Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025

Baroness Sherlock Excerpts

Wednesday 10th December 2025 Lords Chamber

Moved by

[Baroness Sherlock]

That the draft Regulations laid before the House on 23 October be approved.

Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 8 December.

Motion agreed.

Universal Credit: Two-child Limit

Baroness Sherlock Excerpts

Wednesday 10th December 2025 Lords Chamber

[Lord Farmer]

To ask His Majesty’s Government what assessment they have made of the impact on work incentives of lifting the two-child limit in Universal Credit.

[The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, this Government are determined to lift children out of poverty, and removing the two-child limit is the fastest and most cost-effective way to do so. The benefit cap is still in place, encouraging parents to take responsibility and work towards financial independence. Our approach balances fairness and provides a strong safety net without undermining the incentives to work.

[Lord Farmer (Con)]

My Lords, recent international evidence found that unconditional cash transfers increase fertility. Families claiming health-related benefits are not capped, so even these workless families will get UC for every child, again affecting work incentives. Research by the Institute for Fiscal Studies found that money-per-child tax credits increased births by 15% and decreased contraceptive use among beneficiaries. Have the Government assessed whether lifting the two-child limit will incentivise more births in benefit-dependent households, and whether many of the 450,000 children this measure intends to lift out of poverty would not otherwise have been born?

[Baroness Sherlock (Lab)]

My Lords, the Government have seen no evidence that the two-child limit had an impact on family size. For example, 47% of households affected by the two-child limit were not claiming universal credit when any of their children were born. In other words, things happen; people set out, they have children and something happens. Maybe someone loses their job, they are bereaved, their spouse leaves them, or they get sick and cannot work. The welfare state should be there to support people, both into work and in work, but it is also there to support them when they cannot work. We already know that some 60% of households affected by this are in work. Our strategy is to make sure we do all we can to get people into work, get them to develop in work and support them, but we are there as a safety net when they cannot do so.

[Baroness Lister of Burtersett (Lab)]

My Lords, academic research has found that the two-child limit had no positive employment effect and that parents living in poverty are pushed further from the labour market because of stress, insecurity and the sheer hard work of struggling to get by. Does my noble friend therefore agree that a decent social security system can support effective job-seeking and plays an important role in tackling child poverty, as the child poverty strategy recognised?

[Baroness Sherlock (Lab)]

My Lords, my noble friend makes a really important point about the scarring effects of poverty. Our aim is to make sure that everyone who can work, does, with all the help they need to do that. That is what this Government have been doing. We are investing heavily in childcare to make it possible to work, making sure wages pay enough so that work is a good thing, and supporting children.

We know that when children grow up in poverty, things get worse for them. They are less likely to work as adults, and they earn 25% less at the age of 30. Even if some parts of the House are not persuaded on the grounds of the importance of the individual child, this is an investment in the future of our country. No other G7 country has a policy like this and there is a reason for it. We cannot compete on the world stage, grow our economy or create prosperous futures for our kids if we do not enable them to grow up thriving and healthy.

[Lord Palmer of Childs Hill (LD)]

Does the Minister agree that this is not about getting people back to work; it is about improving living standards and making sure children are safe, and that this Question, which tries to link people getting into work with this benefit, is completely ridiculous?

[Baroness Sherlock (Lab)]

My Lords, I think I have made my views clear on the impact of this policy. It is, in essence, a failed social experiment which has been pushing 100 children a day into poverty. We simply cannot allow that to happen. We want to support families. Most parents want to work to support their kids. Already, 84% of parents are in work—that is what people do. I used to work with single parents, who would say, “Even when it’s really a struggle, I want my kids to see this is what you do when you grow up”, but many people face barriers to work, and it is our job to make that possible. If you cannot afford childcare, how can you get to work? If you are not paid enough to be able to make life even bearable, how can you do that? The social security system should be there to support those who cannot work, but for those who can, to make it possible and to help them have a decent standard of living when doing so.

[Baroness Deech (CB)]

My Lords, around £450 million is owed to the Child Maintenance Service by absent fathers and some absent mothers. Some 160,000 children would be lifted out of poverty if the defaulting parents paid what they owed to the Child Maintenance Service. Does the Minister agree that is not right for the taxpayer to pick up the burden owed by defaulting parents and that the Child Maintenance Service must get that money from the parents?

[Baroness Sherlock (Lab)]

My Lords, the great advantage is not an either/or. The wonderful thing about child maintenance is that it does not impact on somebody’s social security, so if someone is working and getting some universal credit, maintenance tops that up further. The Child Maintenance Service does an astonishing job in many, sometimes very challenging, circumstances. Here is one simple statistic: since the Child Maintenance Service was set up in 2012, it has collected 93% of all the maintenance owed, but I am sorry to say that there are some parents who simply do not want to pay for their children. The Child Maintenance Service has astonishing powers. It will go after them, and it will keep after them, but we should encourage everybody to do the right thing: pay for your children, go out there and make it possible for them to have a decent life.

[Lord Gove (Con)]

My Lords, if this policy is such a good idea, why was the Whip removed from seven Labour MPs in the other place when they voted in favour of it last year?

[Baroness Sherlock (Lab)]

My Lords, perhaps the noble Lord knows more than I do about the state of the economy that this party inherited when we came into government. We have dealt with all the challenges that his Government left behind. Chief among those was the state of—not just support for children—the welfare state. We had huge numbers of people who had been abandoned. Under the last Government, the bill went up by £88 billion. This Government came in with a budget. We invested £1.5 billion in employment support; we have reformed Motability and universal credit. We are going to make a difference. We care about children.

[Lord Winston (Lab)]

My Lords, can we come back to the original Question? We have had some very spurious statistics about fertility and contraception. Does the Minister agree that contraception has been hugely important in getting women back to work and earning money?

[Baroness Sherlock (Lab)]

I am grateful to my noble friend for calling me back to order. The availability of contraception has been transformative for women, and we should all recognise that. Being able to have control over their fertility makes an enormous difference to the choices that women make. For many of them, it means they can work and manage family size most of the time. However, we want to enable mothers and fathers both to have children and to work. That is the job of the state. Mothers should not have to choose between having kids and having a job. Families should never have to do that. The job of the state is to make both possible for the sake of those families and those children.

[Lord Londesborough (CB)]

My Lords, child poverty is undoubtedly a serious issue, and the steep drop in the number of children being born in this country is perhaps even more serious. Last week, we learned that the average cost of raising a child has now risen to £249,000, according to research by Moneyfarm, which may explain why an increasing number of working parents choose to have just one child or none at all. Down the line, this means a shrinking workforce in an ageing population. What is the Minister’s view on this?

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, the noble Lord makes a really important point, which is that we need as a country to make sure that we prioritise the cost of living and enabling people to earn enough. It should be possible to go out to work and earn enough to support your family, but that is one reason why we think it is important to invest in appropriate levels of social security. Crucially, we have to help people to develop skills. We want people to get into work, but we do not want them stuck on the lowest-paid work. We have increased the national minimum wage and invested in childcare and free school meals—we are doing all the things to make it possible to do the right thing. However, we need to go further. We need to see people in this country in higher-skilled, higher-paid jobs that will help them, grow our economy, and create opportunities for their children in due course.

[Viscount Younger of Leckie (Con)]

My Lords, can I bring the House back to the original intention behind the two-child limit? It was to make the benefits system fairer to taxpayers who support themselves and their families solely through work. It encouraged parents on benefit to make the same financial choices about family size as those not on benefits. With the Government’s poverty argument in mind, the IFS has said that reversing the two-child limit is “not a silver bullet”. It said that the benefit cap will

“wipe out the gains for some children in the … poorest families”,

as 70,000 more households are affected by the cap. Surely supporting parents into work and into quality jobs is much more important for reducing child poverty. Finally, the IFS says that raising the employment rate to 80% from the current 75% would lift up to 350,000 children out of poverty.

[Baroness Sherlock (Lab)]

My Lords, that is why the Government have set that as their target. I say to the noble Viscount that the whole point about this is that it is not a choice. It is not a question of either supporting children or helping parents to go into work. Supporting families makes work possible. Most parents want to work. Our job is to make that possible, so we have done that. We have invested in expanding free school meals to everyone on universal credit, including those in work; we have raised the national living wage, and we have put in more help for childcare—30 hours a week for parents of preschoolers—and more help for childcare in universal credit. Children deserve the best possible start in life and their parents deserve the best chance to have a decent life. We want to do both.

Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025

Baroness Sherlock Excerpts

Monday 8th December 2025 Grand Committee

Moved by

[Baroness Sherlock]

That the Grand Committee do consider the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025.

Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee

[The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I am pleased to introduce this instrument. Subject to the approval of this Committee, these regulations will be another significant step forward in the reform of our occupational pensions framework, building on the foundations laid by the Pension Schemes Act 2021 and the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022. The primary purpose of these regulations is to extend the legal framework for collective money purchase schemes—commonly known as collective defined contribution, or CDC, schemes—to allow multiple unconnected employers to participate. Until now, CDC schemes have been restricted to single employers or groups of connected employers.

I have been advised that there are two minor drafting errors in Schedule 2 to the SI as laid in draft, resulting in two cross-headings before paragraph 2 where there should be only one and a repetition of “regulation” in paragraph 2. The intention is for these to be corrected in the version that is made so that there is a single cross-heading reading “General” and a single appearance of the word “regulation” in paragraph 2. I apologise for these errors, but I assure the Committee that these corrections do not change the legal meaning of Schedule 2 in general or paragraph 2 in particular.

Before I move on to the detail of this instrument, it may be helpful if I give some context. The Pension Schemes Act 2021 provided the statutory framework for CDC schemes in the UK. The Government believe that CDC schemes have an integral role to play in addressing the challenges faced in our pensions system, so long as the guiding principle is to ensure that we protect the interests of members. Although good progress has been made, four in 10 working-age people are under-saving for their retirement. CDC schemes can help address this issue: by pooling longevity and investment risk across the membership, such schemes have the potential to target higher investment returns for their members than a DC scheme. CDC schemes also have potentially infinite investment horizons and no need to lifestyle investments, which means they can invest productively for longer. Industry modelling suggests that CDC schemes could boost retirement income by anywhere between 25% and 60%. The Committee will agree, I am sure, that if such increases in returns were realised, CDCs could really help address the issue of inadequate retirement incomes.

CDCs can support the wider economy, too. Longer investment horizons mean greater investment in vital UK infrastructure and the technologies of the future, such as renewable energy. Pooling can also shield savers from much of the uncertainty and risk faced by members of DC schemes, which is especially important as they approach retirement. CDC schemes offer members a seamless transition from saving into receiving a trustee-managed retirement income. We know that many people do not want—and, indeed, feel ill-equipped—to make complex financial decisions at retirement. Some 72% of DC members want a pension income yet 50% of pots are taken fully as cash, exposing them to individualised longevity risk. CDC schemes provide a target income for life and will target at least inflationary increases in member benefits at a scheme’s outset, helping members’ money keep pace with the cost of living through their retirement.

The Government want to ensure that as many savers as possible can take advantage of these benefits. That is why we have introduced this legislation. This instrument opens the door for broader adoption of CDCs: it will allow different, unconnected employers to participate in the same scheme, including smaller employers who lack the scale or expertise to go it alone. It also opens the door to CDC being a solution for specific sectors and for commercial schemes. For employers, the benefits are clear. Their liability is no greater than in a DC scheme, with contributions being made in the same way. Yet, with the aforementioned benefits, CDC schemes can be a valued employee benefit, allowing employers both to attract and retain talent in a competitive labour market.

I will now dive into the detail of this instrument, and there is, of necessity, plenty of detail. Despite the successful launch of the Royal Mail collective plan last year, CDC remains a relatively novel concept. It is critical that employers and their employees can have confidence in CDC pensions. The Government therefore make no apology for this instrument setting a high bar for entry. The robust authorisation and supervisory framework introduced by this legislation means employers can be confident they are joining well-run, well-governed schemes.

Part 2 of this instrument removes the exclusion in the Pension Schemes Act 2021 which limits the schemes that can be collective money purchase schemes to schemes used, or intended to be used, by single or connected employers. This allows for the creation of unconnected multiple employer schemes. Part 2 also amends the definition of a qualifying scheme, so that a broader range of organisations can set up a collective money purchase scheme. This will enable commercial organisations to establish unconnected multiple employer schemes.

A scheme applying for authorisation must satisfy the regulator that it meets the authorisation criteria. These criteria are listed in Section 9(3) of the Pension Schemes Act 2021. Part 2 amends the existing authorisation criteria in the 2021 Act and thereby creates additional criteria, specifically for unconnected multiple employer collective money purchase schemes. We have identified persons that we consider will have important roles in unconnected multiple employer CDC schemes and have brought these people within the scope of the “fit and proper persons” test, so that they are subject to appropriate scrutiny.

Regulation 10 amends the 2021 Act to require that the scheme has a single scheme proprietor meeting specific criteria and the specific requirements set out in new Section 14C of that Act. As we are seeking to extend CDC provision to unconnected multiple employer CDC schemes, we know there will be new entities involved in the operation and funding of these new types of CDC scheme. We want to ensure that any financing required to meet relevant costs is credible and realisable, so that it is available at the point of need. Therefore, the scheme proprietor’s ability to deliver such financing will need to be assessed by the regulator, both at authorisation and on an ongoing basis.

Regulation 10 of the instrument also inserts a business plan requirement under new Section 14A of the 2021 Act. The scheme proprietor would be required to prepare, maintain and submit a business plan to the regulator, which will include the key financial information for its financial sustainability assessment. The detailed content of the business plan is set out in newly inserted Schedule 1B to the 2021 Act.

These regulations will permit schemes that intend to operate on a commercial basis. This will involve acquiring new business through the promotion or marketing of their scheme. To mitigate the risk of schemes overpromising to gain a commercial advantage, or mis-selling, we are introducing a new promotion or marketing authorisation criterion for these schemes. The requirement is that no person has carried out promotion or marketing of the scheme that is unclear or misleading without rectification, and that the scheme has adequate systems and processes for ensuring that its promotion or marketing is clear and not misleading.

We also want trustees of these schemes to focus entirely on the interests of the scheme members and to have complete autonomy to do so. If the trustee were also to act as a person who promotes or markets the scheme, or as the scheme’s CFO, it would detract from that responsibility and create a clear conflict of interest. Regulation 5 makes a separation of these roles a criterion for authorisation. The Government’s intention is that running an unconnected multiple employer CDC scheme as a closed scheme should always be an option open to trustees, where it is viable to do so, and to the extent permitted under wider legislation. Regulation 5 therefore inserts a new authorisation criterion into the 2021 Act to ensure that trustees can choose this option if appropriate.

Finally, on Part 2, Regulation 6 imposes a mandatory deadline of 24 months from authorisation by which an authorised unconnected multiple employer CDC scheme must start being operated. This is to deter speculators. We want only people or organisations that are fully committed to providing well-run and soundly designed unconnected multiple employer CDC schemes to apply for authorisation.

Part 3 of this instrument supplements the meaning of “connected” in Section 49(2)(a) of the Pension Schemes Act 2021. This is relevant for determining whether a collective money purchase scheme is a single and connected employer scheme or an unconnected multiple employer scheme and therefore which of the two legislative frameworks applies to it.

--- Later in debate ---

With that, I conclude my remarks.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to the Committee for the handful of questions that has been offered up. I share with the noble Viscount, Lord Younger, disappointment that there are not hordes of colleagues here wanting to question these regulations. They are extremely important and utterly fascinating, but there is no accounting for taste—what can we say? I am very grateful to him and to my noble friend Lord Davies of Brixton for being here, asking such excellent questions and keeping me on my toes. I am going to try to work my way through them.

It is worth saying at the outset that my noble friend Lord Davies had quite a nice analogy about moving into a house. I moved house a year ago, and he is absolutely right—I now realise there should be power points in the middle of my kitchen where I actually use my devices and none of them are there. However, the reality is that there have to be some power points; some decisions have to be taken. At some point down the line, I may decide on additional power points and just have them put in. There may be new lights in the house, but we have to start off with lights, and we may add more lights later.

We have gone to considerable care to make sure that the system is set up as robustly as possible, but we will adapt and learn as we have experience from this. That is an important question, but it is one I am happy to offer reassurance on.

We think that CDCs are a type of money purchase because there is a type of money purchase benefits in the legislation. They are covered by the legislation applying to money purchase benefits and not DB benefits. I can see him shaking his head; I have failed to persuade him, but I will keep trying on subsequent questions.

My noble friend mentioned in passing that there are lots of different kinds of legislation and asked how they join up. I assure him they absolutely do join up. The Government have a vision for the pensions landscape. Most of these issues are coming in stages; for example, we have made our views known; we have had comments and clear steers from the Chancellor; we have had the pensions investment review, which set out the landscape, and as a result of that, we have the Pension Schemes Bill, which starts next week and which he and I are looking forward to so much. That will make the necessary adjustments to the landscape so that the Pensions Commission, which is doing its work on issues such as adequacy, can make sure that if savers, or indeed employers, are encouraged to invest more, or in different ways, the market is fit for it at that point.

These things do connect; I accept that they are complicated. One of the challenges is that pensions are very complicated, and there is a lot of money at stake, and therefore it matters—he raised the point about regulation—that we get that absolutely right.

My noble friend mentioned in passing the question about retirement CDCs. He will be aware the consultation has just closed and so more information on that will be coming out soon. He asked about whether CDC schemes will be captured by things such as the scale requirements in the Pension Schemes Bill. Because CDC schemes are a new and innovative development with the potential to offer improved outcomes, they will need to have a degree of scale and a long investment horizon to enable them to invest in a wider range of assets, including productive assets. It is right to give this new market the space to develop with confidence, but we are going to keep the requirements for these schemes under review as the market develops.

He asked about how the legislation will ensure fairness between members of different employers. Regulation 40 specifies that any adjustment to benefits that may need to be made must be applied to all members “without variation”. Regulation 40 also requires that benefit rates must be determined on the principle of actuarial equivalence and that, as he will of course be only too aware, is achieved when the expected accrual and expected contribution levels are equal over a period of time. That prevents new entrants unfairly subsidising existing members and avoids cross-subsidies between employers, which could, for example, happen if one employer had a younger workforce than another.

Both he and the noble Viscount, Lord Younger, asked about communication to members of CDC schemes. The regulations require schemes to inform members regularly and clearly that the rate or amount of benefits provided under the scheme is not guaranteed and can fluctuate. This includes providing this information at joining, annually and in retirement. CDC schemes are also required to have adequate systems and processes for communicating with members and must provide information in their authorisation application about monitoring them to help ensure the systems and processes remain effective. To ensure transparency, key scheme information must be made available on a publicly available website, including the scheme rules, a summary of the scheme design and information about the most recent actuarial evaluation of the scheme.

My noble friend commented about whether the regulation is all too burdensome or too hard to join, but as in DC schemes, members will bear all the risks of the CDC scheme in accumulation and decumulation. So, we think it is only right that we make sure these schemes are well-designed, well-run and resourced properly so that employers, members and the Pensions Regulator can have confidence in the scheme at authorisation and on an ongoing basis.

My noble friend raised the question of commercial interests. I know he was not necessarily challenging there being commercial providers; it was more about the language and how that is understood. We have worked quite hard to make sure that the authorisation criteria require a clear separation between the trustees and those funding the scheme, promoting the scheme and trying to make a profit out of it. The promotion and marketing authorisation criterion mitigates against the risk of overpromising to gain a competitive advantage, as I said in my opening speech. Although my noble friend does not like the term “proprietor”, the financial sustainability requirements are designed to prevent that person passing on to members the costs of setting up and operating the scheme.

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[Viscount Younger of Leckie (Con)]

I thank the noble Baroness for spelling out the code of practice; we look forward to seeing that. I remain quite surprised that the Pensions Commission will finally report as late as spring 2027. I cannot believe it is going to take that long, despite the fact that pensions are generally known to be quite technical and detailed. I am not expecting the noble Baroness to comment on that, but I just wanted to put it on record. The noble Baroness did not answer my question about surpluses, and I am very happy to be written to about that. Perhaps the main question I wanted to ask, which the noble Baroness also did not answer, is about membership take-up at Royal Mail. What was the rate of take-up for the Royal Mail scheme?

[Baroness Sherlock (Lab)]

On the question of surpluses, the regulators will ensure that a scheme has sufficient financial resources through a range of key mechanisms centred around the role of a scheme proprietor, robust planning and ongoing regulatory oversight. The Pensions Regulator must be satisfied that the scheme is financially sustainable before it can be authorised. That would obviously involve a rigorous assessment of its expected costs, income and the strategy for recovering any shortfalls. The schemes accounts have to be submitted to the regulator on an ongoing basis to give transparency. I am not sure that that does answer his question on surpluses, but if I have an answer, I will write to him.

On the membership take-up of the Royal Mail scheme, 110,000 people have joined and around 700 have opted out. I hope that answers that question, and that I have answered all the other questions. I thank both noble Lords for their helpful contributions to this debate. This instrument will allow CDC schemes to play an integral role in the future of pensions in this country, affording potentially millions of savers access to the benefits they offer. With that, I commend this instrument to the Committee, and I beg to move.

Motion agreed.

Carer’s Allowance: Overpayments

Baroness Sherlock Excerpts

Tuesday 2nd December 2025 Lords Chamber

[Baroness Pitkeathley (Lab)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I acknowledge the Government’s positive response to the recommendations in the independent review.

[The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the Government accept that between 2015 and summer 2025, the guidance on whether and how to average earnings in carer’s allowance did not accurately reflect the statutory position. We will therefore be reassessing earnings-related overpayment cases that occurred between 2015 and September 2025. Where it is found that overpayments were lower than originally calculated, carers will have their debts reduced or cancelled entirely, with the Government refunding any money already paid. We will set out plans for doing this in early 2026.

[Baroness Pitkeathley (Lab)]

I thank my noble friend for that response and for her patience at my persistence. After the problems for carers were ignored for so long by the previous Administration, and after systems did not respond to the clear evidence about the distress caused, carers naturally have a high level of mistrust about how their benefits are administered. Does my noble friend agree that rebuilding that trust must be a priority and that any changes must be completely transparent, with carers consulted and informed at every step of the way?

[Baroness Sherlock (Lab)]

I thank my noble friend for that question and for her work. I pay tribute to the millions of unpaid carers across this country; the Government greatly value them and the work they do. Carers are also fortunate to have some excellent advocates, including many Members of this House—and I think we would probably all acknowledge that supreme among them is my noble friend, whose work in this area has for so very long been recognised by us all.

Carer’s allowance provides support to around 1 million people and, for most of those who receive it, the experience is positive and the rules are clear. But my noble friend is right that, when we came into government, it became clear that there were far too many cases where working carers had been left with large overpayments to be repaid. That is why we commissioned an independent review of earnings-related overpayments. We are very grateful to Liz Sayce for her recommendations, but also to her advisory panel and especially to the unpaid carers who shared their experiences to make that right. We have accepted or partially accepted 38 of the 40 recommendations in the report, we have begun working on many of them already, and we will set out the details in the new year. We will be very clear and transparent: many of the recommendations regard reviewing how we write to people, how we make things clear and how transparent we are. Above all, when the Government make mistakes, they should acknowledge them and put them right, and that is what we are doing.

[Lord Young of Cookham (Con)]

When we discussed this matter a few days ago, I raised with the Minister the issue of the so-called cliff edge, whereby if you earn 1p over the earnings limit you lose the whole allowance. The Minister replied with characteristic sympathy, but she said that modernising the system would take “some years”. The independent review referred to by the noble Baroness, Lady Pitkeathley, takes a totally different view. It says that addressing the impact of a cliff edge is urgent, and asks the department to be

“creative in its thinking about options for short term changes to remove or reduce this impact more quickly”.

Does the Minister accept that recommendation?

[Baroness Sherlock (Lab)]

My Lords, what I said last time we discussed this is absolutely the Government’s position. For the reasons I explained then—I will not go back into them again—carer’s allowance is traditionally not a classic means-tested benefit, so we want to find ways to tackle this. It will take time, because everything about the system has been built in ways that were designed around a simple, non-means-tested benefit. However, we have already done significant things to make a difference; one of the most important of those was to raise the level at which people could earn by the largest cash amount since the benefit was created. This means that if you earn less than 16 hours a week at the national living wage, there is no problem at all. We have also gone through to make sure that most of the ways in which people have fallen foul of the system can be corrected. For example, we have taken action on guidance and communications, and we are now checking automatically all the data that comes in directly from HMRC. We are doing all the things that can be done in the short term.

Much as I do not want to say this, the noble Lord will have to be patient. To be able to remove a cliff edge, the first requirement is to automate earnings coming from HMRC, which cannot be done overnight. We have already begun the work and we are looking for all possible workarounds in the short term. This problem has been around for a long time and no one paid any attention. We spotted it, we are taking action and we will sort it.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for that. The Sayce review identified the problem. I am reminded, sadly, of Lewis Carroll’s “jam tomorrow”, a promised reward that is often postponed. I am not really encouraged by the point that it will be dealt with in 2026. I ask the Minister to be more definite and give us a date in 2026 when this will happen, so that it is not, in Lewis Carroll’s words, “jam tomorrow”.

[Baroness Sherlock (Lab)]

My Lords, if I could give the noble Lord a precise date on which all the computer systems and all the systems will have changed, I would be glad to do it. Let me put this in context: we estimate that about 15% of people who get a carer’s allowance payment are also in paid work and 90% of people who reported earnings did so without difficulty, so we are talking about a very important but specific subset of people, most of whom had fluctuating earnings, which this is designed to address. The biggest challenge in the short term is to make sure that we have clear guidance, we communicate with people, they know what to tell us and we are able to manage that. There is a big prize at the end as we modernise all DWP systems to get this right. A lot of the improvements will be made by really old-fashioned analogue systems—by making sure that we have the right information, communicate well with carers and make it as easy as possible to get the information. Those recommendations may not be exciting, but they actually make a lot of difference.

[Baroness Stedman-Scott (Con)]

My Lords, given that some 185,000 unpaid carers will now have their carer’s allowance overpayments reviewed following the independent report, will the Minister set out how these carers will be notified of the reassessment process and what steps the Government will take to ensure that communications are clear, timely and accessible?

[Baroness Sherlock (Lab)]

I am grateful to the noble Baroness for her important question. Our data suggests that there are around 212,000 overpayment cases in the relevant period, between 2015 and September 2025. We will set out the details in the new year, but we plan to review every case to understand where mistakes were made. Cases that were affected specifically by our unclear guidance will have their overpayment reassessed. If the review confirms that the money was not due, we will make an appropriate refund or reduction. I should say that if it were to result in a higher overpayment, we will not ask anyone for additional money—I just want to reassure anyone who is listening. If the review confirms that the person still owes money, we will give the usual support to make sure that it can be repaid appropriately, because it is not to do with this question.

I want to reassure those who are listening that nobody needs to get in touch with DWP at the moment. Our intention is to work through the cases. We have data for most of these cases and we will contact people proactively. We will set out in the new year how that process will work and what we will do in any remaining cases, but no one needs to get in touch. Please do not phone us at the moment.

[Baroness Tyler of Enfield (LD)]

My Lords, I welcome the independent review and the Government’s response, but what will happen to those carers who have already been convicted of benefit fraud as a result of the mistakes that have been made? Why did the Government decide not to offer compensation to those who have already been so badly affected and whose lives have, frankly, been made a nightmare by the mistakes?

[Baroness Sherlock (Lab)]

My Lords, I said that we will set out in the new year the details of how the reassessment is going to work. We will be working our way through all the cases. I do not know how many, if any, of the cases resulted in prosecution. We will work through what will happen in cases where people, for example, either had overpayments or may have had a civil penalty or even possibly another form of administrative penalty. On compensation, it is not unusual for there to be reassessment exercises when guidance or other systems are found to be wrong, and DWP does not routinely make special payments under those circumstances. The noble Baroness may not welcome it, but I am very grateful that carers’ organisations have really welcomed the fact that we have taken the trouble to work out through an independent review precisely what went wrong and are putting it right. I am delighted that we are able to do it, and I look forward to our being able to right those wrongs.

[Lord Laming (CB)]

My Lords, I hope I am right in thinking that the whole House is in support of what the Minister is trying to achieve, so well done. Can she extend this just a little further and help carers feel that they are recognised and listened to? Some of the points that I receive are of course about the financial arrangements, but more than that, many carers continue to feel aggrieved that their work and their worth are not recognised and valued.

[Baroness Sherlock (Lab)]

I am grateful to the noble Lord, who makes a really important point. One of the good things about the Sayce review is that it involved carers directly and listened to them, and by listening to them was able to get to the bottom of what had gone wrong. My colleague Minister Timms, who is the Minister in charge of this, has carefully gone out to meet carers and is going to do so again. I know that he will want to hear not just what went wrong here but how people’s lives are impacted by the care that they give. How do the Government make their lives easier or harder, and how can we learn from that?

Finally, since the noble Lord prompts me to do the right thing always, I say once again that the whole House will want to join me in thanking carers for the service they give to those they love. Many in this House will have experience of either giving or receiving care, possibly both. It is an act of love and it is the Government’s job to support it and not get in the way, and we pledge to try to do that.

Carer’s Allowance: Overpayments Review

Baroness Sherlock Excerpts

Tuesday 18th November 2025 Lords Chamber

[Baroness Pitkeathley]

To ask His Majesty’s Government when they plan to publish the final report of the Independent Review into Carer’s Allowance overpayments.

[The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the Government would like to thank Liz Sayce for the work and insights that went into the independent review of earnings-related overpayments of carer’s allowance. We are carefully considering the findings of the review and will publish the report and our response by the end of this year. We have already taken steps to improve carer’s allowance, including implementing the highest-ever increase to the earnings limit.

[Baroness Pitkeathley (Lab)]

I thank my noble friend for that response. I trust that I can feel hopeful about it and that, when the government response comes, it will be both positive and compassionate. I hope she will agree that the most important thing we have to avoid in future is prosecution of carers and the great distress caused to them by inadvertently going over the earnings limit when claiming carer’s allowance. The Government have pledged to increase the earnings limit and to keep it pegged to the national living wage. Can my noble friend confirm that this will happen from next year?

[Baroness Sherlock (Lab)]

My Lords, I am grateful for my noble friend’s patience; I am afraid that I must ask her to be patient for just a little longer. On the important question of earnings-related overpayments, we are very conscious that some carers found this extremely difficult—hence the need for the report. As I said, we have committed to keeping the weekly carer’s allowance earnings limit pegged to 16 hours of work a week at the national living wage level. That meant that, last April, there was a record jump in the earnings limit from £151 a week to £196 a week. We will announce the new earnings limit from next April in the next few weeks. I hope the House appreciates how difficult this has been but also that we are determined to get to the bottom of it. Carer’s allowance is an unusual benefit: if you earn £1 below the threshold, you get the lot; if you earn £1 over it, you get nothing. It has taken quite some work, but we hope the report will be out very soon.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for that reassurance, and we will of course wait for the independent review. In the meantime, what steps are the Government taking to ensure that carers are not unfairly penalised for minor or unintentional breaches of earnings rules? Will they consider writing off historical overpayments where department error is a significant factor?

[Baroness Sherlock (Lab)]

My Lords, I am afraid the noble Lord will also have to be patient for just a little longer to hear what the Government will do in response to this. It was a very detailed report of over 100 pages, with lots of detailed recommendations; we have been through it in an equally detailed manner and will publish a proper response very shortly. In the meantime, the Government have done a number of things to make a difference. For example, we have already improved guidance to help staff make judgments about the way they treat overpayments in earnings. The crucial thing, which my noble friend just asked about, is that increasing the earnings limit by so much will mean that a lot of people will not be caught by this issue at all and, by the end of this decade, another 60,000 people will be able to claim carer’s allowance. We have already taken significant steps to improve things and will do more in the months ahead, but for the details I am afraid he must wait for the response to the report.

[Lord Young of Cookham (Con)]

My Lords, further to the reply the Minister gave a few moments ago, why does the carer’s allowance, unlike other benefits, have a so-called cliff edge, where if you earn £1 over you lose all the allowance? Surely there should be a taper, as with other benefits, to avoid some of the problems which the noble Baroness, Lady Pitkeathley, has raised.

[Baroness Sherlock (Lab)]

The issue is long-standing. The real difference is that carer’s allowance, unlike universal credit, for example, is not actually means-tested. It is a benefit which is there to recognise that somebody may not be able to work, or not as much, because they are caring. The requirements are that you must be providing care for 35 hours a week to someone in receipt of a relevant DWP benefit. You must also not be in gainful employment, which we class as being 16 hours a week at the national living wage, and you must not be a full-time student. It is an individual benefit. For example, a woman in a household with no independent income of her own but with income in the household can still claim carer’s allowance.

Having said all of that, we would like to look at the way this works. Unlike universal credit, which was built with a taper in mind and automatic earnings from HMRC, carer’s allowance had none of that, either in the systems, the IT or anything else. Therefore, we have begun to look at other ways to automate certain kinds of earnings coming over from HMRC and what it would take to do a taper, but I do not want to raise expectations too quickly. This is a significant piece of work to modernise the system, which will take some years—but we are looking at it.

[Lord Laming (CB)]

My Lords, in the preparation of this report, could the opportunity be taken to pay a very warm and well-deserved tribute to carers for what they do? As a society, we should always indicate how indebted we are to the people who care for other people with very special needs.

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[Baroness Sherlock (Lab)]

I am so grateful to the noble Lord—trust him to say the thing I should have said right at the outset, but I am very grateful to him for raising it. With all of his experience, he has seen this close-up. As he knows, anyone who has worked in professional social care knows just how much we all depend on the tier of unpaid carers who make all of this possible. I am told that 20 November is Carers Rights Day, so I take this opportunity to pay tribute to all of the unpaid carers who work so hard, day in, day out, to look after not only themselves but the people they care for. The whole of society depends on them. I thank the noble Lord for that very helpful nudge, and I am very pleased to pay tribute to them.

[Lord Sahota (Lab)]

My Lords, since the Government halted the recruitment of overseas care workers in July 2025, around 40,000 visa holders who came here in good faith to work in the care sector remain unemployed. What specific steps are the Government taking to support them and to ensure they are able to find suitable jobs in the care industry?

[Baroness Sherlock (Lab)]

My Lords, the care route admitted more than 150,000 workers in three years. There have been changes to the Immigration Rules, but that will not prevent those who want to from building a career in the sector, because there is a transition period until July 2028, which allows, for example, in-country applications from people who came in by other visa routes. This means that care providers could recruit graduates, for example, or people who come in other ways.

My noble friend is absolutely right that, on 1 July, we laid changes to the Immigration Rules, which included closing the social care visa route to overseas recruitment. That said, there remain significant numbers of international care workers who are looking for work in the UK who have not had the chance to support the system as they wanted. New measures have already come into effect which require care providers in England to prioritise recruiting international care workers who are already in the UK and require new employment.

More generally, DWP is doing a lot to try and encourage people into social care. We are working with adult social care bodies in developing recruitment events for the sector to encourage people into it. We want people who are committed professionals and who want to work in the sector, and we will do what we can to encourage them.

[Viscount Younger of Leckie (Con)]

My Lords, it is a pretty sobering statistic that 150,000 children provide more than 50 hours of care a week. What is being done in schools to understand who these pupils are and to give them the optimum support as they undertake their studies?

[Baroness Sherlock (Lab)]

The noble Viscount raises a very important point. Certainly, I have met with organisations over the years that work with young carers. Schools are becoming increasingly aware of these pressures. Good schools with good pastoral care systems are identifying them and making sure both that these young carers get the support they need and that they themselves are aware of broader issues in the home of which other authorities might need to know. The noble Viscount will know that this does not stop at 18, and there are issues for young adult carers who want to carry on and complete their studies. Fortunately, if somebody is doing less than 21 hours a week of supervised study, they can still claim carer’s allowance, but we are looking at how we can best identify and support young carers to enable them to combine their study with their caring. We want to make sure that their childhood is not ruined and that young adults have a chance to make a life for themselves as well as caring for those whom they love.

[Baroness Lister of Burtersett (Lab)]

My Lords, the level of carer’s allowance, understandably, was not part of the terms of reference of the review, but its very low level, relative to other similar benefits, contributes to the disproportionate risk of poverty faced by carers. Is this something that the Government might look at in the future?

[Baroness Sherlock (Lab)]

I will say to my noble friend that one of the differences, as I began to explain to the noble Lord, Lord Young of Cookham, is that carer’s allowance is not a means-tested benefit. If someone is on a low income and is doing some caring, they can also apply for a means-tested benefit, such as universal credit or, if they are older, pension credit. Although they cannot usually get both of those benefits, if they do get one of those benefits, they can get an extra £2,400 a year in universal credit or pension credit to acknowledge that caring. Having said that, the Government are determined to make sure that this maintains its value and is increased by CPI every year, and new rates for 2026 will be announced in the next few weeks. The Government are spending a record £4.5 billion this year on supporting a million carers through carer’s allowance.

[Baroness Fraser of Craigmaddie (Con)]

My Lords, as the noble Lord, Lord Laming, reminded us, unpaid carers do a challenging, varied and extremely difficult job, but they do it invisibly. What are the Government doing to ensure that the visibility of unpaid carers is heightened, and that, whether they are in DWP or the health and care services, those providing complex support to this invisible and important population are seen and are supported?

[Baroness Sherlock (Lab)]

The noble Baroness raises a very important question; I am not surprised, given her charity work, that she is aware of this and the role of carers. Let me mention a couple of quick things. What DWP and other parts of government do is support those events which highlight them. For example, as I am sure she knows, Carers Week was back in June and Carers Rights Day is on Thursday, and the departments have been involved in those, trying to highlight the importance of this and engage with people. For example, tomorrow night Carers UK is holding a reception, and I know that my right honourable friend Sir Stephen Timms, who is a Minister in my department, and Minister Kate Dearden from DBT, are both going to that reception to mark it. The noble Baroness raises a really important point. Hopefully, even our having this conversation will help to raise awareness of that.

Jobs Market

Baroness Sherlock Excerpts

Thursday 13th November 2025 Lords Chamber

[Lord Hunt of Wirral]

To ask His Majesty’s Government what assessment they have made of the jobs market, and of the implications for the wider economy.

[The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, despite Tuesday’s unemployment figures, there is positive information on the labour market. However, the latest figures show why we are right to focus on supporting people into work with our Get Britain Working plan, which includes modernisation of jobcentres, tackling economic inactivity due to ill health and delivering our youth guarantee.

[Lord Hunt of Wirral (Con)]

My Lords, there are now nearly 2 million unemployed people on this Government’s watch and the number is rising month by month since the introduction of the penal national insurance job tax and now the threat of first-day unfair dismissal rights under the Employment Rights Bill. Will the Minister listen to business, listen to the Resolution Foundation, listen to Tony Blair and listen to this House when it debates this issue on Monday? Will she undertake to persuade her colleagues that this Budget must have measures that inspire business to give people the dignity of work? Otherwise, the message will be what I said in my maiden speech 50 years ago: “Labour isn’t working”. It was not working then, and it is not working now.

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[Baroness Sherlock (Lab)]

My Lords, I regret that I was not here to hear the noble Lord’s maiden speech 50 years ago, but it is interesting that his message has not changed in the intervening years. Let me give him a few thoughts. First, he should look at what is happening underneath the employment figures and around the world. Let me point a few things out to him. Over the last year, more than 329,000 people have moved into work. In the first half of this year, the UK was the fastest-growing economy in the G7. We have the third-highest employment rate in the G7—it is above the G7 average. Over the most recent quarter, the number of people claiming unemployment benefits fell by 35,000. Those people in work are doing well. Let me give the noble Lord one final stat: since July 2024, real wages have risen more than they did in the first 10 years of the previous Government. I celebrate that.

[Lord St John of Bletso (CB)]

My Lords, can the Minister outline what assessment has been made of the dual impact of artificial intelligence on the UK job market, in both the potential for job displacement in some sectors and the creation of new roles? What is the Government’s strategy to manage this transition and equip the British workforce with the skills to drive the new AI economy?

[Baroness Sherlock (Lab)]

This is a really great question that is obsessing most government departments and most employers, as the noble Lord will know. I think the impact depends on the sector and on the individual job, but the evidence is quite clear, which is that, across the piece, it is better for businesses to embrace AI than not to. The biggest risk to our country is in not embracing artificial intelligence—if we do not take the opportunities it offers.

The World Economic Forum has forecast that AI will create 170 million new jobs globally over the next five years and displace 90 million. We will find that there are jobs out there, but they will be different. In our country, we have to make sure that we get those good jobs in the UK. What we are doing as a Government is analysing that very carefully and supporting businesses and individuals to make sure they have the skills they need to move on to the next area. We have reformed skills; we are bringing skills into DWP for many young people; we have a brand-new skills academy; we are looking at developing apprenticeships and we are focusing on supporting education to give young people the skills they need. There will be jobs there in the future; we just want to make sure our people get them.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for her statistics, but the latest ONS figures show unemployment has risen from 4.8% to 5%—the highest level for four years. On that basis, can the Minister share concern that the UK’s sluggish productivity growth and skills shortages are still holding back economic recovery? What further measures are being considered to invest in adult skills and retraining? We will keep coming back to this. I thank the Minister for what she has said, but I would like a bit more information.

[Baroness Sherlock (Lab)]

On the unemployment figures, different things are going on under the surface if one digs down into the figures, which I am sure the noble Lord has done. For example, he may be aware that two things are going on. On the quarter increases and on the unemployment level, a chunk of that is driven by young people aged 16 to 24, including those in full-time education. Crucially, falling inactivity has contributed to increase in unemployment. We are tackling people who are economically inactive, but as people return to the labour market, they move from the figures of economic inactivity into the figures for unemployment. One thing that has happened is that the significant rise in economic inactivity down to ill health has been flattened, and that is really significant.

I would love to talk to the noble Lord at a greater length about skills. As he now knows, I have the great joy that my noble friend Lady Smith, who is now a Minister not only in DfE but in DWP, because she is the Minister for Skills, is joining up the two departments.

[The Lord Privy Seal (Baroness Smith of Basildon) (Lab)]

The other one.

[Baroness Sherlock (Lab)]

Yes, I was going to say the less important one, but I will get in trouble any which way I do this.

We are joining up with DfE to invest heavily in skills. We have new qualifications and new apprenticeships coming online and investment in skills strategies. A huge amount is going on—more than I can say at the Dispatch Box—but I would love to talk to the noble Lord more about this.

[Lord Woodley (Lab)]

My Lords, the Government have given notice that they will stop the employee car ownership scheme, ECOS, in the British car industry. That will reduce production by at least 80,000 units and cost 5,000 jobs. Does the Minister agree that it is time to re-evaluate this proposal?

[Baroness Sherlock (Lab)]

My Lords, I do not often say it, but I know absolutely nothing about that, so I will take it back to my department and somebody will write to the noble Lord.

[Lord Bailey of Paddington (Con)]

My Lords, 111,000 fewer young people are employed than at the beginning of the year. With the rise in NI and the rise in minimum wage, many employers say that they cannot afford to employ young people. What work are the Government doing to make sure that our young people have a future in employment and not on welfare?

[Baroness Sherlock (Lab)]

I am grateful for that question; I know that it is something that the noble Lord cares very much about. We are doing a lot for young people. This is what is so exciting about what is happening. We have a youth guarantee, but my boss as Secretary of State has also made it clear that if an eligible young person has been on universal credit for 18 months, we will create a guaranteed job for them to support them in getting back into a job and transitioning into work. We need to move to a point where every young person out there is either earning, learning or preparing themselves to do one or the other. I am particularly worried about the growing number of young people who are not in education, employment or training, particularly on health grounds or because for some reason they are outside the labour market altogether. The noble Lord may have heard that my Secretary of State has asked Alan Milburn to look specifically at an inquiry to find out what is going on with those young people. We are already doing huge amounts in this area, but we need to address work specifically on that. I am looking forward to finding out what he has to say.

[Lord Tyrie (Non-Afl)]

Has the Secretary of State commissioned an internal report on the effect of the national insurance change on unemployment, and have they passed that information to the Treasury?

[Baroness Sherlock (Lab)]

My Lords, the Government did an impact assessment at the time and acknowledged that there might be an impact on labour supply when they made changes to the national insurance regime. Obviously, what happens in the new Budget I know nothing about and it will come forward. What we have done is work very closely with employers. We know that employers are out there and want to take on people, and they want to support particularly people who are not in the labour market. Our job is to help them in doing that, and we are determined to do so.

[Lord McNicol of West Kilbride (Lab)]

My Lords, I bring to the House my registered interest—I chair the Nuclear Industry Association. We had the recent announcement of the SMR, the small modular reactor, the Rolls-Royce build, going to Wylfa in Wales. Will the Minister join me in welcoming those highly skilled, well-paid and very often trade-unionised jobs being brought to the shores of the UK?

[Baroness Sherlock (Lab)]

I am delighted to welcome that. It was a really exciting announcement, and the Government are committed to investing in new high-quality, highly skilled jobs. We want to be a country that brings inward investment in, trains people up, gets them into good jobs and keeps them there. That is a good example.

[Baroness Stedman-Scott (Con)]

My Lords, we are losing around 5,000 people a day from the labour market on to benefits. What is the department’s latest projection for the number of people expected to flow on to out-of-work and health-related benefits over the next 12 to 24 months? What are the main drivers behind that projection? Will the Government publish the underlying assumptions of the quarterly progress data so that your Lordships can track whether the interventions that the noble Baroness refers to are working?

[Baroness Sherlock (Lab)]

My Lords, we have made clear what our ambitions are with Get Britain Working and that we will have metrics and publish regular data on them. One thing I want to take the opportunity to say at the Dispatch Box is that I have seen headlines this week suggesting that large numbers of people are flowing on to universal credit, as though this was a reason they were flowing out of work. I know the noble Baroness knows this and she is far too smart to raise it at the Dispatch Box, but I remind the House that the key reason for that is that the previous Government decided to close the legacy benefits and move anyone on to universal credit. For example, 800,000 people have left old benefits and made a claim to universal credit. I would encourage noble Lords, if they see those kinds of headlines, to think twice.

Public Authorities (Fraud, Error and Recovery) Bill

Baroness Sherlock Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 11th November 2025 Lords Chamber

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

My Lords, I have already spoken to Motion B. I beg to move.

Motion B agreed.

Motion C

[Baroness Sherlock]

Moved by

That this House do not insist on its Amendment 43, to which the Commons have disagreed for their Reason 43A.

43A: Because it is not appropriate to make further provision about reviews relating to eligibility verification measures.

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[The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I will also speak to Motions E and F, with the leave of the House. I thank the noble Lord, Lord Vaux, for his continued constructive engagement on these issues. I hope that today we will reach a resolution with the amendments in lieu and assurances that I provide.

I start with Motion E and Lords Amendment 84 on the treatment of information obtained using an eligibility verification notice, or EVN. As drafted, this amendment carries three key risks: first, it risks DWP not being able to use EVM information properly, even in those cases where it might be a strong indicator of potential fraud; secondly, it risks legislating for a person’s state of mind; and thirdly, it risks undermining the existing public law principle that staff at DWP take decisions on behalf of the Secretary of State. Government Amendments 84A and 84B in lieu are therefore presented as a substitute. These amendments address those risks, build on the amendments I tabled on Report and reflect the Government’s stated policy intent throughout; namely, that EVM information considered in isolation cannot constitute reasonable grounds for suspicion or indicate wrongdoing.

These amendments focus on the actions which DWP staff must take following receipt of EVM information and clarify that where DWP has received it, staff must also have regard to all other relevant information held before taking further action. This approach would, first, require an authorised officer to consider all information held which is relevant to the question of whether to issue an information notice under new Section 109BZA of the Social Security Administration Act 1992, as well as the relevant EVM information. As a reminder, an information notice under that new section can be issued only where the authorised officer has reasonable grounds to suspect that a person has committed or intends to commit fraud, and the authorised officer considers the notice necessary and proportionate for the purposes of investigating that suspicion. The amendments in lieu make it clear that where EVM information is relevant to those considerations, the authorised officer must also consider non-EVM information that is relevant to the question of whether to issue the notice.

Secondly, it requires that before a DWP staff member can suspend benefit payments, they must consider all information held which is relevant to the question of whether to do so, as well as the relevant EVM information. Finally, it requires that before a DWP staff member can make a change to an earlier benefit decision, they must consider all information held which is relevant to the question of whether to change that earlier benefit decision, as well as the relevant EVM information.

DWP will always hold at least some further information on benefit claims, such as the presence or absence of relevant capital disregards, claimants’ declarations about capital or known vulnerabilities. This amendment provides the necessary assurance that DWP staff will consider this context carefully before taking further action. I think this reflects the intent of the original amendment from the noble Lord, Lord Vaux, as well as the Government’s stated policy intent. I am grateful for his engagement on this matter and hope that these government amendments in lieu offer the necessary reassurance.

I turn to Motion C and Lords Amendment 43 on the requirements of the independent reviewer. The noble Lord, Lord Vaux, knows that I cannot accept his amendment; I shall go through each part to explain why. Officials in my department have discussed its proposed paragraph (d) with the finance industry, which agrees that it may place a significant burden on financial institutions if they are asked to report on costs every year. However, I have put it on record before, and reassure the House again today, that the Government are committed to keeping costs associated with this measure proportionate.

I can assure the House that we will continue working closely with businesses as we implement these measures to ensure it is done in the most efficient and effective way. I have also previously committed to publishing a further, updated impact assessment within 12 months of Royal Assent, taking into account the ongoing work with industry through our test-and-learn period. I am happy to reaffirm that commitment to the House today.

As for proposed paragraph (e), there is no reason for individuals to lose access to banking services solely because of information shared under EVM. We have been clear that this information does not imply any wrongdoing, and we have worked closely with the finance industry to provide clarity in the draft code of practice to prevent any such problems. The role of the independent EVM reviewer is not to review every process which DWP carries out; rather, it is to review the exercise and effectiveness of that specific data-gathering power and to consider the Government’s compliance with the legislation.

I have stressed often before that DWP has strong support in place for vulnerable people. For example, all DWP front-line operational colleagues are trained to help identify and support our most vulnerable customers. This includes mental health training and the ability to provide reasonable adjustments.

Amendments 84A and 84B reaffirm that further decisions will not be taken without considering all relevant information, in addition to EVM information. This would of course include any available information on vulnerabilities.

Government amendments made on Report also introduced a specific requirement that the Secretary of State be satisfied that it is necessary and proportionate to issue an EVM, and clarified that the purpose for which an eligibility notice can be issued is to assist in identifying incorrect payments. As such, the independent reviewer can assess the Government’s actions against these requirements as part of their consideration of compliance with the legislation. We will work closely with the independent reviewer, especially in the test and learn phase, to identify any issues quickly and take steps to prevent or mitigate them.

Turning to subsection (f), Government amendments tabled on Report address this point. They require the Secretary of State to provide the independent EVM reviewer with all reasonably required material. I hope that this duty, alongside the Government’s commitment to work constructively with the reviewer, is sufficient.

My noble friend Lady Anderson made a commitment that Members will have an opportunity to meet with the PSFA’s independent reviewer. Today, I offer the House a parallel commitment that there will be opportunities for Members of this House to meet with the EVM independent reviewer, once they are appointed, and share their views with them.

I turn to Motion F, and Amendment 97 from the noble Lord, Lord Vaux, which concerns DWP-authorised investigators’ use of reasonable force. As I have made clear to the House, the powers of search and seizure, including warrant applications and production orders, are drawn from the Police and Criminal Evidence Act 1984. This also includes the power of reasonable force, as set out in Section 117 of PACE. These powers will be used by expert DWP staff, trained to industry standards, to tackle only serious and organised crime against DWP.

As I outlined on Report, I am not able to accept Lords Amendment 97 as drafted, although our stated policy intent is that DWP-authorised investigators would not use reasonable force against a person. The reason I cannot accept the amendment is that we cannot break down Section 117 of PACE to make the distinction between property and persons, and there is no precedent for specifying in PACE where or on what reasonable force may be applied. The Government’s preferred approach is for DWP to take powers of reasonable force from PACE, following precedents from other government departments.

However, I have listened to the concerns expressed in the House and looked for another way to reflect the stated policy intent in the Bill. The Government have therefore introduced, as amendments in lieu, Amendments 97A, 97B and 97C to Clause 76, and Amendments 97D, 97E and 97F to Schedule 4. These reflect our stated policy intent and draw a distinction between the power of reasonable force, exercisable by DWP-authorised investigators, and police officers or others with constable powers. These amendments remove the power of reasonable force that was derived from Section 117 of PACE and instead create a stand-alone provision on reasonable force in this Bill. This provision restricts DWP-authorised investigators’ use of reasonable force to force against property only, while retaining the police’s power to use reasonable force where necessary against people and property. This delivers our stated policy intent but brings DWP’s power of reasonable force outside of PACE. I believe this reflects the intent behind Lords Amendment 97, and I hope that the noble Lord, Lord Vaux, will welcome it.

However, this is a bespoke approach, and it is important that we maintain the same safeguards when DWP-authorised investigators exercise reasonable force. My department is working closely with the Home Office on this. To ensure that DWP-authorised investigators will still operate in the same way as others with powers of reasonable force under PACE, we will maintain compliance with PACE Code B, which governs the exercise of powers of entry, search and seizure.

The Home Office has confirmed that, when parliamentary time allows, secondary legislation will be brought forward to ensure that the stand-alone provision in the Bill will be subject to PACE Code B. My department has also worked swiftly to secure assurances that inspection of the use of this stand-alone provision will be provided by HMICFRS and the IOPC. The other relevant powers of entry, search and seizure, beyond reasonable force, will still be drawn down from PACE, and are subject to the safeguards and operational standards I have outlined over the passage of the Bill.

A different approach has been adopted for the provisions in Schedule 4 which apply to Scotland. These broadly replicate PACE search and seizure provisions to achieve parity but make some small, necessary adaptations for Scots law. Therefore, Amendments 97D to 97F make equivalent changes to powers of reasonable force in Scotland.

I hope this reassures noble Lords and puts this question about the use of reasonable force beyond doubt, as DWP-authorised investigators now cannot use reasonable force against people. I hope that the House will support this Motion. I beg to move.

--- Later in debate ---

[Baroness Finn (Con)]

My Lords, as we come to this final group of government amendments on the DWP section of the Bill, I begin by recognising the real progress that has been made on the DWP use of PACE powers and eligibility verification provisions—progress that has been driven by this House’s detailed scrutiny and the persistence of Members from all sides, not least the noble Lords, Lord Vaux of Harrowden and Lord Verdirame, and the noble Baroness, Lady Fox of Buckley. Throughout, we on these Benches have sought to ensure that the Bill strikes the right balance—strong on fraud prevention but fair, proportionate and mindful of its impact on vulnerable people. We therefore welcome the Government’s concessions in several areas, which have come about as a result of the sustained pressure applied by this House.

Amendment 43 concerns the eligibility verification mechanism. Our overriding concern has been the impact on vulnerable individuals and those at risk of financial exclusion. The system must not lead to people being debanked, subject to excessive deductions or left unable to access essential services. We are pleased that the Government have now committed to an assurance that Parliament will be able to engage with the independent reviewer after Royal Assent to explore these issues, and that the concerns that we have raised here and in the other place will be formally shared with the reviewer.

I am grateful that the Minister in the other place claimed the may/must change as a government initiative—imitation, after all, is the sincerest form of flattery—but it was in fact first proposed from these Conservative Benches. That is another example of the constructive scrutiny that has improved the Bill, and I am sure that the Minister will be keen to correct this on the record.

We welcome the Government’s concession in Amendments 84A and 84B. These make it clear that human decision-makers must have regard to all relevant information and ensure that human judgment remains embedded in the process. This protects against the risks of mechanistic or AI-driven decision-making, not only now but into the future as these technologies evolve and become more widespread. This is a sensible safeguard and a direct result of arguments advanced in your Lordships’ House.

Regarding PACE powers, I am pleased that the Government have finally accepted that DWP investigators should not be able to use reasonable force against individuals. This corrects a serious drafting flaw in the text of the Bill and aligns its provisions with the Government’s stated policy. It makes the law safer, clearer and more coherent. I really thank the Minister for her valiant efforts in this area. However, it is surprising, especially given that it protects the integrity of the Government’s stated policy, that it should have required so much persuasion from your Lordships’ House for the Government to get to this position.

As a result of the changes made to the Bill in this House, the Public Sector Fraud Authority and the DWP will be better equipped to act against frauds while operating within a framework of stronger safeguards. Because of efforts on these Benches and others, the PSFA will be proactive but also more accountable and transparent. As a result of the work of the noble Lord, Lord Vaux, and other noble Lords, vulnerable people will be better protected and represented in the independent review, and the use of artificial intelligence will be subject to clearer human oversight. Fundamentally, the use of PACE powers will be strictly limited to property, not people.

Having said all that, there are still gaps in the Bill. The Government have yet to engage seriously with the growing problem of sickfluencers, online figures who use their platforms to encourage and advise people to make fraudulent benefits claims. Unless the Government begin to analyse and address this issue, they risk falling behind and missing the opportunity to tackle a significant driver of future fraud risk. We welcome the progress achieved, but we will continue to raise the issues we have championed during the passage of this Bill and keep a watchful eye on how its provisions are enacted. The Bill now better reflects the need to protect the public purse from fraud and the duty to safeguard the public. It leaves your Lordships’ House in a far better place than when it arrived and demonstrates once again, as the noble Lord, Lord Vaux, has said, the constructive and vital work of this House.

[Baroness Sherlock (Lab)]

My Lords, I thank all the noble Lords who have spoken in this debate. I am grateful that all noble Lords who have contributed have conceded that we have reached a point where we are all now content to move forward with this important Bill.

On the specifics, the noble Lord, Lord Vaux, asked whether we would move forward without any other information. DWP will always hold some other information on benefit claims, but it is crucial that appropriate weight can be given to EVM information if necessary. That is the reason we took the approach we did in the new amendment, because it makes clear that, where EVM information is relevant to a question, DWP must also consider non-EVM information that is also relevant. That other information could take different forms; it could be about the presence or absence for disregard or other information, as I went through. I hope that helps.

--- Later in debate ---

Moved by

[Baroness Sherlock]

That this House do agree with the Commons in their Amendment 75A.

75A: Line 36, at end insert—
“(4) In this paragraph, “authorised officer” includes “authorised investigator”.”

--- Later in debate ---

Moved by

[Baroness Sherlock]

That this House do not insist on its Amendment 84 and do agree with the Commons in their Amendments 84A and 84B in lieu.

84A: Schedule 3, page 80, line 26, at end insert—
“(2) Sub-paragraph (3) applies where—
(a) an authorised officer is considering whether to give an information notice under section 109BZA in relation to a person, and
(b) the Secretary of State has been given EVM information that is relevant to the question whether to give the information notice.
(3) The authorised officer must have regard to all information that the Secretary of State has that is relevant to the question whether to give the information notice, including information that is not EVM information.
(4) Sub-paragraph (5) applies where—
(a) the Secretary of State is considering whether to suspend payments of a benefit to a person in accordance with regulations under section 21 or 22 of the Social Security Act 1998, and
(b) the Secretary of State has been given EVM information that is relevant to the question whether to suspend the payments.
(5) The Secretary of State must have regard to all information that the Secretary of State has that is relevant to the question whether to suspend the payments, including information that is not EVM information.
(6) Sub-paragraph (7) applies where—
(a) the Secretary of State is considering whether a decision taken under section 8, 9 or 10 of the Social Security Act 1998 in relation to a person (“the earlier decision”) should be revised or superseded, and
(b) the Secretary of State has been given EVM information that is relevant to the question whether the earlier decision should be revised or superseded.
(7) The Secretary of State must have regard to all information that the Secretary of State has that is relevant to the question whether the earlier decision should be revised or superseded, including information that is not EVM information.”

--- Later in debate ---

Moved by

[Baroness Sherlock]

That this House do not insist on its Amendment 97 and do agree with the Commons in their Amendments 97A, 97B, 97C, 97D, 97E and 97F in lieu.

97A: Clause 76, page 45, line 4, after “investigators” insert “, including”

People with Disabilities: Employment

Baroness Sherlock Excerpts

Tuesday 28th October 2025 Lords Chamber

[Baroness Monckton of Dallington Forest (Con)]

I beg leave to ask the Question standing in my name on the Order Paper. I declare my interest as chairman of Team Domenica.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, notwithstanding the valuable role that volunteering plays in helping people prepare for work, we want disabled people and people with health conditions to be able to secure sustained employment. That is why we are funding local authorities to open our supported employment programme, Connect to Work, throughout England and Wales. Crucially, as part of this programme, specialist employment advisers work with both participants and employers, ensuring that participants are supported and workplaces are inclusive.

[Baroness Monckton of Dallington Forest (Con)]

I thank the Minister for her response, but the fact remains that only 5% of people with learning disabilities are in paid employment. Will the Minister agree to giving businesses an exemption or a remission from the employers’ national insurance contribution for this cohort, whose lives would be transformed by being included in the workplace and their communities?

[Baroness Sherlock (Lab)]

My Lords, I share the noble Baroness’s desire to find more opportunities for people with learning disabilities, severe autism and other conditions to get the benefits of work, of which money is but one. I pay tribute to the work she has done in creating Team Domenica and the work it has done in supporting learning-disabled people into work. I am sure the whole House would share in that.

Having said all that, successive Governments have taken a view that the best way to support disabled people into work is not necessarily by changing the rules around national insurance or the minimum wage. The noble Baroness is absolutely right that the level of employment for disabled people is only around 50% and for those with autism around 30%, and, as she says, it is vanishingly small for those with learning disabilities. We believe passionately that disabled people are vital to the UK’s workforce. The way we have approached this is with the priority of providing opportunities and support for disabled people to thrive in work. That is why we commissioned the independent Keep Britain Working review, which will be published shortly, to understand how we can create and maintain the kind of workplaces that want to support disabled people and enable them to thrive. It is why we are reforming employment, health and skills support, to tackle rising economic inactivity and get people into good jobs. We want the same thing; we are doing it in different ways, but we are determined to make things better.

[Baroness Uddin (Non-Afl)]

My Lords, I thank the noble Baroness, Lady Monckton, for her important Question. I declare my interest as having a 46 year-old son with a learning disability and autism. I am currently mentoring a highly educated 38 year-old young man, who has four degrees, including a master’s and a PhD. He still cannot find a job. Is the Minister satisfied that the local authority allocation for Connect to Work will be ring-fenced for that precise purpose? Will she consider apprenticeship schemes specially designated for people with autism?

[Baroness Sherlock (Lab)]

My Lords, I thank my noble friend for sharing her circumstance with us. I am really optimistic about Connect to Work. For noble Lords who do not know, Connect to Work is a specialist voluntary support and employment programme. It is for anyone who is disabled or who has a health condition or other barrier to work, such as homelessness. Local authorities, supported by DWP, are developing programmes. The reason it works—there is international evidence that shows what works in this space—is that it incorporates helping someone to work out what they want, engaging with employers and job-finding. A specialist adviser works with an individual and with local employers, and connects an individual to an employer, gets them into conversations, and then gets them into work and carries on supporting them in work. Crucially, they help the employers know how best to support people. Recently, I was talking to the head of this programme at one of the south coast councils. She said that lots of employers want to do the right thing but often they do not know how to —they may lack knowledge or be worried about how to have the necessary conversations. We have to tackle this on both fronts, but I am positive about it.

[Lord Laming (CB)]

Does the Minister recall the Public Services Committee’s report on the transition of young people with a disability from education into adult services? The evidence showed that there was a remarkable divergence. In some parts of the country, local authorities demonstrated quite inspiring work in getting young people with disabilities into work; in other parts of the country, the parents described it as like facing a cliff face. Does the Minister agree that we should set targets for every local authority, to make sure that, year on year, the number of young people with a disability going into employment is increasing? The noble Baroness, Lady Monckton, can demonstrate that very well.

[Baroness Sherlock (Lab)]

I am grateful to the noble Lord, who makes a very important point. There has been an issue for some time—I am not telling him anything new; he knows it better than I do—around the transition between the support for young people when they are in school and the support when they get out of school. The bit that we can do something about is around funding to local authorities, which we are providing. A couple of weeks ago, we announced further funding of £167 million to roll out Connect to Work to nine further areas in England, and we expect all areas to be open by early next year. We are working with them to look at what they are providing, how they provide it, and how they tailor it to their local populations and job markets. If we can make a difference and get young people into work—I thought the example of Tom working in Waitrose, until things went wrong, was so interesting—then what is gained from them working is certainly money, but also self-respect, teamwork, a peer group and the chance to make a difference. If we can do that, it can be transformative.

[Lord Palmer of Childs Hill (LD)]

My Lords, can the Minister add to her comments by providing an update on the publication of the Charlie Mayfield report into employment for people with long-term sickness and disabilities? We have been waiting for that report for some months.

[Baroness Sherlock (Lab)]

We have indeed. Despite being a Minister, I have not yet completely calibrated the scale that runs from, at one end, “in due course”, to, at the other end, “very soon”, but it is very much not at the “in due course” end. Watch this space; it will be out very soon.

[Viscount Younger of Leckie (Con)]

My Lords, I too pay tribute to the work of my noble friend Lady Monckton. In November 2017, my noble friend Lady May of Maidenhead set the UK Government a target to get 1 million more disabled people into work by 2027. In 2022, the Conservative Government hit that target five years early, giving 1 million more disabled people the opportunity of fulfilling employment. The noble Baroness spoke about giving opportunity and offering support, which is fair enough, but perhaps she could go further and say what practical steps Ministers are taking to support small and medium-sized businesses, especially those rooted in local communities, such as cafés and pubs, to accommodate these additional needs?

[Baroness Sherlock (Lab)]

I am grateful to the noble Viscount for that really good question. We have a service called “support with employee health and disability”. We are not great at names in DWP, but it does what it says on the tin. That was developed directly with input from smaller businesses and disability organisations. The idea is that it gives employers step-by-step guidance on how they can support employees in common workplace scenarios involving health and disability. For example, employers using the resource may be asked, “Have you got somebody you are working with now?”, and if they say yes then it will ask them what the challenge is. It can support them in understanding what the law says and how to have difficult conversations.

Most people who either are working or want to work, and who have a health condition or a disability, are happy to have conversations to help the employer know how to go about moving them into a job. One of the reasons that the Connect to Work programme I mentioned works so well is that the specialist advisers will work with the employer to help answer all those questions; they will also work with the person who is trying to move into work and can help bring the two together. A person I was talking to recently, who is a lead in one of these programmes, said that small businesses especially just do not have the resources—they have not got a huge HR department and so might not know how to do it—but they are really up for hiring people in the local community, and just want to be supported in doing so. I am really looking forward to seeing how that works out.

[Lord Sikka (Lab)]

My Lords, last year, the TUC estimated that there is an average disability pay gap of £4,300 a year. Add this to the gender and ethnicity pay gaps, and then imagine the plight of disabled women from ethnic minorities. Can the Minister explain how many employers a year are investigated for persistently underpaying disabled persons and ethnic-minority females with disabilities?

[Baroness Sherlock (Lab)]

My Lords, if anyone is not paying the legal minimum then they are breaking the law, whatever the circumstances, and should absolutely be taken to task for that. However, my noble friend is making a broader point, which is that there are clear gaps in employment: for female employment, for the disability employment gap and in pay rates for a number of ethnic minorities, although the pattern is more varied there. One challenge in the whole strategy of trying to move to a more inclusive labour market is that it is not about trying to do something for its own sake but about recognising that if we do not use the talents of all our people, businesses are not getting the best people that they want to do the jobs, and we will not get the kind of growth we need or development in companies. One of the reasons we have had such a focus on working with combined mayoral authorities and local authorities is to try to make sure that they have local Get Britain Working plans which reflect their local populations, so that, as they develop them, everybody in the local area has a good chance to get into work. That is our approach.

Jobcentres: Staffing Levels

Baroness Sherlock Excerpts

Thursday 23rd October 2025 Lords Chamber

[The Lord Bishop of Leicester]

To ask His Majesty’s Government what assessment they have made of the staffing levels within Job Centres.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, DWP monitors demand for jobcentre support on an ongoing basis and has well-established workforce planning systems to make sure that we have the right people in the right place at the right time. These systems help us to prioritise jobcentre activities where needed, protecting our most effective interventions and making sure that we maintain a constant focus on getting people into work, while remaining within funding limits and providing value for money.

[The Lord Bishop of Leicester]

I thank the Minister for her response. A recent BBC article suggested that capacity has been created in jobcentres only by reducing the number and length of appointments. One work coach they spoke to said that having only 10 minutes with clients means

“you’re just being a benefits policeman”,

and some work coaches feel that they are not able to provide the necessary support, in particular to help disabled people into work. Are the Government confident of being able to improve the employment rate for people with disabilities?

[Baroness Sherlock (Lab)]

My Lords, our jobcentres provide a professional, targeted service. DWP recently conducted a thorough review of jobcentre activity, to look at ways in which we can respond to demand without having a negative impact on outcomes for claimants, or indeed on benefit expenditure or fraud and error. After the review, the department introduced a series of operational changes, the aim of which was to maintain consistency in jobcentres across the country.

However, consistency is not the same as uniformity. It cannot be sensible to have the same regime for a 20 year-old who has not worked ever since leaving school, a 40 year-old who is recovering from a serious illness, and a 60 year-old who is working in a job but not earning quite enough to escape from the demands of the jobcentre. So we are exploring ways to adapt the length, frequency and channels for appointments so they are better tailored to the needs of the individual. That way, we will be able to protect the interventions that are most effective but also try to make sure that we direct the resources where they are most needed. We now have additional work coaches working specifically on our programmes to support people with health conditions and disabilities, and we have committed to spending £1 billion by the end of the decade, investing in those very customers.

[Lord Bellingham (Con)]

My Lords, during my time as an MP, I made a point of trying to visit local jobcentres every year on a very regular basis. One of my consistent observations was that, all too often, local offices were never properly involved in designing services to address local priorities. So, is it not time we got away from this one-size-fits-all, Whitehall-led mentality?

[Baroness Sherlock (Lab)]

My Lords, I suspect that the noble Lord has been reading our Get Britain Working plan—that is the only explanation for that comment. That is exactly what we want to do, and he is so right on this. We have been saying from the beginning that one size does not fit all, and that in employment interventions we are looking to work closely with local leaders, so we are running a series of trailblazers around the country, working with local mayoral authorities and local government.

Every labour market is different. The noble Lord is quite right that we do not have a single labour market in Britain; we have a series of different labour markets, with different challenges, populations and employment patterns, and our job is to make sure that we respond to those needs. For example, we have eight youth trailblazers running around the country, from Teesside to the south-west, Cambridgeshire and Peterborough, the East and West Midlands and London, to look at what works. We will learn from that and will then help people to make the right decisions for their people.

[Lord Palmer of Childs Hill (LD)]

My Lords, that sounds a very optimistic viewpoint from the Minister. However, the reports are that staff stress levels are at historic heights, and many are leaving for better pay and less stress. Aligned to that, staff shortages also mean less support for vulnerable clients. Can the Minister give a more optimistic view than is being reported?

[Baroness Sherlock (Lab)]

My Lords, I may be an optimist but I am also very positive. I believe in our staff, and I understand that there are times when this can be a really stressful job: there is no question about that. But we have been looking really carefully to make sure that we can predict demand levels and manage our staffing levels accordingly.

One of the challenges is that we are asking people to do a different job from what they did in the past. I had a really interesting conversation recently with one of our senior people who has worked on the front line about who she recruits to be a work coach, because you have to find people who have the appropriate levels of empathy and can motivate people, but who are also able to have a tough conversation when you need that. One of the things I asked was, “Where do people recruit from?” She said that they come from really different backgrounds. They are teachers, people from retail, people from call centres, the emergency services and from some legal offices. We are looking for skill sets and characteristics that can enable people to do a really tough job. We are also investing in our people, creating a work coach academy to upskill them and give them the tools they need to do the job, and we are investing in AI so that they have the information they need to help the customers. We can do this, and we are going to.

[Baroness Winterton of Doncaster (Lab)]

My Lords, when my noble friend the Minister refers to people with medical conditions that may be preventing them getting back into work, will she look at whether there are in fact enough health advisers in jobcentres who could help by referring them quickly? I know that there are some pilots on mental health advisers, but can she look at whether this could perhaps be extended through the trailblazers?

[Baroness Sherlock (Lab)]

My Lords, that is really interesting. I know that we do have advisers working out of GP centres, for example in Darwen, in Lancashire, and in Braehead, where we are placing people so that, when GPs encounter people with certain kinds of difficulties, we can provide employment support right then, so that people do not then get out of the labour market and end up being out for some time. We also have projects working closely with the NHS for people who are in work but at risk of falling out of work. If we can support them to stay in their jobs, it is much easier and better for the employer than having them falling out. I do not know whether we have GPs or healthcare workers working in our jobcentres, but what an interesting idea—I will go off and ask that very question.

[The Earl of Kinnoull (CB)]

My Lords, I declare my interest as the chairman of the charity that runs the libraries and museums in Perth and Kinross. In Perth and Kinross, there is a feeling that libraries have a part to play here, and that is because sometimes a certain amount of stigma is attached to going into a jobcentre for people who are thinking of needing careers advice or job progress. There is no stigma associated with going to a library, and the libraries in Perth and Kinross have been able to provide all sorts of support. Would the Minister like to comment on that?

[Baroness Sherlock (Lab)]

I am very grateful to the noble Earl—that is a really interesting idea. There are people who are happy to go into a jobcentre, and there are people for whom that would be really difficult. We have a number of jobcentres around the country, but we also have a number of different services operating out of different places, including libraries, but also youth hubs. We are also testing vans: we have mobile vans going out into communities where people will not come out to us. For example, in Burnley jobcentre there are family community work coaches based at a community grocer, where they can reach out to people. We also have people working out of city councils and all kinds of different areas, but there are specifically groups working in libraries. I will go and find out whether there is any more of that we can do, but I have been assured that they can work really well. Also, I am concerned about the future of libraries, and if that is a way to make sure that there are lots of reasons to go to a place, it can be a win-win.

[Viscount Younger of Leckie (Con)]

My Lords, further to the questions raised by the right reverend Prelate, more than half of jobcentres are reportedly reducing support for people claiming universal credit due to a shortage of work coaches, not so much to do with shortened appointment times—although I take the right reverend Prelate’s point. Recent data obtained through a freedom of information request shows that just 16,640 work coaches were employed by the DWP in August, the lowest number since March last year. But, given this, and the department’s plans to place job advisers in GP surgeries and mental health services, how do the Government intend to ensure that there are enough work coaches to deliver effective employment support across all settings?

[Baroness Sherlock (Lab)]

My Lords, that is the question. We have an increasingly sophisticated model for mapping demand and the number that the noble Viscount gave pretty much matches the demand we are predicting. But, if demand rises significantly, we will have to prioritise. As I said at the beginning, at the moment, standard processes are that, when somebody first comes into a jobcentre, we will want to see them weekly for the first 13 weeks, but there is no point in treating everybody the same. It is not necessarily a shortage of work coaches that is driving this; we have some turnover but, actually, we are looking at faster ways to recruit them and we are happy that we have the right numbers at the moment. The challenge is to make sure that the support is in the right place, for the right people. If all the work coaches spent all their time checking and ticking everybody’s boxes, they would not be out there doing the things that only they can do, which is to get people into jobs. That is what we want them to do.

Public Authorities (Fraud, Error and Recovery) Bill

Baroness Sherlock Excerpts

3rd reading
Thursday 23rd October 2025 Lords Chamber

Moved by

[Baroness Sherlock]

That the Bill do now pass.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, it has been a privilege for my noble friend Lady Anderson and me to take this important Bill through the House. This Government are committed to safeguarding public money and tackling fraud and waste. Public sector fraud is not a victimless crime; it damages our public services and, ultimately, it is taxpayers who suffer when they pick up the bill. Tens of billions of pounds are being lost to public sector fraud—money desperately needed by our public services. This Bill delivers on that commitment to safeguard public money and reduce fraud and overpayments resulting from errors across the public sector. It will enable the Public Sector Fraud Authority to support public sector bodies in investigating and dealing with fraud, and it will help the DWP better identify, prevent and deter fraud and error in the social security system. In doing so, this Bill will protect the public purse and deliver £1.5 billion of benefits over the next five years.

I thank all noble Lords who have given so generously of their time and wisdom in scrutinising this important legislation. Although we have not always agreed with them, my noble friend Lady Anderson and I have been grateful for the very many thoughtful and considered contributions that have prompted us at various points to improve the Bill or to clarify its provisions. This is what the House of Lords is for, and I am grateful for it.

Before I conclude, I offer some words of thanks, first, to the Opposition Front Bench. The noble Baroness, Lady Finn, and the noble Viscount, Lord Younger, have given robust but constructive challenge throughout the passage of the Bill. I am grateful for their time, both inside the Chamber and beyond. Similarly, I thank the noble Baroness, Lady Kramer, and the noble Lord, Lord Palmer of Childs Hill, from the Liberal Democrat Benches, who have been passionate advocates on issues such as whistleblowing and carers. I am grateful to the noble Lord, Lord Verdirame, and my noble friend Lady Lister for their careful engagement, both in and beyond the Chamber. I am grateful for the constructive challenge from around House, including from my noble friends Lord Sikka and Lord Davies of Brixton, the noble Baronesses, Lady Bennett and Lady Fox, and the right reverend Prelate the Bishop of Leicester.

Thanks must go to the noble Lord, Lord Vaux, who has maintained a keen interest in both parts of the Bill throughout its passage. The noble Lord has advocated for a number of different issues. We thank him for his constructive engagement and hope he welcomes the progress that has been made.

My noble friend Lady Anderson and I thank our Whips, especially our noble friend Lord Katz for his support throughout the Bill, and put on record our appreciation of all the officials and public servants who provided such dedicated support throughout this legislative process. I thank Georgia, Oliver, Alana and Ewan from our brilliant private offices, Matt, Louise and Tanya from the fabulous Bill team, and all the policy colleagues who stood behind them. Noble Lords who have met them will have been as impressed as I am with their professionalism and knowledge.

Finally, unusually, I thank my noble friend Lady Anderson’s husband for sharing her with us so extensively in the run-up to not just her wedding but her honeymoon. It is a sign of her dedication that she has given so much time to this Bill. She is the only person I know who can, while taking the content incredibly seriously, bring quite so many laughs to the subject of public sector fraud. I am grateful to so many noble Lords, and I beg to move.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the Minister for her remarks. I will make a short reflection on our discussions on Report and in Committee. I speak for my noble friend Lady Finn in so doing. Despite the technical title, this is an important Bill, as the noble Baroness said. It addresses one of the most serious problems that public authorities face. Based on the Public Sector Fraud Authority’s methodology, fraud and error cost the taxpayer £55 billion to £81 billion in 2023-24. The Bill has sought to address this problem, at least in part, through the provision of extensive powers to officials in the DWP and the Cabinet Office. It is largely these that we have discussed over the past few months.

I am proud of the work that this House has done in scrutinising the Bill, identifying issues and problems, and working in the genuine spirit of collaboration to make it better, fairer and more effective. I pay particular tribute to the noble Baronesses, Lady Anderson of Stoke-on-Trent and Lady Sherlock, for the way they have engaged with Members from across the House. They have listened to concerns, shown genuine willingness to make improvements and demonstrated what responsible government should look like. I firmly believe that the Bill before us is stronger and more balanced than the one first introduced to this House. There is more to be done and areas for further improvement, but we have reflected this in our amendments. The changes that have been made are indeed welcome, and we look forward to ping-pong when it comes. I am also grateful to the noble Baronesses for following up on commitments swiftly, not least for providing the now famous flow charts, which have been genuinely useful to us and, I hope, their departments.

I thank other noble Lords for their engagement with this Bill and their support of our amendments both in Committee and on Report. We have sought to address what we see to be serious shortcomings in the Bill on questions of oversight, accountability, proportionality and fairness. I am thankful to noble Lords who supported us in the Divisions that we called. The amendments we have passed in this place advocate for greater oversight, clearer lines of accountability and a PSFA that can actively pursue fraud. I believe that these are important changes that make the Bill more effective and fairer.

I particularly thank the noble Lord, Lord Vaux, and the noble Baroness, Lady Fox, for their support of our amendments, and I certainly do not forget the noble Lord, Lord Palmer, and the noble Baroness, Lady Kramer. I thank them for their support on some of our proposals. I look forward with interest to seeing how the arrangement with the PSFA, the DWP and the banks evolves and becomes effective. We accept that it is test and learn. It is vital that the legislation to seal the agreement becomes effective in combating fraud.

Finally, I thank the officials who have worked so hard from the government side to enable this process to happen. I know from my time as a Minister that we rely on our officials for a great deal; indeed, it is often to them who we turn for advice and support. I also know that their work is often not credited because they are not visible in the way that we are during debates. I therefore thank officials from the DWP, the Cabinet Office, the PSFA and the Ministers’ private offices who have worked hard to support them and, indirectly, all of us in the discussions we have had on the Bill. Noble Lords from across the House should recognise them and their work. I pay particular tribute to and thank my assistant, Oliver Bramley, for his sterling work during this period.

I urge the Government to meet this House on the amendments that it has added to the Bill, given the extensive discussions and strong cross-party support that they command from across the House. The Bill that we return to the Commons is a better one and I urge the Government to use this opportunity to make these changes permanent.

Finally, we all leave the Bill with certain expressions ringing in our ears, such as “test and learn”, which I alluded to earlier, but particularly the tongue-twister “eligibility verification measure”. I think I can just still say that.

--- Later in debate ---

[Lord Palmer of Childs Hill (LD)]

My Lords, I am probably the last person to speak and mull over all that has happened. I thank sincerely the noble Baronesses, Lady Sherlock and Lady Anderson, and their team. They have been very helpful to us in answering our questions, trying to agree with us and offering a meeting to discuss the part of this Bill on carers. We appreciate and look forward to that departmental meeting, together with, I hope, one of our MPs, so that we can have a reasonable view towards ping-pong and what goes forward.

I thank the noble Lord, Lord Vaux, as everyone has, for many things that we worked closely on and supported. I also thank particularly the Conservative Front Bench, who have not been confrontational but have tried to work to get a better Bill. The Bill has been quite exemplary in the way that people have worked towards improving it in many ways. I obviously also thank my noble friend Lady Kramer, who has worked with me on the Bill, and Adam Bull, our legislative and political adviser, who has been giving me support throughout.

We have among us—the Cross Benches, the Government, the Conservative Benches, this Bench and the Bishops’ Bench—all improved the Bill. I hope that the improvements we have made will last through ping-pong and that we end up with a better Bill—not a confrontational Bill but one that will help public funds, which is obviously its aim, while protecting the vulnerable in society who are not really going to be the paymasters of dealing with errors in the past. Congratulations to all, including the staff in the background of the Government who have made this such an interesting exercise, even though I am surprised that we have got to Third Reading so quickly after Report, and in almost indecent haste. If all legislation could be so quick, it would be a great advantage to this House and the other House. I hope that the Bill passes successfully.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to all noble Lords—in fact, that was so nice that I would like it to carry on, but the Chief Whip will kick me from behind if it goes on any longer. However, I will say a couple of things. In response to the right reverend Prelate the Bishop of Leicester, we have already begun to think about how we can look at making things better in the way that I described. I will find the most appropriate way to communicate that, but I assure him that I stand by the assurances that I gave on Report—and I say likewise to the noble Lord, Lord Palmer. In response to the noble Lord, Lord Vaux, I will reflect on what has happened. Having given so much ground, I do not want to spoil the unanimity, but I will not be able to give everything. I am sure he will not be surprised to hear that.

Finally, as we send the Bill down the Corridor, it is now for the elected House to consider and respond to the changes proposed by this House. I am sure I speak for the whole House when I say that we would welcome a swift consideration to make sure that we can move quickly and get on with the important job of addressing fraud and overpayments across the public sector.