Welfare Reform Bill

I am formally moving Amendment 30A and speaking to Amendment 30B, both of which stand in my name. I think this discussion is appropriate at Clause 8, as we are considering the calculation of awards for universal credit, which as we all know is a big change, although one could argue that Clause 136, which deals with the commission that the Government are setting up, or Schedule 13 might be more appropriate places for some of the fine print about minimum income standards. Amendments 30A and 30B seek the Government’s reaction to two things. Amendment 30A would introduce a requirement to consider minimum income standards in the setting of the calculation of the awards for universal credit as the reform is rolled out. Amendment 30B relates to a more finely drawn point, about the situation of pregnant women. I have become more and more concerned about their situation as nutritional science has become more accurate about determining just how sensitive a period pregnancy is. This is particularly the case for low-income families and low-income pregnant mothers, and the children that are born to pregnant women in low-income families. I am concerned about how that rolls out for the life opportunities for the children and indeed for the mother. First of all, I acknowledge that minimum income standards are not new. People are too young to remember but, in the mists of time, Sir Brandon Rhys Williams and Hermione Parker—veritable Conservative titans in this area of debate—were the first people who introduced me to the idea of minimum income standards. Recently, the Joseph Rowntree Foundation, particularly Donald Hirsch, and an organisation that will be no stranger to the noble Baroness, Lady Lister, namely the Centre for Research in Social Policy at Loughborough University—an excellent unit in an excellent university—have been promoting the advocacy of minimum income standards. Why do we need minimum income standards? It occurs to me that, when we are having a public debate about social security policy generally, trying to get the metrics of the money involved is a very difficult thing. We talk about percentage upratings of benefits each year—2 per cent up, or 1.5 per cent down—or we talk about increase in real terms cash, which is often actually the most misleading thing of all as global sums of money are very difficult for ordinary people to understand. The public debate is harder as a result of that. Even if we talk about percentage GDP and future forecasts, forecasting of GDP is a very inexact science, so the metrics around all this misinform the public debate. In this country, we do not discuss seriously exactly how these things are working out—not even in the broadsheet press. Therefore, the question of adequacy needs to be addressed in a different way. I am suggesting minimum income standards as a different approach—an additional metric—that we might use to inform the process. In that regard, the amendment is very modest. All I am asking the Government to do is to weigh in the balance ““after consideration””, in the words of the amendment, the data that come from minimum income standards in order to inform the operating strategy going forward. That is very, very important. Noble Lords will know that minimum income standards are pretty unique because they are based on survey evidence of what the public themselves feel is a modest but adequate income. They are quite instructive, because the public are very realistic about what a modest but adequate income is, and they reflect people’s ability to participate in the societies in which they live. That means that they need occasional holidays, access to technical white goods and televisions, and perhaps even mobile phones. Therefore, when the public are asked via the methodology that is now very well developed—it was started by the Family Budget Unit in the mists of time but has now been developed by Donald Hirsch and his colleagues—they are quite realistic. That methodology is robust in making clear what the communities in which people live expect people to have access to. The research can be done to work out what individual family groups in individual regions of the country need in order to contribute positively to society. I remember being very struck in 1999, when I first started studying this in any real depth—and it is a figure that stays with me—that an unemployed couple with two children on unemployment benefit were, under an MIS, left with £39 per week below what they needed. That was the benefit level in 1999 and it was for not just one or two weeks but week in, week out. When you think about that, it colours your understanding of how the important policies that we are deciding in this Bill affect other people. I am absolutely not calling for minimum income standards of modest but adequate levels to be translated into benefits—of course, there would be huge work disincentives and I am not stupid. However, I think that access to this kind of data changes people’s appreciation and understanding of the subject. I have two examples of that. I believe that the change from the minimum wage to the living wage, which we have seen in London—and the Mayor of London deserves great credit for this—has come about as a direct result of the kind of influence that minimum income standards can have on the general public debate. The other example goes back to the days of the Labour Government, when quite a lot of investment was put into entitlements for the retired population in our country. I think that that was partly informed by some of the work of the Select Committee, on which I sat, on minimum income standards for pensioners. As a result, pensioners as a group are better off relative to other benefit recipient groups. In my opinion, such data can be immensely influential in shaping how the policy goes forward. The one thing that we must avoid in the introduction of the universal credit is trapping families in levels of benefit from which they cannot escape and which do not match a modest but adequate level of standard of life. Noble Lords will be looking at the recent IFS research, which shows the squeeze that is coming from a combination of rising prices and stagnating incomes. We can all see that. There is also the Shelter report on housing, and perhaps we will be referring to that when the Committee comes to the important group of amendments on housing. However, I want to make a very strong point about CPI. In terms of uprating, we are now in quite different territory using the consumer prices index. Lots of statistics could be used here but, for me, the most frightening one is that over the past decade the cost of a modest but adequate basket of goods has risen by 43 per cent. Over that same 10-year period, the consumer prices index has risen by 27 per cent. These are unsustainable gaps. We need to be really careful that we understand what is going on in individual household budgets, going forward. The minimum income standards for 2011, according to Donald Hirsch’s latest work, would leave a single-earner couple with two children requiring a £31,600 pre-tax salary; and a single person would require £15,000 a year, at 2011 prices, to have a modest but adequate income. These are startling figures that we need to bear in mind in all our discussions on the Bill. The final point I want to make relates to Amendment 30B on pregnancy. I was struck by the findings of the Marmot strategic review of health, published in 2010, entitled Fair Society, Healthy Lives. Under the conclusion ““Policy objectives””, the first objective advocated was to a, "““minimum income for healthy living for people of all ages””." The principal policy recommendation is to: "““Develop and implement standards for minimum income for healthy living””." It goes on to talk about the inadequacies in general health but of health in pregnancy in particular. There is compelling evidence that pregnant women are not being properly looked after, particularly in low-income households. It prejudices the life chances of the infants and the mothers, at least regarding post-natal depression, and gives a very poor start for children being born in this country. In this day and age that is unacceptable. I have a bit of a bee in my bonnet about this but it is a very important subject. It is a different approach and a different way of doing things, and it would be in the best interests of the community to bear these amendments in mind as we go through the rest of the Bill. I beg to move.