Welfare Reform Bill

My Lords, I preface my remarks in the slightly Foulkesian vein of exhibiting some displeasure, not about the logistics of the Committee Room—I understand that there are arguments about that—but because I certainly did not find it easy to prepare amendments, talk to colleagues and pressure groups and get here today to start what is one of the most significant pieces of social security legislation that I h0ave ever come across in this way. Starting at the fag-end of an afternoon is not the best way of making progress. There are colleagues, also, at the Conservative Party conference on bona fide political business that denies them access to the first two sessions on the Bill, and I do not think that that is correct. There are also pressure groups at the party conference at Manchester who would like to be here but cannot because they have commitments, and I have found this very difficult. I was dealing with very helpful duty Clerks trying to table amendments from afar; admittedly, we were all afar because we were on Recess last week, so tabling amendments by Friday was very difficult. I say to my noble friend the Deputy Chief Whip that the usual channels—the blame is not all pointed at the Government and I am not expecting him to respond to this—need to give some consideration to how Members approach their work, particularly with a Recess coming before the start of this Bill. For my money, it would have been much more convenient to start this proceeding on Thursday at the least, if not the week after, which was when it was originally booked to start. We need a little consideration for those of us who are technically engaged in this important legislation. I hope that that will be borne in mind. It is completely out of order so I will say it quickly, but this is a consequence of far too much legislation. The usual channels should get themselves together and get this sorted out, otherwise we will all struggle to devote the appropriate level of time and depth of analysis to what we are being invited to look at. I shall explain what I hope will be for the convenience of the Committee. I have spoken at length to the Government Whips Office from afar, some of the conversations being more successful than others. I got some pretty tart replies in the early stages but at last I got some sense out of them. This is what I propose to do. Colleagues will notice that I have tabled a big group of amendments. Group 3 consists of a whole range of amendments. That was during a phase when I thought: ““Golly, if everybody else is having the trouble that I am having, there will be no amendments to Clause 1””. Dilatory tactics are an honourable parliamentary tradition, so in 10 minutes I amended Clause 1 in every way I could. That is what the group beginning with Amendment 3 is all about. However, having calmed down and talked to the Government Whips Office, I had it suggested to me that we begin with a broad-ranging debate on clause stand part. To some, that might appear to be putting the cart before the horse, but in this situation I am convinced that if we have a general discussion—we have some important amendments about the inclusion of council tax which I hope we come to on Thursday—then we can spend what is left of the day inviting colleagues to look at clause stand part and Amendment 1. That would give us the broadest attempt at understanding some of the Second Reading-ish areas, or areas not contained at all in the first 30 clauses. Universal credit, the first clause, opens the gate to Chapters 1 and 2. The first 30 clauses are all about universal credit. The consolation that I can offer colleagues, to whom I apologise, and who have done a lot of research and homework on the group beginning with Amendment 3, is that they are all perfectly admissible by definition in a clause stand part debate because they are all amendments to Clause 1. So it is not for me to encourage anybody to do anything, but I wanted to make clear that I did not want to sell people short and feel they had been short-changed. That is what I think is best for the Committee, and I hope that colleagues find it acceptable. I want to mention two things about what I hope to get out of this Committee stage. Amendments need to be made to the Bill, as I said at Second Reading. This Bill is not perfect. I am particularly concerned about the level of Treasury claw-back in the benefits section. It is absolutely true to say that universal credit will produce new income for low-income households, particularly those going into many jobs and the like. We all understand that, but there will be a reduction of existing levels of benefit, particularly in areas like housing and the universal household cap, which will really, really hurt the households that it affects. My mission in this Committee is to robustly press the Government on the 10-ish or 12-ish issues where that particular concern applies. I understand that this is a long and technical Bill, and I want to make a point about regulations in a moment, but for me, politically, I say this to pressure groups and others outside this place who have been informing and advising us so well: they should concentrate their fire. We need priorities, and we can get changes if we are clear and if this Committee sends a signal to the department. That signal might also get noticed by the Treasury, and it would be a perfect circle if we could make that join and get some improvements by Report in a way that would make people like me more comfortable and think of supporting the changes. I mentioned regulations. Obviously regulations are at the cutting edge of the implementation of the Bill. In passing I want to pay tribute to the Minister of State and the Bill team for making themselves endlessly available and offering us all kilograms of paper, some of which are informative, some of which are just heavy. Whatever you might think about their other approaches to the Bill, the accessibility of the Minister and the Bill team has been exemplary. I hope that that will continue. Maybe the Minister could say something about how he proposes—subject to the availability of the information—to make draft regulations available. Obviously, some of the areas under discussion cannot be dealt with. For example, passported benefits are currently under consultation by the Social Security Advisory Committee. That is perfectly sensible but the committee will not report until later. I am not asking for every draft regulation before we can make sense and see the universal credit come into focus, but I am still struggling with what is quite a fundamental change in the way that we do these kinds of things. What’s in a name? It just occurred to me that ““universal credit”” does not mean anything very much. It is certainly not universal to any social security advocate or specialist, because ““universal”” is something that is not means-tested and no one can say that universal credit will not be means-tested. ““Universal”” is not the right word—and it is not a credit. Credits were all stolen by the former Prime Minister when he was Chancellor. He took them away from the department and created tax credits. It was a successful policy—until it all fell into very difficult administrative difficulties—but the department did not have any say over it. Credits went to the Treasury. Universal credit is coming back to the department, which I am in favour of, but there will be confusion about what a benefit is and what a credit is. I notice that some of the titles in the Bill mention working-age benefits in Part 2. So, the name is very important because it sends a signal about what the benefit is for. I am not seriously suggesting at this stage that we change the name, because I am sure that thousands of pounds have been paid to consultants to craft the artwork around universal credit. But this is a working-age entitlement, which is what I understand it to be, what it should be and what I hope that it is. We are stuck now with ““universal credit””, which I think came from dynamic benefits and the Council for Social Justice report that informed a lot of the philosophy behind universal credits. We need to think carefully and clearly. There was a big attempt when tax credits came in to differentiate working tax credits, which were for work, and child tax credits, which were for family support. That did not work. Thinking more clearly about the name in the future would be helpful. I want to make a couple of other quick points under the clause stand part debate. The one thing that does not appear in the first 30 clauses is the word ““employer””. For this new administrative system to work, employers have to engage and to contract employment with employees. We are concentrating here on the supply side, all the time trying to get employees into a better situation. I am in favour of that and I understand it, but—I am a board member of the Wise Group in Glasgow, so I know this—you cannot do that successfully unless you are working really hard, extensively and sustainably with employers. If you do not encourage them to take on people who, prima facie, are not ideal employees, they will run a mile. You have to get a close relationship with employers. I know that the Government have done some work at a high level with some of the big employment confederations and on a regional basis, where they were getting people to sign up. That is very welcome, but we need to think about small-scale employment as well. I was going to refer to the omission, although it is not really an omission because it would not really fit the legislation. I just make the point that the elephant in the room for the first 30 clauses is going to be employers, and we must not forget that. My second point concerns a philosophy of participation in tax rates, iron triangles and tapers. In my experience, people do not decide to go into low-paid work on the basis of marginal tax rates. If they go into low-paid work in those circumstances, they surrender the security of a regular payment—not a giro cheque; that is old-fashioned now—which is absolutely guaranteed. For many households, the security of knowing that that money will always arrive on time, and it usually does, far outweighs the uncertainty that they will face even with a universal credit. Therefore, there are other factors that I do not think the philosophy of universal credit has properly captured, and we need to bear that in mind as well. I want to make two other quick points before I finish. First, I said that regulations are important. The Social Security Advisory Committee is going to have to work very hard. I came into this area of public policy because I had the confidence of having access to Social Security Advisory Committee reports. Whether they are working in the field of legislation or secondary legislation or with the Delegated Powers and Regulatory Reform Committee or the Merits Committee in this House, both of which do excellent work, ordinary Members who are perhaps not as interested in a subject as others can have the confidence that, if they read the stuff that has been analysed by the SSAC, as well as the committee’s recommendations, they will have a basis from which to draw an opinion and make points. I know that the Social Security Advisory Committee has other things to do. It is supposed to be an adviser to Ministers and I hope that it will get a chance to do that. However, for me, the priority for the SSAC over the next two years and more will be to give serious consideration to these regulations. Indeed, if it would be helpful to colleagues, I have in mind some amendments that we might table to make sure that the committee’s involvement is absolutely secure. My final point concerns our use of language in conducting the rest of these Committee proceedings. I get very nervous when Ministers make aerated speeches about ““welfare””. It is a horrible word. So far as I am concerned, we have a system of social security in this country. Welfare is different and it is now being tagged as a term of opprobrium: people on welfare are somehow feckless and do not pull their weight. The tone of the language that we use is very important in all this. I get even more worried when I find Ministers of the Crown—the Minister of State is not guilty of this—talking about withdrawing benefits for all sorts of reasons. That would be completely unconscionable because it would undermine the confidence of people who are already in difficult circumstances and whom we are trying to help. I think that the Bill will go a long way towards helping them to get some positive support. I hope that it will, but we must not start categorising and stigmatising people. I understand that there will be better take-up with universal credit, and we need to be more understanding about social protection being worth investing in. If people are prepared to take a positive step towards the system, I think that we can make a really big impression. The Minister of State keeps saying that we have a chance to change the culture and I think that that is true. However, we will have less of a chance if we use language that puts people into boxes that are not comfortable for anyone. That would be not only contrary to natural justice but bad policy. I hope that we will have a fairly robust debate on whether the clause should stand part and I beg to move.