Social Security (Claims and Payments) Amendment (No. 2) Regulations 2006

My Lords, I support the Prayer of my noble friend Lord Skelmersdale to annul the regulations. He has drawn your Lordships’ attention to the widespread criticism from authoritative bodies that have examined the legislation and found it wanting. Citizens advice has commented adversely on it. The Social Security Advisory Committee has most unusually recommended that the measure should not be implemented and our own Merits Committee draws our attention to the Government’s inadequate response to the criticism of the SSAC. In particular, it notes the failure to establish an advantage through proper cost-benefit analysis and a failure to present other options to achieve the same objectives. These are damming indictments which should have caused the Government to reconsider their proposals. As it is, the Government stand alone while these authoritative critics all point to flaws and the potential for muddle and waste in the implementation of the regulations. My noble friend also reminded us of the well tried Social Fund loans scheme which, although not perfect, operates well and which could benefit greatly from the additional liquidity which this measure diverts to non-commercial financial lenders. This encouragement of third-party lenders removes from benefit officers the opportunity to take a holistic view of individual and family support systems. It is true that nothing can stop individuals going elsewhere to get out of a financial jam but this measure could well remove them even further from the help that departmental officials can provide. It is also strange that the benefits listed as deductible are relatively restricted. Why do the Government not include in the list tax credits, which are increasingly the vehicle for family support? Is it simply because the tax credit system has become too encumbered to allow this factor to be brought into play? It is a pity that the Government have pressed ahead with this measure. They have ignored advice and have complicated an already Byzantine system which few of those on benefit fully understand. The benefit system is already too complex to give a sense of direction to claimants. This measure only makes it worse. That brings me to my final point. Parliament and government quite properly seek to find ways of supporting individuals and families in poverty. They rightly seek to do so within a framework of social responsibility. This includes encouraging even the most disadvantaged individuals to plan and budget for their needs. The Social Fund loans scheme is designed for exactly this and, it is interesting to note, accounts for by far the largest number of benefit deductions. According to the department’s most recent figures in its quarterly statistical bulletin on income support, jobseeker’s allowance and pension credit, the number of deductions in respect of Social Fund loan recovery across all three benefits was, in February 2005, 904,300 out of a total of 1,817,500—more or less half the deductions made—and was, exceptionally, an increase from five years previously of 190,000 when Social Fund loans accounted only for a third of total deductions made. The Government will recognise the increased use of the fund in these figures. In the future, the move is towards one-stop, single-assessment benefit support. By seeking, at considerable cost, to introduce external agencies—namely, the non-commercial credit unions—the Government dilute the unique and pivotal role they alone have in supporting and nurturing individuals and families in regaining financial control over their lives. This is what the social security system of this country should surely seek to do.