Guaranteed Minimum Pensions Increase Order 2025

Baroness Sherlock Excerpts

Tuesday 25th February 2025 Grand Committee

Moved by

[Baroness Sherlock]

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

Motion agreed.

Social Security Benefits Up-rating Order 2025

Baroness Sherlock Excerpts

Tuesday 25th February 2025 Grand Committee

Moved by

[Baroness Sherlock]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Baroness Lister of Burtersett (Lab)]

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Baroness Sherlock (Lab)]

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

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

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

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

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

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

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

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

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

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

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

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

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[Baroness Janke (LD)]

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

[Baroness Sherlock (Lab)]

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

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

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

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

Motion agreed.

State Pension: Triple Lock

Baroness Sherlock Excerpts

Tuesday 21st January 2025 Lords Chamber

[Lord Dodds of Duncairn]

To ask His Majesty’s Government whether they have any plans to change the “triple lock” guarantee for state pensions.

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

My Lords, our commitment to the triple lock for the entirety of this Parliament means that spending on people’s state pensions is forecast to rise by over £31 billion. As a result, the yearly state pension will have increased by up to £1,900 by the end of the Parliament. Protecting the triple lock, even in the current economic climate, shows our commitment to pensioners.

[Lord Dodds of Duncairn (DUP)]

I thank the Minister for that Answer and for her commitment to the triple lock. Does she understand the concern among many recipients of the state pension about the long-term future of the triple lock, given a number of recent developments? First, there was the appointment of a Pensions Minister who has described the triple lock as “silly”, “messy” and something that needs to be replaced. Then the leader of the Opposition said last week that her party wants to explore greater means testing of government support, which has given rise to some speculation on this issue.

Many pensioners have already suffered as a result of the loss of the winter fuel allowance, which came completely out of the blue and was not in the manifesto. Given that the UK state pension level is one of the lowest in the developed economies of the world, relative to average earnings, can the Minister give a long-term commitment that the triple lock will remain as long as her party is in power?

[Baroness Sherlock (Lab)]

My Lords, I am certainly not going to answer for the leader of the Opposition. I will allow others who are rather better qualified than I am to do that. But I can assure her that the idea of means testing the triple lock, even if its meaning were clear, is not something we on these Benches embrace.

I can tell the noble Lord very clearly that we have a manifesto commitment that the triple lock will hold for the entirety of this Parliament. That is a huge commitment. The noble Lord mentioned winter fuel payments. Means testing those meant that a number of pensioners lost a sum of £200 or £300. By contrast, the amount of money we are investing in the state pension will mean that the annual rate will go up by up to £1,900 by the end of this Parliament.

The comments by my colleague, the Minister for Pensions, Torsten Bell, were made as a private individual when he was the head of a think tank. It is the job of heads of think tanks to think big ideas and to talk about them. However, I assure the House that Minister Bell, along with me, is fully committed to the triple lock and the Government’s commitment to it. I hope the nation’s pensioners will be delighted to hear that.

[Baroness Altmann (Non-Afl)]

Does the Minister agree that there is an inconsistency in the triple lock between younger pensioners, who tend to be better off and for whom the triple lock provides protection for their full new state pension, and the oldest pensioners, who tend to be poorer, or those on pension credit, who either have only the basic state pension triple lock protected, or, in the case of pension credit, no triple lock protection at all? Is there any plan for a review of how, generally speaking, the distribution of incomes among pensioners and the protection provided by the triple lock interact?

[Baroness Sherlock (Lab)]

The noble Baroness has raised a number of important and connected questions. Let me pick a couple of them out—as many as I can in the time. First, on the distinction between those on the old basic state pension and those on the new state pension, it is not a straight read across that people on one are getting more than people on the other. As she knows, it depends, of course, on what the national insurance contribution rates were and how many years they worked. How much contribution they made determines how much they will get. It is also a fact that many people on the basic state pension were contracted out and therefore will have occupational pensions and will have paid lower national insurance contributions as a result. Whichever of those state pensions people get, we will guarantee that it will go up by the triple lock, which is a massive investment, given the economic climate, and a huge investment in pensions.

On the broader question, the noble Baroness will know that in the second stage of the pensions review we will look at the whole question of the adequacy of pensions. We need to have in our country a system designed to be built, as she knows as a former Pensions Minister, on the foundation of the state pension but with an adequate second pension coming from occupational provision. On that, auto-enrolment, investment in the system, addressing gender pay gaps, and a whole range of questions are important. I will stop talking now as I have talked for far too long. The point is that we are investing in pensioners, we will get the pensions market working and we want this to work for everybody.

[Lord Sikka (Lab)]

My Lords, despite the triple lock, some 2 million pensioners live in poverty, and those numbers will increase because pensioners who live below the poverty line will be denied the winter fuel payment. In light of that, I urge the Minister to restore the full winter fuel payment to all pensioners below the poverty line. If the Minister is going to say that there is some kind of financial black hole, I can suggest tens of ways of filling it. So can the Minister please proceed in making sure that pensioners below the poverty line get the winter fuel payment in full?

[Baroness Sherlock (Lab)]

My Lords, if my noble friend has lots of good ideas about filling in the financial black hole this Government inherited, I would certainly be glad to hear them, and so too would my colleague the Chancellor of the Exchequer. So I encourage him to make a Budget submission and I look forward to reading it.

On the question of pensioners, we were very careful. Means testing the winter fuel payment was not a decision we wanted to take, and we were careful to protect the poorest pensioners—those entitled to pension credit. Those who get pension credit can also find themselves accessing a wide range of other passported benefits that will help support them. We also managed, despite the circumstances, to find the money to maintain the household support fund and to extend it into next year, so that, if there are people still struggling, there is help for them.

There is also plenty of other help and a range of support out there for pensioners, including the warm home discount and cold weather payment. I understand how tough this is. I know that the cost of living is high but the Government are determined to do all they can to make things as easy as possible for people despite the circumstances.

[Viscount Younger of Leckie (Con)]

My Lords, it is interesting to note that, at the recent general election, the average voter in the average constituency was aged over 55. The demographics are interesting; there are lots of these people, and they matter. The last Government recognised and addressed pension poverty, and the need to support pensioners. The Minister will know that we took 200,000 pensioners out of absolute poverty. Those figures go back to 2010. I find it extraordinary that Labour’s own analysis shows a reversal of 25% of this in the first year alone. On the pensions review, can the Minister tell us a bit more about the timing—when we are going to see some action? In my view, this is yet another review, of many. We are not really seeing action.

[Baroness Sherlock (Lab)]

That was a little ungracious, I fear, but I will unpick those points one at a time. First, on poverty, let us have a little statistics duel. The last Labour Government lifted a million pensioners out of poverty. Meanwhile, relative pensioner poverty saw a slight increase in the decade between 2010-11, when Labour was last in power, and 2022-23, the period for which we have the latest statistics. We all have challenges to face here, but this Government are determined to work on that.

On the pensions review, as I have explained to the noble Viscount before, stage 1 was focused on making sure that the market was working properly. Stage 2, which follows next, will focus on making sure that we have the appropriate levels of saving in the market and that people have the vehicles in which to invest. We are determined to do this but we cannot fix the entire pensions market overnight. If we tried to do that, we would make mistakes and the noble Viscount would take me to task, rightly, for those. We will do this in the right time, not the fastest time.

[Baroness Janke (LD)]

My Lords, 1.2 million pensioner households are dependent on the state pension. This includes three times more women than men in single-pensioner households. Does the Minister agree that to abandon the triple lock guarantee would plunge the poorest of pensioners into even deeper poverty and inflict hardship on many others who do not have the security of generous additional pensions?

[Baroness Sherlock (Lab)]

My Lords, I have made our position very clear on the triple lock: this Government are committed to the triple lock for the entirety of this Parliament. I am glad to be able to confirm that again today. However, underneath the noble Baroness’s question is something important about the gender pensions gap. I know that the noble Baroness has raised this before; I commend her for her commitment to this issue, which I share.

There are two things that I would say on this. First, the gender pensions gap starts with the gender pay gap, and this Government are determined to tackle that. For example, we have brought in gender pay audits. Once they come into place, we will be able to see what is happening on the ground, then address it and make it better. Secondly, the new set-up is better. Under the new state pension, we are finding that women pensioners are getting about 98% of what their male counterparts are getting; this was not the case under the old system.

Between these two things, and the review to make sure that private pensions work, as well as making sure that we get people into auto-enrolment, and that they get enough return on their investments, I hope that, bit by bit, we will improve the system for all pensioners, including women. I thank the noble Baroness for continuing to raise this in the House; it is an incredibly important issue.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords—

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[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, can I assure the Minister that her confirmation today that the Labour Government will keep the triple lock for the whole of the Parliament is the best news for pensioners? I say that as co-chair of the APPG for pensioners and as a former director of Age Concern. We are really grateful to the Minister for that reassurance.

[Baroness Sherlock (Lab)]

My Lords, I am very glad to be able to give my noble friend that news, especially on his birthday. What better present could he possibly want?

Pension Review: Phase 2

Baroness Sherlock Excerpts

Wednesday 18th December 2024 Lords Chamber

[Lord Davies of Brixton]

To ask His Majesty’s Government whether they have paused phase 2 of their pension review, and if so, why.

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

My Lords, this Government are committed to enabling tomorrow’s pensioners to have security in retirement, which is why we announced the landmark pensions review days after coming into office in July. The first phase will boost investment and economic growth, with two consultations live since November, and we are committed to a second phase focused on retirement adequacy, of which we will provide further details in due course.

[Lord Davies of Brixton (Lab)]

I very much welcome my noble friend the Minister’s reply, but of course she will be aware of how this works. Last weekend there was a series of stories in the national press, from the FT to the Sun, suggesting that the second phase had been put on hold, presumably to provide some assurance to those who are concerned about the high costs of employment. The problem is that without an urgent definition of an adequate pension on a clear and evidence-based basis, much of the debate that we can have on pensions is facile and empty of content. You cannot know which way to go unless you know where you are going. Does the Minister agree?

[Baroness Sherlock (Lab)]

I think I can agree with the last statement firmly. I will try to avoid being facile and empty of content; I cannot make permanent promises, but I will do my best. I understand the point my noble friend is making, but I can perhaps offer him some reassurance. The pensions review is going to be conducted in two phases, and it matters that they are structured in the right way. The first phase, which was launched by the Chancellor in July, is aiming to boost investment, so it offers a win-win. It will boost investment for the country and provide better saver outcomes, alongside economic growth.

Phase 1 launched two significant consultations: one about DC schemes and the other about the Local Government Pension Scheme. It is right that we focus on delivering the first phase before moving on to phase 2. But the second phase, my noble friend will be glad to know, will focus on pensions adequacy and further measures to improve outcomes for pensioners. I take his point about the need to be clear about what adequacy means, and I will take that back. The scope of the second phase will be announced in due course, but I will take that comment back to my colleagues as that is being developed.

[Baroness McIntosh of Pickering (Con)]

My Lords, will the Minister confirm that the pensions review will cover the ombudsman’s recommendations for WASPI women, on which subject I declare an interest?

[Baroness Sherlock (Lab)]

I fully accept that the noble Baroness may not be alone in this place in that declaration of interest. The ombudsman’s review is something to which the Government have already made their response. It was published yesterday, and I repeated a Statement in the House that was made by my right honourable friend the Secretary of State.

As noble Lords will be aware, the Government looked very carefully at the evidence that was provided to and by the ombudsman, and we concluded that while we accept the specific case of maladministration by allowing a 28-month delay in sending out personalised letters to women born in the 1950s, the Government could not accept that that created the impact the ombudsman had described and therefore could not accept the recommendation on injustice and remedy. I am also very aware of the widespread concern among many women who had hoped to retire at 60 and found that they could not, which is a mixture of the decision back in 1995 to equalise the state pension age and the decision of the coalition Government in 2011 to accelerate those changes. That was not a subject of the ombudsman’s review, and nor is it the subject of the pensions review.

[Lord Palmer of Childs Hill (LD)]

My Lords, the Minister talks about the two stages of the pensions review, which is very important. Can she confirm that the modelling by the Government Actuary—and I stress that—shows that the measures in stage 1 of the pensions review will, at best, only slightly improve member outcomes? Those are his words, not mine. Can she give me some reassurance that stage 2 will be given the priority it deserves? Can we get a timescale for when we will get to stage 2? I know the Minister cares about pensioners, and this review is necessary.

[Baroness Sherlock (Lab)]

I thank the noble Lord. We share that; we both care about pensioners. This Government are absolutely committed to making sure that outcomes for pensioners from private pension savings are as good as they can be. Both phases matter. It matters absolutely that we get the pensions market working properly the first time around. The noble Lord will be aware that measures have been announced for the pensions Bill, but there are live consultations on a range of measures that can enhance both growth for the UK and outcomes for savers.

It really matters. We want to end up, as our proposal suggests, with fewer, but better and bigger, pension schemes. All the international evidence suggests that consolidation and scale produce better results for savers. That, in the end, is what will drive private pension incomes. If we can get the market working well, we can try to get people saving as much into it as they need to.

[Viscount Younger of Leckie (Con)]

My Lords, I congratulate the noble Baroness on her promotion. I understand that stage 2 of the review, if it does go ahead, focusing on pensions adequacy, might recommend that pensions contributions increase from 8% to 12%, meaning that employees would continue to contribute 3%, but with employers increasing their contributions from 5% to 9%, which is a very heavy burden, especially on hard-pressed small businesses. In addition, for employees opting out of auto-enrolment, which is their right, the recommendation might be that employers would still pay their side of the contribution. Why did the Chancellor not think holistically about all the costs that businesses have to bear in employing staff when she made the decision in her Budget to raise the national insurance contributions?

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Viscount for his kind words. I am very grateful; it is very gracious of him. He is asking me to comment on speculation about something that might be recommended in the phase 2 review, which has not started yet, so I hope he will bear with me. We think that getting this the right way around really matters. Phase 1 is about trying to get the market working as well as it should, both the DC side and the consultation on the Local Government Pension Scheme. If we can get the market functioning well and drive more scale and consolidation, looking at what they are doing in Canada and Australia, we can then have a better-functioning market and better returns. At that point in stage 2, we can look at matters of adequacy and at what money is going into it.

[Lord Sikka (Lab)]

My Lords, we live in a country where 50% of the population own less than 5% of wealth and the poorest 10% own just 0.02%. What plans do the Government have to improve the share of wealth of a substantial part of the population to enable them to save for a private pension? Surely such things cannot be left to the market.

[Baroness Sherlock (Lab)]

I think that might be slightly above my pay grade. The Government want to make sure that everybody can save an appropriate amount for retirement. For that to work, one of the starting points is that people have to earn enough in their working lives to be able to have an option of saving anything. The measures that the Government have taken, in our plans for jobs and in looking at what we are doing with the national living wage and to try to drive good work, are about trying to drive economic growth, get more people into good jobs and help them to stay there and to grow in their careers. The work has been done around the Get Britain Working White Paper. All the plans around that are trying to get people to develop in their working life and to be more productive to drive economic growth. That is a win-win. It is good for the country and good for individuals and their families.

[Baroness Bennett of Manor Castle (GP)]

My Lords—

--- Later in debate ---

[Baroness Bennett of Manor Castle (GP)]

Returning to the case of the WASPI women and the Government’s ruling against them, can the Minister tell me whether the fact that the Government have overruled the evidence-based decision of the Parliamentary and Health Service Ombudsman is likely to be open to legal challenge? If there is a legal challenge, will the fact that the Labour Party campaigned for WASPI women during the election campaign have an impact on the case?

[Baroness Sherlock (Lab)]

My Lords, I think anything is open to legal challenge if one can find a lawyer to take a case. There have been legal challenges in the past on this decision. If there are again challenges, the Government will present their case. The noble Baroness mentioned that the ombudsman looked at the evidence —so did the Government. We looked very carefully at the evidence. One of the things we have been doing for the past six months is going through line by line every piece of evidence that the ombudsman offered, looking at the evidence we have and what we understand, and we reached evidence-driven conclusions. That is the basis on which we made the decision.

I recognise that it is not a decision that everybody is happy with. I recognise that there will be women born in the 1950s who are disappointed. But I am also convinced that most of the disappointment and, indeed, much of the campaigning and noise were actually about the change in the state pension age and its timing, rather than the very narrow decision that the ombudsman took. The ombudsman said that it was simply about the way DWP communicated with people about the state pension age. The ombudsman found that between 1995 and 2004 the communications were absolutely fine. There was a 28-month period when, although other communications were out there, such as campaigns, employer campaigns et cetera, those letters should have been sent earlier. We have accepted that, and if any legal case comes we will present our case in court, as we always do.

Women’s State Pension Age Communication: PHSO Report

Baroness Sherlock Excerpts

Tuesday 17th December 2024 Lords Chamber

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

My Lords, with the leave of the House, I shall repeat a Statement made earlier today in the other place by my right honourable friend the Secretary of State for Work and Pensions. The Statement is as follows:

“With permission, Mr Speaker, I would like to make a Statement on the investigation by the Parliamentary and Health Service Ombudsman into the way that changes in the state pension age were communicated to women born in the 1950s.

The state pension is the foundation for a secure retirement. That is why this Government are committed to the pensions triple lock, which will increase the new state pension by more than £470 a year from this April and deliver an additional £31 billion of spending over the course of this Parliament, and it is why Governments of all colours have a responsibility to ensure that changes to the state pension age are properly communicated so that people can plan for their retirement.

Before I turn to the Government’s response to the ombudsman’s report, I want to be clear about what this report investigated and what it did not. The report is not an investigation into the actual decision to increase the state pension age for women in 1995 or to accelerate that increase in 2011—a decision that the then Conservative Chancellor George Osborne said

“probably saved more money than anything else we’ve done”.

Understandably, that comment angered many women and sparked the original WASPI campaign.

The ombudsman is clear that policy decisions to increase the state pension age in 1995 and since were taken by Parliament and considered lawful by the courts. This investigation is about how changes in the state pension age were communicated by the Department for Work and Pensions and the impact this may have had on the ability of women born in the 1950s to plan for their retirement.

I know that this is an issue of huge concern to many women, which has spanned multiple Parliaments. Like so many other problems we have inherited from the party opposite, this is something that the previous Government should have dealt with. Instead, they kicked the can down the road and left us to pick up the pieces, but today we deal with it head on. My honourable friend the Pensions Minister and I have given the ombudsman’s report serious consideration and have looked in detail at the findings and at information and advice provided by the department which was not available to us before coming into government.

The ombudsman looked at six cases. He found that the department provided adequate and accurate information on changes to the state pension age between 1995 and 2004, including through leaflets and pension education campaigns and on its website. However, decisions made between 2005 and 2007 led to a 28-month delay in sending out letters to women born in the 1950s. The ombudsman says that these delays did not result in the women suffering direct financial loss but that they were maladministration.

We accept that the 28-month delay in sending out letters was maladministration, and, on behalf of the Government, I apologise. This Government are determined to learn all the lessons from what went wrong, and I will say more about that in a moment. We also agree that the women suffered no direct financial loss because of this maladministration. However, we do not agree with the ombudsman’s approach to injustice or remedy, and I want to spell out why.

First, the report does not properly take into account research showing that there was considerable awareness that the state pension age was increasing. It references research from 2004 showing that 43% of women aged over 16 were aware of their state pension age, but it does not sufficiently recognise evidence from the same research that 73% of women aged 45 to 54—the very group that covers women born in the 1950s—were aware that the state pension age was increasing, or research from 2006 that 90% of women aged 45 to 54 were aware that the state pension age was increasing.

Secondly, the report says that if letters had been sent out earlier, it would have affected what women knew about the state pension age. However, we do not agree that sending letters earlier would have had the impact the ombudsman says. Research given to the ombudsman shows that only around a quarter of people who are sent unsolicited letters remember receiving them or reading them, so we cannot accept that, in the great majority of cases, sending a letter earlier would have affected whether women knew their state pension age was rising or increased their opportunities to make informed decisions.

These two facts—that most women knew the state pension age was increasing and that letters are not as significant as the ombudsman says—as well as other reasons, have informed our conclusion that there should be no scheme of financial compensation to 1950s-born women in response to the ombudsman’s report. The ombudsman says that, as a matter of principle, redress and compensation should normally reflect individual impact. However, the report itself acknowledges that assessing the individual circumstances of 3.5 million women born in the 1950s would have a significant cost and administrative burden. It has taken the ombudsman nearly six years to investigate the circumstances of six sample complaints. For the DWP to set up a scheme and invite 3.5 million women to set out their detailed personal circumstances would take thousands of staff years to process.

Even if there were a scheme where women could self-certify that they were not aware of changes to their state pension age and that they had suffered injustice as a result, it would be impossible to verify the information provided. The alternative put forward in the report is for a flat-rate compensation scheme at level 4 of the ombudsman’s scale of injustice. This would provide £1,000 to £2,950 per person, at a total cost of between £3.5 billion and £10.5 billion.

Given that the great majority of women knew the state pension age was increasing, the Government do not believe that paying a flat rate to all women, at a cost of up to £10.5 billion, would be a fair or proportionate use of taxpayers’ money, not least when the previous Government failed to set aside a single penny for any compensation scheme and left us a £22 billion black hole in the public finances.

This has been an extremely difficult decision to take, but we believe it is the right course of action and we are determined to learn all the lessons to ensure that this type of maladministration never happens again. First, we want to work with the ombudsman to develop a detailed action plan out of the report, so that every and all lessons are learned. Secondly, we are committed to setting clear and sufficient notice of any changes in the state pension age, so that people can properly plan for their retirement. Thirdly, I have tasked officials to develop a strategy for effective, timely and modern communication on the state pension that uses the most up-to-date methods, building on changes that have already been made, such as the online ‘check your state pension’ service that gives a personal forecast of your state pension, including when you can take it, because one size rarely ever fits all.

We have not taken this decision lightly, but we believe it is the right course of action because the great majority of women knew the state pension age was increasing, because sending letters earlier would not have made a difference for most, and because the proposed compensation scheme is not fair or value for taxpayers’ money.

I know there are women born in the 1950s who want and deserve a better life. They have worked hard in paid jobs and in bringing up their families. Many are struggling financially with the cost of living and fewer savings to fall back on, and they worry about their health and how their children and grandchildren will get on. To those women I say: this Government will protect the pensions triple lock so that your state pension will increase by up to £1,900 a year by the end of this Parliament; we will drive down waiting lists, so you get the treatment you need, with an extra £22 billion of funding for the NHS this year and next; and we will deliver the jobs, homes and opportunities your families need to build a better life. I know that on this specific decision many 1950s-born women will be disappointed, but we believe it is the right decision and the fair decision. I commend this Statement to the House”.

--- Later in debate ---

[Baroness Humphreys (LD)]

My Lords, today will be a day of disappointment for many women. They will feel that this new Government, by ignoring the independent ombudsman’s recommendations, have turned their back on the millions of pension-age women who were wronged through no fault of their own. That has to be of concern.

Liberal Democrats have long backed calls for women born in the 1950s affected by the pension changes to receive proper compensation for the Government’s failure to properly notify them of the changes, and have long supported the ombudsman’s findings. Today’s announcement is a hammer-blow to these women, who have fought tirelessly for many years to be properly compensated. I appreciate that the Government have had to make difficult decisions, but have they chosen to ignore the PHSO’s recommendations because they disagree with the findings or because they do not want to find the money to rightly compensate these women?

The PHSO’s ruling in March recommended that some women should get a payout and an apology. Obviously today they have received an apology, but they will not receive a penny of compensation for the maladministration found by the PHSO. Will the Minister outline why the Government have chosen to accept one half of the recommendation but not the other?

One WASPI woman dies every 13 minutes while this appalling scandal continues. Today’s announcement will be devastating for the WASPI community, which has campaigned tirelessly to rectify the maladministration. Does the Minister really think that today’s announcement is a fair solution?

Finally, in her letter to us today, and in the Statement, the Minister promises that this Government will protect the pensions triple lock, so that the yearly state pension is forecast to increase by up to £1,900 by the end of this Parliament. I welcome this promise. The pensions triple lock was a Lib Dem policy adopted by the coalition Government and I am proud of it, but this will be advantageous to all pensioners, not merely the WASPI women. Sadly, it in no way compensates these women for their losses. My colleagues in the other place have promised that they will continue to press Ministers to give those affected the fair treatment they deserve.

[Baroness Sherlock (Lab)]

My Lords, I thank the ombudsman for the considerable work that went into producing this report. The issues it raises are complex and I am grateful that we have time to discuss them this evening, though I share with the noble Viscount the wish that we had more people here while we do it. I would always rather discuss these things with a wider audience.

I thank both noble Lords for their responses. Before I engage with the specific points that they raised, I want to say a few more words about the background to this. The noble Viscount began by, in essence, attacking my colleague the Secretary of State for politicising the issue and then went on to politicise it himself. Therefore, we can either do that—we can take it in turns to point at each other—or we can try to address the issues. I am going to try to do the latter.

We have been looking seriously into the issues raised since we came into office in July. That work has involved looking at what Parliament has said, examining the evidence submitted to the ombudsman, meeting the interim ombudsman and listening carefully to the views expressed by the women affected. We listened, we read, and we reflected before coming to a decision.

The most important thing, to start, is to be clear about what exactly the ombudsman investigated. The ombudsman did not investigate the decision, first taken in 1995, to equalise the state pension age for men and women. I know that many women have strong feelings about that change, particularly the decision taken by the former Government—the Conservative/Liberal Democrat coalition Government—in 2011 to accelerate the changes sharply, which made a significant difference to a number of women. That was a policy that Labour opposed at the time, but the policy was agreed by Parliament, maintained by subsequent Governments and upheld in the courts. It is not the issue at hand today.

What the ombudsman did investigate was how the change of the state pension age was communicated by DWP to the women affected. I can see a Whip on the opposite Benches shaking his head. That is literally what the ombudsman did; I invite him to read the report. The ombudsman concluded that between 1995, when the original decision was taken, and 2004, our communications,

“reflected the standards we would expect it to meet”.

However, it found that between 2005 and 2007, there was a 28-month delay in DWP sending out personalised letters to the women affected. The ombudsman found that that constituted maladministration by the department. It argued that that led to injustice and proposed that financial remedy should be paid to those affected.

The Government accept the ombudsman’s finding of maladministration. We are sorry for the 28-month delay in writing to the 1950s-born women and we are determined to learn lessons from this experience to ensure that it does not happen again. I will come back to that.

In response to the question from the noble Baroness, Lady Humphreys, the reason the Government accepted this in part is that maladministration is about the actions that were taken at the time when things went wrong. We recognise that those letters should have been sent 28 months earlier. They were not; we apologise for that and accept maladministration. Injustice and remedy are about the consequences of those actions. Where we diverge from the ombudsman is on the impact of that failure. That is why we accepted the finding of maladministration, but we are not able to agree with the ombudsman’s decision on the approach to injustice and remedy. That is because the ombudsman had assumed that receiving those letters earlier would have changed what the women knew and how they acted, despite evidence to the contrary.

Research has shown that letters are not an effective means of communicating state pension information in the great majority of cases. Research from 2017 found that only one in four people who got an unsolicited letter remembered receiving and reading it. That suggests that sending letters earlier, as the ombudsman suggested, would not have affected what most women knew and, therefore, the decisions that they took. In other words, while we accept there was unnecessary delay in sending letters to women, we do not accept that that delay led to injustice in the great majority of cases. Given that, with the research suggesting that 90% of 1950s-born women were aware of changes to the state pension age, we cannot justify financial remedy. Paying compensation to all 1950s-born women at the rate proposed by the ombudsman, as the Statement said, could cost as much as £10.5 billion. We cannot justify paying out such a significant sum of money—taxpayer money—when the great majority of 1950s-born women were aware of the changes and therefore experienced no injustice. Writing letters to those who were unaware would not have made a difference for most.

The noble Viscount, Lord Younger, asked whether we had assessed how many women’s cases were strong. The answer is that we have not, for the reasons set out in the Statement. It is the same question, in essence, as whether we could create a targeted compensation scheme to compensate only those affected. Of course, we looked carefully at that possibility, but we concluded that such a scheme is impossible to deliver in a way that is fair and represents value for money. In fact, the ombudsman itself pointed out the challenges in doing that, as the noble Viscount will know, since I know he has read the report. It took the ombudsman, as it pointed out, nearly six years to investigate six cases.

To set up a scheme whereby the DWP would have to consider the detailed personal circumstances of as many as 3.5 million women born in the 1950s would take thousands of staff many years. In fact, we estimated that if we received claims from 60% of that 3.5 million, running a bespoke scheme would require 10 times as many staff as currently administer the state pension for all 12 million pensioners. That is the scale and the impact on the everyday running of the department.

Even more crucially, it would require us to make subjective judgments about whether giving each affected individual different information at different times would have led to different decisions and what the consequences would have been. Those are inherently difficult to consider, never mind prove, and it would be impossible to verify the claims for a scheme where someone self-certifies that they have suffered injustice. As a result, because we do not agree with the ombudsman’s approach to injustice, because 90% of 1950s-born women were aware of the changes and because it would be impossible to set up a bespoke scheme that would be fair, reliable and value for money, we cannot justify paying compensation.

I think it is worth dwelling for just a moment on the fact that this is not about the state pension age because I think that is one of the biggest challenges. We understand that that is difficult, but that decision was made in 1995 and has been settled, and I think nobody is arguing for reopening that.

The noble Viscount asked about learning lessons. The DWP is committed to learning lessons from the ombudsman’s findings so that we can deliver the best possible services in future. This case highlights just how important it is to get communication with our citizens right. We have already taken steps to make this better. We regularly engage with stakeholders and customer representatives, not just in general, but to test and provide feedback on many of the communication materials that we put out.

However, as the Secretary of State said, there is more to be done. The action plan is something that we are going to work on with the ombudsman. We will report on that in due course, and I will keep the noble Viscount informed as that work develops. We are determined to work with the ombudsman to develop an action plan identifying and addressing all the lessons this experience offers. We are continually developing our policy on communicating state pension age changes, rooted in our commitment to give clear and sufficient notice of any changes to those affected.

The noble Viscount quoted in my comment in the letter I sent to all Peers earlier today that

“even taking the difficult decisions we are faced with in government, we feel a deep sense of responsibility to ensure that every pensioner gets the security and dignity in retirement they deserve”.

I will allow myself one little bit of politics here. It is that, despite the very large hole in the finances that the previous Government left, we have none the less managed to find the money to maintain the triple lock, which will involve spending £31 billion, with the result that the new state pension and the basic state pension will go up by 4.1% next April, and in the case of the new state pension, the full yearly rate by the end of the Parliament is likely to be £1,900 higher.

The decision today does not mean that we do not understand that some women are facing financial hardship. The noble Viscount asked me for figures about pension credit. I can tell him that 150,000 people applied for pension credit in the 16 weeks following the announcement. Of those 42,000—I think, from memory, and I will write to him if I am wrong—had a successful claim. We know that at the very least there are those extra numbers of people, significantly more than there would have been in the comparable period previously, who are already getting pension credit and there may be many more. People have until 21 December to apply. Those cases that are in before that deadline will get processed and in due course those who succeed will get not only get the winter fuel payment, which is what the noble Viscount brought up, but all the benefits of pension credit itself and all the passported benefits that it brings with it.

This was a difficult decision to make. There were other questions. The noble Baroness, Lady Humphreys, asked whether we just disagree or whether it is about money. I hope I have answered that. I have set out the arguments. The noble Baroness may or may not disagree with them, but I have tried to set out the reasoning the Government did. We tried throughout this to follow the evidence. That is all that a Government can do when faced with a report such as this. We went through it incredibly carefully. It is evidence that the noble Viscount will be very familiar with. Since he was doing my job before me, he will have had it rather longer than I have. We spent the past six months going through it in detail. We have considered the evidence, and we have made what we believe is the right decision. That does not mean it was not a difficult decision, and I recognise that it will be a disappointing one for many 1950s women. It is not a reflection on their campaigning or anything else, but we feel that, despite that, it was the right decision, for the reasons I set out, and I hope that the House can accept that.

[The Earl of Effingham (Con)]

My Lords, perhaps the Minister might allow me to clarify something. She highlighted that I was shaking my head. Just for the record, I was communicating with her noble friend Lady Anderson about the supplementary questions. I was not shaking my head at anything she was saying.

--- Later in debate ---

[Baroness Sherlock (Lab)]

I apologise for oversensitivity on my part. I thank the noble Earl for clarifying that.

[Baroness Bryan of Partick (Lab)]

My Lords, I would like to ask a supplementary question. I first congratulate my noble friend on her new position. I am only sorry that it has come on the same day as this announcement and that she is thrown right into this difficult debate. I know she will be extremely aware that the very women who are most affected by the change in pension age and the delay in sending out notifications are the very same ones who were least aware of the changes. In many cases, they had already taken the decision to leave work, usually because of caring responsibilities, but with the expectation that they would receive their state pension on the date that they had been led to expect, and hopefully before their savings ran out. These women were probably the most isolated, care-worn and least able to access information online. In many cases, the letters came too late to allow them to make alternative plans.

Just because an injustice is widespread does not mean that it should be ignored. I repeat the question asked by the WASPI women today: what is the point of those six years of the ombudsman giving the report if the Government can simply ignore it?

[Baroness Sherlock (Lab)]

My Lords, I thank my noble friend for her opening comment. I fully recognise the point that she is making. There will be women out there who are very disappointed. There will be many women who expected to retire at 60 and then found that they could not. I hope she will agree with me that one of the biggest drivers of that concern and of the impact was the decision of the previous Government to accelerate those state pension changes in 2011. That meant that they were brought forward very sharply, which had a significant impact on a number of women. However, that is not what the ombudsman was talking about today, it is not what the report was about, and it is not what we are doing here.

I should say at the outset that letters are only ever one part of any communications system. There was extensive communication. The ombudsman found that our communications between 1995 and 2004 were just as they should be. The ombudsman was also aware that a lot of other kinds of activity were going on. There were advertising campaigns, work with employers, and all sorts of information going out. The letters were only one small part of that.

The 28-month delay in those letters has led us to believe not that there are not women who had hoped to retire at 60 and were not able to do so, but that this injustice was not caused by the failure that we described. It is because of this that we simply do not feel able to do it. We had to come back to the evidence. Is the evidence there that that specific act of maladministration caused that injustice? We do not believe that it did, and therefore we do not believe that it was appropriate to provide a compensation scheme.

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

My Lords, I beg to move that the House—

[Viscount Younger of Leckie (Con)]

I would like to come back briefly with a further question, as there is time; we do have time for Back-Bench questions as well as Front-Bench questions. As regards the future, can the Minister give us a feel for how progress on AI is going in the department in respect of the data for WASPI women?

[Baroness Sherlock (Lab)]

My Lords, I would like to talk to the noble Viscount outside to understand exactly what he is asking about AI. If he can clarify the question, I will be very happy to write to him with an answer.

[Lord Davies of Brixton (Lab)]

My Lords, could I—

“Get Britain Working” White Paper

Baroness Sherlock Excerpts

Wednesday 27th November 2024 Lords Chamber

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

My Lords, I thank both noble Lords for their very constructive responses. It is a marked difference from the other place, but plus ça change. I thank the noble Baroness, Lady Stedman-Scott, both for her welcome for the White Paper and for the constructive way in which she approaches these questions. I pay tribute to the work that she has done over many years at Tomorrow’s People and looking at this. I think we will find as we go on that she and I probably share more of an interest—a commonality—in these questions. I may differ with her on some of the choices that her Government made, but we share a view that we have to do what is right to get people into work and to support them to stay there.

Let me do the formal bit first. Yesterday the Government published the Get Britain Working White Paper, bringing forward what we see as the biggest reforms to employment support in a generation. We have already heard that the UK now faces a significant challenge. We have a near-record 2.8 million people out of work due to long-term sickness or disability. Add to that that one in eight of our young people is not in education, employment or training. A stat that I had not seen before but that shocked me is that in England almost a fifth of working-age adults do not have even the equivalent of one GCSE. If we are starting from that position, how can we possibly carry on as we are and expect things not to carry on the way they have been?

Addressing challenges on that scale needs a different approach. We are determined to start a process that we know will take time but will continue to drive down economic inactivity and create opportunity. It will involve fundamental reform of the Department for Work and Pensions, focusing it firmly as a department for work. It will mean overhauling Jobcentre Plus to create, as we have heard, a new employment service, bringing it together with the National Careers Service in England.

The noble Baroness, Lady Stedman-Scott, asked whether we would give people help to stay in work. She is so right: our aim is not just to get people into jobs. The whole point of the new service is that it will not just be for those out of work, because it will be careers as well. It is there to get people to get into a job, get on in work and then progress and develop a career. We have to turn this country from one of inactivity, low pay and low-opportunity jobs to one that can transform not just the lives of individuals but the country, so the system will be universal and do all those things.

Supporting young people has to be crucial. We will improve access to training and job opportunities and establish the youth guarantee that was mentioned, so that young people are earning or learning. As a first step, we are working with mayoral authorities to set up the eight youth guarantee trailblazers with £45 million of funding. I think there is a dialogue to be had between the two Front Benches, because one reason that we are doing trailblazers is that we need to know what works. The noble Baroness, Lady Stedman-Scott, is absolutely right: if we find out that something works, we do more of it; if we find out that it does not work, we do something different. That is why we need trailblazers to know what will work. How can we better get local and central government working together to give people better support when they are young and desperately need opportunity?

Local knowledge is crucial. The White Paper is based on the assumption that we want to empower local leaders to know best what is there for their community and show leadership. Every area in England will be supported to bring forward a local “Get Britain Working” plan, and there will be £125 million going out for those eight trailblazers, looking right across England and including one in Wales. Three of the English trail- blazers will also receive a share of £45 million for dedicated input from the NHS. So often, health is a barrier to getting people into work. We have to join up public services to have any chance of getting this right.

We also know that good work is good for health. We want to get the NHS and the wider health system working to improve employment outcomes, so we will target extra support on driving down waiting times. But we also have to address the key public health issues that contribute to worklessness. We will expand access to expert employment advisers as part of treatment and care pathways.

We are also committed to tackling the root causes of mental health problems. The youth guarantee will support young people to access and navigate their way through mental health services, and there will be specialist mental health support in every school and health professionals available in colleges. We have prioritised funding, despite the tough spending round, to expand NHS talking therapies and the individual placement support programme.

There is loads more going on. We have an independent “Keep Britain Working” review, in partnership with business and led by Sir Charlie Mayfield, who used to chair John Lewis. That will help us to understand the role of employers in creating and maintaining healthy jobs and healthy workplaces. We have set out the principles to reform health and disability benefits, to ensure that the system supports people who can work to start or remain in work, in a way that is fair but also fiscally sustainable. We have launched the guidance for Connect to Work, our new locally led supported employment programme.

I was asked a number of questions. I probably will not get through them all in the time, but there were a few practical ones. The noble Baroness, Lady Stedman-Scott, asked about fit notes. She may remember that there was a call for evidence about fit notes. That closed in July and we have received more than 1,900 responses. Those are being analysed at the moment, and the results will inform our approach going forward. On the question of work coach support, I completely relate to her comments about the Friday girl. At the heart of this is the relationship between the work coach and the people they try to support into work. If we can get that right, all kinds of things are possible.

I have long said—I think I said this to the noble Baroness when we were in opposite positions—that I have been worried for some time that the danger was that our system was still designed as though the major challenge facing the labour market was unemployed people who did not want to work. However, for quite some time it has been people who struggle to work for a range of reasons to do with health or disability, and the system has to be able to address all of that. We are trying to turn this around to focus on making sure people get the support they need, at the time they need it, in the way that works best for them, so they can get jobs and keep them.

The noble Baroness has loads of experience working with young people, and, if it is going to work, we need to make sure that work coaches have that. We will set up a work coach academy to make sure that we can drive up the skills of our work coaches. That will be at the heart of making this work.

I was also asked about GDP per capita and productivity. GDP per capita is essentially about growth and we have to get this right. If we are going to deal with growth, we have to deal with the fundamentals of the economy. I will not go through the pantomime of mentioning black holes because, hey, life is short.

[Noble Lords]

Oh, go on.

[Baroness Sherlock (Lab)]

If you insist. My Lords, this Government inherited a massive black hole—

[Noble Lords]

Oh!

[Baroness Sherlock (Lab)]

Oh well. The reality is that it was quite clear to us that the Government needed to take some difficult decisions to deliver long-term stability and growth. Businesses need stability, infra- structure and a health service and transport system that function, to be able to operate.

We recognise the pressures on business, and our Ministers have been out there speaking to the Federation of Small Businesses, the Chambers of Commerce and the CBI. They are very keen to work with us on this, because they know that their members have hundreds of thousands of vacancies they cannot fill. One-third of those are because of skills gaps. They know that 300,000 people every year fall out of work due to a health or disability problems. We have to support them and support the individuals dealing with that. We want our jobcentres to serve business and to be not a place you go as a last resort when you cannot hire anyone but a place of first resort where you find people and get the learning, experience and support to make your business function.

I would really defend against the challenge that the programme is too small. This is one-year funding for a reason. It is because these are trailblazers to figure out what works. We know what does not work. If what we had been doing worked, we would not have 2.8 million people who are out of work due to long-term sickness or disability. We have to test processes to make sure they work. We are going to learn from that, but we know this is a long-term process.

I should add for the record that many of the policy areas described in the White Paper are devolved in Northern Ireland, Scotland and Wales. To be clear, in those cases, the focus on the White Paper is on the actions of the UK Government in England. But we will be working closely with the Scottish and Welsh Governments to ensure that everything we do dovetails well with existing devolved support. We are keen to understand what works well across the UK and to learn from Northern Ireland’s experience of delivering employment and career support.

I recognise that these are ambitious reforms. I know they will take time and they will need help—not just from the noble Baroness, Lady Stedman-Scott, but from stakeholders and experts across the economy. But we can do this. Together, we can build a labour market that gives everyone the opportunity to be the person they want to be. Also, we can be the country we all want us to be. To do that, we need to get Britain working again.

[Lord Laming (CB)]

My Lords, I thank the Minister for setting out the numbers of young people we are talking about who are not in employment or education. The Minister will know that earlier this year the Public Services Committee of this House set out a report based on a study of the transitional arrangements many of these young people experience as they move from school to employment, especially those with a disability or long-term health problems.

We had the extremes in the evidence. Some were simply brushed aside as being unemployable for a lifetime. For others, services and employers at local level got together and produced some wonderful opportunities to completely change the life chances of these young people. Could the Minister assure the House that the Government will look at this report and take forward the recommendations? They were considerable and intended to achieve some of the outcomes set out in this paper.

[Baroness Sherlock (Lab)]

I am grateful to the noble Lord for that intervention and also of course for his many years of experience and work in the field of social policy and social care. I very much feel that what he described is what we are trying to do, and I absolutely assure him that the report will be looked at in detail and we will go through the recommendations carefully. One challenge we have is that it is too easy to write off young people. Nowadays, they are judged: the assumption is that they are not trying very hard and the expectations are there. Actually, I do not meet young people who do not want to be out there building a life. It is just that, sometimes, the challenges feel too big. If we can find the right way to support them—if we can get proper mental health support in place and if we can help employers to know how best to work with people who have mental health challenges—we can get people into jobs and they can stay in them.

In the years that I worked with single parents, for example, one thing I learned is that if people have found it difficult to get a job, if they find one that works for them, they are the most loyal employees anyone could get, because they have found a way in and something that works, and it becomes a brilliant relationship. So I am grateful to the noble Lord for that and I will take a careful look at it.

[Baroness Browning (Con)]

My Lords, on Friday morning, I was in a Jobcentre Plus office with a 50 year- old woman who has always worked—but not for the last two years, following a major spinal operation and rehabilitation. She is now ready to get back into work. When we went into that office, we were told that she was not entitled to any support from a disability job coach or adviser, although she is in receipt of PIP. The reason given was that she does not claim an unemployment benefit. What does the Minister suggest I do next to help this person? Why are we discriminating against disabled people wanting to get into work, whether they are claiming a benefit or not?

[Baroness Sherlock (Lab)]

I am sorry to hear of the experience that the noble Baroness’s friend or family member had. What she said goes right to the heart of what we are doing. The point of the national jobs and careers service is that it is not just for people claiming benefits: it is for anybody who needs help getting into work, getting back to work or getting on in work. If we narrow it down to simply being about benefits, we will end up putting the incentives in the wrong place.

One thing that worries us about how the system has worked is that a lot of work coaches’ time is spent checking up to see whether everyone has ticked all the boxes and whether those on benefits have done all the right things. Of course, conditionality will always be a part of the system, but we want to see whether there are ways to reform that so that we can test different ways of making sure that people stay connected and work coaches can spend more time devoted to individuals —including the person that the noble Baroness described —to get them back into work if they want. There are 600,000 people out there who are long-term sick or disabled who want to work, but somehow they are not able to. We have to do something about that and we are determined to.

[Baroness Lister of Burtersett (Lab)]

My Lords, there is much to welcome in these proposals for reform of employment support and their aim of better health and good work. But can my noble friend please assure me, first, that the emphasis will be more on carrots than on sticks? Secondly, can she assure me that transforming a department for welfare into a department for work will not mean further social security cuts or abandoning any attempt to repair the serious damage wreaked on the social security system over the past 14 years, at the cost of its role in addressing poverty and providing genuine security?

[Baroness Sherlock (Lab)]

Let me reassure my noble friend of two things. First, we are absolutely committed to tackling the scourge of child poverty, and the Government are completely committed to making sure that how the social security system works is part of that—so I can reassure her on that front.

Secondly, we often talk in terms of carrots and sticks, but I am not sure that that is very helpful. Most people want to get on: they want a satisfying job that will be rewarding in itself and that will also feed them and their family. People want the same things that we want for them, but lots of things get in the way. Our job is to set the system up so that it is aligned to go with that—to get barriers out of the way, to support people, to give them all the help they can get and to get them over the line.

Obviously, some people will not be able to work on grounds of severe disability or perhaps sickness, or maybe their caring responsibilities do not make that possible. The Department for Work and Pensions is there to support them, as it is to support pensioners and those who need our help. A small number of people really do not want to work and, frankly, they should. We are quite clear that we will support them and, in return, we expect them to do their bit. But, in between, surely we can design a system that is not just carrots or sticks but goes with the grain and helps people to be themselves.

[Baroness Manzoor (Con)]

My Lords, I welcome the White Paper and the Minister’s comments. I know her total passion for trying to unlock the potential of young people. In that spirit, my question is about education and the links between education and skills. She mentioned one GCSE. I am concerned that the financial literacy of our young people is very poor and we need to lay particular emphasis on that. I would also welcome the support of the Government to unlock apprenticeships, with better conditions for employers to take on young people much earlier than they currently do.

[Baroness Sherlock (Lab)]

I thank the noble Baroness, Lady Manzoor, and commend her for her work in the field of financial services over many years. She makes an important point about financial literacy. It is an interesting question. To give a simple example, if I go into a supermarket, I will sometimes see an offer on four cans of tomatoes which will actually be more expensive per can than the single cans sitting next to them. If people do not have basic maths, they will not even have the life skills they need when they most need them. If people do not understand what an APR means, how are they to know whether they are getting a decent deal, never mind beginning to think about pensions? I absolutely agree about the importance of that.

I also think it is really important to get apprenticeships right. One thing we are doing is putting money into more foundation apprenticeships, to give more young people the chance to get in much earlier. If people can get a foot on the ladder, or just get in the door, they can be inspired by something: it is a chance to do something, see something, achieve something, often to just be part of a team. After that, who knows where it can go? The noble Baroness raised two important points and I thank her for them.

[Baroness Butler-Sloss (CB)]

My Lords, I have two questions. I very much support the eight trailblazers for the youth guarantee, but what is meant by “the west of England”? Will the Government take further education to be as important as higher education?

[Baroness Sherlock (Lab)]

The main trailblazers are based on combined authorities and the youth trailblazers are being negotiated, so I will have to come back to the noble and learned Baroness on the boundaries of the west of England. On further education, I am absolutely supportive of that. The Government have already invested an additional £300 million of revenue funding into further education to support young people to get the skills they need, and are providing £300 million of capital investment to support colleges to maintain, improve and ensure the suitability of their estate. If she has been to one recently, she will know how much that is needed in some parts. On the apprenticeships fund, £40 million is being directed into delivering shorter and foundation apprenticeships in key sectors. We think that is a way to help people to move forward in the skills area.

[Baroness Blackstone (Lab)]

My Lords, following up on the point made opposite about apprentices, does my noble friend the Minister agree that nothing less than an apprenticeship guarantee is required? If so, what steps will the Government take, working with employers, to make sure that there is an apprenticeship guarantee, so that the many young people who are leaving school and are unable to get access to an apprenticeship will in future be able to do so?

[Baroness Sherlock (Lab)]

My Lords, the aim of our youth guarantee is to go further than that. We want every young person to be guaranteed to get either high-quality training, an apprenticeship or a job, or the support to get into one of those places. There are many young people for whom an apprenticeship is absolutely the right thing; there are others for whom more training is necessary, and others for whom a job is the right way forward. That is what we want: at that age, that is the choice that people should have. They should be earning or learning, and a job, an apprenticeship or education is the way forward.

[Baroness Smith of Llanfaes (PC)]

My Lords, I welcome this White Paper, especially the emphasis on supporting young people into work and recognising that there are lots of different pathways that are suitable for people. It is difficult to distinguish what parts are relevant to Wales. There is reference in the White Paper to the trailblazer in Wales, so can the Minister clarify how this will work and where in Wales it will be?

[Baroness Sherlock (Lab)]

I share this: I have a grid that tells me which bits are devolved and which are not in different parts, because I struggle to keep track of it. The noble Baroness probably knows much more about this than I do, for which I pay tribute. Essentially, in Wales, as she will know, health is devolved; employment support, including youth, skills and training, is devolved; careers are devolved; and welfare reform is reserved. We are going to work with the Welsh Government; for example, there is already a youth guarantee in Wales, as I am sure she is aware. Some of the principles in our White Paper go with the grain of work that has already begun in Wales and we will work with the Welsh Government on a Wales-based trailblazer and to figure out how best we can join up with what they are already doing, where the gaps are and how we can learn together. It will be very much a partnership question. In Scotland, it is slightly different again—not that she asked about Scotland—because different parts are devolved. In Northern Ireland, it is pretty much all transferred. We have already begun speaking to officials in all the devolved Administrations with a view to taking this forward.

[Lord Spellar (Lab)]

My Lords, paragraph 45 refers to the fact that the economically inactive are

“more likely (than the population as a whole) to have no qualifications, and some may also face other complex disadvantages, including homelessness, drug or alcohol addiction and contact with the criminal justice system”—

I stress that final point. In many cases, especially regarding criminal convictions and paper qualifications, these factors become insuperable barriers to gaining employment, even when they have no relevance to the actual requirements of the job concerned. Given that the best way to get a job is to have a job, I ask the Minister to look critically at these discriminatory practices, which are as prevalent in the public sector as in the private sector, and are not only damaging to individuals and their families but incredibly economically inefficient as they impact on hundreds of thousands of our citizens.

[Baroness Sherlock (Lab)]

I thank my noble friend, and I do not need persuading of this. One of the most inspiring things I have seen in the DWP—I did not start it, so I can say this—has been work with prison work coaches. They are based inside prisons, working with those who are preparing to leave, to try to make sure that we can get them into a job. I am working closely with my colleague, the noble Lord, Lord Timpson, and our departments are working together to try to find the best ways in which we can ease the transition from prisons into work. When we look at the levels of recidivism, which are staggeringly high—never mind what happens in young offender institutions—we know that, if we cannot crack this, it will not only be a potentially lifelong challenge for an individual, which they will never really overcome, but a huge problem for the state, both in the loss of opportunity for that individual and their talents and in terms of future crime. My noble friend raises a really important point.

[Baroness Gohir (CB)]

My Lords, I refer to my interests as set out in the register. Black and Asian women, particularly Bangladeshi and Pakistani women, have high unemployment rates and find it very difficult to get back into work after 15 or 20 years of caring responsibilities; for example, they may not have the digital skills they need. What are the Government doing to get these women into work? Are the apprenticeship schemes aimed at returners to work reaching these groups of women?

[Baroness Sherlock (Lab)]

The noble Baroness raises an important point and I pay tribute to her work with the Muslim Women’s Network and with so many in her community. There is a range of support out there and I have seen some good examples. On Employability Day, I spoke to one programme which was doing fantastic work with women from a number of minority communities who were returning to work, or maybe had never been in work, after their children had grown up. They had very particular barriers and the scheme was designed to focus on them.

One of our challenges is finding a way to get people not only into work, which is really important, but to develop in work. I am sure the noble Baroness will know this better than I do, but if you look at the distribution of people who are in jobs at national minimum wage or national living wage, there are overwhelmingly more young people and older people, but also Bangladeshi people and Pakistani people are much more likely to be in low-paid jobs. The one thing we know from the evidence is that if you start at a low pay, you stay in low pay—it is very hard to break out of it. One of the challenges in the new system, which we are determined to get right, as we develop the new national jobs and careers service, is: how do we help people, whatever their background, to have the opportunity to get in, but also to get on and have ambitions?

[Lord Bellingham (Con)]

My Lords, in opposition, the Labour Party said it would be the most business-friendly ever. However, since the last Budget, is the Minister aware that every single employer organisation, ranging from the CBI and the IoD to the NFU and the British Retail Consortium, have condemned the Budget as being thoroughly anti-business? Can she answer the question from the noble Baroness on the shadow Front Bench about how the Government are now going to repair relations with business? How can the Government deliver these programmes and strategies without the good will and support of business and wealth creators?

[Baroness Sherlock (Lab)]

As I said earlier, we have been very grateful that business and business organisations have made it clear that they do want to work with us on this, because there is a clear area of common interest. There are currently over 800,000 vacancies in the economy and businesses need to be able to recruit people, but they cannot do so.

On the broader point, I try not to play the political pantomime game on the Front Bench, but I have to say to the noble Lord that if we had not had the economic crash we did, we would not have to take the measures we have done. We did not want to take them, but we have to repair the economy and our public services, and get our economy growing again, and this Government will do what it takes.

[Lord Beamish (Lab)]

My Lords, the community and voluntary sector plays a key part in getting people into work, not only offering placements but actively working with groups that are difficult to reach. Does my noble friend agree that a lot of those voluntary and community groups are pushed out of this space because they are small and cannot bid for the contracts put forward by the DWP? That is an area she could look at, to ensure that groups such as the Just for Women Centre in County Durham, which does great work, can actually get those contracts.

[Baroness Sherlock (Lab)]

My noble friend knows that the way to my heart is to mention County Durham. I should probably declare an interest, although it is so old that it is not an interest. Once upon a time I contracted with the then DWP to run employment programmes for single parents. That was about 100 years ago, so it is probably too old to be there now.

In response to my noble friend’s question, he is absolutely right that it is very hard for small voluntary organisations to bid for national contracts, yet they can often reach people that central government will never be able to. We have heard examples from around the House today. One of my hopes is that the more we can localise things, the easier it will be to involve a range of partners from an area, and people will know who the good players in their area are. Furthermore, the issues are different in different areas; as the noble Baroness, Lady Gohir, explained, some areas may have a large Muslim or Bangladeshi community, and in other areas there may be large numbers of young people and single parents. Under this system, each area will have a better sense of what its problems are and which partners can be worked with. The aim of the trailblazer areas is to see what difference that system can make.

[Lord Sikka (Lab)]

My Lords, I have received a message from a person in Birmingham with 20 years’ engineering experience who has been unemployed and is now a zero-hours contract worker. He says that engineering has been decimated by high energy costs and that our energy costs are more than double those of the French and four times those of the Chinese. When are the Government going to control energy costs and save skilled jobs? Over to you, Minister.

[Baroness Sherlock (Lab)]

I never like to say that something is outside my range but sometimes it really is. The Government have a very clear strategy on green energy and building green jobs, and on building pathways to secure British energy. The creation of Great British Energy and the strategies around it will all make a difference. I am afraid that is the limit of my knowledge.

[Lord Sterling of Plaistow (Con)]

My Lords, not that many years ago, I had the pleasure of being chairman of the National Maritime Museum and got to know that area very well—it had a lot of unemployment. One day I was introduced to somebody who came along to the museum who was fourth generation on the dole. He said that it was not worth his while, considering the size of his house, to consider a job unless it paid somewhere near £48,000. I bring it up because everybody here, I would suggest, was born with a work ethic and was proud to get a job, but so many people now find all the ways possible to avoid doing so. I know how much this means to the Minister and my question is: how are we going to get people off the dole? There are millions of people who should not be on it at all.

[Baroness Sherlock (Lab)]

This is such a hard one. I have no doubt that there are some people out there who really do not want to work and cannot be bothered. They would not get £48,000 in benefits—they would not be able to—but I am sure there are such people out there. However, I have been around this game a long time and my experience is that most people do want to work; there are just huge problems and the figures back that up. We do not have a massive unemployment problem; we have a massive inactivity problem. We have a physical health problem, a mental health problem and a crisis of sickness, disability and an ageing population.

The challenge of years gone by may have been to make sure that everybody wanted to work. The challenge of today’s economy is to make sure that everybody is able to work, and that they are able to get the job they need to help transform our economy. If we do not do that, businesses cannot fill vacancies, the economy cannot grow and nothing can happen. We are going to do it.

Social Security Advisory Committee: Winter Fuel Payment

Baroness Sherlock Excerpts

Thursday 14th November 2024 Lords Chamber

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

My Lords, I thank the noble Baroness for her question. I am sure she is aware that the Secretary of State has replied to the Social Security Advisory Committee and has placed a copy of that on GOV.UK. She has gone through all the points raised by the SSAC and responded to them in detail, so I commend that to the noble Baroness. If noble Lords would like to ask any questions, I am happy to respond to them specifically. The department has a good working relationship with the SSAC. We welcome its observations and comments, and we always listen to the points it makes. It will be no different on this occasion.

The noble Baroness raised questions of housing benefits and costings. Final costings for the changes were certified and published by the OBR at the Autumn Budget and take account of any behavioural responses and the estimated number of people claiming pension credit in the upcoming years. I stress that if more people who are entitled to it claim pension credit, that is a good thing. It means that those people will get approaching £4,000 a year rather than or in addition to the winter fuel payment.

On the question of housing benefit, the judgment was made not to make housing benefit in itself a qualifying benefit, because it is based not only on financial circumstances but the amount of rent. As the noble Baroness will understand only too well, households that get housing benefit can go higher up the income distribution than those that get pension credit. That can be true even if they get the maximum, because of the way earned income is treated. We also have to take account of fairness between those who are renting and those who are paying mortgages. I presume that is why, when the previous Government did cost of living payments, they did not choose housing benefit as a qualifying benefit. I imagine it was for the same reasons.

[Lord Palmer of Childs Hill (LD)]

My Lords, following the Minister’s reply, the Social Security Advisory Committee recommended that the Government consider bringing forward an urgent amendment to the regulations which would, for this year only, very modestly passport those in receipt of the full rate of pensioner housing benefit on to winter fuel payments. It is a very modest request. Will the Government take that advice?

[Baroness Sherlock (Lab)]

My Lords, I think I have answered the point about housing benefit and explained why the Government took the decision we did. However, we are determined to do everything we can, so we are directly contacting approximately 120,000 pensioner households that may be eligible for pension credit, to encourage them to make a claim. We are also writing to all pensioners to make sure they are aware of the changes coming forward and to link them to where they can claim pension credit if they are entitled to it.

[Lord Deben (Con)]

Will the Minister accept that the decision not to give money to people who do not need it was the right decision, and that to argue against it is not sensible? However, it is also true that the public has really not understood what this now means. The Government have to communicate much better than they are doing at the moment. It is wrong to attack the Government for the decision, but it is perfectly right to attack the Government for not putting that decision over in a way that people can understand.

[Baroness Sherlock (Lab)]

I am grateful to the noble Lord, especially for the first half of that encouragement. The Government had to make some difficult choices. Deciding not to pay the winter fuel payment to people who do not need it was one of those choices. Inevitably, that causes some challenge and concern, particularly for those who are around the margins, as with any system of means testing. That has been challenging, but I take the advice of the noble Lord and we will look again to make sure that we are properly explaining to people what is happening and that those who need this most will still get help. I hope that they will not just get the help of the winter fuel payment, but potentially thousands of pounds in pension credit as well.

[Lord Dodds of Duncairn (DUP)]

Have the Government carried out any assessment of the differential impacts across the regions of England and the countries of the United Kingdom of this decision to axe winter fuel payments for most pensioners? There will be different impacts. Coming from Northern Ireland, we know some of the concerns there are, and the different levels of information that have been given out about people’s eligibility for pension credit and the campaign to encourage uptake.

[Baroness Sherlock (Lab)]

My Lords, the situation is different in different parts of the country. In Scotland, it is complicated by the fact that this is the first year it is devolved, so we have had to legislate in a different way to enable us to do that for Scotland but not for elsewhere in the UK. The Government have sought to make sure, by writing, across the piece, to 12 million pensioners, that we are directly engaging and that people are as aware as possible. There are also campaigns going on with partners in local government and voluntary organisations, as well as a media campaign on radio, television and social media. I will certainly check, go back and review that, and if I have any concerns that it is not being done appropriately in some parts of the United Kingdom, I will very happily come back to the noble Lord.

[Lord Davies of Brixton (Lab)]

As my noble friend says—I will get it right this time—we now have the letter from the Secretary of State. I am sorry to have to press her on this, but the Government consistently fail to answer the first question raised by the committee. I asked the same question in a Written Question during the recess and, again, it was not answered. The committee wants to know,

“the offsetting cost of different levels of additional Pension Credit take-up”.

I too asked that question, and saying that the OBR has signed off the figures is not an answer.

[Baroness Sherlock (Lab)]

My Lords, I understand that the OBR listed certified costings if nobody claimed pension credit, and costings on the assumption, which was also our assumption, that there would be a five percentage-point increase in that. It seems to me that that gives the entire range, and between that, presumably one could do the sums. I think that that does answer the question.

State Pension: Age Increase

Baroness Sherlock Excerpts

Thursday 14th November 2024 Lords Chamber

[Lord Davies of Brixton]

To ask His Majesty’s Government what preparations they are making to inform people born on or after 6 April 1960 about the increase in their state pension age from 66 to 67 which will be implemented over the period 6 April 2026 to 5 April 2028.

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

My Lords, the Government recognise that information about the state pension age is crucial to retirement planning and are committed to communicating planned state pension age changes effectively. The department undertakes a range of activities, including awareness campaigns, digital tools such as “Check your State Pension age” and sending personalised letters. We are developing our strategy to communicate information and assessing the most effective ways to raise awareness about state pension age changes.

[Lord Davies of Brixton (Lab)]

I thank my noble friend for her Answer. I remain concerned that we are only 17 months away from when people discover that they are not able to retire at the date that they thought they would. We know where this ends up: a finding of maladministration by the ombudsman and mass discontent. I urge the noble Lord, the noble Minister, the Baroness, to make sure that a mass campaign is initiated soon. Many people have an aversion to opening brown envelopes; we need this to be highlighted in the press for the next 17 months.

[Baroness Sherlock (Lab)]

My Lords, I answer to anything really. The Government have already used an array of methods to communicate state pension age changes, including leaflets, advertising campaigns, digital tools and directly writing to everybody affected. Between December 2016 and May 2018, DWP wrote to all those in the group my noble friend is talking about—that is, those born between 6 April 1960 and 5 April 1961, which includes me—who have state pension ages between 66 and 67. In 2016, DWP launched a tool “Check your State Pension age” on GOV.UK and also “Check your State Pension forecast”. More than 31 million digital forecasts have been done plus another 1.5 million paper forecasts. I think it is working. The 2021 Planning and Preparing for Later Life survey talked to exactly those people and found that, of those with a pension age between 66 and 67, 94% either correctly identified their state pension age or overestimated it.

[Baroness Meacher (CB)]

My Lords, with the increase in life expectancy in recent years, will the Government consider increasing the state pension age by more than one year in order to limit the tax burden on those of working age?

[Baroness Sherlock (Lab)]

My Lords, life expectancy is increasing, but the rate of increase is slowing. Built into the Pensions Act 2014 is a requirement on the Secretary of State periodically to review the state pension age, taking into account life expectancy and a range of other appropriate factors. There have already been two of those reviews. The next one has to happen by March 2029, I think. I have no doubt that the Secretary of State will take account of precisely those matters.

[Lord Palmer of Childs Hill (LD)]

My Lords, does the Minister agree that we do not want a repeat of the WASPI women scandal? We have been here before. If individuals are not properly informed about the change to their state pension age, will the Government consider introducing a clear appeals process or a safety net to ensure that no one is financially disadvantaged due to a lack of information? From past experience, we know that there will be many people who fall through the net, and we need to have an appeals process in place.

[Baroness Sherlock (Lab)]

My Lords, it is crucial that everybody gets to know their state pension age, but the reality is that there are a lot of different ways in which people do that. I already knew that my state pension age was increasing. A lot of that was simply from information in the news and on television. One of the ironies is that, when I was first briefed about this, I was told that the department had written to everybody in that age category. I said that I had no recollection of receiving such a letter, but I was assured that it had happened. Last weekend, I moved house and, when I opened a folder of unfiled papers, what was sitting on the top but a letter dated February 2018 telling me that my state pension age would be 66 and two-thirds. The point is that different people receive information differently. I am of an age where I get most of my information on my phone, from which I am rarely parted, and from news consumption. We have to use every possible means of communicating to make sure that people get the information out there.

[Baroness Bryan of Partick (Lab)]

My Lords, is the Minister aware that average life expectancy is highly variable depending on many factors, including class? There are parts of Glasgow where people die in large numbers before their pension age, so I hope the Minister can reassure me that the idea of extending it will not be adopted when the people who suffer most are those who need the pension most.

[Baroness Sherlock (Lab)]

My noble friend raises an important point. One of the requirements on the Secretary of State when she comes to do the statutory review of the state pension age is to look at issues such as life expectancy. Every now and again, someone comes up with the idea of varying the state pension age by, for example, location or profession. The reality is that, whereas there are differences between regions or professions, in some cases the differences within them are as great as or greater than the differences between them, so trying to find a way of doing something that would be fair, other than a simple state pension age, is challenging. The real challenge for this Government, as for everyone, is that we should not have these regional variations in our country. We are one country, and we should be tackling those kinds of regional inequalities so that we do not end up in this position.

[Lord Watts (Lab)]

My Lords, is it not the case that we should move to when people start paying national insurance? People often start work at 16 in construction and other jobs, while others do not start work until 23 or 24. Should there not be some understanding about the different types of people, how long they are in work and what jobs they do?

[Baroness Sherlock (Lab)]

There are variations. One of the challenges is that, now we want to keep young people in education, training or employment until 18, we find that fewer people leave school and start work early. My noble friend is raising an underlying point that is really about fairness. We want to see everybody having the opportunity to study for as long as is genuinely helpful and suits them, then to move into fulfilling work and to be able to progress in it over time. I return to one of the challenges. The Secretary of State will consider all factors, but if we look at how difficult it is—and we know how hard we have had to work—to communicate a single state pension age, trying to communicate variable state pensions ages risks complicating it. But my noble friend raises an important point, and we will keep it under consideration.

[Lord Evans of Rainow (Con)]

My Lords, the Chancellor has announced that she is going to merge 86 public sector pension funds into eight megafunds. We have been talking about that for quite a long time. Will the Minister update the House on how and when that will happen?

[Baroness Sherlock (Lab)]

My Lords, information will be coming forward. We are doing a pension review at the moment. Stage 1 is coming to an end and stage 2 is coming through. There is also a pensions Bill coming through, and when that comes through, all the details will be made available.

[Lord Rooker (Lab)]

My Lords, why is it that those who are above the state pension age, whatever age it is, and still working and contributing to society are not required to pay national insurance? We are missing £1 billion-plus to the Treasury. National insurance is a tax; it does not pay for anything. It should be paid by all those who are working, irrespective of age.

[Baroness Sherlock (Lab)]

My Lords, of all the weeks when I am not going to start making up national insurance policy on the hoof, this is most definitely one of them. However, I hear what my noble friend says, and I will pass that along.

[Baroness Stedman-Scott (Con)]

My Lords, what assessment have the Government made of the impact on employment, particularly for older people, of increasing NI contributions for employers, bearing in mind that the winter fuel payment has been withdrawn?

[Baroness Sherlock (Lab)]

My Lords, to separate those two out, the Treasury has published documentation on GOV.UK relating to the Budget and an impact assessment of different aspects of the Budget. On the question of the winter fuel payment, the noble Baroness will know that the vast majority of people who will be entitled to it are being encouraged, if necessary, to apply for pension credit or other benefits. For most of the rest, many of them will not be in employment and will not intend to be in employment. The winter fuel payment is aimed at people of pension age, so I do not see the connection between the winter fuel payment and national insurance, but if the noble Baroness wants to speak to me about it afterwards, I am happy to talk to her.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, does my noble friend agree that one of the best ways to get these kinds of messages over to older people is through the network of voluntary organisations, particularly Age UK, Age Scotland, Age Cymru and Age Northern Ireland? Will she and her department mobilise that network to get this message across?

[Baroness Sherlock (Lab)]

My noble friend is a great advocate for Age UK and its counterpart organisations, and they welcome his advocacy. We have a good relationship with Age UK and other charities in this sphere. They have been very effective at getting messages out, but I come back to the fact that we have to get messages out across the piece. Messaging about the state pension age is aimed at people who are not yet retired, including me, so we need to get messages out everywhere people get their information. One of the ways of doing that is through family and friends—spread the word. Please make sure that everyone is aware of this: go on GOV.UK to “Check your State Pension age” and “Check your State Pension forecast”.

Health-related Benefit Claims

Baroness Sherlock Excerpts

Tuesday 5th November 2024 Lords Chamber

[Baroness Hazarika]

To ask His Majesty’s Government what plans they have to deal with the rising cost of health-related benefit claims.

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

My Lords, this Government are committed to supporting people into work, improving outcomes for all and ensuring long-term fiscal sustainability. Our plans as announced in the Budget include £240 million to tackle the root causes of inactivity through the “Get Britain Working” White Paper. In 2025 we will also bring forward proposals to reform health and disability benefits.

[Baroness Hazarika (Lab)]

I thank my noble friend the Minister for that Answer. Does she agree with me that whatever your politics, we should all care about helping more people back to work? It is good for the individual, the economy and the social security bill. Most people claiming health-related benefits are not feckless or lazy; they want to work but have often suffered bad luck, such as an accident or an illness. Has my noble friend seen the work of the Resolution Foundation, which highlights a particular concern with younger workers and mental health issues? Can she outline what the Government are doing to help our younger people get back to work?

[Baroness Sherlock (Lab)]

I thank my noble friend for some very good questions. Evidence shows that appropriate work is generally good for health and well- being, so we want everyone who can to get work and get on in work, whoever they are and wherever they live. But that means proper support for those who are living with health conditions or disabilities.

In relation to younger people, the Resolution Foundation report on this matter had some very interesting findings. One that struck me particularly was that young people who have lower skill levels are more likely to be workless as a result of health conditions than those with higher skill levels. That tallied with the evidence I have seen. Back in 2012, one in 13 of the young people who were not in education, employment or training reported a mental health problem. Now, it is one in five. We have a real challenge with young people and mental health.

We are doing two things: directly improving mental health support for young people in schools and in the community, and trying to do what we can to get them into work. The Budget money announced will help to establish eight youth guarantee trailblazer areas across England to test new ways of supporting young people into employment, training or apprenticeships, working with local suppliers. That will inform the development of a youth guarantee for all 18 to 21 year-olds.

[The Lord Bishop of St Albans]

My Lords, I pick up the Minister’s reference to mental health. Some estimates suggest that up to two-thirds of those claiming incapacity benefits are doing so on the basis of mental health-related issues. Can the Minister tell us whether a focus on young people, in particular their use of things such as smartphones and social media, is being both researched and fed into the Government’s early intervention strategy?

[Baroness Sherlock (Lab)]

My Lords, there certainly has been a growth both in the number of young people reporting mental health issues and in the number of people on sickness or disability benefits as a result of mental health issues—although, because the numbers still skew towards the older age, there are still more older people with mental health issues. However, we definitely have a challenge with young people and mental health issues.

If my department is doing any research on mobile phones, it has passed me by, but I will go back and ask that specifically. However, I am working with my colleagues in the Department for Education to look at the well-being of young people. For example, a children’s well-being Bill will put children’s well-being at the centre of their education. We are looking at providing every single school with a mental health professional who can work with young people. Outside that, we will have youth hubs, with drop-in services and mental health support. If we want our young people to go on to live fulfilling, thriving lives, we need to tackle this problem as early as possible and give them the help they need.

[Lord Palmer of Childs Hill (LD)]

My Lords, does the Minister believe that the reason for health-related benefits claims is the state of the health service, including people’s access to their GP for a face-to-face appointment? If we do not deal with that, we will not deal with health-related benefits. What are the Government doing to pursue those aims?

[Baroness Sherlock (Lab)]

My Lords, the noble Lord points out another of the contributory factors. A complex web of things brings people to this point. As far as we understand it, a number of contributory factors are driving the rise in health-related benefits. Disability has gone up in prevalence over the last 25 years, including a rise in mental health issues. Also, longer NHS waiting lists are thought to increase claims for benefits before people are treated, because they are waiting longer, and potentially after they are treated, because they have poorer outcomes as a result of problems in the National Health Service.

This Government are absolutely committed to fixing our NHS. We have seen record investments, and the plans that came out in the Budget mean that we are absolutely committed both to engaging directly in supporting the NHS and to tackling some of these problems. As part of “Get Britain Working”, we will have trailblazer areas across England and Wales bringing together health, employment and skills services. In three of those areas, money will go to the NHS to develop evidence on how the health system can prevent ill-health-related economic activity. We are going to sort this.

[Viscount Younger of Leckie (Con)]

My Lords, I remain to be convinced that the measures the Government are taking to get more inactive people on benefits into work, including those with mental health challenges, will bear fruit—I hope that they will. I have lost count of the number of consultations that have been announced. Crucial for this is a willingness of employers to hire. Have the Government not made matters much worse with the rise in national insurance contributions for employers announced last week?

[Baroness Sherlock (Lab)]

My Lords, I ask the former Minister not to prejudge this—we have not even published the White Paper yet. He may not be convinced by it, but I hope to convince him yet. When it comes out, I will happily talk him through it as there are some excellent plans.

He raises an important point about employers. My department is doing a lot of work with them, and we have plans to do even more. If we are to get people into work—particularly people who have challenges, such as mental health issues or other barriers—we need to get the right people into the right jobs with the right support. Otherwise, the danger is that we get people into jobs but they fall back out of them and do not stay there. We are absolutely committed to working with employers, making sure that we can get employers the staff they need and people the jobs they need.

[Baroness Butler-Sloss (CB)]

My Lords, is the Minister aware of whether CAMHS are being properly financed?

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, there is no doubt whatever that there are real problems with child and adolescent mental health services, but we will address them. In the meantime, we have plans in place to recruit another 8,500 mental health professionals to support both children and adults, and we will look carefully at that. We are very conscious that there is no point in identifying mental health problems if there is nowhere to refer young people when they need help.

[Lord Turnberg (Lab)]

My Lords, the most effective treatment for mental illness is cognitive behavioural therapy. It works very well and has been shown to save money because it is quick and effective. It requires clinical psychologists. Do we have enough of them, and what are we doing to fill the gap?

[Baroness Sherlock (Lab)]

Honestly, I have no idea—but I have colleagues in the Department of Health who will. As a Government, we are developing significant extra support and making sure that there is an NHS fit for the future, including by providing appropriate support. I am afraid that I will have to find someone to write to my noble friend about the number of CBT therapists.

[Baroness Fraser of Craigmaddie (Con)]

My Lords, many schemes have been getting people on benefits into work, but research shows that one of the biggest challenges is keeping people in work and enabling them to move on to a second, third or fourth job and a career. What are the Government doing to support keeping people in work?

[Baroness Sherlock (Lab)]

What a great question. We are absolutely committed to this being a strategy not just to get people into jobs but to get people into good jobs, to keep them there and to help them progress over time. The focus of the “Get Britain Working” White Paper will be on that. In this country we need good jobs and we need people to get them. They need to be given the support to get there—and continuing support, if they need it, while they are there—and then to have the ability to progress. Our three-part scheme will not just include the youth guarantee but bring together the national jobs and careers service as well as skills and help-at-work support. It is all about trying to get people in jobs and make sure that they progress when they are there. I thank the noble Baroness for asking a great question.

[Baroness Winterton of Doncaster (Lab)]

My Lords, following the important points that my noble friend Lady Hazarika made about young people with mental health problems, and the point that was made about CAMHS, does the Minister agree that there needs to be a seamless transition between CAMHS and adult mental health services if we are to end fragmentation and help young people with mental health problems back into work? Will she emphasise that to the Department of Health?

[Baroness Sherlock (Lab)]

My noble friend makes an excellent point. I am sure that many noble Lords will have heard cases of individuals who found that they were getting appropriate support sometimes when they were children but then found the transition to adult mental health services problematic afterwards. The NHS, as well as investing in support for young people, is investing in mental health care, but I will make sure that specific point is conveyed to my colleagues in the Department of Health.

Pension Credit

Baroness Sherlock Excerpts

Monday 4th November 2024 Lords Chamber

[Baroness Stedman-Scott]

To ask His Majesty’s Government what steps they are taking to ensure every pensioner who is eligible for Pension Credit receives it.

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

My Lords, the Government want all eligible pensioners to apply for pension credit. The Government have written to pensioners providing advice about claiming pension credit following the change to the winter fuel payment, alongside a range of other creative media campaigns. We are engaging directly with pensioners as well as with stakeholders, including devolved Governments, councils and charities, in a joint effort to raise awareness through our combined networks and channels.

[Lord Davies of Brixton (Lab)]

My Lords—

[Baroness Stedman-Scott (Con)]

I say to the noble Lord: feel free. Having run a pension credit campaign, I can understand what the Minister is undertaking. Do the Government intend to guarantee that the DWP has the capacity to deal with what could well be a rapid uptake of applications for pension credit—with all the extra administration needed to process the claims —after this Government’s shameful decision to deprive pensioners who need it most of their winter fuel payment?

[Baroness Sherlock (Lab)]

My Lords, on that final point, which, obviously, I cannot let go, the poorest pensioners are protected because those on pension credit will still have access to the winter fuel payment.

On the bulk of the noble Baroness’s question, we continue to operate good service levels. Around 500 additional staff have now been brought in to support processing during the recent surge in pension credit claims. Processing times may increase; we have advised customers who apply that it could take nine weeks to process their claims. However, anyone who applies before the deadline of 21 December can have their application backdated, which means not only that they will get winter fuel payments but that they may well get pension credit on top of that.

[Lord Palmer of Childs Hill (LD)]

My Lords, I compliment the Minister on the work being done to make people claim pension credit they should have claimed before, in order to try to make up for the rather strange removal of the winter fuel allowance. Can she tell the House when—if we have not reached this point already—the amount of pension credit that was not being claimed before is going to exceed the amount notionally saved from the winter fuel allowance? If that point has not yet been reached, when will it be reached?

[Baroness Sherlock (Lab)]

My Lords, I was so with the noble Lord for the first 20 seconds—all the way. I am grateful for his congratulations to the department, and I shall take them back to my colleagues, who are doing a brilliant job on this front. We have written to around 12 million pensioners about the change to the winter fuel allowance, so a lot of work has been done out there to encourage people to apply—and it is having an effect. We have seen a 152% increase in pension credit claims received by the DWP in the eight weeks following the announcement on the winter fuel payment compared to the eight weeks before, and that will be updated towards the end of the month.

On the costs at the end, obviously, a lot of these claims have to be processed and we will not know for some time down the road. However, it is very clear that the DWP wants everybody who is eligible to do so to claim pension credit. As I have said before, if we end up with more people claiming the money to which they are entitled, that is a good thing. Pensioners deserve the money to which they are entitled.

[Lord Davies of Brixton (Lab)]

My Lords, I apologise to the House and to the noble Baroness, Lady Stedman-Scott, for jumping in too quickly. My noble friend the Minister gave the figure of 500 additional staff in an Answer to a Written Question from me earlier in the Session. What was not clear from her reply was when the 500 extra staff would be in post and fully trained to provide the service required to achieve the take-up of pension credit that we all want to see.

--- Later in debate ---

[Baroness Sherlock (Lab)]

As I understand it, the staff are mainly being redeployed from within retirement services and the DWP. It is not uncommon for staff to get moved around to different areas of the department as the need moves and flows during the year. Some of those are already in place, and some are going straight in because they are already experienced in dealing with pension credit and need no training. Others who need specific training on dealing with those claims are being moved across—but we are already doing this.

[Lord Watts (Lab)]

My Lords, does the Minister agree with me that it is hard to take lessons from the Opposition, who in government oversaw the biggest increase in poverty and homelessness—and then they have the cheek to lecture this side about poverty?

[Baroness Sherlock (Lab)]

My Lords, it is true that the last Labour Government lifted more than 1 million pensioners out of poverty and that the number of pensioners in relative poverty has increased by around 300,000 since 2010-11. However, on the pension credit, I think we are all of one mind. We want to encourage everybody out there who is eligible for pension credit to claim the money and claim it as soon as possible. Please put the word out.

[Lord Naseby (Con)]

Is the Minister aware that we are dealing with some really quite elderly people? Therefore, the response, in terms of their ability to go online, for example, is likely to be very low, so why on earth are we establishing a terminal date of 21 December? Secondly, am I right in understanding from the Minister that we are taking on 500 extra civil servants to handle this demand? Is that not a complete farce, when really it would have been much simpler to leave the winter fuel allowance where it was for all our pensioners, all of whom have paid taxes over the years—and many of those families have lost loved ones in the Second World War and the subsequent Korean War?

[Baroness Sherlock (Lab)]

My Lords, I apologise to the noble Lord if I was not clear in my last answer—I acknowledge that I speak too quickly on occasion. Many of those 500 staff are being redeployed from within the department. It is not unusual for people to move to different areas of the Department for Work and Pensions, moving on to campaigns as needed. The noble Lord is absolutely right, and of course, there is a very wide range of pensioners. There are many in this Chamber who may technically be of state pension age but who are highly computer literate and more than able to use the online campaigns. The online form is incredibly simple: if somebody applies online, the maximum number of questions they will have to answer is 48, and for some it is as few as 35.

[A noble Lord]

That is still a lot.

[Baroness Sherlock (Lab)]

It is a lot, but they include “name” and “date of birth”, so give us a bit of a break here. That said, there are days, I acknowledge, when some of these are beyond me. The great thing is that if you phone the helpline, it is equivalent to doing it online, because the person at the other end is putting the stuff in for you. If you do not want to do computers, you can phone and someone will take you through it. The satisfaction rates are very high. Finally, those who are really struggling can apply with the help of somebody from DWP or from a charity. In extreme cases, someone from DWP will even visit people at home. We will do what it takes to get people to apply for the money to which they are entitled.

[Baroness Ludford (LD)]

My Lords, my noble friend Lord Palmer did not get an answer to his very legitimate question on when the cost of the claims for pension credit that we hope will be made will cancel out the saving from the winter fuel payment, factoring in the 500 extra staff in particular. It is fair to ask that question and to wonder whether there is a bit of conflict of interest here: if lots more people apply for pension credit, the £1.5 billion saving that has been headlined disappears.

[Baroness Sherlock (Lab)]

My Lords, when the costings on this policy were done, the Explanatory Memorandum made it clear that the expectation was that it would save £1.3 billion in this financial year and £1.5 billion a year after that. That saving was on the assumption that pension credit would increase by five full percentage points, and it was net of any other DWP benefits that might go with that. Until we exceed that point, the savings are still there. We will not know where this lands until all the claims are in and processed. I simply say, finally, that I want everybody who is eligible for this to claim it. If we end up with more people getting not just the winter fuel payment but the pension credit, that can be worth an awful lot of money. The average pension credit award for a single pensioner is around £72 a week. This is worth having.

[Lord Dodds of Duncairn (DUP)]

My Lords, the noble Baroness will be aware that these matters are devolved to the Northern Ireland Assembly and Executive, but we are affected as much as any other part of the UK by the cuts to the winter fuel allowance and short uptake of the pension credit. What has been done to liaise with the Northern Ireland Executive to ensure that pensioners in Northern Ireland will have the same advancements, encouragements and incentives to apply for pension credit?

[Baroness Sherlock (Lab)]

My Lords, my department is working very closely with the devolved Administrations, including with colleagues in Northern Ireland, to make sure that campaigns for take-up are out there. However, the core issues around, for example, state pension are reserved.