My Lords, I support my noble friend Lady Sherlock’s Motion. However, I am sorry that the noble Lord, Lord Kirkwood of Kirkhope, was not able to go ahead with his original fatal Motion, not least because when we debated the earlier waiting days regulations on 19 November, I promised that I would see him on the barricades were he to do so. I, too, oppose these regulations. I will inevitably be repeating some of the arguments already put so ably, but I hope to provide reinforcements in doing so.
I accept that the universal credit regulations will affect fewer people than did those for JSA/ESA, because of how universal credit operates. However, as we have heard, those who are affected stand to be hit harder because of monthly payments and because the universal credit payment includes more elements—in particular housing, to which the Motion of the noble Lord, Lord German, which I also support, relates. The payment also includes childcare costs and children’s allowances.
As the Child Poverty Action Group—I declare an interest as its honorary president—points out in its evidence to SSAC, this means that those with high housing costs and/or with children will be particularly adversely affected. In addition, SSAC points out that carers and lone parents of children aged under three, who do not have to serve waiting days on income support, will have to do so on universal credit.
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In its response to SSAC, the department disputed SSAC’s point that the increase in the number of waiting days will decrease the initial amount of universal credit paid. But in our last debate, the Minister stated clearly that waiting days are “days of non-entitlement”. Moreover, if there is no effect on the amount paid, where do the savings of £200 million—or £150 million—come from? Both figures were given to SSAC by the department, as the Secondary Legislation Scrutiny Committee pointed out, noting that such a discrepancy is not good enough. My noble friend has already asked about this, and perhaps the Minister will clarify what the exact savings are. If there are savings, someone is losing out. Perhaps I am being dense here, but it seems to me that this £200 million, or £150 million, will be taken out of the pockets of claimants at a time of particular vulnerability and also out of local economies, given that this money is likely to be spent as soon as it is received.
SSAC and those who gave evidence to it questioned the department’s argument that it is reasonable always to expect people to use their last earnings to tide them over, particularly given the nature of today’s labour market. The impact assessment for the last set of regulations showed that those on lower earnings are more likely to have been paid weekly rather than through the monthly wages on which the whole universal credit policy is premised. It also shows that only 36% of affected JSA claimants had savings of £100 or more to tide them over. The majority had less than £100 and, in the DWP’s own words,
“could be deemed to be less resilient in a vulnerable time just after losing work”.
But that potential vulnerability does not seem to concern the department. I also asked the Minister during our earlier debate whether the DWP had any information on the numbers leaving work in debt or arrears. He did not, and I wonder whether any effort has been made to find out that information subsequently, given its relevance to the matter in hand.
Of course, the official line is that short-term benefit advances are available. But CPAG noted that its research with Tower Hamlets Foodbank identified problems for claimants accessing them. I know that, in response to the Feeding Britain inquiry, the department is supposed
to be addressing these problems. Can the Minister answer the question posed by the inquiry in its follow up report:
“What progress has the Government made in improving awareness and, as importantly, take-up of Short Term Benefit Advance payments to bridge the gap between a claim being made and a first payment being received”?
Welcome as any such progress might be—I hope we will hear that there has been progress—as CPAG points out, this new waiting day policy is putting the short-term benefit advance to a different use than originally envisaged. Its report says that,
“rather than ameliorating a delay, it will be used to substitute for entitlement”,
and that, as such,
“it will be a loan, to be repaid in full”.
As a result, it says:
“This proposed solution will simply spread the financial loss to families over a longer period of time”.
Moreover, the Secondary Legislation Scrutiny Committee highlights a nasty little Catch-22, which the noble Baroness, Lady Thomas, has already pointed to:
“Advances will not be paid to those … who will not be able to afford the repayment”.
As the committee observes:
“The DWP does not explain how someone in this … category is expected to manage”.
Perhaps the Minister could do so now.
SSAC also noted that part of the rationale for the policy, as first outlined by the Chancellor of the Exchequer, was that people should spend the first few days out of work looking for a job rather than signing on. However, the committee warns, on the basis of the evidence it received, that,
“a family that has little or no resources with which to manage during a period of up to six weeks, exacerbated by the waiting day rule, will inevitably focus on survival rather than looking for work”.
The committee also points out that the family could then risk sanctioning. This really could be a counterproductive policy, as Crisis underlines in its briefing.
SSAC was very concerned about the likely impact on health. As we have already heard, no impact assessment has been provided, on the bizarre grounds that,
“there is no impact on business or civil society organisations”.
Try telling that to the landlords and food banks—that is not how they see it. As the Secondary Legislation Scrutiny Committee notes,
“chapters 4 and 5 of the SSAC report … set out clearly the extra burdens anticipated”.
For all these reasons, as we have heard, SSAC was unequivocal in its rejection of the regulations,
“based on the persuasive and compelling evidence presented to us”.
It praised that evidence for its richness and praised the efforts made by respondents to consult more widely. The Secondary Legislation Scrutiny Committee branded the woolly reasoning given by the department for not accepting SSAC’s recommendation as “unsatisfactory” and suggested the House might wish to press the Minister for more information as to why it did not accept the recommendations.
Will the Minister also tell your Lordships’ House how many times SSAC has rejected draft regulations outright? I may be wrong but I do not think it is very common, and it is particularly telling that it is a committee largely appointed by the current regime at the DWP that has done so. I congratulate SSAC on taking this stand and thank it and all who gave evidence to it. Given that we are unable to reject the regulations tonight, I very much hope that your Lordships’ House will support my noble friend’s Motion so that, rather than the department steaming ahead in the face of the compelling arguments put by SSAC that the regulations should be rejected, the policy can be reviewed in the light of experience after the completion of the rollout of universal credit.