Scotland Act 2016 (Social Security) (Consequential Provision) (Miscellaneous Amendment) Regulations 2021

Baroness Stedman-Scott Excerpts

Thursday 24th June 2021 Lords Chamber

Moved by

[Baroness Stedman-Scott]

That the draft Regulations laid before the House on 17 May be approved. Considered in Grand Committee on 22 June.

Motion agreed.

Scotland Act 2016 (Social Security) (Consequential Provision) (Miscellaneous Amendment) Regulations 2021

Baroness Stedman-Scott Excerpts

Tuesday 22nd June 2021 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Scotland Act 2016 (Social Security) (Consequential Provision) (Miscellaneous Amendment) Regulations 2021.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, I am pleased to introduce this instrument, which was laid before the House on 17 May 2021. Subject to approval, the regulations will make some necessary legislative changes to prevent overlapping entitlements to the soon-to-be-introduced Scottish child disability payment and UK disability benefits. It will also permit the Department for Work and Pensions to accept the Scottish government appointee arrangements for UK government benefit purposes, thereby reducing the administrative burden for claimants and appointees in dealing with both Governments. I am satisfied that the regulations are compatible with the European Convention on Human Rights.

The UK Government are committed to making devolution work and to ensuring the safe and secure transition of powers to the Scottish Government under the Scotland Act 2016. As a result of the devolution of social security powers to the Scottish Parliament under this Act, the Department for Work and Pensions will need to update its legislation from time to time to reflect the introduction of the Scottish Government’s replacement benefits. Section 71 of this Act allows for the necessary legislative amendments, in this case as a result of benefits introduced under the Social Security (Scotland) Act 2018.

I am grateful for the opportunity to debate these regulations today. They will effect some purely technical changes and prevent overlapping entitlement to and payment of the Scottish child disability payment and UK disability benefits such as disability living allowance for children, personal independence payment and Armed Forces independence payment. It also includes some time-limited overlapping provisions for Northern Ireland. It will enable the Department for Work and Pensions to accept appointees over the age of 18 if they have already been granted appointee status by the Scottish Government. This is a positive change for claimants and staff.

Noble Lords will be aware that the Social Security (Scotland) Act 2018 established the legislative framework for the Scottish Government to introduce new forms of assistance using the social security powers devolved under Section 22 of the Scotland Act 2016. Specifically, Section 31 of the 2018 Act allows the Scottish Government to introduce legislation to provide financial support through their disability assistance for people in Scotland with long-term additional health needs. The Scottish Government have legislated for disability assistance for children and young people, which will be introduced from July 2021. They are calling this child disability payment; I will refer to it as CDP from now on.

I understand that CDP will have residency conditions attached and primarily will be paid only to claimants who live in Scotland. However, as part of their offer the Scottish Government will continue to pay CDP for a period of 13 weeks after a claimant has left Scotland and moved to another part of the UK. This will allow claimants time to sort out new benefit arrangements, should they wish to.

Our intention is to offer a similar facility for those moving to Scotland, though this will not be needed for a few years. What is needed now is a modest legislative amendment to deal with this policy, in order to both support the devolution agenda and strengthen a union that works together in the best interests of our shared citizens.

If these regulations are passed today, they will ensure that there are clear boundaries between entitlement to CDP and entitlement to a similar UK government benefit, and that there is no overlapping provision of entitlement. They will do that by making it clear that entitlement to a relevant UK government benefit will not start until the day after payment of CDP has ended and will reflect the Scottish CDP legislation, which acts in a similar way. This will not only protect the public purse by avoiding double payment but help prevent the need for complicated overpayment calculations and recovery. Furthermore, it is also in the best interests of the claimant, who will have a clear expectation of which Government is responsible for paying their benefits at which point in their claim or award.

The instrument includes provisions on behalf of the Ministry of Defence to ensure that Armed Forces independence payment will similarly not overlap with CDP. Provisions have also been introduced to prevent overlapping entitlement when a claimant moves to Northern Ireland and is in receipt of the 13-week run- on payment from the Scottish Government.

Finally, we recognise that many DWP claimants will also be claimants of the Scottish Government’s devolved provisions. This instrument will make changes to UK government legislation to allow the Department for Work and Pensions to accept that a person over the age of 18 has appointee status if they have already been granted it by the Scottish Government. This removes unnecessary burdens on the claimant, the appointee and the department through effective and proportional collaboration on information shared and used by respective Governments. I commend this instrument to the Committee and beg to move.

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

I thank all noble Lords for their contributions today. I shall deal with some of the points that noble Lords have raised.

In answer to the noble Lord, Lord Naseby, and to some degree the noble Lord, Lord Bruce, I would say that all five parties in the Scottish Parliament accepted the Smith commission recommendations on the devolution of social security. The two Governments are now working together to implement them, and this SI is part of that process. In Wales, social security is reserved by virtue of the Wales Act 2017, although the Welsh Government have the power to make payments to people in extreme financial hardship using the discretionary assistance fund. In Northern Ireland, social security is transferred to the Northern Ireland Executive. However, in line with the Northern Ireland Act 1998, the DWP and the Department for Communities in Northern Ireland work closely together with a view to maintaining parity between the two systems.

The Barnett formula is used by the Treasury to calculate the annual block grants for the Scottish and Welsh Governments and the Northern Ireland Executive. It calculates funding for devolved public services based on what the UK Government spend on those functions in England. If the devolved Administrations want to spend more on devolved services, they must find the funding from elsewhere in their budgets.

On the evaluation of implementation, which noble Lords have raised, that is a matter for the Scottish Government. The UK Government will, of course, be interested in the iterations of the reserved benefits, given the larger number of people in Scotland receiving benefits from both Governments.

In answer to the noble Lord, Lord Bruce, the DWP currently administers benefits on behalf of the Scottish Government where they are the same as other benefits. However, replacement benefits, such as CDP, will be entirely delivered by Social Security Scotland, which is part of the Scottish Government. We will, of course, follow with interest how the Scottish Government deliver their new benefit and we can, of course, learn from their experience where we both face similar challenges.

On cross-border moves from Scotland to England, the noble Baroness, Lady Wilcox, asks what will happen if someone moving from Scotland to England and Wales does not apply to the DWP in time for their claim to be processed before their CDP runs out, and whether they will incur a break in payment. If the claimant is late in making the claim following the move, there is a greater risk that there will be a break in payment. However, arrears will be paid back to either the date of the claim or to the date the run-on ceases, depending on the circumstances. If a claimant delays making an application and their CDP stops before their claim has been made, any new claim can be paid only from the date of that claim.

The DWP and the Scottish Government both have devolution programmes to ensure that all partners are ready in delivery and ready for the implementation. We hope that that working together will continue.

The noble Lord, Lord Bruce, asked about how many more SIs on Scotland are coming. It seems that there are three more statutory instruments on devolution of Scottish Social Security to the Scottish Parliament before the Summer Recess. Further instruments will follow as the Scottish Government make further progress on the replacement of benefits.

The UK Government are working collaboratively with the Scottish Government to ensure that the two systems of social security will operate effectively alongside each other and the required legislation that underpins them is delivered successfully for the people of Scotland and, where relevant, claimants in England, Wales and Northern Ireland. This order highlights the importance that the UK Government place on the effective functioning of devolution. I commend this order to the Committee.

Motion agreed.

Armed Forces: Transition to Civilian Life

Baroness Stedman-Scott Excerpts

Tuesday 15th June 2021 Lords Chamber

[Baroness Sherlock]

To ask Her Majesty’s Government what assessment they have made of the support provided by the Department for Work and Pensions to members of the Armed Forces in their transition to civilian life.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, the vast majority of veterans are able to make a successful transition to life outside the Armed Forces; 84% of veterans are employed within six months of discharge, and these rates compare very favourably with the wider population, where 76% are in employment. The DWP provides support to veterans in a number of ways, including through the early voluntary entry to the work and health programme, and support from its network of Armed Forces champions.

[Baroness Sherlock (Lab) [V]]

My Lords, in 2019 the Government committed up to £6 million to fund more than 100 Armed Forces champions. They are there to provide personnel, veterans and families with specialist support to find work and transition to civilian life, and they are a key part of the Government’s commitment to the Armed Forces covenant. The Minister has now told me in a Written Answer that they now aim to hire only 50 champions and have a record low of just 34 in post. So why have the Government abandoned this commitment to our Armed Forces, and how much of that £6 million has actually been spent?

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

The department’s top priority during the pandemic has been to focus on processing claims and paying people quickly. As a result, the planned recruitment for the Armed Forces champion in April 2020 was paused. During that period, there was a lot of liaison with stakeholders and various interested parties and a new model was devised and got real support from all stakeholders. We now have, for the first time, middle-management lead roles and direct customer support for the 50 Armed Forces champions, and this combined support is well supported. In addition to these people, of course the veterans got the full service of all the work coaches in the DWP network.

[The Lord Bishop of St Albans [V]]

My Lords, in the UK it is estimated that former Armed Forces personnel are eight times more likely to develop gambling problems than civilians. They suffer from higher rates of mental health issues and alcohol problems, factors which may feed into the higher rate of problem gambling. Will Her Majesty’s Government commit to surveying the gambling habits of serving personnel so that we can better provide for our military as they transition to civilian life?

[Baroness Stedman-Scott (Con)]

The right reverend Prelate raises a serious issue that people are well aware of. I would like to offer a meeting with him just to get some more detail from him, and then I will of course take that back to the department.

[Baroness Fookes (Con)]

My Lords, I will not disguise my anger and frustration at the recent refusal of the Government to restore war widows’ pensions to those few ladies who lost it on remarriage. Can my noble friend use her considerable powers of persuasion to find a way forward other than by using the name “pension”, which I understand frightens the life out of the Treasury? Could the widows not receive some form of compensation, hardship payment or the like?

[Baroness Stedman-Scott (Con)]

To be asked not to frighten the Treasury is quite a challenge—I will think about that one for now. Of course, the Government recognise the unique commitment that service families make to our country and remain sympathetic to the circumstances of those who remarried and cohabited before 1 April. I understand my noble friend’s points, and I will do my best.

[Lord Ramsbotham (CB) [V]]

My Lords, can the Minister please tell the House whether the Department for Work and Pensions has carried out any assessment of the usefulness of Armed Forces employment to civilian employers?

[Baroness Stedman-Scott (Con)]

An important point is that when people leave the Armed Forces, they have really good skills that are very attractive to employers in both the public and private sectors, and work is done to make sure that all opportunities are made available to those leaving the service.

[Baroness Janke (LD) [V]]

Can the noble Baroness say what specific support is provided for families—particularly children—of members of our Armed Forces to enable their transition, given that many of them will have spent time in different schools and different locations and may find it difficult to transition after their families leave the services?

[Baroness Stedman-Scott (Con)]

The effect on children living in different parts of the country and the world, and the number of schools they have attended, is well known. It is for the MoD to carry out this activity in its resettlement programme. I will ask my friends in the Ministry of Defence to write to the noble Baroness with more detail.

[Lord Lancaster of Kimbolton (Con)]

My Lords, it was an enormous honour to serve as the Minister for Veterans, probably the most rewarding job in government. While that is the only ministerial job to have the word “veterans” in its title, it is important to remember that all Ministers have responsibility for veterans. One of the challenges they face is access to information, which is why we created the Veterans’ Gateway. Can my noble friend simply reassure me that her department engages with that portal?

[Baroness Stedman-Scott (Con)]

I am happy to confirm to my noble friend that the department engages with the portal. We put veterans and their families in touch with the organisations best placed to help them, and the portal, through the national provision tool, is an absolutely vital part of the service.

[Lord McCrea of Magherafelt and Cookstown (DUP)]

My Lords, I recognise the many challenges faced by the members of the Armed Forces in the transition to civilian life, whether it be need for housing or professional care because of physical or mental incapacity through conflict. Can the Minister assure me that all former members of the Armed Forces are equally provided for across the United Kingdom, including those in Northern Ireland?

[Baroness Stedman-Scott (Con)]

I am pleased to be able to respond to the noble Lord to say that the Armed Forces covenant legislation is specifically designed to cover equality of service. It covers health, education and housing, and the MoD has worked with closely with the devolved authorities in implementing that.

[Baroness D’Souza (CB)]

My Lords, the Government have a duty of care to look after those who have served and a moral responsibility to pick up the tab. That said, will the Minister say what combat-related trauma support is available to women veterans who are actively seeking employment?

[Baroness Stedman-Scott (Con)]

I would need to write to the noble Baroness about trauma support because I will need to get the information from the MoD. However, I can give comfort to her and to the whole House: women do very well when it comes to employment after their service. They have good specialist skills such as transport, logistics and medicine, and the support that the DWP gives takes account of individual circumstances and is individually tailored.

[Lord Sharpe of Epsom (Con)]

My Lords, Dr Hugh Milroy, the CEO of the exemplary military charity Veterans Aid, tells me that the current resettlement system is out of touch with the cost of living today and that he has seen this cause genuine hardship for people with otherwise good prospects. I was surprised to find that the individual resettlement training costs grant available to all leavers with six or more years’ service and all medical discharges is set at £534. Does my noble friend the Minister agree that it is time to modernise the system by providing access to an innovative financial empowerment model, perhaps like the student loan system?

[Baroness Stedman-Scott (Con)]

I am happy to tell my noble friend that while the grant is set at just over £500, the training that it can purchase can be worth thousands of pounds. The Career Transition Partnership contract-funded courses are prepaid by the MoD and it offers other courses as well. Other financial support schemes, such as the enhanced learning credits scheme, can provide up to £3,000. Further financial support of up to £175 per year can be made available through the standard learning credit scheme and the publicly funded further education/higher education scheme provides service leavers with all sorts of support for up to 10 years to a value of up to £9,000. If we need to repackage that, I will be happy to take it back to the department.

[Baroness Smith of Newnham (LD)]

My Lords, the integrated review envisages cuts to the regular forces of around 10,000. What work has the DWP done, alongside the MoD, to assess the possible implications for service personnel and their families who will be leaving the forces perhaps rather more unexpectedly than envisaged?

[Baroness Stedman-Scott (Con)]

The services offered by the DWP through the plan for jobs and other activities with the Department for Education on skills are wide-ranging, and I know that the Ministry of Defence and the DWP will work in partnership to provide the most relevant services to the people who the noble Baroness rightly says will need help.

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the time allowed for this Question has elapsed. We now come to the fourth Oral Question in the name of the noble Baroness, Lady Randerson.

Child Poverty: Ethnicity

Baroness Stedman-Scott Excerpts

Thursday 27th May 2021 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, I thank the noble Lord, Lord Woolley, for securing this important debate and introducing it so eloquently and powerfully. I also thank those noble Lords who have contributed to today’s discussion of this important issue.

I share the concern that has been expressed that children from some ethnic minority backgrounds are more likely to be in low income than their peers. It is absolutely right that any Government are held to account for their record on tackling poverty.

Over the past year, our priority has of course been to help all families, regardless of their background, to withstand the financial hardship brought about by the pandemic. Such unprecedented circumstances have called for an unprecedented response. I believe that this Government are delivering this by spending more than £407 billion on support measures to mitigate the impact of the pandemic, including the furlough scheme and the self-employment income support scheme. This has helped to protect jobs and to keep businesses afloat and has helped families to get by. The noble Lord, Lord Woolley, issued us with a challenge: we can do something little or we can do something great. I believe that the Government are doing a good job in trying to support people in this incredibly difficult time.

That spending also includes the additional £7.4 billion injected into the welfare system further to support those most in need, raising our total spend on welfare support for people of working age to around £111 billion. The noble Baronesses, Lady Lister and Lady Sherlock, referred to the £20 uplift. I must tell them that it was always intended to be a temporary measure. As such, as far as I know, it will cease in September.

We have done other things to support families and children. We fully recognise the profound impact of this hugely challenging period on people’s lives. We have taken further substantial action to support the most vulnerable children and families, wherever they live and whatever their background, to ensure that they are able to access food and other essentials.

My noble friend Lord Farmer raised the important issue of family stability and the good work that family hubs are doing. The Government are working to expand these hubs and continue to invest in the reducing parental conflict programme. The hubs continue to grow at pace. There is a cross-government department team working on family hubs and RPC: I am a member of that group. Somebody pleaded with me to use my voice; it is loud and clear on these issues, and I would be very happy to meet any noble Lords to talk about hubs and the reducing parental conflict programme.

To strengthen the welfare safety net, in December 2020, my department introduced the Covid winter grant programme, which had an additional £229 million of local welfare funding and has enabled local authorities to provide targeted support to vulnerable households, keeping them warm and well fed over the winter, focusing particularly on disadvantaged children and families, whether that support is needed in term time or in holidays. Recognising that some restrictions on the economy are still in place, a further £40 million of funding has been allocated to the Covid local support grant fund.

The noble Lord, Lord Wooley, was very challenging in his speech, as other noble Lords have been, about educational attainment and free school meals and breakfast clubs. We have put in place extraordinary measures to ensure that disadvantaged children receive the support they need to learn, whether that is in home or in the classroom. In England, this has included spending an additional £500 million on food vouchers so that children had access to food when schools were closed during lockdown. This is in addition to the usual funding schools have continued to receive to provide free school meals for more than 1.6 million pupils from the lowest income families and universal free school meals for all children in reception, year 1 and year 2. As well as lunchtime meals, the Government also support breakfast clubs in more than 2,450 schools. The Department for Education has recently announced another £24 million to continue the successful breakfast club programme.

The noble Baroness, Lady Bakewell, talked about the summer holidays. Looking ahead to this summer, we recognise that many vulnerable families need additional support during the longer school holidays. Following three years of successful pilots, the Department for Education’s holiday activities and food programme has been expanded for 2021. The programme launched at Easter and will provide support during summer and Christmas this year at a cost of £220 million. This programme is available to disadvantaged children in every local authority. Wider support is available, including our healthy start scheme, and we are exploring any additional support that may be needed throughout the summer.

I now turn to some of the specific points made by noble Lords. The noble Lord, Lord Woolley, talked about unemployment rates for ethnic minorities. We have committed to level up skills and opportunities across the country for people of all backgrounds. Using data from the race disparity audit, updated annually since October 2017, and our own analysis, we are continuing to help those underrepresented in the labour market.

We were challenged in this debate by the noble Lord, Lord Woolley, and others about expanding free school meals. We think it is important that free school meal support is targeted at those who need it most. Free school meals are an integral part of our provision for families on low incomes and of our wider actions to promote social mobility.

On the help we are giving to ethnic minorities, particularly to get into the labour market, we have identified 20 target areas using our own research and data from the race disparity audit. Lessons learned are rolled out, where appropriate, across the country. Each area has a high ethnic minority population and a high gap between the ethnic minority and white employment rates. Together, they represent more than half of the national ethnic minority employment gap. We are also considering the recommendations of the independent Commission on Race and Ethnic Disparities.

Again, I am sorry to say to the noble Baroness, Lady Lister, that I have no information that the two-child policy is going to be changed. I know it will be disappointing to her, but the Government feel quite strongly that a benefit structure adjusting automatically to family size is unsustainable.

We have the same view on the benefit cap. The proportion of individuals capped remains low in comparison to the overall UC case load at around 3%. This is in spite of the significant action that DWP took early in the pandemic to protect those financially impacted, including the temporary uplift in the UC standard allowance and increases to local housing allowance rates. The most vulnerable, who are entitled to benefits for disability and caring, are obviously exempt from the cap.

The noble Baroness, Lady Walmsley, raised a point about free school meals for all primary school children. I am afraid I have no information that that is planned. On the other points the noble Baroness raised, I will write to her.

The noble Baroness, Lady Lister, raised the poverty strategy and cross-government working. Here I might raise a smile, I think. As we recover from the pandemic, departments will continue to work together to deliver a number of key cross-cutting outcomes linked to the 2020 spending review. These outcomes include addressing poverty through enabling progression into work and increasing financial resilience. DWP is leading this work in collaboration with other departments, including, in particular, HMT, DfE, MHCLG and Defra.

My noble friend Lord Moynihan raised the issue of a Cabinet Minister for children, which other noble Lords have raised. The Secretary of State in the Department for Education has responsibility for children and families and takes it very seriously. I will ask my noble friend Lady Berridge to write on behalf of her Secretary of State to say what is being done there.

The noble Baroness, Lady Chakrabarti, urged me to use my voice. I will always do that. I can confirm to her, and to the noble Baroness, Lady Bennett, that we will consider all the recommendations of the national food strategy and respond fully within six months of the publication of the next and final national food strategy report. I will come back to the noble Baroness in writing.

I thank the noble Baroness, Lady Uddin, a passionate campaigner, for her contribution. In my working life, trying to help people back to work, the business community at Canary Wharf has been outstanding in its support for its local communities.

The noble Baroness, Lady Bakewell, made a point about gluten-free products on prescription. I am very happy to write to the Department of Health. I make no promises, but I will write, and I will copy the noble Baroness in on the letter.

The noble Baroness, Lady Sherlock, talked about the impact of the pandemic on levels of poverty being clear and asked whether we will publish our evidence and act on it. Estimating the impact of Covid-19 on relative and absolute poverty requires estimates of income for all people in the UK, which are not yet available. We are wholly committed to supporting people on lower incomes. We spend an estimated £111 billion on welfare, including an additional £7.4 billion on Covid-related welfare policies.

I always finish these debates by apologising for not being able to answer every point, and I always promise that I will look at Hansard and write to noble Lords on any matters I have not dealt with. I hope noble Lords understand that this Government are absolutely committed to helping those who need help most—those in poverty—and my door is open at any time for noble Lords to make representations.

Kickstart Scheme

Baroness Stedman-Scott Excerpts

Thursday 29th April 2021 Lords Chamber

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the Lord Speaker for his service, and I beg leave to ask the Question standing in my name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

I am very pleased to advise the House today that we have now approved 195,000 vacancies on the Kickstart scheme. During the pandemic and the lockdown, employers were very keen to become involved in the Kickstart programme and make opportunities available for young people, but they wanted to wait until we came out of lockdown, when their businesses could start to trade. I can say to the noble Baroness and the whole House that progress is being made day by day and the number of young people going into vacancies is accelerating fast.

[Baroness Sherlock (Lab) [V]]

My Lords, is it not the case that only 16,500 young people have actually started work? That is out of some 575,000 who are unemployed. Last June, Ministers said that Kickstart would create new jobs for a quarter of a million young people. Can the Minister tell the House two things? First, what is the new target date for getting 250,000 young people into jobs? Secondly, given that only 490 placements have happened in the whole north-east of England, what is the plan for making sure that poorer regions are not left behind?

[Baroness Stedman-Scott (Con)]

As I originally said, we have 195,000 vacancies and more are still coming in, so we are positive that we will create hundreds of thousands of jobs for Kickstarters. We are well aware of the difficulties associated with the north-east. We are doing a deep dive on Friday with departmental officials, and we are working at pace to secure adequate opportunities for the plan for jobs. I am confident that we will meet our target in the timeframe allocated for Kickstart.

[Baroness Drake (Lab) [V]]

Can I press the Minister on my noble friend’s question? When will the Government report what direct action they are taking now to ensure they deliver equity across the regions on Kickstart placements? Sentiment is fine, but could we have the evidence of what the Government are doing to ensure equity? Secondly, unemployment of young black people started high and is rising faster than that of their white counterparts. What measures are the Government taking now to stop potential bias and discrimination in the hiring process for Kickstart jobs?

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[Baroness Stedman-Scott (Con)]

I can confirm to the noble Baroness that each region in the country has a regional director for Jobcentre Plus completely focused on ensuring that there are equitable vacancies across the country. The noble Baroness is absolutely right to raise the issue of the BAME community and the need for us to work very hard to ensure that they are not left behind. We are encouraging organisations that work with BAME young people to take part in the Kickstart scheme, which can include acting as a gateway organisation for employers in their networks. We understand the challenges faced, and our work coaches are working hard to use the £90 million investment that we are putting in to address the disparities in youth unemployment, especially in this group.

[Baroness Stuart of Edgbaston (Non-Afl) [V]]

My Lords, I encourage the Minister also to consider the 2021 cohort of undergraduates and combine their need for employment with the needs of SMEs. Would it not make sense to create paid internships of three to six months whereby those undergraduates work in SMEs and thus kickstart not just their employability but the SME sector?

[Baroness Stedman-Scott (Con)]

The noble Baroness suggests a very good idea. Let me be clear: Kickstart is there to help young people who are disadvantaged and at risk of being permanently excluded from the labour market. I will take the option of undergraduates and SMEs back to the department and write to the noble Baroness. At the moment, there are no plans to change the eligibility for Kickstart.

[Baroness Eaton (Con) [V]]

My Lords, vulnerable people display vulnerabilities in many different ways. What measures are in place to ensure that vulnerable people can participate in the Kickstart scheme?

[Baroness Stedman-Scott (Con)]

We are encouraging employers to make opportunities available for vulnerable young people. Our Jobcentre Plus work coaches are identifying those people and working with them through a support package to make sure that they are not excluded in any way from taking part in the Kickstart scheme. Of course, we have our wonderful stakeholders and partners working particularly closely with these young people, who we are working with too.

[Lord Storey (LD) [V]]

My Lords, the Minister will be aware that many unemployed young people have a particular career interest and the financial support from their family to take on an unpaid internship. This is not an option for young people from deprived communities. Have the Government considered making the Kickstart programme available to these people so they too can take an internship in their chosen career?

[Baroness Stedman-Scott (Con)]

I think I answered that question when I answered the question of the noble Baroness, Lady Stuart. As I said, I will take that back to the department, write to the noble Lord and the noble Baroness and place a copy in the Library. However, as it stands, there are no plans to change the eligibility.

[Lord Farmer (Con)]

My Lords, what are the Government doing to ensure that the Kickstart scheme meets the needs of understaffed sectors of the employment market which are well suited to this age cohort and therefore more likely to sustain young people’s employment once subsidies end? I am thinking particularly of both large and small hospitality employers, which are struggling to fill vacancies as pubs and restaurants gear up to reopen fully.

[Baroness Stedman-Scott (Con)]

We are working closely with a whole range of employers in sectors impacted by the pandemic, particularly the hospitality sector, where we have enabled employers to create Kickstart opportunities sooner than the economy might otherwise allow. We have seen a strong response from the hospitality sector, with involvement from the national academy of food and drink and major employers like Greene King offering Kickstart jobs across the country, and we will continue to do so.

[Lord Bilimoria (CB) [V]]

My Lords, over half the people who have lost their jobs since March 2020 are young people. Kickstart is a fantastic scheme to help young people and businesses prevent the scarring of long-term unemployment. Will the Minister acknowledge that although, as she said, almost 200,000 placements have been approved by the scheme, only 16,500 have actually started—as the noble Baroness, Lady Sherlock, said—because of delays caused by the third lockdown and bureaucracy? The CBI, of which I am president, is calling for a six-month extension to the excellent Kickstart scheme until June 2022 to allow many young people to participate. Will the Government please agree to this?

[Baroness Stedman-Scott (Con)]

I understand the noble Lord’s question exactly. I am advised at the moment that there are no plans to extend the scheme, but we never know what might happen in the future. I pay tribute and thanks to the noble Lord in his capacity as chairman of the CBI, which has been an outstanding supporter and helper in the establishment of Kickstart.

[Baroness Donaghy (Lab) [V]]

Even given the difficulties created by the Covid pandemic, a 6% success rate is an abject failure. The Minister knows more than most the importance of work experience for a young person. Calling on 195,000 approved vacancies does not add up to actual jobs. If the target of 250,000 placements is not reached by December 2021, will the scheme be extended, or will the cash be grabbed by the Chancellor when he announces a new age of austerity?

[Baroness Stedman-Scott (Con)]

I do understand the concern about the 16,500 placements but, as I tried to explain, during the lockdown employers have shown great commitment to involvement in Kickstart but wanted to do it when the lockdown ended. I say again to the noble Baroness that we are seeing day by day vast increases in the number of vacancies being filled, and we are confident that we are going to create hundreds of thousands of vacancies and place young people in them. On moving money around, I dare not get involved in that; I think I would be going a bit too far if I confirmed anything in that regard.

[The Lord Speaker (Lord Fowler)]

My Lords, the time allowed for this Question has elapsed, and it brings Question Time to an end.

Unemployment: Over-50s

Baroness Stedman-Scott Excerpts

Tuesday 9th March 2021 Lords Chamber

[Lord Haskel]

To ask Her Majesty’s Government what steps they are taking to address the number of unemployed people over the age of 50.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

Our Plan for Jobs package provides funding to ensure that more people, including those aged 50 and over, get tailored Jobcentre Plus support to help them find work and build the skills that they need to get into work. As part of the Jobcentre Plus offer for over-50s, we are also providing dedicated support through 50-plus champions and mentoring circles to ensure that they fully benefit from the Plan for Jobs package and existing Jobcentre Plus support.

[Lord Haskel (Lab) [V]]

My Lords, the Government’s schemes, though, just do not seem to work. One scheme had the worst outturn, with just one in five being successful. In the past 12 months, the number of unemployed over-50s has gone up by a third, which is significantly more than any other group. This is partly because many employers prefer more technologically skilled younger people, who may come cheaper, perhaps with government money. This over-50s group requires specific, updated back-to-work support using their knowledge and experience. Will the Government be much more specific and give them that support?

[Baroness Stedman-Scott (Con)]

I would like to speak to the noble Lord outside the Chamber about the statistics that he raises because they do not resonate with those that I have. I can only say to him that the support that over-50s are getting through the Jobcentre Plus network builds on their existing skills base and is doing everything possible to get them back into the labour market.

[Baroness Pitkeathley (Lab) [V]]

I am sure that the Minister will know that one in five people over 50 provide unpaid care to a family member or friend. These caring responsibilities have a significant impact on their ability to work, leaving many outside the labour market. Of course, the pandemic has exacerbated this situation. What support can the Government provide to help older carers return to work and juggle work with their caring responsibilities, on which social care so much depends?

[Baroness Stedman-Scott (Con)]

To help and support carers to remain in work or return to work, we have been working with employer organisations, the CIPD, the British Chambers of Commerce and LEPs to host a series of webinars, with content delivered by the business champion for older workers. We absolutely agree with the noble Baroness about the role that carers play. We want flexibility from employers, flexibility in hours and flexibility in the roles that those people can provide.

[Baroness Janke (LD) [V]]

My Lords, older workers have valuable experience and life skills but are twice as likely as younger workers to be out of work for 12 months or more. What opportunities for financially supported training and education will the Government make available to this age group to enable them to develop their skills and, if necessary, change their career paths?

[Baroness Stedman-Scott (Con)]

Again, the noble Baroness makes an important point about the value that older workers can add to the workforce. The UK Government are investing £2.5 billion in the national skills fund to aid the lifetime skills guarantee. This is a great opportunity for older workers.

[Baroness Redfern (Con) [V]]

My Lords, the fact is that many people need to work for longer, but workers aged 50-plus still face barriers to accessing work and training. What extra government support is there particularly for smaller and medium-sized businesses to help them to offer employment to older people who are disabled?

[Baroness Stedman-Scott (Con)]

I am pleased to report that the Government have appointed Andy Briggs as business champion for older workers to spearhead the Government’s work to support employers to retain, retrain and recruit older workers, including the disabled.

[Baroness Meacher (CB) [V]]

My Lords, as the Minister well knows, the over-50s who have lost their jobs during the pandemic are at a serious risk of long-term unemployment, at huge cost to themselves but also to the taxpayer. Have the Government considered creating an over-50s Kickstart scheme—it is an excellent scheme for young people—encouraging employers to create jobs but also providing retraining for older workers who might well benefit from it?

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

That is a great idea. I will take it back to the department because I can promise the whole House that our Secretary of State and our team are looking at innovative ways to get people back into work.

[Baroness Sherlock (Lab) [V]]

My Lords, to build on that, the pandemic has certainly caused job losses for older people and led to people retiring early, or indeed delaying retirement. That hurts those individuals and their families, but it also affects the labour supply and the pensions landscape. It is a big public policy issue. Have Ministers considered developing a focused strategy, with ring-fenced funding and targeted interventions, and perhaps adapted conditionality for older workers?

[Baroness Stedman-Scott (Con)]

In respect of conditionality and targeted support, the work that we are doing through the work coaches is tailored and individual. We are using the conditionality rules as compassionately and sensibly as we can.

[Lord Taylor of Goss Moor (LD) [V]]

My Lords, as has been indicated, over-50s are twice as likely as the rest of the population to stay unemployed, once unemployed, for more than two years. The truth is, of course, that many never get back into work, partly because there is a sense that taking on an older employee is less valuable, despite their skills and experience. Given that during the pandemic we have seen a much greater increase proportionately in unemployment among the over-50s, there is clearly a risk that many of these people will never return to work. I support the suggestion of the equivalent to the Kickstart programme for over-50s, because we know that the longer you are unemployed at over 50, the more likely it is that you will never return to work.

[Baroness Stedman-Scott (Con)]

As I said, I thought that the idea of the noble Baroness, Lady Meacher, was excellent. I can only concur with the noble Lord that we should explore that.

[Lord Dodds of Duncairn (DUP) [V]]

My Lords, the pandemic has been particularly difficult for older people in terms of job losses. Even in normal times, far too many are out of work well before retirement age. We must do more to acknowledge the contribution to society and the economy of people of all ages, so what more can the Government do to cut out age bias in recruitment and training and to get companies to recognise the importance of age inclusivity?

[Baroness Stedman-Scott (Con)]

This will be part of the important work of the over-50s champion appointed by the Government, Andy Briggs. I reiterate that older workers have skills and experience that employers are looking for. It is up to us to work with employers to encourage and influence them to secure vacancies for older workers.

[Baroness Fookes (Con)]

My Lords, I spoke only this morning to four distinguished horticulturalists who said that they would warmly welcome people aged over 50 coming into that sector. They, too, mentioned a modified Kickstart scheme, so may I add to the pleas already made?

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

Kickstart for older workers: message received and understood. The UK Government are investing £2.5 billion in the national skills fund to aid the lifetime guarantee, we have a free online skills toolkit and the Chancellor’s announcement in July of his Plan for Jobs included an extra £17 million to support 32,000 more vocational training places.

[Baroness Wheatcroft (CB) [V]]

My Lords, a snapshot by the Institute for Fiscal Studies last year showed that one in four people on furlough were over 50. My concern is that many of those people will not go back into employment again—as we have heard, over-50s are harder to employ. Could we not profitably use the time when people are on furlough to retrain them for the jobs that will be available when we come out of the pandemic properly?

[Baroness Stedman-Scott (Con)]

I am pleased to be able to confirm to the House that, where an employee is on furlough, they can take part in training, volunteer for another employer or organisation or work for another employer if contractually allowed.

[Lord Young of Norwood Green (Lab) [V]]

My Lords, what efforts are the job coaches and service centres making to assess the current skills of over-50s and to ensure the necessary retraining to enable re-employment? I hope that the House will recognise the enormous efforts being made by job coaches and service centre staff. The system might need some improvement, so the Kickstart idea is a good example.

[Baroness Stedman-Scott (Con)]

I think that I have already covered the issue of reskilling and training. The key to getting people back to work is to have the work coach make an assessment and build an action plan that gets people back to work, along with the efforts that we are making to influence employers. I am grateful to the noble Lord, as will be the whole DWP staff, for his endorsement of their excellent and committed work.

[The Senior Deputy Speaker (Lord McFall of Alcluith)]

My Lords, all supplementary questions have been asked and we now move to the next Question.

Pension Credit

Baroness Stedman-Scott Excerpts

Monday 8th March 2021 Lords Chamber

[Lord Foulkes of Cumnock]

To ask Her Majesty’s Government what action they are taking to increase the take up of Pension Credit.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

The DWP continues to use available channels to promote pension credit and reach potential recipients, their families and friends. This includes using proactive press activity and social media posts to encourage older people to check whether they are eligible. The department is currently writing to over 11 million pensioners in Great Britain about the increase in their state pension from April. The accompanying leaflet highlights that an award of pension credit can provide access to other benefits, such as housing benefit or a free over-75 TV licence.

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

My Lords, I am grateful to the Minister, but does she recall that when we met her and the Pensions Minister last November they promised much more action on pension take-up? We still have nearly 1 million people who are entitled to pension credit but not claiming. They are now losing the TV licence as well. Please will the Minister meet again the Peers who met her before, with the BBC, Age UK and Independent Age, so that we can plan a new more dynamic and innovative take-up campaign?

[Baroness Stedman-Scott (Con)]

I understand the noble Lord’s desire to move speedily on this and I share that desire. Following our engagement session in November, policy officials met the BBC and the director of policy then had a meeting on 17 December. This was followed by a working-level meeting with the DWP and BBC on 11 February. On 29 March, the Minister for Pensions and I will meet the BBC director-general. Of course we will meet Peers again. We are open to dialogue and, in early May, there will be a stakeholders’ meeting including people from other industries.

[Baroness Drake (Lab) [V]]

My Lords, it is clear that the numbers in pensioner poverty have risen. Benefit take-up rates by poor pensioners are low—37%, or 1 million, do not claim the credit. They are now being billed for a TV licence that they should not have to pay for and that they cannot afford, and they will get even poorer. The Government handed over policy on pensioners and the licence fee to the BBC, but they did not hand over their responsibility for the poorest pensioners. I put again the question asked by my noble friend: will the Minister give a backstop date by which there will be a meeting of the Peers with the voluntary bodies involved with the pensioners, the BBC and DWP, so that all the parties in the room can look at this challenge that we need to face? Secondly, will the Minister confirm that she will consider innovative changes to get that take-up rate increased, such as auto-enrolling the poorest pensioners?

[Baroness Stedman-Scott (Con)]

I assure the noble Baroness that the Government are committed to action that helps to alleviate levels of pensioner poverty. I regret that I cannot confirm a backstop date, but I can confirm that we will meet Peers and that we will use all the tools available to us for innovation to try to help this group access pension credit.

[Lord Empey (UUP) [V]]

My Lords, this is not a new phenomenon. While the Question specifically refers to pension credit, we know that successive Governments have not been able to achieve adequate take-up of benefits generally. Will my noble friend suggest to her colleagues that a fundamental review of how benefits are rolled out needs to take place, because public policy is defeated if there is not adequate take-up? Secondly, will she tell the House whether her department takes into account non-take-up amounts in the budget, so that there is a regular build-in of non-take-up by her department?

[Baroness Stedman-Scott (Con)]

I will certainly take the suggestion of a review of benefits back to the department. I am afraid that I will have to write to the noble Lord about the issue of non-take-up as far as the budget is concerned.

[Baroness Altmann (Con)]

My Lords, I am delighted that the Government have included information about pension credit when writing to pensioners about their state pension increases. Will my noble friend tell the House whether that includes mention of the entitlement to all the other benefits that are passported to by pension credit? Will she confirm, if necessary in writing, whether my estimate of around a further £8,000 a year is potentially available to pensioners on pension credit—they may be getting very little of that benefit—in council tax, housing benefit and, indeed, £140 off their electricity bill in warm home discounts, which also suggests that the electricity companies may have some obligation to help on pension credit take-up?

[Baroness Stedman-Scott (Con)]

On the last point that the noble Baroness raises, I am happy to go back and find out the information. I will write to her and place a copy of my letter in the Library. I emphasise that our meeting with stakeholders in early May will include energy companies. I will certainly take her idea back to the department.

[Baroness Janke (LD) [V]]

Does the Minister believe that take-up campaigns fully involve local agencies, such as the charitable and voluntary sector and more particularly local government, which provide many essential services for older people? What plans are there for further involvement of such local agencies in future take-up campaigns?

[Baroness Stedman-Scott (Con)]

I reiterate that we continue to make best use of all the available channels to make sure that we can reach those people and confirm to them their eligibility, particularly family and friends. I am not aware at the moment of anybody making a suggestion about local agencies, but through our stakeholder engagement we have certainly raised this point. I will take back the local government issue to the department.

[Baroness Eaton (Con) [V]]

Many elderly people who may well be eligible for pension credit find that applying online and even by telephone daunting. Will my noble friend explain why there is no automatic awarding of pension credit?

[Baroness Stedman-Scott (Con)]

Whether a person is eligible for pension credit and how much they can get is, as with other means-tested benefits, determined by their financial and personal circumstances, which can be complex. The noble Baroness’s point about technology and vulnerable and elderly pensioners is well made. We try to encourage stakeholders who represent this group, family and friends to do it on their behalf. They can also use the government telephone number.

[Baroness Greengross (CB) [V]]

My Lords, would it not make more sense for the Government to use state resources to support increasing the take-up of pension credit, rather than continuing the policy of the triple lock on state pensions, given that so many people over state pension age continue to work full time or have other incomes? Would taxpayer funds not be better spent promoting pension credit widely, which would increase state assistance for older people in financial need?

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

The noble Baroness has obviously had a great career supporting, promoting and championing pensioners in need. On the use of taxpayers’ money, I am not aware of any plans to do as the noble Baroness suggests.

[Baroness Sherlock (Lab) [V]]

On International Women’s Day, we should note that women pensioners are more likely to be poor than men. A DWP official told the Scottish Social Security Committee that if all poor pensioners claimed pension credit, housing benefit and the council tax reduction, pensioner poverty would reduce to almost zero. The DWP take-up campaign last year has not worked. Peers keep asking Ministers to meet with us, together with charities, because we need more energy and creativity behind a campaign. I do not understand why the Minister keeps side-stepping that request. Can she explain that?

[Baroness Stedman-Scott (Con)]

I am really not aware that I or any of my colleagues have side-stepped meeting with Peers to talk about creativity, and I do not agree with the noble Baroness on that point. There will be a meeting where people will have the opportunity to discuss and put forward their ideas. I am sure that the department will consider them carefully.

[The Lord Speaker (Lord Fowler)]

My Lords, the time allotted to that Question has elapsed. We now come to the second Oral Question.

Covid-19: Universal Credit

Baroness Stedman-Scott Excerpts

Tuesday 2nd March 2021 Lords Chamber

[Baroness Sherlock (Lab) [V]]

I am so sorry; I am out of practice. I beg leave to ask the Question standing in my name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, where do I start? I am so proud of the work that my department has done in supporting people during the pandemic. Time does not allow me to reel off everything that we have done, but I shall list these: our plan for jobs; a £2 billion kick-start scheme; increased support for 40,000 jobseekers of all ages; sector work-based academies; the job-finding support service; the help that we have given to 160,000 people; and our £238 million job entry targeted support. There is much more that I could say to the whole House. The department has done an outstanding job.

[Baroness Sherlock (Lab) [V]]

I am grateful to the Minister for having got that list out of the way, because now she can answer one very simple question from me. Does she accept that cutting £20 a week from the incomes of people on universal credit, whether now or in six months, will push children into poverty and leave out-of-work support at its lowest level in decades, just when unemployment is set to peak? Will she take back to the Chancellor a clear message that he should cancel this cut, extend the £20 to legacy benefits and ensure that our social security system offers a proper safety net to everyone who needs it?

[Baroness Stedman-Scott (Con)]

The £20 uplift in universal credit has done an outstanding job. The Chancellor put it in place in a temporary way, and I guess tomorrow we will find out the intentions for the future. But please be assured that I am very happy to go back to the Chancellor and share the views of the noble Baroness and many others who have made that point.

[The Lord Bishop of Leeds]

My Lords, I congratulate the Government on what they have done in this respect in supporting so many vulnerable people during the pandemic. However, does the Minister agree that the danger of the cut that taking away the £20 a week would be is that the Government would get a short-term saving, but would pay far more in the longer term because of some of the social costs? Given the number of people we see using food banks in my diocese and around the country—including working people—and the number of children in poverty and likely to go deeper into it, the remedial costs of supporting them into the longer-term future will far outweigh anything paid now.

[Baroness Stedman-Scott (Con)]

The right reverend Prelate makes an important point. The £20 uplift has made a significant difference and, like the noble Baroness, Lady Sherlock, he has outlined some of the impacts that would happen should that be stopped. I am terribly sorry, and I wish it were not the case, but I do not have the Chancellor’s ability to make a commitment today.

[Baroness Stroud (Con) [V]]

My Lords, an analysis by the Social Metrics Commission found that, without the universal credit uplift, nearly 1.4 million people would have been pushed into poverty due to the pandemic. With the £20 uplift and other government interventions, however, 700,000 people have been protected, 150,000 of whom are lone parents. Does my noble friend agree that this is a remarkable achievement? What plans do the Government have for ensuring this continued support?

[Baroness Stedman-Scott (Con)]

I thank my noble friend for her acknowledgement of the difference that the £20 has made. I had better say now: “Message received, over and out”. I will relay it and replay it to my colleagues in the department and the Chancellor.

[Lord Berkeley of Knighton (CB) [V]]

My Lords, on a previous occasion the Minister was extremely sympathetic to the plight of freelancers, especially musicians, who have been caught in the government net and unable to get through it—that is, they were not eligible for universal credit or the SEISS. As I say, she was very sympathetic and said that she would look at this with her department. Has she made any further assessment?

[Baroness Stedman-Scott (Con)]

A number of groups of individuals have been impacted by Covid and their incomes have been put under stress. The department continually reviews the impact on people but this is a timely reminder for me to go back and make some more representation, which I will do.

[Baroness Primarolo (Lab) [V]]

My Lords, does the Minister agree that the £20 uplift for universal credit should be extended to include claimants receiving legacy and related benefits, the majority of whom are disabled or carers, or have a long-term illness? These people are suffering great hardship and the Government need to take action now. Will she support that?

[Baroness Stedman-Scott (Con)]

Legacy benefits and the £20 uplift have been the subject of lengthy and great discussions in the department. To be absolutely straight and truthful, the only thing I can say is that the Government have no plans to extend the temporary £20 uplift. I know that that will be a disappointment.

[Baroness Janke (LD) [V]]

My Lords, further to the question of the noble Baroness, Lady Primarolo, I draw to the Minister’s attention the fact that many people still on legacy benefits have had their finances hit hard by the pandemic. The need to reduce health risks, such as by taking taxis to appointments to avoid public transport, purchasing more PPE for those with respiratory conditions and using more heating to reduce the risk of complications from Covid-19 all incur high costs. In previous questions, we have heard that the costs of disability and sickness are considerable, particularly to people who have little at the moment and are on legacy benefits. I know that the Minister has answered by saying that the Government have no commitment to add the £20 uplift to legacy benefits, but will she commit to looking into the circumstances of people on legacy benefits and their carers—disabled people, particularly—to see what action can be taken to improve their circumstances?

[Baroness Stedman-Scott (Con)]

I give an assurance to the noble Baroness that I will speak to her in more depth about the points she raises. Once I have done that, I will of course go back to the department and talk to those there.

[Lord Farmer (Con)]

My Lords, the number of vacancies in the period November 2020 to January 2021 is up by 64,000 from the previous quarter to almost 600,000. What are work coaches doing to ensure that claimants take these vacancies up, and what plans do the Government have to incentivise moving into work by reducing the taper rate and increasing work allowances?

[Baroness Stedman-Scott (Con)]

I say to my noble friend and the whole House that we should thank God that we have work coaches. Their training has been enhanced, they are focused on the individual and they make sure that those individuals get the support and access to the benefits that they need. More importantly than anything else, they are getting access to the help they need to get back to work. Universal credit was designed to make work pay, so not all of a person’s earnings are deducted from UC. The department has made changes to improve the financial incentives to work by reducing the taper rate to 63% from 65%. All these things are continually looked at.

[Lord Clark of Windermere (Lab) [V]]

My Lords, a little while ago there were widespread reports that fraudsters were illegally claiming public money from the universal credit uplift. The Government moved quickly and took steps to tackle this. Can the Minister update the House on the latest position?

[Baroness Stedman-Scott (Con)]

The noble Lord is right to raise the point about people who try to abuse the system with no right to do so. The situation with fraud and recovering sums is being dealt with in the department. To give the best response in the time I have available, I will write to the noble Lord and place a copy of the letter in the Library.

[Lord Bird (CB)]

When universal credit was first put together, one big thing was to cut through bureaucracy and waste. I would like to think that we have moved towards reducing the ways in which people can get on universal credit. Obviously, there are many problems for people who want to go on to it, and they are still having to wait a long time. My question is more about the long-term effect of universal credit. How much does it cost to actually deliver £1 of social support, because in the old days it used to be about a fiver to deliver that £1?

[Baroness Stedman-Scott (Con)]

I not sure where the noble Lord gets his figures from; I do not dispute them, but I will have to go back and have a good look. The universal credit business case was agreed in 2018 and demonstrated that it remains deliverable and affordable, and provides value for money. In a steady state, universal credit will generate economic value of £8 billion per year, and it is doing a great job.

[The Deputy Speaker (Lord Bates) (Con)]

My Lords, I am afraid that the time allowed for this Question has now elapsed.

Commonwealth Countries: Reciprocal Pension Agreements

Baroness Stedman-Scott Excerpts

Monday 1st March 2021 Lords Chamber

[Baroness Altmann (Con)]

My Lords, I understand that the Government are in talks with Canada on possible reciprocal arrangements for state pensions uprating. Can my noble friend tell the House whether they are in discussion with any other countries on this issue, including those in the EEA, EFTA and the EU?

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

The Government are currently negotiating social security agreements with the EEA and the EFTA countries—Iceland, Norway, Liechtenstein and Switzerland—which aim to broadly mirror the new agreement with the EU. The UK state pension has been uprated in these countries as part of the long-standing provision which was in EU law before the UK left the EU, and the Government are seeking to continue state pension uprating for those in scope of the new arrangements. The Government are not in discussion with any other countries on reciprocal arrangements for pensions uprating.

[Lord Singh of Wimbledon (CB) [V]]

My Lords, the Commonwealth should be united by a common commitment to human rights and the well-being of all. Sadly, this has been marred by our silence over the brutal repression of the farmers’ dispute in India. Does the Minister agree that reciprocal pension arrangements can help restore the image by, for example, allowing retirement to Commonwealth countries, which will reduce healthcare needs in the UK?

[Baroness Stedman-Scott (Con)]

The UK has different social security arrangements with different Commonwealth countries. While some bilateral agreements provide for uprating, others do not. I am very happy to meet with the noble Lord to discuss this further if it helps him.

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

My Lords, further to the question from the noble Baroness, Lady Altmann, last week some of us met virtually with Canadian MPs and the Minister of Seniors. He told us that a proposal had been put three months ago to the British Government that would provide some pension justice for the 125,000 British pensioners living in Canada but that they have had no reply. When will the Government respond and can the Minister assure us that it will be a positive response that will help both UK pensioners in Canada and Canadian pensioners here?

[Baroness Stedman-Scott (Con)]

The noble Lord is as impatient as ever, and so are we, to resolve this issue. The Government received a request from Canada in November 2020 to conclude a reciprocal agreement to include indexation of pensions. We will be responding shortly.

[Baroness Janke (LD) [V]]

My Lords, people with frozen pensions have often lived abroad for more than 15 years and have also lost their vote. Is it not time that the Government restore democratic rights to these citizens, many of whom still pay their taxes in the UK?

[Baroness Stedman-Scott (Con)]

The decision to move abroad is voluntary and a personal choice dependent on the circumstances of the individual. For many years now, advice has been provided on the GOV.UK website that the UK state pension is not uprated overseas, except where there is a legal requirement to do so.

[Baroness Sherlock (Lab) [V]]

My Lords, during the passage of the Immigration and Social Security Bill, we discussed the case of Monica Philip who emigrated to the UK in 1959. After 37 years working here as a civil servant, she returned to Antigua to care for her mother, at which point her pension was frozen. The Minister told me during that debate that she did not know how many of the Windrush generation are affected by this policy. Do the Government plan to look into this any further?

[Baroness Stedman-Scott (Con)]

I regret that I do not have figures for how many Windrush victims have been impacted. The UK state pension is payable worldwide and members of the Windrush generation who have chosen to leave the UK and have reached state pension age will receive annual index-linked increases if they reside in a country where there is a legal requirement to uprate, such as Barbados or Jamaica.

[Baroness Eaton (Con) [V]]

My Lords, many British pensioners living in the EU have been anxious about their pensions since we left the EU. What action have the Government taken to protect British pensioners living in the EU?

[Baroness Stedman-Scott (Con)]

The state pension has been uprated in the EU as part of long-standing provisions in EU law before the UK left the EU. The withdrawal agreement ensures that state pensioners who had already moved to the EU to retire while the UK was a member state will continue to have their state pensions uprated.

[Lord Dodds of Duncairn (DUP) [V]]

My Lords, more than half a million people are affected by having their pensions frozen while living overseas. The Government have said on a number of occasions that they do not intend to change the overall policy. How can it be right that something so iniquitous and unjust continues to persist, discriminating in respect of which countries people emigrate to?

[Baroness Stedman-Scott (Con)]

The UK Government have continued to honour their legal obligations in relation to uprating pensions overseas. While I realise this will be disappointing, we have no plans to change that policy at the moment.

[Lord Rooker (Lab) [V]]

My Lords, I could not defend this policy when I was the Pensions Minister 20 years ago and I did not, but the Treasury would not move on it and this is a real problem. How is asking people to work around the world but freezing their pensions in 150 countries if they retire consistent with global Britain? It is absolutely unfair and incompatible with being an international nation, as we claim to be. I ask the Minister to think about her answers, because it seems she has given contradictory answers on Canada to the noble Baroness, Lady Altmann, and the noble Lord, Lord Foulkes.

[Baroness Stedman-Scott (Con)]

I am sorry, I do not agree that I have given contradictory answers. I say again that the Government have no plans to change their policy on this. When people retire to different countries, information about the impact on their pensions is made very clear to them.

[Lord German (LD) [V]]

Can the Minister accept that dignity in retirement should exist for all UK pensioners regardless of where they live as a principle? As raised by the noble Lord, Lord Foulkes, and the noble Baroness, Lady Altmann, the Minister in Canada is waiting for a reply from the UK Government. If, as the Minister here says, it is about a reciprocal arrangement, surely this discussion should start urgently, as both the Government and Members of Parliament in Canada seek a resolution.

[Baroness Stedman-Scott (Con)]

As I have already said, the Government intend to respond to the Canadian Government shortly. We are committed to ensuring that older people can live with the dignity and respect they deserve. The state pension is the foundation of support for them.

[Baroness Gardner of Parkes (Con) [V]]

My Lords, what consideration are Her Majesty’s Government giving to unfreezing the state pensions of the 230,000 Britons who have moved to Australia to take into account rises they would have received in their state pensions if they were still living in the UK? Some now receive only £48.75 per week, despite having made national insurance contributions in the UK throughout their working lives.

[Baroness Stedman-Scott (Con)]

As I understand it, the previous agreement with Australia, which did not include uprating, was terminated by Australia in 2001 due to the UK’s refusal to change its policy on pensions uprating abroad.

[The Lord Speaker (Lord Fowler)]

My Lords, all supplementary questions have been asked. This brings Question Time to an end.

Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2021

Baroness Stedman-Scott Excerpts

Thursday 25th February 2021 Lords Chamber

Moved by

[Baroness Stedman-Scott]

That the draft Order laid before the House on 12 January be approved.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, I am pleased to introduce this instrument, which, subject to approval, reflects the conclusions of this year’s annual review of the automatic enrolment earnings thresholds required by the Pension Act 2008. The review considered the earnings trigger and the qualifying earnings band for the tax year 2021-22.

The earnings trigger determines the point at which a qualifying worker becomes eligible for automatic enrolment in a qualifying workplace pension. The qualifying earnings band determines the earnings upon which workers and employers pay contributions into a workplace pension. This order sets a new upper limit for the qualifying earnings band and is effective from 6 April 2021. The lower earnings limit is not changed within the order and remains at the level set in the automatic enrolment threshold review order of 2020-21, so no further provision is required. Similarly, the earnings trigger is not changed within this order and remains at the level set in the automatic enrolment threshold review order of 2014-15, so no further provision is required. I am satisfied that the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2021 is compatible with the European Convention on Human Rights.

Automatic enrolment has been a hugely successful policy resulting in over 10 million workers being enrolled into workplace pension savings since 2012. Over 1.7 million employers have met their automatic enrolment duties. Automatic enrolment has become business as usual for employers and workers, and this success, supported by all sides of this House, is something that we all can celebrate. Automatic enrolment is re-establishing a culture of retirement saving and making workplace pension saving the norm for a new generation. However, that does not mean that it is mission accomplished. The Government recognise that there is still more to do as we continue to work towards our commitment of helping people to achieve greater financial security in retirement. We also understand that there is more to do for those who are not saving into a workplace pension, which is why we look at the automatic enrolment thresholds annually, ensuring that the coverage remains right.

As noble Lords will be aware, the Automatic Enrolment Review 2017: Maintaining the Momentum, set out our ambition to remove the lower earnings limit and lower the age threshold in the mid-2020s. While I recognise that there has been a reasonable degree of interest in when these measures will be implemented, we also must consider how they will be implemented and find ways to make them affordable for all parties.

It is important to recognise that the success of automatic enrolment has been achieved through a considered and systematic approach to implementation over a period of years which recognises the need to understand and manage the impact on employers and individuals as well as taxpayers. That is why the 2017 review report was clear that implementation will be subject to learning from changes in the automatic enrolment minimum contribution rates, discussions with employers and others on the right approach, and on finding ways to make these changes affordable. As with other areas of public policy, it is important that we pay close attention to the impact and costs of making changes and consider the optimal approach on implementation. This has been further highlighted by the impact of the pandemic and our overall support for the economic recovery. We will continue to support long-term saving, balancing the needs of savers, employers and taxpayers.

Helping people save for their futures remains a key priority for the Government, and the automatic enrolment duties continue to apply to all employers with eligible workers. We continue to monitor the impacts of Covid-19 on savers, employers and the pension industry. As part of supporting the UK’s economic recovery, our aim remains to help workers achieve greater financial resilience for the long term.

Turning specifically to this order, it determines key elements of the framework for the way in which automatic enrolment operates. It will continue to align the lower and upper limits of the qualifying earnings band with the national insurance lower and upper earnings limits for the 2021-22 tax year. The lower and upper limits are therefore £6,240 and £50,270 respectively. By continuing to align the qualifying earnings band limits to the national insurance thresholds, the changes relating to payroll systems are kept to a minimum.

The purpose of this framework is to balance the need to encourage individuals to take personal responsibility for pension saving with a sustainable compulsory minimum contribution level for all employers. Setting the thresholds at these levels will also ensure that contribution levels continue to be meaningful for savers. In doing so, we are mindful of the economic environment within which these changes are taking place. The order does not change the earnings trigger, which remains at £10,000 this year. The Government’s objective in confirming this threshold is, on the one hand, to strike a balance between bringing in those for whom it makes economic sense to be saving into a pension, and, on the other, affordability for employers and workers. Again, we must be mindful of the broader economic context.

Individuals earning below the £10,000 earnings trigger but above the lower earnings threshold will still have the choice to opt in to a workplace pension and benefit from employer contributions, should they wish. Those earning below the lower earnings limit also have the option of being enrolled by their employers in a pension scheme. To conclude on this point, the decision to maintain the earnings trigger at £10,000 and maintain the alignment of the lower and upper limits of the qualifying earnings band with the national insurance lower and upper earnings limit for the 2021-22 tax year maintains simplicity and consistency, while minimising burdens on employers and continuing to increase the total pension savings this year by an estimated £14 million.

I commend this instrument to the House and beg to move.

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

My Lords, I thank all noble Lords for their contributions to this important debate and echo the words of the noble Baroness, Lady Sherlock, about how interesting and robust it has been. I have listened to the questions and sought to prepare my answers, but I am sure that I will not get them all in during the time that I have. If I do not answer all questions, I will undertake, as always, to write to noble Lords.

The noble Lord, Lord McKenzie, and the noble Baroness, Lady Drake, asked about implementation of the AE review measures and whether it was appropriate to take forward the 2017 review. Our ambition is to introduce the changes set out in the Automatic Enrolment Review 2017: Maintaining the Momentum to the lower earnings limit and the age threshold in the mid-2020s. We will do this in light of the impact of the pandemic and our overall support for economic recovery. We will continue to support long-term saving, balancing the needs of savers, employers and taxpayers.

The noble Lord, Lord McKenzie, spoke about explaining the modelling changes and calculating their impact. It is important that our estimates are as accurate as possible and that we review our analysis regularly to make best use of the data available. We have therefore moved to a new model that better reflects the latest data available since the full implementation of automatic enrolment. This has improved the accuracy of our estimates.

The noble Lord, Lord McKenzie, asked why the Government did not change the AE thresholds to enable more women to save; other noble Lords also made that point. Automatic enrolment has helped millions more women save into a pension, many for the first time. Participation among eligible women working in the private sector has risen from 40% in 2012 to 86% in 2019. Our ambition is to remove the lower earnings limit, which would ensure that all workers benefit from an employer contribution if they are enrolled or opt in.

The noble Lord, Lord Bourne, the noble Baroness, Lady Bowles, and my noble friend Lady Altmann raised net pay arrangements. I am not trying to avoid answering the question, but this is a matter for the Treasury and in the 2020 Budget the Government announced a call for evidence on pension tax relief, which also set out the Government’s views on the proposal already put forward. The call for evidence is now closed and the Treasury is analysing the responses received from stake- holders and will respond to the call for evidence in due course. I appreciate that this cannot come quickly enough for noble Lords.

My noble friend Lady Altmann raised the issue of data. I will need to write to her about that.

The noble Baroness, Lady Bowles, asked about the interaction between how benefit assessments are made and pension payments. I thank the noble Baroness for her question; it is a complex matter and I will write to her. The noble Baroness also asked about the conclusions on NPA/RAS rates and whether employers check how many employees are affected. It is for employers to choose the pension scheme that they use and the Pensions Regulator has guidance on its website about the implications of these two schemes. The Treasury is responsible for this; it has publicly carried out the consultation and will report on it in due course.

My noble friend Lady Altmann asked what we can do to ensure that the amounts paid in are correct. Where it suspects non-compliance, the Pensions Regulator carries out compliance investigations on all types of employers in all parts of the UK. In particular, the regulator conducts complex manual investigations into serious prolonged breaches and suspected offences related to automatic enrolment. In most instances, a compliance notice or unpaid contribution notice is sufficient to get the employer back on track.

The noble Baroness, Lady Drake, raised the issue of rising unemployment and asked whether it would increase small pots and when the Government would have a solution. The Government launched the small pots working group to help identify options to tackle the growth of deferred small pension pots. It is clear from the working group that more needs to be done by pension providers, working together with regulators and the Government. We welcome this work and, along- side this, the Government support the work by providers and others on developing proof of concept trials to help move towards solutions. We will study the working group’s recommendations in detail this year.

My noble friend Lord Bourne and the noble Lord, Lord Hain—who is to be congratulated on the work he did in introducing various pension changes when he was Secretary of State for Work and Pensions—asked why the Government did not change the AE thresholds to enable more women to save more. As I have said before, automatic enrolment has helped millions, particularly women, save into a pension scheme for the first time. Our ambition is to remove this limit to ensure that all workers can benefit from an employer contribution if they are enrolled or opt in.

My noble friend Lord Bourne and the noble Baroness, Lady Janke, asked whether we should be encouraging people to save more into pensions and what information about education is being provided. The Government have been active in raising awareness of the importance of pension savings and in driving tools, such as pensions dashboards and simpler pensions statements, to enable people to engage.

The noble Baronesses, Lady Wheatcroft, Lady Sherlock and Lady Janke, and the noble Lord, Lord Hain, all raised intergenerational fairness and the issues affecting young people. The Government’s approach to this is to ensure economic security for working people at every stage of their life. I note the points that all noble Lords have made, particularly the noble Baroness, Lady Drake, about the impact on young people of a very difficult economy and labour market. I confirm to the whole House that we are working flat out on our plan for jobs to get people back to work as quickly as we can. There is a huge focus on young people.

The noble Lord, Lord Hain, asked about the self-employed. The self-employed are a highly diverse population with different incomes and saving experiences. That is why we are committed to carrying out a trialling activity to identify the role of behaviour prompts.

I thank my noble friend Lady Gardner of Parkes for talking about the impact on women of freezing the trigger rates. The decision to freeze the trigger again between 2020 and 2021 has already been confirmed and an additional 8,000 individuals will enter the system.

I am touched by what the noble Lord, Lord Foulkes, said about me—I count him as a noble friend, too. The Government are very serious about the gender pensions gap. It is caused mainly by inequality in the labour market, including differences in working patterns and earnings. We need to ensure that women have the resources needed to make informed decisions. I take on board completely the point raised about charities, and I will write to the noble Lord on that.

The noble Baroness, Lady Ritchie, raised some issues regarding Covid-19 and its impact. We are gathering, monitoring and evaluating workplace pension participation and savings data in order to develop as complete and robust a picture as possible.

My noble friend Lady McIntosh asked about multiple job holders. I will write to her. The noble Lord, Lord Davies, raised the issue of Uber, which was also mentioned by the noble Baroness, Lady Janke. Again, I will need to write.

I am very sorry, but I have run out of time. I will write to noble Lords to answer their questions. To confirm, this order increases the automatic enrolment upper qualifying earnings limit to £50,270 and freezes the lower qualifying earnings limit at £6,240, thereby maintaining the alignment of the automatic enrolment qualifying earnings band with the earnings limits for national insurance contributions. The earnings trigger will also remain at its existing level of £10,000, all resulting in an estimated overall increase in total pension savings year on year. I commend this order to the House.

Motion agreed.