Occupational Pension Schemes (Charges and Governance) Regulations 2015
Debate between Lord Bourne of Aberystwyth and Baroness Sherlock
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his explanation of these regulations, my noble friend Lady Drake for a characteristically thorough interrogation of them, and my noble friend Lady Donaghy for highlighting some very important lessons from the past that should inform our discussions today. I remind the Committee of my registered interest as the senior independent director of the Financial Ombudsman Service.
We on these Benches welcome the fact that action is now being taken to address the problems with governance and excessive charges. Like my noble friend Lady Drake, I welcome action on the active member discounts, although her terminology may indeed be a fairer description of what happens there.
As the Minister indicated, 5 million people are already saving in schemes under auto-enrolment, and that figure will end up closer to 9 million or 10 million in due course. The point made by my noble friend Lady Donaghy is crucial here. If we are to cap the charges levied on pension savers in such schemes, we need to be sure that it works well because of the duty of care owed to those savers who have made no active choice about saving but who have been defaulted by their employer in particular or by the state in general into schemes which they have simply never chosen. It is critical that those who are auto-enrolled remain so and that we do not see a significant opt-out rate, but also that the highest possible retirement income is derived from the savings that individuals and their employers make. That is the context for these regulations, and the history lesson from my noble friend Lady Donaghy is very helpful. People need to know that their pension pots are not being siphoned off in unreasonable charges and that someone in whom they can have confidence is looking after their interests.
My noble friend Lady Drake asked a number of very important questions, and I will add just a few. First, on the charge cap, Labour has been campaigning for that, so it would be churlish not to welcome it—and I very much welcome it. However, can the Minister please tell the Committee why the Government chose 0.75% and what plans they have to reduce that further? The latest impact assessment suggests that, following the response to the consultation, the Government considered just two options: the one set out in these regulations, and doing nothing. I agree that of those two choices, acting to cap charges is definitely the right one, but the case for a lower figure is very strong. Certainly on these Benches we support capping charges at 0.75%, but with the aim of reducing it to 0.5% over the course of the next Parliament. Does the Minister agree that that is where we ought to end up?
Secondly, I would appreciate some clarification about how the cap will work. The Minister explained that it will be set at 0.75% of funds under management or an equivalent combination charge, but can he explain a bit more how the combination charge will be calculated? Regulation 5 seems to suggest that there will be three options: a funds-under-management charge, a combination of a funds-under-management charge and a contribution charge, or a combination of a funds-under-management charge and a flat-rate fee charged to the member.
Regulation 6 sets out the limits if one of the combination options is chosen. Can the Minister tell us a bit more about why these were fixed as they were? Is it the intention that a combination option cannot yield more than the equivalent of 0.75% of funds under management? If so, how can the saver be assured of that? If that is not the case, why are the Government giving the option to choose a charging structure that could yield more than the headline rate of 0.75% of funds under management?
Whatever figure is chosen, for controls on charging to bite, savers need to understand fully what charges are being levied. As we know, defining pension charges is not an easy job. The Minister indicated that transaction charges are not included in the cap. The biggest problem is that, as my honourable friend Gregg McClymont pointed out when the regulations were considered in another place, we do not yet know the full range of transactions attached to pension schemes. The only way to deal with that is through full disclosure of all transaction costs, which is long overdue and to which the Opposition are committed. I would be interested to know the Government’s position on that.
Will the Minister tell me a bit more about the compliance regime? Whose job is it to check that the cap is not breached and what will the penalties be for a breach? As for the minimum governance standards, they are welcome as far as they go, but again I would like to ask about compliance. Is the intention that the main or only compliance tool will now be the chair’s statement? Paragraph 7.34 of the Explanatory Memorandum says that the Pensions Regulator will have the power,
“to issue a fine against the Board of trustees or managers”,
in the event of failure to prepare a chair’s statement as required by the regulations. Will the Minister give some indication of the likely level of fines?
Of course, charges can take different forms, and the Government have made a welcome move in recognising this. For a while, they chose to focus primarily on the annual management charge, but these regulations acknowledge that that is only one part of the picture. My honourable friend Gregg McClymont highlighted the need to focus on the total expenses ratio, which includes custody, legal accounting and administration, and which consequently tends to be significantly higher than the AMC. Do the Government have any plans to evaluate the impact of the regulations on the total costs levied on affected pension schemes and savers?
We need urgently to address the range of challenges facing pensions at the moment if we are to be successful in persuading workers to save for their retirement at the rate that they need to do. My noble friend Lady Drake mentioned the draw-down products, but Labour will take a range of other, tougher steps to protect savers—for example, from new products that damage retirement income. Indeed, a Labour Government will begin immediate consultation on plans for a cap on fees and charges for income draw-down products, with a focus on products bought from the saver’s own pension provider. However, I welcome the progress that has been made and I very much look forward to the Minister’s reply to these and all the other questions that have been asked.
Lord Bourne of Aberystwyth
My Lords, I am grateful for the participation of noble Lords in this debate. Let me try to deal with the points that have been made while saying at the start that, over the next decade, the default fund charge cap should transfer around £200 million from the pensions industry to savers. That is an important point.
I very much take the points made by the noble Baroness, Lady Donaghy, about the historical perspective and the fact that, across the House, we are trying to ensure a fair regime relating to charges. We need a balance to make sure that the industry is properly and fairly rewarded for the services that it is providing and that, at the same time, savers are not overcharged for the services that they are receiving. That has very much been the thrust of the reform and it is why the figure of 0.75% has been chosen, which will represent for most people a fall in the amount that they are charged for the service, as I indicated.
Let me turn to the contributions made by noble Lords. I very much welcome the welcome in general terms from the noble Baroness, Lady Drake, for these regulations, which, as I say, bring in governance arrangements for the default automatic enrolment, as well as a cap on charges. I am pleased that we have universal welcome in general terms for the regulations. I welcome the support that we have had from around the Room in trying to get right the legislation and the consequential regulations.
The noble Baroness—and I apologise if my answers are not necessarily in the order of her questions—asked whether once a default always means a default. In general terms, the answer is yes. The regulations set out where an arrangement is designated as a default for a particular employer by virtue of meeting the tests in the regulations. It will continue to be designated as a default regardless of whether it continues to meet those tests. That is the general position. However, I will write to the noble Baroness on some of the specifics that she raised, because the devil is in the detail and I would not want to mislead her on specific examples, some of which I was a little blindsided by. I will, therefore, write to her about some of the specific examples she brought forward.
The noble Baroness also raised value-for-money issues. The regulations are designed to ensure that we get value for money and that there is transparency on the transaction costs—a matter also raised by the noble Baroness, Lady Sherlock. A transparency regime will come in as a result of these regulations that will enable us to look at value for money in relation to transaction costs. We are committed to looking at that in April 2017 to see whether we should bring it into the cap. That is the schedule. Therefore, at the same time as we are looking to ensure that we have an effective cap, in general terms, on auto-enrolment, we are also looking more widely at the transaction costs, to see whether it is appropriate to bring those into the cap in April 2017. We are already looking at that issue as we move forward from these regulations.
I turn now to the active member discount, or, as the noble Baroness, Lady Drake, phrased it—with some justification—the inactive member premium. There is no intention that we should stop a discount for active members unless it is the deferred members—the inactive members—who are paying for it. As the regulations make clear, there is nothing wrong with providing a discount for employees, provided it is not being subsidised by deferred members. That is the intention of the regulations, and I think that it is delivered by them. Again, however, if I am wrong about that, or there are exceptions to that general principle, I will write to the noble Baroness and copy my letter to other noble Lords who participated in this debate.
The noble Baroness also raised the issue of decumulation, which, as she rightly says, is not covered at this stage by these regulations. That does not mean that the Government are not looking at decumulation; it means that we are not looking at bringing it in at this stage. We are, however, keeping it under review, because, as we say, we want to ensure a fair regime: a fair amount paid—or a fair cap—so that the industry gets its fair return on what it is doing but savers are not ripped off, to use the vernacular. We have that under review.
The matter of the penalties regime was raised by the noble Baroness and also by the noble Baroness, Lady Sherlock. First, there are regulations that provide for a statement by the chair of trustees and a mandatory penalty of between £500 and £2,000 if such a statement is not produced. Trustees will have to demonstrate compliance with the governance and charges requirements in the chair’s statement. I am not sure of the precise sanctions that apply; I think it is under Section 43 and Schedule 18 of the Pensions Act 2014. I think that is right, in respect of the regime. However, I will write to noble Lords on the regime relating to non-compliance with the regulations and what the sanctions are.
Secondly, the contribution of the noble Baroness, Lady Donaghy, gave a very fair assessment of where we are. The noble Baroness made the very fair point that smaller schemes, generally speaking, do not represent such good value as larger schemes. It would not be fair to say that that is universally true, but it is probably generally true. Consolidation is happening—the figures show that—but it is right that we ensure that there is effective protection across the piece. That is, therefore, something that we need to keep under review. I made that clear as the Bill was going through the process of becoming an Act. It applies in general terms but it is a point well worth making.
I am trying to remember whether there were other points raised by the noble Baroness, Lady Sherlock, which I have not covered. If there were, perhaps she would remind me of them.
Baroness Sherlock
I thank the Minister. He has picked up most of them or has said that he will write to me about them. However, I asked how the combination charging options would work, whether the intention was that, if a combination option were chosen, it would be no more than the equivalent of 0.75% of funds under management, and how savers would know about that.
Lord Bourne of Aberystwyth
I am most grateful to the noble Baroness for reminding me of that. It is fair to say that generally, although not universally, that will be the case. I will write to her about the exemptions because there will be some situations where the charge will be higher, but in the majority of cases it will be the combination charge, which will certainly be no more than the 0.75% cap.
With that, I once again thank noble Lords for their support for the regulations. I undertake to write on the points that I have raised and on anything else that I have missed. I commend the regulations to the Committee.
Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2015
Debate between Lord Bourne of Aberystwyth and Baroness Sherlock(9 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his explanation of these regulations, and all noble Lords who have spoken. It is a privilege to be gathered with the same cast of people with whom we have debated these issues over the past couple of years. This is a terribly cruel disease. Some of the stories that we heard from the noble Lord, Lord Alton, and my noble friend Lady Donaghy, which reminded us of the ways people contracted these conditions, should give us pause for thought about what we are missing today. As the Minister has indicated, there is no requirement to uprate these payments. We welcome the uprating by 1.2%, particularly since it is broadly in line with increases to some other social security disability benefits and industrial disablement benefits.
The point raised by the noble Lord, Lord Avebury, on whether the Government would consider putting these upratings on to a statutory footing, was also raised by my honourable friend Kate Green when these regulations were considered in another place. As she noted when the regulations were considered last year in a Delegated Legislation Committee in another place, the then Minister for Disabled People said that the Government were actively reviewing the way that the uprating could be done. Kate Green asked how that was getting on. The answer she got this year was that the matter was still under review. Could the Minister tell the Committee something about the nature of that review and how much longer it might take? Could he share the barriers found during the past year to putting this uprating on a statutory footing in the way described by the noble Lord, Lord Avebury? Has the Minister any sense of the timescale for when that might be resolved?
Secondly, I want to revisit the question of differential treatment of dependants and sufferers under the scheme, also raised by the noble Lord, Lord Avebury. This came up when these regulations were being uprated last year. Dependants receive lower awards than sufferers in these two schemes, in three broad ways. The cut-off age for dependants to be in receipt of an award is 67 for dependants, compared with 77 for in-life claims. Some in-life claimants can receive a 10% enhancement under the 1979 scheme, although not, I acknowledge, under the 2008 scheme.
Awards for sufferers are also set at a higher level than those for dependants. As we discussed last year, that is at odds with the treatment of civil claims for mesothelioma compensation in the courts, where dependants receive higher awards. Because sufferers live for such a short time, as the Minister acknowledged, this can become a real problem. I very much agree with my noble friend Lady Donaghy about the fact that when someone is diagnosed, often the last thing that people want to do is spend the little bit of time left to them having to worry about money. Because the awards are lower to dependants, though, there could be pressure on a sufferer to spend that bit of time trying to sort out a claim because they are worried about what will happen to their dependants. Because the amount is lower if the claim does not get in before they die, that can add to the pressure on them. Have the Government been able to think any more about that?
As was mentioned by the noble Lord, Lord Avebury, when my noble friend Lord McKenzie was the Minister in 2010 he began to eliminate that difference in treatment and began to work towards equalising payments for dependants and sufferers. However, there has been no progress since then in narrowing the gap. When we debated the uprating last year, the noble Lord, Lord Freud, said that the Government were also keeping this issue under review. I had hoped that the Minister would come back to it. Perhaps he can tell us how that review is going: is there any intention to revisit it? Since he told us that we are now looking at deaths from mesothelioma peaking in 2018, the amount of time for this to be addressed is beginning to run out. Can the Minister tell us anything today?
Finally, before I come on to the points raised by the noble Lord, Lord Alton, I have a brief question about education. When the noble Lord, Lord Freud, wrote last year after our uprating discussion to all of us who had contributed to the debates, he mentioned an awareness-raising campaign due to launch in Autumn 2014 with a budget of £1.3 million. He also kindly gave details about what the campaign would cover and how it would be run. Will the Minister update the Committee as to whether the campaign was launched and is proceeding in line with the information given in that letter a year ago? How will the campaign be evaluated and will the evaluation be published?
I turn to the Mesothelioma Act 2014 and the important points raised by the noble Lord, Lord Alton. The question of 3% is very important. We spent a huge amount of time in this House at every stage when the Bill was going through discussing the appropriate level. We negotiated in careful detail about the amount of the levy, who would be covered, what the backdating period would be and the levels of the payment. We were absolutely reassured that that was the most that could possibly be afforded. So be it.
When the Bill then went to another place, the amount of compensation was raised from 75% to 80%, which was very welcome, but the question of the level of the levy was raised then. On Report in another place, my honourable friend Kate Green moved an amendment to enshrine the 3% in law. The response given by the then Minister for Disabled People was:
“Three per cent. is 3% and we have no intention of moving away from it”.––[Official Report, Commons, Mesothelioma Public Bill Committee, 12/12/2013; col. 117.]
and that the amendment was therefore unnecessary.
Now, of course, the amount has come out at 2.2%. When the order was debated in another place, the Minister said that it is not a target, it is a cap. What has happened to move from what was clearly a flat 3% to something that becomes a cap, not a target, in the intervening period? One indication being given, as has been suggested, is that the take-up rate is lower than expected. I very much hope that the Minister can give us some information to help us to understand why the take-up rate is so low and what action the Government are taking to look into either the success rate or the coverage, the reach, being taken into non-traditional areas—a point made by my noble friend Lady Donaghy. That would be very helpful.
If more money is available, there are plenty of ways in which it could be spent, which were pushed for when the Bill was going through Parliament but we were told that the money was not there. The noble Lord, Lord Alton, made a point about research, to which he has returned more than once on the Floor of the House. The noble Lord, Lord Avebury, made a point about entry. There was much pressure on the Government at the time to backdate claims to earlier than 25 July 2012, which was the date eventually settled on. Did the Government consider that?
I echo the request from the noble Lord, Lord Alton, and my noble friend Lady Donaghy for more information about what is happening. If the Minister can give information about the categories of workers affected, can he also give us further information about those who were not workers at all, whom we discussed at length, such as spouses? There was much discussion when the Bill was going through of spouses who had contracted mesothelioma from washing the overalls and work clothes of people of people who contracted it, but who were not covered because they were not workers. Is there any more information about that? I thank all noble Lords who have spoken, and I look forward to the Minister’s reply.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords for their helpful contributions to the debate. The Government recognise that the two schemes form an important part of the support available to sufferers of mesothelioma and certain other dust-related diseases, and the regulations will ensure that the value of those schemes is maintained. As the noble Baroness, Lady Sherlock, said, there is no statutory liability to uprate them but, like other noble Lords, I am pleased that this has been managed this year as it was last year.
Let me try to deal with the many valid points raised. In so far as I cannot supply information, or if I miss anything, I will ensure that we write to all noble Lords who have participated in the debate. I will try to take the points in the order in which they were raised.
I thank the noble Lord, Lord Alton, for his support and acknowledgement of the assistance that we have provided. We believe that the impact will be greatest in 2018. That is our best information but we will double check that, and will certainly write to noble Lords if that is inaccurate. We do not intend to make an annual impact assessment but we will look at whether it is possible. We certainly will have access to the indication of the estimates of the people who are likely to contract the disease, and I hope that we are able to do something around those in terms of the increase as it comes each year—hopefully, it will—to indicate that in some sort of impact assessment.
Social Security Benefits Up-rating Order 2015
Debate between Lord Bourne of Aberystwyth and Baroness Sherlock(9 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his explanation of these orders and all noble Lords who have spoken. I shall be waiting with bated breath for his answer to my noble friend Lord Rooker; I look forward to hearing what he has to say about that. It is always a pleasure to be reunited with the noble Lord, Lord Kirkwood. Had he not appeared, a search party would have been sent out for him. It is very good that he has saved us all the trouble. It is always good to come back and do this.
I was going to play really nicely, but the Minister kicked off by boasting about the wonderful triple lock. I just cannot let that go. I am sorry, I know that time presses on, but I will say just a brief word. This is the first time since it was invented that the triple lock has delivered a higher rise in the state pension than the formula that was linked to the RPI which was in place before 2010. If the Minister is looking a little baffled, I am sure that inspiration from behind him will confirm that.
It is worth reflecting on the triple lock’s history. In its first year it was announced but not used because it would have given too small a rise—75p was probably ringing in ears. For the next three years the triple lock was applied but each year it delivered a pension increase lower than what would have been delivered had the previous formula linked to the RPI been used. This is the first year in which it has been higher than what would have been delivered under the system that was around pre-2010—the increase here is 2.5%; an increase of only 2.3% would have come from the RPI. This is the first year that it has actually kicked in. That is a little bit of context; I shall calm down and return to my more specific questions.
I notice that yet again the Government have decided effectively to pass through the pension credit effect, which is welcome, but to fund it yet again essentially at the expense of the savings credit. Can the Minister unpack for the Committee what effect that will have on the incentive to save? Inevitably, it is not a cost-free element. Could he tell us what the consequence of that will be?
As well as the state pension, the order contains uprating details for some elements of universal credit, as we have heard. Does the Minister have an estimate of how many people are likely to be affected by these? I think that the noble Lord, Lord Kirkwood, made a very important point. When the Welfare Benefits Up-rating Bill was going through Parliament, the Opposition and other noble Lords expressed concern about the effect on poorer households, particularly working households. At Second Reading, the noble Baroness, Lady Stowell of Beeston, prayed in aid universal credit in seeking to persuade noble Lords to back that Bill. That is exactly the point made by the noble Lord, Lord Kirkwood. She said,
“I would ask your Lordships to remember that we are working to restore the welfare system as well. This year will see the introduction of universal credit, an historic change that will create a welfare system that is simpler, more effective, and designed to ensure that work pays. We expect some 3.1 million households to gain from the move to universal credit, on average by £168 per month”.—[Official Report, 11/2/13; col. 460.]
We are some way from having 3.1 million households; I am not sure that we have even 10% of that. Could the Minister tell us what the current number is? Could he also tell us whether the Government still expect the average household to gain by £168 a month from the move to universal credit? If that is not the case, the point made by the noble Lord, Lord Kirkwood, is significant. Universal credit was offered up as being the reason why lots of other things had to happen, but that it would all be okay. If it is not, Parliament needs to know that.
I would also like to ask a very specific question about universal credit. One of the problems about having disaggregated all the ways in which uprating happens is that it is quite a job of work to track down where any particular element of any particular benefit is being uprated. The hardest thing to find is what is missing. What is happening to work allowances in universal credit? I fully admit that I may well have missed them. I tried to go through but I could not see them here. When I raised this last year, I was told that there was no requirement to mention them unless they were changing. If they are here, could the Minister point me to them and tell me what percentage they are being increased by? If they are not here, does that mean that they are not being increased for the second year in a row, so they are being cut in real terms?
Lord Bourne of Aberystwyth
I am sorry. I missed which benefits the noble Baroness was asking about.
Baroness Sherlock
I was asking about the work allowances in universal credit. I think that inspiration may be coming on this point. That information may be in the document, but last year I could not find it and was told that the reason it was not there was because the measure was not changing; in other words, it was not being increased even by the rate of inflation. I have not been able to find it this year.
However, what I have found this year is the childcare costs element—the maximum amounts. Again, they look to me as if they have not changed in cash terms. Is that right? We debated this issue at length when the Welfare Reform Bill was going through the House and we were told in careful detail what the improved work incentives would be under universal credit. However, if we keep effectively having real terms cuts in the work allowances and childcare elements, then each time we do that we are eroding the gains to work. Therefore, it is important that the Government are open and transparent with the Committee about what they expect the work incentives to look like. I understand that the Minister may not be in a position to give me that information today, but I would be very grateful if he would write and tell me what changes have been made to the new work incentives, and gains to work in particular, as a result of those moves.
The noble Lord, Lord Kirkwood, referred to the overall impact on living standards of the various measures that have been taken. I understand that the argument for the Welfare Benefits Up-rating Act was that it was a temporary deficit reduction measure. However, one of the things it has made harder to understand is what the cumulative impact has been on low-income households. As the Minister will be aware, there have been repeated calls from outside as well as inside Parliament for a cumulative impact assessment of the effects. We have always been told by Ministers that that could not be done. Recently, the Institute for Fiscal Studies published a report, The Effect of the Coalition’s Tax and Benefit Changes on Household Incomes and Work Incentives. The opening sentences say:
“Tax and benefit changes introduced by the coalition have reduced household incomes by £1,127 a year or 3.3% on average”.
The report points out that the average loss was made up of an increase due to reductions in direct taxes which was more than compensated for—badly—by increases in indirect taxes, and that is before the benefit cuts were taken into account. The IFS found that the result of that was that households with children have been hit hardest by tax and benefit changes and that the poorest households have lost more than 6% of their incomes. Meanwhile, those without kids in the middle of the income distribution saw their incomes rise. Whenever the Government mention the rise in the income tax personal allowance, of course what they do not point out is that that benefits those richer people who do not lose out as a result of social security changes such as those to tax credits, so the effect is regressive in that respect. Can the Minister tell the Committee what has been the impact of the combination of the Welfare Benefits Up-rating Act 1% increase and the uprating decisions on the benefits covered by these orders on those low-income households? If he cannot do so, will he write? Finally, what difference has the delay in rolling out universal credit made to the anticipated impact of its uprating strategy?
Lord Bourne of Aberystwyth
I was dealing with the point about savings credit, raised by the noble Baroness, Lady Sherlock. An assessment has been made regarding helping the most vulnerable, which we took to be those people who were not on savings credit. It is worth noting that, while no detailed assessment has been made of the number of people affected, there are more than 500,000 savings credit customers who qualify for other payments, which are being uprated by CPI, so a significant number of them are getting other benefits, as it were.
Baroness Sherlock
Did the Minister say that no assessment had been made of the impact of the change to the savings credit threshold?
Lord Bourne of Aberystwyth
No, I said that we have no precise figure for the number of people affected, which is somewhat different. I will write to the noble Baroness giving any information that we have but, as I understand it, we do not have a detailed figure on the number of people affected. What we know, though, is that more than 500,000 savings credit customers qualify for additional amounts under other benefits, which are being operated by CPI, so it is not something one can look at in isolation.
The noble Baroness made some points about universal credit. More than 3 million households will gain £176 per month on average when it is fully rolled out. She will have noted today’s PAC report, which recognises that the programme is more open and transparent and better governed, and that the twin-track approach is the best course of action. As I say, our approach appears to be working well, and that is borne out by the figures from the north-west.
She asked about the work allowances and the childcare element. Both of those are frozen. She is quite right to suggest that they are not being uprated; they are frozen at where they were last year. I think it is right to say that we are intending that there should be a move from 70% of childcare costs to 85%. I think we are aiming for 2016, so that is some good news on that front.
The noble Baroness referred to an overall assessment of the impact of benefits and tax changes. I will write to her on that; it would be a complex assessment to do over the length of the Parliament but, as I see it, it is certainly not an unreasonable request. I think that some of the figures produced by the Labour Party that I have seen knocking around—in fairness, the noble Baroness did not refer to them; she referred to independent ones—do not take account of the tax changes and seem to concentrate only on the benefits. To get the full picture, as I am sure she would acknowledge, we have to look at both—the increases in personal allowances, for example—and some of the figures that I have seen also use RPI rather than CPI. However, I will take that back and write to her, copying in other noble Lords, about how we see it playing out. I hope that I have covered the main points, although obviously I have not covered everything.
Baroness Sherlock
I thank the Minister for offering to write to me. On the question of cumulative impact, if he does not like the figures used by the Labour Party, the best thing to do is to offer the Government’s own, so I look forward to receiving them.
On the question of universal credit, I had hoped that he might be able to provide more information to interested noble Lords about the effect on what we are now likely to see in terms of gains to work and work incentives, because they will be affected by the changes to work allowances. Is that something that he might be able to do in due course?
Lord Bourne of Aberystwyth
On the first point, as I say, we will look at that to see how we can do it, but we will come up with figures only if we can be sure that they are sustainable, which I do not think the Labour Party figures are. That is the point that I was seeking to make. We can toss that one backwards and forwards all evening—or night, if this goes on—but yes, we will have a look at that and I will write to the noble Baroness about it.
On universal credit, I will pick up the point that she makes, but it is worth noting—I hope that she is not going to be churlish about this—that we have more people in employment than ever before. The evidence is that the impact is very favourable in the north-west, and it is best that we acknowledge this, along with the efforts that are being made by the Government and by local authorities—not necessarily being run by the Conservatives—to make sure that this is a success. The early signs are very favourable.
As I say, I will ensure that any other points that I have not taken up fully or not taken up at all are covered in writing to noble Lords. I hope that I have explained that we are spending an extra £2.5 billion on uprating pensions and other benefits in 2015-16, enabling us to protect key benefits. The order protects pensioners, many of whom have worked hard all their lives and are no longer in a position to increase their income through work, and also benefits disabled people, reflecting our commitment to protect those who are least able to increase their spending power. These are the principles behind the order, and on that basis I commend it to the Committee.
Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2015
Debate between Lord Bourne of Aberystwyth and Baroness Sherlock(9 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his explanation of this order and my noble friend Lady Drake for a characteristically forensic and impressive contribution. Like her, I welcome the fact that the Government have seen the light—there is more rejoicing in heaven over one sinner returned, et cetera. I am delighted that they have accepted our long-standing argument that the trigger threshold for auto-enrolment should not simply be tied to the personal allowance, as it has been hitherto under this Government.
We on these Benches have argued for many years that the problem with the approach taken by the Government is that it undermines the basic consensus on which auto-enrolment was built: that it should be a mass pension system encompassing as many people as possible, a point made clearly by my noble friend Lady Drake. It should encompass the low-paid as well as the better off, women as well as men and those in multiple part-time jobs as well as those in single, steady employment in one job. Viewed from that perspective, the Government’s tying of the auto-enrolment threshold to the personal allowance has had significant weaknesses.
When we debated these orders last year, my noble friend Lady Drake built a completely damning indictment of the effect of the Government’s approach to setting the threshold, which I suspect may have contributed to their change of heart. We recalled last year that the original idea proposed by the Pensions Commission, chaired by the noble Lord, Lord Turner, and of which my noble friend was such a distinguished member, was that the qualifying earnings band should start at the primary threshold for national insurance purposes and finish at the NI upper earnings limit. The previous Government said in their 2006 pensions White Paper that they would adopt broadly that approach, so the lower and upper limits of the qualifying earnings band were set at £5,035 and £33,540 respectively, with provision for them to be increased in line with earnings.
When this Government brought in the Pensions Act 2011, though, they introduced an earnings trigger for auto-enrolment at a level higher than the lower equivalent of the qualifying earnings band, and every year since then we have seen more and more people excluded. For 2011-12 the trigger was set at £7,475 rather than the planned threshold of £5,035 and 600,000 people were excluded, 75% of them women. The next year 100,000 people were excluded, 82% of them women. In 2013-14, 420,000 people were excluded, of whom 72% were women. Last year, when the threshold rose to £10,000, it excluded another 170,000 people, of whom 69% were women. So although I genuinely welcome the decision to freeze the threshold, and the confirmation from the Minister that the measure will bring 20,000 more people into the system, 14,000 of them women, does he accept that by tying the threshold to the personal allowance for the last four years more than 1 million low-paid people, most of them women, have been excluded from auto-enrolment?
I want to ask the Minister about the coverage of women by auto-enrolment. Can he remind the Committee how many people the Government now estimate will be covered by auto-enrolment, when it is fully rolled out? Does he accept the figure given by my noble friend Lady Drake that one in three of the target enrolment population are now women? If so, do the Government regard that as a problem? Last year I noticed that the Government had offered the defence that so many women are affected because they work part-time and are likely to earn less than men, so they are disproportionately represented. That is true, of course, but it is not a defence; it is simply a description. Do the Government regard it as a problem that so many women are excluded?
The other defence offered by the Minister was that workers paid below the earnings trigger, as the Government have set it, were likely to be able to achieve their target replacement rates through the new state pension if they remained low earners. Presumably, therefore, it is not beneficial to direct income from working life into workplace pension savings—and, presumably, that applies particularly to low-paid women. But, as has recently been widely discussed, when it kicks off in 2016 only 45% of those who reach state pension age will get the new state pension, so there is a significant issue there.
I will not detain the Committee any further at this point. Labour invented auto-enrolment but the Government deserve credit for having rolled it out. We all think it is a good thing. I am very pleased that the Government have broken their ill advised link between the trigger threshold and the personal allowance, but I look forward to hearing from the Minister a better account of how the Government will ensure that the benefits of auto-enrolment can reach the masses for whom it was designed.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in this debate on the clearly important issue of auto-enrolment and the trigger. I shall seek to deal with the points made by the noble Baronesses in the order in which they were raised. The noble Baroness, Lady Drake, was extremely gracious—at least initially—in welcoming the change, and I welcome her welcome. I appreciate that the noble Baroness, Lady Sherlock, would want to go on a historical journey rather than review the current good news in the present order, but 20,000 more people being brought within auto-enrolment, 70% of whom are women, is of course good news.
On the issue raised by the noble Baroness, Lady Drake, of whether the trigger should be set at a lower limit, such as the national insurance limit—I think that she used £8,000 as another example—it is worth restating that this does not prevent people opting in to a pension. Auto-enrolment means that they will not be automatically enrolled, but it does not stop them saving. If they are above the national insurance limit they can opt in to their scheme and their employer will be obliged to contribute the 1%, as they currently are. Those figures are on an upward trend. I will ensure that I write to noble Lords about the percentage figures in future years because they are set to go up for employees and employers. That is an important point to nail. Also, if your earnings go above the threshold in a particular year, you will of course be automatically enrolled. The assumption is then that you can opt to stay in the pension, even if your earnings dip. You are not automatically de-enrolled; if you want to stay in, you can. That is a significant point to make, and one that I am perhaps able to clarify here.
On the fluctuating income argument, if you are above automatic enrolment in a particular year you can stay in the scheme if you want to do so, provided that your income does not dip below the national insurance limit. You could even stay in then, but you would not be entitled as a right to the employer contribution—although, anecdotally, quite a few employers pay it if an employee is in the scheme. It is a relatively low cost and while that is not a statutory obligation, it is happening. There is some good news there. We have clearly broken the link with the income tax threshold, so there is of course no question about whether we can break it. We will look at the experience of this.
We should restate that auto-enrolment has been a massive success. It has been supported by all parties; I pay tribute to the support that has been given. The priority now is to make sure that small and micro-employers are brought within the system. As noble Lords would expect, we will look at the evidence on how it is progressing. In answer to the noble Baroness, Lady Sherlock, on how many people will be covered by automatic enrolment, we estimate that 8 million to 9 million will be newly saving or saving more. I will write to her on the percentage of women; of those, I think that it is roughly 3 million.
National Employment Savings Trust (Amendment) Order 2015
Debate between Lord Bourne of Aberystwyth and Baroness Sherlock(9 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Sherlock
I am not sure it is relevant but, in case it is, I remind the Grand Committee of my interest as the senior independent director of the Financial Ombudsman Service.
Lord Bourne of Aberystwyth
I was just waiting in case the noble Baroness, Lady Drake, had anything to declare, but I am sure all her interests are in the register.
I thank noble Lords for participating in the debate on this order. I shall try to deal with the points made. I shall try to address them in the order in which they were made. I thank the noble Baroness, Lady Drake, who has massive, almost unparalleled experience in our House on pensions, and therefore I take seriously anything that she raises. She was a member of the Turner commission. I accept the point she made in a non-party-political way. We are keen to look at the two specifics that she raised—she referred to them as inefficiencies, but we reserve judgment on that, although they are certainly challenges—and I will get a detailed response to her on the question of the bulk transfer of closed DC schemes and the default of employees into personal schemes by employers.
As things go forward, the aim of all this legislation, which is shared across the House, is to get as many people as possible enrolled in pension schemes. As people live longer, pensions clearly become a more important part of the legislative landscape, and that is one reason for NEST. We want NEST to fulfil its core function. We are very much focused on that task, and that remains very much the name of the game, as it were.
I turn to the points made by my noble friend Lord German in relation to what was the key issue when we looked at this on Report on the Pension Schemes Bill: the 2107 date and the Altmark case. The noble Baroness, Lady Sherlock, also raised points on this, and I will try not to cover it twice, so some of this will be in relation to her points.
My noble friend Lord German was right that the smaller the company, the greater the challenge in terms of auto-enrolment, so that remains our key focus. In relation to the date, it is true that because we were given permission for a particular date, that does not mean that we cannot seek another date, but it means that if we were to seek another date, we would have to go back to the Commission to get clearance. The noble Baroness, Lady Sherlock, rather than my noble friend Lord German, put forward the hypothesis that it could not be struck down by a UK court. I am not sure about that. I am not expert in EU law, and I will write to the noble Baroness if I am wrong on this, but I think EU law is very much a part of domestic law, so I think it would stand a chance of being referred, at least, to the European court by a domestic court. While we are a member of the European Union, we are obliged to follow its law. I will write if I am wrong on that point, but I appreciate it was not the core point that she was making.
I come back to a point that I made on Report, which is that we have two key concerns about an earlier date. One is that we want NEST to focus on its core mission, which it is fulfilling brilliantly. I accept that there is support for NEST from around the House, as there is in another place. I appreciate there is no difference between the three major parties on this issue. We are all very pleased with what NEST is doing, we applaud it and we want it to do more of it, but at the same time we do not want to distract it from that. That is why when we had a call for evidence, which was initiated by the Department for Work and Pensions in 2012-13, the subsequent Command Paper in June 2013 found that there was no compelling evidence that the key constraints were distracting NEST from its functions, but there was a perception that they were. Faced with that, we had to decide what to do. We thought that 2017 was the date to go for to ensure that NEST had fulfilled its core function and then to seek to list the constraints, believing, as was borne out by the finding of the Commission, that that constituted state aid.
There is no doubt that the Commission found that it did then and that we did not satisfy the Altmark conditions of not being state aid. We as a department remain of the view—as does BIS, it is not just DWP—that this still does constitute state aid. We could of course go back to the Commission to seek clarification on the issue, but again that would take a long time. As my noble friend Lord German has said, the initial process took more than a year and it could take as long again. Given the timings that we are up against, and given that we will publish a timetable on the transfer which would allow us some room for manoeuvre earlier than 2017—although I hasten to add that we have not as yet published a timetable on that—in our view, it simply distracts from the key focus of NEST, which is that of continuing to do what it has been doing absolutely brilliantly so far.
That, I hope, deals with the particular points, but if I have missed any details, I shall be happy to write to the noble Baroness.
Baroness Sherlock
I thank the Minister for his courtesy in giving way. I have just a small point to raise. I accept that the Government could go back and ask for an earlier date, but obviously they could have done that some time ago. I did ask specifically whether they ever did approach the Commission, and if not, why not? It is obviously because they did not want to, but did they ever do so?
Lord Bourne of Aberystwyth
I am not aware that we have gone back to the Commission about that. Clearly, I do not think that there is a difference between us for there to be a need to go back in some shape or form to the Commission for an earlier date. I do not believe that we have done that because, as I say, we believe that the key focus of NEST should be on auto-enrolment. So there are, as it were, two strands to the Government’s position, and the first of those is that we should focus on the key function of NEST.
If I have missed anything in relation to the three helpful contributions from noble Lords, I will ensure that of course they receive full responses.
Social Security (Penalty as Alternative to Prosecution) (Maximum Amount) Order 2015
Debate between Lord Bourne of Aberystwyth and Baroness Sherlock(9 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his explanation of the order. The Opposition has no objection to the increase in penalties and therefore to this order. Benefit fraud, like any fraud, is a serious matter and certainly the scale necessary to trigger this increased penalty is one that requires action. However, I would like to take the opportunity to ask the Minister a few questions.
First, the Secondary Legislation Scrutiny Committee commented that since the current £2,000 maximum penalty has been in force for some time—almost two and a half years—it had expected to see a more evidence-based explanation for the increase. It asked the department to issue a revised Explanatory Memorandum—which it did, and I am grateful for that—but as far as I can see its main argument seems to be that:
“the Government considers there are still too many people committing benefit fraud”.
That obviously is true: if one person is committing benefit fraud, too many people are committing benefit fraud. However, the realities of cause and effect are slightly more complicated. The deterrent effect of penalties will be affected by the likelihood of people understanding that they are committing an offence, their belief that they are likely to get caught and the severity of the penalty if they are caught. Can the Minister tell the Committee what evidence he considered when deciding what the right maximum would be in terms of the deterrent effect? The Explanatory Memorandum very candidly states:
“Whilst we cannot estimate the deterrent impact of the measure in terms of the number of frauds committed in the future, the measure still remains an important part of our overall package of measures”.
How do the Government know? If they have no idea what effect it will have, how do they know that it is an important part of their package of measures? It might be a wholly unimportant part. What was the evidence for that?
Secondly, has the department done any research to assess the level of awareness of the level of penalty in order to understand its deterrent effect? If the presumption is that it will be a deterrent but people do not know about it, it will not. What evidence do the Government have about that?
Thirdly, and in some ways most interestingly, what would success look like? Is the aim to pursue more people who have committed benefit fraud, and, if so, does the Minister expect to see investigations and/or prosecutions rise or fall after this introduction?
Although we support the increase in the maximum penalty, the Government need to do more to convince us that they have an effective strategy to counter fraud. When this order was being debated in another place, my honourable friend Helen Goodman expressed concern that the measure might have been put forward simply so that the Government could be seen to be doing something. Since it affects at most 250 people, it would seem to be only a limited contribution. The Government’s Explanatory Memorandum makes it clear that 250 cases a year is the maximum, so what are the Government doing to tackle the bigger problem? There clearly is a problem: in 2013-14 the department overspent by £3.3 billion on error and fraud, some 2.1% of benefits expenditure. This month, the Public Accounts Committee published a very critical report that highlighted the Government’s failures on tackling fraud and error, especially in housing benefit, where overpayments have risen very significantly, from £980 million to £1.4 billion. The same report also concluded that the department’s handling of housing benefit error and fraud did not deliver value for money.
The National Audit Office has also been critical of how the department is dealing with fraud and error. In October, its report said:
“The Department has a target to reduce total fraud and error overpayments to 1.7% of benefit expenditure by March 2015. In his report on the Department’s accounts for 2013-14, the Comptroller and Auditor General noted the Department was unlikely to achieve its 1.7% target”.
The report described the problem as “escalating”. Can the Minister tell the Committee whether the department expects to hit the 1.7% target by that date and what action it is taking to do so?
Finally, the Explanatory Memorandum indicates that DWP fraud investigations resulting in an administrative penalty fell by three-quarters between 2009-10 and 2013-14, from 7,249 to 1,501. Can the Minister explain why he believes that fall took place and on what evidence he bases his answer?
Lord Bourne of Aberystwyth
My Lords, I thank the noble Baroness, Lady Sherlock, for her contribution and I will do my best to cover her points.
It is common ground between us that if there is one person fraudulently claiming a benefit, that is one too many. I agree with that. By the same token, I think she would accept that if one increases the penalty for a particular crime, it acts as a greater deterrent. We must of course ensure that it is publicised, and the department will be seeking to do that. This is certainly upping the penalty, and as I understand their position, the Opposition accept that.
In relation to the progress made in tackling this, I should stress that I am referring to benefit fraud rather than benefit error, which means that if a case goes to court, fraud has to be proven. We are not talking about a slight mistake, but fraud, which in court would have to be proved beyond reasonable doubt. It is true to say that the level of fraud as set against benefit expenditure has come down only slightly from 2.2% under the previous Government to 2.1% under this one. I accept that it is certainly true that more work needs to be done.
The noble Baroness asked why we picked this particular figure. The reason is that overpayments between £4,000 and £10,000 in relation to fraud are the second largest single category of fraud overpayments—the most at the lower scale of fraud, as it were. That is why we have sought to focus resources on that particular group. Also, freeing the system up by allowing people to choose administrative penalties means that a matter does not go to court and is less work for the department, which means that we are able to focus resources on the most serious frauds. Numerically, they may be fewer but there are significant fraudsters at the top end of the scale where we feel resources should be focused.
The driver for raising the maximum amount is broadly to strengthen the range of measures that the department has to tackle benefit fraud. I am sure that it is not a silver bullet; we are not claiming that. But we feel that it should make better use of resources and act as a deterrent in relation to that particular group where there is a significant bubble of fraudsters for whatever reason, and it will enable us to focus resources on the most serious fraud cases. That is the scheme.
I will write to the noble Baroness in regard to the particular point of how we are aiming to get to 1.7%. Can she refresh my memory on the target date that we have given for that?
Lord Bourne of Aberystwyth
March of this year. I accept that to get from 2.1% to 1.7% is a significant challenge. Perhaps I can write to the noble Baroness on the measures that the Government are taking. Clearly, this is one of them. The support of the Opposition both here in another place, which we are grateful for, shows that we have common cause in trying to ensure that benefit expenditure is focused on those people who really need it. Everyone who steals from the benefits system is effectively stealing from those who really need the benefit. We are committed to driving that figure further down, but I will write to her with the details, if I may.
Baroness Sherlock
I am grateful to the Minister for offering to write to me. As I have said, there is nothing between us on this order because we support it, but there are one or two other small questions that he has not been able to respond to. Could he pick those up and include them in the letter so that we do not detain the Committee today?
Lord Bourne of Aberystwyth
I am most grateful to the noble Baroness, Lady Sherlock, on that point and of course I will respond fully.
State Pension Regulations 2015
Debate between Lord Bourne of Aberystwyth and Baroness Sherlock(9 years, 11 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Bourne of Aberystwyth
I thank noble Lords who have participated in the debate on these regulations. I will try to cover the points raised; where I fail to do so, I certainly undertake to write to noble Lords. I turn first to the points made by the noble Lord, Lord German, on an issue that is, perhaps, somewhat tangential to the regulations themselves, but certainly an issue that I know the noble Lord feels strongly about, and is impacted by these regulations. Let me return to the basic point here, and answer some of the points raised by the noble Baroness, Lady Sherlock, as well.
The 10-year period signifies a close connection with the United Kingdom. I suppose there is nothing magic in a period: that is the period chosen, and, of course, we have to do this within the broad envelope of public spending. That is the basic rationale here. The question raised by the noble Lord, Lord German, concerned what happened to pensioners, or prospective pensioners in some cases, who were in countries such as South Africa, Canada, Australia and New Zealand, which did not have a bilateral arrangement with the United Kingdom and were clearly not in the EEA. It is fair to say that they are not able to build up the qualifying period in the same way as people within the United Kingdom and people in the EEA or countries with bilateral agreements with the United Kingdom, such as the USA and Israel, which I mentioned. That has been the position through successive Governments. This is nothing new in these regulations and nothing new with this Government: this has been built up over a period of time. This is not seen as a key priority at the moment, in relation to pensions reform. I do not know the number of people who will be affected or the breakdown of how many are in each country. I will write to both noble Lords with whatever statistics we have on this to elucidate that point. The fundamental point is, however, that 10 years has been picked as signifying a close connection with the UK. The EEA is in a particular position with regard to the co-ordination of pensions policy, so that is why that is affected.
In relation to the point raised by the noble Lord, Lord German, on guidance and communications, I will, again, seek to provide more information in writing. We have a communications campaign going on that will set out the broad principles: they are operational and will influence how the scheme operates. This was launched in November and aimed at broadening awareness and understanding of how the state pension is changing. This has been trialled: there are regional trials in the north-west and the north-east as a control to see how that is being perceived. There is also an online campaign with an offshoot of YouTube—PensionTube—for people to find out more information. We are seeking to communicate the changes being made to the system as things move forward.
Turning to the point made by the noble Baroness, Lady Sherlock, I can confirm that those unlawfully at large are not, so far as I am aware, getting food and lodging at the expense of the public purse. A different point applies there. That is the point in prison. If they escaped from prison, it would be a bit perverse to reward them for escaping from prison or a psychiatric unit by saying that they could have their pension. Presumably if we were in that position, we would know where they were and would recapture them, but that is the point.
The noble Baroness made a particular point about the lump sum or annuity where somebody has deferred and then seeks to crystallise the amount in a lump sum or annuity. The reason for dispensing with the lump sum payment arrangements was that the new deferral arrangements would help to flatten the expenditure profile and offset some of the costs of the early years over a period which, if there was an ability to take a lump sum, would expose us on the public spending front, as I understand it. The new state pension scheme—this may be hard to believe—is simpler, and the deferral arrangements reflect the change. Offering a choice of deferral payments has made the current system rather complex, and people are unsure what is best for them. That is basically the reason. The lump sum is seen as a somewhat inflexible savings vehicle. That is the reason that we have gone for the annuity option.
I will have to write to the noble Baroness on this point. I think I have seen this somewhere, but I had better be careful what I say. I think it is possible after 2016 to buy additional qualifying periods pre-2016. I am not sure whether that affects qualification or only the amount of the pension that could be drawn down. I think that is probably a point on which we need to get back to the noble Baroness. I will write on that point. I think at the very least I have seen something about it affecting the amount of the pension that you can draw down. You can certainly contribute post-2016. Whether you can use that for a qualifying year, I am not sure, but I will write to the noble Baroness on that point. There is a communications campaign.
The noble Baroness raised a number of points. The mini-jobs point was raised by the noble Baroness, Lady Hollis, in the Chamber. I am afraid I do not have the current state of play on that because it is somewhat wide of these regulations, but I will ensure that the noble Baroness gets a response on that point.
With regard to the fact that not everybody will be getting the full amount, the reason is that if those who have contracted out—and many have currently contracted out, although that ends in 2016—were to get the full amount, it would be double-counting. You would have the benefit of contracting out in the other pension and then you would get the full amount with the state pension. That would be unfair, so that is why. Nobody is worse off. There are provisions now to prevent that opting out counting. That is purely what this is. That number will decline over time because opting out is ending, but the figures that the noble Baroness cited are correct. Not all those getting the new pension will get the full amount because they are getting the benefit of the opt-out.
Baroness Sherlock
Did the Minister say that nobody would be worse off? Did he mean that?
Lord Bourne of Aberystwyth
I hope I did not, because I am not sure that is the case. If I did, I certainly correct that point. I am not sure that nobody will be worse off. I could not say that.
When that story broke, as it were, this was not new news; it was old news and the BBC and perhaps others—I should not single the BBC out—were being lazy in reporting. We are clearly correcting that via the media. I think it has been corrected. The reason for this is to ensure that there is no double-counting. As I cannot be certain, I would not go so far as to say that nobody is worse off, but I think it would be perceived as fair by most fair-minded people that if you have opted out of the state system and the state has, as it were, contributed to a different pension, you should not be able to count that again for the benefit of the state pension. I think it is fair to say that most people are better off, but I would not like to put a particular figure on the amount.
If I have missed anything, I will certainly pick it up in writing to noble Lords who have contributed to this debate. I thank them once again for their helpful contributions and commend these regulations to the Grand Committee.
Personal Independence Payments
Debate between Lord Bourne of Aberystwyth and Baroness Sherlock(9 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Bourne of Aberystwyth
The noble Lord does notable work in the area of autism, as is well known. The guidelines on the medical assessments related to PIP indicate that all these conditions should be taken account of. I have no evidence of this being a particular problem, but if the noble Lord would like to write to me about it, I will ensure that it is looked at.
Baroness Sherlock (Lab)
My Lords, last June, Iain Duncan Smith told MPs that by the end of 2014 nobody would be waiting more than 16 weeks for a PIP assessment. Can the Minister tell the House precisely when that target will be met? I do not believe that it was met by the end of 2014. As the target was only for when people would get an assessment, can he also tell the House how long people will have to wait to get a final decision, and their money? He seemed to be reassuring the House that people would get their money backdated when they eventually got it, but is it not the case that, even though PIP is backdated, passported benefits such as blue badges and carer’s allowance are not?