisions are made to improve their area. It is for those reasons, both the practical ones based on what I saw in Sheffield and to take freedom of information one step further, that it is really important that people can understand the advice given to and the process followed by politicians, the mayor or the combined authority to enable them to come to a decision.

Lord McKenzie of Luton: My Lords, we are fully committed to openness and transparency in the proceedings of local government, combined authorities and mayoral combined authorities. We would draw the line so that the same rules operated as for local government currently. We would have reservations about taking it back beyond that—certainly taking it into the area of advice.

That raises a question; I do not know whether the Minister can help us with it. When there are discussions and negotiations about devolution deals, are they in the public domain?

Lord Brooke of Sutton Mandeville (Con): My Lords, my first intervention in proceedings on the Bill were when we were discussing the same subject in Committee. There were references then, as there have been today, to the 1972 Act. The particular episode to which I referred in that previous debate was the Private Member’s Bill introduced by Margaret Thatcher in the 1959-64 Parliament, which was her first real appearance on the parliamentary scene. My late noble kinsman sat on the Front Bench throughout the passage of her Bill.

I have taken an interest in the subject going back a great deal further, to that moment in 1809—we were fighting the French at the time—when the Treasury intervened to say that three particular government departments which it had nominated must by 12 noon on any day, on anything which had been in any way controversial or interesting in the morning’s papers, agree the Government’s position, which would then literally, in the language of government, become the line to take thereafter for the rest of the day. When I served as a Treasury Minister, the reason that I had

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responsibility for the Central Office of Information went back to that fact, because it was the Treasury which had set up the system in the first place.

I want also to say a brief word about the passage of the then Greater London Authority Bill, because it was the first Bill under which the evidence of those advising councillors in local authorities could be made available to the public at large. I am not in any way intending to pour anything hostile into wounds that are long since healed, but the Minister in charge of that Bill made an extremely loyal and long-term defence of the fact that that provision was in the text of the Bill—which it was not. I am afraid that I did go on pestering the Minister in charge of the Bill—no names, no pack-drill—as to where in the text of the Bill, which we were looking at, that information was. Eventually, he broke down and admitted that they were planning to do it and were going to put down an amendment, but had not actually put down the amendment before. It was very loyal of him to have defended and covered for the junior Minister, the Minister who should have put it down.

This has long been an interest and I shall be very interested indeed to hear what my noble friend says in responding to the propositions that have been put in front of her.

6.30 pm

Lord Berkeley of Knighton (CB): My Lords, not having worked in local government but having sat on boards that involved public money, such as that of the Royal Opera House, I very much like to see open debate. On the other hand, I think the point that the noble Lord, Lord Heseltine, made is very pertinent. Sometimes, if people cannot think outside the box, as we had to when the Royal Opera House was faced with closure, what tends to happen is that the things that the proponents of this amendment want can be completely thwarted: discussion can become more closed because people are frightened of saying what needs to be said, as it will create such a storm. I am not going to come down either way on this but I see both points. As somebody who has sat on a board and wrestled with this, I reiterate that I understand the point that the noble Lord, Lord Heseltine, made.

Baroness Williams of Trafford: My Lords, Amendment 14A seeks to ensure that the public have full and free access to combined authority meetings and documents and meetings of officers regarding the discharge of functions. The noble Lord, Lord McKenzie, put it absolutely right when he said that the same rules must apply to local authorities as do to combined authorities.

The noble Lord also asked whether devolution deals would be done under the gaze of the public and cameras. I imagine that, when a deal gets to the stage of a combined authority, that decision-making process would be in full view of the public and may even be recorded in some circumstances. Certainly that is allowed now under the rules of 2014. The process of developing a deal would involve a range of discussions, as the noble Lord will appreciate, between members and Ministers and between officers and officials. Crucially,

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decisions on whether or not to agree to anything will, as I said, be formal decisions of the combined authority; and—devolving down further—the constituent councils would have to agree to it as well, subject to the openness and access requirements applicable to councils and combined authorities.

The Local Government Act 1972, which applies to a combined authority just as it applies to a local authority, provides that all meetings of a combined authority must be open to the public except in limited and defined circumstances. A meeting of a combined authority, as with all other council meetings, may be closed to the public only in two circumstances: first, if the presence of the public is likely to result in the authority breaching a legal obligation about the keeping of confidential information; and, secondly, if the authority decides, by passing a resolution of its members, that exempt information, for example information relating to the financial affairs of a particular person, would likely be disclosed. The normal rules about access to agendas and documents that apply to local authorities apply to meetings of a combined authority—that is, to meetings of all or some of the members of the combined authority in their role as members of the combined authority to discharge the functions of the combined authority. Moreover, the Conservative-led coalition Government made new regulations in 2014 to make clear that a combined authority is required to allow any member of the public or press to take photographs, film, audio record and report on all public meetings. This openness ensures that combined authorities are genuinely accountable to the local people whom they serve.

The amendment seeks to extend this to give the public the right to attend meetings of officers. It would not be appropriate for the public to have a right of access to meetings of officers of the authority and would be wholly impractical. My noble friend Lord Heseltine and the noble Lord, Lord Berkeley, made the point that, far from opening up options and discussions, it would seek to restrict them and close them down. It is right that officials give advice in public. I can think of one occasion—the annual budget setting—where the finance officer has to stand up and say whether or not the budget is sustainable. It is absolutely right that that is done in a public forum. However, to invade officers’ meetings would be wrong. It would not happen in a council, and given that these provisions mirror the provisions for local authorities, why should it happen in a combined authority? Officers cannot discharge functions of a combined authority, in the same way as officers collectively cannot discharge the functions of a local authority. In a combined authority, as in a local authority, functions are discharged by the members, committees or sub-committees of members, or can be delegated to particular officers. It would be wholly impractical for the public to attend officers’ meetings. Officers meet continually through the day to discuss issues, prepare advice for members and implement the decisions that members have taken.

I rather like my noble friend Lord Brooke’s suggestion of 12 noon decision-making. I think we would get rather a shock if that came into your Lordships’ House. On that note, I ask noble Lords to withdraw the amendment.

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Lord Scriven: Before the Minister sits down, can I just ask one question? Is it not the case that any advice that is given, which is written down or in an email, can be requested under freedom of information legislation? What is the difference between that and debate being curtailed by allowing the public to hear the advice being given? They can request it anyway through a freedom of information request.

Baroness Williams of Trafford: My Lords, there is an informal process for discussions and there is a formal process. If something was written down in an email, it would, barring some restrictions on access to information, be disclosable under a freedom of information request.

Lord Shipley: My Lords, I am grateful to the noble Lords who have taken part in this debate, and in particular to my noble friend Lord Scriven for pointing out the importance of the Freedom of Information Act and its provisions in this respect.

I share some of the concerns of the noble Lords, Lord Berkeley of Knighton and Lord Heseltine. I understand exactly the points that are being made. However, the Secretary of State would, as part of this amendment should it succeed, be able to state in regulations how this would be managed.

This is an extremely important issue. This amendment is not asking for commercially sensitive matters to be revealed when it would not be in the public interest to do so or for informal day-to-day meetings with officers to be included. We are saying that the Secretary of State should recognise that the accountability of an elected mayor does matter. The Secretary of State should therefore regulate to ensure proper access to meetings and information to avoid a slide into greater secrecy in decision-making.

The noble Lord, Lord McKenzie of Luton, said that the same rules should apply as for local government—if I recall correctly what he said. I understand that perspective, but we are talking about a single elected person. There is no precedent for the scale of the roles to which they are about to be elected, for the reason that existing mayors in some of our cities and towns have more limited powers. Here, there is to be significant devolution of power from central government across Whitehall and Westminster. There is not even the scrutiny system that is provided within London through the GLA—and we heard from the noble Baroness, Lady Jones of Moulsecoomb, earlier about how the London system does not work terribly well. So I am still very concerned by this situation.

The public right of access to meetings and information must not be diminished as a consequence of this Bill. That is the risk that the Bill introduces. As a consequence of that, I beg leave to test the opinion of the House.

6.41 pm

Division on Amendment 14A

Contents 85; Not-Contents 153.

Amendment 14A disagreed.

13 July 2015 : Column 402

Division No.  4

CONTENTS

Addington, L.

Alderdice, L.

Allan of Hallam, L.

Alton of Liverpool, L.

Ashdown of Norton-sub-Hamdon, L.

Bakewell of Hardington Mandeville, B.

Barker, B.

Bonham-Carter of Yarnbury, B.

Bradshaw, L.

Browne of Belmont, L.

Burnett, L.

Chidgey, L.

Clement-Jones, L.

Dholakia, L.

Doocey, B.

Dykes, L.

Erroll, E.

Falkland, V.

Falkner of Margravine, B.

Fearn, L.

Fox, L.

Garden of Frognal, B.

German, L.

Glasgow, E.

Goddard of Stockport, L.

Greaves, L.

Grender, B.

Grey-Thompson, B.

Hamwee, B.

Harris of Richmond, B.

Haughey, L.

Humphreys, B. [Teller]

Hussain, L.

Hussein-Ece, B.

Janke, B.

Jolly, B.

Jones of Cheltenham, L.

Jones of Moulsecoomb, B.

Kirkwood of Kirkhope, L.

Kramer, B.

Lee of Trafford, L.

Loomba, L.

Ludford, B.

Macdonald of River Glaven, L.

Maclennan of Rogart, L.

McNally, L.

Maddock, B.

Manzoor, B.

Mar, C.

Marks of Henley-on-Thames, L.

Miller of Chilthorne Domer, B.

Newby, L. [Teller]

Northover, B.

Paddick, L.

Palmer of Childs Hill, L.

Parminter, B.

Pendry, L.

Purvis of Tweed, L.

Randerson, B.

Rennard, L.

Roberts of Llandudno, L.

Rodgers of Quarry Bank, L.

Scott of Needham Market, B.

Scriven, L.

Sharkey, L.

Sharp of Guildford, B.

Shipley, L.

Shutt of Greetland, L.

Smith of Newnham, B.

Stoneham of Droxford, L.

Strasburger, L.

Taverne, L.

Teverson, L.

Thomas of Gresford, L.

Thomas of Winchester, B.

Tope, L.

Tyler, L.

Wallace of Saltaire, L.

Wallace of Tankerness, L.

Walmsley, B.

Watson of Richmond, L.

Williams of Crosby, B.

Willis of Knaresborough, L.

Wrigglesworth, L.

Young of Hornsey, B.

NOT CONTENTS

Aberdare, L.

Ahmad of Wimbledon, L.

Altmann, B.

Anelay of St Johns, B.

Armstrong of Ilminster, L.

Arran, E.

Ashton of Hyde, L.

Attlee, E.

Balfe, L.

Bates, L.

Berkeley of Knighton, L.

Berridge, B.

Black of Brentwood, L.

Blencathra, L.

Bourne of Aberystwyth, L.

Bowness, L.

Brabazon of Tara, L.

Bridgeman, V.

Bridges of Headley, L.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Browning, B.

Butler-Sloss, B.

Caithness, E.

Callanan, L.

Carrington of Fulham, L.

Cathcart, E.

Cavendish of Furness, L.

Chisholm of Owlpen, B.

Cooper of Windrush, L.

Cope of Berkeley, L.

Cormack, L.

Courtown, E.

Crickhowell, L.

De Mauley, L.

Dixon-Smith, L.

Dunlop, L.

Eaton, B.

Elton, L.

Evans of Bowes Park, B.

Farmer, L.

Faulks, L.

Fink, L.

Finkelstein, L.

Flight, L.

Fookes, B.

Fowler, L.

Framlingham, L.

Freeman, L.

13 July 2015 : Column 403

Freud, L.

Gardiner of Kimble, L. [Teller]

Gardner of Parkes, B.

Garel-Jones, L.

Geddes, L.

Glendonbrook, L.

Gold, L.

Goldie, B.

Goodlad, L.

Grade of Yarmouth, L.

Green of Hurstpierpoint, L.

Greenway, L.

Griffiths of Fforestfach, L.

Harding of Winscombe, B.

Harris of Peckham, L.

Helic, B.

Heseltine, L.

Heyhoe Flint, B.

Higgins, L.

Hodgson of Abinger, B.

Holmes of Richmond, L.

Hooper, B.

Hope of Craighead, L.

Horam, L.

Howard of Lympne, L.

Howe, E.

Howell of Guildford, L.

Hunt of Wirral, L.

Inglewood, L.

Jenkin of Kennington, B.

Jopling, L.

Kakkar, L.

Keen of Elie, L.

Kirkham, L.

Lamont of Lerwick, L.

Leigh of Hurley, L.

Lexden, L.

Lingfield, L.

Liverpool, E.

Lyell, L.

McColl of Dulwich, L.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

MacLaurin of Knebworth, L.

Magan of Castletown, L.

Mancroft, L.

Marlesford, L.

Mawson, L.

Mobarik, B.

Montrose, D.

Moore of Lower Marsh, L.

Morris of Bolton, B.

Moynihan, L.

Naseby, L.

Nash, L.

Neville-Jones, B.

Neville-Rolfe, B.

Newlove, B.

Northbrook, L.

Norton of Louth, L.

O'Cathain, B.

O'Neill of Gatley, L.

Oppenheim-Barnes, B.

Palumbo, L.

Patel, L.

Patten, L.

Perry of Southwark, B.

Popat, L.

Prior of Brampton, L.

Rowe-Beddoe, L.

Ryder of Wensum, L.

Sanderson of Bowden, L.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Shackleton of Belgravia, B.

Sharples, B.

Shephard of Northwold, B.

Sherbourne of Didsbury, L.

Shields, B.

Shrewsbury, E.

Skelmersdale, L.

Spicer, L.

Stedman-Scott, B.

Stirrup, L.

Stowell of Beeston, B.

Strathclyde, L.

Suri, L.

Taylor of Holbeach, L. [Teller]

Trefgarne, L.

True, L.

Tugendhat, L.

Ullswater, V.

Verma, B.

Wakeham, L.

Waldegrave of North Hill, L.

Walpole, L.

Warsi, B.

Wasserman, L.

Wheatcroft, B.

Wilcox, B.

Williams of Trafford, B.

Younger of Leckie, V.

6.52 pm

Schedule 2: Mayors for combined authority areas: police and crime commissioner functions

Amendment 15

Moved by Lord McKenzie of Luton

15: Schedule 2, page 19, line 10, at end insert—

“( ) An order under sub-paragraph (2) must include provision for an appointment process for any other person who may exercise any PCC functions of the mayor.”

Lord McKenzie of Luton: My Lords, the amendment requires that on page 19, line 10, we should insert:

“An order under sub-paragraph (2) must include provision for an appointment process for any other person who may exercise any PCC functions of the mayor”.

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This is a straightforward issue. The amendment deals with the important role of the PCC taken on by the mayor and the extent to which its functions can be passed to others. It seeks to ensure that there is a proper appointments process to put that into effect. I beg to move.

Baroness Williams of Trafford: My Lords, I thank the noble Lord, Lord McKenzie, for being so brief in moving the amendment. As he said, it seeks to insert a new provision into new Schedule 5C to ensure that the Government must provide, by order, an appointment process for any other person who may exercise any of the PCC functions of the mayor.

The amendment is not necessary because the Government have already committed on the Floor of this House to apply Schedule 1 of the Police Reform and Social Responsibility Act 2011 to metro mayor areas by order where PCC functions are being transferred. Paragraphs 9 to 12 of that schedule set out an appointments process for senior posts below a PCC, including for the post of deputy PCC. This involves the scrutiny of any proposed appointment by a police and crime panel. I reiterate that we intend to apply these provisions to metro mayors by order to ensure that such appointments are properly scrutinised in the same way. The role of the dedicated police and crime panel will, of course, continue.

However, it will almost certainly be necessary to amend these provisions to some extent before they can be applied directly to a particular metro mayor area, given the different structures and posts which might exist in different areas, hence our proposal to implement this by order. I wish to be clear that we intend that there will be an appointments process for senior posts that will be based on that set out in Schedule 1 to the Police Reform and Social Responsibility Act 2011. All posts other than that of the deputy PCC mayor, and which support discharging the mayor’s PCC functions, will be subject to the standard local government requirement that appointments must be made on merit, as set out in Section 7 of the Local Government and Housing Act 1989. This requirement currently applies to all appointments made by PCCs other than the post of deputy PCC, which may be a political appointment, albeit still subject to scrutiny by the panel. Appointments to all other posts below mayor on policing matters would have to be made on merit alone, and appointments to senior posts will additionally be subject to scrutiny by a police scrutiny panel.

I hope that reassures the noble Lord and that he feels content to withdraw the amendment.

Lord McKenzie of Luton: My Lords, I am most grateful to the noble Baroness for that much longer explanation than mine in moving the amendment. It is perfectly satisfactory and I beg leave to withdraw the amendment.

Amendment 15 withdrawn.

Amendment 16

Moved by Baroness Williams of Trafford

16: Schedule 2, page 19, line 21, leave out “or (e)” and insert “, (e) or (f)”

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Baroness Williams of Trafford: My Lords, in moving Amendment 16 I will speak to the others in this group. Amendments 21 to 24 seek to insert new provisions into new Section 107F to clarify how the council tax requirement is calculated and precept issued in respect of mayoral combined authorities.

Amendment 21 requires that issuing the precept will always be a function of the mayor acting on behalf of the combined authority. Amendments 22 and 23 ensure that the Secretary of State can by order modify the application of Chapter 4 or 4ZA of Part 1 of the Local Government Finance Act 1992, where that chapter is being applied to a mayoral combined authority, in order to provide for the specified outcomes in respect of calculation of the council tax requirement and issuing of the precept.

Amendment 24 extends the Secretary of State’s powers to make provision in an order in respect of how the council tax requirement will be calculated where the functions of a mayor include PCC functions. In these cases, we will require there to be separate components of the council tax requirement in respect of the mayor’s PCC functions and the mayor’s general functions. Amendment 24 also requires that the calculation of the component of the council tax requirement that relates to PCC functions is to be regarded as a PCC function exercisable only by the mayor.

By requiring that there is a separate component of the precept for PCC functions, we will ensure that the council tax referendum criteria can be applied separately to the council tax element of police funding, thereby ensuring that government has full flexibility to apply distinct council tax referendum principles for the police component of a mayoral combined authority precept in the same way it currently does for all other PCCs across England and Wales. This would allow a mayoral combined authority the flexibility to hold a council tax referendum on the level of funding for the police specifically. These amendments will ensure broad consistency with the PCC model, in that the mayor will calculate the element of the council tax requirement that relates to PCC functions as a PCC does now, and this calculation will be subject to challenge by the police scrutiny panel. Amendments 16, 17 and 18 are consequential amendments to new Schedule 5C to reflect these changes.

Amendment 16 would ensure that only the mayor can calculate the component of the council tax requirement which relates to policing and that this function cannot therefore be delegated to a deputy PCC mayor or any other individual. This is consistent with the PCC model whereby the PCC cannot delegate such responsibilities to a deputy. Amendments 17 and 18 clarify that the Secretary of State’s power to provide directions to a mayor acting on behalf of a mayoral combined authority in respect of police budgets applies only to the calculation of the component of the precept relating to PCC functions, and not to the component relating to general functions. With this explanation, I beg to move.

7 pm

Lord McKenzie of Luton: My Lords, as we have heard, Amendments 21 to 24 require that there should be two components of a single precept in circumstances

13 July 2015 : Column 406

where the mayor for a combined authority takes on the role of the PCC: the policing and the general work component. We have heard that this separation is necessary should different referendum principles be applied to PCC precepts generally, and this is enabled, of course, because the Bill also requires separate accounting for PCC functions. Amendments 16 to 18 have been described as consequential, and we see them as being entirely reasonable.

Amendment 16 agreed.

Amendments 17 and 18

Moved by Baroness Williams of Trafford

17: Schedule 2, page 21, line 10, after “to” insert “the mayor acting on behalf of”

18: Schedule 2, page 21, line 10, at end insert “in relation to the calculation of the component of the council tax requirement relating to the mayor’s PCC functions (see section 107F(2A)(a) above)”

Amendments 17 and 18 agreed.

Amendment 19

Moved by Baroness Williams of Trafford

19: Schedule 2, page 21, line 16, leave out “to (5)” and insert “and (4)”

Baroness Williams of Trafford: My Lords, Amendments 19, 20 and 25 make minor and technical amendments to Clause 4 and Schedule 2. They remove a reference in the Bill that is relevant to Section 107E of the Local Democracy, Economic Development and Construction Act 2009. The reference would have provided that an order made by the Secretary of State may amend, apply, disapply, repeal or revoke any police and crime commissioner enactment. Amendment 25 removes the definition from new Section 107F inserted into the Local Democracy, Economic Development and Construction Act 2009. The definition of “modify” to include amendment or repeal in relation to Part 1 of the Local Government Finance Act 1992 where the precepting authority is a mayoral combined authority is no longer necessary. These references have been removed as the express power to amend or repeal, and the amendment to the definition of “modify”, are no longer needed given that Amendment 82 amends Section 117 to include a general power to amend or repeal. I beg to move.

Amendment 19 agreed.

Amendment 20

Moved by Baroness Williams of Trafford

20: Schedule 2, page 21, leave out lines 28 to 30

Amendment 20 agreed.

Clause 4: Financial matters

Amendments 21 to 25

Moved by Baroness Williams of Trafford

21: Clause 4, page 6, line 8, at end insert—

13 July 2015 : Column 407

“(1A) The function of issuing precepts under Chapter 4 of Part 1 of the Local Government Finance Act 1992 in respect of mayoral functions is to be a function exercisable only by the mayor acting on behalf of the combined authority.”

22: Clause 4, page 6, line 9, leave out “Provision under subsection (1) may” and insert “The Secretary of State may by order”

23: Clause 4, page 6, line 10, after “4” insert “or 4ZA”

24: Clause 4, page 6, line 12, at end insert—

“(2A) Where the mayoral functions of a mayor include PCC functions—

(a) the provision made by virtue of subsection (2) must include provision to ensure that the council tax requirement calculated under section 42A of the Local Government Finance Act 1992 consists of separate components in respect of the mayor’s PCC functions and the mayor’s general functions, and

(b) the function of calculating the component in respect of the mayor’s PCC functions is itself to be treated as a PCC function for the purposes of this Part.”

25: Clause 4, page 6, leave out line 38

Amendments 21 to 25 agreed.

Clause 5: Local authority functions

Amendment 26

Moved by Baroness Williams of Trafford

26: Clause 5, page 7, line 13, leave out subsection (5)

Baroness Williams of Trafford: My Lords, in moving Amendment 26 I shall speak to all the other amendments in the group. They are about streamlining, fast-tracking and giving greater flexibility in the setting up of combined authorities or the making of changes to an existing combined authority. Certain of the amendments also give greater flexibility in establishing or changing economic prosperity boards, which can also be established under the Local Democracy, Economic Development and Construction Act 2009. Specifically, Amendments 26, 27, 62 and 77 modify the processes for establishing a combined authority in order to provide, if circumstances warrant it, a fast-track process that, while quicker, will maintain all the necessary essential safeguards.

The current process for creating a combined authority under the 2009 Act is lengthy. Past experience shows that it can take well over a year even to reach the point of the order being made, and that is before the real implementation begins. The process involves duplication, particularly where the setting up of a combined authority is agreed as part of the conversations and discussions surrounding a devolution deal. These amendments provide a streamlined process for creating combined authorities where the risks of duplication are minimised—a streamlined process that in particular can be used where local areas have agreed to have combined authorities as part of the devolution deals which they have agreed with the Government. This streamlined process will allow them to implement the deal as quickly as possible without getting tied up in further administrative processes that do no more than duplicate the conversations and discussions that have led to the deal.

13 July 2015 : Column 408

For example, a number of councils agree as part of a deal to the establishment of a combined authority. They have provided the Secretary of State with sufficient information and evidence for the Secretary of State to undertake the statutory tests: that is, to conclude that creating the combined authority is likely to improve the exercise of statutory functions in the combined authority’s area, to have regard to the need to reflect the identities and interests of local communities, and to secure effective and convenient local government. Finally, all the councils in the area of the proposed combined authority consent to the combined authority. In such circumstances, the fast-track process will enable the Secretary of State to proceed to seek Parliament’s approval of the necessary draft order once he has fulfilled a statutory duty to consult such persons as he considers appropriate. His decision as to who is appropriate will of course have to be taken in accordance with the well-established principles of administrative law—to act reasonably having regard to all relevant considerations.

With this streamlined process, councils no longer have to undertake the lengthy process of developing a governance review and preparing a scheme. This is not because the substance of these steps is unimportant, but because that substance will have been undertaken in a different way, and the guarantee that this is so is provided by the statutory requirements of the Secretary of State to apply in accordance with administrative law the statutory tests and the statutory consultation.

These amendments also provide that where the fast-track process is not being followed and councils are developing a governance review and scheme, the process can still be more streamlined than is currently the case. The current requirement that the Secretary of State undertakes a consultation, including the clear duplication of being required to consult the very authorities that have prepared the scheme, is replaced by simple requirements that the Secretary of State must have regard to the scheme and the councils must consent to the combined authority. The Secretary of State still has the option of consulting if he considers it necessary. These amendments therefore facilitate the timely implementation of devolution deals, which will be of critical importance to areas being able to respond to the economic challenges and opportunities the country faces today. It is not an option that we have bureaucratic and time-consuming processes slowing the actions needed to grow our economy, improve productivity and increase our competitiveness.

Amendments 63, 64, 65, 76 and 78 provide certain greater flexibility and streamlining aspects of combined authorities and greater flexibility for economic prosperity boards, for which the 2009 Act also provides. Amendment 79 makes a small change to references in Sections 111 and 112 of the 2009 Act. The origin of these amendments is the draft legislative reform order that was laid in Parliament in March this year. In its report of 19 June, the Delegated Powers and Regulatory Reform Committee noted that the Bill and the LRO were operating in the same policy space, and commented that making changes through two separate legislative vehicles progressing at different speeds would present challenges. We have responded to the committee’s comments and by these amendments

13 July 2015 : Column 409

are now incorporating into this Bill provisions that give effect to those in the draft LRO, and are withdrawing the LRO.

The amendments do three things. First, they enable local authorities that do not have contiguous boundaries to form combined authorities and economic prosperity boards if the statutory tests are met. They also allow the creation, if the statutory tests are met, of combined authorities and economic prosperity boards that have a “doughnut-shaped” area. Secondly, they enable a county council in a two-tier area to be within a combined authority for only part of its area where that area coincides with one or more districts. Thirdly, they provide that minor changes to the funding, constitution or functions of an economic prosperity board can be prompted by the councils asking for such a change.

All these amendments streamline and facilitate putting in place the governance needed to support the devolution of powers to areas, helping areas grow their local economies and improving the efficiency of local public services. I commend them to the House and beg to move Amendment 26.

Lord Tyler (LD): My Lords, I shall speak to Amendments 62 and 77 in this group. First, I very much appreciate the Minister’s explanation of the reason for this group and I particularly welcome the fact that the Government have moved so quickly to amalgamate the previous draft LRO with the Bill. In my view, that is extremely important.

I think the Minister knows that I serve on the Delegated Powers and Regulatory Reform Committee. As an individual, I very much welcome that she has been able to respond so quickly. However, I think she will also know that this afternoon the committee met especially to look at the latest set of amendments. Amendments 62 and 77, to which I want to draw attention, were in one set of amendments that we looked at today.

I am obviously in some difficulty; I cannot refer to the precise recommendations of the committee because they will be reported to your Lordships’ House tomorrow, which is really my point. It would be quite wrong for us to move on those amendments without having seen the recommendations of your Lordships’ committee. However, I can refer briefly to the importance of these amendments. Amendment 62 would introduce a new clause which would make substantial amendments to the Local Democracy, Economic Development and Construction Act 2009. It would do so in a way that quite deliberately dilutes the provisions for consultation.

I think all Members of your Lordships’ House who have been following this Bill are well aware that wide consultation, which was a requirement of that previous Act, is central to the acceptance of this Bill in its current form. The dilution of those very important provisions in the 2009 Act seems to me to raise important issues. The Minister has been talking at some length about streamlining and fast-track. I am always a little apprehensive about fast-track streamlining because it usually means a sleight of hand. I fear that in this case that is precisely what is in place. If we are not to have the effective consultation provided for by the previous Act, at the very least we need a full explanation. We

13 July 2015 : Column 410

have not yet had that and I do not think we can expect to have it until the Minister has had an opportunity of seeing the report from the committee, which will be published tomorrow.

I understand only too well that in the speed with which the department has had to composite—I think that that is the appropriate word—the LRO from the provisions in the Bill, it may well simply have been a mistake that this consultation process has been, in the words of the Minister, streamlined. That raises very important issues that Members who have been following the consideration of this Bill throughout will wish to look at again in the light of the report from the Delegated Powers and Regulatory Reform Committee. Since that will not be available until tomorrow, I hope the Minister will at least agree that there should be, as there can be under the rules of the House, a further debate on these clauses on Wednesday. I certainly would reserve the right to speak. as an individual of course but with the information that will then be available from the committee, when these come before us again on Wednesday. I hope that the Minister will recognise that that is a perfectly appropriate way for the House to proceed.

7.15 pm

Lord McKenzie of Luton: My Lords, it is a great pity that these proposed changes have come forward very late in the day. Certainly, for some of those not caught up in regulatory reform, we will have to unpick some of the intricacies of the Local Democracy, Economic Development and Construction Act 2009. Even with the aid of a Keeling schedule, that takes some time. I perhaps go further than the noble Lord, Lord Tyler, and say that, rather than preserve some right to have a further debate on Wednesday, we should be entitled to come back to this at Third Reading if necessary. A lot of new stuff has been introduced. I would certainly like to take the opportunity of reading what the noble Baroness has said on the record so that we can get our minds round all that. It is not absolutely clear in every respect.

As I understand it, in terms of the key provision, Amendment 62 will provide a fast track to the establishment of a combined authority. Amendments 63 and 64 concern the removal of geographical restrictions on EPBs and combined authorities, and Amendment 65 covers changes to existing economic prosperity boards. We see the benefits of being able to move more swiftly perhaps than circumstances hitherto have permitted, but we need to stand alongside that a caution about not abandoning parts of that process which have made a valuable contribution to the judgments that have been made today.

Amendment 62 would provide an override of the existing requirements of Section 109 to undertake a review and prepare and publish a scheme for combined authorities, which I think the noble Baroness confirmed. That would seem to reverse the current process so that the initiative is with the Secretary of State, who still has to make a judgment about whether a change would improve the exercise of statutory functions in the area. We have had introduced—I think for the first time in our consideration of this Bill—administrative law and what that requires in terms of consultation

13 July 2015 : Column 411

and other matters. I am bound to say that we need a little time to fully understand what all that entails. Even under the amendment,

“the Secretary of State must have regard to”—

perhaps the Minister can expand on that obligation—a Section 109 scheme if one has been published. If not, what is to underpin the Secretary of State’s judgments? The Minister went through a range of issues in making her presentation. We would certainly like the opportunity to study what is on the record in that respect.

There is the prospect of the Secretary of State consulting persons he considers appropriate, “if any”, and the constituent councils having to agree. But it is unclear what analysis or review the Secretary of State will look to in making that judgment. What is to stop the fast-track approach becoming the norm? Perhaps that is what is intended. Will the Minister confirm whether that is the intention in this regard and that the previous or existing process will now be replaced in total by this fast-track process? Clearly, some further information will come when we get the report of the DPC. We cannot reasonably conclude our deliberations without sight of that report and advice.

Amendment 63 deals with EPBs and Amendment 64 with combined authorities. They appear to address the same issue of geographical restrictions on what can be included in an area. For example, for combined authorities it relaxes the current requirements that the local government areas of a combined authority must be contiguous and that no area not in the combined authority can be surrounded by local authorities that are. As I think has been confirmed by the Minister, this would appear as a “doughnut” formation, or as a combined authority formed from areas that are geographically quite far apart. However, in applying the new rules, the Secretary of State must have regard to the likely effect of the new arrangements on the exercise of equivalent functions in any adjoining local government area. We have no detail on how this test is likely to be applied; perhaps the Minister will say more on that.

Generally, some flexibility on the geographical construction of the combined authority should be welcome, provided there is protection for those authorities that might be surrounded, for example. Given that we are on Report, I was about to say that this would perhaps have to be sorted out in another place, but on reflection I do not think that that is right. The noble Lord, Lord Tyler, is right that we should have a further opportunity to pick up these important issues on Report or at Third Reading. They may be fairly brief amendments, but they touch on the processes that have operated hitherto. To clarify: we are not trying to make life difficult in this respect, but we need to understand the detail of what is proposed and the safeguards that will be there to balance the speedier process that these amendments seek.

Lord Woolmer of Leeds: These proposals are enormously important. I hope very much that we will have time to consider them and to reflect, but I see them as potentially extremely helpful, certainly to Yorkshire.

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I will ask for clarification on two matters, but I will study the detail more carefully over the next couple of days. First, I assume that these proposals will apply to extending a current combined authority area, as opposed to establishing a de novo combined authority. I assume that they would apply if an existing combined authority area wished to have discussions to extend its boundaries. Secondly, if I understood the Minister—I apologise that I have not read the proposals in the detail I should have—they would enable an existing combined authority to extend its boundaries, either with contiguous shire districts, or potentially even to an authority that does not adjoin the existing combined authority; the word “doughnut” was used. It would be helpful for me to understand whether that is the case.

These are enormously important proposals and a lot of people will be extremely interested to understand them. They could be very helpful in making combined authority areas make a lot of sense in economic terms. Some existing combined authorities, while very useful, could do with extension to a degree.

Baroness Williams of Trafford: It might be helpful to noble Lords if I say that Amendments 62 and 77 are expected to be reached on Wednesday. They are after Clause 9. Therefore, there will be an opportunity to discuss them then if noble Lords wish.

The noble Lord, Lord McKenzie, asked about fast-tracking becoming the norm. The amendments have been proposed to enable deals where constituent councils are content to approve deals that are ready, not to rush other areas that might take a bit longer. He also asked what underpins the Secretary of State’s judgment if there is no scheme. It will be the information and the evidence available in the deal. If insufficient information is available for the Secretary of State to make a judgment on whether the tests are met, then the fast-track process cannot be used.

The noble Lord, Lord Woolmer, asked two very useful questions. One was on changing an existing combined authority. The answer is yes, existing combined authorities would be able to be non-contiguous or doughnut-shaped; I am glad he will find that response helpful. He talked about non-adjoining areas. The answer is also yes, that will be possible. I hope that that assists noble Lords.

Lord McKenzie of Luton: Before the noble Baroness sits down, could she clarify this? I think she said that we would reach Amendments 62 and 77 on Wednesday. According to the groupings list, they are in the group that we have just discussed.

Baroness Williams of Trafford: My Lords, the amendments would be after Clause 9, so they can be discussed then if noble Lords wish.

Lord McKenzie of Luton: We would be very happy to have a further discussion—it is vital that we do—although we would be squeezed for time on Wednesday with lots of other big issues. I thought from what the noble Baroness said that these amendments are not included in the group that we just discussed. According to the groupings list, they should be.

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The Deputy Speaker (Lord Faulkner of Worcester) (Lab): It might help the noble Lord if I point out that even though the amendments are in this group, if they are to be taken on another day it is open to any Lord to raise them when they are called.

Amendment 26 agreed.

Amendment 27

Moved by Baroness Williams of Trafford

27: Clause 5, page 7, line 20, leave out subsection (7)

Amendment 27 agreed.

Consideration on Report adjourned until not before 8.27 pm.

Universal Credit (Waiting Days) (Amendment) Regulations 2015

Motion

7.27 pm

Moved by Lord German

That this House calls on Her Majesty’s Government, in the light of the Social Security Advisory Committee’s Report of June 2015, to remove the housing element of the Universal Credit (Waiting Days) (Amendment) Regulations 2015, in order to mitigate the harshest impacts of the policy (SI 2015/1362).

Relevant document:3rd Report from the Secondary Legislation Scrutiny Committee

Lord German (LD): My Lords, I move this Motion because these regulations introduce additional waiting days before the first payment of universal credit. The period of waiting for this first payment is added to the already-existing waiting period of one month, plus the application and approval period before the award is made. In total, it is estimated that most applicants will wait about six weeks after an application before receiving their first payment.

The Government’s own Social Security Advisory Committee produced a very powerful and thorough report on these regulations. It had full consultation and went into great detail. It recommended, first, that these regulations should not proceed; and, if they did, that housing benefit should be removed from the waiting period. In their Explanatory Memorandum the Government agree that these waiting days are a cost-saving measure. This Motion asks the Government to agree the minimum change that the Social Security Advisory Committee asked for, to deal with the harshest parts of the policy. We on these Benches believe that a primary purpose of our social security system is to provide a safety net, to provide protection for those most in need who need help when sickness or unemployment hit them.

7.30 pm

As well as the Social Security Advisory Committee’s report, we can also draw on the reports of the House of Lords Secondary Legislation Scrutiny Committee: not one, not two but three reports—and that on a

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piece of legislation which is subject to the negative procedure. The second of its reports contains strong criticism of the Government, saying that the Government’s response to its first report was,

“disappointing in that it largely repeated material already received by the Committee from the Department. The House may … wish to press the Minister for a better explanation”.

I hope that this debate will provide an opportunity for the Minister to do just that.

The effects of this piece of legislation will be: first, to push people to use food banks; secondly, to increase rent arrears; thirdly, to turn people to payday lenders; fourthly, to produce budgetary problems for registered social landlords and private landlords; and, finally, to lead to fewer private landlords taking benefit tenants. In that respect I have recently seen in the window of a rental property a notice saying, “No DSS permitted here”. Such notices used to appear some time back and I thought that we had dealt with the issue many decades ago.

There are major differences between the current waiting days schemes for jobseeker’s allowance and employment and support allowance and the universal credit scheme proposed in this legislation. Principal among those differences is that the old system related to a single benefit during a period of unemployment. The proposal in this legislation relates to universal credit, which brings together six existing benefits. These include tax credits and housing benefit as well as support for the current jobseeker’s allowance. So universal credit, unlike jobseeker’s allowance or employment and support allowance, covers both in-work and out-of-work benefits, and spans across a range of existing benefits, some of which are not currently subjected to the waiting days regime, in particular housing benefit.

The Social Security Advisory Committee rightly pointed out that claimants faced with a long wait for their first payment will prioritise feeding their families over paying the rent. Waiting time overall for that first payment will be in the region of six weeks—much longer than the monthly payment for the in-work system which universal credit is trying to emulate. The Government’s position on monthly benefit payments replicates how most people in work receive their pay or salary—but monthly means monthly, not six-weekly. For many workers, that means receiving your pay at the end of the month even if you have started work some way through that month. Very few workers would expect to have to work for six weeks before receiving their first pay. This waiting proposal is about people having no incoming money to budget for essentials such as food, utilities and rent.

The Government have an interesting policy on exceptions to their legislation. They tell us that they want a blanket policy with a limited number of exceptions. That is their stated ambition. They say that they want a simple and fair rule and that it will be difficult to state all the circumstances in which an exemption could apply. In view of this, I wonder how the Minister reacts to the statement in the Social Security Advisory Committee’s report that,

“the Government’s decision to set out a limited set of exemptions (with no further discretion) … is unexpected”.

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The Government’s stated principle for this policy as a whole is that benefits are not intended to provide financial support for very brief breaks in employment or periods of sickness. They state that they would expect people to use their own resources to fund themselves during that period. However, people will not typically have savings to cover a six-week shortfall and pay basic living costs, which will include paying the rent.

HSBC reported in a substantial report just a few years ago that,

“34% of the UK population have savings of £250 or less”.

It further states that they do not have the means to cover a week’s rent, let alone six, or living costs if the breadwinner’s job were to end. This headline on savings is backed by a number of other studies referred to in the Social Security Advisory Committee’s report. For example, the Resolution Foundation found that more than half of low and middle-income households—middle-income households are crucially important in this—had no savings at all, and that two out of three had less than enough to see them through a month, let alone six weeks.

The Government intend that the waiting days will apply only to new applicants for universal credit, and say that most will already be receiving one of the legacy benefits, and therefore will not be treated as new applicants. Those who are not, so the Government allege, will be able to cover the six-week period without any money coming in from their savings. However, the evidence for these savings is clearly not there.

Further, as this Government’s £12 billion cuts to the welfare budget are implemented, there will be further erosion of the legacy benefits such as tax credits—so, if the Government achieve their policy aim of reducing the number using tax credits, there will be an even greater chance of people making new applications for universal credit. As it is, the Government estimate that 880,000 new claims will be made each year: that is the number of households the measure will affect. This could be a substantial underestimate of the number of claims there will be when the Government’s welfare reductions work their way through.

This measure will have a number of practical effects on families, households and others. The first concerns the availability of advance payments. The House of Lords committee today published a letter from the Minister on this matter, and the Government are praying this in aid. But last year, under the legacy system of benefits, two out of every three applications for an advance on benefits to help applicants cover the period when they were without any money were turned down. The explanation provided to your Lordships’ Secondary Legislation Scrutiny Committee in the last few days offers little hope that applicants will do any better under universal credit.

Another practical effect of the measure will be to create a disincentive for people to take a job with a six-month contract as it would mean them having to put in a new application. Rent arrears will inhibit free movement of labour. If you choose to prioritise feeding your family or ensuring that you have basic utilities such as electricity and gas in your home, and subsequently

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build up rent arrears, that will reduce your ability to spend money on moving around to find a job because you owe rent where you currently live, so things will be even worse for you. Similarly, it is clear that because of the variation in rents around the country, claimants in high-rental areas will suffer most.

It is also clear that there will be some fiscal displacement. Additional costs, which the Government are not going to cover, will be passed on to charities and local government, which have to cover the costs of emergency housing and of supporting people, particularly where children are involved. Basically, there will not be an absolute saving to the public purse because those costs will be passed on to other bodies and agencies, particularly hard-stretched local authorities.

In conclusion, your Lordships’ House can send a strong signal to the Government tonight that it expects this waiting-period policy to be changed because it will force people to use food banks, because it will push people towards payday lenders and because it will put people into rent arrears and into a cycle of debt. I beg to move.

Baroness Sherlock (Lab): My Lords, I thank the noble Lord, Lord German, for moving his Motion and for explaining to the House the effects of this measure. I will not detain the House by repeating that explanation. I also understand his desire to mitigate some of the effects of these provisions by seeking to exclude the housing element of universal credit from the regulations, but I think that there is a better way to approach this so I have taken a different direction in my Motion and I will explain why I think the House should agree. I am also being ever-optimistic, hoping that the noble Lord, Lord Freud, will find this a more persuasive case and that by the end he will rise up and cheer in agreement and obviate the need for a vote at all. I shall do my best.

The starting point for Labour is that we support universal credit. We think it is a good idea. Bringing together separate working-age benefits can potentially make the system simpler and should make it easier to work out whether and by how much you would be better off in work. But because we support it, we want it to work, and we understand that to work it needs to get off to the best possible start. Sadly, that has not happened.

When the Welfare Reform Act was going through Parliament, noble Lords from across the House, from all Benches, pointed out to the Government at different stages some of the risks inherent in the approach they were taking and made various suggestions for how the Bill could be improved. Sadly—as we all think—had these been listened to, we might not be in the position we are in now; none the less, things are not looking brilliant. Unfortunately, once the legislation was in, things did not improve. Delivery has been disastrous from the outset, starting with an implementation plan which the Opposition pointed out to Ministers right at the beginning was hopelessly overoptimistic.

The July 2010 Green Paper on universal credit even included the claim that the IT changes necessary to deliver it,

“would not constitute a major IT project”.

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In retrospect, the naivety of Ministers in signing off the plan is extraordinary. Since 2011, £130 million of taxpayers’ money has been written off because of failed universal credit IT. The Government still have not published any of the details of how they are going to spend this £12.8 billion budget, having repeatedly claimed that universal credit was on time and on budget when patently it was neither.

What of the impact on claimants? In November 2011, Ministers announced that 1 million people would be claiming universal credit by April 2014 and the project would be fully rolled out to 7 million people within six years, by 2017. But now there are only 65,380 people claiming universal credit and full rollout is still some way off. It is in this context that these regulations have been laid.

The noble Lord, Lord German, cited the damning report from the Government’s Social Security Advisory Committee, as well as the concerns expressed by our own Secondary Legislation Scrutiny Committee. As he explained, the provisions will extend the waiting time to seven days. They are already in place for jobseeker’s allowance and employment and support allowance but those are normally paid fortnightly and, as the noble Lord, Lord German, explained, the universal credit system is paid monthly and people could find themselves waiting six weeks for money, and at that point getting an amount of money equivalent to only a month minus seven days’ allowance.

When the Social Security Advisory Committee looked at the regulations and recommended, unusually, that they should not be made, the Government’s only response was that they did not accept the SSAC’s recommendation because the risks were outweighed by the benefits that could accrue from reinvesting the savings in measures to help claimants get into work. When the scrutiny committee pressed them on this and said in that case could they explain how they were going to spend this money, all the Government would say was that during 2015-16 they would commit only to spend the money in this way but they would not give any plans for subsequent years or any detail about how the money might be spent. Since that appeared to be the Government’s only defence to the SSAC’s report, it is, frankly, unreasonable for them not to have offered more information when asked to do so by the scrutiny committee.

Can the Minister give the House the kind of detailed breakdown of costs and savings that he was specifically asked for by the scrutiny committee—repeatedly—and which he simply failed to give? The change is described as a “save to spend” measure, which will save £150 million a year once universal credit has been rolled out. The savings will fund measures to get people off benefit and into work. Those savings are predicated on the full rollout to 7 million people. We have 65,000 people so £150 million does not seem a reasonable assumption for the savings at the moment. Will the Minister please tell us? If the figure is proportionate, the back of my envelope suggests that it would cost £1.4 million. I presume it is not proportionate but I invite the Minister therefore to give us an up-to-date estimate of savings in this and the next financial year. The scrutiny committee asked for this but he simply failed to do it.

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The only other bit of financial information I could glean was in the Budget costings, which said that the Government would have to spend an extra £5 million if the start of these regulations was delayed by a month. Is that a good way to extrapolate the cost and, if so, will the Minister explain it to us? As the noble Lord, Lord German, pointed out, the Social Security Advisory Committee said that the DWP should give claimants more information about how to get an advance. The Government said they would look at that in the digital process, where nothing is mentioned, so will the Minister tell us what is going on?

7.45 pm

In summary, the critiques have suggested that when the regulations were published, there were problems with the impact on claimants waiting six weeks. They have also pointed to the lack of information about the number of people affected, the costs rolled out and the savings that are to be made, as well as the lack of detail to back up the Government’s claim that they were going to reinvest savings—there is no information on whether they are going to be reinvested every year, spent on something new or used to offset the existing already-planned activity.

That would have been bad enough but the picture has got worse since then. The Government were also criticised for not producing an impact assessment. Even if they had done so, in the past week it would have become completely out of date because the Budget contained a whole raft of measures that will have a significant impact on universal credit. These include: freezing the main rate of universal credit and the limited capability for work element for four years; reducing the benefit cap; removing the family element and restricting the child element in universal credit; extending conditionality rules in universal credit to parents of three and four year-olds; reducing the work allowances in universal credit; and ending the automatic entitlement for out-of-work young people.

Cumulatively, those measures could have a significant impact. Will the Government tell us what that impact will be? For example, will the Minister tell us if the total caseload on universal credit is likely to change? Will he tell us what the impact will be on the average entitlement to individuals? Will he tell us if work incentives or gains to work will change? It is hard to imagine they will not, given that the amount you are allowed to earn before you lose your universal credit is coming down; and the taper means that that money is going to be taken away from you much more quickly. What change is that going to make? If we do not have that information, we are being asked to fly without radar.

Universal credit is only an infant. It is barely crawling. It will be March or April before it is even rolled out to all single unemployed claimants, never mind families with children and all the complex cases that will come thereafter. Once families are included, the size of awards will rise significantly, as well as the number of claims being processed. The Government will also have to invent and deliver a mechanism for getting free school meals to claimants since they are currently attached to benefits that are being abolished. The same applies to all the other passported benefits that are similarly attached. What happens if, as universal

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credit scales up from 65,000 people to 7 million people, the IT system slows down and benefits are delayed for even longer than the six weeks referred to by the noble Lord, Lord German? What happens then to the system of delaying payments?

In other words, we simply do not yet know if universal credit is going to work and what the full range of implications will be so I urge the Minister to think very hard before pressing ahead with the regulations. At a time of such uncertainty and such pressure on his beloved universal credit, is this really the time to step ahead with these measures? Would it not be more responsible to wait until universal credit has been rolled out, has been seen to work and is working properly? The Minister could then come to Parliament and show us it was working and at that point we would be in a position to understand the consequences.

I return to where I started: we in Labour back the idea of universal credit. We want it to work but it has had a very shaky start, it is still deeply unstable and its future has suddenly been thrown into severe doubt and confusion by the Chancellor in his summer Budget. Why put yet another burden on it at this difficult time? I urge the Minister to think again. Millions of people will eventually depend on universal credit. They need it to work so that they can work and live and pay their rent and feed their children. For their sake, the Minister should step back from this measure today.

Baroness Thomas of Winchester (LD): My Lords, this debate perhaps illustrates why the way in which the House scrutinises important, not to say controversial, statutory instruments is not satisfactory and is rising to the top of the procedural agenda. I know that there is a move afoot for a delaying power; in fact, we now have the Motion of the noble Baroness, Lady Sherlock. I have also put forward what I believe is a better way of debating controversial SIs, with advisory amendments being suggested. But for the moment these two types of Motion, moved by my noble friend Lord German and the noble Baroness, Lady Sherlock, are the best that we can do without killing the regulations. However, I should make it clear that I see no merit in the Government’s proposals at all. It is tempting simply to recommend that the regulations be annulled. The suggestion in my noble friend Lord German’s Motion for removing the housing benefit element from UC waiting days, from the Government’s very own advisory committee, is the very least that the Government should do. However, I will support the Motion of the noble Baroness, Lady Sherlock, as the second-best option after that.

The purpose of the Social Security Advisory Committee is to advise the Government on secondary legislation and to issue occasional reports in this area. Its report on these regulations details what it calls “compelling evidence” as to why they should not proceed, received in response to its consultation. The Government’s reasoning is that the new arrangements refer only to new claims for universal credit made after 3 August this year and do not apply to certain vulnerable groups or those migrating to UC from existing benefits. They therefore believe that those who qualify for UC by a means test are likely to have savings to fall back on because they will be,

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“coming from the world of employment”.

In any case, they then say rather vaguely,

“advances of benefit will be available to help those who are in financial need”.

This is a thoroughly misleading sentence which turns out not to be entirely true, as I shall demonstrate.

We are told that the principle behind the waiting days policy in UC is,

“not designed to provide cover for moving between jobs or brief spells of unemployment”,

although this somewhat sniffy comment does not take account of the fact that universal credit, like PIP, is an in-work as well as an out-of-work benefit. I have been very fair to the Minister by spelling out the Government’s rationale for the policy. So why is the policy being questioned by not just the SSAC but our very own Secondary Legislation Scrutiny Committee? I prefer to call that committee by its old name, the Merits Committee, because the clue as to what it does is in the name. I am very pleased that the chairman of the committee, who has been writing letters to the Minister, is here.

The committee has been like a terrier with a bone. First, it points out that, as the noble Baroness, Lady Sherlock, said, no impact assessment giving costs and savings has been provided, so there is insufficient information to gain a clear understanding of what is going on. I take the noble Baroness’s point that the impact assessment would in any case probably be out of date but that is no excuse for the Government not having done it. The equality assessment is not a substitute for a properly done impact assessment. There is a glaringly obvious example of why an impact assessment is vital. The Government maintain that benefit advances are available for those in financial need, as I said just now. But the SSAC report tells us that the Government admit that advances will not be available to everyone, especially not to those who will not be able to afford the repayment. So what will these people do when they are left with no money for six weeks while almost certainly having debts, being in danger of being thrown out of their accommodation for non-payment of rent and with no food?

No wonder the Government have not done an impact assessment. If they had done one properly, they would have had to admit that there will indeed be extra burdens on landlords, local authorities—particularly if they have to give out loans—housing charities and food banks, and quite possibly the police and health services. But, I hear the Minister saying, “These are people from the world of work, surely not those at the bottom of the pile. They must have some savings, mustn’t they?”. But the evidence provided to the SSAC does not back this up. As my noble friend Lord German said, research by HSBC showed that 34% of the UK population have less than £250 in savings and do not have the means to cover a week’s rent and living costs if the breadwinner’s job were to end. Scottish Widows found that of those with no savings, two-thirds had debts. There are lots of similar comments. We also know what happened when there was a computer glitch at RBS recently: many of its wage-earning customers said that they could not manage to pay their outgoings, even for a very short time.

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The SSAC report sums up the argument by saying that the question as to the balance between those with sufficient savings and those without has not been resolved in the supporting paperwork from the DWP. What the Government seem not to have understood is that what they call the “world of employment” might mean a very low-paid job in an expensive place such as London.

Turning to the crucial question of the housing benefit element of UC, the SSAC says:

“The fact that the Committee received so many submissions from landlords and their representatives is an indication of the degree of anxiety that has been generated in the housing market by this proposal”.

The Cornwall Residential Landlords Association is more forthright. It says:

“Many landlords have expressed concern about the payment of Universal Credit at the end of a calendar month leading to late payment of rents and other bills. Adding a further barrier to claimants being able to meet their financial obligations is likely to result in an increase in the number of landlords no longer willing to accept these people as tenants”,

as my noble friend Lord German said. It added:

“The increased risk of homelessness will add to the costs of policing and health services”.

The Notting Hill Housing Trust also makes the point that having rent arrears has the potential to inhibit the free movement of labour, thus hobbling those who are looking for work in as wide an area as possible.

Turning back to the absent impact assessment which should have provided costs and savings, the Minister’s letter to the chairman of our secondary legislation committee gives us more information. It says that the anticipated savings will all be spent in giving additional support for claimants in Jobcentre Plus offices but we have heard before of all the support that claimants are now supposed to be getting from JCP offices. As for the impact assessment not having been done, the reason is given that the legislation does not directly impose obligations on public or private bodies. In other words, it is almost admitted that parts of impact assessments are tick-box exercises, often not worth the paper they are written on. That is something those of us interested in statutory instruments know all about.

However, I am concerned not just with process but with the end result. I fear that the result of the Government proceeding with this arrangement will be real hardship for many of those affected. The Government do not seem to acknowledge that many UC claimants will have been trying to find work before they apply, which makes this proposal particularly harsh. I urge the Government to withdraw the regulations—and if not, to take the housing benefit element out before pressing ahead.

Baroness Lister of Burtersett (Lab): My Lords, I support my noble friend Lady Sherlock’s Motion. However, I am sorry that the noble Lord, Lord Kirkwood of Kirkhope, was not able to go ahead with his original fatal Motion, not least because when we debated the earlier waiting days regulations on 19 November, I promised that I would see him on the barricades were he to do so. I, too, oppose these regulations. I will inevitably be repeating some of the arguments already put so ably, but I hope to provide reinforcements in doing so.

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I accept that the universal credit regulations will affect fewer people than did those for JSA/ESA, because of how universal credit operates. However, as we have heard, those who are affected stand to be hit harder because of monthly payments and because the universal credit payment includes more elements—in particular housing, to which the Motion of the noble Lord, Lord German, which I also support, relates. The payment also includes childcare costs and children’s allowances.

As the Child Poverty Action Group—I declare an interest as its honorary president—points out in its evidence to SSAC, this means that those with high housing costs and/or with children will be particularly adversely affected. In addition, SSAC points out that carers and lone parents of children aged under three, who do not have to serve waiting days on income support, will have to do so on universal credit.

8 pm

In its response to SSAC, the department disputed SSAC’s point that the increase in the number of waiting days will decrease the initial amount of universal credit paid. But in our last debate, the Minister stated clearly that waiting days are “days of non-entitlement”. Moreover, if there is no effect on the amount paid, where do the savings of £200 million—or £150 million—come from? Both figures were given to SSAC by the department, as the Secondary Legislation Scrutiny Committee pointed out, noting that such a discrepancy is not good enough. My noble friend has already asked about this, and perhaps the Minister will clarify what the exact savings are. If there are savings, someone is losing out. Perhaps I am being dense here, but it seems to me that this £200 million, or £150 million, will be taken out of the pockets of claimants at a time of particular vulnerability and also out of local economies, given that this money is likely to be spent as soon as it is received.

SSAC and those who gave evidence to it questioned the department’s argument that it is reasonable always to expect people to use their last earnings to tide them over, particularly given the nature of today’s labour market. The impact assessment for the last set of regulations showed that those on lower earnings are more likely to have been paid weekly rather than through the monthly wages on which the whole universal credit policy is premised. It also shows that only 36% of affected JSA claimants had savings of £100 or more to tide them over. The majority had less than £100 and, in the DWP’s own words,

“could be deemed to be less resilient in a vulnerable time just after losing work”.

But that potential vulnerability does not seem to concern the department. I also asked the Minister during our earlier debate whether the DWP had any information on the numbers leaving work in debt or arrears. He did not, and I wonder whether any effort has been made to find out that information subsequently, given its relevance to the matter in hand.

Of course, the official line is that short-term benefit advances are available. But CPAG noted that its research with Tower Hamlets Foodbank identified problems for claimants accessing them. I know that, in response to the Feeding Britain inquiry, the department is supposed

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to be addressing these problems. Can the Minister answer the question posed by the inquiry in its follow up report:

“What progress has the Government made in improving awareness and, as importantly, take-up of Short Term Benefit Advance payments to bridge the gap between a claim being made and a first payment being received”?

Welcome as any such progress might be—I hope we will hear that there has been progress—as CPAG points out, this new waiting day policy is putting the short-term benefit advance to a different use than originally envisaged. Its report says that,

“rather than ameliorating a delay, it will be used to substitute for entitlement”,

and that, as such,

“it will be a loan, to be repaid in full”.

As a result, it says:

“This proposed solution will simply spread the financial loss to families over a longer period of time”.

Moreover, the Secondary Legislation Scrutiny Committee highlights a nasty little Catch-22, which the noble Baroness, Lady Thomas, has already pointed to:

“Advances will not be paid to those … who will not be able to afford the repayment”.

As the committee observes:

“The DWP does not explain how someone in this … category is expected to manage”.

Perhaps the Minister could do so now.

SSAC also noted that part of the rationale for the policy, as first outlined by the Chancellor of the Exchequer, was that people should spend the first few days out of work looking for a job rather than signing on. However, the committee warns, on the basis of the evidence it received, that,

“a family that has little or no resources with which to manage during a period of up to six weeks, exacerbated by the waiting day rule, will inevitably focus on survival rather than looking for work”.

The committee also points out that the family could then risk sanctioning. This really could be a counterproductive policy, as Crisis underlines in its briefing.

SSAC was very concerned about the likely impact on health. As we have already heard, no impact assessment has been provided, on the bizarre grounds that,

“there is no impact on business or civil society organisations”.

Try telling that to the landlords and food banks—that is not how they see it. As the Secondary Legislation Scrutiny Committee notes,

“chapters 4 and 5 of the SSAC report … set out clearly the extra burdens anticipated”.

For all these reasons, as we have heard, SSAC was unequivocal in its rejection of the regulations,

“based on the persuasive and compelling evidence presented to us”.

It praised that evidence for its richness and praised the efforts made by respondents to consult more widely. The Secondary Legislation Scrutiny Committee branded the woolly reasoning given by the department for not accepting SSAC’s recommendation as “unsatisfactory” and suggested the House might wish to press the Minister for more information as to why it did not accept the recommendations.

13 July 2015 : Column 424

Will the Minister also tell your Lordships’ House how many times SSAC has rejected draft regulations outright? I may be wrong but I do not think it is very common, and it is particularly telling that it is a committee largely appointed by the current regime at the DWP that has done so. I congratulate SSAC on taking this stand and thank it and all who gave evidence to it. Given that we are unable to reject the regulations tonight, I very much hope that your Lordships’ House will support my noble friend’s Motion so that, rather than the department steaming ahead in the face of the compelling arguments put by SSAC that the regulations should be rejected, the policy can be reviewed in the light of experience after the completion of the rollout of universal credit.

The Lord Bishop of Portsmouth: My Lords, I and others from these Benches have welcomed the principle of universal credit, and I readily do so again. However, the best of policies and principles have practical consequences which make all the difference to the effectiveness of policy. In that constructive spirit, wishing universal credit to be successful in simplifying the complexity faced by benefit claimants and confirming the dignity of work at a decent rate of pay, I add some reservations to the extension of waiting time to seven days.

Delay in receiving first benefit payments has been an issue for many years. Inevitably, and sadly, there can be administrative delays. I am not aware that any assurance has been given that universal credit processes would prevent such delays; indeed, I doubt that any such reassurance could be given. Process, technology and human error are realities. Compounding these with longer statutory waiting times will exacerbate the problem. We should be reticent about further lengthening that wait, at least until delays consequent on the new universal credit process and procedures are ironed out. It would be rash, given our general experience, not to expect some continuing transitional challenges. There are some worrying instances and worrying delays. That is not to attribute blame—rather, it is to remind ourselves of the importance of extensive and ongoing training for those involved in assessing applications and advising on helplines. I hope the Minister might confirm ongoing commitment to this.

Some caution about extending waiting times is therefore appropriate. Furthermore, whereas, as we have heard, jobseeker’s allowance provided for a waiting time of a fortnight, universal credit has a month before first payment is reached. Carers and lone parents have not previously faced a waiting time rule at all. Not all those affected will benefit from redundancy payments or have the cushion of savings. Though some will, a compassionate and just system provides for the worst cases and for those most vulnerable. A job search, which we would wish to encourage, costs money.

The welcome advantage that universal credit encompasses a number of previously independent benefits, which in almost every way is a huge step forward, is in this instance, perversely, a disadvantage. The consolidated nature of universal credit being awaited by a claimant means that the payment being delayed is likely to be a very significant part of income.

13 July 2015 : Column 425

As I understand it, the intention of the noble Lord, Lord German, and the noble Baroness, Lady Sherlock, is to moderate the impact of these proposed changes—to moderate risk. On balance, I have some anxiety that the first amendment risks complicating universal credit arrangements by excluding housing benefit from the regulations. It seems to go a bit against the grain of simplifying the benefit system. The second amendment, delaying enactment, gives some time to assess the impact of moving to monthly payments and any protection needed for vulnerable groups, for instance. I hope that the Minister can consider agreeing to a delay to allow for some learning in transition to what I trust will be a significant step forward in supporting those in need through universal credit and into work at a decent living wage.

Lord Kirkwood of Kirkhope (LD): My Lords, I shall make a brief intervention in these two important debates. I congratulate my noble friend and the noble Baroness, Lady Sherlock, on securing the time. I should perhaps say at the outset—and the noble Baroness, Lady Lister, rightly adverted to the fact—that I had a failure of nerve earlier last week and withdrew my prayer to annul. I did so because I think the Treasury are requiring the department to take the introduction of this fundamental flagship policy right to the edge of proper implementation. The Minister told the House last week that the department has already been required to make significant savings. Some £2.4 billion was the anticipated spend, but that has now been reduced to £1.8 billion. The Minister may be able to persuade me otherwise on the rollout of the digital element of the service, and I would like to hear him on that subject—but, if not, I am really worried that we are cutting this so thin that we may lose the core benefit of universal credit. I agree with the noble Baroness, Lady Sherlock: everybody in this House, or certainly anyone who served in the Welfare Reform Bill Committee in 2012, is committed to the principle of a single working-age benefit that is blind to work. But if the Treasury is not careful, the house of cards will collapse. So if I had succeeded in a fatal Motion and the Minister had been sent back to the Treasury with his tail between his legs, it may have said, “It’s all too much—we’re just going to let you swing in the wind”.

I know that it is not the Minister’s fault at all, but the idea that this is a save-to-spend initiative is a complete nonsense, as far as I am concerned, and I just do not believe it. It is a departmental expenditure limit that will carry these savings and, as the noble Baroness, Lady Lister, said, the claimants will carry the can, on top of everything else. We are talking about £200 million or £150 million—we do not know—but we really are in danger of putting people at risk.

Another thing that irks me is the fact that we are now beginning to confuse means-tested safety nets with income replacement benefits. Means-tested safety nets should apply in any circumstances; they are the point of last resort. I do not believe that the local government establishment, although it tries hard with reduced budgets, can pick up all of the downstream damage that will be done to low-income households that will struggle to stay alive. Therefore, we have to get behind the department to get the Treasury to

13 July 2015 : Column 426

recognise a bit more what is at stake here. That is one of the purposes that I hope the debate this evening will serve.

8.15 pm

I am very pleased to see the noble Lord, Lord Trefgarne, here, because I want to say to him that, despite the fact that, as has been mentioned, there are rising concerns about the procedures available to us in this House to deal with some of these policy issues, the work that his Secondary Legislation Scrutiny Committee does is exemplary. Even those of us who have been studying this issue for a long while require his help in getting information out of the department. He succeeds in doing that, and the professionals who work for his committee, and the membership of his committee, deserve great credit for doing that. It is boring work, but it is absolutely essential to give confidence to policy-makers on the floor in debates like this that they understand all the issues properly. That is true of Mr Paul Gray and the Social Security Advisory Committee, too; it has always done great work, and I pay both those organisations a great tribute.

I am struggling to understand whether we can get some key performance indicators into the operation of this policy. At the moment, the universal credit payment would normally be paid directly into a claimant’s account within seven days of the last day of the monthly assessment period or as soon as is practically possible. After 3 August, there will be a seven-day waiting period. I am worried about,

“as soon as reasonably practicable thereafter”,

which is a term of art. If these regulations go though, is there some way of monitoring the degree of lateness, if I can put it that way, and whether the six-week, or perhaps even more than six-week, period is observed in practice?

We had this debate about jobseeker’s allowance and employment and support allowance a year ago, and we previewed all these issues. That was a saving of £15 million. It is presumably too early to get any useful feedback from the implementation of that policy, but I would very interested to learn whether, with the new agile computing systems we have, we could pinpoint whether the period that people will be faced with after 3 August is six weeks, six and a half weeks or seven weeks. Over the distance, the House is entitled to ask questions of that kind, as further and better particulars would influence our future consideration of this issue.

We know—the Minister confirms it and he is right—that test and learn is a part of the 2012 legislation framework. I hope that, if these regulations are implemented, we will try to test how we can mitigate some of the effects of these extra waiting days. They will be bound to increase the hardship experienced by people who are subject to the new universal credit regulations. I think the House will want to return to this in future. If the Minister is serious about trying to defend his policy and make it work sensibly, the generality of the people who are claiming will find universal credit much easier to use, but waiting days, particularly on top of Digital by Default, are going to mean that we could damage the proper, sensible rollout

13 July 2015 : Column 427

of this policy if we do not pay attention to the bottom 15% of the household distribution who will need help the most. If we do not get that right, the House will be failing households in this country who will suffer in future as a result of these changes.

Lord Farmer (Con): My Lords, while the noble Lord, Lord German, and the noble Baroness, Lady Sherlock, raise important points for consideration, I have to disagree with them both and speak against these Motions. In fact, I would go further and say that in the light of the £12 billion taken out of welfare in last week’s Budget, I am surprised that they are asking the Government to find yet more savings in other places. This is the implication of these Motions.

The waiting days measure, which is consistent with the wider landscape of welfare in this country, is projected to save around £150 million per annum, although there may be some debate on that. Indeed it is a save-to-spend measure, and so removing the housing element and delaying implementation will sharply decrease the amount of funding available for a number of programmes to get people off benefits and into work. I think noble Lords would all agree that we need to make the best possible use of taxpayers’ money and focus spend here. So I am concerned that, in particular, the proposed Motions will curtail the amount of help the Government can continue to give the long-term unemployed, such as quarterly work search interviews for all claimants and voluntary programmes available to lone parents with children aged three to four years old to help them become work ready.

I have been reading the Government’s response to the Social Security Advisory Committee and note that the SSAC’s recommendation to take housing benefit out of the waiting days regime would cut savings by around a half to two-thirds, costing £70 million to £100 million, as well as increasing the complexity of the universal credit payment from the point of view both of IT and the user. The onus is therefore on those tabling these Motions to say where they would cut the £70 million to £100 million to enable these important initiatives that started last year to continue.

Looking first at the concept of waiting days before entitlement to employment-related support, noble Lords will be aware that waiting days have been a long-standing feature of the benefit system and already exist in other working-age benefits, such as jobseeker’s allowance and employment and support allowance. In addition, it must be recognised that many people who make a new claim for universal credit will have come from a previous job and will therefore have final earnings or other income to support themselves until their first benefit payment.

Again, taking this approach to universal credit is consistent with the wider benefit system, which is not designed to cover very short periods of unemployment or sickness. Waiting days are also more consistent with the world of work, where very short breaks between jobs are unpaid as no employer is receiving the benefit of any work. This Government’s determination to ensure as far as possible that welfare mimics the world of work is the right approach.

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It is my understanding that the safety net for vulnerable people is not being dismantled and that a number of groups are exempt from this change, including people who are terminally ill, victims of domestic abuse, care leavers, 16 to 17 year-olds without parental support, and prison leavers. Also, those who are in work and receiving universal credit who lose their job will not be subject to waiting days as they are already in the system.

I was pleased to read about a range of other targeted exemptions, which seem to be a better use of scarce public funds than treating all people as equally in need. I am, however, concerned about those who are long-term unemployed and have no savings or incoming final payment, and this is where it is vital that claimants receive timely and effective personal budgeting support as well as, if necessary, cash support in the form of a universal credit advance. Again, I would say that this Government are right to take a more finely grained approach and help those who particularly need support in the very short term, instead of assuming that everyone is in the same position.

I turn to the other elements of universal credit not tied to employment support, especially the housing benefit element that is the concern of the Motion of the noble Lord, Lord German. My understanding is that as universal credit is simplifying the welfare system, not least to make work pay, it would run counter to that goal to treat the housing element separately. I think that this was said earlier, but paying universal credit as a single monthly sum to households aims to help to prepare claimants for the world of work or to keep them in that mindset when they drop out of the labour market.

Quite rightly there is an expectation placed on households to manage their own budgets. Obviously housing costs do not cease when someone finds themselves having to move on to universal credit, but neither do they cease when someone is between jobs. However, I was relieved to find out that protections are in place for tenants who fall into arrears and alternative payment arrangements are available. In other words, it is not a sink-or-swim situation but we are encouraging the norm that very many of those who are in work try to live by, which is saving something for a rainy day.

In summary I support the Government’s position on waiting days, on the grounds that when there is such a tight financial settlement it is imperative that the welfare system is simple but concentrated on those who need it most. However, I echo the Social Security Advisory Committee’s plea, which we have just heard, that this change be subjected to the test-and-learn approach that was a hallmark of welfare reform under the coalition Government. It is essential that we can irrefutably say that the exemptions and other fine print of the waiting days measure are delivered as promised.

The Minister of State, Department for Work and Pensions (Lord Freud) (Con): Before considering the individual arguments, I think it would be useful to understand to whom exactly waiting days actually apply. It is not the most vulnerable: care leavers, the terminally ill, victims of domestic violence, youngsters without parental support and prison leavers have all been exempted. It is not those coming from other

13 July 2015 : Column 429

benefits such as jobseeker’s allowance or employment and support allowance. We have to remember that because universal credit is a benefit for low-income people in work as well as a safety net, many people in low-income and unstable employment will remain on universal credit as they move in and out of work. Hence, the very people for whom much of the concern has been expressed today will not be affected.

Noble Lords, and indeed the Social Security Advisory Committee’s consultation, highlighted a series of examples of cases that might be affected. These included the effect on a single mother reducing her hours to care for her sick child; the effect on those who have not been able to build up a cushion for a rainy day because they have been in low-paid work, on zero-hour contracts or in in-work poverty; the reluctance of claimants to take short-term employment as they fear they may have to serve waiting days again when the job finishes; the concern of landlords that their tenants might not be able to pay their rent because they lose a week’s housing and the disproportionate effect that that will have in London; and the fear that low-income people may borrow from payday lenders and loan sharks to keep afloat, a point made by the noble Lord—I find it hard not to call him my noble friend—Lord German.

I understand why these examples cause concern. They would cause me concern, too, if I was not confident that in such cases waiting days would not affect the most vulnerable. The single mother, the low paid, and zero-hours contract workers will most likely already be on universal credit while in work if their income is low. If on universal credit, they will not serve waiting days. Even if a person on a zero-hours or a short-term contract comes off universal credit, they will be exempted if they reclaim within six months. People moving from other legacy benefits are also exempted.

8.30 pm

The policy is focused on those who come to universal credit from relatively higher-income employment, who in general go back to work quickly. Around a third of people who come on to jobseeker’s allowance end their claim within a month and around two-thirds do so within three months, in most cases because they have found a new job. By six months, over 80% have ended their claim for jobseeker’s allowance. Without waiting days, some people may get a very small amount of universal credit, which they may not need, given that they have new work.

The Secondary Legislation Scrutiny Committee’s third report of the Session—the merits committee, as the noble Baroness, Lady Thomas, continues to call it—picks up on the Social Security Advisory Committee’s report and the Government’s response, or several responses. In addition to the housing element, which I will pick up on in a moment, the committee asks about access to advances for claimants with new claims to universal credit. I assure the House that most claimants in financial need will be able to claim a universal credit advance. It is possible that there could be a very small number of new claims where insufficient universal credit is payable due to a sanction or fraud penalty—a point raised by the noble Baronesses, Lady Thomas and Lady Lister. However, claimants in these

13 July 2015 : Column 430

circumstances can apply for a recoverable hardship payment or can approach their local authority, which can provide assistance.

The committee, as well as the noble Baroness, Lady Thomas, also criticised the fact that no impact assessment was published alongside the Explanatory Memorandum and the equality analysis. As noble Lords will be aware, an impact assessment is not required where the legislation does not directly impose any regulatory, administrative or other obligations on any public or private bodies. Measures are in place to provide support through advances of benefit to those claimants who are in financial need.

The noble Lord, Lord German, gave a considered examination of the issues that relate to housing support during the period of waiting days. At present housing benefit is paid from the Monday after the claim, so housing benefit claimants already have to wait for up to a week for their award to begin. I think I can speak for the whole House when I say that we all agree that the old system of multiple and sometimes overlapping benefits was confusing and could have perverse incentives and disincentives. Because it is a unified benefit available in and out of work, universal credit removes disincentives to work and simplifies the system. To exclude the housing element from the waiting days would add administrative complexity, go against the policy of simplifying income-related benefits, and make the payments confusing to claimants. That point was made by the right reverend Prelate the Bishop of Portsmouth and my noble friend Lord Farmer.

The Social Security Advisory Committee and stakeholders expressed a great deal of concern about this. Again, however, we must recognise that the most vulnerable are protected either by exemptions or because they will already be claiming universal credit while in work. Thus, for them, there will no period of non-entitlement. For other people who do not have the resources to cushion themselves during what, for many, will be a short period before finding work, universal credit advances can be applied for.

I turn to the Motion in the name of the noble Baroness, Lady Sherlock, to delay the enactment of waiting days until after universal credit has been fully rolled out. There is no operational or policy reason for doing this. The systems are in place to implement waiting days in universal credit without any detriment to the more general rollout. Let us remind ourselves that the unified approach of universal credit as a benefit available to those both in and out of work means that people on the lowest incomes will not serve waiting days when their circumstances change. This is very different from legacy systems, where a change of circumstances can mean a new claim for benefit.

The noble Baroness, Lady Sherlock, poured a little bit of cold water on our rollout of universal credit, much to my disappointment. The current expectation is that we will have completed the full rollout of universal credit by 2019. Waiting until full rollout takes place will mean a long period where people on the older legacy benefits such as ESA and JSA are subject to waiting days, while those on universal credit are not. That would clearly create an imbalance in the system during the transitional period.

13 July 2015 : Column 431

Lord Purvis of Tweed (LD): I have been listening to the debate very closely and I wonder whether the Minister can clarify something for the House. He will be aware that Clause 25 of the Scotland Bill concerns,

“persons to whom, and time when”,

universal credit will be paid. It will be a concurrent power lying with the Secretary of State and Scottish Ministers. How can the noble Lord make with so firm a view the statements about the operational aspects all being in place, when they are not necessarily in place in Scotland? Agreement will still have to be reached with Scottish Ministers about how this will operate. The figures that the noble Lord is giving and the assumptions he is making cannot necessarily be correct when the passporting of one system to another within Scotland is not resolved. Therefore, would it not be better to delay these regulations until these aspects, which could affect many people in Scotland, are clarified between two potential Ministers?

Lord Freud: Universal credit is a fully reserved matter. There are some areas that we will discuss with the Scottish Government by agreement but they do not include a mainstream policy such as waiting days.

Lord Purvis of Tweed: I know that the noble Lord is aware that the Scotland Bill is going through another place, but is he aware that Clause 25, which is headed “Universal credit: persons to whom, and time when, paid”, says:

“A function of making regulations to which this section applies so far as it is exercisable by the Secretary of State in or as regards Scotland, is exercisable by the Scottish Ministers concurrently with the Secretary of State”?

That is still the Government’s position in the Government’s Bill, is it not?

Lord Freud: I have expressed the exact agreement under the Smith commission and, as I understand it, as it appears in the Bill to which the noble Lord has referred.

I turn to the question about the savings raised by the noble Baronesses, Lady Sherlock and Lady Lister. In steady state the savings are currently estimated at £130 million to £140 million. In the current year— 2015-16—the figure is £30 million. I think that we can congratulate the noble Baroness, Lady Sherlock, on finding the formula relating to the £5 million difference. The figure goes up pretty rapidly to the steady-state figure over the next three years, so it reaches it by 2017-18.

The expenditure with the savings is committed for 2015-16, and I cannot pre-empt the spending review in the autumn. We discussed the things that that would be spent on.

I am trying not to bore the House by telling it things that it might find unnecessary. I can assure the noble Baroness, Lady Lister, that telephone calls are available to arrange meetings. For the most vulnerable, we will explain the availability of universal credit advances either on the phone or face to face if not digitally.

The noble Lord, Lord Kirkwood, and the right reverend Prelate the Bishop of Portsmouth asked: how will we ensure that people are supported in their

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work search? We have more than 26,000 staff now trained to provide job coaching, so we are rolling that out in scale.

Let me just wind up. I appreciate that noble Lords genuinely support universal credit. That sentiment has been expressed widely, particularly by the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Sherlock. I understand that. It is a slightly odd debate in that way, because noble Lords are trying to reinforce universal credit. I absolutely understand and appreciate that.

It is a savings measure. It releases £130 million to £140 million in steady state. The blunt reality is that, in the present environment, if we did not find money here, we would have to find it somewhere else. The noble Lord, Lord Kirkwood, has an instinct about how these things happen to which I am very sensitive.

Last week, the Chancellor of the Exchequer set out a vision of a higher-wage, lower-tax, lower-welfare society. As a first step towards this, he pledged to raise the personal allowance to £12,500 by the end of this Parliament, with an £11,000 down payment in the next tax year. Coupled with the living wage, which he announced, it gives people the chance to make decisions about their own money. It is still absolutely right, as noble Lords have said, that universal credit continues to operate as a real safety net for the most vulnerable and offers real support to those wanting to work and support themselves.

I commit to keeping a very close eye on this. I have been alerted to it tonight by noble Lords as something to watch. We are committed to a test and learn strategy. We will be rolling this out from August. I will come back to your Lordships as soon as I have a reasonable level of data to let you know whether that is happening and whether I am right in what I am telling you today: that this will not affect the people about whom noble Lords are so rightly concerned; but that I am right that it affects the people who are flowing through the system and we are just not paying them as much during that short period. I hope I am right on that, and I think that I am, but I will look at this very closely and come back to the House on its concerns about the vulnerable and tell noble Lords what is happening and what my level of confidence is on that when we have real evidence.

8.45 pm

The Chancellor was able to reduce taxes for the lowest earners and put us in a position where we can live within our means by reducing spending on welfare and tax credits by £12 billion, which is an enormous amount of money. I know that we will discuss some of that in the months to come. However, that means that we have to make real choices about how we effectively protect the most vulnerable. I have looked very long and hard at this and decided that, in this context, this change is appropriate and strikes the right balance. I will report back on whether that is the right judgment. I hope that the House will accept that.

Lord German: My Lords, first of all, I thank all Members who have spoken in the debate. I particularly thank the noble Lord, Lord Freud, for his contribution. Many people in your Lordships’ House will recognise

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that one thing he is very passionate about is the success of universal credit. We on these Benches also support universal credit and wish to see it happen.

The issue raised today is about the very short-term responses that government makes to people who have the worst problems and are in the worst condition. The key question that I wanted to see answered in this debate was how people will manage in that period when they are at their weakest and most vulnerable through illness and unemployment. I know that some people are exempt, but not all are, and considerably fewer people will be exempted than the Government expected. It is about those very short-term measures. This is not about the response to people who are unemployed over a longer term. This is about the period when they have either lost their job or become ill and require support in order to do two things: support their family and pay their rent. The fundamental issue behind the Motion is that, in that period, when choices are being made, people will choose to feed their family first and pay the electricity bill to keep the lights switched on. They will then not be able to pay their rent. That is the period for which the very harshest part of the regime has to be dealt with. It is the very simplest and smallest of measures that we are asking to be changed today in order to allow people to be able to manage at that most difficult time.

A number of noble Lords talked about universal credit in the longer term. Of course we are impatient on these Benches for its rollout to occur more quickly, but it has to be right. That is why it is the smallest of measures that we are asking to be changed today.

I say to my colleagues on the Labour Benches that there is nothing incompatible with removing the housing element from the waiting days and then having a review on postponing the measures for the introduction—both go hand in hand. This is the most difficult part of the whole waiting-days regime and housing benefit is the crucial part that people will avoid when they have to feed their families.

To those who have said that there is an alternative in the form of emergency payments—universal credit allowance payments—I must say that, last year, in answer to Parliamentary Questions, we were told that two-thirds of claimants who asked for emergency payments to help bridge that gap, in this very short period, were refused by Jobcentre Plus. Nearly 150,000 out of 221,824 applications were turned down. We know from the Trussell Trust and others that food banks are about short-term financial crisis. It is that short-term financial crisis which we should seek to avoid.

Lord Freud: It is worth clarifying that on universal credit advances, which are an advance for people who feel they need this financial support, I am aware of hardly any turndowns. It is a very different process. It is important not to conflate the two types of financial support.

Lord German: I say with the deepest respect to the Minister, who I know is an honourable man, that only a very small number of people—and they are not with families and children—have received universal credit.

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We have to take as an example the past year, where the same rules have applied about being able to afford to repay that advance on payment.

I come back to the fundamental point: how will those who are the most vulnerable manage? I am afraid that I have not yet been satisfied that we will do all we can, and I therefore believe it important to test the opinion of the House on this matter.

8.51 pm

Division on Lord German’s Motion

Contents 69; Not-Contents 132.

Lord German’s Motion disagreed.

Division No.  5

CONTENTS

Addington, L.

Alderdice, L.

Allan of Hallam, L.

Alton of Liverpool, L.

Ashdown of Norton-sub-Hamdon, L.

Bakewell of Hardington Mandeville, B.

Barker, B.

Best, L.

Burnett, L.

Clement-Jones, L.

Dholakia, L.

Doocey, B.

Falkner of Margravine, B.

Fearn, L.

Fox, L.

Garden of Frognal, B.

German, L.

Greaves, L.

Grender, B.

Hamwee, B.

Harris of Richmond, B.

Humphreys, B. [Teller]

Hussein-Ece, B.

Hylton, L.

Janke, B.

Jolly, B.

Kirkwood of Kirkhope, L.

Kramer, B.

Lee of Trafford, L.

Lister of Burtersett, B.

Loomba, L.

Low of Dalston, L.

Ludford, B.

Macdonald of River Glaven, L.

McNally, L.

Maddock, B.

Manzoor, B.

Meacher, B.

Miller of Chilthorne Domer, B.

Newby, L. [Teller]

Nicholson of Winterbourne, B.

Northover, B.

Paddick, L.

Parminter, B.

Purvis of Tweed, L.

Randerson, B.

Redesdale, L.

Rennard, L.

Roberts of Llandudno, L.

Scott of Needham Market, B.

Sharkey, L.

Sharp of Guildford, B.

Shipley, L.

Shutt of Greetland, L.

Smith of Newnham, B.

Steel of Aikwood, L.

Stoneham of Droxford, L.

Strasburger, L.

Teverson, L.

Thomas of Gresford, L.

Thomas of Winchester, B.

Tope, L.

Tyler, L.

Tyler of Enfield, B.

Wallace of Saltaire, L.

Wallace of Tankerness, L.

Walmsley, B.

Wilkins, B.

Williams of Crosby, B.

NOT CONTENTS

Ahmad of Wimbledon, L.

Altmann, B.

Anelay of St Johns, B.

Ashton of Hyde, L.

Attlee, E.

Balfe, L.

Bates, L.

Berridge, B.

Black of Brentwood, L.

Blencathra, L.

Bourne of Aberystwyth, L.

Brabazon of Tara, L.

Bridgeman, V.

Bridges of Headley, L.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Butler-Sloss, B.

Callanan, L.

Carrington of Fulham, L.

Cathcart, E.

Cavendish of Furness, L.

Chisholm of Owlpen, B.

Cooper of Windrush, L.

Cope of Berkeley, L.

Cormack, L.

Courtown, E.

Crickhowell, L.

13 July 2015 : Column 435

De Mauley, L.

Dixon-Smith, L.

Dunlop, L.

Eaton, B.

Elton, L.

Evans of Bowes Park, B.

Farmer, L.

Faulks, L.

Fink, L.

Finkelstein, L.

Flight, L.

Fookes, B.

Fowler, L.

Framlingham, L.

Freud, L.

Gardiner of Kimble, L. [Teller]

Garel-Jones, L.

Geddes, L.

Glendonbrook, L.

Goldie, B.

Goodlad, L.

Goschen, V.

Grade of Yarmouth, L.

Green of Hurstpierpoint, L.

Greenway, L.

Griffiths of Fforestfach, L.

Harding of Winscombe, B.

Harris of Peckham, L.

Helic, B.

Heseltine, L.

Higgins, L.

Hodgson of Abinger, B.

Holmes of Richmond, L.

Hooper, B.

Horam, L.

Howard of Lympne, L.

Howe, E.

Hunt of Wirral, L.

Inglewood, L.

Jenkin of Kennington, B.

Jopling, L.

Kakkar, L.

Keen of Elie, L.

Kirkham, L.

Lamont of Lerwick, L.

Lawson of Blaby, L.

Leigh of Hurley, L.

Lexden, L.

Lingfield, L.

Liverpool, E.

Lothian, M.

Lyell, L.

McColl of Dulwich, L.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

Mancroft, L.

Marlesford, L.

Mawson, L.

Mobarik, B.

Montrose, D.

Moore of Lower Marsh, L.

Morris of Bolton, B.

Moynihan, L.

Naseby, L.

Nash, L.

Neville-Jones, B.

Neville-Rolfe, B.

Newlove, B.

Northbrook, L.

O'Cathain, B.

O'Neill of Gatley, L.

Oppenheim-Barnes, B.

Perry of Southwark, B.

Popat, L.

Prior of Brampton, L.

Sanderson of Bowden, L.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Shackleton of Belgravia, B.

Sheikh, L.

Shephard of Northwold, B.

Sherbourne of Didsbury, L.

Shields, B.

Shrewsbury, E.

Skelmersdale, L.

Spicer, L.

Stedman-Scott, B.

Stirrup, L.

Stowell of Beeston, B.

Strathclyde, L.

Suri, L.

Taylor of Holbeach, L. [Teller]

Trefgarne, L.

True, L.

Tugendhat, L.

Ullswater, V.

Verma, B.

Warsi, B.

Wasserman, L.

Wheatcroft, B.

Wilcox, B.

Williams of Trafford, B.

Younger of Leckie, V.