Benefits: Reductions — House of Lords, 2018-11-01
Topic: Social Welfare
Anthony Young (Labour, Centre-left): My Lords, I too congratulate my noble friend Lord Bassam on introducing this debate, and I echo the tributes that have been paid to Lady Hollis I want to focus on a couple of aspects, and start by quoting from the Times on 15 October. Paul Johnson is director of the Institute for Fiscal Studies—not exactly a left-wing organisation, so a reputable source, I trust the Minister will agree. He focused on whether the allegation that universal credit is a poll tax moment. At the end of the article, he says: "The same point pertains here as to the recent two-child limit in means-tested benefits. The idea is that nobody will lose in cash terms as they transition on to universal credit They will be protected. Again, only new claimants, or people who have a change in circumstances, will lose relative to the existing system Whatever one thinks of the long-term effects, that doesn’t look like it will create a poll tax moment What might create such a moment, though, is the third issue—the administration of the system. That is already creating some problems when new claimants move on to universal credit. There are all sorts of risks here, but perhaps the biggest are likely to arise as up to two million families presently receiving tax credits and benefits transfer across to the new system" I trust the Minister is listening. The article continues: "Under current proposals, they will actively have to reapply. The transfer won’t happen automatically. If they don’t reapply, they will lose their benefits, including any transitional protection. The scope for large numbers of people to end up losing benefits in unintended ways is clearly huge. That is what should be keeping ministers awake at night It is hard to overstate just how big a change universal credit will be. It will create millions of winners and losers. Any poll tax moment, though, is most likely to occur for administrative reasons. The first priority for avoiding such a moment should be to ensure that existing claimants transfer as easily and seamlessly as possible" That is what I want to focus on, because it is fundamentally important. I am not one of those who is calling for the scrappage of universal credit; to be honest, that way lies madness. I do not believe that going back to the previous system would be feasible. I could not help reflecting that, if there was someone else who I would have liked to be in the Chamber, it would be the noble Lord, Lord Freud—who, after all, was one of the main architects. It would have been interesting to hear his reflections Like many people, I welcome the cash injections in the Budget: I have to say that they were necessary. Not only Members on this side of the House, but those on the other side, were saying how much they were needed and that the Osborne formula had gone too far. I would like confirmation from the Minister about the waiting time—it was once six weeks, was reduced to five weeks and now is going to be reduced to three weeks. I am sure I read about that somewhere, but could not find it Politics is about the language of priorities and choices. I cannot help reflecting on something in the Budget that is important. Raising the tax threshold is good; it is hard to argue against that. It was interesting to hear the analysis, which has been referred to by a number of noble Lords today—namely, that it benefits more people at the middle and top end, and those at the lowest end benefit the least. If the Government really want to help those people—and I think that they probably do; I am going to give them the benefit of the doubt, although I am probably out of keeping with many of my comrades here—then the best thing they could have done was to raise the national insurance threshold. That would have had a bigger impact I will turn briefly to the Library briefing—another superb document. Sometimes they are so weighty that they overwhelm you, but with this one they have obviously discovered that less is more, and it is really helpful. The briefing quotes from a report by the Resolution Foundation, which points out that once universal credit is in a, "steady state we expect working families to be, on average, £625 a year worse off" The report continues that this means that, overall, universal credit is set to be, "almost £3 billion a year less generous than the tax credit system it replaces". I am sure that the Resolution Foundation is not making that up, and it is a concern To return to the question of transition, the noble Baroness, Lady Jenkin, said at the beginning of the debate—and it was not a throwaway remark—that DWP staff need more training. They might do; I am sure that they would benefit, but that is not the problem and the challenge that they face. I happen to be in contact with somebody who actually works for the DWP, and I recommend that the Minister goes and talks to the staff—not the job coaches, but the staff who are dealing with claimants on a day-to-day basis. They are under enormous pressure. They want to do the best they can; they are dealing with complex cases, but often find that they have to give a small amount of time to those cases because they have to go on and deal with the others. It is a really serious problem: people sometimes literally break down in tears because of the pressures they face. I could not help smiling when I heard recently that a regional manager came round and thanked them. That was it. What the regional manager ought to have done was sit down with them for half an hour and ask them what challenges they were facing The most important thing that the Government need to do, if they do not want universal credit to be seen as universal discredit, is to ensure that that transition takes place in an orderly way, so that people feel confident about the change to universal credit. So much of the analysis by the noble Lord, Lord Shinkwin, who is not now in the Chamber today was ideological and unfair, in my view; but that is a debate for another time. He said that there was going to be some kind of a pause. There should be, because you need to give time to ensure that the DWP staff are ready to cope with that enormous workload. I would welcome the Minister’s response to that point.