Social Security Benefits Up-rating Order 2024

Debate between Baroness Janke and Baroness Sherlock

Tuesday 27th February 2024 Grand Committee

[Baroness Janke (LD)]

My Lords, we too welcome the uprating of benefits and will support today’s SI but, as the noble Baroness, Lady Lister, has said, there are ever-rising numbers in poverty, as drawn to our attention by the Joseph Rowntree Foundation’s 2024 report on poverty, published a short while ago. According to its previous report, around 20% of the population were in poverty in 2020-21—around 13.4 million—of whom 7.9 million were working adults, 3.9 million were children and 1.7 million were pensioners. Poverty among people on universal credit remained high at the same time at 46%, it said,

“despite the temporary £20-a-week uplift and a resetting of Local Housing Allowance”

to better reflect the level of rents in an area. Poverty rates remained highest in the social and private rented sectors

“and much higher for households including a disabled person or an informal carer”.

The cost of living crisis is having a major effect on poorer families. The Joseph Rowntree Foundation’s cost of living tracker found the following shocking results in October 2022, across the poorest fifth of families: six in 10 families were unable to afford an unexpected expense; over half were in arrears; around a quarter were using credit to pay bills; and more than seven in 10 were going without essentials. The report found that there are elements in the benefit system that increase poverty, such as the two-child limit on income-related benefits, the benefit cap, the five-week wait for the first payment of universal credit and unrealistic debt repayment deductions. Will the Minister say what plans there are to reassess the impact of these measures? I have not been doing my job in this area for some time, yet I recall that, when I was, these measures were constantly raised as causes of poverty that need to be addressed.

The report finds that the level of benefits is inadequate for people to afford the basic essentials, which is a damning finding. It also urges a resetting of benefits that would ensure that income cannot fall below these levels through debt repayment deductions or repayment of advances. This is essential for people on benefits as a proper safety net, not just during the cost of living crisis but for anyone who is on benefits. When will a full assessment take place of the efficacy of universal credit as an adequate safety net for those who need it? What is the Minister’s response to these findings?

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing this order and all noble Lords who have spoken. As he has explained, the Social Security Benefits Up-rating Order will increase most working-age benefits in line with CPI. We too welcome this instrument, because of course we want to see social security keep pace with prices, particularly at a time of spiking inflation and economic instability. That used to be the norm among both Labour and Conservative Governments, of course, but the past decade has seen a marked change.

There were of course the years of shame between 2013 and 2020, when most working-age benefits and tax credits were either frozen or uprated by small amounts, such as just 1%. Although today we are back to uprating mostly by CPI and occasionally by earnings, as my noble friend Lady Lister said, once again that uprating has been preceded by a period of speculation, which is deeply unhelpful. I can assume only that this is driven from somewhere inside the Government, because it happens too regularly. The speculation suggests that maybe this year the uprating will not be by the full amount or maybe will not happen at all.

As my noble friend mentioned, that speculation causes real stress and worry for people who depend on benefits and tax credits to survive. I begin to wonder: is it a strategy to allow Ministers the option of either freezing benefits or not uprating them fully so that, if they then finally do the right thing, people are supposed to be suitably grateful? As my noble friend Lady Lister pointed out, it is good that benefits are being uprated, but it is not an act of unusual generosity; it is simply a decision not to cut the value of benefits during a cost of living crisis.

This instrument, as we have heard, also increases the state pension by earnings in line with the triple lock. I accept the distinction that my noble friend Lord Davies helpfully made. The rates of basic and new state pensions will rise by 8.5%, as will the standard minimum guarantee in pension credit and the higher rate of widows’ and widowers’ pensions in industrial death benefit. However, this does not apply to a number of the others. I will be interested in the Minister’s response to that. In particular, can he explain the position on the deferred state pension? If someone chooses to defer their state pension and the pattern is that the deferred amount is uprated by CPI rather than the triple lock, are they made aware of that? When people make a decision about deferral, do they understand the consequences?

I had some other questions on pensions and pensioners but I was entirely thrown by the decision to separate these two instruments this year. Most years, we do them together in a single block, so I wrote a wonderful speech waxing lyrical and weaving in pensioners and old age, but now here I am. I shall come back, if the Minister will indulge me, to a couple of more general questions on pensioners when we come to debate the next instrument.

The context for this year’s uprating, as my noble friend Lady Lister expounded in some detail—aided ably by the noble Baroness, Lady Janke—is absolutely brutal. I will not repeat the extensive critique that my noble friend made or her unpacking of the economic climate in which so many families are living, but it is brutal. The basic fact is that there are now more than 4 million children living in poverty. There are 400,000 more children living in poverty now than when Labour left office in 2010.

One of the things that bothers me about this is that, whenever somebody raises this, the Minister—I know it is in his brief—will at some point in the response use the line that the Government believe that work is the best route out of poverty. Yet, clearly, the facts speak for themselves: more than two-thirds of children who live in poverty have parents in work. Something in that picture does not work. It is something that all of us in politics must address.

We in Labour have been looking at what we would do. We have a plan to give people a better life, so that they are able to make ends meet and have a good start for their children. We are looking at making sure that there is a breakfast club in every primary school and at giving people access to cheaper energy and an insulated home. We will reform universal credit, jobcentres and employment support so that people can get a better job with better pay. We will also have a child poverty strategy. Can the Minister tell the Committee in his response what the Government’s strategy is? What is their plan to do that? Other than simply declaring that work is the best route out of poverty, what is the Government’s plan to deal with the challenge of child poverty today? I look forward to the Minister’s response.

Social Security Benefits Up-rating Order 2023

Debate between Baroness Janke and Baroness Sherlock

Wednesday 22nd February 2023 Grand Committee

[Baroness Janke (LD)]

My Lords, as the two previous speakers said, I am sure it will be a matter of great relief to the poorest citizens and families that this year there is a realistic rise, unlike last year when, despite forecasts from the Bank of England of inflation rising to 7.9%, the rise in benefits and pensions was only 3.1%. Other speakers have referred to the distress suffered by so many citizens who have had to manage with that, despite the crisis in energy costs and the cost of living, and the pressures that have been put on families and individuals in recent months.

Some evidence of the level of distress caused by this policy is the increase in the use of food banks. The number of food bank users increased to over 2 million in 2022, of whom 832,000 are children. A measure that was intended for emergency charitable use has now become a national institution and without it many impoverished families would go hungry.

The increase in short-term government funding is a positive step and it is to be welcomed that it is excluded from the benefit cap. I share the views of the noble Lord, Lord Davies, on the triple lock and agree that we should retain it until the state pension has regained much more of its value, because it is taking quite a time to catch up. Large numbers of the poorest pensioners are dependent on the state pension but that is sometimes not appreciated. We hear quite a lot of speeches from people nowadays saying that the triple lock should be abolished because everybody is jolly too well off; in fact, large numbers of pensioners are completely dependent on the state pension so to those people, it is absolutely crucial that it retains its value.

We would also like to see an extension of auto-enrolment to younger workers and those on lower incomes. They could get started a bit earlier and would welcome that in their older age.

I also recognise the campaign on pension credit and know that the noble Baroness, Lady Stedman-Scott, was keen to pursue it. It has encouraged me greatly to hear the adverts and to hear from the Minister today that the percentage of take-up has increased so much. I would certainly like to have a look at that.

The uprating increase of 10.1% will, we hope, provide more protection to those on limited incomes but the situation for many families does not improve—it only worsens. We have heard from the noble Baroness, Lady Lister, about the benefit cap and although it will be uprated today it has quite a bit to catch up. The benefit cap has been found by many studies to be a major contributor to poverty in families. There are 123,000 households subject to that cap. That is 64% higher than before the pandemic; 85% of them are families with children and 65% are lone parents. The benefit cap takes no account of the size of a home needed to house a family, so the freezing of the local housing allowance at the March 2020 level, despite rapidly increasing rent costs, will mean more capped households falling into poverty.

I have these questions for the Minister. What will the Government do to prevent a new wave of homelessness following the freeze in the LHA? I point out to him that in my city of Bristol, for example, the cost of a one-bedroom home at the 30th percentile is 7% higher this year. But with housing benefit still frozen, there is now a shortfall of £18.41 a week between what can be claimed and what has to be paid.

What plans do the Government have to review the range of evidence about the benefit cap? I am sure the noble Baroness, Lady Lister, can provide plenty. She has certainly made that case very articulately many times. I feel it is time that the Government re-evaluate and look into the circumstances that this is causing. I would also like the Minister to look at the findings of studies of the two-child limit. This seriously disadvantages families. It was championed by the Government as an incentive to people on benefits to work. However, official statistics show that most families affected are in work while a study found that those affected felt strongly that the two-child limit unfairly punished hard-working, low-income families at a time when they needed most support, that is, at the birth of a child. I hope that we may revisit that.

All in all, I am grateful that we are having a much more realistic increase this year. I hope that some of the points made by other noble Lords about the delay and distress caused by the way that the increase is calculated can be looked at. I hope that we will look again at how some of the most vulnerable underprivileged families, and particularly children, are faring under the current benefits scheme.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his introduction and all noble Lords who have spoken. As my noble friend Lady Lister said, it is nice to have the band back together again. I also find it very moving that people turn out every year to try to make the case and to bear witness to the struggles that so many people around the country have and why it matters.

I will talk briefly on each order in turn. If we come back again, I notice that it has been nice to have had the Minister here previously as a Whip, although if one can be here one year as a Whip and the next year as the Minister, perhaps his noble friend to his right should be thinking very carefully about what might happen next year if he is not very good indeed.

I shall run though each order in turn, although probably not in the order the Minister did. GMP is really interesting. As we have heard, this gives schemes the percentage by which they have to uprate GMP between 1988 and 1997. I have a really simple question: can the Minister remind the Committee why the cap was set at 3%? That makes me Clive Myrie to the contestant behind me, my noble friend Lord Davies, who asked a much better question, so I will simply wait and let the Minister answer that instead. It will be very interesting.

Is there any reason why the Minister thinks we ought to worry when the gap is so big between the cap at 3% and the prevailing inflation rate at 10.1%? Is there any cause for concern there?

The only other point I want to raise on GMP is that some people with a large GMP lost out when the new state pension was introduced in 2016. The Minister will be aware that the Work and Pensions Select Committee called on the Government to identify those who were affected, calculate their losses and get in touch with them. Obviously that did not happen. The Parliamentary and Health Service Ombudsman reported on two cases of people who complained that they had not been given enough information by the DWP about the fact that the reforms could leave them worse off. The ombudsman said that the DWP failed to provide clear and accurate information despite being warned, with the result that some people were not aware that they might need to make alternative provision for their retirement. The ombudsman recommended that the DWP should

“review and report back its learning from our investigations. In particular”,

it should improve its communications on this issue. In response, in August 2021, I think, the DWP finally published a fact sheet on GMP and the effect of the new state pension. I then read with fascination the growing correspondence between the Select Committee and successive Pension Ministers, driven, I think, by correspondence from members of the public who were concerned about the effect. For the record, I commend the Committee for its detailed and tenacious work on this frankly very technical issue.

I shall ask the Minister two brief questions. First, now that there is a fact sheet, what is DWP doing to draw its existence to the attention of those who might need to know about it? Secondly, can the Minister tell the Committee how many people have successfully applied, or indeed applied at all, for any compensation since the PHSO report?

I now turn briefly to the draft Benefit Cap (Annual Limit) (Amendment) Regulations because the case has been made so well by my colleagues that there is not much left for me to say. As we have heard, the Secretary of State is required to review the level every five years. My noble friend Lady Lister and the noble Baroness, Lady Janke, have set out the background to how we got here and the consequences of the failure to uprate it hitherto. I remember the then Secretary of State Iain Duncan Smith saying very clearly that the original rationale for the policy was to ensure that people who were unemployed and on benefits would not receive more than average earnings. We had a debate at the time because, for example, child benefit also goes to those on average earnings. However, even allowing that for the moment, the problem with that argument is that the level of the cap was not in any way tied to average earnings. Having brought it in in 2013, not only was it not increased but it was reduced in 2016 and never increased after that until these regulations. Is the Government’s rationale for the benefit cap still related to average earnings? If not, what is the rationale, so we can assess how effectively the policy is achieving its objective? Has DWP made any assessment of the impact of the benefit cap on child poverty? If not, would it like to?

I turn now to the draft Social Security Benefits Up-rating Order, which we debate every year, except during the years of shame. It is worth reminding ourselves for the record that before 2010 annual uprating of benefits by at least inflation was the norm for both Conservative and Labour Governments. However, between 2013 and 2020 this was abandoned, with most working-age benefits and tax credits being either frozen or uprated by just 1%. The reason I continue to repeat this, even in a year when they are being uprated, is because that means that most benefits and credits have fallen in value even before the latest cost of living crisis. Many noble Lords have expressed relief that, finally, having debated the alternatives and being subject to pressure from around both Houses and outside, the Government decided to raise benefits and tax credits in line with CPI last September.

However, as my noble friend Lady Lister said, this is not an act of unusual generosity. It is simply a decision not to cut the value of benefits in the middle of a cost of living crisis, which should be a pretty obvious decision. To do the alternative would have consequences that we have heard about already. Of course, as noble Lords have pointed out, the reference point is the 12-month CPI rate in the previous September. When inflation is as volatile as it is now, that gap can cause real hardship. If we go back a year to last April, inflation was nearly 10%, but benefits were uprated that month by just 3.1%—the CPI rate from the previous September, and that loss of value is baked in because it is the basis for this year’s increase.

The result of this is that the value of out-of-work benefits is at a historically low level, as my noble friend Lady Lister said. As the noble Baroness, Lady Janke, said, it is no wonder that food bank use is at a new high. Trussell Trust food banks gave out 1.3 million parcels between April and September, which is up by one-third on the year before and includes an estimated 328,000 people using its food banks for the first time, so new people are being drawn into the need to use food banks to survive. The Trussell Trust thinks that this winter will prove to be its busiest ever. I want to put something in particular to the Minister. The Prime Minister told the Liaison Committee in December that he very much hoped that food bank demand would be lower by the end of this Parliament. Is there any plan in DWP to take action to make sure that this will actually come to pass?

Although most working-age benefits will be increased by 10.1%, there will be no change to two crucial benefits: first, the childcare element of universal credit and tax credits and, secondly, the local housing allowance, as mentioned by my noble friend Lady Lister and the noble Baroness, Lady Janke. Why are those two not being uprated? Is the presumption that they are not affected by inflation in the same way? Childcare is in crisis. We know that employers are desperate for staff and parents cannot afford childcare. I notice that we keep seeing media briefings appearing about possible benefit crackdowns and how people need to work more hours. Can the Minister confirm whether it is the case now that the childcare support in universal credit is sufficient to cover part-time hours only because the cap in it has been frozen for so long? Of course, that is not to mention the fact that for parents to get that help, they have to pay the money up front for childcare and then claim it back. That makes it a non-starter for most parents who are poor enough to be entitled to universal credit in the first place in the middle of a cost of living crisis. Can the Minister tell us what the plan is to address this?

Universal Credit (Exceptions to the Requirement not to be receiving Education) (Amendment) Regulations 2021

Debate between Baroness Janke and Baroness Sherlock

Monday 13th December 2021 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Storey, for introducing his Motion and all noble Lords who have spoken. I reassure the noble Baroness, Lady Bennett, that while this may not be a large debate, with my help it may be slightly longer than it might otherwise have been. The reason for that is, as the noble Lord, Lord Storey, said, that this is a very complicated area. I want to set out what I think has got us to this point and invite the Minister to correct me if I am wrong, because it is important that we get that down on the record. I am grateful to the Secondary Legislation Scrutiny Committee, which noted that the concept behind these regulations had been “poorly explained” in the first version of the Explanatory Memorandum, and asked the DWP to reissue it. That has helped us.

The rules specify that, to claim universal credit, there is a broad condition that you must not be receiving education—but Regulation 14 of the Universal Credit Regulations 2013 says that there are some exceptions. They include young people living independently doing A-levels or the like; those who are responsible for kids; and some disabled people who get attendance allowance, disability allowance or PIP and have limited capacity for work. All Regulation 14 does is remove the blanket requirement that you must not be in education to get universal credit. It does not stop people in those groups from facing conditionality, but disabled people in that third category—with limited capability for work—were able to get universal credit while studying.

However, there was a judicial review last year, instigated by two disabled students on the grounds that, before rejecting their claims for universal credit, the DWP should have determined whether they had limited capability for work. In the end, the Government did not defend the claim. What they did instead was to introduce the Universal Credit (Exceptions to the Requirement not to be receiving Education) (Amendment) Regulations 2020. Those regulations amended the 2013 regulations so that a disabled student would be eligible for universal credit only if they were classed as having limited capability for work before they started education; or if they were already in education before they made a claim for universal credit. What is happening here is that the DWP now says that those regulations were deficient because they permitted a workaround: namely, that if a disabled student makes an application for new-style ESA—contribution-based employment and support allowance—and supply medical evidence, they will automatically be referred for a work capability assessment, which could lead to them being classed as having limited capability for work. They would then be entitled to claim universal credit. The Government therefore brought forward these regulations to stop that workaround as well.

I have some questions. First, will the Minister say whether that is an accurate description of where we are? He can nod if he wishes. I can see him nodding: that might be a gesture of trust on his part, but I definitely note his nodding. I am sure the cavalry will arrive to reverse that nod should it prove to be an ambitious and premature nod.

Secondly, can we establish the size of the problem we are dealing with in this workaround? How many such cases were there last year or in the latest period for which figures are available? I tried to find this out myself, but the data do not seem to record student status. However, using age as a proxy—it is not a bad proxy for this population—I went poking around on the data on Stat-Xplore, and I think that the answer is that there are very few cases indeed. If I read it correctly, in the quarter to May, there were only 39 people aged 21 or under in the support group of new-style ESA. Can the Minister say if that seems right?

Thirdly, what is the effect of this latest tightening? If I have understood it aright, these latest regulations mean that no disabled student will be entitled to claim universal credit unless they have been deemed to have limited capability for work before they start their course of education. Even someone in that tiny category—someone who claimed new-style ESA and was classed as having limited capability for work—would be entitled to universal credit only if that happened before they started their course.

What will that mean? Like other noble Lords, I have had representations, particularly about the position of young disabled people. The Child Poverty Action Group says that the current workaround is used by some young people who are over 19 but still in basic education. Their parents can get support and universal credit for them, but that stops at the September following their 19th birthday. If this workaround is removed, the only option for these young disabled people would be to apply for universal credit in their own right. There is then a risk that they would not be allowed to carry on with their studies, unless their work coach decides that carrying on studying, even in basic education, is their best chance of getting a job.

The charity Contact says that some young people who have reached the September after their 19th birthday and are on non-traditional courses, such as life skills, may be able to convince their work coach to treat them as though they are not receiving education and thus get universal credit. However, Contact is worried that those who have not reached the milestone of the September after their 19th birthday are now at risk of being shut out of universal credit altogether. Can the Minister say what will happen to them?

I will give one brief example from Contact of a woman called Doreen, who said:

“Our grandson is 21 and lives with us, his grandparents. Our grandson is in full time education at an autism specialized college with an EHC plan. He’s been getting Universal Credit since he was 17. That’s his financial income to enable him to stay in full time education to get the qualifications he needs for possible future employment. Without Universal Credit he wouldn’t have been able to continue his education at his specialist college.”


Can the Minister say what would happen to someone in those circumstances?

CPAG warns that the regulations could stop disabled people moving from college or school to university. It takes four months on average to get a work capability assessment, so how could people do that before starting university? Or is the intention that they should not, because they should rely on loans and grants?

Finally, if the Government are legislating again simply to deliver on the original policy intention of the 2013 regulations, which they say they are, why has it taken eight years, judicial review and three sets of legislation to get to that point? How confident is the Minister that we will not be back with a fourth set of regulations next year? There is of course another JR making its way through the system at the moment.

This is the latest iteration of an issue that crops up often, most recently during the passage of the Skills and Post-16 Education Bill, which a number of us were involved with. It is a tension between the DWP and DfE as to who supports certain categories of people going through education. Here, the DWP is claiming that disabled students are just like any other students and that, if they want to go into education, they should get grants, loans and bursaries like any other student.

However, as CPAG points out, many students now have to work to supplement any grants or loans they receive to get through their education. Many disabled students would find it much less easy to work alongside their course. Treating people the same does not always leave us in the best position.

Given the state of the disability employment gap, surely we all want to do everything we can to help disabled people get the education they need to get on and get a job in the future. The noble Baroness, Lady Bennett, is absolutely right: we should invest in all our people to enable them to fulfil their potential.

I think the Minister is unlikely to accept the Motion in the name of the noble Lord, Lord Storey, given that it is a fatal Motion and the convention in this House is that we do not support Motions that will annul regulations. However, it is crucial that he looks carefully at the issues facing disabled students. Will the Government agree to review all the support provided to them, to see whether it really is possible for them to move on to education and develop as they should? I look forward to his reply.

[Baroness Janke (LD)]

My Lords, we have heard from noble Lords today that a great injustice is about to be perpetrated on young people with disabilities. As we have heard, many young people still in education will be ineligible for universal credit unless they have had a work assessment and been assessed as having limited capability for work

“before they started receiving education”.

The noble Baroness, Lady Sherlock, has explained the background to this sad state of affairs.

Disability Rights says:

“The new regulations are really bad news for disabled students … Unfortunately they put a legal stamp on what has been the actual operational practice of the DWP that places them in a Catch 22 position.”


The position has been to reject a universal credit claim made by a full-time disabled student who was not previously in receipt of educational support allowance

“on the grounds that they have not been determined to have a LCW”,

or limited capability for work, and then for

“the Universal Credit section to refuse to arrange a work capability assessment to determine if they have a LCW … Even though they may clearly meet the Universal Credit means test if found to have a LCW.”

As the noble Baroness, Lady Sherlock, explained, the way round this is for the disabled student to make a claim for contribution based on new-style ESA, for which they will not meet the national insurance contributions entitlement conditions, having not been in employment and therefore not contributing.

Despite this, the student will get a work capability assessment but, as Disability Rights explains only

“if a LCW decision is made can any means tested Universal Credit entitlement be awarded.”

It continues:

“This torturous route is absurd. Worse, it undoubtedly has the effect of deterring Universal Credit claims by some disabled students. Some will not know to claim NSESA ‘workaround’ … and some may even not pursue their higher education course.”


This is a significant change from the previous system in which disabled people in receipt of disability living allowance or personal independence payments were automatically determined as having limited capability for work.

Furthermore, as others have said, these new regulations were not subject to review by the Social Security Advisory Committee or any equality impact assessment before being issued. As Disability Rights notes, they

“cast doubt on the Government’s commitment to ensure disabled people’s access to education. In addition, they will in turn cast doubt as to the Government’s commitment to increase the number of disabled people in employment.”

It is worth reminding ourselves of extracts from Shaping Future Support: The Health and Disability Green Paper, in which the Government say:

“Our first priority is to support disabled people and people with health conditions to live independently and achieve their potential. This means that people should be provided with the right amount of financial support, given the opportunity to make their own choices, have equal access to services, be supported to access healthcare and treatment, and be able to participate in society on the same basis as other people.”


How can these new regulations support these objectives and why were they not scrutinised by the Social Security Advisory Committee? Why was no equalities impact assessment carried out? I hope the Minister can help us with answers to these questions.

This change will severely affect disabled young people who reach the age of 19 before finishing non-advanced education and those continuing to higher education. Many young people with impairments will take much longer to finish their full-time education and will be forced to make an impossible choice between trying to continue without access to the benefits they need or dropping out of education and losing out on future employment opportunities. The reality is that these regulations will force young disabled people who cannot continue their education without financial support to drop out. This also affects families and care givers, as their care responsibilities increase if the disabled young person they care for is not in education.

As many noble Lords have said, this measure is unfair and unjust, and it severely restricts the life chances for young people with disabilities. I hope, although I am not confident, that the Government will think again. We need to give a fair deal to young disabled people who only want the chance to achieve their potential, as the Government say, with the right amount of financial support, as the Government say, and to participate in society on the same basis as other people—as the Government say. I am not confident, but I hope the House will support this Motion.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Janke and Baroness Sherlock

3rd reading & Report stage & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 17th November 2020 Lords Chamber

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the Minister for her remarks. As I made clear at the outset, we support the Bill, while deeply regretting the economic circumstances that have made it necessary. During its brief passage, some important issues have been raised. I hope the Government have taken note of those issues and will apply themselves to them in the near future. During our consideration of the Bill many noble Lords raised the question of support for those of working age. I keep hoping that we will hear some good news on that—especially on universal credit and other working-age benefits—soon.

We have had some really interesting discussions about the difficult and growing issue of pensioner poverty. We now have 1.9 million pensioners living in relative poverty and the Government need to develop and implement a strategy for tackling pensioner poverty. That will require a proactive plan to boost take-up of pension credit. I regret that I was unable to attend the rearranged meeting with the Pensions Minister on this matter but I look forward to hearing what went on there. At the moment, four out of 10 eligible pensioners do not claim it, so they are missing out on that and on other benefits, including, increasingly, free TV licences for the over-75s.

Then there is the fact that the triple lock does not apply to pension credit. The Minister said in her opening remarks that there will be an uprating to the standard minimum guarantee in pension credit but I did not catch whether she said by how much. In Committee she told my noble friend Lady Drake that she would write to her to tell her whether the Government intend to pass through the triple-lock payment to pensioners on pension credit—which is of course crucial, because if they do not, the richest pensioners will get the full benefit of the triple lock but the poorest will not because it will be clawed back from pension credit. Can she clarify the position on that? If she has written to my noble friend Lady Drake, I apologise; I have missed the letter.

I am very glad that we were able to get the Bill through the House in good time. It was a pleasure to welcome two maiden speakers in Committee: the noble Lord, Lord Field of Birkenhead, and the noble Baroness, Lady Stuart of Edgbaston. I would like to express my thanks to the Minister and her officials who have met us and answered questions; it is a very co-operative department and I am very grateful. I thank colleagues across the House for their thoughtful contributions; Dan Stevens of our staff team for his support with the Bill; and the House officials and the broadcast team.

Pensioners deserve to spend their retirement in financial security. This Bill will enable the Government to fulfil their manifesto commitment to apply the triple lock to the state pension and we have been pleased to support it.

[Baroness Janke (LD) [V]]

My Lords, I, too, thank noble Lords for their contributions to our deliberations on the Bill, and I thank the Minister and her team for providing us with advice and information to help us understand the issues raised by the Bill. We very much welcome the Government’s commitment to the triple lock and hope that it will not be abandoned as a short-term political fix in the face of the economic difficulties that are no doubt ahead of us. I am sure that the Government have listened to the issues raised in the debate, and I hope they will look again at the position of overseas pensioners whose pensions are worth so little despite how much they have contributed over the years. It seems that the Government have committed to consider the numbers of pensioners living in poverty. I draw attention particularly to the plight of many women who have received very unfair treatment and unfair settlements on their pensions.

I welcome the work that is being started on pension credit and I believe that the Government are committed to ensuring that those who need it most are, in fact, able and willing to claim it. I thank the Minister again for the meeting yesterday, which I thought was extremely positive, and I look forward to working with her on that project. I also thank my colleagues for supporting the Bill and Sarah Pughe in the Liberal Democrats office, who supported us so ably. So saying, I give my support to the Bill.

Supporting Disadvantaged Families

Debate between Baroness Janke and Baroness Sherlock

Thursday 12th November 2020 Lords Chamber

[Baroness Sherlock (Lab) [V]]

We welcome the contents of this Statement. Any measures that can help to stop children going hungry over the tough months ahead must always be welcomed.

However, before I ask questions, let us look briefly at the context. I must say that I was a wee bit disappointed that the Statement made no reference anywhere to Marcus Rashford, even though everybody knows that this initiative is a response to his campaign for free school meals in the holidays. Can I invite the Minister to go on the record and pay tribute to Mr Rashford, as I do? It is quite an achievement on his part not only to force this Prime Minister to move but also to get the whole country talking about child poverty. Indeed, it is quite chastening for those of us who spend most of our lives talking about the issue, but it is a remarkable achievement. If I am ever lucky enough to meet Marcus Rashford, after congratulating him, I think I might see if I can focus his attention next on the five-week wait or maybe the savings gateway and universal credit.

Although I am thrilled at his success, I wish that the Government had handled this better. There was a deeply depressing debate in the other place where hapless Tory MPs were forced to defend the Government’s stance on this, not just by disputing the Rashford free school meals plan but essentially by claiming that there is not an underlying problem. We need to be very careful how we talk about these matters because, as the national debate raged on, we started to hear parents once again being blamed for their poverty, with the old chestnuts appearing that if you give money or vouchers to poor parents, they will only spend them on drugs. Yet, out of this mess came one of the most heartwarming things I have seen this year, when the backlash against the Government’s position prompted a huge number of hospitality businesses, many of them badly hit by the pandemic, to offer to feed children free of charge during half-term when the Government did not.

Enough of that: I am delighted that the Government have now come round and agreed to take some action. It would be helpful if the Minister could give the House some more details on the package. First, we are told that there will be a new Covid winter grant scheme, which will give £170 million to English local authorities and, unlike previous grants,

“will carry conditions and reporting requirements to ensure that the scheme is focused on providing support with food and utility costs to vulnerable families with children who are affected by the pandemic.”

Are the Government going to define “vulnerable”? Is it about income or is it more than that? Does struggling to make ends meet count as vulnerable? Plenty of people who would not previously have classed themselves as vulnerable are losing their jobs or facing cuts in income as a result of this pandemic. Who is going to be covered by this scheme?

It is good to know that the Government will roll out holiday activities and food programmes across the country from Easter next year. Does that mean that the scheme will be in place for the next Easter holidays, in 2021, or will it kick in after Easter? We are told that the scheme is being extended to “all disadvantaged children”. Can the Minister tell the House what a disadvantaged child is for these purposes? Is it the same as a vulnerable child for the purposes of the Covid winter grant scheme? Are these separate schemes aimed at the same families or are they different schemes aimed at different families, and is there an overlap? Finally, we are told that the value of Healthy Start vouchers will be raised from £3.10 to £4.25 but not until next April. Can the Minister explain why it is not happening straightaway, given the amount of need in the country right now?

There is a much deeper issue here. During the campaign on extending free school meals, I was horrified to hear suggestions that the blame lay with parents for failing to feed their kids properly when the basic underlying problem is that too many parents just do not have enough money to make ends meet. Every week, more people are losing hours or losing jobs and they are finding that, despite years of paying in, our social security system simply does not provide them with enough to live on. However, every time we mention this, Ministers simply repeat that they have given £9 billion et cetera. That is great—I am really glad that they have invested this money—but it is clearly not adequate to the scale of the problem. Food bank use is skyrocketing and people are falling into debt. That highlights that there just is not enough money in the system.

At the start of this crisis, we asked for five urgent steps to be taken. The first was an extension of the £20 increase in universal credit to legacy benefits. I urge the Minister again, as I did this morning, to explain to the House why the Government will not do that—that is, tell us not just that they will not but why. Why is it okay to give the money to universal credit recipients but refuse it to JSA and ESA? Secondly, we asked them to scrap the savings threshold on universal credit so that we were not punishing savers. Thirdly, we asked for an end to the terrible two-child limit. Fourthly, we asked for a suspension of the benefit cap so that everyone can get the extra money that the Government have announced. Fifthly, we asked them to turn the universal credit advance into a grant rather than a loan to address the five-week wait in the short term.

If Ministers had taken those basic steps, we would have fewer parents struggling to feed their children in the first place. I therefore urge the Minister to ask her colleagues to change their minds once more, to implement these five changes and then to take a longer look at why our social security system is failing to stop so many of our fellow citizens falling into poverty. This pandemic has already done enough damage to our children. Let us all work together to do what we can to stop it getting any worse.

[Baroness Janke (LD) [V]]

My Lords, we welcome these measures and recognise the Government’s intentions to support disadvantaged families through winter and beyond—

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Janke and Baroness Sherlock

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 27th October 2020 Lords Chamber

[Baroness Janke (LD) [V]]

My Lords, I too welcome the amendment of my noble friend Lord Addington. We are all interested to hear the Government’s thinking, particularly on the future of the triple lock. I am sure that we all welcome their commitment to the undertakings in their manifesto and are pleased to see the Bill. However, in recent months, a lot of doubt have been shared regarding the triple lock’s future. Some people have said to me that there seems to be an almost systematic picking at the seams of the triple lock. With the Chancellor under pressure due to the economic implications of the pandemic, we would like some reassurance from the Minister that the Government are committed to ensuring that the pension keeps its value.

The state pension is particularly important to give the poorest pensioners confidence. Everyone is suffering under the pandemic but there is no doubt that the poorest are suffering worst. We would like to know the Government’s thinking for the future. Will there be a commitment in the Bill to keep the 2.5%, as well as transparency and clarity to reassure those pensioners who are particularly dependent on the state pension? I look forward to the Minister’s reply.

[Baroness Sherlock (Lab) [V]]

My Lords, I am grateful to the noble Lord, Lord Addington, for explaining what his amendment would do, and to other noble Lords who have spoken in pursuit of clarity. The noble Baroness, Lady Altmann, raised the issue of the uprating of pension credit and the standard minimum guarantee in particular. I will return to that in more detail when I move my Amendment 3 shortly.

The Bill is permissive rather than prescriptive. The Explanatory Notes say that it will

“allow the Government to meet its commitment to the Triple Lock.”

At Second Reading, the Minister was invited by many noble Lords to tell the House if it was indeed the Government’s intention to increase the state pension in line with the triple lock, but she simply repeated the formula that the Bill

“will allow the Government to maintain their manifesto commitment to the triple lock.”—[Official Report, 13/10/20; col. GC 309.]

Had she been able to go further, she might have obviated the need for much of the debate we are having at the moment.

The Minister was also asked at Second Reading whether the Government intended to stand by the manifesto commitment to the triple lock for the rest of this Parliament. As the noble Baroness, Lady Janke, pointed out, there have been various rumours and briefings swirling around that have cast some doubt on the future of the triple lock. But answer came there none.

I realise that the Minister is in a difficult position. She probably thinks it unreasonable of us to ask her to answer these questions because the decisions are not hers, but she speaks for the Government in this House. We are being asked to fast-track this Bill to enable the governing party to fulfil a manifesto commitment, although the Government will not tell us whether they are going to fulfil it. It does not seem unreasonable to ask for a bit more clarity. I look forward to her reply.

Immigration and Social Security Co-ordination (EU Withdrawal) Bill

Debate between Baroness Janke and Baroness Sherlock

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 16th September 2020 Lords Chamber

[Baroness Janke (LD) [V]]

My Lords, I will speak in support of Amendments 84 and 85 and of Clause 5 being deleted from the Bill. As other noble Lords have said, the amendments in this group seek to restrain the Government in their objective of transferring wide-scale powers to Ministers to take action that could have a major impact on the lives of UK citizens living in EEA countries and on EEA citizens living in the UK.

Amendment 84 would restrict the Secretary of State’s power to make regulations to the powers listed in Clause 5(3). These powers enable the social security co-ordination regulations to be amended and policy to be changed. The social security regulations co-ordinate access to social security for people moving between EEA countries and they are widely accepted and understood across those countries. They ensure clarity about where payments and contributions are made. These payments are essential income to UK citizens living in the EEA and EEA citizens living in the UK. As other noble Lords have said, it is important for all citizens to have confidence in the continuation of these complex regulations and in the withdrawal agreement itself. The Government’s explanation is that the clause allows them to make regulations to implement any new policies regarding co-ordination of social security. The clause is intended to be used to implement new policies, subject to the outcome of future negotiations with the EU. As the Delegated Powers and Regulatory Reform Committee has warned, there has been no adequate justification for the transfer of these powers to Ministers. The Constitution Committee also recommends that Clause 5 be deleted from the Bill and says:

“Any further modification of the Social Security Co-ordination Regulations that might be required could be achieved using the power in section 8 of the European Union (Withdrawal) Act 2018.”


Amendment 85 seeks to preclude the power of the Secretary of State to distinguish between recipients of pensions and other benefits on the basis of their nationality or residence in a particular state. This takes no account of other circumstances and would lead to arbitrary and unjust decisions that would have a huge impact on the lives of the people they relate to.

Further, I wish to oppose that Clause 5 stand part of the Bill. If successful, this would see Clause 5 as an inappropriate delegation of power, as recommended by the DPRR Committee in its 46th report. How can it be right or proper that the regulations governing the crucial payment of social security, such as disability benefit and unemployment benefit, to large numbers of people can be radically changed, even to their extreme disadvantage, without consultation, without proper scrutiny and with little accountability? This is a licence to penalise large numbers of citizens arbitrarily without proper justification or democratic safeguards. If this clause goes through, public consideration of changes to the regulations will be so limited that the people affected will have no opportunity to question or make representations as to their impact.

I support these amendments and strongly oppose Clause 5 standing part of the Bill. As the Delegated Powers and Regulatory Reform Committee said:

“We remain of the view, expressed in our earlier Report, that the Government have provided an inadequate justification for a wholesale transfer to Ministers of power to legislate in a field that could have a major impact on large numbers of UK citizens resident in EEA countries, and EEA citizens resident in the UK, who currently rely upon reciprocal arrangements.”


I support my noble friend Lady Ludford in saying that such changes should be the subject of primary legislation and not as is suggested in Clause 5.

[Baroness Sherlock (Lab) [V]]

My Lords, it is good to have a chance to explore the social security part of this Bill at last. I will speak to the Clause 5 stand part amendment, to which I have attached my name, and to my Amendment 91, to which my noble friend Lord Rosser has added his name and which would sunset the powers in Clause 5(1).

There are two minimum steps that Ministers need to take if they want to keep Clause 5 as it stands. First, they must address all the issues raised by the Delegated Powers Committee. Secondly, they must be clear with Parliament about the state of social security co-ordination after transition. The DPRRC’s 22nd report highlights matters that Ministers have failed to explain, such as how the Clause 5 powers fits with provisions in the 2018 and 2020 Acts;

“how the Government might seek to use the power; why it includes a power to amend primary legislation and retained direct EU legislation other than the SSC Regulations; why the power is not time limited; why Ministers will have no duty to consult before making regulations.”

We have received some very helpful briefings so that we can explore these issues, but we need to get some answers on the record. My understanding of what we have heard is that the Clause 5 power enables government to make policy changes, whereas the power under the withdrawal Act is used to fix deficiencies, and the delegated power in the 2020 Act relates only to ensuring that the provisions of the withdrawal agreement can work. Can the Minister tell the Committee whether that understanding is right? Can she confirm that the Clause 5 power cannot be used to make changes for those people who fall within the scope of the withdrawal agreement?

On the breadth of the powers, I think that the Government’s defence is that the powers in Clause 5(1) can be used only to modify retained direct EU legislation as specified in Clause 5(2), and that Clause 5(3) says that the powers in Clause 5(1) can be used for various purposes—but, again, only in relation to the retained EU law specified in Clause 5(2). In any case, they say that the illustrative draft regulations under Clause 5 repeal all the instruments specified in Clause 5(2), so there is nothing for this power to apply to. Is the Minister telling the Committee that it is the Government’s intention to repeal all the instruments specified in Clause 5(2)? Are there any circumstances in which those regulations would not be repealed?

In terms of how the Government will use it, my understanding is that the Clause 5 power will be used to repeal provisions not covered by any deal; that is what is suggested by the illustrative draft regulations. We have been told that the power may therefore be used only once. In that case, what is the problem with time-limiting the power, as Amendment 91 proposes? Again, it has been suggested that you need to hold on to it—for example, in case a new state joins the EU, but this seems highly disproportionate. If that were the only issue, I am sure that Ministers could find a much more targeted way to deal with it—and they will have plenty of time to work it out because new states do not just join the EU overnight. So, is there any other reason why the Government need to retain the Clause 5 powers beyond 12 months other than to deal with a new state joining the EU? If it is just that, what other mechanisms did they look at for dealing with that?

Pension Schemes Bill [HL]

Debate between Baroness Janke and Baroness Sherlock

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 30th June 2020 Lords Chamber

[Baroness Janke [V]]

My Lords, I support Amendment 52. I also support the other two amendments tabled by the noble Baroness, Lady Altmann, as a result of the matter being much debated in Committee, I am very grateful to the noble Baroness, Lady Drake, for her clear analysis of the issues involved.

Many would say that pensions dashboards are long overdue. They enable people to plan their future finances taking account of existing pensions, and to take a long-term view of future financial provision. However, the challenge of producing a dashboard that will adequately cover the complexity of the pensions landscape should not be underestimated. We are talking about millions of people, and the enormous number of lost pensions that we hear about shows both the need for and scope of the task. Given the level of complexity, the scope for scams and fraudulent actions increases and it is therefore essential that members of the public are sufficiently protected.

As many noble Lords have said, the vulnerability of many people means that they can be much more susceptible to scams and bogus claims and apparently attractive offers from the commercial sector. The additional factor that digital literacy and access can be problematic for some people also needs to be considered. That and the lack of sound advice can lead to bad decisions and life-changing, irreversible mistakes, as we heard from the noble Baronesses, Lady Drake and Lady Altmann, in Committee.

Pensions is a complicated subject; it is not easily accessible by everyone. Lack of engagement, which has already been talked about, is a result and, as the noble Baroness, Lady Drake, said, people often take the line of least resistance and take wrong decisions that they are unable to change. I hear the arguments made by the noble Baroness, Lady Neville-Rolfe, about innovation. Certainly, it is an important factor, but I feel that the protection of pension holders is more important. Measures to provide full protection should be the subject of further primary legislation rather than secondary legislation, as indicated in the Bill.

[Baroness Sherlock [V]]

My Lords, I will deal first with the data issues. There are known to be problems with data quality in many pension schemes that need to be addressed. The regulator has rightly been pushing trustees to improve the accuracy of their data and to evidence that they are doing so. But as we move to a world of pension dashboards, with a consumer’s savings all being displayed in one place and the expectation that behaviour will be influenced by it, data accuracy and standards are key, so I hope the Minister will take to heart the issues raised today.

On transactions, done well, a pensions dashboard can be a really useful service, helping savers to locate lost pots and see all their different pensions in one place—state and private—and work out if they are saving enough for retirement. But there are big risks, especially because the Bill leaves almost every aspect of the dashboard service wide open. In Committee, we tried to put some boundaries around this. We tabled an amendment to insist that there must be a public dashboard from the outset, and I am delighted to see the government amendment now requiring that. Another of our amendments required the FCA to regulate the provision of dashboard services; again, Ministers confirmed that that would happen. Another of our amendments proposed that using the dashboard to see your own data must be free, and Ministers confirmed that it would be. We have come a long way and I am really grateful to the Government for engaging with our concerns.

But two important issues are still outstanding, and they are addressed in this and the next group. As my noble friend Lady Drake explained so well, Amendment 52 would stop delegated powers in the Bill being used to authorise commercial dashboards to engage in transactions. We simply believe that the risks of this are such that Ministers should have to come back to Parliament and seek further authorisation before going down that road. Remember, we still do not know how many dashboards there will be, who will run them or what information can be put on them. We do not know where liability will lie for each link in the chain or how consumers will be compensated if they lose out. We do know that there will be a public dashboard and that the Government want commercial dashboards running alongside it from the start.

But let us think for a moment. If a company cannot charge to look at a dashboard, why would they create one, unless they can profit from it in some other way? How might that be? Could a company show a consumer their data and say, “Look, you’ve got all these different pots. Wouldn’t it be tidier if your brought it all over into this fund here, which my firm happens to run?” Could they fund it by taking advertising? Could a consumer log on to a commercial dashboard and see an advert popping up, inviting her to connect with an adviser, or saying, “Have you ever thought about equity release?” There are even risks just in presenting data in a way that could privilege some kinds of assets over others, depending on who is running the scheme.

This is a risky market—a point that my noble friend made very well. Those who sell complicated pension products generally know and understand a lot more about them than those who buy them. Let us remember the history of financial services mis-selling—from personal pensions through to endowment mortgages, to the PPI scandal, as a result of which, firms are likely to end up repaying up to £50 billion to consumers. The average pension pot is worth rather more than the average PPI policy. The dashboard project could extend to some 22 million people. It is a powerful tool.

Covid-19: Department for Work and Pensions Update

Debate between Baroness Janke and Baroness Sherlock

Tuesday 5th May 2020 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Statement. I want to record our thanks to each member of staff working on the DWP front line for all they are doing during this crisis to process the unprecedented volume of claims that have been made.

I want to say at the outset how much we welcome each of the steps that the Government have taken to improve the welfare state to deal with this crisis, but the social security system that we had going into the crisis was a safety net with holes in it. I am glad that the Government have recognised the need to start shoring some of those up.

Labour has five proposals to enable the social security system better to respond to the crisis. The first is to increase legacy benefits. The Government have increased universal credit by £20 a week for this year, but those on legacy benefits such as JSA or ESA do not get that increase. More than 100 charities point out that this discriminates against disabled people. Can the Minister explain that?

The second proposal is to suspend the benefit cap. The House of Commons Library estimates that at least 18,000 extra families in Great Britain could be hit by the cap as a result of the increase in UC and housing help. That would take the total number of families affected this year to over 100,000. The cap affects not just big families; half of those 18,000 families have only one or two dependent children. More often, it is the high cost of housing. Ministers normally say, “You can escape the benefit cap by getting a job, working more hours or moving to cheaper housing”, but all those are impossible during this crisis. No wonder so many bodies, from the IFS to CPAG, are calling for the cap to be suspended. Will the Government do that now?

Thirdly, suspend the savings limit in universal credit. Anyone with savings of over £16,000 is banned from claiming UC altogether. That does not happen in tax credits, where the means test simply takes account of any income from savings. Why should someone who has put money aside for a housing deposit or is saving for a substantial item be completely frozen out of universal credit? They paid into the system when they were able to work, so should it not be there for them now? Will Ministers review those savings limits?

I have a brief question. Can the Minister tell me whether this would affect someone who is self-employed and who had a viable business that has collapsed since the Covid crisis? The Government have put back the date for paying tax. If you have that money sitting in your bank account, would it be treated as savings income and thus stop you getting universal credit?

Fourthly, remove the two-child limit. Ministers argued for this policy on the grounds that those who receive social security benefits should have to make the same family choices as those who do not. That was always a deeply flawed argument, but this crisis shows the absurdity of it. Some 2 million people have applied for benefits over the past few weeks. Do we really think that when, three years ago, some of them decided to have another child, they could possibly have imagined that a global pandemic would virtually shut down our economy? The policy is pushing ever more children deeper into poverty, so will Ministers please think about it again?

Fifthly, end the five-week wait for universal credit. I know that I go on about this a lot, but it is simply wrong that people have to wait five weeks for their money, or else they take a loan that will be deducted from future payments that will leave them with less to live on each month than the basic universal credit amount. That five-week wait has been the single biggest driver of housing arrears, short-term debt and food bank usage, so will Ministers act now either to end it or give grants instead of loans?

I want now to ask some specific questions. First, given that the noble Baroness, Lady Scott, is standing in for the Minister, I recognise that she may need to write to me in response to some of them. However, I would really appreciate some specific answers. First, she mentioned that the Government have now allowed maternity and adoption pay and maternity allowance to be calculated on salary rather than on furlough pay, which may be lower. Will they now backdate payments to women who have already had their payments calculated on their furlough pay rather than their full salary?

Secondly, universal credit disregards statutory maternity pay when it applies to the work allowance, but it does not do that for maternity allowance, which is the benefit paid to many low-income women. This means that a low-paid pregnant woman could be as much as £4,000 a year worse off. Will the Minister correct this?

The Minister went on to mention how people are struggling to get through to the DWP on the phone. She talked about the “Don’t call us, we’ll call you” approach? Can she explain that? If I want to call the DWP and I cannot get through, can I leave a message and will someone call me back? If so, on average how long will it take—or is it simply that the department will call me only if it wants information? People need help in the first place, and they ought to be able to get through.

This crisis has revealed two things. It has shown how unjust and unequal our labour market is, and it has also shown how our basic welfare state has been quite significantly eroded in recent years.

The Secretary of State told the Commons yesterday that universal credit was only there to help the poorest in society. I do not think that it is giving enough help to them. Our welfare state is meant to provide a safety net to support any of us who are hit by a crisis. Like the NHS, it is a means of pooling our risk because we do not know who will be affected by disability, unemployment or bereavement, or indeed by a virus. How many of the millions of people who have claimed universal credit of late ever thought that they would need help from the welfare state? We all know of people who have been paying in all their lives expressing shock at how low SSP is and how low benefits are, probably because they have heard Ministers claim for so long that the benefits system is far too generous—even though we know how really ungenerous it is for many people.

As the Government plan for the recovery and not just the immediate response, is the department looking at all of the recent learning and thinking about how best to use the system to address the inequality, poverty and insecurity which have been revealed by this crisis? I look forward to the Minister’s reply.

[Baroness Janke (LD)]

I thank the Minister for repeating the Statement and I would also like to thank the staff of the DWP for their commitment to answering and addressing the huge additional workload which is the result of the current crisis. What is clear is that, despite their hard work, there are now many people in desperate straits who are struggling to survive. Many people whose income has dropped to zero have been trying desperately to access money through universal credit to meet their daily needs. They cannot wait the required five weeks when they have no money and a family to feed. Equally, people with no income cannot be expected to pay back any emergency advance.

The two-child limit hits families with children hard and is a major factor in causing child poverty, which is now at 4 million and thus one of the highest rates of childhood poverty in Europe. The benefit cap seriously hits families with children, in particular the poorest. As the noble Baroness, Lady Sherlock, has just said, it affects people on low pay with insecure jobs. It is a major problem in the current situation for people who are on such very low incomes.

I would ask the Government to consider taking the following crisis measures to help those who are most in need. First, the initial universal credit payment should be sent after five days rather than five weeks, and the clawing back of UC advance payments should be suspended. The Government should suspend the two-child limit and the benefit cap for at least three months, subject to a further review. They should suspend all benefit sanctions and introduce an additional dedicated hardship fund via local authorities for people in urgent need who cannot access funds through universal credit. I look forward to the Minister’s response.

Guaranteed Minimum Pensions Increase Order 2020

Debate between Baroness Janke and Baroness Sherlock

Tuesday 3rd March 2020 Grand Committee

[Baroness Janke (LD)]

My Lords, I congratulate the noble Baroness, Lady Lister, on her speech and I very much support what she said. I shall just raise a few issues that I hope the Minister will agree to consider.

After four years of the freeze in working benefits and £36 billion in cuts over that period, we of course welcome the end of the benefits freeze. However, as the noble Baroness said, the current increase does absolutely nothing to address the shortfall that has built up over the four years, especially since prices are rising for essentials such as food and children’s clothes. The benefit freeze has hit families very hard, particularly children. There are 4.1 million children in poverty—and they are in deeper poverty, further below the poverty line. The average family in poverty is now £73 per week below the poverty line, compared with £56 per week in 2012-13. Unless the Government act to restore the real value of financial support for families, things will continue to get worse. Without policy change, child poverty is projected to rise to 4.8 million, or 37% of all children, by 2023.

I hope the Government will consider what they can do to restore the situation. I know the Minister has a great interest in the welfare of children and I feel sure she will do everything she can. I hope the Government will consider ending the two-child limit on tax credits and universal credit. Continuing with these will push a further 300,000 into poverty. Will they consider lifting the benefit cap to move 100,000 children out of “deep poverty”—those living on 50% of median income before housing costs? Another suggestion is that adding £5 to child benefit would start to restore key benefits to all children.

We welcome the pensions uprating, which is particularly important to women as they live longer than men and often live alone. The pensions situation in the UK shows very significant differences between men and women, and I hope that the Minister will consider what can be done. I know we will be coming back to this issue when we discuss the Pensions Bill tomorrow, but the position as far as women are concerned needs to be looked at.

I very much welcome the fact that state pensions have become more inclusive and redistributive for those who take family caring breaks. However, for those who retired before April 2016, because the full amount of the basic pension remains nearly £40 a week below the threshold for means-tested single-rate pension credit, this improvement has had a limited effect on gender equality. As far as private pensions are concerned, among 65 to 74 year-olds the median private pension wealth is £164,700 for men and £17,300 for women. Among women aged 55 to 59, total personal income is two-thirds the income of men in the same age bracket.

Self-employment, zero-hours contracts and other precarious forms of employment have been increasing and these inequalities restrict the ability to pay either national insurance or private pension contributions. Even when incomes are similar, women’s pension saving is less than men’s, with too many women relying on their partner’s pensions. Many women are excluded from auto-enrolment because they are in low-paid jobs. Extending the coverage of auto-enrolment by reducing the earnings threshold to the national insurance primary threshold would bring 480,000 people, mostly women, into pension saving and would help to improve the gender pensions gap.

I hope that the Minister will consider what has been said. We take the opportunity to raise this issue while we can, despite the fact that nothing can be done about it today. Perhaps reforms to pensions such as revisiting care credits, a reduction in the number of qualifying national insurance years for the state pension and reducing or, indeed, removing the earnings limit so that low-paid workers, particularly women, would be eligible for private pension schemes are issues she might consider in due course.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing these orders and thank all noble Lords who have spoken. First, I will speak briefly about the Guaranteed Minimum Pensions Increase Order before moving on to the Social Security Benefits Up-rating Order.

As we heard, the Guaranteed Minimum Pensions Increase Order 2020 provides for defined benefit occupational schemes that were contracted out to increase by 1.7% members’ guaranteed minimum pensions that accrued between 1988 and 1997, in line with CPI. This is a basically a routine uprating, but I want to take the opportunity to raise a specific issue. When the GMP order 2019 was debated on 14 February of that year, my noble friend Lady Drake invited the then Minister to give an update on the Government’s proposed guidance to occupational pension schemes in the light of the Lloyds Banking Group case. As the Minister will know, that case had the effect of requiring trustees to amend their pension schemes to equalise GMP benefits. In that debate, the Minister, the noble Baroness, Lady Buscombe, said:

“My department has put forward a method that schemes can use to equalise pensions which, because of its ‘once and done’ nature, should limit costs resulting from additional administration requirements. The department will provide guidance in the near future for schemes wishing to use the method upon which the department consulted in November 2016.”—[Official Report, 14/2/19; col. 1961.]