Welfare Reform Bill

My Lords, I shall speak also to Amendment 51C. These amendments seek to ensure that free school meals and health costs, which are the core of passported benefits, are included as part of the universal credit. They also seek to ensure that any amounts included for universal credit are not included as part of the benefit cap. In May, the Minister deftly devolved the tricky matter of how to deal with passporting to the Social Security Advisory Committee. In a Written Statement earlier this month, he updated the House on the committee's consultation and its information gathering. It reported that the SSAC had had more than 60 responses from individuals and a wide range of organisations, including disabled people, offenders, schools, children, housing bodies, medical bodies, the NACAB, local councils, debt advice bodies and, of course, the devolved Administrations. That was alongside a trawl of relevant research and some qualitative research, which included focus groups with welfare rights advisers, and a few in-depth interviews and discussions with individuals who either have or are claiming passported benefits. The research identified more than 25 different passported benefits provided by government departments or local authorities, some of which were mentioned by my noble friend Lady Drake on the previous group. Perhaps more significantly, although hardly surprisingly, the committee found that passported benefits are viewed as fulfilling important needs. Respondents' views on the withdrawal of passported benefits were mixed, with some supporting a tapered withdrawal and others more of a timed withdrawal when a claimant moves into work. At the moment, we would argue—I think that this would go across the Committee—that passported benefits should be designed to incentivise people both to move into work and to stay in work. The committee has now been asked to develop guiding principles for such a design of passported benefits in relation to universal credit. I think that it has been given until the end of January to do that. My understanding is that we will see that report and the DWP's response only in the spring of next year, which makes it difficult for this Committee and the House later to judge whether the Bill will ensure that work always pays. Furthermore, I am slightly unclear as to how the new ““app”” foreshadowed by the Minister last week will be able to deal with things such as free school meals and other passported benefits if these are to be subject to any sort of taper or awarded only to certain UC recipients. Perhaps the Minister will spend a moment exploring this in his response, especially now that my noble friend Lord Knight who understands these things is in his place and will understand, I hope, the response better than I will on things like that. The Social Security Advisory Committee unsurprisingly found that passported benefits provide a vital support to many. Free school meals can have a significant impact on the well-being of children. In its response, the CPAG stressed that access to school meals has a range of positive well-being, health and educational outcomes for children, from improved classroom behaviour to increased key stage 2 performance. It also pointed out that school meals tend to be far healthier than packed lunches: only 1 per cent of packed lunches meet the nutritional standards set for school lunches. We know that for a number of children, this is the only hot meal that they get in a day. Similarly, the support available under the health costs criteria provides vital help to people on a low income. People who meet various criteria can get support with dental charges, optical costs, wigs and travel costs. In England, some get free prescriptions. Unlike Scotland and other areas where prescriptions are free, they are paid for in England. Passported benefits thus provide a means of safeguarding the health of children and adults, and can be worth substantial amounts in cash terms. The CPAG in its evidence gave an example of a lone parent aged 37 with two school-age children and a two year-old, and her passported benefits were probably worth about £37 a week from the mixture of free school meals, prescription, dental costs, bus fares and eye-care, along with some discounts on travel, phone bill and leisure activities. So, knowing which of these benefits she will still be able to be entitled to as she moves into work will be absolutely vital in judging whether or not she will be better off in work, and whether work really does pay. We know that the current system is not perfect. Some 20 per cent of children in poverty are not entitled to free school meals. But for those who are, the current loss of free school meals when the parents move into work is really quite a significant cliff edge; but at least at the moment that loss of support is offset by the extra payments in working tax credits, because the current system provides an income boost when parents move into work of 16 hours or more. But by contrast, the welfare White Paper suggestion that passported benefits would be withdrawn once the family reached a certain income level seems to have two problems. The first is in replicating the cliff edge. If entitlements were suddenly lost at an income threshold, that could have a disastrous effect on work incentives as well as family budgets, and a family with two children earning an extra pound a week could be in a state where they lose £18 per week in free school meals. Secondly, if it was to be an income threshold, that appears to take no account of family size. So a mother of three would stand to lose much more as she reached the cliff edge than—for example—a mother with one child. The first mother's work incentives would obviously be much worse. Now we know that, again, the canny Minister has asked the Social Security Advisory Committee to consider these issues, which are clearly pretty challenging. So we may not have the answers today. Nevertheless, we would ask for two assurances and clarifications. First, will the commitment made by the Secretary of State in the White Paper that universal credit, "““will ensure that work always pays and is seen to pay””," apply after the loss of passported benefits has been taken into account? Because it is unclear at the moment whether passported benefits have been included in the current impact assessment of work incentives under universal credit. As Citizens Advice says, the Government really do need to ensure that decisions about who is entitled to free school meals and help with health costs does not undermine universal credit principles—which we are all signed up to—of making work pay. Secondly, can the Minister confirm that any calculation of total benefits for the purpose of the benefit cap, will not include amounts paid in lieu of passported benefits—or the value of those benefits—if they continue to be provided in kind? Perhaps I may add two points of clarification. First, will the IT system be able to deal with passported benefits? Secondly, could the Minister help me with the definition of ““spring”” as he has rather helpfully done over ““soon”” and ““very soon””? It does seem that unless we are clear before the Third Reading whether work really will pay—taking passported benefits into account—then it will be very difficult to measure whether this whole Bill will achieve the laudable aims that the Government have for it. I beg to move.