Employment and Support Allowance

Viscount Younger of Leckie Excerpts

Wednesday 18th October 2023 Lords Chamber

[Lord Young of Cookham]

To ask His Majesty’s Government what progress has been made on getting those on Employment and Support Allowance into work.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, in 2017 the Government set a goal to see 1 million more people in work by 2027. Last year, we surpassed that goal five years early. The Government have a range of initiatives to support disabled people and people with health conditions to start, stay and succeed in work. This includes work to further join up employment and health systems, including employment advice in NHS talking therapies and individual placement and support in primary care.

[Lord Young of Cookham (Con)]

My Lords, I welcome the initiatives taken since 2017 to help back into work those who can and to support those who cannot with appropriate measures without penalising them. But is there not a worrying underlying trend in a country that ought to be getting healthier? There are now 2.5 million people out of the workforce due to long-term sickness; that figure is up half a million in the last four years. Last year, there were double the number of new claimants for disability as against the year before. In the last six months, over half those under 24 in work have taken time off because of mental illness. In the last Budget, I welcomed the £2 billion allocated to support back into work those in poor health, but can my noble friend explain how that initiative will reverse the trend I have mentioned in the interests of those who are out of work but also in the interests of the wider economy?

[Viscount Younger of Leckie (Con)]

The House will not be surprised when I say that that is one of the Government’s biggest challenges—that is very clear. People with long-term sickness are some of the hardest to help and often face multiple barriers in returning to the labour market. There is a range of complex and interacting factors that contribute to the rise in economic inactivity due to long-term sickness, such as changes in population demographics and the increasing prevalence of work-limiting health conditions. On my noble friend’s question, regarding the support in the spring Budget, announcements included Work Well and universal support, and we have increased our support in particular for helping people to get back into work, where they can, with additional work coach time. There are other multiple national strategies and initiatives, including Excellence in Continence Care and the major conditions strategy, and we are moving at pace on a number of these initiatives.

[Baroness Lister of Burtersett (Lab)]

My Lords, employment and support allowance is one of the working-age benefits potentially under threat because it is rumoured that it may not be inflation-proofed next year, given the inflation rate announce d today. Given that many benefits have already been subject to a series of cuts since 2010 and the growing evidence of acute hardship among recipients both in an out of work, will the noble Viscount make the case within government for full inflation-proofing as strongly as possible?

[Viscount Younger of Leckie (Con)]

I should remind the noble Baroness that we uprated by 10.1% in 2023, and I take her point. I can reassure her that the process leading up to April 2024 is beginning; I have no doubt that the Secretary of State will be looking very carefully at all the evidence, and announcements will be made at the appropriate time.

[Baroness Browning (Con)]

My Lords, I declare a long-standing family interest in ESA, particularly in the support group. I venture to offer my noble friend some advice, as I could write not just a book, but a series of books on applications to ESA. The Government need to make sure that they employ people who fully understand the medical conditions they are dealing with. To give a quick example, it is no good having so-called doctors asking people who suffer from epilepsy and epileptic seizures whether they can get in and out of a bath. When the reply comes, “As someone with epilepsy, I am advised not to get into a bath of water”—for obvious reasons—the reply comes back, “Just pretend you don’t have epilepsy. Could you get in and out of a bath or not?” It is not just a joke—it is tragic, because it causes the most appalling problems for many disabled people.

[Noble Lords]

Hear, hear.

[Viscount Younger of Leckie (Con)]

I have listened very carefully to my noble friend and have every sympathy. It might help to know that we are looking very carefully at the descriptors for those who are disabled and who may or may not be able to return to the workplace or even take up work. Those descriptors, as part of the WCA, are being particularly considered in terms of the focus on mobility, continence and social engagement. A lot of work is going on in this area; it is being done at pace but also with a great deal of empathy and care.

[Baroness Sherlock (Lab)]

My Lords, let me follow on from what the noble Baroness, Lady Browning, has very movingly said. As the noble Lord, Lord Young of Cookham, described, we are now in a position where those who are out of the labour market long-term because of ill health are the single biggest challenge facing our economy. Whenever we have this conversation, the Minister mentions different initiatives. However, as we now have 2.6 million people who are out of the labour market long-term, and we know that, for example, 23% of them want a job, that is 600,000 people who are desperate to get back to work but need appropriate help. Instead of having a series of schemes, is it not time to make sure that the core DWP, jobcentres and all the staff understand what they are dealing with when it comes to applications and to helping people to get back to work? The country needs it, and so do they.

[Viscount Younger of Leckie (Con)]

That is exactly what we are doing. We have been recruiting at pace more experts for the jobcentres and, as the noble Baroness will know, are consulting on the conditionalities and descriptors. It is quite right that we engage with the public and other stakeholders to make sure that we get this right. She will know that the WCA focus is a more rapid matter compared to the National Disability Strategy, which is a much more long-term thing. We are taking this very seriously; she is quite right to point this out, but a lot is going on and it will lead to results.

[Lord Palmer of Childs Hill (LD)]

My Lords, to follow on from various other questioners, the jobcentre work coaches will make referrals to the new programme, which the Minister has referred to. There is then initial assessment and then they receive wraparound support. All this sounds very good on paper, but how even-handed will the training and monitoring of these people, who will be assessing people’s future, be across the UK?

[Viscount Younger of Leckie (Con)]

I am not sure about the definition of “even-handed”, but I reassure the noble Lord that it includes training the experts in the jobcentres in dealing with the individuals they are looking at with a great deal of empathy and sympathy. We know that one in four people who are disabled wish to come into work; it is a question of making sure that the assessment is correctly done, that the individuals concerned buy into it and that employers are engaged in taking them on.

[The Lord Bishop of Sheffield]

My Lords, one such initiative that supports people with a health condition to find and remain in paid employment is called Working Win. It has been piloted in South Yorkshire, and I am assured that both the DWP and the South Yorkshire Mayoral Combined Authority consider the pilot to have been a success. What plans do the Government have to roll out this health-led employment programme more widely?

[Viscount Younger of Leckie (Con)]

Although I do not have information on that specific programme here, I will certainly write to the right reverend Prelate. It no doubt fits in well with and complements many of the other initiatives we are taking, including, as I mentioned earlier, the work coach support, the disability employment advisers, the Access to Work grants and the Disability Confident scheme—I could go on.

[Lord Sikka (Lab)]

My Lords, in May 2010, 527,000 people were claiming the employment and support allowance. At that time, the NHS England waiting list was 2.5 million; now, it is 7.8 million and 1.63 million people are claiming the allowance. Clearly, there is a correlation between the two statistics. Can the Minister explain why the Government have failed to address the main cause—the degradation of the NHS?

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

This is much more of a health matter, but we in the DWP are focusing on getting the 2.5 million back into work, should they wish to.

[Baroness Redfern (Con)]

My Lords, getting more people into work requires resources and training for those on the front line, particularly those in jobcentres. However, surely as important are the contacts made with employers, so what is my noble friend’s assessment of progress in empowering national and local employers to take on more disabled people?

[Viscount Younger of Leckie (Con)]

There are a few initiatives, such as the Disability Confident scheme, which I have alluded to. Increasing access to occupational health is a very important initiative which particularly requires focus on small and medium-sized enterprises that do not normally have occupational health. I also mentioned Access to Work; it is very important that we empower and encourage businesses to take on those who are disabled.

Pensions (Extension of Automatic Enrolment) (No. 2) Bill

Viscount Younger of Leckie Excerpts

3rd reading
Monday 18th September 2023 Lords Chamber

[Baroness Sherlock (Lab)]

I thank the noble Baroness, Lady Altmann, for piloting the Bill through this House and I share her thanks to the Minister and his team, and all noble Lords who participated. Auto-enrolment is a much-loved child with more than one parent. As the noble Baroness said, the work came from the Pensions Commission, set up by the last Labour Government and on which my noble friend Lady Drake and the noble Lord, Lord Turner, served with such distinction. The coalition Government implemented it in 2012, and there has been a welcome growth as a result in the number of people saving for a pension. We can all celebrate that—but, as we noted at Second Reading, pensions adequacy is still an issue, so we need to look at continually improving auto-enrolment and addressing the question of the gender pensions gap, which remains a matter of serious concern.

This simple, permissive Bill would allow the Government to make progress in fulfilling their commitment by implementing some of the 2017 review measures, namely reducing the lower age limit for being auto-enrolled and removing the lower earnings limit. The Minister confirmed at Second Reading that the Government were still committed to doing that in the mid-2020s. Without wishing to be depressing, as 2023 begins its descent towards the sea, I wonder if the Minister can give us any hint as to whether 2024 might be the year, or is this gently rolling into the grass beyond the election?

The Opposition fully support this Bill. I thank again all those involved in proposing it and look forward to its passage.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I, too, congratulate my noble friend Lady Altmann on piloting this excellent Bill to its final stages. As I said at Second Reading, it has the full backing of His Majesty’s Government, and I am pleased to reiterate that support today. As the noble Baroness, Lady Sherlock, has just said, the 2017 review measures will see hundreds of thousands more young workers brought into workplace pensions for the first time. Alongside this, 2.5 million existing savers will see their pension contributions grow. Removing the lower earnings limit will mean that every worker will be paying pension contributions from their first pound of earnings and benefit from an employer contribution. Overall, an extra £2 billion-worth would be saved a year.

I am grateful for the constructive scrutiny of the Bill from noble Lords on all sides of the House. I acknowledge the thoughtful interventions at Second Reading of the noble Baronesses, Lady Sherlock and Lady Drake, and the noble Lords, Lord Palmer of Childs Hill and Lord Davies of Brixton. If the House agrees to final passage today, the Government will look to play their part by consulting on how to implement the expansion of automatic enrolment at the earliest opportunity, which I hope gives some idea of the timescale to the noble Baroness, Lady Sherlock. We hope that it could be later this year. We will then report to Parliament about how we intend to proceed in accordance with the provisions in the Bill. I am very pleased that there is cross-party support for my noble friend’s Bill, and I hope that this House will agree to its final passage today.

Work Capability Assessment Consultation

Viscount Younger of Leckie Excerpts

Tuesday 5th September 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, with the leave of the House, I will repeat a Statement given in the other place by my right honourable friend the Secretary of State for Work and Pensions. The Statement is as follows:

“With permission, I would like to make a Statement on our proposed changes to the work capability assessment, which aim to ensure that no one who can work is permanently written out of this country’s strong labour market story. It is a story that has seen nearly 4 million more people in work compared to 2010; 2 million more disabled people in work than in 2013; and record numbers of people on payrolls. But, although it is the case that the number of people overall who are economically inactive has fallen strongly from its pandemic peak, there remain over 2.5 million people who are inactive because of long-term sickness and disability.

Yet we know that one in five people on incapacity benefits who are currently not expected to prepare for work want to work in the future, if the right job and support were available, and the proportion of people going through a work capability assessment who are being given the highest level of award and deemed to have no work-related requirements at all has risen from 21% in 2011 to 65% last year. This situation is excluding significant numbers of people from receiving employment support to help them to move closer to work opportunities. It is holding back the labour market and economy but, perhaps most important of all, it is holding back human potential. I want to ensure that everyone who can benefits from all the opportunities that work brings—not just the financial security but all the physical and mental health benefits too.

No one who can work should be left behind. That is why, earlier this year, we announced an extra £2 billion-worth of investment to help disabled people and those with health conditions move into work. That includes bringing in our new universal support employment programme, which will assist disabled people and those with health conditions to connect with vacancies, and will provide support and training to help them start and stay in a role. Through our individual placement and support in the primary care programme, we are investing £58 million to help more than 25,000 people to start and stay in work. We are modernising mental health services in England, providing wellness and clinical apps, piloting cutting-edge digital therapies and digitising the NHS talking therapies programme. We have also published fundamental reforms to the health and disability benefits system through our health and disability White Paper. That will see the end of the work capability assessment and a new personalised, tailored approach to employment support to help everyone reach their full potential.

The scale of our reforms means that they will take time to implement, but there are changes we can make more quickly that will also make a difference. So before the White Paper reforms come in, I want to make sure that the work capability assessment—the way in which we assess how someone’s health limits their ability to work and therefore what support they need—is delivering the right outcomes and supporting those most in need. Today my department is launching a consultation on measures to ensure that those who can work are given the right support and opportunities to move off benefits and towards the jobs market.

As I have said, we know that many people who are on out-of-work benefits due to a health condition want to work and, assisted by modern working practices, they could do so while managing their condition effectively. We have seen a huge shift in the world of work in the last few years—a huge change that has accelerated since the pandemic. This has opened up more opportunities for disabled people and those with health conditions to start, stay in and succeed in work.

The rise in flexible and home working has brought new opportunities for disabled people to manage their conditions in a more familiar and accessible environment. More widely, there have been improvements in the approach that many employers take to workplace accessibility and reasonable adjustments for staff. A better understanding of mental health conditions and neuro- diversity has helped employers to identify opportunities to adapt job roles and the way disabled people and people with health conditions work.

The consultation that I am publishing today is about updating the work capability assessment so that the way it works keeps up with the way people work. The activities and descriptors within the work capability assessment, which help to decide whether people have any work preparation requirements to improve their chances of gaining work, have not been comprehensively reviewed since 2011. It is right that we look afresh at how we can update them, given the huge changes we have seen in the world of work. For instance, the work capability assessment does not reflect how someone with a disability or health condition might be able to work from home—yet we know many disabled people do just that.

Our plans include taking account of the fact that people with mobility problems, or who suffer anxiety within the workplace, have better access to employment opportunities due to the rise in flexible and home working. We are consulting on whether changes should be made to four of the activities and descriptors that determine whether someone can work, or prepare to work, to reflect changes in working practices and better employment support. This includes looking at changing, removing or reducing the points for descriptors relating to mobilising, continence, social engagement and getting about. We are not consulting on changes to the remaining descriptors, which will remain unaltered. These changes will not affect people who are nearing the end of life or receiving cancer treatment, nor will they affect the majority of activities for those with severe disablement—for example, if a person has severe learning disabilities or is unable to transfer from one seat to another.

We are also consulting on changes to the provision for claimants who would otherwise be capable of work preparation activity but are excluded from work preparation requirements on the basis of substantial risk, most commonly on mental health grounds. The original intention for substantial risk was for it to be advised only in exceptional circumstances. It was intended to provide a safety net for the most vulnerable. However, the application of risk has gone beyond the original intent. We are therefore consulting on how we might change how substantial risk applies, so that people are able to access the support they need to move closer to work and a more fulfilling life. We are also considering the tailored and appropriate support that will be needed for this group, safely helping them move closer to work.

These proposals will help people move into, or closer to, the labour market, and to fulfil their potential. We are consulting over the next eight weeks to seek the views of disabled people, employers, charities and others about our proposed changes. If the proposals were taken forward following consultation, the earliest we could implement any change would be from 2025, given the need to make changes to regulations and ensure appropriate training for health assessors.

These plans are part of our wider approach to ensuring that we have a welfare system that encourages and supports people into work, while providing a vital safety net for those who need it most—a welfare system that focuses on what people can do, not on what they cannot, and that reflects the modern changes to the world of work. It is time to share the opportunities of work far more fairly. It is time for work to be truly available to all those who can benefit from it. It is time to get Britain working. I commend this Statement to the House.”

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

I begin by thanking the noble Lord, Lord Palmer, and the noble Baroness, Lady Sherlock, for their points. The way I read it is that the consultation has broadly been accepted, but I understand that a number of questions have been raised and I will do my best to answer them.

First, there is some agreement that it is very important to support disabled people and to give them every opportunity, if they are not in work, to find a way of getting into it or to prepare for it. Hopefully, there is agreement to that extent. The noble Baroness, Lady Sherlock, is absolutely right that no one should be shut out of the workplace. We are at the forefront in wanting to do more to ensure that disabled people who want to and can work are able to do so. However, some disabled people may not be able to work; we are a compassionate country and it is important to make the point that, where they are generally unable to work, the state should step in and support them, as it does at the moment.

I take issue with what the noble Baroness said about the intention and scope. We believe that it is an important measure to look at the conditionalities during this eight-week consultation, because it is important to move quickly. It is part of a whole package of measures that the Government have taken and continue to take for the disabled, which includes, as the House will be aware, the national disability strategy and the disability action plan. I will expand on that to try to be helpful. By the way, the sole intention is not to do with figures —there is no target; it is not to do with that at all; it is to look more closely at who in the disabled diaspora might be willing to work and how they can be encouraged and helped into work or preparing for work.

To pick up a point from the noble Lord, Lord Palmer, as he will know, the consultation is inviting comments on the four descriptors: mobilising, continence, getting about and coping with social engagement. As the House will know, people are referred for a WCA when they report a health condition or disability which may prevent or limit their ability to work or undertake work preparation activities. Currently, the activities do not take account of somebody’s ability to work from home, as the Statement said. We have identified some activities as the most likely to be affected by modern changes in the workplace, including working from home and better support and understanding from employers around how to overcome barriers to work for disabled people and people with health conditions. To that extent, we are moving more quickly and offering this targeted approach as part of the consultation.

On our broader support, I remind the noble Baroness that we announced £2 billion at the Spring Budget 2023 to support disabled people and people with health conditions into work, including through WorkWell and universal support. We also increased our support offer to help people move back into work when they can with additional work coach time.

I will set out some figures for the House. Roughly 700,000 new benefit claimants go through a work capability assessment each year and we are seeing around 450,000 determined as having limited capability for work-related activity. Hopefully, that gives some scope of the population we are working within. Clearly, if we helped just 10% of that cohort, around 45,000 more people per year would be placed in a group in which they would receive the necessary help to get into employment.

[Baroness Sherlock (Lab)]

I do not think the Minister answered some of the questions I asked—maybe he omitted to do so. I asked about the timing and whether a shift away from the higher rate to the lower rate would have any implications for the amount of money somebody got, for example. Did he miss those questions?

[Viscount Younger of Leckie (Con)]

This is unusual procedure. On the timing, I made it clear in the Statement that we will work through this consultation and receive the results. In terms of the results coming through, I mentioned 2025. I will certainly look at the other questions the noble Baroness raised and write to her, although I think there were probably just one or two.

[Baroness Stedman-Scott (Con)]

My Lords, I apologise for not being here for the start of the Statement. In all my time in the department, now being carried on by my noble friend the Minister, there was real ambition to help those people in the work capability assessment—earlier rather than later, because the longer you leave it, the worse the condition gets.

This weekend, I was trying to tidy up my study, which is a massive job, when I came across an independent evaluation of a programme we ran at Tomorrow’s People when I was there—I declare an interest, although I am not there any more. We had a programme in a doctor’s surgery called “The Right Prescription: A Job”. When somebody was physically or mentally unwell and came to the doctor, if there was nothing he could do for them, he called them his “heartsink patients” because his heart sank when they walked in the room. He wrote “a job” with us on the prescription pad.

We had a consulting room and, initially, we worked with a cohort of 200 people. The results were pretty astounding. We ended up with 880 surgeries across the country wanting us, representing millions of patients. The Government at the time—I will not declare which—said that it was too expensive, but for an investment of £2,000 you got a return to society of £10,000. We reduced the anti-depressant prescription bill by 34% for those 200, saved the doctor 20% of his time, saved referrals to counsellors and got people into work. On average, 80% of them were there 12 months later, although it was intense.

We must look at the consultation as an opportunity for people to put forward ideas that make life better for people. If the department will have me in for 10 minutes, I will certainly come back and share that evaluation to see whether it can help, because people with mental health issues in particular need all the help we can give them.

[Viscount Younger of Leckie (Con)]

I take this opportunity to encourage all those who are interested to give input to the consultation. To pick up on my noble friend’s point about GPs, a key principle is that the WCA considers what impact the person’s disability or health condition has on them, not the condition itself. To clarify, the department does not ask claimants’ doctors to make decisions about their patients’ capability for work. This is because the doctor diagnoses and treats a patient’s illness, whereas the WCA healthcare professional’s role is to assess the effects of the claimant’s illness on their ability to perform everyday work-related activity. It is important to make that distinction.

[Baroness Bennett of Manor Castle (GP)]

My Lords, my question is informed by a study published this May by a group called INvolve, which spoke to 500 UK employed adults with invisible disabilities, including visual impairment and chronic pain. Two-fifths said they were not getting the support they needed at work, particularly as businesses cut back under the current economic challenges; two-thirds said it was up to them to sort out their own support, as they were not getting help from their employer; one-quarter said they had a workload that they simply could not manage; and one- fifth said they were considering leaving their job as a result of their difficulties. The kinds of things these sick and disabled workers were seeking were flexible working hours, training for other employees to understand their situation and assistive technologies and tools.

This government action is focused entirely on people suffering from sickness and disabilities, but they are going out into a workplace where there is clearly significant discrimination. The Statement makes a lot of the move towards working from home, but quite a number of businesses have been heading in the opposite direction, trying to force staff now working from home to come back into the office. Do the Government plan measures of a similar scale to those in this Statement to crack down on discrimination in the workplace and to ensure that employers offer conditions in which the people this Statement refers to can work?

[Viscount Younger of Leckie (Con)]

The noble Baroness makes a very good point, which allows me to emphasise the dependence on employers. The noble Baroness will know that we have reached out considerably to employers to encourage them, and we continue to encourage them to take on those who are disabled. ONS data from September 2022 to January 2023 shows that 44% of working adults work from home exclusively or at least some of the time each week. If that is translated into those who are disabled working for employers, that is quite encouraging. We encourage everyone to input into the consultation.

The noble Baroness may know that recent published data suggests that disabled people are more likely to work in the health, retail or education sectors. As of July 2023, these three industries have a combined total of 350,000 vacancies. There is a tremendous opportunity there, and we need to work through that.

Reducing Parental Conflict

Viscount Younger of Leckie Excerpts

Thursday 20th July 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, since its announcement, we have allocated £77 million to the reducing parental conflict programme, 151 local authorities have been directly supported, and the programme has developed evidence and approaches to relationship support that benefit families. We are committed to a cross-government approach to provide a strong, early help offer to families, and we continue integration into local services and alignment with other key government programmes, including family hubs and Supporting Families.

[Baroness Stedman-Scott (Con)]

My Lords, I thank my noble friend for that Answer. I am very encouraged about the encouragement of cross-government department working. If I have understood it correctly, Supporting Families is being more aligned to DfE work and family hubs. Does my noble friend agree that there is much to be gained by aligning the reducing parental conflict programme in this way?

[Viscount Younger of Leckie (Con)]

I believe the work achieved and continuing to be done within the RPC is invaluable. The programme has had three interim reports published that give strong evidence for that. As announced yesterday, three reports to be published in due course further demonstrate the impact of the programme with more granular detail. We are working to integrate RPC outcomes into other key government programmes, including family hubs and the Supporting Families programme, but for the moment the RPC programme remains firmly within DWP.

[Baroness Thornton (Lab)]

My Lords, for this programme, the DWP developed a national offer of parental relationship support. In 2015 it piloted a local family offer in local areas, in 2019 it invited top-tier authorities to apply for strategic leadership support funding and developed a practitioner training offer, in 2021 the DWP offered workforce development grants, and last month it announced £2.8 million funding for eight projects to reduce parental conflict. The Government have just now committed £33 million to be spent on this programme between 2022 and 2025. Will the Minister tell the House where the £33 million is going and the outcome of all these activities?

[Viscount Younger of Leckie (Con)]

It certainly remains work in progress. As the noble Baroness said, the reducing parental conflict programme was initiated in 2017 in response to two key pieces of evidence, one of which was the number of children who live in coupled families reporting conflict, which in 2020 was as much as 12%. We have three further evaluation reports coming out. They are enormous—I have seen them. This granular detail will be coming out shortly. It shows, for example, that 90% of those parents who have gone through it have a satisfaction rate, meaning that there is already some valuable information about its success.

[Lord Palmer of Childs Hill (LD)]

My Lords, I am not reassured by what the Minister said about how this is being rolled out. Is there adequate support for people without easy access to digital services? We seem to have an academic exercise. The Minister said it is being rolled out through local authorities. He will know that most local authorities have straitened financial circumstances at the moment. Does the Minister have evidence that they are actually doing something to give face-to-face support to families with these problems?

[Viscount Younger of Leckie (Con)]

Very much so. The noble Lord may know that we had a first challenge fund, and we now have a second challenge fund with eight interesting initiatives as part of RPC. For example, one of the challenge funds is looking at the digital side. This has a particular focus on ensuring that those who are not particularly digitally aware can be. The results of that will come out in due course, but I hope that answers directly the noble Lord’s question.

[Baroness Altmann (Con)]

My Lords, I am delighted to hear about all the work that my noble friend and the department are doing and that they have recognised how important the role of stability and the family unit is in creating family cohesion. Does my noble friend agree that it is also important to include the role of grandparents and intergenerational aspects? What are the Government doing in this respect on policy and actions?

[Viscount Younger of Leckie (Con)]

My noble friend makes an excellent point about the role of grandparents because I think, and I am sure that the Government think, that for stability within families—which now come in all shapes and sizes, and we must recognise that—the role of grandparents is incredibly important to feed down to their grandchildren certain lessons in life. The family test, which the House will know about, was introduced by the Government in 2014. It aims to bring a family perspective into policy-making, and various tests are used. This is something for which we are responsible in my department, particularly looking at the guidance and the raising of awareness about this initiative.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, can the Minister assure the House that his civil servants are briefing Opposition spokesmen on this and other DWP programmes to ensure that there is a smooth transition to the next Labour Government?

[Viscount Younger of Leckie (Con)]

I am not going to be tempted into giving an answer to that. I have to tell the noble Lord, as he will expect me to say, that we are fully focused on a major programme of change, including in my particular area. Our aim is to focus on children, and that is the most important thing that we are doing.

[Lord Farmer (Con)]

My Lords, it is heartening to hear that there is integration going on between departments of government, which has always been a bugbear for us to contend with. I just mention family courts, which post-separation conflict clogs up very expensively, leaving families in destructive limbo. Is my noble friend the Minister taking this area into account to integrate into the policy?

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

Yes, and my noble friend makes an important point about the link with the MoJ, particularly its work in the family courts. We are watching with interest the progress of work on mediation between parents who are separating. I also endorse my noble friend’s point on wider integration. I would like to reassure the House that the Government are working closely with a focus on relationship dynamics. That is what it is all about. Evidence shows that conflict, which can be intense, frequent and poorly resolved, as we know, can really damage children’s mental health and their longer-term outcomes, including attainment and employment.

[Baroness Butler-Sloss (CB)]

My Lords, as a former family judge, I saw a great deal of this. To what extent are the Government able to help with the traumatic effect on so many of these children?

[Viscount Younger of Leckie (Con)]

I think I have already alluded to a number of points of help because, first of all, the reducing parental conflict programme sits within my department. We have the Supporting Families programme, which is moving into the DfE quite shortly, and we have the family hubs. On the noble and learned Baroness’s question, we are working across government on family-focused policies, and it is very important that we continue to do that to provide cohesive answers to these very challenging matters.

[Baroness McIntosh of Pickering (Con)]

My Lords, will my noble friend pay tribute to the work of volunteers who man child contact centres, which permit access to warring parents often in a very tense situation? They do a fantastic job. Will he ensure, through the MoJ, that they are properly funded, whether they are in the public or the private sector?

[Viscount Younger of Leckie (Con)]

Yes. My noble friend makes a very good point about those who are outside the main programmes but set aside their own time to help, often with some extremely challenging matters. That is often within families themselves. The role of grandparents was mentioned. If there are some issues regarding the parents, the grandparents often have a most important role to step in and help in linking in with those who are skilled and trained in these matters.

[Lord Polak (Con)]

My Lords, has the Minister seen the report by Domestic Abuse Commissioner Nicole Jacobs, The Family Court and Domestic Abuse: Achieving Cultural Change, produced this week? I refer the Minister to it in this discussion. It is a very simple but important report that I hope he will take account of.

[Viscount Younger of Leckie (Con)]

I have not seen that report. I want to provide clarification for my noble friend that reducing parental conflict and domestic abuse are not exactly linked. It is easy to make a link, but the RPC programme seeks to address conflict, not domestic abuse. Having said all that, as my noble friend will know, domestic abuse is incredibly important and this Government are very much committed to preventing it and to ensuring that victims get the support they need.

Pensions Dashboards (Amendment) Regulations 2023

Viscount Younger of Leckie Excerpts

Monday 17th July 2023 Lords Chamber

Moved by

[Viscount Younger of Leckie]

That the draft Regulations laid before the House on 8 June be approved.

Relevant document: 44th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument). Considered in Grand Committee on 12 July.

Motion agreed.

Pensions (Extension of Automatic Enrolment) (No. 2) Bill

Viscount Younger of Leckie Excerpts

2nd reading
Friday 14th July 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am pleased to add my support to my noble friend Lady Altmann’s Bill. This legislation would bring into workplace pensions more younger people, women and those in part-time work, including workers not already benefiting from an employer pension contribution. My noble friend eloquently set out further detail of the Bill, its benefits and its beneficiaries.

The Government are committed to building on the success of automatic enrolment to date with a stronger, more inclusive savings culture for younger people. The noble Baroness, Lady Sherlock, was right to remind us of some of the historical context. My noble friend’s Bill would expand the automatic enrolment framework, which was one of the most radical reforms to the pensions landscape since Lloyd George enacted the first state pension nearly 120 years ago. This Bill builds on the undoubted success of workplace pensions and sits firmly within the political consensus established by the independent Turner commission, on which the noble Baroness, Lady Drake, served, as has been mentioned, and which set out the road map for these reforms in 2005. I add my name to those who have paid tribute to the noble Baroness in this respect.

I want to move straight on to the subject of small pots, which was raised by the noble Lord, Lord Davies. I hope that I can help in providing some answers because I agree—he is right to raise this issue—that the growth of deferred small pots is a huge challenge for the workplace pension market. We know that it acts as a burden on providers, reducing the value for money that pension schemes can provide and negatively impacting retirement outcomes for their members.

I assure the noble Lord and the House that the Government are taking decisive action to address this issue. We are consulting now on our ambition to deliver a framework for a default consolidator approach, which will enable a small number of authorised schemes to act as consolidators for deferred small pots in order to provide greater value for money for their members. In this way, we are working to address the current and future stock of deferred small pots. I note the comments made by the noble Lord today in this respect; we would very much welcome his contribution to the consultation if he has not already given his views, as I suspect he may well have done.

I turn to some of the points made by my noble friend Lady Altmann and the noble Baroness, Lady Sherlock. We had an interesting, brief debate on the lowering of the age limit, which we reckon is about right at 18. The Bill provides for regulation-making powers to reduce the age for AE, rather than setting a specific number. This has been done to avoid pre-empting the statutory consultation. We do not wish to close off our ability to respond openly and thoughtfully to stakeholder proposals.

The 2017 review found 18 to be the appropriate minimum age for automatic enrolment. The current minimum of 22 has failed to keep pace with changes elsewhere, such as to the national minimum wage. The lower age also aligns with the entitlement to social security benefits, such as universal credit. Moving to 18 is seen as an effective way to embed the habit of workplace pension saving for young people as they start work for the first time. Indeed, the Government’s commitment for young people below the age of 18 in England and Wales to remain in education or receive training and employment through apprenticeships has resulted in a decrease in 16 and 17 year-olds in the labour market. Workers aged 16 and over will still be entitled to opt in to AE and receive an employer contribution if they choose to save into a workplace pension.

I also want to touch on pension tax relief. The Government recognise the different impacts of the two systems of paying pension tax relief on pension contributions for workers earning below the income tax personal allowance. This picks up on some points raised by my noble friend Lady Altmann. We have announced a new system that will make top-up payments to low earners in net pay schemes, many of whom are women—I think that she made this point—to address the net pay relief at source anomaly. The Treasury has confirmed that this will be introduced for contributions from 2024-25 onwards. In 2025-26, we estimate that up to 1.2 million individuals, 75% of whom are women, could benefit from top-ups worth on average around £50 each year. The Office for Budget Responsibility assesses that the cost to the Exchequer could be between £10 million and £15 million per year.

My noble friend Lady Altmann also raised the issue of low earners, as did one or two other Peers. The AE framework has an earnings trigger that is set at a level that aims to bring those individuals for whom it pays to save into pension saving automatically. The Secretary of State must review this trigger each year to help to make sure that it remains appropriate. As my noble friend mentioned, currently the trigger is set at £10,000. However, if an eligible worker earns below this amount, they can still choose to opt in to a workplace pension if they want to save, as mentioned earlier. The Bill is the essential first step to allow the expansion of AE. The Government are clear that these measures are the best route to enabling low and medium earners to save more, with more workers benefiting from the employer contribution to help them to build their retirement savings.

I will now move on to a few general comments about pensions and, indeed, the state pension, which was alluded to by the noble Lord, Lord Davies. I hope that I am not going too far in terms of his remarks, but hopefully this will set the scene a bit. I reassure the House that we believe that the state pension remains the foundation of the UK pension system. In April 2023, the state pension saw its biggest ever cash increase, rising by 10.1%, so that the full yearly amount of the basic state pension will be over £3,050 higher in cash terms than in 2010.

Workplace pensions sit on top of that foundation, helping to maximise individual retirement saving. This is an approach guided by the work of the independent Pensions Commission, which made clear the importance of reinvigorated private saving to help individuals to achieve their retirement aspirations. The Government continue to support the success of automatic enrolment, which has seen 10.9 million workers enrolled into a workplace pension since 2012, with an additional £33 billion saved in real terms in 2021 compared to 2012.

I move on to a more substantive point raised by the noble Lord, Lord Davies—I think that he mentioned it twice—which is what we are doing to reduce the gender pensions gap. As he will know, the pensions gap is a complex issue tied to the labour market, the pensions system and demographic differences, but one that the Government take seriously. We remain committed to implementing the 2017 review measures, which will disproportionately benefit lower earners, including people working in multiple jobs, who are predominantly women.

Going back to the basic concept of automatic enrolment, AE came along at a time when the UK was towards the very bottom of the OECD league tables on retirement saving. A radical reversal has taken place in the past decade putting us close to the top, with the UK now having the largest pension market in Europe. I pay tribute to those, some of whom are in the House today, for their efforts to make this happen.

In the private sector, workplace pension participation for eligible employees has increased from 42% in 2012 to 86% in 2021, representing a 44 percentage point increase. As my noble friend Lady Altmann said, it has been especially transformative for women, low-earners and young people. Her Bill would enable the Government to build on that success and deliver the expansion of AE.

There are a couple of other questions I want to answer—actually, about three—particularly from the noble Baroness, Lady Drake, from the noble Lord, Lord Davies, and from the noble Baroness, Lady Sherlock, on timing, which is a very fair question. The Government are committed to making progress in implementing the 2017 review measures, including lowering the age for being automatically enrolled and reducing the lower earnings limit so that pensions contributions are payable from the first pound of earnings, in the mid-2020s. We have always been clear that implementation of these measures and the timing must be done in a way and at a time which is affordable, balancing the needs of savers, employers and taxpayers, with a suitable lead-in time for implementation. I am afraid that that is as far as I can go on that, but as soon as I have any further detail I will certainly let the House know.

The noble Baronesses, Lady Drake and Lady Sherlock, are right that we need to look at any opt-out rate with great care in monitoring, and I reassure the House in that respect. The noble Baroness, Lady Drake, raised a very important point about AE enforcement. The regulator has a statutory duty to enforce compliance with employer AE duties. Employers must provide information about AE to each eligible employee, including their right to an employer contribution. If a worker has concerns about whether their employer is complying with the law, they can report their concerns to the regulator in confidence—as I suspect noble Lords will be aware.

[Baroness Drake (Lab)]

My point was that the regulator is doing a good job on enforcement, but very young people are quite vulnerable, and I was just saying that it needs a new lens brought to enforcement activity.

[Viscount Younger of Leckie (Con)]

Absolutely. Again, I provide reassurance that we are very much alert to the issue and we shall be sure that we monitor it and keep the House updated.

The noble Lord, Lord Davies, raised the important subject of carers, and I have a couple of brief answers for him. The Government recognise the valuable role of carers and that they are disproportionately women. Where carers are working, if eligible, they will be automatically enrolled into a workplace pension, or they can opt in. The expansion of AE will see all those participating get an employer contribution from their first pound of earnings, and that will help to improve the incentive to save for those who are in lower-paid or part-time work, including carers.

Finally, to touch on consultation, which was raised by the noble Lord, Lord Davies, and others, the use of the Bill’s powers would be subject to a statutory consultation requirement and the affirmative procedure in both Houses to gain consensus on the implementation approach and timetable, so that the measures can be introduced in a way that is affordable for all parties, as mentioned earlier. This is a crucial point. While we are all rightly keen to build on the success of AE—and many Peers call for more and faster change, hence the questions on timing—the approach needs fully to take account of the impact of these measures on employers, workers and the Exchequer in a way that makes the changes both beneficial and affordable for all. To clarify, we intend to consult in the autumn with employers, payroll and delivery partners throughout the supply chain to get the implementation approach and timetable right before changes are introduced.

I again thank my noble friend Lady Altmann for taking the Bill through and for helping more people gain the benefits of retirement saving. I judge from the mood in the House that it shares my view of the importance of the Bill and the positive and sensible way in which it would allow for the future expansion of automatic enrolment, which I believe is an ambition we all share.

Child Support (Enforcement) Bill

Viscount Younger of Leckie Excerpts

3rd reading
Friday 14th July 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Redfern, for piloting the Bill through this House and, along with the rest of the House, wish her a speedy recovery. I also thank the noble Baroness, Lady Pidding, for standing in for her today so crisply and effectively. Thanks are due too to the Minister and his team, both for their work on this Bill and for their briefing of Peers to help us understand the context in which it sits. I am grateful also to Gingerbread and the charities that work so hard in this area.

We on these Benches wholeheartedly support the principle that non-resident parents should pay child maintenance and that there should be enforcement for those who fail to pay. The Bill should make a small but welcome contribution to that end by speeding up the process by which the non-resident parent who is in arrears can be made to pay what they owe. I hope that in future, we will see a further reduction in the amount of child maintenance that goes unpaid. There is still work to be done to increase compliance with the child support regime and to ensure that it becomes the norm that both parents continue to support their children, whatever happens to their relationship with one another.

For now, I simply thank again the noble Baroness, Lady Redfern, and Siobhan Baillie MP, and wish the Bill well.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I congratulate my noble friend Lady Pidding, speaking on behalf of the main sponsor of the Bill, my noble friend Lady Redfern, on ensuring that the Bill has reached its final stages. I wish my noble friend Lady Redfern a speedy recovery.

As mentioned at Second Reading, the Bill has the full backing of His Majesty’s Government, and it gives me great pleasure to speak in support of it today once again. I also thank the noble Baroness, Lady Sherlock, for the thoughtful questions she raised at Second Reading. I hope the letter I sent in response has provided her with some clarity on the issues raised. I very much take note of her comments today.

This Government are committed to improving the support the Child Maintenance Service offers to separated families, so the Bill makes important improvements to CMS enforcement processes by amending existing powers. Once commenced, this will allow the Secretary of State to make an administrative liability order where the paying parent has failed to pay an amount of child maintenance, without the need to make an application to court.

On the point raised at Second Reading by the noble Lord, Lord Palmer, who is not in his place, I would like to reassure the House that the central protections for paying parents will be provided through secondary legislation. This will give parents the right of appeal, while setting out some parameters around the appeal process. First, this will include the period within which the right of appeal may be exercised, and, secondly, the powers of the court in respect of such appeals. Secondary legislation will follow the affirmative procedure, so your Lordships will be able to debate the proposals eventually when they are put forward.

To conclude, I am very pleased that there is cross-party support for my noble friend’s Bill, and that this House will agree to its final passage today.

Bill passed.

Pensions Dashboards (Amendment) Regulations 2023

Viscount Younger of Leckie Excerpts

Wednesday 12th July 2023 Grand Committee

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Pensions Dashboards (Amendment) Regulations 2023.

Relevant document: 44th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument).

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am pleased to introduce this statutory instrument, which, subject to approval, will make amendments to the Pensions Dashboards Regulations 2022. The instrument removes the staging profile from the 2022 regulations and introduces a single connection deadline of 31 October 2026 for relevant occupational pension schemes to connect to pensions dashboards.

The successful introduction of automatic enrolment more than a decade ago, combined with a trend towards people working multiple jobs in their lifetime, has seen a substantial increase in smaller pension pots. Without intervention, the number of lost and forgotten pots will remain exactly that—lost and forgotten—and financial planning for retirement will become still more complex. Pensions dashboards will help hard-working savers to locate pension pots that they have accumulated over time, reconnecting them with lost and forgotten pension pots and supporting better planning for retirement. People will be able to view their various pensions, including their state pension, securely and all in one place online.

There can be no doubt that pensions dashboards have the potential to become a game-changer that will revolutionise the pensions landscape. The UK is not alone in realising the enormous potential that pensions dashboards bring. Countries such as Denmark, Israel and Australia have all established pensions dashboards as a feature of their financial landscape. However, the UK’s pensions industry is arguably unique by virtue of its scale and complexity. We should not underestimate the ambition and challenge of securely connecting thousands of schemes and of presenting data in a coherent manner, from state and private pensions, for the benefit of savers. We anticipate that, once all schemes in scope of the regulations are connected, the pension records of over 71 million memberships from relevant occupational pension schemes and providers of FCA-regulated entities will be accessible to people at the touch of a button, at a time of their choosing.

The reason for bringing forward these amendment regulations is that, at the end of last year, the Pensions Dashboards Programme, which is responsible for delivering the digital architecture that underpins pensions dashboards, informed my department that more time was required to complete the build of the digital architecture. The PDP faced several key issues: the technical solution has not been sufficiently tested and there is still work to do to finalise the necessary supporting documentation and to get the necessary systems in place to support the pensions industry with the connection process. It was concluded that more time was needed to successfully deliver dashboards and that a reset of the programme was required.

The Minister for Pensions subsequently issued a Written Statement in March 2023, announcing the delay and setting out that the Pensions Dashboards Programme would be reset to get it back on to a path for successful delivery. The decision to pause, review and reset the programme will provide it with the time to ensure complete delivery of the ecosystem and supporting documentation before industry begins to connect. So far, the reset has assessed the digital architecture and I am pleased to report that no fundamental issues have been identified. This has provided reassurance to the Government to move forward with amending the regulations.

The staging profile in Schedule 2 to the 2022 regulations set out the order in which different types of schemes, categorised by size and type, would connect to pensions dashboards. However, the 2022 regulations did not provide the flexibility necessary to deliver a programme of this magnitude—a digital undertaking that will enable users to search over 3,000 schemes to find their pensions.

This instrument curtails the period of uncertainty for the pensions industry. The staging profile in the 2022 regulations required the first schemes to connect at the end of August 2023. By laying these amendment regulations, we are seeking to avoid any perception that schemes would be in breach through no fault of their own. As mentioned, all schemes in scope will now be required to connect to dashboards by 31 October 2026 at the latest. The regulations will provide more flexibility to deliver pensions dashboards while retaining the broad framework of a phased approach to help to manage the flow of connections and maximise coverage as early as possible.

The Government will work with partners and the pensions industry on a connection timetable to be published in guidance. We expect that the connection timetable in guidance will prioritise large schemes with the greatest number of members. This will maximise the potential for savers to realise the benefits of dashboards as early as possible. The dashboards available point—the point at which dashboards will be available for widespread public use—could therefore happen before the October 2026 connection deadline in the regulations. Although the connection timetable set out in guidance will not be mandatory, there is a requirement for scheme trustees or managers to have regard to this guidance. Not doing so would be a breach of the regulations. The Financial Conduct Authority will ask its board to make corresponding deadline changes in the dashboard rules for FCA-regulated pension providers shortly after Parliament approves these amending regulations.

I will now explain what has not changed. Although the instrument amends the requirements on trustees or managers by removing Schedule 2, there are no other material changes to the regulations. All other requirements have been retained, including the requirements to be satisfied for qualifying pensions dashboard services, connection duties and requirements on “find” and “view”. Crucially, the requirement for the Secretary of State to provide six months’ notice ahead of the dashboards available point remains unchanged. The Government will continue to work with the industry on the matters that must be considered before dashboards are launched to the public.

The consumer is at the heart of all our endeavours. These relevant matters are important to ensure that pensions dashboards are launched to the public safely and securely, having been rigorously tested. Protecting the best interests of savers is the core principle behind dashboards and the Government remain firmly committed to ensuring that people’s data is accurate, simple to understand and, above all, secure. Dashboards will ensure that people always remain in control over who has access to their data, as existing legislation, including data protection duties, underpins the requirements that must be adhered to by pension providers, schemes and qualifying pensions dashboard services.

Accurate and high-quality data is essential to delivery and the success of pensions dashboards rests on the pensions industry’s ability to successfully match consumers to their information. The Government and the regulators have repeatedly advised the industry to get its data ready for dashboards. It should use the extra time to ensure that it can meet its dashboard obligations. Schemes and providers are already subject to existing statutory and other protections on data, including the accuracy principle under UK GDPR, which places a requirement on schemes to take all reasonable steps to erase or rectify inaccurate data without delay. It is crucial that dashboards give power to savers and not to scammers. Robust controls and standards will be built into the digital architecture to prevent potential scammers or fraudsters from gaining access to people’s information.

These amendment regulations will facilitate a collaborative approach to connection that delivers on our commitment to introduce pensions dashboards. Pensions dashboards have the potential to transform retirement planning for ever and these regulations are another step in the right direction. I therefore commend them to the Committee. I beg to move.

[Lord Young of Cookham (Con)]

I am most grateful to my noble friend for the clear exposition of this statutory instrument and for the very helpful meetings that he and his officials have held with noble Lords over the past few months. I am also grateful to him for the letter that he wrote to me following the last meeting.

Looking around, I see some aficionados from our earlier debates on the pensions dashboard. I was looking at a debate from 28 January 2020, when I said:

“Over the weekend, I logged on to the Pensions Dashboard Prototype Project, which I found informative, but right at the end it said: ‘The industry and government hope to have Pensions Dashboard services ready by 2019’”.


At that time, we were debating a consultation document and the response to it. Again, I quote:

“Reading the response to the consultation document, we are told: ‘Once the supporting infrastructure and consumer protections are in place, and data standards and security are assured, most pension schemes should be ready to provide consumer’s information to them within three to four years’”.—[Official Report, 28/1/20; col. 1373.]


That was in January 2020. My noble friend knows that this project has been dogged by uncertainty and delay.

I have a specific point to raise about the identification service. Consumers will obviously have to identify themselves before they can access the dashboard. The Government’s initial proposal was to use Verify, a system sponsored by the Government with ambitious targets to have 46 government services accessible by March 2018. Sadly, that project was not a success. The NAO said that

“it is difficult to conclude that successive decisions to continue with Verify have been sufficiently justified”,

and the Government withdrew support from Verify in 2020. The pensions dashboard has had to develop its own service in the meantime.

In my noble friend’s very helpful letter, he referred to the new government service, GOV.UK One Login. He said:

“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”


are up and running. I have actually connected to and logged into One Login, and am now registered.

In his letter to me, my noble friend went on to say:

“As you may recall, the PDP”—


pensions dashboard programme—

“has procured an interim identity service provider, whose contract runs until January 2024”.

At what point will the pensions dashboard transfer from this interim service? Will it transfer to the government-run One Login, which seems the obvious thing to do, assuming that it is as robust? By the time the system is launched in 2026 or earlier, will the interim service have been put to one side and will we all have moved over to One Login; or will the interim service still be the one that we have to use, for the next few years? I hope to hear that it will have transferred to One Login, so that we do not have to register twice—first with the interim one and then with One Login. That is my main point.

My final point is on the Secondary Legislation Scrutiny’s Committee report on this statutory instrument, published on 22 June, which I am sure my noble friend has seen. The committee raised two points in its conclusion, to which I am sure my noble friend will reply. In paragraph 27, it quoted its 16th report:

“We encourage the Government to take this opportunity to address the complexity and costs of the dashboard … by simplifying and standardising the system wherever possible”.


The committee confirmed that that remains its position in its latest report on this instrument. Finally, it said:

“We are disappointed to, once again, find our Report supplying basic information to the House that DWP should have published in the EM”—


the Explanatory Memorandum. I am sure my noble friend will respond to those points, in addition to my main point about the verification service.

--- Later in debate ---

We on these Benches have been very supportive of the creation of a public dashboard but we really do not want to be back here next July doing the same thing again. I hope that this is the beginning of a new start. I urge the Minister to keep engaging with us all and to keep us informed as we go. Let us hope that we get this right the next time.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the Committee for its broad approval for these regulations. I start by making the point that it was helpful to hear from the noble Baroness, Lady Drake, who is highly respected in this House for her pensions expertise. She welcomed the regulations and pointed out that, back in 2019, in her view, these regulations were far from being ready—she is of course correct in saying that. I value her broad support this afternoon. However, I acknowledge that there are a huge number of questions to answer in this debate, for which I thank noble Lords.

Throughout their development, pensions dashboards have received cross-party support in both Houses. Your Lordships will no doubt share my disappointment that we have needed to amend the original timeline. It is vital that the foundation upon which the dashboards ecosystem is built is safe and secure, as I said in my opening remarks. However, I am certain that the Government have made the right decision in slowing things down for the benefit of consumers.

I thank my noble friend Lord Young. I am grateful to him for reminding us of past deadlines—and indeed of past deadlines missed. I reassure him and the Committee that we are getting back on track. I hope that, in answering a lot of the questions raised today, I provide reassurance on that.

My noble friend raised the revised Explanatory Memorandum. During scrutiny of the regulations, the Secondary Legislation Scrutiny Committee felt that the EM could have provided more detail on the impact of the amendment regulations. Officials in my department subsequently provided a written response to the committee, and the department has replaced the EM with a revised version that provides the further detail requested by the committee. The DWP recognises the value of parliamentary scrutiny and the requirement for comprehensive explanatory material. It has begun internal action to strengthen its assurance processes.

I will answer the question raised by my noble friend Lord Young on the One Login, probably towards the end of my speech. I very much take note of what he asked.

I turn now to the broader issues regarding the dashboards and the reset. This was raised by the noble Lord, Lord Vaux, and the noble Baroness, Lady Sherlock, but it is a general theme. For example, he asked whether we had made the reset too complex. He also asked how much the scope has changed. As I said in my opening remarks, dashboards are complex, but the design is right. It is based on security and information, and on an understanding, from user research, about the information that users expect. The scope has remained the same throughout.

The noble Lord, Lord Vaux, went further, in asking questions about why the delay came about. I am probably repeating myself, but it is a project of significant undertaking, requiring the development of new technology that will permit individuals to find their pensions by searching thousands of pension schemes, which collectively hold millions of pension records. It became clear that the PDP would require additional time to deliver the complex technical solution to enable the connection of pension providers and schemes. I believe that my department took swift action to address the issues as soon as we knew that they had arisen. As I said earlier, the delay is frustrating, but it is vital that the foundation on which the dashboard’s ecosystem is built is safe and secure.

The noble Lord, Lord Vaux, also asked about the cost to the taxpayer. The dashboard project is funded by the financial services levy and the general pensions levy. These levies pay for the Pensions Dashboard Programme and the MoneyHelper dashboard, including staffing costs. The PDP has a spending review allocation through to 2025-26, and allocations beyond this point have not yet been determined. As the regulatory impact assessment shows, there is an increase in direct costs to industry of £69 million. I hope that provides some help.

The noble Baroness, Lady Drake, raised the so-called Mansion House package. I will give an overarching response on that. Since her appointment, the Minister for Pensions has focused on reforms to the private pension system, which have centred on introducing greater fairness, adequacy and predictability for today’s auto-enrolled generation of savers. The DWP has been working closely with the Treasury on a package of measures set out by the Chancellor in his speech the day before yesterday, as the noble Baroness knows, all designed to drive better outcomes for pension savers.

These are all part of a wider government agenda to improve the opportunity for investment in alternative assets, including high-growth businesses, and to improve saver outcomes. We believe that a higher allocation to high-growth businesses as part of a balanced portfolio can increase overall returns for pension savers, leading to better outcomes in retirement. We want to ensure that our high-growth businesses of tomorrow can access the capital that they need to start up, scale up and list in the UK. I am happy to write to the noble Baroness with further information. She asked about the value for money framework, so I will write to her about that.

My noble friend Lady Altmann asked about enforcement actions for schemes and whether or not they adhere to the guidance. The timeline in guidance will not be mandatory. However, trustees and managers must have regard to the guidance on connection. Trustees and managers will be expected to demonstrate how they have had regard to the guidance, and a failure to do so will be a breach of the regulations and therefore could result in enforcement action. All trustees and managers must connect by the deadline set out in legislation. I reassure my noble friend that failing to do so could result in action by the regulator, as I suspect she probably knows.

Then the question of liability arises. If an individual makes a poor decision based on inaccurate information, what then happens? Making pensions dashboards work involves multiple parties, so the question of liability if something goes wrong needs to be considered, but on a case-by-case basis. Pension schemes, qualifying pensions dashboard services and MaPS will all be subject to complaints management by the relevant ombudsman. This means that if the party at fault does not deal with the user complaint satisfactorily, the relevant ombudsman may investigate complaints and make determinations to put things right.

My noble friend Lady Altmann asked about standardisation of data, which is an important question. The Pensions Dashboard Programme is seeking to standardise many aspects of data. The regulations set out clear requirements relating to connection and the value and other data. MaPS will publish standards relating to data. The Financial Reporting Council had updated its requirements regarding the calculation of values to improve the consistency of projections.

The noble Lord, Lord Palmer, asked about digital access. His specific question was about those who do not use it, which is a fair point. It is true to say that, moving forward, this is primarily a digital solution we are providing, but there are existing resources still available, including the provision of annual statements. I hope that gives him some reassurance about those who are not quite as digital as others.

The noble Baroness, Lady Sherlock, asked about transparency on progress. I remind her and the Committee that the PDP publishes a six-monthly report. Additionally, it holds a briefing sessions with interested Peers—which I pledge to do on a regular basis—and we are keen to give as much information as we can. I hope that, from past form, she will be reassured on that.

A number of questions were raised by not only my noble friend Lady Altmann but the noble Baroness, Lady Sherlock, and I will attempt to whisk through them in the time available. The noble Baroness asked whether, with a single compulsory connection deadline, there is a risk of a backlog of schemes trying to connect as the deadline—31 October 2026—approaches. That is a fair question, and other Peers raised the same point. The regulations include a requirement to have regard to guidance issued on connection. We will be engaging with industry on guidance that will set out the proposed connection timetable. There have been positive signs among leading providers of their intent to adhere to the guidance, which is helpful. Similarly, the ABI published a statement indicating that its members would look to connect as per the guidance. The Pensions Regulator may take action where the trustees or scheme managers fail to have regard to the connection guidance and is assessing whether any changes need to be made to its compliance and enforcement policy.

The noble Baroness also asked what action the department would take if there was evidence of back-ending and backlogs building up. The DWP will work with the Pensions Dashboard Programme and regulators to monitor connection activity, and will use insight from industry to inform how we can best help to maximise adherence and remove potential barriers for schemes. Our expectation is that, given the widespread support for dashboards, the schemes will adhere to the connection profile in guidance. However, to provide more reassurance, we will keep this approach under review and will consider changes, including further legislation—note that—if problems emerge.

The noble Baroness, Lady Sherlock, asked several questions in relation to our intention to publish a revised connection timeline in guidance. She asked—as did my noble friend Lady Altmann—when the guidance on proposed connection dates will be published. We will work with industry this year on agreeing the connection timetable to be published. We intend to publish it as soon as possible.

The noble Baroness, Lady Sherlock, asked what role the regulator would play in encouraging schemes to follow the guidance, given that trustees and managers must have regard to it. She and the noble Lord, Lord Palmer, also asked about clarity on encouragement to compliance. The regulator will write to all schemes, informing them of their proposed connection date, as set out in guidance, and the action that they need to take to connect by the set date. The regulator will expect trustees to be able to demonstrate how they have had regard to the guidance. As I mentioned earlier, failure would result in enforcement action.

--- Later in debate ---

[Lord Young of Cookham (Con)]

My noble friend has been very helpful. Is it the Government’s objective that the Government’s One Login will be the access point to the pensions dashboard?

[Viscount Younger of Leckie (Con)]

The answer is yes, eventually, but I will need to write to my noble friend to qualify what I mean by that. That is the aim and it makes sense, but I cannot say that it will be by a particular date. I shall write to my noble friend.

I shall conclude quickly because I realise that others are waiting for the next debate. I thank all noble Lords in the Committee for the points that they have made. I commend the regulations to the Committee.

Motion agreed.

Pension Funds: Investments and Tax Relief

Viscount Younger of Leckie Excerpts

Thursday 29th June 2023 Lords Chamber

[Baroness Altmann]

To ask His Majesty’s Government, further to tax relief provided to pension funds, what assessment, if any, they have made of the actions taken by pension trustees to ensure their investments (1) effectively manage climate risk, and (2) comply with treaties on human rights.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, the Government have introduced legislation and published guidance alongside the TCFD requirements to help pension schemes improve the quality of governance and manage climate risk. DWP committed to review the requirements in late 2023. These reviews will utilise insights from the regulator’s review of early reports and will also consider clarifications of fiduciary duty. DWP also launched an industry-led task force on social factors, which aims to produce a guide for industry by this November.

[Baroness Altmann (Con)]

I congratulate my noble friend the Minister and the Government on their work so far, but as at least 25% of all pension fund assets originated from taxpayer reliefs, does he agree that the Government have ample justification to expect pension funds to invest responsibly, supporting national objectives? Does he share my concern that this seems not to be happening? For example, Corporate Adviser magazine’s February 2023 ESG report shows that the three largest pension providers invest in cluster munitions, even though the UK is recent president and signatory of the international agreement to end their use, and that investment in domestic companies and green projects has been weak. Will the Government encourage or ensure that more of the taxpayer contribution to all pension funds helps UK markets and supports UK sustainable growth and climate and nature protections, to meet social or national objectives?

[Viscount Younger of Leckie (Con)]

I hope I can answer a number of the points that my noble friend made. On her general push, she is right: there is a lot more we need to do to encourage pension funds to invest in net zero. The introduction of the TCFD reporting requirements for pension schemes was pioneering; these regulations are still relatively new and it would be premature to judge their effectiveness, but a lot more is happening in this space, as my noble friend will be aware. As well as the task force, we have a stewardship review, which will assess the effectiveness of the guidance, and alongside this the Financial Reporting Council, which works alongside the FCA, my department and the regulator.

[Lord Rooker (Lab)]

What legal authority do the Government have to attempt to create a de facto sovereign wealth fund by manipulating our pension assets? Unlike countries such as Norway, we do not have experience of running a sovereign wealth fund. I feel uneasy. I want the investment to be in this country—that makes sense—but doing it in the way it seems to be being done is fraught with difficulty. Will the Government take extra care over this attempt to manipulate pension funds, because we now have trustees with powers they did not have 30 years ago?

[Viscount Younger of Leckie (Con)]

I do not know about manipulation of pension funds, but I can say that there are strong fiduciary duties on trustees. The noble Lord will know that in the green finance strategy, published in March, the Government committed to engaging with interested stakeholders on how we can continue to clarify fiduciary duty through a series of round tables and a working group of the Financial Markets Law Committee. I think it fair to say that many larger schemes consider climate change risk, which I think is the gist of his question, to be financially material; we have made this clear in guidance.

[Lord Palmer of Childs Hill (LD)]

My Lords, debate on how pension fund assets can be used more productively has focused on defined contribution pensions, rather than traditional defined benefit or final salary-type pensions. Given the large sums currently held in defined benefit pension schemes under a very tight regulatory regime, what plans do the Government have to allow such schemes to invest more productively, as other speakers have said in other contexts, while ensuring members’ benefits continue to be secured?

[Viscount Younger of Leckie (Con)]

The noble Lord makes an important point about defined benefit schemes, which he will know are still maturing, with decreasing numbers of active contributing members and increasing numbers of pensioner members. It is therefore important that their pensions are properly protected and that these schemes are properly funded. The majority of schemes in the DB sector are well run, plan for the future and manage their risks effectively, but the gist of the noble Lord’s question is that there is still more to be done.

[Baroness Stedman-Scott (Con)]

What assessment has been made of the burdens placed on trustees in respect of reporting? This must have a chilling effect on getting people to become trustees of pension funds.

[Viscount Younger of Leckie (Con)]

We are not unaware of this. We have carefully considered the balance between the burden of reporting requirements for trustees on climate risk and the need for urgent action in this area. That is why we have introduced TCFD requirements only for the very largest schemes, as my noble friend will probably be aware, which have, let us face it, more capability and capacity. It gives us the widest coverage of pension scheme numbers while minimising burdens on trustees.

[Baroness Hayman (CB)]

My Lords, I draw attention to my interests as recorded in the register and to the fact that I have a son who works in this area. The Minister referred to the complexities and nuances of the clarification of fiduciary duty, an issue that was much debated during consideration of the Financial Services and Markets Bill. What interaction is His Majesty’s Government having with the Financial Markets Law Committee, which is looking at this, and the round tables? Will parliamentarians have the opportunity to be involved in those?

[Viscount Younger of Leckie (Con)]

I would hope that parliamentarians have a role in this; I shall certainly get back to the noble Baroness on that point. As she will know, guidance states that trustees can consider climate change, but we acknowledge that there is some ambiguity, which I think is the gist of the noble Baroness’s question. That is why we are engaging with the Financial Markets Law Committee working group, which is discussing further fiduciary duty. The next meeting will take place at the end of the month.

[Lord Deben (Con)]

May I encourage the Government to do what they have sought to do, but to recognise too that the speed at which climate change is happening is right at the top end of what the scientists thought? Therefore, the fiduciary duty of pension funds to take that into account becomes the more urgent. I hope that in the review later on in the year, the Minister makes sure that they understand the devastating effects on those investments.

[Viscount Younger of Leckie (Con)]

I know that my noble friend is extremely active in this area, and I reassure him that we continue to encourage pension schemes to commit to net zero in a way that works for them. As mentioned earlier, from October 2022 we introduced this requirement in the TCFD regulations, which is specifically to calculate and report the extent to which their investments are aligned with the Paris agreement goal.

[Baroness Sherlock (Lab)]

My Lords, the Climate Change Committee has just reported that the Government are missing climate targets on nearly every front, which makes it all the more disappointing that they opposed a recent Labour amendment to the Financial Services and Markets Bill that would have required the Treasury carefully to review the case for pension funds investing in green infrastructure while maintaining the soundness of funds. Can the Minister tell the House why?

[Viscount Younger of Leckie (Con)]

No, I cannot, but I can say that the introduction of TCFD reporting requirements for pension schemes was pioneering. We are a leader in this field. As I say, these regulations are still very new and there is a lot going on in this space, and we will be reporting by the end of the year.

[Baroness Sheehan (LD)]

I refer to my interests as per the register. The FCA, in its consultation on AGM voting, proposes that standardised vote reporting be wholly voluntary, with zero incentives for firms to adopt the framework. However, earlier this month, the noble Baroness, Lady Penn, in her role as the Minister taking the Financial Services and Markets Bill through this House, said that

“the Government will carefully consider whether its recommendations go far enough to address existing issues of transparency, and what further action may be appropriate”.—[Official Report, 6/6/2023; col. 1326.]

It is now clear that they do not go far enough to allow trustees to fulfil their fiduciary duty, so what further action does the Minister think appropriate?

[Viscount Younger of Leckie (Con)]

Well, indeed. There is a point of contact, which may be helpful for the noble Baroness, called the UK National Contact Point, which is part of the Department for Business and Trade. It is responsible for promoting the Organisation for Economic Co-operation and Development. It may be helpful to know that considerable guidance has been given for pension schemes in this respect.

Cost of Living Support

Viscount Younger of Leckie Excerpts

Thursday 22nd June 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Baroness, Lady Sherlock, and the noble Lord, Lord Palmer, for their comments and questions. I will start by addressing a point the noble Baroness made. We wanted to use this opportunity to explain the help we have already given and are continuing to give to those who are definitely suffering as a result of the problems in the economy at the moment; “problems” is an understatement, and I am the first to say that. We wanted to make it clear that it is not just about the £150, which was the gist of the Statement; the Government are providing total support of more than £94 billion during 2022-23 and 2023-24 to help households and individuals with the rising cost of living.

Cost-of-living payments are only one part of the overall support. We want to get that message across if we have not done so already. It includes support for energy costs, which was alluded to by the noble Lord, Lord Palmer, and the extension of the household support fund in England, which helps with rents, which again were raised by the noble Lord. In 2023-24 we increased benefits, state pensions and the benefit cap by 10.1% and made further increases to the national living wage.

I want to say quite a bit more because one of the issues to raise, which is obviously very topical at the moment, is mortgages and inflation. I reassure the House that tomorrow, the Chancellor will meet with principal mortgage lenders to ensure that they are living up to their responsibilities to their customers, and to ask what help they can give to people who are struggling—I do realise that they are struggling—to pay more expensive mortgages and what flexibilities may be possible for families in arrears. Of course, I am aware of the announcement today.

We have a clear target to halve inflation this year and to support the Bank of England as it returns it to the 2% target. I remind the House that the IMF forecasts that inflation will reduce substantially to around 5% by the end of the year, which would be a large fall from the highs we saw last year. I remind the House that in March, the OBR forecast that inflation would be 2.9% by the end of the year, and that the last Bank of England forecast, which was in May, was for inflation to go down to 5.1% by the end of the year. However, we are not complacent. This is a serious time, as everyone has been saying. We remain focused on our very important ambition, which is to drive inflation down while providing a cost-of-living package worth about £3,300 per household on average over this year and last. The IMF has already noted the “decisive and responsible steps” that we have taken, and we will continue to take such steps to deliver on this priority.

The noble Baroness, Lady Sherlock, asked about other countries. I have already made the point that we are on track to halve inflation and continue to support the Bank in delivering the 2% target. We believe that inflation is on a downward trajectory, although I understand that it is stubborn. Even though the reduction is quite small, it is in part thanks to our action to hold down energy bills and freeze alcohol and fuel duty, which is having a direct impact on driving down inflation.

The noble Baroness, Lady Sherlock, and the noble Lord, Lord Palmer, asked about Scope. I am very aware of the report. They have been many studies estimating the cost of disability, including this latest Scope report and previous ones from Scope and other organisations. The common feature of these reports is that their findings vary due to the definitions of disability and methodology being used. Our view is that there is no objective way of deciding what an adequate level of benefits should be, as everyone has different requirements. Beneficiaries are free to spend their benefits as they see fit, and in the light of their individual commitments, needs and preferences.

The noble Baroness, Lady Sherlock, focused on the disabled and support for them, and she made some very important points. I hope she knows that we will be spending around £78.6 billion in 2023-24 on benefits to support disabled people and people with health conditions, which is around 3.1% of GDP. The Government are providing a further disability cost-of-living payment of £150, which is part of the gist of the Statement. The majority of these payments will be made to eligible claimants this week. Indeed, many have been made already.

The noble Lord, Lord Palmer, focused on fuel poverty. I make the point, which he would expect me to make, that advanced economies around the world share the challenge of high inflation arising from the energy shock, and the UK has been affected by those global factors. The energy price guarantee, as he will know, was extended at the same level for an additional three months, to the end of June 2023, and it will remain in place as a safety net until the end of March 2024. There are some signs that energy costs are reducing, but again, we are not complacent.

The noble Lord, Lord Palmer, asked a focused question about the use of food banks. He will know that we have some recent data from the latest Family Resources Survey. The Government are using that data to better inform them about the use of food banks. We are well aware that food banks are being used as never before—we are very aware of that.

The noble Lord, Lord Palmer, makes a very good point about repossessions. At the moment, although we are not complacent, repossessions remain at a lower rate than before the pandemic. We are not complacent because of course we see the pressures around.

[Lord Young of Cookham (Con)]

My Lords, unlike others, I find much to welcome in the Statement, not least the increase in the maximum payments of 50% to those on universal credit for childcare, which will help them find work. However, is my noble friend confident that the childcare market will be able to respond to the increased demand that is likely to result from this increased beneficence from the department?

[Viscount Younger of Leckie (Con)]

My noble friend makes a good point about childcare, and the House will be aware of the announcements that were made recently. We are determined to support as many families as possible with access to high-quality affordable childcare, which is why the Spring Budget announced these significant new investments to expand free early education entitlements from 2024-25, together with uplifts in 2023-24 and 2024-25 for the existing entitlement offers.

On his specific question about demand versus supply, that is a very good point. We are confident that supply will meet demand, but we are also aware—certainly I am aware of some anecdotal evidence—that demand is going up, and we want to be sure that demand meets supply. Although I do not have any figures, I reassure my noble friend that we are aware of this particular matter.

[The Lord Bishop of St Edmundsbury and Ipswich]

My Lords, we recognise the value of the immediate and urgent provision that is being suggested and those points being argued for. However, in the light of our experience of the deepening crisis, I wonder whether, because of the interlocking nature of so many factors, now is the time to be looking at a comprehensive anti-poverty strategy.

[Viscount Younger of Leckie (Con)]

We have already taken a number of initiatives, which the right reverend Prelate will be aware of, to look at poverty. As I say, this is a particularly difficult time. Although I cannot comment on a particular poverty strategy, the important point is that we have a number of initiatives across government to address specific aspects of poverty. That includes families and children, and of course it includes those who are homeless, who we are very aware of, as well as the increasing homelessness issue.

[Baroness Hollins (CB)]

My Lords, at the same time as the cost of living crisis, local authorities’ social care budgets are under pressure. I have heard from some disabled people who have a personal budget that they are being asked to make an increased contribution, thus significantly reducing their direct payments. I do not think the proposed new payment will eliminate even those increased contributions, let alone really help with the cost of living situation.

[Viscount Younger of Leckie (Con)]

As I said earlier, the £150 should be taken at face value, and I think I made the point that there are a number of other initiatives to help those who are disabled. It is important, as the Minister in the other place said on Tuesday, to look at the total package, including the £150, that we have in place to help those who are disabled.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, I thank the Minister for repeating the Statement. However, neither his remarks this morning nor the Statement acknowledge the real size of the problem that we now have. I am almost sorry for him that so many things have happened since the Statement was first made on Tuesday, one of which was yesterday’s Joseph Rowntree Foundation report showing that 5.5 million people in lower-income households did not have food last year—they skipped meals and had poor meals, which of course affects their health—while 4.5 million lower-income households are now in debt, many of them to people who will then demand very high rates of interest and so on. They cannot get credit in the way that he and I could get it, at lower interest rates—although all the interest rates are going up now. These are really scary numbers, and the JRF has shown that this is now embedded across our society.

I talked this morning for an hour and a half with organisations in the north-east that are working with the most vulnerable families. I came off that call really scared about the future, because of the numbers involved. Does the Minister understand that this is far more serious than the way we have paid attention to it so far suggests? We really need a serious, overarching strategy to tackle poverty and improve public services, so that the most at risk get the best and the most help, which they cannot get at the moment.

[Viscount Younger of Leckie (Con)]

I hope the House will recognise that I am certainly not playing down the seriousness of the position at the moment. I am very aware, as the House is, of the further interest rate rise today. The Government absolutely recognise the pressures that people are facing and have acted, providing total support of over £94 billion, which I mentioned earlier, over 2022-23 and 2023-24. I have already mentioned the uprating, which I will not go over again, and that we will be making further cost of living payments totalling £900.

However, there is more to say, given the noble Baroness’s question. I have already mentioned that the Chancellor is meeting mortgage lenders tomorrow to see what more can be done, but he has already met the Competition and Markets Authority, to be sure that there is fair competition between the supermarkets so that we make sure that food prices come down. As we are all aware, food inflation is still far too high. It was 19% last month; it has now nudged down a bit but it is still far too high. That is really important, particularly for those who are the most vulnerable. I reassure the noble Baroness that we really do take this seriously. I think we all know that it is a defining moment.

[Lord Bilimoria (CB)]

My Lords, I remind the Minister that, in February 2021, when I was president of the CBI, I asked Rishi Sunak, when he was Chancellor, if he was worried about inflation, because I was worried about it then. Today, we have the highest inflation in the G7, while the United States of America is already at 4% inflation—less than half our rate. Today, our interest rate is at 5%, the highest in 15 years, and we have the highest level of tax burden in seven decades. Today, we have a debt to GDP ratio of 100%; the last time it was at that level was over six decades ago. Does the Minister acknowledge that two of the Prime Minister’s five priorities are growth and halving inflation? Given the situation we are in now, where households are struggling to make rental and mortgage payments, which are increasing as a proportion of their income, is a recession likely? What are the Government’s plans to help people deal with their mortgage and rental payments, because there is a crisis looming in front of our eyes?

[Viscount Younger of Leckie (Con)]

I hope I can help the noble Lord. As I have already mentioned, inflation really is one of the Prime Minister’s key priorities. He has made it clear, as we have, that reducing inflation is absolutely key. He also speaks about growth, while making it clear that growth comes as a secondary item to inflation. However, it is also important that the economy grows. In previous answers, I have made it clear that we are doing as much as we possibly can to look at what more banks can do to be helpful. One thing which I have not said is that we are working closely with the Bank of England, while making it clear that the Bank is independent in also working as hard as it is in the fight to bring down inflation. It is not just us in the UK; as others have said, there are similar issues in other countries, particularly in Europe. However, I realise that in the UK we still have a lot of work to do.

[Baroness Kramer (LD)]

My Lords, the Minister looks to a negotiation with the banks to provide better terms to mortgage holders who are under pressure. He must surely accept that the banks will offer those terms to those they deem their most attractive customers, not to low-income house owners, who cannot take the required flexibility of interest-only or a long extension to their mortgage’s life. That is the group, surely, which needs to be served by an emergency mortgage fund to rescue this situation. Surely he could find the money to support those who will see their mortgages rise by more than 10% of their disposable income and take the money back from the banks, which are seeing bumper profits off the back of rising interest rates.

[Viscount Younger of Leckie (Con)]

I certainly note what the noble Baroness has said. I have mentioned already that the Chancellor is meeting the banks. I do not want to pre-empt the outcome of those discussions. What is important are the initiatives we have taken already to help people. There is support for people who have mortgages. We have increased the generosity and availability of the support for mortgage interest scheme, meaning that those on universal credit can apply for a loan to help cover interest repayments after three months rather than nine and can now receive support while working.

A new Financial Conduct Authority customer duty, coming into effect next month, will ensure that firms put customers first, delivering fair value and ensuring good outcomes for those in financial difficulty. The noble Baroness raises a very important point and I hope that further measures can be produced. We await the outcome of discussions.

[Lord Liddle (Lab)]

My Lords, I have a great deal of personal sympathy for the noble Viscount in having to make this Statement to the House on this of all days. I do not doubt his personal commitment to ensuring fairness and help for the people in the most desperate situations in our society, but I would like him to respond to two observations.

First, the main problem we have, which my noble friend Lady Armstrong referred to, is the number of families who can no longer afford the basics of life. In thinking about policy as it goes forward, we have to think harder about the generational distribution of impacts. I am a wealthy pensioner. I got the generous support for energy bills. Is that right, when families are in such desperate need?

Secondly, Conservative Back-Benchers need to stop talking about the urgent need for tax cuts. The fact is that we face desperate pressures on public services and benefits. We have debt at 100% and there are no proposals coming forward from the Government for credible reductions in public spending. The consequence of tax cuts is that there would be a tension between the monetary policy of the Bank, which is trying to deal with inflation through interest rates, and the fiscal policy. We would be at risk of prolonging high interest rates if we went ahead with irresponsible and unfunded tax cuts.

[Viscount Younger of Leckie (Con)]

I think the noble Lord made three points altogether. I can only reiterate that I am aware of the impact on households, particularly those at the vulnerable end of society. I have already mentioned a number of initiatives and points that are being made outside government, particularly what the supermarkets are doing. At the end of the day, it is the basics that count. That includes, as the noble Lord alluded to, where the next meal is going to come from.

The noble Lord made a good point about the generational aspect, which ought to be in all of our minds. Whatever is happening now, we need to think about the next generation and generations after that, helping children and looking at the educational side and the health aspects of children. Of course, I understand that the current situation does not particularly help.

Finally, on the noble Lord’s point about tax cuts, we have made it clear that we on this side wish to make tax cuts but are not in a position to do so. It is important to make the point again that tackling inflation is by far the biggest challenge. Although there are some signs that it will come down—we have the predictions and forecasts—there is a lot more work to do. But that is the most important point, and No. 10 made it as well.

[Baroness Thornhill (LD)]

My Lords, the Minister mentioned homelessness, and the best model currently available for that predicts 300,000 more homeless people over the next year. The group in that category that I believe is most vulnerable is low-income earners in the private rented sector. Of course, evictions in the private rented sector have more than doubled in the last year. As rents have risen, their benefit, based on the local housing allowance, has been frozen at 2018 levels—we all know that a lot has happened since then. So have the Government given any thought to unfreezing the local housing allowance, even if only temporarily?

[Viscount Younger of Leckie (Con)]

We keep it under review, but we are not looking at that at the moment. I understand the point that the noble Baroness makes about the LHA, but she will know that we have the discretionary housing payments, which are currently being delivered through local authorities to the most vulnerable. I reassure the noble Baroness that we keep a close eye on that to be sure, and to get the feedback, that these payments are being given and are helping those at the vulnerable end of society. Echoing the noble Baroness’s point, I am very aware that rents are very high—far too high—in the private rented sector, and seeing what more can be done is certainly very high among the Government’s priorities.

[Baroness Donaghy (Lab)]

As my noble friend Lord Liddle said, some of us are sympathetic to the noble Viscount’s predicament. It cannot be easy when the Bank of England has just announced a 0.5% increase in Bank interest rates. He said seven times—I counted—“We are not complacent”, and I know that he is sincere; he is much respected by this House. It would have helped if the Statement from the Government had not been quite so complacent. The reference to “global factors” does not seem to take any account of government responsibility over the last 12 or 13 years. Do the Government take any responsibility whatever for trashing the economy? Did Prime Minister Truss actually exist? If she did not, does that mean that she will not be able to put forward any peerages to this House? It would be interesting to know what precise responsibility the Government take for the current predicament: that our inflation rate is higher than in any other country in the G7, as the noble Lord, Lord Bilimoria, said.

The Minister himself said that 3.1% of GDP is not that high for helping our most vulnerable. Why will the Government not consider uprating some of these benefits to assist them? Even the 10.1% rate for pensioners scales into insignificance when the rate of inflation is 8.7%. It is probably still going up—the Minister said that it was going down, but that is slightly misleading, if he does not mind me saying so. Inflation is going not down but up. I think he is referring to the rate of increase slowing down, which is a very different matter. In view of the urgent situation, will the Government not think of more emergency uprating for some of these benefits?

[Viscount Younger of Leckie (Con)]

There are a number of points from the noble Baroness, who I respect very much, but I will not be drawn into some of the political points that she started off by making. What I will say—and this was in the Statement—is that a lot of what we are facing is to do with the post-pandemic issues that have arisen. As the House will know full well, the war in Ukraine has certainly been quite a factor in that.

I remind the noble Baroness—I think she said it herself—that the uprating of 10.1% we have made to a number of benefits was, we felt, generous. Others would say that we should have done more, but we felt that it was generous at the time. To go back to the beginning of her remarks about the Statement itself, whatever she made of the Statement, as I have said before, we are continuously looking at what more we can do to help those people at this particular time.