Personal Independence Payment
Baroness Buscombe Excerpts(6 years, 5 months ago)
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, by the leave of the House I shall repeat as a Statement an Answer given to an Urgent Question in another place by my right honourable friend the Secretary of State for Work and Pensions on the withdrawal of her appeal—Secretary of State for Work and Pensions v AN & JM CPIP/1882/2015 CPIP/1159/2016—in relation to personal independent payments:
“I am absolutely committed to ensuring that disabled people and people with health conditions get the right support they need. PIP is a modern, personalised benefit that assesses claimants on needs, not conditions. It continues to be a better benefit than its predecessor, DLA, for claimants with chronic conditions. Under DLA, only 16% of claimants with diabetes received the top rate, whereas under PIP 29% receive the top rate.
I carefully considered these historic cases and decided to no longer continue with these appeals in order to provide certainty to the claimants. Since withdrawing the appeals, I have provided instructions to operational colleagues to put these claims in payment urgently. These claimants will receive any backdated moneys owed and should receive their first payment within the coming days.
These cases were decided prior to the March 2017 amending regulations, where the Government clarified their policy for managing therapy under PIP daily living activity 3. These regulations are not affected by our decision to withdraw these appeals”.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for repeating that Answer. This refers to the fact that the First-tier Tribunal ruled that two claimants with chronic conditions were entitled to PIP. The Secretary of State appealed but withdrew the appeals shortly before the Upper Tribunal was due to hear them on 21 May. The appeals concerned the meaning of daily living activity 3. One claimant needed watching at night in case urgent treatment were needed to prevent him falling into a fatal diabetic coma. The tribunal decided that he should qualify for PIP. According to the lawyers representing him, the Government argued in the appeal that he should be awarded only one of the minimum eight points needed to qualify for PIP.
This is the second time in a year that we are debating a serious error of judgment by the DWP in lawfully implementing the benefit it created. Noble Lords will remember that the High Court previously ruled against the Government on mobility payments, and in January the Government said that they were no longer appealing that judgment, either.
Normally when we ask questions on the meaning of judgments—and in the past when I have raised questions—Ministers stand up and say, “We are really generous to disabled people”, and the same thing has happened in another place. That is not a conversation. So I urge the Minister today to listen carefully to the questions and to try to answer them as best she can, and to write to us if she cannot. I have two. First, will she tell the House how many other cases are potentially affected by this ruling, and over what period and by what means her department will identify these people and notify them? Secondly, have Ministers taken legal advice on whether the regulations rushed through in March 2017 are definitely lawful?
Baroness Buscombe
My Lords, it gives me pleasure to respond to the noble Baroness. First, let me make it clear that, in our amendments to the regulations in March 2017, we were responding not to an error in the policy or in the PIP system but to a lack of clarity. The March 2017 amendments clarify the department’s position going forward, and further litigation is therefore unnecessary. The Secretary of State made it clear when she first arrived at the department that she wanted to withdraw these appeals on the basis that she wanted to provide these claimants with certainty. I want to be clear that this Urgent Question relates to the withdrawal of two appeals on 18 May and is about two specific cases. Therefore, there is no question about how many other cases it is concerned with and over what period.
On legal advice, we always confer and consult with lawyers to ensure that we are, to the best of our ability, making the right decisions on the regulations. We are clear in our minds that the regulations as they stand are lawful.
Baroness Thomas of Winchester (LD)
My Lords, presumably the department had advice before it brought in the descriptors that have been found not to be right, so I am not sure whether the legal advice is worth the paper it is written on. Can the Minister tell us whether there was any consultation on the amended regulations? After all, there are many rare and ultra-rare conditions. The people who needed watching over at night may be just two people from a cohort of many who need that kind of support when they are taking therapy. Will the Minister tell me about the consultation?
Baroness Buscombe
My Lords, I can confirm that the PIP assessment criteria were extensively consulted on prior to their introduction and were developed in collaboration with disabled people and independent specialists. The 2017 amending regulations did not represent a policy change. They were introduced to restore the original policy intent and to clarify the distinction between the needs of claimants who require assistance to manage therapy and those who require assistance for medication or in monitoring a health condition under daily living activity 3.
For the benefit of all noble Lords, let me explain that what we are talking about is, unlike DLA, a very personalised system of support. It is not based on condition; it is based on need. The important point is that it focuses on managing the condition at one end of the scale and actually requiring extensive therapy at the other end of the scale within the particular 3b criteria that have to be followed. Each case has to be considered on its individual merits. That is one of the flexible and important aspects of PIP. Of course, the outcome of that is that many more people are receiving the highest rate of award under PIP than under DLA.
Baroness Primarolo (Lab)
My Lords, in the interests of clarity for the Government and certainty for the claimants, can I return the Minister to the question raised by my noble friend Lady Sherlock? Will the Minister explain to the House how the Government intend to move forward in ensuring that they have identified other cases that are potentially affected by this judgment and the lack of clarity—some might call it error—in the regulations originally drafted by the Government?
Baroness Buscombe
My Lords, it is important to re-emphasise the fact that this Urgent Question is about two specific cases that occurred before the regulations were amended in March 2017. It is about a five-month period. We are focusing on support for those two particular claimants and will ensure that any loss will be recovered and paid to them, literally within the coming days.
I sense that the House is perhaps referring to a judicial review decision that was made in the sense that the Secretary of State decided not to appeal a judgment towards the end of 2017 in relation to mobility activity 1, which is different from today’s Question. However, in relation to that, we will be carrying out an administrative exercise to identify claimants who may be eligible for more support under PIP and we need to screen the whole PIP caseload of 1.6 million to identify those people as a result of that JR judgment. The actual number of people whose award will be affected is much smaller. The judgment relates to people who suffer from overwhelming psychological distress that affects their ability to plan and follow a journey. Anyone who is identified as affected will be contacted by DWP and their payments will be backdated to the effective date in each claim.
Baroness Browning (Con)
My Lords, I declare a personal family interest. While I appreciate the constraints of this particular Question and judgment, my noble friend referred to the judicial review that was debated in this House. There have been many changes since the initial legislation came in. Can she tell the House how many existing people remain on DLA and are still waiting for their PIP assessment from DLA to PIP?
Baroness Buscombe
My Lords, I apologise. I hope that my noble friend will appreciate that this was given to me as an Urgent Question. I know that since PIP was introduced, 3.1 million decisions have been made, which will include some who were on DLA as well as new applicants for PIP, 9% of which have been appealed and 4% overturned. I am struggling to give the exact figure of the number of people who have moved from DLA to PIP. In that case, I am happy to write to my noble friend.
British and Irish Sign Language
Baroness Buscombe Excerpts(6 years, 6 months ago)
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Lord Bruce of Bennachie
To ask Her Majesty’s Government what practical support they plan to provide to enable the establishment of a nationwide video relay service for users of British and Irish sign language.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, video relay services are currently available from organisations that buy into the service. It should be possible for these privately operated services to be extended to allow deaf people to communicate with friends and family, but the end user would have to pay. BSL users already have a well-established VRS network, allowing accessible communication with a range of private, public and voluntary organisations. These bodies purchase the service from several established providers to enable their deaf customers to access their services.
Lord Bruce of Bennachie (LD)
My Lords, the Minister’s answer falls far short of what deaf sign language users feel is their right—both what they are entitled to and what they actually need. This is their preferred technology and can give them access to interpreters any time, anywhere. At the moment, its availability is time-restricted and, as the Minister said, it is a chargeable service. VRS is available for free in Scotland for access to public services nine to five, Monday to Friday. But sign language users want access 24/7 for all purposes—private services and public services at work, and contacting their family and friends. The US provides this, as does Australia, Canada, France, Switzerland and even Thailand: why can Britain not do the same?
Baroness Buscombe
My Lords, first, I pay tribute to the noble Lord, Lord Bruce of Bennachie, for the enormous amount of work he has done in this area over many years. It is important to recognise that access to assisted hearing is available in a number of ways. We have assessed that of approximately 2 million people with hearing impairment, about 25,000 use sign language. Where VRS is not provided, we are ensuring bespoke support—for example, through the disabled students’ allowances and our Access to Work support, whereby the cap on grants for every individual who qualifies for Access to Work has just been increased to £57,000 per person per year to ensure that more people can receive the support they need in a bespoke way to help them stay and progress in work. There is always more to be done. However, we do not believe that enshrining this in statute and focusing all our resources in one area would be right, given the speed of technological advances.
Lord Borwick (Con)
My Lords, I declare my interest in the register as a trustee for about 20 years of the Ewing Foundation for deaf children, a registered charity. Does my noble friend the Minister agree that communication of every form is vital to deaf people of every age but that the majority of people who have hearing loss are elderly and do not use sign language? Does she agree that the great work of the NHS in fitting cochlear implants to deaf babies and children, together with the expensive training that is required to make full use of them, and the development of new high-tech digital hearing aids enable a large number of people to use their residual hearing effectively? Does she agree that the new technology of cameras fitted to smartphones and Skype calls enables the creation of what is in effect a worldwide video relay service, not only for the users of British Sign Language but for all deaf people and at far lower cost?
Baroness Buscombe
My Lords, I thank my noble friend. I entirely agree with him that in supporting access to communication for everyone, the exciting work of the NHS in fitting cochlear implants to babies and children is one example of why, as the Minister of State for Disabled People has said, it is clear that there is now a wealth of technological solutions with the power to make a real difference to someone’s ability to progress in education and also to find and keep a job. This means that we can use more of our devices. It offers more opportunities and a wider range of ways in which people can break down the barriers of hearing impairment. Of course, the majority of people with a hearing impairment are elderly and for the most part they do not use sign language.
Baroness Sherlock (Lab)
My Lords, I am sure the Minister would not in any way mean to suggest that people who use BSL should be thinking about other ways of communicating. I want to bring her back to the fact that in 2016, the Department for Work and Pensions introduced VRS for some of its services as a result of a recommendation from the DWP Select Committee that the department ought to be more accessible to BSL users. The Government said at the time:
“In the future, it is hoped that VRS can be rolled out across DWP’s complete range of services”.
I have had a look at the website and some services, such as applying for ESA or PIP, do seem to be available via this mechanism. But I looked on the universal credit website and could find no reference to it at all. Are the Government now saying that they no longer wish to do this at all and will therefore not be rolling it out, or that they will be rolling it out but have not got round to it yet?
Baroness Buscombe
I assure the noble Baroness that there is no question of our not supporting the use of BSL services. In fact, good, accessible services are the best way to remove or overcome barriers that BSL users and people with hearing loss face. We have worked closely with deaf people and their organisations on delivering improvements across a wide range of services, including those provided by the Department for Work and Pensions and across much of the public sector; this is also the case in private companies such as Barclays, Lloyds, Sky and Virgin Media. The reality is that a growing number of organisations in the private, public and voluntary sectors are providing access to their services for deaf BSL users via the video relay services. With respect to the Department for Work and Pensions, I reassure her that there is no question of our not considering this service for UC rollout, but I will certainly take that point back to the department to ensure that that is the case.
Lord Elystan-Morgan (CB)
Can the Minister assure the House that the Welsh language will be given full parity with the other languages of the United Kingdom in this matter?
Baroness Buscombe
My Lords, BSL is a devolved matter so, with regard to Wales and the Welsh language, there were no particular recommendations on the provision of BSL. However, a parliamentary Statement in 2003 recognised BSL as a language and the Lords Select Committee was clear that this should be extended to the devolved regions. It is also important to make it clear that there are a number of different sign languages, not just one particular sign language.
Financial Guidance and Claims Bill [HL]
Baroness Buscombe ExcerptsTuesday 1st May 2018
(6 years, 6 months ago)
Lords ChamberRead Full debate Financial Guidance and Claims Act 2018 View all Financial Guidance and Claims Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 97-I Marshalled list for consideration of Commons amendments (PDF, 67KB) - (30 Apr 2018)
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, throughout the passage of this Bill, the importance of increasing the number of people taking Pension Wise guidance has been debated and recognised on all sides. We all want people to make more informed decisions and to make it the norm to use Pension Wise before accessing their pension.
Amendments 4, 7, 8 and 36 place new duties on managers and trustees of all defined contribution pension schemes. They build on proposals put forward by noble Lords who introduced an amendment seeking to give those accessing pension flexibilities a stronger, last-minute nudge towards Pension Wise. They also draw on the proposals put forward subsequently by the Work and Pensions Select Committee in another place to require that people should have to make an active decision to opt out, rather than be able to opt out passively.
I want to stress that the guidance given under these amendments can be provided only by the single financial guidance body. This is by virtue of the interaction between Clauses 3 and 5 and Amendments 7 and 8. Subsection (7) of the new clause inserted by Amendment 7 and subsection (6) of the new clause inserted by Amendment 8 define the pensions guidance referred to in the amendments as the information or guidance provided in pursuance of Clause 5. This clause requires the new body, as part of its free and impartial pensions guidance function in Clause 3, to deliver what we know as Pension Wise guidance.
Throughout this process, discussions with Members of both Houses and key stakeholders brought out two core issues. The first was that any requirements should be based on the presumption that people have not already accessed Pension Wise guidance. The second was that, if people are to opt out of accessing such guidance, it might be desirable for that opt-out decision to be made and communicated to a body other than their own pension scheme. These amendments to the Bill provide a workable way to achieve the consensus position that was reached in those discussions. When an individual seeks to access or transfer their pension pot, these duties will ensure that members are referred to Pension Wise guidance, that members receive an explanation of the nature and purpose of that guidance, and that before proceeding with an application, subject to any exceptions, schemes must ensure that members have either received Pension Wise guidance or have explicitly opted out.
Rules and regulations must specify how, and to whom, the member must confirm that they are opting out. This allows for the opt-out process to be separated from schemes. Rules and regulations will set out the detail of the opt-out process based on evidence of what helps people take up Pension Wise guidance. This approach is completely aligned with the Select Committee in another place. The committee recommended that the details of how an individual could expressly turn down the opportunity to receive guidance should be set out in FCA rules following public consultation.
It is important that new requirements introduced in this area are operationally deliverable for schemes and the new guidance body. Detailed rules and regulations should be based on evidence of what delivers the outcome we all want: more people taking up Pension Wise guidance and a robust opt-out process. These amendments provide scope to test what works best and to update the approach as the pensions landscape, technology and the needs of the users change. This might be through direct hand-off of the member from the scheme to Pension Wise, including for the purpose of conducting an opt-out process, or through providers booking Pension Wise appointments for their members.
Further, these clauses also require the FCA, the Secretary of State and the new body to work together to develop and deliver these new requirements. As is customary, before making the rules and regulations the FCA and the Secretary of State will need to consult, providing the proper opportunity for public scrutiny of proposals before they are commenced.
Baroness Buscombe
I thank all noble Lords who have taken part in this brief debate, and in particular the noble Lord, Lord McKenzie, for his very warm words of support for these amendments and for the Bill, and for the way in which we have worked collaboratively and have, collectively, improved the Bill. We have sought to do so with care not to impose requirements where they are not necessary or where they could box the new body into a corner in terms of its ability to be flexible. Default guidance is an example of an area where we want to be extremely careful. That is why so much time and care has been taken to make sure that we have come to a situation where we are managing that balance sufficiently.
I absolutely understand the concerns of the noble Baroness, Lady Drake, in relation to the scheme being free and impartial. To reassure her, and my noble friend Lady Altmann, I will refer back to a part of my speaking note where I made it absolutely clear that that is the case and stressed that the guidance given under these amendments, as the noble Lord, Lord McKenzie, said,
“can only be provided by the single financial guidance body. This is by virtue of the interaction between Clauses 3 and 5, and Amendments 7 and 8. Subsection (7) of Amendment 7 and subsection (6) of Amendment 8 define the pensions guidance referred to in the amendments as the information or guidance provided in pursuance of Clause 5 of the Bill”.
This sounds rather convoluted, but I reassure noble Lords that it actually creates clarity.
I fear that my noble friend Lady Altmann is looking for mandatory guidance, but we simply do not believe that that is right. As the Work and Pensions Select Committee in another place observed in its report, Clause 5(2) does not require individuals to participate in or expressly turn down guidance before being granted access to their pension pot. Opting out could be passive for a significant proportion of people. It also risks making routine transactions, and those in which the individual has already taken advice, unnecessarily cumbersome. Further, the clauses which relate to the rules and regulations that will be developed require the FCA, the Secretary of State and the new body to work together —this is very important—to develop these new requirements. Respecting the concerns of my noble friend Lady Altmann, we are talking about a strong final nudge. As is customary, before making the rules and regulations the FCA and the Secretary of State will need to consult, providing the proper opportunity for public scrutiny of proposals before they are commenced.
My noble friend referred to a vote that took place on default guidance. However, it is important to stress that it did not reference mandating the guidance. All our research, including talking to stakeholders, shows—
Baroness Altmann
I thank my noble friend for giving way. I am not in favour of mandatory guidance: I have always supported the idea of default guidance.
Baroness Buscombe
On that basis, I hope that I have—at least to some degree—reassured noble Lords that we have found the right balance, having worked very closely with all noble Lords and the Select Committee in another place to ensure that we hit the right mark in developing default guidance.
“(7) The consumer protection function is—
(a) to notify the FCA where, in the exercise of its other functions, the single financial guidance body becomes aware of practices carried out by FCA- regulated persons (within the meaning of section 139A of the Financial Services and Markets Act 2000) which it considers to be detrimental to consumers, and
(b) to consider the effect of unsolicited direct marketing on consumers of financial products and services, and, in particular—
(i) from time to time publish an assessment of whether unsolicited direct marketing is, or may be, having a detrimental effect on consumers, and
(ii) advise the Secretary of State whether to make regulations under section (Unsolicited direct marketing: other consumer financial products etc) (unsolicited direct marketing: other consumer financial products etc).”
Baroness Buscombe
My Lords, let me now turn to the Government’s action to further protect consumers from harmful cold calls. This Bill has been agenda-setting in relation to cold calling, as well as in respect of our close co-operation across the House on this important issue. I have been delighted to engage closely with the noble Lords, Lord McKenzie and Lord Sharkey, on these important issues.
The measures introduced in the other place enable us to restrict pensions and claims management cold calls—two of the most pressing areas of need for consumers—and to bring forward measures that enable the Government to keep the issue under review and act further in relation to consumer financial products when it would be appropriate. Indeed, I was delighted to hear that in the other place, the honourable Member for Birmingham Erdington described our commitment to ban pensions cold calling as a “wholly welcome step”, and the honourable Member for Eastbourne noted that the Liberal Democrats “welcome the amendments” that the Government have made on these issues.
Let me turn to our specific amendments. Amendments 10 and 11 allow us to protect consumers from harmful cold calls by enabling us to lay regulations to ban pension cold calling, and to introduce bans for other forms of cold calling if we consider it appropriate. Amendment 10 builds on the proposed approach of the Commons Work and Pensions Select Committee to banning pensions cold calling. The new clause enables us to ban pensions cold calling both quickly and effectively. Our proposed ban has a wide scope, meaning that we can ban all pension-related calls. Crucially, unlike the existing Clause 4, we do not need to wait for advice from the new body before laying a ban. Let me be absolutely clear that we are going to make regulations to ban pensions cold calling as soon as possible. This is a commitment we have made repeatedly. We know the detriment that pensions cold calling can cause and we are going to protect consumers. Indeed, I hope noble Lords are further reassured on this point by the fact that the Economic Secretary to the Treasury will have to lay a Statement before both Houses if we have not made regulations by the end of June 2018.
Turning to Amendment 11, it is clear to the Government that too often significant consumer detriment arises because of cold calling. If the Government, supported by the new body, find that there is evidence that people are experiencing detriment as a result of cold calling on consumer financial products, we will not hesitate to use this power to take action to protect consumers.
I am now pleased to be able to confirm the final part of our approach to protect consumers from cold calling when speaking to Amendment 2. The amendment expands and improves the consumer protection function, and gives the new body powers to publish assessments of consumer detriment resulting from cold calling on a regular basis, and advise the Secretary of State on where further bans should be implemented. The body’s core purpose is to provide high-quality support on all money matters, so we believe that specifying that the body must complete a two-yearly review would not be the correct use of its resources. Instead, the Government expect the body to be flexible and responsive to emerging issues, and we expect it to report promptly as and when such evidence of detriment is available. I, alongside Ministers in the other place, will work closely with the body to ensure that consumers are firmly protected from nuisance calls.
Alongside these changes, we also introduce Amendment 5, which strengthens the information-sharing provision in the Bill with respect to the consumer protection function.
Having replicated much of the existing Clause 4, but in a more effective way that helps to better protect consumers, we are committed to removing the existing Clause 4 through Amendment 3. I beg to move.
Motion on Amendment 2A (as an amendment to Amendment 2)
Lord McKenzie of Luton
My Lords, I start by acknowledging the role played by the noble Lord, Lord Sharkey, in our deliberations—particularly on cold calling, which he has been focused on. I am not sure that we are meant to, under the rules, but I also welcome the Minister from the other place, who is with us and hoping not to get the Bill back for another round of ping-pong. We will see.
The consumer protection function of the single financial guidance body is part of the armoury to build a case for banning cold calling and unsolicited direct marketing for consumer financial products. It adds to the abolition of cold calling for pensions and CMCs that is now in the Bill. As sent back from the Commons, the Bill requires the SFGB to consider the impact of unsolicited direct marketing on consumers, publish from time to time an assessment of whether such activity has a detrimental effect on consumers and advise the Secretary of State whether to make regulations under the cold calling provisions of the Bill.
The amendment in the name of the noble Lord, Lord Sharkey, seeks to add a requirement for the SFGB to additionally publish an assessment,
“not less than once every two years”.
Given where we are in the process, I frankly doubt that this requirement would add value. Surely the key is to have flexible arrangements so that the body can respond to emerging issues and report expeditiously as and when evidence of detriment is available. If the noble Lord’s concern is that the SFGB will somehow let this function lie fallow, I am sure that the Minister can put something on the record in her response.
Amendment 10A—also in the name of the noble Lord, Lord Sharkey—seeks to ban,
“the use by any person of data obtained in contravention of the prohibition”,
of cold calling for pensions and,
“determine the penalties for any such contravention”.
A further amendment seeks a parallel prohibition on data from cold calling for claims management services. It is understood that through measures in this Bill—which will be complemented by existing and forthcoming data protection legislation—where personal data is obtained through an unlawful cold call, further use of that data would be contrary to the Data Protection Act 1998. I understand that fines for such abuse are about to be raised significantly. Through the general data protection regulation and the Data Protection Bill going through Parliament, these matters will be addressed and prohibited. The issue is important and it is certainly important that we hear from the Minister on the second amendment of the noble Lord, Lord Sharkey.
Baroness Buscombe
My Lords, I thank all noble Lords who have taken part in this brief debate. I thank the noble Lord, Lord Sharkey, for his amendments, which give us an opportunity to reiterate some of the assurances that I hope I have already made, both through the passage of the Bill and about where we go now. It is a pleasure to echo the words of the noble Lord, Lord McKenzie: although we appreciate the sentiments of the noble Lord, Lord Sharkey, and understand where he is coming from, the Government expect—I stress this—the body to be flexible and responsive to emerging issues. We expect it to report promptly as and when evidence of consumer detriment in relation to cold calling is available. Our concern is that as soon as one says, “It’s every year” or “It’s every two years”, the situation in departments and bodies such as the new one can so easily become a box-ticking exercise. We do not want it to be that. We want to be sure that the body will be able to respond as issues emerge, particularly real evidence of consumer detriment. Having been through the process of the Bill and talked to all those currently working in the three existing bodies that will be transferred shortly into the one single financial guidance body, I have great trust that the level of expertise and experience we will be able to transfer to the new body is such that they will have a strong eye on this. I assure noble Lords that there is strong feeling in support of what we seek to do both in your Lordships’ House and way beyond. We have listened to noble Lords on these issues and we will act firmly to protect consumers where appropriate.
Baroness Buscombe
That this House do agree with the Commons in their Amendments 3 to 5.
Baroness Buscombe
My Lords, this group contains a number of technical and consequential amendments necessary to enable the other government amendments to operate as intended.
I will start with Amendments 6, 37 and 38, which relate to changing references to the Data Protection Act 1998 to a reference to “data protection legislation”. These amendments prepare the Bill for the forthcoming data protection legislation currently before Parliament.
Amendments 9, 22, 25, 31, 32, 39, 40 and 41 make minor drafting changes to both clauses and consequential amendments. Amendment 12 inserts a reference to the “consumer protection function” introduced in Amendment 2. It also references the change in definition to the new data protection legislation that I mentioned earlier. Amendment 13 aligns our definition of direct marketing with the existing data protection legislation that I mentioned.
Amendments 14 and 15 are small and consequential amendments, extending the FCA’s financial promotions regime to claims management activity. They also bring claims management activity into line with the amendments already made in the Bill to Section 21 of the Financial Services and Markets Act 2000, which covers restrictions on financial promotions.
Amendment 23 inserts a new subsection (3A) into Clause 29, “Extent”, so that amendments to the Pension Schemes Act 1993 proposed by Amendment 8 extend only to England, Wales and Scotland. It also provides that the corresponding power in Amendment 8 for the Department for Communities to make regulations will extend to Northern Ireland.
Amendments 24, 26, 27, 28, 29, 30, 33 and 34 make consequential changes to both the extent and commencement clauses. They amend Clause 30 to ensure that the pensions cold calling ban comes into force on Royal Assent so there is no unnecessary delay to making regulations.
Amendments 42 and 43 make changes to the Long Title of the Bill to ensure that it correctly reflects the changes in respect of unsolicited direct marketing. Finally, Amendment 34 removes the privilege amendment inserted previously by your Lordships’ House. I beg to move.
Baroness Buscombe
That this House do agree with the Commons in their Amendments 7 to 9.
“Personal pension schemes: requirements to refer members to guidance etc
(1) Section 137FB of the Financial Services and Markets Act 2000 (FCA general rules: disclosure of information about the availability of pensions guidance) is amended as follows.
(2) After subsection (1), insert—
“(1A) The FCA must also make general rules requiring the trustees or managers of a relevant pension scheme to take the steps mentioned in subsections (1B) and (1C) in relation to an application from a member or survivor—
(a) to transfer any rights accrued under the scheme, or
(b) to start receiving benefits provided by the scheme.
(1B) As part of the application process, the trustees or managers must ensure that—
(a) the member or survivor is referred to appropriate pensions guidance, and
(b) the member or survivor is provided with an explanation of the nature and purpose of such guidance.
(1C) Before proceeding with the application, the trustees or managers must ensure that the member or survivor has either received appropriate pensions guidance or has opted out of receiving such guidance.
(1D) The rules may—
(a) specify what constitutes appropriate pensions guidance;
(b) make further provision about how the trustees or managers must comply with the duties in subsections (1B) and (1C) (such as provision about methods of communication and time limits);
(c) make further provision about how, and to whom, a member or survivor may indicate that they have received or opted out of receiving appropriate pensions guidance for the purposes of subsection (1C);
(d) specify what the duties of the trustees or managers are in the situation where a member or survivor does not respond to a communication that is made for the purposes of complying with the duty in subsection (1C);
(e) provide for exceptions to the duties in subsections (1B) and
(1C) in specified cases.”
(3) In subsection (2), for “this section” substitute “subsection (1)”. (4) After subsection (2) insert—
“(2A) Before the FCA publishes a draft of any rules to be made by virtue of subsection (1A), it must consult—
(a) the Secretary of State, and
(b) the single financial guidance body.”
(5) In subsection (3), for “the rules” substitute “rules to be made by virtue of subsection (1)”.
(6) After subsection (3) insert—
“(3A) In determining what provision to include in rules to be made by virtue of subsection (1A), the FCA must have regard to any regulations that are for the time being in force under section 113B of the Pension Schemes Act 1993 (occupational pension schemes: requirements to refer members to guidance etc).”
(7) In subsection (4), for the definition of “pensions guidance” substitute— ““pensions guidance” means information or guidance provided by any person in pursuance of the requirements mentioned in section
5 of the Financial Guidance and Claims Act 2018 (information etc about flexible benefits under pension schemes);”.”
“Unsolicited direct marketing: pensions
(1) The Secretary of State may make regulations prohibiting unsolicited direct marketing relating to pensions.
(2) The regulations may—
(a) make provision about when a communication is to be, or is not to be, treated as unsolicited;
(b) make provision for exceptions to the prohibition;
(c) confer functions on the Information Commissioner and on OFCOM (including conferring a discretion);
(d) apply (with or without modifications) provisions of the data protection legislation or the Privacy and Electronic Communications (EC Directive) Regulations 2003 (S.I. 2003/2426) (including, in particular, provisions relating to enforcement).
(3) The regulations may—
(a) make different provision for different purposes; (b) make different provision for different areas;
(c) make incidental, supplementary, consequential, transitional or saving provision.
(4) Regulations under this section are to be made by statutory instrument.
(5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.
(6) If before the end of June in any year the Secretary of State has not made regulations under this section (whether or not in that year), the Secretary of State must—
(a) publish a statement, by the end of July in that year, explaining why regulations have not been made and setting a timetable for making the regulations, and
(b) lay the statement before each House of Parliament.
(7) In this section, “OFCOM” means the Office of Communications established by section 1 of the Office of Communications Act 2002.”
Baroness Buscombe
That this House do agree with the Commons in their Amendments 11 to 15.
“Unsolicited direct marketing: other consumer financial products etc
(1) The Secretary of State must keep under review whether a prohibition on unsolicited direct marketing in relation to consumer financial products and services other than pensions would be appropriate.
(2) If the Secretary of State considers that such a prohibition would be appropriate, the Secretary of State may make regulations applying regulations made under section (Unsolicited direct marketing: pensions) to other consumer financial products and services (with or without modifications).
(3) In considering whether to make such regulations, the Secretary of State must take into account any advice received from the single financial guidance body under section 3(7)(b)(ii) (consumer protection function: advice on effect on consumers of unsolicited direct marketing).
(4) The regulations may—
(a) make different provision for different purposes; (b) make different provision for different areas;
(c) make incidental, supplementary, consequential, transitional or saving provision.
(5) Regulations under this section are to be made by statutory instrument.
(6) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
Baroness Buscombe
That this House do agree with the Commons in their Amendments 16 to 20.
Baroness Buscombe
My Lords, Amendment 19 places a duty on the Law Society of England and Wales to cap fees in relation to financial services claims management activity, as well as giving a power to the Law Society of Scotland to restrict fees charged for this activity. It also gives a power for some legal services regulators in England and Wales to restrict fees charged for broader claims management services. Alongside this, Amendment 20 gives the Treasury a power to extend the Law Society of Scotland’s fee capping power to broader activity in future.
Amendments 16, 17 and 18 ensure that the interim fee cap provisions, introduced as a concessionary amendment in your Lordships’ House, work together with the fee capping powers for legal regulators. Taken alongside the fee restriction powers for the FCA that we have already agreed should form part of the Bill, these provisions will ensure that consumers are protected, no matter which type of claims management service provider they use, and whether it is regulated by the legal service regulators or by the FCA.
They will also ensure that the relevant regulators are able to adapt to any future changes in the market and that there is continuity of coverage for the interim fee cap throughout the transfer of regulation. Indeed, the honourable Member in another place Jack Dromey MP put it well when he said:
“The clauses are sensible because they go beyond claims management companies. … Of course it is about not only CMCs, but legal service providers”.—[Official Report, Commons, Financial Guidance and Claims Bill Committee, 6/2/18; col. 95.]
I hope that noble Lords will agree with this sentiment and will accept Amendments 16 to 20, as made in the other place. I beg to move.
Lord McKenzie of Luton
My Lords, if my honourable friend Jack Dromey is happy with these, I have to be as well.
“Cold calling about claims management services
(1) The Privacy and Electronic Communications (EC Directive) Regulations 2003 (S.I. 2003/2426) are amended as follows.
(2) In regulation 21 (calls for direct marketing purposes), after paragraph (5) insert—
“(6) Paragraph (1) does not apply to a case falling within regulation 21A.”
(3) After regulation 21 insert—
“21A Calls for direct marketing of claims management services
(1) A person must not use, or instigate the use of, a public electronic communications service to make unsolicited calls for the purposes of direct marketing in relation to claims management services except in the circumstances referred to in paragraph (2).
(2) Those circumstances are where the called line is that of a subscriber who has previously notified the caller that for the time being the subscriber consents to such calls being made by, or at the instigation of, the caller on that line.
(3) A subscriber must not permit the subscriber’s line to be used in contravention of paragraph (1).
(4) In this regulation, “claims management services” means the following services in relation to the making of a claim—
(a) advice;
(b) financial services or assistance;
(c) acting on behalf of, or representing, a person;
(d) the referral or introduction of one person to another; (e) the making of inquiries.
(5) In paragraph (4), “claim” means a claim for compensation, restitution, repayment or any other remedy or relief in respect of loss or damage or in respect of an obligation, whether the claim is made or could be made—
(a) by way of legal proceedings,
(b) in accordance with a scheme of regulation (whether voluntary or compulsory), or
(c) in pursuance of a voluntary undertaking.”
(4) In regulation 24 (information to be provided for the purposes of regulations 19 to 21)—
(a) in the heading, for “, 20 and 21” substitute “to 21A”; (b) in paragraph (1)(b), after “21” insert “or 21A”.”
Baroness Buscombe
My Lords, Amendment 21 implements the commitment I made to your Lordships’ House that the Government would table an amendment restricting cold calls made in relation to claims management services. We are all aware that calls about claims management services are not just a source of irritation; for the most vulnerable in our society, being bombarded by these nuisance calls can be highly distressing.
The Government have already taken forward a number of measures to tackle this issue, but debates in your Lordships’ House clearly demonstrated that more action was needed. That is why the Government tabled Amendment 21, which will insert a provision into the Privacy and Electronic Communications (EC Directive) Regulations—the regulations which govern unsolicited direct marketing calls—to ban such calls in relation to claims management services, unless prior consent has been given. This amendment takes the onus away from the individual to opt out of such calls being made to them and puts the responsibility back on the organisation to do its due diligence before making such calls. As I have mentioned previously, there are complexities in legislating in this area, including issues relating to EU frameworks. But I am confident that the amendment will have the effect of making unwanted calls about claims management services unlawful.
Concerns were also raised in your Lordships’ House about the commercial use of illegally obtained data, and I have been having further discussions with the noble Lord, Lord McKenzie, on this issue. The measures in the Bill will be complemented by existing and forthcoming data protection legislation. Where personal data is obtained through an unlawful cold call, the further use of that data—for example, to make further calls in the future—would be contrary to the Data Protection Act. The ICO can issue fines of up to £500,000 for breaches of the Data Protection Act, although this will be raised significantly—to approximately £17 million or 4% of a company’s turnover—through the forthcoming general data protection regulation and the Data Protection Bill that is currently going through Parliament.
Overall, we believe that Amendment 21 is another robust proposal to add to our package of measures to tackle unsolicited marketing calls, and one that will be gratefully received by consumers across the UK.
As we have heard, Amendment 21A, tabled by the noble Lord, Lord Sharkey, seeks to prevent the use of data obtained by illegal calls. I completely agree with the sentiment behind this amendment and, as I said, government Amendment 21 on cold calling will be complemented by data protection legislation, which includes requirements for data to be processed fairly and in accordance with the law. I repeat the assurances I gave earlier, that where personal data is obtained through an unlawful cold call, the further use of that data—for example, to make further calls in the future—would be contrary to the Data Protection Act 1998. I therefore encourage the noble Lord, Lord Sharkey, not to move his amendment, and I beg to move the Motion on Amendment 21.
Baroness Altmann
My Lords, before the Bill passes into law, I would just like to welcome the Bill, as well as the debt respite scheme and the help for those with unsecured debt. It includes some very important measures. I thank my noble friend the Minister and the Bill team for all the hard work they have done on these measures. I thank the noble Lords, Lord Stevenson, Lord McKenzie and Lord Sharkey, the noble Baronesses, Lady Drake and Lady Kramer, and the noble Earl, Lord Kinnoull, who have all been so instrumental in getting this through. On this particular amendment, I am most grateful to my noble friend the Minister for listening to the concerns expressed in this House.
The Earl of Kinnoull
My Lords, I can be even briefer, but I want to thank particularly the Minister for living up to her commitment because, having read through the comprehensive Amendment 21, it does precisely that and I thank her.
Baroness Buscombe
I once again thank very much all noble Lords who have taken part in the many debates in your Lordships’ House on the Bill. We have come a long way and there has been huge consensus. We have improved the Bill, along with our honourable friends in another place, and I hope that all noble Lords can wish it well. In particular, on the future of the new body, I hope that we will know its name soon so that we can start calling it something in our future debates on this subject.
Lord McKenzie of Luton
My Lords, if it is time to say our thank yous, I will add mine to those of all noble Lords who have participated in these debates. There have been robust exchanges on what was initially quite a narrow Bill, but its coverage has been expanded, quite appropriately. I certainly thank the Bill team. I know that, on our side, we have probably put them through some misery with our questions from time to time, but when we have had the opportunity to touch base in that way, it has been really helpful to the passage of the Bill in this place. I wish the Bill well on its passage into legislation.
Baroness Buscombe
That this House do agree with the Commons in their Amendments 22 to 43.
Benefit Cap: Child and Family Well-being
Baroness Buscombe Excerpts(6 years, 6 months ago)
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Baroness Lister of Burtersett
To ask Her Majesty’s Government what assessment they have made of the impact of the benefit cap on child and family wellbeing since that cap was lowered in 2016-17.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, since 2013, the benefit cap has provided a strong financial incentive for those who can work to come off welfare and so improve their child and family well-being. While 134,000 households had their benefits capped, figures for February 2018 show that around half are no longer capped because they are working at least part time, and so qualify for their full benefit entitlement and therefore a considerable boost in income and well-being.
Baroness Lister of Burtersett (Lab)
My Lords, a new study by Policy and Practice, which was founded by one of universal credit’s architects, highlighted the human costs of the cap, arguing that it should be applied only to those who are actively required to seek work. Can the Minister explain what purpose is achieved by imposing this measure, which is designed to get people into paid work, on lone parents of infants, who are not required to seek paid work because of their caring responsibilities, thereby causing, in the words of a High Court judge,
“real misery … to no good purpose”?
Baroness Buscombe
My Lords, I beg to differ from the noble Baroness. I would call it not “imposing” but “empowering”. Our research shows that the best way to lift children out of poverty is by supporting parents into work. Record numbers of lone parents are now working: 1.2 million, with 1 million fewer people living in absolute poverty compared to 2010, including 300,000 children. We know that 75% of children in poverty leave poverty altogether when their parents move into full employment. We have doubled free childcare to 30 hours a week for nearly 400,000 working parents of three and four year-olds, and a parent need work only one hour a month to be eligible for childcare costs.
The Countess of Mar (CB)
My Lords, the noble Baroness has not responded to the question from the noble Baroness, Lady Lister, who was referring particularly to mothers of infants. There is no special nursery care for those, and mothers should be with their infants in the early stages.
Baroness Buscombe
I respond to the noble Countess by saying that many women, however young their children are, want to work. We are encouraging jobcentre staff to help people to find work that fits around their caring responsibilities. We are also giving those people extra discretionary housing payments. I add that those who are not working at all are still in receipt of what amounts to a gross salary outside London of £23,000 a year and in London £29,000 a year.
Baroness Thomas of Winchester (LD)
My Lords, does the Minister accept that many local authorities are now having to pick up the pieces of this policy, particularly in high rent areas, where two and three-child families are now being hit? Discretionary housing payments are supposed to be only a temporary sticking plaster, not the complete answer.
Baroness Buscombe
My Lords, we welcomed recent external research on the benefit cap, working with local authorities. We are finding that there is a positive employment impact from the lower benefit cap, even at such an early stage in a child’s life. This supports our evidence that the cap is increasing work incentives for previously workless households.
The Lord Bishop of Portsmouth
My Lords, welfare reform was predicated on the principal that work should pay, but that principal is being undermined, not least by the two-child limit. In future, a family with three or more children seeking to avoid the cap by moving into work will find themselves subject to the two-child limit instead. They could end up losing out by going to work. What assessment have the Government made of the impact of this perverse incentive?
Baroness Buscombe
My Lords, I would not call it a perverse incentive. Our reforms of support for children make sure that people on benefits and those supporting themselves solely through work have the same choices, including whether or not they can afford to have another child. Our policy is about fairness and incentivising work. Of course, child tax credits were not available before 2003, and, no matter how many children someone might have, they continue to be paid child benefit for each and every child.
We welcome last week’s decision by the High Court in relation to kinship carers. We have considered that part of the judgment, which I referred to during a Question last week, pertaining to non-parental carers, alongside internal reviews that the Department for Work and Pensions carried out in parallel to the legal case. We are pleased to announce that it is right that this change should be extended, not just to those in non-parental caring arrangements but also to include children who are adopted who would otherwise be in local authority care. We can respond positively to all noble Lords who have been pressing us on this point.
Baroness Sherlock (Lab)
My Lords, I am grateful to the Minister for that and I commend the Government for having made the right decision, but will she think about what the next stage is? My honourable friend Anna Turley has raised the case of a constituent who had two dependent children in her care and was then asked by social services to take in two of her grandchildren. As a result, the household was hit by the benefit cap. Will the Minister think about that for a moment? There is not much point in exempting kinship carers from the two-child policy if, in practice, they cannot claim those benefits because the benefit cap then kicks in. Might the Government either review who is affected by the benefit cap or, at the very least, consider exempting the benefits given on behalf of the children that a kinship carer has taken in when the benefit cap is considered?
Baroness Buscombe
My Lords, I cannot assure the noble Baroness that we will consider this any further. It is right that I articulate the fact that we are already spending £95 billion a year on benefits for people of working age. We have a budget in our department of £200 billion, which is 25% of the whole of the budget for government. We have to think about affordability before we can continue to extend our policies, notwithstanding that each and every individual case is of great importance to us. Our concern is to ensure that we help those who are genuinely in need.
Lord Watts (Lab)
My Lords, is it not the case that children come out of poverty only if the two parents get excellent, well-paid jobs, and the vast majority in this category do not do that?
Baroness Buscombe
My Lords, perhaps I can also explain that, not only is universal credit giving so much further support and really making work transform lives that, in a family with three children, for example, the couple need only work up to 24 hours in total a week to be exempt from the cap. So the cap comes off and they receive benefits to the equivalent of a salary of £35,000 gross a year, and that does not include housing benefit. Noble Lords should accept that such a salary compares extremely favourably with the income of the many thousands of families who do not call upon the welfare system.
Universal Credit
Baroness Buscombe Excerpts(6 years, 7 months ago)
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Baroness Sherlock
To ask Her Majesty’s Government what progress they have made in rolling out Universal Credit.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, we continue to roll out universal credit in a safe and controlled way, with an expected completion date of December 2018. Any changes to the rollout schedule are carefully considered, and we work together with local authorities and stakeholders to deliver universal credit. Universal credit is working and transforming lives across the country; it continues to deliver real improvements to people’s lives and strengthens the UK economy.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for her Answer. The Welfare Reform and Work Act introduced the two-child limit to universal credit and most other benefits and credits. Noble Lords may recall the case I raised in December of Alyssa Vessey. She was 18 when her mother died suddenly and gave up college to raise her three younger siblings. When she later had a baby of her own, she applied for support and was turned down under the two-child policy. This House had secured an exemption for kinship carers, but Ministers applied it in such a way that, if Alyssa had had her own baby and then taken on her siblings she would have got help, but doing it the other way round she did not. Last Thursday, in a case taken by the Child Poverty Action Group, the High Court ruled that to be perverse and struck it down. Will the Minister confirm to the House today that the Government will act immediately to extend the exemption from the two-child policy to all kinship carers?
Baroness Buscombe
My Lords, the Government acknowledge the immense value of care provided by kinship carers. We are working to ensure that they are supported by enabling them to access benefit entitlement in the same way as parents. We have introduced a number of exceptions to the two-child policy—providing support for a maximum of two children—to protect claimants who are unable to make the same choices about the number of children in their family. These already protect certain groups, including kinship carers. Regarding the court case to which the noble Baroness referred, the department is now closely looking into the impact of this policy on kinship carers.
Baroness Meacher (CB)
My Lords, under universal credit, claimants with mental health problems who are waiting for their work capability assessment and who may, therefore, be proved unfit for work, are nevertheless being required to look for work during that waiting period, and will be sanctioned if they fail to do so. Does the Minister accept that this is an entirely unacceptable and grossly unfair system? Will she assure the House today that the Government plan to take action to bring this system to an end? If she cannot do that today, will she write to me to explain what action the Government will take to give fair treatment to mentally ill people waiting for their work capability assessment?
Baroness Buscombe
I thank the noble Baroness for her question; I know that she has great interest in this area. As I have said before, we are continually working to improve the work capability assessment. As a result of our Budget announcements last autumn, it is now possible for people to have a 100% advance on their universal credit while they are waiting for that assessment. I emphasise that those with severe disability do not now have to go through further work capability assessments. I assure the noble Baroness that we are constantly looking at this, working to improve the training of our work coaches and all the professionals involved in work capability assessments, to make sure that we minimise the number of people for whom we fall short in terms of support and protection.
Lord Kirkwood of Kirkhope (LD)
My Lords, coming back to the rollout of universal credit, surely the Minister’s department’s priority in the short term should be to improve the quality of services available to vulnerable applicants for universal credit at a local level. Will she commit to working with her local authority colleagues to establish a more widespread network of multi-agency hubs, which have proved so effective in getting people from disadvantaged families through the transition process? Does she agree that multi-agency hubs are a much better form of support than food banks?
Baroness Buscombe
My Lords, it is right to say that our focus is not necessarily on multi-agency hubs but on proper signposting by our work coaches to make sure that, working with local authorities, we protect those vulnerable groups. A particular example is prison leavers. We have made sure that they can now have up to 100% advances on their universal credit the moment they leave prison. Vulnerable groups are at the forefront of our minds.
Baroness Couttie (Con)
My Lords, many of those on universal credit also struggle with debt, sometimes involving expensive payday lenders, because of their credit standing. Are the Government doing anything through universal credit to support people who find themselves in such difficulties?
Baroness Buscombe
Yes, they are, I am pleased to say. The Government have taken a number of steps to reduce the risk of problem debt, including capping payday lending costs and promoting savings. In addition, we have outlined a firm timetable for taking forward the breathing space scheme, and we are progressing with policy proposals for this and a statutory payment plan, all through the single financial guidance Bill, under which overindebted individuals will continue to be protected from creditor action.
Baroness Primarolo (Lab)
My Lords, will the Minister explain why the universal credit sanctions regime imposes multiple sanctions on claimants with mental health problems, damages individuals’ health, causes unnecessary suffering and hardship, and does absolutely nothing to improve their ability to find paid work?
Baroness Buscombe
My Lords, I have to disagree with the noble Baroness. Putting aside the raft of additional support and improvements that come with universal credit, we can demonstrate that universal credit is a far better route than the old legacy system to giving much better support to the people to whom she referred. Sanctions are used only in a minority of cases where claimants fail to meet their conditionality requirements without good reason.
Baroness Hayman (CB)
My Lords, I want to take the Minister back to the Question raised by the noble Baroness, Lady Sherlock. The Minister said that the department is “closely looking into” this grossly unfair and unjust case. Those are almost exactly the same words she used when this issue was raised some months ago. Since then, I raised it with the Minister, her noble friend Lord Bates, who promised that the Treasury would look at it. Given that we have now had a court ruling, and given the great interest in this issue on the part of Members on all sides of this House, who have written to the Secretary of State about it, can the Minister undertake to let us know within the next week what the department will do?
Baroness Buscombe
I well remember the noble Baroness asking me this very question probably about two months ago. I reassure all noble Lords that I continue to press on this point. However, as the result of last Friday’s judgment, I am now able to say that we are again looking at this point. I cannot confirm within the week, but I can confirm whether we will be able to go forward and support these people, who rightly deserve our particular attention, within the month.
Universal Credit: Free School Meals
Baroness Buscombe Excerpts(6 years, 8 months ago)
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Lord Kirkwood of Kirkhope
To ask Her Majesty’s Government what assessment they have made of the effect on Universal Credit work incentives of the recently announced proposals for passporting family entitlement to free school meals.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, the Department for Work and Pensions has been working closely with the Department for Education to support the delivery of their eligibility criteria for free school meals for universal credit claimants in England. When the Social Security Advisory Committee, which is independent of government, looked at this issue in 2012, it found that there was no rigorous research evidence to show that the provision of passported benefits acted as a work disincentive.
Lord Kirkwood of Kirkhope (LD)
My Lords, I am grateful for that Answer. I would like to remind the Minister of the policy promise that was made in a White Paper back in 2010 when universal credit was first introduced, and I want to put to her a question that relates to a statement made in the foreword by the then Secretary of State:
“Universal Credit will mean that people will be consistently and transparently better off for each hour they work and every pound they earn”.
Does the Minister accept that, under the proposals which are being brought forward, that proposition will no longer always be true?
Baroness Buscombe
The simple answer to the noble Lord is no: I do not accept that. I think it is important to dispel straightaway any potential misunderstanding of what we are doing to safeguard the free school meals system for the future. The Government’s purpose here is to ensure that the programme continues to reach the most disadvantaged households in a way that is consistent, simple and fair. As the rollout of universal credit continues, it is no longer fair to retain the temporary measure, which we always said was temporary, that allows all households in receipt of universal credit to access free school meals. That said, the new rules will ensure that the provision of meals continues to be targeted where it is needed most, with 50,000 more children expected to benefit by 2022 as compared with the previous benefits system.
Baroness Lister of Burtersett (Lab)
My Lords, the noble Baroness has not actually answered the noble Lord’s question, so could she do so now? Can she also give an assurance that no one will be sanctioned if they are required to increase their earnings to the point which takes them over the eligibility limit and they lose their entitlement to free school meals as a result?
Baroness Buscombe
I have to take issue with the noble Baroness, because I feel that I have answered the question. I want to stress that the reality of this is that every child receiving free school meals now, and any child subsequently given free school meals while the universal credit rollout is under way, will have their entitlement protected until the end of the rollout or until the end of the child’s current phase of education, whichever is later. We want to ensure that, through the universal credit system, we are doing absolutely our best to give our young people the best possibilities in life; this is not the same as the old legacy benefits.
Baroness Sherlock (Lab)
My Lords, perhaps I may put the question for the third time. At the moment, if someone reaches a certain level of income, they lose free school meals but at that point they gain working tax credit, which is worth much more. What the Government are proposing under universal credit is that, when a household’s earnings exceed a cash fixed point of £7,400 a year, once the system has been rolled out, a household in that situation will immediately lose free school meals for all of the kids. Someone could be offered an extra hour of work or a small pay rise and face the choice of either turning it down or accepting it and losing free school meals for all of their kids. While the Minister has said a great deal about the transitional protection during the rollout, when the system beds down, is not the noble Lord, Lord Kirkwood, right that this will fly right in the face not only of the quote from Iain Duncan Smith, but of the whole point of universal credit—at such huge expense and great disruption?
Baroness Buscombe
My Lords, I heard quite a lot of what was said in another place yesterday, and I am afraid that quite a lot of it is misinformation. One only has to look at Channel 4’s FactCheck, which looked at the claims made by the Opposition about children losing free school meals and was clear that the Government are not taking free school meals from the 1 million children who currently get them. I quote the article directly:
“This is not a case of the government taking free school meals from a million children who are currently receiving them. It’s about comparing two future, hypothetical scenarios”,
both of which are more generous than the old benefits system.
Baroness Walmsley (LD)
My Lords, on what basis was it decided that the earnings threshold for eligibility in Northern Ireland would be double what it is in England? Is this because poor children in Northern Ireland are twice as malnourished as they are in England, or could it be political expediency?
Baroness Buscombe
My Lords, it is not a question of political expediency. In fact, the earnings threshold in Scotland, introduced last August, is lower than what we propose to introduce in England. Let me also explain further, referring—as the noble Baroness opposite did—to the threshold. The £7,400 relates to earned income and does not include additional income through universal credit. Depending on its exact circumstances, a typical family earning around the threshold would have a total annual household income of between £18,000 and £24,000, but let us remember that if we allowed free school meals to continue beyond the transitional period when universal credit is rolled out, we would include parents earning over £40,000 or £50,000. Is that absolutely fair? Is that what noble Lords opposite want?
The Lord Bishop of Newcastle
My Lords, we have years of clear evidence that tackling child hunger improves outcomes at school and improves achievement and social mobility. What assessment have the Government made of the impact of these proposals on child hunger and on our investment in our children’s futures?
Baroness Buscombe
I thank the right reverend Prelate for her question. That is why we have chosen not to monetise free school meals; if we did, the benefits of a hot meal in the middle of the day could be lost for 1.1 million of the poorest children. That is because there would be a risk of children not getting the free school meal if it were just added to the rates for UC. We believe that the nutritional needs of children should be paramount. We therefore think it is right that free school meals should continue to be provided in the way we propose.
Lord Watts (Lab)
My Lords, can the Minister explain why there is a different threshold in different parts of the union? Surely all children should be treated the same?
Baroness Buscombe
My Lords, the issue is actually about ensuring that children receive the right treatment. There is not an issue about—
Baroness Buscombe
I am seeking to answer the question. The devolved nations have decided on different thresholds for their own parts of the United Kingdom, but at the end of the day we want to ensure that we can target free school meals to those who need them. Let me also be clear that, throughout the current rollout of universal credit and until 2022, no parents of a child who currently gets free school meals will have to pay for their meals. It is either then or when they finish their primary or secondary education—whichever comes later.
Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2018
Baroness Buscombe Excerpts(6 years, 8 months ago)
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Baroness Buscombe
That the Grand Committee do consider the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2018 and the National Employment Savings Trust (Amendment) Order 2018.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, I am pleased to introduce these instruments, which were laid before the House on 29 January and 31 January 2018. Subject to approval, the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2018 reflects the conclusions of this year’s annual review of the automatic enrolment earnings thresholds required by the Pension Act 2008. It has considered both the automatic enrolment earnings trigger, which determines the point when someone becomes eligible to be automatically enrolled into a qualifying workplace pension, and the qualifying earnings band, which determines those earnings which the enrolled employee and their employer have to pay a proportion of into a workplace pension. This order sets a new lower and upper limit for the qualifying earnings band and will be effective from 6 April 2018. The earnings trigger is not changed with the order and remains at the level set in the automatic enrolment threshold review order 2014-15, so no further provision is required.
Subject to approval, the National Employment Savings Trust (Amendment) Order 2018 will facilitate the effective operation and development of the NEST pension scheme and improve the way the scheme operates for participating employers and scheme members. From 6 April 2018, the proposals will allow the NEST trustee to accept people who are contractually enrolled by their employer, give the trustee the discretion to remove members with empty accounts, allow bulk transfers in with consent, and require NEST Corporation to carry out research. I am satisfied that the orders are compatible with the European Convention on Human Rights.
Automatic enrolment has been hugely successful in achieving its aim of getting millions more people saving into their pensions. Since its launch in 2012, more than 1 million employers have complied with their automatic enrolment duties and more than 9 million people have been successfully enrolled into a workplace pension. The vast majority of people who have been automatically enrolled are choosing to continue saving, with opt-out rates remaining consistently low at around 9%. Such progress and success, supported by all sides of the Committee, is truly to be commended and celebrated.
This is a big year for automatic enrolment and one which marks several key milestones for the policy and programme. First, the final and most challenging phase of rollout concludes this month when the last month group of the smallest employers take on their duty to automatically enrol all staff. These employers will have to declare their compliance by the end of July 2018. This means that all established employers are now subject to automatic enrolment. From last October, the duties also began to apply to all new employers as a matter of course.
Secondly, in April this year, the first of the two planned increases in minimum contribution levels for automatic enrolment will occur with contributions rising to 2% and 3% of band earnings for employers and jobholders respectively. Automatic enrolment continues to be a programme that works. It is re-establishing a culture of saving and making workplace pension saving the norm for a new generation. However, the Government recognise that there is still more to do as they continue to work towards their commitment of improving retirement outcomes for millions of savers.
This time last year we were embarking on the early stages of the 2017 review of automatic enrolment. Last December, the report from this work, Maintaining the Momentum, was published—I think we should change the name—setting out a clear path for the future of workplace pension saving. The comprehensive and balanced package of proposals that it detailed are intended to build on the remarkable success of automatic enrolment to date, increasing the number of people saving and the amount that they will save. We are now embarking on the process of building consensus around these proposals. It is my Government’s ambition to implement these changes in the mid-2020s, subject to discussions with stakeholders around their detailed design, learning from the contributions increases in 2018-19 and finding ways to make the changes affordable. I am sure noble Lords will join me in welcoming and supporting our continued progress with this crucial agenda.
Turning now to the orders of the day, I will first describe impacts of the automatic enrolment thresholds order. As signalled by the Minister for Pensions and Financial Inclusion in his Written Statement in another place on 18 December 2017, the order will, as previously, align the both the lower and upper limits of the qualifying earnings band with the national insurance lower and upper earnings limits of £6,032 and £46,350 respectively, ensuring stability and consistency in the light of the key milestones already highlighted. By continuing to align the limits to the national insurance thresholds, the changes relating to payroll systems are kept to a minimum. Simplicity is maintained and this approach helps employers to manage costs while they adjust to the overall increases in contributions from April. Setting the thresholds at these levels will also ensure that contribution levels continue to be meaningful for savers.
Baroness Buscombe
I thank the noble Lords, Lord Kirkwood and Lord McKenzie, for their contributions to this debate and for their incisive questions. I also thank the noble Lord, Lord Kirkwood, for saying that the whole concept of automatic enrolment and the process through to its delivery and implementation has been successful. As the noble Lord, Lord McKenzie, said, this came about through a considerable amount of consensus. We hope that the changes—albeit fairly minor—that we have made to NEST will work well. Certainly for us, the whole process has been a huge success, and we hope that it will also work well into the future.
One reason why we have brought forward this order on NEST is that it is important to keep tidying up the legislation to ensure that certain requirements make sense—for example, in relation to research, as the noble Lord, Lord Kirkwood, said. He asked a question which I asked of officials while I was learning about this issue in recent weeks. Why were there only five responses to a small consultation? The truth is that of the five responses, four said, “Thank you so much for asking us but we really have no comment”. The fifth was a little bit negative, and that was it.
Baroness Buscombe
I am glad that the noble Lord has said so. I take that as a very good sign that we are doing the right thing. Let us hope that it continues. We will ensure that we keep tidying up where necessary to keep this whole process—the implementation, the work of NEST and the work of developing auto-enrolment—as simple as possible while retaining an important balance between what is fair for the employer and what makes sense for us in communicating changes and developments in the whole programme.
The noble Lord, Lord McKenzie, asked some questions about automatic enrolment and the review proposal, including why we are not doing anything until the 2020s. Our review proposal is a comprehensive and balanced package, recognising that costs will be shared between individuals, families and businesses, who need time to plan for change. Over the coming year, we will work to build a renewed consensus to deliver the detailed design and implementation of our proposals. We need to learn from the implementation of the contribution increases, starting from this April. The support of employers and their advisers has been key to the success of automatic enrolment. We recognise the importance of giving them and savers sufficient time to plan for further changes. Our ambition is to implement changes to the automatic enrolment framework in the mid-2020s, subject to discussions with stakeholders around the detail of the design, learning from the contributions increases in 2018 and 2019, and finding ways to make the changes affordable, followed by formal consultation with a view to introducing legislation in due course.
The noble Lord, Lord McKenzie, asked about the timing of the implementation. It is important to put on the record that through the 2017 review we have set a clear direction to build a more robust and inclusive savings culture, specifically supporting younger generations with the opportunity to save for a more secure retirement.
The noble Lord, Lord Kirkwood, raised the issue of women. Increased gender parity is something that we are very pleased about, and it is making such a difference. Automatic enrolment was designed specifically to help groups who historically have been less likely to save, such as women and lower earners. The decision to freeze the trigger again for 2018-19 is estimated to bring an additional 100,000 individuals into workplace pension saving, of whom 72% are expected to be women. The gender gap in private sector pension participation has now been closed. In 2012, 65% of women employed full-time in the private sector did not have a workplace pension. As of 2016 this had fallen to 31%. I hope noble Lords will agree that that is real progress.
The noble Lord, Lord McKenzie, asked about net pay arrangements versus relief at source. Pensions taxation policy is a matter for Her Majesty’s Treasury—that sounds as if I am proposing a get-out clause. We continue to work with the Treasury and officials on this matter but a straightforward or proportionate fix has not yet been identified. However, alongside further work on the automatic enrolment changes outlined in the recent automatic enrolment review, the Government will examine the processes for payment of pensions tax relief for individuals to explore the current difference in treatment and ensure that we can make the most of any new opportunities that emerge, balancing simplicity, fairness and practicality, while engaging with stakeholders to seek their views.
I was asked why NEST needs to offer contractual enrolment. Contractual enrolment was raised in a response to the DWP call for evidence on the policy framework underpinning NEST, NEST: Evolving for the Future. Contractual enrolment is where workers are enrolled with their consent into a pension scheme under a contract and by reference to the rules of the scheme. By contrast, automatic enrolment is where workers are enrolled automatically into a qualifying scheme in accordance with the Pensions Act 2008. Contractual enrolment often covers groups of workers who do not qualify for automatic enrolment, such as those earning less than £10,000 per year or those aged under 22.
The majority of respondents who mentioned it in the call for evidence thought that any qualifying scheme should be open to all of a participating employer’s workers, including those who are contractually enrolled into it, as is normal in the industry. The Government expect that this change could ease administrative burdens on some employers who are already using NEST, and could result in small increases in the number of workers benefiting from workplace saving and an employer contribution. This change is minor and technical in nature and supports the delivery of the service of general economic interest defined in the approval granted to NEST.
The noble Lord also asked about empty accounts. Very briefly, it is just an issue of churn. Some people fall out of the system; more come in. We wanted to make sure that we tidied up the process. In fact, we are reducing the number of schemes, which will make it easier to administer. It is not anything that we feel we should be particularly concerned about, it is just a general issue of churn.
I hope that I have been able to answer all noble Lords’ questions. If I have failed in any way, I would be very happy to write. The long downward trend in pension saving has reversed. The number of workers saving into a workplace pension scheme has increased to almost 9.3 million. In practice, the changes will be delivered largely by the payroll and advisory communities, which have worked hard to support the introduction of automatic enrolment, providing a range of products to help employers comply with their automatic enrolment duties. NEST is playing its vital part in this success story and we need it to continue to do so.
Social Security Benefits Up-rating Order 2018
Baroness Buscombe Excerpts(6 years, 8 months ago)
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Baroness Buscombe
That the Grand Committee do consider the Social Security Benefits Up-rating Order 2018 and the Guaranteed Minimum Pensions Increase Order 2018.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, these orders were laid before the House on 15 January. In my view, the provisions in both orders are compatible with the European Convention on Human Rights.
I will start by touching briefly on the Guaranteed Minimum Pensions Increase Order. This order provides for contracted-out defined benefit occupational pension schemes to increase members’ guaranteed minimum pensions that accrued between 1988 and 1997 by 3%, in line with inflation as measured by CPI.
Moving on to the Social Security Benefits Up-rating Order 2018, this Government are once again making good on our guarantee to the country’s pensioners that we will continue to apply the triple lock to the basic state pension and the full rate of the new state pension for the duration of this Parliament. For 2018-19, this means an increase of 3%, in line with inflation. The rate of the basic state pension for a single person will thus rise by £3.65 to £125.95 a week from April 2018. Pensioners who receive this rate will from April 2018 be £1,450 a year better off than they were in April 2010. The basic state pension will be worth around 18.5% of average earnings, which is one of the highest levels relative to earnings for over two decades. The full rate of the new state pension for people reaching their state pension age from 6 April 2016 onwards will rise by £4.80 to £164.35 a week, which is around 24.2% of average earnings.
With regard to pension credit, we are making sure that the poorest pensioners in the UK will see the full benefit of the triple lock by increasing the standard minimum guarantee in pension credit by £3.65 to match the cash rise in the basic state pension. This is a year-on-year increase of 2.29%, marginally exceeding annual growth in earnings of 2.2%, which we will fund by raising the savings credit threshold. From April 2018 the standard minimum guarantee for single people will be worth £163 a week, while the equivalent rate for couples will rise by £5.55 to £248.80 a week. With regard to the additional state pension, state earnings-related pension schemes will rise by 3%, in line with inflation, as will protected payments in the new state pension.
With regard to disability benefits, we continue to support carers and those with additional needs as a result of disability and will increase the benefits they receive by 3%, in line with inflation. These include: disability living allowance; attendance allowance; carer’s allowance; incapacity benefit; the personal independence payment; disability-related and carer premiums paid with pension credit and working-age benefits; the employment and support allowance support group component; and the limited capability for work and work-related activity element of universal credit.
In conclusion, total government spending on uprating benefit and pension rates in 2018-19 comes to an extra £4.2 billion. This is £4.2 billion that we are using to support pensioners, disabled people and carers. On this basis, I commend the orders to the Committee and I beg to move.
Baroness Lister of Burtersett (Lab)
My Lords, I had not planned to speak this afternoon, since I was supposed to be in two different places. But then I had this horrible memory of reading Hansard from our most recent debate on the uprating order, and of my noble friend Lady Sherlock naming and shaming me, in the nicest possible way, for not being there. I thought that I could not let this happen two years running, so here I am.
The Minister rightly said that the orders are compatible with the European Convention on Human Rights. However, there are other international obligations with which I do not think they are compatible. I would like to talk about the elephant in the room—those benefits that are not being uprated. This happened last year and the Minister very fairly accepted that it was a reasonable thing for us to do, because we cannot talk about uprating the benefits without thinking about benefits in the round.
As the Minister is aware, the European Committee of Social Rights recently issued a report, saying that levels of contributory benefits to the sick and unemployed are inadequate and therefore do not conform with Article 12 of the European charter. That was based on 2015 levels on benefits, so they would be even more inadequate now because of the benefits freeze in most working-age benefits.
In a report published last week the Resolution Foundation said that,
“in every year from 2016-17 to 2022-23 the UK is projected to miss its international commitment—through the 2030 Sustainable Development Goals”.
Those goals apply to us, as well as to poorer countries. The report said that it will fail,
“to deliver higher growth for the poorest 40 per cent of the population than for the population as a whole”.
Inequality is projected to rise to record highs by 2022-23. The Resolution Foundation says that this is,
“a story of the poorest working-age households being left behind”.
A key driver is the freeze in most working-age benefits. This is a policy choice. The Minister will talk about the living wage and personal tax allowances at some point but all this is taken into account. The fact is that the poorest people are falling behind, largely because of the benefits freeze.
According to the Resolution Foundation report, by 2020 jobseeker’s allowance and child benefit beyond the first child will be worth less than 32 years ago and child benefit for the first child will be at its lowest real-terms level in 20 years. I am sure that the noble Lord, Lord Kirkwood, will feel the same as me: as someone who has been working in this area for so long I find it very depressing to see how seriously we are going backwards.
The Minister gave us the welcome news about how pensions are improving relative to average earnings, but child benefit for a two-child family is less generous that at any previous point in the almost 40 years since it was fully introduced. It is set to fall even further over the next five years. Jobseeker’s allowance—unemployment benefit as was—was around a fifth of average full-time pay in the 1970s. It is now around 11% and is on track to fall to 10% by 2022, which will be a new low.
Does the Minister have the figures for what these key benefits, for people of working age and their children, would have been had they been uprated in line with prices since 2010? If she does not have them here—I would not expect her to read them all out anyway—would she be able to send them to Members of the Committee? It is important that we know what effect this freeze is having.
Given the way benefits are falling behind, it is hardly surprising that more people are turning to food banks and that poverty, especially child poverty, has started to rise again and is projected to increase by more than 1 million by the next decade. It is quite shocking. We are happy to allow the poorest to pay the price of increased inflation while the better off continue to enjoy cuts in taxation which do nothing for those whose income is too low even to pay income tax. I was very struck by reading in the paper yesterday that the Archbishop of Canterbury has said:
“Austerity is a theory for the rich and a reality of suffering for the poor”.
As the Resolution Foundation and others have said, these are choices. How we have responded to the financial crisis has been a matter of choices. I believe they are the wrong choices and that those with the narrowest shoulders are being asked to carry the burden. With inflation continuing to be significantly higher than it was projected to be at the point when the benefit freeze was first announced, is it not time that the Government think again about that policy and come back at the next available opportunity to say that they will now lift the benefit freeze?
Baroness Buscombe
This has been a really lively and interesting debate. It is right that I emphasise that these orders are not about the benefit freeze and a fair number of other issues raised by noble Lords. However, having said that, I shall attempt to do my best to reply to noble Lords.
I have some news, also, for the noble Lord, Lord Kirkwood. He was here last year. Indeed, there are some similarities in his speech. I have to say that some aspects of it I have enormous sympathy with, so I shall come to that, and I welcome his contribution to this debate.
I shall cut straight to the issues of benefit freeze. It is not a cut—it is a freeze—and it is part of a package of welfare reforms designed to incentivise work, which we know is the best route out of poverty. I want to talk about the things that we have done that are really positive, because I fear that if one listened just to noble Lords opposite one would have a sense that somehow everything is going completely wrong—but that simply is not the case. However—and I shall come to this again in a few minutes—the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Sherlock, touched on the issue of affordability, which is a really tough and prescient one. Indeed, it has exercised my mind and thoughts since I arrived at the Department for Work and Pensions, given the huge sums of money that we are spending on welfare. We are spending more on pensions alone than we are spending on education and defence put together—£100 billion a year out of a total government budget of £750 billion. That is a huge proportion. Yes, there are some really difficult choices; it is all about choices—so are we making the right ones? We believe that we are, but we will have disagreements, of course. Indeed, there will be disagreements not only across the House but in another place as well, which is entirely laudable. But as the noble Lord, Lord Kirkwood, said, all of us need to keep thinking in terms of the future sustainability of the welfare system which really looks after those who are most in need.
The benefit freeze is part of a package of welfare reforms that are designed to incentivise work, which is the best route out of poverty. We have brought in 30 hours a week of free childcare for working families in England, cut income tax for 30 million people and provided the lowest earners with their fastest pay rise in 20 years through the national living wage. So yes, that is one choice that that we have made, but we have to support those who are earning and those on low wages to the best of our ability. We see that welfare reform is working. The employment rate is at a near record high and there are fewer households where no one is in work than at any time since comparable records began. However, I will say, 14.5% of all households in the UK are still workless, which is far too many.
The noble Baroness, Lady Lister, referenced the Resolution Foundation saying that inequality is projected to rise to record levels in the coming years. We simply do not believe that that is the case. There are choices. We have to make difficult choices and believe that we should focus our spending on those who need it most.
On the question raised by the noble Baroness, Lady Lister, of the burden falling on the poorest, Her Majesty’s Treasury published a cumulative distributional analysis alongside the Budget in November 2017, showing the impacts on household income of tax, welfare and public expenditure changes implemented or planned to be implemented since the 2010 general election. This analysis shows that the state is highly redistributive. On average, the 10% of households with the lowest incomes receive more than four times as much support in spending as they contribute in tax, while the 10% of households with the highest incomes contribute more than five times as much in tax as they receive in spending.
The noble Baroness, Lady Primarolo, asked whether we will lift the freeze on working tax credits, child tax credits and child benefit. I respond by simply saying that the Treasury is responsible for these benefits and it announced the 2018-19 rates at the same time as the Budget in November 2017. The noble Baroness talked a lot about children and families. We are committed to supporting families and tackling the root causes of child poverty and disadvantage. If you are a child growing up in a household where no one is in work you are almost twice as likely to fail at all stages of your education than if you lived in a working family. Children in households where no one is in employment are five times more likely to be in poverty than those in households where all the adults work. Nearly three-quarters of children from families where no one has been in employment moved out of poverty when their parents entered full-time work. That is why we are supporting parents to find and stay in work.
We have made the childcare element of universal credit more generous. Parents on universal credit can now claim back up to 85% of eligible childcare costs, compared with 70% in working tax credit, a change that is benefiting 500,000 working families. This Government are investing record amounts in childcare. By 2019-20 we will be spending more than £6 billion per year to support working families in this way. For families who face additional, complex barriers to finding work, we set out our framework for action when we published our strategy, Improving Lives: Helping Workless Families in April. I can tell noble Lords that we are doing a huge amount of work on this in the department. As I said earlier, the number of households where no one is working is actually at a record low: it is 954,000 households lower than it was in 2010, which means 608,000 fewer children in such households than seven years ago. We believe we are on the right trajectory. On a before-housing-costs basis, there are now 200,000 fewer children living in absolute poverty than in 2010.
I want to confirm for the noble Baroness, Lady Primarolo, that inflation is not at 4%; it is actually at 3%. Indeed, that is something that I double-checked with our researchers at the department. The noble Baroness, Lady Lister, asked for figures on the poverty rate since 2010 and the impact of the benefit freeze. We do not actually have those figures but the benefit freeze is part of a package of welfare reforms designed to incentivise work and support working families, including, as I have said, increasing the national living wage, reducing income tax and, of course, the rollout of UC. I will write to the noble Baroness with those figures.
Lord Kirkwood of Kirkhope
Is there any programme to evaluate the work-incentive point? Of course it is a perfectly obvious point and it may be working, but the only place where the data can be found is in the department. Is the department doing any work that will evaluate whether the powerful work incentive point that she has just made is actually making a positive difference?
Baroness Buscombe
Yes. Work is being done and I am very conscious of the fact that we should be talking more about that. We have been saying that work pays— I prefer to say that work transforms lives. The noble Lord is right. We need to do more to articulate our belief and the reasons why we are confident that we are right and that work transforms lives. It relates hugely to outcomes. It is not a simple, overnight back of the envelope matter, but we are working on it.
The noble Baroness, Lady Primarolo, asked about targets for child poverty. The income-related targets set out in the Child Poverty Act 2010 have been replaced by two new statutory measures of parental worklessness and children’s educational attainment. This will drive continued action on the areas that can make the biggest difference to children’s outcomes now and in the future. The noble Baroness also asked whether the Government would lift the freeze on working tax credits. The answer is that the Treasury is responsible for working tax credits.
The noble Lord, Lord Kirkwood, made his point with feeling, and I can only say that we are working hard and thinking about our policies going forward. The huge question is affordability. We are spending £95 billion—that is, ninety-five thousand million pounds—a year on benefits for people of working age. For how long is that sustainable? Our department accounts for 25% of the whole of the Government’s budget, which in terms of expenditure is now the size of Chile or similar, I understand. The noble Baroness, Lady Lister, referred to some overseas organisation, saying that we are behind the curve in terms of our expenditure. I simply do not recognise that, in terms of how much other countries are spending or of the choices that they have made. For example, are they paying the similar amount of 0.7% of their national income, which is what we are paying, on overseas aid?
Baroness Lister of Burtersett
I am sorry to interrupt. I may not have made myself clear. I was not referring to some international organisation. The Resolution Foundation pointed out that we will not be meeting our obligations under sustainable development goals not because of overall expenditure levels but because the lowest 40% are going to do worse than the population as a whole. That goes against what we have signed up for under the sustainable development goals. We think of the SDGs as being for the poorer countries, but they are for us as well.
Baroness Buscombe
I accept that, but it has to be comparative in terms of the goals that we have set. In the back of my mind I have the response to that particular figure that was quoted and we do not recognise that as being correct. I think that I have said that on the Floor of the House in another debate.
The noble Baroness, Lady Sherlock, raised a number of questions, the first of which was about contracting out. If a person was previously contracted out for a long period they may have a lower starting amount for a new state pension than someone who had built up some additional state pension. This is because they paid lower national insurance when they were contracted out and have built up an occupational pension as a result of these arrangements. Part of their occupational pension replaces the part of the state pension they were contracted out of. People who were previously contracted out are therefore not missing out. Although some people will get a lower starting amount from the state, many will have more than the new full rate in total if they add their state pension and their contracted-out private pension together. If no adjustment was made, people who had been contracted out would be paid twice for the same national insurance contributions. The transitional arrangements ensure that everyone who qualifies for the new state pension will get at least as much as they would have done under the old system, based on their own national insurance contributions to 6 April 2016.
Baroness Buscombe
My Lords, I would love to concur with the noble Lord. The following point is certainly not in my brief but is something that I think about a lot. The children we have referenced today will sooner or later become the working young. I think of my three children, who are all working now but do not earn very much. The issue is how the working young will afford pensions in the future. In probably about an hour’s time we will debate the order on auto-enrolment, which shifts the culture in terms of people contributing to their future pensions. There is very much a cross-party consensus on working out how we can make pensions sustainable in the long term. However, in the short term, I hope that the noble Lord will accept that, notwithstanding the fact that we would like to be ever more generous, it simply is not possible.
Lord Jones
That is a fair answer. Has the Minister answers to some of the questions that I posed? If she does not have them to hand, she may wish to write to me. However, she may wish to answer one or two of the questions.
Baroness Buscombe
I thank the noble Lord. I have just found the answers in my array of papers. He asked about different benefits, particularly disability and carer benefits. We now spend over £50 billion a year on benefits to support disabled people and people with health conditions, which is over £7 billion more than in 2010. The noble Lord asked about disability living allowance and benefits for carers. We are increasing benefits for the additional costs of disability and for carers in line with inflation. Recipients of carer’s allowance will now get £550 more per year than in 2010, while the monthly rate of disability living allowance paid to the most disabled children will have risen by more than £104. On a before-housing-cost basis, the absolute poverty rate among people living in a family where someone is disabled has fallen to a record low.
I am sorry that I have not been able to respond to noble Lords’ questions, particularly those of the noble Lord, Lord Jones, in relation to cold weather payments. That was discussed in the department yesterday, but I will write to the noble Lord.
Baroness Sherlock
I am grateful to the Minister for giving me quite a lot of information about the way the GMP system will work. The specific questions that I raised were raised by the NAO—whether the department had enough information about who would be affected in terms of the GMP and what it was doing to tell people about that. I am happy for the noble Baroness to write to me, but perhaps she could have a look at the specific questions in the record and write to me on those. I do not know whether I missed it, but will she confirm that she told the Committee what the latest estimate is of the savings to the Exchequer of the four-year benefit freeze over and above the amount originally scored? I apologise if I missed that.
Baroness Buscombe
I apologise to the noble Baroness; I had hoped that I would be able to reply to those questions today but, given the time as well, it is much better that I write to her and copy in others.
To conclude my closing remarks, the Government are maintaining their commitment to the triple lock for both the basic state pension and full rate of the new state pension, increasing the pension credit standard minimum guarantee so that the poorest pensioners see the full benefit of the increase in their basic state pension and increasing benefits to meet additional disability needs and carer benefits in line with inflation. I commend these orders to the Committee.
Family Relationships (Impact Assessment and Targets) Bill [HL]
Baroness Buscombe ExcerptsFriday 23rd February 2018
(6 years, 9 months ago)
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Lord Kirkwood of Kirkhope
That is a helpful intervention, because I absolutely agree with that. Family impact assessments are an important tool in getting to that point. That was the point I was going to make.
We need to look not only to local authorities—as the noble Lord, Lord Blencathra, and the noble Baroness, Lady Massey, mentioned—but to try to capture some soft support systems in neighbourhoods and communities in future. That is new for me; I look to the noble Baroness, Lady Stroud, when I say this, but I have always kept a bit of distance from the agenda that she has been very positively promoting in her own way, because I always had a suspicion that Conservative Governments and Conservative Chancellors in the past have sometimes used it as a way of saying that we do not really need to keep up the benefit expenditure. I am in favour of individual entitlements to benefits, and when you look at the cuts, freezes and caps, that has not been made any easier. But even I—if I can put it that way—am now thinking that we really need to look at some of these symptoms that the Centre for Social Justice and others have been looking at, as additional methods of support. We can make it more cost-effective if we have more effective family policy, and I think that this Bill does that, particularly in setting up objectives and targets, looking at reporting and being transparent and honest about that reporting.
I have a couple of points to contribute to the debate. The DWP has an enormous amount of data. The quest of the noble Lord, Lord Farmer, could be assisted considerably if some of the really clever people in the research department there thought about how to cut across and tabulate some of the real-time information. There is a minefield—no, not a minefield, a mine. What am I trying to say?
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
A mine of information?
Lord Kirkwood of Kirkhope
Ministers have their uses. There is a mine of information in the DWP, and Ministers should go back and ask whether some assistance can be given to this kind of policy programme. The data needs to be made available to local authorities, although you obviously have to be careful about data protection. There are rules about that, but you should be testing them to the limit of what is useful if that makes a difference to identifying some of the anticipated problem families. Big data is now so clever that you could begin to get, not algorithms but almost algorithms, which would anticipate where the problems were. You could make available the priorities in terms of the spatial dimension in deprived areas; and professionals in the department, and in local authorities, could start to be provided with data on circumstances that would help them to anticipate where future problems would arise. In support of family impact assessments, the department should do a little bit of work to see whether any help could be provided in that direction.
I spent a very interesting morning at the universal credit centre in Dover, where I observed two applications. I am saying this against myself—I was really looking for problems that I could come back and attack the DWP about, but they both went swimmingly well. It was clear that the job coaches were signposting people who had individual problems. That is what they should be doing, but they could be doing more of it. The noble Lord, Lord Farmer, rightly said that policy is pointed at individuals. Universal credit is actually pointed at households. The claimant commitment could go as far as saying to people coming on to universal credit for the first time that, if anyone who has signed up to it sees problems arising in their household that might lead to family breakdown, they could phone. The “Ghostbusters” number should be that of the universal credit coach who could hold the ring and say, “Let’s see what we can do”. I know that they have only got a certain amount of time available and they are not looking for things to do. However, in the course of these interactions with people coming on to universal credit, we might start to look at family problems a bit more broadly. That is a good place to start the discussion.
Finally, I say to the noble Lord, Lord Farmer, that if this does not work, we should think about getting more robust about enforcing it. If the DWP cannot do it, it should go to the Cabinet Office or to somebody who has control of all the Secretaries of State, now that I hear they are all in play—I hope that includes the Treasury. In the course of discussing the Bill, I hope that this House will send a clear signal to central government that we are not going to allow the family test failure to happen again on this Bill. If they do not get it right, we will come back looking for more and we will not be long in doing it. I support the Bill and encourage the noble Lord, Lord Farmer, whom I thank for the opportunity for this debate. I will stand shoulder to shoulder with him in his future work in this important area.
Baroness Buscombe
My Lords, I thank my noble friend Lord Farmer and congratulate him on securing a Second Reading debate on the Bill. I also thank all noble Lords who have participated in today’s excellent and thoughtful debate. My noble friend has worked tirelessly to strengthen families. This is evident both in this debate and beyond, in particular through his work to strengthen the family relationships of prisoners, who are often the most in need of a supportive family environment. I agree with the noble Lord, Lord Kirkwood, and my noble friends Lord Framlingham and Lady Stroud that we value his work and the message to him is: please keep going.
The Government have a critical role to play in supporting families. Strong families, in all their forms, are critical to our success as individuals and as a society. I am pleased to see, and to learn from having been in the Department for Work and Pensions for several months, that families have been climbing the political agenda in recent months with debates being held on how the Government can support families and on the critical institution of marriage and its place in government policy. However, I agree with the noble Baroness, Lady Tyler, that we need to do more.
It is right that the Government continue to champion the family as the bedrock of a strong society. The family test, which has been in place since 2014, has helped policymakers to put families at the heart of policy development. We developed the current family test in conjunction with the Relationships Alliance, a group of expert organisations with a rich depth of knowledge about family relationships and functioning. Led by the Department for Work and Pensions, we continue to engage with other government departments to help them to implement the family test, and by doing so, ensure that families are considered early in the policy-making process.
Yes, families come in all shapes and sizes, in the words of the noble Baroness, Lady Massey of Darwen, and the noble Lords, Lord Alton and Lord Shinkwin; that is a critical point that should be made. However, I say to the noble Lord, Lord Kirkwood, that there is no question but that, for example, the Cabinet Office is looking very closely at how we can do more to strengthen policies in support of the family, as indeed we are across government.
My honourable friend in another place, Oliver Dowden, who is the Minister for Implementation, led a debate on 8 February this year on the strengthening families manifesto, during which he said:
“Within the Cabinet Office, we are continually looking at ways to measure the impact of policies in relation to the family. We currently analyse that impact through mechanisms such as the implementation unit, which falls within my brief. That is a central part of the initiative”.—[Official Report, Commons, 8/2/18; col. 659WH.]
I should explain to noble Lords that the implementation unit is a cross-governmental unit to support departmental capability and public service reform.
With regard to the statutory basis for the family test, I reassure noble Lords that the Government continue to be committed to the family test and the benefits that it brings by ensuring that families are central to all the policies that we develop. The family test and the five questions within it are intended to comprise a broad and flexible tool that encourages consideration of the family from the first stages of policy thinking and throughout policy development. Good policy-making requires giving consideration to a range of important factors, and the family test is a tool to assist policymakers to take into account impacts on family relationships and family functioning.
I am pleased to see that the proposals for the family impact assessment laid out in the Bill take into account all the factors that we consider as part of the current family test. Indeed, we agree that the Government should consider these factors, and the family test already supports this to happen throughout government. However, we are concerned that placing such an assessment on a legislative footing could risk losing the flexibility to adapt and change. I have been very struck by a number of the ideas and suggestions from noble Lords in today’s debate. Embedding such an assessment within primary legislation would mean that we lost that flexibility, which is an important feature of the current family test.
Noble Lords have made reference to the use of different language and talked about a different narrative and changing the culture. I believe it is very difficult to change culture. I say that as a lawyer; indeed, as a lawyer I am rather cynical that embedding policy in primary legislation can always succeed in changing culture. I am sure all noble Lords present will know that the recent report from the Jo Cox Foundation recommends that the Government should consider amending the family test to consider the matter of loneliness, which we know is a significant problem for many people across this country. Indeed, I would see loneliness in a sense as a subset of family and the breakdown of family, and that is something that we should consider in the round.
My noble friend Lord Framlingham spoke passionately about the impact of the internet on children and their response within their family and beyond. This is where, I fear, the truth is that legislation is a double-edged sword. It is easy to exclude if it is not on the list; indeed, the noble Lord, Lord McKenzie, made reference to the list of what constitutes the structure of a family. We have to take great care and think about future-proofing. However, that is not to say that we disregard much that is in the Bill or the spirit behind it with regard to the development of our policy.
The Bill also raises the matter of reporting on the costs and benefits of extending family impact assessments to local authorities—something raised by several noble Lords. We know that local authorities and the wide networks of partner organisations they work with are best placed to understand the families living in their areas, which is why central departments, including the Department for Work and Pensions, work closely with local areas on a range of family issues.
My noble friend Lord Farmer asked how many information exchange sessions and courses on implementing the tests had taken place over the past two years. The noble Lord, Lord McKenzie, also referenced the tests and the number of courses. When the family test was first introduced four years ago, the Department for Work and Pensions ran a number of seminars and sessions and supported departments with evidence packs and guidance. We continue to support departments to build capability of their own in this area, although I noted noble Lords’ emphasis on the importance of consistency across departments.
The work being carried out at the moment at the Department for Work and Pensions includes the new reducing parental conflict programme, in which I know my noble friend Lord Farmer has taken a keen interest. Since today’s Bill was laid last June, we have seen an increase in the total funding available for this vital work to up to £39 million. I note what the noble Lord, Lord McKenzie, said about cuts, but in many instances they have been accompanied by other support systems for the family. We are very careful to ensure that what we do does not drive breakdown in family relationships through income poverty, which he referenced. We understand, appreciate and accept that that would be entirely counterproductive.
Noble Lords have all stressed that it takes a lot more than money, critical though that is, to support the family. Through our new programme, we are actively supporting local authority areas across England to embed proven parental conflict provision into their mainstream services for children and families, as well as building and sharing the evidence base for what works to improve the quality of interparental relationships.
As we work with local areas on these critical issues, we will be able to gain a greater understanding of what support and guidance local authorities need in order to best consider the impacts of policies on families. Local authorities also need to retain flexibility to adapt and change how they assess impact on local families, including the ability to take local factors into account.
I was struck by what the noble Lord, Lord Kirkwood, said about his visit to Dover, which I have read all about. I am pleased that he found it a positive experience attending the jobcentre there. I am also pleased to be able to say that as work coaches in jobcentres become more familiar with the system of universal credit, they are enjoying and getting great satisfaction from, in a sense, going beyond their brief to support in a more holistic way the welfare, in the biggest use of that word, of those in front of them. I will also take what he said back to the department, because he is absolutely right: all the time we must think about ways in which we can so easily add to our support to the family through communication and signposting, which is so important.
I turn to the issue of family stability and the provision in the Bill which would require government to establish objectives, indicators and targets for promoting strong and stable families. We believe that families are vital. Not only are they the basic building block on which we build a successful economy and a stable society, but growing up in a loving family environment helps children develop into successful adults.
As my noble friend Lord Shinkwin said, without families there is no sustainable society. I was also struck and concerned when my noble friend used the words, “systematic devaluation” of the family, which was very much echoed in the speech by my noble friend Lord Framlingham. That is something that we should take great care of when thinking through our policy: how we respond to that idea of systematic devaluation of the family. But I was also struck by what was said in response to that, in a sense, by the noble Baroness, Lady Massey, who has spoken on this subject for so many years in your Lordships’ House, with such eloquence, expertise and experience—and I so welcome her contribution today. She suggested that we should ask what makes a family go right, and she is absolutely right. It is really important to think about what lends stability to a family. That is a very different experience, in many ways, from the experience and extraordinary expertise of the noble Baroness, Lady Tyler, in the work that she has carried out on all the evidence of what lends to the negative impacts of family breakdown.
To demonstrate our commitment to these key issues, last April we published Improving Lives: Helping Workless Families. This, with its accompanying analysis, set out nine national indicators designed to track the Government’s progress towards tackling the root causes of poverty and disadvantage. It includes the new relationship distress indicators, which measure elements of parental conflict in both intact and separated families. This was based on recent evidence, which shows that, when it comes to the critical issue of improving children’s outcomes, the quality of the relationship between the parents is far more important than the structure of the family. Indeed, my noble friend Lady Stroud referenced adult relationships, and we cannot underestimate their importance. As I mentioned, we are beginning to tackle the problems faced by workless families, who are three times as likely to experience parental conflict, through our new reducing parental conflict programme.
My noble friend Lord Blencathra referenced the Armed Forces and the importance of supporting them in this area. As the Department for Work and Pensions representative on the newly formed Armed Forces Covenant and Veterans Board, I reassure my noble friend that I am very much focused on the welfare of veterans and of our serving personnel. We are constantly looking at the range of extra support we provide to our Armed Forces families. Apart from anything else, as my noble friend said, retention of our Armed Forces personnel and their welfare is of vital importance.
I know that all the noble Lords present understand the importance of supporting families, and the benefits that strong family relationships can bring to us all. My department will continue to encourage active use of the family test, and continue the discussions across Whitehall, which will include the need for policymakers to consider whether any new policy supports strong and stable families or undermines these vital relationships. On a personal level, I am particularly keen to work with colleagues across government to reassess, perhaps, some of the narrative. A number of noble Lords today have referenced the use of language—how we explain what we are trying to achieve. Why do we use the term “conflict”, for example? It sounds more like a war zone—and, yes, is “test” the right word that we should use? We should not be afraid to revisit that issue.
I thank all noble Lords who have participated in today’s debate. I shall write to those to whom I have been unable to respond. I look forward to working with all noble Lords, because this is more than a Conservative Party issue—it is cross-government and cross-party. It is too important to be part of politics. So I look forward to working with all noble Lords as we strive to build a society that works for everyone, with the family at its core.
Personal Independence Payments
Baroness Buscombe Excerpts(6 years, 10 months ago)
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, with the leave of the House, I shall repeat as a Statement an Answer given to an Urgent Question in another place by my right honourable friend the Secretary of State for Work and Pensions on the High Court judgment on PIP—personal independence payment. The Statement is as follows:
“After careful consideration, I took the decision not to appeal the High Court’s judgment on this case. I informed this House of my decision immediately by tabling a Written Statement on Friday last week. This Written Statement set out my decision and the steps my department will now take to implement the judgment. I repeat once again my commitment to implementing this judgment in the best interest of our claimants and through working closely with disabled people and key stakeholders over the coming months.
The Department for Work and Pensions will undertake an exercise to go through all affected cases in receipt of the personal independence payment and all decisions made following the judgment in MH to identify anyone who may be entitled to more as a result of the judgment. We will then write to those individuals affected and all payments will be back-dated to the effective date in each individual claim.
In accepting the outcome of this High Court judgment, the department does not agree with some of the details made in the judgment. The 2017 amending regulations were introduced in response to an Upper Tribunal case that broadened the interpretation of eligibility for Mobility 1, which is the ability to plan and follow a journey. Our intention has always been to deliver the original policy intent through clarifying how symptoms of overwhelming psychological distress should be assessed. In order to provide certainty to our claimants, we are not appealing the outcome of the recent High Court judgment.
Our next steps will build on the positive work this Government are already undertaking, including the following. Spending on the main disability benefits—PIP, DLA and attendance allowance—has risen by £4.2 billion since 2010 and real-terms spending on disability benefits will be higher every year to 2020 than in 2010. The Government have commissioned two expert-led reviews and invested a record £11.6 billion into mental health services. The Access to Work mental health support service has been expanded with a two-year trial of targeted support for apprentices with mental health conditions. We have also accepted all the recommendations in the independent review by the noble Lord, Lord Stevenson, and Paul Farmer, including establishing a framework for large employers to voluntarily report on mental health and disability within their organisations.
With regard to the next steps following this judgment, the Department for Work and Pensions will write to those who may be entitled to a higher rate of PIP. Where relevant, all payments will be backdated to the effective date in each individual claim.
PIP is a modern, dynamic and fairer benefit than its predecessor, DLA, and focuses the most support on those experiencing the greatest barriers to living independently. At the core of PIP’s design is the principle that awards of the benefit should be made according to a claimant’s overall level of need, regardless of whether they suffer from physical or non-physical conditions. This Government are committed to furthering rights and opportunities for all disabled people and we continue to spend over £50 billion per year to support people with disabilities and health conditions”.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for repeating that Answer. I remind the House that these regulations were rushed through after the tribunal specifically to deny the higher-rate mobility component of PIP to people who were claiming on grounds of psychological distress, affecting people with Parkinson’s disease, schizophrenia or various other mental health conditions.
In the High Court judgment, Mr Justice Mostyn said that these new criteria were “blatantly discriminatory” against those with mental health impairments and that they “cannot be objectively justified”. Ministers should have known that. On 27 March this House voted for a regret Motion in my name objecting to these regulations precisely because they discriminate against people with mental health conditions. I then wrote to Damian Green, with the support of the right reverend Prelate the Bishop of Durham and the noble Baronesses, Lady Browning and Lady Bakewell, asking him to conduct a review mandated by that Motion. He declined to do so, so we ended up in the High Court.
I am glad that Ministers are not appealing the decision, but it leaves many questions, of which I can ask only two. First, will there be an appeal process for PIP claimants who are not contacted by the department but who believe they should receive back payments? Secondly, will applicants be entitled to a reassessment if they were given only the standard rate of the PIP mobility component after the regulations came through, where the cause of the claim was “psychological distress”?
If Ministers had, once again, only listened to this House, this confusion and distress for claimants could have been avoided. I dearly hope they do so next time.
Baroness Buscombe
My Lords, I shall respond robustly to what the noble Baroness opposite has just said by making it absolutely clear that this Government have been far more generous in supporting people with mental health conditions than the previous Labour Government, who put off any changes to disability support, particularly in relation to mental health conditions, until after the general election of 2010, which by then was too late.
This is not a policy change. We are going back to the heart of the policy intent and relates to those in psychological distress. We have accepted the Stevenson/Farmer recommendations, which shows that we are committed to supporting claimants with disabilities. We are also working with a range of disability charities to implement the judgment in the best way. We will look at appeals, to which the noble Baroness opposite made reference, but we want to make sure that we get the process right. We have already spoken with the charity Mind on how we implement the judgment. The Minister for Disabled People, Health and Work in another place talked only yesterday with a disability charity consortium to discuss the decision and to hear its views on implementation. We will reach out to claimants and look at every one of them.
To be clear, we are spending over £50 billion on disabilities. We are entirely committed to this issue—indeed, it is one of the Prime Minister’s top priorities. I can confirm that this was never a cost-saving measure. The judge in the case made references to cost saving but we do not agree with that. Indeed, we have focused on being more generous through the introduction of PIP and, as a result of the judgment, we will rightly become even more generous in supporting people with mental health conditions.
Lord Kirkwood of Kirkhope (LD)
My Lords, perhaps I may ask the Minister about the process. I fail to understand why, in March 2017, the Government did not have recourse to the power available to them under the Social Security Administration Act 1998 to suspend the implementation of adverse legal judgments pending further and better particulars. If they had taken that route they would have had recourse to the SSAC and a proper consultation, which would have prevented this adverse outcome from the High Court. Will the Minister learn from this and give an assurance that in such future circumstances, the Government will use the unique power the DWP has to prevent getting egg all over their face and causing adverse circumstances for many claimants who do not deserve that kind of treatment?
Baroness Buscombe
I hear what the noble Lord is saying. This is one of the reasons why the immediate response of my colleague the Minister for Disabled People—and indeed the Secretary of State—was not only to decide not to question the judgment but to do everything we can to help claimants. That is why we have already had early meetings with stakeholders and organisations who can help us think through how to ensure that we do not make mistakes going forward. It is important to say that the 2017 amending regulations did not represent a policy change. The distinction was based on the considered advice of highly qualified medical advisers, and the activities considered in PIP are used as a proxy for assessing a claimant’s overall level of need in daily life, which is what we were focusing on.
Lord McKenzie of Luton (Lab)
My Lords, the Minister on several occasions used the term “generous” in describing the Government’s position. By what yardstick is “generous” measured in these terms?
Baroness Buscombe
The noble Lord will understand that since 2010, spending on the main disability benefits comprising PIP, DLA and attendance allowance has risen by £4.2 billion. Disability benefits are at a record high this year. Indeed, as a share of GDP, the UK’s public spending on disability and incapacity is higher than in all other G7 countries bar Germany.
It is important to focus on the components in terms of spending on PIP and the DLA equivalence, which of course was what we had under the Labour Government. As at October 2017, 66% of PIP recipients with a mental health condition received the enhanced rate daily living component, compared with 22% receiving the highest rate DLA care component as at May 2013. Some 31% of PIP recipients with a mental health condition get the enhanced rate mobility component as at October 2017, compared with 10% receiving the higher rate DLA mobility component as at May 2013. I could go on with more figures. If one compares the percentage of spending by this department with other departments within the Government’s budget, we are, as we should be, strongly focused on how we can help those with physical and with mental health conditions to do a very dynamic thing that PIP stands for: have the independence to cope with their lives, whatever their condition.
Baroness Hussein-Ece (LD)
My Lords, the number of applicants who fail to qualify run into the hundreds of thousands. Can the Minister say what is being done to recruit enough staff to deal with the backlog? I have seen a report which states that it will take decades before they finally get up to date and PIP applicants will receive their social mobility claims, as they duly should. What is being done about the backlog?
Baroness Buscombe
I can indeed respond to the noble Baroness because only last week I had a meeting with officials who are closely focused on this issue. I cannot give her the exact numbers, but we are bringing on board many more work coaches. We are training them and continually working to improve our systems to ensure that any backlogs in the waiting time for the initial assessment and reassessment are cut down; I think they have been cut by at least half over the past year. We recognised that the number of people coming forward was greater than we had initially judged, so we are responding to that as quickly and efficiently as we can. At the same time, we have to make sure that there is continuous improvement, that the PIP benefits process is working fairly and effectively and that it offers the best claimant experience possible. My honourable friend in another place, the Minister of State with responsibility for this issue, has given me a list of the different things we are doing to improve the assessment process and deal with any backlogs in the system.
Baroness Altmann (Con)
My Lords, I would like to congratulate my noble friend the Minister and my right honourable friend in the other place on taking this decision. It is the right decision, although I am sure it was a difficult one and will be difficult for the department to implement. Nevertheless, it is right and I welcome it.
Baroness Buscombe
I thank my noble friend for supporting us in what we feel strongly was the right decision. It was a difficult one because obviously, we need to take some time—not long, but some time—to make sure that we can respond in the right way and support a fair number of people whose assessments we need to re-evaluate. We will do that to the best of our ability, but very much at the forefront of our minds is the need to work with stakeholders, including Mind and other charities, to ensure that we get this right. Again, I thank my noble friend.