My Lords, I will speak to Amendments 62ZZA and 62ZB, in my name and that of my noble friend Lady Sherlock, to Amendments 59, 60, 61 and 66 in the name of my noble friend Lady Hollis and Amendment 62ZA in the name of the noble Baroness, Lady Meacher.
At Second Reading, this part of the Bill figured large. The mood of your Lordships’ House then was that these provisions merited further debate and possible revision. We were all particularly indebted to the right reverend Prelate the Bishop of Derby for his powerful contribution that day. A lifetime of providing pastoral care to those suffering bereavement amounts to a wealth of experience and knowledge that we ignore at our peril, particularly when the lessons drawn from it are supported by the best research, as the contribution of the noble Lord, Lord German, has just suggested.
I expect that a strong thread of the Minister’s response will be an argument that the principal aim of these reforms is to make bereavement payments more effective in the 21st-century context. The Government have concluded that doing so requires only short-term intervention to allow a bereaved spouse or civil partner the time to deal with the immediate costs of the death of a partner and to come to terms with the consequential emotional and financial implications. In the longer term, they argue, if support is needed to cope with the consequences of bereavement, the universal credit system will provide that long-term support.
Broadly, those whom the Government consulted supported that approach, but significant reservations were expressed about the impact of the proposed changes on bereaved families. I believe, like many noble Lords and, perhaps surprisingly, the Pensions Minister himself, that there is a debate to be had about how long support should last, particularly in relation to bereaved families with children. On 29 October, on Report in the House of Commons, the Pensions Minister, Steve Webb, in restating the basic design of his reforms, said,
“there is a debate to be had about how long support should last”.—[Official Report, Commons, 29/10/13; col. 867.]
Thanks to the amendments before the Committee this evening, we have the chance to have part of that debate. I am indebted, once again, to my noble friends and other noble Lords who, in speeches moving and supporting the amendments, have set out the relevant differences in the proposed new financial support provisions compared to the status quo, saving me the need to repeat them and sparing your Lordships the tedium of having to listen to me do it. However, I have some points that complement their contributions and are worth emphasising.
The Bill—certainly this part of it—is cost-neutral, or at least broadly cost-neutral. It achieves its objective of paying out to all bereaved partners, regardless of age, mainly by reducing the level of support for bereaved families and by redistributing that money to those without children. The biggest beneficiaries are bereaved partners under 45—who are also the group most likely to be in work.
Secondly, the Government’s own figures on the number of families affected and what their numbers mean tell us some things, but not everything. The total number of deaths of people aged 25 to 64 in 2012, according to the ONS statistics, was about 73,000: 43,799 men and 29,413 women. The number of deaths increases with age, as one might expect. The number of people in receipt of each of the current three benefits includes 10,000-12,000 receiving bereavement support payments per annum. In November 2012, there were 21,000 people in receipt of one-year bereavement payments and 44,000 in receipt of the widowed parent’s allowance.
If I understand these statistics—and I might not—it appears that only half of bereaved partners in any one year are receiving bereavement benefits. This indicates that either bereaved partners are not claiming, they are not married or in civil partnerships, or they are unable to meet the national insurance contributions criteria. It would be interesting to know whether the Minister has any more detailed statistics than this. The estimated total expenditure of these benefits in 2013-14 is £575 million, falling to £531 million in 2016-17. The total is falling as the number of people dying below state pension age is falling and it is expected to continue to fall as people live longer. Importantly, however, as my noble friend Lady Hollis and the noble Baroness, Lady Finlay, reminded us very forcefully, behind these statistics each death is a great family tragedy. It is the loss of a loved partner or a loved parent, in some cases both.
This reform package includes a simplification of the conditions of entitlement and a relaxation of the qualifying national insurance contributions conditions. At this stage, I want to make two points. First, the contribution record of the deceased partner is still the principle qualification for these benefits, and that is important. This is not a case of something for nothing: it is a payment out for people who have paid in. Secondly, it is argued—although this is not reflected in any amendment before the Committee this afternoon—that in these reforms, the proposed contribution condition is more restrictive than at present. In particular, the proposed contribution condition requires Class 1 or Class 2 contributions, while the existing contribution condition allows payment of Class 3 contributions. Furthermore, unlike the current arrangements, it is argued, where the contributor dies before the end of the relevant year for the necessary contributions, there is no provision for earlier years to be aggregated and treated as if made in the relevant year. Will the Minister tell us whether this was intentional and, if so, why? Would the Government be sympathetic to an amendment that reflected the current rules?
As has already been explained by my noble friends, the existing system is replaced by the payment of a lump sum and monthly payments for one year to all
bereaved spouses or civil partners regardless of age. We understand that the lump sum will be tax-free. Although the impact assessment assumes that the monthly payment will also be tax-free, we understand that this is still a matter about which the DWP is in discussion with the Treasury.
Amendment 62ZZA in the names of my noble friend Lady Sherlock and myself would ensure that both the lump sum and the instalment element of BSP would be tax- free. In the House of Commons, the Pensions Minister argued that if BSP is paid for just one year, it is easier to make the case that it is not a replacement for income, but a grant to meet the extra costs of bereavement. Therefore, he told us, it was easier to argue that it should be exempt from tax. Accepting that this is, of course, a matter for Her Majesty’s Treasury, a proper understanding of the effect of BSP requires more certainty than the Government are providing about its tax status. It would be helpful if the Minister could tell us when he hopes to have more clarity about this issue. Would it be helpful to the DWP if an amendment similar to our Amendment 62ZZA were passed on Report?
Amendment 59, in the name of my noble friend Lady Hollis engages directly with the Pensions Minister’s call for a debate about how long support should last. As explained by my noble friend, it seeks to extend the time of payment of BSP to a bereaved parent with children for at least three years or until the second year of schooling is complete for all dependent children, whichever is the longer period. The Childhood Bereavement Network states its confidence that this could be done cost-neutrally by adjusting down the monthly rate of BSP for parents and by reducing the lump sum for non-parents. Is the Minister willing to use his resources to test whether that brief is well founded? If it is, surely it significantly supports my noble friend’s amendment. She has shared not only her own experience of the effect of the loss of a parent on a child, but referred to research to which the noble Lord, Lord German, referred extensively. This demonstrated that the impact of a parent’s death on a child will be significant beyond a period of three years. This proposal is therefore evidence-based and, interestingly, is less generous than the current arrangements that my noble friend herself introduced.
The question that we are all asking is: to what extent are the Minister and the Government considering the needs of children in making this significant change of policy, by moving money from parents with children to those without? We hope that the Minister will engage with that question when he responds.
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Amendment 60 also engages with the issue occupying the mind of the Pensions Minister. It seeks to relax the work conditionality requirement for all those in receipt of bereavement payments, which is especially important for widowed parents. We know that some will not be fit and able to seek work after experiencing the death of a spouse or civil partner, and my noble friend Lady Hollis makes a powerful argument that we need to protect people by building flexibility and protection into the regulations, to take account of their personal circumstances. No two of us are exactly alike.
As is repeatedly pointed out in this argument when it comes to carers of children, in the UC regulations kinship carers are exempt from work conditionality for a year after they assume care of a child, in recognition of the need to support children in care through a time of change. Why, it is argued with some power, does the same principle not apply to bereavement? The Pensions Minister, Steve Webb, said in the Public Bill Committee in the House of Commons on 4 July 2013 that in practice local Jobcentre Plus offices have the flexibility to do this without the need for regulations. However, noble Lords know that where civil servants have targets, it is much easier to be flexible if there is clear permission for that, and geographical consistency in the interpretation of the rules is more likely if there are regulations.
Mr Webb also argued, curiously, that families may be able to delay the start of their UC claim, thus delaying the impact of the requirement to search for work by eking out the lump sum and the monthly instalments. Is it fair that families should face a choice between claiming UC and being with their children? Once again, whether the flexibility that my noble friend’s amendment calls for is appropriate will be influenced by whether it can be done cost neutrally or at very minimal cost. Is the Minister able to tell your Lordships’ Committee his department’s estimate of the cost of implementation of the amendment? If he is unable so to do, will he agree to instruct such a calculation and write to my noble friend before Report?
I turn now to Amendment 61, as it follows on logically from the powerful case my noble friend has made about the impact of bereavement on spouses by including in the group who would be entitled to payment of BSP for longer those who have been in caring relationships. In all probability, she argues convincingly, spouses who have been eligible for carer’s benefit have been caring for a sick or disabled partner or close family member until their death. The amendment seeks to protect bereaved partners who have had carer’s allowances from work conditionality where this is necessary to enable them to get back on their feet. We know that many bereaved widows go back to work and believe this is the best way to start to rebuild a life for themselves. However, this simple amendment allows a little flexibility for those who need longer to face their future alone or without their partner.
My noble friend implies that this amendment could still be accommodated within the concept of cost neutrality or near to it. Small numbers certainly would be involved. Is the Minister willing to consider an exercise to establish what the additional cost of this amendment would be? If it is small and affordable, will he be willing to adopt it?
Amendment 66ZA, in the name of my noble friend Lady Meacher, would remove WPA and WMA from the list of benefits treated as income other than earnings for UC purposes. She explained, and I do not need to repeat, the effect that her amendment would have on claimants’ income. A briefing that I received yesterday from the Childhood Bereavement Network has an illustrative calculation which shows that treating WPA as income other than earnings means that working widowed parents in receipt of both UC and WPA could end up £7.50 per week worse off, simply on
account of their receipt of WPA. Surely, as my noble friend said, the Government cannot have intended that this would be the case.
My noble friend has made a compelling argument for this to be looked at again, and surely the Minister must be willing to do that. Helpfully for him, the briefing which I have a copy of—I will be happy to pass it to him if he does not have one—suggests other ways of avoiding this loss for widowed parents. Will he simply undertake to reconsider the Government’s position if he cannot explain why this consequence has come about?
I turn now to Amendment 62ZB, tabled in my name and that of my noble friend Lady Sherlock. It calls for a review of the impact of the proposed changes on bereaved families through a report to Parliament within six months. When debating the amendments in the names of my noble friends we identified many but not all of the causes of unease about the impact of these proposed changes on bereaved families, all of which support further reflection. I pray in aid the evidence of Cruse Bereavement Care and the Childhood Bereavement Network to the Commons committee, and the Pensions Minister’s own concession on Report that how long support should last is still an open question. The Minister may have been persuaded that some of my noble friend’s amendments would improve the Bill and better reflect the 21st-century context. If so, he will accept them, but if not, there are still many questions that require answers. A review such as that called for in our amendment is the obvious answer to this challenge. We all recognise the need for the Bill to be cost-neutral, but in this part we are dealing with rather small numbers, particularly in DWP terms. Some of the proposals put forward may have modest financial implications and all are evidence-based. We on these Benches believe that this debate should continue, if possible to a conclusion, before final decisions are made. Furthermore, as many of these changes will be enacted largely through regulations, the review need not delay the Bill.
Finally, if the Minister is not minded to accept any of the specific amendments or our generic amendment, perhaps he could engage with these outstanding issues in another way. The policy manager at the Children’s Society, Dr Sam Royston, has advised us that within cost neutrality the BSP could be extended to three years by reducing the ongoing payment and by reducing the lump sum payment, both by comparatively small amounts. I would be happy to share this proposal in detail with the Minister and his team and am sure that his own support networks could easily explore what adjustments to the payments might facilitate an extension in the ways we have been discussing. First, I would ask the Minister to consider in particular whether delaying the implementation of the BSP to those aged under 45, until at least the time when savings are to be made, would allow greater generosity and flexibility to bereaved families. Secondly, does he agree—I put this crudely—that, if we spread the jam slightly more thinly, it would be possible for BSP to be paid to parents with the care of children for at least three years?
I know that we have taken some time to debate this issue, but it was perhaps less time than I had expected.
However, doing so merely reflects the serious concerns that have been expressed across your Lordships’ House and are shared by significant numbers of people beyond this place. I trust that the Minister will take into account all that has been said today in his response.