Welfare Reform Bill

My Lords, I am privileged enough to share the billing on the amendment with the noble Baroness, Lady Lister of Burtersett. She has made a very powerful and comprehensive case, and there is not an awful lot left to say, except one or two things. This is a significant change. In my previous incarnation, as a member of the Select Committee in the other place, I was always surprised at the extent to which weekly budgeting is a feature of life that is qualitatively different. If you do not live under those circumstances, it is hard to appreciate how difficult it is. A change to monthly payments would be extremely significant. I feel that it is part of my duty to protect the Minister of State from his normal missionary zeal in many of these cultural attempts to change the way people behave. They are perfectly logical, but potentially really quite dangerous if we take them too far and too fast. The first thing I hope that the Minister will do for the Committee is put some flesh on the Government’s proposed mitigation factors which talk about exceptions and budget support. The noble Baroness, Lady Lister, correctly asked for those to be made clearer. She is right that if this is to be done properly and the system is to be equal to the task, it might cost more than the department currently thinks. That has the potential to wreck some of the elegance of the simplicity around universal credit, which would be a bad thing. However, before the Committee can make a judgment on the Government’s position, we need to listen carefully to what is planned. Secondly, this is a significant change because there is no appeal on frequency of payment. As colleagues know, throughout the benefits system there is a highly developed set of circumstances for people who feel that they are being short-changed or not being properly served. There are means of recourse through systems that are well known, well used and well supported by the legal advice community, pressure groups and the like. There is no right of appeal here, so if we get it wrong, people will have nowhere else to go. There is an issue too about monthly payments. Monthly is not the same as 12 times a year. People pay their bills monthly because that is how often the bills come in. So it is not just a simple question of weekly payments or not, it is actually that people being paid on a weekly basis know when the utility bills will come in and know where savings have to be made in order to meet them. It is not an easy thing to move from weekly payments to 12 times a year. I absolutely agree with the noble Baroness, Lady Lister, about the payday loans issue, and I think that it will become seriously significant. I would draw attention to what I am sure colleagues already know intellectually, which is that discretionary payments made under the Social Fund are flying up under the changes we are making now. The Government say that we need not worry too much about it because there are local circumstances—400 of them in England, not to mention Scotland and Wales—and they will fill the gap. I remain to be convinced of that. We need to be careful that we are not creating a loan shark’s charter at the expense of lower income households in our communities. We need an impact assessment, and many noble Lords were right to draw attention to that. I look forward to seeing the document that was magicked to some effect out of the Minister’s top hat earlier today, and long may that continue. If we have one of those every time the Committee sits, we will make some serious progress. In the end, however, this is a question of choice. For me, Amendment 27 does it perfectly. It states, "““so that it is payable twice per month where requested by the claimant””." I understand the driver to replicate the monthly situation. Obviously everyone in this Committee has a natural rhythm of payments constructed around monthly bills, direct debit payments and all the rest of it. The ability for the claimant to request that this is the way that they work and to do otherwise would cause them serious distress would still leave them with a default position where they would largely get what they want, and the people who are nearer the labour market would be perfectly happy to accept the discipline that they need to make this work successfully. The noble Baroness, Lady Lister, also made the point that this will create pressure on women because women are predominantly the week-to- week managers—we have to be careful about this characterisation because it is gender-typing of the worst kind—but by and large in my experience the males pay the utility monthly bills and the week-to-week household budgets for food and dietary provision are mainly carried by the women. It is the week-to-week budgets that will be put under particular pressure if we move in this direction without thinking about it. Finally, there was some experience of a change of this kind in 2009 when we went from weekly to fortnightly benefits, as some colleagues may recall, and I think the Government are founding this on the fact that that was easy. I do not think that it was as easy as people imagine. I would like to see the evidence for saying that the change was easy—I think it was quite difficult. However, there is a world of difference between moving from weekly to fortnightly and moving to monthly, and we underestimate that at our peril. These are significant amendments. I do not think we are asking for much. Unless the Government are prepared to say that they are offering a really in-depth, face-to-face, money-upfront support system for those who fall foul of these new proposed monthly payments—I will listen with great interest to whether or not that is the case—we risk causing additional hardship to the financial limits that people are going to be faced with in future. I am delighted to support my noble friend of many years’ standing in the work that she has done. She is an academic, she is an expert—she knows what she is doing. She is right and I support her.