Wednesday 23 March 2022
Arrangement of Business
Good afternoon and welcome to the Grand Committee. Members are encouraged to leave some distance between themselves and others. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after a few minutes.
Universal Credit (EAC Report)
Motion to Take Note
My Lords, I rise to introduce the Economic Affairs Committee report Universal Credit isn’t working. In the first paragraph of their response to the report, the Government say that they are
“surprised by several of the Committee’s observations with regard to Universal Credit … In particular, in contrast to the title of the report, the effectiveness of UC as a comprehensive benefits system has been admirably demonstrated in response to the pandemic.”
I pay tribute to the department for the way in which it dealt with the Covid outbreak and the speed with which it was able to put people on universal credit, but I have to say that the rest of the response from the Government shows that they are remarkably tin-eared.
In introducing the report, I begin by thanking our outstanding clerk Adrian Hitchins and our policy analyst Will Harvey for the splendid support that they gave to the committee to enable us to produce this report, which at long last has been given time to be debated. So much time has passed that I am no longer the chairman of the committee, but we have an excellent new chairman in the noble Lord, Lord Bridges, from whom I am looking forward to hearing later in the debate.
When the Government announced plans to introduce universal credit in 2010, the scale of their ambition was largely greeted with approval in Parliament and among commentators. However, support seeped away as universal credit was rolled out. The way that universal credit has been designed and implemented appears to be based around a kind of idealised claimant and it has features that are harming many of the most vulnerable people in our country. It is certainly linked to the exponential growth in food banks and it is probably also linked—although rent rises are a feature—to the dramatic increase in rent arrears. Many claimants reported to our committee that they find the system incomprehensible. Overall, it is fair to say that universal credit’s reputation has nosedived.
The Government’s response indicated that they were surprised by the title of the report, as I said. A couple of recommendations were accepted, although one of them was actually rejected and has now been accepted. Indeed, this very afternoon, the Government have been taking credit for reducing the taper for universal credit, which is a welcome measure. Nevertheless, during our inquiry, which was completed in July 2021, most witnesses thought that universal credit should not be abolished because of the severe disruption that this would cause for millions of people and thought instead that substantial reform was required in order to make it fit for purpose.
Change cannot come soon enough as far as I am concerned. The country is facing a major assault on living standards as a result of soaring inflation, tax increases, rising mortgage costs and savage fuel and energy price increases. The Chancellor’s decision to cut universal credit by £20 a week at this moment is simply indefensible. Conservatives believe in securing a safety net below which no one can fall and it is hard to see how millions of families in this country will manage in the months ahead. The conflict in Ukraine is forecast to put up energy and food prices substantially. Inflation is expected to rise to 8% this spring and perhaps even higher later in the year according to the Bank of England, which has consistently underestimated the rate of inflation and the impact of its policies of quantitative easing.
Of course, the basket of items used to calibrate CPI inflation does not begin to measure the actual inflation that many of the poorest families in the country experience. Scandalously, many of these very poor families have higher electricity charges through pre-paid meters. Benefits are due to rise by 3%, resulting in a substantial real-terms cut to income as essential bills escalate. Since our report was published, the Government have increased the work allowance and reduced the taper rate, as I have alluded to, to ensure that working universal credit claimants can keep more of their earnings. This is very welcome, especially since it supports the original purpose of universal credit to incentivise work. It still means that some of the lowest-paid people in the land are facing an effective marginal rate of tax of 55%—I note that the Chancellor has started to call the reduction of the taper rate a “tax cut” but, if it is a tax cut, it is an effective marginal rate of tax of 55%. That is 10% higher than people earning over £150,000 in taxable income. As if things were not tough enough, deductions from universal credit awards have left some claimants with an income that is substantially lower than their essential needs. Surely the DWP should be required to conduct affordability assessments before making deductions from awards.
Scandalously, universal credit is being used by the Government as a vehicle through which to recover debt. Most of this is comprised of around £6 billion of historic tax credit debt. Many people who owe this money are unaware of it. Certainly, the original receipt of an overpayment may have been outside of their control. The recovery of the money is leaving many households with an income that is well below what is needed to get by on, even before the current cost of living crisis. We called on the Government to write off historic tax credit debt that is owed by universal credit claimants. It should be treated as a sunk cost. Who really believes that this money is ever going to be repaid? Why create so much misery and anxiety among people who are extremely vulnerable in many cases?
The five-week wait for the first universal credit payment is the main cause of insecurity for claimants. Many people have nothing on which to fall back during this period, when their needs are most acute. The wait entrenches debt, increases extreme poverty and harms vulnerable groups disproportionately. The Department for Work and Pensions has introduced some measures to mitigate the most harmful effects, but these fall well short of what is needed. In the view of the committee, the DWP should introduce a non-repayable, two-week initial grant for all claimants. This would provide some security to claimants, mitigating the timing problems in relation to housing costs, and would make repayments of advances more manageable.
The way in which universal credit payments are calculated is based on a monthly assessment period and is designed to mimic the world of work. I ask the Committee: on which planet are these people living? Most people about whom we are concerned here are not used to be being paid on a monthly basis with index-linked pension plans, like the civil servants who have produced this scheme. However, it can result in substantial fluctuations in income month to month, which makes it extremely difficult for claimants to budget. This is impractical and fundamentally unfair and it should be resolved. We recommend that the DWP fixes the level of awards at the same level for three months. If claimants experience significant falls in income or disadvantageous changes in circumstances during this time, a mechanism should be introduced to enable them to have an early reassessment.
Paying awards on a monthly basis does not reflect the lived experiences of many claimants. It forces them to fit the rigid requirements of the system and causes unnecessary budget and cash-flow problems, both for those out of work and for those who are used to receiving wages more frequently. All claimants should be able to choose whether to have universal credit paid monthly or twice monthly.
Moreover, the way universal credit is paid as a single household payment should be revisited. Access to an individual income is important for maintaining balanced and equal relationships and, in more distressing cases, for reducing the risk of financial coercion and even domestic abuse. The DWP should review the option of a separate payment by default, drawing on the review carried out, I am pleased to say, in Scotland.
The conditionality requirements on claimants who can look for or prepare for work should be rebalanced. The extent of conditionality has increased significantly over recent years, too often to the detriment of claimants. Less emphasis should be placed on obligations and sanctions. Instead, there should be more support to help coach and train claimants to find jobs or to progress in their current roles.
The UK has some of the most punitive sanctions in the world, but there is very little evidence that they have a positive effect. Removing people’s main source of support for extended periods risks pushing them into extreme poverty, indebtedness and reliance on food banks. Furthermore, there is a great deal of evidence that sanctions, and the threat of sanctions, are harmful to claimants’ mental health.
We recommend that the Government publish an evaluation of the impact of conditionality and sanctions on mental health and well-being. Furthermore, we recommend that the DWP evaluates how the current length and level of sanctions facilitate positive behaviour change and how they lead to sustainable work outcomes. The DWP should also expedite its work on introducing a written warning system before the application of a sanction. Sanctions should always be a last resort.
Our report was an appeal for the Government to act now. That was in July; it is now even more important. Universal credit needs an immediate increase in funding to match the cost of living crisis, reform in its design and implementation, and improved support for claimants to find and prepare for work.
In his Mais lecture last month, the Chancellor quoted the opening paragraph of Adam Smith’s Theory of Moral Sentiments, which I am sure everyone in the Committee will have read. I will remind them of what it says:
“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner.”
In the difficult months ahead, may these words be his guiding light. I beg to move.
My Lords, I congratulate the committee on a first-class report and commend its then chair for having championed some of its recommendations, even today, notably concerning the withdrawal of the £20 uplift. The departmental response was, though, depressing, with what the then chair described in a letter to the Secretary of State as “perfunctory replies” to some of its “most urgent recommendations”. Although I noted numerous “do nots” and the occasional “acknowledge” or “note” in the response, the word “accept” was notable by its virtual absence. Thus, over one and a half years on, the problems identified by the report remain and some have got worse.
I have frequently quoted the report, in particular with reference to the benefit cap, which has still not been reviewed; the two-child limit, which is dragging more and more larger families into poverty; the already referred to five-week wait, which is not solved by repayable advances, especially given the level of other debts recuperated from weekly benefit; and the implications, especially of the single household payment, for victims and survivors of domestic abuse, ignored in the Domestic Abuse Act.
I will highlight just two areas now that stem from two of the valuable sets of principles framing the report, which were ignored in the DWP’s response: that universal credit should
“provide claimants with adequate income”
“provide security and stability—income must be predictable”.
These principles, and many of the report’s criticisms, were echoed by participants in two more recent studies but were found sadly lacking in their experiences of relying on UC. One participant in the Covid realities research, to which I referred yesterday in my OQ, said that
“the title ‘social security’ is laughable. We have never felt so insecure”
and the report referred to
“chains of insecurity and uncertainty”.
Likewise, an ESRC-funded study of couples on UC, carried out by a team that included the committee’s specialist advisers, found that in particular the monthly assessment of earnings, the whole-month approach to changes of circumstances—under which circumstances on a single day decide entitlement for a whole month—and monthly payment all contributed to insecurity, instability and lack of predictability. These issues were all raised by the report, as the noble Lord said, but given short shrift in the department’s response.
With regard to adequacy, the report argues that UC should be set
“at a level that provides claimants with dignity and security”
and pointed out that the £20 uplift
“shows the original rate was not adequate”.
Well, the evidence of its inadequacy was mounting even before the cost of living crisis, but, despite that, as we have heard, claimants now face a cut of more than 4% in the real value of these inadequate benefits over the coming year. Women as the shock absorbers and managers of poverty will bear much of the brunt of this cut. As the Minister knows, I feel strongly that there has to be an additional uprating, preferably in April but failing that in October. If a second uprating requires emergency legislation, so be it; this is an emergency. Additional funds to local authorities for discretionary support, announced today, are no substitute for the security provided by weekly benefits that meet people’s needs. In the longer term, we need a proper review of the adequacy of benefits—as the report sort of calls for.
I hope that the noble Lord will excuse me if I spend the rest of my time on an issue that is not explored in the report but is highly relevant to its recommendations on support with claiming, namely migration to UC. I recently attended a meeting of the UC all-party parliamentary group, of which I am an officer, and we heard evidence about the issue of migration that made me realise that I for one had taken my eye off the ball of migration, which now threatens to hit and bruise badly many claimants. I am grateful to the Child Poverty Action Group, of which I am honorary president, for its help on this.
First, the CPAG reports growing concerns among advisers about the “lobster pot” aspect of natural migration, which means that there is no going back once a UC claim is made, even if it proves to be to the claimant’s detriment. It and other charities recently called on the DWP to allow test claims so that the many households—including, for instance, many of those with disabled children—that turn out to be worse off on UC after making a voluntary claim can return to the legacy benefits system. Alternatively, they suggest that they could be covered by the transitional protection that will be available under managed migration, now called Move to UC. Could the Minister give us the department’s response to this recommendation?
Turning to Move to UC, the process of managed migration was supposed to be based on the outcome of a three-stage pilot. This was, understandably, paused at the start of the pandemic after just eight months, during which I understand that fewer than 13 households were confirmed as having made the move to UC. The purpose of the pilot was, according to Neil Couling of the DWP, to develop a
“measured approach to roll out, ensuring the system works for everyone.”
But, instead of continuing the pilot as originally promised, the DWP now says that it has gleaned a “considerable amount of learnings”, sufficient to proceed. Those learnings have not been made public and it is hard to be confident that the department has the necessary information from such an attenuated pilot.
Proceeding without the level of testing originally envisaged, or proper reflection and scrutiny, puts claimants’ well-being at risk. As the DWP has acknowledged, those who fail to respond to an official notification about migration will have their benefits stopped, threatening increased vulnerability and possible destitution. To ensure that this will not happen, can the Minister assure us that further piloting will take place so that the DWP can design a process that we can be confident will work? Will she publish the evaluation of the pilot, such as it was, without further delay and give an assurance that the department will fulfil the commitment to publish the evaluation strategy for the pilot? Finally, can she also assure us that Parliament will have the opportunity to scrutinise the managed migration/Move to UC regulations before the cap allowing no more than 10,000 claimants to be migrated to UC is lifted?
I can understand why the department wants to get on with it after the time lost during the pandemic, but surely it is more important to get it right. I therefore support the CPAG’s call for a pause in the Move to UC programme until it has been properly piloted, the evaluation has been published and Parliament has had a chance to scrutinise the plans. Can the Minister also say when the department envisages being able to publish take-up figures for UC, because, as the report points out, the promise of increased overall generosity rests on higher take-up? This higher take-up has been promised to flow from the supposed simplification of combining most means-tested benefits into a single award. The response to the report’s recommendation on publication of take-up figures simply said that
“The Department does not publish estimates of UC take-up rates”
and implied that there were no plans to do so. Well, I hope I read that wrong and that there will be plans to do so. We need to know when that will be possible. I understand why it may not be possible now, but it has to be possible at some point.
Finally, what is the Government’s response to the principle enunciated by the committee that UC
“must … reflect the lived experience of claimants—they must be at the heart of its design and involved in devising solutions to problems”?
This is a principle that was raised in yesterday’s OQ and that the Scottish Government have taken to heart, but I have yet to see evidence that the UK Government have.
My Lords, I am very grateful for the opportunity to discuss this report from the Economic Affairs Committee. The contributions we have heard from the former chair of the committee, the noble Lord, Lord Forsyth, and the noble Baroness, Lady Lister, have explained the detail of what has actually gone wrong with the universal credit system.
First, I am very concerned that the report was issued in July 2020 and that we are discussing it in this Chamber only in March 2022. Given that the Government’s formal response was sent 18 months ago, it is very hard to see what has held up such a debate—and, inevitably, some facts and figures have changed. When the Minister replies, perhaps she might just explain why we have had to wait this extraordinary length of time to have a debate on this absolutely vital matter for so many.
However, we should be very grateful to the noble Lord, Lord Forsyth, for enabling a Private Notice Question to be placed on the Order Paper of your Lordships’ House on the very day of the Spring Statement. Doing so has drawn out a number of facts. One is that, as I interpreted the Minister’s response in the Chamber a few minutes ago, the Government have done no affordability assessment, and nor has anything been done as an impact assessment more generally. That is very serious, as in most cases impact assessments are part and parcel of what the House of Lords is asked to consider.
Many responders to the committee’s inquiry said that universal credit was not necessarily broken. The noble Lord, Lord Forsyth—indeed, the report—says that it commands broad support in principle as a structure, but it does need reform. It is hardly surprising to me that some things went wrong, simply because it was such a major change to the benefits system. Inevitably, some things do not work as well as you want them to. However, as the noble Lord, Lord Forsyth, identified in his introduction, the rise in the use of food banks is a direct consequence of what has happened with universal credit. The noble Lord was absolutely right in his initial remarks to comment on why the Government said that they were surprised by the recommendations in the report—because so many of those recommendations are absolutely justifiable. So I will add my own surprise that the Government were surprised in their response to the committee’s recommendations.
As the committee said, universal credit should not undermine
“the security and wellbeing of the poorest in our society.”
I understand, as I guess we all do, that the report was issued at a very worrying time for a lot of people as the pandemic threatened their livelihoods. Like the noble Lord, Lord Forsyth, I recognise that the Government produced temporary and permanent welfare measures to the value of around £9 billion during the pandemic. In the Budget last October, low earners were able to keep 8p more for every £1 earned, and the work allowance increased by £500—and the pressure on the taper issue did have an impact.
The report congratulates DWP on its response to the pandemic and the huge increase in workload that the department had to manage, helped by digital working and automated processes. However, as the committee said, the underlying problems with universal credit remain. Some new claimants are not used to monthly pay. A fortnightly payment option would help them. The five-week wait for new claimants is too long and creates insecurity. The committee’s two-week grant recommendation seemed to me to be a very wise and helpful proposal, but the Government have turned it down. I still do not fully understand the audit reasons they have for so doing, because there are ways around that, which the committee proposed.
The Government say that an applicant may be able to get a universal credit advance if they are unable to manage during this five week-period. I hope that the Minister might be able to tell us in her reply what evidence from research undertaken by the DWP the Government have that that advance system is working fairly and reasonably for those who receive universal credit. As the committee rightly identified, the principle at stake is that the system should not cause shortfalls in income for individuals. As the noble Lord, Lord Forsyth, said, sanctions should be applied only as a last resort. The DWP should do affordability assessments before making deductions from awards. As a principle, someone’s income should never be lower than their essential needs.
We have heard about the cut of £20 per week; there has been a huge amount of debate around it. In my view, it was a gross error. I was hoping that something further might be done about it today, but I fear that that has not happened. More than 5 million low-income families lost just over £1,000 from their annual income, creating severe financial hardship for many people. What this revealed was that the real problem with universal credit is low incomes; that issue is fundamental to understanding the crisis around universal credit. With the current inflation rate heading towards 10%, an uplift under CPI of 3.1%—the Minister will recall our discussion of that uplift in Grand Committee a couple of weeks ago—simply will not do.
Crisis seems an appropriate word to use in this situation. Rent costs, housing costs, energy costs, food prices and transport costs are all rising. Food bank use has been rising and is clearly going to rise further and further. Household finances are much more difficult for the low paid because they have so little money. We need a real living wage, not the national living wage. The Government talk of the national living wage, but they have to talk about the need for a real living wage. It is true that many universal credit recipients are in work, but many people see adjustments being made to their hours of contract. It does not help when people get their hours cut, never mind a low hourly rate; in the end, this is about the income they receive.
I repeat that the five-week wait is the primary cause of insecurity in universal credit as it
“entrenches debt, increases … poverty and harms vulnerable groups disproportionately.”
Those were the words used by the committee, so there is an opportunity for the Government here. We will not get more than a few months into 2022 without needing to do something further.
In that respect, I ask the Minister about the proposal to close so many DWP offices. I seek an assurance from her that this will not in any way impact the support of clients who need help. A few days ago, there was an announcement that 42 DWP offices were to be closed across the UK. Apparently, 13 will be full closures while 29 are to be closed and relocated. There are offices being closed in Stoke, Southend, Peterborough, Chesterfield, Aberdeen, Kirkcaldy, Barrow, Bishop Auckland, Doncaster and Burnley—taking jobs out of these communities.
The Minister, David Rutley, said that the closures
“will not impact on jobcentres and the customer-facing interactions”.—[Official Report, Commons, 17/3/22; col. 1032.]
Can the Minister explain exactly what a customer-facing interaction is? What are the implications for the agreement and contract that the Government have with Citizens Advice, which comes to an end a year from now, in March 2023? Under the help to claim system that has been running since 2019, Citizens Advice in partnership with Citizens Advice Scotland has given people independent advice. I understand there has been an investment in that of £21.3 million. If it would be helpful for the Minister to write later, rather than respond in detail now, I want to be reassured about the impact on people for whom digital or telephone contact may be very difficult. If they were able to go to a local office, will they be able to continue to go to that office to secure help?
That is all I want to say at this stage, but I think we will come back to this matter several times this year. I hope the Government and the Chancellor understand that this issue is profoundly serious. I said that two weeks ago, when we talked about the use of CPI at 3.1% for the benefit uplift, when inflation is heading towards 10% this year. For those on low incomes, that position is simply unsustainable.
My Lords, I first add my thanks to the Economics Affairs Committee for producing this excellent report. As is often the case with a Select Committee report, reading it is not only enlightening but deeply informative. I have learned a great deal from it, for which I am grateful.
I too pay tribute to the noble Lord, Lord Forsyth, for his tenacity, such as when securing the intervention in the Chamber earlier. It was so interesting that the concerns were being raised from every Bench. I hope the Government Whips and others are listening to the profound unease coming from every quarter of the House; it is not going to go away. I have experience of working across two relatively well-off counties. I used to work in the Black Country, but nowadays I have responsibility for Hertfordshire and Bedfordshire, which are fairly wealthy, by and large. The concerns coming out of parts of Watford, Stevenage and Bedford are uniform: we are facing a serious challenge.
I have to confess to noble Lords that some of the material in this report was new to me. I am ashamed to say that I had not realised, until reading it, that universal credit is being used by the Government as a vehicle to recover debt. I was glad to be able to raise that earlier although I do not think the Minister understood the point I was making, because we received no answer. This is deeply disconcerting, not only because it will not deliver what the Government want. Simply taking pennies off the poor at a time when Her Majesty’s Government have written off £16 billion in Covid business loans due to errors and fraud—which led to resignations from the Front Bench in our own House—is quite extraordinary and unrealistic.
As a general principle, I am absolutely committed to recovering debts. If the Government deem it necessary to pursue these historic tax credit debts from UC claimants, I hope they will broach other debts with the same level of vigour. I think we have no choice but to support the recommendation that we look for a Jubilee-style “Reset the Debt” policy, which would be just a small first step to addressing the serious and growing problem that we face.
What is true of the notion of pursuing claimants is equally true of the sanctions regime, which, as the report mentions, is one of the most punitive in the world. The findings of the report in this regard largely mirror those of the 2015 study by Christians Against Poverty, which stated that there was little evidence to suggest that the UK benefits sanctions regime made a positive contribution to helping people find work but that it did help in discouraging those who were unemployed from applying to the benefits system. I fear that the new shortened sanctions regime introduced earlier this year is merely an extension of this logic: an aid to get people off, and further discourage them from accessing, UC. However, the whole point about UC is that it is for people who have no other place to turn to. That is why it is vital that Her Majesty’s Government can categorically prove that sanctions help facilitate claimants in finding work and that the Government are open and honest about their purpose and effects.
I move now to some general points. The most fundamental question is whether universal credit is enough to live on. Leave alone the details of the system; there is simply a fundamental, pressing question when we face the levels of inflation that the noble Lord, Lord Shipley, has just mentioned about whether it will enable people to weather the current economic storm. Can the Minister assure us that Her Majesty’s Government are looking at what would be appropriate increases in universal credit, as this huge storm comes together? It is simply hitting people now. I had a meeting this morning with someone from my diocese who yesterday visited the food bank in Broxbourne. Parts of Broxbourne are fairly well heeled, but they had seen a doubling in the number of clients in the past year; it has really hit them badly.
This report goes beyond a simple discussion of the amounts of universal credit that individuals receive and details the design flaws and tensions within the scheme. We all know that it is hoped that UC should be a transitional pathway to lead people into stable, long-term employment and financial independence. We all think that is the best way forward. The problem is that we are trying to do it at a time when much of this poverty is to do with in-work poverty, as repeatedly and consistently raised by different people.
Regardless of the lived circumstances, I echo the report’s concerns on the substantial fluctuations in month-to-month income due to the monthly assessment period and the huge difficulties that that is causing people. When visiting and meeting people in different parts of my diocese, I have been struck by how much this has been raised, as if it is almost impossible to make any plans. That then rolls out in all sorts of areas of public policy. For example, not being able to plan means that we cannot do the detailed work needed to ensure that people can live on a balanced diet, so that we can address the huge problems caused by eating inappropriate foods and obesity, which have knock-on effects such as diabetes and other problems.
I totally support the report’s recommendation to fix the level of awards for three months, to provide longer-term budgetary stability and encourage people to work without any pecuniary downside. Extending the assessment period might allow individuals to experience what one hopes is the dignity of labour as a platform on which to build their employment prospects. I hope that the Government will take on board some of the report’s recommendations so that we can attend to the disparities and produce a fairer and more just benefits system, which accords with Her Majesty’s Government’s own vision of a system that will help people to move into work in the long term and find themselves in a position where they can be full and contributing members of society.
I am grateful for this opportunity to discuss this important topic. I will focus on one particular aspect of universal credit: housing benefit. I should first say that I work part-time for Business in the Community on levelling up left-behind towns, in places such as Bradford, Rochdale and Sheffield. Each of these towns has their own unique strengths and challenges. In passing I should say that I am delighted that Bradford has just been shortlisted for City of Culture, which would give the city a tremendous boost.
The place on which I want to concentrate is Blackpool, which, according to Zoopla, provides a gross annual yield to buy-to-let investors of 8.6%, the second best in the country. So far so good, but now let us look at the living conditions in those buy-to-let houses. Blackpool has about 4,000 private rented units in the centre of town, the legacy of bed and breakfasts that did not keep up with the more modern hotel accommodation that is now available. Many of these B&Bs have been converted to houses in multiple occupation and those HMOs are located in eight of the 10 most deprived wards in England. Life expectancy in this area is the worst in England.
Some 80% of these tenants rely on housing benefit or universal credit. While tenants in social housing can rely on the decent homes standard, there is currently no quality assurance for a private landlord receiving housing benefit. Therefore, if you are motivated only by money, or indeed absent and unaware of local conditions, the incentive is to squeeze in as many people as possible, leading to those profitable yields that I mentioned. Not only are these people crammed in, but the conditions are appalling. It is estimated that one in three of these buildings has a category 1 hazard. This type of hazard is defined as
“the most serious harm outcome … for example, death, permanent paralysis, permanent loss of consciousness, loss of a limb or serious fractures”.
I am delighted to say that two Secretaries of State had the chance to see these dreadful living conditions for themselves last week, during the Conservative Party’s spring conference. The Government have now announced a package of interventions. These include beefing up the council’s inspection and enforcement team and investing through Homes England to create more liveable neighbourhoods.
I am truly delighted that the national Government have focused on Blackpool as an exemplar of how to level up. But the issue remains that tens of millions in housing benefit goes to these HMO landlords and, without any requirement for decent standards, there are plenty in Blackpool who will do everything in their power to avoid the expense and hassle of upgrading their properties. It is imperative that, as soon as possible, the Government bring in legislation which means that substandard landlords are not eligible for housing benefit payments, mirroring the decent homes standards that were introduced in the social housing sector in 2000.
The levelling up paper aims to reduce the number of “non-decent homes” by 50%,
“with the biggest improvements in the lowest performing areas.”
I would like to suggest an addendum: “and no non-decent homes will be funded by public funds provided through housing benefit or universal credit.”
My Lords, I start by congratulating my noble friend Lord Forsyth and the committee on their excellent report. I had zero hand in it and agree with it entirely. It is always difficult to follow my noble friend Lord Forsyth on occasions such as this, because I feel that I am repeating everything he has said—he is so eloquent at summing up reports.
I am not going to go through the entire list, but it strikes me as an incredibly comprehensive critique of how universal credit should be improved. Reading the Government’s response, I too was very disappointed by its tone and substance—and, like the noble Lord, Lord Shipley, I was surprised by the Government’s surprise.
Something more fundamental than this strikes me. As we just saw in the Chamber, this entire area of policy, especially the issue of the £20, is uniting Members on all sides of the House. This area of policy needs a fundamental reassessment, for reasons that I will come on to, but especially for the reasons the report sets out: the five-week wait for the first payment; fixing the level of awards for three months; rebalancing the sanctions regime; the abuse of universal credit to recover debt, as the right reverend Prelate mentioned; and, perhaps most important of all, making the £20 a week uplift permanent. All these recommendations seem to make perfectly eminent sense—and that was the case when the report was published.
Let us remember, as the noble Lord, Lord Shipley, said, that the world is now fundamentally different. Back then we were in the first phase of the crisis called Covid and inflation was still seen as under lock and key, or thereabouts. Oil was at $40 a barrel. Today, we have heard that prices are rising at the fastest rate for 30 years and oil is at $120 a barrel. It really is the case that the past is a foreign country; we did things differently there.
As we look ahead, we see energy bills rising by 50%-plus in April alone. As we heard in today’s Statement, households are facing the biggest fall in disposable income per person since the 1950s. Meanwhile, the backdrop to this is that the tax burden is on track to be at its highest since the 1950s, while debt is at its highest level since the 1960s. It is worth noting, as this is the backdrop to all the policies that we are addressing, what that means. As we heard in today’s Statement, interest payments are set to hit £83 billion in the next fiscal year. That is a record level—more than is spent on schools, the Home Office and the MoJ combined.
So wherever I look on the economic dashboard, I see the lights flashing red. As the noble Baroness, Lady Lister, and the noble Lord, Lord Shipley, said, this is an emergency. At times in politics we are apt to use the word “crisis” in a slightly flippant way. But this is a crisis, and it really is one for those who are on the lowest incomes. I think all of us here share a sense of responsibility and a sense of wishing to take real and urgent action to address that.
As the OBR warns today, and as my noble friend pointed out, benefits are going up by 3.1% in April, but inflation is set to average at 8% in 2022-23 as a whole. Before today’s Statement, low-income households face a real-terms cut in income just six months after the £20 per week cut to universal credit. Let us remind ourselves what all this amounts to. The Child Poverty Action Group’s analysis shows that families’ universal credit will fall in value by £570 per year on average. The Joseph Rowntree Foundation has calculated that 400,000 people could be pulled into poverty by this real-terms cut to benefits. Families with children in poverty will face £35 per month in extra energy costs even after the Government’s council tax rebate scheme is factored in.
That is before we get to other issues that we should be concerned about. One that I am very concerned about is the rising cost of food. Wheat prices are already up 40% this year alone. That is before we get to the threat of another hike in energy bills in October. Citizens Advice forecasts that 14 million households will struggle with their bills. That is one in four adults. Let us put all that together: we cannot continue with business as usual.
I absolutely applaud some of the measures taken today but, as the document from the OBR makes clear, total tax and benefit changes in today’s Statement offset only about a third of the overall decline in real per person disposable incomes. That assumes that this crisis does not deepen further. Although I welcome some of the measures in today’s Statement, I cannot help but think that we are giving with one hand and taking back with the other, creating a piecemeal system that is extremely confusing.
I ask a simple question, building on what others have said: why are the Government not taking the simpler and more straightforward approach of using the welfare system and reforming it to help those on low incomes and committing to the policies set out in this report? I know that the Minister will argue that the increase in work allowance and the cut in taper are an effective tax cut. We heard that from the Chancellor on Sunday. But what does she say to the Resolution Foundation, whose analysis shows that around three-quarters of families—that is 3.6 million—on universal credit in 2022-23 will be worse off under the new regime than they would have been absent the last Budget changes but if the £20 per week uplift had been retained? That is question one.
Secondly, picking up on what my noble friend said, what does the Minister say to the finding that the overall marginal effective tax rate for universal credit families earning over the work allowance will be 70% in 2022-23? This is the same rate as experienced by families receiving tax credits from 2003-04 to 2010-11. How does this 70% marginal tax rate square with the Government’s assertion that they will ensure that “work always pays”?
Finally, as I said in the Chamber earlier, I fear that we have lost sight of one of the best ways to help those on low incomes, which is to provide them with jobs and job security. I have to repeat what I said in the Chamber: the rise in national insurance is absolutely a hammer-blow to many of the people we are talking about whom we wish to help and the businesses that employ them. Of course I welcome today’s announcement regarding thresholds and likewise I welcome the employment allowance, but I note that today the Institute of Directors has commented that this measure is marginal for employers.
We have to consider what the national insurance rise will do, not just for employees but for employers. Let us consider the sectors that will be worst hit, which are the ones that have been worst hit by Covid: distribution, transport, hotels and restaurants. How will this measure help them create jobs? How does it help them encourage investment? How does it make them more competitive? How does it help them to keep their costs low? I hate and dislike everything about this tax rise. It is taking us in the wrong direction. But the key point that is relevant to this debate is that it exhibits a lack of strategy and a lack of principle that bedevils this Government. It does nothing to help those on low incomes who need that job security.
The question for my noble friend the Minister, who I fear might get a bit of a tough time this afternoon, but I know she can take it, is whether the Government are really doing enough to help those on low incomes. Are they really rising to the moment? Do they still see this as business as usual or are they treating it as the emergency that it really is?
My Lords, I am delighted to follow the noble Lord, Lord Bridges, who, as he has just demonstrated, is an excellent successor to the noble Lord, Lord Forsyth, as chairman of the Economic Affairs Committee.
We are finally able to debate our report on universal credit, in the bijou location of the Moses Room, 20 months after its publication. Other noble Lords, not least the noble Lord, Lord Shipley, have remarked on this unacceptable delay—if not necessarily the relegation of the debate to the Moses Room. For me, there is perhaps one silver lining to this cloud, which is that I find myself the only speaker this afternoon, apart from the noble Lord, Lord Forsyth, who was an EAC member when the inquiry was held, so I feel that I can be permitted to say a few words about the chairman as well as echoing his tribute to the work of the staff, special advisers and witnesses who guided us through this exceptionally complex and difficult subject.
The noble Lord, Lord Forsyth, led the committee from the front and none of us could match the burning sense of injustice about the Government’s policies that he articulated in the meetings and subsequently, as his introduction today has demonstrated. It is a little-known secret that to commemorate Sir Bernard Ingham’s description of the late Lord Biffen as a “semi-detached” member of the Thatcher Cabinet, the Conservative Whips in your Lordships’ House vote annually on the Bernard Ingham award for semi-detachment. I am told that the noble Lord, Lord Forsyth, has won this so many times in recent years that he may well own the trophy in perpetuity, although I think that there are promising signs that the noble Lord, Lord Bridges, may give him a run for his money.
It would not be right to thank the many witnesses who gave oral or written evidence without noting the particular contribution of Sir John Hills, professor of social policy at the LSE, who very sadly died not long after the report’s publication.
I will concentrate my remarks on a couple of big-picture questions; other speakers have already raised highly effectively many of the specific recommendations in the report and the universally disappointing response from the Government. First, is it right to see universal credit as the basis of in and out of work benefits for the foreseeable future? The report’s summary states that
“we received overwhelming evidence that Universal Credit should not be replaced with a new system, not least because of the severe disruption that this would cause for millions of people.”
Although I continue to feel a nagging worry that this could be an example of sunk cost fallacy after 10 years of tortuous migration from legacy benefits—still not completed—I at least tentatively support this conclusion. My suspicion is that the digital platform on which universal credit is based should and will survive but that, by the time the reforms advocated in the committee’s report and others from different sources have been implemented by possibly a more enlightened Government than this one, the system will be largely unrecognisable from that which currently prevails.
One of the recommendations of the report was that childcare should be taken out of universal credit. Picking up on the remarks of the noble Baroness, Lady Valentine, we had a vigorous debate about whether housing benefit really fitted within universal credit. In the end, we concluded that it should not be moved, but I think that a universal credit system would still work effectively with four or five of the legacy benefits incorporated, not the current six.
I turn now to my second main question. Can any system give the support that the noble Lord, Lord Forsyth, so eloquently argued that we, as a civilised society, should give to those in financial distress? I vehemently support the noble Lord’s condemnation of the Government’s decision not indefinitely to continue the £20 per week uplift that was introduced for the period of lockdown when many households’ outgoings may have decreased.
However, as every psychotherapist might say, “Maybe we should move on”. I will move on and ask the fundamental question: what amount is necessary and fair for any household to live on? Professor Jonathan Portes, who was the chief economist at the Department for Work and Pensions from 2002 to 2008, wrote last year:
“The overwhelming case against cutting Universal Credit: not the pandemic, but the extraordinary cuts to unemployment-related benefits over the last four decades.”
In the period from 1979 to 2019, average out-of-work benefits fell from 25% of average earnings—hardly a licence for luxurious living—to less than 15%. Even if the temporary uplift in universal credit in 2020-21 and the suppression of some earnings may have reversed that trend in those years, the relative normalisation of the economy now will inevitably see new lows tested.
The furlough measures introduced by the Government in response to the pandemic and related working restrictions were rightly and generally praised. These provided for furloughed employees to receive 80% of their previous earnings, capped at £30,000 per annum. Can the Minister explain to your Lordships why she thinks that, if 80% was the right level of income support under the furlough scheme, 15% of average earnings is a justifiable level of support for unemployed people in normal economic conditions? I am not saying that 80% is a sustainable level in the long term, but surely 15% is far too low.
It may or may not be a coincidence that today’s debate coincides with the Chancellor’s Spring Statement, with what I can only regard as a stunt of an income tax cut in two years’ time—and I admit that perhaps the inventor of stunts of that sort was my right honourable friend Gordon Brown. The general tone of today’s Spring Statement seemed to be, “I’m all right, Jack”. Unless and until the Government reform the system of universal credit in the way in which the committee has advocated, we will face a period, to adapt JK Galbraith, of
“private affluence and public poverty”.
My Lords, one of the great advantages of being a non-affiliated Peer is that I am always placed last on the list. I want to take a different stance from that taken by most noble Lords. I agree with all noble Lords that this is an excellent report and I have learned a lot from reading it. I have studied poverty in various ways in the UK, India and other places for much of my career in economics. There is one unfailing thing that one can say about these things: to those who have, more shall be given, and from those who do not have, what little they have shall be taken away.
Debt recovery procedures are much tougher on the poor than they are on the rich. In 2008, when the stock market collapsed, all previous discipline of balanced budgets was abandoned and money was printed like there was no tomorrow to give the banks, which had lost money, and everybody else lots of money so that they could re-establish the value of their property. The consequence was that, when universal credit had to be implemented, there was no money, surprisingly. It was therefore created in an atmosphere where it was said, “We don’t have any more money for all this”. So the poor, as always, were the last in the queue.
I want to take a slightly different stance from that taken by most speakers. Why is the political economy of welfare, if I may so call it, so mean to the poor? This is not just about universal credit, although I would say that it is especially horrible to the poor. For a long time, we have had a tradition that the poor should be treated with suspicion. The poor will be suspected of being lazy and shiftless and if they are ever unable to prove that they are seeking work, that will immediately lead to some kind of punishment by taking their benefit away.
It is interesting that the noble Lord, Lord Forsyth, who has shared with us his committee’s great report, quoted the Theory of Moral Sentiments and cited the Chancellor. During the pandemic, I have written a book about why political economy is so misanthropic. Adam Smith was all right; he was generous in his attitude towards the poor and how the whole purpose of an economy was to create wealth not only for the few but for the many, if I may coin a phrase. It was with the Reverend Malthus and Ricardo that economics became very mean. When Malthus invented his completely fake theory of population growth, it was to make sure that the poor were not given more money because, if they were given it, they would breed more people and therefore it is useless to give people more money. David Ricardo put that in his theory of how there should be an iron law of wages. We then had the poor law reform in the 1830s and so it continued.
The logic was simple. There are so-called paupers who cannot work due to physical reasons, but they are all right. Then there are the poor, who are to be suspected because they are capable of working but likely to be lazy and shiftless, so the maximum meanness ought to be exercised in compensating the poor—you have to make them work. Finally, under the great and rational Benthamite rule, workhouses were created so that the unemployed would be in those, and nowhere else, to be strictly supervised by the poor law commissioners. Bentham wanted the children of the poor to be employed from the age of four as apprentices, so that they would learn that work was their fortune.
We have continued like this. I remember when we had the idea, before universal credit came, that if a single person was poor they would get so much but if it was a couple, they would not get twice that: they get less than twice because somehow the poor do not need as much money as the rich. That of course led to people living apart. Then people had to spied on by their local council in case they were cohabiting, which was not so much a sin as an economic crime, and so on.
We have this attitude, and it has not gone away. During the 2010 to 2015 Government, corporation tax was cut because cutting corporation tax or income tax is always good and beneficial to society. However, as far as the poor are concerned, cutting it is good for society because that is where we have to save money. This sort of logic has continued. I do not know how one can move the political and economic system from appreciating that announcing a 1p cut in tax in 2024 will get you applauded in Parliament. However, had he said that he would restore the £20 cut in universal credit, he would have done much more than was expected of him.
Anyway, I want not so much to ask questions but to make a couple of points. How does whatever minimum entitlement we have decreed for universal credit compare with the poverty levels that the European Union has laid down? The World Bank has a measurement of poverty for the third world; it is around $3.50 per day per person. The EU standard is 60% of median income; I may be wrong by a few percentage points but 60% of median income is the EU poverty level. Is the universal credit entitlement below or above the poverty line?
I should also say that, as soon as I started studying these things, I found these arrangements so complex that you need a PhD to know what is going on. I remember that there used to be a very fat book published by the Child Poverty Action Group in the 1960s to help people make their way through the variety of benefits and things, with all the conditions and exceptions and this and that. Why do we make the poor work so hard for the pittance we give them? Why can we not simplify the matter so that people get their money in a certain, predictable way? After all, as someone else said, we are not giving them much money compared with how much we have lost in fraud. It is nothing; it is a pittance. Although we were right to give money for furlough, we did not give a similar amount of money to the poor.
So we need a political rethink of why we do what we do. Why is the logic always misanthropic in our political economy, or whatever you want to call it? I hope that reports like this one will make us think that we have to change our attitude completely and not expect the poor to be more patient, more frugal and more rule-obeying. The fault, dear Brutus, is in ourselves and not in the poor.
My Lords, I am grateful for being allowed to speak in the gap. I apologise for not giving notice; I did not think I was going to be here. I had not even noticed that the debate was going on.
The report led by the noble Lord, Lord Forsyth, seems excellent. I am not surprised by the disappointment in the reaction. I was a member of an ad hoc committee on financial exclusion that reported in 2017. We did some of it on universal credit, although we did not go into the same depth. I agree with everything that has been said.
In the time I have, I want briefly to comment on people and mental welfare. Mental welfare has become an increasingly important topic, led by Prince William and others. It really is important and, as things do not go so well, it becomes more and more important.
One of the problems is that universal credit is too complicated. We have just heard that it is so complicated that we do not understand it. People feel like criminals when they go through this process; I will come on that in a minute. The five-week wait puts people in debt. The Government will argue that that is not the whole reason, but we know that there is an increase in the number of people who are going into debt, for one reason or another, as a result of universal credit.
We went to Toynbee Hall, among other places. As noble Lords may be aware, this is an amazing charity that supports disadvantaged people. Many things struck me there. One was a lady who I and others were talking to. She said, “I just pray that you can give me some help. This is my correspondence about universal credit”—and it was a full lever arch file. She could not understand it and we could not understand it. All it said was, “Thank you for the answer to your last question. Will you please answer the following? Thank you for the answer to that; will you please do this?” She was at her wits’ end and felt she was being criminalised.
The next problem is the wait for money and people going into debt. This has a far greater effect than the Government ever seem to accept. The low-income group is an incredibly proud group of people. They care for their pennies, worry about the food they buy for their families and manage their expenses in an amazing way. Then a change in system dictated by government puts them into debt. They say, “We’ve never been criminals; we’ve always obeyed everything. But, to me, being in debt is a crime”. It does not just hit them; they are destroyed by this.
Therefore, when the Government say that they do help but there will be some people in debt, take a moment to understand the hundreds of thousands of people who, first, are made to feel like criminals because they have to fill in so many forms and answer so many questions and, secondly, feel like criminals because they are not able to hold their heads up and say, “I have never owed anybody anything”. Something like 40% of the population are not able to repair their washing machine out of cash—and we then do this to them. I ask the Minister whether the Government would consider this further. It brings you to tears to listen to them, when you can do nothing whatever to help. We have devised a system that has taken them away from their careful life planning —not borrowing, because they hate it, and not stealing, because they are not criminals. We then put them into this and, in three weeks, they are in debt—and, as far as they are concerned, they are criminals.
We are debating an excellent report, like all the reports produced by the Economic Affairs Committee under the dynamic and effective chairmanship of the noble Lord, Lord Forsyth of Drumlean. I find that very annoying, because I was a member of his committee and, after leaving, have detected no falling off at all in the quality of the reports it has produced. I have to tell the noble Lord, Lord Forsyth, that, knowing how dynamic and effective the noble Lord, Lord Bridges, is, I do not expect to see much falling off in the quality of the reports now, either.
The sad thing about this report is that it has not been overtaken, although it came out in July 2020. There is an extra dimension of sadness for me in that something is missing that could not be there, because it was written in July 2020, before the energy price spikes started. As the noble Lord, Lord Bridges, said, the energy price cap will go up by 54% next week. That is based on the increase in wholesale energy prices last autumn. We are now in the next reference period, which will determine the increase in October. At present, we are in for a rather larger increase. It looks as if the average household price, which is teetering at nearly £2,000 now, will go up to over £3,000, with another increase of 55% or 60% in the autumn.
We all know what a big component of household expenditure heating and lighting is for the less well off. Is it beyond the wit of man, or the wit of the department, to consider indexing universal credit, or an element of it, to the price of heating and lighting? Next winter could be an extraordinarily bad one for anybody on universal credit, for all the reasons that were set out in the report and discussed in the Chamber today, but with the additional reason, perhaps bigger than most of them, that the price of heating and lighting will be very much higher.
My Lords, I too thank the noble Lord, Lord Forsyth, and the Economic Affairs Committee. As the noble Lord, Lord Kerr, said, it is a very august and illustrious committee, as I am sure it was when he was a member of it. It is of great encouragement to me, and I am sure to the noble Baroness, Lady Lister, and others, that we have this support for major changes to universal credit. I have to say that in the past we have not had a great deal of support for the kinds of changes proposed in the report, many of which we have raised. But I am encouraged today, and I hope that we have two people here who will see some of these fundamental changes through and campaign for them. I know the Minister; she is also a campaigner, and I know she will be very good at understanding the issues raised in the report and their effect on the people they apply to.
An effective safety net must provide realistic and accessible support for anyone who falls on hard times, whether through loss of a job, bereavement, relationship breakdown or other personal catastrophes. Any of these could happen to all of us in periods of our lives; they often do. The current system manifestly does not do this, as the report evidences.
The report identifies and analyses a range of familiar problems, as well as the lack of confidence, failure to understand how the scheme works and general feeling of powerlessness experienced by people who try to use the scheme, and gives practical recommendations. As many noble Lords have said, there is a need for a fundamental revisiting of the scheme’s finances. I know from reading the book Clashing Agendas by the noble Lord, Lord Freud, about the pressures in place when the Government tried to establish the scheme and set it on its way. As the report says, now is a timely moment to look at the fundamental financing of the scheme.
All noble Lords mentioned the crisis we face in energy and prices. The sticking plaster today in the form of an increase in the household support fund seems to show contempt for the suffering of so many people. As I said, I am grateful for the report because it does so much to analyse with the committee’s rigour and bring forward firm proposals that are deliverable, so I am hopeful.
As the noble Lord, Lord Forsyth, said, confidence in the scheme is extremely low. There is an overall perception of a chaotic system that is incomprehensible, inaccessible, intractable in its decisions and harshly punitive of any perceived shortcomings of claimants. I have written down some of the report’s themes that I hope the Minister will respond to, particularly the recommendations, which seem very sensible, as many noble Lords have said.
As I said, more funding is definitely needed to provide adequacy. The current level of support is quite rightly said by many to not be enough to live on. It needs to be a secure and fair scheme that provides proper support for claimants when they need it. So the recommendation that the Government should have committed
“to making the increase in the standard allowance permanent”
is very welcome. The recommendation also says:
“To avoid undue hardship and poverty it should also examine the relative levels of benefits for couples and those with children and investigate whether there are other claimant groups who do not receive adequate income.”
Many noble Lords have referred to the delays in the system. The five-week wait is ruinous for many people. I was encouraged to see that, during the lockdown, many people who would normally be in work were made aware of just how awful it is to have to wait five weeks when you have no money to put food on the table.
The inflexibility of the monthly assessment period has been fairly well documented—in fact, I think there has been a court case on it. The idea that people should be paid monthly because it corresponds to work takes no account of the way people work nowadays. It takes no account of the fact that people work on zero-hours contracts and that many need to have two jobs in order to live. Not only do they have to wait but, worse still, they have deductions made because they were overpaid because of the schedule, not because they have too much money. As I have said, for many people, it is incomprehensible that they should be put through this system.
The recommendations on conditionality, sanctions and the punitive approach are welcome. The suggestion of a written warning system is very helpful, because many claimants do not even know that they are going to be sanctioned or realise it only when they have just had their money cut. Similarly, I support the recommendation that deductions from universal credit be first subjected to an affordability assessment and made only in accordance with what the claimant can afford. I would like to see that brought in.
Some elements of the system actually increase poverty, including the two-child limit—if the right reverend Prelate the Bishop of Durham were here today, he would have a great deal to say about that—so I welcome the recommendation that the two-child limit be reinvestigated. I am not necessarily sure about the tapered allowance for large families; I would like to see the evidence that that would adequately support larger families before I agreed with it. However, we certainly support the ending of the benefit cap, which we believe is another direct cause of poverty for many people.
Many noble Lords, particularly the noble Viscount, Lord Brookeborough, mentioned that the Government’s response is not surprising. I am sure that the noble Baroness, Lady Lister, who has been campaigning on this subject for much longer than I have, was not surprised by it either. However, we are encouraged that the chilling economic circumstances described so ably by the noble Lord, Lord Bridges, might bring about some rethinking in the Government and hope that it will be an incentive. One hates to think that it needs a financial and economic crisis and a crisis in the cost of living to make the Government rethink, but if that happens, we will be very pleased to see it.
As many noble Lords have said, it is the most vulnerable who will suffer the most punishing circumstances in the cost of living crisis. The noble Lord, Lord Kerr, referred to indexing universal credit to the price of heating and lighting. That would be a welcome measure. The point on cuts in budgets over the past 40 years, made by the noble Viscount, Lord Chandos, is, again, one that we need to take into account. Comparison between the furlough and what people receive on universal credit is very telling indeed.
This has been a call to arms from the Economic Affairs Committee and I hope that the noble Lord, Lord Bridges, will take the fight forward as chair. I know that he will have plenty of people who will be willing to help him. I hope that, as a result, we might see a real advance. I again thank the noble Lord, Lord Forsyth, for his strength of purpose and his willingness to take on big challenges, and hope that he will continue to do so.
My Lords, I am the substitute for my noble friend Lady Sherlock. I could not even begin to match her wide knowledge and experience of these matters, but I can match her determination in wanting to put things right. I welcome the many detailed contributions from your Lordships. I was particularly struck by the opening remarks from the noble Lord, Lord Forsyth of Drumlean, who made salient point after point about the dire state of the many millions of people significantly affected by the cost of living crisis. Indeed, he gave the Government many sensible and strong points to follow, and I hope they listen to what he said. They would be wise to act upon his advice and that of his committee. His words were ably supported by the new chair of the committee, the noble Lord, Lord Bridges of Headley, who provided clear and concise key points and noted a lack of principles in this Government.
A lot has happened since the Economic Affairs Committee published the report we are debating back in July 2020. As a result, some of its content and recommendations have been superseded—in particular, retaining the £20 pandemic uplift, which has been cut, and reducing the taper rate, which went from 63% to 55% in the last Budget. I will return to these points, but let me address the content of the report itself first.
Much of the report and the issues that it found with universal credit still exist and continue to make life difficult for those eligible for it. As the name of the report says, universal credit is not working. Temporary and inadequate sticking plasters like the household support fund are no substitute for a proper social security system that offers security to families in hard times. I acknowledge that the Chancellor has doubled that fund in his Spring Statement today, but, disappointingly, he made no mention of universal credit.
Although my view and that of the Labour Benches is that universal credit should eventually be replaced, which the report does not agree with, I share the report’s overall conclusion that “substantial reform” is required in the first instance, as in its current state, the inflexible system is
“harming many, particularly the most vulnerable.”
A big part of this is about complexity. Universal credit was heralded—I remember seeing the TV documentaries with Iain Duncan Smith—as a simplified system, making it easier for claimants and the department alike. Instead, as the report notes, claimants do not know the support they will receive on a month-to-month basis, and the use of an arbitrary assessment date and pay date do the opposite.
Claimants are also on the end of significant shortfalls caused by the whole-month approach to any changes in circumstance, which in many cases will be out of their control and in no way reflects the lives of those in low-income households. A fair system would reflect the lives of those using it and be flexible enough to adapt.
As well as reflecting any changes in circumstances, the Government have said that their intention was for payments to reflect work, but this is not the reality. The report notes—as did the noble Lord, Lord Forsyth—that many new claimants have no experience of monthly pay. Having no flexibility in payment schemes different from this is detrimental to claimants, who are being forced to accommodate the system rather than the other way around. This principle extends to single household payments. As the report highlights, this simply does not reflect reality, but more pressingly it is an enabler for financial coercion and domestic abuse by making it more difficult for sufferers of these terrible situations to escape.
But the most damaging design flaw is the five-week wait. We know that the Government are aware of this as they have taken steps to mitigate it, but they have not gone far enough. Taking an advanced payment—one of the Government’s favourite tactics to make it look as if they are doing something when they are really doing nothing—means claimants choosing between a shortage now or later. This has left claimants, particularly those in vulnerable groups, disproportionately in limbo, with increasing debt, poverty and anxiety. Also, it is a minimum five-week wait. Some people are waiting even longer—and, even if everything goes to plan, in this time many people are referred to food banks as they struggle with debt, rent arrears and the mental health issues that arise from or are exacerbated by the uncertainty.
Moving on from design issues, there is of course the question of the adequacy of awards. Since the report was published, the then newly introduced £20 weekly uplift has been scrapped—in October last year. That was the second cut to benefits in six months, which, given the numerous other issues with the system and the cost of living crisis, was the last thing that claimants needed and will have achieved little beyond making the wide range of difficulties faced by claimants harder.
It is welcome that the Chancellor followed Labour’s lead and reduced the work allowance taper rate at the last Budget, but that is the equivalent of bailing water from a sinking ship with a spoon. Over one in four people on universal credit have no work requirements because they are unable to work due to a disability or a caring responsibility—a group for which lowering the taper rate provides nothing.
The committee’s report also highlighted the use of universal credit to collect other debts, which claimants are often unaware of, from recipients including
“£6 billion of historic tax credit debt”.
How can the Government look at this and think it is anything other than entirely against the principles of the system? You cannot have social security that offers no security.
Ultimately, I think that drifting away from the set of principles that would constitute a working social security is where universal credit has gone wrong, regardless of how this point has been reached. My noble friend Lady Lister expertly noted that, in the longer term, a review of the adequacy of benefits is needed. She has a detailed understanding of the causes of poverty and has provided many solutions for the Government in her academic work, if only they were willing to listen and learn.
The committee set out eight key principles that it set the report’s conclusions and recommendations against, derived from evidence taken during the inquiry, and which it considers reforms should be shaped by. I hope that very few in this place disagree with a set of principles that includes dignity and respect, providing adequate income, security and stability, reflecting lived experience, and being fair and flexible. But what is clear from both the committee’s inquiry and the experiences of claimants that we hear regularly is that the system we currently have in place does not reflect these principles closely enough. So I sincerely hope that the Government will turn to them as a guide and enact the serious reform that universal credit requires.
My Lords, I congratulate the committee and my noble friend on the report that we have been considering today. I will start by saying that I completely appreciate the depth of feeling and passion on the issues that have been raised.
I start by disagreeing slightly with something. When it is said that universal credit is not working, I would have to disagree. If we had had the legacy system in place and the issues around Covid-19, I doubt that anybody would have got any money on a regular basis. There are certainly a lot of elements of UC that work, but today all noble Lords have raised concerns that we must take account of, and we must change where it is possible to change.
The reform of universal credit is an ongoing process. It is under the leadership of Neil Couling and his team. I congratulate them on their excellent work.
My noble friend Lord Forsyth mentioned pre-paid meters. At this stage, let me say that I completely agree about the issues and additional expense that they cause. This situation rests with BEIS but I undertake to follow up on it personally, as I agreed to do in the Chamber earlier this week.
I completely agree with noble Lords that this is a difficult time. I would like to set the record straight, if I may. On universal credit and the monthly assessment period, if we had had the tax credit system, there would have been an annual assessment. That is why we have the debt we do. A monthly assessment is far better for the individuals we are trying to serve.
I thank noble Lords for their contributions to this debate. It is worth noting, as some have said, that this report was commissioned prior to Covid-19. In what has been a very difficult period, the universal credit system has proven its worth through the invaluable support it has given to the 6 million people who faced financial insecurity during this time, with the pandemic seeing the amount of universal credit claims double and many people—a high proportion of them—being paid on time.
On the cost of living, which all noble Lords raised, the Government have introduced new measures to help with energy costs on top of the existing £12 billion of support that they are providing to help families during this financial year and the next. We are increasing the national living wage to £9.50 but I take the point made by the noble Lord, Lord Desai, about whether it is a living or a thriving wage; however, we have increased this amount as the years have gone on.
I will come on to more interesting points about housing costs, but we have helped with the cost of housing. Discretionary housing payments can be paid and are very flexible. In 2021-22, the Government made £140 million of discretionary housing payments available to local authorities. Vulnerable renters struggling due to the impact of the pandemic will be helped by a £65 million support package announced by the Department for Levelling Up, Housing and Communities. The funding will go to councils in England to support low-income earners in rent arrears, helping to prevent homelessness.
The noble Baroness, Lady Janke, and the noble Lord, Lord Kerr, raised the issue of energy bills. The Government have announced that they will provide significant financial support of up to £350 to the majority of households, protecting them from half of the forecast £700 rise in energy bills. This support is worth £9.1 billion in 2022-23.
There is also a £150 non-repayable cash rebate on council tax for 80% of households, and the Government will provide £144 million in discretionary funding for local authorities to support households that would not be eligible for that. There is the warm home discount scheme, cold weather payments and help with basic food costs through Healthy Start food vouchers. We are investing more than £200 million a year in our holiday activities programme while ensuring that children get food in the school holidays.
Noble Lords have said that our record on the cost of living is poor. I do not accept that. We have a proud record of being on the side of working people. Since 2010, under successive Governments, we have doubled personal tax thresholds, which we increased again today. We have doubled free childcare, which I will come on to. We have increased the work allowance and cut the taper rate; my noble friend was right to say that this measure was in his report prior to us doing it. Of course, as I said, we have also extended free school meals.
The robustness of the UC system was evident in dealing with an unprecedented event, which we could not have foreseen. As I have said, this would not have been possible under the legacy system. The digital nature of universal credit allowed for its adaptability during this period, where we managed to get a record number of claims processed within the first few months. This ensured financial security at a very uncertain time, with around 95% of claims being paid at the end of their first assessment period, despite pressures on the UC system. Regrettably, I must say that during this period organised criminals and opportunists sought to exploit the extraordinary circumstances of a global pandemic for gain.
Last autumn, we announced a 75% uplift in our investment in counter-fraud, compliance and debt operations, taking our funding to £1.4 billion over the next three years. With this funding, we are: setting up a new, targeted review of universal credit claims; investing in enhanced data and analytics to prevent fraud and error occurring; increasing our capacity to address serious and organised crime; and scaling up our existing operations, through funding for around 2,000 additional trained specialists to identify and stop scammers. This investment will generate billions of pounds of savings over the scorecard period.
The noble Lord, Lord Shipley, and the noble Viscount, Lord Chandos, raised Help to Claim. We recognise the challenges that a digital platform may pose for those who are unable to use this technology. That is why we have support through Help to Claim, and the alternative of being able to make a claim by telephone. A £21.3 million investment has been made available for the Help to Claim provision, providing support for a further 12 months, following a recent competition. From 1 April 2022, people will be able to access Help to Claim support online and over the phone through Citizens Advice and Citizens Advice Scotland. The service will be available at any time until the first full, correct payment of universal credit is made. People who are unable to access support, or to make their claim to universal credit by telephone or online, will be able to go to their jobcentre, where jobcentre staff will identify the right support to meet their needs.
The use of assessment periods ensures that we calculate a household’s benefit entitlement correctly, reducing overpayments and debt for families who already face financial uncertainty. The use of real-time information further enables this with accurate and current earnings information, ensuring the robustness of the assessment of entitlement.
All noble Lords have raised the issue of advances. I must confirm that, for those in financial need, the introduction of new claims advances allows for an eligible claimant to receive their full benefit entitlement up front, resulting in 25 payments of UC over 24 months. For those looking for work, universal credit works alongside existing provision to get people back into work, and to help fill the 1.2 million vacancies available. To highlight this, the Government’s Plan for Jobs initiative has made great strides in its bid to help 2 million people back into work. Further evidence can be seen through Kickstart, which is integrated with the universal credit system, resulting in over 130,000 young people getting valuable work experience to assist them to move forward in their careers. This is complemented by the reduction of the earnings taper and increased work allowance to ensure that work does pay, and results in 1.9 million households keeping, on average, around an extra £1,000 a year.
The department firmly believes that the best way to support claimants is through empowered work coaches, who engage proactively with claimants to help them identify the options they need to help build their skills, increase their confidence and return to employment. The claimant commitment is a tool for setting out, and getting the claimant to take ownership of, what they need to do in return for receiving their UC. In this sense, conditionality is indeed adapted dynamically with the claimant to ensure that the requirements for receiving support are appropriate and proportionate to the claimant’s current situation.
The claimant commitment is a key enabler to support claimants into work or to increase their earnings. For staff, it should be an enabler which supports robust setting and monitoring of work-related activities, and fair decision-making in relation to sanctions. The claimant commitment is a living document and is continually reviewed with the claimant, as appropriate, to ensure that it reflects their current situation. As such, the department considers that this meets the needs of the claimant, as well as our work coaches, in supporting claimants back into work.
When moving into work, there is additional support through the universal credit childcare offer. I completely understand the challenges that people face with childcare and that it sometimes stops them moving back to work. Eligible UC claimants can claim back up to 85% of their registered childcare costs each month, regardless of the number of hours they work, compared to 70% in tax credits. These can be claimed up to a month before starting a job and eligible claimants can receive help for upfront childcare costs by applying for help from the flexible support fund. Our work coaches absolutely love the flexible support fund and will use it legitimately for anything that helps to remove barriers for people going back to work. That help is non-repayable and paid directly to the childcare provider, where it is used for childcare fees. Additionally, a universal credit budgeting advance is available to eligible UC claimants to assist with upfront costs.
The Government are committed to improving the lives of disabled people and delivering the most ambitious disability reform agenda in a generation. In 2017, we set a goal to see 1 million more disabled people in work by 2027. In the first four years of the goal, between quarter 1 2017 and quarter 1 2021, the number of disabled people in employment increased by 850,000.
For those unable to work because of ill health or disability, universal credit provides generous support. A claimant who is determined to have limited capability for work and work-related activity is awarded an additional amount of benefit; it is currently £343.63 per calendar month, which is more than double the equivalent rate paid in employment and support allowance. Additionally, claimants who are assessed to have limited capability for work, or for work and work-related activity, are eligible for a work allowance and, in couple claims where one is working, access to help with childcare.
I try to be as respectful to noble Lords as I possibly can in all these debates. The two areas that the noble Baroness, Lady Lister, raises frequently—I respect her for it—are the benefit cap and the two-child policy. There is always a balance that must be struck between supporting those in need and having a system that provides a strong work incentive and fairness for hard-working tax households. This is not a new concept.
I remind all noble Lords that the proportion of households capped remains low, at 1.9% of the overall working-age benefit caseload. Exemptions from the cap also exist, such as those for households with earnings of at least £617 in an assessment period, and for those who are vulnerable and receiving disability benefits or are entitled to carer benefits. In addition, it is worth highlighting that the national cap of £20,000 is equivalent to gross family earnings of around £24,000, while the London cap of £23,000 is equivalent to gross family earnings of around £28,000.
The two-child limit is based on statistics from the Office for National Statistics showing that, in 2020, 85% of all families with dependent children had a maximum of two in their family; for lone parents, it was 83%. On the latest figures, 62% of households with a third or subsequent child that are in receipt of UC or CTC are not affected by the two-child policy. It is important to support families, but it is also important to be fair to the many working families who do not see their budgets rise when they have more children.
I will come on to some of the more specific points raised. I will see what I can do within the limits on my time.
A question was asked by my noble friend Lord Forsyth, the noble Lord, Lord Shipley, and others about why it is paid monthly. Universal credit is designed to top up earnings from employment, adapting to changes in the amount of earnings received each month. I must tell noble Lords that the department has no plans to change either universal credit assessment periods or payment structures. The current approach reflects the world of work, where the majority of employees receive wages monthly. Paying in this manner will encourage claimants to take personal responsibility for their finances and budget on a monthly basis, which could save households money. Ensuring similarities between paid employment and receiving benefits also eliminates an important barrier, which could prevent claimants adjusting to paid employment.
I cannot say this with utter confidence but I am quite sure that, where claimants are in difficulty and hardship, work coaches can help them. Rather than give information that is not 100% correct, I will write to noble Lords to confirm the additional support for when people are in difficulty.
The right reverend Prelate the Bishop of St Albans referred to the monthly assessment periods. Entitlement to UC is calculated in monthly assessment periods and the amount paid reflects as closely as possible the actual circumstances of a household in each assessment period, including any earnings reported by the employer in that period. Monthly reporting allows UC to be adjusted monthly, which I can only say is better than the tax credit yearly reconciliation. It ensures that, if a claimant’s income falls, resulting in a rise in their universal credit, they will not have to wait several months to receive it.
My noble friend Lord Forsyth raised the whole-month approach. As I have said before, universal credit is assessed and paid on a monthly basis. It is paid in arrears for each month and the amount will not vary to reflect the number of days in the month. To simplify the policy, we took a whole-month approach to changes of circumstance. This is a fundamental design principle of universal credit and is more straightforward for claimants to understand as they can anticipate how much universal credit they will receive, so can budget accordingly.
I come to the work of the work coaches. From all my dealings with them, all the visits I have done and all the times I have spoken to them, I know they are doing a first-class job. Nothing makes their heart sing more than when people get the right support and get into work, and where their payments are made correctly. We have 104 intensive work search claimants per work coach. To meet the demand for jobcentre services, DWP successfully recruited 13,500 new work coaches by March 2021. If any noble Lord wishes to meet a work coach, I would be only too happy to make those arrangements so that they can talk to them and see at first hand what they do. Whether the issue is money, childcare, personal circumstances, domestic abuse or anything else, they stand ready to help our clients.
My noble friend Lord Forsyth and the noble Baroness, Lady Janke, mentioned written warnings. In 2018, we committed to look at processes to give claimants a written warning instead of a sanction, sometimes referred to as a “yellow card”. We have restarted the work to test issuing a written warning instead of a sanction for a first sanctionable failure to attend a work search review. A second proof of concept is testing the operational viability of a warning system, and a further proof of concept is planned for later in the year. Once the proofs of concept are complete, we will assess the results and determine whether a larger-scale pilot is required. On sanctions, let me just say that no work coach or person in the system goes to work with a target to sanction so many people. They go to work thinking, “How many people can I progress today and get into work?”
Many noble Lords, including my noble friend Lord Forsyth, the right reverend Prelate the Bishop of St Albans, the noble Lord, Lord Shipley, and the noble Baroness, Lady Wilcox, talked about advances. For UC, new claims advances are available urgently if a claimant needs support during their first assessment period and budgeting support is available for anybody who needs extra help. Advances of 100% of potential UC entitlement are available urgently. With an advance, claimants receive an additional UC payment, resulting in 25 payments over a 24-month period. We have reduced the normal maximum rate of deductions from 30% to 25% and have made numerous improvements to UC, including ensuring that people get the money they need as soon as possible through advances.
There was reference to the advances creating debt. I think the noble Viscount, Lord Brookeborough, mentioned people who have never been in debt in their life. I understand the delicacy around this, but we are trying to get money to people who need it and for them to repay it, which is not unreasonable, over a period that they can cope with.
My noble friend Lord Forsyth made points about the current system supporting the long-term unemployed to move from one low-paid job to another. Our job is to get people into work, a better job and a career. We are managing to achieve this through our Plan for Jobs programme, with more news to come on the in-work progression system when that works.
I have already talked about the five-week wait. Nobody has to wait five weeks; I can only endorse that again.
We have talked about the benefit cap and the two-child policy. Through everything they have raised, noble Lords have talked about fairness in the system, which I understand. For policy areas that are often open to criticism that are highlighted in this report, such as the benefit cap and the two-child policy, there is always a balance that must be struck between supporting those in need and providing a system that provides a strong work incentive and fairness for hard-working taxpaying households. This is not a new concept and one that we will not change.
A benefits structure adjusting automatically to family size is unsustainable, and the Government have had to take the difficult decision to stabilise our economy and build a welfare system that works for those who use it, as well as those who pay for it. The Government’s view is that providing support for a maximum of two children in UC and CTC ensures fairness between claimants and taxpayers who support themselves through work. I doubt that I could have done anything to placate noble Lords on that issue, but it is the Government’s position.
The noble Baronesses, Lady Janke and Lady Lister, talked about the adequacy of the benefits system. All benefit uprating since 1987 has been based on the increase in the relevant inflation index in the 12 months to the previous September, as happens now. We all know that 3.1% was used this year.
The noble Baroness, Lady Lister, raised the move to universal credit. The pilot scheme that had been active in Harrogate was suspended as the department focused on delivering the Government’s ongoing response to Covid. Ahead of restarting activity around the move to UC this year, we want to ensure that claimants are aware of their entitlements and to support those who wish voluntarily to move to UC to do so. The department will make an announcement in due course on the plans for the move to universal credit. I have no doubt that there will be all-Peers briefings and meetings for us to discuss that.
I will cover that in winding up; I am conscious of the time.
The noble Lord, Lord Shipley, raised food banks. Food banks are independent charitable organisations and the DWP does not have any role in their operation. There is no consistent and accurate measure of food bank usage at constituency or national level.
On third-party deductions, benefit debts and social fund loans can see deductions reduced or deferred as the creditor, DWP, will always try to ensure that government debt is recovered effectively without causing undue hardship.
The noble Lord, Lord Shipley, talked about an impact assessment. The Government recognise that the public sector equality duty set out in Section 149 of the Equality Act 2010 is ongoing. As such, a full equality impact assessment was completed prior to the introduction of the uplift to UC, and it was reviewed and updated prior to the implementation of the temporary six-month extension announced by the Chancellor at the Budget on 3 March 2021.
I have already covered cost of living issues, fully cognisant of the difficulties that people are facing. I have heaps of information here. I try to answer all your Lordships’ questions and to treat the Grand Committee with respect. I do not want anyone to think that I am not prepared to answer questions; I will go through Hansard and through all these questions. I will write, and all noble Lords will get a copy of that. I thank your Lordships for the time you have spent listening to me.
My Lords, this is an unusual experience for me, because I have not found anyone to disagree with. On the fact that this committee is so much in agreement, on 9 March 2021, we did something rather unusual: we had a joint meeting of the Economic Affairs Committee and the House of Commons Select Committee concerned with these matters. We were unanimous in our view, and we took evidence from Mr Couling and the then Minister, Will Quince MP. There was universal agreement, except with Mr Couling, who thought that we were interfering with his perfect system. I think he said that making any changes would make it even more complicated and that he had devised a system which he thought would be around for generations to come. It is a classic example of coming up with a perfect system that everyone has to fit into and then ignoring the problems that occur.
I pay tribute to my noble friend the Minister. She does a fantastic job, and we all know that she is very well aware, from her own background, experience and the care with which she does her ministerial job, of the kinds of problems that arise. We know that the real problem here is the Treasury.
That reminds me of something from my noble friend Lord Dobbs: “You may say that, but I couldn’t possibly comment”.
I very much appreciate the way in which the Minister responded to the debate, but I know that the noble Baroness, Lady Taylor, has been very patiently waiting to get on with the debate on the excellent Constitution Committee report, so I just thank everyone who has participated. Let us hope that the urgency and severity of the situation means that Mr Couling, the Secretary of State and the Treasury will mend their ways. I beg to move.
Covid-19 and the Courts (Constitution Committee Report)
Motion to Take Note
My Lords, the noble Lord, Lord Howarth of Newport, will be contributing to this debate remotely.
My Lords, I am very pleased that we have an opportunity to discuss this report. It was published some time—a full year—ago, meaning that it has been a long wait, but perhaps that gives us an opportunity to hear to what extent the Government have taken on board the recommendations that we made.
The remit of the committee’s inquiry was to explore the impact of the pandemic and the Government’s response in relation to the operation of the courts. We were particularly interested in how the experience of the pandemic might influence the workings of the justice system in the future. I think it is fair to say that some of what we found will be very helpful going forward in terms of both what would work and what did not work.
No one can doubt the scale of the challenges that the pandemic brought us across all aspects of our lives. The justice system was no exception. In the report, we acknowledge the work that was done by those who have responsibility for our Courts & Tribunals Service. We said that there was
“a monumental effort by all”—
at least, most of the people—
“working in courts and tribunals to maintain a functioning system despite the COVID-19 pandemic.”
That was no mean ambition, and absolutely essential to our democracy.
However, as was patently clear from all the evidence we received, the justice system in England and Wales was under very significant strain even before the pandemic hit. It is important that we keep that at the back of our minds throughout this debate. I draw particular attention to paragraph 14 of our report, which shows clearly the impact of the Government’s funding cuts on Her Majesty’s Courts & Tribunals Service. I must emphasise how significant and damaging these cuts were. The scale of them is quite astounding. In 2019-20, Ministry of Justice funding for the Courts & Tribunals Service was a full 21% lower in real terms than it was in 2010-11. Between 2010 and 2019, a full half of all magistrates’ courts and more than a third of county courts were closed. The number of HMCTS staff went down as well.
In addition to this, there was a significant cut in legal aid funding. By 2019-20, legal aid funding was 37% less in real terms than it had been in 2010-11. That led us to the following conclusion—it is in paragraph 20, for those who are interested:
“The reduction in Government funding in the decade preceding the pandemic left courts vulnerable going into the COVID-19 crisis.”
I am afraid that that was the starting point, and it exacerbated the difficulties that the courts were going to find.
On top of all that, we have the problem of digital transformation. In 2014, the Ministry of Justice acknowledged the very real problems in the digital infrastructure of the whole system and announced a welcome package of measures to address it—in particular a package that would offer new IT support for remote hearings. The National Audit Office has reported on the problems of that programme, and it is not a happy story. We have seen repeated delays and significant problems that made it even more difficult for the justice system to adapt when Covid hit.
Finally, as an example of the lack of preparedness, we were told that the Government’s simulation of a flu pandemic in 2016, Exercise Cygnus, did not even consider what the impact might be on courts and tribunals. It was an obvious omission from an exercise that should have been complete.
That was the backdrop. That was the situation that we had pre the pandemic and, clearly, it had been made worse by the Government’s decisions. These cuts and this confusion led to an enormous backlog of cases—we will mention that later, because there are still some very worrying signs about the backlog that exists today.
When Covid hit us all, as it did so severely, change had to come quickly for everyone involved in the justice system: for victims, for defendants, for legal professionals, for the judiciary and for the support staff in courts—who very often do not get the credit they deserve for helping to keep the show in the road. On the ability of different parts of the justice system to adapt, there was a very mixed picture as to whether there was a satisfactory outcome. The immediate response of the Government—the Lord Chancellor working with the Lord Chief Justice—was to take some very significant steps. Some courts were closed; jury trials were suspended; there was a focus on priority cases, though there will always be a definitional problem there—who thinks a case is not a priority if they are involved?—and we saw the increasing use of technology to support remote hearings. There was, to give the Government credit, increased spending to facilitate the changes in technology for remote hearings. In addition, temporary courtrooms—the Nightingale courts—were opened to try to provide extra facilities and accommodation, especially when social distancing was necessary. That proved to be a very steep learning curve for everyone involved.
I shall not go into it in detail, but paragraph 35 of the committee’s report sets out the sequence of lots of the changes that were made over that period, responding to some of the pressures that existed. The most obvious of the significant changes was the move to remote hearings. This was not easy in many respects, but it was not easy primarily because of the antiquated nature of the IT systems that many in the courts system were using.
However, change there was. People responded quickly, and a new norm developed where there was a fivefold increase in the use of video and audio and, very soon, four out of every five cases were being heard remotely. Other things happened. HMCTS provided the criminal courts with a cloud-based video platform. The Lord Chancellor and the Lord Chief Justice both told us that they were impressed by the way in which the courts had responded.
It is true that, for many, this system did work. However, there was anything but a uniform experience. In the senior and appellate courts, the evidence that we received showed that remote hearings generally worked well. That was no surprise, because the judiciary and the practitioners at that level were—and, indeed, are—very well resourced, and the nature of much of the case work was more suitable for remote hearings. Because of this, the Lord Chief Justice was able to tell us that, in the High Court, 80% of normal work continued. The Supreme Court told us that no case had been adjourned because the court was unable to provide a hearing. Those figures and that information should give us some reassurance.
However, that was not the case elsewhere. There was certainly a more mixed picture in the lower courts, where the majority of cases are held and where many vulnerable litigants had a very different, and a very difficult, experience. I mentioned the family courts—and other noble Lords may wish to say more on this—where there was a rapid change to video and audio hearings. That had a very mixed set of results, with many people feeling very hard done by and that justice had not served them well. The Nuffield Family Justice Observatory, which is an independent research organisation, said that a majority of parents and families had concerns about the way in which their cases had been dealt with and that nearly half of those asked said that they had not understood what was happening during the online hearing. That is a very worrying picture, and one which gives real cause for concern. The Government need to think ahead of what should be happening in the future to make sure that that kind of experience does not happen on an ongoing basis.
The committee heard from one solicitor who very clearly described the difficulties which a client had experienced with just one mobile phone and no internet connection while trying to deal with both the court and her solicitor remotely. That is not the case in every situation, but it provides a contrast with the commercial cases, where all the resources and skills are available to everyone involved.
I want to mention one aspect of remote hearings which should not surprise us because it is very logical. Some remote hearings were very useful in emphasising the potential benefits of distanced participation. I think in particular of cases of domestic violence, where the victim could be heard remotely and not have to be in danger of being intimidated by the presence of the accused, or his family, in a court room. These are all factors which must be taken into account as we go forward, but, overall, it is clear that the vulnerable individuals involved in the courts system were often made more vulnerable by remote hearings. As I said, this is something to which the Government will need to give more attention in the future.
I also want to mention video remand hearings. The Lord Chancellor described them as a “singular success story”, and there are obvious advantages if a defendant does not have to be brought from remand to a court and escorted while they wait for a hearing that might come after a long wait and then last a matter of minutes. That is a resource-intensive event, and it is clear that there are very significant benefits in remote video hearings. However, we were also told that in October 2020 the National Police Chiefs’ Council confirmed that police forces would stop using virtual remand hearings due to cost and service pressures. The Lord Chancellor seemed frustrated by that, and I totally understand why. There is obviously real scope for benefit to everybody—except perhaps the prisoner who wants time out of prison—but it is not really the answer to how we could deal efficiently with cases of that kind, and I hope that there will be a report of some progress on that, because it is a very clear way forward.
I have outlined some of the main issues that are involved, and I know that other colleagues will pick up other aspects and give more detail on some—for example, the backlog. I hope that the Minister will clarify exactly where we are on the backlog of cases. I saw recently that the Nightingale court in Bolton was being closed, along with others, and I also saw that Liverpool and Chester Crown Courts had reported an ever-increasing build-up of cases, with the number of cases at the end of March 51% higher than at this time last year. I also noted that the National Audit Office had said recently, and very worryingly, that the Courts & Tribunals Service and the Ministry of Justice were
“not yet working towards shared … objectives”.
The National Audit Office described the Ministry of Justice’s plans to tackle the backlog as “ambitious”—and I think those of us who have seen “Yes Minister” know what that means. So there are some very real problems there to be answered.
I will ask the Minister to think about one other point. It is the question of the data that is available on all these problems. We heard very compelling evidence from Dr Natalie Byrom on the need to improve information gathering—I think that she has been in touch with the Ministry of Justice—but we need some detail about what is going to be done on that to make sure that we are operating on proper information.
So I hope that the Minister will acknowledge that the experience and the response to the challenges of Covid have some aspects that deserve praise, but I hope he will also acknowledge that the system was under pressure and vulnerable because of government cuts, and that the problems of the IT system have not gone away. I think we could do with an update following the National Audit Office’s criticisms. We really are worried about that backlog. But my main concern is the fact that vulnerable people are not well served if we do not have the proper infrastructure to give them the support that they need. Just recently, the Law Society has echoed our concerns about those who do not have access to all the technology and support that they need to be effective in remote hearings. We cannot have one size fits all when many people will lose out. So we need a sense of urgency to cope with the changes that are necessary, because we need urgent investment to give us the kind of justice system that this country deserves and that we can all trust.
My Lords, I was a late arrival to this inquiry by the Constitution Committee. I did not become a member until all the evidence had already been heard and the committee was considering its report. I was able to contribute a little to the discussion, having had some experience of court procedure and some awareness of the problems the pandemic had created for all court users, but the bulk of the work had been done by others. That enables me to say, without the risk of too much self-congratulation, that this is an excellent report. It has been brought to life very well by our chair, the noble Baroness, Lady Taylor of Bolton. It owes much to her skill and leadership, and to the work of the staff of the committee and to the many witnesses who gave evidence.
There is no doubt that the suddenness of the lockdown created severe problems. Much of this was because the justice system already faced significant challenges due to underfunding, as the noble Baroness pointed out. I look back to the cuts we faced in Scotland as long ago as the 1990s, when I was the Lord Justice General. They started with a request, shortly after I entered office, that we should cut our expenditure for that year by 2%. That was an incentive to cut out what was wasteful and we were able to do as we were asked, but it became increasingly difficult to maintain standards as the same request to cut expenditure was made of us year after year. We were being made to do more with less. What was the case for the system in Scotland was also such in England and Wales.
So there is a warning here, which the noble Baroness has issued and I endorse, and that experience needs to be taken very seriously. The fact is that underfunded systems are much less resilient to the kind of shock that was caused by the pandemic. But there is a bright side to this: like all shocks to the system, the pandemic was an impetus for the development and application of new ideas and the acceleration of improvements, some of which were already under way. The aim of this report was to explore what should and could be done as we seek to learn from that experience. The committee looked at the impact of the pandemic across the justice system and it made many recommendations.
The report was published on 30 March last year. The Government’s response, by the then Lord Chancellor, Robert Buckland QC, was issued on 28 May 2021. It was as good a response as we could have hoped for, as it covered the issues that we raised in commendable detail. However, as so often happens with these debates on reports, time has slipped by. Here we are, debating it some nine months after we received the response. This means that some of the information that was given then needs to be updated. I am sure the Minister will want to do that and I very much look forward to what he has to say.
I will concentrate on just a few points—first, managing the backlog. It was inevitable that the business of the courts would be interrupted by the lockdown and especially by the impact of the need for social distancing in the conduct of criminal trials. This impacted the whole handling of business in courts, which are usually attended by many people in close proximity to each other. This meant even more delays in cases coming to trial, even more increases in the time spent on remand, with all that that entails for the detainee, for whom remand is often a miserable existence, and risks to the quality of evidence.
The Government said in their response last May that, given that at that time the courts were still operating within these constraints, their indicators on current levels of timeliness were positive. That was the message we were given then. I conducted a search of the latest edition of Criminal Court Statistics Quarterly, from July to September 2021, which was published in January this year. It shows there was a continuing recovery in some areas, including a timeliness decrease in the magistrates’ courts of 5%.
The position in the Crown Court seems very different. The median age of outstanding cases had increased by 50% on the previous year. Around 23% of cases had been outstanding for a year on more, up from 15% in the third quarter of 2020. The statistics for the last quarter of 2021 are not yet on the website, but it would be helpful if the Minister could bring us up to date. I hope there has been some improvement and that priority has been given to custodial cases to reduce time spent on remand as far as possible.
Secondly, there is the use of remote hearings. A study of the HMCTS website shows that much has been achieved and full advantage has been taken of the available technology. As far as I can see, there is a lot of online guidance now on how to manage the various systems. I also welcome the guidance the Lord Chief Justice recently gave about how to conduct remote attendance by advocates in the Crown Court. This will help to maintain consistency in this area of practice.
But what is being done to help those who do not have access to online guidance—the disadvantaged elderly, the disabled, or those who are less able to understand what is on offer? We noted in our report, at paragraphs 279 to 280, that the then current plans to collect data on the protected characteristics of court users lacked “clear deadlines or targets”. Is that still the case? Are the data, always so crucial to proper planning, being kept up to date?
Then there is the need for more accommodation to reduce the backlog. It is good to see that the number of Nightingale courts is to be expanded by making available 30 more such places spread around the country. Some are being closed, but more are being opened. Can something be said about whether these facilities are enough to cope with the demand and why, as we are being told, they are to be available only until March 2023? Can we be assured that they will be available after that date if the backlog has still not been cleared?
Lastly, there is the question of remote jury trials. The provisions in Part 13 of the Police, Crime, Sentencing and Courts Bill—to enable criminal jury trials to take place if the judiciary thinks it acceptable—are controversial, but the report shows that such trials have been taking place in Scotland. It was impossible to accommodate juries in the accommodation that was available in the courtrooms there because of the need for social distancing. Of course, juries in Scotland are 15, not just 12.
Two possible solutions to the problem were rejected, as I believe they were in England and Wales. The first was to dispense with juries altogether during the period of emergency; the other was to reduce their size. It was decided that the jury should sit in a remote location, usually a cinema, while all the other participants, suitably spaced, were in the courtroom. It was decided that the judge should be there in the courtroom and not with the jury. Some people, particularly in this jurisdiction, have objected to this on the ground that the judge and jury should never be separated, but even a judge cannot be in two places at once. The most important thing is for the judge to be in the courtroom, where the witnesses are and where the trial is being conducted by the advocates.
I have been assured by the Lord Justice Clerk, Lady Dorrian, that the Scottish system has been working well, to the satisfaction of all participants. There is no question of the remote trials that the Bill is providing being used other than in exceptional circumstances, but the experience in Scotland is of some assistance. Are the Government continuing to pilot remote trials, as the report recommended in paragraph 220? If so, what conclusions are being drawn? In particular, is attention being paid to the issue that caused some concern of where the judge should sit under the new system, if there is a need to preserve social distancing? As I said, it seemed to work well in Scotland, with the jury sitting remotely from the judge and the judge being in the place where he or she most needed to be.
I am sure the Minister will agree that bringing the courts system under scrutiny, as the committee sought to do in this inquiry, has been beneficial. Of course, there remains the question of whether the system will be given the resources it needs to achieve the level of performance we would all like to see and to give it the resilience that it requires, but that, I suspect, is a matter for another day.
My Lords, it is a privilege to follow the noble and learned Lord, Lord Hope, and our past, distinguished chair, the noble Baroness, Lady Taylor. I look forward to all contributions in this debate, including from our new chair, the noble Baroness, Lady Drake, who has followed so ably the noble Baroness, Lady Taylor, in her task.
I do not want to repeat what is in the report although, on re-reading it after a little time, I have to say that it seems to make some cogent points. It has been excellently summarised by the noble Baroness, Lady Taylor. The committee was absolutely right to consider that the effect of Covid on the courts was, and is, a constitutional issue. Why is this so? In civil cases, the ability to bring a case to court within a reasonable time is a critical part of a functioning legal system and thus of the rule of law. In jurisdictions where long delays are endemic, people avoid paying debts, often driving creditors into penury, and can by delays render justice an almost unattainable goal. In criminal law, delays are even more serious, if that is possible—for defendants, some of whom may be in custody, for witnesses and, generally, for the ability to have a fair trial.
Covid took, or seemed to take, the world very much by surprise. It is not, of course, over. Another variant—or even another virus altogether—should, I hope, find our courts system much better prepared. The Minister has already been asked a number of questions and, no doubt, in the rest of the debate will be asked many more. Of course, some are posed by the report itself. Although the problems with the criminal justice system long predate his appointment as a Minister, I know that he will answer questions in his usual careful and informative manner. Can he tell the Grand Committee what preparations have been made in the event of a further outbreak of some sort?
As the committee has pointed out and has been drawn to the attention of the Grand Committee, there was already a substantial backlog. I am sure that the Minister will tell us how the courts system is now coping. We were very critical of the backlog and the response to the pandemic, but I acknowledge, as have previous speakers, the considerable efforts that were made by HMCTS to adapt. What, though, is now the position? What is the average wait in a rape case between charge and trial, or in a fraud case?
The use, albeit limited, of Nightingale courts and remote jurors—even in cinemas, as we heard from the noble and learned Lord, Lord Hope—were all attempts to mitigate the backlog but there was no alteration to the fundamental right to trial by jury, a jury of 12 members. The infrastructure and cost of jury trials is considerable. The complications involved in having them in a pandemic cannot be overestimated. We welcomed the greater use of hearings online, which was happening pre the pandemic anyway. We also recommended piloting remote jury trials as having the potential to reduce the backlog.
We considered the question of altering the norm of having juries of 12. There was the possibility that they might be reduced to six or seven, or that defendants with legal representation should be allowed to choose a trial by judge or a panel of judges without a jury. A suggestion was made by the noble and learned Baroness, Lady Hale, of two lay people and a judge instead of a jury, while the noble and learned Lord, Lord Phillips, advocated judge-only trials in response to the pandemic, but only when chosen by the defendant in question. There was also the possibility, ventilated by the Lord Chief Justice, of a judge and two magistrates, which would be much easier to manage than any jury. Labour’s shadow Lord Chancellor suggested having perhaps juries of seven.
There has been precedent for using other than traditional jury trials: in the famous Diplock courts, of course, and during the Second World War. We cover all this at paragraphs 221 to 225 of our report. However, I must point out that, notwithstanding canvassing these options, the committee came to the conclusion that any change to the jury system should take place only after careful consideration by Parliament, with full parliamentary debate preceded by evidence.
Personally—I do not speak for the committee—I think the time has come to think carefully about the future of jury trials. Other countries with mature legal systems do not find them necessary. More than 90% of our criminal cases are, in fact, heard by district judges or trained magistrates assisted by a legally qualified clerk, but for the most serious offences we leave the matter to 12 randomly selected members of the public.
There has inevitably been very little research on what juries think about in how they approach cases, the exception being that of Professor Cheryl Thomas QC. I am happy to assume that the vast majority of jurors approach their task conscientiously and will often come to the right result, or at least a fair result, but we do not know why they convict or acquit. If a judge were to decide the matter, perhaps assisted by magistrates, lay persons or assessors, they would have to give reasons for their decision, which would be capable of analysis on appeal. Appeals in jury cases have to rely on a misdirection by the judge, the admission of some new evidence not available at the trial or a perverse verdict. Incidentally, reasons for a decision are much more compatible with the European Court of Human Rights’ approach, in particular to Article 6.
Let us not forget that all personal injury cases were heard by jurors until relatively recently. That is the biggest volume of civil cases. Until 2013, defamation cases were all tried by juries too. I have not heard it much suggested that justice in these cases has been compromised by the fact that they are decided by judges alone.
Abolishing or reducing the right to trial by jury should certainly not be done without careful consideration by Parliament. Perhaps it could be done incrementally. I suggest that fraud cases would be a good place to start. In 1986, Lord Roskill, a former Lord of Appeal in Ordinary, and his committee made a recommendation along these lines following a number of failed prosecutions in fraud cases. His suggestions were not adopted by the Government, although various other recommendations he made for improvements in criminal procedure were.
We are unfortunately living in a very fraudulent age. The estimated scale of fraud relating to the various financial consequences of Covid grants is quite extraordinary. In the last two weeks the Government introduced the long-awaited economic crime Bill, which recently went through your Lordships’ House. Apparently, economic crime Bill 2 is shortly to be brought to Parliament, with a number of other provisions contained in it. Unfortunately, there is fraud in almost every aspect of society. The Government have set up a kleptocracy unit, while the fallout from sanctions is likely to give rise to a great deal of fraud prosecutions.
It is a feature of fraud cases that the prosecution has to simplify a case to make it digestible for a jury, but it is in the defence’s interest to obfuscate. The question then comes for a jury at the conclusion of a case: “Can you really be sure, in view of this immense complication, of the guilt of the defendant, having regard to all this uncertainty and this huge accumulation of documents?”
Juries, however conscientious they are, are often simply not well equipped to decide these cases. Nor is it—I emphasise this—consistent with the rule of law to wait five or 10 years for a case to come to trial.
I hope that Covid will have the effect of encouraging better investment in our courts system, in the future of the legal profession in the criminal sphere and in the imaginative and creative use of courts, but can it also be a catalyst for thinking seriously about the future of jury trial? The National Crime Agency, the Serious Fraud Office and other agencies are very short of funds and resources, hampering their ability to prosecute cases effectively. The need for a timely and fair prosecution in many of these cases is clear. Covid has exposed the general vulnerability of the criminal justice system. I can only hope that, following the experience of Covid, there will be a general reassessment of what is in the interests of justice and of a better-functioning criminal justice system.
My Lords, the Constitution Committee applauded the “monumental effort” of those working in the courts to maintain a functioning system during the pandemic, but equally recognised that those efforts could not obscure the scale of the challenge faced. As others have said, the courts system was already struggling with major pre-existing weaknesses so, when Covid hit, rendering courts reliant on remote technologies, those vulnerabilities were exposed. The urgent need for major investment was laid bare.
The 21% decline in court funding over the preceding decade and the failure to deliver a modernisation programme exposed the weakened resilience of the system. Remote proceedings have the potential to enhance access to justice by increasing the number of hearings that can take place, but the delay in the modernisation programme meant that new case-management systems had not been rolled out, common IT systems had not been implemented, the digitisation of court forms was delayed and court data was stored on a range of legacy systems. The courts were ill prepared for the scale of the shift to remote hearings.
That sudden shift was also uneven in its impact. Senior courts and those dealing with commercial cases adapted relatively well. The lower courts, particularly those dealing with criminal and family cases, had a much more difficult time. The evidence revealed the practical challenges facing ordinary people in virtual hearings, including—among other things—limited broadband access, phones or iPads shared between users in a household, no private space, dependency on pay-as-you-go phones and expensive data packages, sensory impairments and limited digital literacy.
The evidence we heard indicated that remote hearings can make it difficult for lawyers and their clients to communicate, frustrate users if they cannot see or understand what is going on and undermine the ability of litigants to engage. On the other hand, there was evidence that court users can benefit from remote proceedings and the speedier conclusion of cases. As has been mentioned, some women who would be frightened of giving evidence in a court where their abuser was also present may prefer the security of a remote hearing. I learned recently of a case of a young mother whose baby was facing end of life. She wanted to be in court when she gave evidence as she wanted people to know that she had done everything she could to protect her child, but wanted to participate remotely on other days so that she did not have to spend time travelling away from the hospital.
It is important to ensure that courts function in an innovative way to meet the demand on the system and deliver speedy and effective justice. However, as a solicitor specialising in children’s law who gave evidence to the Committee commented:
“We need to ensure that there is consultation on good practice for remote hearings to allow the courts that remain open, to hear those cases which for a number of very good reasons may need to be heard in person.”
I look to the Minister on the point that people are looking for assurances that such essential consultation will take place, and that efficiency will not by default trump access to justice.
The Lord Chief Justice described the rapid adoption of new technology during the pandemic as
“the biggest pilot project that the justice system has ever seen”
and an opportunity to
“take the best of this new way of working”.
However, the information to support that opportunity was
“just not available”.
As the Government have acknowledged, the long-standing absence of quality data in the court systems meant that important questions about access and the efficiency of the courts remained partially unanswered. They include questions about the effects of digital technology on non-professional court users and where access to justice is most at risk when remote hearings are deployed. In 2019, the Legal Education Foundation published its report by Dr Byrom, Digital Justice: HMCTS Data Strategy and Delivering Access to Justice. The majority of its recommendations were accepted by the Government. What recent action has been taken to build excellent data systems and what is the timetable for achieving that objective?
During the pandemic, pre-existing backlogs of cases increased to record levels. This month, in his message, “A View from the President’s Chambers”, the President of the Family Division of the High Court, Sir Andrew McFarlane, commented that
“work in the Family Court is at an all-time high”;
that agencies and law firms had to ration their use of resources as demand in some areas has exceeded the capacity to deliver; and that
“there is unacceptable delay in listing cases.”
That resonated with recent evidence taken in a study by the APPG on Kinship Care that some local authorities are now having to prioritise the cases for which they bring childcare proceedings because they know that the courts do not have the capacity to handle all their potential cases, and that those that do are taking longer to complete. Given such rationing in terms of unmet need, the “family court backlog” must be an understatement.
Sir Andrew’s message had the ring of a cri de cœur. The family courts deal with vulnerable children. As the public advisory group of the Family Justice Board observed:
“For children who remain stuck in the middle of the court system, the detriment to them is immeasurable.”
The life of the child goes on while they are stuck, and they may have further negative experiences. Sir Andrew observed on their impacts:
“Backlog and delay in the Family Court are not … static … they have the potential to feed on themselves and grow the longer cases are left without a final resolution.”
The number of children in care is rising. A key driver is children staying in care for longer and not leaving. Children’s social care is inadequately funded and in need of radical reform. Domestic abuse is increasing. A report by the Competition and Markets Authority published just two weeks ago found that some large private providers of fostering services and children’s homes were generating excessive profits. It added:
“The UK has sleepwalked into a dysfunctional children’s social care market … some children are not getting the right care from their placement. Some children are also being placed too far away from where they previously lived or in placements that require them to be separated from their siblings.”
That overstrained care system is now having to operate alongside a family justice system that is far from robust.
I have another example: kinship carers are grandparents, aunts, uncles, siblings and family friends who voluntarily take on the care of nearly 200,000 vulnerable children who might otherwise be taken into looked-after care. They often take on the children at very short notice following a proverbial knock on the door by a police officer or social worker. Largely unsupported financially or legally, they produce better outcomes for children and save the state millions in costs. I have heard so many of their stories, and many are heroic. But aspects of the justice system reveal a bias against them. During public law care proceedings, kinship carers are often not joined as parties to proceedings, so they can struggle to follow what is happening and understand their options. Many kinship care cases are private law cases, and legal advice and support is even more limited. Carers struggle to get legal aid. They struggle to get access to guidance and advice so that they can make the right court application for the protection of the children, and there appears now to be even less time in the court diary for private law cases.
The backlog of cases is exacerbating that bias to the detriment of children’s interests. Sir Andrew observed that there was
“no single, let alone simple”
answer to the question,
“what is to be done?”,
which is evidently true. But it is sometimes said that we judge the quality of a society by how it treats its old people and its vulnerable children. We have a way to go before our vulnerable children get the access to justice and the care that they deserve.
There are many on the committee and who are following this debate who will want to know what the Government’s commitment is to increasing resources, pushing ahead with the modernisation programme and building in innovation to the court system so that we do not face the problems that were reported in this report in future. Finally, I acknowledge my noble friend Lady Taylor’s excellent chairing of the Constitution Committee in bringing this informed report to the House.
My Lords, I congratulate and thank my noble friend Lady Taylor for her fine chairmanship of the committee and for the way she introduced our report. The committee notes that Covid hit a justice system that was already in trouble. We also noted that the courts rallied impressively to meet the huge challenge of Covid by adapting at speed as best they could to provide remote hearings, operate in improvised premises and keep court users safe.
Access to justice was gravely compromised before the Covid crisis made it worse. The Treasury had been gunning for legal aid since the 1990s, and criminal legal aid fees for solicitors, I understand, had not been increased since 1998. An egregious example of the injustices resulting from Treasury niggardliness was what became known as the “innocence tax”, whereby a defendant refused legal aid after means testing was not reimbursed their legal costs if acquitted. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 was, however, the biggest assault on access to justice, hitting especially those least able to assert their rights. LASPO largely removed from the scope of legal aid family, employment, welfare benefits, housing, debt, clinical negligence and immigration law.
The Government claimed that austerity necessitated a reduction of legal aid spending by £350 million—an indiscernible fraction of public expenditure but a significant proportion of the legal aid budget. In the event, the cut to legal aid spending between 2010-11 and 2018-19 was worse than that: £1 billion, or 36%. Political hostility to legal aid was part of a wider narrative about scroungers, shirkers and the undeserving poor. The Ministry of Justice said that its aim was to target legal aid on those who needed it most. What actually happened was that those left without essential advice and representation included disabled people, people with impaired mental capacity, carers, victims of sexual exploitation, trafficking and slavery, victims of domestic abuse, people who were homeless or living in substandard accommodation, people in detention and people fleeing persecution.
With this drastic reduction in legal aid, by 2019, more than half of law centres and not-for-profit legal advice services had closed. I declare with pride an interest as a patron of Norfolk Community Law Service. It has defiantly kept going, raising enough funding to provide advice and support to many people—though only a fraction of those who need it.
The MoJ said that another of its intentions in LASPO was to deliver better value for money for the taxpayer, yet it removed funding for early legal advice, which is crucial to prevent problems escalating. In housing law, legal aid for advice on disrepair issues became unavailable until the situation had become serious enough for people’s health to suffer. In family law, legal aid became unavailable until a dispute about a child had escalated to a complex legal battle with even more damaging effects on all concerned. The long-term cost in mental health can only be great. The health—or otherwise—of the justice system is reflected in the health of society. Cuts to the MoJ budget of 27% in 10 years were a false economy, with MoJ costs exported and multiplied in the health service, social security, education, the police and local government.
Between 2010 and 2019, 295 court facilities—a third of the courts estate—were closed, including more than half of magistrates’ courts. A huge backlog of maintenance also developed. When Covid came, posters in courts instructed people to wash their hands but barristers reported that there were no soap or towels. Decent, well-maintained court buildings were once a mark of respect for the law and society. In 2018-19, the Government cut 15,100 court sitting days; they then reinstated just 4,700. At the end of 2019, before the pandemic hit, the backlog in the Crown Court was 37,500 cases.
Plenty of money was found for digitisation, however. In 2016, the Government proclaimed that they would spend £1 billion
“to modernise and upgrade our justice system so that it works even better for everyone.”
Not a lot then happened. There was no public consultation on the principles that should apply in regard to the rule of law and access to justice in the digital realm, although there was the obvious risk that significant numbers of people who were not computer literate would be seriously disadvantaged. This was found to be so in the pandemic. Progress was dilatory in equipping the courts with new technology and training court users. In 2020, when, with Covid, the courts suddenly needed to hold virtual hearings, they were unprepared to do so.
There has developed an unhappy lack of comity between senior Conservatives and the judiciary. As Lord Chancellor, Liz Truss appeared unwilling to defend judges when the Daily Mail attacked them as “enemies of the people”. In January 2020, Suella Braverman launched a remarkable attack in Conservative Home:
“The political has been captured by the legal. Decisions of an executive, legislative and democratic nature have been assumed by our courts … if a small number of unelected, unaccountable judges continue to determine wider public policy, putting them at odds with elected decision-makers, our democracy cannot be said to be representative.”
Shortly afterwards, the Prime Minister appointed her Attorney-General.
Smarting at the decisions of the Supreme Court in the two Miller cases and on the legality of the Prorogation of Parliament, the Government have been meditating on how to clip the wings of the judiciary. Access to justice will not be improved by further limitations on the right of citizens to seek redress by way of judicial review for the improper use of powers by government and its agencies.
What is the Government’s vision for the justice system? The backlog in the Crown Courts is now around 60,000 cases and it is taking up to five years for cases to come to court. In his letter to Peers of 15 March, Dominic Raab expressed some appropriate aspirations, but not since Michael Gove was Lord Chancellor have we heard a fully considered statement of principle or strategy. From time to time, in the face of disaster, small mitigations of LASPO and small additional doses of money have been forthcoming. I recognise that there was a more substantial development last week in the Government’s response to the Bellamy review of criminal legal aid. In the view of the Criminal Bar Association, the additional funding will not be enough to prevent a continuing haemorrhage of criminal advocates. I hope it is wrong.
The MoJ’s post-implementation review of LASPO in 2019 was belated and timid, failing to address the issues of the scope of civil legal aid, means tests, bureaucracy and the supply of services. Its so-called action plan amounted to little more than promises of further research and consultation, and some narrow pilot schemes. The recently approved order for a two-year pilot scheme in Manchester and Middlesbrough to examine whether early advice can produce savings for the public purse is unnecessary: the evidence that it does was set out compellingly in the Pragmatix report. It smacks of Treasury-driven foot-dragging.
We need to look systemically at the whole ecology of justice. The Government need to ensure that proper data are available to enable informed understanding of what is happening. Everything interacts. All parts of the system need to be resourced properly or else deficiency in one area produces damaging pressures elsewhere. The Government can reduce the burden on tribunals and courts by making better administrative decisions in social security and immigration cases—and, of course, by addressing the roots of poverty and crime.
The chronic underfunding of the justice system disrupts society, wreaks misery across the country and violates the principle that, where citizens have a reasonable case but cannot afford justice from their own resources, they should be supported by the state to have their case heard. That was once common ground across the political parties; for decades, we moved towards its fulfilment. It should still be seen as a bedrock principle of the welfare state, our constitution and a liberal society. The Justice Secretary, who is also Lord Chancellor, bound by his oath of office to respect and defend the rule of law, should not tolerate continuing dereliction of this principle. I look forward to the Minister telling us how the Government plan to restore and renew the justice system.
My Lords, I congratulate the noble Baroness, Lady Taylor of Bolton, and her committee on producing an excellent report in this field.
First, I pay tribute to the prison and court staff who kept the court system going through the pandemic to the extent that they could. It was particularly stressful for them because, with the lack of any contingency planning, they had to cope with new ways of working and new technologies. There was no central direction in the days leading up to 23 March 2020. One by one, Crown Court judges had to take individual decisions on whether to allow jury trials to continue based on inconsistent information and advice. There was no governmental risk planning; if there was, it was confined to Exercise Cygnus, which of course dealt with influenza.
In the weeks that followed, piecemeal solutions were put together jurisdiction by jurisdiction and court centre by court centre. It took months before there were any proper co-ordinated approaches. The High Court and the Court of Appeal coped but Crown Courts, where the bulk of the backlog of cases lies, did not. The digital case system in the Crown Court, which could be a brilliant resource to allow cases to be managed and prepared properly, was held back by the problem of getting jury trials up and running at all.
Some high-profile cases were able to go ahead. The trial for the murder of PC Andrew Harper at the Central Criminal Court led the way, but that case required huge resources involving a remote link to defendants in custody elsewhere. Only a tiny number of cases could be handled in that way.
Nightingale courts in a variety of strange locations—cinemas, theatres, hotels and even a football stadium—were a modest success but were limited because they could not deal with custody cases. You could not bring a defendant to court in a custody case. Custody time limits were extended by statutory instrument from six months to eight months to allow for the pandemic but courts routinely extended custody time limits further, beyond that time period, finding that the pandemic was “good and sufficient cause” for an extension. Eventually, the Divisional Court ruled that this should be followed nationwide in a case of judicial review.
The effect of this was that the defendants remained in custody way beyond the statutory time limit because the Crown Courts could not cope and could not put on trials for them. Now, as the courts begin to recover and tackle the backlog, priority must be given to these custody time limit cases. Other cases, often including serious sexual offences, which have such an effect on the victim, are being vacated from the lists as courts try to catch up on cases where an unconvicted defendant is languishing in prison on remand.
Fundamentally, the pandemic has exposed the chronic underfunding of the criminal justice system, as the noble Baroness, Lady Taylor, pointed out, supported by the noble and learned Lord, Lord Hope. There are not enough judges, nor enough courtrooms, nor enough court staff. Facilities have been shown up as old, defective, inefficient and unkempt; indeed, some were exposed as inadequately clean. Public Health England, which was brought in as part of Exercise Cygnus, was not impressed.
Since the courts resumed, there has been a problem with barristers becoming unwell, just as we in the Lords now find our colleagues falling by the wayside. There is a cohort of experienced criminal juniors who are struggling to cover the work. Some of them are voting with their feet. It is too stressful; the hours are too long and the courts are often not a pleasant working environment.
Paragraph 30 of the report recommends an increase in legal aid to match need. That is a very important finding. The report before us should be read with Sir Christopher Bellamy’s more recent review of criminal legal aid, published last November, which exposed the chronic underfunding that is undermining the profession. The Government have offered to implement at an unspecified point in future the minimum recommendation of the Bellamy review, which is an immediate £135 million investment in criminal legal aid. However, to date, there is no indication of how the money will be spent and the headline figure masks the reality. It is for all parts of the criminal justice system, not just the Crown Courts.
I was impressed by the speech of the noble Lord, Lord Howarth of Newport, a moment ago. He referred to the statutory instrument about legal advice that we debated in this Room not so long ago. Legal advice used to be provided on a green form: legal aid for legal advice was a way in which people could be pointed in the right direction for their problems to be solved. What we had last week or the week before was a statutory instrument to bring about a pilot scheme that will last two years and so cannot come into effect until 2024. That is wholly inadequate. We need to research whether this is required. I remember from my early days that more than 1 million people had legal advice on legal aid without it causing any huge problem.
The criminal Bar has decided that it is too little, too late. On 11 April next, the Criminal Bar Association is going back to a policy of “no returns”; that is, not to provide cover for a barrister who finds himself, by reason of the current deficiencies, listed in two courts at once and has to return his brief to someone else. It is not a strike but a work to rule, and it is planned for next month.
I know that the criminal Bar does not want to damage the system but to improve it. Unhappily, the criminal justice system has not been given sufficient priority in the nation’s recovery from the pandemic—if indeed there is such a recovery as yet.
I heard the noble and learned Lord, Lord Hope, talk about remote juries in cinemas and the noble Lord, Lord Faulks, talk about whether jury trials should exist at all. I have some experience of juries and of jury trials as an advocate. I do not believe that it is right to put a barrier between a jury and what goes on in court. It is a strange thing, but in the whole of my career, I have had only one case in a jury trial where I thought the jury got it completely wrong. I think juries do get it right and they do understand.
When it comes to special juries, we have heard a lot about that in the past, particularly in relation to financial fraud. I have always thought that I would not have confidence, never mind the broader public, in a jury composed of bankers trying a banker for fraud; it is like a jury of policemen trying a policeman for an assault on a member of the public. The whole thing about the jury system is that people come into the jury box with their various life experiences and sit there and listen. They may not follow every point of law that is put to them, but they are part of it. It is particularly important that juries have the confidence of the people of this country. I can well imagine that, if we were to remove jury trials in serious cases, that confidence would not last very long.
There is some research from a very long time ago on the jury system. The same case—obviously, it was not a real case—was put before various juries, one of 12, another of seven and another of, I think, 15. The research showed that, with a jury of 12, the issues in a case are more distinctly and completely covered than with different numbers. I have every confidence in juries, but it is a topic that I think we shall debate long and hard at some future time.
My Lords, I thank my noble friend Lady Taylor of Bolton for this extremely interesting report. As she said in her introduction, it may be a year old, but it deals with issues which we are still dealing with today, and it addresses the context, if I can put it like that, of the way in which the criminal justice system went into the pandemic. She very fairly gave the historical context of the underinvestment in our criminal justice system.
The speech which I had prepared was to go into the statistics of it all—the backlogs, the appalling statistics particularly for sexual-related offences taking a long time to court—but a number of noble Lords have rehearsed those statistics, so I shall not go through them again now.
I thought I would go through the speeches we have heard and draw out the points that were of particular interest, and offer my experience on those matters. I just remind the Committee that I sit as a magistrate in London and deal with adult, youth and family law matters.
My noble friend talked about the digital challenge, as we went into the pandemic, and the uneven picture between the higher and the lower courts, which did not respond as immediately. I sat as a family magistrate throughout the pandemic. We did not stop. Within a week, I was personally operating from my dining room table, originally doing cases by telephone and then eventually by MS Teams. We found a way of working around the cases.
Just to give a bit more background, I am currently chairman of the Greater London Family Panel of 300 family magistrates in London. The panel responded to the Nuffield Family Justice Observatory report, to which my noble friend referred. I am aware of the shortcomings that that report highlighted. Sir Andrew McFarlane encouraged us to respond and we did so. It is difficult not being defensive, given the shortcomings that were identified, but I will just say that there was no alternative but to hear the cases that we did, because children’s safety was at stake. I literally took children away from their parents by telephone in the early days of the pandemic. I think we did the right thing, although there were shortcomings in the system.
My noble friend went on to say that some aspects of working remotely are beneficial. She cited domestic abuse cases, which is fair. I also deal with domestic abuse cases, in different formats and in different jurisdictions, and it is now part of the working process to think about what is best for each particular case.
I also know about the National Police Chiefs’ Council saying it would stop using remote remand hearings. My understanding is that it is a resourcing issue for the police in police stations, and it is a matter of regret to the court system that we were not able to do remote remand hearings and that prisoners actually had to be brought to court. Literally only a couple of years ago, we were able to deal with remote remand court cases when people were still in police stations.
The noble and learned Lord, Lord Hope, also gave some statistics, the experience of Scotland and some historical context, if I can put it like that. The different approaches taken in Scotland were interesting. In my experience of the differences between England, Wales and Scotland, people are very open to looking at alternative ways of working. I occasionally talk to colleagues in Scotland about the way they are addressing similar issues to us.
The noble Lord, Lord Faulks, spoke very effectively about how Covid in courts is a constitutional issue. I agree. He also said that, for some people in various parts of the criminal justice system, justice seems an unobtainable goal. I agree with that as well. He asked the Minister, and I would be interested in his response, about preparations for a future outbreak, if that were to happen.
The noble Lord then went into a greater exposition, if I can put it that way, about the various alternatives to jury trials that had been considered. I thought it might be worth telling an anecdote, speaking as a magistrate and a Labour Party member, about speaking to the then shadow Justice Secretary, David Lammy, about why the Labour Party was supporting jury trials over the alternatives. His response was simple: he said that people trust jury trials more than any alternative. The second point he made was that disproportionality—the make-up of the people taking the decision—is more likely to be accommodated with 12 people than it would be if there was some alternative arrangement. Those were the two points that David Lammy made to me about why the Labour Party supported jury trials continuing through the pandemic.
I thought an interesting point was made about fraud cases. I realise that is a much bigger debate, which is not really for today.
I was pleased that my noble friend Lady Drake spent some time going into the situation in family courts. She quoted Sir Andrew McFarlane and spoke about her experience on the All-Party Group on Kinship Care, citing the concern that there is effectively a rationing of family courts. The piece of jargon which we sometimes use in the family court system is that the local authorities are encouraged to “hold the risk” within themselves, rather than passing the cases on into the court system. The consequence is that cases which do turn up in the family court system are more serious, more advanced and more difficult to deal with. That is a policy decision and partly resource driven. Nevertheless, it has a very real effect: although the numbers of cases are going up, their actual complexity and seriousness are going up as well.
My noble friend Lady Drake also talked about kinship carers not joined to public law cases. She must be a mind reader. I was in a family court earlier today in Holborn and we were dealing with exactly that issue: whether to join some grandparents in private law proceedings to look after their grandchildren while, in parallel, there was a public law case for the children to be potentially taken away into care. It was a little example of the difficulties that the court faces because, although I was physically sitting in court, we were doing it remotely and the connection was extremely poor. The grandparents were not prepared for the case we were hearing. In fact, it had been wrongly listed in the first place, so it was an administrative problem. It did not work very well; I hope it works better next time.
My noble friend Lord Howarth of Newport gave an awful lot of background. I will not repeat the points that he made, because it was a tour of the horizon. Similarly, I endorse the tribute of the noble Lord, Lord Thomas, to court staff and prison staff. They behaved absolutely heroically, in my experience, and kept things working. I will not go into the other points that the noble Lord made because he made them from a source of greater authority than I would be able to match. However, I will be very interested to hear the Minister’s response to the various questions which have been put to him.
My Lords, I thank noble Lords for their contributions. This has been an extremely useful debate. I also thank the committee, including its former and new chairs, for its thorough and wide-ranging report, which underpinned today’s discussion. If I noted it down correctly, the noble and learned Lord, Lord Hope of Craighead, said that it was an excellent report, and I respectfully agree. As a relative newcomer to the House, when I read the report—shortly after it was published some months ago—it was clear that it was a very good example of the detailed and careful work done by committees of the House.
I should say right at the outset that a number of points have been made. Some of them would justify a debate on their own. I hope that the Committee will not find this out of order, but I will seek to respond to the themes, including giving some statistics and data; I will then ask my team to go through the Official Report with me, and I may send a follow-up letter as well. I hope that that will be acceptable.
The noble Lord, Lord Faulks, said that this was a constitutional issue. He referred to both civil and criminal issues. He is absolutely right, of course. The rule of law underpins everything else in society. I led a trade mission to the Gulf last November. The example I gave was that, when you build those wonderful skyscrapers, you do not see the cement once the building is built; however, without that cement, there would be no skyscraper. The rule of law is the cement that holds everything else in our society together.
The justice system is at the heart of everything we do and believe in as a society. There is no doubt that the pandemic had a very significant impact on it. On behalf of the Government, I repeat our thanks to all our partners across the justice system, including solicitors, barristers and the judiciary, but especially—I say this respectfully—court staff, who kept the system running and the wheels of justice turning.
In response to the impact of the pandemic, HMCTS set up national response structures that worked with the wider structures in the Ministry of Justice, other government departments and various external stakeholders. Practical measures were put in place. The estate was made safe by installing Plexiglas screens in more than 450 courtrooms, and 70 courtrooms were reconfigured to hear larger trials. There were a number of discussions with the judiciary to ensure that the most urgent cases could be dealt with if absences went beyond what might reasonably be expected. As we heard from the noble Lord, Lord Ponsonby of Shulbrede, cases were sometimes dealt with in what might be called suboptimal circumstances—but it was better to do that than to do nothing. Sometimes justice just has to be done the best way you can.
That was the situation in the pandemic. The NAO has been referred to, but it is fair to remind the Committee that the NAO praised HMCTS’s response to the pandemic, saying:
“HMCTS responded quickly in the early stages of the pandemic … HMCTS’s evolving governance structures helped it respond quickly and effectively to the operational risks in criminal courts.”
That had a number of effects: domestic abuse victims, who were mentioned earlier, were still able to obtain protection orders; the remand of dangerous suspects could be extended; and, as we have heard, the commercial and family courts continued. We were one of the first countries in the world to resume jury trials; that is an achievement we should be proud of. In turn, that helped us to address the delays caused by the pandemic more quickly than some other jurisdictions.
One of my briefs in the department is the international brief. When I talk to jurisdictions around the world, they see our response to and recovery from the pandemic as extremely good. No doubt there are things we could do better—I will come to the point made by the noble Lord, Lord Faulks, about how we would face a future pandemic later—but the response was very good. We are recovering pretty well, I think, from what has been a fairly torrid two years.
A lot was said about the funding background. The statistics are set out in the report. Those points were made by the noble Baroness, Lady Taylor, the noble and learned Lord, Lord Hope, and others. The Government have made significant investment in the justice system to help it recover from the pandemic. The MoJ’s spending review settlement is the largest increase in justice spending in more than a decade. It was a little disappointing that that point was not recognised. It is one thing to focus on cuts in the past, but we should also look at what is happening now.
More than £1 billion has been allocated to boost capacity and accelerate recovery from the pandemic in our courts and tribunals. That includes £477 million to improve waiting times for victims, and to reduce Crown Court backlogs caused by the pandemic from about 60,000 to our aim of 53,000. The figure for the Crown Court going into the pandemic was not out of line with the historical figure if one looks at how many cases are actually waiting to be heard. The key thing, of course, is not actually the backlog; it is throughput and how long it takes a case to get through the system. You could have a lot of people waiting to have a knee replacement, but the real question is not how many people are waiting but how long they are waiting. We are focused on throughput.
Funding secured for the Crown Court will enable it to sit at its maximum capacity. I will come to Nightingale courts, but we do not have an issue with rooms. The main issue is the number of judges; we now have enough rooms. We have set aside £324 million for civil and family courts, and tribunals, and an additional £200 million to complete the flagship £1.3 billion court reform programme.
I think everybody recognised that technology was a necessary response to the pandemic. I suggest that what we saw in the justice system during the pandemic was what we saw in society in a range of areas: the pandemic accelerated change that probably would have happened anyway. Everything in our lives has been disrupted and I am afraid the justice system has not been any different. As the noble and learned Lord, Lord Hope, said, it was the impetus for new approaches and some of these have stuck.
The remote hearing provisions in the Coronavirus Act allowed literally thousands of hearings to take place. We now have about 11,000 hearings taking place remotely each week. We rolled out the cloud video platform at pace to keep justice going. We developed guidance to support court users when joining remote hearings. Video remand hearings were vital in our efforts to reduce the risk of Covid transmission, removing the need for prisoners to be transported to court sites.
On that point, I understand that it is effectively a resourcing issue in the police. The police withdrew support for video remand hearings in October 2020. Since then, use has diminished significantly: only three forces continue to operate them. We therefore continue to work with other government departments to find a strategic funding solution to address this issue, because we recognise that video remand hearings had some significant upsides.
As I said, the move to online justice was effective and there were lots of upsides to it. That is why we are in the process of replacing some of these provisions with permanent provisions in the Police, Crime, Sentencing and Courts Bill, which is still going through Parliament. I of course recognise that remote hearings might not be suitable for everyone or in all types of case. Therefore, I underline that the mode of hearing will remain a judicial decision and a remote hearing will not take place unless the judge is satisfied that it is in the interest of justice for all parties involved. We have also recently commissioned an evaluation of the implementation and use of the new video hearing services across civil, family and tribunals jurisdictions to ensure we get this right.
I will say a word or two about data. I am afraid that I am a bit of a data freak; I subscribe to the proposition that if you cannot measure it, you do not really know what the problem is, let alone how you are going to respond to it, so please take that point as read. I have had several meetings with Dr Byrom, and she worked closely with the department. We now put out a lot of data. When I write, I will set out some of the datasets that we put out.
I acknowledge that data collection across the court system has historically been challenging and that there is room for improvement. One of the issues—it is a constitutionally proper issue—is that it is not the MoJ which is in charge of every court and every courtroom, in the sense that judges ultimately decide listing, for example. When it comes to collecting data, we have to work with the judiciary to make sure that the data is appropriately captured. Judges, understandably, are very busy, and we have to make sure that we do not divert them and their staff from their main task, but I absolutely acknowledge that we need to do better on data.
One of the benefits of the reform programme is improving data collection: reform will deliver improved data on the way we schedule hearings and use court time, including the use of audio-visual technology. We published the HMCTS Data Strategy in December 2021, which is intended to build on the expanded data available to help transform our services.
We are doing some other things in the data space which I should mention briefly. One of these is making judgments available on the National Archives for the first time. At the moment, if you want to find a judgment you have to pay a private provider for a lot of them. We think that putting them on the National Archives will increase transparency and ensure free access for all. From April this year, that service will also host judicial review rulings, European case law, commercial judgments and many cases of significance from the High Court, the upper tier tribunal and the Court of Appeal. The Supreme Court publishes its judgments on its own website.
So far as protected characteristics are concerned, last week HMCTS published the first report summarising responses to the collection of protected characteristics. They were collected for the period between April and September 2021. It is the first time this information has been published, and we hope that that will be a valuable contribution to the dataset. I underline, however, that the survey is voluntary, so the statistics have to be read with that caveat.
Nightingale courts provided much-needed extra capacity. Of course, the problem was that we could not use a lot of our existing courts because they were too small, so we had to have Nightingale courts. Sometimes they heard criminal trials; sometimes they heard other work which freed up other jury trial rooms to hear jury trials. We have now opened two super-courtrooms, in Manchester and Loughborough, which are three times the size of a usual courtroom and allow for trials of up to 12 defendants. I underline that room is not actually the issue at the moment—we have enough rooms. As I said, the issue is the number of judges.
Another thing we have done to help reduce the backlog is increase magistrates’ sentencing powers. I will not say too much about this, because it was not mentioned by anybody else, but I underline that extending magistrates’ court sentencing powers from the current maximum of six months to 12 months’ imprisonment will enable us to bring criminals to justice more quickly by moving sentencing hearings from the Crown Court into the magistrates’ courts. We estimate that this frees up over 1,700 Crown Court sitting days a year. If you translate that into jury trials, that is another 500 jury trials per year. We are also investing more than £1 million in a recruitment campaign. We want a broader range of people to become magistrates and to boost their ranks by 4,000.
That is part of a broader judicial recruitment campaign. We aim to recruit 2,000 new judges over the next two years, which will enable us to have enough capacity to sit at the required levels over the coming years. So we are encouraging fee-paid judges, with a particular focus on recorders, to sit where they can and are needed, and we are raising the maximum number of days that they can sit each year without having to establish a separate business case. So, for the second year in a row, we have increased the maximum number of sitting days for all recorders from 30 to 80 days.
Over and above that, we have increased the statutory mandatory retirement age from 70 to 75 for judicial officeholders, which will enable us to retain an extra 400 judges and tribunal members, and 2,000 magistrates, every year. There has also been a reform to judicial pensions, but, given the time, I will not say more about that now.
I will say a word about online hearings. I underline that there are benefits in addition to getting cases through the courts. We heard about one: domestic violence. You do not have to go in the same room as your abuser. But there are collateral benefits in terms of diversity for lawyers. For example, if you live in Derby, it is much easier to take your children and drop them off at school and then attend a hearing remotely in Exeter. You can do that if it is remote, and there are many advocates who find that extremely helpful.
The noble Baroness, Lady Taylor, mentioned family courts. The Special Educational Needs and Disability Tribunal has been running as a completely remote hearing since the start of the pandemic. This means that families in crisis, often with children with complex needs, can seek justice more quickly and easily. So, although I absolutely accept that, as we move to online justice, we have to be cognisant of those with poor broadband and poor computer skills, and others who need help—I have made this point in the Chamber on a number of Bills and amendments—there are many advantages of online justice and we cannot tell the 98% that they have to wait for the 2%. We need to help the 2% and make sure that everybody has access to justice—I am passionate about that—but, equally, we need to see where justice is going, and justice is going online.
I turn to the backlogs with the caveat, as I said earlier, that the real issue is throughput and not backlog. We have already made significant strides towards recovery. In the magistrates’ courts—I apologise for throwing figures at the Committee—the caseload is close to recovering to pre-Covid levels. At the end of January of this year, the outstanding criminal caseload was 373,000. That was down from 445,000 in July 2020, a reduction of 16%. In the Crown Court, the outstanding caseload is down to 59,000. That is a reduction of about 2,000 cases since June last year. I absolutely accept that there is much further to go, but it shows that measures to tackle the backlog are starting to have an effect.
In the family courts, we have stabilised the outstanding caseload. In public law, the outstanding caseload by child stands at 21,000. We expect to see this start to fall over the course of this year. In private law, we have started to make inroads and the outstanding caseload by child has fallen to 83,000—down from 85,000 in August last year. The President of the Family Division was mentioned. I have very frequent and constructive meetings with him, and he and I are clear that we need a step change in family law, especially in private family law. Far too many private family law cases are going to court when frankly they should not be anywhere near a court. Back in 2015-16, the number of disposals per day was much higher than it is now; there has been a steady decline. That is nothing to do with the pandemic; there are other factors in family law that are going on and, whether it is the fact-finding hearings or other things, we need a real focus, and there will be a real focus, on private family law in particular.
In the civil courts, timeliness has improved. The average time it takes a small claim to reach its first full hearing has come down by three weeks. In the Immigration and Asylum Tribunal, the case load has fallen by 10%. That is down by 3,400 cases, and its timeliness has also improved.
I am conscious of the time but, if the Committee will indulge me, there was quite a lot said about juries so I hope I may respond fairly briefly. We heard from the noble and learned Lord, Lord Hope of Craighead, that remote juries worked in Scotland. I repeat what I said in the Chamber: we have no plans to introduce remote juries as a matter of course. The provision we put in the Bill is there on an “in case needed, break glass” basis. However, I respectfully suggest to the Committee that, if something is done in Scotland and they regard it as a proper way of doing justice, we perhaps should not find it as radical as some Members of the Committee seemed to see it.
The noble Lord, Lord Faulks, went further on juries. As he knows, we are consulting in the Human Rights Act consultation on the position of jury trials. It is right to say that when one looks at the Strasbourg jurisprudence and talks to lawyers from other jurisdictions, they find it odd that we have cases decided by people with no legal training who do not have to give reasons. Again, I respectfully ask the Committee to consider whether all the countries around the world which manage to decide their fraud cases without a jury are not operating a justice system. There is a real risk in a justice system that what is familiar becomes the only way of doing justice. I suggest that, ultimately, there are two reasons for why we should think very carefully before we move away from the jury system. However, neither has anything to do with its inherent superiority over other systems.
The two reasons are: first, the system in fact has the overwhelming confidence of the people of this country, and that is critical for a justice system; secondly, when you look at a jury—in particular, a jury of 12 because there are more people—you are more likely to see people like you. This is really tied to the first point, I suppose, but juries can be more representative of the community. This is well above my pay grade, so I will touch on this very briefly. I think it is slightly odd that we still ban research into juries. It is difficult to have any real debate—as in the one we are sort of having now—when, at the same time, the legislation effectively prohibits us finding out what actually goes on. If I say anymore, I might be out of a job, so I will stop there.
The noble Lord, Lord Faulks, also asked about our preparation for a future outbreak. Of course, we have learned from the Covid-19 pandemic. We now have a well-established pandemic-focused contingency plan, and we will also build more robust and tested plans to deal with other national events. We are already improving our readiness and planning for other strategic risks to our justice system.
If I can be indulged for another two minutes, I will turn to legal aid. The noble Lord, Lord Howarth, put a gauntlet down about how I will restore and renew the justice system. I am not sure that I can do that on a Wednesday evening. However, I point the Committee to our response to Sir Christopher Bellamy’s report. Also, the means-test review for both criminal and civil legal aid was published at the same time—please do not overlook that. There are a lot of very good ideas and proposals in that means-test review. We think that it brings 3.5 million more people within the scope of criminal legal aid, and 2 million more within the scope of civil legal aid.
Although the Criminal Bar Association is not particularly happy with the Government at the moment, what we said in response to Sir Christopher Bellamy’s report was welcomed broadly by the Bar Council, the Law Society and the Chartered Institute of Legal Executives. I say to the leadership of the CBA that the proposed action is ill-judged and unmerited, and I very much hope that they will reconsider. So far as the innocence tax is concerned, when the noble Lord, Lord Howarth, looks at the means-test review, he will see that it is one thing that we are proposing to do away with. It was a matter of a little regret that he did not mention that in his speech.
We also want people to be able to resolve issues without lawyers. For example, with the new online whiplash claims service and the online money claims service, they can do all that without a lawyer. We are running the system hot; there is no limit on sitting days; we are going to hear as many cases as we possibly can.
I underline that it is no part of my approach to clip the wings of the judiciary, but there is a proper constitutional debate to be had about judicial review and the Human Rights Act, and we will have that in due course.
I am conscious that I am trespassing on the Committee’s patience. I say in summary that we acknowledge that there is a lot more to be done. I hope that the Committee sees that we are doing a lot. We are very focused on justice for all. I think that the benefits from the pandemic are that we will emerge from it with a stronger justice system that is really suited to the 21st century.
My Lords, I must thank everyone who has contributed to this debate, particularly those members of the Constitution Committee who did so much to aid the production of this report. I think that Members will have realised the breadth of experience on that committee. It is indeed significant. We have the noble and learned Lord, Lord Hope, with his vast wealth of experience at the centre of the judicial system. We have the noble Lord, Lord Faulks, who likes to be provocative from time to time, as he proved this evening—I think we could have spent the next few hours talking about the jury system, but it is probably as well not to go there. We have the noble Baroness, Lady Drake, who proves her expertise and experience on family matters and the work that she has done in this House and elsewhere on kinship care. And we have the noble Lord, Lord Howarth, who joined us again today, giving his clear analysis and overview as I have seen him do on many other committees. I want to thank them and the staff of the committee, who were very important to us in writing that report. I now realise why I miss my Wednesday mornings, because they were stimulating and genuinely informative, and it was well worth going to all those meetings.
I thank the noble Lord, Lord Thomas, for his comments about the report. I got the feeling when the noble Lord, Lord Ponsonby, was speaking that perhaps he should have been one of our prime witnesses, because he gave clear examples from his own experience of exactly what we were talking about. It was important that we heard that. We had not discussed it earlier, but I am glad that he took that approach.
I accept that the Minister takes this report seriously and has read it in detail. He covered a wide range of points, and we all share his appreciation of the work done by the courts staff in keeping the show on the road. He mentioned lots of problems, such as what needs to be done on the availability of more judges for more days. What has happened on pensions and on the age change is important. The committee has looked at these issues in the past and will no doubt come back to him, because there are concerns about diversity as well as just numbers and availability.
I am glad that the Minister is a data nerd, if I can put it that way, because that is extremely important. The evidence that we were given showed a great lack of availability of information. He mentioned that the Ministry of Justice is not responsible for every bit of information. That might be why the National Audit Office thought that there was not enough joined-up thinking between the department and the Courts & Tribunals Service.
I agree with him that, as my noble friend said, suboptimal hearings are better than nothing, but I think there is a problem with the backlog. The Minister mentioned throughput, but there is clear evidence of very long delays to very critical cases. That has to be worrying to the victims, their families and a whole range of people. It is another point that we must make.
Overall, we all want to see a court and tribunal system that has more resilience. The Minister mentioned that it has recently had its largest investment in a decade, but I point out that that is the same decade in which the Government made the cuts, so they are just catching up with themselves. But let us put the politics aside. We need resilience and I hope that the Minister will acknowledge that, when we change systems—remote hearings are here to stay—we have to make it work. He said that 98% of people can probably make it work and we should not wait for the 2%. I agree that we should not wait, but I am afraid we are not talking about 2%. We are talking about a much larger group of people who have vulnerabilities, but neither the resources nor the expertise to make best use of that system. We have to take them into account as a priority when we are looking at this.
We are all agreed that the rule of law underpins everything. We need a well-functioning legal system, and a well-functioning court and tribunal system. The recommendations from the committee are intended to be positive and constructive, and I hope the department will take them in that spirit.
Committee adjourned at 8.21 pm.