Then there is an entirely different question, not connected with that at all, which goes back to the Minister’s words towards the end of the last Committee day on work conditionality and sanctions and on the preparation for work interviews for those with a toddler aged two years or more—although the requirement to work does not bite until the toddler is three. Are people required to attend such work interviews or work preparation without their toddler? Consider a situation in which a lone parent has recently had to move, perhaps six months before, from a privately rented, mouldy property on an insecure tenancy to another property, and there is no support system in place. The little two year-old boy still does not speak, although he perhaps has the beginnings of a bit a temper. That child still needs to be fed and to have his nappies changed, but there is no local support network in place and the little boy has never been looked after by anyone other than his mother. Given that we are not talking about a work placement or continuous employment, as would happen when that toddler is three years old, but about attending, often on quite short notice, a work interview or work preparation training, may I have the Minister’s assurance that the lone parent may bring her two year-old toddler with her? In that case, are the jobcentres appropriately staffed and do they have provision for nappy-changing facilities and the like for such small infants?

The Earl of Listowel: May I correct something I said earlier? On my visit to the food bank in Tower Hamlets on Friday, the principal reasons given for people coming to food banks were mistakes in benefits and their own lack of knowledge about their entitlements; it was not to do with sanctions brought against them. I have checked my notes and apologise for my mistake.

Lord McKenzie of Luton (Lab): My Lords, I speak enthusiastically in support of Amendment 57, moved with her customary precision and passion by my noble friend Lady Lister. I am pleased that it also has the support of the noble Earl, Lord Listowel, the noble Baroness, Lady Manzoor, my noble friend Lord Beecham, and the noble Lord, Lord Kirkwood, with his particular focus on getting these things sorted out before we get fully into universal credit.

The amendment seeks a full and independent review of sanctions attached to working age benefits, with particular reference to their application to lone parents and disabled claimants. The review should also focus on the effectiveness of sanctions in moving claimants into sustained work. The noble Lord, Lord Hodgson of Astley Abbotts, posed three tests for a review, based on timing, remit and even-handed terminology. I think that we have established that the terminology involved is that which the department itself uses. On timing, the issue here is that the hardship and detriment people are suffering because of the sanctions regime is happening to them now. They do not have the time to wait for a fuller, more extended review. On the remit, I doubt whether my noble friend would have great problems in seeing that expanded. We would be interested to know quite how much further detail the noble Lord wants.

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The proposition follows a call from the House of Commons DWP Committee in its March 2015 report, referred to by my noble friend. We know the call has been rejected, but we hope that this debate will help the Government to change their mind. This is of course inextricably linked to conditionality issues, which we debated at some length on Wednesday. We can agree that conditionality has long been a component of social safety nets and needs a system to support compliance. But as the amendment makes clear, as did my noble friend in moving it, the system should be applied appropriately, fairly and proportionately, and with a clear focus on improving sustained employment outcomes. It should not be seen as a substitute for effective support to help individuals back into work.

We support the approach that says that the design and application of sanctions need to be considered alongside conditionality and employment support. The three go together. The coalition Government initiated the Oakley review, although as we have heard it was narrow in its remit. It focused on JSA claimants and back to work programmes, but the number of sanctions overwhelmingly associated with the Work Programme represented only some one-third of the total JSA sanctions in 2013.

5.45 pm

So why a review now? There are a number of compelling reasons. The sanctions system was made significantly more onerous in the 2012 welfare reform legislation, with the higher-level sanctions potentially extended to three years. Perhaps the Minister can tell us how many three-year sanctions have been applied. Your Lordships will recall that at the time we were told there would only be a handful. How many have there been? We have JSA sanction levels amounting to 100% of the benefit, and there is a high threshold for access to hardship payments. There has been an unprecedented use of sanctions in recent years, with 6% of all claimants on JSA being sanctioned every month. In the space of less than three years, from October 2012 to 31 March 2015, 971,000 individual JSA claimants have been sanctioned—a truly staggering number.

There is concern that the sanctions system is actually discouraging claimants from staying on benefits. The share of the unemployed who are not claiming JSA continues to rise, meaning that such individuals not only are receiving no financial support but are not receiving any support to get back into work. It is also a matter of concern that a growing number of sanctions are being applied to people who have a health condition that limits their ability to work. The experience of ESA claimants appears to be overwhelmingly negative. Being sanctioned was found to have a series of so-called unintended consequences, pushing individuals into debt and hunger, straining relationships and exacerbating mental health problems.

There is evidence that young people are being disproportionately sanctioned. A report from Sheffield Hallam University, commissioned by Crisis, referred to an emerging evidence base that homeless service users are disproportionately affected by sanctions. They may be twice as likely to be sanctioned as the wider claimant population and this can be due to systemic and personal barriers rather than an unwillingness to comply.

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There is also a series of horror stories that are received routinely in the postbags of MPs—reference to which was made when this issue was debated in another place. Specific cases were raised in your Lordships’ House last week and again today, including the harrowing examples given by my noble friends Lady Lister and Lord Beecham. There are always dangers in extrapolating from a few high-profile issues but the breadth of these examples is truly troubling. At the extreme, there are circumstances involving the suicide of claimants, and the department’s case for rejecting information about the circumstances where the claimant was subject to a benefit sanction is, frankly, pretty thin. Policy changes from such incidents are a proper area of inquiry.

There is also concern about the quality of some of the information emanating from the DWP on sanctions statistics. A leaflet had to be withdrawn because of manufactured comments. Changes to the way statistics are presented, as we have heard, have been recommended by the UK Statistics Authority following representations from Frank Field MP in his role as chair of the Select Committee. These touched upon multiple sanctions, where he pointed out that, for the application of more than a million low to intermediate sanctions and 137,000 decisions to apply high-level sanctions, there was no way of knowing for how long individuals had been without money. He also expressed concern about what happens to claimants once they have been sanctioned. What data does the Minister have which can help us on this point?

Prompted by Dr David Webster of Glasgow University, who we have heard about, the UK Statistics Authority is to write to the DWP—it may have done already—with a range of recommendations in an endeavour to obtain further clarity on what is actually happening on sanctions. This will include recommendations on repeat sanctions and hardship payments—at least a start to lifting the veil.

My noble friend has done us a service by bringing forward this issue. Given the pivotal role that sanctions are designed to play in helping deliver full employment and make progress in halving the disability employment gap, we need to be assured that the system is fit for purpose. An independent review must assist at this time. As my noble friend said, surely it is in the department’s interest to know, as well.

Baroness Evans of Bowes Park (Con): My Lords, the amendment, moved by the noble Baroness, Lady Lister, and supported by the noble Baroness, Lady Manzoor, the noble Lord, Lord McKenzie, and the noble Earl, Lord Listowel, would put into statute an independent review of the sanctions system. However, we are not sure that that is necessary, as the Government already keep the operation of the sanctions system under constant review to ensure that it continues to function fairly and effectively.

There is clear evidence that sanctions are effective with more than 70% of JSA and more than 60% of ESA recipients saying that sanctions make it more likely that they will follow the rules, but, where we identify that there is an issue, we act to put it right. This is clearly shown in the improvements already made to the JSA and ESA sanction system following the recommendations of Matthew Oakley’s independent

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review last year. However, as I said, we do not stop reviewing the process to ensure that it is fair and effective. That is why we have accepted, or accepted in principle, many of the recommendations made by the Work and Pensions Select Committee’s recent report into sanctions.

The chair of the Work and Pensions Select Committee, the right honourable Member for Birkenhead, has welcomed our response and our willingness to work with the committee to ensure that the conditionality system works as it should. In our response to the committee, we announced that we will trial a sanctions warning system giving claimants a further two weeks to provide evidence of good reason before a decision is made. We believe that this will help to strike the right balance between conditionality and fairness.

I can confirm to the House that it is our intention that the trial will operate in Scotland from March 2016, running for approximately five months. A full evaluation of the trial will be undertaken, and findings will be available from autumn 2016.

The noble Baroness, Lady Lister, asked about the monitoring of the destinations of sanctioned claimants. DWP officials are currently quality-assuring the data for universal credit official statistics. As part of this review process, we will carefully consider the option of including destination data. We are not yet in a position to confirm which statistics will be provided in future.

We are also considering extending the list of JSA vulnerable groups for hardship payment purposes to include those with mental health conditions and those who are homeless. This will mean that these claimants can receive hardship payments from day one of their sanction, provided that they also meet the other criteria.

The noble Baroness, Lady Lister, also asked about sanctions being applied fairly. Any decision to sanction a claimant is not taken lightly, and there is a full and proper process that includes the claimant from the start. At the start of the claim, as noble Lords will know, all claimants receive a tailored claimant commitment, and the requirements take into account mental health conditions, disabilities or caring responsibilities. Any failure to meet a requirement is always thoroughly considered and claimants are given the opportunity to provide good reason for not complying before any decision to sanction is made by the decision-maker, but I will need to come back to the noble Baroness, Lady Hollis, on the timescales that she asked about, because I do not have that information to hand.

The noble Baroness, Lady Lister, also mentioned the Crisis report. We absolutely understand that homelessness is a complex issue, and our priority is to ensure that individuals affected get the right support. That is why we have made more than £1 billion available to prevent and tackle homelessness and support vulnerable households since 2010, and we will continue to work closely with organisations such as Crisis to make sure that support is provided where it is needed most.

On the question of the noble Baroness, Lady Hollis, about lone parents being required to come to jobcentres without a toddler, no, requirements to attend appointments at the jobcentre should be tailored to take into account individual claimants’ caring responsibilities, and work coaches should be able to help to make appropriate

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arrangements, including helping to arrange appointments around childcare. I cannot speak about the range of facilities within jobcentres, but it is within the gift of the work coaches to be flexible in working with lone parents.

Baroness Hollis of Heigham: So I have the Minister’s assurance that any lone parent who turns up with a toddler in tow will not as a result be sanctioned?

Baroness Evans of Bowes Park: I have already said that I cannot speak to all the facilities, but as I am writing to the noble Baroness on a previous issue I will include that in that response.

It is important that we focus on ensuring that all the agreed recommendations proposed by the Work and Pensions Select Committee are delivered and can be embedded in the design and delivery of universal credit. To clarify for the noble Lord, Lord Kirkwood, I say that universal credit sanctions are just on the standard element, not on the whole amount. We believe that a call for a further independent review is unnecessary to embed this in legislation.

Lord Kirkwood of Kirkhope: The noble Baroness said earlier that a pilot was being mounted in Scotland for five months. Is that for all of Scotland, or just individual areas within Scotland? I would be surprised if it was Scotland-wide.

Baroness Evans of Bowes Park: No, it will be within a particular region of Scotland.

Sanctions play an important part in the labour market, encouraging people to comply with conditions which help them move into work. We want the sanctions system to be clear, fair and effective in promoting positive behaviours and we will continue to keep it under review so that it meets its aims, but also to ensure that it is flexibly delivered, as noble Lords said.

The noble Lord, Lord McKenzie, asked about sanctions statistics. We will look carefully at the point raised and consider what further information is useful to inform public debate. We have made a start on this, and our statistical releases now include additional information on sanctions.

Lord McKenzie of Luton: Can the noble Baroness deal specifically with the issue of how many, if any, three-year sanctions there have been?

Baroness Evans of Bowes Park: JSA sanctions continue to decrease, and the JSA monthly sanctions rate has slightly fallen—by 15%—over the past year. Each month, on average, 95% of JSA claimants comply with the reasonable requirements placed on them. On average, 5% of JSA claimants were sanctioned each month of last year. We can provide those figures; I will write to the noble Lord.

The noble Lord, Lord Kirkwood, asked about the gulf between the department and what charities say about sanctions. I can only attempt to reassure him that officials are working closely with charities to investigate concerns. For instance, we have worked closely with Crisis and Gingerbread on improving communicating sanctions and will continue to do so. I

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will take the issues raised by the noble Lord, Lord Beecham, back to the department, because I do not have some of the more detailed information that he was asking about.

On the basis of those responses, I hope that the noble Baroness will withdraw her amendment.

Baroness Hollis of Heigham: I realise that this is a sensitive issue, but the amendment in the name of my noble friend has been tabled for some time on sanctions, time, efficaciousness and the need for a review. I would have expected in the Minister’s brief the detail of how many sanctions for how long, how long the decision-making is taking, the number of people going through as a result to appeal, and the results of the appeals. I would have expected two or three pages in her brief giving her the statistical detail which would empower her to answer many of the questions which, understandably, she is taking away today. I am surprised at that, because the amendment has been tabled for some time. The department will have the statistics, and they should have been made available to us in Committee, so that we have that material here today before we consider what we—and my noble friend in particular—may or may not do at Report.

I am in no sense criticising the Minister, but Ministers are coming to this House woefully underprepared with the information they need, which is of a detailed sort, to deal with the amendments being discussed. Members on the Opposition Benches have a right to expect Ministers to have that at their fingertips.

The Minister of State, Department for Work and Pensions (Lord Freud) (Con): My Lords, that was an unnecessary intervention. Most of the information that was asked for is available on public websites—in particular, on the question about the three-year sanctions. I will ensure that noble Lords have the address of that website to check.

Baroness Hollis of Heigham: It should not be a question of going to a website. If a question is asked on the Floor of the House, and it is on a website, I would expect the Minister to have that detail in the briefing from the Box. That is their function—that is their job. I do not blame or criticise the Minister in any respect, but I would have expected a higher level of appropriate technical briefing for her, with which to equip her to answer what are obviously technical questions.

6 pm

The Earl of Listowel: My Lords, I thank the Minister for her response on vulnerable groups, the mentally ill and others. Perhaps in the letter that the noble Lord has kindly offered to send me on care leavers, he can confirm that care leavers were flagged up in the welfare system and will get this special consideration before any sanction is made on them—and whether he might consider extending that. Currently, if a care leaver is participating in work or education, up to the age of 25, they are flagged up in the DWP system and special measures can be taken for them—but if they are not doing that, they do not get that support; it finishes at

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the age of 21. So 21 to 25 year-olds not in education or training are missing out. I encourage the Government to think about extending the kind of considerations to vulnerable groups that she was just describing to care leavers who are not in education or training but who would be called care-experienced adults. In a sense, they are the most vulnerable, because they are not in education or training but have been in care and face all the difficulties. I am sorry to speak for so long—but in that letter, I would appreciate some comments on that.

Baroness Lister of Burtersett: I am very grateful to noble Lords who have spoken, particularly those who spoke in support of the amendment. The noble Lord, Lord Kirkwood, made the very important point that we need to be clear about this before universal credit is rolled out any further. Increasingly, I feel that we are in two parallel universes—the universe of those on the ground and the voluntary organisations and the universe of Ministers and officials. I am very glad that the Minister said that they are meeting to talk but, unfortunately, it seems as if they still operate within these parallel universes, where there is a completely different understanding of what is happening. I am grateful to my noble friend Lord McKenzie for the very comprehensive and thorough case that he made for an independent review. I am grateful, too, to the noble Lord, Lord Hodgson of Astley Abbotts, who said that he was not opposed in principle to reviews. Perhaps we could look again at his criteria.

My noble friend made the point about timescale—that people suffering as a result of sanctions need this review now. However, I am a very reasonable person and I accept that, by the time the Bill becomes law, it will not leave very long between that and the timescale in the amendment. I would be very happy to discuss with the Minister perhaps a more realistic timescale.

On the remit being too narrow, I say that the whole point of the criticisms of the Oakley review was that it was too narrow. Indeed, Matthew Oakley himself acknowledged the narrowness of his remit and suggested that perhaps something broader was needed. So I am delighted that the noble Lord would like a broader remit than the one suggested in the amendment. The point about the term “sanctions” has already been addressed, but I just wonder how many times the Minister actually used the word; it was probably at least as many times as in the amendment itself. Perhaps, given that the noble Lord does not oppose in principle the idea of a review, he might help me to produce a better amendment for Report, if we decide to come back to this issue.

I am grateful, too, to the Minister. She started by saying that she was not sure whether the proposal was necessary. That seemed a rather tentative statement about something so important because, on this side of the House, we are sure that it is necessary. We have heard from my noble friend Lord McKenzie and others why it is necessary. She did not seem to have taken on board what I said about the yellow-card system. I welcome what is proposed, but it is not exactly the original Work and Pensions Committee recommendation. I was a bit disappointed that she did not explain why there had been that unacknowledged shift from what had been recommended. Perhaps she could write to

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me, and pop the letter to other noble Lords who have spoken on the specific question that I asked, about why the Government have rejected the Work and Pensions Committee recommendation that there should be a specific evaluation of the efficacy and impact of a minimum of four weeks’ sanctions. That was rejected without any explanation in the response to the report. I asked for an explanation and would be very happy to have one in writing. That said, I am grateful to her for her response. I do not think that it will satisfy the kind of organisations mentioned by the noble Lord, Lord Kirkwood, or the people living in the universe that is engaging on a day-to-day basis with claimants suffering as a result of sanctions. I beg leave to withdraw the amendment.

Amendment 57 withdrawn.

House resumed.

Airport Capacity


6.06 pm

The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con): My Lords, with the leave of the House, I shall now repeat a Statement made in the other place by my right honourable friend the Secretary of State for Transport. The Statement is as follows:

“With permission, Mr Speaker, I would like to make a Statement about airport policy. Aviation is a British success story. Today we have the third-largest aviation network in the world, second only to the US and China, but with that success comes challenges. Heathrow is full; Gatwick is filling up. If no action is taken, the entire London system will be full by 2040. Yet we need new connections to new cities in new economies. There are other challenges, too. Airports create jobs and opportunities. Technology is changing. Planes are becoming quieter and more efficient. But there is still, inevitably, an environmental impact.

To some, the arguments seem simple—oppose all expansion anywhere, or back it, but always somewhere else. And yes, there are opportunities in our network of national airports, with global connections from cities such as Birmingham, Edinburgh, Glasgow, Manchester and Newcastle. But growth here will come alongside growth in the south-east, not instead of it. That is why in September 2012 Sir Howard Davies was asked to lead a commission on the issue. Its final report was published less than six months ago. It made a strong case for expansion in the south-east. We have considered the evidence. The Government accept the case for expansion, and accept the Airports Commission’s shortlist of options for expansion. We will begin work straightaway on preparing the building blocks for an airports national policy statement, in line with the Planning Act 2008. Putting this new framework into place will be essential groundwork for implementing the decisions we take on capacity, wherever new capacity is to be built. That is the issue I want to turn to now.

Sir Howard Davies and his team produced a powerful report. Heathrow Airport Ltd’s scheme was recommended by the Airports Commission, but all three schemes

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were deemed viable. We are continuing to consider all three schemes, and we want to see action, but we must get the next steps right, both for those keen to push ahead with expansion and for those who will be affected by it. So we will undertake a package of further work.

First, we must deal with air quality. I want to build confidence that expansion can take place within legal limits, so we will accept the Environmental Audit Committee’s recommendation to test the commission’s work against the Government’s new air quality plan. Secondly, we must deal with concerns about noise. I want to get the best possible outcome on this for local residents, so we will engage further with the promoters to make sure the best package of noise mitigation measures are in place. Thirdly, we must deal with carbon emissions, so we will look at measures to mitigate carbon impacts and address the sustainability concerns, particularly during construction. Fourthly, we must manage the other impacts on local communities. I want people who stand to lose their homes to be properly compensated for the impacts of expansion, and I want local people to have the best access to the opportunities that expansion will bring, including new jobs and apprenticeships. So we will develop detailed community mitigation measures for each of the shortlisted options.

We expect to conclude this package of work by the summer. Crucially, this means the timetable for delivering additional capacity set out by Sir Howard does not alter. The commission reported that an additional runway would be required by 2030, and we intend to meet that. In saying this, I am fully aware that some will wish we could go further and others will wish we were not making such progress. We are prepared for that because I want to get this decision right. That means getting the environmental response right and in the mean time getting on with the hard work to build new capacity to the timetable set out by Sir Howard in the commission’s report. I commend this Statement to the House”.

My Lords, that concludes the Statement.

6.10 pm

Lord Rosser (Lab): My Lords, I thank the Minister for repeating the Statement made in the other place this afternoon by the Secretary of State. It is typical of this Government that they should make the announcement that the commitment the Prime Minister gave to make a decision this month no longer stood, at a time when Parliament could not be told and was not in a position to hold the Government to account for nearly four days. I do not intend to spend any time on the entirely credible point that this Government’s decision to delay on a matter of national interest—not simply that of London and the south-east—is rooted in their own party political considerations, even though the Minister must know that has been an important factor.

I have one or two points to make, and then I have a number of questions. As recently as 23 November, in response to a Question from the noble Lord, Lord Spicer, the Government repeated the Prime Minister’s assurance that a decision on London’s airports would be made before Christmas. When another noble Lord

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asked for confirmation that that decision would be final, not simply interim, he was told by the Minister that the Government’s position had been made clear and that he was clutching at straws. As we now find out, just three weeks later, he was in reality clutching at incredibly strong straws.

One area where this Government and their Prime Minister are extremely decisive is when it comes to avoiding decisions. Airport capacity in the south-east is simply yet another such case. Bearing in mind that the Government recently repeated the Prime Minister’s assurance that a decision would be made before Christmas, what issue has arisen or what information has come to light between 23 November and last Thursday evening, 10 December, that is of such significance as to require a further delay in making a decision, and yet was not known about before 23 November and could not, and did not, come to light during the lengthy consideration by the Davies commission or in the six months since the commission published its findings and recommendations? That is six months during which the Government have been considering the findings and recommendations of the Davies commission report, including on environmental considerations and air quality, for which the commission said there should be statutory guarantees. The items to be looked at, as set out in the Statement, are not new. They should have been being looked at during the past six months, and should have been known about when the Government gave a commitment to make a decision this month.

What specific further investigations or studies do the Government now intend to undertake to enable them to come to a decision, who will undertake those and within what timescale? Will the Government give an assurance that the results of those further studies and investigations will be made public well before a final decision is made? Will the Davies commission be asked to consider them, and say whether they would have led it to reach different findings or recommendations, with the views of the commission again being made public well before a decision is made by the Government?

We agree that there is a clear and immediate need for additional runway capacity in the south-east of England and a need to ensure that environmental and community concerns are balanced against the economic and operational case for expansion. The Government recently announced the setting up of the National Infrastructure Commission, headed by the noble Lord, Lord Adonis, to provide independent, authoritative advice on the merits and compatibility of major infrastructure projects, including when they need to be undertaken. Will the Minister say why the Government believe that the lengthy indecision over future airport capacity and additional runways we have faced and continue to face would have been avoided under the new National Infrastructure Commission? What would have been different had the National Infrastructure Commission been in existence earlier? In view of the further government delay of many months in reaching a decision, will the Minister indicate whether the Government will now take the opportunity to seek the views and advice of the National Infrastructure Commission on the most appropriate long-term decision on airport expansion in the south-east?

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Will the Minister confirm what, if anything, the Government are committed to in relation to increased airport capacity in the south-east? Are they committed to at least one additional runway somewhere in the south-east? Significantly, the Statement does not directly answer that question. Will the Government also say when they expect to announce a decision? The Statement does not specifically say when there will be such a decision, only when the Government expect a package of work to be concluded, which is a totally different issue.

We appear to have moved backwards in time, because the Government have indicated that the option of an additional runway at Gatwick is still in the frame, as well as that of a third runway at Heathrow, as recommended by the Davies commission. The uncertainty and blight for those living near Heathrow and Gatwick continue for an apparently potentially lengthy period, as it does for the less than impressed business community, which is worried about the impact on the economy.

Finally, we are still left to deal with the immediate problems of airport capacity in the south-east. Heathrow is effectively full, and Gatwick is operating at 85% capacity. What, if any, plans do the Government now have to ease this problem, which is already having adverse impacts? In the light of the apparent further lengthy delay in making a decision—which simply adds to the delay caused by the time it took to set up the Davies commission, and the decision that its report and recommendations should not appear until after the general election—do the Government intend to address the lack of capacity in the south-east as it stands, bearing in mind that additional capacity is clearly some considerable time away?

Baroness Randerson (LD): The Minister has my sympathy this evening because this delay is clearly all about Zac and Boris and has nothing to do with the need to look at air quality in greater detail. However, it gives us an opportunity to push the Government on the issues mentioned in the Statement and to test them. Surface transport access to Heathrow and Gatwick airports is an essential part of solving this problem, yet there is no reference to issues relating to it in the Statement. Will the Minister say whether there will be public investment in the surface transport infrastructure that is badly needed, or only private investment by Heathrow and Gatwick airports? Heathrow seems to believe that public investment will be needed; Gatwick seems to believe that it will not. I will be grateful for the Government’s take on this issue.

Given the further delay to which the noble Lord, Lord Rosser, just referred and the pressure it will cause, will the Government agree to look again at the increased use of regional airports alongside the work they are doing on the Davies solutions to airport capacity? Hub airports have moved on. We are in danger of answering yesterday’s question today; indeed, in the case of Heathrow, we are in danger of answering the day before yesterday’s question today, because this saga has gone on for so long. Dubai and Schiphol are now well established as the world’s hub airports, and a new generation of planes makes certain aspects of this issue redundant, so this question could be overtaken by events.

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The Liberal Democrats have always believed that there needs to be much better use of existing spare capacity, which will need better surface connection before we expand Heathrow or Gatwick in the near future. However, if there is to be another air quality report, who will do it, to whom will it report and will that report be published in full? Any additional work on air quality must have greater public confidence than the work the Davies commission was able to produce.

Lord Ahmad of Wimbledon: My Lords, I thank the noble Lord and the noble Baroness for their contributions. The noble Lord, Lord Rosser, asked a series of questions about the responses given in November and subsequently, and what factors have been considered. As I have said, we are emphasising the importance of environmental considerations regarding both air quality and other pollution, such as noise pollution.

One significant development, which I am sure the noble Lord is aware of, is that on 26 November a decision was taken by the Environmental Audit Committee specifically on outlining the need to ensure that, whatever decision is taken:

“On air quality, the Government will need to re-examine the Commission’s findings in the light of its finalised air quality strategy”.

I pick up the question from the noble Baroness, Lady Randerson, on the specific issue of air quality. The commission published a large amount of analysis on air quality and greenhouse gas emissions. We will therefore accept the committee’s recommendation to test the commission’s work against the Government’s new air quality plan, which I am sure she is aware will be published very shortly. We will develop measures to mitigate impacts on local people and the environment.

The noble Baroness rightly raised the important issue of surface access to airports. The Government have a plan for investment in road and rail transport networks to promote growth. The Government’s road strategy for 2015-20, which I am sure she is aware of, includes investments that will improve strategic road access to Gatwick, Manchester, East Midlands, Birmingham, Heathrow and Stansted airports. I know that she has mentioned, and is a strong advocate for, regional airports, which I also support. I have always said that they are part of the overall offering of UK plc when it comes to airport capacity.

The noble Baroness may well also be aware that, as part of the Thameslink programme, we will deliver new state-of-the-art trains on the line between Brighton, Gatwick Airport and London by 2016. By 2018 these trains will start operating on two direct services connecting Gatwick to Peterborough and Cambridge, following the completion of the Thameslink programme. Turning briefly to Heathrow, I am sure noble Lords will be aware that in 2019 Crossrail will start running to Heathrow Airport and improve access to London City Airport from the west. Most recently, there have been improvements to the station at Gatwick as well. I am sure that noble Lords acknowledge that surface transport is an important part of whatever final decision is taken.

The noble Lord, Lord Rosser, asked various questions, such as what additional steps may be taken with regard to the final decision that we will be moving to. I mentioned in my Statement that we are looking to

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move forward on this and come to our conclusions by summer 2016. In terms of reviewing the position on all three options, we will be giving further policy consideration and prioritisation to the commission’s package in respect of both Heathrow and Gatwick. We want the best deal for all affected communities, as I said, particularly on the areas of noise mitigation, including respite; air-quality mitigation strategies related to that; offers to local communities, which I mentioned in the Statement, specifically relating to compensation and job opportunities in terms of apprenticeships and employment; wider housing issues and infrastructure considerations; and of course the importance of carbon impact mitigation and sustainability, particularly during the construction phase. We will also be considering how to engage with and take account of community and wider aviation views. There will of course be further engagement with scheme promoters on expansion, specific mitigations, public commitments and the potential to maintain some competitiveness between the different options.

As I have said, the Government have moved forward on this. We have agreed with the Davies commission conclusions, which did not rule out any of the three options. We sustain these and continue to work on ensuring that the important issues of noise mitigation and wider environmental impacts are duly considered as part of the Government’s decision.

6.25 pm

Lord Spicer (Con): My Lords, “Zac 1, United Kingdom 0” just about sums up my own view about the present situation, although I have to say that the Opposition are not throwing any particular light on the issue or coming up with any solutions of their own. Would the Minister at least concede that if this goes on for much longer, Heathrow Airport will drop out of the premier league of international airports; that Britain will be an island without an airport entry point commensurate with its economic size; and that the loss of jobs and investment will be massive, just at the time when some people think there is going to be an economic recession? Is this not a rather serious situation?

Lord Ahmad of Wimbledon: I thank my noble friend for his questions. He has been a consistent and vociferous questioner on this issue; indeed, he has another Question on the subject on Wednesday. He mentioned a particular scoreline. To get political for a moment, I certainly hope that there is a 1-0 scoreline when it comes to the May election in favour of my honourable friend in the other place.

My noble friend talked about the impact on the economy. I agree with him, and the Government feel very strongly that there is a need to make a decision that is based on the right decisions for the economy, the country and, as I have said specifically in my Statement, the environment.

We are now well connected. As my noble friend points out, there are constraints and they are beginning to bite. By 2040, all major south-eastern airports will be full. Failing to address this would cost passengers between £21 billion and £23 billion, and of course there would be wider indications for the economy,

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estimated to be in the region of £30 billion to £45 billion. However, with regard to the timetable of summer 2016 that I have talked about, the Davies commission reported that, whatever decision or option was chosen, we would need to complete by 2030. I assure the noble Lord that this would still allow for that decision to be taken and the appropriate expansion to take place in good time to meet the 2030 deadline.

Lord Clinton-Davis (Lab): My Lords, this is an absolute abdication of responsibility. British aviation has been put in a secondary position compared with other vital industries. What has been advanced is the interests of the Conservative Party, and as a result our competitors are going to be richly rewarded. Putting aside the Minister’s discomfort, should we not consider how best British aviation can recover from this grievous blow? Meanwhile, words hurriedly uttered by the Minister are no alternative to government policy.

Lord Ahmad of Wimbledon: I assure the noble Lord that we are moving forward. I have talked of the timetable that we are moving to. As I said earlier, it will ensure that we meet the required deadline. Whatever decision is taken, the Government have accepted in principle the findings of the Davies commission. Three options were put forward and none was discarded by the commission. We are ensuring that all three stay on the table, and we are firmly committed to south-eastern airport expansion. The important thing is to ensure that all considerations are taken into account. With the timetable that we have outlined, we will be able to proceed forward. It will be a great asset for UK plc to ensure that we reach a decision quickly on south-eastern airport expansion capacity in summer next year.

Baroness Valentine (CB): Does the Minister understand how deeply frustrated the business community feels about this further delay? We had a three-year independent commission, which was supposed to take the politics out of it, but it has come back into political soup. It appears that the Government have answered the interim report of two years ago, which suggested that we focus on three options and that we accept that there was a need for expansion in the south-east. I do not understand what progress has been made in the last two years. In the interim report there was a recommendation for an independent noise ombudsman to sort out the noise issues. We have known for 15 years that we are in breach of European air-quality limits in London. It is simply unclear to me what the Government have been doing for the last three years.

Lord Ahmad of Wimbledon: We are moving forward. We will begin work straightaway on preparing the building blocks for an airports national policy statement, as I said in my earlier Statement; that is the most appropriate vehicle to set the framework for the planning consent for new capacity. Noble Lords should be assured that, with the proposals we are moving forward on and the important consideration being given to environmental impacts, we will still be able to move forward on whatever decision is taken in line with the Davies commission proposals.

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The Lord Bishop of Bristol: My Lords, can the Minister comment on the remarks made by the chief executive officer of International Airlines Group, who said that as far as the airlines are concerned there is basically no business case at all for the extension of Gatwick? When he focused his comments on the Heathrow proposal, he said that the runway would cost £182 million but the total cost would be somewhere around £18.6 billion. He went on to say that this is a,

“gold-plated airport to fleece its customers”,

and that he would consider moving his business either to Madrid or Dublin. If we are to spend all that money on one of these options and if the response of the airlines is to move business away, with the attendant jobs, will the Minister say something about that to your Lordships’ House?

Lord Ahmad of Wimbledon: The right reverend Prelate raises the media report of comments made over the weekend by the chairman of IAG, which I have read. I assure the right reverend Prelate that we continue not just on this issue of airport expansion in the south-east but meet regularly with all airlines to ensure that, as we plan our infrastructure and how we plan to move forward on this agenda, airlines are part and parcel of our consultation. Obviously, the chairman has made some comments on issues he feels strongly about, but perhaps it would be inappropriate to speculate on the true intent behind his comments.

Lord Forsyth of Drumlean (Con): My Lords, I declare an interest as a regular flyer from Scotland to London who avoids Heathrow at every possible opportunity because of congestion, and as a member of the Economic Affairs Committee, which interviewed Sir Howard Davies when he published his report. Can my noble friend say how much the Davies report cost? Given that it was a very expensive, thorough and authoritative report, what is the point of commissioning a report which makes a clear recommendation, at very considerable cost to the taxpayer, and then ignoring it?

Lord Ahmad of Wimbledon: If I may, I will write specifically on the issue of cost, but it is not being ignored; estimates have been made of that. The important point my noble friend raises is about the commission. Yes, the previous Government initiated the commission in 2012. As I have said previously from this Dispatch Box, we have committed ourselves to ensuring that the report of the commission is duly considered, which we are doing and have done since its publication, and that will form the basis of however the Government choose to proceed. We are not discarding the findings of the Davies commission—on the contrary, we are supportive of them and are ensuring that all elements raised within the Davies commission and through the Audit Committee’s recent report are built into our response. We will move forward in a positive frame in that regard in the summer of next year.

Lord Soley (Lab): My Lords, this is government with a vengeance: everything to do with the date of the mayoral elections in London and nothing to do with the environment. This has been trawled over for years. I will ask the Minister two specific questions. First, if the Government are going to resurrect the

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Gatwick proposal, has Gatwick local authority been consulted on the amount of storage space that will be required for all the cargo that arrives? Secondly, and very specifically—this is particularly important for the rest of the UK economy—have the Government taken into account the impact on the regional airports in the regions of Britain if Heathrow does not get that extra runway, thus enabling those regional airports to link into the global economy? Without that, there will be immense damage to business.

Lord Ahmad of Wimbledon: The noble Lord raises an important point about air freight, which of course contributes over 40% of the UK’s non-EU trade and over £140 billion in total, which is a very important part of the offering. As the noble Lord rightly pointed out, this is an important issue and one of the many factors we are considering. We will be working on the proposals in front of us from the Davies commission to ensure that the best decision is taken for expansion of airport capacity in the south-east. It is an important consideration and it will be part of our discussions going forward.

The Duke of Somerset (CB): My Lords, might the Government consider spreading the pain and pollution by treating both Gatwick and Heathrow as just different terminals of the same London airport? A new runway at Gatwick, linked by dedicated high-speed rail link, might solve many of the problems that have been outlined this evening, as well as joining up the rail system with the other improvements that the Minister alluded to earlier.

Lord Ahmad of Wimbledon: The Davies commission put forward distinct proposals on south-east airport expansion. The important thing he raises, which the Government are fully committed to, as I have said earlier, is that when it comes not only to our airports in the south-east but our airports across the UK, we need to look at increased connectivity through surface transport. Indeed, a greater level of investment is going on through Crossrail, and the development of HS2 will ensure that our connectivity across our airports across the United Kingdom will be much stronger to allow for greater contributions to be made to economic development and to allow one airport to complement the other.

Lord McKenzie of Luton (Lab): My Lords, the Minister has made much of the need for more capacity in the south-east and in the London system. Will he at last take the opportunity to acknowledge the role that London Luton Airport can play in delivering that extra capacity? In 2011, Luton accounted for 7% of passengers at London airports and on DfT forecasts it will contribute 17% of London passenger growth by 2030. While the Government have been dithering, a local public/private partnership has been getting on with investing £13 million, and will have invested up to £18 million by 2020. Will the Minister at last just acknowledge that that is a real contribution?

Lord Ahmad of Wimbledon: The noble Lord has asked me “at last” to acknowledge that, but I have previously done so and acknowledge again that London Luton Airport continues to be an important part of

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the UK plc airport offering. As he has just outlined, it has been a successful part of that contribution and I am confident that that contribution will grow in the months and years ahead.

Lord Empey (UUP): My Lords, will the Minister not accept from me that even if a third runway at Heathrow or wherever were to be paved with gold, it matters little to some of us who cannot get access to it? The right reverend Prelate made the point about the comment made by the chief executive of IAG, which is only one comment. But the Minister will know of my interest in this matter; the regions do not have guaranteed access to a major piece of national infrastructure, and through European law the Secretary of State has no power to do anything about it and ensure access. Can the Minister revisit this issue, because it is fundamental? If it is a national piece of infrastructure, all parts of the nation should have access to it, but currently his department has no control over that.

Lord Ahmad of Wimbledon: I know that the noble Lord has raised this issue before and, again, I assure him that the Government have an answer to this. If a particular route is affected—for example, Gatwick to Newquay—the Government have stepped in when public concern has been expressed and have guaranteed support and financing for the route. We continue to ensure that all routes that need to be supported are supported. The Government take very seriously connectivity across the whole of the United Kingdom, including Northern Ireland.

Lord Hughes of Woodside (Lab): My Lords, the Statement says:

“We expect to conclude this package of work by the summer”.

I take it that that is not a firm promise, as the Prime Minister said from the Dispatch Box that the decision would be made by Christmas. For the avoidance of doubt, for clarity and to stop this whole thing becoming a total Whitehall farce, will the Minister say when exactly we can expect to get this report?

Lord Ahmad of Wimbledon: I think I have been clear in saying that it will be by the summer. If the noble Lord is asking me to specify the year, I do mean the summer of 2016.

Lord True (Con): My Lords, I remind the House of my interest as leader of a London borough council. Like hundreds of thousands of other Londoners, I welcome this stay of execution on Heathrow, although I see two nooses still hanging in the yard. The Minister referred to air quality and noise. A bigger Heathrow would fail on those. I put to him also the issue of security—it would be foolishness to fly another quarter of a million flights over our capital—and that good old Conservative principle of competition. How on earth can it be in our national interest to load more, as the right reverend Prelate reminded us, on to a single monopoly airport owned by foreign interests and hedge funds—our fair-weather friends in China and Qatar? Is not the truth that the Prime Minister took the right decision in 2010 with “no ifs, no buts”? Perhaps we should have got on with building the alternative then, and we should certainly do so now.

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Lord Ahmad of Wimbledon: The analogy with nooses that my noble friend draws is certainly not how I or the Government view it. This is an opportunity to expand airport capacity in the south-east, which is a central part of ensuring the growth of our country and our future development. As I said, it is important that we listen to all views—the Airports Commission produced a very detailed and thorough piece of work—and that we consider all environmental impacts, including air quality, noise and carbon emissions. I know that my noble friend has made representations in this regard and we are listening to those representations. It is important that we make the right decision for the south-east, for our country and for moving our economy forward.

Lord Birt (CB): My Lords, someone coming anew to this debate and hearing the Minister’s opening remarks might think that Sir Howard and his colleagues set out three options, weighed them immaculately and left the choice open. It is hard to imagine a more thorough report than he and his colleagues wrote or a clearer conclusion and recommendation. What were the shortcomings in the report that have occasioned this delay? What did the commission not make clear?

Lord Ahmad of Wimbledon: One issue, which I mentioned earlier and which was referred to by the Environmental Audit Committee, was the need to ensure that air quality standards are applied to each proposal within each of the options that we are considering. We feel quite strongly that those need to be considered, reviewed and analysed so that we make the right decision on the basis of not just the economy but important environmental considerations.

Lord West of Spithead (Lab): My Lords, the failure to take this decision is seemingly either mind-blowingly incompetent or amazingly cynical. We have now had longer than the duration of the Second World War to think about this. As the noble Baroness said, in the last two years we seem to have gone round in circles. As I cannot believe that any Government would be so cynical over something so important for the wealth of our nation, I have to assume that it is mind-blowing incompetence. Will any heads roll in the Department for Transport because of this incompetence and failure to make a decision?

Lord Ahmad of Wimbledon: I totally disagree with the noble Lord. I do not think that it is either of the issues he proposed. I am sure he will recognise that it is important that these decisions are considered: they have to be the right decisions based on all the issues in front of us. The environment and environmental issues have been raised, and these are important considerations to ensure that we get the required expansion. I will be absolutely clear. I mentioned the summer of 2016. That timetable will in no sense delay the proposals in the Davies commission for achieving extra capacity by 2030.

Lord Kilclooney (CB): My Lords—

Earl Attlee (Con): My Lords—

Viscount Younger of Leckie (Con): I believe that it is the turn of the Conservatives.

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Earl Attlee: My Lords, can the Minister now answer the question from the noble Lord, Lord Rosser? What has changed since the Government told the House that we would have a decision before Christmas? Or it is merely that the Cabinet as a whole lacks the moral courage to make the decision?

Lord Ahmad of Wimbledon: My noble friend has said something that I cannot agree with—and nor do I agree with it on principle. The Government have moved forward. We have agreed that airport expansion will take place in the south-east, and I am sure that he will acknowledge the importance of the environmental considerations. I said specifically that in the interim, on 26 November, we received a reasonable and full assessment from the Environmental Audit Committee and I quoted from its report. I commend the report to my noble friend, as he will see that we need to ensure that all the key environmental considerations are taken into account in making the final decision.

Lord McKenzie of Luton: My Lords, perhaps I may correct an earlier omission in not drawing attention to my aviation interest in the register.

Welfare Reform and Work Bill

Committee (3rd Day) (Continued)

6.46 pm

Amendment 58

Moved by Lord Low of Dalston

58: After Clause 15, insert the following new Clause—

“Safeguarding of vulnerable claimants: guidance

(1) The Secretary of State shall issue statutory guidance for the safeguarding of vulnerable claimants in relation to any sanction, reduction of benefit, or disallowance of benefit (“the guidance”).

(2) The guidance shall incorporate all relevant provisions and operational protocols contained in the following Departmental operating guidance—

(a) procedural guidance within the Labour Market Conditions Guide;

(b) universal credit guidance for agents;

(c) Employment and Support Allowance (ESA) guidance for Jobcentres;

(d) ESA operational guidance for benefit delivery centres;

(e) ESA Incapacity Reference Guide;

(f) Core Visits Guide;

(g) Work Programme guidance;

(h) guidance for health professionals.

(3) The guidance shall specify—

(a) indicators of vulnerability and procedures for identification of vulnerable claimants;

(b) situations which may demonstrate good cause for inability to participate in a work-focused interview, undertake work-related activity, or attend mandatory Work Programmes or back-to-work schemes;

(c) where claimants must be referred for a Core Visit conducted by a Department for Work and Pensions (DWP) Visiting Officer;

(d) how to support claimants with additional or complex needs;

(e) liaison arrangements with mental health services where claimants are mental health service users;

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(f) collaborative approaches through which DWP can work with independent advice and support bodies in assisting such claimants;

(g) who is responsible for ensuring that the guidance is complied with.

(4) “Vulnerability” and “vulnerable claimants” shall be taken to refer to individuals who are identified as having complex needs or requiring additional support to enable them to access DWP benefits and use DWP services.

(5) Complex needs may refer to difficult personal circumstances, life events, or health, disability or incapacity conditions that affect the ability of individuals to access DWP benefits and services.

(6) In issuing the guidance the Secretary of State shall ensure consistency of definitions, terminology and language in the guidance.

(7) The Secretary of State shall ensure that consistent principles, good practice and fairness in safeguarding procedures is applied across all types of benefit claims, including Jobseeker’s Allowance claims, and by all agents involved in the assessment and administration of benefits.

(8) The Secretary of State shall report to Parliament annually on the application of the guidance.”

Lord Low of Dalston (CB): My Lords, I shall speak also to Amendment 62. At Second Reading I spoke about two issues that had been highlighted for me by my work as chair of an independent commission which had been considering the future of advice and legal support on social welfare law in England and Wales: how to protect the most vulnerable from the worst effects of sanctions, and how claimants might get the advice and support they need to adjust to the changes brought about by welfare reform legislation. Amendment 58 deals with the first of these and Amendment 62 with the second.

Operational guidance has been developed over a number of years to build some minimum safeguards into the application of conditionality-based decision-making—for example, in dealing with claimants with serious mental health problems or cognitive impairments. It has been evolved in a piecemeal fashion around certain minimum requirements covering, in broad terms: the identification of claimants with mental health conditions or a background of mental illness and liaison with social and mental health services, with such cases referred to a higher managerial decision-maker before a benefit withdrawal decision is made; the requirement for the DWP to consider any good cause as to why a claimant may not have met a particular condition; and a requirement for the DWP to attempt to contact the claimant, conduct a face-to-face discussion about the conditionality and, if necessary, arrange a home visit if they do not accept that good cause.

Welfare reform legislation and new policy on sanctions since the 2012 Act in particular has complicated matters, although the same guidance on minimum requirements carries over to a significant extent. The guidance is, however, piecemeal and scattered over several different operational guidance manuals, each with subtle differences in language and terminology, leading to application and practice that is far less consistent than it should be. Overall, this has meant that the guidance is weaker in its application to new JSA claims—in fact, there is no JSA-specific guidance—universal credit claimants and clients of Work Programme providers.

Welfare rights workers can also point to numerous cases where the DWP has failed to apply safeguards correctly, especially following ESA work capability

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assessments. The consequences for vulnerable claimants can be devastating. In its inquiry on benefits sanctions beyond the Oakley review, the Work and Pensions Select Committee concluded that:

“Given the complexity of the existing legislation, there is a strong case for a review of the underpinning legislative framework for conditionality and sanctions, to ensure that the basis for sanctioning is clearly defined, and safeguards to protect vulnerable groups clearly set out”.

The Select Committee further recommended strengthening and clarifying guidance around the protocols and purposes of home visits or core visits. It also recommended better guidance on vulnerability specifically directed to Jobcentre Plus staff in identifying vulnerable JSA claimants, including those with mental problems and learning difficulties who may face difficulties in understanding and/or complying with benefit conditionality.

I have a number of cases that illustrate the need for a stronger legal framework to protect vulnerable claimants in situations where they potentially face sanctions. Given the time, I will mention only one, but it graphically makes the point. Mr D had his ESA stopped after failing to attend a work capability assessment. The DWP was aware of his history of mental ill health and that he was receiving support from his local NHS mental health service. However, it did not carry out safeguarding procedures and did not attempt to contact his local NHS mental health service to find out more about the risks to Mr D’s health if his income were to be stopped. After benefit was stopped, Mr D’s mental health deteriorated and he became suicidal. His psychiatrist assessed that the benefits stopping was a stressor that put Mr D at severe risk of suicide. Mr D was assisted in contacting the advice service by his psychiatric nurse. After the advice service challenged the DWP on its handling of the case, benefit was reinstated and Mr D was placed in the support group of ESA.

Amendment 58 would address the state of the guidance and the recommendations of the Select Committee by inserting a new clause in the Bill which would provide a clear statutory underpinning and codification for all safeguarding procedures and guidance; put all the guidance in one place, which should make it more accessible, user-friendly and easier for professionals to use; require consistency and robustness of application, especially consistency between new and legacy benefits systems; and require the Secretary of State to report annually to Parliament on the operation of the safeguarding procedures. As the language used in the amendment is drawn from existing guidance—for example, as regards the approach to vulnerability—it does not attempt to impose a higher threshold of safeguarding requirements in relation to conditionality but rather to ensure that existing standards are made more effective, consistent and transparent. The amendment is therefore consistent with the scope of the Bill, and the 2012 Act and its predecessor legislation.

Amendment 62 addresses the question of how claimants might get the advice and support they need to adjust to changes brought about by welfare reform legislation. The universal credit support service framework is a DWP-led collaborative project with the Local Government Association to deliver local support for

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more vulnerable claimants and to assist those who might be unable to use the digital claims process or who may need help budgeting, given the transition to monthly payments. The DWP drives a lot of the demand for advice as a result of delays and failures within the system, so it is only right that it should have an obligation to support and fund welfare rights advice. It therefore needs to be engaged in directly supporting the advice sector to help vulnerable claimants transition to new benefit regimes and/or adjust to new entitlement rules, as well as helping to challenge the system when it gets decisions wrong.

Amendment 62 would insert a new clause in the Bill providing that the Secretary of State shall publish guidance for local authorities about their role in developing schemes to support claimants, especially claimants with additional needs or indicators of vulnerability, and report annually to Parliament on the operation of the universal credit local support service framework. It provides that guidance shall specify, among other things, the role of local authorities in developing partnerships to deliver support and a priority role for independent local advice agencies. Finally, it provides that the Secretary of State shall ensure that the universal credit local support service framework is appropriately resourced so that it can be rolled out to all local authority areas. It is difficult to establish how far the DWP intends to roll out its local universal credit support services beyond the initial UC pilot areas and how the funding for this works. Therefore, it would be helpful if the Minister told us what the department’s plans are in this regard and what the relationship is between the universal credit local support service funding and other grants to local authorities, such as the troubled families programme, and the information and advice strategies required by the Care Act. I beg to move.

The Earl of Listowel (CB): I rise to support both these amendments and have attached my name to Amendment 62. I have an interest in this as vice-chair for the last 10 years of the parliamentary group for children in care and care leavers, and as a carer of a mentally ill adult. I know how fragile many of the individuals seeking welfare support are. The Minister himself may have been shocked to discover the issues around mental health as he has done his important work in building capacity in jobcentres. I strongly support my noble friend’s amendments.

Baroness Sherlock (Lab): My Lords, I intend to speak very briefly as we have had a good debate on sanctions and the noble Lord, Lord Low, introduced his amendment with characteristic care and detail.

I just want to say a couple of things to the Minister. I know that the department is not attracted to statutory guidance in universal credit in particular. One of the reasons is that it likes to make personalised decisions. Before the noble Lady tells us how the system is meant to work, I want to flag something up. I worked in government and know that you always get complaints from non-profit organisations about how things are working. At some point, the noise being made reaches a certain level, and you know that maybe things are not working quite the way they are meant to work. It is my judgment that we are approaching that level.

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The level of concern expressed by charities about the way the sanctions environment is working, particularly for vulnerable groups, and about the severity of some individual mistakes that have been made, suggests there may be something systemic going wrong. I am not suggesting that means it is going wrong on a large scale across the caseload, but that something is going wrong often enough, and on occasions badly enough, to merit attention.

When the Minister responds, even if she is not attracted to the way the amendment might resolve this issue, could she address the underlying problems and tell us how the Government might like to deal with them?

7 pm

Baroness Evans of Bowes Park (Con): My Lords, Amendment 58, tabled by the noble Lord, Lord Low, seeks to make part of statute all guidance relating to the safeguarding of vulnerable claimants in relation to any sanction. It also seeks to define vulnerability and to commit the Secretary of State to report annually to Parliament on the application of the guidance. In his speech on this Bill on 17 November, the noble Lord, Lord Low, said that the Work and Pensions Select Committee had called for safeguarding measures to be included in legislation. However, it did not recommend that specific action and did not suggest that the guidance should be put on a statutory basis. Therefore we do not believe that the amendment will achieve what the noble Lord intends.

As a principle, the guidance that the department produces to support the implementation of key policies is comprehensive. It is also regularly reviewed and refreshed to ensure that it meets policy intent, reflects new evidence about its effect and implementation and allows us to introduce easements within the scope of the current legislation. Much of the guidance relating to the safeguarding of vulnerable claimants in relation to any sanction, reduction of benefit or disallowance of benefit is based on individual assessment of need. Defining the scope of vulnerability too closely or predetermining who these groups are in statute could create unintended consequences. One example is the plight of Syrian refugees: fixed guidance might not have been able to respond to the specific and varied needs of those fleeing the conflict. Embedding a definition which may appear fit for purpose today within statutory guidance would remove important flexibility to ensure that we can respond to change quickly tomorrow and thereafter.

It is also worth noting that the existing vulnerability guidance already provides detailed material to assist work coaches in identifying and supporting the complex needs of vulnerable claimants. It is linked to an online vulnerability hub which has been specifically created to support staff in dealing with all forms of vulnerability and to ensure that guidance is in one place, which is what the noble Lord is suggesting. For instance, the hub contains information such as the mental health toolkit and the hidden impairment toolkit, both of which have been developed in conjunction with health experts and DWP work psychologists to ensure its effectiveness.

The content of all eight sets of guidance is reviewed frequently and the department works with both internal

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and external stakeholders to ensure that it effectively recognises and supports vulnerable claimants. We are also currently changing elements of the guidance in response to a recommendation made by the Work and Pensions Select Committee to supplement the existing work coach guidance to illustrate how conditionality can be tailored to take account of individual claimants’ circumstances where they have complex needs or need additional support.

Amendment 62, in the names of the noble Lord, Lord Low, and the noble Earl, Lord Listowel, refers to the universal credit local support services framework, now called universal support delivered locally. Again, I am sure that the noble Lord has tabled this amendment to ensure that vulnerable claimants are identified and supported as we move to universal credit. However, again, we do not believe that the amendment is best placed to achieve this aim.

The universal support framework was developed in acknowledgement that some people will need additional help in making and maintaining a claim for universal credit, which for the majority of people will be an online service with payments made monthly direct to the household. The framework aims to align with a flexible approach to services for vulnerable complainants and those with complex needs and recognises that individual local needs may be best met through integrated localised support service offers. It aims to help DWP and local partners plan the level of appropriate services and delivery methods to support the delivery of universal credit and to support claimants in moving towards greater individual self-sufficiency and independence.

Universal support trials started across Great Britain in September 2014. Five of the trials ended on 31 August this year and the remaining six ended on 30 November. The trials tested digital inclusion, financial inclusion, different arrangements for triaging household needs and the sharing of data, skills and estates to create the right integrated local foundation to support more households into work. The final evaluation of these trials will published in late spring 2016, although a short summary of key learning will be published before then. The trials will also allow us to better understand the business case for universal credit delivered locally, claimants’ needs, funding requirements and the delivery approaches that tested best. This information will be used to inform a refreshed framework alongside the full universal credit digital service from May 2016 and a refreshed specification of requirements.

The intention is that the universal support framework sets out the principles and specifications but is not prescriptive about delivery, although learning from the trials and local expertise will be brought to bear to enable continuous improvement. We want to ensure that local areas support their local communities as best they can and it will be up to them to decide how they want to bring resources together and to effectively provide the support needed. For instances, trials in Greater Manchester, Kent and Flintshire have all produced different ways of working which have been effective for those local communities.

On the basis of this explanation, I hope that the noble Lord will withdraw his amendment.

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Lord Low of Dalston: My Lords, I thank the Minister for her full and careful reply and my noble friend Lord Listowel and the noble Baroness, Lady Sherlock, for their speeches in support of the amendments.

I missed out the end of my speech. I would have said that I hoped the Minister might agree that these are two useful amendments, almost of a good housekeeping nature. The Minister has given a substantial reply to the points that I made. In particular, she has told us that the guidance is available and referred to the hub. It is perhaps in more of a one place than I allowed for when moving the amendments. However, all in the garden cannot be said to be lovely when cases of the kind I mentioned in my remarks come to notice. I had a good many more up my sleeve than there was time to tell noble Lords about.

Although the guidance may be found in one place, there still may be a need for some rationalisation. The noble Baroness has told us that it is constantly kept under review and has been updated and I like to think that the process of continuous rationalisation is taking place. However, I wish to read the noble Baroness remarks—there was a lot in them to digest all at once and I should like to take time to consider them carefully—go back to my advisers on the Low commission, take further advice and, if we feel there are further points we could make to assist the department or that there are still matters to discuss with a view to improving the guidance, I hope the noble Baroness and her colleagues at the department would be prepared to meet us to discuss these matters.

Having said that, I propose for now to withdraw Amendment 58.

Amendment 58 withdrawn.

Amendment 59

Moved by Baroness Manzoor

59: After Clause 15, insert the following new Clause—

“Universal Credit (Work Allowance)

The Universal Credit (Work Allowance) Amendment Regulations 2015 are repealed.”

Baroness Manzoor (LD): My Lords, I am delighted that in his comprehensive spending review the Chancellor bowed to pressure and agreed with my fatal Motion to scrap the proposed cuts to tax credits for working families. He was lucky to receive a £27 billion windfall to enable him to do this, but it was the right thing for him to do. However, this is little consolation to families who start claiming universal credit after April 2016. Despite George Osborne’s decision in his Autumn Statement to scrap cuts to tax credits, the new universal credit system will mean a less generous benefit entitlement for working families.

The Institute for Fiscal Studies has estimated that 2.6 million working families can expect to be, on average, £1,600 a year worse off under universal credit than they would have been under the existing system. The institute says that the transitional protection means that potentially very different amounts of benefit could be paid to people in similar circumstances depending on when their universal credit claim started.

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Universal credit transitional protection is the system the Government are implementing whereby an additional amount is paid to universal credit claimants to make up the shortfall. However, it can act as a barrier to taking on higher-paid work, according to the Social Market Foundation. This is because for many family types, universal credit will be less generous than the tax credit system it replaces. The foundation states that the difference will be quite substantial for some families. An example is that of a two-earner family with two children could be £2,700 better off receiving tax credits as compared with universal credit if both parents are working full time and earning £7.20 per hour. As a consequence, many families will be understandably reluctant to move from tax credits on to universal credit.

That is because the transitional protection will cease to apply if the family undergoes any change in its circumstances, such as a partner moving in or out of the household, a person moving off universal credit due to a lot of earned income in just one particular month or one or both adults leaving work, or indeed even moving home. The Social Market Foundation illustrates the problem by citing an example, stating:

“Suppose a family was receiving transitional protection as a result of being moved from tax credits to UC. One partner is offered a better-paid job, but one that would require the family moving home. The family faces a dilemma. Do they move to take up the job offer, increasing their income but losing their transitional protection payments? Or do they refuse the job offer in order to continue the receipt of their transitional protection?”—

That protection may be important for the family, particularly when moving between low-paid jobs.

“This example … illustrates precisely the kind of situation that universal credit was designed to avoid: a barrier to taking up better-paid work. The problem will be exacerbated in April 2016 when the cuts to UC create considerable differences in the generosity of tax credits as compared with universal credit”.

Another problem is that, if income levels in a household fall, the universal credit entitlement does not rise to offset that fall until the transitional protection has been exhausted. Families losing work will face the double whammy of experiencing not only worklessness, but also of being transferred on to a much less generous welfare system under universal credit.

The Universal Credit (Work Allowance) Amendment Regulations 2015 will have exactly the same impact as the cuts to tax credits for working families which may need to have work allowance as part of their universal credit from April 2016. Under universal credit, cuts will be made to work allowance and large reductions will be made to how much families can earn before benefits start to be withdrawn—called work allowance under universal credit. This will mean that tax credits start to be withdrawn once family earnings are above £3,850 rather than the current £6,420 under tax credits. The IFS states that this will weaken the incentive for families to have someone in work.

As a result of the changes, universal credit, which when originally introduced by the coalition Government was intended to see 2.7 million working claimants better off, will now mean that 2.6 million working people will be worse off by an average, as I have said, of £1,600 a year. The whole point of universal credit is to make sure that it always pays more to be in work than on benefits. The Universal Credit (Work Allowance)

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Amendment Regulations 2015 further undermine that vital principle. They are an attack on hard-working, low-income families.

I know that the Minister supports the framework of university credit, and I applaud him for doing so because I support the framework as well. However, this undermines some of the fundamental principles that we are working towards. I would be grateful if the Minister could give an assurance that, in light of the Chancellor’s assurance to the public and to working families that work will always pay, the Government will consider repealing these regulations, or at the very least end the anomalies presented by them—particularly given that they were introduced, again, by secondary legislation.

Can the Minister also say what effect the Chancellor’s announcement in the Autumn Statement on the minimum income floor, which is in line with the national minimum wage, will have on self-employed people, particularly as this means that universal credit claimants who have been self-employed for more than 12 months are assumed to have earnings of at least 35 hours a week at the national living wage? I understand that there are exceptions, such as for those with caring responsibilities, but claimants will receive no additional support if their income drops below this level. I beg to move.

7.15 pm

Baroness Lister of Burtersett (Lab): My Lords, I rise to speak in support of Amendment 59, to which I was happy to add my name. The work allowance was one of the jewels in the crown of universal credit, heralding a shiny new era of improved work incentives and making work pay. How quickly it has turned into the Cinderella of the social security system: first frozen, then cut in real terms, frozen again, and abolished altogether for non-disabled, childless households. When I questioned the Minister on this in an Oral Question on 27 October, he justified what has happened by referring to the experience of single people, arguing that they do not in fact need the work allowance for the incentives. I have since read the Resolution Foundation analysis and I accept that there may be a case for abolishing the work allowance for this group, but the foundation recommended that that should be in the context of the need for improvements elsewhere—in particular, an increase in the work allowance for lone parents, who are very responsive to such incentives, and a shift in the balance of the allowance between the first and second earners in a couple, with a new work allowance for second earners in families, just as some of us argued for during the passage of the Welfare Reform Act 2012. The foundation went on to say that that is a,

“crucial step in making UC pro-women, a test it currently fails”.

The Social Security Advisory Committee picked this up in its report, Universal Credit: Priorities for Action, and agreed that second earners need further attention, and it recommended further consideration of the Resolution Foundation report to the Government. I would be grateful if the Minister told us what consideration has been given to that report.

The Resolution Foundation also emphasises the importance of uprating policy and argues that cuts in income tax should be passed on in full to families on

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universal credit via an equivalent adjustment to work allowance; otherwise, people on universal credit will not get the same benefit from an increase in tax allowances. Other analyses by the Child Poverty Action Group—I declare my interest as honorary president—and the TUC show that it is much more cost-effective to raise work allowance than to increase personal tax allowances in terms of getting parents into work and addressing child poverty.

In his reply to my Oral Question, I felt that the Minister tried to brush the cuts in work allowance aside as somehow inconsequential. The noble Baroness, Lady Manzoor, has spelt out just how consequential they are for new claimants of universal credit. In his oral evidence to the recent Work and Pensions Committee’s inquiry into tax credits, Torsten Bell of the Resolution Foundation said:

“That work allowance change is so large that our view is that it to a degree fundamentally changes how universal credit is going to feel for people on low hours”.

He gave an example and said:

“Before the Budget a single parent on the minimum wage could have worked 22 hours under universal credit before she had any of her universal credit entitlement taken away. After both the reduction in the work allowance, which falls to £5,000 for her next year, and the increase in the national minimum wage”—

I would say, the so-called national minimum wage—

“if she is on that, she will now only be able to work 10 hours before she starts to see quite a significant, 76%, tapering of her entitlement. It is exactly that kind of incentive that the welcome purpose of universal credit was aiming to get around”.

I think that he means disincentive. Picking up on the point made by the noble Baroness, Torsten Bell continued:

“When we are talking about these work incentives, more of the debate should be focused on what we have done to the original purpose of universal credit in these drastic cuts to the work allowances, in particular for single parents”.

I know that the Minister cared passionately about that original purpose of universal credit and I cannot believe that he is happy about what is happening to work allowances. I would welcome a more considered response than it was possible to give in Oral Questions, now that he has more time to give such a response.

The Earl of Listowel: I will speak to Amendment 62D in this group and apologise to your Lordships for giving so little notice of it. The issue was only drawn to my attention on Friday. I felt that it was important and timely so I asked for a manuscript amendment. I am very pleased to see that the noble Baroness, Lady Armstrong of Hill Top, has attached her name. Unfortunately, she cannot be here. I have not had the opportunity to thank the Minister for saying that there would be a life chances strategy and I am sorry that I was so pessimistic. I was very pleased to read the comments made last week by Christine Lagarde, the head of the IMF, about the success of the economy in terms of employment and improving productivity. The Minister may feel that this is recognition of his good work and that of his colleagues in these areas.

This amendment was brought to my attention by the Family Rights Group and is supported by many other children’s charities. Its purpose is to ensure that lone parents under the age of 25 who are also care leavers continue in the same system under the new arrangements, so that they will be £780 a year better

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off. I very much welcome the extremely good work the Government have done and are doing for young people leaving care. The strategy has been a great success. Many people recognise that it is very difficult to get different departments to work together. Through the strategy, the DWP identified care leavers and can give them the additional support they need. Other departments also are aware of that. Staying Put has been a very important step forward. It recognises that young people leaving care should have the right to remain with their foster carer until the age of 21 where both parties agree. Some 50% of children in the general population stay with their parents until the age of 22, so these children should also be able to remain.

However, there is much further to go with these young people. Ofsted has recently started assessing care-leaving services. Its most recent report found that, of the local authorities it examined, 63% of the care-leaving services were inadequate or needed improvement. There is a very long way to go.

The Centre for Social Justice has done some important research on births. There is a much higher likelihood of teenagers leaving care becoming pregnant. One in 10 young people leaving care between the ages of 16 and 21 have their child removed. Often, they have been in care and then lose their own child. It is important that these lone-parent care leavers get all the support they can. This additional cash would be very important for them. They do not have the family network that many of our children have to support them. I hope the Minister is prepared to accept this amendment, and I look forward to his response.

Baroness Sherlock: My Lords, I will say a brief word on Amendment 62D and move on to the main amendment in the name of the noble Baroness, Lady Manzoor. The noble Earl, Lord Listowel, has clearly made the point about the particular vulnerability of young care leavers and the way the changes to the provision of support for under-25s and universal credit will affect them. In 2013, half of 22 year-olds in the UK still lived with their parents. This Bill makes it more likely that even more young people will need to live at home. The issue, of course, for care leavers is that they do not have a home to live in. One of the problems is that they are simply not in a position to depend on the kind of support and home environment that other young people can turn to as an alternative. Perhaps the Minister will comment on that in responding to this amendment.

Likewise, an important point was made by the noble Earl about the position of care leavers who are much more likely to become teenage mothers and, in turn, lose their children. Certainly, when they are supported appropriately by charities and given appropriate financial support, there is much more chance of their being able to keep the children with them and then try to break the cycle. Without that, there must be some risks. I will be very interested to hear the Minister’s comments.

I really want to talk about universal credit and the implications of the amendment in the name of the noble Baroness, Lady Manzoor. We on these Benches have long supported the principle of universal credit. I

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know the Minister has done a lot of work to make sure that the new system will make work pay and will work for working families. But I am getting increasingly concerned, as are many people, about the Treasury’s continuous slashing away at the money involved, which makes it harder and harder for universal credit to do the job. I do not expect him to comment on that, but he has my sympathies.

The speed at which this is being rolled out is also making a difference. As we know, from October 2013 there should have been no more claims for the old legacy working-age benefits. In fact, everyone would have been transferred over by April 2017. By last March, we should have had 4.5 million households on universal credit. The last time I saw the figure, it was about 141,000. There have been various slippages in timing and now it will not be fully rolled out until, I think, 2021. That matters because it goes right to the heart of the transitional protection arrangements for people moving across, as mentioned by the noble Baroness, Lady Manzoor. Along the way, the Treasury has made six—this is the seventh—cuts to universal credit: £6 billion has been slashed from the budget before it has even been fully rolled out. There are some potentially serious traps down the line.

I unreservedly welcome the fact that, after pressure from all quarters and being asked to think again by this House—I pay tribute to my noble friend Lady Hollis and congratulate her on her successful delaying Motion, which caused Mr Osborne to have the opportunity to think again—the Chancellor decided not to proceed with the tax credit cuts. Three million working families would have lost an average of £1,300 a year.

However, as has been mentioned, he did not reverse the comparable cuts in universal credit. I want to understand the implications of that, so I hope the Minister can help us. The Autumn Statement suggested that the Government are still planning to take £10 billion from working families through cuts to universal credit during this Parliament, as a result of removing work incentives and work allowances. That means that 2.6 million families will still be £1,600 worse off by 2020, on average. Therefore, I am trying to understand why the Secretary of State, Iain Duncan Smith, when touring TV and radio stations last week, was able to say that universal credit is a big success. He said on “The Andrew Marr Show” that nobody will lose a penny from the UC cuts. How can that be true?

In the wake of the Autumn Statement, the OBR put more figures out to help people understand. I have been poring over them with a wet towel around my head to try to make sense of them. I suspect that I have not, but the Minister will put me right. There are three issues: whether people on UC will be better off than those on tax credits, whether people transferring from tax credits to universal credit will lose out, and whether anyone will lose out in cash terms come next April.

7.30 pm

The House of Commons Library ran the figures for people on universal credit. It ran the figures for a single parent with two children working full-time on the minimum wage. The noble Baroness, Lady Manzoor,

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mentioned this. I could make sense of it only by imagining a person, so I shall call her Jane. Jane is living in the home that she shared with her husband but they have split up and he has moved out. They own the home, the two children are living with her and she is working full-time on the minimum wage. If she were currently claiming universal credit, the Library figures suggest that next April her UC award would fall by £3,084 a year. Dynamically—are noble Lords proud?—because her wages and her tax will change, she will not be £3,000 a year worse off; she will be £2,384 a year worse off. Maybe the Minister could tell me whether that is right and whether there are any working families on UC to whom that could happen next April.

The Library also ran the figures for someone in exactly the same circumstances but still on tax credits. I shall call him John; he lives next door to Jane. John, after paying tax and national insurance, and getting tax credits, will get tax credits worth £2,981 a year more than Jane’s, who lives next door in the same circumstances. Again, could that happen and is it right? If John’s circumstances change so that he ends up moving across to join Jane on universal credit, the real question that comes up is: does he get transitional protection? The Secretary of State seemed to think he would but I would be interested to know what happens. If his circumstances then change—maybe he gets a new job or meets a new partner—would he lose his transitional protection?

Jane and John are hypothetical but the questions are very real for the working families out there in the 98 areas where universal credit is running. There is widespread confusion about what kind of transitional protection is available. My understanding is that the last published document said that transitional protection is available only if you move on to universal credit as part of the mass migration of people who are moved from tax credits to UC. That will not now happen until 2018. However, the Secretary of State, Iain Duncan Smith, said that the DWP will somehow protect the other claimants—I think he said by using the flexible support fund. Could the Minister tell us whether that is right? The flexible support fund is a discretionary fund managed by jobcentres that is normally used to help people who have barriers to work. They might need to travel to interviews; they might need tools to do a job or that kind of thing. The fund’s budget is only £69 million, so if it is that, will the budget be increased to fund this and, if so, by how much?

There are four specific questions that I would be grateful if the Minister could answer. First, what transitional protection will be available for current universal credit claimants when their work allowances are cut in April? How long will it last and how will it be paid for? Secondly, if you are moved across to universal credit as part of the managed migration in 2018, will you get transitional protection and how long will it last? Thirdly, if, like John, you end up moving on to universal credit sooner, ahead of the mass migration, what transitional protection will you get? Finally, in any of these cases, what happens to transitional protection if your circumstances change? Does it stop? If so, can the Minister confirm precisely which circumstances? Would that mean that changing

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your job, meeting a new partner or having a baby could see your income reduced by thousands of pounds? What started as something that was meant to be a help to working families is becoming a source of real anxiety. I very much look forward to hearing the Minister’s answers.

The Minister of State, Department for Work and Pensions (Lord Freud) (Con): My Lords, the amendment proposed by the noble Baroness, Lady Manzoor, would repeal the Universal Credit (Work Allowance) Amendment Regulations 2015, which were laid before Parliament on 10 September 2015 and come into force next April. The amendment tabled by the noble Earl, Lord Listowel, and the noble Baroness, Lady Armstrong, would increase the standard UC allowance payable for lone parents who are also care leavers. Both amendments refer to issues recently considered by this House. The work allowance regulations were lying before the House as recently as last month and we have already discussed care leavers in debates on the Bill, most recently last Wednesday.

The Bill does not make any changes to the standard allowances in universal credit, which are set out in the Universal Credit Regulations 2013, debated in this House in February of that year.

The Government set out in the summer Budget measures to transform Britain from a low-wage, high-tax, high-welfare society to a higher-wage, low-tax and low-welfare society. This package of measures included changes to UC and tax credit allowances but also the introduction of the national living wage and further increases to the personal tax allowance. Noble Lords will be aware that the Chancellor has subsequently announced changes to the tax credit element of this plan in response to concerns raised mainly by noble Lords about the timetable for implementation. However, the overall strategy remains unchanged. The welfare system needs to be brought under control to make it fair to the taxpayer and support economic growth.

This is perhaps a reasonable time to pick up the point made by the noble Baroness, Lady Lister, about all the improvements that there might be to universal credit. I acknowledge that there may well be improvements. One of the opportunities that we have, uniquely in universal credit, is to start doing randomised control trials to discover how we might improve it. Some of those suggestions may well work when we have discovered the dynamic effect of making those changes. We do not know at this moment, but we and future Governments will have the opportunity to test some of those propositions.

Doubtless noble Lords will have seen analyses published by various organisations assessing the impact of these changes on claimants and are clearly concerned about the possible impact on families. As I start trying to explain the impacts, it is important to explain why those analyses tell only part of the story. First, they fail to reflect that the summer Budget measures are a package. The comparator, which excludes work allowance changes but includes all other summer Budget measures, reflects the Government’s policies to deliver low taxes but not those to deliver low welfare. If we are to deliver our commitment to stable public finances, we cannot deliver one without the other.

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Secondly, they fail to take account of all elements of government policy that will have an impact on families between now and 2020, including spending on vital public services such as the NHS and schools, on which so many families rely. If you take the sort of analysis that has been carried out by the IFS and the Resolution Foundation but instead compare the net incomes of those on tax credits in 2015 with what they would get under UC in 2020, taking into account the national living wage, increases in the personal allowance, better provision for childcare and economic growth, the cash position would look broadly similar in 2020.

Thirdly, and perhaps most importantly, the analyses fail to take account of the dynamic impact of universal credit, or indeed of any changes in behaviour as a result of the measures in the Bill. We are introducing universal credit precisely to give people more choice and opportunity to get into and progress in the labour market. The early impact is already documented, but static analyses cannot help showing claimants as passive recipients of welfare, unresponsive to the new possibilities that this Government are opening up with these reforms. This is particularly important when we consider universal credit claimants directly affected by this change when it comes into effect next April. The overall numbers are of course small, given the controlled rollout. They are also made up primarily of childless singles.

Let us be clear about the group we are talking about. They are a group with no barriers to full-time work. Indeed, many of them already move off universal credit altogether by finding full-time employment. Those with residual universal credit awards in work are normally working part-time and would therefore have got absolutely nothing under the tax credits system. The changes in April will reduce that generosity but will still leave this group better off than under the previous system.

I recognise that there are some more complex cases in the current caseloads, with higher entitlements and greater barriers to increasing earnings. To respond to the first question asked by the noble Baroness, Lady Sherlock, I can say that the Secretary of State has announced that we will use adviser support and the flexible support fund to ensure that each of those families is supported through the change.

Baroness Hollis of Heigham (Lab): Would the noble Lord expand on that answer? How many lone-parent families? How much will they be supported by in terms of their finance—is he saying that it would be as though the cuts had not affected them—and for how long?

Lord Freud: It would be a small number of families; I do not have the precise number.

Baroness Hollis of Heigham: Can he give us a feel: are we talking about 100 or 1,000?

Lord Freud: It is a small number. It is probably towards the lower end of that, but I do not have the precise number. We will use the flexible support fund—the measures the Secretary of State was talking about—to help them to make the transition, so that they manage the change.

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Baroness Hollis of Heigham: Does that mean that they will not be worse off in cash terms during their transition by virtue of the support system?

Lord Freud: It is not the same as transitional protection, as I was indicating. It is our means of helping people adjust to the change we are seeing in universal credit for those groups.

Baroness Hollis of Heigham: How will that happen?

Lord Freud: We will help them make the transition. It will vary for each of those families: it might be some more work or it might be upskilling to earn more. The numbers are very particular and specific but they are clearly a focus of our obligation to those groups to help them to manage their position. We will put the resource in to help them to do that. That is what we are talking about. Helping those on lower income towards financial independence requires a tax and welfare system that encourages and rewards work, and one which provides people with the right support to progress in the labour market and provide their families with long-lasting security.

The next question asked by the noble Baroness, Lady Sherlock, was about how the transitional protection works. The people who get transitional protection are only those who we have managed migration for, which, as the noble Baroness pointed out, will start in 2018. It is not designed to provide indefinite financial protection. Over time, transitional protection will be eroded as claimant circumstances change. It will be appropriate to end it when circumstances underlying the award are no longer recognisable as those on which the legacy calculation was made. We have not yet regulated for transitional protection, but we have described its principles. We will bring forward those regulations in due course.

Baroness Manzoor: Will the Minister say what those changes will be? The changes in circumstances are really important. The Minister has not highlighted those issues.

Lord Freud: We put them out at the time of the Bill. They were reasonably large changes. There is a list of them: re-partnering would trigger one, as would a new member of the household. Other changes might be a sustained drop in earnings—an equivalent almost to moving out of work—or one or both members stopping work. As I said, those are all indicated. We will set out those changes in due course.

Baroness Hollis of Heigham: Can the noble Lord envisage a situation in which a couple—a family—received this, he moved out and she became poorer, but the result was a change in circumstances, so her reduced income was made worse because she no longer had transitional protection?

7.45 pm

Lord Freud: The trouble is that one can make up particular stories and play around, but overall the position is that, as we get through to the time when the managed migrations happen and the national living wage and various other things come in, the norm will be pretty stable, as I said before.

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I will move on to the next question on those people who move earlier—that is, not in the managed migration—and reconfirm that they are effectively making a new claim for universal credit. Therefore, they will not be transitionally protected. I think I have gone through those very specific questions.

Baroness Manzoor: In terms of the flexible element of the budget, can the Minister say, as the noble Baroness, Lady Sherlock, requested, how large that budget will be? It is not the transitional protection money but the other fund that may be available.

Lord Freud: I do not have the precise figures here so it is quite hard for me to know how much of that flexible support fund will need to be diverted, but it is a mixture of support and funding. It is a question of how that is combined. We do not anticipate a large amount because the numbers are not very large. We have not isolated the precise numbers. It is too difficult—we just have not done that—but our anticipation is that it is not a substantial amount.

Let me pick up the point from the noble Baroness, Lady Lister, on incentives to work. There are only two ways of reducing the cost of universal credit: looking at either the taper or the work allowances. The taper is what maintains the incentives to work and to work more. Keeping it at a steady rate so that people can understand exactly where they are, so that if they change their work hours they can understand exactly what happens in a way that they cannot with the present system, was something that we saw as a priority, particularly at a time when the economy is strong and there is work available. There may be a different dynamic at different stages of the cycle, but that is the position we are in now.

On the question from the noble Baroness, Lady Manzoor, the minimum income floor will continue to be calculated by reference to the national minimum wage, which includes the national living wage.

I turn now to Amendment 62D, tabled by the noble Earl, Lord Listowel. In the current system there is considerable complexity around the rates for young people, with some differences between benefits. The structure of age-related rates in universal credit is much simpler than the benefits it replaces, with just four rates of the standard allowance: two for singles, two for couples. That compares with 15 in employment and support allowance, for example.

The age-related rates are now established in universal credit and the Bill does not make changes in this area. Doing so would start to replicate some of the complexity that we are looking to remove and noble Lords have heard me grumble about “carbuncleising” enough to know what I mean. However, the Government do recognise the challenges which these young people face. We should be supporting vulnerable young people and parents to stabilise their lives and find work and we have a number of measures within the context of universal credit. We will ensure that care leavers claiming universal credit who need help managing their money and paying bills on time will have access to personal budgeting support. Care leavers are exempt from serving waiting days in universal credit to ensure a smooth financial transition, and single care leavers aged 18

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to 21 are exempted from the shared accommodation rate for LHA housing costs. I ask the noble Baroness to withdraw her amendment.

Baroness Hollis of Heigham: I am still trying to make sense of the responses which the noble Lord very helpfully gave to my noble friend Lady Sherlock. I know that the Minister does not like hypothetical questions, but if we want a dynamic—to use his word—situation, we have to look at it in those terms. A lone parent with two children is currently on tax credits. Let us say that, in 2018, she re-partners. Her partner moves in and the tax credit transitional protection ends because his income floats it off. Within a year, he leaves her: does she then have to make a new claim to universal credit? Putting aside any question of the level of the national minimum wage, would that be at a lower rate, in cash terms, than she would have received on tax credits? In other words, what sort of linking would there be? If he moved out in less than six months, would she be able to resume her previous tax credit claim or will the cuts kick in at any point when there is a change in circumstance—even if it effectively only lasts for a fortnight—that takes her on to UC?

Lord Freud: We have not yet put out the detail of the transitional regulations and that is where one would expect to see them. We will be producing some precision in how the regulations will work.

The Earl of Listowel: My Lords, I am grateful for the Minister’s response and for the work which the Government do to support care leavers. I omitted to say why Amendment 62D was timely: today, research from the University of Lancaster highlighted a huge leap in the number of newborns being taken into care. In 2008 it was about 800, in 2013 it was over 2,000; a very considerable number. Some of that is down to better early intervention; taking children very quickly out of damaged families. However, Nicky Morgan, the Secretary of State, is concerned about this and it suggests, again, that we need to be even better at supporting these vulnerable families. I hear what the noble Lord has said and I will look carefully at it.

Baroness Lister of Burtersett: Will the Minister say when, roughly, he expects to be publishing the transitional regulations? Will he, in his normal helpful way, commit to publishing a draft of the likely contents first, so noble Lords can discuss them, rather than just be presented with the actual regulations?

Baroness Hollis of Heigham: Before Report.

Lord Freud: I will take that request in the helpful way that it was offered. I will write to the noble Baroness to see if I can give her any comfort.

Baroness Manzoor: I thank all noble Lords who have taken part in discussing this group of amendments, particularly the noble Baronesses, Lady Lister, Lady Sherlock, and Lady Hollis, and the noble Earl, Lord Listowel. I also thank the Minister for his considered response and for allowing me to intervene when he was speaking. A number of issues have been raised. The noble Baroness, Lady Hollis, stated very clearly

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what happens to an individual when there is a change of circumstances. It is important that there is some guidance before Report. I have not been reassured by the answers which have been given. I have every sympathy for the Minister in terms of what he is trying to deliver, but I passionately believe that cuts are affecting people who want to work and will want to go into work under what is being proposed. I will consider what has been said, but I am likely to bring it back on Report. As the noble Baroness, Lady Lister, said, I would be grateful to receive any other information that would help us make our minds up. On that basis, I beg leave to withdraw.

Amendment 59 withdrawn.

Amendment 60

Moved by Baroness Manzoor

60: After Clause 15, insert the following new Clause—

“Housing benefit: age of entitlement

In section 130 of the Social Security Contributions and Benefits Act 1992 after subsection (1)(a) insert—

“(aa) he is aged 16 or over”.”

Baroness Manzoor: My Lords, I am pleased that the noble Lord, Lord McKenzie, has added his name to Amendment 60. Support for housing costs for 18 to 21 year-olds is not contained in the Bill but it was announced in the Budget. From April 2017, 18 to 21 year-olds making a new claim for universal credit will not be automatically entitled to support for their housing costs. As the Bill creates no new powers for this, these measures are likely to appear in regulations, using powers already contained in the Welfare Reform Act 2012. Crisis states that it has serious concerns that removing young people’s access to support with their housing costs will lead to an increase in youth homelessness. Crisis, the Joseph Rowntree Foundation and the Homelessness Monitor state that youth homelessness is already on the rise, with 8% of 16 to 24 year-olds reporting being recently homeless.

According to the Crisis analysis of CHAIN data, in four years the number of young people sleeping rough in London has more than doubled. There are many reasons why young people may find themselves homeless, including parental relationship breakdowns; abuse and violence from family members; and leaving care. For many young people, housing benefit is all that stands between them and homelessness and is an important safety net.

My proposed new clause attempts to address this hole in support for young people. The amendment says “aged 16” in order to avoid excluding 16 year-olds already entitled to housing benefit from eligibility in the future. But the amendment is ultimately about stopping the Government’s attack on 18 to 21 year-old claimants. Some 15% of current 18 to 21 year-old claimants are in work. They need this housing benefit to subsidise their rents; one only has to look at the level of rent in cities such as London.

Housing benefit is also vital for those living in areas of low employment to enable them to move to somewhere where they will have more chance of getting a job.

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Does the Minister really believe that it is better for our economy, and our young people, for them to remain in the family home, away from possible employment opportunities, than to temporarily pay for their housing benefit? I recollect the “get on your bike” sentiments expressed by Norman Tebbit—now the noble Lord, Lord Tebbit. These appear to be holding little water now. I beg to move.

8 pm

Lord Low of Dalston: My Lords, I rise to speak to Amendment 62C. In the Summer Budget, the Chancellor announced that under universal credit there will be no automatic entitlement to support for housing costs for 18 to 21 year-olds. This is to make sure that young people are unable to leave home and start claiming housing support unless they have a job. It is intended to mirror the choices made by young people who choose to live at home until they can afford to support themselves. The Government have been clear that vulnerable groups will be exempt, but have not yet confirmed how this will work in practice. Amendment 62C is intended to fill this gap by setting out the vulnerable groups which should be exempt. I am grateful to the organisation Crisis for briefing me on this amendment. It is also supported by Nacro, the Salvation Army, Caritas Social Action Network, Centrepoint, Shelter, Action for Children, St Mungo’s, Homeless Link, the YMCA, the Prison Reform Trust and the Albert Kennedy Trust, so we can be sure that there is a good deal of consensus as to the groups which should be exempt.

The Government have committed to protect care leavers, those with dependent children and those receiving the equivalent of ESA or income support. Young people living in homeless hostels or domestic violence refuges are also expected to be exempt given that they will continue to be funded through housing benefit and not universal credit, at least in the short term. If the groups listed in the amendment are not exempt, there is concern that we could see a further rise in youth homelessness. This could also damage the prospects of the young people affected finding employment. In four years, the number of young people sleeping rough in London has more than doubled, and 8% of 16 to 24 year-olds report recently being homeless. For young adults who are trying to rebuild their lives following a period of homelessness, failure to provide the safety net contained in this amendment—if the protections for the most vulnerable are not sufficient—may make it much harder to keep their lives on track.

For many young people housing benefit is all that stands between them and homelessness. This includes those who have experienced violence or abuse from family members. Some younger adults may be unable to live with their parents because of relationship breakdown but find this difficult to prove—for example, if they have been thrown out because they are gay or if a parent has remarried. To make sure that all young people at risk of homelessness are protected, the list of those who will be exempted from the proposals must take into account all the reasons young people may need support with their housing costs.

The projected savings from this measure are small in relation to the overall savings from the Welfare

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Reform and Work Bill. The Treasury has estimated that this measure will save the public purse £25 million in the first year, rising to £40 million a year in 2020-21. However, if the Government’s exemptions are not sufficient to protect young people at risk of homelessness, greater costs will be incurred. Homelessness is estimated to cost the Exchequer £1 billion a year. Investing in homelessness prevention on the other hand can make significant savings. Recent research commissioned by Crisis found that tackling homelessness early could save the Government between £3,000 and £18,000 for every person helped. The report uses illustrative vignettes, each based on qualitative data from 165 interviews to give an overview of the costs of homelessness. Each vignette explores two scenarios: one where homelessness is prevented or resolved and the other where homelessness persists for a year. One of these vignettes concerns a 19 year-old who is expected to leave the parental home and exhausts sofa-surfing arrangements with friends. In the first scenario she is helped into immediate temporary accommodation in supported housing for four weeks. She then receives a low-intensity floating support service during a short-term return to the parental home, which enables her to make a planned move into suitable shared private rented accommodation. Parental relationships become positive while she is able to live independently and she secures paid work within a year.

In the second scenario the local authority finds her ineligible for the homelessness duty. She receives a list of private rented accommodation but no other assistance. She relies initially on sofa-surfing but negative experiences from these arrangements lead to a deterioration in her mental health. She makes increasing use of homelessness services and uses drugs as a result of stress and depression. She has a non-elective long stay in hospital as a result of the deterioration in her health. She is admitted into a residential detoxification service for six weeks but lack of settled suitable housing presents major challenges. The research calculated that preventing her homelessness in the first scenario cost £1,554. By comparison, this cost rose to £11,733 when her homelessness was not properly resolved, as described in scenario 2. If this young person were unable to meet the eligibility threshold for claiming the housing costs element of universal credit, the first scenario would not be open to her.

I shall go through the groups of young people who would be protected by the amendment. Crucially, the system must be flexible enough to cover more difficult or complex cases. First, I shall address those who are owed a rehousing duty under the Housing Act 1996 and the comparable Scottish and Welsh legislation. By definition, people who are already homeless have nowhere else to live and should be exempted from these proposals or they will be at serious risk of street homelessness. Young people who approach their local authority and meet the statutory definition of unintentionally homeless in Scotland, and of being in priority need in England and Wales, should automatically qualify for support. Local authorities have a statutory duty to house those who meet this threshold, which they will be unable to meet if the young people owed the duty cannot claim the housing costs element of universal credit.

Secondly, I shall address those who are homeless or at risk of homelessness being supported by local authority

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housing options teams. In England, the threshold for priority need is high, however, and most single people will not meet it. Nevertheless, they are owed a general duty of advice and information about homelessness and the prevention of homelessness. Across England, Scotland and Wales, many homeless people are supported by local authority housing options teams to prevent or alleviate homelessness. In England, statutory homelessness guidance advises housing options teams to use family mediation services to prevent homelessness when family or friends are no longer able or willing to accommodate. It is therefore vital that those who fall short of the statutory homelessness threshold, as well as those young people at risk of becoming homeless, are protected.

Thirdly, I address those who are homeless or at risk of homelessness and are being supported by voluntary or statutory agencies into more settled accommodation. While many homeless young people are housed in supported accommodation which will continue to be funded through housing benefit, homeless hostels are not right for everyone who has experienced homelessness. Others may struggle to find a bed space since numbers of beds are declining. Those being supported by homelessness organisations to find and sustain alternative forms of accommodation should therefore be protected. This includes private rented sector access schemes and supported lodgings. Withdrawing support from young people using such schemes would undermine the Government’s own efforts, including significant investment to tackle single homelessness.

Fourthly, I address those who have formerly been homeless as young adults aged 16 or over. People who first become homeless when young are particularly vulnerable to repeat homelessness. To mitigate the risk of people becoming homeless again following a period of stability, it is important that young homeless people who qualify for the housing cost element of universal credit can continue to do so following a change in circumstances up to the age of 21. Young people ready to move on from a homeless hostel or domestic violence refuge must be able to access financial support to maintain a private tenancy, or moving on will be impossible. The chance to move on in this way will in turn enable other young homeless people and those experiencing domestic violence to access hostel and refuge places.

Fifthly, the amendment refers to,

“a person without family or for whom the home environment is not suitable to live in”.

The Government have been clear that those who cannot live at home will be protected. We welcome this commitment, since relationship breakdown is a leading cause of homeless young people no longer being accommodated by parents. A broad exemption to protect young people at risk of homelessness due to family breakdown will prevent young people having to become homeless before they can access support. This protection must apply to those without living parents or parents in the UK, and to those for whom it would be damaging to remain in or return to the family home. For example, up to 24% of homeless youth identify as lesbian, gay, bisexual or transsexual, and in 69% the primary cause identified is rejection or abuse after coming out to parents or caregivers.

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Some young adults need to leave home because the family home is unsuitable or puts them at risk of harm. This may be because of overcrowding, for instance, if the family has downsized due to the social sector size criteria. Overcrowding is a form of hidden homelessness with implications for family cohesion and well-being. In some cases of severe overcrowding, councils may offer to rehouse adult children independently, rather than move the entire family. If young people in overcrowded homes can no longer access housing support, this will not be possible. For some young people, the neighbourhood may be unsuitable: for instance, due to risk of involvement with gangs or other anti-social and unlawful activity. A 2011 cross-government report, Ending Gang and Youth Violence, committed to roll out schemes to rehouse former gang members wanting to exit the gang lifestyle and cited joint police and council projects which seek accommodation for people at high risk from gang violence. This work will be significantly undermined if young people in such circumstances cannot access support for their housing costs.

Sixthly and finally, regarding “those leaving custody”, young people leaving custody are at particular risk of homelessness due to their higher levels of need, vulnerabilities and chaotic lives. Thirteen per cent of young homeless people are offenders and 22% have an offending history. Accommodation is critical for effective resettlement. A return to the family or neighbourhood may expose them or their families to risk of harm and the negative social networks which they are trying to leave behind. An exemption for young people at the point of release will provide stability and support to help them adjust at this critical time, when the risk of reoffending is greatest.

Baroness Hollins (CB): I support Amendment 62C, as spoken to by my noble friend. I do not usually speak on homelessness but I have a keen interest in the mental health and well-being of young people. I am also a huge admirer of Crisis and other charities offering support to people experiencing homelessness. I was extremely concerned to hear that the number of young people sleeping rough in London has more than doubled in four years, and that 8% of 16 to 24 year-olds report having recently been homeless, for reasons such as those outlined by my noble friend—being victims of or at risk of violence or abuse, or a breakdown in family relationships. According to Crisis, tackling homelessness early can save the Government between £3,000 and £18,000 per person. Can the Minister describe exactly which homeless young people will be entitled to the housing costs element of universal credit?

8.15 pm

Lord Best (CB): My Lords, I support Amendment 62C, in the names of my noble friends Lord Low of Dalston and Lady Hollins. This is one of a number of amendments to the Bill addressing issues of special concern to charities seeking to help homeless—very often, young homeless—people.

I see the tension here between the objectives of the Department for Work and Pensions, which is so very concerned to see the huge housing benefit bill reduced, and the objectives of the Department for Communities

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and Local Government, which of course wants to see rising homelessness reduced. It is not going to be possible for the objectives of both departments to be met and a balance between these conflicting aims has to be achieved. It is utterly pointless for the DWP to win in cutting the benefit bill for housing costs if the homelessness position deteriorates further. The supposed savings will then look very paltry, not least when set against the costs to other government departments in physical and mental health, social care, criminal justice and more. This anxiety that cost-cutting measures will undermine homelessness charities is reflected in the list of 12 charities seeking to persuade your Lordships to accept this amendment, as set out by the noble Lord, Lord Low, with Crisis as the co-ordinator of their efforts. They are a roll-call of nationally important charities trying very hard to tackle the horrors of homelessness.

Amendment 62C addresses a key concern of the charities, which has been very well spelled out by my two colleagues: that the vulnerable 18 to 21 year-olds who come within the priority categories set out in the amendment will no longer be able to get enough financial help with their rent to obtain the accommodation and support which they need and which the charities and local authorities can organise or provide for them if the rental funds are forthcoming. If the charities have to turn away young people because they are denied access to sufficient support with their rent, then street homelessness—as the noble Baroness, Lady Hollins, has said, it has doubled in London since 2011—will get worse. That means more young people sleeping rough and facing the cold, the abuse, the violence and the illness that goes with that.

Later amendments in my name also address the same issue of the problems which will emerge if benefit payments for housing—in this case, the entitlement to the housing element in universal credit—are reduced for vulnerable young people. The other reductions, for us to discuss in detail later, which potentially affect housing costs for young homeless people are, first, the proposed 1% per annum cut to social housing rents, which could put some social housing charities out of business and, secondly, the new idea that rents in social housing should be capped at the local housing allowance levels set for private landlords, although the charities’ rents may include special support services that no private landlord would ever supply.

I am making the overarching point in respect of all these cuts that the DWP’s earnest desire to reduce the costs of housing benefit—in future, of universal credit—really must avoid crushing efforts to help those who are or will be homeless. To save time in our later deliberations, I simply flag up the common policy point which relates to all these amendments, since the Minister may want to respond in the round. I hope that he can provide reassurance that the DWP’s different ways of reducing benefits for housing will stop short of squeezing those people in the most acute difficulty and those bodies desperately trying to help them.

I think all of us, and every Government I have worked with over the last 45 years, have been clear that we must give special attention to trying to ensure that young people at risk of homelessness are supported. If

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we fail, and yet another young person ends up living on the streets, it is incredibly hard for that person to keep away from crime, alcohol, drugs, depression and ill-health and to get back on their feet, as we all know and as was so well illustrated by the example quoted by the noble Lord, Lord Low.

I feel sure the Minister gets this and has no desire for the Government’s welfare cuts to pull the rug out from under the charities that are trying so hard to address the evils of homelessness. This amendment would remove one of the new threats to these bodies continuing their vital work by ensuring a range of vulnerable young people are not going to be denied housing support just because they are aged 18 to 21 and will be in at least no worse a position to pay their rent than those who are older. Indeed, 18 to 21 year-olds may have a greater need for help simply because they are young. I commend the amendment to the Minister and hope he will be able to tell us that Government recognise the case being made and have no intention of harming the vital work of the charities that can offer a life-saving lifeline to very vulnerable young people.

The Earl of Listowel: My Lords, I rise very briefly to support the amendment of my noble friends. On a visit to a Centrepoint hostel in Soho several years ago, I spoke with a very young girl—16 or 17 perhaps—and asked her why she was there. She said that her mother had a new boyfriend who did not want her around. The OECD said in its report on family formation that this country will overtake the United States in the 2030s in terms of the numbers of young people growing up without a father in the home. We have to think about the changes in families and about the Children’s Commissioner’s report on the sexual exploitation of children. Most sexual exploitation takes place within the family, from people within the family who the children know. Some 90% of lone parents are going to be women, and if different men are regularly coming into the household, this issue of girls in such households having worries about sexual exploitation or being sexually exploited also has to be considered. I commend the amendment to the Minister.

Lord McKenzie of Luton (Lab): My Lords, as your Lordships have heard, we have added out name to Amendment 60 in the name of the noble Baroness, Lady Manzoor, and I cannot think why we did not do likewise for Amendment 62C, which we support and which also has the support of the noble Baroness, Lady Hollins, the noble Lord, Lord Best, and the noble Earl, Lord Listowel.

The proposition to remove access to the housing element of universal credit for 18 to 21 year-olds from April 2017 has been some time in the making. Its progression—or, more likely, regression—can be tracked from a series of references by the Prime Minister at his party conference. Its original focus was to remove housing benefit for people aged 16 to 24, but this has now been narrowed, as we have heard, to 18 to 21 year-olds for universal credit. There are of course already lower levels of housing benefit allowances for single people under 25 and couples under 18, as well as restrictions under the shared accommodation rate. Can the Minister

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confirm that the Prime Minister’s desire to have an extended denial of housing benefit or universal credit for 16 to 25 year-olds is now off the agenda? The rationale for the policy has a familiar refrain:

“This will ensure young people in the benefits system face the same choices as young people who work and who may not be able to afford to leave home”.

That is a simplistic view of the choices facing many young people and in any event ignores the fact that housing benefit can be claimed by those in work.

This policy is being introduced at the same time as the new youth obligation for 18 to 21 year-olds on universal credit—the so-called boot camp. As the noble Lord, Lord Low, points out, we are promised that there will be exemptions, and the amendment is probing what might be available. The policy starts from April 2017 for 18 to 21 year-olds who are out of work. Can the Minister confirm specifically that there will be protection for vulnerable claimants, as spelt out by the noble Lord, Lord Low, and that they will definitely include those with recent experience of work, young people living in homeless hostels or domestic violence refugees, care leavers, those with dependent children, those receiving ESA, or its equivalent, or income support and those who cannot live at home?

Like the noble Lord, Lord Low, we are grateful for the briefing provided by Crisis and its insights into the consequences of these proposals should they not be ameliorated—in particular, the consequences for those who are homeless or who have experienced or are at risk of homelessness. Its briefing reminds us that if the protections and exemptions are not sufficient, any savings from this measure will be wiped out by costs elsewhere, mostly from increased homelessness.

The policy has generated a range of criticism, as we have heard. The Chartered Institute of Housing says that it could mean young people being less willing to take risks in moving for work because of the removal of a safety net. Centrepoint says that claiming housing benefit is for many a short-term solution to a situation they find themselves in, providing them with a safety net from which they can get their lives back on track. Shelter opposes the measure because it asserts that,

“every young adult deserves somewhere safe and decent to live”—

and who could disagree with that?

House of Commons briefing paper number No. 06473 of 26 August 2015 refers to the Uncertain Futures paper published by YMCA England. This points out that, of the estimated 3.2 million 18 to 21 year-olds, just over 19,000 young people are currently claiming jobseeker’s allowance and housing benefit, and that 71% of the 18 to 21 year olds who access JSA do so for less than six months. It also points out that 7,200 young care leavers between 19 and 21 years-old in England are currently out of work and would potentially be able to claim JSA and housing benefit and that nearly 1,400 18 to 21 year-olds are currently living in YMCA supported accommodation and claim JSA and housing benefit. It points out, on lifestyle choice and the assertion that people just want to live on the dole, that most young people are entitled to £57.90 a week in JSA—frankly, what we would blow on a meal at the weekend.

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YMCA England concludes:

“By removing automatic entitlement to Housing Benefit for 18 to 21 year olds the Government could be in danger of inadvertently taking away support from the young people who need it most and in doing so, exposing many more vulnerable young people to the risk of becoming homeless and therefore damaging their prospects of finding work in the future. Action is needed to address youth unemployment, but without protections thousands of vulnerable young people will face uncertain futures, not knowing if they will have anywhere they can call home and leaving them less able to find work”.

Lord Freud: My Lords, the Government’s policy proposal is to remove automatic entitlement to the housing cost elements of universal credit for certain young people aged 18 to 21. I confirm to the noble Lord, Lord McKenzie, that that is the Government’s policy. It will apply only to relevant 18 to 21 year-old claimants who make new claims in the areas where UC digital has rolled out. This will ensure young people in the benefits system face the same choices as young people who work and who may not be able to afford to leave the family home.

I start with the amendments tabled by the noble Baroness, Lady Manzoor. It is not fair that taxpayers should have to pay for young people who are not working to be able to live independently when young people in work or education may not be able to afford to do so. Having said that, the Government recognise that vulnerable people need to be protected. Work is currently being undertaken with a wide range of stakeholder groups to understand who these vulnerable young people may be. I can reassure the noble Baroness that the policy will not stop people looking for work in other areas of the country in the same way that young people not reliant on benefits can look for opportunities away from where they live.

We need to complete the consultation work in order to ensure that a robust policy is put in place. I acknowledge the remarks of a wide range of noble Lords, including the noble Lord, Lord Low, the noble Baroness, Lady Hollins, and the noble Lords, Lord Best and Lord McKenzie, but we are doing this work. It is too soon to make decisions on the specific exemptions that will be applied, but we will bring forward detailed proposals once the work is completed—although, to anticipate the question, that will not be in time for Report. Indeed, to jog back to the previous amendment, I do not anticipate that the work on the work allowances that we discussed in UC would be done in time for Report. As I mentioned previously, the change will apply only to new universal credit claims from April 2017.

8.30 pm

On the amendment tabled by the noble Lord, Lord Low, we recognise that there will be vulnerable young people who do not have the stability of a family home to rely on, and we want to do everything we can to help them. That is why we will ensure that the exemptions that I have just discussed will be in place to protect those who are vulnerable. We are discussing this policy with landlords, housing associations, including Crisis, and charities. As these groups are often closest to young people, they have a unique perspective on the support that they require.

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I shall leave the rounder issues raised by the noble Lord, Lord Best, until we move into housing, which will be later on in the consideration of this Committee. I urge the noble Baroness to withdraw her amendment.

Baroness Manzoor: I thank all noble Lords who took part in discussing the two amendments. I am very grateful to the Minister for stating that there are likely to be exemptions in certain aspects of this area. Of course, my amendment referred to current entitlement—the 16 year-olds who currently are entitled to housing benefit—and I wanted to safeguard that same provision for the future, for the reasons so well articulated by noble Lords. I personally would have preferred to see what the exemption said.

On that basis, I am particularly keen to explore this area much further, because I am very concerned about those of 16-plus and the fact that they are excluded from the 18 to 21 year-old group, for their vulnerability in terms of work and where they are going out to work. I am thinking of someone living in a small village. That comes to mind when I think of two young people who may well be searching for work; they are very likely to go into low-paid work. That means that if they are going into the city, which is quite a number of miles away from them, they cannot come backwards and forwards from home. In fact, it would be very expensive for them to do so, so they would be looking for accommodation in the cities. They would be unable to do so as matters stand, under this Bill.

I feel very strongly that there needs to be a clause such as the one that I have indicated. Indeed, I take on board the other amendment—and like other noble Lords I am not sure why I did not have my name to it. I understand where the noble Lord, Lord Low, and others are coming from.

I give notice that I shall come back to this amendment on Report. On that basis, I beg leave to withdraw the amendment.

Amendment 60 withdrawn.

Amendment 61

Moved by Baroness Donaghy

61: After Clause 15, insert the following new Clause—

“Self-employment and minimum income floor

In Schedule 1 to the Welfare Reform Act 2012 (universal credit: supplementary regulation-making powers), in paragraph 4, at end of sub-paragraph (4) insert “, and may prescribe modifications of such provisions in respect of particular persons or classes of persons”.”

Baroness Donaghy (Lab): In moving Amendment 61, I shall speak also to Amendment 66 in my name. The detailed amendment comes before the general one, but it is about the self-employed—and the Minister will not be surprised by that because I raised this in the Welfare Reform Bill discussions. I am coming back to haunt him.

With approximately 4.8 million self-employed people, this is an important area for growth in our economy, which makes it even more surprising that this Bill

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makes no reference to the particular and varied needs of the self-employed at such time that they might need some support from the social security system. I am grateful to the Low Incomes Tax Reform Group for its briefing.

Amendment 66 would add a new reporting obligation on the Government about self-employment and the impact of the minimum income floor in particular. The self-employed are a very diverse group which includes freelancers, farmers, seasonal traders and workers in construction and IT. Their needs will be different if their businesses are start-ups or are ongoing business. We need an annual government assessment. Some will take up to five years before their business is viable, and some will experience extremes of volatility in their income depending on their profession. We do not know enough about how this diversity fits into the social security system. The self-employed might be flexible, but their experience of the system is anything but.

I am arguing for a different system for the self-employed and for groups within the self-employed, particularly bearing in mind the Chancellor’s announcement that the minimum income floor will be the equivalent of the national living wage from next April, when it was originally the statutory national minimum wage. That is comparatively good news for the employed, but is bad news for the self-employed. To require the self-employed claimant to achieve an earnings pattern similar to that of the employed claimant is fundamentally to misunderstand the nature of profit and to ignore the fact that a business has to meet its costs and expenses before it can declare a profit. They include rent, heating, lighting, office equipment, vans, tools et cetera.

Reporting to Parliament would help to reveal what work is organised and regular under the new, much more stringent test to qualify for working tax credit. It would help to reveal how monthly reporting to DWP for universal credit purposes adds to the difficulty in the lives of the self-employed. This also has to be seen in the context of the Chancellor’s recent announcement that small businesses will have to report quarterly from 2020 instead of annually, just as our largest companies are dropping quarterly reports to their shareholders. Apparently, it is going to be made easy because the Government are,

“going to build one of the most digitally advanced tax administrations in the world”.—[

Official Report

, Commons, 25/11/15; col. 1361.]

Does that statement not fill you with terror?