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Social Security Benefits Up-rating Order 2015

Volume 759: debated on Wednesday 25 February 2015

Motion to Consider

Moved by

That the Grand Committee do consider the Social Security Benefits Up-rating Order 2015.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments

My Lords, the Guaranteed Minimum Pensions Increase Order 2015 and the Social Security Benefits Up-rating Order 2015 were laid before the House on 19 January 2015, and I am satisfied that they are compatible with the European Convention on Human Rights.

I start by touching briefly on the Guaranteed Minimum Pensions Increase Order. The order provides for contracted-out defined benefits schemes to increase their members’ guaranteed minimum pensions which accrued between 1988 and 1997 by 1.2%, in line with price inflation as at September 2014. As the Committee will be aware, we are not here to discuss the Welfare Benefits Up-rating Order 2015, which was made on 14 January. The rates increased under that order, by 1%, were debated in Parliament during the passage of what became the Welfare Benefits Up-rating Act 2013.

Turning to the Social Security Benefits Up-rating Order, I start with the increase in the basic state pension. One of this Government’s first acts was to restore the earnings link to the basic state pension. Indeed, we went a step further and provided for a triple lock for pensioners: a commitment from the Government to increase the basic state pension each year by earnings, prices or 2.5%, whichever is the highest. This year, as 2.5% is greater than the increases in prices and average earnings, the basic state pension will increase by 2.5%, twice the increase in prices and four times the increase in earnings, which is the minimum required by law. The new rate of basic state pension will be £115.95 a week for a single person, an increase of £2.85 from last year. We estimate this means that the basic state pension will be around 18% of average earnings, its highest comparative level for more than two decades.

Our triple-lock commitment means that someone on a full basic state pension can expect to receive £560 a year more than if it had been uprated by earnings since the start of this Parliament. This commitment also means that, since coming into office, the coalition has increased the basic state pension by around £950 a year.

On pension credit, we have taken an important decision to ensure that the poorest pensioners are able to benefit from the effects of our triple lock. That means that rather than rising in line with earnings at 0.6%, the minimum required by legislation, the standard minimum guarantee credit in pension credit will be increased by 1.9%, so that the poorest pensioners benefit from the full cash value of the increase in basic state pension. Single people will therefore receive an increase of £2.85 a week, while couples will receive an increase of £4.35 a week. Consistent with our approach last year, the resources needed to pay for that above-earnings increase to the standard minimum guarantee have been found by increasing the savings credit threshold, which means that those with higher levels of income will see less of an increase.

Turning to additional state pensions, I can confirm that these will again rise in line with price inflation in 2015-16 and so will be increased by 1.2%, which is the CPI level. The decisions we have taken on pensioners reflect the Government’s belief that even in difficult economic times, it is important to protect those who are less able to increase their spending power. This belief is reflected in our decision to ensure that those benefits that reflect the additional costs because of disability will be protected, too, and will be increased by the full value of CPI at 1.2%. These payments are the personal independence payment, disability living allowance, attendance allowance, incapacity benefit, the disability-related premia paid with pension credit and working-age benefits, the support component of the employment and support allowance, and the limited capability for work and work-related activity element of universal credit. Carer’s allowance and carer premia paid with pension credit and working-age benefits will also be protected and increased by the full value of CPI at 1.2%.

I ask noble Lords to note that, at a time when the nation’s finances remain under real pressure, this Government will be spending an extra £2.5 billion in 2015-16. Of that, about £2 billion is for state pensions, including an above inflation increase for the basic state pension, around £300 million will go to disabled people and their carers, and nearly £200 million will go to people who are unable to work because of sickness and unemployment.

The up-rating commitment that I have outlined today provides for increases above both inflation and earnings in the basic state pension and the standard minimum guarantee credit in pension credit. It also protects benefits that reflect the additional costs that disabled people face against increases in the cost of living. On that basis, I commend these orders to the Committee. I beg to move.

My Lords, I suppose that I should declare an interest as a recipient of one of the pension benefits that the Minister has just announced. I should get that on the record. When he read out the increases, I was reminded that I was the 75p Pensions Minister. He took me back down memory lane as he spoke.

I remember it well, too.

I want to raise a very narrow point on this order. Article 10 under Part 2 concerns the rates of the personal independence payment. Within the PIP is the mobility component, which enables people to access the mobility scheme for the lease of vehicles. I was in the Commons in the 1970s when the scheme replaced the old invalid trike, so I am well aware of the positive change. I make no comment on the scheme, save to say that it has given safe access to mobility for many thousands—indeed, millions—over the years, and I hope that it will for years to come. Given that it is public money that we are dealing with, I want to call now for a full inquiry in the next Parliament by the National Audit Office, the Public Accounts Committee and the Work and Pensions Select Committee into the finances of the scheme and particularly the banker-sized salaries paid to certain individuals.

The DWP is paying the Motability charity around £20 million per annum. The charity receives about £7 million in lease levy from the vehicles used. It has a total income of about £30 million. The £20 million from the DWP is paid to a company in respect of advance payments and adaptations. The charity itself—I will come to another one in a moment—is dependent on the money in this order. The chief executive of the charity, which is over 60% dependent on public funds—the money paid from the DWP—was paid £160,000-plus in 2013.

However, the main vehicle scheme is operated by Motability Operations Group plc, a company owned by four banks—Barclays, Lloyds, HSBC and RBS. It operates as a contractor to, and is overseen by, the charity. This point is crucial because it is the link with the money in this order. The revenue of the operations company is broadly £4 billion: £2 billion from operating leases and £2 billion from the sale of vehicles at the end of the three-year lease. Six hundred cars a day are placed on the second-hand car market, and I am aware that one in my family was once such a car.

The company, Motability Operations Group, claims, on page 4 of its report, that it gets no money from the Government, but the £2 billion for leases is in fact the DWP payment—now, the PIP—paid to over half a million people. Because the people receiving the PIP have agreed to assign the DWP allowance to the scheme, it is paid directly to the operations company and it is clearly government funding. I call that public money.

The company CEO receives a pay package of £923,000, as set out on page 82 of the accounts. On the same page I see that the chair of the operations company receives a pay package of £195,000, and a small number of directors share some £3.3 million. In addition, there are long-term incentive arrangements for the CEO and the directors. The whole system is dependent on the DWP payment, which is being uprated in paragraph 10. In fact, it is the only example I know of where a social security benefit creates, supports and finances a large private sector operation. As such, the National Audit Office, with its duty to ensure value for money, and the PAC should take a look at this arrangement. I think that the DWP Select Committee should also show some interest.

The Charity Commission should also be interested in the governance of the charity, which is 60% funded by the DWP. It could ask, for example, why the chair of the company operations remuneration committee considers it right to stand down after two terms of three years, as set out on page 43, and yet the charity trustees have served for decades—term after term after term. For decades the same people have served. The Charity Commission could ask why there is a need for a second charity. According to its report, the Motability Tenth Anniversary Trust is sitting on assets of £176 million, spending £5 million with no employees and no volunteers. It could ask if the Nolan principles are being followed.

The commission might also want to take a look at an interesting article I came across the other day at entitled “Motability: An interesting charity”. In short, we have a service that everyone agrees is a public good and which is based on public funds where they dress up the risk factors, which are minimal by comparison with the private sector, and use them as a flimsy excuse to pay banker-size salaries. I accept that the second-hand car market is highly specialised and that there are some risks but, let’s face it, this company is putting into the market 600 cars a day seven days a week. It virtually controls the entire market. The risks are ones that they can manage. The whole edifice is built on the way the scheme started in 1977-78. It was then a public good, but in my view it has got out of control.

I should add that I am never clear on what the banks get out of the arrangement. The Library has not been able to explain it to me and says that it does not have any financial accounting experts. But the banks are not doing this for altruistic reasons. Given that paragraph 10 of Part 2 of the uprating order is the start point and end point, I think that it is right that, after 40 years, Parliament should review this aspect of public expenditure and the value for money that it is providing for the taxpayer.

In conclusion, I am well aware that the changes in the PIP, which I am not going to go into at the moment, mean that some people will lose their vehicles in the next couple of years. The company I have referred to has just made a charitable donation of £150 million to the charity to help fund people who are going to lose their vehicles. It has come out of their profits. I am not arguing about it and I am not even raising it. My point is a much more targeted one. This is a public company which is funded by a social security benefit and is providing a public good. I cannot see the need for the extra money to pay those banker-size salaries.

I fully admit that I do not expect the Minister to answer these points. He can tell his colleagues that I would not be on my feet today if it were not for the fact that on Monday, 2 December 2013, during a very busy and crowded session of Oral Questions, the noble Lord, Lord Wigley, asked a Question about this issue. Half way through the supplementaries, my friend in this respect, the noble Lord, Lord Forsyth, popped up and asked the Minister about the salaries in the charity. The Minister said, “£800,000”. When Hansard reports what I am about to say—“Noble Lords: Oh!”—that is an occasion when the House indicated, “Oh!”. I rang the Minister’s office and asked whether he meant £80,000, not £800,000; was it a slip of the tongue, it is easy to do? “No, Lord Rooker,” they said, “but it is the operations company he meant, not the charity”. The charity supervises and oversees the operations company. There is a link. The whole thing depends on all those people assigning their Motability allowance in the PIP over to the company for the vehicles, so the scheme itself works all right. My question is, why the banker-size salaries on what is effectively a public good paid for out of public benefits?

My Lords, it is pleasure as always to follow the noble Lord, Lord Rooker. I was the chairman of the Social Security Select Committee when he appeared in front us with his 75p increase. When I asked him if he thought he could live on that, he was honest enough to say, “No”. His reputation for honesty derives from that moment, as far as I am concerned.

The noble Lord has made a very effective intervention, even if it is on a narrow point, and I support what he is saying. I certainly think it needs to be looked at in the Select Committee in the other place and if not, the PAC is certainly the place to do it. There is a huge amount of uncertainty about the consequences of the changes. It is not just a question of transparency and proper use of public funds; there is a public policy downside that might cause great concern to large numbers of people. I do not want to detain the Committee. I just did not want to miss an uprating order because I have done 18 of them in the past 18 years and I would not want to be left out—people would think I was not well if I did not appear.

My first question is a broader one about the process we are now in. The Minister was quite correct to say that the 2013 uprating Act supersedes the Government’s usual review process for establishing value for money. What are the consequences of that? This is a unique uprating order in that sense. Was any review of any kind undertaken? Obviously, working-age benefits are largely absent from this order, except, as he said, disability carer benefits and ESA support components. What are the consequences for the future? Can we be given an assurance that when the three-year period of the 1% uplift, which was automatic under the 2013 Act—I got very excited about that at the time and I am still concerned about it—is over, we will go back to business as usual and there will be serious modelling in the department? I understand that Ministers review everything all the time and they always have done but in the old days of the Rooker-Wise amendment, for example, these things were seriously discussed on the Floor of both Chambers and that gave confidence to people that some serious modelling was done. I am nervous that that process is being eroded; it was always a valuable protection. There is a lot of corporate knowledge in the department and if it is deployed properly it can inform Ministers and Parliament. If that goes or is considered to be downgraded by the experience of the 2013 uprating Act I would be the first to queue up at the Minister’s front door and complain about it.

The other thing I noticed was the Minister’s references to the uprating of the basic state pension. The coalition Government have made some substantial progress with the uplift and the triple lock. I hope that that can be taken forward and enshrined in perpetuity, if the economy can bear the weight. The other side of that is the interesting front-page story in the Financial Times yesterday about the £7 billion reduction there has been in working age benefits that are not in these orders. I do not know if the Minister saw it.

My point is that there has been a dramatically increasing trend, in my view, of support for people past retirement age—both the noble Lord, Lord Rooker, and I are beneficiaries of that and, as I say, I welcome what has been done—but it should not be consistently at the expense, over long periods, of the working-age cohort of our society. There are two reasons for that. First, as colleagues know, the value of the CPI versus the RPI erodes. There has been another erosion, too: the change to the CPI in the 12 months to September 2014 was 1.2%, while the change in the RPI in the same period was 2.3%. That is another salami slice in the erosion of the respective relative benefits available to the retired population as opposed to the working-age population. Other benefits are involved, too. No doubt the upcoming election will allow everyone to talk about this—hopefully, more intelligently than some of the debates in the past. It cannot go on like this; the working-age population cannot be expected to be the source of increased resources for people who are past retirement age. I hope that that point can be addressed.

Schedules 9 and 10 of the order talk about some of the changes to the jobseeker’s allowance provisions. I am very worried about the impact of sanctions now on the jobseeker’s allowance, and they are covered in this order. One of the big increases in poverty that we have seen—the use of food banks—both in my experience and in the intelligence available to me, is among people who are temporarily out of work. I think that the great British public perceive people who are out of work as being a static group, as opposed to those who are in work. That is not the reality, as I am sure the Minister knows; there is a churn all the time and there are families going in and out of benefit. I am really surprised at the extent to which sanctions are being applied; I never for a moment expected 800,000 to 900,000 sanctions to be applied each year—I am really concerned about that.

My third point is that the department should weigh in the balance the fact that in 2010, when the Autumn Statement set some of this policy in place, there was a clear expectation, certainly in my mind, that by now universal credit would be bringing relief to big numbers of low-income households. We all know that there have been difficulties with the IT, but I am not satisfied that it is on the right track. We need to get it in as soon as we can. It will probably be 2019 before it is finished. In 2010 we were saying, “Well, this will provide some comfort”, but the fact that it is absent except for 61,000 people—and half of them are under 25-ish—will be weighed in the balance of benefit uprating, if not in this one then certainly in the next. If universal credit had been as operational as expected, and I think 2 million people were expected to be in place by now, that would have been a significant assistance to some of these low-income households. The early rushes that I have seen from the early evaluation of universal credit show that it is working; the cohorts are actually going into work, and it is sustained work. If the anti-poverty strategy is all about getting people into work, then the main engine of getting people into work, as far as I can see, is absent. I am really quite nervous about that; it needs to be thought about more carefully.

My final point, because disabilities are involved in this uprating order, is that single-parent families are under stress. Low-income households with disabilities, and some of those people are working-age, are really struggling. The Minister said that there was an uplift of £300 million. That is very welcome, but it does not match the demonstrated need that my intelligence leads me to believe is necessary to do this job properly. We have to be very careful. We are right to pursue universal credit progressively and positively, and to pursue the Work Programme and help people in that direction. We need a housing policy because, in the long run, it is the only way that we will deal with the burgeoning housing benefit bill, which is far too big and a waste of public money in the sense that it does not build any houses.

This uprating order is unusual in that it is constrained. When we get back to normal business and the economy starts to flourish, as we all hope it will in the coming months, I hope that we can get an assurance that we will not lose any of the important mechanisms that we have had for protecting the ability of Parliament to cross-examine government, just because we have had three years of a different system. I hope that the Minister can give the Committee some assurance on that point.

My Lords, I thank the Minister for his explanation of these orders and all noble Lords who have spoken. I shall be waiting with bated breath for his answer to my noble friend Lord Rooker; I look forward to hearing what he has to say about that. It is always a pleasure to be reunited with the noble Lord, Lord Kirkwood. Had he not appeared, a search party would have been sent out for him. It is very good that he has saved us all the trouble. It is always good to come back and do this.

I was going to play really nicely, but the Minister kicked off by boasting about the wonderful triple lock. I just cannot let that go. I am sorry, I know that time presses on, but I will say just a brief word. This is the first time since it was invented that the triple lock has delivered a higher rise in the state pension than the formula that was linked to the RPI which was in place before 2010. If the Minister is looking a little baffled, I am sure that inspiration from behind him will confirm that.

It is worth reflecting on the triple lock’s history. In its first year it was announced but not used because it would have given too small a rise—75p was probably ringing in ears. For the next three years the triple lock was applied but each year it delivered a pension increase lower than what would have been delivered had the previous formula linked to the RPI been used. This is the first year in which it has been higher than what would have been delivered under the system that was around pre-2010—the increase here is 2.5%; an increase of only 2.3% would have come from the RPI. This is the first year that it has actually kicked in. That is a little bit of context; I shall calm down and return to my more specific questions.

I notice that yet again the Government have decided effectively to pass through the pension credit effect, which is welcome, but to fund it yet again essentially at the expense of the savings credit. Can the Minister unpack for the Committee what effect that will have on the incentive to save? Inevitably, it is not a cost-free element. Could he tell us what the consequence of that will be?

As well as the state pension, the order contains uprating details for some elements of universal credit, as we have heard. Does the Minister have an estimate of how many people are likely to be affected by these? I think that the noble Lord, Lord Kirkwood, made a very important point. When the Welfare Benefits Up-rating Bill was going through Parliament, the Opposition and other noble Lords expressed concern about the effect on poorer households, particularly working households. At Second Reading, the noble Baroness, Lady Stowell of Beeston, prayed in aid universal credit in seeking to persuade noble Lords to back that Bill. That is exactly the point made by the noble Lord, Lord Kirkwood. She said,

“I would ask your Lordships to remember that we are working to restore the welfare system as well. This year will see the introduction of universal credit, an historic change that will create a welfare system that is simpler, more effective, and designed to ensure that work pays. We expect some 3.1 million households to gain from the move to universal credit, on average by £168 per month”.—[Official Report, 11/2/13; col. 460.]

We are some way from having 3.1 million households; I am not sure that we have even 10% of that. Could the Minister tell us what the current number is? Could he also tell us whether the Government still expect the average household to gain by £168 a month from the move to universal credit? If that is not the case, the point made by the noble Lord, Lord Kirkwood, is significant. Universal credit was offered up as being the reason why lots of other things had to happen, but that it would all be okay. If it is not, Parliament needs to know that.

I would also like to ask a very specific question about universal credit. One of the problems about having disaggregated all the ways in which uprating happens is that it is quite a job of work to track down where any particular element of any particular benefit is being uprated. The hardest thing to find is what is missing. What is happening to work allowances in universal credit? I fully admit that I may well have missed them. I tried to go through but I could not see them here. When I raised this last year, I was told that there was no requirement to mention them unless they were changing. If they are here, could the Minister point me to them and tell me what percentage they are being increased by? If they are not here, does that mean that they are not being increased for the second year in a row, so they are being cut in real terms?

I was asking about the work allowances in universal credit. I think that inspiration may be coming on this point. That information may be in the document, but last year I could not find it and was told that the reason it was not there was because the measure was not changing; in other words, it was not being increased even by the rate of inflation. I have not been able to find it this year.

However, what I have found this year is the childcare costs element—the maximum amounts. Again, they look to me as if they have not changed in cash terms. Is that right? We debated this issue at length when the Welfare Reform Bill was going through the House and we were told in careful detail what the improved work incentives would be under universal credit. However, if we keep effectively having real terms cuts in the work allowances and childcare elements, then each time we do that we are eroding the gains to work. Therefore, it is important that the Government are open and transparent with the Committee about what they expect the work incentives to look like. I understand that the Minister may not be in a position to give me that information today, but I would be very grateful if he would write and tell me what changes have been made to the new work incentives, and gains to work in particular, as a result of those moves.

The noble Lord, Lord Kirkwood, referred to the overall impact on living standards of the various measures that have been taken. I understand that the argument for the Welfare Benefits Up-rating Act was that it was a temporary deficit reduction measure. However, one of the things it has made harder to understand is what the cumulative impact has been on low-income households. As the Minister will be aware, there have been repeated calls from outside as well as inside Parliament for a cumulative impact assessment of the effects. We have always been told by Ministers that that could not be done. Recently, the Institute for Fiscal Studies published a report, The Effect of the Coalition’s Tax and Benefit Changes on Household Incomes and Work Incentives. The opening sentences say:

“Tax and benefit changes introduced by the coalition have reduced household incomes by £1,127 a year or 3.3% on average”.

The report points out that the average loss was made up of an increase due to reductions in direct taxes which was more than compensated for—badly—by increases in indirect taxes, and that is before the benefit cuts were taken into account. The IFS found that the result of that was that households with children have been hit hardest by tax and benefit changes and that the poorest households have lost more than 6% of their incomes. Meanwhile, those without kids in the middle of the income distribution saw their incomes rise. Whenever the Government mention the rise in the income tax personal allowance, of course what they do not point out is that that benefits those richer people who do not lose out as a result of social security changes such as those to tax credits, so the effect is regressive in that respect. Can the Minister tell the Committee what has been the impact of the combination of the Welfare Benefits Up-rating Act 1% increase and the uprating decisions on the benefits covered by these orders on those low-income households? If he cannot do so, will he write? Finally, what difference has the delay in rolling out universal credit made to the anticipated impact of its uprating strategy?

My Lords, I am grateful to noble Lords who have participated in this informative debate. I shall try to deal with the points in the order in which they were raised. The noble Lord, Lord Rooker, rightly has a reputation for being independent and honest, as was indicated by the reference to the 75p amount. That took me completely by surprise. I have spoken to officials and we obviously take it very seriously. We will look at it in some detail and I will make sure that the Minister for Disabled People—Mark Harper—the noble Lord, Lord Freud, and the Secretary of State are aware of it, and will write to noble Lords accordingly.

Coming to the points raised by the noble Lord, Lord Kirkwood—although not necessarily in the order in which they were raised, as Eric Morecombe might have said—first: why is CPI used over RPI? I knew that I was not going to agree with much of what the noble Baroness, Lady Sherlock, said when she said that she was going to be a good girl but then changed her mind at the last minute. I know her sense of humour, so I regard that as having been said tongue in cheek. I will come back to her points about RPI.

The CPI is now the correct index for use, as recognised by the Paul Johnson review which was commissioned by the Office for National Statistics. Internationally, it is now the recognised medium for adjusting benefits. I have not heard the Labour Party commit itself to going back to RPI, but perhaps the noble Baroness wants to intervene at this stage to say that of course it will. Perhaps she wants to keep her tinder dry—understandably. The CPI is internationally recognised as the right way to review benefits.

In relation to the three-year welfare order of 1%—I phrased that somewhat clumsily—it will obviously be a matter for the next Government what processes are followed in future. I cannot give any undertaking on that, for obvious reasons. It will depend on the shape of the next Government what the policy is. I cannot anticipate that.

In response to the comments of the noble Lord, Lord Kirkwood, on the state pension, I welcome the fact that he welcomed the growth of the state pension—at least I think he did. It has grown—if we accept that there would have been a move away from RPI to CPI—it has undoubtedly grown positively. Many pensioners are very vulnerable and poor, and they do not have the same access to the jobs market at that age as other people. Necessarily, they are in a different position from people of working age. I recognise what the noble Lord says, and there are many cases where one wishes that we could do more, but these are the economic times in which we live. If it was a time of great expansion, no doubt we would be looking at it differently.

The number of JSA sanctions actually decreased in the year to September 2014, the last year for which we have figures, but the Oakley review stressed that they are a key element of the mutual obligation that underpins the effectiveness and fairness of the social security system. We need to recognise that they are an essential part of the system. On food banks, as the most reverend Primate the Archbishop of Canterbury has said, this is a complex issue. It should not be a party-political issue. It is far more complex than just the level of benefits. There is high take-up of food banks—higher than in the UK, I believe—in the US and in Germany, for example, so it is a complex issue. I pay tribute to the work that food banks have done and continue to do.

On universal credit, it is right to say that we have taken a softly softly, test-and-learn approach. It is also fair to say that the evidence is pretty irrefutable, certainly in the north-west, where it has been rolled out more substantially than elsewhere, that it is working. There has been very successful work with local authorities, for example, in getting people into jobs. We are having some success. On rollout, we are hoping that the great bulk of those affected by universal credit will migrate to it by 2019.

Using evidence from claimants in the north-west of England, the analysis found that compared to similar claimants on jobseeker’s allowance, universal credit claimants are more likely to enter work and spend more time in work. They are consistently more likely to be in work and to earn more. The results are statistically significant. It is only early evidence and we cannot be totally complacent, but it is very encouraging. I hope that noble Lords will welcome that.

Points were raised about housing benefit—I forget who raised the issue; perhaps it was the noble Lord, Lord Kirkwood—and house building. I could not agree more: that has to be part of the solution. We are committed to that in projects such as Ebbsfleet, which will help.

I do not have the points raised by the noble Baroness, Lady Sherlock. The figures for savings credit used by the Labour Party—

Sitting suspended for a Division in the House.

I was dealing with the point about savings credit, raised by the noble Baroness, Lady Sherlock. An assessment has been made regarding helping the most vulnerable, which we took to be those people who were not on savings credit. It is worth noting that, while no detailed assessment has been made of the number of people affected, there are more than 500,000 savings credit customers who qualify for other payments, which are being uprated by CPI, so a significant number of them are getting other benefits, as it were.

Did the Minister say that no assessment had been made of the impact of the change to the savings credit threshold?

No, I said that we have no precise figure for the number of people affected, which is somewhat different. I will write to the noble Baroness giving any information that we have but, as I understand it, we do not have a detailed figure on the number of people affected. What we know, though, is that more than 500,000 savings credit customers qualify for additional amounts under other benefits, which are being operated by CPI, so it is not something one can look at in isolation.

The noble Baroness made some points about universal credit. More than 3 million households will gain £176 per month on average when it is fully rolled out. She will have noted today’s PAC report, which recognises that the programme is more open and transparent and better governed, and that the twin-track approach is the best course of action. As I say, our approach appears to be working well, and that is borne out by the figures from the north-west.

She asked about the work allowances and the childcare element. Both of those are frozen. She is quite right to suggest that they are not being uprated; they are frozen at where they were last year. I think it is right to say that we are intending that there should be a move from 70% of childcare costs to 85%. I think we are aiming for 2016, so that is some good news on that front.

The noble Baroness referred to an overall assessment of the impact of benefits and tax changes. I will write to her on that; it would be a complex assessment to do over the length of the Parliament but, as I see it, it is certainly not an unreasonable request. I think that some of the figures produced by the Labour Party that I have seen knocking around—in fairness, the noble Baroness did not refer to them; she referred to independent ones—do not take account of the tax changes and seem to concentrate only on the benefits. To get the full picture, as I am sure she would acknowledge, we have to look at both—the increases in personal allowances, for example—and some of the figures that I have seen also use RPI rather than CPI. However, I will take that back and write to her, copying in other noble Lords, about how we see it playing out. I hope that I have covered the main points, although obviously I have not covered everything.

I thank the Minister for offering to write to me. On the question of cumulative impact, if he does not like the figures used by the Labour Party, the best thing to do is to offer the Government’s own, so I look forward to receiving them.

On the question of universal credit, I had hoped that he might be able to provide more information to interested noble Lords about the effect on what we are now likely to see in terms of gains to work and work incentives, because they will be affected by the changes to work allowances. Is that something that he might be able to do in due course?

On the first point, as I say, we will look at that to see how we can do it, but we will come up with figures only if we can be sure that they are sustainable, which I do not think the Labour Party figures are. That is the point that I was seeking to make. We can toss that one backwards and forwards all evening—or night, if this goes on—but yes, we will have a look at that and I will write to the noble Baroness about it.

On universal credit, I will pick up the point that she makes, but it is worth noting—I hope that she is not going to be churlish about this—that we have more people in employment than ever before. The evidence is that the impact is very favourable in the north-west, and it is best that we acknowledge this, along with the efforts that are being made by the Government and by local authorities—not necessarily being run by the Conservatives—to make sure that this is a success. The early signs are very favourable.

As I say, I will ensure that any other points that I have not taken up fully or not taken up at all are covered in writing to noble Lords. I hope that I have explained that we are spending an extra £2.5 billion on uprating pensions and other benefits in 2015-16, enabling us to protect key benefits. The order protects pensioners, many of whom have worked hard all their lives and are no longer in a position to increase their income through work, and also benefits disabled people, reflecting our commitment to protect those who are least able to increase their spending power. These are the principles behind the order, and on that basis I commend it to the Committee.

Motion agreed.