21 Dec 2015 : Column 2303

House of Lords

Monday, 21 December 2015.

2.30 pm

Prayers—read by the Lord Bishop of Southwark.

Death of a Member: Lord Janner of Braunstone


2.36 pm

The Lord Speaker (Baroness D'Souza): My Lords, I wish to inform the House of the death of the noble Lord, Lord Janner of Braunstone, on 19 December. On behalf of the House, I extend our condolences to the noble Lord’s family and friends.

Railways: Suicides


2.36 pm

Asked by Lord Faulkner of Worcester

To ask Her Majesty’s Government how they plan to reduce the number of suicides on railways, and to reduce the disruption they cause.

Lord Faulkner of Worcester (Lab): My Lords, I beg leave to ask the Question standing in my name on the Order Paper and remind the House of my railway interests declared in the register.

The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con): My Lords, the Government are fully supportive of initiatives which the rail industry is taking, led by Network Rail, in liaison with the Samaritans and other organisations, to reduce the number of suicides on the network. They are beginning to show results. The initiatives include measures to reduce the ease of access to platforms passed by fast trains and to train staff to intervene to help people near the railway who may be in a distressed state.

Lord Faulkner of Worcester: My Lords, I am sure the Minister will agree that it is impossible to exaggerate the distress and disruption caused by people taking their own lives on the railway to the bereaved families and friends, to station staff and passengers who may witness the event and to the train drivers affected, many of whom are so traumatised that they never drive again. British Transport Police tells me that fatality delays this year will amount to more than 455,000 minutes and that the number is rising. Does the Minister agree that the railway cannot tackle this problem on its own and that, while much is being done with bodies such as the Samaritans, which he mentioned, there needs to be a national campaign involving the Government, the civil police, mental health professionals, rail staff and the travelling public to identify people at risk and discourage them from harming themselves on our railways?

21 Dec 2015 : Column 2304

Lord Ahmad of Wimbledon: My Lords, the noble Lord is quite correct to point out the challenges that we face on the railways in particular. Of course, any suicide is one too many. As he will be aware, the Government have been working very closely with the Samaritans and over the past 18 months have invested £1.2 million to finance suicide prevention initiatives. The newly formed suicide prevention duty holders group brings together the very multiagency partnership he talked about. There is more to be done, including bringing together those who are impacted. The noble Lord talked about the cost. The cost to the rail network and beyond to the economy is £60 million, but the loss of life is far too great. We need joint working, and the Government are moving forward on that agenda.

Lord Balfe (Con): My Lords, I declare an interest as a trustee of a charity that deals with post-traumatic stress disorder among staff who witness these tragic events. The level of support offered to staff, who are often severely traumatised by the incidents they are called upon to witness, is pathetically low. Will the Minister approach the different unions and other actors to try to get a co-ordinated policy to help staff who are witnesses to overcome the problems they will often face as a result of these actions?

Lord Ahmad of Wimbledon: My Lords, I am sure that my noble friend is aware of the Journey to Recovery initiative, which was aimed specifically at rail drivers going through trauma. That has now been extended to other staff, with Back on Track being a particular initiative. On the issue that my noble friend has raised, there is already positive joint working. Network Rail, for example, is working closely with trade unions in this respect to ensure that those who suffer trauma are, to quote the report, put “Back on Track” as soon as possible. As I have acknowledged, though, there is more work to be done.

Baroness Hollins (CB): My Lords, suicide on the railways is a very public form of suicide. One of the risks of members of the public seeing a suicide is the possibility of copy-cats. As the rate is going up, I wondered whether there was any evidence of that happening. Given that suicidal thoughts are very common in the population at large, does the Minister consider that more could be done—for example, by the Samaritans—in advertising help on every single railway station to assist people who may be having suicidal thoughts at the time when they see such a death?

Lord Ahmad of Wimbledon: Part of the Government’s initiative is to work together with bodies such as the Samaritans on national public awareness campaigns. There are physical things that we have done: for example, dividers on platforms, which have resulted in a decline in numbers of attempts at stations where they have been deployed. However, the noble Baroness is quite correct: information to travellers, not just to staff, is an important part of this. She rightly points out that media coverage sometimes leads to copy-cat suicides, and we are working to ensure that that is kept to a minimum to discourage such practices from taking place.

21 Dec 2015 : Column 2305

Baroness Randerson (LD): My Lords, the role of the British Transport Police is crucial in dealing with these very sad events, and there are other events that cause disruption to the railway that the British Transport Police is also very closely concerned with. I was therefore very sad to read last week stories about potential cuts to the British Transport Police budget next year. Are those stories true? Will funding to British Transport Police be cut next year? If so, by how much?

Lord Ahmad of Wimbledon: We work very closely across the board with the British Transport Police on this issue. The noble Baroness may well be aware that initiatives are being taken—right here in the capital, for example—to increase police patrolling to ensure that we minimise not just suicide prevention, as she points out, but also hate crime that takes place on our networks. We seek to minimise that and we work together with the police on ensuring this.

Lord Rosser (Lab): The Minister has already made reference to dividers on platforms. If he is talking about the same thing that I am, he will know that on the Jubilee line extension from Westminster eastwards at stations below ground level there are barriers at the edge of the platforms that also have the effect of preventing people from jumping in front of an incoming train. Are the Government pressing for such barriers to be extended to more stations on the London Underground in a bid to reduce the number of suicide attempts?

Lord Ahmad of Wimbledon: The noble Lord is right to point out that those have proven to be successful prevention barriers. The prevention barriers that I was referring to, those within Network Rail stations, physically divide the platforms and manage commuter traffic. We are looking at ensuring that prevention measures can be accommodated where possible in existing stations to prevent suicides. As I said, one suicide is one too many.

Lord Cormack (Con): My Lords, how many mainline stations have a chaplaincy service where priests and leaders of other faiths are available to talk to people who may be in such distress that they contemplate this awful final act?

Lord Ahmad of Wimbledon: In response to my noble friend, we are already working closely with the Samaritans, which I have already alluded to and who are the key providers of this support both to staff and to the travelling public. A poster campaign underlining that has also been launched.

VAT: Evasion


2.44 pm

Asked by Lord Lucas

To ask Her Majesty’s Government what action HM Revenue and Customs is taking to reduce VAT evasion by overseas online retailers.

Lord Ashton of Hyde (Con): My Lords, Her Majesty’s Revenue and Customs takes all forms of evasion seriously. HMRC has established a task force to undertake

21 Dec 2015 : Column 2306

operational and intelligence-gathering activity to investigate this form of VAT evasion by overseas online retailers. Joint investigations with other government agencies are already under way and further targets are being identified. Contacts have been established with key commercial players in the sector and liaison continues with relevant international fiscal and law enforcement authorities.

Lord Lucas (Con): My Lords, I thank my noble friend for that encouraging reply. As HMRC knows, for some long while Amazon and eBay have been collaborating with hundreds of overseas retailers to defraud the taxman of millions of pounds every day. It seems that HMRC has been very slow in its response. Does HMRC realise the importance of effective and speedy enforcement for the fairness of the tax system and for the protection of honest internet retailers, and why has it been so reluctant to work openly and actively with UK businesses that know this part of the internet backwards and are in a position to help it make its enforcement effective and speedy?

Lord Ashton of Hyde: My Lords, HMRC certainly engages with other businesses, in particular with online businesses, and has dedicated customer relationship managers. A meeting with the top online retailers at a very senior level took place only last month. HMRC has dedicated 25% of its customs and international trade operational resource to this problem and has set up a national task force to deal with it.

Lord Davies of Oldham (Lab): My Lords, ever since 2010, when this Chancellor came into office, I have been astonished that ideology has triumphed over rationality and that the Government, while purporting to have a campaign against tax evasion, are slashing the staff numbers in the Inland Revenue. Can the Minister give an assurance today that the drastic cuts proposed for the Inland Revenue will not result in the dismissal of any staff whose returns to the Revenue are greater than the costs of their employment?

Lord Ashton of Hyde: My Lords, in the spending review the Chancellor confirmed that HMRC is making savings of 18% in its own budget through efficiencies. Of course, in this digital age we do not need taxpayers to pay for paper processing or 170 separate tax offices. However, the Government are reinvesting £1.3 billion of their savings in HMRC to transform it into one of the most digitally advanced tax administrations in the world.

Lord Leigh of Hurley (Con): My Lords, I declare an interest as a director of a chain of retailers with 200 shops and a member of the Chartered Institute of Taxation. The problem is with non-established taxable persons. The solution is either to implement Article 14 properly or to bring in regulation—which we are allowed to do by derogation because it is evasion—and push the problem back to the retailers so that they police the evasion of tax.

21 Dec 2015 : Column 2307

Lord Ashton of Hyde: My Lords, on whether online platforms should be made liable for VAT and duty, HMRC is looking at all possible solutions now and cannot rule anything in or anything out.

Lord Lea of Crondall (Lab): My Lords, is the noble Lord aware that some years ago—10 years ago, I think—one of the sub-committees of the European Union Committee looked at e-commerce, and we were astonished to find that there were almost no data within Europe? I know the issue goes wider than Europe, but that is one area where transfer pricing is a big issue. One cannot be surprised, therefore, that multinationals run rings around HMRC. Will the noble Lord look into this question of data collection so that the Inland Revenue data match the Board of Trade data on how much e-commerce there is, which is not the case now, rather than it being treated as insignificant in numerical terms?

Lord Ashton of Hyde: The noble Lord is absolutely right to identify data as one of the crucial enforcement tools. The task force has been set up, first, to enable cross-government co-operation with other government agencies and, secondly, to look at issues such as data.

Baroness Janke (LD): My Lords, have the Government considered a packaging tax on these companies to discourage the wasteful use of wrappings and to contribute to the cost of their disposal?

Lord Ashton of Hyde: My Lords, that is some way from the subject of VAT evasion. I am not aware that the Chancellor has considered a packaging tax; if he has, he has not informed me.

Baroness Farrington of Ribbleton (Lab): My Lords, in answer to my noble friend Lord Davies, the Minister referred to efficiency savings. When the current level of efficiency is improved, how long will people have to wait for telephone calls to be answered, or will they have to wait longer?

Lord Ashton of Hyde: Obviously the idea is that they will not have to wait longer. I think everyone at HMRC has acknowledged that the service provided to individual taxpayers was substandard. That is why it recruited more people and has more people in training. HMRC expects that the service will be improved, as do we all.

Lord Foulkes of Cumnock (Lab): My Lords, has the Minister had the opportunity to look at John Swinney’s first Scottish budget using the extensive tax powers that have already been devolved to Scotland? He used none of those powers to carry out his so-called anti-austerity programme. In view of the fact that we are now being asked to give the Scottish Government even more powers, will the Government support the amendment to the Scotland Bill put forward by my noble friend Lord Maxton to the effect that if the Scottish Government do not use those powers, they should lose them?

Lord Ashton of Hyde: My Lords, again, that is some way from VAT evasion. I am afraid that I have to say to the noble Lord that I have not studied John Swinney’s budget very carefully.

21 Dec 2015 : Column 2308

Pregnancy: Neural Tube Defects


2.51 pm

Asked by Lord Rooker

To ask Her Majesty’s Government whether they have any proposals to minimise the risk of neural tube defective pregnancy in women of reproductive age.

The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, the Government are looking at all aspects of preconception health. This includes the uptake of folic acid, which can reduce the risks of neural tube defects. Women are advised to take a supplement of 400 micrograms of folic acid from several weeks before conception until the 12th week of pregnancy. This information is available on the NHS Choices website.

Lord Rooker (Lab): My Lords, is the Minister aware that on four occasions his predecessor told the House that the Government were awaiting information on blood folate levels? It was published nine months ago yesterday and we have had no statement whatever about it. Has the Minister had the chance to look at the scientific paper published last week showing that, if the UK had adopted white bread flour fortification at the same time as the United States of America, there would have been 2,000 fewer neural tube defect-affected pregnancies in the UK? There is now a spina bifida epidemic in Europe, which there is not in the 80 countries that fortify flour with folic acid. Surely it is time for action.

Lord Prior of Brampton: My Lords, I pay tribute to the noble Lord for the extraordinary work that he has done in this field and for giving this very important and tragic issue a greater degree of public awareness. My honourable friend in the other House, Jane Ellison, the Minister for Public Health, is considering her response to the report that the noble Lord referred to and to the report by the SACN, the committee on nutrition, published on 20 October. I expect that she will come to a decision early in the new year.

Baroness Walmsley (LD): My Lords, given the importance for the health of the foetus of folic acid being taken by women before they are pregnant, will the Minister work with his colleagues in the Department for Education to ensure that all young women—and young men—know the importance of taking folic acid long before they even think of becoming pregnant?

Lord Prior of Brampton: The noble Baroness is absolutely right. When you know you are pregnant, it is too late to start taking folic acid, and that is the fundamental reason why the noble Lord, Lord Rooker, is pushing for fortifying flour with folic acid. However, she is absolutely right that education is fundamental to this as well.

Baroness Hayman (CB): My Lords, is the Minister aware that the best tribute that he could pay to the noble Lord, Lord Rooker, and his campaign would be to make an early and positive decision on the fortification of white flour in this country? How long are the

21 Dec 2015 : Column 2309

Government going to go on not taking any notice of either the scientific evidence or the evidence in practice from 78 other countries? I remember the definitive trial proving the benefit of folic acid in pregnancy in 1991. We have seen that advice alone does not work. When will the Government take action?

Lord Prior of Brampton: My Lords, as I said in my response to the noble Lord, Lord Rooker, this matter is being actively considered by the Minister for Public Health, and she expects to come to a decision very early in the new year.

Baroness Gardner of Parkes (Con): My Lords, we have unanimous feeling here. I was going to quote the statement made on a previous occasion by the noble Lord opposite that, really, we in this House are pretty well unanimously in favour of this and cannot see anything wrong with it, and yet the action has not followed.

Lord Prior of Brampton: My Lords, when my noble friend says that this House is almost unanimously agreed she may well be right. However, the decision on this matter has to be taken in the other House. As I said, my honourable friend Jane Ellison, the Minister for Public Health, is going to come to a decision very quickly.

Lord Turnberg (Lab): My Lords, we seem to have been for ever on this particular question. There is an irrational fear that somehow it is dangerous to fortify flour, and this has held up people in some way or other. But scientifically that does not bear fruit. It is clear from all the experience around the world of many years of fortifying flour with folic acid that it does work. We should be doing it here now.

Lord Prior of Brampton: My Lords, I am certainly not going to argue on clinical grounds with the noble Lord, who knows far more about this than I do. However, the issues are not purely clinical; they are to do with the mass medication of the whole population to reach a very small minority of women of child-bearing age. There are also some administrative issues to do with making sure that people do not take too much folic acid, as some cereals have folic acid added to them. However, I understand exactly what the noble Lord is saying, and can only repeat that the Minister for Public Health is reviewing this now.

Lord Blunkett (Lab): Can I surprise the Minister and not necessarily upset my noble friend Lord Rooker, but put down a word of caution? I agree with what the Minister has just said about having great caution when we involve ourselves in any mass medication—I have a history of being awkward on these issues, including mass medication through the water supply. I have no doubt whatsoever that this is an effective way of tackling the problem, but I have every concern that it is a slippery slope that we go down with great care.

Lord Prior of Brampton: My Lords, I think they were helpful and wise words from the noble Lord, Lord Blunkett. This is a difficult issue, and it is not as

21 Dec 2015 : Column 2310

black and white as is sometimes portrayed. As I said, my honourable friend in the other House is taking all these matters into consideration.

Lord Hunt of Kings Heath (Lab): My Lords, I must inform the House that I am president of the Fluoridation Society. Therefore, although I always welcome my noble friend Lord Blunkett’s interventions, perhaps I welcome this one not quite as much as usual. I have great respect for the Minister’s colleague, the Minister for Public Health, and know that she is committed to public health. But she has had the evidence from the research, which caused the Government to delay a decision, for nine months. Is it not a fact that she cannot get agreement inside government, and that the Government have decided not to go ahead? Is not it time for them to be straight on this?

Lord Prior of Brampton: My Lords, I do not think that what the noble Lord has said is entirely correct. My honourable friend Jane Ellison received a letter from the SACN, the committee on nutrition, on 20 October that indicated that many more women were below the foliate level than had previously been thought. That evidence is quite new and came in at the end of October. That is what she is now considering.

Lord Patel (CB): My Lords, the Minister has said that he is against mass medication. Do we really think that this is mass medication? We are talking about adding to flour micro amounts of nutrition that is lacking, to give a choice to people: if they intend to get pregnant, they eat bread made from that flour and not unfortified flour.

Lord Prior of Brampton: Just to correct the noble Lord. I did not say that I was against mass medication; I said that it was one of the things that should be considered. It is also worth saying that, even if there was mass medication, it probably would affect between 15% and 30% of women who have babies with neural tube defects and not all women.

Counterterrorism: Muslim Communities


2.59 pm

Asked by Lord Pearson of Rannoch

To ask Her Majesty’s Government whether, as part of their antiterrorism strategy, they will encourage leaders of the United Kingdom’s Muslim communities to identify, confront and expose their violent co-religionists.

The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con): My Lords, we welcome, acknowledge and indeed thank the many people who are already confronting extremism in this country. The Government are absolutely committed to strengthening our partnership with all those who want to see extremism defeated in all its ugly guises.

21 Dec 2015 : Column 2311

Lord Pearson of Rannoch (UKIP): My Lords, I thank the noble Lord for that reply. I suppose that it would be dangerous for our Muslim friends to fulfil this Question with the energy which many people would like. Does the noble Lord agree that our Muslim leaders also face the problem that there are more than 100 verses in the Koran which order violence towards non-Muslims and so give theological justification to the jihadists? What does the noble Lord have to say about those verses, not to mention the bellicose example of Muhammad himself, which all Muslims are supposed to follow and which therefore undermine the Government’s strategy?

Lord Ahmad of Wimbledon: I can say clearly that I totally disagree with the noble Lord in his assertion about the holy scripture and the example of the holy Prophet of Islam. What is true, is fact and is real in this country is that Muslim contributions today, yesterday and for many decades—indeed, centuries—have been widely acknowledged as a positive contribution to the progress of this country, and long may it continue.

Lord Morris of Handsworth (Lab): My Lords, does the Minister agree that the so-called co-religionists are to be found in nearly all communities, not just the Muslim community?

Lord Ahmad of Wimbledon: What is important is that we must stand together and unite against all forms of extremism. I acknowledge that Islam is being challenged by those who seek to hijack a noble faith and misrepresent it. I commend the fact that we as a country—all communities and all faiths—come together in saying, “Not in our name”.

The Lord Bishop of Peterborough: My Lords, does the Minister agree that there is a danger that asking questions in this way and hearing questions in the way that some might could demonise the Muslim community, the vast majority of whom are peace-loving and are as appalled by terrorist acts as the rest of us? Will the Minister agree that it would be far better to ask faith communities and others of good will to work together for social cohesion?

Lord Ahmad of Wimbledon: The right reverend Prelate is of course correct. It is the Government’s view and, indeed, the view of our country, that no one should be demonised. We celebrate the diversity of our country and the fact that we are a multifaith society, with everyone contributing. I acknowledge the fact that, yes, the Government are committed—as I believe all in this House are committed—to ensuring the strengthening of partnerships.

Lord Lamont of Lerwick (Con): My Lords, is the Minister aware that the last time the noble Lord, Lord Pearson, intervened on this subject, he circulated to some of us a piece of paper in which he claimed that the Prophet Muhammad renounced the verse in the Koran saying, “To each his own religion”. I checked this with an imam in London and found that what the noble Lord said was quite incorrect. Through the

21 Dec 2015 : Column 2312

Minister, I extend an invitation to the noble Lord, Lord Pearson, to come with me to the mosque I visited in north London recently where it was explained to me that, contrary to what he has said, the word “infidel” or “kafir” does not mean non-Muslims—Christians and Jews—but people who do not act according to God’s will and can apply to Muslims as well. Is it not absurd for the noble Lord, Lord Pearson, to set himself up as an authority on the Koran?

Noble Lords: Hear, hear.

Lord Ahmad of Wimbledon: I could not agree with my noble friend more. I also acknowledge receipt of the documents sent by the noble Lord, Lord Pearson. But I rely on the interpretation of God and his noble Prophet rather than, with respect, the interpretation of my faith by the noble Lord, Lord Pearson.

Lord Singh of Wimbledon (CB): My Lords, does the Minister agree that much of the conflict in the Middle East and the radicalisation of young Muslims in this and other countries is due to the export of a cruel and medieval interpretation of Islam from Saudi Arabia that has been rightly criticised by Dr Shuja Shafi, the Secretary General of the Muslim Council of Britain? Should we not be doing much more to help people counter this extreme interpretation of their faith, which is doing incalculable harm to the image of Islam?

Lord Ahmad of Wimbledon: I thank the noble Lord, and as the Government Minister responsible for countering extremism, no one is more committed to ensuring that we unite to face up to the hijacking of a noble faith.

Lord Paddick (LD): My Lords, I was the police spokesman following the 7 July bombings in 2005. In a press conference, I said that as far as I was concerned, Islamic terrorism was a contradiction in terms. I went on to say that from my professional experience as a police officer, the UK was a much better and more law-abiding country for having strong Muslim communities. I stand by what I said then. Does the Minister agree with me?

Lord Ahmad of Wimbledon: I totally agree with the noble Lord, and perhaps I may put this into context. It is why our Prime Minister said recently when referring to Daesh that it is neither Islamic nor is it a state. That underlines how we deal with those who seek to hijack the noble faith in this country.

Lord Rosser (Lab): My Lords, in November the Muslim Council of Britain took out an advert in the national press to underscore the united condemnation by Muslims of terrorism, especially after the Paris attacks. On 9 December thousands of Muslims took to the streets of London to participate in a peace rally, which received limited media coverage, presumably because such a story does not sell papers. Does the Minister think that all who are in a position to do so, whether they are individuals or organisations, have a responsibility to reflect in what they say and write the real abhorrence and rejection of terrorist activities by all key sections of our diverse nation?

21 Dec 2015 : Column 2313

Lord Ahmad of Wimbledon: It is not often that I have the opportunity to say this, but I totally agree with the noble Lord and I wish everyone a merry Christmas.

European Council

Private Notice Question

3.07 pm

Asked by Lord Boswell of Aynho

To ask Her Majesty’s Government what progress the Prime Minister made at the European Council meeting on 17 and 18 December towards reaching an agreement on EU reform.

The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con): My Lords, the Prime Minster has clearly set out the four areas of our renegotiations: economic governance, competitiveness, sovereignty and migration/welfare. The discussion of the UK’s EU reform agenda at the European Council on 17 and 18 December was, as European Council President Tusk said, an opportunity to focus minds on the trickiest areas of our reform agenda, notably on in-work benefits for EU migrants. As the conclusions from the European Council set out, the Council agreed to work closely together to find mutually satisfactory solutions in all four areas of our reform agenda at the European Council meeting of 18-19 February 2016.

Lord Boswell of Aynho (Non-Afl): My Lords, I thank the noble Baroness for her response and her indication of some progress having been made at the European Council meeting. However, does she acknowledge that if I had not tabled this Private Notice Question, the House would simply not have been given a chance to consider reform until mid-January, which is half way to the next and what will probably be the decisive European Council meeting in mid-February? Why did the Government not offer an Oral Statement, and can the noble Baroness at least now give an undertaking that the Government will honour their commitment to keep Parliament informed, thereby living up to their declared belief in the vital role of national parliaments within the European Union?

Baroness Anelay of St Johns: My Lords, as the other place rose last Thursday, my right honourable friend the Leader of the House made it clear that the Prime Minister would make a Statement on the first day back when the other place sits, which is Tuesday 5 January. I accept that protocol means that it was not possible to give the title of the Statement, but the mere fact that it is a Prime Ministerial Statement was indicative. I can give an assurance to the noble Lord that this Government take their responsibility and accountability to Parliament very seriously. I can therefore confirm that the Prime Minister will make a Statement on all matters discussed at the European Council when another place sits on 5 January. As is usually the case when the Houses do not sit concurrently, it would be possible through the usual channels for arrangements to be made, if the Opposition so wished, for the Statement to be repeated here when the House returns.

21 Dec 2015 : Column 2314

Baroness Morgan of Ely (Lab): My Lords, can the Minister confirm that there was no discussion in relation to social provision and workers’ rights at the Council meeting as set down in the treaty? Does she agree that it is essential to keep these rights if we want to retain support for EU membership from workers in this country? Can the Minister also say whether the Prime Minister will give dispensation to all Ministers to campaign on a different side from him in the EU referendum campaign? I have never heard the Prime Minister state clearly and proudly that he is a European citizen. Can the Minister undertake to ask him to state proudly and often that he is indeed a European citizen and that Britain’s future is best served as a member of the European Union?

Baroness Anelay of St Johns: My Lords, my right honourable friend the Prime Minister has made it clear that in renegotiating the terms of membership of the European Union he is acting on behalf of the interests not only of this country but of all members of the European Union. The four areas where we have sought renegotiation would serve all well. Protecting Britain to ensure that countries outside the euro cannot be discriminated against under EU rules, so we keep our economy secure, benefits all members. Making Europe more competitive benefits all members. Ensuring that ever closer union is not going to exclude us may suit others. We have also addressed the issues of migration and welfare. With regard to Ministers, it is clear government policy that the whole Government are behind the process of renegotiation followed by a referendum by 2017 based on that outcome. It has been said many times and I say it again today. The noble Baroness referred in particular to social measures. I know that questions have been asked with regard to the working time directive before, and I can reaffirm that we have an opt-out and we need to protect that. It will need to be part of the final agreement that it is protected within the system.

Baroness McIntosh of Pickering (Con): My Lords—

Lord Wallace of Saltaire (LD): My Lords—

The Lord Privy Seal (Baroness Stowell of Beeston) (Con): My Lords, a Private Notice Question is not the same as a Statement so we do not have to go round the Front Benches in the same way as we do on a Statement. I do not know whether the noble Lord might want to give way to my noble friend Lady McIntosh.

Baroness McIntosh of Pickering: My Lords, as my noble friend the Minister explained, we hear a great deal about Britain’s demands for reform. Other member states have requested reform at the same time, so will my noble friend explain to the House what they were and, in particular, what discussion there was after the Danes rejected in their referendum proposals to opt out of their opt-out?

Baroness Anelay of St Johns: My Lords, there were indeed wider discussions than the renegotiation reform agenda of the United Kingdom. The PNQ refers to a specific part of that. I can reassure my noble friend

21 Dec 2015 : Column 2315

that wider issues such as that of Denmark and on security and terrorism will be dealt with in the Prime Minister’s Statement.

Lord Wallace of Saltaire: My Lords, we on these Benches recognise that the Prime Minister has made very good progress and we wish him luck in finishing the negotiations in February in the national interest. We recognise that there are parallel negotiations to be conducted within the Conservative Party and we hope he will put the national interest before the party interest as well. On the most difficult issues of migration and welfare benefits, will the Government do their utmost to ensure that we are all provided with accurate evidence on the situation? It has always been very difficult to get out of the Home Office and the DWP accurate evidence of how serious the problem is, rather than the campaign promoted by the Daily Mail and others. If we are to have a mature debate on all this as we come up to the referendum, we need to know how much of a problem there is on in-work and out-of-work benefits as a pull factor.

Baroness Anelay of St Johns: The noble Lord is right to say that discussions on a matter as important—a once-in-a-lifetime decision—as the position of the United Kingdom in the European Union should be made in a cool, rational and evidence-based way. With regard to in-work benefits, I simply say that taking a look at the DWP’s own figures for March 2013—the latest usable figures in this connection—shows that about 40% of all recent European Economic Area migrants are supported by the UK benefits system.

Lord Robathan (Con): My Lords, while I hope that we all wish the Prime Minister well in his negotiations—

Noble Lords: This side!

Lord Tomlinson (Lab): Does the noble Baroness agree that this is the second European Council statement where we have had all the broad words about the four areas but no substantive detail? Can she tell this House whether any progress at all was made between the previous European Council meeting and the one held last week? If any progress was made, what is it?

Baroness Anelay of St Johns: My Lords, I shall be brief because others wish to ask questions. First, there is agreement that people who come to Britain cannot claim unemployment benefit for the first six months; we are well on the way to achieving that. The second thing is that people who cannot find a job after six months should either leave and go home or remain here at their own expense. The third thing is the issue of sending child benefit home. We are making very good progress on that and are close to the final decision on it.

Lord Garel-Jones (Con): Does the Minister agree that perhaps the most effective way of reinforcing national and parliamentary sovereignty would be to ensure that the principle of subsidiarity, which has been undermined by the so-called yellow card system, should be reinforced?

21 Dec 2015 : Column 2316

Baroness Anelay of St Johns: My Lords, the European Union Select Committee of this House has made excellent proposals on that, which this Government have endorsed.

Lord Foulkes of Cumnock (Lab): My Lords, as the noble Lord, Lord Boswell, said, is it not a bit embarrassing for the Minister that this matter is being reported to the House only as a PNQ and not being volunteered by the Government, particularly since one of the four things the Prime Minister is supposed to be arguing is greater powers to national parliaments? Will she remind the Prime Minister, and the Leader of this House, that the Government are responsible to Parliament, and not the other way round?

Baroness Anelay of St Johns: My Lords, I have no embarrassment because this Government are responsible to Parliament, and my right honourable friend the Prime Minister is making it clear that he will make a Statement in another place. Both Houses will then obviously have an opportunity to comment on it. Perhaps the history books will show that I am wrong but I would be surprised if this House made a Prime Ministerial Statement in recent years when the Prime Minister was not a Member of this House. That would be an unusual step, and one that the Labour Party never took when it was in office. Perhaps the noble Lord will add that to the reforms that the Labour Party proposes for this House—that the Prime Minister can be here, too.

Welfare Reform and Work Bill

Welfare Reform and Work Bill

Committee (4th Day)

3.18 pm

Relevant document: 13th Report from the Delegated Powers Committee

Moved by Lord Freud

That the House do now resolve itself into a Committee upon the Bill.

Baroness Hayman (CB): My Lords, on a business point, perhaps I can help the noble Baroness, Lady Anelay, as I noticed that other Members of the House wished to come in on the Question, but we had only 10 minutes in which to do so rather than the 20 minutes that we would have had on a Statement.

It was not a prime ministerial Statement, but I well remember making a proper ministerial Statement to this House when the other place was not sitting when the first case of foot and mouth disease was discovered in February 2001. As I say, the House of Commons was not sitting. Although the noble Baroness is not the Prime Minister, she has the respect of this House and I simply recommend to the Government Front Bench that it would be possible to have a ministerial Statement in those circumstances; there is precedent for that.

Lord Cormack (Con): My Lords, in considering that, I urge my noble friend to consider also how inconvenient it is when the two Houses sit at different

21 Dec 2015 : Column 2317

times. It would have been so much more sensible if both Houses had risen on the same day and were to come back on the same day.

Motion agreed.

Clause 3: Support for troubled families: reporting obligation

Amendment 70

Moved by Baroness Sherlock

70: Clause 3, page 3, line 10, at end insert—

“( ) A report prepared under this section must include information regarding the adequacy of resources given to local authorities to fund the support provided for troubled families.”

Baroness Sherlock (Lab): My Lords, in moving Amendment 70 in my name and that of my noble friend Lord McKenzie of Luton, I will speak in support of Amendment 71 in the name of the noble Baroness, Lady Manzoor.

We are supportive of the recognition by successive Governments of the need to invest intensively in co-ordinated support for families facing multiple challenges, many of whom are involved with a number of agencies. Labour began work in this area, and in 2012 the coalition Government launched the first phase of what they called the troubled families programme. The Prime Minister, David Cameron, was reported as saying that he would put “rocket boosters” under efforts to turn around the 120,000 troubled families in the wake of the riots of 2011. I declare an interest as one of the four members of the Riots Communities and Victims Panel set up by the Prime Minister in the wake of those riots.

My experience as a member of the panel really stays with me. The panel was unpersuaded that there was much overlap between the rioters and the surprisingly precise number of 120,000 families who were then the target of the troubled families programme. In a poll we conducted of 80 local authorities, only 5% felt that there was much overlap between the rioters and the troubled families. One of our concerns was how we should support the roughly 500,000 forgotten families, who would not be reached by the government programme because things were not bad enough. They were bumping along the bottom, not coping but not doing badly enough to get help.

Those families need our help. I have never felt that the challenges families face are just about money, although its absence can be and often is a significant or at least aggravating factor. I will be interested to see the evaluation of the various programmes local authorities set up under the banner and funding regime of troubled families. I welcome the proposal in Clause 3 to require the Secretary of State for Communities and Local Government to report annually to Parliament on the progress of families supported by the troubled families programme. Amendment 70 would require that report to include information,

“regarding the adequacy of resources given to local authorities to fund the support provided for troubled families”.

21 Dec 2015 : Column 2318

I find it hard to work out the detail from the published financial framework so I hope the Minister can help. Can she say for the record what the longer-term funding proposals are, now that the Autumn Statement is out? Councils are being asked to design their own programmes to work with an agreed number of families, using criteria set out by central government. I understand that the original troubled families programme offered £4,000 per family. The financial framework says there will be a £1,000 attachment fee when an authority first works with a family, then an extra £800 on a payment-by-results basis depending on certain outcomes. Satisfactory outcomes are either “continuous employment” or “significant and sustained progress” over the five-year period.

I have some questions for the Minister. First, what work have the Government done with local authorities to ensure that that is an appropriate amount to incentivise them to choose the right outcomes for each family, rather than the ones that are the easiest to evidence, to make sure that they get the money that they are going to depend on to be able to run the provision? Secondly, are the Government talking to local authorities to make sure that the reporting requirements are not so onerous that they drain valuable resources or create incentives to focus on more readily documentable activity or more easily evidenced outcomes?

On the reporting point, one local authority representative said in the evidence session on the Bill in another place that the troubled families programme is addressing behaviours built up over decades or even generations. It is not,

“a 12-month, quick-fix, dip-in dip-out programme”.—[

Official Report

, Commons, Welfare Reform and Work Bill Committee, 10/9/15; col. 17.]

How will the Government ensure that annual reports reflect the need for longer-term interventions?

Have the Government considered the extent to which other proposals in the Bill may obstruct the success of the troubled families programme and, if so, how they might mitigate that? The reduced benefit cap and the two-child limit are likely to force some families to move in pursuit of cheaper housing. One Member of Parliament reported that 1,000 families had already moved from her inner London borough to cheaper areas. But as the cap is reduced, they could end up moving again. Losing track of families who move has been a recognised problem for social services for years and it features quite often in serious case reviews, including some very well-known and damaging child protection cases.

Having to move is worrying because after families have been given support for the first time, when they move they can simply drop out of sight. They also lose access to community support services such as preschool activities, parenting classes, health visitors or support workers in mental health. I am particularly worried about children having to move schools—I will return to this on a later group—when a lot of work could have been done to get that child and school working together and keep them in school.

The family will also lose their troubled families support worker and that is a relationship based on trust, which can take a long time to establish. On the

21 Dec 2015 : Column 2319

assumption that the worker will not move to the new boundary, how can the programme ensure that the work that has been invested in that relationship of trust is not lost? That relationship between the worker and the family is not the icing on the cake; it is the cake. Louise Casey, who runs this programme, has talked movingly about the missing ingredient in these settings often being love. This is based on relationships. My concern is that a significant investment in those families, both emotional and financial—as taxpayers’ money—will be thrown away if that relationship is broken. Can the Minister tell the Committee what arrangements have been made for transferring support for families if they end up moving across boundaries, especially as a result of the Government’s own policies? I beg to move.

Baroness Manzoor (LD): My Lords, I shall speak to Amendments 70 and 71. I do not want to repeat what has already been so well put by the noble Baroness, Lady Sherlock, concerning Clause 3 and reporting obligations. I want briefly to summarise something that the Guardian found under a freedom of information request in November 2015. That request showed that in the 120 councils that responded, only 79,000 families were turned around through a family intervention, which is meant to be an integral part of the troubled families programme. The research also found that more than 8,000 families in more than 40 local authorities had not received any kind of family intervention but had instead been turned around solely on the basis of data-matching exercises. The research found that councils might, for example, trawl through employment, youth crime and truancy data to identify a family that would have been eligible for the programme and which, without receiving any help from the troubled families programme, fulfilled the criteria for being turned around because school attendance had improved or one of the parents had found a job.

My Amendment 71 is an attempt to prevent this. It asks that a report prepared under this section must include an assessment of,

“the types of interventions provided by local authorities in the previous financial year, and … the success or failure of the types of interventions provided by local authorities in the previous financial year”.

I hope that the Minister will feel that this amendment would enable an improved assessment of the interventions provided by local authorities and will accept it because without this kind of data, we are not going to get underneath exactly which services local authorities are providing. I believe that the Government believe they must have an evidence-based approach, and this amendment will enable them to do so.

Lord Kirkwood of Kirkhope (LD): My Lords, I want to make a short intervention in support of the two excellent speeches that have been made in introducing Amendments 70 and 71. I agree with everything that has been said, and I think we need another name for this programme as “troubled families” is a terrible name for it. I do not know whether we should have a competition for it—it might be too late. However, those families are certainly more troubled for being called troubled, so we need to think carefully about this. I hope that these suggested annual reports will

21 Dec 2015 : Column 2320

not just be analytical and statistical but will come up with some policy advice and dynamics about change, to make these programmes better for the future.

I have had a bit of experience of working with a troubled families programme indirectly as a non-executive director of the Wise Group in Glasgow. It had a pay-as-you-go performance contract in the north-east of England, which was very interesting. I am in favour of the multiagency approach, but it is still in its early days and needs to be developed. I hope that these annual reports will look at a snapshot year by year and look across the different experiences and the different programmes mounted by the different local authorities to try and get best practice established and shared. That would be really useful.

3.30 pm

The most difficult thing about the troubled families programme as it stands is getting an evaluation that makes sense. Different methods and procedures are being tried, but it is the local authorities that evaluate these things and are, as it were, marking their own homework. This still needs some extra work, as the temptation is to say that it has been more successful than it actually has. I do not say that against local authorities, as people are working in difficult circumstances and trying to build on the platform of the experience that we have had in this important new public sector programme, but central government needs to hold the ring and make sure that the evaluation techniques that we are using are sensible, translatable and comparable.

This is a bit of a left-field suggestion, but I believe that the sanctions that are now so prevalent in the rest of the social security system need to be integrated in some way with the troubled families programme. If people are getting sanctioned regularly in a way that the system notices, they should be offered a slot on the troubled families programme. It is a voluntary programme, so the offer would have to be accepted, but some of the experience I have had, again in the Wise Group, suggests that the troubled families programme is a better way of dealing with some of these people who have been sanctioned multiple times and are obviously troubled in a way that is not just to do with their CV—it is deeper and wider than that within the family setting—than sanctions and the Work Programme. I hope that the Minister will think about that.

Finally, the point made earlier about close contact being maintained with local authorities is absolutely correct and must be right for England. But this is not just about local authorities in England. I accept the need for a report such as the one we are talking about here but, although it may not be directly analogous to the programmes in England, I hope that the Minister will also embrace the experience of the other jurisdictions in the United Kingdom, which are doing work of this kind, too. It would be a mistake not to have some way of bringing in the experience from Scotland, Northern Ireland and possibly even Wales for all I know. This is a developing and interesting area. It has to be resourced sensibly but it will help. I am in favour of the suggested reports but I agree that adding the suggestions in these amendments would be an entirely sensible thing for the Government to do.

21 Dec 2015 : Column 2321

Lord Farmer (Con): My Lords, I am sure I speak for many in your Lordships’ House when I say how pleased I was that funding for the troubled families programme was extended into this Parliament and that the Bill will create a statutory duty to report on our progress in supporting these families with multiple, highly complex problems.

In more than one in 10 of the original troubled families on the programme, an adult moved off benefits and into continuous employment, which was a huge achievement since, on average, troubled families in the first programme had nine serious problems to overcome. Surely I am not being too optimistic in assuming that this reporting obligation signals an intent on the part of this Government to keep helping such families in the most effective ways possible and to renew the necessary funding.

Although ongoing accountability and financial commitment are obviously essential, I have to confess to a nervousness about the wording of Amendment 70, which talks about,

“the adequacy of resources given to local authorities”.

My understanding of when and why troubled families programmes have worked best is that one crucial common factor has been the wider system reform that the funds have helped to effect. In early speeches about the intent of the programme, a recurring theme was that if social services were to help families turn themselves around, this would require the service landscape in a local authority area to be no less transformed itself.

The Government never intended to foot the bill for business as usual but to make a contribution on a payment-by-results basis to the bigger prize of system reform. Local authorities would not get the results they needed on the per-family spend alone—indeed, the first financial framework document published in 2012 was explicit that they would get only up to 40% of the unit cost of the intensive interventions that work with this group of families. Government were priming a pump, not signing a blank cheque. This should remain the guiding principle: a level of funding that incentivises services such as the police, health and social services to work more closely together to reduce costs, not a level of funding that is adequate in isolation to fund the support provided for troubled families.

This brings me to Amendment 71 in the name of the noble Baroness, Lady Manzoor. She argues that the report should specify which types of interventions were used and which were a success or failure. But this seems to ignore the evidence that a whole system has to become relentlessly focused on supporting families across the spectrum of need if a local authority can truly be deemed to be successful. Taking an intervention-level approach runs the risk of ignoring the importance of synergy and the whole-system emphasis also seen, for example, in the way in which Ofsted is now examining the entirety of a council’s services to support children, using the single inspection framework.

Local authorities, such as the Isle of Wight, which have gone through profound reform, have integrated their troubled families work and funding with early years obligations, delivered through children’s centres, by forming family hubs. These help families with children right up the age range and across the spectrum

21 Dec 2015 : Column 2322

of need, so are able to offer early help as well as the more intensive help typically associated with troubled families. This is highly relevant, given the Prime Minister’s recent announcement that local authorities which fail to safeguard children adequately will be taken into special measures, because that is what happened to the Isle of Wight. It was taken over by Hampshire, forced to rethink all its children’s services and make prevention of harm the watchword. It is now modelling a better offer for all families.

Increasingly, family hubs are the visible manifestation of a system that integrates troubled families work with full-spectrum support in a sustainable financial envelope. Surely the future lies in evidence-based interventions being locally tailored into better functioning systems. I am not convinced that reporting at the level of interventions would capture the most important learning, which is surely the priority.

Lord Beecham (Lab): I spoke today to the officer in Newcastle who is responsible for the programme. We do not call it the troubled families programme in Newcastle; we call it the families programme. The noble Lord, Lord Kirkwood, is right to say that we need a title that does not imply some kind of stigma.

Newcastle has been extremely successful in the way in which the present scheme has been working. However, it was interesting to learn in a little more detail from the officer in question—I declare my interest as a member of the city council—what is occurring on the financial front and with progress on the ground.

In moving her amendment—I support both amendments in this group—my noble friend Lady Sherlock referred to the financial basis that was initially for a grant of £3,900 or £4,000. Two-thirds went on a fee for mounting the programme, while the other third went on a success fee. That has been turned around so that the larger proportion is spent on the success fee. Now, of course, the amounts have been reduced by roughly a third, so the total figure is in the order of £2,600 although, as I have said, the proportions have been reversed. That may in itself be a source of some difficulty.

However, other issues need to be considered. One of the criteria is getting people into employment. Of course, that is important and makes a significant difference, but those criteria will not necessarily apply evenly across all the relevant authorities. It will, frankly, be more difficult to get someone into a job in Newcastle and other parts of the north-east than in some other parts of the country, simply because of the state of the local economy. Too much weighting on that one factor could be regressive. That needs to be considered.

Then there is the question of what outcome we are looking for from the programme and, in particular, whether we are looking over a sufficiently long period to be able to judge what is happening and what is successful. I hope that, in any kind of survey of what is going on, we can take that long-term view—over several years rather than only two or three—to see what approaches have paid a dividend.

Another aspect that occurs to me is that the Labour Government made a mistake, frankly, in dividing children’s services from adult social care. I was chairman of the

21 Dec 2015 : Column 2323

social services committee in Newcastle in the early 1970s, when the two services had been brought together. Dividing them, particularly in the context of families, is potentially difficult. It means that you are working across departmental boundaries, possibly less efficiently than would otherwise be the case. It is time—not only from the perspective of troubled families but generally, given the pressures on social care and children’s services collectively—to reopen that issue. It is worth revisiting whether that decision is now applicable.

The noble Lord, Lord Farmer, referred to changes and savings that might be made. We must bear in mind that at the moment—I speak with some unfortunate knowledge of what is likely to happen in Newcastle—financial pressures are such that we will see significant cuts in both adult social care and children’s services. We will lose experienced staff because we are facing a reduction of some £32 million in the resources available to the authority. I suspect that, to a greater or lesser extent, that will be the case across much of local government, particularly in the areas with greatest need.

Although it is obviously right to bring people together as far as possible, so that we do not have a succession of different bodies or individuals working with the families in question, it will stretch the capacity of local authorities to be able to cope with this without depriving some other potential or current recipients of the support they also need. We need to look at the totality of funding across the range of services provided by local authorities and their partners in the health service and elsewhere to deal with these issues.

Both amendments encapsulate the correct approach: we should regularly be taking a significant look at what will be a long-term programme. I return to the point made by the noble Lord, Lord Kirkwood, and encourage the Government to change the name, because it implies a certain stigma and it would be better if more neutral terminology were applied.

The Earl of Listowel (CB): My Lords, I urge that, whatever approach is taken, we are better at supporting families, particularly vulnerable families. In recent years, we have seen a steady increase in the number of young people being taken into care from their families and a flood of new-born children being taken into care. In some ways, that suggests that we are intervening better to take children out of damaging families, but we should really be trying our level best to support families so that they can keep their children.

Whichever approach one takes—I suspect that it will be a mixture of the two—one needs adequately to fund the general services of local authorities, and I am grateful to the Chancellor for ensuring that there is some limiting of the cuts expected by local authorities. At the same time, approaches such as the troubled families initiative—I express my admiration for Louise Casey, having watched her work in the past—which recognise the need to stick with the family over time, and the importance of loving that family until it can look after itself, are very welcome.

3.45 pm

Baroness Evans of Bowes Park (Con): My Lords, Amendment 70, tabled by the noble Baroness, Lady Sherlock, and the noble Lord, Lord McKenzie, seeks

21 Dec 2015 : Column 2324

to require the Government to report on the adequacy of the funds provided to local authorities to support troubled families. We believe that the best way to judge the adequacy of the funding will be in the outcomes that the programme achieves. Our report will ensure that the Government remain transparent in publishing the progress made by families supported by the programme. This amendment, therefore, is not necessary.

The Government have committed to funding the new, expanded troubled families programme. In the spending review 2015, funding of £720 million was allocated for the remaining four years. Of course, the new programme also aims to incentivise local authorities to reprioritise existing resources to achieve better outcomes for families with multiple problems. These families are known to local services and money is already spent on them.

As the noble Lord, Lord Beecham, said, there is pressure on funding for children’s services, but we have actually seen local authorities maintaining relatively stable funding in these areas. However, we completely understand that there is pressure, and that is why we are also providing additional resources to change the way services respond to these families to achieve better outcomes.

As a number of noble Lords have said, funding for the new troubled families programme is available to local authorities in three ways. They are provided with a service transformation grant to transform their services and collect evidence for the national evaluation; they receive attachment fees of £1,000, as mentioned, for each family that they agree to work with; and they are able to claim an £800 results payment once one of these families achieves significant and sustained progress.

Of course, noble Lords will be well aware that the real financial prize, as a number of noble Lords have said, is the long-term change that we make to these families’ lives. It is not the money provided by central government, but the cost savings that can be delivered through redesigning their services to deliver better results for complex families with multiple problems and to see those families take control of their lives and move forward. We would certainly expect, as the noble Baroness suggested, local authorities to work together when a family moves from one area to another. It is both in the local authorities’ interest and in the family’s interest, so we would expect the sharing of information.

The programme has been designed to incentivise local services to reprioritise their money and front-line resources away from reactive services towards more integrated, targeted interventions to offer better outcomes for families with high-cost, multiple problems. By responding more effectively to the issues that these families face, the burden placed on local services can be reduced for the long term.

It is also important to remember that we are talking about a programme that has a track record of success. As the noble Baroness said, the original programme achieved success with about 116,000 families struggling with a multitude of problems. This could not have been achieved if the right services had not been in place. As with the original programme, the Government have asked local authorities to provide information that will enable us to assess its impact. This includes

21 Dec 2015 : Column 2325

understanding what is being spent on families and the savings that are being achieved through local cost-benefit analysis. The noble Baroness, Lady Sherlock, asked whether this would increase the burden on local authorities. We do not believe that it will, because local authorities have already agreed to supply this information as part of the national evaluation of the expanded programme. Furthermore, they themselves receive valuable analyses of the programmes to help them drive improvement to their services.

Amendment 71, tabled by the noble Baroness, Lady Manzoor, seeks to require the report of the Secretary of State for Communities and Local Government to include information on the types of interventions families receive and whether they are successful. DCLG has always recommended that families should be supported through a whole-family approach to achieve positive outcomes, but it does not mandate a specific type of intervention. This is because we believe that, to work effectively, local authorities need the flexibility to adapt their approach to their local area and to each family they work with. There are no set or standard interventions that are universally applied by or across local authorities: each intervention is specific to each family. Given this necessary flexibility, the effectiveness of the programme will be measured through the outcomes it achieves with families rather than the individual intervention that it uses.

The duty to report, as it stands, already ensures that the Government are held to account on the effectiveness of the programme through publishing annual information on the progress made by families. To make progress, families will have received effective support from local authorities and their partners. The report will include information on this.

It may also be worth noble Lords noting that the report Parliament will receive annually on the troubled families programme will be based on the national evaluation of the expanded programme and the payment by results achieved by local authorities. The national evaluation will provide information about the progress of families against the six headline problems that the programme seeks to address.

The noble Baroness, Lady Manzoor, asked about data matching, which was used by local authorities in the original programme in relation to outcomes. They used data sets to track and monitor the progress of families. However, the fact that they used data in this way should not imply a lack of support for families. Every family that it was claimed had been turned around made real progress following support from local services. This is checked through the councils’ internal audit process before they can claim a results payment.

On the Guardian report that the noble Baroness mentioned, that was based on something of a misunderstanding of the programme. The programme certainly encourages services to join up and offer better support for families with multiple problems through redesigning their approach to providing support, and we advocated a family-style intervention approach, but that is not the only approach. The Guardian looked only at a certain subsection of families who achieved

21 Dec 2015 : Column 2326

support through the programme in this particular way, rather than the large number of families helped through a whole variety of different approaches.

On the basis of the information I have provided, I ask noble Lords to withdraw Amendment 70 and not move Amendment 71.

Lord Beecham: Could the noble Baroness indicate whether it is intended to have longitudinal studies of the programme and, if so, what kind of period we might look at? Secondly, are the Government encouraging—perhaps they are; I ask out of ignorance—peer review between different authorities carrying out projects of this kind? That would seem particularly helpful given the range of problems faced.

Baroness Evans of Bowes Park: I believe that the full scope of the reports has yet to be decided. I am certainly happy to take back those two suggestions to the department.

Baroness Sherlock: My Lords, I thank all noble Lords who contributed to this short debate. I thank the noble Baroness, Lady Manzoor, the noble Lord, Lord Kirkwood, and my noble friend Lord Beecham for their support.

We heard a lot of emphasis on evaluation. When the Minister takes this back to the department, I urge her to reflect a bit more carefully on that. I was a little concerned that, towards the end of her remarks, she seemed to imply that we do not need to assess either quality or funding because if the outcomes work it must have been okay. The question I would raise is that of causality. We are dealing here with very complex situations. Essentially, a family that is already engaged with lots of agencies and that may have multiple problems is an organic and dynamic unit—coming in and going out all the time. To assume, because it started at X and ended at Y, that what happened must have been the right thing is a very central government assumption and a slightly risky one in the circumstances.

I ask her to take that back, along with the suggestion of my noble friend Lord Beecham about longitudinal studies and peer review, to try to think very carefully about how we can capture the learning. With respect to the noble Lord, Lord Farmer, the point of these programmes is that what one authority does may not be the best thing for another authority. It depends on the circumstances, as my noble friend Lord Beecham described.

I also take the point made by the noble Lord, Lord Kirkwood, about terminology. Certainly, when I was on the riots panel I talked to a number of families who felt that being stigmatised got in the way of their trying to deal with things. It was not that they did not know they had problems; it was just that everybody constantly telling them that they had problems did not help. They wanted help to get themselves out of those problems, not to be branded. We need to find a way to ensure that that does not happen. I encourage the Government to think some more on that.

I am also grateful to my noble friend Lord Beecham for pointing out to the noble Lord, Lord Farmer—whose interest in this subject I recognise—how many local authorities are struggling with funding, especially in

21 Dec 2015 : Column 2327

the poorest areas where so many of these families will be. We need to be aware of that. I am grateful for the subject having been aired in this debate and I hope that the Government will come back to us on this on a regular basis. Given that, I beg leave to withdraw this amendment.

Amendment 70 withdrawn.

Amendment 71 not moved.

Debate on whether Clause 3 should stand part of the Bill.

Lord Elton (Con): My Lords, I would like to express appreciation for the troubled families programme as a whole, since we are now leaving it. Whatever the questions about causality, things have changed very considerably in the course of its existence and very many families have benefited from it. Moreover, it is the result of the Prime Minister leaving a Minister in the place where he knows the job for long enough to do it. I reckon this is a very important occasion and a very great benefit of which we should all be grateful.

Clause 3 agreed.

Clause 7: Benefit cap

Amendment 72

Moved by Baroness Sherlock

72: Clause 7, page 8, line 22, leave out subsection (2)

Baroness Sherlock: My Lords, I shall speak also to Amendment 92. These amendments were tabled in my name and that of my noble friend Lord McKenzie of Luton. I shall also speak to the other amendments in this group. In doing so, I thank the many organisations which supplied briefing on this subject, including CPAG, Gingerbread and Shelter.

When the benefit cap was introduced, the Government made much of the fact that they were setting it at the level of average earnings. In May 2011, the then Minister, Chris Grayling, sought to defend the rationale for the cap by saying in another place:

“Our policy approach, and the Government’s clear intent, is to have a cap that bears reference to average earnings. That is necessary for the credibility of our benefit system. It is the right place to set the cap”.––[Official Report, Commons, Welfare Reform Bill Committee, 17/5/11; col. 952.]

We in this House debated at length whether the test was fair, and we voted to exclude child benefit from the cap—a move that was overturned in another place. Now the Government have simply abandoned any such rationale and have plucked figures out of the air. The Bill reduces the cap to £23,000 a year in London and £20,000 elsewhere.

Even more worryingly, in future the Secretary of State can review the cap whenever he wishes without reference to any external benchmark and change the level simply by regulation. This could become a vehicle for Ministers to ratchet down the amount of help given to needy families without adequate parliamentary scrutiny. Our amendments seek to remove the subsection which would enable a reduction in the benefit cap. The effect would be to leave the cap at its current level.

Now that the Government have abandoned any external benchmark, it is hard to understand their

21 Dec 2015 : Column 2328

rationale for choosing these levels. The impact assessment sheds little light. The nearest it comes to justifying the lower rate outside London is on the grounds that one in four households in London earns less than £23,000 a year while one in four households outside London earns less than £20,000. Is that the new benchmark? Is it to be set at a level equivalent to 40% of median earnings or is this, as I suspect, a post hoc rationalisation of an arbitrarily chosen figure? Once again, the rationale is misleading by referring only to household earnings rather than to income and in doing so failing to acknowledge that many households earning below the cap will also be receiving benefits covered by the cap, such as child benefit, child tax credit or housing benefit.

The new threshold will drastically change the impact of the cap. It will more than quadruple the number of capped households. The DWP estimates that as many as 90,000 additional households will be affected, and they could see their housing benefit reduced substantially. Rather than hitting large families in expensive areas, it will hit small families right across the country. For example, Shelter says that the new cap would affect a family with one child living in Guildford, a family with two children in Leeds or Plymouth or a single-parent family with two children sharing a room in almost one in five areas in England.

As the Government’s evaluation shows, relatively few households have been able to move into cheaper accommodation to escape the benefit cap. The lower thresholds will make it even harder for families to move to cheaper accommodation as ever-lower rents must be found. Without the availability of cheaper housing in areas where there are also suitable jobs and childcare, families are going to be put in an impossible position. If they find it hard to escape the benefit cap, their only choice is to become poorer.

Once again the people most affected by this policy are poor families with children. The impact assessment says that 330,000 children will be hit further by the reduced cap, 24,000 for the first time, and the benefits of the rest, who are already in capped households, will be cut further still. They will include families who have been forced to move to cheaper houses or areas only to find that they are now above the new cap and could have to move again, with the children having to move to new schools.

Can the Minister reassure the Committee that it is not the Government’s intention to keep cutting the cap repeatedly? Otherwise, these families, some of whom will have very good reasons for being unable to work, as we will hear in the next couple of debates, could face being shunted around the country, moving repeatedly, damaging their children’s education and destroying family stability in the process. How will that help the Government’s desire to focus on improving educational outcomes for poor children?

4 pm

The Government have made much of their research into the effect of the benefit cap as evidence that it acts as a work incentive. In fact, the research found that the proportion of households that moved into work was just 4.7 percentage points higher among capped households than in the control group. The IFS concluded that,

21 Dec 2015 : Column 2329

“a large majority of affected claimants responded neither by moving into work nor by moving house”.

Indeed, I presume that that is because 85% of them are in circumstances where even this Government do not require them to work, recognising that they have good reasons not to; perhaps they are carers, have children or have been found not fit for work. The Opposition are sympathetic to the goal of reducing overall spending on social security, but we want to get that down by seeing reduced rents, people in skilled, sustainable jobs with better wages, and more people able to work. Slash and burn is not the solution.

There is increasing evidence that a cap could end up costing, not saving, the public purse. The Government’s own assessments show that rent arrears, evictions and homelessness could increase—crucially, forcing local authorities to house families out of their own budgets. The Chancellor has acknowledged that by having to announce in parallel an increase of £800 million in discretionary housing funds. Labour opposes the reduction in the benefit cap because it will drive people further into poverty, and because it sets a clear precedent for a further reduction in the support offered to low-income families irrespective of rising living standards in the wider economy. It is not acceptable to get the benefit bill down by sending more children into poverty and socially cleansing our towns and cities, splitting up communities and damaging local economies.

Clause 8 provides that the Secretary of State must review the level of the cap at least once in each Parliament, and may do so at any time. Clause 8(3) says that in carrying out a review, the only thing that the Secretary of State must take into account is “the national economic situation”. He may take into account other matters, but he is not required to. It is sensible—in fact it is obvious—that the Secretary of State should consider the national economic situation in setting the cap. Of course he should—but that is not enough. Amendment 92 would add two other factors that the Secretary of State should take into account as well. The first is the relationship between the level of the benefit cap and median household income—and in my defence I refer to the statement from Chris Grayling at the start of my speech. The second is the impact on households affected by the cap. I hope that the reasons for that are obvious and incontrovertible.

As we have heard, when introducing the cap, the Government stressed the importance of linking it to what other people in our country were living on. Lots of doubts were expressed about the way in which that would be done, but at least it was a benchmark; it could be measured and tested and, presumably, it meant that as earnings rose, the cap would rise as well. Instead, even though earnings are finally rising, the cap is being reduced—substantially, in the case of households outside London. Even more worryingly, the Government have now abandoned any objective rationale or yardstick, so they can adjust the cap by regulation at whim annually, or even more often if they choose.

All that this second amendment does is to say that the Secretary of State must take account of what is happening to household income in those households before he takes the decision to change the level of the

21 Dec 2015 : Column 2330

cap. Any civilised Government should want to take account of the consequences of their decisions before repeating or adjusting them. The amendment would require Ministers to look at the impact on those households. As I said at Second Reading in relation to other measures, if Ministers will the ends, they must will the means. They should be forced to consider the effect on poor households, most of which have young children, before reaching a decision that could make it very difficult for many parents to clothe, house and feed them. I beg to move.

Baroness Lister of Burtersett (Lab): My Lords, I shall speak to Amendments 74 and 93. I am grateful to the noble Lord, Lord Kirkwood, for his support for both, and the noble Earl, Lord Listowel, for his support for Amendment 93. The aim here is to ensure that we debate the human rights implications of the cap, particularly regarding children and women. I am grateful to CPAG for its help with these amendments, and I declare an interest as its honorary president. I also support the other amendments in this group.

Amendment 74 would require the exemption of households from the benefit cap where necessary to avoid a breach of convention rights within the meaning of the Human Rights Act 1998. It would send a clear message that Parliament intends a cap to be implemented in a human rights-compliant way. It would enable tribunals and courts to exempt families from the operation from the cap so as to avoid a breach of human rights without having to make a declaration of incompatibility. This is necessary because by incorporating the list of benefits included in the cap in primary legislation in Clause 7, which was not the case before, rather than leaving them in regulations as now, it appears that the Government are trying to avoid legal challenge under the Human Rights Act other than by way of such a declaration.

Amendment 93 would require the Secretary of State’s review of the cap to take into account the need to safeguard and promote the welfare of children. The phraseology echoes that in Section 11 of the Children Act 2004 and Section 55 of the Borders, Citizenship and Immigration Act 2009. In ZH (Tanzania) the noble and learned Baroness, Lady Hale, found that this effectively incorporated Article 3 of the UN Convention on the Rights of the Child, which requires the welfare of the child to be treated as “a primary consideration”.

Lord Blencathra (Con): The noble Baroness quoted the noble and learned Baroness, Lady Hale, which I presume was from the Supreme Court case which ruled just a few months ago. However, the noble Baroness will be aware that the Government were taken to court on this very point of not implementing the UNCRC, the court ruled by three to two against Lady Hale and the judgment was that the Government were perfectly correct. The court went on to say, quoting some other distinguished noble Lords in this House, that it would be quite inconceivable for an unincorporated charter like the UNCRC to be given force in English law.

Baroness Lister of Burtersett: I am grateful to the noble Lord. I will come on to that case; I was talking about an earlier case that the noble and learned Baroness,

21 Dec 2015 : Column 2331

Lady Hale, was involved in. I am quite aware of the outcome of the case heard earlier this year, but I thank the noble Lord for providing a trailer for what I will say later.

These amendments are prompted in part by the inadequacy of the Government’s own assessment of the human rights implication of the cap and in part by the judgment in the Supreme Court case that the noble Lord mentioned on the cap earlier this year. Both the Joint Committee on Human Rights, of which I was then a member, and the Office of the Children’s Commissioner have emphasised that child poverty is a human rights/children’s rights issue. Lowering the benefit cap clearly has implications for the number of children living in poverty. An internal assessment leaked to the Guardian in May suggested that if parents are unable to avoid the cap through paid work, it could plunge a further 40,000 children into poverty.

The impact assessment says nothing on the subject of child poverty, yet when I tabled a Written Question to ask what the impact on the number of children in poverty would be, I was referred to that impact assessment. As I said in our first session, I consider that rather insulting, as the implication was that I had not read it. I remind the Minister that the Companion makes it clear that Ministers should be as,

“‘open as possible’ in answering questions”,

as this is,

“inherent in ministerial accountability to Parliament”.

I therefore ask the Minister now, what is the department’s estimate of the impact on child poverty of reducing the cap, given that we know from the Guardian that such an estimate exists? I am quite happy to accept any provisos about possible behavioural responses but this is not a good enough reason for refusing to provide Parliament with such a crucial piece of information. Also, can the Minister tell us how the Government responded to the questions from the UN Committee on the Rights of the Child on whether a proper child rights impact assessment had been conducted and,

“the measures being taken to mitigate negative impact on the enjoyment of the rights of children, particularly those in vulnerable situations”?

The impact assessment has a section entitled “What are we doing in mitigation?”. I could summarise the contents by saying, “Not very much”. It says nothing at all about mitigation of the negative impact on the rights of children, despite the request from the UN committee. The Equality and Human Rights Commission, too, has criticised the impact assessments and the human rights memorandum which accompany the Bill for failing fully to assess the impact on equality and human rights. It warns that there is a risk to the UK’s compliance with its obligations under national and international human rights law, particularly with reference to children, women and disabled people, and therefore it gives its firm support to these amendments.

The impact assessment does at least acknowledge that women are more likely to be affected than men, as 64% of claimants who have their benefit reduced are likely to be single females—mainly lone parents. Sixty-three per cent of households capped to date have contained a child under five, and in total more than twice as many children as adults have been hit by the cap.

21 Dec 2015 : Column 2332

In the human rights memorandum, the Government note the Supreme Court’s decision, which I shall come to now. They assert that they have fully considered their obligations under the UNCRC—in particular, Article 3, which concerns the duty to treat the best interests of the child as a primary consideration. However, their analysis of the best interests of the child seems to rest on the proposition that it is in the best interests of children overall to have parents in work and that work remains the surest route out of poverty.

That would be laughably inadequate if it were not for what is at stake. As the EHRC observes, it betrays a particular lack of understanding regarding compliance with the UNCRC. It may well be in the best interests of many children for parents to find work but it will depend on the work available and on the circumstances—as has already been discussed on earlier amendments, work can represent a cul-de-sac rather than a route out of poverty. Moreover, this bald statement ignores the fact that, as my noble friend said, the great majority of those who were already subject to the cap did not find work as a result. Is it really in the best interests of children to have their standard of living reduced even further when a survey, reported in the first-year review of the operation of the cap, found that more than a third of those affected had already had to cut back on household essentials and many had incurred debt?

In fact, the Government’s position pretty much ignores the judgment of the noble and learned Baroness, Lady Hale—echoed by the noble Lord, Lord Kerr— that it,

“misunderstand[s] what article 3(1) of the UNCRC requires”.

The final decision does not alter that fact. She continues:

“It requires that first consideration be given to the best interests, not only of children in general, but also of the particular child or children directly affected by the decision in question. It cannot possibly be in the best interests of the children affected by the cap to deprive them of the means to provide them with adequate food, clothing, warmth and housing, the basic necessities of life. It is not enough that children in general, now or in the future, may benefit by a shift in welfare culture if these are also the consequences. Insofar as the Secretary of State relies upon this as an answer to article 3(1), he has misdirected himself”.

She also pointed out that the children affected suffer from a situation which is none of their making and which they themselves can do nothing about. Can the Minister now give a more convincing response to the weighty charge that the cap, and therefore these clauses, are not in the best interests of children? As it is, the failure to give proper consideration to the best interests of the child could leave this measure vulnerable to a further future legal challenge.

In his judgment, Lord Carnwath referred to a point—mentioned by my noble friend—made during the passage through this House of the Welfare Reform Bill, which became an Act in 2012. That point was that most of the savings from the cap resulted from the inclusion of child benefits and child tax credits, even though these will be received by the great majority of those on median earnings. I shall return to this when I speak to Amendments 76 and 77. Although ultimately, Lord Carnwath sided with the judges who did not allow the appeal, he still considered that the cap did not comply with the UNCRC, and he expressed the

21 Dec 2015 : Column 2333

hope that the Government would address the implications of this when it came to reviewing the cap. Even Lord Reed, who spoke for the majority in disallowing the appeal, linked the proportionality assessment to the fact that the cap was set at median earnings. Now that, as my noble friend has made clear, there is no clear rationale for the level of the cap, as it is pushed to be below median earnings, that proportionality judgment might start to look rather different.

I have focused mainly on the implications for children’s human rights, but, as I said, the human rights of women and disabled people are also at issue. I am sure we will hear more about the more recent High Court case that found indirect discrimination against disabled people through the impact on carers, but I will not go into that now. These wider implications are another reason for my amendment to Clause 7, which requires general human rights compatibility.

I believe that these amendments should be uncontroversial. After all, if the Government are so confident that the cap is compliant with human rights instruments, they have nothing to fear from them. I hope, therefore, that the Minister will be willing to take them away and consider them.

4.15 pm

Baroness Manzoor: My Lords, I shall speak to Amendments 72 and 92 in the names of the noble Baroness, Lady Sherlock, and the noble Lord, Lord McKenzie, which I support. As I said at Second Reading, although we on these Benches agree on the need for a cap, we do not see the logic in reducing it to £23,000 a year for households in Greater London and to £20,000 for those in the rest of the country. Nor do we see the logic behind breaking the link between average earnings and the cap, as has already been said. I agree with the Child Poverty Action Group, which states that:

“The reduction in the level of the benefit cap severs the link with median earnings, and instead is based on an arbitrary figure, leaving it unclear what the fairness test is now”.

The Government’s rationale is that the benefit cap will deliver strong work incentives. However, the real concern here is that the requirements to find housing at an affordable level may force families away from areas where there are high levels of work opportunities, such as in London, to places of high unemployment. This would undermine the ultimate aim of getting people off benefits.

Although the Government demonstrate that the existing benefit cap successfully strengthens work incentives, as evidenced by the greater proportion of those capped moving into employment as compared to those under the cap, in-depth interviews conducted by DWP itself in 2014 show that many households responded to the cap by,

“being willing to accept low-skilled, low-paid jobs, rather than pursuing further qualifications which they hoped would help them get a better job in the future”.

As the noble Baroness, Lady Sherlock, has already said, the Institute for Fiscal Studies, which undertook a peer review of the DWP research, concluded that its analysis told us:

“that the large majority of affected claimants responded neither by moving into work nor by moving house”.

21 Dec 2015 : Column 2334

Forfeiting further education and training for low-skilled, low-paid jobs limits an individual’s long-term human capital and earning prospects, which lowers potential tax revenues paid to the Government and, on an aggregated level, hinders economic productivity and potential output.

Long-term reductions in welfare spending will be realised only by increasing people’s income through employment and by reducing their outgoings, primarily through improving access to affordable housing. I urge the Minister to maintain the benefit cap as currently set.

At Second Reading, I asked whether the Government intended to undertake a distribution analysis of the levels of housing benefit that the average person hit by the benefit cap would receive and where they might be able to secure suitable housing. I wonder whether the Minister is in a position to answer this question more fully on this occasion. Will he also say what impact the further lowering of the benefit cap will have on single parents and how the rights of children will be protected? This has been very clearly highlighted by the noble Baroness, Lady Lister. Gingerbread quite rightly is concerned. Lowering the benefit cap will continue disproportionately to affect single parents, of which as many as 70%—I think that the noble Baroness, Lady Lister, quoted 69%—will have a child under the age of five. That cannot be acceptable.

Baroness Meacher (CB): My Lords, I speak to Amendment 94—I emphasise that it is a probing amendment. I do so in the hope that we can highlight the need for a comprehensive and regular review of the impact of the totality of the benefit cuts on specific groups—who are the most vulnerable—applied during the past few years, including those in the Welfare Reform Act 2012, in more recent legislation and in this Bill. The amendment requires that in carrying out a review of the benefit cap, the Secretary of State must include an assessment of the impact of the benefit cap on disabled people, their families and carers. I for one have not fully grasped the full impact of the multitude of cuts. At the very least, I believe that the Government have a moral obligation to understand the implications of their policies for the most vulnerable citizens in this country and to make public that information. That is what this amendment is about.

The benefit cap applies even to benefits designed to compensate for the extra costs of disability or caring for disabled people, including ESA WRAG, incapacity benefit, severe disablement allowance and carer’s allowance. We know that one-third of disabled people—fully 3.7 million—live below the poverty line already. The benefit cap combined with the freezes and cuts to employment and support allowance for those in the WRAG group will see disabled people’s incomes reduced significantly again. This significant reduction is from a level which is already below the poverty line.

The Government argue that the new lower, tiered cap has been designed to strengthen the work incentives for those on benefits. When I met the Minister from the other place, he said, “The whole point of this is to encourage people to work for more hours”. I find that so cynical, when most of these people simply cannot work more hours for a range of reasons. However,

21 Dec 2015 : Column 2335

as we have argued previously in Committee, the Government have provided no evidence to back up the claim that cutting benefits that disabled people receive will incentivise them to work. As I have already indicated, the Government’s reference to an OECD study failed to point out that the study did not even refer to disability throughout, and rightly so—of course, people who are disabled are in an entirely different position from those who are healthy and able bodied. We have evidence that reducing disabled people’s incomes will make it harder and not easier for them to move into work.

In addition, the impact assessment provides no detail on the impact of lowering the cap on disabled people who are in receipt of DLA/PIP—those who are severely disabled and cannot do much about their situation. This amendment has no financial consequences. I hope that the Minister will take this matter away with a view to bringing back a government amendment on Report.

I support Amendment 93 tabled in the names of the noble Baroness, Lady Lister, the noble Lord, Lord Kirkwood, and the noble Earl, Lord Listowel. The case for the amendment has been eloquently spelt out and, fortunately, I do not need to add to that. I hope that the Minister will assure the Committee that this crucial issue will be dealt with on Report.

Baroness Pitkeathley (Lab): I add support to the amendment just spoken to by the noble Baroness, Lady Meacher, to which my name is added. While an exemption for households including a DLA or personal independence payment claimant exists, this does not protect all families affected by disability or all carers from the cap. That is because of the way in which “household” is defined in the benefits system. For the purposes of the benefits system, a household is considered to be an adult, their partner if they have one and any children they have under the age of 18. If any other adult relatives—for example, older parents, brothers or sisters, or even adult children—live in the same house, they are considered to be part of a different benefits household even though they all live together. This means that while carers looking after disabled partners and disabled children aged under 18 are exempt from the cap, those caring for adult disabled children, siblings or elderly parents are subject to it.

The Government’s impact assessment for the introduction of the benefit cap estimates that 5,000 households containing carers would be affected by it. That seems to be completely contrary to the Government’s policy on supporting carers. In its 2015 manifesto, the Conservative Party committed to provide more support for full-time carers. The fact that the benefit cap continues to apply to carers and the further lowering of the cap are entirely contrary to that commitment. The inclusion of the carer’s allowance in the list of capped benefits also goes against the commitment to protect vulnerable families that are coping with the extra costs of disability and ill-health. I will have more to say about the inclusion of carer’s allowance and the recent judgment in a later set of amendments.

Carers struggle every day with the extra costs of caring and it is clear, as the noble Baroness said, that many carers are absolutely unable to work as a result of heavy caring responsibilities. Therefore they cannot

21 Dec 2015 : Column 2336

afford any reduction in their income at all, and yet the Government continue to cap their benefits, with those carers who fall within the scope of the cap losing up to an estimated £169 a week under the new cap compared with the position before the introduction of the policy. The benefit cap places an increasing financial and emotion strain on families, pushing carers to breaking point and ultimately threatening the sustainability of those caring relationships. Surely the Government must be prepared, at the very minimum, to assess the impact of these changes.

The Earl of Listowel: I rise to support the noble Baroness in these amendments. Relevant to this is the question of responsibility. It is clear that children are not responsible because they are not in charge, as it were. When we think about the difficult decisions we are making today, surely an important part of it was the greed of a few bankers some years ago that went unchecked. They are responsible to a large degree for the debates that we are having today. We should also think about the failure of successive Governments to build sufficient housing. The most important part of the benefits bill is housing benefit, and the reason that it is so high is that there is such a shortage of housing that we are paying over the odds for it in this country. It is not the fault of these children that they are in this position; it is due to successive failures by various people who were responsible in the past. I support the amendments because it is paramount that we keep the interests of the child at the very forefront of our minds as we make these decisions. We will simply be shooting ourselves in the foot if we neglect these children.

Lord Lansley (Con): My Lords, I rise briefly to contribute to the debate in respect of Amendment 72, which seeks to remove subsection (2) from Clause 7, and to say that I think it would be a mistake on the part of your Lordships’ House to accept it. The noble Baroness, Lady Sherlock, was looking for the reasons why the benefit cap had been introduced and why it is being adjusted in the way it is. Coming here recently from another place, I think that the reason for introducing the benefit cap in the first place is at least as valid now as it was then. It is to ensure that we create a disparity between what people are able to live on through work and what they can live on in an accumulated way through benefits so as to heighten the incentive to seek work. Doing this at a time when job vacancies in the economy are at their highest level seems to me to be exceptionally important because it gives people a route out of poverty through work, which I had imagined we were all agreed is the most effective way to reduce poverty. I was surprised and disappointed to hear the noble Baroness, Lady Lister, say that work is often a cul-de-sac. It is not.

4.30 pm

Baroness Lister of Burtersett: Perhaps I can explain. Unfortunately all the evidence shows that far too many people get stuck in low-paid work which does not take their children out of poverty. A very large proportion of children in poverty have a parent in work. One of the points made by the Joseph Rowntree Foundation against the cap is that, even in that minority

21 Dec 2015 : Column 2337

of cases where the result has been for someone to move into work—it is a very small minority, as we have heard—the danger is that in the long term it is counterproductive because it pushes them into unsuitable, insecure and low-paid work.

Lord Lansley: I understand the point that the noble Baroness is making, but I am afraid that I do not agree with it, for two reasons. The first is by virtue of the other measures that this Government are taking in relation to availability of childcare, the further extension of personal tax allowances and the increase in the national minimum wage, leading to a national living wage. All of these enable people who are in work to achieve more of a living income through being in work. The second and most important reason is that work in itself changes the character of a household; it changes the character of people’s lives. Frankly, in the long run, it changes people’s employability.

Baroness Meacher: The noble Lord, Lord Lansley, is making an incentives argument, which I accept completely. Does he accept that, when people are unable to work more or at all because they are carers or severely disabled, the incentive argument really falls down?

Lord Lansley: The point I was answering was in relation to people in work, so that is a slightly different point. In relation to that point, too, as the noble Baroness has brought it up, the structure of the benefit cap is designed to ensure that people who are in a support group under the employment and support allowance, those in receipt of personal independence payments, and so on—there are number of exceptions—are not covered by the benefit cap. Those households are not covered by the benefit cap. We are focused, to a large extent, on those who have a capability for work even if that capability may be restricted in some ways.

I did not complete the point I was making in response to the noble Baroness, Lady Lister. Many years ago when I was deputy director-general of the British Chambers of Commerce—I do not think it has changed in the slightest—I know that what matters to employers is that people have been in work and have all the attributes of somebody who has been in work. The longer one is out of work the less likely one is, as we know, to have those attributes. Therefore, the entry into work, even if it might not necessarily be the right job or be regarded as suitable or appropriate, will by its very nature make someone more likely to have those attributes necessary for work.

That is just one of the reasons why the benefit cap is needed. It is also needed because of a sense of the fairness between those who are in work and those who are not. The noble Baroness, Lady Sherlock, said there was a relationship with average earnings. That was true when the benefit cap was introduced, but to assert that it is some kind of mechanistic or scientific relationship is misleading. It is a judgment. A judgment was made, when there was previously no benefit cap to try and establish a benefit cap at a level that was regarded as fair.

21 Dec 2015 : Column 2338

I have to tell noble Lords—again coming from recent experience of fighting elections and being in the other place—that the public support the benefit cap. They regard it as still generous—too generous in many respects. When one looks at the relationship with those who are in work—the four in 10 households, broadly speaking, as was mentioned—who are not earning any more from their work than would be available through the benefit cap by the accumulation of benefits, they do not regard it as fair or reasonable for people to accumulate more by way of benefits than they are able to access by work.

Lord Blencathra: My noble friend has just said that from his recent experience in the other place he found that large numbers of the public supported the benefits cap. Can he tell us what Members of the Labour Front Bench in the other place were saying about the benefit cap, until quite recently?

Lord Lansley: Until recently—I do not know what the most recent experience is, but certainly until September this year—the Opposition Front Bench in the other place said that they supported the principle of the cap. I suppose they would say that they support the principle of the cap but at the level that it is currently set.

That brings me to the third reason why we have a benefit cap—namely, that we have to decide our priorities for distributing any given level of public expenditure. Of course, we know that Parliament has supported an overall cap on the welfare budget. Frankly, it is better for it to be distributed in relation to specific need than for some households to accumulate it to a greater extent.

If one were to seek to sustain the benefit cap at the level at which it currently applies, rather than apply it at the level proposed in the Bill—I hope that this House would not go down that path—that begs the question of where that money is to come from. Where else in the welfare budget can that saving be made because this step is still part of a necessary process of reducing the deficit over this Parliament? Where there is public support for this measure, where jobs are available in the economy and where there is scope to deliver an additional step towards reducing the deficit and heightening incentives for work while at the same time focusing the available resources on giving support—as we debated earlier in Committee—to those who we want to assist into work, and giving specific targeted support to the maximum extent we can where people have identified specific needs, Ministers are right to say that we should be doing that rather than allowing this benefit to be accumulated by some households to a greater extent.

The Lord Bishop of Durham: My Lords, I wish to speak specifically to Amendment 93, in the names of the noble Baroness, Lady Lister, the noble Lord, Lord Kirkwood, and the noble Earl, Lord Listowel, and Amendment 94, in the names of the noble Baronesses, Lady Meacher, Lady Pitkeathley and Lady Lister.

We all agree that the welfare of children is key in our considerations. I remind the Committee that this is rooted not simply in the modern era of rights but in

21 Dec 2015 : Column 2339

our Judaeo-Christian history, where the care of the orphan was paramount in Old Testament law. The failure to protect orphans was one of the core messages of the prophets of the Old Testament. Jesus himself demonstrated that welcoming and caring for children lay at the heart of what the Kingdom of God is like. We have not always demonstrated this care of the child well—I include my own church in that—which is why the need to ensure children’s welfare is in our legislation. It is there as a reminder to us all, specifically those who exercise power and authority, that children must be taken fully into consideration in decision-making.

In principle, I accept that a benefit cap is a reasonable approach, partly for the reasons which the noble Lord, Lord Lansley, has just outlined, although I am not wholly convinced by his arguments about why the reduction should be made in the way proposed. Inevitably, whichever level the benefit cap is set at will affect children, so it is surely essential that the Secretary of State is required to consider its impact on children’s welfare rather than leave this as a possible other matter that is considered relevant.

Sadly, in the busyness of economics, politics and high-level decision-making, all of us can lose sight of the child. I see it happening in the House of Bishops, in the General Synod of the Church of England, in local authority decision-making and in national decision-making. Therefore, to ensure that this does not happen unintentionally, I hope that the Minister will seriously consider Amendment 93.

Alongside this, I note the well-documented reality of increased costs for those who live with disability, and for their families and carers. I suggest that we have a slight problem with language here. One reason that many carers are not available for paid work is because, frankly, they are working very hard, caring for their family member. To suggest that they are not working is to demean them. It therefore seems entirely reasonable that since the benefit cap will impact these families, serious consideration should be given by the Secretary of State. As the noble Baroness, Lady Meacher, pointed out, this has no financial costs. It should not be left to his or her discretion.

I have three questions. The first is in relation to the point about disability and Amendment 94. Will the Minister agree to bring a suitable amendment on Report to include this in the review? In relation to Amendment 93, does the Minister accept that in the complexities of political and economic decision-making the child can be forgotten or side-lined? In the light of that, will the Minister accept that the welfare of the child must be at the top of priorities and so should be stated in the Bill?

Baroness Hollis of Heigham (Lab): My Lords, I want to come back on some of the points raised by the noble Lord, Lord Lansley. His first point was about public opinion being concerned about the apparent disparity of income between those on benefits and those in work. My noble friend Lady Lister made a good point on this. She pointed out that families in work also receive additional benefits, which are not taken into account, either by any comparison that the Government make or indeed by those families receiving

21 Dec 2015 : Column 2340

them. If they looked at their entire income, including not just child benefit but, possibly, child tax credits to top up their wages and housing benefit, and then compared that to the total out-of-work income that will now be received by families hit by a cap—in other words, if they were better informed, and if the noble Lord, Lord Lansley, were better informed, if I may say so, they would have a fairer comparison to make.

My second point is that, understandably, a lot of the public do not understand how social security works. The majority of people surveyed think that 40% of the benefit budget goes on JSA—on the unemployed, who should be working. That is the common perception. Actually, it is 4%. That is the size of the disparity. Therefore, our job is to make sure that people understand the facts of it, not to cloud the argument by saying that because they were misinformed we should follow where they go. That has never been the position of honourable parliamentarians. By all means, when the public are well aware of the situation, we should respect that, but we should ensure that any such views are well based on information.

That brings me to my third point. The noble Lord, Lord Lansley, referred—and I think this was echoed by the right reverend Prelate the Bishop of Durham—to the value and the ethic of work. I agree. He is absolutely right that it changes the dynamic of the household. Although I am disappointed that only 4% or so of people were incentivised into work as a result of the higher cap, the hopes the Government may have of encouraging more people into work by making the cap tougher seem remote.

In particular, I remain completely baffled by one point. I hope that the Minister will help me on this. It was raised by the noble Baroness, Lady Meacher, and by my noble friend Lady Pitkeathley. I think that we all accept that where people can work, they should. We should help them through jobcentre advisers and with appropriate benefit support for getting back into work. I do not think there is any dispute around the House that if work is there, where people can work, they should work. But the Government are quite explicit that any lone parent with a child under three is not required to work. They are expected to attend interviews when the child hits two but not to work until the child is three. Yet that lone parent with a child under three will be caught by a benefit cap which is supposed to propel her into work, even though the Government have expressly said that she is not expected or required to work—and many would think that that was very wise.

My noble friend Lady Pitkeathley made the same point about full-time carers: they are indeed working very hard. Their work is unwaged but it is full-time work. Yet they, too, are being caught, even though the Government recognise, by virtue of the payment of carer’s allowance, that they are working more than the 35 hours a week that entitle a person to get their carer’s allowance—and on top of that, they may well be supporting a second person as well. The Government have accepted that both these groups of people should not be expected to work, which is why they have the benefits. They then argue that the cap should apply to them none the less, in order to incentivise them into

21 Dec 2015 : Column 2341

work. I am completely baffled by this morally, as well as politically and economically, and I hope very much that when the noble Lord, Lord Freud, comes to respond in a moment he can help me answer that question.

4.45 pm

Lord Blencathra: My Lords, it is a pleasure to follow the noble Baroness, Lady Hollis. She said at one point that the public do not understand how social security works. That is very true; I spent many years as a Member of Parliament and understood only a fraction of it, and I believe that very few people understand the details of the 70,000 regulations. However, what the public do understand is that when they have to move to another part of the country and cannot afford a mortgage on £26,000, or if they have to live in a house which they would ideally like to be bigger, better or different, or in a better street, and they cannot afford that, but then they see someone else or a family getting £26,000 or more in benefits, they feel it is unfair. You do not have to know how the regulations work to have that instinctive feeling. That is why all parties strongly supported the benefits cap when it was introduced by the previous Government. I appreciate that the Labour Party now has some reservations about it and I will comment on that later.

I had intended to talk only about the level of the cap and how it was fair. However, in view of the comments of the noble Baroness, Lady Lister, on the UNCRC, which I thought I would be dealing with on another amendment, perhaps I could make those comments in this speech in answer to her and I will not speak again on UNCRC matters. On the level of the benefits cap, as politicians we have different views but this was part of a case before the Supreme Court last year. It was just decided a few months ago and five of the noble judges ruled in the Government’s favour that the benefits cap was not contrary to the rights of the child and not in breach of the ECHR.

In looking at the level of the cap, Lord Reed for the court said that:

“In relation to the related criticism that children in households affected by the cap are deprived of the basic necessities of life, that argument was rejected by the courts below, and I see no basis for reaching a different conclusion. As I have explained, the cap for a household with children is equivalent to a gross salary of £35,000 per annum, higher than the earnings of half the working population in the UK, almost three times the national minimum wage, and not far below the point at which higher rate tax becomes payable”.

That was of course in relation to the level of the cap then and we are now talking about a reduction of 12.5%—but, based on the strong views of the court, I can see no reason why it would come to a different conclusion if the cap were lowered by 12.5%.

In looking at how families had been forced to move, the learned judge went on to say:

“In relation to the argument that households with children cannot reasonably be expected to move house … Millions of parents in this country have moved house with their children, for a variety of reasons, including economic reasons. It is, in particular, not uncommon for working households to move out of London in order to find more affordable property elsewhere. It is also necessary to recognise that transitional financial assistance is

21 Dec 2015 : Column 2342

available for households affected by the cap who cannot move until suitable arrangements have been made in relation to the children, as I have explained”.

Those views were taken from a 95-page report of the Supreme Court, having heard days and days of argument.

Baroness Lister of Burtersett: I may have misheard, but I think that I heard the noble Lord say that all five judges said that the cap complied with the UNCRC on the rights of the child. Is that right or did I mishear?

Lord Blencathra: If I said that, I misspoke. It was three out of five: a majority verdict of the Supreme Court.

Baroness Lister of Burtersett: So some of the five said that it did not comply but the fact is that the UNCRC is not incorporated into UK law, and therefore that was not sufficient for the appeal to be allowed.

Lord Blencathra: I take the noble Baroness’s point but that was not the view of Lord Reed, which I read. I can see nowhere in his judgment where he said that we did not comply with the UNCRC but that nevertheless, because it was not incorporated, he was going to find in the Government’s favour. That is not my interpretation of reading those pages whatever.

Let me move on to the UNCRC, since we have got there. First, the judge made the point:

“As an unincorporated international treaty, the UNCRC is not part of the law of the United Kingdom (nor, it is scarcely necessary to add, are the comments upon it of the UN Committee on the Rights of the Child)”.

Then comes the crucial point:

“‘The spirit, if not the precise language’, of article 3(1) has been translated into our law in particular contexts through section 11(2) of the Children Act 2004 and section 55 of the Citizenship, Borders and Immigration Act 2009”.

The judge was making it very clear that although the exact wording of the UNCRC was not applicable in the UK, the Government, through legislation, had incorporated the principles of it and were therefore complicit.

The judge went on to say that,

“it is therefore inappropriate for the courts to purport to decide whether or not the Executive has correctly understood an unincorporated treaty obligation”.

He then quoted Lord Bingham of Cornhill’s comments from a famous judgment, which I will leave aside, before noting:

“Lord Brown of Eaton-under-Heywood expressed himself more emphatically … ‘It simply cannot be the law that, provided only a public officer asserts that his decision accords with the state’s international obligations, the courts will entertain a challenge to the decision based upon his arguable misunderstanding of that obligation and then itself decide the point of international law at issue’”.

The noble Baroness, who I greatly respect and who is very knowledgeable in this matter, quoted extensively I think from the noble and learned Baroness, Lady Hale, who took a rather more fundamentalist view of incorporating the UNCRC into English law. She has held that position for some time, but it was not the view that the court collectively took.

21 Dec 2015 : Column 2343

I will conclude taking extracts from these turgid 95 pages shortly. The judge went on to say:

“Finally, it has been explained many times that the Human Rights Act entails some adjustment of the respective constitutional roles of the courts, the executive and the legislature, but does not eliminate the differences between them: differences, for example, in relation to their composition, their expertise, their accountability and their legitimacy. It therefore does not alter the fact that certain matters are by their nature more suitable for determination by Government or Parliament than by the courts. In so far as matters of that nature have to be considered by the courts when deciding whether executive action or legislation is compatible with Convention rights, that is something which the courts can and do properly take into account, by giving weight to the determination of those matters by the primary decision-maker”.

That decision is,

“relevant to these appeals, since the question of proportionality involves controversial issues of social and economic policy, with major implications for public expenditure. The determination of those issues is pre-eminently the function of democratically elected institutions. It is therefore necessary for the court to give due weight to the considered assessment made by those institutions. Unless manifestly without reasonable foundation, their assessment should be respected”.

In conclusion, the judge says:

“Many of the issues discussed in this appeal were considered by Parliament prior to its approving the Regulations … Furthermore, that consideration followed detailed consideration of clause 93 of the Bill, which became section 96 of the 2012 Act. It is true that the details of the cap scheme were not contained in the Bill which Parliament was debating, but the Government’s proposals had been made clear, they were challenged by means of proposed amendments to the Bill, and they were the subject of full and intense democratic debate. That is an important consideration. As Lord Bingham of Cornhill observed in R (Countryside Alliance) v Attorney General … ‘The democratic process is liable to be subverted if, on a question of moral and political judgment, opponents of the Act achieve through the courts what they could not achieve in Parliament’”.

He went on to say:

“The same is true of questions of economic and political judgment”.

I apologise for quoting extensively from those bits of the judgment. I shall not speak again on UNCRC issues, but the noble Baroness provoked me in the sense that she relied heavily on the UNCRC to somehow suggest that the Government were acting improperly or illegally and had something to fear from the Human Rights Act. That was not the view of the majority of the court.

Baroness Lister of Burtersett: I do not want to provoke the noble Lord any further, but would he not accept that Lord Carnwath, in accepting that the appeal was unfounded—whatever the legal term is—and that the issue was one for Parliament, specifically asked the Government when they reviewed the benefit cap to consider what the judges had said about Article 3.1 of the UNCRC? That was my point—the Government have reviewed the benefit cap, and it will be even less in the interests of children than it was at the higher level.

Lord Blencathra: I thank the noble Baroness. I think that the comments of Lord Justice Carnwath are what the lawyers would call obiter dicta—they did not go to the heart of the judgment. He was making an observation that it might be nice if the Government considered it, but there was no suggestion that the Government’s action in imposing the benefits cap was

21 Dec 2015 : Column 2344

somehow contrary to the European Human Rights Act because we had failed to look after the interests of the child, as set down in the UNCRC.

Lord Beecham: The noble Lord, Lord Lansley, prayed in aid the state of public opinion about the benefits system. My noble friend Lady Hollis rightly corrected that. In addition to opinion polls, which have proved less than infallible in recent times, we should have a fact poll. We could then gauge what people really know about the issues that the country and individuals face. As my noble friend pointed out, there is a wide misapprehension about this issue as well as many others affecting the benefits system.

We are moving from a position in which the cap was related to average earnings to a different system. By sheer coincidence, perhaps, that move is taking place at a time when, after a long period in which average earnings have not risen, they have at last begun to rise. I suspect that this overdue rise in incomes, which would otherwise have affected benefits, has triggered the change that the Government are proposing. As other noble Lords have pointed out, and as we shall no doubt hear again during the Bill’s proceedings, one of the principal problems that families face is the very high level of rents in the private sector and the difficulty of obtaining alternative accommodation at a reasonable rent. So these incomes are very much under pressure, with or without benefits. We are not talking about excessive amounts of money; £20,000 for couples and lone parents outside London is not the kind of money that enables people to live a life of luxury—far from it.

These amendments do not destroy the system but try to impose some criteria by which the benefits cap should be assessed. What on earth can be wrong with the suggestion in Amendment 92 that the Secretary of State must take into account,

“the relationship between the level of benefit cap and median household income”,

the impact of the cap on households, local and public authorities and registered social landlords? What is there to object to in that proposal being a matter for consideration?

Lord Elton (Con): May I tell the noble Lord my view, which is appropriate on occasions such as this? The longer a list, the more clear it is that things that are not included are not to be considered. That is counterproductive. The shorter the list, the more flexible it is.

Lord Beecham: If I may say so, that takes for granted the propensity of Governments in general, and this Government in particular, to look at a wide range of issues. Frankly, on the evidence of the last few years, I do not think that that is a plausible argument. Why should it not be on the record, as proposed in Amendment 93, that the Secretary of State should take into account,

“the need to safeguard and promote the welfare of children”,

in his review of the benefit cap? Similarly, Amendment 94 proposes that the Secretary of State must take into account,

“the impact of the benefit cap on disabled people, their families and carers”.

21 Dec 2015 : Column 2345

If these issues are taken into account, the Government lose nothing by it, but if they are not, or if there is a risk that they will not be, then they should surely be part of the process.

If the Minister is going to resist the amendments, I cannot understand why. They do not dispense with the possibility of having a cap. In this context, and in others, I repeat: one of the principal problems is the cost of private rented housing, in which very many people who rely on benefits are found. We will return to that later, but we should not forget it even as we look at these amendments, which I commend and support.

5 pm

The Minister of State, Department for Work and Pensions (Lord Freud) (Con): My Lords, Amendment 72, tabled by the noble Baroness, Lady Sherlock, and the noble Lord, Lord McKenzie, would retain the benefit cap at its current levels and have those levels apply across Great Britain. We introduced the benefit cap to increase incentives to work, to promote fairness between those in work and those on benefits and to help address the deficit, and it is clear from the evidence that the cap is working. Since it was introduced in 2013, more than 18,000 previously capped households have moved into work.

The evaluation evidence shows that capped households are 41% more likely to go into work than similar uncapped households. This is even more marked in London alone, where households were 70% more likely to go into work than similar uncapped households.

I am heartened to hear from the noble Baroness, Lady Sherlock, that she now supports the existing benefit cap. I happen to remember that that was not necessarily the position on the Opposition Benches in 2012. Indeed, I seem to remember that the counter proposition from them was that we should have a regional cap, so I hope that the Opposition are now delighted that we are beginning to move in the direction suggested. Perhaps in another three years, in 2018, the Opposition—

Lord McKenzie of Luton (Lab): When we debated the regional cap at that time, did the noble Lord support it?

Lord Freud: Of course I did not support it; I am on the record as not supporting it. This is not an absolute regional cap—this is a two-tier cap, London and the regions—but, the Opposition may feel that it is better late than never. I look forward, by 2018, in another three years, to the full-hearted support of the Opposition for the current proposals.

Baroness Hollis of Heigham: My Lords, does the Minister not also accept—I am sure that his memory stretches back this far—that the main concern of the Opposition, led by my noble friend Lady Sherlock, who will no doubt respond to this in any case, was to come in behind the Bishops’ amendment? That was to ensure that we compared like with like—not, as the Government were doing, like with unlike. They were excluding from those in work income such as child

21 Dec 2015 : Column 2346

benefit and additional forms of benefit, so they were comparing income for those exclusively on benefit with earnings only, excluding benefits, for those in work. We therefore came in behind the Bishops’ amendment to try to protect children caught in that situation.

Lord Freud: I am delighted to have a trip down memory lane, but since we have changed the basis of the measure, as noble Lords have pointed out, we might just spend unnecessary time on it.

Let me go on to the present proposition, which is to align the cap with the circumstances of many working people throughout the country. The Bill reduces the cap to £20,000 a year for lone parents and couples and £13,400 for single people without children, except in Greater London, where it will be £23,000, with a lower rate of £15,410 for single people without children. These are still significant amounts: £20,000 is the equivalent of an annual pre-tax income of £25,000, while £23,000 is equivalent to an annual pre-tax income of £29,000. About four out of 10 households in London earn less than £23,000 a year, while approximately four out of 10 households outside of London earn less than £20,000.

Baroness Hollis of Heigham: Has the noble Lord assessed the figures for their income rather than their earnings?

Lord Freud: I do not have that to hand. As a noble Lord said, we are now reaching a judgment on how to arrive at those figures. Indeed, the debate that we had in 2012 basically looked at the same point. We are looking at the level of earnings that we feel is fair above which people should not get benefits.

Baroness Hollis of Heigham: My Lords, the Minister is not addressing the issue. What matters is income versus income, not income versus earnings, ignoring additional income. Therefore, if the Minister is going to run this argument, which I understand is a perfectly proper argument to run—and I think it commands a lot of support—he has to include actual income and not exclusively earnings, because those families that he is talking about will almost certainly have additional payments for their children and additional payments for their housing.

Lord Freud: Yes, I am just looking here at the level of earnings and that is the figure that we are taking. These levels for the cap will reinforce our message that work pays, and that it is not fair for someone on benefits to be receiving more than many working households. Having looked at the evidence, we believe it is fair to have a higher cap in London.

Baroness Hollis of Heigham: This question session has not got anywhere. Those families do not have an income that is higher than that for those at work. The point is that if you compare it only with earnings, you are possibly excluding a substantial portion of income that is available to those in work. I hope that the Minister will correct his statements as he goes through, otherwise he is comparing apples with oranges, and it does none of us any kindness to continue down that path.

21 Dec 2015 : Column 2347

Lord Freud: I have tried to make it as clear as I can that we are looking at the level of earnings here. It is not a matter of direct comparisons between earnings and income: we are looking at the level of earnings.

Lord Kirkwood of Kirkhope: May I try to make sense of this? I do not think that the Government know what the disposable income per head is of the families that are subject to the benefit cap. That is my objection, because big families obviously have a disposable income that is divided by the number of people in the house. I do not think that these metrics exist, and therefore the noble Baroness is absolutely correct: it is not safe to rely on earnings, because you are not comparing like for like. The really important question for me is: how do we know, in relation to the impact it has on children, what the disposable income per head is in those families that are subject to the cap?

Lord Freud: I accept that that is a point about which noble Lords opposite are concerned, but I can only reiterate that we have reached these levels by using the basis of earnings. That is the basis.

Lord Oates (LD): Is the Minister not, then, concerned about disposable income and the impact on children? He said that these Benches were concerned: are he and the Government not concerned?

Lord Freud: We are very concerned about the interests of children, and I will come on to that. Let me summarise the point that I will make later. The reason for this is that it is in the interests of children to be in a household where one or two adults are in work. All of the measures that we have suggest that they do better in life when that is the case.

The tiered element of the cap means that we estimate that roughly three-quarters of capped households will live outside of London, with around 24% in London. It has been set a level that also recognises that housing constitutes one of the biggest costs for households. For example, in London, housing benefit awards are on average £3,000 a year more than they are elsewhere in the country. Even in the south-east, the average housing costs are only around half those for London, so we think it right that the benefit cap take those differences into account. I say to the noble Lord, Lord McKenzie, that that might account for the difference between the regional proposal and this two-tier proposal.

On the question from the noble Baroness, Lady Sherlock, on savings versus costs, the Treasury-led scoring process and the estimated savings are agreed by both the Treasury and the Office for Budget Responsibility, which felt them to be a robust and fair estimate of the policy change. On the question from the noble Baroness, Lady Manzoor, about where people would go, interestingly, under the current cap—if that is an indicator—very few capped households have moved house and generally those who moved did so only a short distance, so the double hit that concerned the noble Baroness is a relatively small issue. Again in answer to her, the impact assessment sets out that 59% of capped households will be those of female lone parents. There are about 1.25 million lone parents in employment in the UK, so combining parenting

21 Dec 2015 : Column 2348

with childcare is possible. Those doing 16 hours work a week and receiving working tax credits will be exempt from the cap. Later, under UC, the measure will be 16 hours at minimum wage.

We believe that introducing this tiered level will build on the success of the cap and do more to improve work incentives throughout the country while promoting greater fairness. Again in answer to a question from the noble Baroness, we set out the impact of the cap on protected groups in our impact assessment. On the question from the noble Baroness, Lady Lister, I am not utterly convinced that she believes in what the Opposition Front Bench says: that work is the solution for people. However, work remains the best route out of poverty. We know that around 75% of poor people left poverty altogether where the parents moved into employment. One of the genuine points that I agree with is the danger of a cul-de-sac. The present legacy system has that wrinkle in it because it traps people at the 16-hour point. One thing we are now beginning to see in universal credit in the north-west is the freeing of benefit recipients from that particular cul-de-sac.

Amendment 74, tabled by the noble Baroness, Lady Lister, and the noble Lord, Lord Kirkwood, provides that the application of the cap may not reduce any welfare benefit where that would result in a breach of a person’s convention rights within the meaning of the Human Rights Act 1998. I will not go through the sterling work of my noble friend Lord Blencathra, who was utterly masterful on the legal aspects and certainly taught me a lot. However, I can say that the Government are of the view that the Bill is compliant with the European Convention on Human Rights, so this amendment is unnecessary.

On the question from the noble Baroness, Lady Lister, on the poverty impact, clearly we do not comment on leaked internal documents which may or may not be part of the iterative policy process. One of the real issues behind that is that any assessment of child poverty must not be purely static but should take into account the dynamic effects of the cap.

5.15 pm