Grand Committee

Tuesday 25th February 2025 Grand Committee

Tuesday 25 February 2025

Arrangement of Business

Tuesday 25th February 2025 Grand Committee

Announcement

15:45

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

My Lords, we are expecting Divisions in the Chamber this afternoon, so when they happen, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Social Security Benefits Up-rating Order 2025

Tuesday 25th February 2025 Grand Committee

Considered in Grand Committee

15:45

Moved by

[Baroness Sherlock]

That the Grand Committee do consider the Social Security Benefits Up-rating Order 2025.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

In speaking to this order, I will also speak to the draft Guaranteed Minimum Pensions Increase Order 2025. In my view, the provisions in both instruments are compatible with the European Convention on Human Rights.

Let us begin with the draft Social Security Benefits Up-rating Order. This instrument will increase relevant state pension rates by 4.1%, in line with the growth in average earnings in the year to May to July 2024. It will increase most other benefit rates by 1.7%, in line with the rise in the consumer prices index in the year to September 2024. As such, the up-rating order commits the Government to increased expenditure of £6.9 billion in 2025-26. In so doing, it maintains the triple lock, benefiting pensioners in receipt of both the basic and the new state pensions; raises the level of the pension credit safety net beyond the increase in prices; increases the rates of benefits for those of working age; and increases the rates of benefits to help with additional costs arising from a disability or health condition, as well as carers’ benefits.

I turn now in more detail to the issue of state pensions. The Government’s commitment to the triple lock means that the basic and full rate of the new state pension will be uprated by the highest of the growth in earnings or prices, or 2.5%. This will therefore be 4.1% for 2025-26, in line with the conventional average earnings growth measure. As such, from April 2025 the basic state pension will increase from £169.50 to £176.45 a week, and the full rate of the new state pension will increase from £221.20 to £230.25 a week. The basic and new state pensions will increase by 4.1% in April of this year, benefiting 12 million pensioners by up to £470 next year. That is up to £275 more than if pensions had been uprated simply by inflation. Other components of state pension awards, such as those previously built under earnings-related state pension schemes, including the additional state pension, will increase by 1.7%, in line with the statutory minimum requirement of prices.

The safety net provided by the pension credit standard minimum guarantee will increase by 4.1%. For single pensioners it will increase from £218.15 to £227.10 a week, and for couples it will increase from £332.95 to £346.60 a week. The Government are committed to supporting pensioners on the lowest incomes and want everyone entitled to this support to receive it. That is why we launched the national pension credit campaign.

I turn now to the support given to those in the labour market, such as universal credit and the legacy means-tested benefits it replaces. The up-rating order increases the personal and standard allowances of working-age benefits, including universal credit, by 1.7%, in line with the increase in prices in the year to September 2024. Around 5.7 million families are forecast to benefit from the uprating of universal credit, with an average annual gain for a family estimated to be £150. Additionally, this order increases statutory payments by 1.7%, including statutory maternity pay, statutory paternity pay, statutory shared parental pay and statutory sick pay.

The up-rating order will also increase rates by 1.7% for those with additional disability needs and for those who provide unpaid care for them. This commits the department to increased expenditure of £0.9 billion in 2025-26. This means that benefits such as disability living allowance, attendance allowance and personal independence payment, intended for those who have additional costs as a result of disability or health conditions, will rise in line with the rise in CPI in the year to September 2024.

This order will also increase carer’s allowance by 1.7% from April 2025, from £81.90 to £83.30 per week. Recognising the vital role played by unpaid carers, the Government have also announced that from April, the weekly carer’s allowance earnings limit will be tied to the level of 16 hours’ work at the national living wage.

I turn now to the draft Guaranteed Minimum Pensions Increase Order 2025—the GMP order—which is a routine, technical matter we attend to each year. I shall therefore be brief.

The GMP order was laid before the House on 16 January 2025. It sets out the annual percentage increase that must be applied to the GMP part of an individual’s contracted-out occupational pension earned between 1988 and 1997. Occupational pension schemes that provide GMPs are required to increase GMPs earned during that period, and which are in payment, by 1.7% for the tax year 2025-26.

The 1.7% figure is taken from the CPI inflation rate for the year to September 2024. That approach is broadly consistent with other uprating approaches, and it balances the need to provide members with a measure of inflation protection while giving schemes greater certainty about their ongoing liabilities.

In summary, the draft Social Security Benefits Up-rating Order implements the Government’s commitment to the triple lock; it provides for a real-terms increase in the value of the safety net in pension credit; and it increases the rates of benefits for those in the labour market, as well as those with additional disability needs, and those providing unpaid care to people with those needs.

The draft GMP order requires formerly contracted-out occupational pension schemes to pay an increase of 1.7% on GMPs in payment earned between April 1988 and April 1997. This provides people with a measure of protection against inflation, paid for by their scheme. I beg to move.

[Baroness Lister of Burtersett (Lab)]

My Lords, I have lost count of the number of these debates I have participated in while in opposition on the Benches opposite. This is the first debate I have participated in while knowing that there is a commitment to tackle child poverty and a serious government taskforce drawing up a strategy to do so. So I can applaud that, and the welcome improvements in benefits announced in the Budget. But I am afraid I have to concur with the Joseph Rowntree Foundation, which in its recent poverty review described the improvements as “timid” and falling

“a long way short of what is required to deliver the scale of changes needed.”

So this speech is less supportive than I would have liked.

As already noted, the uprating of working-age and children’s benefits by 1.7% follows the convention of increasing them in line with inflation the previous September. But as JRF points out:

“According to OBR and Bank of England forecasts, this may well be the low point of inflation in the near term, with inflation in 2025/26 likely to be higher, meaning benefits will lose a little value next year”.


Indeed, inflation is already at 3%, and just today we heard of a higher than expected energy price cap increase. Losing a little value may not sound very significant, but when benefits are so low to begin with, as I will come back to, it can make a real difference for families struggling to get by.

My noble friend the Minister previously raised the long reference period for the uprating, as did the Work and Pensions Committee in last year’s report on benefit levels. Disappointingly, the DWP told the committee that even in the longer term, when the migration to universal credit is completed, it has no plans to shorten the reference period. Can my noble friend say whether this might be looked at again under the new Administration?

The Work and Pensions Committee also recommended that limits on benefit entitlements such as the benefits cap be uprated annually. Again, it is disappointing that no such increase was announced for this year. As a recent report by the IPPR, supported by Save the Children, notes, the effect of the near constant freeze is to make the policy

“considerably more punitive than at the point of introduction”.

The stock response from the DWP—that the legislation requires the level of the cap to be reviewed every five years only, and that therefore, following the 2022 review, another review is not required until November 2027 —simply is not good enough. It may not be required but it is permitted, and so long as the cap continues, it should be reviewed annually so that, at the very least, those hit by it, mostly families with children, can benefit in full from the annual uprating.

Together with the two-child limit—also ignored in the Budget—the cap is a key driver of child poverty, as well as contributing to homelessness and disproportionately affecting survivors of domestic abuse. Research has shown that it is not achieving its aims. I know that my noble friend will say that we have to await the outcome of the child poverty review for any decision on the cap and the two-child limit, but every day they continue spells misery for many thousands of parents and children.

The other serious omission in this year’s uprating is the local housing allowance. As the IPPR report points out, this is tantamount to a benefit freeze for housing support and breaks the principle that support should be tied to changing rents in a local area. The result is that, for those with housing costs at or above the current LHA, the real value of their uprated UC will in effect be cut.

The impact of all this has to be understood in the context of benefit levels that, in the words of JRF, fall a

“long way short of what is needed to enable recipients to escape poverty”,

and that mean that many continue to “struggle needlessly”. Paid work may be the best route out of poverty, but it is not a route open to all. For too many, it proves a cul-de-sac, as they swap out-of-work poverty for in-work poverty. Inquiries by the All-Party Parliamentary Group on Poverty, of which I am co-chair, and the Work and Pensions Committee received

“a wealth of evidence that benefit levels are not meeting need”.

Benefit levels were never generous, but the effect of years of freezes, cuts and restrictions imposed by the Conservatives have meant that, in the words of the Financial Fairness Trust,

“we do not have a safety net worth its name”.

As a result, claimants are denied access to the most fundamental material resources needed to function day to day and to have healthy lives. The Work and Pensions Committee’s recommendations concerning the establishment of a benchmark for assessing benefits adequacy and the review of the extent to which current benefit levels are meeting this benchmark were rejected by the previous Administration. I urge my noble friend and her colleagues to look at them again. I ask her whether any consideration has been given to Trussell’s and JRF’s proposals for a protected minimum floor in UC, as a first step towards an essentials guarantee. For anyone who believes that poverty is relative, this is a pretty minimalist demand.

The Work and Pensions Committee also recommended that the local authority household support fund should be made permanent, so that local authorities can better plan the support they provide. This is not the place to go into detail but, if my noble friend has not already done so, I urge her to read the recent proposal from Trussell for a permanent and effective system of discretionary cash-first local crisis support, with broad statutory duties and ring-fenced funding that would incorporate both the household support fund and welfare assistance schemes where they still exist. It sees such a scheme as a crucial element in meeting our manifesto pledge to try to end mass dependence on emergency food parcels, which is a moral scar on society. At a recent meeting of the APPG on Ending the Need for Food Banks, the Minister for Employment assured us that the reform of local crisis support is definitely under review. It would be good if my noble friend could confirm this on the record in Hansard. As welcome as the extension of the fund for another year is—and it is welcome—those working on the ground need to be given some hope for the future. We heard reports at the meeting that food bank workers on the front line are scared and are burning out.

Scared, too, are many in receipt of disability benefits, in the face of mounting speculation about cuts to their benefits. It is worth remembering that disabled people are at disproportionate risk of poverty, in part because of the additional costs associated with disability. A recent report by Pro Bono Economics for Z2K warned that cutting the benefits that go some way toward meeting these costs could have a seriously damaging impact on the health and well-being of disabled people.

Also looking ahead, the Minister for Social Security and Disability advised, in the Commons debate on this order, that the Government would “set out shortly” how they plan to fulfil the manifesto commitment to a review of UC. Is my noble friend able to say any more at this stage about, for example, whether it will follow the example of the child poverty review in taking evidence from stakeholders, including those with lived experience of UC?

16:00

In conclusion, there is a lot of talk these days about the so-called ballooning welfare bill, ignoring the £50 billion a year which, according to CPAG, has been cut from the social security budget over the past decade or so. As charity after charity has emphasised, in the words of JRF, any credible child poverty strategy must include policies that rebuild the tattered social security system. This will of course take money, so it is crucial that the Treasury is on board. I know that my noble friend understands all this and is limited in what she can say to us, but I hope that she will feed back to the Treasury the concerns that have been raised.

I finish by quoting someone with lived experience of living on benefits who is part of the Changing Realities project. Gemma is disabled and a single mother of three children, as well as a carer for her autistic nephew. She writes of sleeping in the same bed as her children to keep warm during the cold spell and of the black mould that is starting to appear: “For families like mine, living on a low income, we have run out of corners to cut. I cannot wait for warmer days. I’m at the bottom of a dark hole and there is no way of getting out. I sometimes find it difficult to imagine how my situation can get better, but it really has to because life should not be this hard”. My Government have a responsibility to give parents like Gemma some hope that their situation will get better and that their lives will not continue to be that hard. As Gemma herself advises, that has to mean bold and real change by investing in social security.

[The Lord Bishop of Chelmsford]

My Lords, it is very good to be here today and I am glad to be able to contribute on this important subject. As we consider a proposed uprating of 1.7%, as compared with 6.8% last year and 10.1% the year before, I am mindful of the different backdrop to this year’s decision. We may no longer be in a period of soaring inflation, but costs remain high in just about every area of life. The discrepancy between the inflation rate from September 2024, by which most means-tested benefits will be uprated, and the current rate of 3% will be felt particularly by those who have not benefited from wage growth this year. This is a timely moment to explore social security as the Government set out their wider agenda in this area.

The manifesto commitments to review universal credit as a means of supporting people into work and addressing poverty and to produce a child poverty strategy could give us a basis on which to improve the lives of millions of people in our country. Indeed, bold action is required in both these areas and, like other noble Lords, I await the outcome of these reviews with keen interest.

As the Church of England’s lead bishop for housing, I see the consequences of not aligning housing support with housing costs, with half of private renters on housing benefit experiencing poverty. I suggest that local housing allowance ought to be linked to private rents as a matter of course, especially taking into account research from the Joseph Rowntree Foundation, which shows that 81% of low-income private renters in receipt of housing benefit are going without essentials such as food, heating and warm clothing. I very much hope that the Government will consider the adequacy of social security in their review of universal credit. For the first time since its introduction, we have an opportunity to explore how well the system works and to consider carefully the impact of sanctions, deductions and the five-week wait on the lives and incomes of people who rely on social security simply to make ends meet.

I welcome the introduction of the fair repayment rate, which is an important step towards ensuring that deductions do not cause people to fall below the threshold of what we would consider an acceptable standard of living. Despite this, I still worry about the impact of the deductions. I draw the Committee’s attention to the Private Member’s Bill brought forward by the right reverend Prelate the Bishop of Manchester, which would equalise the standard allowance of universal credit for care leavers under the age of 25. Care leavers have shared their experiences of deductions from their universal credit, which, when taken from an already lower rate, can leave them struggling to afford essentials. This cohort of young adults cannot necessarily rely on the same level of family support as many of their peers.

Even though we have resumed uprating benefits in line with inflation, their real-terms value is low by historic standards. The major issue is that benefits are not calculated in relation to the day-to-day costs people face. One solution could be for benefits to rise in line with wages rather than prices, as advocated by, among others, the Resolution Foundation. Another could be to introduce a minimum floor in universal credit to ensure that people have the money they need to afford the essentials, as advocated by the Trussell Trust and the JRF. It seems eminently sensible to calculate benefits in relation to the day-to-day costs people face. We have a precedent for this, with pensions credit calculated by comparing a person’s income with the amount the Government think necessary to live on. I would be grateful to hear the Minister’s views on whether means-tested benefits could be subject to a similar assessment.

As I close, I reflect on the impact of poverty on our places of worship and wider communities. There will always be a place for voluntary provision, particularly when it comes to support that requires a more human and relational touch; but we must be attentive to the reasons why there is so much demand for food banks, warm spaces, breakfast clubs and the many other activities hosted in church buildings and by other faith groups and charities. We see first hand what the statistics bear out: poverty is deepening in our country. Investment in social security, alongside reforms in other areas, is essential in order to turn the tide on poverty.

[Baroness Drake (Lab)]

My Lords, I refer to my entry in the register of interests as a trustee of pension schemes, and I thank the Minister for her clear explanation of the two statutory instruments before us.

I want to raise an issue concerning the Guaranteed Minimum Pensions Increase Order 2025. Given the pace at which DB pension schemes are transitioning to buyout contracts, this raises the issue of the extent to which, and how, a buyout contract contains liability for a guaranteed minimum pension, and the contractual provision of a promise to provide at least that pension from the age of 60 or 65. Is this a liability that all buyout contract providers must take on when they accept the original transfer from the defined benefit pension scheme? Secondly, does the DWP intend to update its guidance on the guaranteed minimum pension, considering the extent of buyout activity now taking place among DB pension schemes?

[Baroness Janke (LD)]

My Lords, I, too, thank the Minister for her presentation. I also support very strongly the Government’s commitment to the triple lock, despite the loud and frequent calls for it to be abandoned. It is worth repeating that those who call for it to be abolished often do so from a position of financial security, conveniently ignoring the fact that large numbers of pensioners are dependent on the state pension, which is still one of the lowest in Europe.

I also welcome the capping of automatic deductions on debt from universal credit that leave people far below the amount they need to live on. But over the last year there have been reports of record levels of deductions from universal credit, and I wonder if the Minister could comment on the reasons for those.

The 1.7% uprating for other benefits will be of little comfort to the growing numbers in poverty. The Joseph Rowntree report has been mentioned already; it tells us that one in five people in the UK—21%—are in poverty. Of these 14.3 million people, 8.1 million are working-age adults, 4.3 million are children and 1.9 million are pensioners. Children, as we have heard, have higher risks of poverty overall, at 30%, versus 21% for the whole population. But larger families with three or more children have consistently faced a higher rate of poverty: 45% of children in large families were in poverty in 2022-23. That is an appalling indictment of this policy, which Labour Oppositions have criticised so much, as the noble Baroness, Lady Lister, acknowledged. I wonder how long it will take for the Government to abolish it.

Today’s uprating means that we are looking to approve a basic rate of universal credit of £92 a week for a single person aged over 25, and £145 for a couple. Yet the Joseph Rowntree Foundation and the Trussell Trust have estimated that at least £120 is needed for a single person, and £200 for a couple, in order to afford even the basic essentials—a shortfall of around £30 a week on the bare minimum needed to survive. Shortfalls in the benefit system are key drivers of poverty, depriving people of the basic necessities for survival. Specific features have been found to increase the numbers in poverty, including the benefits cap and the two-child limit, and the erosion of the value of universal credit means that its standard allowance is now at around its lowest levels as a proportion of average earnings. I too support the Joseph Rowntree Foundation on having a basic minimum floor for universal credit.

Another feature is that the capital cut-off for universal credit has been frozen since the benefit was introduced. This is a form of taxation by stealth of the least well-off, and it hits hard people in their 50s and 60s who are on benefits, having saved something for later life. For example, if they have more than £16,000 in non-pension ISAs, they are disqualified from universal credit. I wonder whether this needs to be looked at again.

The House of Lords Select Committee report Hungry for Change recommended that:

“The Government should embed consideration of the cost of the Eatwell Guide into calculations of benefit payment rates”.


Many of us were very surprised to hear that this is not factored into the calculation of the amount of benefits needed to live on. The report continued:

“The cost of the Government’s dietary guidance should be built in as a reference point to consideration of government interventions, including those relating to welfare and public food provision”.


It also cited, horrifyingly, that

“the poorest decile of UK households would need to spend 74% of their after-housing … income on food just to meet the cost”

of the Government’s Eatwell Guide, as

“compared to just 6% in the richest decile”.

With individuals and families denied the means of buying bare essentials, will the Government undertake a proper assessment of the adequacy of benefit payments to pay for the cost of essentials, including food?

The uprating today, as others have said, is not realistic in the face of ever-increasing poverty in the UK. A far-reaching and radical review of the benefits system is needed to tackle some of the fundamental problems. I know that we all look forward to the forthcoming benefit review, and the child poverty strategy, which we very much hope will address some of these desperate issues that continue to condemn families and individuals to a life of insecurity, hunger and misery, and children to a childhood of deprivation that will stay with them for life.

[Viscount Younger of Leckie (Con)]

My Lords, I, too, thank the Minister for clearly outlining the essence of these two SIs. I recall that last year, they were debated separately but I cannot remember why. Nevertheless, we are reverting to the status quo ante, and I hope that this will speed things up somewhat.

16:15

However, at the outset, I wish to state that His Majesty’s Opposition support the core principles of these SIs—namely, the uprating of pensions in line with earnings, and of benefits in line with inflation. I also acknowledge that the SIs are largely technical in nature. I shall now turn to the effect of the orders. I do not intend to go into too much detail because the Minister set out the specifics, and for that I am grateful. However, I note the pension uprating and the guaranteed minimum pension, and the two questions raised by the noble Baroness, Lady Drake. I am sure that the Minister will put her mind to answering those. This is very much an annual issue and a technical adjustment. The GMP also remains an annual point of discussion in the Committee.

However, I understand that some pensioners may not see the effect and value of the uplift until the end of May, due to a quirk in the timing of payments, as pensions are paid four weeks in arrears. The change takes effect from 7 April, as we know, and unless I have misunderstood, this issue warrants clarification from the Minister, particularly regarding any mitigating measures that can be put in place. I am ever mindful of the pensioners affected by the cut in the winter fuel allowance. What might be done there?

The uplift will see the benefits rise in line with inflation. The level of the rise is based, as we know, on retrospective statistics—1.7%—in line with the September CPI rate of inflation, which has been alluded to today. As the noble Baroness, Lady Lister, and the right reverend Prelate the Bishop of Chelmsford have said, we should all be concerned about the latest ONS figures on inflation, up 0.5% from December and now at 3% for January. Inevitably, this will erode the value of family finances. Price rises of certain goods are the core of the problem. This is another blow on top of the winter fuel allowance cut for pensioners and the employer national insurance contribution rises, with their impact on businesses and job security, and the emerging evidence of a chill on recruitment, I am afraid.

Although this debate focuses on the two SIs, it provides an opportunity for me to reflect on the wider welfare and pensions landscape. I hope the Committee will forgive me for doing that, because we face the serious issues of inactivity and dependency on our welfare system, with taxpayers currently spending £65 billion a year on incapacity and disability benefits—a figure expected to rise to £100 billion by 2029 unless the Government undertake clear, serious and immediate reform. We have also seen an alarming rise in musculo- skeletal and mental health issues, with people opting for sickness benefits whose financial support far exceeds what they could earn from work. The system is failing to incentivise work and, as a result, we are seeing a growing number of individuals on long-term sickness benefits. We have read a lot about that in the press.

Universal credit has succeeded in reducing unemployment benefit claims and moving people into work by providing support and strict job-search conditions. However, the incentives in the sickness benefit system, particularly the limited capacity for work-related activity allowance—the so-called LCWRA category—have led to individuals receiving significant support without any meaningful obligation to re-engage with the workforce. So, I should like to touch briefly on welfare reform proposals and the delays. Here, I diverge from the views of the noble Baroness, Lady Lister, and one or two others who have spoken. The Government have picked up from where we left off with the opportunity for substantial reform. Suggestions in the media about scrapping the LCWRA category, abolishing the work capability assessment or introducing a duty to engage—if that is the way it is described—with work coaches are certainly encouraging.

So, here are my questions for the Minister. Can she update the Committee on the current strategy for incapacity benefit? Can she confirm that fit notes from doctors are not being reformed? If so, what will the process be to move from a doctor’s medical assessment—as I understand it, the current sign-off rate is 94%—to a detailed and fair assessment, with a definitive decision on an individual’s ability to work, to work part-time, to work from home only or, as I do acknowledge, to do no work at all if that is the outcome of the assessment?

The concern remains that too many people are being consigned to sickness benefits without proper reassessment or support. Can the Minister provide a timeline for the Green Paper on welfare reform and clarify when we can expect actual decisions on the ground to be made? If she cannot tell us the contents of the Green Paper—I realise that she may not be able to—can she at least tell us what to expect in terms of process? Will there be, for example, a White Paper after the Green Paper, and how long will that take? I lived in hope that a decision on welfare reform would be made today, in addition to the announced cuts in overseas development aid, in line with the increase in defence spending—on this aspect, we are in favour.

The Government are also reviewing universal credit—yet another review. I hope they will conclude, as they should conclude, in my view, that it serves the country well. More than this, does the Minister agree that it more than proved itself as a robust system during the incredibly challenging times of the pandemic, when the old system comprising six benefits would most likely have failed? Does she agree that the Government should work with UC and just use it?

There was a brief debate in the Commons on the Government’s commitment to the triple lock for pensions, and the Minister there recently confirmed the triple lock. Of course, it has been mentioned here today, including by the Minister herself. I have a specific but fairly easy question for her: can she specify how long this commitment will last?

Finally, the 1.7% rise also benefits those who are receiving benefits but are not supposed to. Fraud is prevalent primarily in the benefit system, but the Government have acknowledged that there is some limited fraud in the pension sector. The Minister is well aware that we are broadly behind the crackdown on fraud, with upwards of £8 billion of fraud to rein in. I was pleased to read in the papers last week that the Government acknowledge that they are, in effect, continuing a lot of the good work that I believe we started; I hope that the Minister recognises this. Although we will have many questions when the Bill in question eventually reaches the Upper House, in general, we will support efforts to stop fraud; no more uplift of fraudulent payments is what we all want.

With that, I look forward to hearing the Minister’s responses to these points.

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords who contributed to this afternoon’s debate. In opposition, the presence of lots of well-informed Peers asking great questions seemed like a good thing, but in government its appeal has waned very slightly. It turns out that it is rather harder to answer questions than to ask them—who knew? I will do my best, and if I do not provide answers, I will be in touch afterwards.

It is worth beginning by briefly touching on the context in which today’s uprating decisions are being made. These decisions are being taken against the very difficult backdrop of a challenging fiscal inheritance and a seriously uncertain global economic outlook. I think we all know the situation we face. Despite those challenges, today’s orders commit the Government to an increased expenditure of £6.9 billion on social security in 2025-26. I just want to note that as a starting point. That said, I very much hear the challenges referred to by the Committee, and I will try to work my way through them.

I thank the noble Viscount, Lord Younger, for his support for the approach taken by the Government and the traditions here. I also thank the noble Baroness, Lady Janke, for her support for our position on the triple lock; it is helpful to know that. I wish to address the noble Viscount’s question head on. This order demonstrates the Government’s commitment to pensioners by maintaining the triple lock, even in the current economic climate. The commitment was made very clear in our manifesto: we committed to the triple lock for this Parliament. This will mean spending on the state pension being forecast to rise by more than £31 billion across this Parliament.

The noble Viscount raised a specific point about pensioners waiting for their first uprated payment of the state pension. I think he will know from his time doing the job I now do that the state pension is paid in arrears, so the date on which somebody is first paid the higher rate—their pay date, essentially—will depend on where their cycle is. I understand that that means two things. For example, if somebody were paid on 2 May, in practice, roughly three weeks of that payment would be at the higher rate and the rest would be at the earlier rate, so there would be another month before they got their first full payment. But, crucially, this means that people receive the same rates of state pension for an equal number of weeks across the year, regardless of their pay day. I hope that helps to clear the matter up, but if I have made it more confusing, the noble Viscount can let me know afterwards and I promise to write to him.

The noble Viscount referenced the change to the winter fuel payment eligibility. Without relitigating that yet another time, I should just say that, as I have said before, the decision to target winter fuel payments on the poorest pensioners was difficult, but I believe it was right given the challenging public finances. But we are determined to get help to those who need it most, which is why the winter fuel payment is still available to those on pension credit. It is why the Government have done so much to promote pension credit and have seen such significant increases in applications for it.

A number of noble Lords mentioned the challenges of the cost of living, particularly energy. It is maybe worth reminding the Committee that additional financial help is available for low-income pensioners, first through the cold weather payments in England and Wales but also through the warm home discount scheme. Committee Members may know that this provides a £150 rebate on winter energy bills to eligible low-income households across Great Britain. We expect over 3 million households to benefit from that this winter, including over 1 million pensioners. I do not know whether noble Lords have heard the news that, just today, the Government published a consultation on an expansion of the warm home discount, which would bring another 2.7 million households into it. This means that up to 6 million households could benefit from that rebate by next winter. I hope that that will be welcomed.

The Government are also working closely with Ofgem to accelerate proposals for a debt relief scheme—something previously consulted on. The idea is that it would target the unsustainable debt built up during the energy crisis, which has led to some of the deductions that have been mentioned and challenges elsewhere.

A couple of noble Lords mentioned the household support fund in England, which is there to provide discretionary support to those most in need with the cost of essentials such as food, energy and water. I am grateful to my noble friend Lady Lister for welcoming the household support fund. It was pretty challenging. It was one of the very first things my department had to do: six weeks after the election, it had to find £0.5 billion to continue the household support fund for the rest of the last financial year. The Government have now found the money to extend the fund by a further year from 1 April 2025 until 31 March next year, with funding of £742 million plus Barnett consequentials for the devolved Administrations.

On the longer question, I regret to say to my noble friend that all I can say at the moment is that no decision has been made at this stage on the funding beyond the end of March 2026, and all the problems will be considered in the round. But we hope at least that, by giving notice ahead, we have enabled local authorities to plan much further ahead than in the slightly hand-to-mouth situation of previous times. But we will keep this under review and, if there is any change, we will obviously share any news as soon as possible.

My noble friend Lady Lister, the right reverend Prelate the Bishop of Chelmsford and the noble Baroness, Lady Janke, raised the levels of benefits and the need to tackle poverty. The Government are committed to tackling poverty and making work pay, and they have already taken some steps. I really appreciate the right reverend Prelate the Bishop of Chelmsford welcoming the decision to fund what we call the fair repayment rate. I am so grateful that my boss, Liz Kendall, wanted to spend a significant sum of money on that, even though most people will have no idea what it is. It genuinely targets those most in need by helping them to keep more of their money. But we know we have more to do on this.

The Child Poverty Taskforce is continuing its work and will explore all levers, although I am not in a position to say anything today about changes to matters such as the two-child limit. The Child Poverty Taskforce will look to span the key themes of increasing incomes, which will include social security reforms and reducing essential costs, and increasing financial resilience and better local support, especially in the early years. We will continue to watch this space as best we can.

The noble Viscount, Lord Younger, and the right reverend Prelate, among others, asked about the Government’s review of universal credit. We have now started the review, and the idea is to make sure that universal credit does its job in tackling poverty, helping people manage their money, making work pay and improving work incentives. We want to maximise the potential of universal credit, looking at its impact on customers. I say to the noble Viscount that there are things that universal credit does well, but aspects of its design have caused significant challenges to the people using it. This is an opportunity to look at how it is designed, to listen to those with experience of it and to look at whether there are ways we can better achieve the objectives I have outlined.

16:30

To respond to my noble friend Lady Lister, the Minister for Social Security and Disability, Stephen Timms, is going to lead the review and will engage with people over the next year, inviting views on how we can improve universal credit and looking at the sort of issues I have raised. We will continue to work with stakeholders, and I will take back to the department her specific point about those with lived experience of poverty and make sure that it is heard.

The right reverend Prelate raised the important issue of support for care leavers. While the Government have not been able to support the Private Member’s Bill, and although, as she will be disappointed but not surprised to hear, I cannot offer to increase the rate of universal credit, I want to reassure her of the support the Government give to care leavers. We offer various support, such as the exemption from the shared accommodation rate, and “staying put” arrangements. We try to make sure we are supporting care leavers into work. They have special single points of contact in jobcentres, priority access to universal credit budgeting support, and the opportunity to make advanced claims for universal credit to try to bridge those gaps as they effectively become independent adults. We are doing our best to support them to move into work and to develop in work, to give them a more sustainable future.

There were a number of questions about the timing of uprating. It has been done this way for a long time for a reason. The first challenge is that inflation clearly moves, but when inflation is stable it might be worth using actual inflation rates for the previous September. That will mean that, over the medium term, benefits will hold their value over the course of the year and broadly match inflation trends. It might be worth noting that for the past two financial years, using the September inflation figure actually resulted in increases higher than the rate of inflation the following year. Working-age individuals, for example, benefited from an increase that was 1.4% higher than the rate of inflation in April 2023 and 4.4% higher than the rate of inflation in April 2024. It does move, but it often moves in different directions.

My noble friend asked whether we can move to a shorter timeframe. Inevitably, things are always more complicated when one is in government. It is worth saying that the Government begin programming the IT systems for the new rates for the following April in November. Using a shorter timeframe could only ever be achieved for universal credit, not across all benefits, because the systems are different. I will take this idea back and we will keep looking at it, but one of the challenges is the number of interdependencies. For example, we are quite dependent on data going to and from DWP, but also housing benefit for pensioners, and HMRC for calculation of 12 million tax notices. These interdependencies mean that it is never quite as straightforward as one hoped, but I take note of her aspiration and I will keep conversations going on that.

On the levels themselves, we recognise that there are challenges, and different benefits do different things and have therefore always been uprated in different ways. We probably do not have time to go into that, but I take the broader points that have been made. On the question of work, the Government are absolutely committed to providing financial support for those in low-paid work, those who are looking for work and those who cannot work, but we also know that reducing economic inactivity and increasing the number of people in work is crucial to their best interests, and to growing the economy. That is why this Government’s Get Britain Working White Paper outlines the biggest employment reforms in a generation, backed by £240 million of investment.

My noble friend Lady Lister raised the question of in-work poverty. One thing that will help, of course, is that the Chancellor has raised the national living wage and the national minimum wage from next April, which will benefit 3 million full-time workers by up to £2,500 a year. Part of our job is to pursue good work, and to get people into work and moving up within that.

In response to the noble Viscount’s comment about reform of health and disability benefits, we might have to disagree about the effectiveness of the previous Government’s attempts to get people into work and what the consequences were, but we can have that debate at more length when we publish the document. I am afraid that it is good revenge for all the times I have pressed him to tell me when reforms would happen. All I am able to say to him now is what he has often said to me in the past: “in due course”. In fact, I can be more specific: the Green Paper will come out in the spring, and it will contain details. We are looking to develop proposals specifically to reform the system of health and disability benefits, in order to promote and enable employment among as many people as possible.

The noble Viscount raised the issue of work capability assessments. We are clear that the WCA is not working and needs to be reformed or replaced, alongside a proper plan to help disabled people into work, which will help them, business and the economy. We will reconsult on the WCA changes as part of the Green Paper.

The right reverend Prelate the Bishop of Chelmsford, my noble friend Lady Lister and others raised the question of housing—the LHA issue. The Government had to take some difficult decisions in the Budget to address the challenging fiscal context. But we clearly have a problem with the housing market. We currently spend around £33 billion a year on support for renters in both private and social rented sectors. One of the things that we are determined to do is work with MHCLG on its long-term housing strategy, which will be published in the spring. That will set out a plan to reform the housing market to work better for communities, to build another 1.5 million high-quality homes and deliver an increase in affordable housing.

I will try to run through the other questions quickly. I have plenty of time. On the question of food banks, this Government are committed to reducing mass dependence on food banks, and we are open to evidence from anywhere, including from the Church —particularly in relation to child poverty—about what is driving that. I am meeting with Church organisations and looking forward to visiting projects exactly to see at first hand the kind of things the right reverend Prelate is describing. We are keen to learn from that as part of the process in trying to review the child poverty strategy. I ask noble Lords to intervene if I have missed anything out.

[Baroness Janke (LD)]

Can I ask about the record levels of deductions in universal credit that have been made in half of last year, which hit record numbers? I have been reading reports about them. Could we have some insight into that?

[Baroness Sherlock (Lab)]

I do not have an insight on that at the moment. It is something I have asked about and have not yet got clear data on, but we are hoping that the changes we will make around things such as the fair repayment rate will help to rebalance that at the bottom, but I will have a look and, if I have any more data, I will write to the noble Baroness, if that is okay.

I turn briefly to the guaranteed minimum pensions increase order. I am grateful for the support for it. It simply aims to ensure that members who have a guaranteed minimum pension earned between 1988 and 1997 receive a measure of protection against inflation.

My noble friend Lady Drake asked a good question, as ever—in this case, about whether all buyout contract providers have to take on GMP liabilities in full when they accept the original transfer from the defined benefit pension scheme. I am happy to say that the Pension Schemes Act 1993 and associated regulations require all bulk annuity contracts to provide GMP benefits where applicable. From the point of view of scheme trustees, if a scheme was contracted out and still contains GMPs, both its trust deed and rules, and the legislation, will require the trustees to make sure that the bulk annuity contract provides those GMPs. From the point of view of the buyout contract provider, if a buyout contract includes GMPs, the provider is under a contractual obligation to provide those benefits. If the correct benefits somehow are not properly reflected in the bulk annuity contract, the scheme trustees, I am afraid, will remain liable for any additional liability, and that would include any GMPs. A question has been raised about whether there should be additional guidance, but the schemes and providers already have a clear legal duty or requirement that they have to follow and that they should be familiar with before they consider a buyout.

To conclude, through these orders, the Government are increasing the basic state pension and new state pension in line with earnings growth by 4.1%, meeting our commitment to the triple lock. We are increasing the pension credit standard minimum guarantee in line with earnings growth by 4.1% to support pensioners on the lowest incomes, increasing benefits to meet additional disability needs, and increasing carers benefits and working-age benefits in line with prices by 1%, and we are ensuring indexation on guaranteed minimum pensions earned between 1988 and 1997 that are in payment. I commend these orders to the Committee.

Motion agreed.

Guaranteed Minimum Pensions Increase Order 2025

Tuesday 25th February 2025 Grand Committee

Considered in Grand Committee

16:39

Moved by

[Baroness Sherlock]

That the Grand Committee do consider the Guaranteed Minimum Pensions Increase Order 2025.

Motion agreed.

Social Security (Scotland) Act 2018 (Scottish Adult Disability Living Allowance) (Consequential Modifications) Order 2025

Tuesday 25th February 2025 Grand Committee

Considered in Grand Committee

16:41

Moved by

[Baroness Anderson of Stoke-on-Trent]

That the Grand Committee do consider the Social Security (Scotland) Act 2018 (Scottish Adult Disability Living Allowance) (Consequential Modifications) Order 2025.

[Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)]

My Lords, this draft order is the result of collaborative working between the two Governments of Scotland and supports the Scottish Government’s decision to introduce the Scottish adult disability living allowance in Scotland next month. Discussions on this order began over a year ago under the previous Government. I thank the noble Lord, Lord Cameron, for his previous work in the Scotland Office to facilitate this order.

The Scotland Act 2016 devolved significant powers, including responsibility for certain social security benefits and employment support, to the Scottish Parliament. The Scottish Government’s introduction of the Scottish adult disability living allowance under Section 31 of the Social Security (Scotland) Act 2018 exercises this responsibility. The Scottish Government will administer this new benefit in Scotland through their executive agency, Social Security Scotland.

At introduction, the Scottish adult disability living allowance will operate on broadly the same terms as the disability living allowance that it replaces. It is the intention of the UK Government that those individuals in receipt of the Scottish adult disability living allowance should receive the same treatment in the reserved social security and tax systems as those on the disability living allowance, the Scottish recipients of which will transfer from DWP to Social Security Scotland.

The order before us is made under Section 104 of the Scotland Act 1998, which allows for necessary amendments to legislation in consequence of any provision made by or under any Act of the Scottish Parliament. It is therefore the appropriate vehicle to make these technical—by which I mean “very technical”—but important changes to recognise the Scottish adult disability living allowance in reserved systems. Scotland Act orders are a demonstration of devolution in action, and I am pleased to say that the Scotland Office has taken through over 250 orders since devolution began.

I turn to the effect that this order will have and the provisions that it will make. The order makes amendments to UK legislation to ensure that the Scottish adult disability living allowance is recognised as a qualifying benefit, in the same way as disability living allowance, in the reserved social security system with regard to entitlements to additional reserved UK Government benefits and premiums. This includes the Christmas bonus and the carer’s allowance. This means that recipients of the Scottish adult disability living allowance will be entitled to receive the annual £10 Christmas bonus payment if it has not already been paid via another benefit. Should all other eligibility criteria be met, it will also ensure that the reserved carer’s allowance can be paid to someone caring for someone in receipt of the Scottish adult disability living allowance.

This order also prevents dual entitlement to benefits paid because of the same needs: individuals entitled to Scottish adult disability allowance cannot be entitled to attendance allowance, disability living allowance or personal independence payments. This is in the same way that disability living allowance and PIP are not payable to people in receipt of attendance allowance. It also amends the taxation of trusts with disabled beneficiaries, to treat those with beneficiaries in receipt of Scottish adult disability living allowance in the same way as those with beneficiaries that receive DLA.

Without this order, people in Scotland on Scottish adult disability living allowance would not receive the equivalent tax treatments and entitlements to reserved premia and additions as individuals in receipt of DLA in England and Wales, or Northern Ireland. The Scotland Office, the DWP, HMRC, the Scottish Government and the Northern Ireland Executive have worked closely to ensure that this order can be made, clearly demonstrating cross-government support for it. This Section 104 order is yet another example of devolution in action and I beg to move.

[Lord Bruce of Bennachie (LD)]

My Lords, I am grateful to the Minister for her introduction of this order. As she says, it is technical and complex but there can be the rub in these kinds of things. I also welcome the fact that there is constructive collaboration between the Scottish Government and the UK Government on this. The people of Scotland have two Governments; it is important that they know that they do, and who is doing what and where they are working together. I take it that the same funding transfer will take place as in other social security benefits that have been transferred to Scotland. Again, it is important that the UK Government make that clear and that the Scottish Government acknowledge it, but it obviously gives the Scottish Government the ability to adapt these benefits to local circumstances, which is really the advantage of this.

I think we might all be grateful for the Scottish Commission on Social Security’s analysis. There are one or two aspects of concern which it has raised— I do not intend to pursue them all—that I want to explore with the Minister. In my previous capacity as a Member of Parliament, obviously I saw many circumstances where benefit claimants had problems with the administration. They also had family involved in that too.

Perhaps the biggest issue that happens is that those people who have succeeded in applying for and getting long-term benefit, in particular, have a real anxiety about anything that involves a review, even though they have been told that it is permanent. As the commission points out, the fact that there is an option to apply for adult disability payment—the Scottish adult DLA can effectively continue as if it was DWP—sounds like an improvement on the situation in England, where there is an automatic transfer to PIP. But the problem for many claimants is that if they apply, they really do not know whether they will be better or worse off. That is aggravated by the fact that once they have applied, if they find out that they are worse off they cannot revert to the previous benefit.

To some extent—I expect the Minister will argue this—it is a matter for the Scottish Government, and I accept that. But equally, the Minister wanted to make it clear that the DWP and the UK Government wanted to be sure that there would be no loss of benefit. Nor do I take the view that the Scottish Government have any obvious intention to disadvantage people who may be in that situation.

A particular recommendation of the commission that seems valid is that people must have access to independent, professional advice as to whether it would be in their interests to apply to switch to the new Scottish benefit or stay on their current effective benefit. Why would they want to transfer? In some cases, it will give them access to other related benefits which are triggered by the benefit that they are claiming. On the other hand, by leaving one they may also forfeit benefits that they currently can get, so it really is important that people know what they are going to do. The question of the grace period of two years also arises; the commission has suggested that it should be more flexible, because people really may not know what the advantage or disadvantage of doing it would be.

That is the main point of concern. There are obviously issues relating to those of working age and those of pensionable age. There is also the possibility that one benefit may give you access to related benefits while the other one does not.

So, in sum, to what extent is the collaboration a continuing one as opposed to handing it over and basically saying to the Scottish Government, “There you go. We’ve handed over some account of the money. You now have it and you can do what you like with it”? Alternatively, is there a recognition of good will on both sides and that people should be able to opt for what is best for them? The Scottish Government’s objectives are that benefits should always offer the best that is available for which people qualify. But the danger, sometimes, is that opting for one benefit as opposed to the other may lead to a loss. Why is it not possible to opt for the transfer but if, as a result of that, it becomes clear at the point of swapping over that it is a disadvantage to switch, are people in a position to say, “No, I’m not going to switch”, or are they already too far committed? That is really the point.

I think the Minister will appreciate that people who find themselves on the wrong side of that will be aggrieved and will let people know they are aggrieved, which is surely not what we want. The objective is to ensure that people who have applied for benefits get them on a fair basis and that, once they have secured them, they continue on a fair basis and there is no arbitrary situation where what they can or cannot claim changes simply because they have opted for one benefit as opposed to the other. So the choice is great, but not if people do not know the reason, the benefits and the outcomes.

A number of other issues were raised by the commission, but the Minister will know what they were. It did a very useful report that covered pretty well everything that needed to be covered. The assurances we have are that the British Government will not simply wash their hands but that the collaboration will continue, allowing the Scottish Government to do what they are doing—but perhaps recognising that there are some transitional things here that may require a bit more flexibility than appears to be provided for by the instrument itself.

[Lord Cameron of Lochiel (Con)]

As ever, I am grateful to the noble Baroness for her helpful introductory remarks and for her kind words about me and my brief stint as a Minister in the Scotland Office. I feel somewhat undeserving of those. The July election meant that I never quite got the opportunity to present a Scotland Act order in this Committee, and I now find myself, regrettably, scrutinising them in opposition.

In general terms, this is indeed a sensible and technical order that we will not oppose. Clearly, those who are entitled to the Scottish adult disability allowance should not also be entitled to the UK Government’s disability living allowance at the same time. Further, it is important that the relevant UK legislation is amended to ensure that recipients of the new Scottish DLA are treated in the same way as recipients of DLA in the rest of the UK, in respect of reserved taxes and benefits.

Since 2016, the devolution of some aspects of welfare to the Scottish Government has been complex and certainly not straightforward. It is perhaps a unique policy area, where some elements are reserved and some are devolved. That means that it requires sophisticated operating systems to be in place within both the new Social Security Scotland and the DWP. It also necessitates close and collaborative working between the Scottish and UK Governments at an official level—a point made so well by the noble Lord, Lord Bruce.

With that in mind, I raise the following points. Is the noble Baroness confident that these operating systems are agile and accurate enough to avoid the very duplication that this order seeks to preclude, as well as ensuring that cases that might be complex and difficult do not lead to people being denied payments that they are entitled to?

Secondly, although there has been no formal consultation here, can the Minister update the Committee on what informal consultation has occurred, if any? Has there been a public information campaign of any kind to ensure that those affected by these changes are aware of them?

Thirdly and finally, I return to divergence; I accept that it is a bit of a pet subject of mine, but it is important. There remains the distinct possibility that, in time, the Scottish and UK systems might diverge, whether in terms of rates, payables or benefits in more fundamental terms. Has any assessment been made of the consequences of potential divergence when it comes to eligibility for benefits? I look forward to hearing the Minister’s answers to these points.

[Baroness Anderson of Stoke-on-Trent (Lab)]

I thank both noble Lords for their contributions to the debate this afternoon. As ever, they asked some pertinent and relevant questions. However, I reiterate that this is a technical SI and that the policy process is a matter for the Scottish Government. We are, as our responsibilities make clear, providing them with the legal framework that already exists.

With regard to the questions asked by the noble Lord, Lord Bruce, the same funding transfer arrangements will take place. As I said, this is technical. I completely agree with him in terms of his experiences as an MP. Some of the most heart-wrenching conversations I ever had were with my former constituents who were in fear of what might happen in terms of a review—not even of the review itself. Then the appeal process was something else. So I completely agree with the noble Lord, but I reiterate that the application and review processes are a matter for the Scottish Government and Social Security Scotland. However, I assure him that there will be ongoing collaboration between both Governments, who touch on the lives of the people of Scotland and of people in every corner of the United Kingdom. There is genuine good will; I hope that there will be even better good will after the next set of Scottish elections, but we will see.

With regard to the benefit options, the Scottish Government are making sure that individuals can make an informed choice about what will benefit them, but I want to clarify something for noble Lords: everybody currently on DLA will ultimately end up transferring into the new benefit. It is a replacement benefit. As that process happens, it is a matter for the Scottish Government.

I turn to the noble Lord, Lord Cameron. I am sorry—not necessarily for the country but for him—that he never got to stand on this side of the Room to put forward a Section 104 SI. However, he started the work that we are discussing today, and I am grateful for that. With regard to his specific questions on the agile systems that we expect to be in place, the Scottish Government and Social Security Scotland believe that they are ready for them. In fact, the process will get under way on 21 March. So they are definitely aware, but we will continue to work closely with them. In terms of whether those affected are aware, that will be an ongoing process, but we will make sure that we work closely with anyone who is affected, especially anyone who either is on the border or would have been entitled and who lives in either Scotland, England or Wales—as the onus will be on us, I think; my officials have not shouted at me yet so I think we are okay.

I know that divergence is of huge interest to the noble Lord, Lord Cameron, as well as to many other noble Lords. The Scottish adult disability living allowance operates in broadly the same way as the DLA, and the UK Government have agreed that it can be treated in the same way—it is a qualifying benefit but is very similar. We will consider any changes that the Scotland Government make to the Scottish adult disability living allowance in future and, if those changes meant that it diverges significantly from the DLA, it would be for the UK Government to consider how to identify individuals in Scotland who may be eligible for additional support in the reserve system. So we will continue to monitor that. I think that answers the noble Lord’s question.

I believe I answered everything so, in closing, I say that this instrument demonstrates the UK Government’s continued commitment to working with the Scottish Government and to delivering for the people of Scotland.

Motion agreed.

Safeguarding Vulnerable Groups Act 2006 (Amendment) (Provision of Information) Order 2025

Tuesday 25th February 2025 Grand Committee

Considered in Grand Committee

17:01

Moved by

[Lord Hanson of Flint]

That the Grand Committee do consider the Safeguarding Vulnerable Groups Act 2006 (Amendment) (Provision of Information) Order 2025.

Relevant document: 14th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument).

[The Minister of State, Home Office (Lord Hanson of Flint) (Lab)]

My Lords, I beg to move that the Committee has considered the order, which amends the Safeguarding Vulnerable Groups Act 2006 in order to give the Disclosure and Barring Service, the DBS, an express power to share its barred list information with UK non-territorial police forces and the Crown dependency police forces of Guernsey, Jersey and the Isle of Man. I hope this will be a relatively straightforward Motion for the Committee because, as well as issuing criminal record certificates, commonly known as DBS checks, the DBS also maintains two lists—one of people that the DBS has barred from working in regulated activity with children, and one of those it has barred from working in regulated activity with adults. Regulated activity for the purposes of this includes sensitive roles such as work in schools, health and social care.

The DBS bars people from such work if their criminal history or other information held by the police, or their behaviour in the workplace, indicates that they pose a high risk to either or both of those groups. The DBS itself updates the police national database, PND, on a weekly basis with the names of individuals who have been barred. If the police then look up a named individual on the police national database—for example, for the purposes of criminal investigation or police officer vetting—the police will be able to see if that person is on one or other of the DBS barred lists.

An express power to share such information with the police is provided to the DBS by Section 50A of the Safeguarding Vulnerable Groups Act 2006. This gives the DBS the power to provide any information it has to a chief officer of police for the purposes specified in the Act, and it confirms that a chief officer of police includes the Police Service of Northern Ireland and Police Scotland. However—and this is the nub of the order before the Committee—it does not make express reference to the non-territorial police forces or the Crown dependency police forces. Following an extensive review, which includes arrangements for accessing the police national database, the DBS has decided on a precautionary basis that there should be express statutory ground for sharing its barred list data with these forces. It therefore took steps in March 2024 to prevent them accessing the barred status of individuals, pending resolution of the legislative position. This means that, at the moment, non-territorial forces and the Crown dependency police forces cannot currently access an individual’s barred list status.

We therefore intend, through this order, to make it clear that the definition of “chief officer of police” in Section 50A also includes the chief officers of the UK, non-territorial and Crown dependency police forces. Those non-territorial forces are the British Transport Police, the Civil Nuclear Constabulary, the Ministry of Defence Police, the Royal Navy Police, the Royal Air Force Police, the Royal Military Police, the National Crime Agency and the tri-service serious crime unit. The Crown dependency forces, for the purposes of this order, are the States of Jersey police force, the salaried police force of the Isle of Guernsey and the Isle of Man Constabulary. This order effectively gives the Disclosure and Barring Service the certainty it seeks to provide all forces with access to information that indicates that someone is considered to pose a risk to children and vulnerable adults.

In conclusion, the DBS’s barred list exists to help protect the most vulnerable in our society from those who pose a high risk of harm to them. That information is important to decisions made by police forces, whether related to police officer vetting or related to the prevention and investigation of crime.

This order’s purpose is to give the DBS the statutory power, beyond any doubt, to share this information with all forces, including the non-territorial and Crown dependency forces. I commend it to the Committee.

[Baroness Brinton (LD)]

My Lords, just before I contribute, are we not doing both SIs together?

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

That is not what my brief indicates, but of course, if the noble Lord wishes to do that, he can propose it.

[Baroness Brinton (LD)]

I apologise.

The first reading of this brief regulation and the Explanatory Memorandum is misleading. It appears to be a minor correction to ensure that access to DBS barred list details will now include non-territorial and specialist police officers. Nothing to see here—or is that the case?

Once again, I thank the Secondary Legislation Scrutiny Committee for its 14th report of this Session, in which it set out the real background to this SI and the previous history of errors in law by this department being corrected by regulations—but with Explanatory Memorandums lacking in information to inform those parliamentarians wishing to scrutinise regulations. It points out at least 10 SIs for this period since July 2024 that have been unsatisfactorily presented to your Lordships’ House—referenced by the committee in its third, fourth, eighth and 10th reports. This SI now needs to be added to that list.

The reality of this SI is that highly confidential information under the DBS legislation had been passed on to police bodies even though they were not permitted to receive it. The original Act, passed in 2006 under the previous Labour Government—nearly 20 years ago now—has clearly not been reviewed in detail since then. One must commend the new Government for dealing with not just this issue but the other ones as well. However, it is a real shame that the somewhat underhand tactics of the Explanatory Memorandum, designed to elicit confidence in the reader, are misleading as to be against the spirit of the relationship between a Government and the Parliament that is there to ensure that it can hold that Government to account. Can the Minister say whether the systems have been changed in the Home Office to ensure that this type of obfuscatory approach is now ended and that all such legislation that needs to be updated has been updated?

On the SI itself, the Secondary Legislation Scrutiny Committee raises the issue that the implication of the draft order is that unlawful sharing of data may have happened, even if it did not concern very many people. Individuals on the list may have been affected by being denied a job or made the subject of a protection order. So can the Minister tell the Grand Committee how many individuals—even if the number is small—may have been affected by the unlawful activity, and, perhaps even more importantly, whether those individuals have been told?

[Lord Cameron of Lochiel (Con)]

My Lords, I am grateful to the Minister for setting out the detail and rationale for this order. I make no comment on the on the observations just made by the noble Baroness and seek to address only the substance of the order.

As the Minister said, this statutory instrument seeks to grant explicit statutory authority for the DBS to share information with a range of non-territorial and specialist police forces. Although the need for this clarification is important and of course understandable, there are several questions about how this change will affect safeguarding practices more widely.

The order seeks to address a gap in the legal framework and expand the list of forces with access to the DBS. These were listed by the Minister, and I do not seek to repeat them. Given the critical role that these forces play in safeguarding vulnerable people, it is vital that they have access to all the relevant data that could indicate a risk to public safety. If properly implemented, the changes discussed today should enable the relevant forces to access that information and enhance protection.

I will probe the Minister on a couple of points. Is he confident that the forces now granted access to DBS data are fully equipped—in terms of both training and technology—to handle and act upon this sensitive information effectively? Safeguarding data is of the utmost sensitivity, and the risks of misuse or failure to act on such information are significant. What specific protections are in place to ensure that qualified authorised personnel within these forces can access and use the data properly?

Further, the SI allows the sharing of data on individuals barred from working with children or vulnerable adults. There is obviously an expectation that that data will be actively used to prevent harm. Therefore, are any guidelines or protocols in place to govern how this information will be used by the additional range of forces?

Finally, it is important to understand how these new regulations will fit into the broader safeguarding landscape. While recognising the need to protect and secure sensitive personal data for a host of reasons, I ask: does that preclude a more integrated approach to data sharing in general, not just among police forces but perhaps with agencies such as social services and healthcare providers?

The Opposition see this a positive step toward improving safeguarding. Plainly, it is important that its utility is measured and evaluated. I look forward to hearing the Minister’s responses.

[Lord Hanson of Flint (Lab)]

I am grateful for the contributions from the noble Baroness, Lady Brinton, and the noble Lord, Lord Cameron. I first address a point that the noble Baroness made about the Explanatory Memoranda for Home Office SIs. I am going to be honest with her: there has not been a been a good performance by the Home Office for a long period of time. The Home Office has recognised that. I am responsible for what has happened since 4 July last year. A number of SIs criticised by the statutory instrument committee were lacking in information and assessments from the previous Government. I am not going to pick a fight with the previous Government for that; that can happen.

On entering office in July, my job was to recognise that concern from the statutory instruments committee and to ensure that we try to address it. In addressing it, I did two things: I met the then chair of the statutory instruments committee—the noble Lord, Lord Hunt—and I have since had discussions with the noble Lord, Lord Watson, who has subsequently taken over that position. We will continue to liaise with him on that and we will examine that with him. I initially gave the noble Lord, Lord Hunt, the assurance that we will try to improve performance on SIs. I am committed to ensuring that SI legislation is delivered to the highest standard.

We are in a transitionary period. We are still in only the seventh or eighth month of this current Government. Therefore, we, the Home Office, are working hard to drive improvements in explanatory materials where there have been deficiencies. That includes organising refreshment training and guidance for members of staff. I have personally met with officials who deal with the statutory instrument guidance across the board. They are fully aware that not only I but the Leader of this House and the Leader of the House of Commons are very keen to ensure that SIs and Explanatory Memoranda are at a better standard than they were. I give that assurance to the noble Baroness today. It is starting to yield results, with the Secondary Legislation Scrutiny Committee having commended the department recently for its explanatory materials provided in support of several of the latest Home Office instruments. I assure the noble Baroness that that will get better over time, all being well.

17:15

There were valid questions from both Front-Bench spokespeople with regard to the assessment. I will first take the question of legal risk, which was party to both of their contributions. To go back to first base: the DBS was, until March 2024, sharing this information with the authorities that are in this order. It was sharing it with Guernsey, Jersey and the other police forces that I mentioned, therefore, to go back to the point made by the noble Lord, Lord Cameron, it had confidence that those organisations were capable, efficient and able to use that information in a proper and effective way.

What it did not have was what it perceived to be full legal cover, so it was worried about the potential for legal challenge. That issue led to the proposal in March 2024 —again, before I came into office—saying, “Can we review this procedure to give it full legal status?” In a sense, we are making sure that what happens now, which happened before March 2024, is on a fully legal basis so that it does not have the type of challenge that the noble Lord indicated and which I think the noble Baroness, Lady Brinton, also mentioned.

Most of those who are barred by the DBS will have been barred because of a conviction for a serious offence or because police information disclosed on an enhanced DBS check led to the DBS considering them for barring. That is information which is currently in the police computer. When these forces search for information on their systems, they will find the criminality and police information to which they already had access, as well as the barred list status of the individual.

What we are looking at now is in relation to the small number of individuals—again, this goes to the nub of the points made by both Front-Bench speakers—who are on the barred list for reasons other than a relevant criminal conviction or other police information. It is still possible that the police may have information on those individuals on their systems via, for example, a criminal investigation. That leaves a small potential cohort on the barred list where the barred status, which can be accessed only with DBS permission, would be the only information available on police systems. In those cases, the number in this small group is reduced further as it concerns only those being looked into by those forces added by this order which, by definition, are a minority of police forces. The assessment we have made is that there is a minimal risk to the public from that change.

The noble Baroness mentioned the potential for individuals to know whether they are on a barred list. If they have a criminal conviction or other things that I mentioned previously, they will know that they are on it. What they will not necessarily know is when someone accesses that information. I hope that the concerns that she has mentioned are not founded, but I am happy to reflect on what she said when I read the Hansard transcript. If need be, I will write to her accordingly.

I hope that I have answered the points mentioned by the noble Lord, Lord Cameron, because on capability, guidelines and protocol, that was all happening before March 2024. The DBS, the police national computer and the agencies receiving that information were content, but the DBS itself said, “We think we potentially don’t have the legal cover to do that”, so this order is to ensure that that legal cover is there. The jurisdiction in Guernsey, Jersey and other places is a matter for them but we are now sharing that information on the same basis that we were pre-March 2024, subject to this order, but given that legal certainty on top. With those comments, I hope that I have answered the points—

[Baroness Brinton (LD)]

I thank the Minister very much for his very helpful answer. I was asking about individuals because if this tiny group do not know that they are on the barred list but are having jobs denied them, we are going back to the system that used to operate 30 years ago when I was chair of education in a county council. It was essentially a secret list then. The point about those who have criminal records is that the individuals concerned know. It may be only a small number but I am very concerned about that group.

[Lord Hanson of Flint (Lab)]

I think I said—but I will check Hansard again—that all individuals will know that they are barred. Having reflected on this matter, I can confirm that all individuals will know that they are barred. Again, this is, in a sense, a process matter to ensure that there is legal certainty for the agencies that share that information.

[Baroness Brinton (LD)]

What about the individuals?

[Lord Hanson of Flint (Lab)]

The individuals know that they are barred because of the reasons they have. So there is legal certainty about that. I hope I have answered the noble Baroness, but, if she wishes to intervene again, I am obviously happy to reply. If she does not, I commend this instrument to the Grand Committee.

Motion agreed.

Immigration and Nationality (Fees) (Amendment) Order 2025

Tuesday 25th February 2025 Grand Committee

Considered in Grand Committee

17:20

Moved by

[Lord Hanson of Flint]

That the Grand Committee do consider the Immigration and Nationality (Fees) (Amendment) Order 2025.

Relevant document: 16th Report from the Secondary Legislation Scrutiny Committee

[The Minister of State, Home Office (Lord Hanson of Flint) (Lab)]

My Lords, this fees order sets out the immigration and nationality functions for which a fee is to be charged and the maximum amount that can be charged in relation to each of those functions. Within the order, we propose a number of changes that will facilitate major government policy.

Fees charged by the Home Office for immigration and nationality applications are an essential part of the department’s funding settlement and help to support the sustainable operation of the migration and borders system while reducing reliance on taxpayer funding. It is important, therefore, that we have sufficient flexibility within the department’s legislation to set fees at levels that support this funding approach. This amendment order will play an essential role in delivering this flexibility while also helping to ensure that our legislation remains current and reflects changes in the wider migration and borders system.

I will go into more detail on each of the changes that we propose, but, to summarise, this order covers a number of areas. First, it will increase the fee maxima that can be set for the electronic travel authorisation—ETA—for sponsorship on work routes, for naturalisation as a British citizen or British Overseas Territory citizen, and for certain nationality services. It will also remove the fee provision related to the electronic visa waiver and make consequential amendments to the Immigration and Nationality (Fees) Regulations 2018 to remove the fee.

I turn to the changes we propose to the fee maximas. The figures set out in this order act as a ceiling within which the Home Office is able to make changes to fee levels by laying separate legislation and seeking agreement across government. It is sensible to keep these maximas under review, to ensure that the order continues to support our fees and funding objectives. The changes we propose today, which are accompanied by an economic impact assessment, will provide the necessary flexibility to make changes to fee levels where they are required to ensure that the sustainability of the migration and borders system is maintained.

I emphasise that the actual fee levels that are charged to those seeking to enter or remain in the UK are not changing in this order. Any changes to the fee levels will be made through separate legislation and will also be accompanied by full economic impact assessments. However, in laying this order, we have sought to provide some clarity to Parliament and the public about our intention to increase certain fees when parliamentary time allows and when further orders are brought forward. We will, first, increase the fee maxima applying to an application for an electronic travel authorisation—ETA—from £15 to £16, in order to facilitate a subsequent increase in the chargeable fee from £10 to £16. The fee maxima that applies to certificates of sponsorship, which are assigned by employers to employees who need a visa to work and stay in the United Kingdom, will increase from £300 to £525. This maxima increase will also apply to the successor sponsor a worker process, which is being rolled out on a phased basis currently. In both cases, the chargeable fee for the main category of application will increase from £239 to £525.

We will also increase from £1,500 to £1,605 the fee maximum that applies to adult applications made to naturalise as a British citizen or a British Overseas Territory citizen. This will facilitate a subsequent increase in the chargeable fee for applications to naturalise a British citizen to the new maximum level. We will also increase the fee maxima that apply to various nationality-related services, which include an amendment to the certificate of registration or naturalisation and the supply of a certified copy of a document granted under current or former nationality Acts or, indeed, the supply of any of the documents specified in Table 7 in this fees order. All these will increase from £400 to £428. The review of a decision related to immigration and nationality will increase from £450 to £482, and the issuance of a document confirming that a person has the right of abode in the United Kingdom will be increased from £550 to £589.

To be clear to the Grand Committee, although we have announced our intention to increase fee levels later this year, they will not be increased until we lay separate legislation, the immigration and nationality fees regulation, which will be subject to agreement and approval by Parliament.

Finally, we will remove from this order the chargeable function from an electronic visa waiver and make the necessary amendment to the Immigration and Nationality Fees Regulations to remove the fee. This change is being made because the electronic fee visa waiver has been replaced by the ETA for nationals of Qatar from October 2023 and for nationals of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates from February 2024. The changes we will be making through this order are vital to provide flexibility to amend fee levels. They will subsequently have to have the approval of Parliament to ensure that the system is sustainably funded. I emphasise once again, there is no fee increase today through this order, but I move the principle so that Parliament, the public and those who want to access those services know where they stand for a future planning purpose.

[Lord Rowlands (Lab)]

My Lords, it was my pleasure for the past three years to have served on the Secondary Legislation Scrutiny Committee. It has reported on a whole series of immigration and nationality fees, and it is in that context that I wish to raise a particular, serious issue that has arisen. That committee has never questioned the need or requirement for such fees, or that they should be appropriate and should match the costs. However, an extraordinary situation has arisen in the context of some of the fees that have been charged by the Home Office. That is, a whole series of fees have been charged unlawfully, in that it proved to be the case, after years of these fees being charged, that there is no statutory basis for doing so.

On top of that, worse is to follow. In fact, VAT has also in some cases been inappropriately served on some of these fees. The Secondary Legislation Scrutiny Committee has drawn the special attention of the House to this extraordinary situation. The committee recommended that those fees that were considered unlawful should be suspended until such time as the matter had been resolved. The department refused to do so and, in fact, is continuing unlawfully to charge fees in some areas, despite the recommendations of the Secondary Legislation Scrutiny Committee.

I seek to draw attention to this extraordinary situation. I have been around for a very long time and have never come across the situation where a major government department has behaved in this way. In a three-year period, it collected £50 million without statutory authority. That is an astonishing situation. Therefore, we on the committee have been pressing—indeed, everybody should press—the department to resolve this legislative shambles that has occurred.

It appears that the possible resolution for this situation is that it may require retrospective legislation to sort it out. I therefore ask my noble friend the Minister, first, whether the department now agrees that it is necessary for such retrospective legislation to resolve this legislative fiasco? Secondly, if so, when will that be introduced? He cannot drag his feet any longer. This unlawful imposition of fees has been going on for a long time. I therefore ask the Minister to assure us not only that there will be such legislation but that it will be brought in promptly, so that the intolerable situation that has arisen can be resolved.

17:30

[Lord Foster of Bath (LD)]

My Lords, I am fascinated to follow the noble Lord, Lord Rowlands, with the information that he has provided to us today; I very much look forward to the Minister’s response to the points that he made. I shall concentrate on only one very small bit of the statutory instrument before us: the bit that relates to the electronic travel authorisation, or ETA.

I serve as the chair of your Lordships’ Justice and Home Affairs Select Committee. We have on a number of occasions looked in a great deal of detail at the planned introduction, and now the actual introduction, of the ETA. It is an authorisation requirement for anybody who does not have a visa and who wants to come here for a short stay from non-visa countries. We welcome the pushing out of the boundaries and the borders that this measure involves, giving us the opportunity to collect information about visitors to our country before they have even arrived, but we have expressed a number of concerns and made a number of recommendations to the Government about it. That is why I am focusing on this one particular issue.

What is proposed here is an increase in the maximum fee from £15 to £16, which of course seems incredibly limited; it is a very small increase. However, as the Minister rightly pointed out, the Government have made it absolutely clear that it is their firm intention that, as soon as time allows, another statutory instrument will come along; this one will increase the current fee from £10, as it is now, to a new maximum of £16. Obviously, that is a very significant 160% increase that we are going to see.

Bear in mind that, when this measure was introduced, we heard a number of things from the previous Government, who, in fairness, introduced it. In a Written Ministerial Statement of 6 June 2023, the then Minister of State for Immigration, Robert Jenrick, said:

“This fee level is competitive with that of equivalent systems run by other countries”,—[Official Report, Commons, 6/6/23; col. 821WS.]


so the £10 is a competitively charged amount. Of course, he was absolutely right. Currently, in Israel, it is £5.61; in South Korea, it is £5.53; in New Zealand, it is £7.68; and in the Seychelles, it is £8.33. In Australia, it is free unless you pay roughly £10 to use the smartphone application. All the EU countries are about to introduce their own similar scheme, and they have already announced that that will cost €7. So, clearly, £10 is of an order of magnitude but is actually slightly higher. By the time we get to £16, it is going to be significantly higher.

I acknowledge there is one aberration in that: the United States. However, if we look back at its history, it had a very much lower figure for a very long time during the measure’s introduction and it has only just recently increased that. So we will be out of line, when the original plan was to be in line and be competitive with other countries. The question is: will that have an impact? The answer is that the committee is concerned that it will have a significant impact on tourism.

To those who think, “Well, what’s the evidence for that?”, I say that we already have some evidence. One of the other things we were concerned about was the original intention for transit passengers to Heathrow and Manchester to have to apply for, and pay for, an ETA; we thought that that would be a disadvantage to Manchester and Heathrow Airports in particular. The current Government have looked at that, and we are pleased that they have decided not to go ahead with it and, temporarily at least, it is not happening.

17:35

Sitting suspended for a Division in the House.

17:45

[Lord Foster of Bath (LD)]

It is a brave Minister who continues without his Whip.

I was trying to explain why fees such as the ETA fee must be looked at in the context of the possible impact on tourism. The example I was giving to illustrate it relates to the system that we had until recently, whereby an ETA fee was charged for people who were travelling from a third country through the UK in transit to somewhere else, using Heathrow and Manchester in particular. We as a committee were concerned about that and thought that it would have an impact on tourism; that was backed up when the ETA was introduced initially for a few Gulf countries. As a result of that introduction, Heathrow Airport alone recorded a reduction of 122,000 people transiting through Heathrow from those relatively small countries. That was when the fee was at £10; if it is to go to £16, you can see the impact that it will have on people—not for transit but for people thinking of coming here. There is real, clear evidence that this fee increase being proposed, from £10 to £16, could have a huge impact on tourism.

Of course, our committee expressed a particular concern in relation to these fees in terms of tourism in Northern Ireland and issues in relation to the common travel area between the Republic of Ireland and Northern Ireland. This issue was picked up in the 16th report of the Secondary Legislation Scrutiny Committee, which said:

“We asked the Home Office for any assessments it has made about ETAs to date, especially in relation to Northern Ireland (NI). The Home Office stated that as a result of its monitoring … it was working with a range of government and tourist bodies to ensure that ‘ETAs are not seen as a barrier to cross-border tourism on the island of Ireland’”.


I ask the Minister the very question that the committee suggested, which is

“whether (or when) firmer evidence can be made available on the practical impact of the ETA on”

Northern Ireland tourism. If the Minister has any information, clearly, that would be very helpful. More generally, given that the Minister said that this SI has been introduced following a review of all these fees, can he tell us whether the issue of tourism was taken into account? In particular, can he give a categorical assurance that, when the new SI comes forward—the one that will actually make the increase to the new maximum—the impact assessment will take account of tourism?

I said that Robert Jenrick, when he announced the whole scheme, made two points. His second point was that the £10 charge

“will ensure that the Department’s costs in delivering the scheme are effectively covered across a range of volume scenarios”.—[Official Report, Commons, 6/6/23; col. 44WS.]

Can the Minister, whose department has conducted this review, tell us whether the increase that is being proposed is as a result of evidence that the £10 is insufficient to cover the costs of the operation of ETA; or whether this is in fact just a way of making additional money for the Exchequer? I am sure that he will be able to answer that and will have the figures to back it up.

I just say to the Minister that, given that we see in the notes for this particular SI that the longer-term effect is to bring £260 million-odd into the Exchequer, I suspect that the fee increase for ETA is about adding to that. However, I also warn him that, if tourism is seriously affected in the way I have suggested, the Government will not be able to make that amount of money.

My final point is about the ease of operating the ETA system. If it is difficult to operate, that will put people off bothering and it will stop people even thinking of coming to this country as tourists and perhaps also for business sessions, and so on. When we looked at the ETA introduction, we were concerned about the lack of different languages in which the information about ETA was being provided. The then Government actually agreed with us and accepted that official information relating to ETA should be made available in a wider number of languages “as soon as possible”, including French, German and Spanish. So can the noble Lord tell us whether this has happened?

I should tell him that, prior to this meeting, I sought to find out for myself whether I could get details of how ETA operates in other languages. I could not. So I asked our good friends in the Library whether they could find out, and they told me that they too could not find any evidence that information is provided in any language other than English. They pointed out to me that, of course, some platforms have a translate option—that might be the clever way out—but, when we checked some of the platforms, we could not get the ETA to translate into different languages. So the evidence I have shows that what was promised has not been done. Of course, it may have an impact on people choosing to come to this country if they find it hard to get this information. So perhaps the Minister can address this.

There are many other issues with the ETA operation which are not relevant to the SI, so I will not raise them now, but the Committee and the Justice and Home Affairs Committee are very keen to have an opportunity to discuss those issues with the Minister. However, in the meantime, on this SI and the proposed future SI, I very much look forward to the Minister’s response.

[Baroness Brinton (LD)]

My Lords, it is a pleasure to follow my noble friend Lord Foster, who raised serious questions about the ETA and whether there will be an impact. He provided evidence to show that having an ETA at the current level, before any increases, is already having an impact. One of the general themes I will cover is what the impact assessment does not say about the impact on businesses, including tourism in this case, and other areas that I will come to. This is yet another charge that has gone up, adding to overheads, and it is becoming a problem in certain sectors.

It is also a pleasure to follow the noble Lord, Lord Rowlands, who outlined many of the problems that the Secondary Legislation Scrutiny Committee has been reporting on over the years. I look forward to the Minister’s response to his questions.

I will start on an optimistic note, given our debate on the previous SI. The Secondary Legislation Scrutiny Committee does not often hand out commendations in its reports, but it has commended the Minister and his officials on the Explanatory Memorandum, which was very helpful. With my calculator out, I did a lot of calculations and, although Minister may be irritated by some of the questions he gets, it is actually because we understand what is happening. That needs to be to be credited because we have not necessarily been able to give that credit in the past. The impact assessment was helpful, but I am not sure that it asked the right people about the impact. I will come back to that in a second.

Paragraph 29 of the Secondary Legislation Scrutiny Committee’s 16th report says that

“the net benefit of the changes is relatively small. Further, we note that in some scenarios set out in”

the impact assessment,

“the costs of the changes outweigh the benefits. This possibility arises because … it is ‘highly uncertain’ what goods and services visitors and visa-holders consume, and how many of those are provided”

by British businesses. Can the Minister comment further on this, or is the impact assessment just guesswork? That is the perhaps slightly unfair approach to trying to translate what the Secondary Legislation Scrutiny Committee said.

I say that because the maxima level set here is, pretty broadly, a 7% increase. I very much echo the comments made by my noble friend; the Government have made it very plain that when they do introduce fee rises—as opposed to setting a new maxima—most of them will go up to the new maxima. As the impact assessment says, the Government are trying to ensure that they can cover the costs of migration and the staffing for that, but I am concerned because 7% seems high.

For example, the pension triple lock is increasing by 4% this year. Many felt that was too high in the current financial circumstances. I am not going to comment on that but am trying to weigh it up as 7% seems to be a general increase, if not for the next year. I know the Minister will say it is only a maxima, but we heard elsewhere that there is an intention in most cases to go to that.

It is true that in paragraph 5.2, the EM says:

“The department is seeking to implement changes to fees to generate additional income from end users to support the funding of the migration and borders system and reduce reliance on funding from the taxpayer”.


However, the increases that are not 7% are the ones that really worry me. They seem bizarre and, in one particular case, ill thought through. For example, the skilled worker and temporary worker fees have both been increased by over 100%: from £239 to a £525 maxima for the skilled worker fee and from £25 to £55 for the temporary worker maxima. The reality is that in just over seven months, this Government have increased other costs to businesses—not Home Office costs, I grant you—but it is difficult and tedious for employers to recruit staff from overseas at the moment. I am not commenting on whether it was right or wrong, but the previous Government really tightened down on who could come to work here. Part of that was to start increasing substantially the costs that businesses and individuals coming here had to pay.

One of the costs I am particularly concerned about—we have just had a vote on this and there will be more before the evening is done—is on the increase to employers’ national insurance contributions. Not only are these increasing, but the floor for payment is lowered to include many lower-paid workers. Migrant workers filling gaps in our economy, such as in social care, hospices, agriculture and hospitality, are much more likely to be in those sectors where the margins for businesses are extremely low.

Our social care sector is already in complete crisis. Only today, there are reports of care at home being removed and clients being told they will have to leave their home and move into care homes, solely because of the economics of the increased national insurance contributions and the high costs associated with care delivered in a home setting. To have extra fees for migrant workers—often paid for by the businesses because the migrant workers just do not have their own resources—is going to add further to those sectoral problems. I wonder why the impact assessment says there are no financial implications from a 100% increase in these fees.

If these increases are as set out in paragraph 5.2 of the EM, did the Home Office actually seek advice from some of the sectors most reliant on overseas workers, whether skilled or temporary? I am slightly less worried about the very high-value skilled workers, where an employer will not only take on somebody at a high salary but be prepared to manage an oncost. It is those who are given temporary leave to work here, or in the health sector, where we know they have been granted.

Finally, paragraph 5.10 sets out the increase for the review of a decision related to immigration and nationality. The main fee maxima is increased by 7% and I have already commented on that. Hidden a few lines further down is a really shocking increase from £80 to £480 for an administrative review of a decision. This is nothing to do with the relevance of costs and I wonder if it is a financial punishment. An administrative review is very different to a review by a panel or senior officer, as referred to earlier in that section. Can the Minister explain why this particular administrative review has now hit the same maxima level as the much more complex and personnel-intensive level required under the main type of panel review?

By the way, it is interesting to note that, at paragraph 11.1, that particular increase has not been highlighted, whereas others have. I wonder why that might happen. The reason why the noble Lord, Lord Rowlands, my noble friend Lord Foster and I are raising these issues is to try to understand the strategy behind these increases, as opposed to just a reason to raise money. We are concerned that at least some of them may backfire and stop the increase in growth that this Government are keen to see.

18:00

[Lord Cameron of Lochiel (Con)]

My Lords, again, my thanks go to the Minister for setting out the background to this order and for the specific detail that he outlined. As he said, it is a matter of the principle of the fee increase, not the actual increases themselves. I am also grateful for the pertinent and interesting points made by the noble Lords, Lord Rowlands and Lord Foster, and the noble Baroness, Lady Brinton.

As the Government have outlined, this order seeks to increase the maximum fees that can be levied for a range of key immigration services, including the ETA, certificates of sponsorship and applications for naturalisation. This measure is not unexpected. It aligns with the policy direction pursued by successive Governments—including the previous Conservative Administration, who sought to make the immigration system financially self-sustaining and to reduce its reliance on general taxation.

Noble Lords will know that the principle that those who benefit most from the immigration system should contribute to its costs is a long-standing one. In this context, it is logical that the Home Office looks to raise fees, given the increasing financial strain on the system. The proposed fee increases are expected to generate an additional £133.6 million annually while reducing public service provision, thereby saving the Exchequer a further £12.42 million. On the surface, this appears to present a clear net benefit to the Government’s finances; the previous Government acknowledged the necessity of fee increases to maintain the sustainability and integrity of the system.

Going forward, it is of course important to assess whether these revenue projections are robust, particularly in the light of the complex and ever-changing landscape of immigration; and to ask whether these measures will in effect lead to the intended behavioural changes. For instance, we are told that previous fee increases had little impact on demand. Is that always going to be the case? The Government’s own impact assessment here on ETA, for instance, indicates a modest reduction in ETA applications due to the fee increase. All of this points to a general question for the Minister: what ongoing monitoring is in place to assess, on a continuing basis, the impact of fees on issues such as behaviour, demand and costs? I would be grateful if the Minister could outline that in his response.

In conclusion, we do not oppose the Government’s desire to increase fees in order to fund the immigration system. We must ensure that these fee increases are implemented in a way that is fair and equitable and which truly serves the long-term interests of both the immigration system and the broader public. It is in the best interests of the United Kingdom to have an immigration system that is financially sustainable and fair to all those who seek to contribute to our society. I trust that the Government will continue to monitor the effects of these increases and remain responsive to any concerns that may arise.

[Lord Hanson of Flint (Lab)]

I am grateful for the contributions from noble Lords and from the noble Baroness, Lady Brinton, on behalf of the Liberal Democrats. I want to remind the Grand Committee of something it already knows, but it is worth putting it in context at the beginning: there is no increase today in the fee levels, and impact assessments for each potential future fee increase, if this order were to be approved, would be put in place. There would be an impact assessment for each potential new fee level determined by the Government, in due course. That fee level may or may not be put forward by them at some point in the future, up to the maxima being agreed today, and would include an assessment of the impact on tourism, jobs, investment, growth and on the appertaining costs of any fee as a whole.

I know that the Committee knows that, but it is worth putting it in context. This is the hors d’oeuvre to a meal; it is not the main meal, because that will come downstream when potential new fee levels are put before both Houses of Parliament for approval, with an appropriate impact assessment covering the many points made by Members here today.

I will start with my noble friend Lord Rowlands, who I am pleased to see in his place. We shared a long time together in the House of Commons and it is good to see him again here today. He touched on a very important point. First, there is the scrutiny of legislation by the statutory instruments committee, which was also touched on by the noble Baroness, Lady Brinton. The points my noble friend made about that, and the performance of the Home Office, are well made. They were made in the previous debate by the noble Baroness, Lady Brinton; I am hoping that they will not be made in future debates, for the reasons I outlined then. The Government intend to make sure that statutory instruments have proper Explanatory Memoranda and are thoroughly investigated and overseen by Ministers, and that measures which are brought forward are appropriate and testable by the SI committee, and defensible by Ministers accordingly.

My noble friend Lord Rowlands made a clear reference to the failure to provide legislative cover for fee increases. This was round about April of last year. My first defence is that, as he will know, I was not the Minister responsible at the time. Why it happened is a matter of conjecture, but it has. I am not going to put the proverbial political boot in to previous Ministers or officials. That is where we are and, in their defence, there was a general election, which has impacted upon any timescales to rectify that error, but that error has existed. When it was noticed, measures were brought to the attention of Ministers in the current Government, and we brought forward regulations at around Christmastime. Those were taken through the Grand Committee and the House and approved accordingly, so that the fees now being charged are on a legal statutory basis.

As my noble friend mentioned, that leaves a gap of some months—maybe April to November—where fees were charged accordingly, with no legal backing. He asked, rightly, what measures there are to ensure that we take action on that. The Border Security, Asylum and Immigration Bill has within it measures to provide retrospective statutory authority for those fees that were charged in connection with services provided by Ecctis Ltd. On that basis, that Bill, which has been published in the House of Commons, is correcting the position on fees charged to date.

Those who have previously been charged have received a service that they have paid for. We want to avoid putting an additional burden on taxpayers, so we do not intend to issue refunds, because although the fee was charged without that legislative cover, the service that the fee provided was still received by the individuals concerned. We are trying to ensure that we regularise not just the situation, as we have now done, but that gap which happened—not on my watch, but it did. It is now being regularised by this legislation, which will be challenged. The noble Baroness, Lady Brinton, also mentioned this point. It is open to scrutiny and to approval, rejection or amendment in this House, but it is the Government’s position to try to resolve something we were not responsible for. I hope that answers my noble friend’s point, but I will happily take an intervention.

[Lord Rowlands (Lab)]

I believe so. The most important thing is: have the lessons been learned as a result of the fiasco that occurred, so that we can be assured that, in future, there will never be a fee that is not statutorily based?

[Lord Hanson of Flint (Lab)]

I will give my noble friend what I would say is a guarded response: I hope so. It is my intention that that will not happen again. I cannot verbally legislate today to say that mistakes will not be made by Ministers and/or officials downstream, but I hope that lessons have been learned. The moment it was drawn to this Government’s attention, we introduced legislation to regulate the current level of fees that were being proposed and, through the proposed Bill, cover legislatively the backdated gap that was in place. I hope I can give my noble friend that assurance. Certainly, it is something that current Ministers are aware of and do not wish to have—but, as ever, it is a human system, as my noble friend knows.

I turn to the meat of other points that were made noble Lords. I welcome the support of His Majesty’s Opposition Front Bench. The noble Lords, Lord Foster and Lord Cameron, and the noble Baroness, Lady Brinton, raised the impact on tourism, on jobs and on a range of other things. Let me put this into context again. The Government have to cover the costs of the immigration border control system. This is potentially helping with any future decisions taken—not the increase today, but any future decisions—to meet the costs of that system and to put in place measures to ensure that we have border control for tourism and employment, as well as the measures we are taking separately in the immigration Bill to look at illegal migration. It is important that we regulate that and that the taxpayer gets resource back from it. We have taken decisions, which may not be popular with the noble Baroness, to look at how we can potentially raise money from that. As I said, we will bring forward further impact assessments and proposals on the actual figures for each of the sectors that she mentioned, but we have made a judgment that we have to cover those costs and we must ensure we can do that.

The Government have a growth agenda. We do not want to hinder growth in jobs or in tourism; we want people to come to the United Kingdom. The question I throw back to the noble Lord, Lord Foster, is: would a fee of £16 deter somebody from coming to the United Kingdom on a tourist visit? I think he said yes from a sedentary position. That is a judgment we will have to examine and look at. The impact assessment shows a marginal impact. It is something we will have to look at. When and if we bring forward proposals on the rise from £10 to a potential maximum in the future, we will look at those issues. I do not know—do I not go to America because it costs me £35 or whatever it is for an ESTA? Do I not go to France, in due course, when I am charged a fee for its equivalent of an ESTA? Do I not go to Spain, to Greece or to other countries? Alternatively, do I absorb that as part of my tourism package?

[Lord Foster of Bath (LD)]

There is a great deal of research evidence on this very point. Going to America turns out to be very different from going to a country within the European Union. Going to a Schengen area country turns out to be very different now from going to the UK, because of course you can get one document to get into all the different countries. There is a great deal of evidence already about this, and when we bear in mind that this country has higher VAT on, for instance, accommodation, tourist attractions and so on than most other countries, we are already at a disadvantage. All I am grateful for is that the Minister has assured me that we are going to have full consultation and a full impact assessment when he brings the next stage forward.

18:15

[Lord Hanson of Flint (Lab)]

There will be an impact assessment. I still say to the noble Lord that people want to come to London: they want to see this building and Buckingham Palace; they want to see Downing Street and Trafalgar Square. In my home city of Liverpool, people want to see Beatles-related material or they go for football matches. People will go to York because of its history. People go to Scotland—the noble Lord’s home base—because they like Edinburgh and Scottish culture. That is not going to change because we have gone from £10 to £16. There might be other factors that stop people coming but I am not convinced that that figure will be looked at. I reassure the noble Lord that if the figure goes at a future date from £10 up to the maximum of £16 on that proposal, there will be an impact assessment and he can test it. He can vote for or against it in due course.

The noble Lord made another important point on the ETA form and I am grateful to him for raising it. I want to get the bottom of the source of his knowledge about potential translations—I will do this, if I may, outside the Grand Committee. I will look at it and write back to him in due course. At the moment, the form is available only in English. It has been launched in the Gulf countries. We have had no significant feedback, but I will take that point away. If there were assurances given previously by Ministers or officials, I want to get to the bottom of them. I am not aware of them from the discussions that we had today or from my discussions with officials in the Home Office. We will look at that in due course.

The noble Baroness, Lady Brinton, talked about the logic for all of this. The logic is that we have to fund the cost of the migration system. The logic is that if there are fee-level increases—which are not yet on the table, but could come—with impact assessments, these will be to ensure that we maximise the income to cover the cost of administration and of border systems generally. There may also be some businesses that ask, “Can I recruit home-grown employment?”. That is an important consequence as well.

[Baroness Brinton (LD)]

I am grateful for the Minister’s response. I am mindful that the Secondary Legislation Scrutiny Committee said that some of the increases in the maxima might not cover the administrative costs of introducing them. That then starts to be a burden on the Home Office’s budget, so is analysis being done to look at that? It will otherwise become counter- productive.

[Lord Hanson of Flint (Lab)]

The driver for some of these issues is to ensure that we have self-sufficiency on costs for this area. Obviously, I am talking today about the potential for maximas. We are not talking about what those fees are going to be. They may be the maximas and they may not. The Home Office will take that decision and it will lie predominantly with Ministers who are Members of the House of Commons, rather than of the House of Lords—such as myself. We will discuss those fee increases. That is a decision taken by the Minister for Migration and Borders, who is a Member of the House of Commons in the Home Office team. We will look at that and these orders will come forward to both Houses in due course. I will take feedback and discussion, as I am doing now with colleagues in this House.

The general principle of this is that we ensure that we raise that resource and potentially look at challenging behaviour so that we give opportunities for people to say, “If it costs X to bring someone from Y country, are those skills available locally to boost the economy locally?” That is a perfectly legitimate policy objective that I think was shared by the last Government and which is not difficult for Members to accept and understand.

I hope that I am covering all the points. The final point that I want to make is on Northern Ireland. Citizens of the UK, including citizens who live in Northern Ireland—whether they identify as Irish or British—will not have an ETA to go to Ireland, and, vice-versa, Irish citizens will not need an ETA to go to Northern Ireland. There will be tourist movement from other countries into Ireland and Northern Ireland, and potentially into the United Kingdom as a whole through that route. I am cognisant of that and we are aware of it. We will make an assessment on that. Again, I repeat my record that says that we have not yet made the decisions on the figures. We have not brought those forward or made the impact assessment but when we do, I will be ensuring with colleagues that that impact on Northern Ireland tourism is assessed, as will be the impact of the collectability of that ETA in relation to the island of Ireland and the common travel area.

I am grateful to noble Lords who have raised that issue but it is something on which we have worked closely with the Northern Ireland Executive and the Irish Government since the inception of the ETA policy. We will continue to work with those partners to understand the impact of ETAs in Northern Ireland. By requiring an ETA on crossing the land border, we will also have a better understanding of those who are seeking to come to the United Kingdom. However, as noble Lords, particularly the noble Lord, Lord Foster, will know, the land border issue in Northern Ireland is sensitive and not one that we wish to see imposed—as it was, even in the times when I was a Northern Ireland Minister 20 years ago.

With that, I hope that I have answered the points made. I commend this order to the Grand Committee.

Motion agreed.

Committee adjourned at 6.21 pm.