Youth Unemployment

Baroness Stedman-Scott Excerpts

Thursday 15th October 2020 Lords Chamber

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

My Lords, the Government are taking unprecedented action to protect young people’s jobs, with more than 9 million of them supported via the furlough scheme. Earlier this year, we announced our £30 billion Plan for Jobs, which provides an unlimited number of Kickstart placements, recruits new youth employability coaches and establishes youth hubs across the country. We are also expanding our excellent sector-based work academy programme to offer bespoke opportunities to support claimants to fill job vacancies and pivot into new careers.

[Lord Baker of Dorking (Con) [V]]

In July, about a quarter of a million 18 year-olds left schools, sixth-forms and other colleges. Most of them are now on the unemployment register. I accept that Kickstart will help trainees to some extent, but much more is needed. An unemployed 18 year-old should be able to take a one-year course, such as an HND or an HNC, to acquire better skills. If they do this, however, they must pay £6,000 or more for the course; often, they have to take out a loan. It is morally and politically unacceptable that we expect 18 year-olds to take out a loan to receive a training course. These courses must be free. I ask the Minister to convey my views to other Ministers because, rest assured, we will need more measures to reduce youth unemployment.

[Baroness Stedman-Scott (Con)]

I am happy to relay to Ministers the noble Lord’s concerns about loans and the fact that 18 year-olds are asked to take them out. I will certainly pass his concerns on to the Department for Education as well. However, we have launched a wide-ranging youth employment programme. We have the National Careers Service and the new enterprise allowance. We are doubling the number of work coaches; please do not underestimate the work of these great people and the difference that they are making in getting young people into jobs, which is what we all want.

[Baroness Clark of Kilwinning (Lab) [V]]

In the 1980s, when I was growing up in the west of Scotland, there were very high levels of youth unemployment. In Glasgow, it stood at 80%. There were few opportunities and little hope. Now, we are walking into something similar. Will the Government agree to hold a job summit to meet trade unions, local authorities, metro mayors and representatives from Scotland and Wales and talk about all the different things that can be done to prevent such a catastrophe? It is the job of the UK Government to lead. Will they take the initiative here?

[Baroness Stedman-Scott (Con)]

I thank the noble Baroness for that constructive idea; I will certainly take it back to the department. However, we are holding what are almost local job summits around the country and people are working closely in geographical areas to achieve exactly what she challenges us to achieve.

[Baroness Janke (LD) [V]]

Sixteen to 24 year-olds suffer discrimination through universal credit in that they do not receive the full amount. What steps will the Minister take to ensure that these young people receive a fair, realistic and just entitlement under universal credit so that they can meet their essential living costs and support themselves in seeking new work?

[Baroness Stedman-Scott (Con)]

On young people on universal credit receiving help to get work, I say that we do not compartmentalise any age groups. We are doubling the number of work coaches and we have the job finding support service. We have a £150 million support fund that can be used flexibly to meet the needs of people going into work. The support that young people will get will be second to none and we will turn every stone to get them into work. The noble Baroness will know that lots is being said about universal credit at the moment. I will not add to that but it is being looked at all the time to see how we can make life better for people.

[Lord Laming (CB) [V]]

My Lords, does the Minister recall a saying that I often heard in my youth: “Idle hands make light work for the devil”? We all know that the years between the ages of 16 and 24 are a period of a transition—but, for many, a transition to what? Services for this age group have been severely cut. We worry about their mental health, drug abuse, county lines and knife crime but, if we do not put in place a robust and effective range of services, these young people are in danger of being left behind. Do the Government have in place an action plan for these young people?

[Baroness Stedman-Scott (Con)]

The Government have an action plan that we are putting into action. It is our Plan for Jobs, which is grossed up into a £30 billion fund. I have already mentioned some of things that we are doing with that money; I do not want to repeat them. I take the point about the devil making work for idle hands, I really do, but what is different here is that young people will get a work coach—a personal coach—who will stick with them. We will do everything we can to make sure that young people transfer into work, achieve their destiny and do not fall into activity that we do not want to see them involved in.

[Lord Farmer (Con)]

My Lords, blunt-instrument measures that force the shielding of the old and vulnerable, instead of allowing them to choose to shield themselves, are devastating areas of the economy in which young workers’ careers flourish. This is widening the divide between young and the old. The Government are balancing many considerations, but are they including the impact of tighter restrictions on intergenerational harmony? And, crucially, what are the Government doing to support young people who are not receiving universal credit?

[Baroness Stedman-Scott (Con)]

The department is committed to providing targeted support for young people, including those who are still claiming jobseeker’s allowance. This support offers basic skills training, traineeships, work experience, sector-based work academies and support that is funded through other organisations. I would say to the noble Lord that immense work is going on with different businesses. I know that my Secretary of State and the Minister responsible for employment will be going to Pinewood Studios to launch “from aviation to the creative industries”. The Buckinghamshire LEP has done a great job and we hope that there will be opportunities similar to that all over the country.

[The Lord Bishop of Oxford]

My Lords, I thank the Minister for the compassion and passion in her answers but, as we must acknowledge, this is a very serious situation. The Resolution Foundation now forecasts that unemployment among the 18 to 29 year-olds could triple to 17% by late 2020—a level not seen since 1984. Given the well-established link between unemployment and mental health, and the risks of a mental health epidemic, will the Government undertake to fund support for additional mental health provision, in addition to the education and employment initiatives which she has unpacked, to support this very hard-pressed and vulnerable Covid generation?

[Baroness Stedman-Scott (Con)]

I will say to the right reverend Prelate that we do not underestimate the seriousness of this situation. I think that we are all mindful of the impact that it can have on the lives of all those who are affected by unemployment. On the question I have been asked about mental health, I am not sure what support, fiscally or otherwise, is available, but I shall talk to my colleagues in the Department of Health and Social Care and write to the right reverend Prelate to confirm it.

[Lord Brooke of Alverthorpe (Lab) [V]]

My Lords, does the Minister recall the complaints that I have been making to her department about the increasingly poor performance of call centres? In conversations I have had with people working in call centres, they have said that they are very short of staff. When will the Government engage with all these call centres? They already have people there to do the training. They should get them to create the jobs that are needed so that proper performance standards are met by these companies—and if they are abroad, the work should be brought back home, which in turn will create many jobs for the young unemployed.

[Baroness Stedman-Scott (Con)]

I can confirm to the noble Lord that I will go back to the department with this and speak to the Director General for Service Excellence. I also offer to meet with the noble Lord so that he can share his concerns verbally and get some answers.

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

My Lords, I am afraid that the time allowed for this Private Notice Question has now elapsed, so we will move on to the next business.

In fact, the time allowed for this Private Notice Question has not elapsed. We have an extra five minutes, which is wonderful. I therefore call the noble Baroness, Lady Benjamin.

[Baroness Benjamin (LD)]

My Lords, thank goodness for that. Black, Asian and culturally diverse people are more likely to be unemployed, and the 16 to 24 year-olds in this group are no exception. They are finding themselves at the very bottom of the pile during this pandemic and are hardest hit, with little hope of finding a job. So what pathways and policies are being put in place beyond the six-month Kickstart Scheme to reassure these vulnerable young people, many of whom are suffering from anxiety and depression?

[Baroness Stedman-Scott (Con)]

The point I would like to make to the noble Baroness is that the ethnic minority employment rate reached a record high of 67.5%, which is an increase on the previous quarter. It is not good enough, but it was an upward trend. The point that the noble Baroness makes is completely justified; this is of great concern. I should say that the Government have unlocked an additional £150 million from dormant bank accounts to support charities and social enterprises help vulnerable individuals into work.

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

I now call the next speaker, the noble and learned Lord, Lord Woolf.

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[Lord Woolf (CB) [V]]

I am grateful to your Lordships for dealing with the local difficulties. The point I emphasise is that, while everything I have heard about the immediate action that the Government are taking is encouraging, I am concerned about when things go wrong, as they will, and youngsters land up in the court system. What action do the Government propose to ensure that the harm already done is not aggravated by that experience?

[Baroness Stedman-Scott (Con)]

It is important that, when young people fall into the court system, they have good role models and mentors to keep them on the straight and narrow. As far as the DWP is concerned, our work coaches will be providing that support. I am not aware of what the Home Office is doing, but I am happy to find out and write to the noble and learned Lord.

[Baroness Stroud (Con) [V]]

My Lords, it is now clear that the impacts of the Covid-19 pandemic have not been equally distributed across society. Official statistics show that the number of under-25s on universal credit nearly doubled during lockdown, rising by 250,000 to 538,000. What assessment has the DWP made of an age-stratified approach to Covid, which could allow resources to be focused on older people and high-risk patients, while allowing younger and healthier people to keep working and businesses to stay open? Given that the DWP exists to get and keep people in work, what forecasts and representation are the department making to the Prime Minister?

[Baroness Stedman-Scott (Con)]

The impacts of Covid-19 are felt differently by different groups, which is why the Plan for Jobs supports people of all ages. We are supporting the most vulnerable through our wider offer and specific programmes, such as job entry targeted support. People need hope in this very difficult time, and I assure the whole House that we will make sure that there is no poverty of hope, aspiration, determination and inspiration for our young people.

[Lord McNicol of West Kilbride (Lab) [V]]

My Lords, I declare my non-financial interest, as in the Members’ register. With the comprehensive spending review a matter of weeks away, does the Minister agree that organisations such as the National Citizen Service, with a proven track record of equipping young people with life skills and facilitating volunteering activity—both of which contribute to employability—should have their income streams protected?

[Baroness Stedman-Scott (Con)]

I pay tribute to the work of the National Citizen Service. Not wanting to disappoint the noble Lord, I cannot comment on what the Treasury may or may not do, but I am sure that the National Citizen Service has made its representations well known.

[Lord Aberdare (CB) [V]]

My Lords, there used to be many more opportunities for young people in small businesses in sectors such as hospitality, travel and retail. Which sectors does the Minister believe are likely to offer young people the best opportunities for jobs with small employers in the current environment? What are the Government doing both to encourage young people into those sectors and to make small businesses more aware of the benefits of employing young people with the skills that they desperately need, notably in the digital and STEM areas?

[Baroness Stedman-Scott (Con)]

The three sectors to which I would refer all noble Lords, which are recruiting young people, are health and social work, education and manufacturing. Through our sector-based work academies, we are trying to ensure that young people are equipped with the skills that they will need in the difficult days coming. We are working hard to ensure that.

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

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

Pension Scams

Baroness Stedman-Scott Excerpts

Wednesday 14th October 2020 Lords Chamber

[Baroness Warwick of Undercliffe]

To ask Her Majesty’s Government, further to the report by the Police Foundation and The People’s Pension Protecting People’s Pensions: Understanding and Preventing Scams, published on 7 September, what action they are taking to protect people from pension scams.

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

The Government are committed to safeguarding consumer savings. We have introduced measures that assist all pension savers to understand their choices and alert them to possible risks through advice and guidance. To help protect people from scams, the Government have banned cold calling and tightened the tax registration procedures, and, via the Pension Schemes Bill, are limiting the statutory right to transfer. We also continue to raise awareness of scams through ongoing communications directly from the DWP and through other organisations.

[Baroness Warwick of Undercliffe (Lab)]

That reply was encouraging—I thank the Minister. However, I hope that we can persuade the Government of how vital it is that even more specific actions are taken. Tragically, some scams make the victim complicit in the crime, so they lose all their money to the scammer and are pursued by HMRC for tax payments for pension liberation which they cannot meet. The police described HMRC’s approach as “unrelenting and uncompromising”. What action will the Government take to give some relief to these victims?

[Baroness Stedman-Scott (Con)]

I am sure that everybody feels sympathy for an individual placed in this position. HMRC collects the taxes that Parliament decides are due and seeks to treat each case sympathetically and on its own facts. I have talked to the Minister for Pensions about this issue and he is quite happy to meet the noble Baroness to talk further about it.

[Baroness Altmann (Con)]

My Lords, I declare my interests as listed in the register. I know that my noble friend is sympathetic on this issue. Will the Government consider establishing a central intelligence database to offer providers an early warning system for scams and help potential scam victims? Can my noble friend comment on any plans to centralise the confusing array of bodies for protecting consumers, including ScamSmart, Action Fraud, the police, regulators and Project Bloom?

[Baroness Stedman-Scott (Con)]

I assure my noble friend, and indeed the whole House, that this issue is very high on the Government’s agenda. It is what we would call work in progress. We have established Project Bloom, which brings together all finance organisations, the regulator and pension providers to see what can be done and to work collaboratively. The Minister for Pensions met representatives to hear their thoughts on what the industry and Government can do. I would say, “Watch this space”.

[Lord Loomba (CB) [V]]

My Lords, I welcome this timely report by the Police Foundation and The People’s Pension. The scale of loss is staggering, as bogus companies can set up to instigate the frauds and are often closed quickly to avoid detection. What are the Government doing to strengthen checks on company registration so that only genuine companies are able to trade?

[Baroness Stedman-Scott (Con)]

The noble Lord makes a very good point. I think that I will need to write to him with the detail of those checks.

[The Lord Speaker (Lord Fowler)]

I call the next speaker, the noble Baroness, Lady Drake.

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[Baroness Drake (Lab) [V]]

My Lords, even where a key risk to their savings is identified and information and red-flag warnings are given to the individual, they can still transfer their pension, and too many do, regardless. Pension providers and trustees have few, if any, powers to stop this. Will the Government extend the powers of the regulator to allow an override of the individual’s statutory right to transfer in the event of a suspected scam, thereby safeguarding their savings and future well-being?

[Baroness Stedman-Scott (Con)]

I am happy to confirm to the noble Baroness that the Minister for Pensions has written to the chair of the Work and Pensions Select Committee about this—I will place a copy of his letter in the House of Lords Library—and I can confirm that the Government are already taking further legislative action through the Pension Schemes Bill. I say again that the Minister for Pensions is quite prepared to meet noble Lords to discuss this issue.

[Baroness Janke (LD) [V]]

What plans do the Government have to improve support for victims of pension scams? The measures outlined in the report are criticised as inadequate. Can the Minister say what the Government plan to do about it?

[Baroness Stedman-Scott (Con)]

I apologise to the noble Baroness; I had trouble hearing her question. Perhaps I may read Hansard and write to her directly with a reply.

[Lord Kirkhope of Harrogate (Con) [V]]

My Lords, I refer to my entry in the Members’ register. Having heard my noble friend’s answer a moment ago to the noble Baroness, Lady Drake, I would nevertheless like to pursue the matter of the responsibilities of trustees and pension administrators. We are very sympathetic to beneficiaries who are subject to scams, but would it not be a good idea to oblige beneficiaries who wish to transfer pension pots to be in interpersonal contact with their administrators before that is permitted? Much of the paperwork at the moment is part of the scam itself, and trustees and administrators need some further protection from their liabilities.

[Baroness Stedman-Scott (Con)]

I take my noble friend’s point. The contribution that he has made just heightens the need for us to have more dialogue on this with the Minister for Pensions. However, as I have already said, the Government are taking further legislative action through the Pension Schemes Bill to enable regulations to be made prescribing conditions that, if not met, will limit an individual’s statutory right to transfer.

[Baroness Sherlock (Lab) [V]]

My Lords, the FCA acknowledges the increasing role of online platforms, including social media, in promoting harmful information to consumers, including from pension scammers. However, the cold-calling ban that came into effect last year does not cover online activity, and scammers can get around the ban by first building relationships with consumers so that they then consent to a cold call. How will the Government update the law to keep pace with this very fast-moving digital environment, since it is clearly increasing consumer vulnerability to scams?

[Baroness Stedman-Scott (Con)]

I can confirm that the Government are well aware of this issue. I referred earlier to Project Bloom, which brings together government departments, regulators, enforcement agencies and industry representatives to share information and co-ordinate actions that will deal with situations such as this. I can confirm that we, particularly the Department for Digital, Culture, Media and Sport, are already engaging with technology companies.

[Lord Taylor of Warwick (Non-Afl) [V]]

My Lords, this study report is most welcome but there is an area that needs looking at for the future. Ethnic minority pensioners are said to be 24% worse off than white pensioners; indeed, the average total pension of BAME women is 51% less than that of white men. This pension inequality will become starker as the growing BAME population reaches retirement age, which may make BAME pensioners even more vulnerable to scams. Does the Minister agree that the Government also need to look into these related and relevant BAME pension issues?

[Baroness Stedman-Scott (Con)]

I say to the noble Lord that the Government must look into these matters. It is a great concern that people from BAME communities should be disadvantaged in such a way, and we will certainly do that.

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

My Lords, most of the people who I meet who have suffered badly from these scams are, surprisingly, older people who have always been efficient and capable at dealing with their own affairs. Is there any way that the Government can keep these people up to date so that they know to avoid the scams that are currently around?

[Baroness Stedman-Scott (Con)]

It is a great tragedy that these scammers are so clever and such ruthless people. The Government passed legislation in 2015 making it a requirement that all people take advice, and we have banned cold calling, but there is a recognised need for more action to address this issue. It is important that people take advice from the Money and Pensions Service but I am sure that in the Project Bloom activity more communication will come out to people. I hope that this will help.

[Baroness Bowles of Berkhamsted (LD) [V]]

One recommendation in the report is to ensure that victims of fraud are not liable for tax penalties. Will the DWP take that up with HMRC? If HMRC also suffered from the fraud, would greater protections be more forthcoming?

[Baroness Stedman-Scott (Con)]

I referred earlier to tax and the issues that people face as a result of scams. As I said to the noble Baroness, Lady Warwick, the Minister for Pensions is quite prepared to meet on this and other issues, and I will extend that invitation to the noble Baroness so she may raise her point.

[The Lord Speaker (Lord Fowler)]

My Lords, the time allowed for this Question has elapsed.

Social Security (Up-rating of Benefits) Bill

Baroness Stedman-Scott Excerpts

2nd reading
Tuesday 13th October 2020 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Social Security (Up-rating of Benefits) Bill before Second Reading.

Relevant document: 25th Report from the Delegated Powers Committee.

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

My Lords, I take this opportunity to thank all noble Lords for the positive engagement and feedback they have provided thus far. From the conversations I have had with many noble Lords, I believe there is a genuine desire across the House to tackle the matters addressed by the Bill. It is my sincere hope that we can continue to engage in this way as the Bill progresses through the House. Should any noble Lord wish to discuss any part of the Bill between its stages, our doors are always open.

It is unlikely to have escaped noble Lords’ attention that this is a short Bill. While short and technical, it is an important piece of legislation that will avoid a state pension freeze and benefit millions of pensioners by granting the Secretary of State powers to implement an increase in state pension rates in the 2021-22 financial year. It will also allow for increases for the poorest pensioners who are in receipt of pension credit, as well as uprating widows’ and widowers’ benefit under the industrial death benefit scheme.

Each year, the Secretary of State is required by law to conduct a review of most state pension rates and certain other benefit rates to determine whether they have retained their value in relation to the general level of earnings. If there has been an increase in earnings, there is a requirement to uprate these rates at least in line with that increase. However, if there has been no increase in earnings, there are no legal powers to bring forward an uprating order to increase these rates.

Since 2011, the Government have used average weekly earnings growth for the year from May to July as the basis for the review. The figures published by the Office for National Statistics earlier today confirmed that for the year from May to July 2020, earnings fell by 1%. Given this decline in the general level of earnings due to the coronavirus pandemic, the Bill temporarily amends the Social Security Administration Act 1992 to grant discretionary powers to the Secretary of State to increase pension and benefit rates linked to earnings even if there has been no growth in earnings. The provision lasts for one year only.

The Bill must receive Royal Assent by mid-November if it is to have any practical effect. If the Bill does not receive Royal Assent by the time the Secretary of State conducts her review of benefit rates, the existing provisions will apply and state pensions will be frozen. The Secretary of State must complete her review before 27 November, which is a hard deadline for the IT systems across the DWP that implement the increases, to allow them to take effect in April 2021.

The Bill covers the basic state pension, the new state pension, the standard minimum guarantee in pension credit, and widows’ and widowers’ benefits under the industrial death benefit scheme. These are the benefits that are linked in primary legislation to earnings. The Bill does not extend to benefits that are linked to prices. The Secretary of State will review those under the existing powers in the 1992 Act.

This is a technical Bill and, provided that it receives Royal Assent by mid-November, it will ensure that the state pension is not frozen in 2021-22. It will allow the Government to increase the level of the safety net for the poorest pensioners in pension credit and the rates of widows’ and widowers’ benefits under the industrial death benefit scheme. I beg to move.

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[Baroness Stedman-Scott (Con)]

My Lords, I start by thanking all noble Lords who have taken part in the debate today. This House has a great deal of experience in pensions and social security, which has been well demonstrated today. I join noble Lords in congratulating the noble Lord, Lord Field, and the noble Baroness, Lady Stuart, on their excellent maiden speeches. There is no concept of regretting having them in this House. The House is further enriched by their experience, wisdom and integrity, which I can say is bombproof. The noble Lord and the noble Baroness bring with them their expertise and involvement in DWP matters, though not exclusively. That is widely respected and acknowledged. I look forward to working with them both, although I accept that that will be very challenging.

The debate today has covered a wide range of subjects, and I will try to do justice to as many points as possible. If I do not answer all questions, be assured that it is not because I do not want to; it will be because I have run out of time. My officials and I will go through those questions that I have not answered and write to each noble Lord.

The noble Lord, Lord Blunkett, kicked us off with the intergenerational fairness point, which is understandable, and nearly all noble Lords have referred to it. We have recently seen rises in the living standards of pensioners, but we must remember that not all pensioners are in the same position. Over 1 million current pensioners rely solely on the state for their income. While the majority of pensioners have a fixed income, particularly those who rely on the state pension, people of working age are able over time to improve their incomes through work. The noble Baroness, Lady Janke, reminded us that today’s working-age people are tomorrow’s pensioners, and future generations of pensioners will also benefit from the way in which the state pension is uprated today.

The noble Lord, Lord Blunkett and Lord Shipley, and the noble Baroness, Lady Lister, asked why working-age benefits are not increased by the same levels as pensions. As required by law, the Secretary of State will review working-age benefit levels as part of an uprating review in November and assess whether they have retained their value in relation to prices.

The noble Lord, Lord Addington, and other noble Lords, including the noble Viscount, Lord Trenchard, mentioned the triple lock. For 2021-22, the Bill makes technical changes, which will ensure that state pensions can be uprated, even though there has been no growth in earnings. This will allow the Government to maintain their manifesto commitment to the triple lock. All noble Lords asked why we should not do that for two years. Let me be clear: for 2022-23, we are dealing with a huge amount of uncertainty. No one can predict with confidence what earning trends will be over the course of next year, which will be the relevant index for uprating decisions for the following April. Of course, we hope that earnings will increase as the economy recovers, and the Secretary of State will look at this issue when she conducts a statutory annual review of earnings, prices and benefit rates in 2020-21. That will also be the process by which annual uprating decisions will be made in future years, and any decisions will be taken in the context of the wider public finances.

I turn to the contribution by the noble Baroness, Lady Greengross. She asked whether workers aged over 65 should pay national insurance and tax. This is now a matter for the Treasury rather than for the DWP, but I reassure the noble Baroness that we are very much in favour of people working for as long as they can, because it is good for their health and well-being. As my noble friend Lady Altmann knows well, that is why we have the strategy on fuller working lives. I pay tribute to the noble Baroness, Lady Greengross, for the way she champions more mature workers—I must not say “older” because I would probably get in trouble. I thank her for all she has done in that field.

My noble friend Lord Bourne of Aberystwyth mentioned the Social Metrics Commission. Work to develop the experimental statistics has been suspended in the current circumstances, and the DWP’s focus is on activity that supports making payments and critical service lines. In the current uncertain climate, we are unable to predict when our work looking at poverty measures will resume.

The noble Baronesses, Lady Lister and Lady Drake, and my noble friend Lord Bourne of Aberystwyth asked what we were doing in relation to working-age benefits. As I have said, and I say it again to confirm, as required by law, the Secretary of State will review working-age benefit levels as part of her uprating review in November. However, we have done a lot in government to support people at this difficult time, including the plan for jobs, increasing the universal credit rate, investing over £9 billion of extra support to protect people’s incomes, removing the seven-day waiting period and relaxing the universal credit minimum income floor. The Government are committed to doing all that they can.

The right reverend Prelate the Bishop of St Albans mentioned the deep poverty issue that came out in various reports. This Government are helping those who need support the most. I do not want to repeat myself, but I say again: we are putting £9 billion into the welfare system.

I refer to the letter that 50 charities wrote to the Chancellor asking for the £20 uplift to be made permanent and extended to legacy benefits. Many people have championed retaining the £20 extra, and we are not a bit surprised by that. DWP Ministers have worked closely with our Treasury counterparts throughout the pandemic response and will continue to do so.

I pay tribute to faith groups, which do the most amazing work with the most vulnerable, especially in this difficult time.

The point that the noble Lord, Lord Field, made about modern day slavery is outside the scope of the Bill, but it is a major priority for society and this Government. His points are well made, as are those of the noble Baroness, Lady Meacher.

The noble Baroness raised the point about the standard minimum guarantee, and the noble Baroness, Lady Sherlock—she is my friend—raised it, too. It is right that we protect the incomes of the poorest pensioner households receiving the standard minimum guarantee. That is why in previous years, when the triple lock has applied to the state pension, we have increased the standard minimum guarantee by more than the percentage increase in average earnings to ensure that they see the benefit of the cash in the increase in the state pension.

The noble Baroness, Lady Meacher, challenged us by asking what we would do next year if there was a spike in earnings. We are dealing with a huge amount of uncertainty, so no one can predict with confidence what earning trends will be over the course of next year. Of course, we hope that earnings will increase as the economy recovers.

My noble friend Lord Randall, the noble Viscount, Lord Trenchard, and the noble Baroness, Lady Meacher, raised the issue of uprating pensions overseas, and I have to say that they made their points very well. The policy on this issue is a long-standing one of successive Governments. The current policy has been in place for around 70 years and, while noble Lords will be disappointed, there are no plans to change this.

The noble Baroness, Lady Drake, raised the issue of pensioner poverty rising and asked why we had not done more to support the poorest pensioners. The Government are committed to action to alleviate levels of pensioner poverty. For current pensioners, that includes the contribution of the triple lock, the new state pension and pension credit.

Noble Lords asked how we intend to uprate pension credit. Without this Bill, the core component of the pension credit standard minimum guarantee will be frozen in 2021-22. The decision on how to uprate the standard minimum guarantee will be made during the Secretary of State’s uprating review, which I have already referred to. Noble Lords will understand that it is not right to pre-empt the outcome of the review. I can also tell noble Lords that the department and the Minister for Pensions are doing as much as they can to raise awareness of pension credit. If any noble Lords have ideas for how we can improve that, we are very open to receiving them.

The noble Baroness, Lady Drake, asked for a comment on the report from the Resolution Foundation. We have provided an extra £9.3 billion in welfare support to help those most in need, as I have said. We have already taken steps to ease the burden of universal credit debt payments, including reducing the maximum deduction from 40% to 30% of a standard allowance, and from October 2021 we will reduce this further to 25%. We will also double the time available to repay advances to 24 months.

The noble Lord, Lord Shipley, referred to an uprating order introduced in the Commons in January. The figures will be announced to Parliament in late November after the Secretary of State’s review of benefit rates. The noble Lord raised the much-debated subject of universal basic income. This Government do not believe that a universal basic income would provide the right sort of support. Universal credit targets those in the greatest financial need. I confirm yet again that there is no intention to introduce universal basic income.

The noble Baroness, Lady Stuart of Edgbaston, raised the issue of the gender gap in pensions. Reforms to the state pension have put measures in place to improve state pension outcomes for most women. More than 3 million women stand to receive an average of £550 more per year by 2030 as a result of the recent reforms.

My noble friend Lady Altmann questioned whether it was fair that a higher rate is protected by the triple lock under the new state pension. She talked about the difference in uprating treatment between those under the new state pension and those under the old one. It is not possible to make direct comparisons between the two systems in this way. The new system has been designed so that no more money is being spent than under the previous system. Care has been taken to ensure fairness to both groups while delivering a sustainable system for the future. Although some people may get a larger amount uprated by the triple lock, they will not have access to other elements of the previous system; for example, a lower state pension age and the ability to build a higher state pension through the additional state pension.

My noble friend also raised the issue of state pension underpayments. We are aware of a number of cases where individuals have been underpaid a category B or basic state pension. We corrected our records and reimbursed those affected as soon as the underpayments were identified. We are checking for further cases and, if any are found, awards will also be reviewed and any arrears paid in accordance with the law. I urge anybody who believes they are being underpaid their state pension to contact the DWP.

The noble Baroness, Lady Lister, asked what the Government’s child poverty strategy is. Supporting people financially through these difficult times is currently our main focus. Our long-term ambition remains to build an economy that supports employment and ensures opportunities such as the apprenticeship scheme that the noble Lords, Lord Blunkett and Lord Field, referred to. We want people to be able to enter into work and to progress where possible, with welfare system support in their time of need. We are actively reviewing all measures at our disposal to identify how best to support people in the economic recovery. As we move to the next phase, we will continue to review our priorities. We will monitor the evolving economic and labour market situation to identify the most effective way to help people stay in or close to work, both now and in the future.

The noble Baroness, Lady Lister, and others talked about the benefit freeze. The Secretary of State will review all benefit levels as part of the uprating in November. The noble Baroness has been tenacious and has shown great energy in talking to us about the benefit cap. We had an all-Peer session yesterday on this. We made it very clear that both the Minister for Employment and the Minister for Welfare Delivery stand ready to engage further. To clarify the Government’s position, we believe that, where possible, it is in the best interest of children to be in working households. The benefit cap provides a clear incentive for parents to move into work, and a child living in a household where every adult is working is about five times less likely to be in relative poverty than a child in a household where nobody works.

The noble Baroness, Lady Lister, asked about the assessment the Government have made about the call from the Joseph Rowntree Foundation, the Trussell Trust and Save the Children to increase the child component of universal credit and tax credit. The Government have implemented an unprecedented support package, including the job retention and self-employment income protection schemes, to help families cope with the financial impact of Covid-19. We will continue to monitor the evolving economic and labour market situation to identify the most effective way to help people stay in work or close to work, both now and in the future.

I thank the noble Lord, Lord Loomba, for raising the issue of television licences for those aged over 75 during the pandemic. The Government are deeply disappointed that the BBC has chosen to restrict the over-75 licence fee concession to those in receipt of pension credit. We recognise the value of free TV licences to the over-75s and believe that they should be funded by the BBC.

The noble Viscount, Lord Trenchard, asked why the pattern of countries where the uprated pension is paid is not consistent. Despite appearing random—with some uprated and non-uprated countries in close proximity, for example—the uprating policy is determined by the differing social security arrangements for the countries concerned. For example, Canada has a bilateral agreement with the UK that does not cover uprating. The UK sought a reciprocal agreement, including uprating, with Canada but this was rejected as legislation prevented Canada paying its pensions overseas.

On pension credit take-up, my noble friend Lord Trenchard raised the point that it is all very well increasing rates of pension credit, but asked what we are doing to ensure that more pensioners are in receipt of it. This is why, in February, we launched a nationwide campaign to raise awareness of pension credit.

I thank the noble Lord, Lord Foulkes, for his unlimited support for the Bill. I am sorry that I am unable to confirm about the 2.5%, as he would like me to. I hope he will forgive me for that on this occasion.

My noble friend Lord Trenchard asked what support we are providing to older workers. We have taken legislative steps to support older workers to remain and be retained in the labour market by abolishing the default retirement age. We have strengthened things through the Fuller Working Lives partnership and appointed Andy Briggs, CEO of the Phoenix Group, as business champion for older workers. We are providing new targeted support to help people who are unemployed and have not reached the state pension age.

On the state pension being the lowest in the EU, I say to the noble Lord, Lord Foulkes, that fullfact.org investigated that claim and concluded that

“differences between their pension systems means it’s not a fair comparison.”

That makes it difficult to make meaningful comparisons between pension schemes in different countries, because there are so many fundamental differences in how they are run.

I have two points to make to the noble Baroness, Lady Sherlock, about the state pension. Again, we are dealing with a huge amount of uncertainty. We are unable to predict with confidence what earning trends will be and therefore what changes might be made. She raised the valid point that if every pensioner claimed the benefits they were entitled to, this would reduce pension poverty rates. Yes, and we encourage everyone to claim what they are entitled to, including their council tax reductions.

The Bill reflects the Government’s commitment to maintaining pensioners’ incomes in these difficult times. Provided it achieves Royal Assent by mid-November, it will ensure that state pensions are not frozen in 2021-22. It will also allow for the uprating of the safety net in pension credit and widows’ benefits in industrial death benefit. I thank noble Lords for their contributions. I commend the Bill to the Committee and ask that it be given a Second Reading.

[The Deputy Chairman of Committees (Lord Lexden) (Con)]

My Lords, if I might be permitted a personal comment, I add my congratulations to those made in this debate to my friends of long standing, the noble Lord, Lord Field, and the noble Baroness, Lady Stuart, on their maiden speeches in this House.

Covid-19: Over-60s

Baroness Stedman-Scott Excerpts

Monday 12th October 2020 Lords Chamber

[Baroness Bryan of Partick]

To ask Her Majesty’s Government, further to the advice by the World Health Organization that people over 60 should be treated as vulnerable to COVID-19, what plans they have to support people in this age group during the COVID-19 pandemic who must work because they do not have access to a pension.

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

My Lords, people over 60 are not automatically considered to be either clinically vulnerable or clinically extremely vulnerable, as those categories are based on specific clinical circumstances. Employers have a duty of care towards their workers and should ensure that appropriate steps are taken to mitigate health and safety risks in the workplace. For those who are unemployed, we have announced a comprehensive jobs package to build on the existing Jobcentre Plus support.

[Baroness Bryan of Partick (Lab) [V]]

I thank the Minister for her reply. Is she aware that healthy life expectancy for women in Glasgow is 58 years and six months, but many women in poor health have to continue to work because they still have years to wait for their state pension? Some 80% of key workers in education, health and social care are women, and these occupational groups are among those at the highest risk of Covid-19. Approximately 32% of these women are over 60. Can the Minister explain why the Government cannot give them early access to their state pension?

[Baroness Stedman-Scott (Con)]

First, I want to say how we value the work that front-line workers do and how much of a debt we owe to them. The Government are not considering granting early access to the state pension; I am unable to say more than that.

[Baroness Gale (Lab) [V]]

Will the Minister agree with me that women over 60 who work in care homes have to make impossible decisions between a job and their health, and will she further agree with me that they have made great sacrifices over the last few months to protect the people they care for? Will she commit now to ensure all care homes are Covid-safe by improving the health and safety regime and ensuring that employers follow the guidance?

[Baroness Stedman-Scott (Con)]

I am pleased to be able to confirm to the noble Baroness and indeed to the whole House that, since late March, the Health and Safety Executive has had an extra £14 million in its budget. It has carried out a programme of interventions to check how businesses are implementing measures to reduce the transmission of Covid. Concerns are acted on quickly, and the HSE decides on what kind of enforcement there has to be.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, for the avoidance of doubt, will the Minister redouble efforts with colleagues to correct the pension injustice done to the WASPI women, which has been exacerbated by the Covid issues of this year, and ensure fair transitional arrangements for all women born in the 1950s who are affected by these pension changes?

[Baroness Stedman-Scott (Con)]

I understand the noble Baroness’s concern. However, both the High Court and the Court of Appeal have supported the actions of the DWP and, because that is being appealed, we are not able to comment on ongoing litigation.

[Baroness Eaton (Con) [V]]

My Lords, could my noble friend the Minister clarify the position for workers living with someone who is shielding or clinically extremely vulnerable? Do they now need to go back to work?

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

Shielding was paused on 1 August in England, and clinically vulnerable and extremely vulnerable people are now required to follow the same local and national arrangements as the rest of the population. This means somebody living with someone who is clinically extremely vulnerable is able to attend work as normal if they are unable to work from home.

[Baroness Walmsley (LD) [V]]

My Lords, at the heart of this Question is how to protect the most vulnerable. At the start of the pandemic, my husband received a letter telling him to shield because of his vulnerability and, as the noble Baroness said, in August he got another letter saying that he no longer needed to shield. Given that virus cases are now doubling every day, what consideration is being given to whether such letters will be sent out again, on what criteria and in which tiers of risk?

[Baroness Stedman-Scott (Con)]

The answer to the noble Baroness’s question needs to come from the Department of Health and Social Care. I will talk to my colleague and ensure that a letter is written to the noble Baroness with the answers to her questions.

[Baroness Altmann (Con)]

My Lords, I am glad my noble friend agrees that people in their early or mid-60s are fit and healthy, and most are able to work. However, some are genuinely unable to do so. In light of the near 20-year differential in healthy life expectancy across the UK and looming rises in unemployment, might the Government consider a bit more flexibility in the state pension and allowing early access, perhaps on health grounds?

[Baroness Stedman-Scott (Con)]

It will come as no surprise to my noble friend that the Government at this point have no plans to review early access to state pensions, as I have already said. Where people have health conditions and are in receipt of universal credit, however, depending on the circumstances, they may be able to receive an additional amount.

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

My Lords, this Question is particularly pertinent to freelancers and people in the creative industries. In fact, the Musicians’ Union told me this morning that it has around 10,000 members who fall into this category. Given that it is very difficult for people of this age to retrain, and when they do retrain it is difficult for them to get jobs against 20 year-olds and 30 year-olds, what would the Minister suggest these people do when they are in financial extremis?

[Baroness Stedman-Scott (Con)]

My understanding is that if somebody’s job has gone—and I take what the noble Lord says about the creative industries—they can apply for universal credit. They will get the support of a work coach, who will help them in the next phase of their journey, in working out what work they could do and what transferable skills they have, and then turning every stone to make sure that they secure alternative employment.

[Baroness Sherlock (Lab) [V]]

My Lords, just as unemployment started to rise, the Government decided to reinstate conditionality and sanctions. From what the Minister has just said, is she really saying that if somebody who is clinically extremely vulnerable—on grounds of either age or condition—or who lives with someone like that, refuses to take a job, because they think they would put themselves or their partner at risk, the Government would sanction them and take away some of their benefits? Is she really saying that?

[Baroness Stedman-Scott (Con)]

I respond by saying to the noble Baroness that the work coaches are exercising caution and compassion when considering sanctions. Only if there is no good reason for somebody to turn down an opportunity will sanctions be applied.

[Lord Balfe (Con)]

The Question actually refers to

“the advice by the World Health Organization that people over 60 should be treated as vulnerable to COVID-19”.

Some 24.1% of the British population is aged over 60—most of this House is aged around 70. The average age of Covid deaths is 82. Does the Minister agree that the WHO brings itself into disrepute somewhat if it starts categorising a quarter of the population as vulnerable? Would the Minister confirm that the many over-60s who are working hard to get this country back on its feet also deserve a bit of praise?

[Baroness Stedman-Scott (Con)]

I completely agree with the noble Lord that it is patronising and not a good thing to be judging people aged over 60, because of their ability to work or otherwise. Noble Lords in this House—I include myself in that—would say that they work very hard and make a great contribution to the country. We owe a huge debt to the over-60 generation, but I am afraid I am not going to comment on what the World Health Organization says people should do.

[Lord Flight (Con) [V]]

My Lords, I first ask for clarification of whether the World Health Organization report is based solely on age and does not take potential physical condition into account. Secondly, what steps are the Government taking to prevent long-term unemployment among older workers as a result of Covid-19?

[Baroness Stedman-Scott (Con)]

On the noble Lord’s first point, I will need to write to him and clarify that answer. Secondly, the Government have recently announced their plan for jobs, doubling the number of work coaches and putting £150 million into the flexible support fund. The Government are also offering people all manner of support services. We are not writing anybody off and we are going to turn every stone to get people back to work.

[The Deputy Speaker (Lord Russell of Liverpool) (CB)]

My Lords, the time allowed for this Question has elapsed.

Covid-19: Low-income Families

Baroness Stedman-Scott Excerpts

Thursday 8th October 2020 Lords Chamber

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

A direct assessment of Covid-19’s impact on low-income families with children has not been made. However, we are monitoring several data sources, including Her Majesty’s Treasury’s recent distribution analysis of Covid-19’s impact on working households. The Treasury analysis has shown that the Government’s unprecedented support package, including job retention, self-employment protection schemes and an additional £9 billion to strengthen the welfare system, has supported the poorest working households the most, with those in the bottom 10% seeing no income reduction.

[Baroness Sherlock (Lab) [V]]

My Lords, the Government may not make an assessment but I am seriously worried by mounting evidence from Action for Children, CPAG and the Trussell Trust of parents struggling to pay the bills and to feed their kids in this pandemic. We could help by lifting the benefit cap and the two-child limit and topping up legacy benefits, but Ministers have said no and now the Chancellor is threatening to scrap the £20 a week he put on universal credit. I have two simple questions. Does the Minister accept the evidence that a growing number of parents are struggling financially? If she does, what are the Government going to do about it?

[Baroness Stedman-Scott (Con)]

I take the noble Baroness’s point well. I assure her that we are considering all evaluations—the Trussell Trust, Joseph Rowntree and Action for Children, as well as Understanding Society, the Covid-19 survey and the opinions and lifestyle survey by the Office for National Statistics. I am sure this question will come up many times today, so I say that the £20 UC increase was put in for one year only. As my colleague the Secretary of State for Work and Pensions in the other place said, dialogue is continuing with HMT on this, and the Prime Minister confirmed yesterday that it is under constant review.

[Lord McNicol of West Kilbride (Lab)]

My Lords, in 2010 the UK poverty rate stood at 15%; it now stands at 26%—an increase of more than 1.1 percentage points a year. An additional 670,000 people are expected to be classed as destitute by the end of 2020. I want to press the Minister a bit more on the detail on the supplementary question from the noble Baroness, Lady Sherlock. The Minister talked about what has been done. It does not seem to be working. Can we have some explanation of what the Government will do in the future?

[Baroness Stedman-Scott (Con)]

I can again confirm to the noble Lord that all welfare issues are under constant review and, as sorry as I am, I cannot say more than that at this time.

[The Lord Bishop of Blackburn]

My Lords, a recent report by the Church of England and the Child Poverty Action Group highlighted the “disproportionate impact” of the pandemic on low-income families with children, saying that:

“Without a radical change in policy direction, the prospects for many families are likely to deteriorate further through the remainder of this year as unemployment rises”


and more families become reliant on the welfare system. Following Prime Minister’s Question Time in the other place yesterday, will the Government do more than consider? Will they commit to making the temporary uplift in universal credit permanent? Will they also commit to a commensurate increase in the level of support for children, to reflect the additional needs of families with children?

[Baroness Stedman-Scott (Con)]

As much as noble Lords press me today, I can only confirm that matters are under constant review. I am sorry, but I am not in any position to make any commitments.

[Baroness Fookes (Con)]

My Lords, I attach great importance to the work of work coaches in getting the unemployed into work and out of poverty. Is my noble friend satisfied with the numbers of these at her disposal, and with their quality?

[Baroness Stedman-Scott (Con)]

I know that my noble friend is a great champion of work coaches. They do a great job and we are proud of the work they are doing at the DWP. I am also proud of the fact that we are doubling the number, spending £895 million. We will have 13,500 more work coaches, 7,500 in the next three months. I am sure that they will do a great job.

[Lord German (LD)]

My Lords, in the first four months of this pandemic, 300,000 people applied for universal credit because they had lost their job, and failed to get it. Far too many people are falling through the trapdoor of unemployment and finding that universal credit is not available to them. The Minister has just said that we are going to have a review. Will this be a root-and-branch review? Will it look at bringing our tax and benefit systems closer? The evidence now is that, if we do that, we will have a much better system by unifying the two.

[Baroness Stedman-Scott (Con)]

We are all aware of the difficult time that people are having in these days. I will take the noble Lord’s request for a root-and-branch review back to the Minister for Welfare Delivery. I will write back to the noble Lord. If he has some very good ideas, would he please write and give them to me?

[Lord Moynihan (Con)]

Will my noble friend the Minister recognise the work of StreetGames and community organisations which encourage young, disadvantaged people from low-income families to adopt a healthy and active lifestyle through the work of locally trusted organisations, which are the first port of call for many families struggling to cope with the crisis?

[Baroness Stedman-Scott (Con)]

I acknowledge and pay tribute to the work of the organisation to which the noble Lord referred.

[Baroness Watkins of Tavistock (CB) [V]]

My Lords, children of school age have had their education severely disrupted, with those in the poorest households affected the most. We know that Covid-19 is passed on through droplet transmission, particularly in small, ill-ventilated spaces. Will the Minister assure the House that no families with school-age children will be evicted during this academic year, to prevent families being placed in bed and breakfasts, with the increased risk of transmission of Covid-19, to prevent mental health breakdown in children, and avoid further disruption to their education?

[Baroness Stedman-Scott (Con)]

I thank the noble Baroness for bringing that important point to the notice of the House. My best response is that I will go back to my colleagues at MHCLG to get their position on the issue of evictions and write back to the noble Baroness.

[Baroness Lister of Burtersett (Lab) [V]]

My Lords, welcome as what the Government have done is, there is growing evidence of hardship among low-income families with children, most recently from Save the Children today. Following on from the right reverend Prelate’s question, why have the Government not done anything to improve social security benefits for children?

[Baroness Stedman-Scott (Con)]

The Government have put £9 billion into the welfare system to help the poorest. As I said in my original Answer, the bottom 10% have not had their income lessened at all. I know how passionate the noble Baroness is about this, and I respect her tenacity in raising it on a regular basis. I have put my head above the parapet and organised an all-Peers briefing session on the benefit cap, with the Minister for Employment, next week. I am sure these issues will be talked about in greater detail then. I extend an invitation to all noble Lords to attend that briefing.

[Lord Roberts of Llandudno (LD) [V]]

In 1942, William Beveridge introduced his report which led to the welfare state and the NHS. We are still facing the same giants that he was tackling at that time: squalor, want, idleness, ignorance and disease. Is it not time that we had another commission like that, and found an outstanding person with Civil Service colleagues to produce a report that will really tackle the long-term issues facing us?

[Baroness Stedman-Scott (Con)]

I can only assure the noble Lord, and the whole House, that the excellent civil servants we have got, and the partners that we work with at DWP, are all the time trying to find better ways to deliver services to people so that they can realise their destiny.

[Baroness Boycott (CB) [V]]

I thank the Minister for her clear efforts in this area. I know that she is very sympathetic. My point is similar to that of other noble Lords. Save the Children said today that 27% of families are finding it harder to find food than they were in April. This is obviously going to get worse over the winter. I particularly want to ask about children: are the Government going to implement the three recommendations in the national food strategy, particularly about holiday hunger? The Christmas holidays will be upon us before we know it and we need a plan in place.

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

The noble Baroness, Lady Watkins, also raised with me, outside the Chamber, the issue of food, children and holiday cover. I pledged to talk to my noble friend Lady Berridge. I have been so busy that I have not been able to do that, but I give an undertaking to do so and to write to the noble Baroness.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

My Lords, the time allowed for this Question has elapsed. I apologise to the noble Baroness, Lady Massey, that there was no time for her question. We now come to the second Oral Question, in the name of the noble Lord, Lord Polak.

Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) Regulations 2020

Baroness Stedman-Scott Excerpts

Wednesday 16th September 2020 Lords Chamber

Moved by

[Baroness Stedman-Scott]

That the Regulations laid before the House on 6 July be approved.

Relevant document: 23rd Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 14 September.

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

My Lords, in moving this Motion I should clarify remarks I made during the debate on these regulations, which took place in Grand Committee on Monday, concerning their application to certain charitable incorporated organisations. Following the making and laying of these regulations, the Department for Digital, Culture, Media and Sport made the Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) (No. 2) Regulations 2020, which disapplied Section A51 of the Insolvency Act 1986 in relation to charitable incorporated organisations. Section A51 was cited in the making of the SI before the House, which means that as a result of the DCMS regulations the provisions in this SI have not applied to charitable incorporated organisations since 13 August 2020. This does not affect the validity of the powers used to make these regulations; the powers applied to charitable incorporated organisations at the time this SI was made. Likewise, its application to charitable incorporated organisations until 13 August is not affected.

The legal effect of the DCMS SI is one of implied repeal of the provisions from that date onwards. So far as they apply to charitable incorporated organisations, a legal position, we think, is clear. The Department for Digital, Culture, Media and Sport has since indicated in a memorandum to the Joint Committee on Statutory Instruments its intention to bring forward legislation, at the next available opportunity, to correct the position to that reflected in the regulations before the House today.

[Baroness Smith of Basildon (Lab)]

My Lords, I am grateful to the Minister, but I cannot have been the only one in your Lordships’ House struggling to follow the information she gave to us. I was not 100% clear because she said that the “legal position, we think, is clear”. I do not know whether that means “We are not sure whether it is clear; we only think it is clear”, or whether those who debated this in Committee have been made aware of the information she has brought before your Lordships’ House today.

I have not fully understood the implications of everything she said—I do not know whether other noble Lords have. It may be that it has no material impact, but maybe it does. Before we agree this Motion today, I wonder whether she ought to consult those who were in that Committee so that everyone who debated the regulations is clear that there is no material difference, given the rather lengthy and complex explanation she has given today.

[Baroness Stedman-Scott (Con)]

I am happy to respond to the noble Baroness’s points; this is, indeed, a complex matter. I am confident that the legislation we intend to bring forward at the earliest opportunity will clarify matters, but I will consult with the Members of the Grand Committee to make sure that everybody is clear about the impact of this change.

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

The Question is that the Motion in the name of the noble Baroness, Lady Stedman-Scott, be agreed to. As many—

[Baroness Smith of Basildon (Lab)]

My Lords, I think that the Minister has just said that, before agreeing it, she will take it back to Members to see if they are happy with it because there is some complication. That was the implication of what she said: she was not going to put it forward for a vote today until she had consulted people.

She is checking with the Clerk so I will keep talking for a second while she gets advice. However, I am still not clear. I thought she said she was agreeing to take it back and consult with Members who were on that Committee.

[Baroness Stedman-Scott (Con)]

I am advised that I am not able to withdraw the Motion, but I am quite happy to make sure that people understand exactly what is meant. I beg to move.

--- Later in debate ---

[Baroness Smith of Basildon (Lab)]

My Lords, I will not necessarily push this to a vote at the moment, but I say to the Minister that the reason why she says it cannot be withdrawn is that it comes into force today. If she has not consulted Members of the Committee on something so complex before bringing a Motion to your Lordships’ House today, there is a serious issue here. Are these “made affirmative” regulations, which come into force whether we debate and agree them or not? I am not clear. I have to be honest that I am completely at a loss as to what is happening at the moment, but it seems that there is some question mark over the validity of this and whether it is correct. I may be wrong and everything may be in order. However, it was complex and I did not fully understand what she was putting forward today.

[Baroness Stedman-Scott (Con)]

I advise that they are “made affirmative” and to be dealt with today. I can only reaffirm what I have said: it is a complex matter but I am confident that the legislation we intend to bring forward at the earliest opportunity will clarify matters.

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

If that is of sufficient clarity, I will ask the Question.

Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) Regulations 2020

Baroness Stedman-Scott Excerpts

Monday 14th September 2020 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) Regulations 2020.

Relevant document: 23rd Report from the Secondary Legislation Scrutiny Committee

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

My Lords, I am pleased to introduce a statutory instrument laid before the House on 6 July. These regulations form part of the corporate insolvency and restructuring regime introduced in the Corporate Insolvency and Governance Act. I am satisfied that the regulations are compatible with the European Convention on Human Rights.

The Corporate Insolvency and Governance Act introduced corporate restructuring tools which include a moratorium and a restructuring plan which offer breathing space and flexibility to keep companies going. These regulations provide the board of the Pension Protection Fund, the statutory compensation scheme, with creditors’ rights in certain specified circumstances when a company, a limited liability partnership or a certain charitable incorporated organisation obtains a moratorium from creditor action or proposes to restructure their business, as applicable, under the new processes available in the Corporate Insolvency and Governance Act.

I had expected also to introduce another set of related regulations for debate. However, we are working with the relevant government department to resolve a technical legal issue. We intend to re-make and lay those regulations with a debate scheduled for a later date.

The regulations we are debating provide the board of the Pension Protection Fund, the statutory compensation scheme, with creditors’ rights in certain specified circumstances. They include when a company, a limited liability partnership or a certain charitable incorporated organisation obtains a moratorium from creditor action or proposes to restructure its business, as applicable. The pension scheme is eligible for the Pension Protection Fund and is directly affected. A moratorium gives companies an opportunity to explore rescue and restructuring options free from creditor action. A restructuring plan will enable struggling companies to negotiate restructuring arrangements to give them the best possible chance of continuing as a going concern.

Under existing pensions legislation, similar corporate rescue processes are treated as insolvency events. This triggers a number of safeguards. When such an event occurs in relation to an employer of an eligible occupational pension scheme, the Pension Protection Fund assesses the scheme and, among other things, takes over the scheme trustees’ or managers’ role as a creditor of the sponsoring employer. Neither moratoriums nor restructuring plans are listed as insolvency events in the relevant pensions legislation as this would undermine the overarching intention to maximise the company’s chance of survival. Therefore, the normal safeguards within the legislation are not engaged.

During the passage of the Bill, there was significant stakeholder and parliamentary pressure to provide specific protections in the new moratorium and restructuring plan procedures in respect of the impact on pension schemes. The concern is that these procedures could result in the pension scheme, as an unsecured creditor of the company, being disadvantaged. The Pension Protection Fund could face a greater loss if the company subsequently fails and the scheme falls into the fund with a larger deficit than it originally had, so there is a need to build in some specific protections by ensuring that the Pension Protection Fund has a seat at the table in any relevant restructuring proposal.

These regulations ensure that the new moratorium and restructuring plans do not leave pension schemes and the Pension Protection Fund without appropriate protections in legislation. We have expedited the making and laying of these regulations to minimise gaps in the legislation after the moratorium and restructuring plan measures came into force. This ensures that the Pension Protection Fund is in a position to act quickly in a fast-moving situation to protect its interests and those of its levy payers. The regulations enable the Pension Protection Fund board to step into the shoes of the scheme trustees or managers in their role as a creditor in the context of the new moratorium and restructuring processes, in relevant specified circumstances, to ensure that the board’s interests and those of the scheme are properly represented. In relation to the moratorium, they provide for the Pension Protection Fund to act in place of the scheme trustees or managers as a creditor in decision-making that may be ordered by the court following a challenge to the directors’ actions and where creditor consent is sought on whether the moratorium should be extended.

Where a restructuring plan is proposed in respect of a relevant entity, and where in the relevant specified circumstances the scheme trustees or managers would otherwise exercise creditors’ voting rights, the board of the Pension Protection Fund will have the exclusive right to vote on the plan. By enabling the Pension Protection Fund to exercise creditor rights, the fund will be protected against the risk of an agreement being struck without it being involved. This will avoid a scheme continuing without adequate protection knowing that the fund will pick up the pieces. The Pension Protection Fund is funded mainly by a levy collected from pension schemes, so it would be levy payers who suffer the loss.

The scheme trustees or managers are not completely excluded, however; they too play an important role protecting members’ interests. To provide the appropriate balance, before the Pension Protection Fund exercises any voting rights or participates in a decision-making process to the exclusion of the scheme trustees or managers, it will be required to consult them. Also, certain rights will be exercisable concurrently, such as the right to participate in meetings ordered by the court and the right to make representations to the court, as applicable.

The moratorium and restructuring plan are important measures that will give companies the best prospect of survival in this period of economic uncertainty. We must also ensure that they do not undermine the protections for pensions schemes, the Pension Protection Fund and its levy payers. I commend these regulations to the Committee and I beg to move.

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[Baroness Stedman-Scott (Con)]

My Lords, I am grateful to all noble Lords for this helpful debate and their contributions. I hope that I have been able to establish why it was so important that we introduced these regulations.

The Pension Protection Fund creditors’ rights during a moratorium are intended to enable it to take part in certain decision-making processes as a creditor. For example, it enables the Pension Protection Fund to take part in a decision whether to grant consent to the extension of a moratorium in the relevant specified circumstances set out in the Act.

Where a restructuring plan is proposed, the rights given to the Pension Protection Fund are intended to enable it to influence the shape of any deal, and to seek additional security and guarantees to offset the risk that it takes on a scheme with an even larger deficit in the future.

The Covid-19 pandemic has meant that we have had to respond quickly to facilitate the survival of companies. That will offer employees the best chance of retaining their job. At the same time, we have strengthened the position of pension schemes to improve the chances of employees receiving their expected pension outcomes.

I turn to some of the questions asked by noble Lords. The noble Baronesses Lady Drake, Lady Altmann, Lady Ritchie, Lady Wheatcroft and Lady Sherlock all mentioned gaming. During the passage of the Corporate Insolvency and Governance Act through Parliament, the Government listened to concerns raised and amended the Bill to avoid lenders exercising their rights to accelerate their pre-moratorium debt, thereby potentially gaming the system through a moratorium. While the moratorium provisions do not prevent a financial services creditor exercising a termination or acceleration clause, nor do they remove the requirement that if the accelerated debt is not paid, the monitor must bring the moratorium to an end. But financial services’ pre-moratorium debts are excluded from super-priority where the debt has been accelerated during the moratorium period. The provisions are aimed at encouraging lending to companies in difficulty while also supporting the operation and stability of financial markets. The provisions disincentivise such creditors from seeking to accelerate their pre-moratorium debt solely to benefit from super-priority, should the company fail. There is also power to amend what does and does not receive super-priority, should market practice indicate that tightening the provision is necessary. It is too early to anticipate whether government action will be needed here. We think the provisions in place strike the right balance. The moratorium provisions will be reviewed within three years of enactment.

The noble Baroness, Lady Altmann, asked what powers the Pension Protection Fund will have in cases where a moratorium is in force. A company subject to a moratorium can sell charged property as if it were not subject to a charge only with the court’s permission. A court would not make such an order without the charge holder having had the opportunity to be heard on the application. It will be for the court to decide whether the Pension Protection Fund can intervene. A court will give permission for such a sale only if it will support the rescue of the company as a going concern, something that will be in all stakeholders’ interest, including the pension scheme. Additionally, the open market value of the property must be paid to the charge holder following the sale.

There are provisions to allow for the Pension Protection Fund and the Pensions Regulator to be provided with information concerning a moratorium or a restructuring proposal, in terms of powers to obtain information. In the case of a moratorium, the board of the Pension Protection Fund and the Pensions Regulator will be provided with certain notifications, including that a moratorium has come into force, in relevant specified circumstances. In the case of a restructuring, any notice or other document required to be sent to a creditor of the company must also be sent to the board of the Pension Protection Fund and the Pensions Regulator in relevant specified circumstances. The Pension Protection Fund is then able to review this information including, where necessary, engaging external experts to assess the impact and to reach a view as to how to vote in any transaction.

The noble Baroness, Lady Ritchie, asked if there was sufficient money in pension schemes. Unfortunately, not all pension schemes are well funded. Where a scheme is not well funded, it will go into the Pension Protection Fund. The Pension Protection Fund is confident that its long-term funding strategy and diverse investment approach positions it well to weather current market volatility and future challenges. The Pension Protection Fund’s latest modelling shows that it is well placed to achieve its self-sufficiency target, which is the ability to pay Pension Protection Fund compensation in full, with a 10% buffer. This means that Pension Protection Fund members and members of defined benefit schemes can be confident of the fund’s ability to continue to provide the compensation promised and to remain a robust safety net.

My noble friend Lord Bourne and the noble Baroness, Lady Janke, raised the point that the lag in the timing of bringing forward these regulations is problematic. We have expedited the making and laying of these regulations to minimise gaps in the legislation. After the moratorium restructuring plan, measures come into force. The “made affirmative” procedure enabled the regulations to come into force soon after they were laid. We are not currently aware of any moratorium in force or restructuring plan proposed in relation to an employer pension scheme eligible for the Pension Protection Fund.

My noble friend Lord Bourne and the noble Baroness, Lady Janke, raised the issue of the impact so far. As I said, we are not aware of any moratorium or restructuring plan in place, but we will monitor the situation closely.

My noble friend Lady Wheatcroft asked about reduction contributions: are deficit reduction contributions enforceable during a moratorium? As employees’ wages or salary must be paid, whether or not they fall due before or during the moratorium, the term “wages or salary” also includes a contribution to an occupational pension scheme. Payments made under deficit repair contributions are not enforceable. This is the debt for which the Pension Protection Fund is acting as a creditor.

My noble friend Lady Wheatcroft also raised the Bernard Matthews case. Pre-pack sales are a useful tool for rescuing businesses, saving jobs and maximising funds available to creditors. If I may, I shall write further to her on that issue.

My noble friend also raised the issue of the Pension Protection Fund’s resources to intervene in moratoriums. The Pension Protection Fund has an in-house restructuring and insolvency team but also the ability to call on third-party advisers to support its work. The Pension Protection Fund keeps its level of resourcing under review but at present it is confident that it can engage in moratoriums and restructuring plans as necessary.

A number of noble Lords raised questions about monitoring as things develop. We have regular governance meetings with the Pension Protection Fund and the Pensions Regulator as the sponsoring department. We will therefore be able to monitor developments in the light of operational experience.

Many noble Lords asked questions that I will not have time to respond to in summing up, but I confirm to all noble Lords that we will review Hansard and make a point of writing to noble Lords with the answers to their questions.

To conclude, we will keep these measures under review. My department and the Pension Protection Fund have regular meetings to review its performance. I commend the regulations to the Committee.

Motion agreed.

Jobseekers (Back to Work Schemes) Act 2013 (Remedial) Order 2020

Baroness Stedman-Scott Excerpts

Wednesday 9th September 2020 Lords Chamber

Moved by

[Baroness Stedman-Scott]

That the draft Order laid before the House on 5 September 2019 be approved.

Relevant document: 1st Report from the Joint Committee on Human Rights. Considered in Grand Committee on 3 September.

Motion agreed.

Kickstart Scheme

Baroness Stedman-Scott Excerpts

Monday 7th September 2020 Lords Chamber

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

I thank the noble Baroness for her question. She has started us on a very important issue to do with the Kickstart Scheme. The jobs secured through the Kickstart Scheme will go through a very rigorous process. One of the major benefits of the new Kickstart Scheme is the involvement of the private sector. We will ensure that the jobs provided under Kickstart will be good quality. We believe the best chance for a sustained job will come from taking part in the scheme. The employers will have a chance to see if they can place participants permanently in their establishments.

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

While it is incredibly important to get young people into work, small businesses are struggling to make sense of how they can access this scheme—yet the poster child is Tesco, which is taking on people, growing and benefiting from coronavirus and will now get free members of staff. How can the Minister ensure that those people taken on at government cost would not have been taken on in any case by Tesco and that they will get some kind of qualification or hope of a job at the end of this?

[Baroness Stedman-Scott (Con)]

I am pleased to say that the latest briefing I have had today is that a range of companies wish to take part in Kickstart—large companies, as the noble Lord suggested, and small companies, as well as charities. There will be a rigorous process to follow to ensure that those jobs are additional and not previously advertised. I am sure the process we go through will result in good-quality opportunities for our young people.

[Lord Bates (Con)]

Prior to my noble friend becoming a Minister, she had devoted much of her life to helping some of the hardest-to-reach and troubled young people in the country find their way into the dignity of work. How will she ensure that the Kickstart programme supports our most vulnerable young people, who already face the greatest barriers to employment, and does not leave them to fall further behind?

[Baroness Stedman-Scott (Con)]

The Kickstart Scheme really is very exciting for young people. First, they will have a work coach who will be with them throughout their journey. They will have full support from Jobcentre Plus and employer support; the HR teams will hopefully work with them. They will be able to put together a CV, understand the world of work and undertake training opportunities that enhance their employment prospects. The flexible support fund of £150 million will be deployed and, most importantly, when somebody is in a Kickstart placement, there will be regular reviews of their progress to ensure that we do not miss any opportunity to keep them in that placement, rather than them falling out. Without blowing my own trumpet, there are all the key components we deployed at Tomorrow’s People that made the outcomes so successful.

[Lord Harries of Pentregarth (CB) [V]]

My Lords, I congratulate the Government on this initiative, but I would like to ask the Minister what plans they have for when it ends. The danger, of course, is that too many people will simply drop back into unemployment, as happens too often in France. I wonder whether it is possible to have continuing support at a lower level, so that there is a tapering off, as with the present furlough system? Would the Government give further thought to this?

[Baroness Stedman-Scott (Con)]

My Lords, I am pleased to say—and I reiterate the points I made before—that all through the Kickstart Scheme journey, young people will have the support services of their work coach and the full support of the Jobcentre Plus system, along with their intermediaries and employers. Work coaches will continue to support claimants into work after their placements have been completed. They will not be left to drift. We want as many young people as possible to gain support from this service. On the noble Lord’s point about changing the mechanism of the programme, I am not aware of any plans to do that at present.

[Lord McKenzie of Luton (Lab) [V]]

My Lords, for those employers whose individual job needs do not amount to 30, arrangements can be put in place, as we have heard, by intermediaries. What is the process for this? Is it just a DWP recommendation? Is there a quality assurance process for recognition of intermediaries? Who has responsibility for delivering the various programmes—individual employers or the intermediary entity?

[Baroness Stedman-Scott (Con)]

My Lords, I must apologise to the noble Lord, as the sound was not great, but I think I got the gist of his question. Where employers have robust HR teams and can manage the process, they will obviously be able to bid. Where employers have only one or two opportunities, the role of the intermediary steps in. There will be a quality assurance process for their procurement. I understand that yesterday Movement to Work and the Prince’s Trust were gearing up to fulfil this role. We will make sure that the best possible people are taking part as intermediaries.

[Lord Forsyth of Drumlean (Con) [V]]

My Lords, I congratulate my noble friend on this excellent scheme and the speed with which she has put it in place. I understand why it has been necessary to focus on people who will give an opportunity to a batch of youngsters, but the real hope will be small businesses that can help one or two. Once the scheme is up and running, will she consider the ways in which small employers can engage directly? Will she also recognise that the sooner Britain gets back to work the better, because many of these young people will need support and guidance in the workplace. Does she think there are enough work coaches in place to maintain the scheme?

[Baroness Stedman-Scott (Con)]

I can assure all noble Lords that as the Kickstart Scheme is implemented and progresses, it will be kept under constant review. If the noble Lord, or any Member of your Lordships’ House, has some idea about how it could be amended for the better, my door is always open to receive those. We are doubling the number of our work coaches. We will make sure that there are ample people to offer support on the journey. I could not agree more: the sooner we are back to work the better. Young people will receive the support they need to ensure that they make a good transition from Kickstart to work.

[Baroness Uddin (Non-Afl)]

My Lords, I welcome the proposed Kickstart programme, although I would have liked to see apprenticeships and some graduate programmes extended; this remains a glaring gap. I steered the Labour Government’s first mentoring project, the People into Management Network, for three years. It primarily targeted young Asian women, undergraduates and graduates, supporting over 500 young people with 100 leading organisations, including Microsoft, the Foreign Office, the police and others. 10 Downing Street itself provided placements, mentoring and ongoing support for three months, for a comprehensive and impactful placement experience. I am glad to hear that prolonged coaching and support will be available. Will the Minister take the opportunity to meet me and other noble Lords interested in discussing how to improve the programme?

[Baroness Stedman-Scott (Con)]

My Lords, my door is open and I would be very happy to meet noble Lords to discuss this if it helps them. If I may, I will build on a point that the noble Baroness made. With our plans for jobs, we are doubling the work coaches and putting £2 billion into Kickstart, and there will be no cap on places. We have expanded the youth offer, we are expanding the work and health programme, we are expanding the sector-based academies, and we have put an extra £40 million in for additional capacity for an online job-finding support scheme. I am very proud of what my Government are doing to make sure we help as many people as possible.

[The Deputy Speaker (Lord Brougham and Vaux) (Con)]

My Lords, the time allowed for this Question has now elapsed.

Jobseekers (Back to Work Schemes) Act 2013 (Remedial) Order 2019

Baroness Stedman-Scott Excerpts

Thursday 3rd September 2020 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Jobseekers (Back to Work Schemes) Act 2013 (Remedial) Order 2019.

Relevant document: 1st Report from the Joint Committee on Human Rights

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

My Lords, this instrument was laid before Parliament on 5 September 2019 and has been discussed and approved in the other place. Today, I am grateful to move this forward through your Lordships’ House.

In 2013, my department passed the Jobseekers (Back to Work Schemes) Act. The Act validated sanctions and notifications issued to claimants who failed to take part in employment programmes designed to help them into work. The Court of Appeal found the Act to be an effective and valid way of achieving this but also recognised that, in a small number of very specific circumstances, some individuals had lost their right to a fair hearing under the Act.

This draft remedial order amends the Jobseekers (Back to Work schemes) Act 2013 to resolve this issue and allows the tribunals to find in favour of the claimants whose appeals were affected, where it is right to do so. It also gives my department the ability to reconsider relevant sanction decisions in these cases and to pay any affected individuals anything that they are then due. It is of fundamental importance to me that those who had appealed a sanction decision but were prevented from having a fair hearing because of the Act should have this right restored. Only a specific group of people—some 5,000 individuals—have been affected by the Act in this way. As the remedial order applies only in very particular circumstances, not all cases will lead to a payment.

My department aims to resolve these cases and make any necessary payments to these individuals as soon as it can. We anticipate that the whole process may take up to 12 months, for us to identify and pay any affected individuals. We aim to commence work on these claims in the autumn and begin reconsidering the decisions and payments. This is not just resolving this matter for the small number of claimants affected; we must also ensure that we learn the important lessons around communicating with claimants and do not create similar instances in future.

Noble Lords may be acutely aware that, in the summer, the Chancellor announced an unprecedented package of measures not only to protect jobs but to ensure that we get individuals who may have lost jobs as a result of the Covid-19 emergency back into work. I have real confidence that the digital nature of UC and its improved means of communication with our claimants via the online journal means a future Government will not find themselves in a similar situation.

The draft remedial order was laid for 60 sitting days on 28 June 2018 and then again for another 60 days last year. This was done to enable representations from Members of both Houses and the Joint Committee on Human Rights. By using a non-urgent remedial order, Parliament has been given time and the opportunity to scrutinise and consult on the order’s contents. I have considered the views of the tribunals, and this draft of the remedial order has been amended accordingly. The Joint Committee on Human Rights approved the draft remedial order earlier this year, in March, and recommended it to Parliament.

Currently, no other Bills are planned that could accommodate this specific legal objective and resolve the incompatibility. This is a way of achieving that end without repealing the Act itself, which still holds for the majority of claimants.

Although it has been a long and complex process, we have comprehensively assessed the issue and carefully considered any representations that we have received. I am keen to resolve the appeal cases for these individuals as soon as we can and to take the learnings forward as we look to support people back into work. I hope that noble Lords will support this order during its final passage through Parliament.

I am satisfied that the draft remedial order is compatible with the European Convention on Human Rights and I commend it to the House.

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

I thank noble Lords for their contributions today. Getting people back into work and giving them the support that they need is of the utmost importance, especially at this time. My department is dedicated to doing all that we can for these individuals.

My department is constantly learning and evolving. As the Secretary of State told the House of Commons on 29 June, claimant commitments must now reflect our “new normal”, acknowledging the reality of a person’s local jobs market and personal circumstances to prepare them for getting back into work. We are managing this with a phased approach to ensure that our work coaches can deliver an effective service in a reasonable, measured and safe way, taking into account any Covid-19 restrictions.

I will move on to the many observations made about sanctions—an issue which all noble Lords have raised. We use sanctions as a consequence of people not meeting the agreed commitments that a claimant accepts to be entitled to benefits. We always apply reasonable judgment before any actions, and take into account the current circumstances of the individual. My department’s work coaches use their judgment of what are reasonable steps. Claimant commitments must be reasonable, and in this unprecedented time they will be. Sanctions are used only if a claimant does not do what they have committed to do without good reason.

Before the start of the pandemic, sanctions were used in only a small percentage of cases, and the rate of sanctions has fallen over the last year. However, we are never complacent in our ongoing commitment to ensure that our policies are fit for purpose. That is why, in November 2019, we reduced the maximum length of high-level sanction from three years to six months, as my noble friend Lord Forsyth referred to. Data from March 2020, before suspending conditionality, shows that 2.12% of UC claimants subject to conditionality at the point where the sanctions applied had a reduction taken from their UC award. This is near the lowest on record. The latest data available following the suspension of conditionality shows that 0.73% of UC claimants subject to conditionality at the point where the sanction was applied had a reduction taken from their award.

As many noble Lords have said, the department has committed to doing an evaluation of the effectiveness of universal credit sanctions in supporting claimants to search for work in response to the Work and Pensions Select Committee report on benefits sanctions. The department will look to publish in autumn.

Noble Lords asked what “as soon as we can” means. I appreciate that we want this as quickly as possible, but the department has faced unprecedented demand on services. With an increase in claimant count of nearly 600%, we are doubling our work coaches and recruiting more and more so that we can support more people. We are having to increase the DWP estate so that we can look after people safely, with social distancing, and we have turned over every stone to increase the relationships that we are making with employers to ensure that, where vacancies exist, we can get them and put people forward for them. These are tough times and we are working very hard to support the people we are in business to support.

The noble Baroness, Lady Bennett, asked about progress reports. I need to take this question back to the department; I will get an answer to her and make sure that all noble Lords are apprised of it. She also talked about a person in Ashton-under-Lyne and gave some very alarming details about the case. If she could please let me have the details, I will ensure that that case is investigated. If other noble Lords have details of where things have apparently not worked out for people, I ask them to let me know; I give my word that it will be looked into.

Another point raised was about the unfairness of mandating people to go on employment programmes. We aim to provide individuals with the help they need to find work, stay in work and get better work, so I strongly refute that requiring people to attend programmes to help them into work is unfair. The Court of Appeal ruled in our favour on this point: attendance on these work programmes is not a breach of human rights.

I acknowledge that all noble Lords have raised points about sanctions and their impacts on people, and the noble Baroness, Lady Bennett, and my noble friend Lord Forsyth raised the point about sanctions leading to poverty and destitution and the use of food banks. We do not sanction people lightly. It is applied only where there is good reason. If people find themselves in hardship, hardship payments are available to eligible claimants to help them meet their essential needs.

The noble Baroness, Lady Bennett, raised a point about the commitment of the department and the Government to helping people back into work. I have never known a time in my working environment when I have seen such commitment in action through our Jobcentre Plus network, our partners and, in particular, our work coaches. I must say that I take the point about forcing someone into any job, but over my life I have learned that when you have a job, it is easier to get the next one. With the work we are doing on in-work progression, I can honestly say that this is the best course of action.

The noble Baroness, Lady Janke, raised a point about sanctions for not attending unpaid work placements. We do not sanction people for not attending work experience placements. If we can have more details, I will investigate that.

On who falls in the scope of the remedial order, we estimate there to be under 5,000 individuals who may be affected by this. The remedial order affects a very specific group, and we will use the appeal records to identify those people.

The 2013 Act was introduced because of the department’s defective notifications. I was asked whether we have reviewed the notifications and letters since. We have, and we are constantly revising and improving processes on sanctions.

Another question was whether the 2013 Act was unconstitutional. The Act was not only constitutional but it was necessary. It was introduced in people’s best interest and was an effective means of achieving its policy effect.

As to when people will be paid, as I have said, during this difficult time resources have had to be elsewhere, but we will begin resolving the cases impacted by the order and paying people any amounts that they are due this year.

I am sorry, but in the time available I am never going to be able to answer all the questions. After this order is dealt with, I will go back to the department with my officials and make sure that people get answers to the questions they have raised.

I recognise the importance of resolving this incompatibility as quickly as possible. It has taken time to consider and develop the best course of action. I believe that the proposed remedial order is a reasonable and lawful approach to resolving an otherwise complex issue, and I am grateful to the Joint Committee on Human Rights for its scrutiny of the matter. The remedial order process is very rarely used, but it is an effective way of correcting incompatibilities.

Finally, the Economic Affairs Committee’s report on universal credit has been published. We thank the committee for its work. We are considering the content and recommendations, and we will report back in due course. If any noble Lord wishes to discuss that report with me, they should feel free; I am very happy to meet them.

There are no arguments now to justify delaying the process. It has already been approved in the other place. I hope that the Committee will support the remedial order during its final passage through Parliament. I commend the order to the Committee.

Motion agreed.