Occupational and Personal Pension Schemes (Amendment etc.) (EU Exit) Regulations 2018

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Tuesday 15th January 2019 Lords Chamber

[Baroness Buscombe]

I beg to move.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am grateful to the Minister for that extended explanation. It was quite clear, but perhaps it is easier for me to say that because I am a serving member of the Secondary Legislation Scrutiny Committee, which has been looking very carefully on the House’s behalf at all of these points. These regulations were cleared, and the SLSC does not clear regulations that are not properly looked at. All of the important questions were addressed. While I would encourage your Lordships to ask more questions about some regulations—because there are occasions when regulations are laid before Parliament that deserve a lot more scrutiny than they normally get—this is not one of them. This regulation is technical and I take the point that has been made about the lack of consultation. That is always something that the committee is very solicitous to understand and the explanation that we got, which was crystal clear to me, was that the objection that came in and was found by bilateral consultations with the industry was so technical that you would not expect a member of the public to be able to volunteer something of that kind.

There are two kinds of consultation, and we are always looking for consultations where there is any case for making them. In regard to this regulation, this was not a sensible judgment to make, so the department was right both to take the advice from industry and to make the change. It is standard that regulations, in the gestation between Parliament and the department, often get relaid. Often the Explanatory Memoranda are changed and that is all to the good.

Benefit Reforms

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Thursday 10th January 2019 Lords Chamber

[Baroness Buscombe]

I said I would begin by saying that we now spend more in this country than any other developed nation on family benefits. The aim of the two-child policy is an important one: to strike the appropriate balance between support for claimants with children, and fairness to taxpayers and families who support themselves solely through work. Parents who support themselves solely through work would not expect to see their wages increase simply because of the addition of a new child to their family. However, we are looking at the policy with regard to its extension, which is due to take place next month.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, the Resolution Foundation recently estimated that the four-year benefit freeze implemented in the Welfare Reform and Work Act 2016 will result in a net cumulative saving by the Exchequer in 2020 of £4 billion. Is it not now time to think about redeploying some of those savings to provide much-needed assistance to hard-pressed low-income families with children?

[Baroness Buscombe]

My Lords, let us look quickly at what we offered in the Budget. The Budget has made an enormous difference in the amount of money that we have put into the system following concerns. We announced a £4.5 billion cash boost to universal credit in the 2018 Budget; that was voted against by the party opposite. The reality is that we are doing a lot to reduce the number of children in workless households because we believe that that makes an enormous difference to the possibilities for children: we know that they are five times less likely to be in poverty where both parents work. Children need role models, and parents need dignity and a sense of self-worth to believe that they can achieve their potential and support their children. The principles of UC entirely support this truth.

Universal Credit

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Tuesday 8th January 2019 Lords Chamber

[Baroness Buscombe]

I will respond by saying first that perhaps we should ask the press what on earth is going on. The news that there is a delay is wrong. The Government previously committed to hold a debate on the affirmative regulations in relation to managed migration, and that will happen in due course on the Floor of the House. We will debate them as and when parliamentary time allows, but we will also make sure that we meet our commitment to severe disability premium recipients. To ensure a start date from July 2019 for those 10,000 people, we have long said that we will work with a test-and-learn process.

The noble Baroness talked about a pilot. We have always called it a test. It is perhaps just different terminology. In my response to a debate put to the House by the noble Lord, Lord Bassam of Brighton, on 1 November, I made it very clear that we were always going to have the test-and-learn phase starting at the end of July 2019, whereby we would manage-migrate only 10,000 people through the following 12 months. A debate will be held on the regulations to allow for the managed migration.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I welcome this change in so far as it separates the regulations in the first phase to do the testing and learning. It was argued for very forcefully by the scrutiny committee and others. I welcome the Government paying attention to that. However, a timing issue flows from it, because if we do not get the evaluation of the test-and-learn phase in time to be useful when the comprehensive spending review comes around later this year, we are going to be short of money. If we are to learn anything between now and July, time is very short, so the managed migration regulations need to be laid and they need to be evaluated in time to be useful to get resource put into universal credit in the longer term for the future.

[Baroness Buscombe]

I very much take on board what the noble Lord said. This has been very much part of our thinking in the department. It is very important that we make sure that we have an opportunity to debate the managed migration regulations prior to the end of July 2019 and the pilot phase—as it is now popularly referred to, rather than, as we have called it, the test and learn phase—whereby we will be co-designing the whole system with 70 stakeholders working with us to make sure that we get this right. So there is no question of us not being very cognisant of the fact that we want to ensure that we protect recipients of the severe disability premium so that they do not in any way have a gap in receipt of their severe disability premium. We want to make sure that that happens as soon as possible.

Social Security (Amendment) (EU Exit) Regulations 2018

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Tuesday 4th December 2018 Lords Chamber

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

My Lords, these regulations were laid before both Houses on 17 October 2018. They enable the Government to make minor and technical changes to domestic legislation to reflect the fact that the UK will no longer be an EU member state after exit day.

Let me provide some context and background to the regulations. British domestic legislation contains various references to EU law and to the UK as a member state of the European Union, which will no longer be the case once the UK withdraws from the EU. It also includes a provision that allows the Secretary of State to implement reciprocal agreements. The social security legislation applying in Northern Ireland broadly mirrors that in Great Britain; we are making regulations that make analogous amendments to the corresponding Northern Ireland legislation. The Department for Communities in Northern Ireland has agreed to the text of the regulations. This follows the recommended approach in the EU exit SIs policy handbook: to make separate NI statutory instruments that create a separate “transferable” body of NI legislation made at Westminster in the absence of a functioning Northern Ireland Assembly. This helps to keep a separate body of Northern Ireland law intact for when a functioning Executive and Assembly return.

These regulations are made using powers in the European Union (Withdrawal) Act 2018 to fix legal inoperability and other deficiencies that will arise on exit in retained EU law—so that the converted law continues to operate effectively post exit—and make consequential provision. The approach to these amendments is completely in line with both the policy and legal intent of the withdrawal Act. The use of secondary legislation to amend primary legislation—the so-called Henry VIII powers—was debated at length during the passage of the withdrawal Act.

The list of specific legislation that the regulations amend is lengthy. Broadly speaking, we are using the regulations to make two types of changes, the first being where the UK is referred to as a member state of the EU. In these instances, an amendment will be made to reflect the UK’s new status as a state independent of the EU. Secondly, we are extending the scope of Section 179 of the Social Security Administration Act 1992 to allow us to implement a social security agreement with a supranational organisation such as the EU. Of course, the ability to implement an international agreement with such organisations was not necessary as an EU member state. It is only logical that we make this consequential change to our legislation to reflect the UK’s position as independent of the EU and allow us to fully implement any agreement in domestic law.

The Northern Ireland regulations mirror the same amendments to Northern Ireland legislation. No formal consultation was carried out by the Department for Work and Pensions on the regulations as these changes make only minor and technical changes to existing DWP domestic legislation. Similarly, we expect the regulations to have no impact on business, charities, voluntary bodies or the public sector.

Noble Lords will know that the withdrawal Act is a crucial piece of legislation that will ensure, whatever the outcome of negotiations, that we have a functioning statute book on exit day, providing certainty to people and businesses across the UK. The Act enables this by providing a power for Ministers in the UK Government and devolved Administrations to deal with deficiencies in the law arising as a result of our exit from the EU. We are continuing to work closely with the devolved Administrations to ensure that all parties are involved in the process where their interests are concerned. I beg to move.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I thank the Minister for that helpful introduction. I understand that these are minor and technical amendments. I have looked at them very carefully as a member of the statutory instruments scrutiny committee of your Lordships’ House. I am pretty familiar with their scope.

Could the Minister clear up two questions from my mind? First, is there any prejudice, potential or otherwise, to transfer payments and entitlements made from United Kingdom sources and systems to United Kingdom citizens and families living in the European Union? I think the answer is no, but an assurance would help, particularly relating to pension payments.

Secondly, I know that the Minister cannot do anything about this but I am getting more and more nervous about the Northern Ireland arrangements being handled indirectly by the department with no meaningful legislature in Northern Ireland to deal with some of their consequences, particularly since it has a free-standing social security system of its own. Colleagues know that it is a mirrored system, so changes are almost automatic. We have been living with that for some time. But in situations such as this, where changes are being made at one or two stages removed from the good people of Northern Ireland who are entitled to these benefits, there are particular concerns that those entitlements should be especially carefully considered in these amendment regulations. If the Minister can help me with these two items I would be very happy to see the regulations pass.

Child Support (Miscellaneous Amendments) Regulations 2018

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Tuesday 30th October 2018 Grand Committee

[Baroness Buscombe]

I thank noble Lords for their contributions to this debate and for the constructive approach that they have taken towards today’s proceedings. I will now respond to some of the key issues raised. I will attempt to do this in order but I doubt whether I will succeed. I will do my best and if I fail to answer any questions, please be assured that we will write to the Committee following the debate.

I wish to put into context the justification for what we are doing. This has not been a quick or easy decision; it has involved exhausting other approaches to deal with the debt. We have also had numerous long debates and discussions within the department in trying to decide the best thing to do. We are talking about huge sums of money here. I say immediately that when considering resources and budgets, the truth is that we have to be proportionate—what is reasonable in the circumstances; what is more pressing; and what is more important. In our department we are already spending 25% of the entire government budget across Whitehall, so we have to think about resources and the degree to which we want to protect and support children going forward versus the difficulty of writing off such a considerable debt. We have to balance that against the fact that if we do not write it off and keep it on our books it would cost us approximately £30 million a year, which would not be money well spent. It has been a difficult balancing act.

Moving all the debt to the CMS IT systems would incur a one-off cost of at least £250 million, without the resources to action it. We have taken various actions to collect this debt, including using debt collection agencies to chase what is owed. More than 63,000 cases were passed to debt collection agencies for them to arrange collection, but after three years we took back 55,000 cases because the DCAs had not been able to make any debt collection arrangements.

This is our approach following exhaustive discussions, debates and thinking through what is fair to the taxpayer. As the noble Baroness, Lady Sherlock, said, the most important thing is to put the children at the forefront of our minds while seeking ways to send out the critical message that no one should cease to be responsible for their children. Enforcement matters.

I say to the noble Lord, Lord Kirkwood, that I absolutely respect his considerable and lengthy involvement on this really important subject. Of course, there have all along been compelling arguments on both sides. It is interesting what he said about the economic environment being different. Maybe there is also a sense that people are becoming more artful in how they seek to avoid their responsibilities, which is depressing. I am not sure what that says but the truth is that we must have the well-being of children at the forefront of our minds. In a sense, yes, these regulations are overdue, so it is important that we look forward. It is also important to say here that they form the first of two packages. We plan to lay a further set of regulations in 2019 to secure the remaining powers to deliver the 2018 compliance and arrears strategy. These will allow us to take a consistent approach to deduction from benefits.

I should explain that the regulations are being laid in two packages because the Social Security Advisory Committee needs to consider the regulations that make changes to deductions from benefits. But we would not wish to delay the rest of the regulations so that we may lay them all together. Those regulations are not yet drafted, so there is still time—I stress this—to take into account any thoughts on these provisions from noble Lords and honourable friends in another place. We welcome any input on that.

[Lord Kirkwood of Kirkhope]

That is an opportunity perhaps, under an SSAC consideration of the second package of regulations, for affected parents with care and non-resident parents to make submissions to the SSAC scheme later this year. If I understood what the Minister was saying, the Social Security Advisory Committee will undertake a normal consultation and will be looking for people to make submissions for consideration as the committee makes its recommendations. Am I right in thinking that?

[Baroness Buscombe]

I ask the noble Lord to bear with me, because I do not want to get this wrong. The answer is: only if the committee decides to report the regulations.

I will focus on some of the questions put to me, which are welcome. I start with the question from the noble Lord, Lord Kirkwood, on case closure timescales and the fact that there has been slippage. We are still on course to have ended all existing liabilities on CSA cases by the end of this year, 2018. The noble Lord referenced the NAO report. In that context, it is really important to say that we are continuing to consider the recommendations in the report. The department, in a broader context, has really taken on board that we need to be much better at listening. We thought that we were doing enough perhaps, but there is always more that we can do—within time and resource constraints, of course—but it is very important that we listen.

The noble Baroness, Lady Sherlock, asked how the representations will be sought. Will each parent to whom money is owed be written to individually? Depending on which category a case falls into, a client will receive a different letter or series of letters explaining what is happening and why, and, where appropriate, giving them the opportunity to ask us to try to collect their debt. These letters will be sensitively worded and will acknowledge that this may not be the outcome a client is hoping for. I was asked whether, if there has been a payment in the last three months, we will continue to collect. The answer is yes. If the case is in payment, we will continue to collect any arrears still outstanding for as long as the case remains in payment.

I was also asked whether our power to confiscate passports will be used only in a few cases. We will use this power in a targeted, proportionate way. I noted what the noble Baroness, Lady Sherlock, said about our having tried driving licences and asking whether that worked. The keyword here is “deterrent”. The vast majority of parents, we must stress, willingly pay towards their liabilities; we will seek to apply sanctions only in cases where parents wilfully refuse to pay. This happens only in limited circumstances. As with other enforcement powers, such as removing driving licences, the threat of exercising it can be very persuasive. The threat of denying people a passport is certainly something that stood out, when I first read the draft regulations, as something quite exceptional. I hope noble Lords will agree that it should send out a strong message to those who, frankly, are consistently refusing to take responsibility for their children.

The noble Baroness, Lady Sherlock, and the noble Lord, Lord Kirkwood, enquired about compliance rates for cases of collect and pay, asking what we are doing to improve the figure of 57%. The latest data, published in September, for collect and pay compliance shows it is going up; it is now 62%. Of the £1.85 billion due to be paid since the Child Maintenance Service began, £1.6 billion has been arranged through direct pay or collected through collect and pay while £290 million is currently unpaid—around 12% of the total. This percentage share continues to decline from 12.4% last year and 13.1% two years ago.

The CMS is not the only option available for separated parents to arrange child maintenance; it is there for people who cannot work together to make their own arrangements. The collect and pay service is in place for those parents unable to work together, who are less likely to be compliant. This means that the caseload is smaller but naturally more challenging than the CSA caseload.

The noble Baroness, Lady Sherlock, asked how many cases will be affected by the notional income power each year. We have not made projections on this point, but we anticipate the number to be small as, historically, only a small number of parents attempt to avoid their liabilities in this way. On the question of how many passports we expect to be disqualified every year, the figure referred to indicates that we project 20 applications for all types of sanctions will be made in the year. These include commitment to prison and disqualification from driving. Sanctions must only ever be a last resort; this is not just about how many we pursue but about targeting the right people. The threat often results in payments restarting.

The noble Lord, Lord Kirkwood, asked why the passport power is not being introduced for people in Northern Ireland. I can assure the noble Lord that this is not a particular sop to those resident in Northern Ireland who do not respect their responsibilities for their children. This is not being introduced in Northern Ireland simply because Northern Ireland citizens are entitled to an Irish passport; they have options for dual nationality, which would reduce the effectiveness of the power—they would simply find an easy way around it.

The noble Baroness, Lady Sherlock, asked whether giving periods of representation to account holders would mean that NRPs can move money to other accounts. This change is intended to close down a known loophole. If we intend to deduct a lump sum from a joint or business account, the funds will be frozen during the representation period. If parents move their funds to another type of account—for example, a sole account—we will target that account. If the funds are moved to an account we are unable deduct from, we will use our other strong enforcement measures to collect the debt.

Universal Credit

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Tuesday 16th October 2018 Lords Chamber

[Baroness Buscombe]

My Lords, I am grateful for the noble Lord’s questions. Let me say straightaway that we have not been recalibrating anything. He will be aware that there have been a number of PQs in the past few months. There was a Written Ministerial Statement in June this year, wherein we set out very clearly that from the beginning of next year, we want to move to managed migration in a very slow and careful way. We want to be sure that we get it right, that the right systems are in place. As we also made clear to the Social Security Advisory Committee, we will not begin to introduce managed migration, which is those who are on existing benefits—the legacy system, as we call it—rather than those who are new to the benefit system who are going on to universal credit, until July next year. That has long been the case.

We are now waiting for the end of the rollout of the system into every jobcentre by the end of December this year. We are also now in receipt of some important recommendations made by the Social Security Advisory Committee as a result of our proposals to it with regard to managed migration regulations, which we hope to lay before the House in the near future. We are now considering those recommendations very seriously and I will report to this House in the very near future.

The most important answer that I must give straightaway is that a key point for the managed migration regulations, which we will bring forward, is to protect the most vulnerable. We are not halting any rollout. Our concern is to protect the most vulnerable— those who cannot work, those with severe disabilities—through the severe disability premium and careful full transitional protection through migration on to universal credit.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am grateful to the Minister for repeating the Statement. I concur with her tribute to Patricia Hollis. She was an integral part in the creation of this legislation and delivered a complete masterclass in parliamentary scrutiny in the 2012 committee which I was privileged to share with her. She will be missed.

Can I confirm that there will be no delay in the publication of the managed migration regulations and that the Social Security Advisory Committee report will be published in due time? There should be no delay in either of those two things. Some of us are a little surprised that the recent controversy about the cuts has suddenly blown up, because it has been painfully obvious since 2012 that a moment would come when these things would bite and things would get really tough in terms of financial hardship for low income families.

I will make two points. First, I am now really worried about the requirement for managed migration people to have their benefits turned off and then to make their own application. We need to seriously look at these regulations to make sure that there is automaticity of transfer to universal credit, and then we can sort out the difficulties afterwards. Otherwise, hardship will be exacerbated.

The other thing I will say strongly to the Minister is that Church Action on Poverty has produced a very interesting report indicating that the safety net that was available in 2012, according to its research, has been slashed. Community care grants and crisis loans totalled more than £200 million a year, and we are now at the stage when the Government have just announced £37 million as the total amount of money for universal support across the country. Frankly that is not enough to prevent hardship occurring in ways that will hurt families in the future. The House will need to turn its attention to these things during consideration of the managed migration regulations.

[Baroness Buscombe]

I thank the noble Lord and say straightaway that there will be no delay to the publication. Indeed, because we have to see these regulations on the statute book by the end of this year, it is very important to ensure that they are laid shortly and that we can debate them in your Lordships’ House. We very much hope that, unlike the package of £1.5 billion in extra support for universal credit that was introduced in another place following the Budget last autumn, the managed migration regulations will not be rejected, as the package was last autumn.

It is important to remember that we introduced a package that made advance payments quicker and easier for people to access. They could have a 100% advance up front for their first month’s claim, with no interest to repay for 12 months. We scrapped the seven-day waiting period and introduced a two-week run-on for people receiving housing benefit, with a cash payment that was not repayable. We are helping more than 500,000 people by protecting severe disability premiums.

That package was rejected in another place. Let us hope that this managed migration package will be supported in another place and in your Lordships’ House, because we want to protect the severely disabled, those with health conditions and those who genuinely need our support. We, too, are surprised by the recent controversy, because we are trying to do the right thing to support the right people. Benefits will not be turned off. We will be very careful to ensure that there is a transfer. That is why we will introduce the system slowly and carefully. We are using six months of next year to try to get this right.

Employment and Support Allowance

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Thursday 19th July 2018 Lords Chamber

[Baroness Buscombe]

I thank the noble Baroness for her response. I turn straightaway to her point about restricting—as it were—the payments. Initially the department believed that we were legally restricted to calculating repayments from 2014 due to a statutory rule—Section 27 of the Social Security Act 1998—which governs the position with regard to payment of arrears when a court of tribunal finds that the department has made an error of law. Following a thorough investigation, however, we realised that this interpretation was incorrect. We have made this very clear in previous Statements to the House and we have made it clear that we have been working extremely hard to do everything we can to correct a mistake that should never have been made in the first place. We believed, however, that the law prevented our paying benefit back to the date of conversion. We now understand that we can do that. We have listened to a range of opinions, including those of the CPAG, undertaken a thorough investigation of the legal position and realised that the law that dictated that we could not do this in the first place was wrong.

We want to be sure, therefore, that we pay back everything that is owed. I would add that the staff have been working extremely hard to put this right and to help everybody who may have lost out from these payments since the whole process of migrating people from incapacity benefit to ESA began in 2008.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, is the Minister satisfied that the reduction in the departmental expenditure limit that the DWP has experienced over the past five to 10 years has not contributed to this error? She has just said that the DWP is now putting 400 staff on the case. I have a serious concern about the extent to which staff shortages are occasioning these massive administrative blunders that cause not just inconvenience but serious financial difficulty to large numbers of the population. Can she confirm that passported benefits will also be paid by way of compensation, because some of the people who have been left out in these underpayments have also lost out on free dentistry, NHS treatment, travel and free school meals, to the extent that it would accumulate to large sums of money each year, in addition to not getting the benefits to which they are entitled?

[Baroness Buscombe]

My Lords, let me make it clear that we do not believe that this is attributable to staff reductions at the Department for Work and Pensions. We still have over 70,000 employees. We have also been working hard to do more since 2010. Since this Government came to power, we have spent £5.4 billion a year more than we were doing in 2010 to support people with disabilities. We continue to do so while upping our game and, yes, demanding more from our employees, who are working extremely hard. That is to ensure that we have the proper resource and the staff to make sure that we can review all these cases at pace. We have already started making payments—over £40 million in arrears so far—so we are doing everything we can to ensure that people get the support they are entitled to and at pace.

Based on my meetings with the Minister of State for Disability and our Permanent Secretary, who made a robust case for delivery by our department in front of the Public Accounts Committee last week, I can say that the department is working hard. Yes, we are doing more, so noble Lords could say we are a little stretched, but we are proud of what we are doing and delivering. We want to get this right. On passporting benefits over to UC, we are making sure that people will not lose out in what they are entitled to.

Universal Credit

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Thursday 5th July 2018 Lords Chamber

[Baroness Buscombe]

My Lords, first, I make it absolutely clear to your Lordships’ House that right from the start, when the report was published, there has been no issue with the factual information that the National Audit Office has used. In collating that information, there has been and continues to be a strong relationship between the National Audit Office, the Department for Work and Pensions and the officials. That is important. It is the interpretation of these facts and the conclusions drawn as a result that the department questions, as I said in the Statement. A lot of it is about context rather than saying that there is any issue with the facts.

We are absolutely clear that, as the report says, the National Audit Office completed its independent review of the universal credit programme after analysing evidence that we collected between August 2017 and April 2018. The issue we have is that we are still not able to judge, and nor is anyone, the full impact of significant policy changes that we have announced and implemented since the Budget last autumn. They include extending advances, which was implemented in January 2018, removing waiting days in February 2018 and the housing benefit run-on. The report makes it clear that it is referencing evidence up to April 2018. On the housing benefit run-on, it was impossible for us to measure the extra two weeks’ additional cash to cover people transferring from the old legacy benefit on to universal credit, which they would not have to repay. Each of these measures will take time to impact on the experience of claimants and stakeholders. Although some of these measures were mentioned in the report, their impact would not have been felt during the evidence-gathering period.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am absolutely in agreement with the noble Baroness, Lady Sherlock. This is a quite extraordinary state of affairs. I have been following social security since 1986. I have never seen such an explicit letter of correction from such a distinguished public servant as the Comptroller and Auditor-General, Sir Amyas Morse. Two things follow from it. First, I hope the noble Baroness can give the House an assurance that the Secretary of State will take whatever steps are necessary to repair the relationship between the political leadership of the DWP and the Comptroller and Auditor-General’s office. That is essential for the good conduct of the universal credit programme in future, and that work needs to be done.

What I find extraordinary, because I know how much trouble goes into negotiating reports—and this one was signed off on 8 June—is that if the Secretary of State is founding her defence on the fact that she does not think that the NAO knows about the recent changes to waiting days, advance payments and HP run-ons, she is demeaning the value of the historical analysis that is so valuable to the prosecution of public policy. That must be put right too. This is serious territory that needs to be addressed urgently.

[Baroness Buscombe]

My Lords, it is important for me to make clear that my right honourable friend the Secretary of State for Work and Pensions has already apologised, and that apology has been accepted by the House of Commons and the Speaker of the House of Commons. Following Oral Questions on Monday, my right honourable friend was afraid that she had mistakenly used a term that was not an accurate term reflected in the report. My right honourable friend therefore went to see the Speaker. This was entirely independent of the letter produced on Wednesday, so there is no question that my right honourable friend has tried to avoid, evade or do anything untoward. My right honourable friend was very clear that she was mistaken, she was wrong and she was very keen to put that right at the earliest opportunity. Hence, the Speaker accepted that apology yesterday.

The meeting on Monday will of course be extremely important. We accept the facts in the report. We do not deny the facts; we support the facts. In a sense, we are saying, “Please, please, National Audit Office, we want to demonstrate that the impact of the changes undertaken, particularly those made last autumn, is yet to be proven”. She will want to make that absolutely clear.

There is no question but that we will look with care at what has been said in the report. I am sure that we will implement those recommendations that we feel able to from the report.

Universal Credit

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Monday 23rd April 2018 Lords Chamber

[Baroness Buscombe]

I thank the noble Baroness for her question; I know that she has great interest in this area. As I have said before, we are continually working to improve the work capability assessment. As a result of our Budget announcements last autumn, it is now possible for people to have a 100% advance on their universal credit while they are waiting for that assessment. I emphasise that those with severe disability do not now have to go through further work capability assessments. I assure the noble Baroness that we are constantly looking at this, working to improve the training of our work coaches and all the professionals involved in work capability assessments, to make sure that we minimise the number of people for whom we fall short in terms of support and protection.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, coming back to the rollout of universal credit, surely the Minister’s department’s priority in the short term should be to improve the quality of services available to vulnerable applicants for universal credit at a local level. Will she commit to working with her local authority colleagues to establish a more widespread network of multi-agency hubs, which have proved so effective in getting people from disadvantaged families through the transition process? Does she agree that multi-agency hubs are a much better form of support than food banks?

[Baroness Buscombe]

My Lords, it is right to say that our focus is not necessarily on multi-agency hubs but on proper signposting by our work coaches to make sure that, working with local authorities, we protect those vulnerable groups. A particular example is prison leavers. We have made sure that they can now have up to 100% advances on their universal credit the moment they leave prison. Vulnerable groups are at the forefront of our minds.

Universal Credit: Free School Meals

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Wednesday 14th March 2018 Lords Chamber

[Lord Kirkwood of Kirkhope]

To ask Her Majesty’s Government what assessment they have made of the effect on Universal Credit work incentives of the recently announced proposals for passporting family entitlement to free school meals.

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

My Lords, the Department for Work and Pensions has been working closely with the Department for Education to support the delivery of their eligibility criteria for free school meals for universal credit claimants in England. When the Social Security Advisory Committee, which is independent of government, looked at this issue in 2012, it found that there was no rigorous research evidence to show that the provision of passported benefits acted as a work disincentive.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am grateful for that Answer. I would like to remind the Minister of the policy promise that was made in a White Paper back in 2010 when universal credit was first introduced, and I want to put to her a question that relates to a statement made in the foreword by the then Secretary of State:

“Universal Credit will mean that people will be consistently and transparently better off for each hour they work and every pound they earn”.


Does the Minister accept that, under the proposals which are being brought forward, that proposition will no longer always be true?

[Baroness Buscombe]

The simple answer to the noble Lord is no: I do not accept that. I think it is important to dispel straightaway any potential misunderstanding of what we are doing to safeguard the free school meals system for the future. The Government’s purpose here is to ensure that the programme continues to reach the most disadvantaged households in a way that is consistent, simple and fair. As the rollout of universal credit continues, it is no longer fair to retain the temporary measure, which we always said was temporary, that allows all households in receipt of universal credit to access free school meals. That said, the new rules will ensure that the provision of meals continues to be targeted where it is needed most, with 50,000 more children expected to benefit by 2022 as compared with the previous benefits system.

Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2018

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Tuesday 27th February 2018 Grand Committee

[Baroness Buscombe]

I thank the noble Lords, Lord Kirkwood and Lord McKenzie, for their contributions to this debate and for their incisive questions. I also thank the noble Lord, Lord Kirkwood, for saying that the whole concept of automatic enrolment and the process through to its delivery and implementation has been successful. As the noble Lord, Lord McKenzie, said, this came about through a considerable amount of consensus. We hope that the changes—albeit fairly minor—that we have made to NEST will work well. Certainly for us, the whole process has been a huge success, and we hope that it will also work well into the future.

One reason why we have brought forward this order on NEST is that it is important to keep tidying up the legislation to ensure that certain requirements make sense—for example, in relation to research, as the noble Lord, Lord Kirkwood, said. He asked a question which I asked of officials while I was learning about this issue in recent weeks. Why were there only five responses to a small consultation? The truth is that of the five responses, four said, “Thank you so much for asking us but we really have no comment”. The fifth was a little bit negative, and that was it.

[Lord Kirkwood of Kirkhope]

Not a bad score.

[Baroness Buscombe]

I am glad that the noble Lord has said so. I take that as a very good sign that we are doing the right thing. Let us hope that it continues. We will ensure that we keep tidying up where necessary to keep this whole process—the implementation, the work of NEST and the work of developing auto-enrolment—as simple as possible while retaining an important balance between what is fair for the employer and what makes sense for us in communicating changes and developments in the whole programme.

The noble Lord, Lord McKenzie, asked some questions about automatic enrolment and the review proposal, including why we are not doing anything until the 2020s. Our review proposal is a comprehensive and balanced package, recognising that costs will be shared between individuals, families and businesses, who need time to plan for change. Over the coming year, we will work to build a renewed consensus to deliver the detailed design and implementation of our proposals. We need to learn from the implementation of the contribution increases, starting from this April. The support of employers and their advisers has been key to the success of automatic enrolment. We recognise the importance of giving them and savers sufficient time to plan for further changes. Our ambition is to implement changes to the automatic enrolment framework in the mid-2020s, subject to discussions with stakeholders around the detail of the design, learning from the contributions increases in 2018 and 2019, and finding ways to make the changes affordable, followed by formal consultation with a view to introducing legislation in due course.

The noble Lord, Lord McKenzie, asked about the timing of the implementation. It is important to put on the record that through the 2017 review we have set a clear direction to build a more robust and inclusive savings culture, specifically supporting younger generations with the opportunity to save for a more secure retirement.

The noble Lord, Lord Kirkwood, raised the issue of women. Increased gender parity is something that we are very pleased about, and it is making such a difference. Automatic enrolment was designed specifically to help groups who historically have been less likely to save, such as women and lower earners. The decision to freeze the trigger again for 2018-19 is estimated to bring an additional 100,000 individuals into workplace pension saving, of whom 72% are expected to be women. The gender gap in private sector pension participation has now been closed. In 2012, 65% of women employed full-time in the private sector did not have a workplace pension. As of 2016 this had fallen to 31%. I hope noble Lords will agree that that is real progress.

The noble Lord, Lord McKenzie, asked about net pay arrangements versus relief at source. Pensions taxation policy is a matter for Her Majesty’s Treasury—that sounds as if I am proposing a get-out clause. We continue to work with the Treasury and officials on this matter but a straightforward or proportionate fix has not yet been identified. However, alongside further work on the automatic enrolment changes outlined in the recent automatic enrolment review, the Government will examine the processes for payment of pensions tax relief for individuals to explore the current difference in treatment and ensure that we can make the most of any new opportunities that emerge, balancing simplicity, fairness and practicality, while engaging with stakeholders to seek their views.

I was asked why NEST needs to offer contractual enrolment. Contractual enrolment was raised in a response to the DWP call for evidence on the policy framework underpinning NEST, NEST: Evolving for the Future. Contractual enrolment is where workers are enrolled with their consent into a pension scheme under a contract and by reference to the rules of the scheme. By contrast, automatic enrolment is where workers are enrolled automatically into a qualifying scheme in accordance with the Pensions Act 2008. Contractual enrolment often covers groups of workers who do not qualify for automatic enrolment, such as those earning less than £10,000 per year or those aged under 22.

The majority of respondents who mentioned it in the call for evidence thought that any qualifying scheme should be open to all of a participating employer’s workers, including those who are contractually enrolled into it, as is normal in the industry. The Government expect that this change could ease administrative burdens on some employers who are already using NEST, and could result in small increases in the number of workers benefiting from workplace saving and an employer contribution. This change is minor and technical in nature and supports the delivery of the service of general economic interest defined in the approval granted to NEST.

The noble Lord also asked about empty accounts. Very briefly, it is just an issue of churn. Some people fall out of the system; more come in. We wanted to make sure that we tidied up the process. In fact, we are reducing the number of schemes, which will make it easier to administer. It is not anything that we feel we should be particularly concerned about, it is just a general issue of churn.

I hope that I have been able to answer all noble Lords’ questions. If I have failed in any way, I would be very happy to write. The long downward trend in pension saving has reversed. The number of workers saving into a workplace pension scheme has increased to almost 9.3 million. In practice, the changes will be delivered largely by the payroll and advisory communities, which have worked hard to support the introduction of automatic enrolment, providing a range of products to help employers comply with their automatic enrolment duties. NEST is playing its vital part in this success story and we need it to continue to do so.

Social Security Benefits Up-rating Order 2018

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Tuesday 27th February 2018 Grand Committee

[Baroness Buscombe]

This has been a really lively and interesting debate. It is right that I emphasise that these orders are not about the benefit freeze and a fair number of other issues raised by noble Lords. However, having said that, I shall attempt to do my best to reply to noble Lords.

I have some news, also, for the noble Lord, Lord Kirkwood. He was here last year. Indeed, there are some similarities in his speech. I have to say that some aspects of it I have enormous sympathy with, so I shall come to that, and I welcome his contribution to this debate.

I shall cut straight to the issues of benefit freeze. It is not a cut—it is a freeze—and it is part of a package of welfare reforms designed to incentivise work, which we know is the best route out of poverty. I want to talk about the things that we have done that are really positive, because I fear that if one listened just to noble Lords opposite one would have a sense that somehow everything is going completely wrong—but that simply is not the case. However—and I shall come to this again in a few minutes—the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Sherlock, touched on the issue of affordability, which is a really tough and prescient one. Indeed, it has exercised my mind and thoughts since I arrived at the Department for Work and Pensions, given the huge sums of money that we are spending on welfare. We are spending more on pensions alone than we are spending on education and defence put together—£100 billion a year out of a total government budget of £750 billion. That is a huge proportion. Yes, there are some really difficult choices; it is all about choices—so are we making the right ones? We believe that we are, but we will have disagreements, of course. Indeed, there will be disagreements not only across the House but in another place as well, which is entirely laudable. But as the noble Lord, Lord Kirkwood, said, all of us need to keep thinking in terms of the future sustainability of the welfare system which really looks after those who are most in need.

The benefit freeze is part of a package of welfare reforms that are designed to incentivise work, which is the best route out of poverty. We have brought in 30 hours a week of free childcare for working families in England, cut income tax for 30 million people and provided the lowest earners with their fastest pay rise in 20 years through the national living wage. So yes, that is one choice that that we have made, but we have to support those who are earning and those on low wages to the best of our ability. We see that welfare reform is working. The employment rate is at a near record high and there are fewer households where no one is in work than at any time since comparable records began. However, I will say, 14.5% of all households in the UK are still workless, which is far too many.

The noble Baroness, Lady Lister, referenced the Resolution Foundation saying that inequality is projected to rise to record levels in the coming years. We simply do not believe that that is the case. There are choices. We have to make difficult choices and believe that we should focus our spending on those who need it most.

On the question raised by the noble Baroness, Lady Lister, of the burden falling on the poorest, Her Majesty’s Treasury published a cumulative distributional analysis alongside the Budget in November 2017, showing the impacts on household income of tax, welfare and public expenditure changes implemented or planned to be implemented since the 2010 general election. This analysis shows that the state is highly redistributive. On average, the 10% of households with the lowest incomes receive more than four times as much support in spending as they contribute in tax, while the 10% of households with the highest incomes contribute more than five times as much in tax as they receive in spending.

The noble Baroness, Lady Primarolo, asked whether we will lift the freeze on working tax credits, child tax credits and child benefit. I respond by simply saying that the Treasury is responsible for these benefits and it announced the 2018-19 rates at the same time as the Budget in November 2017. The noble Baroness talked a lot about children and families. We are committed to supporting families and tackling the root causes of child poverty and disadvantage. If you are a child growing up in a household where no one is in work you are almost twice as likely to fail at all stages of your education than if you lived in a working family. Children in households where no one is in employment are five times more likely to be in poverty than those in households where all the adults work. Nearly three-quarters of children from families where no one has been in employment moved out of poverty when their parents entered full-time work. That is why we are supporting parents to find and stay in work.

We have made the childcare element of universal credit more generous. Parents on universal credit can now claim back up to 85% of eligible childcare costs, compared with 70% in working tax credit, a change that is benefiting 500,000 working families. This Government are investing record amounts in childcare. By 2019-20 we will be spending more than £6 billion per year to support working families in this way. For families who face additional, complex barriers to finding work, we set out our framework for action when we published our strategy, Improving Lives: Helping Workless Families in April. I can tell noble Lords that we are doing a huge amount of work on this in the department. As I said earlier, the number of households where no one is working is actually at a record low: it is 954,000 households lower than it was in 2010, which means 608,000 fewer children in such households than seven years ago. We believe we are on the right trajectory. On a before-housing-costs basis, there are now 200,000 fewer children living in absolute poverty than in 2010.

I want to confirm for the noble Baroness, Lady Primarolo, that inflation is not at 4%; it is actually at 3%. Indeed, that is something that I double-checked with our researchers at the department. The noble Baroness, Lady Lister, asked for figures on the poverty rate since 2010 and the impact of the benefit freeze. We do not actually have those figures but the benefit freeze is part of a package of welfare reforms designed to incentivise work and support working families, including, as I have said, increasing the national living wage, reducing income tax and, of course, the rollout of UC. I will write to the noble Baroness with those figures.

[Lord Kirkwood of Kirkhope]

Is there any programme to evaluate the work-incentive point? Of course it is a perfectly obvious point and it may be working, but the only place where the data can be found is in the department. Is the department doing any work that will evaluate whether the powerful work incentive point that she has just made is actually making a positive difference?

[Baroness Buscombe]

Yes. Work is being done and I am very conscious of the fact that we should be talking more about that. We have been saying that work pays— I prefer to say that work transforms lives. The noble Lord is right. We need to do more to articulate our belief and the reasons why we are confident that we are right and that work transforms lives. It relates hugely to outcomes. It is not a simple, overnight back of the envelope matter, but we are working on it.

The noble Baroness, Lady Primarolo, asked about targets for child poverty. The income-related targets set out in the Child Poverty Act 2010 have been replaced by two new statutory measures of parental worklessness and children’s educational attainment. This will drive continued action on the areas that can make the biggest difference to children’s outcomes now and in the future. The noble Baroness also asked whether the Government would lift the freeze on working tax credits. The answer is that the Treasury is responsible for working tax credits.

The noble Lord, Lord Kirkwood, made his point with feeling, and I can only say that we are working hard and thinking about our policies going forward. The huge question is affordability. We are spending £95 billion—that is, ninety-five thousand million pounds—a year on benefits for people of working age. For how long is that sustainable? Our department accounts for 25% of the whole of the Government’s budget, which in terms of expenditure is now the size of Chile or similar, I understand. The noble Baroness, Lady Lister, referred to some overseas organisation, saying that we are behind the curve in terms of our expenditure. I simply do not recognise that, in terms of how much other countries are spending or of the choices that they have made. For example, are they paying the similar amount of 0.7% of their national income, which is what we are paying, on overseas aid?

Family Relationships (Impact Assessment and Targets) Bill [HL]

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

2nd reading (Hansard): House of Lords
Friday 23rd February 2018 Lords Chamber

[Lord Kirkwood of Kirkhope]

That is a helpful intervention, because I absolutely agree with that. Family impact assessments are an important tool in getting to that point. That was the point I was going to make.

We need to look not only to local authorities—as the noble Lord, Lord Blencathra, and the noble Baroness, Lady Massey, mentioned—but to try to capture some soft support systems in neighbourhoods and communities in future. That is new for me; I look to the noble Baroness, Lady Stroud, when I say this, but I have always kept a bit of distance from the agenda that she has been very positively promoting in her own way, because I always had a suspicion that Conservative Governments and Conservative Chancellors in the past have sometimes used it as a way of saying that we do not really need to keep up the benefit expenditure. I am in favour of individual entitlements to benefits, and when you look at the cuts, freezes and caps, that has not been made any easier. But even I—if I can put it that way—am now thinking that we really need to look at some of these symptoms that the Centre for Social Justice and others have been looking at, as additional methods of support. We can make it more cost-effective if we have more effective family policy, and I think that this Bill does that, particularly in setting up objectives and targets, looking at reporting and being transparent and honest about that reporting.

I have a couple of points to contribute to the debate. The DWP has an enormous amount of data. The quest of the noble Lord, Lord Farmer, could be assisted considerably if some of the really clever people in the research department there thought about how to cut across and tabulate some of the real-time information. There is a minefield—no, not a minefield, a mine. What am I trying to say?

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

A mine of information?

[Lord Kirkwood of Kirkhope]

Ministers have their uses. There is a mine of information in the DWP, and Ministers should go back and ask whether some assistance can be given to this kind of policy programme. The data needs to be made available to local authorities, although you obviously have to be careful about data protection. There are rules about that, but you should be testing them to the limit of what is useful if that makes a difference to identifying some of the anticipated problem families. Big data is now so clever that you could begin to get, not algorithms but almost algorithms, which would anticipate where the problems were. You could make available the priorities in terms of the spatial dimension in deprived areas; and professionals in the department, and in local authorities, could start to be provided with data on circumstances that would help them to anticipate where future problems would arise. In support of family impact assessments, the department should do a little bit of work to see whether any help could be provided in that direction.

I spent a very interesting morning at the universal credit centre in Dover, where I observed two applications. I am saying this against myself—I was really looking for problems that I could come back and attack the DWP about, but they both went swimmingly well. It was clear that the job coaches were signposting people who had individual problems. That is what they should be doing, but they could be doing more of it. The noble Lord, Lord Farmer, rightly said that policy is pointed at individuals. Universal credit is actually pointed at households. The claimant commitment could go as far as saying to people coming on to universal credit for the first time that, if anyone who has signed up to it sees problems arising in their household that might lead to family breakdown, they could phone. The “Ghostbusters” number should be that of the universal credit coach who could hold the ring and say, “Let’s see what we can do”. I know that they have only got a certain amount of time available and they are not looking for things to do. However, in the course of these interactions with people coming on to universal credit, we might start to look at family problems a bit more broadly. That is a good place to start the discussion.

Finally, I say to the noble Lord, Lord Farmer, that if this does not work, we should think about getting more robust about enforcing it. If the DWP cannot do it, it should go to the Cabinet Office or to somebody who has control of all the Secretaries of State, now that I hear they are all in play—I hope that includes the Treasury. In the course of discussing the Bill, I hope that this House will send a clear signal to central government that we are not going to allow the family test failure to happen again on this Bill. If they do not get it right, we will come back looking for more and we will not be long in doing it. I support the Bill and encourage the noble Lord, Lord Farmer, whom I thank for the opportunity for this debate. I will stand shoulder to shoulder with him in his future work in this important area.

Personal Independence Payments

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Tuesday 23rd January 2018 Lords Chamber

[Baroness Buscombe]

My Lords, I shall respond robustly to what the noble Baroness opposite has just said by making it absolutely clear that this Government have been far more generous in supporting people with mental health conditions than the previous Labour Government, who put off any changes to disability support, particularly in relation to mental health conditions, until after the general election of 2010, which by then was too late.

This is not a policy change. We are going back to the heart of the policy intent and relates to those in psychological distress. We have accepted the Stevenson/Farmer recommendations, which shows that we are committed to supporting claimants with disabilities. We are also working with a range of disability charities to implement the judgment in the best way. We will look at appeals, to which the noble Baroness opposite made reference, but we want to make sure that we get the process right. We have already spoken with the charity Mind on how we implement the judgment. The Minister for Disabled People, Health and Work in another place talked only yesterday with a disability charity consortium to discuss the decision and to hear its views on implementation. We will reach out to claimants and look at every one of them.

To be clear, we are spending over £50 billion on disabilities. We are entirely committed to this issue—indeed, it is one of the Prime Minister’s top priorities. I can confirm that this was never a cost-saving measure. The judge in the case made references to cost saving but we do not agree with that. Indeed, we have focused on being more generous through the introduction of PIP and, as a result of the judgment, we will rightly become even more generous in supporting people with mental health conditions.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, perhaps I may ask the Minister about the process. I fail to understand why, in March 2017, the Government did not have recourse to the power available to them under the Social Security Administration Act 1998 to suspend the implementation of adverse legal judgments pending further and better particulars. If they had taken that route they would have had recourse to the SSAC and a proper consultation, which would have prevented this adverse outcome from the High Court. Will the Minister learn from this and give an assurance that in such future circumstances, the Government will use the unique power the DWP has to prevent getting egg all over their face and causing adverse circumstances for many claimants who do not deserve that kind of treatment?

[Baroness Buscombe]

I hear what the noble Lord is saying. This is one of the reasons why the immediate response of my colleague the Minister for Disabled People—and indeed the Secretary of State—was not only to decide not to question the judgment but to do everything we can to help claimants. That is why we have already had early meetings with stakeholders and organisations who can help us think through how to ensure that we do not make mistakes going forward. It is important to say that the 2017 amending regulations did not represent a policy change. The distinction was based on the considered advice of highly qualified medical advisers, and the activities considered in PIP are used as a proxy for assessing a claimant’s overall level of need in daily life, which is what we were focusing on.

Private Sector Pension Abuse

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Monday 22nd January 2018 Lords Chamber

[Baroness Buscombe]

I am grateful to the noble Lord for mentioning that the Prime Minister clearly takes this situation extremely seriously. He reiterated that we intend to strengthen the regulator’s powers. Importantly, we have done that with care, introducing a Green Paper last year, and we have committed to the publication of a White Paper in the spring. Although the Pensions Regulator and the Pension Protection Fund manage the process of company insolvencies, and while most pension schemes are managed successfully and very robustly, we accept that there are instances where it might be possible to improve and strengthen the powers. We have received more than 800 responses to the Green Paper. The department is analysing these and will bring forward proposals as quickly as possible.

It is important to emphasise—I sense that the noble Lord opposite appreciates this—that it is hypothetical to suggest that a different set of powers for the Pensions Regulator, such as the ability to clear corporate activities, would have necessarily made a material difference to the pension schemes. Having said that, there has been strong communication between the regulator and Carillion since the middle of last year, when a profit warning was announced. But of course, a profit warning is a warning as opposed to a transaction, so it was not necessarily a sign that the company overall was in such difficulty.

It is important to stress that we are very keen to strengthen the powers but, at the same time, we need to ensure that the new measures we introduce build on existing measures that to a large extent have worked extremely well since 2004, as I said before. However, we want to strengthen the Pensions Regulator’s anti-avoidance framework and information-gathering powers.

I am afraid that as yet, I cannot be certain about when legislation will be forthcoming. Obviously, we will look forward to and welcome the consultations and responses to the White Paper.

[Lord Kirkwood of Kirkhope (LD)]

My question is further to the important one raised by the noble Lord, Lord McKenzie, about timing. Whereas the Statement is correct to say that big insolvencies happen infrequently, when they do happen they strike at the confidence among employees about occupational pension savings altogether. I hope the Minister shares the House’s concern about the indirect impact this may have on auto-enrolment. As the Minister knows, some important steps are being introduced in the next phase of auto-enrolment in the near future but, if there is a White Paper in March, it may be 2020 or 2021 before the regulations are available to regulators, auditors and others. Will the Minister undertake to do everything in her power to push forward proper and sensible consideration of the regulations to be introduced, with as much dispatch as it is possible to muster?

[Baroness Buscombe]

I thank the noble Lord for his question. I share his concerns about the direct impact this might have on those who have pension plans and on those who are retired and in receipt of their pensions. Our drive on auto-enrolment has been extremely successful thus far. More than 9 million people have enrolled, via the auto-enrolment scheme, up to the end of last year. We will push this issue with as much dispatch as is sensible. Having said that, at the same time we do not want a knee-jerk reaction. We will publish our White Paper in the spring. We want to be sure that we make the right decisions and do not compromise the established, robust and, to a large extent, successful scheme that exists for the current powers of the Pensions Regulator. Yes, we must do all that we can. I am pleased to say that, as I speak, colleagues in another place are now debating the Second Reading of the single financial guidance body Bill, which I hope will support giving people advice and good counsel. The Pensions Advisory Service and others are already working on the Carillion issue. We are looking all the time to improve the system, to reassure people and to give them good advice and guidance on their pensions. We will legislate to do the right thing as soon as we can.

Universal Credit

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Thursday 23rd November 2017 Lords Chamber

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am happy to follow the noble Baroness, Lady Sherlock, and I agree that the statement that we had in the Budget deals only with the journey on to—the gateway into—universal credit. I welcome the Statement. To be realistic, if the Government had not said something, it would have been impossible to resist the pressure to delay the further rollout of universal credit, and I do not agree that that would be sensible—I never have.

I have two questions for the Minister. For the reasons that the noble Baroness, Lady Sherlock, set out at length, the delivery of these changes will be difficult. Can she assure us that they will land, be locked in and operate to the benefit of claimants in future, without fear of further disruption, letdown and distress? It is a very tall order. Some of these changes start next month. Given the background to the operational implementation of universal credit, it is not unreasonable to be suspicious about the implementation of the immediate changes that have been announced, welcome as they are. Can the Minister assure us that she personally will ensure that they all work and will make claimants’ lives easier, and that she will report to the House regularly on the success or otherwise of the rollout?

But these are only gateway measures; they are only easing the transition to universal credit. The noble Baroness, Lady Sherlock, is quite right: the rising costs and fixed benefits that low-income households are facing will condemn some of these families to a very bleak future. That necessitates my second question: will the Government start planning to use some of the £3 billion annual savings within UC alone—never mind the other ongoing cuts and freezes—to ease people’s road into work by increasing work allowances and tapers? If we do not do something of that kind, it will be very difficult successfully to promote the programme of progression through work into sustainable longer-term jobs and careers.

Once the difficulties of getting people on to universal credit are overcome, and people are in a steady state of receiving their universal credit payments monthly, the next big political battle will be trying to get the Government to be more realistic about the money available to support people when they are on universal credit.

[Baroness Buscombe]

My Lords, I will do my best to reply to the multitude of questions. I will begin by saying that they seem to be in contrast with the response made in another place by, for example, the right honourable member for Birkenhead, who was very congratulatory about what we have achieved in this package.

Let me be clear: today’s package is worth £1.5 billion over the scorecard period, and will ensure that claimants get money, and get it sooner. We should remember that we are already spending more than £95 billion on benefits for people of working age. So all that I am hearing about cuts and how terrible it all is—all it is doing is frightening people. That has to stop.

Financial Guidance and Claims Bill [HL]

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Report: 2nd sitting (Hansard): House of Lords
Tuesday 31st October 2017 Lords Chamber

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I shall make just two quick points in support of the speeches that have already been made. I am very much in favour of the amendment but the timing is really important. I say that because universal credit, as we all know, has some introductory rollout problems, such as establishing debts in a way that can sometimes overwhelm new applicants, given the 42-day waiting period. If some magic process could put in a breathing space immediately, that would give succour, support and some respite to families who will almost certainly now face arrears, particularly rent arrears. Therefore, time is of the essence and I hope that the Government will bear that in mind.

I also agree with the point that has just been made about public sector bodies. The Government should perhaps be able to do that anyway by getting people within the public service to be more reasonable about the way they prosecute the recovery of debt.

My second point, which is really important to me, is that the presence of this opportunity in Scotland completely changes the atmosphere in which negotiations can take place. People start acting a lot more rationally and are not driven by fear into doing things and making undertakings which, in their innermost hearts, they know they cannot fulfil. The circumstances are thereby compounded, which makes everybody’s position worse. In Scotland, the ability to just stop the clock, step back and think rationally about the solutions over a longer timeframe transforms the circumstances of families in distress. It is very important that we get this done quickly and take advantage of the experience north of the border, where such an approach has been demonstrated to be worth while and to work.

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

My Lords, I thank all noble Lords who have taken part in this very important debate—indeed in all the debates that we have had on this crucial issue since Second Reading.

As noble Lords will be aware, the Government’s manifesto contains a commitment to deliver a breathing space scheme that would give heavily indebted consumers a period of respite from creditor enforcement action, further interest and charges for up to six weeks. Where appropriate, they would be offered a statutory repayment plan to help them pay back their debts in a sustainable way.

I am grateful, as I said, for the helpful contributions during all our debates from noble Lords, and from the noble Lord, Lord Stevenson, in particular, on the important topic of protecting heavily indebted consumers. Noble Lords will have seen, just last week, that the Government have taken their crucial first step towards delivering this manifesto commitment by launching an extensive call for evidence. I might just say here, as noble Lords have asked about public sector debts, that the breathing space call for evidence seeks views on that. We want to ensure that the scheme is designed in the best possible way to support consumers.

The noble Lord, Lord Kirkwood, referred to universal credit. It is right that I point out to noble Lords that all those going on to universal credit are entitled to up to 50% in advance payments, and in some cases they can receive it on the same day they sign up. So, there should not be a huge increase in debt because of those early days.

In addition to support from this House, the announcement of the call for evidence has been positively received by a wide cross-section of the debt advice sector. For instance, The Children’s Society has said it is “delighted” with the announcement, the Money Advice Trust agreed this was “good news” and Citizens Advice said:

“It’s good to see the government taking action on problem debt”.


We plan to continue to engage closely with these bodies and other stakeholders over the coming months to develop our policy.

Work Capability Assessment

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Monday 9th October 2017 Lords Chamber

[Baroness Buscombe]

My Lords, I hear what noble Lords are saying in relation to piloting. As I have said, our officials are working hard to consider the next steps. I will take that suggestion back to them. They are thinking about all the future plans and taking into account the concerns of all the 6,000 people who responded to the consultation. Of course, if there is a wish to have more pilots, I am convinced that my department will look at that.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, if the Minister is bringing forward plans, that is extremely welcome, but before she makes any positive changes will she look at the Ministry of Justice employment tribunal statistics that were published last month? They show a rate of successful overturn on appeal in ESA cases of 68%. Further, the mean period for the disposal of a case is now 20 weeks, which is three weeks longer than last year. These are important things that need to be remedied in any plans she brings forward, so a review is fundamentally and urgently needed now.

[Baroness Buscombe]

My Lords, we are committed to ensuring that people have the best support possible. That is why we have allocated £330 million for new voluntary employment support for people with limited capability for work over four years, starting with this year. The current system fails to provide the right incentives and support to help disabled people and those with health conditions toward and into work. Those people deserve better.

Financial Guidance and Claims Bill [HL]

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 6th September 2017 Lords Chamber

[Lord Kirkwood of Kirkhope]

I did not intend to contribute to this debate, but it is a very important issue. The note, which I also received at 3.46 pm this afternoon via the Whips Office despatch, misses the important point about auto-enrolment. That is causing the most concern. The noble Baroness, Lady Altmann, clearly explained how that changes the circumstances. The Government need to continue to work on this. I am not an expert, but, speaking for myself, I would want to test this in the Division Lobby if they cannot come up with a more rational response to the amendment of the noble Lord, Lord McKenzie, and the arguments of the noble Baroness, Lady Altmann.

[Baroness Buscombe]

My Lords, I thank all noble Lords for their contributions to this debate, particularly the noble Lord, Lord Stevenson, for introducing Amendments 33, 34, 36 and 37. Straightaway, I apologise that the all-Peers note arrived at only 3.40-something this afternoon.

Financial Guidance and Claims Bill [HL]

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Committee: 1st sitting (Hansard): House of Lords
Wednesday 19th July 2017 Lords Chamber

[Lord Kirkwood of Kirkhope]

My Lords, I do not want to delay this debate, which has been a very important one. This is the most important issue for me in the first 16 clauses. I share the frustration that has been reflected by powerful speeches from colleagues including my noble friend on the Front Bench, who made an excellent speech about the significance of the proposal in this group of amendments, particularly the breathing space provisions.

One of the reasons why this is so important is that debt, I think, is going to get worse, which is probably a realistic assumption to make, for the next four or five years. I have spent my entire life working on the benefits, social security and social protection side of state provision. It is increasingly untenable that the calculation of means testing takes no account whatever of levels of benefit. People might well be applying for universal credit now, and being allowed work allowances and tapers that are appropriate to a clean sheet of paper, but no question is ever asked of decision-makers about to what extent the household debt behind the application affects the family circumstances—which affects child poverty, as the right reverend the Prelate Bishop of Newcastle just pointed out to some effect. This is the most important part of the Bill for me.

This also puzzles me because I come from Scotland and absolutely endorse what the noble Lord, Lord Stevenson, said. For 10 years now, this system has been tried and tested there, and there is no doubt about the fact that it works. I know there are rumours that people in Scotland are particularly stingy and difficult when it comes to how they spend their money—particularly on the west coast of Scotland late on a Friday night—but it seems self-evident to me that consultations with jurisdictions in other parts of the country are part of what we should be doing in a new devolved United Kingdom. I would have expected the department to go across the border to make urgent and active inquiries into exactly what ingredients in Scotland have made this successful.

Indeed, you can argue it the other way round: it is not a good thing to have this level of disparity across the United Kingdom when the body we are setting up is UK-wide. The best practice that Scotland has demonstrated is being ignored—almost wilfully, if I can put it as strongly as that—through the position the Government are taking. Both the cold calling and the breathing space provisions are popular things to do. The Government would not be attacked by anybody I would think of as reasonable on either of these two important subjects. I do not understand why the Government are not being a bit more responsive to the unanswerable claims made in powerful speeches earlier this afternoon. I think the Government will lose in this House if they do not make some amendments, and solutions have been offered.

I know Governments do not like tinkering with Long Titles. I was a Whip for long enough to learn that, and it is not something I would want to start doing a lot myself. But there is a case to be made for my noble friend’s point about the small change needed to shoehorn these two important subjects into consideration so that they can be addressed more directly—and, if I may say so, in a more adult way than we are doing at the moment by trying to look round corners and use smoke and mirrors—to achieve an objective that we all think is sensible.

My plea to the Minister, who is very good at responding to these things and considering them further, is that she carefully consider particularly the breathing space proposal. It will dog the rest of the Bill’s proceedings if the Government and the department do not offer a compromise that enables one or both of these important issues to be addressed more directly.

[Baroness Buscombe]

My Lords, I start by thanking all noble Lords, including the noble Baroness, Lady Kramer, the noble Lords, Lord Sharkey and Lord Stevenson, and the noble Earl, Lord Listowel, for their positive contributions so far on the passage of the Bill, particularly in relation to this important debate. Noble Lords have raised important issues such as indebtedness, the introduction of a breathing space scheme and protecting individuals from pensions and debt-management cold calling. I welcome the opportunity to talk about these significant issues.

Clause 2 sets out the functions and objectives of the single financial guidance body. An important function of the new body is to work with others in the financial services industry, the devolved authorities, and the public and voluntary sectors, to support and co-ordinate the development of a national strategy to improve financial capability, the ability of people to manage debt and the provision of financial education to children and young people. I say that up front, because it is important when we are thinking about how this body will evolve that the strategic function means that the body will work with others rather than in isolation. That is why we refer to its “strategic” function.

The amendments tabled by noble Lords seek to specify in statute that the body, in discharging this function, will need to focus on reviewing the case for a breathing space. This would include considering the impact of not having such a scheme, reviewing the insolvency schemes available and considering the impact of not banning pensions and debt-management cold calling.

I will first talk about the breathing space issue, which probably all noble Lords who have spoken in the debate have raised. The amendment proposed by the noble Baroness, Lady Kramer, and the noble Lord, Lord Sharkey, seeks to give the single financial guidance body the ability to specifically advocate for the introduction of a breathing space scheme. The amendment proposed by the noble Lord, Lord Stevenson of Balmacara, and the noble Earl, Lord Listowel, seeks to give the single financial guidance body a specific requirement in respect of its strategic function, which is to review the case for the introduction of a statutory breathing space scheme.

The amendment proposed by the noble Lord, Lord Sharkey, and the noble Baroness, Lady Kramer, seeks to give the single financial guidance body a specific requirement in respect of its strategic function. It would require the body annually to assess the extent to which consumer detriment is caused by, or contributed to by, pensions and debt-management cold calling and the lack of a moratorium for debt recovery, also known as a breathing space. Both the noble Baroness and the noble Lord noted during Second Reading that the level of overindebtedness among the UK population is of increasing concern—a concern I share with all noble Lords this evening.

As I said at Second Reading, the Government recognise that the cost of living can sometimes become too great. Problem debt can be hard to escape and can compound family breakdown, worklessness, stress and mental health issues, along with other issues such as those raised particularly eloquently by the noble Earl, Lord Listowel. I understand that the breathing space is of particular interest to noble Lords and that some expressed disappointment that a breathing space scheme was not provided for in the Bill. But I would like to reassure noble Lords that the Government are committed to tackling problem debt. The Government’s manifesto, as noble Lords have referenced this evening, proposed the introduction of a statutory breathing space scheme and statutory debt repayment plan. This is an important and complex issue. It requires thorough preparation and consultation on details, such as who could be eligible, which debts could be in scope and how someone could enter into a breathing space.

Pensions

Debate between Lord Kirkwood of Kirkhope and Baroness Buscombe

Wednesday 19th July 2017 Lords Chamber

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am grateful to the Minister for robustly repeating the Statement. My eye was drawn to the last phrase, which she read with a flourish: “and this is what the Government are doing today”. What are the Government going to do next week on some of these matters, particularly in relation to the triple lock? I support the questions addressed to the Minister by the noble Lord, Lord McKenzie. Most importantly—this was also addressed by the noble Lord, Lord McKenzie—if the Government are to secure dignity and security for retirement, at their next review they will need to look not just at average income data but at latter-day morbidity data as well.

The one thing that is missing from the Government’s Statement and response is the fact that the totality of the policy is missing. The Government need to move in a way that releases and uses the £74 billion that we will save by this move in the public policy field between now and 2045-46 to mitigate, as Cridland suggests, some of the transitional protections and to make it easier for those who are reaching retirement but who are less able to work—the disabled, carers and people of that kind. I hope the Minister will be able to say that by the next review these transitional and support questions will be addressed using some of the savings that we are obviously making from this important policy announcement this afternoon.

[Baroness Buscombe]

My Lords, I thank noble Lords for their response to the Statement. We believe it is really important that we have a seriously responsible approach to this. The Opposition’s wish to fix the state pension age at 66, even though they legislated to increase the pension age to 68, demonstrates a failure to appreciate the situation. Their approach would add £250 billion to national debt spending in 2040, which is equal to £20 billion a year borne by future generations. It is hugely important that we take these steps now, act responsibly and with care, and focus very much on intergenerational fairness.

The noble Lord, Lord McKenzie, asked about life expectancy. We will of course look at all life expectancy data very carefully, particularly following the report by Sir Michael Marmot. The current ONS projections are that life expectancy will continue to increase, but there is uncertainty around the rate of change in future life expectancy, which is why the state pension age review mechanism ensures regular six-yearly reviews. Long-term trends of increasing life expectancy mean we need to balance the needs of pensioners with the working-age generations who fund the pensions and health and care needs of an ageing population. As for the possibility that life expectancy may be falling, the latest ONS statistics show that 65 year-olds in the UK are expected to live over half of their remaining life in good health: 11.1 years for women and 10.3 for men. Healthy life expectancy has also been increasing over recent decades and, at age 65, has been relatively stable as a proportion of total life expectancy since 2000.

The noble Lord, Lord McKenzie, spoke about regional unfairness. John Cridland, in his report, concluded that there are no practical or workable ways to factor in variations in life expectancy, and there is no evidence of regional options being any fairer or more targeted at disadvantaged groups. Allowing early access to the state pension on a reduced basis would risk leaving people with an inadequate pension. Also, disadvantaged groups should be assisted, through working age, through the benefits system rather than through changes to the state pension age.

As for the triple lock, that will remain in place for the remainder of this Parliament. The noble Lord, Lord McKenzie, also asked about whether we are going to go ahead with this or not. We have said that the Government have decided that the rise in state pension age to 68 should take place between 2037 and 2039; however we will carry out a further review before legislating, to enable consideration of the latest life expectancy projections and to allow us to evaluate the current rises in state pension age.

In relation to carers, the new statutory entitlement to carer’s leave is a BEIS-led policy. The Government are reviewing long-term carers’ leave entitlements and will set out our plans in due course. Carers will not be disadvantaged by increases to state pension age. As society ages, and care needs increase, it is important that carers are able to combine caring with paid employment or to return to paid employment when their caring duties allow. We are working with employers nationwide to encourage the adoption of carer-friendly employment policies. Under universal credit, carers are provided with more flexible support, because their claims can remain open even when they move into work. The Government’s Fuller Working Lives strategy, published in February 2017, sets out proposals to help carers combine work and care. The Government remain committed to the provision of a safety net to support pensioners who, for whatever reason, do not have a full state pension.

We are very much focused on improving communications. The intention is to provide people with adequate notice to give them clarity and certainty over their state pension. People can now use the online Check your State Pension service to get a forecast of their state pension, find out when they will reach their state pension age, how they may be able to improve their state pension and view their national insurance contribution record. Indeed, since its launch in February 2016, over 4.5 million state pension forecasts have been viewed online up to the end of June 2017. But, for any future changes, we will seek to make the position clear at least 10 years in advance. We recognise the need to provide transparency for future pensioners to facilitate effective retirement planning. The Department for Work and Pensions is looking at how best to take advantage of emerging technologies in the coming years, to build greater engagement in financial planning for later life.

The noble Lord, Lord McKenzie, also referred to the state pension. We will be discussing that very issue later this afternoon when we are in Committee on the single Financial Guidance and Claims Bill. The Opposition Front Bench also asked whether we are supporting John Cridland’s proposal to increase the state pension age once per decade, which means the next increase would not occur until 2047-49.

We do not support John Cridland’s proposal to commit to only one year’s rise every 10 years, as this would limit the Government’s ability to respond to future changes in life expectancy and would go too far in removing the link between when we change state pension age and the proportion of life people can expect to spend in receipt of state pension. However, we recognise the need for appropriately spaced rises. In the past, the UK has been slow to take account fully of life expectancy increases. This has led to changes to state pension age in three Acts of Parliament in the past 10 years, as noble Lords will know.

Thanks to the action we have now taken, however, the UK state pension is now on a firmer footing. The state pension age review framework should maintain that position through its greater responsiveness to changing life expectancy projections. This will ensure a stable state pension system in the future. That is our focus: a sustainable pension so that future generations can enjoy state pensions.

Using the 32% proportion of adult life spent over state pension age as our longer-term benchmark balances the need to maintain an affordable state pension against the need to give people clarity about what they can expect from the state: security in retirement and confidence in the value of private pension savings. I hope this in large part covers the questions raised by the noble Lords opposite.