Bereavement Benefits

Lord Henley Excerpts
Thursday 6th April 2017

(7 years, 7 months ago)

Lords Chamber
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Baroness Altmann Portrait Baroness Altmann
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To ask Her Majesty’s Government whether they will reconsider changes to bereavement benefits for parents with dependent children.

Lord Henley Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
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My Lords, bereavement support payment is a new benefit intended to help people with the immediate additional costs of bereavement. It will not be taxed and is disregarded for income-related benefits, thus helping those on the lowest incomes the most. Those who need further support will be able to access better-placed areas of the welfare system for long-term, means-tested financial assistance.

Baroness Altmann Portrait Baroness Altmann (Con)
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I thank my noble friend for his response and agree that the old system needed modernising and the new system has some advantages, but these reforms are designed to cut £100 million from welfare spending for bereavement. Within that reduced budget, bereaved partners without children will get more at the expense of those with young children, who will receive significantly reduced support which will stop completely after just 18 months. What is our national insurance welfare state for if not to support families properly in such tragic circumstances? Will my noble friend acknowledge the problems that this is likely to cause and relay concerns from across this House expressed in a cross-party letter to my right honourable friend the Secretary of State asking his department to reconsider these reforms by extending support for bereaved children beyond the inadequate 18 months?

Lord Henley Portrait Lord Henley
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My Lords, I am aware of the letter that my noble friend refers to. My right honourable friend will answer it in due course. I can give an assurance that we have consulted on these matters—my noble friend will be aware of this because she was a part of it—legislated on them and consulted on them again. We made changes to the regulations before we introduced them and we have made a commitment in the impact assessment that there will be a further review. Nevertheless, I will convey my noble friend’s concerns to my right honourable friend, and I am sure that, his door always being open, he will be more than happy to see her.

Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, I also signed the letter and was pleased to do so. There is genuine feeling around the House that the Government have made a mistake on this. What will happen in practice is that a six year-old who lost her father last year will be supported until she leaves school; if her father dies next year, that support will stop after 18 months. That cannot be right. I know that I gave the Minister a hard time a few weeks ago when the regulations were in Grand Committee, but I do not blame him; I know that he did not make the decision. I think that we are now at the point where the whole House recognises that the Government have made a mistake. These cuts were simply part of an attempt to cut £12 billion off social security. The House does not believe that the Government should be taking money away from bereaved children. Will he please tell his Secretary of State that?

Lord Henley Portrait Lord Henley
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My right honourable friend will obviously listen to what the noble Baroness has had to say, but I reject her allegation that these are cuts. There will be no savings to the taxpayer in the first two years; thereafter, as was made clear in the impact assessment, there will be some savings. The important point to get over is that we have increased the initial payment, which was frozen by the previous Government in 2001 and remained frozen for many years, from £2,000 to £2,500. We then make payments for 18 months to those with children. Obviously, no element of money will resolve the problems that individuals who have lost one or other parent will have. This is designed to help with the immediate costs of that bereavement. That is why we think that, by increasing the initial payment, we have made a very real change and provided some support for those with children.

Lord Polak Portrait Lord Polak (Con)
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My Lords, the DWP impact assessment taken from the consultation on the website suggests that bereavement benefits make up a tiny part of the welfare budget, accounting for 0.32% in 2016-17 and anticipated to fall to 0.27% by 2019-20. I totally support the Government in the need to reduce the welfare bill, but it should not be done here. If children are bereaved, there is no fraud; you cannot fake it, or even abuse the system. Are we not, as I fear, targeting the wrong area?

Lord Henley Portrait Lord Henley
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My Lords, again I do not accept what my noble friend said. We have made changes to this because the old system of three benefits—bereavement payment, bereavement allowance, widowed parent’s allowance—was overcomplicated, had been in place, with minor changes, since around 1920 and needed change. We have made a change that provides extra support at the immediate moment that that support is needed and appropriate support for those with children. There are, as I said, no immediate savings to the taxpayer; there might be savings later but it is always important, in all matters relating to benefits, to keep an eye on the overall costs.

Lord Bishop of Peterborough Portrait The Lord Bishop of Peterborough
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My Lords, I too signed the letter to the Secretary of State. I fully accept that the system needed reform, but those of us who spend a lot of time looking after people in bereavement know that a widowed parent may sometimes have to spend several years giving considerable extra time, attention and care to the children. In practice, that may necessitate working only part-time for a number of years while children are still at home. Previously in this House there was an assurance that income-related benefits would be there to support such parents, but under universal credit that is not so simple. Can the Minister reassure us that bereaved parents will not be subject to the in-work conditionality requirements that apply under universal credit?

Lord Henley Portrait Lord Henley
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My Lords, those requirements were explained, I think, by my honourable friend Caroline Nokes when the regulations were dealt with in the Commons. They are complicated but the simple fact is that universal credit and other income-related benefits are there to fill the gap after that 18-month period. We believe that, with a contributory benefit such as bereavement support benefit, it is quite right to make that very generous initial payment, to then provide some support for those with children for 18 months and thereafter to let people seek help from income-related benefits.

Baroness Bakewell of Hardington Mandeville Portrait Baroness Bakewell of Hardington Mandeville (LD)
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My Lords, we understand the Government’s need to reduce the benefits bill; however, we believe that this is not the right place to do it. Given the spotlight that has recently been shone on the devastating impact of children suffering bereavement by the programme on Rio Ferdinand, I ask the Minister to talk to his colleague, the Secretary of State, and ask him to reconsider this policy and the devastating impact it will have.

Lord Henley Portrait Lord Henley
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My Lords, I have been trying to explain that I believe that this benefit is an improvement in offering support at the initial stage, which is where it is important. I do not believe, and I do not think that the noble Baroness would believe, that any sum of money is going to deal with the problems of bereavement suffered by the surviving spouse or the children, but I believe that appropriate support ought to be offered for a period. That is what we have done, that is what we consulted on, that is why we made changes after that consultation, having listened to what people said, and that is what this new benefit will do. I think that that is the right way forward.

Pension Schemes Bill [HL]

Lord Henley Excerpts
Moved by
Lord Henley Portrait Lord Henley
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That this House do agree with the Commons in their Amendment 1.

1: Clause 1, page 1, line 17, leave out “and” and insert “to”
Lord Henley Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
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My Lords, if it is convenient to the House I shall speak also to Amendments 3, 4 and 20. The amendments largely respond to points raised in debates in this House. Amendments 1 and 20 address an unintended consequence of the Bill and enable a scheme funder to engage in activities in relation to any part of the scheme, not just the money purchase section. I am grateful to the noble Lord, Lord McKenzie, for drawing our attention to that issue. Amendments 3 and 4 address the original requirement in the Bill that the scheme funder must be a separate legal entity and must only carry out activities directly relating to the master trust scheme in question. Noble Lords and stakeholders raised concerns about the impact of this requirement on business.

First, the amendments enable scheme funders to operate more than one master trust. Secondly, a new regulation-making power will introduce some flexibility to the requirement that scheme funders’ activities be limited to the master trusts of which they are the scheme funder or prospective funder by allowing exceptions subject to certain requirements. For example, the regulations might require that a scheme funder who carries out activities other than those that relate to the master trust disclose information similar to the financial reports in its management accounts, so that the activities relating to the master trust are distinct from other lines of business. The regulations may also require, where a scheme funder is part of group of companies, that information be disclosed about the corporate structure of the group to the extent that it affects the financing of the master trust.

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Lord McKenzie of Luton Portrait Lord McKenzie of Luton (Lab)
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My Lords, I thank the Minister for introducing this first group of Commons amendments—Amendments 1, 3, 4 and 20. By way of background, we should acknowledge a degree of consensus emerging on the Bill, which has indeed been helped by the amendments before us today, which deal directly with some of the concerns we raised earlier in the parliamentary process.

This does not mean that we consider, as should have been evident in the other place, that the Government are on top of the entirety of the pensions landscape. There is more to do on the level and transparency of charges; governance; extending the benefits of auto-enrolment; and addressing the lingering injustice felt by those women whose state pension age was raised quicker than expected. Of course, the Government will need to consider John Cridland’s analysis of the state pension age, emerging issues from the DB Green Paper, and the need to make progress on proposals for the Money Advice Service, not to mention the continuing combating of pension scams.

The Bill deals with a specific and technical issue and is important to protecting millions of savers and billions of pounds of savings, and we have sought to address it in these terms. One of the criticisms of the Bill is its heavy reliance on secondary legislation, although that has now been changed to affirmative on first use, as we have just heard. The aspiration, as we understand it—and the Minister may confirm—is for this process to be completed during 2018 to enable all the provisions to be commenced. Doubtless this timetable was contemplated without due regard to Brexit. What is clear now is that an enormous amount of legislation, mostly secondary, will be required to give effect across government to our exiting the EU. Can the Minister say what assessment has been made of the capacity of government—indeed, of Parliament—to cope with all of this? Will he undertake to publish a current timetable for implementation of the Pension Schemes Bill?

We support Amendments 1 and 20, which as we have heard deal with an unintended effect of the original drafting. It would have required the scheme funder’s activities to relate only to the money purchase benefits aspect of each scheme that is a mixed-benefit scheme.

As the Minister has outlined, Amendments 3 and 4 deal with Clause 11 and the scheme funder requirements. This clause generated considerable debate in your Lordships’ House and in the other place, as the Minister again acknowledged. This was not about challenging the policy, which quite properly seeks to ensure that the financial position of scheme funders and their financial arrangements with master trusts are transparent and clear to the regulator. The concern raised by a number of noble Lords as well as stakeholders was that the original requirement for separate legal entities and activities relating to just one master trust scheme were too restrictive, could force costly corporate restructuring and could detract from market opportunities to consolidate.

The remedy proposed is to allow the scheme funder to carry out activities that relate to more than one master trust and for the Secretary of State to have power to make regulations to except a scheme funder from the requirement that it must carry out only activities directly related to master trust schemes for which it is a scheme funder. The power can be used where a scheme funder meets additional requirements relating to its financial position, its arrangements with the master trust involved and its business activities. The regulations can also enable application by the relevant master trust scheme to seek to satisfy the regulator that the scheme is financially viable.

On the face of it, these amendments potentially enable concerns about shared services, FCA-regulated entities and consolidation opportunities to be addressed, but it would be helpful if the Minister put further flesh on the bones of how he sees these relaxations being used. As we expected, he has addressed the Delegated Powers and Regulatory Reform Committee’s requiring a more convincing explanation of why these regulations should be subject to the affirmative procedure on first use—bearing in mind that this is the case in a number of places in the Bill. Subject to any final matter the Minister may raise, we are inclined to support these amendments as they demonstrate that the Government have been listening to the genuine concerns about what the original Clause 11 would have generated.

Lord Henley Portrait Lord Henley
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My Lords, I am most grateful to the noble Lord, Lord McKenzie, for the constructive approach he has taken to this group of amendments. I hope that this will continue for the rest of this consideration of Commons amendments. He raised various points about Cridland and the state pension age, which go wider than the Bill at the moment. I will not respond to those points but he made an important point about the degree of secondary legislation that will come forward not purely from the Department for Work and Pensions but from across government—he meant later this year, I presume, and throughout next year. He wondered whether we hoped to get all of it completed by 2018. I believe that we do but it will obviously be quite a trying matter. We will want to continue to engage with the regulator, the pension industry and other stakeholders throughout the year. That will be followed by formal consultation on those draft regulations, which we currently hope to get early next year so that we can get them coming into force from 2018.

What pressure there will be on this House and another place from all the various primary and secondary legislation coming before us is probably beyond the noble Lord’s pay grade, and certainly beyond mine. However, I am sure that the usual channels will discuss that and ensure that we give appropriate coverage to all these matters.

As to the detailed timetable of all that consultation with the regulator and pension stakeholders, the noble Lord asked for a table, but it might be helpful it I write him a short letter setting that out, if there is anything that I can add to what I have said. We aim to have those regulations coming into force from 2018, and nothing that I have seen so far seems to suggest that we will not be able to meet that. I think we can go ahead and agree these amendments. I hope the noble Lord will accept that.

Motion agreed.
Moved by
Lord Henley Portrait Lord Henley
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That this House do agree with the Commons in their Amendment 2.

2: Clause 9 leave out Clause 9
Lord Henley Portrait Lord Henley
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My Lords, it will be convenient to take Amendments 5 to 19 at this stage. In the other place, Amendment 2 resulted in the removal of Clause 9, which had been inserted in this House after a vote on Report on an amendment tabled by the noble Baroness, Lady Drake. It provided for a scheme funder of last resort to meet costs where a master trust is being wound up without the necessary funds to transfer the accrued benefits. It remains the Government’s view that this provision is simply not required. I do not want to go through all the arguments put forward by my noble friends Lord Young and Lord Freud who took this Bill through the vast majority of its stages late last year. The Bill requires that in order to operate, a master trust must be authorised. The authorisation criteria include that the master trust must be financially sustainable and have sufficient systems and processes for the running of the scheme. To meet the financial sustainability requirement, the scheme will, among other things, need to provide evidence to the Pensions Regulator that it has sufficient funds to meet the costs of wind up. It will also have to provide evidence that it has sufficient systems and processes, which will include its arrangements for holding accurate records on its members and the rights and benefits to which they are entitled. The Pensions Regulator will carry out ongoing supervision of master trusts. The schemes will be required periodically to provide the Pensions Regulator with information on its financial resources and administration to enable the Pensions Regulator to be satisfied that the funding remains adequate and the systems and processes robust. A scheme funder of last resort would therefore be required only if this whole approach to regulation fails in some catastrophic way. I have no reason to believe that it is likely to do so.

Amendments 5 to 19 concern the provisions in the Bill for a master trust that is going to wind up; they are intended to address concerns that were raised in earlier debates in this House that finding another master trust to take members on may be difficult. The amendments allow regulations to provide that master trusts that are to be wound up under continuity option 1 can transfer their members’ accrued rights and benefits to a pension scheme other than a master trust. In addition, the same restrictions in the Bill on new or increased charges being applied to a master trust receiving scheme could be applied by regulations to that non-master trust receiving scheme.

In introducing these amendments in another place, my honourable friend the Minister for Pensions said:

“The non-master trust receiving scheme would be made subject to exactly the same restrictions on increasing or introducing new charges as those to which master trust receiving schemes are subject”.—[Official Report, Commons, Pension Schemes Bill Committee, 7/2/17; col. 65.]


The amendments allow for regulations to be made that would widen the potential destinations to which members of a master trust being wound up can be transferred, while ensuring that their savings cannot be used to fund the costs of that transfer. In another place, my honourable friend the Minister for Pensions explained:

“Allowing other types of pension schemes to receive transferred members, as long as they meet specified requirements, could increase the options available to trustees, introduce extra flexibility and widen the market for potential schemes. This might be useful if trustees found that they were struggling to find somewhere appropriate for their members’ rights, which might particularly benefit members using decumulation options. Being able to increase the options in future might help reduce the risk that trustees of failing master trusts might not be able to find another master trust to take their members on”.—[Official Report, Commons, Pension Schemes Bill Committee, 7/2/17; col. 66.]


Amendments 5 to 19 are therefore primarily useful in future-proofing this aspect of the authorisation regime, and will be used as and when developments in the market give rise to a need for them. Not to include them in the Bill at this stage could unnecessarily restrict the market for members’ rights and benefits to their detriment. I beg to move.

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Lord McKenzie of Luton Portrait Lord McKenzie of Luton
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My Lords, let me start by expressing our regret that the requirement for there to be a funder of last resort—successfully pressed by my noble friend Lady Drake on Report—has been deleted from the Bill. That concern was also expressed by the noble Baroness, Lady Altmann. We of course accept that the whole purpose of the Bill—its protections, including capital adequacy, financial sustainability, systems requirements, scheme funder and transfer regime—is to secure people’s pension pots, militate against scheme failure, and ensure good order when difficulties arise. But as my noble friend asserted on Report, notwithstanding this, it cannot be guaranteed that a master trust will not fail and when it does there will be an available master trust to step into the breach so that members’ funds are protected. The noble Baroness, Lady Altmann, has just expressed similar concerns with vivid potential examples.

In seeking to resist the funder of last resort proposition, the noble Lord, Lord Freud, claimed that it would be costly and a disproportional response to the issue and with moral hazard implications—arguments deployed by the Parliamentary Under-Secretary of State for Pensions in the other place. We remain unconvinced of these arguments when put in the balance against the importance of protecting people’s savings. Nevertheless, we need to examine how the Commons amendments to Clauses 25 and 34 contribute to ameliorating this risk, which at least potentially they do.

We acknowledge the amendments to Clauses 25 and 34 which potentially widen the scope of continuity option 1 and expand the prohibition on increasing administration charges or imposing new administration charges. In particular, they raise the prospect of the accrued rights and benefits under a master trust scheme being transferred to an alternative pension scheme which is not a master trust. No detail is offered in the amendment about the likely characteristics of an alternative pension, other than the fact that it must be a pension scheme under the 1993 Act. This of course will include both personal and occupational pension schemes. Regulations will spell out the circumstances when the alternative might be available, and the characteristics of an alternative scheme. Regulations will also spell out how such an option is to be pursued.

While we can see the benefits of a potentially wider pool of pension schemes which could be available in the event of a master trust failure, it begs a number of questions about how any alternative scheme would be regulated and what protection it would offer members. My noble friend Lady Drake, in particular, as ever has produced some forensic questions to seek at least some clarity on key issues: further actions and discussions that have taken place; whether a receiving alternative scheme is sustainable and well governed; how such a scheme can operate a prohibition on increasing charges and preventing members’ funds from being accessed; and consideration of how bulk transfers would work. The noble Baroness, Lady Altmann, joined in the same sort of inquiry.

It remains to be seen how much these amendments provide a real opportunity to add a layer of protection and whether the market will offer up alternative schemes which can assist. We look forward to the Minister’s reply, but we are not minded to oppose these amendments.

Lord Henley Portrait Lord Henley
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I start by offering my thanks to the noble Lord for making it clear that he is not minded to oppose these amendments. I understand that noble Lords felt quite strongly about their amendments and for that reason wanted them in the Bill to be considered by another place. The other place has considered those amendments and we now have this opportunity for further debate. We can then get on with seeing the Bill on to the statute book.

Before dealing with the questions, I shall respond to the brief point made by my noble friend Lady Altmann about not being happy with the groupings. The groupings are a largely informal matter, sorted out by the usual channels. To my knowledge—and I think that it was probably done in discussion with the Opposition—they have changed a number of times, but that is not unusual. Very often we get it wrong in how things are grouped. But as is made clear on the bit of paper that comes to the House every day, groupings are an informal matter, and it is always open to all noble Lords to intervene on any appropriate amendment at the appropriate stage.

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Lord Henley Portrait Lord Henley
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I am grateful to the noble Lord. It is a matter that is possibly more in the hands of the Opposition than those of anyone else—but it is also a matter for all other Members of the House to put in their views, if they wish. The groupings are designed purely to assist the House and, as the mantra makes clear, they are informal and can be broken by any noble Lord.

A number of questions were put forward by the noble Baroness, Lady Drake. Again, I commend her for all the work on this Bill; I am grateful that it was largely my noble friends Lord Young and Lord Freud who had to deal with her expertise at those earlier stages, rather than myself. I come to it late, and have learned a certain amount in the course of proceedings—and, no doubt, I shall learn more in due course, particularly when we get to the regulations referred to earlier.

I come to the first of the noble Baroness’s questions, when she asked what further plans the department had for how things would be taken forward. My honourable friend the Minister for Pensions, who takes this Bill and all within it very seriously, referred in Committee to conversations that he had with representatives of certain pension funds who were then contemplating a system for allocation among themselves of any master trust that was going to wind up, if the market did not provide a proper destination. Those discussions will continue and, no doubt, my honourable friend, if he has any further points, will be able to speak to my noble friend Lady Altmann and others who have concerns.

My noble friend Lady Altmann was also worried about the confidence that we had that the risk of a master trust failing in a catastrophic manner is very low. I would still maintain that, and I think so would my honourable friend. The Pensions Regulator has been working very closely with the master trusts, and the work certainly gives us all in the department the comfort that the risk is low. The regulator continues to proactively assess the level of risk in the master trust market, and so will be alert to any changes. We hope that the regulator will publish information, including on confidence in the levels available in due course.

The noble Baroness, Lady Drake, also raised the question of how the Government will be satisfied that the receiving scheme is sustainable and well governed. Any receiving scheme would have to be regulated by the appropriate regulator; all the occupational schemes will be overseen by the Pensions Regulator and all the contract schemes will be regulated by the FCA. We hope that that will provide the appropriate coverage.

Finally, the noble Baroness asked about the Pensions Regulator and how it would apply the prohibition. The Bill provides the power to legislate on restrictions on charges in non-master trust receiving schemes. How those restrictions on charges would operate where the receiving scheme was not regulated by the Pensions Regulator would form part of future discussions if these regulations were considered to be necessary. For instance, if the scheme was regulated by the FCA, there would be discussions with the FCA about how to achieve this.

As the regulator of the exiting scheme, the Pensions Regulator would have responsibility and oversight over this scheme’s actions. The master trust pursuing continuity option 1 will have to set out in its implementation strategy which scheme it intends to use as its receiving scheme. The exiting master trust will have its implementation strategy approved by the Pensions Regulator, which also has the power to direct the trustees of the exiting master trust where they are failing to comply with their duties under the Bill. While the Pensions Regulator may not be the regulator of the receiving scheme, it will have oversight and powers it can use in that situation.

I hope that that deals largely with most of the questions. If there is anything I have failed to address, obviously, I will write. However, there will be further opportunities as we consult on those regulations over the coming year and next year to deal with these matters. Again, I give the assurance that my honourable friend the Minister for Pensions, as well as my right honourable friend the Secretary of State, will keep all this in mind and will be open to all comments that noble Lords wish to make.

Motion agreed.
Moved by
Lord Henley Portrait Lord Henley
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That this House do agree with the Commons in their Amendments 3 to 20.

3: Clause 11, page 7, line 7, leave out subsections (2) and (3) and insert—
“(2) The first requirement is that the scheme funder is a body corporate or a partnership that is a legal person under the law by which it governed.
(3) The second requirement is that the scheme funder only carries out activities that relate directly to Master Trust schemes in relation to which it is a scheme funder or prospective scheme funder.
(3A) The Secretary of State may make regulations providing for exceptions from the second requirement.
(3B) The regulations may include provision excepting a scheme funder from the second requirement—
(a) where the scheme funder meets additional requirements specified in the regulations (such as requirements relating to a scheme funder’s financial position, its financial arrangements with the Master Trust scheme in question or its business activities);
(b) where the scheme funder applies to the Regulator and provides the Regulator with information specified in the regulations, or such other information as the Regulator may require in order to satisfy the Regulator that the Master Trust scheme is financially sustainable.”
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Moved by
Lord Henley Portrait Lord Henley
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That this House do agree with the Commons in their Amendment 21.

21: Clause 46, page 31, line 3, leave out subsection (2)
Baroness Altmann Portrait Baroness Altmann
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My Lords, before the Bill passes through, I will make a couple of observations. Perhaps the Minister, who will not have the answers now, might write to me to allay some of my concerns that I will put on the record about the Bill.

The first regards net pay schemes being used for auto-enrolment as master trusts for low earners, who cannot get tax relief so they end up paying 25% more for their pensions. These low earners, who are probably mostly women, are the ones who surely most need extra money yet are unable to receive it. There is nothing in the master trust framework that will require employers to ensure that low earners are not enrolled into such schemes. Indeed, one pension scheme—NOW: Pensions—is reimbursing members for the tax relief they have lost, which is fine; they are not out of pocket.

The second issue on which my noble friend might be able to write to me is that I remain concerned that during a pause order, members may in fact lose entirely their entitlement to an auto-enrolment pension building up for them—for an indefinite period, because we do not know how long the pause order can last.

Lord Henley Portrait Lord Henley
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My Lords, I am not sure that I have ever spoken on a privilege amendment before, but I have noted what my noble friend had to say and I promise to write to her. I beg to move.

Motion agreed.

Local Authorities: Relationship Support Services

Lord Henley Excerpts
Wednesday 5th April 2017

(7 years, 7 months ago)

Lords Chamber
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Baroness Tyler of Enfield Portrait Baroness Tyler of Enfield (LD)
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My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as vice-president of the charity Relate.

Lord Henley Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
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My Lords, 11 local authorities bid for the local family offer funding in December 2016. They were notified in January that their bids were successful. Each area has now been offered £50,000 to deliver the local family offer, including a new role as advocates, as we support more areas to integrate action to reduce parental conflict.

Baroness Tyler of Enfield Portrait Baroness Tyler of Enfield
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I thank the Minister for his Answer and I am grateful for that explanation. Could the Minister explain how the local family rollout relates to the new programme announced by the Secretary of State yesterday of £30 million to support parents in workless households experiencing relationship distress and to the promised funding across the lifetime of this Parliament of £70 million for relationship support, which I hope will be available for everyone who needs it, not only parents in workless households?

Lord Henley Portrait Lord Henley
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My Lords, the noble Baroness has highlighted three different aspects of work we are doing in the Department for Work and Pensions, but the work goes across all parts of government. She is right to highlight the different sums of money involved in the three schemes. The one we are discussing today is a small-scale scheme designed to offer a degree of help to local authorities to access expertise and evidence in order to drive forward various local strategies. I hope that will feed into all the other programmes as well but, as I say, that particular programme is a small-scale one to help those 11 local authorities.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett (Lab)
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My Lords, we know that money, or lack of it, can be an important factor in parental conflict. Given the announcement made yesterday, about which we have just heard, that the Government’s aim is to reduce parental conflict in workless families, can the Minister tell us what assessment they have made of the impact of benefit cuts, including the ongoing freeze in benefits, on parental conflict in families who are already struggling, and will be struggling all the more with the impact of these cuts?

Lord Henley Portrait Lord Henley
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My Lords, anyone who has been involved in family matters will know that money is one of the major causes of conflict in parental disputes, and that can be true at all levels of income. I do not accept that the changes and reforms we have made to the benefit system, which will continue to roll out this year, are making any difference in this respect.

Earl of Listowel Portrait The Earl of Listowel (CB)
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My Lords, is the Minister aware that at the beginning of this decade the OECD found that one-fifth of children in this country were growing up without a father, compared with a quarter of children in the United States and one in seven children in Germany? We were performing poorly against our European neighbours. I welcome the funding that the Government are introducing. Does he agree that it is hugely important that children see their parents in harmony together and that, as far as possible, their fathers stay in contact with them and stay in their lives? Do the Government plan to put additional funding into this area in the future?

Lord Henley Portrait Lord Henley
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My Lords, I agree with most of what the noble Earl says. How much the Government can do to solve all these problems is another matter. However, there are things that we can do and that is why I was grateful for the opportunity to respond to this Question and just deal with this one small scheme. As I say, other things can be done—that is why we published our policy paper, Improving lives: Helping Workless Families, yesterday—and we will continue to see where we can help in all areas.

Lord Bishop of St Albans Portrait The Lord Bishop of St Albans
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My Lords, perhaps I may build on the response just given by the Minister. The Government can only do so much and we certainly need to see joined-up thinking and action if we are going to help these families. What are Her Majesty’s Government doing to ensure that when local authorities bid for funding for the local family offers, they are working collaboratively with grass-roots organisations—charities, churches and so on—which are already seeking to build up relationship capacity in families?

Lord Henley Portrait Lord Henley
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My Lords, I cannot give precise details of what consideration was taken when assessing the bids, but I am fairly sure that the degree of co-operation that local authorities want to build with such organisations is a factor which would be taken into account.

Baroness Manzoor Portrait Baroness Manzoor (Con)
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My Lords, I welcome the Government’s commitment to continue with the troubled families programme, although there were some difficulties with it. Can my noble friend tell us how the outcome of that programme is to be monitored so that it delivers what it is meant to do?

Lord Henley Portrait Lord Henley
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I am grateful to my noble friend for that question and I can give her an assurance that we will be evaluating phase one of the programme, which has been completed, and then phase two, about which I have just given details. We aim to publish an evaluation of phase one later in the summer, whenever that might be, and in due course we will consider an evaluation of phase two.

Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, I should like to return to the answer given by the Minister to my noble friend Lady Lister. Perhaps he should go back to his own paper entitled Improving Lives: Helping Workless Families, which came out yesterday. Paragraph 33 cites evidence that problem debt and financial burdens can put pressure on relationships. It attributes those issues to persistent low income and income shocks. Will he think again not only about the damage that has been done by cutting £12 billion off social security for those out of work? Also, given that this is aimed at workless families, if the DWP wants to get them back into work, why is the department persisting in cutting in-work benefits, the very things that make work pay? Before the Minister tells us more about the living wage, perhaps I may remind him of what he knows already. Most of the living wage for the poorest people goes straight back to the Treasury in taxes and lower benefits. Will the department look again at its strategy and make work pay?

Lord Henley Portrait Lord Henley
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There is no need for the noble Baroness to try to answer my question because I will answer it in my own way.

None Portrait Noble Lords
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Oh!

Lord Henley Portrait Lord Henley
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The noble Baroness wanted to answer my question. She can practise those things as long as she likes. Perhaps I may remind her just how high the rates of employment are. Employment is the best route out of poverty for all households, and certainly the best route out of poverty for households with children. Since 2010 we have seen a decline of some 590,000 children in families that are workless.

Child Support: Unpaid Maintenance

Lord Henley Excerpts
Thursday 30th March 2017

(7 years, 7 months ago)

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Baroness Royall of Blaisdon Portrait Baroness Royall of Blaisdon
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To ask Her Majesty’s Government what action they are taking to expedite the collection of over £3 billion in unpaid child maintenance which was ordered by the former Child Support Agency.

Lord Henley Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
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My Lords, the main focus of the Department for Work and Pensions is to collect money owed that will benefit children today. It is well established that much of this old debt is uncollectable due to its age and the circumstances of these cases. The department is currently developing a new strategy for handling historic arrears accrued on Child Support Agency schemes. We will consult on the proposed approach before publishing the new strategy.

Baroness Royall of Blaisdon Portrait Baroness Royall of Blaisdon (Lab)
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My Lords, I simply do not think that is acceptable because, according to a withering NAO report, around £3 billion in child maintenance is likely to be uncollectable. The Government say that they are offering parents a fresh start by suggesting that they write off debts to which their children are legally entitled. These are some of the poorest children in society, suffering as a result of incompetence and cuts in enforcement work, so why do not the Government restore staffing levels, step up enforcement and ensure that the new Child Maintenance Service is obliged to collect outstanding debts?

Lord Henley Portrait Lord Henley
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My Lords, I would be more than happy to accept the noble Baroness’s assessment that this is withering and the figures are astronomical if we were talking about figures that related to the children who are likely to benefit today. A lot of this £3.9 billion—sorry, £3.8 billion; there are different figures according to different things—goes back a very long way to the 1993 scheme. Some of it goes back before the reforms introduced in 2003 by the Government of whom the noble Baroness was a member, and some of it goes back before 2008. If the noble Baroness thinks about the number of years that have passed, she will realise that those children are now grown up and will not benefit from recovering that money. It is very sad that absent parents have behaved badly. The only people who have lost out—as the noble Baroness put it—are those children. However, we are concerned about the children of today and to make sure that matters operate properly now, and that the money owed by absent parents, where the department has a role in trying to enforce that, gets paid to the caring parent so that the appropriate children benefit. I am terribly sorry but a lot of that £3.9 billion is in effect lost, as the noble Baroness said, to those children who are no longer children now.

Baroness Eaton Portrait Baroness Eaton (Con)
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My Lords, financial arrears are often symptomatic of an adversarial approach to collecting child maintenance. How is the new child maintenance system encouraging parents to set up family-based arrangements, and what success is it having?

Lord Henley Portrait Lord Henley
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My Lords, I thank my noble friend for that question. I am not going to go into what we are doing about arrears. However, I shall talk about the 2012 scheme of child maintenance. By bringing in more simplified methods of calculation, we are helping parents to sort these matters out. We are also encouraging parents to sort these things out themselves without necessarily using the department. We are now at a stage where in nine out of 10 cases parents are paying towards the child maintenance that they owe, and paying the appropriate amount. Therefore, we are making progress but there are still some who are not doing what they can.

Lord Kirkwood of Kirkhope Portrait Lord Kirkwood of Kirkhope (LD)
- Hansard - - - Excerpts

But is the Minister aware of the concern that the government arrangements to manage the outstanding £3 billion-worth of arrears are not yet clear? Arrears are still sitting in the CSA legacy schemes. They need to be sorted out because the biggest risk to the 2012 scheme is a botched job in closing the legacy CSA schemes.

Lord Henley Portrait Lord Henley
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My Lords, as I said, this goes back a long way. It covers Conservative Governments, Labour Governments and the coalition Government. We have all tried to sort this out. I am afraid that a lot of this money is lost for ever. We are looking at a new arrears scheme and will consult on that to try to get what we can, but I am sure the House would agree that the first priority should be to get money that can still benefit the children of today rather than trying to get the money that was owed yesterday, or the money that is owed to the department. The bulk of the money is very historic.

Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, I am happy to take the Minister at his word. Let us look at today, but in doing so I declare an historic interest as a member of the board of CMEC before I came into the House. The Government are closing the CSA and if you have an active case on the CSA, instead of transferring it to the new system, it is shut down and you are invited to apply to the new system. The Government estimated that two-thirds of parents would apply to the new system. The NAO has found that only one in five is doing so. The Government have said that most of the rest would make private, family-based arrangements. More than half of families have no arrangement at all in place. This matters because it is not just important for tackling child poverty: a decent child support system sends out a message to the world at large that you might divorce your spouse or separate from your partner but you do not stop being responsible for your kids. Will the Government sort this out?

--- Later in debate ---
Lord Henley Portrait Lord Henley
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My Lords, I agree with the noble Baroness’s last sentence: the important thing is that the children of today benefit. That is why I cited the figures earlier. We are now at a stage where in nearly nine out of 10 cases parents pay towards the child maintenance they owe. When we are dealing with historic debt, I am sure the noble Baroness will agree that the right thing to do is to pursue that debt that is likely to benefit the children of today rather than those of before. I think that we were also right to seek reforms to the Child Support Agency, which the noble Baroness’s party tried to do in 2003 and 2008. That is why we brought in CMS. CMS allows us to provide assistance to parents on some occasions, but on many occasions it allows many others to manage these things for themselves without the interference of the Government. The noble Baroness thinks I have not answered sufficiently, but this is why I started off with the fact that most people are making payments.

Disabled People: Independent Living

Lord Henley Excerpts
Thursday 30th March 2017

(7 years, 7 months ago)

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Baroness Thomas of Winchester Portrait Baroness Thomas of Winchester
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To ask Her Majesty’s Government what steps they are taking to support independent living for disabled people of working age.

Lord Henley Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley)
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My Lords, the Government believe that individuals should have the opportunity to work and realise the benefit of stable employment where they can, enabling them to live independently and fulfil their potential. We are therefore working to join up the health system, the welfare system and society more widely so that we focus on the strengths of people with disabilities or health conditions and what they can do.

Baroness Thomas of Winchester Portrait Baroness Thomas of Winchester (LD)
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I very much welcome that reply. The most important thing is that the infrastructure—such as enough care support and accessible transport—is got right around the country. Disabled people must have enough support. I wonder whether the Minister’s department will now agree to conduct a cumulative impact assessment on current government policies, which shows their effect on disabled people. The Equality and Human Rights Commission has offered its support and this should be taken up.

--- Later in debate ---
Lord Henley Portrait Lord Henley
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My Lords, I am unsure that I should necessarily want to do it in the manner suggested by the noble Baroness, but I assure her that we shall continue to examine the effectiveness of all our policies and of all the benefits that we administer on behalf of the Government. Only today, the second of two reviews conducted by Paul Gray into PIP has been published. We promised these statutory reviews as a result of legislation passed some years ago. The Government will respond to the second review in due course.

Baroness Masham of Ilton Portrait Baroness Masham of Ilton (CB)
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My Lords, I declare an interest as president of the Spinal Injuries Association. Is the Minister aware that we have many young people of working age who have broken their backs and necks and are paralysed and who need help to get in and out of bed and into their cars? They need expensive personal care so that they can get to work. If they do not get this, they cannot work.

Lord Henley Portrait Lord Henley
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My Lords, the noble Baroness is right to draw attention to the problems of people with spinal injuries. The same is true for people with any of a host of other conditions, be they mental or physical. That is why we offer the help that we can and why we are committed to trying to reduce the employment gap between those who are disabled and those who are not by seeking greater working opportunities for those with health problems.

Lord Bishop of St Albans Portrait The Lord Bishop of St Albans
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My Lords, the Motability scheme is a crucial element for getting people back into work, yet about 50,000 people have lost out on it. What is particularly worrying is that the vast majority of appeals are upheld, by which time those concerned have lost the vehicle and then have to get it again. It is costing a lot of time and money. Would Her Majesty’s Government consider having a scheme whereby people do not lose the vehicle until the end of the appeal process? This would make much more sense where the appeal is upheld.

Lord Henley Portrait Lord Henley
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My Lords, I understand the problems to which the right reverend Prelate refers. The department is looking at these matters. My honourable friend the Minister for Disabled People, Health and Work is well aware of them. As the right reverend Prelate will know, schemes are available for one-off cash payments to help those who are losing their cars. We shall certainly look at speeding up the whole appeals process to make sure that the problems to which the right reverend Prelate referred do not get any worse.

Baroness Sherlock Portrait Baroness Sherlock (Lab)
- Hansard - - - Excerpts

My Lords, to pursue this a little further, I appreciate that the Minister may be thinking about this but the point made by the right reverend Prelate is that people cannot wait. Between October and December last year, 800 people a week were having to hand back their Motability cars because they did not have the money to pay for them any more as a result of PIP reassessment. The Motability website says clearly that you get only six weeks from that decision to hand back your car. Frankly, the DWP is a long way off speeding up assessment to the point where appeals are concluded within six weeks. Will the Minister please look at this a little more urgently?

--- Later in debate ---
Lord Henley Portrait Lord Henley
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My Lords, this matter has been treated with considerable urgency. As I made clear, transitional schemes are in place. The package has already helped many claimants to meet their mobility needs by buying a used car. That is why I referred to that. I am more than happy to have further discussions on that but, as I said, my honourable friend the Minister for Disabled People, Health and Work is fully aware of these problems and is engaged with discussion both with Motability and with others.

GovCoin

Lord Henley Excerpts
Monday 27th March 2017

(7 years, 7 months ago)

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Lord Henley Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
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My Lords, the initial independent assessment of the small-scale trial has been positive. The Department for Work and Pensions continues to work with industry to explore new and innovative products such as this that have the potential to support people with their personal budgeting and reduce the overall costs of welfare administration.

Lord Holmes of Richmond Portrait Lord Holmes of Richmond (Con)
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My Lords, would my noble friend agree that initial findings offer real potential in this area, not least in greatly empowering the relationship between benefit recipient and the Government while at the same time realising significant savings for the taxpayer? To this end, will he urge colleagues in the department to push ahead with a full-scale trial to see whether we can deploy this technology—not only in the DWP but potentially across government?

Lord Henley Portrait Lord Henley
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My Lords, I would not want to speak for the rest of government, although obviously I answer on behalf of Her Majesty’s Government on this occasion. Certainly, we want to look carefully at this particular trial. It was a very small trial, involving only some 20 to 30 people. It was more what I think is termed a proof of concept rather than a trial, but it produced encouraging results and we want to look at those in due course.

Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett (Lab)
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My Lords, concerns have been raised, including as I understand it by members of the Government Digital Service, that this technology could be used in future to monitor or even control how social security claimants spend their benefits. Could the Minister give a categorical assurance that this will not happen, in the interests of claimants’ privacy and freedom of choice?

Lord Henley Portrait Lord Henley
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My Lords, I give the noble Baroness that categorical assurance. The Department for Work and Pensions has absolutely no access to any such claimant information and will have no access to it in any further trials we look at. We want to keep it like that. Obviously, information will be able to Disc—which is GovCoin, referred to in the Question—but that will be protected by data protection principles. I reiterate what I said to the noble Baroness: the department and the Government will have no access to that information.

Baroness Tyler of Enfield Portrait Baroness Tyler of Enfield (LD)
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My Lords, does the Minister agree with me that this initiative, however welcome, is but one small step in tackling the much larger problem of financial exclusion? Could he give an assurance that the Government will carefully consider the recommendations of the Select Committee on Financial Exclusion, the report of which was published on Saturday? I had the privilege of chairing that committee. Particularly, there is the recommendation that fewer people are unbanked in the first place and so would not need this technology.

Lord Henley Portrait Lord Henley
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My Lords, I wondered whether the noble Baroness would want to get in to highlight the fact that she produced the report that came out on Saturday. I think the report was embargoed until midnight on Friday and I have not yet had the opportunity to read it. I glanced at it but assure the noble Baroness that the Government will give it due consideration.

Baroness Sherlock Portrait Baroness Sherlock (Lab)
- Hansard - - - Excerpts

My Lords, I am tempted to invite the Minister to explain how bitcoin and blockchain technology work, but I will take pity on him. For people like me, it is much simpler. I understand that volunteers were given an app through which, essentially, electronic, digital money was paid to them and they could spend it only in certain ways which were tracked and recovered. Obviously, that raises significant issues about privacy and data. My understanding is that the Government’s own report on what is called distributed ledger technology said that it clearly needs a regulatory, ethical and data framework. In the absence of that, when the DWP started this, how did its Ministers assure themselves that benefit claimants were genuinely giving free, informed consent to be able to use this? If it is now to be a much larger-scale project, what kind of parliamentary oversight and scrutiny will there be?

Lord Henley Portrait Lord Henley
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My Lords, as I said, we have not yet decided to move on to a fuller and larger trial, but if we did, no doubt that would have the appropriate checks and balances and be examined by the noble Baroness and others in due course. This is a simple, small-scale trial involving some 20 or 30 people. I am assured that they all gave full and proper consent to it, and that some of them found it very useful indeed. I am grateful to the noble Baroness for not asking me to explain the more technical matters, which are probably beyond her—and me. As she knows, it is a very simple app designed in the form of jam jars into which one can put one’s money and then take it out for specific tasks. As I said earlier—and the assurance I gave on this would apply to any further trials—the department and the Government will have no access to that information; that is, what has come out of the jam jars and gone into housing or whatever.

Lord Campbell-Savours Portrait Lord Campbell-Savours (Lab)
- Hansard - - - Excerpts

Will traders who sign up to and agree to trade under this scheme be able to offer discounts to benefit recipients? By the way, I thought the next trial was for 1,000 people.

Lord Henley Portrait Lord Henley
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My Lords, there is no next trial planned at this stage. We are considering that. It is not a question of discounts but of the fact that those who have to deal purely in cash can find life very much more expensive than those who are able to pay by other, more advanced means. That is the point behind it.

Viscount Ridley Portrait Viscount Ridley (Con)
- Hansard - - - Excerpts

Does my noble friend agree that blockchain technology in general has applications far beyond this trial—indeed, all the way across government and society? Are the Government studying the phenomenon to check where it might be useful?

Lord Henley Portrait Lord Henley
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My noble friend is absolutely right that very interesting ideas can come from blockchain and other things. I do not want to expand further on that in this Question. We are dealing with just a small-scale trial here, designed to make life easier for certain benefit claimants and to make it easier for them to manage their money.

Lord Harris of Haringey Portrait Lord Harris of Haringey (Lab)
- Hansard - - - Excerpts

My Lords, my noble friend talked about the need for an ethical framework underpinning the use of this sort of technology. Obviously, the Government have decided to go ahead with this trial in the absence of such a framework, but does the Minister agree that one is needed, not only for further developments in this area but for developments in the sorts of areas that have just been referred to by his noble friend?

Lord Henley Portrait Lord Henley
- Hansard - -

My Lords, that might or might not be the case, but what we are talking about here is this particular trial. The important thing is that we achieved the proper consent of those taking part and we gave the proper assurances, as I have repeated, that there would be no release of information about how those individuals spent their money to the department or the Government more widely.

Personal Independence Payment Regulations

Lord Henley Excerpts
Wednesday 15th March 2017

(7 years, 7 months ago)

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Lord Henley Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
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My Lords, with the leave of the House, I shall repeat as a Statement an Answer given to an Urgent Question in another place by my right honourable friend the Secretary of State for Work and Pensions on personal independence payments. The Statement is as follows:

“Recent legal judgments have interpreted the assessment criteria for PIP in ways that are different from what was originally intended. The department presented regulations, which clarify the original policy intent, to the Social Security Advisory Committee. I welcome SSAC’s careful consideration and we are looking closely at its suggestions.

But let me be clear: SSAC decided that it did not require the regulations to be formally referred to it and would not therefore consult publicly on them. I believe that it was right to move quickly to clarify the criteria and it is clear that SSAC is not challenging that decision.

I want to make clear again that this is not a policy change, nor is it intended to make new savings. This is about restoring the original intention of the benefit, which has been expanded by the legal judgments, and providing clarity and certainty for claimants. I reiterate my commitment that there will be no further welfare savings beyond those already legislated for. It will not result in any claimants seeing a reduction in the amount of PIP previously awarded by the Department for Work and Pensions”.

My Lords, that concludes the Statement.

Lord McKenzie of Luton Portrait Lord McKenzie of Luton (Lab)
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My Lords, I thank the Minister for repeating that Answer. The Social Security Advisory Committee expressed the view that outside the DWP there is indeed some confusion regarding the original policy intent of the measures, and that the department had made errors about its intent in submission to an Upper Tribunal. The committee further expressed concern about unintended operational and legal consequences arising from the changes to the mobility descriptors in the regulations that have been made. It drew attention to circumstances where multiple factors make it impossible for someone to follow a journey without help, and where it would be difficult to strip out and exclude psychological distress from other factors.

How does the Minister respond to this issue and to the recommendation that these proposed changes and those relating to managing therapy should be tested with healthcare professionals and decision-makers? Will he commit to doing this before implementation of the regulations that have been laid? Further, can the Minister explain how regarding the consequences of psychological distress is consistent with fostering parity of esteem between those with physical and mental health conditions?

Lord Henley Portrait Lord Henley
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My Lords, the original policy intentions were set out quite clearly during the passage of the legislation. The noble Lord will remember that far better than I do. That was then set out in the legislation—and in secondary legislation. However, as he is aware, the Upper Tribunal made it clear that there was, as I think it put it, a lack of clarity in the regulations as we set them out. That is what, I hope, we put right in the regulations we laid a week or so ago and which come into effect tomorrow.

The noble Lord asked whether there would be further consultations on that. Obviously, my honourable friend the Minister for Disabled People and others within the department will continue to keep an open dialogue with all those involved to make sure that our policy intentions are correctly applied and that these things are dealt with as clearly as possible.

The noble Lord also doubted whether there was the appropriate parity between mental and physical conditions. He alleged that there was a lack of parity, which we want to achieve. I believe that there is parity because we are looking not at the conditions but at the overall needs of individuals. In other words, it is not some specific complaint that the individual suffers from but how it affects how they get on with their lives. That applies equally—hence the parity—to those with mental and physical conditions.

Baroness Thomas of Winchester Portrait Baroness Thomas of Winchester (LD)
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My Lords, it is quite clear that more clarity is needed. Why do the Government not use the powers they already have to prevent the decisions of the Upper Tribunal from having immediate legal effect? I also know that the Government are appealing the decision from the Upper Tribunal. Why do they not wait for the result of that appeal? What about claimants whose claims are only half way through the process? What about those who have an existing award and whose condition has not changed in any way, who will be reassessed very soon? Are they to have that award taken away? In general, this committee is very supportive of the DWP and I urge the Government to use the powers they have to not bring these regulations into force until there has been proper consultation on them.

Lord Henley Portrait Lord Henley
- Hansard - -

My Lords, there would be considerable financial implications in allowing the decision of the Upper Tribunal to stand. It would not be right or proper for the department to do that. For that reason, we brought forward the new regulations and they come into effect tomorrow. We then referred those to SSAC and we have received its comments on them. My honourable friend the Minister for Disabled People responded to SSAC and no doubt SSAC will want to make that letter available in due course. We believe that we have achieved parity with the new regulations—but, as I said, we are more than happy to continue consultations in the usual manner.

Lord Skelmersdale Portrait Lord Skelmersdale (Con)
- Hansard - - - Excerpts

My Lords, the objective of PIP has always been to subsidise people who are disabled, whether mentally or physically, for the extra costs of living. Surely the answer to the question asked by the noble Baroness, Lady Thomas, is that if those conditions have not changed, there is no earthly reason why the individual should not continue to get their PIP.

Lord Henley Portrait Lord Henley
- Hansard - -

My Lords, individuals will continue to get their personal independence payment and will continue to be able to apply for it in the usual way. It is just that we have new regulations that bring clarity, as I am sure my noble friend will be aware, to the lack of clarity that the Upper Tribunal complained of.

Baroness Hollis of Heigham Portrait Baroness Hollis of Heigham (Lab)
- Hansard - - - Excerpts

My Lords, following the pertinent questions of my noble friend Lord McKenzie, two days ago the Social Security Advisory Committee pointed out the error made by the DWP in a previous submission to the Upper Tribunal in 2015, which led in turn to the inconsistency of determinations by decision-makers on PIP. Yet the DWP has still failed to clarify the ambiguity of the psychological distress criteria for people who are concerned about travelling by themselves and cannot successfully do so. Does this not show that SSAC should have been properly consulted throughout this procedure before the revised, tougher—yet still ambiguous—regulations were issued, given the errors, inconsistency and ambiguity in the DWP’s handling of PIP in the past? Frankly, should the department not stop digging?

Lord Henley Portrait Lord Henley
- Hansard - -

My Lords, I do not think the last comment was worthy of the noble Baroness. The point we are making is that the Upper Tribunal saw a lack of clarity in these regulations. It was appropriate that the department acted quickly. In a previous Statement we made it clear that we were going to act quickly and that we were going to consult SSAC on this matter. The matter was put to SSAC. SSAC considered it. SSAC then wrote to the department earlier this week and today my honourable friend the Minister for Disabled People wrote back to SSAC. The noble Baroness can see that letter in due course—she seems to indicate that she already has a copy of the letter. I have a copy, but there is no need for us to read it out to the House. The noble Baroness has a copy of the letter that deals with those matters. I believe that we have done this in exactly in the right way and that we are bringing clarity to a matter that needed some clarity, following the remarks of the Upper Tribunal.

Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2017

Lord Henley Excerpts
Monday 13th March 2017

(7 years, 7 months ago)

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Moved by
Lord Henley Portrait Lord Henley
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That the draft order laid before the House on 2 February be approved.

Considered in Grand Committee on 9 March.

Motion agreed.

Universal Credit

Lord Henley Excerpts
Thursday 9th March 2017

(7 years, 8 months ago)

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Baroness Sherlock Portrait Baroness Sherlock
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To ask Her Majesty’s Government what assessment they have made of the impact on claimants of the time taken between applying for Universal Credit and receiving payments.

Lord Henley Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
- Hansard - -

My Lords, the universal credit assessment period and payment structure is a fundamental part of its design, reducing welfare dependency by mirroring the world of work. Safeguards are in place to help the minority of claimants who are in genuine need to transition to universal credit. This includes advances and budgeting support. We continue to work closely with landlords, local authorities and other organisations to ensure claimants are supported.

Baroness Sherlock Portrait Baroness Sherlock (Lab)
- Hansard - - - Excerpts

My Lords, if only it were that simple. In 2013 the Government introduced a rule that when you first claim benefit you are not entitled to any money for the first seven days. The problem is that universal credit is paid monthly in arrears so it means you get no money at all for six weeks. That does not sound very long, but the typical family in social housing has only £200 in savings and some people are in debt. Social landlords are now saying that tenants are getting into big arrears and people are turning to payday lenders and even loan sharks. Even the noble Lord, Lord Freud, recently told the Work and Pensions Select Committee that the seven-day waiting period should be dropped. Please can the Minister not be complacent about this. Will he go back to his department, look again at the evidence and please take action before anyone else is pushed into debt?

Lord Henley Portrait Lord Henley
- Hansard - -

My Lords, I repeat what I said in my original Answer. It is a fundamental part of the design. That argument was put forward by my noble friend Lord Freud during the passage of the Bill and was debated at great length. We recognise that this does not necessarily suit everyone. That is why I again made clear in the second part of my Answer that there are safeguards in place. We introduced universal credit advances for new claimants. Claimants can apply for an advance immediately if they are in need and can receive up to 50% of their indicative award soon afterwards. To go back to the original point, it is important to make sure that we mirror the world of work where 75% of employees are paid monthly.

Lord Bishop of Oxford Portrait The Lord Bishop of Oxford
- Hansard - - - Excerpts

My Lords, in the last three months I have visited a large number of food banks across the diocese of Oxford in seemingly affluent communities, building on my experience of food banks in the diocese of Sheffield. All have underlined to me that the most common reason why people access food banks is delay in accessing welfare payments. It is clear from the Government’s figures that too few people are aware of, or receiving, the emergency payments intended for them. Will the Minister please outline what steps the Government are taking to improve communication of and access to short-term benefit advances for existing benefits and to ensure that lessons learned from this are applied to the operation of universal credit?

Lord Henley Portrait Lord Henley
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My Lords, the right reverend Prelate is right to draw attention to the problems some people have in knowing how the system works. He will find that how work coaches explain the administration of universal credit to people coming to them is completely different from how it used to operate. I recommend that the right reverend Prelate takes an opportunity to visit one of his local jobcentres to see how it works in practice. He might find that things have moved on a great deal since, say, his time in the diocese of Sheffield. If he wishes to take up my offer, I will be more than happy to make the arrangements.

Lord McKenzie of Luton Portrait Lord McKenzie of Luton (Lab)
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My Lords, is it not the case that it is not just the architecture of universal credit that is creating problems but its administration, as the Select Committee in the other place determined? I understand that, when asked about the sometimes fractious relationship between the DWP and the Treasury over universal credit, the noble Lord’s predecessor said that,

“there were times when one’s view about the Treasury was totally unprintable”.

Does the current Minister have any such inhibitions?

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Lord Henley Portrait Lord Henley
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My Lords, we have all on occasions had moments when we have had doubts about what goes on in the Treasury, but I shall not go into that at the moment. I shall go back to what the noble Lord said about the administration of the benefit. From my experience some 25 years ago in the old Department of Social Security, and seeing how things are operating now in the DWP with universal credit, I think that there is a very real change taking place. It is important that noble Lords get a look at what the work coaches are doing and how they are getting this over to claimants who are coming to them. The offer that I made to the right reverend Prelate is one that I repeat to the noble Lord.

Baroness Bakewell of Hardington Mandeville Portrait Baroness Bakewell of Hardington Mandeville (LD)
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My Lords, it is a fundamental design of universal credit that people have to wait a month for their benefits to mirror what happens in real life, but that is not actually what is happening. Many families are experiencing delays of up to 12 weeks in the payment of universal credit, forcing them to use food banks and borrow from loan sharks. I have heard what the Minister says about the mechanism in place to prevent it happening, but is he aware that it is just not happening?

Lord Henley Portrait Lord Henley
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My Lords, we were grateful for the support of the Liberal Party as part of the coalition Government in the passage of the Bill and in reaching that appropriate design, whereby we were looking for something that mirrors the world of work. That is what we are doing. That is why we also built in, as I made clear in my original Answer, the safeguards that we have. That is why, for example, I have stressed that there are universal credit advances for certain individuals who are having problems coping with that four-week waiting period.

Baroness Hollis of Heigham Portrait Baroness Hollis of Heigham (Lab)
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My Lords, I am sure that all of us in this House want universal credit to work, but it is not. There have been pilot schemes showing how people are being plunged into debt through no fault of their own. There are three simple administrative changes, as my noble friend on the Front Bench mentioned, that would transform the easy delivery of UC and prevent people spiralling into deep debt from which many can never recover. The first is to get rid of the seven-day waiting period; the second is to pay people fortnightly as well as monthly in advance, if they so wish; and the third is to pay housing benefit, if tenants so wish, direct to the landlord. Those three things together would transform the ability of people who are not particularly sophisticated about the benefit system—why should they be?—and give them the opportunity to get money that will help them back into the labour market, as we all want, and not have a lifetime of debt hanging over them.

Lord Henley Portrait Lord Henley
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My Lords, I am very grateful that the noble Baroness offers support for universal credit. Like her, we wish to see it work, which is why, as my noble friend Lord Freud always made clear, we want to see a very slow rollout of universal credit. The noble Baroness, Lady Hollis, will be aware just how slow that rollout has been—deliberately so, before the noble Baroness, Lady Sherlock, giggles too much—so that we can learn as this goes along. I do not necessarily accept the three points that the noble Baroness made, but they can be taken into account as we continue with that rollout as it accelerates over the coming year.

Homelessness: Housing Benefit

Lord Henley Excerpts
Thursday 9th March 2017

(7 years, 8 months ago)

Lords Chamber
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Kennedy of Southwark Portrait Lord Kennedy of Southwark (Lab)
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My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I refer noble Lords to my entry in the Register of Lords’ Interests.

Lord Henley Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
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My Lords, from 1 April, automatic entitlement to housing costs in universal credit will be removed for some 18 to 21 year-olds. This policy removes a perverse incentive for young adults to leave the family home and pass the cost on to the taxpayer. There is a comprehensive set of exemptions in place for the most vulnerable.

Lord Kennedy of Southwark Portrait Lord Kennedy of Southwark
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Last week, the Government made the announcement about the withdrawal of housing benefit from 18 to 21 year-olds. On the previous Friday in this Chamber, they supported the Homelessness Reduction Bill and said that they had identified money for that purpose. Does the noble Lord not see the absurdity and hypocrisy of those two decisions? Does he agree with the comments of the Member for Enfield Southgate in the other place, who described the decision to withdraw these benefits from 18 to 21 year-olds as “catastrophic”?

Lord Henley Portrait Lord Henley
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My Lords, I simply do not accept the point that the noble Lord makes. Yes, we supported that Bill and will support it again tomorrow, when I think it will have its Committee stage in this House. We will continue to do so and we will continue to protect the most vulnerable in relation to housing. But we also wish to make sure that young people do not slip into a life on benefits. That is what this change is about.

Baroness Bakewell of Hardington Mandeville Portrait Baroness Bakewell of Hardington Mandeville (LD)
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My Lords, currently, 19,000 18 to 20 year-olds on jobseeker’s allowance claim housing benefit. They are simply unable to live at home for a variety of reasons, including physical and sexual abuse. If housing benefit is withdrawn, how does the Minister think that these young people will be able to find jobs if they are living on the streets?

Lord Henley Portrait Lord Henley
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My Lords, not one of the individuals on jobseeker’s allowance to whom the noble Baroness referred will be affected. As I made clear in my Answer, this matter relates to those on universal credit. As we also made clear in another place, and I will make clear now, there is a considerable number of exemptions. I think that some 25 are listed in the regulations—I can go through them if the noble Baroness wishes me to do so—which offer protection for those who need it.

Lord Watts Portrait Lord Watts (Lab)
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My Lords, given the massive increase that we have seen in the number of young homeless people on our streets, how will this policy help that situation?

Lord Henley Portrait Lord Henley
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My Lords, this policy will help that situation by encouraging young people to stay at home with their families rather than establishing themselves in a life on benefit. As we made clear, for those who need help, protections are in place. It is the noble Lord and those who wish to get rid of measures such as this who would condemn individuals to a life on benefit and cause far greater problems than we are addressing with this measure.

Lord Marlesford Portrait Lord Marlesford (Con)
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My Lords, does my noble friend agree that one of the beauties of housing benefit is that it is very flexible and can be focused where it is needed, and that it is the most efficient way of helping people who need affordable housing?

Lord Henley Portrait Lord Henley
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My Lords, my noble friend is correct in relation to housing benefit. It is right therefore to withdraw it for those 18 to 21 year-olds on universal credit who can stay at home.

Lord Hylton Portrait Lord Hylton (CB)
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Does the Minister accept that some young people in this age bracket have genuine reasons for wanting to live somewhere else? They might have no family or a dysfunctional family, or they might have to move to take up an apprenticeship or another important opportunity.

Lord Henley Portrait Lord Henley
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My Lords, I fully accept the noble Lord’s point. That is why he will find a list in the regulations—I do not want to delay the House by reading it out in full—of some 25 different exemptions for 18 to 21 year-olds. That will be operated in the most sympathetic manner, and I do not think that anyone with a genuine reason to leave home is likely to suffer at all. I am more than happy to show the list to the noble Lord and to others—but reading it out in full would waste the House’s time.

Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, there are so many reasons why young people choose not to live at home, but remarkably few of them do. If somebody is out there on their own aged 18, something else is going on. The Minister can give all the lists he wants, but people out there who have suffered from repeated bad decisions when they have applied for disability benefit or all kinds of other benefits will not trust them. Is it not the case that all the homeless charities have pointed out that the proposal is likely to increase homelessness? Even though there are young people who want to go out and rent independently, the National Landlords Association said:

“Never mind the nuances, all landlords will hear is that 18-21 year olds are no longer entitled to housing benefit … they just won’t consider them as a tenant”.


Have the Government thought about that?

Lord Henley Portrait Lord Henley
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Of course the Government have thought about it. That is why we are bringing forward this measure and why we will be working with stakeholders such as the National Landlords Association and others to develop appropriate engagement for landlords to make them understand how the new rules will operate. As I said, protections have been built into this that mean that no one who has to move away from home will suffer. We think it is right that there should not be a perverse incentive that encourages people to move away from home and live on benefits at the expense of the taxpayer.