Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2023
Viscount Younger of Leckie Excerpts(3 years, 1 month ago)
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Viscount Younger of Leckie
That the draft Regulations laid before the House on 12 January be approved.
Considered in Grand Committee on 6 March.
Employment: Disabled People
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Lord Touhig
To ask His Majesty’s Government what plans they have for new initiatives to encourage business and industry to employ disabled people.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, a range of government initiatives are already supporting disabled people to start, stay and succeed in work. The Government are working to improve and better integrate resources for businesses, helping them to support and manage health and disability in the workplace. The Government are looking in detail at workforce participation, including discussions with business and industry, whose role is key to making the most of the talents of disabled people in the workforce.
Lord Touhig (Lab)
I thank the Minister for his helpful Answer; I will follow up on some of the points that he just made. Just 5% of adults with a learning disability are in work. One way to change this is by offering more supported internships; the charity Hft tells me that this helps business better understand the benefits of employing someone with a learning disability. However, the problem is that supported internships are available to people only up to the age of 25. Will the Government consider extending this scheme to include learning-disabled people over the age of 25, which would enable many more to get into work?
Viscount Younger of Leckie (Con)
I appreciate the noble Lord’s question and the work that he does in this area. I can assure him that the Government are committed to reducing the disability employment gap, including in relation to the young and interns. It is important that those who have a disability are given every chance to start on the path to a career. What I cannot do, I am afraid, is commit to the noble Lord’s point about extending the scheme beyond the age of 25, but I have noted it and will take it back to the department.
Baroness Deech (CB)
My Lords, what happened to the Government’s national disability strategy, which was declared illegal by the Court of Appeal a while ago? It does not seem to have been renewed. Moreover, many of the recommendations made by the committee on disability that I chaired have still not been implemented by the Government. When are the Government going to be proactive?
Viscount Younger of Leckie (Con)
We have a disability action plan, but it is separate from the noble Baroness’s point about the national disability strategy. We are disappointed by, and strongly disagree with, the High Court’s finding that that strategy was unlawful; as the noble Baroness may know, the Secretary of State has been granted permission to appeal the court’s declaration. In order to ensure compliance with the court’s declaration, we are obliged to pause a limited number of policies referred to in the strategy or directly connected with it, which is a disappointment.
Lord Addington (LD)
My Lords, I declare my interests in this field as set out in the register. What are the Government doing to make sure that businesses, particularly small ones, know that, if they employ a disabled people, they have somebody who is less likely to take time off work and less likely to change jobs frequently—both those things are proven—than a non-disabled person? This sort of information would certainly help to break down perceptual barriers.
Viscount Younger of Leckie (Con)
Indeed, and this is very much a matter for Jobcentre Plus. Further training is being given to job coaches in jobcentres. It is very important that those with health conditions or disabilities receive the support and advice that they need to move into or to stay in employment.
Baroness Thornton (Lab)
My Lords, last December, research conducted by the economic and social inclusion unit revealed the huge benefits and the challenges regarding the working conditions, employment and retention of personal assistants for working-age disabled people to allow them to be economically active. This is the third time that I have raised this issue in the House, so hopefully it will be third time lucky. Has the Minister taken account of this useful evidence on service user need and experience? Will it inform improvements and, if so, how and when?
Viscount Younger of Leckie (Con)
Yes, indeed, I am aware of the question. Although I do not have an answer to that point, I will certainly write to the noble Baroness about it. I am not sure that she has asked it three times, but maybe she did so with my predecessor.
Baroness Altmann (Con)
My Lords, employment figures show that a significant number of older people have left the labour market. There is a large differential in healthy life expectancy across the country. Many people in their fifties and sixties are not well. Some may have left work due to ill health or disability but would be able to work part time. What more can the Government do to encourage flexible working to provide more help in this area?
Viscount Younger of Leckie (Con)
As my noble friend will know, all employees have the legal right to request flexible working provided they have worked for the same employer for at least 26 weeks. As she will know, under the Equality Act, employers must make reasonable adjustments to ensure that workers with disabilities are not substantially disadvantaged when doing their jobs. This could include a flexible working arrangement; for example, a change to the timing, hours or location of work. I assure her that in December 2022 the Government responded to a consultation that considered changes to this legislation to provide employees with better access to flexible working arrangements.
Lord Wigley (PC)
My Lords, given that a major challenge to the UK’s economic recovery is a significant labour shortage, not least because activity rates for the over-50 age group remain low, is it not in everyone’s interest that those labelled as disabled people should be looked upon for their abilities rather than their disabilities, and helped into the active workforce by the availability of every positive assistance that the state can provide?
Viscount Younger of Leckie (Con)
The noble Lord is right. This is why we have the disability action plan, which, as I said to the noble Baroness, Lady Deech, is distinct from the strategy. A new disability action plan will be consulted on and published this year. It will set out the action that the Government will take this year and in 2024 to improve disabled people’s lives. The noble Lord is right that ensuring that the voice of disabled people is properly heard is a priority for the Government. We will run a fully accessible public consultation on the plan this year.
Baroness Brinton (LD)
My Lords, on 12 January, the Disability News Service reported that neither the Secretary of State, Mel Stride, nor Tom Pursglove, the Minister for Disabled People, had signed up to become members of Disability Confident, unlike many previous Ministers. On 23 January, Mel Stride said that
“we have to ensure that employers see disabled people with eyes wide open—their abilities and the contribution they can make. That is why we promote Disability Confident”.—[Official Report, Commons, 23/1/23; col. 735.]
Have the Secretary of State and the Minister for Disabled People now signed up to Disability Confident?
Viscount Younger of Leckie (Con)
I can certainly confirm that a whole range of departments have signed up to this, including the Department for Work and Pensions. Although I cannot answer the noble Baroness’s question in terms of the individuals concerned, the department at least has signed up.
Lord Sterling of Plaistow (Con)
My Lords, for a number of years, the noble Lord, Lord Touhig, and I have worked together to improve the lives of disabled people. Motability has over 650,000 people. Importantly, what has changed is that now many of them are computer literate. What is more, instead of loneliness, they can work at an office. Many whom I know would love not only to do that but to feel that they can put something back into society, which has helped them over the years. How can we encourage employers to realise that, as was just said, this would help the economy?
Viscount Younger of Leckie (Con)
I hope that I can help my noble friend by talking about the work that we are doing on communication. It is very important that a digital service is organised for employers and offers tailored guidance on health and disability. This is a key outcome of the “health is everyone’s business” consultation, which was rolled out in 2019. It is very important to use this as a vehicle to allow the people to whom my noble friend referred to move forward in their careers.
Baroness Bull (CB)
My Lords, following the original Question about the low number of adults with learning disabilities in the workforce, what are the Government doing to ensure that schools have adequately funded programmes available, so that young people with learning disabilities can have work experience opportunities and, therefore, develop their aspirations to be part of the future workforce?
Viscount Younger of Leckie (Con)
The noble Baroness again raises an important point, which would go to the Department for Education, but I will answer on behalf of the Government. I have no doubt that there are some initiatives within that department that would help in this area. As I said earlier to the noble Lord, Lord Touhig, it is very important to ensure that those with disabilities can, as soon as possible, move seamlessly from school into work and can stay in work.
Baroness Fookes (Con)
My Lords, several gardening charities do wonderful work with people with disabilities, whether mental or otherwise. Would my noble friend look at the opportunities that are offered in horticulture, which range from simple to degree-level qualifications?
Viscount Younger of Leckie (Con)
I will certainly look at that. My noble friend raises a very good point and I happen to know somebody with disabilities who works in the gardening sector. I agree that this is a useful area, particularly for young people to start out in.
Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2023
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Viscount Younger of Leckie
That the Grand Committee do consider the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2023.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, I will speak also to the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2023. I am pleased to introduce these statutory instruments, which were laid before the House on 12 January 2023. These instruments will increase the value of lump sum awards payable under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, and the diffuse mesothelioma scheme, which was established by the Child Maintenance and Other Payments Act 2008.
As many noble Lords will be aware, these two schemes are not included in the main social security benefits uprating procedure and their uprating is not a statutory requirement. However, through these statutory instruments, we will increase the amounts payable by the September 2022 consumer prices index of 10.1%. These new amounts will be paid to those who satisfy all the conditions of entitlement for the first time on or after 1 April 2023.
Many noble Lords will be aware of friends and close colleagues from your Lordships’ House who have lost their lives as a result of these dreadful diseases. We must remember the great impact that these diseases have on people and their families. The Government recognise the tremendous suffering that diseases such as mesothelioma and pneumoconiosis cause to those who are diagnosed. The conditions covered by these schemes can be debilitating and life limiting and often involve very long latency periods, with symptoms starting to show many years, often many decades, after exposure. Mesothelioma, for example, is an aggressive type of cancer strongly associated with exposure to asbestos and is usually terminal. Life expectancy from diagnosis is poor.
I will now outline the purpose of the two schemes we are debating. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979, which, for simplicity, I shall refer to as the 1979 scheme, provides a single lump sum compensation payment to individuals who suffer from one of the prescribed diseases covered by the scheme, including mesothelioma, pneumoconiosis and three other dust-related respiratory diseases. This scheme was designed to cover people who are unable to claim damages from employers because they have gone out of business and who have not brought any action against another party for damages. To be eligible, a claimant must be in receipt of industrial injuries disablement benefit for a disease covered by the 1979 scheme.
The 2008 mesothelioma lump sum payments scheme, which I will refer to as the 2008 scheme, was introduced to provide compensation to people who contracted diffuse mesothelioma but who are unable to claim compensation under the 1979 Act. This may be because they were self-employed or their exposure to asbestos was not due to their work. The 2008 scheme allows payments to be made quickly to people with diffuse mesothelioma at their time of greatest need. Under both schemes, a claim can be made by a dependant if the person with the disease has sadly died before being able to make a claim. These schemes aim to ensure that, where possible, the people who suffer from the diseases they cover receive compensation within their lifetime.
The rates payable under the 1979 Act scheme are based on the disease sufferer’s assessed level of disablement and their age at the date of entitlement. The highest awards are made to individuals with the highest assessed level of disablement and those who become entitled to a payment at an earlier age.
All payments for diffuse mesothelioma under the 1979 Act scheme are automatically made at the 100% disablement rate—the highest rate of payment—reflecting the serious nature of the disease. Similarly, all payments for this condition under the 2008 scheme are made at the 100% disablement rate. The highest payments from both schemes are made to the youngest sufferers of the disease. Between April 2021 and March 2022, the latest financial year for which data is available, 3,080 awards were made across both schemes, totalling £44.7 million. Between 2022-23 and 2027-28, expenditure on these schemes is forecast to fall by 8% in real terms.
I will now touch on the legacy of Covid-19. As the Committee will be aware, the Covid-19 pandemic presented unprecedented challenges. I am mindful of the impact it has had on sufferers of respiratory diseases in particular. As my predecessor set out in last year’s debate, the department made the decision to suspend all face-to-face assessments between March 2020 and April 2021 to protect the health of our claimants, and of course our staff. Some assessments were further suspended beyond April 2021 due to the additional risks of undertaking them face to face. Inevitably, this has led to delays in some customer journeys for claims to industrial injuries disablement benefit and the lump-sum schemes.
In response, the department and its assessment provider, the Centre for Health and Disability Assessments, introduced several innovations to ensure that claims for IIDB, the 1979 scheme and the 2008 scheme continued to be processed as quickly as possible. We increased the use of paper-based assessments and introduced video assessments where appropriate. I am pleased to say that we continue to assess some customers via these routes where possible.
I will now touch on one specific, important and sensitive theme linked to these regulations, which is asbestos removal and schools. Tremendous strides have been made to restrict the use of asbestos and introduce safe environments for its handling in this country. However, the legacy of its widespread use, including in schools, is still with us today.
The Health and Safety Executive has a mature and comprehensive regulatory framework to ensure that the legacy asbestos risks in Great Britain are managed, which aligns with the best evidence currently available. Correct implementation of the Control of Asbestos Regulations 2012 not only ensures management of the risks of exposure but will eventually lead to the elimination of asbestos from the built environment. I understand that some noble Lords have previously raised the issue of asbestos in schools in these debates. I assure them, and this Committee, that the Government take the safety of children and those who work with them incredibly seriously.
The Department for Education is committed to working collaboratively with the regulator, the HSE, to support schools and duty holders. As part of this, the Department for Education published bespoke guidance on asbestos management for schools in 2020 and is working with the HSE and the sector to look at further ways to help them and to build on existing guidance and support. Well-maintained and safe school buildings are a priority for this Government. That is why over £13 billion has been allocated for improving school buildings since 2015, including £1.8 billion committed for the financial year 2022-23.
I will conclude on a positive and—I hope noble Lords will agree—hopeful note. While there is always a degree of uncertainty in predicting future disease incidence, current projections by the Health and Safety Executive suggest that total annual mesothelioma deaths in Great Britain are expected to decline in the coming decades. For males, a decline is projected over the course of this decade, and for females, deaths are projected to start falling shortly after. These figures offer some hope that, one day, no more families shall have to endure the suffering caused by these dreadful diseases.
Medical research into treatment options is ongoing, particularly in the field of immunotherapy. While these treatments are not currently curative, a recent trial has shown clear evidence of benefit to advanced mesothelioma patients, equivalent to an additional three to four months of life.
I am sure that all noble Lords here today will join me in recognising the continued importance of the compensation provided by the 1979 and 2008 schemes and the importance of maintaining the value of these payments at this time. I am pleased to say that these regulations were considered in the other place on 8 February 2023.
Finally, as part of my role today, I am required to confirm—which I am pleased to do—that these provisions are compatible with the European Convention on Human Rights. I commend to the Committee the increase of the payment scales for these schemes and ask approval to implement them. I beg to move.
Lord Alton of Liverpool (CB)
My Lords, I thank the noble Viscount for the way in which he introduced these regulations. Just before we began, a group of us were recalling how we have discussed this year in, year out. We were also recalling some of his illustrious predecessors and others in all parts of the House who contributed to some of the changes that he has referred to.
I am thinking particularly of the late Lord Newton of Braintree, who was a Secretary of State. He was a great supporter when I moved amendments in your Lordships’ House seeking to change the Criminal Justice Bill and to bring about what then became a full-scale Act of Parliament, the Mesothelioma Act. The noble Lord, Lord Freud, was decisive in making that happen. He also once shared in this Committee how his father had died of mesothelioma. On this side of the Committee, I think of Lord McKenzie of Luton, who died at the end of 2021. It will seem a strange debate without his voice. His attention to granular detail was extraordinary and his knowledge of pneumoconiosis and mesothelioma admirable, demonstrating the very best of your Lordships’ House.
The noble Viscount referred to the removal of asbestos from schools, which I was very pleased to hear about. It has been a recurring theme that we have raised in these Committees over the years. On a hopeful note, he said that mesothelioma might be plateauing. I will come back to the data a bit later. He also talked about advances in medical treatments. He will know that the Mesothelioma Act was specifically about providing government funding toward the work of the British Lung Foundation and others on the causes and consequences of mesothelioma and on looking for cures. Can the noble Viscount tell us more about whether that funding is being sustained and what progress is being made in that area?
One of the things that has struck me is the number of noble Lords who have shared personal stories of loved ones, family or friends who have died of this disease, which, over the distance, has claimed more than 30,000 lives. That is the same number of deaths still estimated to be caused globally every year. As I have done on previous occasions, I pay tribute to John Flanagan and the Liverpool-based charity, the Merseyside Asbestos Victims Support Group, for keeping a candle lit for all those afflicted by mesothelioma. In 2020, I noted that people in Liverpool are more than 18% more likely to die of mesothelioma. I know that we will hear from my noble friend Lord Wigley and the noble Lord, Lord Jones, during our proceedings; we have heard from them previously about the situation in Wales. However, this disease is no respecter of geographical boundaries or class. Indeed, the noble Lord, Lord Allan of Hallam, and I were discussing this just before the Committee met. We were talking about some of those who have talked about the loss of loved ones.
My noble friend Lord Freyberg talked in the House about his sister, a journalist, who had died of mesothelioma. The noble Lord, Lord McNally, talked about his sister, who had simply been washing overalls and had died of mesothelioma. The noble Lord, Lord Giddens, told us about his wife, who had died of mesothelioma. We also heard from the noble Lord, Admiral Lord West, the story of how young men training for the Navy played snowballs with asbestos. Indeed, Jeremy Hunt, the Chancellor of the Exchequer, described how his father, Admiral Hunt, had also died of mesothelioma. So this is not something that is remote. It is something we know about, but sometimes it is regarded almost as having Cinderella status.
Viscount Younger of Leckie (Con)
I thank the Committee and all noble Lords for participating this afternoon, and for their general support for these regulations. I noticed that the noble Lord, Lord Jones, described our approach as humane; I might think that was a little bit of an understatement, but I appreciate the comments that he made.
I will pick up on some of the comments made by the noble Lord, Lord Alton. He did the Committee a huge service by reminding us about the historical context of this. We should remember, as he rightly said, Lord Newton of Braintree, who I remember—just, as a much younger person—as Tony Newton. I think he was an ex-Health Secretary. It was helpful to hear the noble Lord’s comments there and to remind ourselves, as we do need reminding, of my noble friend Lord Freud, who did so much in this area. We should particularly remember Lord McKenzie of Luton—the noble Baroness, Lady Sherlock, is completely right on that—who was so active in this House and did so much for it.
On a personal note, I also want to mention a very dear friend who died of mesothelioma about 18 months ago. He was a quite remarkable individual who survived for eight years. He told me that he knew the longest surviving period of time was seven years and he managed, through thick and thin, to survive for eight. He was an incredible individual who gained an MBE for the work that he did in prisons, so I always remember that.
A number of questions were asked and I will start by saying that the Government recognise that the two schemes we are debating are a crucial part of the support available to people suffering from these dust-related diseases. It is right that we maintain the value of these payments at this time. In addition to the compensation awarded through these schemes, the department provides specific support for those who have industrial injuries, or diseases caused by occupational exposure, through industrial injuries disablement benefit, a weekly payment based on the assessed level of disablement. Other state benefits may also be available to claimants of the schemes to cover other needs, such as income replacement and caring costs, as well as further costs arising from their disability.
I want to pick up an important point raised by the noble Lord, Lord Alton of Liverpool, which was followed up by the noble Lord, Lord Allan of Hallam, on the question of funding. Research is crucial in the fight against cancer and the Department of Health and Social Care invested £98.3 million in cancer research in 2021-22, through the National Institute for Health and Care Research. For several years, we have been working actively to stimulate an increase in the level of mesothelioma research activity from a pretty low base. This includes a formal research priority setting exercise, a National Cancer Research Institute workshop and a specific call for research proposals through the National Institute for Health and Care Research—so those are important points to be made.
The noble Lord, Lord Alton, asked about schemes comparable with civil damages claims. When the DMPS was introduced in 2014, the payment tariffs were based on 80% of the average damages award in the civil courts. As a result of the Diffuse Mesothelioma Payment Scheme (Amendment) Regulations that were laid on 27 February 2015 and came into effect on 31 March 2015, the tariffs increased from 80% of average civil claims to 100%. Since then, the tariff payments have remained the same. However, in line with commitments made during the passage of the Mesothelioma Bill, working collaboratively with the insurance industry and other key stakeholder groups, the department has now started to progress the tariff review to ensure that the expectations of the stakeholder lobby groups are managed and that, fundamentally, the payments are still commensurate with damages awarded in civil cases for occupational mesothelioma.
The noble Lord also raised equalisation. I hope that I can give him a reasonably comprehensive answer on this, because there is often much interest in the Government’s position on equalisation of payments made to dependents with those made to the sufferers of these diseases. I have listened carefully to the concerns raised today by the noble Lord. The Government remain of the view that available funding should be prioritised for those currently living with the disease to support them in dealing with the challenges that these illnesses bring in life. It is therefore right that available funding should be targeted where it is needed most. Indeed, around 90% of payments made under both schemes are paid to the sufferers of the diseases covered by them. However, it is of course clear that whole families can be devastated by the diseases covered by the lump sum schemes, which is why dependants are still entitled to some compensation under the schemes.
The noble Lords, Lord Jones and Lord Wigley, asked a number of specific questions on the figures involved. I will do my best to answer them, although I fear that there may be a letter arriving after my comments. As a generic response to the noble Lord, Lord Wigley, on the numbers per sector, data on mesothelioma deaths in Great Britain is published on the Health and Safety Executive website, on the health and safety statistics page under the sub-heading “Ill health”. These statistics include analyses of the relative frequency of recording of different occupations on mesothelioma death certificates, which are more useful as an indication of potential past sources of occupational asbestos exposure than absolute numbers recorded for particular occupations.
The noble Lords, Lord Wigley, Lord Jones and Lord Allan, asked about the breakdown of costs by region. The noble Lord, Lord Jones, also asked about quarrymen and those working in the slate industry. I feel that I will need to write to him on that. Volumes of awards through the 1979 and 2008 schemes, broken down by region, are now published. Unfortunately, information on the occupational breakdown of these awards is not published or readily available. This would require analysis of multiple datasets for the 1979 scheme and the industrial injuries disablement benefit scheme to determine industry information. Information on IIDB assessments is published on Stat-Xplore. I will write to see what more I can do to help all noble Lords on this point.
However, I might be able to help in one respect. The noble Lord, Lord Allan, asked, perhaps more as an aside, whether I could give some figures on the sex of those who have suffered. It is fairly simple: in 2017-18, the breakdown was 5% female and 95% male; the overall figures from then until 2021-22 are 7% female and 93% male. I hope that is of some help.
The noble Lord, Lord Allan, and the noble Baroness, Lady Sherlock, asked why statutory uprating should not be done on a regular basis—and this may be asked every year. Perhaps I can make some reassurances to this Committee that, although there is no statutory requirement to review the level of these payments annually, DWP Ministers have agreed to uprate payments under both the 1979 and the 2008 scheme together in line with inflation each year since 2010. A change of this nature is unlikely to make any monetary difference to those who receive awards under these schemes. Making this a statutory requirement would require amendments to primary legislation and, even with amended primary legislation, it is probable that statutory instruments would still be required to uprate the schemes annually. As such, parliamentary debates on this subject would continue. I add that these debates provide a valuable avenue to raise awareness of the lump sum schemes and, more broadly, support for people with respiratory diseases. That point was raised by the noble Baroness, Lady Sherlock, and I very much appreciated that.
Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2023
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Viscount Younger of Leckie
That the Grand Committee do consider the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2023.
Pensions Dashboards (Prohibition of Indemnification) Bill
Viscount Younger of Leckie ExcerptsFriday 3rd March 2023
(3 years, 1 month ago)
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, I congratulate my noble friend Lord Young on his excellent introduction to the Bill. My noble friend has made it clear to the House that the Bill will increase protection for pension savers. It has the full backing of His Majesty’s Government, and it gives me great pleasure to speak in support of it today.
The introduction of automatic enrolment has been a resounding success in helping people save for retirement, on a scale which was hard to imagine just 10 years ago. It has normalised workplace pension saving, with more than 10.8 million workers being enrolled into a workplace pension to date, and £33 billion more saved in real terms in 2021 than in 2012.
This success has, at the same time, resulted in challenges for the Government, consumers and the pensions industry more broadly. Research by Aegon found that 73% of people have multiple retirement or pension plans. While it is usual for people to move around the labour market throughout their working lives, this can make it difficult for people to keep track of what they have saved. Indeed, research by Scottish Widows in October 2022 has shown that nearly half of workplace pension holders do not know how many pension pots they hold with previous employers.
Pensions dashboards will help to address these issues—and I will come back to the point raised on dashboards. They will put the saver in control and allow them to view information about their pensions, including the state pension, in one place online. By doing so, dashboards will enable savers to be reunited with pension pots they may have lost or forgotten about over many years. To highlight how significant the total value of lost pots may be, the Pensions Policy Institute suggested in its paper last year that it could be as high as £26.6 billion.
The Pensions Dashboards Programme is supervised by the Money and Pensions Service to deliver the technology underpinning dashboards. This is far from a straightforward task. It involves connecting thousands of pension schemes so that millions of consumers are able to search for their pensions.
Yesterday, as has been mentioned in the House this morning, the Government published a Written Ministerial Statement which explained that additional time is needed to deliver the complex and technical solutions to enable the connection of pension providers and schemes, in accordance with the connection deadlines set out in the Pensions Dashboards Regulations 2022 and the Financial Conduct Authority’s corresponding rules for pension providers. Given these delays, my honourable friend in the other place, the Minister for Pensions, has initiated a reset of the Pensions Dashboards Programme, in which the DWP will play a full role. This will include a new chair of the programme board and the development of a new plan for delivery.
The noble Baroness, Lady Sherlock, spoke about the importance of ensuring 100% quality and security for these dashboards. I cannot give her more detail on precisely what the reset will mean, which was the gist of her question, but the DWP will play more of a part in terms of those who are managing the dashboard, including MaPS—she will know more about that. But I will endeavour to update her and the House as soon as I can on progress. Obviously, the WMS has just come out, but she rightly asked these questions and that is as much as I can tell her.
The Government will also amend the Pensions Dashboards Regulations 2022 at the earliest opportunity to provide the pensions industry with clarity about the timings of its legal obligations. The Government will ensure that the pensions industry has adequate time and the necessary technical information to prepare for any revised connection deadlines. The Minister for Pensions will provide a further update to Parliament before the Summer Recess, as the noble Baroness, Lady Sherlock, mentioned.
However, none of this detracts from the importance of this Bill, which is needed irrespective of the timeline for delivery. The Pensions Dashboards Regulations 2022 set out detailed requirements for occupational pension schemes to be connected to a digital ecosystem, which will enable the provision of pensions information at the request of a pension scheme member. As set out in the Written Ministerial Statement, this framework for dashboards set out in the regulations remains fit for purpose. The Pensions Regulator may take enforcement action for non-compliance with any of the requirements in part 3 of the Pensions Dashboards Regulations. Once connected to the dashboards ecosystem, occupational pension schemes may be in breach of the regulations—for instance, if they fail to maintain connection to the digital architecture or fail to provide information within the timeframe set out in the regulations. In the event of non-compliance, the Pensions Regulator may issue penalty notices of up to £5,000 for individuals or up to £50,000 in other cases, such as those involving corporate trustees. Several questions were raised in this respect, notably by my noble friend Lady Altmann and the noble Lord, Lord Sharkey.
Having covered the basic penalties, I add that the Pensions Regulator is required by the Regulators’ Code to take a proportionate, consistent and targeted approach to enforcement. However, in the event of multiple compliance breaches, the regulations allow TPR to issue multiple penalty notices within the same document. The Pensions Regulator’s consultation on its compliance and enforcement policy closed on 24 February 2023. In that consultation, TPR set out its intention to consider the total amount of any penalties issued in the light of the circumstances of the breaches and the impact they have had. TPR expects to publish its consultation response and final compliance by the summer. Hopefully, this helps to answer the questions raised by the noble Lord, Lord Sharkey. We feel that the levels are consistent with other areas of pensions legislation. He may know more about that than me, but that is what we believe. Regarding the question raised by the noble Baroness, Lady Sherlock, there is nothing novel in the approach we are taking in this respect.
My noble friends Lord Holmes and Lady Altmann raised the important issue of data accuracy checks. It is critical that savers be able to trust the information in front of them. Trustees and managers have existing legal obligations in respect of data quality, including the accuracy principle under UK GDPR, which requires organisations to ensure that data remains accurate and up to date. The Pensions Regulator has set out its expectations on data quality in its record-keeping guidance. This includes that data be measured at least once a year. The regulator’s guidance on dashboards is also clear that trustees and managers must ensure that the values provided are accurate, and it urges them to work with administrators to improve data if required.
Bringing us back to base, this Bill from my noble friend Lord Young focuses on solving one key issue: that current pensions legislation does not prevent a trustee or manager being reimbursed for these penalties using funds from the pension scheme. The Bill increases protection for pension savers by prohibiting trustees and managers of occupational personal pension schemes from being reimbursed out of scheme asset in respect of penalties imposed on them for non-compliance with the Pensions Dashboards Regulations. The Bill would achieve this by amending Section 256 of the Pensions Act 2004, which already provides similar prohibition in other areas of pensions legislation. I confirm to my noble friend Lord Young—the noble Baroness, Lady Sherlock, mentioned this as well—that that was indeed an oversight. It did indeed escape the eagle-eyed lawyers—including that of the noble Lord, Lord Sharkey, so I am sure that he can be forgiven.
Under the Bill’s proposals, if a trustee or manager were to be reimbursed, and knew or had reasonable grounds to believe that they had been so reimbursed, they would be guilty of a criminal offence unless they had taken all reasonable steps to ensure that they were not so reimbursed. Should a trustee or manager be found guilty, the provisions of the Bill allow a maximum sentence of up to two years in prison, or a fine, or both. Additionally, were any amount to be paid out of the assets of a scheme in such a way, the Pensions Regulator would have the power to issue civil penalties to any trustee or manager which fails to take all reasonable steps to secure compliance.
The Bill has been drafted to make provision across the United Kingdom. As noble Lords will know, pensions policy is transferred to the Northern Ireland Assembly and the usual process would be for the Assembly to provide a legislative consent Motion for any provision relating to a transferred area. However, the Government’s position is that if the Northern Ireland Assembly is unable to consider the matter before the final amending stage of the Bill, it should proceed unamended. Ultimately, the Government are of the view that it would be wrong for these protections not to extend to pension members in Northern Ireland.
A number of questions were raised in relation to and beyond this Bill. My noble friend Lady Altmann asked about NEST and its readiness for connection. The announcement yesterday allows the programme to develop a firmer footing and put it on a path to successful delivery, including ensuring that all data providers can connect safely and securely. The programme and DWP have been in regular contact with NEST and will continue to be over the coming months, to support it in preparing to meet its connection duties when the revised timeline is in place.
My noble friend Lady Altmann also asked about One Login, the successor to Verify. As she may know, there are currently more than 340 services on GOV.UK, with around 190 accounts accessed via 44 different sign-in methods. GOV.UK One Login will replace these with a single ubiquitous way for users to sign in and prove their identity. It will improve inclusion and save millions of pounds through collaboration, efficient service delivery and tackling fraud across departmental boundaries. Development of GOV.UK One Login is progressing at pace, and I can reassure my noble friend Lord Holmes that the core of the system has been launched—its sign-in element, a web-based identity verification journey and a fast-track identity-checking app. There are currently five live services using One Login, with more services expected to onboard in 2023-24. The Cabinet Office and the Government Digital Service are working closely with central government departments to ensure that the programme meets their and their users’ needs.
My noble friend Lady Altmann asked about security and the alternative to Verify. The Pensions Dashboards Programme has procured an interim identity service provider, whose contract runs until January 2024. The service it provides is aligned with the Government Digital Service’s good practice guide. The Money and Pensions Service is engaging with officials in the Cabinet Office and the Government Digital Service, as well as the wider market, building on the engagement work undertaken in 2020, to identify all possible options that may comprise its new identity service delivery model.
Returning to the Bill, the noble Baroness, Lady Sherlock, raised an important point about trustees using schemes to buy indemnity insurance. I can reassure her that the Bill would make it a specific criminal offence for pension scheme trustees or managers to reimburse themselves using the assets of the pension scheme in respect of penalties. It also includes taking out an indemnity policy but having the cost of that reimbursed through the scheme.
The noble Baroness also asked about—I am paraphrasing what she said—a chilling effect, particularly for non-professional trustees; it is a very good point. The Government acknowledge that many trustees do an excellent job, often on a voluntary basis. The vast majority of trustees are in schemes with fewer than 99 members and so would be outside the scope of these regulations unless they connected to pensions dashboards voluntarily. While we accept that the regulatory requirements on trustees have grown a great deal over the years, this is only right given what is at stake, since we are talking about the pensions savings of millions of people. The Pensions Regulator will provide an extensive programme of communications to support trustees to meet the requirements in the pensions dashboards regulations.
The noble Lord, Lord Sharkey, asked about the statutory maximum fine in relation to summary conviction. I may have covered that, but I will write to him if I have not answered the question; I hope that is helpful.
To conclude, I am firm in my view that everyone rightfully deserves protection for their pension savings; we all know that, and that is exactly what the Bill does. It is a simple Bill in that it will extend a prohibition in existing legislation rather than placing new requirements or additional costs on to occupational pension schemes. However, the proposals under the Bill are powerful enough to swiftly deter any rogue actors from reimbursing themselves using pension assets that belong to hard-working people. I hope that the House recognises that and supports its passage today.
Social Security Benefits Up-rating Order 2023
Viscount Younger of Leckie Excerpts(3 years, 1 month ago)
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Viscount Younger of Leckie
That the draft Orders and Regulations laid before the House on 16 January be approved. Considered in Grand Committee on 22 February
Local Housing Allowance Rates
Viscount Younger of Leckie Excerpts(3 years, 1 month ago)
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Baroness Lister of Burtersett
To ask His Majesty’s Government what assessment they have made of the impact of the freeze in local housing allowance rates.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, the local housing allowance policy is kept under regular review. We monitor the average rents and shortfall levels for claimants to assess the impact of the policy. A significant support package was announced in the autumn Budget, including uprating benefits by 10.1% and extending the household support fund for 2023-24. Further support—discretionary housing payments—is available, and since 2011, nearly £1.6 billion in DHPs have been provided to local authorities.
Baroness Lister of Burtersett (Lab)
My Lords, according to the Institute for Fiscal Studies, this further freeze in private rental support means that two-thirds of lower-income private renters must cover at least a quarter of their rent from elsewhere. For many, this means a real cut in the value of inadequate benefits that are supposed to cover basic needs such as food. Cash-limited local authority discretionary housing payments are no answer, especially as their budgets have also been cut. Does the Minister accept that one consequence of this freeze is likely to be increased homelessness? What is his advice for those faced with a growing, unaffordable gap between help with housing costs and actual rents?
Viscount Younger of Leckie (Con)
I absolutely hear the noble Baroness, because we recognise that rents are increasing—there is certainly lots of anecdotal evidence of that in the press. However, the challenging fiscal environment means that difficult decisions were necessary to ensure that support is targeted effectively. That is why the Chancellor announced at the Autumn Statement a substantial package of cost of living support to target the most vulnerable households. As I mentioned earlier, one of the initiatives for those who require additional support is the discretionary housing payments available from local authorities, which are best able to target those funds.
Baroness Thornhill (LD)
My Lords, the overall level of housing benefit indeed remains a difficult political decision. However, does the Minister agree that it is the way the current local housing allowance system is structured that produces such an arbitrary and unfair system, particularly for private sector renters in high-rent areas? In the face of such overwhelming IFS evidence to prove this, are the Government giving any consideration to reframing the way that housing benefit is calculated in order to remove this growing unfairness?
Viscount Younger of Leckie (Con)
Again, I note the comments made by the noble Baroness. We are very aware of this, and we are aware of the juxtaposition of what central government can do and the role of local authorities. As I said earlier to the noble Baroness, Lady Lister, local authorities are best placed to understand exactly where the funds that we give them are best targeted. However, there is more than that; I mentioned the discretionary housing payments, but we also have the household support fund. There are a number of other initiatives which are important to mention as regards helping people, particularly to stay in their homes.
Lord Naseby (Con)
I accept what my noble friend says about the Autumn Statement, but is there not one sector of the public who are particularly badly affected? That is the people who are unfortunately unemployed and who are totally dependent on the local housing allowance and therefore disadvantaged, according to the local authorities that I have checked with.
Viscount Younger of Leckie (Con)
Yes, indeed, and this plays into what we spend a lot of time doing in our department, which is looking at universal credit and the benefit cap, including the need for housing. We therefore recognise the importance of safeguarding the welfare of claimants, particularly those who, I am afraid, have got into debt. Looking at how they are able to afford housing is a key part of that.
Lord Whitty (Lab)
My Lords, in the light of the rise in rents in the private sector, the likely rise in local authority rents and other social housing and the inadequacy of the local housing allowance to make good that, what is the Government’s estimate of the number of evictions that are likely to take place in both the public and private sector—that is in both social and private sector housing?
Viscount Younger of Leckie (Con)
I certainly do not have an estimate of what the evictions will be, but we are very aware of the pressures around and we focus on the homelessness prevention grant, which is given out. That is to ensure that people are not evicted from their homes. It is very important that we do whatever we can to support people with their houses, particularly in areas where there is the greatest pressure, and the homelessness prevention grant will help as an extra comfort blanket for that.
Lord Carrington (CB)
My Lords, what proportion of people receiving the local housing allowance are unemployed and therefore heavily dependent on this money to pay their rent?
Viscount Younger of Leckie (Con)
Although I do not have that particular figure—perhaps it would come from local authorities—I will certainly be very happy to write to the noble Lord with that information.
Baroness Sherlock (Lab)
My Lords, let us try to understand the system. The Government set up a system where you were meant to be able to rent one of the cheapest 30% of properties in an area on the local housing allowance rate and then they froze those rates in cash terms while rents kept going up. That forces people on low incomes to compete for fewer and fewer properties in their local area. This is not at the margins. Roughly 1.5 million people on universal credit get the housing allowance. Over half of those are having to top up their rents by an average of £100 a week. The inflationary increase that the Minister mentioned for the adult allowance on universal credit was a top-up of £100 a month, but £34 extra a month is coming in. How does that work?
Viscount Younger of Leckie (Con)
The noble Baroness might like to be reminded that the LHA was originally set at 50th percentile of local market rents and then the policy was reformed, as she will know, in 2011, when it was reduced to 30th percentile. The reforms were made for a reason, because the scheme was unsustainable, with excessively high LHA rates in some areas. Having said all that, we are very aware of the pressures at the moment, as I said earlier, and that is why we have other initiatives to help those who are really struggling— I acknowledge that they are—in some cases with their housing costs.
Lord Young of Cookham (Con)
My noble friend has mentioned several times discretionary housing grants, which are available to top up the difference between the local housing allowance and rents. Should not more be done to make those better publicised and if, as the noble Baroness said, there is pressure on the local authorities that have these grants available, would it not be more economical to top up the discretionary housing grants for local authorities if the Government are unable to review local housing allowances?
Viscount Younger of Leckie (Con)
Yes. My noble friend makes a good point, and it may well be that better communication is required. I will certainly look into that. However, local authorities, as I said earlier, have broad discretion to spend in line with their local priorities, supported by the non-statutory guidance provided by my department. That provides a list, crucially, of priority groups to assist with their decision-making. Obviously, that needs to be informed perhaps by better communication in terms of where the needs are. There is no evidence that it is not working, but I will look at that.
Baroness Janke (LD)
My Lords, there is evidence that the freezing of the local housing allowance affects families most severely, particularly those subject to the benefit cap and, most particularly, lone families. In his reply to the noble Baroness, Lady Lister, the noble Viscount mentioned the importance of targeting resources where they are needed. How can he justify this policy given that we know what the effect will be?
Viscount Younger of Leckie (Con)
I would answer that by saying that it is not a question of justifying it but of looking at the whole way in which we are helping people at the moment. That is why it is worth reminding the noble Baroness that, for example, working-age and disability benefits will increase by 10.1% in 2023-24, which I will be speaking to later in the Moses Room. In addition, the benefit cap will be increased in line with CPI. We understand the pressures that people are under and that is why we will also deliver further cost of living payments worth up to £900 for claimants on means-tested benefits, £300 for pensioner households and, as I mentioned yesterday, £150 for those on disability benefits.
Lord Watts (Lab)
My Lords, the Minister seems to suggest that people should contact the local authority if they are in trouble. Has he contacted all local authorities to see whether they can help those people? If he has done so, can he publish the findings?
Viscount Younger of Leckie (Con)
I will see whether we are able to publish the findings, but perhaps I may reassure the noble Lord that there is continuous interaction between central government and local authorities in terms of the funds that we give them. As I said earlier, it is for them to prioritise the targeting of the funds but, equally, we want some feedback on how well those have been targeted. That is happening.
Social Security Benefits Up-rating Order 2023
Viscount Younger of Leckie Excerpts(3 years, 1 month ago)
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Viscount Younger of Leckie
That the Grand Committee do consider the Social Security Benefits Up-rating Order 2023.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, I shall speak also to the draft Benefit Cap (Annual Limit) (Amendment) Regulations 2023 and the draft Guaranteed Minimum Pensions Increase Order 2023. All three draft instruments relate to the way in which pension and benefit rates are increased, and in my view the provisions of all three are compatible with the European Convention on Human Rights.
The Social Security Benefits Up-rating Order increases state pensions and benefits by 10.1% from April 2023, in line with the increase in the consumer prices index in the year to September 2022. The draft Benefit Cap (Annual Limit) (Amendment) Regulations also increase the four benefit cap levels by 10.1% in April 2023, in line with the increase in benefit rates. The Guaranteed Minimum Pensions Increase Order sets out the annual percentage by which the relevant part of an individual’s contracted-out occupational pension must be increased. The relevant part is the guaranteed minimum pension that was earned between 1988 and 1997. Occupational pension schemes are required to increase these, where they are in payment, by 3% for the tax year 2023-24.
By way of history and context, the Committee will know that inflation in the year to September has been the conventional measure used by Governments since 1987 in reaching a decision on how to increase the rates of state pensions and benefits. This is the latest figure that can be used to allow for the necessary operational and IT changes to be made across the DWP, HMRC and local authorities so that the new rates can come into force the following April.
This year, more than ever, it is imperative that these rates are increased so that we protect pensioners and people on low incomes. Putin’s illegal war in Ukraine and two years of a global pandemic mean that we and our partners across the G7 face levels of price inflation unprecedented in recent times. Strategically, the Prime Minister has made clear his commitment to halve the level of inflation this year, and on 9 February the Governor of the Bank of England told the Treasury Select Committee that he expects inflation to fall rapidly this year to somewhere below 5%.
More immediately, the draft uprating order ensures that state pensions and benefits keep pace with the increase in the cost of goods and services over the longer term. For this year’s uprating, the September CPI figure of 10.1% is forecast to be higher than actual inflation in the following year, but this follows two years where the opposite has been true. Using a consistent index ensures that these fluctuations even out so that state pensions and benefits retain their purchasing power over time.
In the shorter term, the Government acknowledge that further help is needed alongside the twin longer-term strategies of bearing down on inflation and uprating benefits consistently over time. The Government are therefore making provision for further cost of living payments in addition to the annual uprating. I will say more about these payments later, which I am sure the Committee realises are already well-rehearsed in this House.
Let us turn now to the detail of the draft Social Security Benefits Up-rating Order 2023. First, on state pensions, due to the Government’s commitment to the triple lock for 2023-24, the basic and new state pension will be uprated by the highest of earnings, prices or 2.5%. Consequently, as the increase in prices is the highest, state pensions will increase by September’s CPI of 10.1% for 2023-24. As a result, from April 2023 the full basic state pension will increase to £156.20 per week for an individual. The full rate of the new state pension will increase to £203.85 a week.
Other components of people’s state pension awards, such as those previously built under earnings-related state pension schemes, including the additional state pension, will also increase by 10.1%. The safety net for pensioners on low incomes, which is the pension credit standard minimum guarantee, will also increase by 10.1%, rising to £201.05 for a single pensioner and £306.85 a week for a couple.
I know that the take-up of pension credit is a matter of particular interest across the House and to members of this Committee. Noble Lords raised the matter on several occasions with my predecessor and noble friend, Lady Stedman-Scott. I thought I might share the latest position to be helpful to the Committee. Since April 2022, the Government have undertaken a substantial and sustained communications campaign to raise awareness of pension credit and to promote take-up. Since the awareness campaign began, weekly pension credit applications are on average 73% higher compared to the year before. Noble Lords will also be encouraged to learn that the latest statistics show that more households were in receipt of pension credit in August 2022 than in May 2022. This is despite the fact that the eligible population for pension credit is declining, as the new state pension lifts more pensioners above the basic level of the means test.
For those below state pension age, this order increases the personal and standard allowances of benefits, including universal credit. Noble Lords will be aware that there is no statutory requirement for the Secretary of State to increase these rates. However, to protect the most vulnerable in the current economic situation, he has decided to increase them by 10.1%, in line with the consumer prices index in the year to September 2022.
The monthly amounts of universal credit work allowances, which is the amount that a person with children or limited capability for work can earn before their universal credit payment is affected, will also increase in April by 10.1%. This too is a discretionary decision on the part of the Secretary of State. For those eligible for a work allowance who are receiving support with housing costs, the allowance will increase to £379 per month. For those eligible for a work allowance who are not receiving support for housing costs, it will increase to £631 per month.
Additionally, the order increases statutory payments by 10.1%. These include statutory adoption pay, statutory maternity pay, statutory paternity pay, statutory shared parental pay, statutory parental bereavement pay and statutory sick pay.
Turning to another important area, that of disability and carer’s benefits, the Government will continue to ensure that carers and people who face additional costs because of their disability get the support that they need. The Government recognise the vital role that unpaid carers play, and carer’s allowance will increase from April by 10.1% to £76.75 per week. Unpaid carers may also access support through universal credit, pension credit and housing benefit, all of which include additional amounts for carers.
For a single person, the carer element in universal credit will increase to £185.86 a month from April, while the additional amount for carers in pension credit and the carer premium in other income-related benefits will increase to £42.75 a week. Benefits for those who have additional costs as a result of disability or health conditions will also increase by 10.1%. These include disability living allowance, attendance allowance and PIP—the personal independence payment.
I turn to the draft Benefit Cap (Annual Limit) (Amendment) Regulations, which will also increase each of the four benefit cap levels by 10.1%. This will ensure that all households see an increase in their benefit following uprating. The national benefit cap levels will be £22,020 a year for couples and lone parents, and £14,753 for single people. For households living in Greater London the levels will be £25,323 a year for couples and lone parents, and £16,967 for single people. Just to put this in perspective, it means that households will be able to receive benefits up to the equivalent gross earnings value of around £26,500, or £31,300 in London.
Viscount Younger of Leckie (Con)
My Lords, I start by thanking the Committee in general for its overall support for these regulations. I also thank various Peers, including the noble Baroness, Lady Lister, and the noble Lord, Lord Davies, who made some very kind remarks about me coming into this particular role; I appreciate it. I was more than prepared for the fact that a good number of questions would arise from these regulations, of which there are three; I will of course do my best to answer them.
Let me start, in what I hope is not too discordant a way, by taking some issue with what the noble Baroness, Lady Sherlock, said. There is no question that there is no way in which we have played fast and loose with this; that is a bit unfair. A huge amount of thought has gone into this. I think the Committee has acknowledged that we have moved in the right direction by raising many of these benefits by 10.1%.
Baroness Sherlock (Lab)
Let me just clarify: I was not suggesting that the Government played fast and loose this year. I was talking about previous years when they broke with uprating and did not uprate at all, not this year. I am sorry if I did not make that clear.
Viscount Younger of Leckie (Con)
That is fine; I accept that. I think we can leave it at that.
I will start by tackling a couple of issues that were raised by the noble Baroness, Lady Sherlock, towards the end of her speech. She made some good points that completely chime with what the Government think. We totally understand that a number of individuals are suffering as a result of the war in Ukraine, the pandemic and cost of living issues generally. I completely acknowledge that; I hope the Committee understands that.
Let me start on why childcare has not been included; perhaps I can help. Regardless of the number of hours that they work, eligible parents can claim back up to a generous 85% of their childcare costs each month, up to the maximum amount of £646 for one child and £1,108 for two or more children. The vast majority of UC claimants receiving a childcare element do not hit the UC childcare caps. In fact, between August 2020 and July 2021, 92% of universal credit claimants receiving a payment for the UC childcare element were eligible to receive the full 85% of their childcare before the earnings taper.
So we believe that our policy provides fairness in the welfare system between those receiving out-of-work benefits and those in work by putting in place a reasonable cap on the childcare costs that a household can have reimbursed through UC, in each assessment period. We believe that the childcare policy aligns with the wider government free childcare offer in England and our similar funded early learning offers in the devolved nations. We keep childcare under review. We know that childcare costs are extremely high; I am certainly aware of that. I cannot add anything more to that, only that the Committee should be aware that we are aware of these issues. I will stick with that.
Secondly, the noble Baroness, Lady Sherlock, raised a perfectly reasonable point about food back usage. I am aware from a previous Oral Question in the Chamber of various Peers’ strong concerns and the comments that have been made. I chime with those as well. As the noble Baroness knows, food banks are independent, charitable organisations and our department does not have a role in their operation. What she and the Committee should know is that we are looking to give some feedback from a series of questions posed by the Family Resources Survey. We hope that these will be published next month and will give the Government some idea about usage. It is very much our wish that food banks are not needed. We need to continue to work as hard as we can to look at the reasons behind their usage. We can all guess what they are; I have given some flavour of that this afternoon.
On the same theme, I will touch on inflation. This leads to a number of important points raised by noble Lords, in particular the extremely good point from the noble Baroness, Lady Lister, on the increase in food prices. We are all concerned about the price of certain food items rising particularly steeply. Like many countries around the world, and as the noble Baroness knows, the UK faces the challenge of high inflation. We will continue to provide support through cost of living payments, which have been well rehearsed in this Committee and in the Chamber, while increasing state pensions, benefits and the benefit cap levels by 10.1%.
To help the Committee, the CPI stood at 10.1% for the 12 months to January 2023, down from 10.5% in December. This monthly decline was principally driven by lower rises in motor fuel. The Bank of England predicts that the CPI will continue to fall. The OBR states that government action has limited the severity of the recession and protected 70,000 jobs, and that it will take 3.4 percentage points off inflation by the end of March. This will contribute to a fall in inflation, which, as the Prime Minister has said, is expected by mid-year.
This leads quite neatly on to some of the points raised by the noble Baroness, Lady Lister, and the noble Lord, Lord Davies. To paraphrase, the general gist of their question was: why can we not uprate more frequently using a more up-to-date CPI figure? That is a fairly reasonable question. The Secretary of State undertakes an annual review of benefits and pensions. As I mentioned earlier, the CPI in the year to September is the latest figure that the Secretary of State can use. This is crucial to allow sufficient time for the required operational changes before new rates can be introduced at the start of a new financial year.
All benefit uprating since April 1987 has been based on this particular timing. Given the volumes involved, the technical and legislative requirements and the interdependencies across government, we state very firmly that it is not possible to undertake the uprating exercise any later than currently timetabled. I do not say this to be particularly cheeky but I wonder whether the comments might not have been quite so critical of this timing issue for the higher uprated figure had there been real evidence today of a much lower level of inflation, so all those people would be getting more than the level of inflation—perhaps I should not go there.
I turn to the local housing allowance—the LHA—which was raised by the noble Baroness, Lady Lister, and others; yes, we had 10 minutes on this in the Chamber earlier. I am not sure that I can really add to what I have said. I genuinely believe that the £1 billion that we invested in 2020 to provide support for private renters by increasing the rate to the 30th percentile was the right thing to do. It is a fact that it has been frozen but it is also a fact that the discretionary housing payments—DHPs—and homelessness protection grants are helpful. I say again that we believe it is right that we defer to local councils and local authorities to make the right decisions in terms of how to target the funds that we have given them, including to people who are generally suffering and are on the lowest incomes. It is up to them to decide what to do.
Baroness Lister of Burtersett (Lab)
Perhaps I can ask again the question that I asked this afternoon but in a slightly different way. Let us take somebody whose local housing allowance is well below the rent that they are paying and they are on benefits. They are probably struggling anyway because, as we have heard, benefits have been cut in real terms in recent years—if benefits had not been cut since 2010, people might have been in a better position that they are to withstand the current cost of living crisis. Let us say that they also live in an authority where the local housing allowance budget is under great strain; according to Shelter, some authorities are really struggling because demand is so high. What is the Minister’s advice to them? What should they do? There is no point saying, “Go to the local authority”, because there may not be any money there.
Viscount Younger of Leckie (Con)
I take note of that; I am certainly not dismissing what the noble Baroness says. It is a legitimate point that she raises. I hope, though, that she will acknowledge that it is right that the money we give is properly targeted to those who are in genuine need. I would like to hear of issues where they are not particularly targeted. If the money is going to people who do not need it, that is an issue, but the main thing is that the money should go to people who are genuinely in need. However, it does not just rely upon that; it relies upon the other initiatives that I have already mentioned.
To pick up on what the noble Baroness said in her remarks, the local housing allowance rates are not intended to meet all rents in all areas. In areas where rents are more expensive, those in receipt of benefits have to make the same decisions about where to live as those not claiming benefits. May I just leave it that we probably will not agree on this and that I will take away what the noble Baroness has said? It is important, I acknowledge, that local authorities follow through and give support to those who are in genuine need in all areas.
I will move on to the transitional element—that is, the uprating and the link to universal credit and transitional protection, which was raised by the noble Baroness, Lady Lister, and the noble Lord, Lord Davies. As they know, TP provides eligible claimants time to adapt to UC by protecting entitlement at the point of migration to universal credit. TP is neither intended to replicate permanently nor be an indefinite increase in benefits. I therefore acknowledge that it erodes. This ensures that UC entitlement for those managed migrations will gradually align with new claimants in the same circumstances. The noble Lord, Lord Davies, asked how many people will see a less than 10.1% increase due to the interaction with transitional protection; I will need to write to him on that point.
Baroness Lister of Burtersett (Lab)
I asked that question as well. Will the Minister write to me about how many will be affected? I had hoped that he might be able to bring those figures today.
Viscount Younger of Leckie (Con)
If I had been given advance notice of the questions, I might have been able to.
Baroness Lister of Burtersett (Lab)
The noble Viscount was. I am sorry but the very reason I raised it with him earlier this week was so that it might be possible to bring the figures today.
Viscount Younger of Leckie (Con)
In which case, I apologise. I would normally take note and come back with some answers. Of course I will include the noble Baroness; in fact, I will include any Peer who has taken part in this debate in my letters about anything that I am not able to answer.
The noble Lord, Lord Davies, and the noble Baroness, Lady Sherlock, said that the Government need to be clear about why we are raising the guaranteed minimum pensions by 3%. For the pre-2016 pensioners, the Government meet the difference; for post-2016 pensioners, we do not—however, these people benefit from transitional protection. I hope that gives some form of an answer.
The noble Baroness, Lady Sherlock, raised communication. A fact sheet covering the policy change was published on GOV.UK in August 2021—I see that she is nodding at that—which invited people to write to the department if they wanted an explanation of how they had been affected by the policy change. One request for compensation has been received so far, which is interesting. As of 25 January, we do not yet know the outcome of that claim, but I hope that provides an answer.
The noble Baroness also asked about the benefit cap increase linked to child poverty. As she will know, the Government are fully focused on tackling the root causes of poverty, such as children’s education and parental worklessness, to improve the lives of people in our country. She will know that the best way of doing that is for us to have a strong economy and get people into work. As mentioned earlier, the proposed levels will mean that households will be able to receive benefits up to the value of gross earnings of around £26,500, or £31,300 in London.
The noble Baroness, Lady Lister, asked about low pay and whether the Low Pay Commission—the LPC—would include in its deliberations the adequacy of benefit rates. I thank the noble Baroness and will draw the Treasury’s attention to that.
There are a number of other questions that I need to answer, but we probably need to draw a halt, as time is running short.
Baroness Janke (LD)
Please can I have some answers to my questions, perhaps in writing?
Guaranteed Minimum Pensions Increase Order 2023
Viscount Younger of Leckie Excerpts(3 years, 1 month ago)
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Viscount Younger of Leckie
That the Grand Committee do consider the Guaranteed Minimum Pensions Increase Order 2023.
Benefit Cap (Annual Limit) (Amendment) Regulations 2023
Viscount Younger of Leckie Excerpts(3 years, 1 month ago)
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Viscount Younger of Leckie
That the Grand Committee do consider the Benefit Cap (Annual Limit) (Amendment) Regulations 2023.