Pensions Dashboards (Prohibition of Indemnification) Bill

Viscount Younger of Leckie Excerpts

2nd reading
Friday 3rd March 2023 Lords Chamber

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

My Lords, I congratulate my noble friend Lord Young on his excellent introduction to the Bill. My noble friend has made it clear to the House that the Bill will increase protection for pension savers. It has the full backing of His Majesty’s Government, and it gives me great pleasure to speak in support of it today.

The introduction of automatic enrolment has been a resounding success in helping people save for retirement, on a scale which was hard to imagine just 10 years ago. It has normalised workplace pension saving, with more than 10.8 million workers being enrolled into a workplace pension to date, and £33 billion more saved in real terms in 2021 than in 2012.

This success has, at the same time, resulted in challenges for the Government, consumers and the pensions industry more broadly. Research by Aegon found that 73% of people have multiple retirement or pension plans. While it is usual for people to move around the labour market throughout their working lives, this can make it difficult for people to keep track of what they have saved. Indeed, research by Scottish Widows in October 2022 has shown that nearly half of workplace pension holders do not know how many pension pots they hold with previous employers.

Pensions dashboards will help to address these issues—and I will come back to the point raised on dashboards. They will put the saver in control and allow them to view information about their pensions, including the state pension, in one place online. By doing so, dashboards will enable savers to be reunited with pension pots they may have lost or forgotten about over many years. To highlight how significant the total value of lost pots may be, the Pensions Policy Institute suggested in its paper last year that it could be as high as £26.6 billion.

The Pensions Dashboards Programme is supervised by the Money and Pensions Service to deliver the technology underpinning dashboards. This is far from a straightforward task. It involves connecting thousands of pension schemes so that millions of consumers are able to search for their pensions.

Yesterday, as has been mentioned in the House this morning, the Government published a Written Ministerial Statement which explained that additional time is needed to deliver the complex and technical solutions to enable the connection of pension providers and schemes, in accordance with the connection deadlines set out in the Pensions Dashboards Regulations 2022 and the Financial Conduct Authority’s corresponding rules for pension providers. Given these delays, my honourable friend in the other place, the Minister for Pensions, has initiated a reset of the Pensions Dashboards Programme, in which the DWP will play a full role. This will include a new chair of the programme board and the development of a new plan for delivery.

The noble Baroness, Lady Sherlock, spoke about the importance of ensuring 100% quality and security for these dashboards. I cannot give her more detail on precisely what the reset will mean, which was the gist of her question, but the DWP will play more of a part in terms of those who are managing the dashboard, including MaPS—she will know more about that. But I will endeavour to update her and the House as soon as I can on progress. Obviously, the WMS has just come out, but she rightly asked these questions and that is as much as I can tell her.

The Government will also amend the Pensions Dashboards Regulations 2022 at the earliest opportunity to provide the pensions industry with clarity about the timings of its legal obligations. The Government will ensure that the pensions industry has adequate time and the necessary technical information to prepare for any revised connection deadlines. The Minister for Pensions will provide a further update to Parliament before the Summer Recess, as the noble Baroness, Lady Sherlock, mentioned.

However, none of this detracts from the importance of this Bill, which is needed irrespective of the timeline for delivery. The Pensions Dashboards Regulations 2022 set out detailed requirements for occupational pension schemes to be connected to a digital ecosystem, which will enable the provision of pensions information at the request of a pension scheme member. As set out in the Written Ministerial Statement, this framework for dashboards set out in the regulations remains fit for purpose. The Pensions Regulator may take enforcement action for non-compliance with any of the requirements in part 3 of the Pensions Dashboards Regulations. Once connected to the dashboards ecosystem, occupational pension schemes may be in breach of the regulations—for instance, if they fail to maintain connection to the digital architecture or fail to provide information within the timeframe set out in the regulations. In the event of non-compliance, the Pensions Regulator may issue penalty notices of up to £5,000 for individuals or up to £50,000 in other cases, such as those involving corporate trustees. Several questions were raised in this respect, notably by my noble friend Lady Altmann and the noble Lord, Lord Sharkey.

Having covered the basic penalties, I add that the Pensions Regulator is required by the Regulators’ Code to take a proportionate, consistent and targeted approach to enforcement. However, in the event of multiple compliance breaches, the regulations allow TPR to issue multiple penalty notices within the same document. The Pensions Regulator’s consultation on its compliance and enforcement policy closed on 24 February 2023. In that consultation, TPR set out its intention to consider the total amount of any penalties issued in the light of the circumstances of the breaches and the impact they have had. TPR expects to publish its consultation response and final compliance by the summer. Hopefully, this helps to answer the questions raised by the noble Lord, Lord Sharkey. We feel that the levels are consistent with other areas of pensions legislation. He may know more about that than me, but that is what we believe. Regarding the question raised by the noble Baroness, Lady Sherlock, there is nothing novel in the approach we are taking in this respect.

My noble friends Lord Holmes and Lady Altmann raised the important issue of data accuracy checks. It is critical that savers be able to trust the information in front of them. Trustees and managers have existing legal obligations in respect of data quality, including the accuracy principle under UK GDPR, which requires organisations to ensure that data remains accurate and up to date. The Pensions Regulator has set out its expectations on data quality in its record-keeping guidance. This includes that data be measured at least once a year. The regulator’s guidance on dashboards is also clear that trustees and managers must ensure that the values provided are accurate, and it urges them to work with administrators to improve data if required.

Bringing us back to base, this Bill from my noble friend Lord Young focuses on solving one key issue: that current pensions legislation does not prevent a trustee or manager being reimbursed for these penalties using funds from the pension scheme. The Bill increases protection for pension savers by prohibiting trustees and managers of occupational personal pension schemes from being reimbursed out of scheme asset in respect of penalties imposed on them for non-compliance with the Pensions Dashboards Regulations. The Bill would achieve this by amending Section 256 of the Pensions Act 2004, which already provides similar prohibition in other areas of pensions legislation. I confirm to my noble friend Lord Young—the noble Baroness, Lady Sherlock, mentioned this as well—that that was indeed an oversight. It did indeed escape the eagle-eyed lawyers—including that of the noble Lord, Lord Sharkey, so I am sure that he can be forgiven.

Under the Bill’s proposals, if a trustee or manager were to be reimbursed, and knew or had reasonable grounds to believe that they had been so reimbursed, they would be guilty of a criminal offence unless they had taken all reasonable steps to ensure that they were not so reimbursed. Should a trustee or manager be found guilty, the provisions of the Bill allow a maximum sentence of up to two years in prison, or a fine, or both. Additionally, were any amount to be paid out of the assets of a scheme in such a way, the Pensions Regulator would have the power to issue civil penalties to any trustee or manager which fails to take all reasonable steps to secure compliance.

The Bill has been drafted to make provision across the United Kingdom. As noble Lords will know, pensions policy is transferred to the Northern Ireland Assembly and the usual process would be for the Assembly to provide a legislative consent Motion for any provision relating to a transferred area. However, the Government’s position is that if the Northern Ireland Assembly is unable to consider the matter before the final amending stage of the Bill, it should proceed unamended. Ultimately, the Government are of the view that it would be wrong for these protections not to extend to pension members in Northern Ireland.

A number of questions were raised in relation to and beyond this Bill. My noble friend Lady Altmann asked about NEST and its readiness for connection. The announcement yesterday allows the programme to develop a firmer footing and put it on a path to successful delivery, including ensuring that all data providers can connect safely and securely. The programme and DWP have been in regular contact with NEST and will continue to be over the coming months, to support it in preparing to meet its connection duties when the revised timeline is in place.

My noble friend Lady Altmann also asked about One Login, the successor to Verify. As she may know, there are currently more than 340 services on GOV.UK, with around 190 accounts accessed via 44 different sign-in methods. GOV.UK One Login will replace these with a single ubiquitous way for users to sign in and prove their identity. It will improve inclusion and save millions of pounds through collaboration, efficient service delivery and tackling fraud across departmental boundaries. Development of GOV.UK One Login is progressing at pace, and I can reassure my noble friend Lord Holmes that the core of the system has been launched—its sign-in element, a web-based identity verification journey and a fast-track identity-checking app. There are currently five live services using One Login, with more services expected to onboard in 2023-24. The Cabinet Office and the Government Digital Service are working closely with central government departments to ensure that the programme meets their and their users’ needs.

My noble friend Lady Altmann asked about security and the alternative to Verify. The Pensions Dashboards Programme has procured an interim identity service provider, whose contract runs until January 2024. The service it provides is aligned with the Government Digital Service’s good practice guide. The Money and Pensions Service is engaging with officials in the Cabinet Office and the Government Digital Service, as well as the wider market, building on the engagement work undertaken in 2020, to identify all possible options that may comprise its new identity service delivery model.

Returning to the Bill, the noble Baroness, Lady Sherlock, raised an important point about trustees using schemes to buy indemnity insurance. I can reassure her that the Bill would make it a specific criminal offence for pension scheme trustees or managers to reimburse themselves using the assets of the pension scheme in respect of penalties. It also includes taking out an indemnity policy but having the cost of that reimbursed through the scheme.

The noble Baroness also asked about—I am paraphrasing what she said—a chilling effect, particularly for non-professional trustees; it is a very good point. The Government acknowledge that many trustees do an excellent job, often on a voluntary basis. The vast majority of trustees are in schemes with fewer than 99 members and so would be outside the scope of these regulations unless they connected to pensions dashboards voluntarily. While we accept that the regulatory requirements on trustees have grown a great deal over the years, this is only right given what is at stake, since we are talking about the pensions savings of millions of people. The Pensions Regulator will provide an extensive programme of communications to support trustees to meet the requirements in the pensions dashboards regulations.

The noble Lord, Lord Sharkey, asked about the statutory maximum fine in relation to summary conviction. I may have covered that, but I will write to him if I have not answered the question; I hope that is helpful.

To conclude, I am firm in my view that everyone rightfully deserves protection for their pension savings; we all know that, and that is exactly what the Bill does. It is a simple Bill in that it will extend a prohibition in existing legislation rather than placing new requirements or additional costs on to occupational pension schemes. However, the proposals under the Bill are powerful enough to swiftly deter any rogue actors from reimbursing themselves using pension assets that belong to hard-working people. I hope that the House recognises that and supports its passage today.

Social Security Benefits Up-rating Order 2023

Viscount Younger of Leckie Excerpts

Tuesday 28th February 2023 Lords Chamber

Moved by

[Viscount Younger of Leckie]

That the draft Orders and Regulations laid before the House on 16 January be approved. Considered in Grand Committee on 22 February

Motions agreed.

Local Housing Allowance Rates

Viscount Younger of Leckie Excerpts

Wednesday 22nd February 2023 Lords Chamber

[Baroness Lister of Burtersett]

To ask His Majesty’s Government what assessment they have made of the impact of the freeze in local housing allowance rates.

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

My Lords, the local housing allowance policy is kept under regular review. We monitor the average rents and shortfall levels for claimants to assess the impact of the policy. A significant support package was announced in the autumn Budget, including uprating benefits by 10.1% and extending the household support fund for 2023-24. Further support—discretionary housing payments—is available, and since 2011, nearly £1.6 billion in DHPs have been provided to local authorities.

[Baroness Lister of Burtersett (Lab)]

My Lords, according to the Institute for Fiscal Studies, this further freeze in private rental support means that two-thirds of lower-income private renters must cover at least a quarter of their rent from elsewhere. For many, this means a real cut in the value of inadequate benefits that are supposed to cover basic needs such as food. Cash-limited local authority discretionary housing payments are no answer, especially as their budgets have also been cut. Does the Minister accept that one consequence of this freeze is likely to be increased homelessness? What is his advice for those faced with a growing, unaffordable gap between help with housing costs and actual rents?

[Viscount Younger of Leckie (Con)]

I absolutely hear the noble Baroness, because we recognise that rents are increasing—there is certainly lots of anecdotal evidence of that in the press. However, the challenging fiscal environment means that difficult decisions were necessary to ensure that support is targeted effectively. That is why the Chancellor announced at the Autumn Statement a substantial package of cost of living support to target the most vulnerable households. As I mentioned earlier, one of the initiatives for those who require additional support is the discretionary housing payments available from local authorities, which are best able to target those funds.

[Baroness Thornhill (LD)]

My Lords, the overall level of housing benefit indeed remains a difficult political decision. However, does the Minister agree that it is the way the current local housing allowance system is structured that produces such an arbitrary and unfair system, particularly for private sector renters in high-rent areas? In the face of such overwhelming IFS evidence to prove this, are the Government giving any consideration to reframing the way that housing benefit is calculated in order to remove this growing unfairness?

[Viscount Younger of Leckie (Con)]

Again, I note the comments made by the noble Baroness. We are very aware of this, and we are aware of the juxtaposition of what central government can do and the role of local authorities. As I said earlier to the noble Baroness, Lady Lister, local authorities are best placed to understand exactly where the funds that we give them are best targeted. However, there is more than that; I mentioned the discretionary housing payments, but we also have the household support fund. There are a number of other initiatives which are important to mention as regards helping people, particularly to stay in their homes.

[Lord Naseby (Con)]

I accept what my noble friend says about the Autumn Statement, but is there not one sector of the public who are particularly badly affected? That is the people who are unfortunately unemployed and who are totally dependent on the local housing allowance and therefore disadvantaged, according to the local authorities that I have checked with.

[Viscount Younger of Leckie (Con)]

Yes, indeed, and this plays into what we spend a lot of time doing in our department, which is looking at universal credit and the benefit cap, including the need for housing. We therefore recognise the importance of safeguarding the welfare of claimants, particularly those who, I am afraid, have got into debt. Looking at how they are able to afford housing is a key part of that.

[Lord Whitty (Lab)]

My Lords, in the light of the rise in rents in the private sector, the likely rise in local authority rents and other social housing and the inadequacy of the local housing allowance to make good that, what is the Government’s estimate of the number of evictions that are likely to take place in both the public and private sector—that is in both social and private sector housing?

[Viscount Younger of Leckie (Con)]

I certainly do not have an estimate of what the evictions will be, but we are very aware of the pressures around and we focus on the homelessness prevention grant, which is given out. That is to ensure that people are not evicted from their homes. It is very important that we do whatever we can to support people with their houses, particularly in areas where there is the greatest pressure, and the homelessness prevention grant will help as an extra comfort blanket for that.

[Lord Carrington (CB)]

My Lords, what proportion of people receiving the local housing allowance are unemployed and therefore heavily dependent on this money to pay their rent?

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

Although I do not have that particular figure—perhaps it would come from local authorities—I will certainly be very happy to write to the noble Lord with that information.

[Baroness Sherlock (Lab)]

My Lords, let us try to understand the system. The Government set up a system where you were meant to be able to rent one of the cheapest 30% of properties in an area on the local housing allowance rate and then they froze those rates in cash terms while rents kept going up. That forces people on low incomes to compete for fewer and fewer properties in their local area. This is not at the margins. Roughly 1.5 million people on universal credit get the housing allowance. Over half of those are having to top up their rents by an average of £100 a week. The inflationary increase that the Minister mentioned for the adult allowance on universal credit was a top-up of £100 a month, but £34 extra a month is coming in. How does that work?

[Viscount Younger of Leckie (Con)]

The noble Baroness might like to be reminded that the LHA was originally set at 50th percentile of local market rents and then the policy was reformed, as she will know, in 2011, when it was reduced to 30th percentile. The reforms were made for a reason, because the scheme was unsustainable, with excessively high LHA rates in some areas. Having said all that, we are very aware of the pressures at the moment, as I said earlier, and that is why we have other initiatives to help those who are really struggling— I acknowledge that they are—in some cases with their housing costs.

[Lord Young of Cookham (Con)]

My noble friend has mentioned several times discretionary housing grants, which are available to top up the difference between the local housing allowance and rents. Should not more be done to make those better publicised and if, as the noble Baroness said, there is pressure on the local authorities that have these grants available, would it not be more economical to top up the discretionary housing grants for local authorities if the Government are unable to review local housing allowances?

[Viscount Younger of Leckie (Con)]

Yes. My noble friend makes a good point, and it may well be that better communication is required. I will certainly look into that. However, local authorities, as I said earlier, have broad discretion to spend in line with their local priorities, supported by the non-statutory guidance provided by my department. That provides a list, crucially, of priority groups to assist with their decision-making. Obviously, that needs to be informed perhaps by better communication in terms of where the needs are. There is no evidence that it is not working, but I will look at that.

[Baroness Janke (LD)]

My Lords, there is evidence that the freezing of the local housing allowance affects families most severely, particularly those subject to the benefit cap and, most particularly, lone families. In his reply to the noble Baroness, Lady Lister, the noble Viscount mentioned the importance of targeting resources where they are needed. How can he justify this policy given that we know what the effect will be?

[Viscount Younger of Leckie (Con)]

I would answer that by saying that it is not a question of justifying it but of looking at the whole way in which we are helping people at the moment. That is why it is worth reminding the noble Baroness that, for example, working-age and disability benefits will increase by 10.1% in 2023-24, which I will be speaking to later in the Moses Room. In addition, the benefit cap will be increased in line with CPI. We understand the pressures that people are under and that is why we will also deliver further cost of living payments worth up to £900 for claimants on means-tested benefits, £300 for pensioner households and, as I mentioned yesterday, £150 for those on disability benefits.

[Lord Watts (Lab)]

My Lords, the Minister seems to suggest that people should contact the local authority if they are in trouble. Has he contacted all local authorities to see whether they can help those people? If he has done so, can he publish the findings?

[Viscount Younger of Leckie (Con)]

I will see whether we are able to publish the findings, but perhaps I may reassure the noble Lord that there is continuous interaction between central government and local authorities in terms of the funds that we give them. As I said earlier, it is for them to prioritise the targeting of the funds but, equally, we want some feedback on how well those have been targeted. That is happening.

Social Security Benefits Up-rating Order 2023

Viscount Younger of Leckie Excerpts

Wednesday 22nd February 2023 Grand Committee

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Social Security Benefits Up-rating Order 2023.

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

My Lords, I shall speak also to the draft Benefit Cap (Annual Limit) (Amendment) Regulations 2023 and the draft Guaranteed Minimum Pensions Increase Order 2023. All three draft instruments relate to the way in which pension and benefit rates are increased, and in my view the provisions of all three are compatible with the European Convention on Human Rights.

The Social Security Benefits Up-rating Order increases state pensions and benefits by 10.1% from April 2023, in line with the increase in the consumer prices index in the year to September 2022. The draft Benefit Cap (Annual Limit) (Amendment) Regulations also increase the four benefit cap levels by 10.1% in April 2023, in line with the increase in benefit rates. The Guaranteed Minimum Pensions Increase Order sets out the annual percentage by which the relevant part of an individual’s contracted-out occupational pension must be increased. The relevant part is the guaranteed minimum pension that was earned between 1988 and 1997. Occupational pension schemes are required to increase these, where they are in payment, by 3% for the tax year 2023-24.

By way of history and context, the Committee will know that inflation in the year to September has been the conventional measure used by Governments since 1987 in reaching a decision on how to increase the rates of state pensions and benefits. This is the latest figure that can be used to allow for the necessary operational and IT changes to be made across the DWP, HMRC and local authorities so that the new rates can come into force the following April.

This year, more than ever, it is imperative that these rates are increased so that we protect pensioners and people on low incomes. Putin’s illegal war in Ukraine and two years of a global pandemic mean that we and our partners across the G7 face levels of price inflation unprecedented in recent times. Strategically, the Prime Minister has made clear his commitment to halve the level of inflation this year, and on 9 February the Governor of the Bank of England told the Treasury Select Committee that he expects inflation to fall rapidly this year to somewhere below 5%.

More immediately, the draft uprating order ensures that state pensions and benefits keep pace with the increase in the cost of goods and services over the longer term. For this year’s uprating, the September CPI figure of 10.1% is forecast to be higher than actual inflation in the following year, but this follows two years where the opposite has been true. Using a consistent index ensures that these fluctuations even out so that state pensions and benefits retain their purchasing power over time.

In the shorter term, the Government acknowledge that further help is needed alongside the twin longer-term strategies of bearing down on inflation and uprating benefits consistently over time. The Government are therefore making provision for further cost of living payments in addition to the annual uprating. I will say more about these payments later, which I am sure the Committee realises are already well-rehearsed in this House.

Let us turn now to the detail of the draft Social Security Benefits Up-rating Order 2023. First, on state pensions, due to the Government’s commitment to the triple lock for 2023-24, the basic and new state pension will be uprated by the highest of earnings, prices or 2.5%. Consequently, as the increase in prices is the highest, state pensions will increase by September’s CPI of 10.1% for 2023-24. As a result, from April 2023 the full basic state pension will increase to £156.20 per week for an individual. The full rate of the new state pension will increase to £203.85 a week.

Other components of people’s state pension awards, such as those previously built under earnings-related state pension schemes, including the additional state pension, will also increase by 10.1%. The safety net for pensioners on low incomes, which is the pension credit standard minimum guarantee, will also increase by 10.1%, rising to £201.05 for a single pensioner and £306.85 a week for a couple.

I know that the take-up of pension credit is a matter of particular interest across the House and to members of this Committee. Noble Lords raised the matter on several occasions with my predecessor and noble friend, Lady Stedman-Scott. I thought I might share the latest position to be helpful to the Committee. Since April 2022, the Government have undertaken a substantial and sustained communications campaign to raise awareness of pension credit and to promote take-up. Since the awareness campaign began, weekly pension credit applications are on average 73% higher compared to the year before. Noble Lords will also be encouraged to learn that the latest statistics show that more households were in receipt of pension credit in August 2022 than in May 2022. This is despite the fact that the eligible population for pension credit is declining, as the new state pension lifts more pensioners above the basic level of the means test.

For those below state pension age, this order increases the personal and standard allowances of benefits, including universal credit. Noble Lords will be aware that there is no statutory requirement for the Secretary of State to increase these rates. However, to protect the most vulnerable in the current economic situation, he has decided to increase them by 10.1%, in line with the consumer prices index in the year to September 2022.

The monthly amounts of universal credit work allowances, which is the amount that a person with children or limited capability for work can earn before their universal credit payment is affected, will also increase in April by 10.1%. This too is a discretionary decision on the part of the Secretary of State. For those eligible for a work allowance who are receiving support with housing costs, the allowance will increase to £379 per month. For those eligible for a work allowance who are not receiving support for housing costs, it will increase to £631 per month.

Additionally, the order increases statutory payments by 10.1%. These include statutory adoption pay, statutory maternity pay, statutory paternity pay, statutory shared parental pay, statutory parental bereavement pay and statutory sick pay.

Turning to another important area, that of disability and carer’s benefits, the Government will continue to ensure that carers and people who face additional costs because of their disability get the support that they need. The Government recognise the vital role that unpaid carers play, and carer’s allowance will increase from April by 10.1% to £76.75 per week. Unpaid carers may also access support through universal credit, pension credit and housing benefit, all of which include additional amounts for carers.

For a single person, the carer element in universal credit will increase to £185.86 a month from April, while the additional amount for carers in pension credit and the carer premium in other income-related benefits will increase to £42.75 a week. Benefits for those who have additional costs as a result of disability or health conditions will also increase by 10.1%. These include disability living allowance, attendance allowance and PIP—the personal independence payment.

I turn to the draft Benefit Cap (Annual Limit) (Amendment) Regulations, which will also increase each of the four benefit cap levels by 10.1%. This will ensure that all households see an increase in their benefit following uprating. The national benefit cap levels will be £22,020 a year for couples and lone parents, and £14,753 for single people. For households living in Greater London the levels will be £25,323 a year for couples and lone parents, and £16,967 for single people. Just to put this in perspective, it means that households will be able to receive benefits up to the equivalent gross earnings value of around £26,500, or £31,300 in London.

--- Later in debate ---

When politicians play fast and loose with benefits uprating, the results are felt in lives that are blighted. There are already 4 million children in poverty. Only a few weeks ago, the Joseph Rowntree Foundation reckoned that one in seven families was going without essentials. We are now coming up towards one-fifth of pensioners living in poverty—that figure is much higher than when Labour left office—with older and disabled pensioners being the most affected. Can the Minister tell us whether the Government have a strategy to deal with growing poverty among the young and the old in our society? I look forward to his reply.

[Viscount Younger of Leckie (Con)]

My Lords, I start by thanking the Committee in general for its overall support for these regulations. I also thank various Peers, including the noble Baroness, Lady Lister, and the noble Lord, Lord Davies, who made some very kind remarks about me coming into this particular role; I appreciate it. I was more than prepared for the fact that a good number of questions would arise from these regulations, of which there are three; I will of course do my best to answer them.

Let me start, in what I hope is not too discordant a way, by taking some issue with what the noble Baroness, Lady Sherlock, said. There is no question that there is no way in which we have played fast and loose with this; that is a bit unfair. A huge amount of thought has gone into this. I think the Committee has acknowledged that we have moved in the right direction by raising many of these benefits by 10.1%.

[Baroness Sherlock (Lab)]

Let me just clarify: I was not suggesting that the Government played fast and loose this year. I was talking about previous years when they broke with uprating and did not uprate at all, not this year. I am sorry if I did not make that clear.

[Viscount Younger of Leckie (Con)]

That is fine; I accept that. I think we can leave it at that.

I will start by tackling a couple of issues that were raised by the noble Baroness, Lady Sherlock, towards the end of her speech. She made some good points that completely chime with what the Government think. We totally understand that a number of individuals are suffering as a result of the war in Ukraine, the pandemic and cost of living issues generally. I completely acknowledge that; I hope the Committee understands that.

Let me start on why childcare has not been included; perhaps I can help. Regardless of the number of hours that they work, eligible parents can claim back up to a generous 85% of their childcare costs each month, up to the maximum amount of £646 for one child and £1,108 for two or more children. The vast majority of UC claimants receiving a childcare element do not hit the UC childcare caps. In fact, between August 2020 and July 2021, 92% of universal credit claimants receiving a payment for the UC childcare element were eligible to receive the full 85% of their childcare before the earnings taper.

So we believe that our policy provides fairness in the welfare system between those receiving out-of-work benefits and those in work by putting in place a reasonable cap on the childcare costs that a household can have reimbursed through UC, in each assessment period. We believe that the childcare policy aligns with the wider government free childcare offer in England and our similar funded early learning offers in the devolved nations. We keep childcare under review. We know that childcare costs are extremely high; I am certainly aware of that. I cannot add anything more to that, only that the Committee should be aware that we are aware of these issues. I will stick with that.

Secondly, the noble Baroness, Lady Sherlock, raised a perfectly reasonable point about food back usage. I am aware from a previous Oral Question in the Chamber of various Peers’ strong concerns and the comments that have been made. I chime with those as well. As the noble Baroness knows, food banks are independent, charitable organisations and our department does not have a role in their operation. What she and the Committee should know is that we are looking to give some feedback from a series of questions posed by the Family Resources Survey. We hope that these will be published next month and will give the Government some idea about usage. It is very much our wish that food banks are not needed. We need to continue to work as hard as we can to look at the reasons behind their usage. We can all guess what they are; I have given some flavour of that this afternoon.

On the same theme, I will touch on inflation. This leads to a number of important points raised by noble Lords, in particular the extremely good point from the noble Baroness, Lady Lister, on the increase in food prices. We are all concerned about the price of certain food items rising particularly steeply. Like many countries around the world, and as the noble Baroness knows, the UK faces the challenge of high inflation. We will continue to provide support through cost of living payments, which have been well rehearsed in this Committee and in the Chamber, while increasing state pensions, benefits and the benefit cap levels by 10.1%.

To help the Committee, the CPI stood at 10.1% for the 12 months to January 2023, down from 10.5% in December. This monthly decline was principally driven by lower rises in motor fuel. The Bank of England predicts that the CPI will continue to fall. The OBR states that government action has limited the severity of the recession and protected 70,000 jobs, and that it will take 3.4 percentage points off inflation by the end of March. This will contribute to a fall in inflation, which, as the Prime Minister has said, is expected by mid-year.

This leads quite neatly on to some of the points raised by the noble Baroness, Lady Lister, and the noble Lord, Lord Davies. To paraphrase, the general gist of their question was: why can we not uprate more frequently using a more up-to-date CPI figure? That is a fairly reasonable question. The Secretary of State undertakes an annual review of benefits and pensions. As I mentioned earlier, the CPI in the year to September is the latest figure that the Secretary of State can use. This is crucial to allow sufficient time for the required operational changes before new rates can be introduced at the start of a new financial year.

All benefit uprating since April 1987 has been based on this particular timing. Given the volumes involved, the technical and legislative requirements and the interdependencies across government, we state very firmly that it is not possible to undertake the uprating exercise any later than currently timetabled. I do not say this to be particularly cheeky but I wonder whether the comments might not have been quite so critical of this timing issue for the higher uprated figure had there been real evidence today of a much lower level of inflation, so all those people would be getting more than the level of inflation—perhaps I should not go there.

I turn to the local housing allowance—the LHA—which was raised by the noble Baroness, Lady Lister, and others; yes, we had 10 minutes on this in the Chamber earlier. I am not sure that I can really add to what I have said. I genuinely believe that the £1 billion that we invested in 2020 to provide support for private renters by increasing the rate to the 30th percentile was the right thing to do. It is a fact that it has been frozen but it is also a fact that the discretionary housing payments—DHPs—and homelessness protection grants are helpful. I say again that we believe it is right that we defer to local councils and local authorities to make the right decisions in terms of how to target the funds that we have given them, including to people who are generally suffering and are on the lowest incomes. It is up to them to decide what to do.

[Baroness Lister of Burtersett (Lab)]

Perhaps I can ask again the question that I asked this afternoon but in a slightly different way. Let us take somebody whose local housing allowance is well below the rent that they are paying and they are on benefits. They are probably struggling anyway because, as we have heard, benefits have been cut in real terms in recent years—if benefits had not been cut since 2010, people might have been in a better position that they are to withstand the current cost of living crisis. Let us say that they also live in an authority where the local housing allowance budget is under great strain; according to Shelter, some authorities are really struggling because demand is so high. What is the Minister’s advice to them? What should they do? There is no point saying, “Go to the local authority”, because there may not be any money there.

[Viscount Younger of Leckie (Con)]

I take note of that; I am certainly not dismissing what the noble Baroness says. It is a legitimate point that she raises. I hope, though, that she will acknowledge that it is right that the money we give is properly targeted to those who are in genuine need. I would like to hear of issues where they are not particularly targeted. If the money is going to people who do not need it, that is an issue, but the main thing is that the money should go to people who are genuinely in need. However, it does not just rely upon that; it relies upon the other initiatives that I have already mentioned.

To pick up on what the noble Baroness said in her remarks, the local housing allowance rates are not intended to meet all rents in all areas. In areas where rents are more expensive, those in receipt of benefits have to make the same decisions about where to live as those not claiming benefits. May I just leave it that we probably will not agree on this and that I will take away what the noble Baroness has said? It is important, I acknowledge, that local authorities follow through and give support to those who are in genuine need in all areas.

I will move on to the transitional element—that is, the uprating and the link to universal credit and transitional protection, which was raised by the noble Baroness, Lady Lister, and the noble Lord, Lord Davies. As they know, TP provides eligible claimants time to adapt to UC by protecting entitlement at the point of migration to universal credit. TP is neither intended to replicate permanently nor be an indefinite increase in benefits. I therefore acknowledge that it erodes. This ensures that UC entitlement for those managed migrations will gradually align with new claimants in the same circumstances. The noble Lord, Lord Davies, asked how many people will see a less than 10.1% increase due to the interaction with transitional protection; I will need to write to him on that point.

[Baroness Lister of Burtersett (Lab)]

I asked that question as well. Will the Minister write to me about how many will be affected? I had hoped that he might be able to bring those figures today.

[Viscount Younger of Leckie (Con)]

If I had been given advance notice of the questions, I might have been able to.

[Baroness Lister of Burtersett (Lab)]

The noble Viscount was. I am sorry but the very reason I raised it with him earlier this week was so that it might be possible to bring the figures today.

[Viscount Younger of Leckie (Con)]

In which case, I apologise. I would normally take note and come back with some answers. Of course I will include the noble Baroness; in fact, I will include any Peer who has taken part in this debate in my letters about anything that I am not able to answer.

The noble Lord, Lord Davies, and the noble Baroness, Lady Sherlock, said that the Government need to be clear about why we are raising the guaranteed minimum pensions by 3%. For the pre-2016 pensioners, the Government meet the difference; for post-2016 pensioners, we do not—however, these people benefit from transitional protection. I hope that gives some form of an answer.

The noble Baroness, Lady Sherlock, raised communication. A fact sheet covering the policy change was published on GOV.UK in August 2021—I see that she is nodding at that—which invited people to write to the department if they wanted an explanation of how they had been affected by the policy change. One request for compensation has been received so far, which is interesting. As of 25 January, we do not yet know the outcome of that claim, but I hope that provides an answer.

The noble Baroness also asked about the benefit cap increase linked to child poverty. As she will know, the Government are fully focused on tackling the root causes of poverty, such as children’s education and parental worklessness, to improve the lives of people in our country. She will know that the best way of doing that is for us to have a strong economy and get people into work. As mentioned earlier, the proposed levels will mean that households will be able to receive benefits up to the value of gross earnings of around £26,500, or £31,300 in London.

The noble Baroness, Lady Lister, asked about low pay and whether the Low Pay Commission—the LPC—would include in its deliberations the adequacy of benefit rates. I thank the noble Baroness and will draw the Treasury’s attention to that.

There are a number of other questions that I need to answer, but we probably need to draw a halt, as time is running short.

[Baroness Janke (LD)]

Please can I have some answers to my questions, perhaps in writing?

[Viscount Younger of Leckie (Con)]

Yes, of course. To conclude, I beg to move.

Motion agreed.

Guaranteed Minimum Pensions Increase Order 2023

Viscount Younger of Leckie Excerpts

Wednesday 22nd February 2023 Grand Committee

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Guaranteed Minimum Pensions Increase Order 2023.

Motion agreed.

Benefit Cap (Annual Limit) (Amendment) Regulations 2023

Viscount Younger of Leckie Excerpts

Wednesday 22nd February 2023 Grand Committee

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Benefit Cap (Annual Limit) (Amendment) Regulations 2023.

Motion agreed.

Disabled People: Impact from Policies and Spending Cuts

Viscount Younger of Leckie Excerpts

Tuesday 21st February 2023 Lords Chamber

[Baroness Thornton]

To ask His Majesty’s Government what steps they will take to assess the impact of their (1) policies, and (2) planned spending cuts, on people with disabilities, to ensure that they do not exacerbate existing inequalities.

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

My Lords, the Government recognise the barriers that disabled people face across many aspects of their lives. All government departments have rigorous processes in place, in line with the public sector equality duty to ensure that they consider proactively the impacts on disabled people when carrying out their day-to-day work in shaping policy and delivering services. This includes the Treasury, which carefully considers the equality impacts, including for disabled people, of the individual measures announced at fiscal events.

[Baroness Thornton (Lab)]

I thank the Minister for his Answer. This Question concerns the wider issue of impact assessments being used to guide government policy for disabled people, and is not just around vital income support. First, is an impact assessment being conducted, or has one been proposed, to look at the impact that Home Office immigration rules are having on the supply of personal assistants for working-age disabled people to allow them to be economically independent? Secondly, is an impact assessment being carried out, or has one been proposed, on the effects of the proposed modernisation of the railways on the mobility of wheelchair-users and people with sight impairment, many of whom are very worried about this?

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

The first thing to say is that there are no plans for impact assessments. What I can say to reassure the noble Baroness and the House is that much work has been done to take account of the extra costs that are required for those who are disabled. The extra-cost disability benefits have been uprated every year since their introduction, in line with inflation; these benefits were also exempt from the recent benefits freeze. Over 1.3 million more people of working age are in receipt of an extra-cost disability benefit since May 2013. On her final point about transport. we have done a lot of work on the transport issues. For example, we have enacted the Taxis and Private Hire Vehicles (Disabled Persons) Act 2022 and published guidance on inclusive mobility and tactile paving, and there is more that I could say.

[Lord Farmer (Con)]

My Lords, my understanding is that Access to Work grants for disabled people are beset with significant delays. For example, the Royal National Institute for Deaf People says that many are waiting close to four months for initial claims to be processed or renewals to be approved. This has a knock- on effect on the support workers they rely on, who understandably may refuse to take bookings from them as they will not get paid. Will my noble friend the Minister say what the Government are doing to cut delays?

[Viscount Younger of Leckie (Con)]

I agree with my noble friend that there have been delays, and perhaps I can give a little thought to this. One matter to note is that the Access to Work systems are currently receiving an increased level of applications for support—for example, there are 24,677 cases. On what we are doing about this, DWP has taken a number of actions: all applications for a job to start in the next four weeks are prioritised, renewal applications are also prioritised where possible, and support is approved using a new streamlined process. We have also increased the number of staff working on Access to Work. We are very aware of the delays and are taking some action.

[Baroness Falkner of Margravine (CB)]

My Lords, I declare an interest as chair of the Equality and Human Rights Commission. Are the Government minded to implement Section 28(8) of the Equality Act 2006, which would give the commission the powers to bring disability discrimination cases to court?

[Viscount Younger of Leckie (Con)]

Although I cannot confirm that, I know that the commission examined whether my department was making reasonable adjustments to its processes for people with mental health conditions and learning difficulties, as required under the Equality Act 2010. As the noble Baroness will know, the EHRC published a statement on 19 April about drawing up a legally binding agreement with the DWP to commit it to an action plan.

[Baroness Uddin (Non-Afl)]

My Lords, I declare my interest: a 42 year-old family member has recently become an amputee, so I have seen at first hand the desperate situation that many suffer, particularly in residential care. We are prepared to pay up to £2,000 or £3,000 a week for residential care but not for independent accommodation. Therefore, if the Minister considers an impact an assessment—I am disappointed to hear that he is not doing so—will he consider the impact on disabled people, particularly those with physical disabilities? Given local authorities’ depleted housing stock, they may need to rely on private housing. Will the Minister give some assurance that he will at least look at that?

[Viscount Younger of Leckie (Con)]

I reassure the noble Baroness that we understand that people across the UK, including those who are disabled, are worried about the cost of living—she mentioned housing and other matters. She will know that we have provided £37 billion-worth of cost of living support in this financial year, including a cost of living payment of £150 for the disabled. We have provided up to £650 for low-income households and £300 for pension households —both of these groups have large numbers of disabled people.

[Baroness Brinton (LD)]

My Lords, other noble Lords have spoken about some of the problems inside DWP. I will ask about PIP and applicants who have been disallowed it because they “didn’t return the form”. In 2017, 7,500 claimants were disallowed but, by last year, that had risen to over 42,000. The problem is that, even though many of these people were marked as vulnerable, some have died: Laura Winham starved to death, and it took three years for her body to be found—she was not the only person. What systems is DWP putting in place to ensure the protection of the most vulnerable disabled people?

[Viscount Younger of Leckie (Con)]

The noble Baroness is right to raise PIP. We are targeting support at those with the greatest needs, as she raised. PIP exempts a household from the benefits cap and is uprated by CPI, and it is payable regardless of a person’s employment status. On her particular points, I am pleased to say that we continue to see an improvement in the way that we look at and pay PIP, and particularly in the clearance times—the noble Baroness will know that there have been some delays. I will write to her on her specific question about the content. As I say, the delays are very much a priority for my department at the moment.

[Baroness Andrews (Lab)]

My Lords, I take the Minister back to his answer on personal assistants. When we were taking evidence in the Adult Social Care Committee on the provision of personal assistants, it became perfectly obvious that there is a real crisis for those people who do not want to ask their families to care for them and who would really benefit from personal assistants. One lady we spoke to had employed 27 personal assistants in the course of a year, none of whom could stay with her because they could not afford to. What is the Minister going to do, if he is not going to do an impact assessment, to find out what is actually going on in the lives of these people, particularly in an area where the data is extremely short and where we also know that people are having to take on personal assistants and then act as small businesses to try to organise their national insurance? For many, that is a huge burden.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

The noble Baroness raises an important point. I think it might be helpful to remind her that the Minister for Disabled People announced on 1 December last year that a new disability action plan will be consulted on and published in 2023. The groups the noble Baroness mentioned will be part of that. It will set out the immediate action the Government will take in 2023 and 2024 to improve disabled people’s lives, as well as laying the foundations for a longer-term change. The plan will reference the work already being taken forward by individual government departments, but I know that there is more to do in this area and she is right to raise it.

[Baroness Janke (LD)]

My Lords, a decade of tightening eligibility for out-of-work sickness benefits on top of cuts to rates means that disabled people are now far more likely to be found incorrectly fit for work than awarded benefits they do not need. When will the Government take action to do something about this injustice?

[Viscount Younger of Leckie (Con)]

We certainly keep this under review. The noble Baroness will know that SSP is administered and paid entirely by employers, at a rate of £99.35 per week. Employers are required to pay it, but as I say, this matter is kept under constant review.

[Lord Touhig (Lab)]

My Lords, we all know that the cost of living crisis and pressures on public services are affecting families across the country, but the impact on families with disabled children is particularly acute and often not well highlighted. What assessment have the Government made of the effect of their current spending plans on the level of support for disabled children and their parents?

[Viscount Younger of Leckie (Con)]

I do not have any figures on disabled children but I can say that, in the year 2022-23, we will be spending around £65.7 billion on benefits to support disabled people and people with health conditions in Great Britain, including children. This is around 2.6% of GDP. Spending on the main disability benefits—PIP, DLA and attendance allowance—will be more than £7 billion higher in real terms than it was in 2010.

Health and Safety and Nuclear (Fees) Regulations 2022

Viscount Younger of Leckie Excerpts

Tuesday 31st January 2023 Grand Committee

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Health and Safety and Nuclear (Fees) Regulations 2022.

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

My Lords, the Health and Safety and Nuclear (Fees) Regulations 2022 statutory instrument was laid before Parliament on 20 December 2022 and came into force on that same day. These regulations correct an error in the powers used to make the Health and Safety and Nuclear (Fees) Regulations 2021. The error was an unfortunate oversight. Due to the volume of Covid, Brexit and trade agreement work, pressures on the Government Legal Department—GLD for short—resulted in this referencing error not being picked up in checks. HSE and GLD regret the error and are taking steps to reduce the risk of this sort of error happening again. The error was identified by GLD during a recent review.

The urgency to make these regulations arose from the need to use the powers in the European Union (Withdrawal) Act 2018 before they expired on 31 December 2022 and so avoid the requirement for primary legislation. This instrument has to be made in the affirmative and debated in both Houses because this is what the EU (Withdrawal) Act 2018 specifies.

This instrument is non-contentious, as it repeats the previous regulations with some minor technical changes. The preamble to the Health and Safety and Nuclear (Fees) Regulations 2021 did not cite one of the enabling powers and was not made with the consent of HM Treasury to certain fees for chemical regulation functions which were transferred from the EU. The correction ensures that the Health and Safety Executive can continue to recover its costs for these functions.

The preamble in the 2021 regulations refers to paragraph 7 of Schedule 4 to the European Union (Withdrawal) Act 2018. It should also have referenced paragraph 1 of Schedule 4 to give the powers for the provisions which allow charging for certain regulatory activity around biocides and classification labelling and packaging—so-called CLP. In addition, this same error was repeated in later regulations, which contained a series of amendments to, and mirrored powers in, the 2021 regulations. This instrument also corrects that error.

Biocides and CLP provisions in the fees regulations 2022 rely on paragraph 1 of Schedule 4 to the European Union (Withdrawal) Act 2018, and so consent from HM Treasury is required, as referenced in paragraph 3 of that schedule. I can assure your Lordships that consent has been given. I can also assure your Lordships that we have a rigorous checking process in place which will normally ensure that errors are identified before instruments are made.

In conclusion, I take this opportunity to emphasise that this instrument is a restatement of the fees regulations 2021, with the correct powers cited in the preamble and for which HM Treasury consent has been obtained. These changes put beyond doubt the ability of HSE to charge fees for certain biocides and CLP regulatory activity. The instrument makes no changes to policy or duties, although, as explained in the Explanatory Memorandum, it corrects some minor technical errors as well.

I hope that colleagues of all parties will join me in supporting the new regulations, which I commend to the Committee. I beg to move.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for that introduction, and I can only take it that the remarks he addressed to “colleagues of all parties” means me, so I am delighted to be here. I also love it when a Minister announces, as was done in the Commons as well, that an instrument is non-contentious. From the Opposition Benches, our mind goes, “Well, we’ll see about that; that’s our call.” It is not the kind of thing one can do unilaterally.

However, as we have heard, this instrument revokes and replaces the Health and Safety and Nuclear (Fees) Regulations 2021, as amended by the amending regulations, and consequentially revokes Regulation 14 of those. We have heard that the purpose is to correct a number of errors. I accept that some of them are clearly technical. There is the incorrect cross-reference in Regulation 12, the error in the definition of “nuclear provisions” in Regulation 16 and the omission from Regulation 22 of the process clarifying how to interpret terms on classification, labelling and packaging, and so on.

However, there is a more serious error. The fees regulations 2021, as amended, were meant to enable the Health and Safety Executive and the Office for Nuclear Regulation to charge fees for a range of specified activities, but, as we hear, it has become apparent that an error in the preamble to the regulations and to the amending regulations has caused a problem. Neither cites paragraph 1 of Schedule 4 to the EUWA 2018, but both should have done so. The problem is that that would have allowed provision for the charging of fees in connection with functions following Brexit, particularly those performed by the HSE in relation to biocides and chemicals—I still think fondly of our long debate on biocides and chemicals not very long ago.

I have some questions. The effect of the error was that the required Treasury consent was not sought prior to the making of regulations under paragraph 1 of Schedule 4 to the EU withdrawal Act. I accept that the Treasury has indicated that it would have given consent had it been asked. However, it was not asked, which is of course the problem. The EM says that the error

“may raise doubt as to HSE's ability to continue to recover the affected fees.”

Can the Minister unpack that a little more for us? First, we need to be clear what fees have already been charged using the flawed powers in the 2021 regulations. When these regulations were debated yesterday in the Delegated Legislation Committee in another place, the Minister, Mims Davies, said:

“About £25,000 was charged across the industry under the powers related to the error. However, HSE judged that there is a low chance of any case being brought, due to the amount of money involved. That is why we are rectifying it extremely quickly. HSE will continue to manage any legal implications on a case-by-case basis.”—[Official Report, First Delegated Legislation Committee, Commons, 30/1/23, col. 8].


Can the Minister tell the Committee: was there a legal basis for charging those £25,000-worth of fees? If not, will the money be refunded to the firms which paid them, or do I take it from that last sentence of the Minister that the Government are simply waiting to see whether anyone who paid them under deficient rules will sue to get their money back? Were any fees not charged as a result of this error that would otherwise have been charged? If so, has any revenue been lost?

There are two other questions. We need to know more about how we got here and, more importantly, how the Committee can be assured it will not happen again. I accept that drafting errors happen, of course, but there are quite a lot of errors in one set of regulations here. Yesterday, the Minister gave the explanation that the noble Lord has repeated today, which dumps the blame pretty much lock, stock and barrel on the Government Legal Service, saying that it was under pressure as a result of Covid, Brexit and trade agreement work, it had too much pressure and that is why it happened. The only problem with that is that two of those three were completely foreseeable. I realise that post Brexit there will have to be redrafting of regulations and other legislation, but the volume and speed is a direct consequence of decisions the Government made about the nature of Brexit and about the way to handle retained EU law.

So, knowing all this, why did the Government not plan and resource the GLD accordingly so that it could deal with the volume of work and the pressure that it would be facing? We cannot simply accept that our statute book should be in a mess as a result of Brexit. There were various points at which these errors could have been picked up. Why were they not? Is there a quality assurance process in place? Does the HSE or the DWP do any checking of their own legislation? Do they literally just give it to the GLD, say, “Do it!” and then take whatever is given back and put it out? Is there a quality assurance process and, if so, why was none of the errors picked up? I spent some years as a non-executive director on a board. If the executive reports a significant error, the question that one asks is: is it systemic? If the answer comes back, “No, it is not”, then one wants evidence of that; if the answer is: “Yes, it is”, one wants to know how one can be assured that it will not happen again?

The Minister yesterday in the Commons said that,

“the HSE and the GLD have completed a full review of the lessons learned,”

and,

“identified some practical actions”.—[Official Report, Commons, First Delegated Legislation Committee, 30/1/23; col. 7.]

to improve ways of working between their officials. That is nice but—this is an important question—if those practical actions had been in place, would they have avoided these errors? So, one has done lessons learnt. If one had done those things then, could this error have happened? If it could still have happened, then we have not solved the problem. Did the review look at other errors, other than the one that it turned out had created this problem?Crucially, how confident is the Minister in assuring the Committee that something this serious will not happen again?

Finally, we are told that

“the Department is adopting the free issue procedure in relation to this instrument.”

Do I take it that that means that there will be free issues of this instrument and the amendment regulations? What will be the cost of that?

Given that I have fired a number of questions, I really want to get answers today—I do not want any more letters because they never arrive, or they may arrive eventually but it takes a long time and these regulations have already been made. To clarify, I am interested in finding out: what happened; why the mistakes were not picked up; whether fees were charged without any legal cover and, if so, whether fees are going to be refunded and whether there were fees that could have been charged that have not been; whether there is quality assurance in place; and whether the DWP and the HSE do any checking of their own legislation and how they can assure us that this will not happen again. I look forward to the Minister’s reply.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Baroness, Lady Sherlock, for her response. I totally understand the tone and nature of the questions that she has asked. I hope that I can respond. It may be that the detail in the responses is not quite what she is looking for and, of course, I will say that I will write to her if the answers are deemed to be not satisfactory. But I will certainly do my best.

I should like to say first that these errors are unfortunate. As I said, the error was an unfortunate oversight caused by pressures on the GLD—the legal side—due to the volume of Covid, Brexit and trade agreement work. Despite checks in place, the omission of one of the powers from the preamble was not noticed. I shall go into a little more detail in terms of how the error was noticed. The preamble to the fees regulations 2021 referred to Paragraph 7 of Schedule 4 to the EUWA 2018 but should have also referenced Paragraph 1 of that schedule. The error was repeated in the amendment regulations, being a set of regulations that amended the fees regulations 2021. Due to that unfortunate oversight, the correct power was not cited in the preamble, which meant that certain regulations were made without the consent of HM Treasury, as they should have been. The error was spotted during a recent review of the fees regulations 2021, as I mentioned.

On the noble Baroness’s question what has been done to prevent such errors happening again, I believe that the review has been rigorous, and we do not believe that it will happen again. However, I shall give a bit more detail. HSE and GLD have completed their review of lessons learnt. This has identified some practical actions that can be taken including better ways of working between GLD crucially and HSE policy officials.

The question of HM Treasury and its role came up, and perhaps I can be helpful in answering some questions. HM Treasury has approved the 2022 fees regulations and has confirmed that consent would have been provided at the time of the 2021 regulations, if sought. HM Treasury consent was given when the fees were first introduced into UK law in 2019 by way of amendments to the fees regulations 2016. HSE is informing HM Treasury of the proposed treatment of the approximately £25,000 of fees received between 1 April 2021 and 21 December 2022. Some 14 companies have been charged between £500 and £5,000, so I hope that is helpful.

--- Later in debate ---

[Baroness Sherlock (Lab)]

On the £25,000, I asked a specific question: was there legal cover for charging that money? I would like an answer to that. I think the Minister said that the HSE is informing the Treasury as to what it will do about the money. Can he inform us what it is going to do about it rather than just the Treasury?

[Viscount Younger of Leckie (Con)]

Those are two fair questions. I will have to write to the noble Baroness to follow through on the specific details that she has asked for. I will certainly write a letter and make sure that she is fully informed. With that, I commend these regulations to the Committee.

Motion agreed.

Universal Credit: Benefit Cap and Two Child Limit

Viscount Younger of Leckie Excerpts

Tuesday 24th January 2023 Lords Chamber

[Baroness Lister of Burtersett]

To ask His Majesty’s Government how many families in receipt of Universal Credit are subject simultaneously to the benefit cap and the two child limit.

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

My Lords, both policies aim to introduce fairness between households claiming benefits and taxpayers who support themselves solely through work. We estimate from published statistics that fewer than 30,000 households were impacted by both policies in April 2022, which is under 1% of households on universal credit. These families may benefit from additional financial help, such as the cost of living payment and discretionary housing payment, if they need additional support to meet rental costs.

[Baroness Lister of Burtersett (Lab)]

My Lords, in the absence of official data hitherto, the Benefit Changes and Larger Families Project estimates that at least 110,000 children are being pushed deeper into poverty because their parents are caught by both the cap and the two-child limit. Evidence of the damaging effects strengthens the case for scrapping both policies, which are far from fair. At the very least, will the Government now undertake to publish regular data on the numbers affected and monitor the impact on children and their parents?

[Viscount Younger of Leckie (Con)]

I am certainly aware of the larger families project. The latest published statistics on households on universal credit show that the majority of families—79%—on universal credit had fewer than three children, with 21% of universal credit households with children having three or more children. Having said that, it is important to note that there are a number of other initiatives where we can help families with more than two children if they get into difficulty.

[Baroness Meacher (CB)]

My Lords, one of the major contributors to poverty is the absence of affordable housing. Shelter produced a really alarming report this week which showed a year-by-year reduction in the building of affordable housing over the past 12 years. Do the Government have a commitment to reverse that policy and to increase the number of affordable homes built every year so that people living in abject poverty—particularly those depending on universal credit—will at least be able to find an affordable home?

[Viscount Younger of Leckie (Con)]

Absolutely. There are a number of initiatives on housing, which I am sure the noble Baroness will be aware of. One example is the discretionary housing payment, which can be paid to those entitled to housing benefit or the housing element of universal credit, particularly those who face a shortfall in meeting their housing costs. It is certainly a matter that I am aware of, and I know that my noble friend Lady Scott will be very much on top of that. We are working across government on this issue.

[Lord Farmer (Con)]

My Lords, can my noble friend reassure me that universal credit still makes work pay despite childcare costs when there is more than one child? Of course, an at-home parent conscientiously doing their own childcare in the early years is, in fact, working. What expectation is placed on claimants to work when parental care is their strong preference?

[Viscount Younger of Leckie (Con)]

Yes, my noble friend makes an important point. I should say at the outset that the Government firmly believe that, where possible, it is in the best interests of children to be in working households. That is why the department has continually provided support to help move people into work. To further that, this sort of support in making people financially resilient by moving them into work and also ensuring that they are progressing in work is important; up to 85% of the registered childcare costs each month is paid regardless of the number of hours that they work, compared with 70% for tax credits.

[The Archbishop of York]

My Lords, it is encouraging to see that the Government are keeping a check on the numbers of people being affected by these policies, but I was not quite sure whether I heard that work is being done to measure the impact of the policies on families. I can say, and it gives me no joy to say it, that from where I serve in the north of England—I am thinking particularly of Middlesbrough and Hull—I see the disturbing impact of an increase in poverty, child poverty and families in very difficult situations, not least with the cost of living crisis on top of all this. My simple, genuine and heartfelt question is: how would you explain this to a mum expecting her third child, or a family with three or four children who have been pushed into benefits over the past couple of years? They do not understand why this is happening but they are suffering as a consequence of it. How do we explain to them the rightness of this policy?

[Viscount Younger of Leckie (Con)]

My Lords, first, we are very aware of the fact that some people are finding it particularly difficult at the moment—some very good points have been made about that. One of the issues to focus on, which we are doing, is childcare, which is a key enabler of employment for parents and has clear developmental benefits for children. Of course, the onus falls on the caseworkers in the jobcentres. Often they are very well trained, and they have to deal directly with these people who come with some heartfelt stories.

[Baroness Sherlock (Lab)]

My Lords, can I give a specific example? The most reverend Primate has talked about the impact on individuals. The larger families study that the Minister mentioned interviewed parents who have been affected by this. It gives the example of a single mother who had experienced domestic abuse. She was given an exemption from the two-child limit under the rape clause because the child was conceived by rape, so she was then awarded an extra £237 a month. But then the benefit cap kicked in and she got only £30 a month of it. Because she struggled to provide for her children, she ended up returning to a violent relationship. I ask the Minister again: what does he think about the impact of these policies, not just their number?

[Viscount Younger of Leckie (Con)]

The noble Baroness makes a good point because we should be aware of the impact, which is why we are working hard on a number of initiatives. As she will know, there are a number of fallbacks on top of this, particularly the provision of cost of living support worth over £37 billion for 2022-23, including £400 for the non-repayable discount to eligible households. However, it is more than this. I am in awe of people on the front, including those who work in the front line of the jobcentres, who work with the social workers, and indeed with the Church, to see through these very challenging issues for some families.

[Lord Goddard of Stockport (LD)]

My Lords, does the Minister agree that larger families on benefits are doubly penalised by the Government’s policy, not only by losing support for third or subsequent children but also due to the lack of affordable childcare to enable them to work? Those families are, in effect, losing £2,935 a year.

[Viscount Younger of Leckie (Con)]

I mentioned childcare costs before and it is important to support parents who have childcare needs. Of course, we have the child benefit but on top of that there are other support mechanisms to ensure that those who have children—particularly more than two, which is the subject of this Question—can survive and, in many cases, find the next meal.

[Baroness Deech (CB)]

My Lords, research has shown that the majority of children of single parents would be lifted above the poverty line if the absent fathers paid what they owe. For decades, the child maintenance system has let single mothers down, condemned children to poverty and let men get away with it. What is the Minister’s advice?

[Viscount Younger of Leckie (Con)]

This is another important subject. The child maintenance system supports separated parents to agree their own family-based arrangements where it is possible. Where it is not possible, the child maintenance system steps in. It is incredibly important that the paying parent pays, and this is where the system is dealing with some extremely challenging issues in order that the receiving parent receives what they are due.

[Baroness Berridge (Con)]

My Lords, all noble Lords will be pleased that it is a small number of families that are affected. Can the Minister inform us whether any of those families are also being affected by having to pay back money, such as aged debts, when they are on such limited income? It has always struck me as rather odd since when you get fined in a court, very careful consideration is given to your means to pay, and if you borrow money from the Government for your education, you are not asked to repay it until you are earning a fair sum of money. The poorest in our society are being asked to pay money back to the Government, so can the Minister provide us with information on that?

[Viscount Younger of Leckie (Con)]

I will need to write to my noble friend about that issue. I am certain that this system allows for payback whenever possible, but I will certainly look into that.

[Baroness Finlay of Llandaff (CB)]

Can the Minister tell us when the special rules, which have passed through Parliament, will come into force for people caring for a terminally ill person at home, given that the cost of care has gone up quite significantly and that if it is a young parent, some people can find themselves in such poverty that they have to go bankrupt?

[Viscount Younger of Leckie (Con)]

I do not have any information to hand on the future of any legislation, but I will certainly follow up with the noble Baroness and let her know whatever I have.

Bereavement Benefits (Remedial) Order 2022

Viscount Younger of Leckie Excerpts

Tuesday 24th January 2023 Lords Chamber

Moved by

[Viscount Younger of Leckie]

That the draft Order laid before the House on 13 October 2022 be approved. Considered in Grand Committee on 17 January.

Motion agreed.