Welfare Reform Bill (Programme) (No. 2)

It is a pleasure to make my first contribution to this stage of proceedings on the Bill by welcoming an aspect of Government amendment 2. Specifically, it is enormously welcome that the short paragraph (e) will enable regulations to include"““a level of earnings below which earnings must not be reduced””" when overpayments are being recovered. That echoes the practice in Sweden, Germany, the Netherlands, Norway and other nations, which have legally enforceable, attachment-free limits when debts are being enforced, below which claimants must be protected. The limits relate to a national minimum income standard, which is set by a variety of methods. I am grateful to Professor John Veit-Wilson, Professor Elaine Kempson, Damon Gibbons of Debt on our Doorstep and Rev. Paul Nicolson of the Zacchaeus 2000 Trust, who have helped me to prepare for this debate. I would be pleased to see the principle of irreducible attachment-free minimums extended to all debts and to the unemployed, in particular to safeguard children's, disability and housing benefits. That would prevent the damage that is done to physical and mental health by the enforcement of debt against poverty incomes, and the damage that that does to the capacity of the poorest adults to find and keep work. In Sweden, the standards for a reasonable standard of living are uprated for price index changes every year and reset every five years by the National Board for Consumer Affairs. The standards are based on survey data on national household consumption patterns and current prices; statisticians and NBCA policy officials decide what is reasonable in terms of deviations from the averages. For example, for the past four years in the UK, the prices of food and domestic fuel have increased faster than the retail prices index and the consumer prices index. The standards are used by the social service board for setting benefits and by the tax authority for setting the tax threshold. The tax threshold is also used by the court enforcement authority to set its attachment-free sum for debt enforcement. That sum consists of two parts: variable housing costs and a fixed standard normal sum for all other living expenses. There are clearly other methodologies for setting the minimum acceptable income standard below which incomes should be protected and attachment-free. In Committee, we explored work that is under way in this country at the universities of York and Loughborough, among others, to develop a minimum income standard that can command and be informed by the perceptions of the public. There is a range of options for assessing and setting the minimum standard below which there will not be deductions. There are examples from other nations where such a minimum is enforceable by the courts and related to national minimum income standards. In countries that have legally enforceable limits, the courts, in setting payment plans, can ensure that the debtor is left with a minimum level of income, taking account of family size. I hope that the small but vital paragraph (e) in Government amendment 2 will begin an era of cross-party support for legally enforceable irreducible and attachment-free minimums when people are repaying debts, which are based on minimum income standards. That would contribute to a reduction in the huge cost of mental illness to the health service and the wider economy, and make a significant contribution to the reduction of poverty in the UK. I hope that we have an ambitious approach to setting that minimum.