Local Housing Allowance Rates
Baroness Sherlock Excerpts(1 year, 8 months ago)
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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.
Social Security Benefits Up-rating Order 2023
Baroness Sherlock Excerpts(1 year, 8 months ago)
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Baroness Lister of Burtersett (Lab)
My Lords, I welcome the Minister to this annual outing for us social security geeks and thank him for meeting me earlier this week. Of course I welcome the uprating of benefits and the benefit cap in line with inflation, even though it is no more than convention that leads us to expect it when it comes to the benefits themselves. I realise that the Government were under some pressure from within the Conservative Party to limit the increase to that in average wages, and it is to their credit that they withstood that pressure.
However, there is a real danger that, come April, some of the media will go to town on the 10.1% increase as if it somehow represents a bonus for claimants not enjoyed by those in paid work. It is therefore important that the Government make clear the context of the increase and also that, for two-fifths of universal credit claimants, their UC is topping up earnings. The issue was raised in the Commons debate on the regulations by Conservative MP Jerome Mayhew, who said it had been raised by his constituents on the grounds that they felt it was unfair, but he explained why
“it is fair. That is because it is morally right to protect the purchasing power of those very poorest families at an absolute level, even when other people in employment are suffering as well. I think it is right, because personal inflation is at its highest in the poorest families and food inflation is responsible for a higher percentage of their spending”.—[Official Report, Commons, 6/2/23; col. 706.]
Mr Mayhew made a strong moral case and rightly pointed to how, when energy and food prices are rising faster than overall inflation, those on low incomes suffer most. According to the Child Poverty Action Group, of which I am honorary president, in 2023-24 benefits will be 14% higher in cash terms than in 2021-22, but over the same period prices will be 21% higher for low-income families, so despite the uprating in line with overall inflation, they will be worse off. The Resolution Foundation warns that even as inflation starts to fall, food price inflation, currently running at nearly 17%, will continue to pose a particular problem for low-income families, as will high energy costs.
There are a number of further important points that help put this April’s uprating in context and serve to strengthen Mr Mayhew’s case. First, claimants have had to live on benefits plunging in value over the past year as a result of an increase last April of a mere 3.1%, despite our best efforts in both Houses, when inflation was expected by the OBR to average 10.1% over that period. According to the Joseph Rowntree Foundation, as a result 2022 saw the greatest fall in the value of the basic rate of unemployment benefit since 1972, when annual uprating began. The Minister has, as I expected, pointed to the additional cost of living payments that have been made and to the extension of the discretionary household support fund available from local authorities but, welcome as they are, neither provides the certainty and security that an increase in weekly benefits provides. One Citizens Advice adviser cited in a just published report spoke for many when they described the support fund as
“a very small sticking plaster on a very big wound”,
and because the cost of living payments take no account of family size, couples with two or more children will be worse off despite them, according to the CPAG. I will leave to the forthcoming debate on the additional payments Bill the other problems associated with one-off payments.
Just how difficult this past year has been for families in receipt of benefits was underlined in an open letter to the Prime Minister and the Chancellor yesterday from a group of organisations which called on them not to let this become the “new normal”. Resolution Foundation research highlights the emotional distress suffered by many in receipt of benefits and that one-third of poorer household feel that their health has been negatively affected by the cost of living crisis.
This all underlines the point that we made last year about the shortcomings of an annual uprating based on inflation around half a year earlier, especially at a time of high inflation and given that universal credit can be uprated much more quickly. Nigel Mills, a Conservative member of the Work and Pensions Committee, was one of those who expressed exasperation at this state of affairs in the Commons debate. He said:
“Now that we know that more of the legacy benefits will be continued on late into this decade, surely it is time to try to get a system that means we can do an uprating that reflects the real cost of living at the time that income comes in.”—[Official Report, Commons, 6/2/23; col. 687.]
His plea was echoed by Sir Stephen Timms, the chair of the committee that last year called for reform but to no avail, but it was ignored by the Minister in his closing speech. I know that the Minister addressed that in his opening speech, but I ask him to take this point back to the department and have another look at it.
Another theme of the Commons debate was the extent to which the benefits being uprated meet or do not meet the needs of those who rely on them. I think I have raised this issue in just about every uprating debate I have participated in, but it has taken on a renewed urgency given the growing evidence of hardship. Indeed, the APPG on Poverty, which I co-chair, is currently undertaking an inquiry into benefit adequacy. Bright Blue is one of many organisations that have recently drawn attention to this issue. In a recent article for Conservative Home, its head of research noted that
“the baseline level of support is inadequate in helping people avoid destitution.”
Similarly, the Joseph Rowntree Foundation concluded in its poverty report that
“the basic rates of benefits are inadequate and do not allow recipients to meet their essential needs.”
Have the Government’s considered the recommendation from Bright Blue and others that there should be a Low Pay Commission-type body to advise government on benefit rates?
Although it has been a failing of successive Governments to have uprated benefits without questioning whether the rates are adequate to meet people’s needs, the situation has been made worse by the cuts made over the past decade, which have reduced the value of working-age and children’s benefits and, particularly for families with children, have broken the link between need and entitlement. That is another reason why inflation-proofing is justified now.
However, one key benefit is not being inflation-proofed: the local housing allowance. Despite the Work and Pensions Secretary representing the freezing of the allowance as maintenance in cash terms at the elevated rates agreed for 2021—as if it were a bonus—the fact is that the value of the LHA has been cut for the third year running when average private rents increased by between 8.6% and 10.5% between September 2020 and September 2022, according to a highly critical Secondary Legislation Scrutiny Committee report. Although that freeze is covered by separate regulations, it affects the impact of the regulations that we are debating today because it means that claimants must use more of their basic benefit to cover their housing costs. I argued this earlier in Oral Questions but neither of the questions I asked were replied to by the Minister, and he may well bow his head in shame at that.
Baroness Lister of Burtersett (Lab)
Yes, he could. Incidentally, the concern that this freeze is causing was evident from the unprecedented number of unsolicited briefings that I received for my Question.
According to the IFS—these figures are different from the ones I used earlier—just 8% of low-income private renters now have all their rent covered by housing benefits, compared with almost half in the mid-1990s. For 32% of them, the amount of rent not covered by housing benefits eats up at least one-third of their non-housing-benefits income, a situation faced by just 14% of the group in the mid-1990s. I ask the Minister not to say again that those affected can turn to discretionary housing payments because, as they are discretionary and cash-limited, they do not provide the security that is needed. The DHP budget was cut by 29% last year, leaving many authorities struggling to meet demand, according to Shelter.
Another related way in which the link between need and entitlement has been broken is the benefit cap, which, along with the two-child limit, hits larger families particularly hard. Of course, it is very welcome that the cap will for the first time be uprated in line with inflation this year, but that will cover only one year’s inflation. According to calculations done for me by the Library, the rates contained in the regulations will still leave the cap 9.8% less than it would have been had it been uprated in line with inflation since it was set at its current level in 2016. How is that fair? Whatever one thinks of the cap—I agree with the noble Lord, Lord Freud, that it is an excrescence—at the very least, its level should be maintained in real terms annually. I hope that it will be from now on for as long as it exists.
Baroness Janke (LD)
My Lords, as the two previous speakers said, I am sure it will be a matter of great relief to the poorest citizens and families that this year there is a realistic rise, unlike last year when, despite forecasts from the Bank of England of inflation rising to 7.9%, the rise in benefits and pensions was only 3.1%. Other speakers have referred to the distress suffered by so many citizens who have had to manage with that, despite the crisis in energy costs and the cost of living, and the pressures that have been put on families and individuals in recent months.
Some evidence of the level of distress caused by this policy is the increase in the use of food banks. The number of food bank users increased to over 2 million in 2022, of whom 832,000 are children. A measure that was intended for emergency charitable use has now become a national institution and without it many impoverished families would go hungry.
The increase in short-term government funding is a positive step and it is to be welcomed that it is excluded from the benefit cap. I share the views of the noble Lord, Lord Davies, on the triple lock and agree that we should retain it until the state pension has regained much more of its value, because it is taking quite a time to catch up. Large numbers of the poorest pensioners are dependent on the state pension but that is sometimes not appreciated. We hear quite a lot of speeches from people nowadays saying that the triple lock should be abolished because everybody is jolly too well off; in fact, large numbers of pensioners are completely dependent on the state pension so to those people, it is absolutely crucial that it retains its value.
We would also like to see an extension of auto-enrolment to younger workers and those on lower incomes. They could get started a bit earlier and would welcome that in their older age.
I also recognise the campaign on pension credit and know that the noble Baroness, Lady Stedman-Scott, was keen to pursue it. It has encouraged me greatly to hear the adverts and to hear from the Minister today that the percentage of take-up has increased so much. I would certainly like to have a look at that.
The uprating increase of 10.1% will, we hope, provide more protection to those on limited incomes but the situation for many families does not improve—it only worsens. We have heard from the noble Baroness, Lady Lister, about the benefit cap and although it will be uprated today it has quite a bit to catch up. The benefit cap has been found by many studies to be a major contributor to poverty in families. There are 123,000 households subject to that cap. That is 64% higher than before the pandemic; 85% of them are families with children and 65% are lone parents. The benefit cap takes no account of the size of a home needed to house a family, so the freezing of the local housing allowance at the March 2020 level, despite rapidly increasing rent costs, will mean more capped households falling into poverty.
I have these questions for the Minister. What will the Government do to prevent a new wave of homelessness following the freeze in the LHA? I point out to him that in my city of Bristol, for example, the cost of a one-bedroom home at the 30th percentile is 7% higher this year. But with housing benefit still frozen, there is now a shortfall of £18.41 a week between what can be claimed and what has to be paid.
What plans do the Government have to review the range of evidence about the benefit cap? I am sure the noble Baroness, Lady Lister, can provide plenty. She has certainly made that case very articulately many times. I feel it is time that the Government re-evaluate and look into the circumstances that this is causing. I would also like the Minister to look at the findings of studies of the two-child limit. This seriously disadvantages families. It was championed by the Government as an incentive to people on benefits to work. However, official statistics show that most families affected are in work while a study found that those affected felt strongly that the two-child limit unfairly punished hard-working, low-income families at a time when they needed most support, that is, at the birth of a child. I hope that we may revisit that.
All in all, I am grateful that we are having a much more realistic increase this year. I hope that some of the points made by other noble Lords about the delay and distress caused by the way that the increase is calculated can be looked at. I hope that we will look again at how some of the most vulnerable underprivileged families, and particularly children, are faring under the current benefits scheme.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his introduction and all noble Lords who have spoken. As my noble friend Lady Lister said, it is nice to have the band back together again. I also find it very moving that people turn out every year to try to make the case and to bear witness to the struggles that so many people around the country have and why it matters.
I will talk briefly on each order in turn. If we come back again, I notice that it has been nice to have had the Minister here previously as a Whip, although if one can be here one year as a Whip and the next year as the Minister, perhaps his noble friend to his right should be thinking very carefully about what might happen next year if he is not very good indeed.
I shall run though each order in turn, although probably not in the order the Minister did. GMP is really interesting. As we have heard, this gives schemes the percentage by which they have to uprate GMP between 1988 and 1997. I have a really simple question: can the Minister remind the Committee why the cap was set at 3%? That makes me Clive Myrie to the contestant behind me, my noble friend Lord Davies, who asked a much better question, so I will simply wait and let the Minister answer that instead. It will be very interesting.
Is there any reason why the Minister thinks we ought to worry when the gap is so big between the cap at 3% and the prevailing inflation rate at 10.1%? Is there any cause for concern there?
The only other point I want to raise on GMP is that some people with a large GMP lost out when the new state pension was introduced in 2016. The Minister will be aware that the Work and Pensions Select Committee called on the Government to identify those who were affected, calculate their losses and get in touch with them. Obviously that did not happen. The Parliamentary and Health Service Ombudsman reported on two cases of people who complained that they had not been given enough information by the DWP about the fact that the reforms could leave them worse off. The ombudsman said that the DWP failed to provide clear and accurate information despite being warned, with the result that some people were not aware that they might need to make alternative provision for their retirement. The ombudsman recommended that the DWP should
“review and report back its learning from our investigations. In particular”,
it should improve its communications on this issue. In response, in August 2021, I think, the DWP finally published a fact sheet on GMP and the effect of the new state pension. I then read with fascination the growing correspondence between the Select Committee and successive Pension Ministers, driven, I think, by correspondence from members of the public who were concerned about the effect. For the record, I commend the Committee for its detailed and tenacious work on this frankly very technical issue.
I shall ask the Minister two brief questions. First, now that there is a fact sheet, what is DWP doing to draw its existence to the attention of those who might need to know about it? Secondly, can the Minister tell the Committee how many people have successfully applied, or indeed applied at all, for any compensation since the PHSO report?
I now turn briefly to the draft Benefit Cap (Annual Limit) (Amendment) Regulations because the case has been made so well by my colleagues that there is not much left for me to say. As we have heard, the Secretary of State is required to review the level every five years. My noble friend Lady Lister and the noble Baroness, Lady Janke, have set out the background to how we got here and the consequences of the failure to uprate it hitherto. I remember the then Secretary of State Iain Duncan Smith saying very clearly that the original rationale for the policy was to ensure that people who were unemployed and on benefits would not receive more than average earnings. We had a debate at the time because, for example, child benefit also goes to those on average earnings. However, even allowing that for the moment, the problem with that argument is that the level of the cap was not in any way tied to average earnings. Having brought it in in 2013, not only was it not increased but it was reduced in 2016 and never increased after that until these regulations. Is the Government’s rationale for the benefit cap still related to average earnings? If not, what is the rationale, so we can assess how effectively the policy is achieving its objective? Has DWP made any assessment of the impact of the benefit cap on child poverty? If not, would it like to?
I turn now to the draft Social Security Benefits Up-rating Order, which we debate every year, except during the years of shame. It is worth reminding ourselves for the record that before 2010 annual uprating of benefits by at least inflation was the norm for both Conservative and Labour Governments. However, between 2013 and 2020 this was abandoned, with most working-age benefits and tax credits being either frozen or uprated by just 1%. The reason I continue to repeat this, even in a year when they are being uprated, is because that means that most benefits and credits have fallen in value even before the latest cost of living crisis. Many noble Lords have expressed relief that, finally, having debated the alternatives and being subject to pressure from around both Houses and outside, the Government decided to raise benefits and tax credits in line with CPI last September.
However, as my noble friend Lady Lister said, this is not an act of unusual generosity. It is simply a decision not to cut the value of benefits in the middle of a cost of living crisis, which should be a pretty obvious decision. To do the alternative would have consequences that we have heard about already. Of course, as noble Lords have pointed out, the reference point is the 12-month CPI rate in the previous September. When inflation is as volatile as it is now, that gap can cause real hardship. If we go back a year to last April, inflation was nearly 10%, but benefits were uprated that month by just 3.1%—the CPI rate from the previous September, and that loss of value is baked in because it is the basis for this year’s increase.
The result of this is that the value of out-of-work benefits is at a historically low level, as my noble friend Lady Lister said. As the noble Baroness, Lady Janke, said, it is no wonder that food bank use is at a new high. Trussell Trust food banks gave out 1.3 million parcels between April and September, which is up by one-third on the year before and includes an estimated 328,000 people using its food banks for the first time, so new people are being drawn into the need to use food banks to survive. The Trussell Trust thinks that this winter will prove to be its busiest ever. I want to put something in particular to the Minister. The Prime Minister told the Liaison Committee in December that he very much hoped that food bank demand would be lower by the end of this Parliament. Is there any plan in DWP to take action to make sure that this will actually come to pass?
Although most working-age benefits will be increased by 10.1%, there will be no change to two crucial benefits: first, the childcare element of universal credit and tax credits and, secondly, the local housing allowance, as mentioned by my noble friend Lady Lister and the noble Baroness, Lady Janke. Why are those two not being uprated? Is the presumption that they are not affected by inflation in the same way? Childcare is in crisis. We know that employers are desperate for staff and parents cannot afford childcare. I notice that we keep seeing media briefings appearing about possible benefit crackdowns and how people need to work more hours. Can the Minister confirm whether it is the case now that the childcare support in universal credit is sufficient to cover part-time hours only because the cap in it has been frozen for so long? Of course, that is not to mention the fact that for parents to get that help, they have to pay the money up front for childcare and then claim it back. That makes it a non-starter for most parents who are poor enough to be entitled to universal credit in the first place in the middle of a cost of living crisis. Can the Minister tell us what the plan is to address this?
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.
Health and Safety and Nuclear (Fees) Regulations 2022
Baroness Sherlock Excerpts(1 year, 9 months ago)
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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.
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.
Universal Credit: Benefit Cap and Two Child Limit
Baroness Sherlock Excerpts(1 year, 9 months ago)
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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.
Bereavement Benefits (Remedial) Order 2022
Baroness Sherlock Excerpts(1 year, 10 months ago)
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Baroness Brinton (LD)
My Lords, I too start by thanking the Minister for his helpful explanation. I apologise for not being able to attend the briefing, but Monday mornings are a problem.
On balance, we on these Benches are as pleased as other speakers that this has now come to fruition. We are grateful for the work that the previous Minister, the noble Baroness, Lady Stedman-Scott, did on this. The example given by the noble Baroness, Lady Hayman, was extremely helpful, and the points raised by the noble Baroness, Lady Altmann, and the noble Lords, Lord Jones and Lord Davies, on some of the other implications, such as tax, are very interesting.
I am sorry that I will now get into some really difficult areas; I hope the Minister will bear with me. I appreciate that I am creating a scenario to which there may not be a speedy response, and I am more than happy to have a written reply. I am particularly interested in paragraphs 7.23 to 7.25 of the Explanatory Memorandum, which set out the determining hierarchy should there appear to be more than one claimant. It is very helpful.
In his introduction, the Minister talked about polyamory, but there are other circumstances as well, such as where people with caring responsibilities live under the same roof, which might include familial members who are not actually spouses but, in the event of the death of the parent—for this purpose I am assuming it is a sole parent who is dying—there are others who will take over responsibility for the children. I know that there has been some concern over multiple claims, and paragraphs 7.23 to 7.25 helpfully set out the priority order.
For me, the issue is much more about the JCHR’s proposal that this benefit should be identified as belonging to children. I am not sure it said it should be paid directly to the children, but because much of it is determined on the age of the children it is clearly designed to support extra costs for somebody with children who has lost a partner. For me, that is important, because I want to raise the issue of kinship carers.
I make a full declaration: I think that my husband and I counted as kinship carers 20 years ago when we became foster parents and then guardians, approved by the family courts, for our best friend. When she died, her children joined us. We had to navigate all the systems in place at that time, which included going to the family court and getting the residency order. That enabled us to claim child benefit for the children. I know that is now means tested, but I am talking about eligibility for child benefit.
The organisation Kinship consistently reports that family members who take on responsibility for children after a partner either has been unable to look after them or has died, as in this circumstance, have ended up having to leave their jobs, not being entitled to benefits and finding every barrier put in their way because they are not typical family carers. Even though they may have had to go through the fostering approval process, as we did, because the courts need to be satisfied that they are capable of looking after and taking responsibility for the children, they are not entitled to foster payments because they are regarded as kinship carers.
The “Emmerdale” actor Jay Kontzle, who was raised by his grandparents after his mother died when he was four, recently said he saw at first hand the way it affected their lives. His grandmother had to stop work and they both had to take on the very difficult task of looking after their orphaned grandchild. It is helpful that he has done that. Kinship surveys have shown that 45% of carers give up jobs and have found repeatedly that they were not eligible for support.
I am remembering my schoolgirl Latin. There is a word, “num”, which notoriously requires a negative answer. I think I expect a negative answer, but there is a real injustice here for this group of kinship carers, whose identification is confirmed by the courts and other benefits but who would not be eligible under these arrangements unless they were living in the same house. How long do they need to live in the house? I wonder whether the Minister can look at this. It may be that this is one of those special cases where there is nobody else who would obviously qualify but where it is needed, for the children and the life changes they will face, for the kinship carers to be considered eligible.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his introduction to this remedial order and all noble Lords who have spoken. I always think that any debate that starts, “Let me give some context from 1925” is never going to be speedy, but let us work through what we have heard today.
Before I start, I congratulate the noble Baroness, Lady Hayman. It is always lovely to find that somebody who writes to a Member of the House of Lords is listened to, the issue is taken up and something happens. I congratulate her on her perseverance, as well as the former Minister, the noble Baroness, Lady Stedman-Scott, on her willingness to listen.
I would be very interested to hear answers to a number of the questions that have come up. Obviously, I am glad the Government are stepping forward to take the appropriate response to fulfil their legal obligations. We would not want in any way to stand in the way of this, but there are some important questions still to be asked about how it will work in practice, as my noble friend Lord Davies said.
First there is the question of how DWP will make decisions on whether someone was cohabiting with a partner who has died and therefore is eligible for support. As we have heard, DWP has established practices to decide whether someone is cohabiting. Many years ago, I ran a charity working with single parents, and the rumour mill was alive that the “two toothbrushes test” was the one deployed. Whether or not this was ever the case, the assumption is that in plenty of cases there was no formal evidence, such as a shared rent book or shared bills, yet people were held to be cohabiting when in fact they were being given benefits as a single parent.
There is no question that the DWP has ways of determining this. The noble Baroness, Lady Altmann, pointed out that it has always been able to do so. Indeed, ironically, widowed parent’s allowance was not given to someone who was cohabiting, but you lost it if you started cohabiting after you were bereaved. There obviously must have been some means for making this assessment.
My noble friend Lord Davies asked a really good question: will the criteria be the same for this as for other tests that are applied? If the Government could explain that, it would be really helpful. I would be very interested in the answer to the question raised by the noble Baroness, Lady Brinton, about the hierarchy and the breadth to which that is accepted.
The next thing I found myself wrestling with is the fact that WPA is an “overlapping benefit”, in the jargon, so presumably there will be some people who claimed another contributory benefit because, at the time, they were deemed not to be eligible for widowed parent’s allowance, yet they should have been and had they been entitled to WPA they might have been better off. Can the Minister tell us whether the previous benefit payment is off-set against the backdated WPA where this happens? If so, over what period are the payments?
As we have heard, the order has retrospective effect to the date of the McLaughlin judgment in 2018. My noble friend Lord Jones asked some very good questions about how many people will be affected and the global sum involved. To take that on a stage, can the Minister tell us the most that any one person could be due in backdated benefits? I want to know because of the point raised by the noble Baroness, Lady Altmann: if the sum is large enough for someone on modest means, they might want to husband it quite carefully, but if that is the case, they might have some left over when they go into the next financial year because it has been disregarded for only 12 months. If so, they could find themselves penalised and given less in means-tested benefits in the following year because they had this capital sum available. Will they be told that? How will they be warned that this could happen? The other side of the coin—the point made by the noble Baroness, Lady Altmann—is: if they decide to spend it all in the first 12 months, is there any danger that it then gets treated as notional capital because the rules on deprivation of capital hove into view? If the Minister could reassure us, that would be helpful.
The next question is on tax credits. I confess that I am quite confused on this. I was trying to listen to what the Minister said, but I did not quite catch it. Tax credits do not treat capital in the way universal credit does, so I am still not clear as to how any backdated lump-sum payment for WPA will be treated for those on tax credits. I think I heard the Minister say that a backdated payment will be assessed in the year of payment, not the year of entitlement. Can he confirm that? Could he possibly confirm to me now, before I carry on asking questions, whether that lump sum is treated as capital or as income for tax credit purposes? Maybe he could nod if it is capital or if it is income—I am trying to avoid having to intervene to ask the question again when he responds. If it is treated as capital and it is all treated in the year of payment, then it is disregarded and we do not have a problem; if it is treated as income, we do. In which case, can he explain what happens? What is it set against? Is it just the tax credit entitlement in year? Is there any effect from previous years? If this is the case, I assume there is no question of going back and reopening finalised previous tax credit awards. Is there any implication for previous years’ tax credit awards that are not yet “finalised”, in the jargon? Could that happen in any way?
Finally on this point, there is the question of the benefit cap. WPA and BSP both count towards the benefit cap, so it is obviously possible to imagine that a lump sum might take somebody over the benefit cap threshold when an annual entitlement would not have. Will this be affected by the benefit cap, or will the cap be applied retrospectively to previous years by attributing the relevant WPA to each year? What will happen there?
On the money front, there is the question of taxation. As we have heard, BSP is not taxable but WPA is, and in the year of entitlement rather than the year of payment. Therefore, if a lump sum is paid for backdated entitlement, tax is likely to be due on that. Like others, I read the very interesting briefing from the Low Incomes Tax Reform Group. It pointed out that the plan seems to be to pay lump sums gross rather than net of tax, so the obligation then rests on the claimant to pay the backdated tax. I think I heard the Minister say that the Government will flag these cases up to HMRC so that it knows to make an assessment for tax, and I think he said they will flag it up to the claimant so that they know the tax will be payable. Could he clarify that last point in particular? Will they be told what is payable and which tax year it applies to? Many of those people will not have an accountant or any way of understanding this, but they need to know how much of this lump sum to keep to give to the taxman down the line, rather than spending it and then finding themselves even worse off.
Baroness Sherlock (Lab)
I am grateful to the Minister and thank him for the answers he has been able to give. He was unable to answer questions from my noble friend and me about the treatment of the lump sums, which are extremely important. They are at the heart of the way this order will be operationalised. Given that, according to the order, it takes affect the day after it is made, can the Minister undertake to write as quickly as possible?
Viscount Younger of Leckie (Con)
The noble Baroness raises a very fair point. I will speak to the team and see what we can do to write a letter quickly covering all the points, not just that particular point.
Biocidal Products (Health and Safety) (Amendment) Regulations 2022
Baroness Sherlock Excerpts(1 year, 11 months ago)
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Baroness Sherlock (Lab)
My Lords, I thank the Minister for her introduction to these regulations, the noble Baroness, Lady Brinton, for her very interesting contribution, and officials for supplying some useful information.
As we have heard, these regulations are needed because the post-Brexit arrangements made for authorising biocidal products in Great Britain are not, shall we say, working quite as smoothly as one might have hoped at an early stage of the process. After Brexit, the process of authorising the “active substances” in biocidal products was transferred from the EU to the Health and Safety Executive. There was a three-year transition period during which products whose active substances had previously been authorised could continue to be sold in GB using the certification. These regulations propose that those products can carry on being sold in Great Britain until the end of 2027, whether or not the HSE has processed their application for authorisation—I hope I have that right; I read them several times but I would not swear to it. However, the Minister can correct me in her response if I have not.
The noble Baroness, Lady Brinton, mentioned the comments by the Secondary Legislation Scrutiny Committee, which helped us to understand that the big problem is in fact a huge backlog primarily caused by the fact that the HSE no longer has access to much of the data stored in EU databases on which previous assessments have been made. Therefore, we need this instrument to give legal certainty that at least until the end of 2027 biocidal products can continue to be sold and used legally while the HSE works its way through the backlog of applications for authorisation.
I too have some questions. First, when did the HSE know that it would not have access to the data in the relevant databases that was needed to make these assessments? Presumably, it was part of the negotiations for Brexit; did it know in plenty of time? If so, why were alternative arrangements not put in place for some time? Nobody could suggest that the Brexit process passed swiftly—I feel that it has been happening for most of my adult life, but even if it was not that long, it was not a speedy process. Was there not time to get ahead of the curve?
I would be interested in the response to the questions raised by the noble Baroness, Lady Brinton, about what the agency is doing to build up its own database and what progress it is making on reducing the backlog.
What assessment has been made of the possible risks of the HSE not having access to the data it needs to make timely and expert assessments of biocidal products? I understand that the EU was doing a rolling review of active biocidal substances, so presumably there are products awaiting authorisation that have not been reached. So their active substances had not yet been reviewed by the EU, yet, at the moment, these regs provide for them to be legally marketed until the end of 2027 without any HSE authorisation. Can the Minister therefore tell us what is the longest period a product could be on the market since either its active substances were approved either by the EU or the HSE?
What happens if evidence emerges that an active substance is not as safe as it had perhaps been thought or indeed as it was known to be when it was approved by the EU? I presume that the HSE or other bodies have powers to act if someone brings evidence to them saying, “Evidence has emerged that this product is not as safe as we thought it was.” However, since there will not be any guaranteed systematic review of the evidence for quite a long time, what if that evidence emerges elsewhere and is not drawn to the attention of the agency? Has a plan been put in place to consider the impact of that? If a product were to contain, say, two active substances which had been approved separately by the EU, how would we know if they would interact and whether the product is safe if the product is not being authorised by the HSE for, potentially, a number of years?
Finally, to follow on from the question from the noble Baroness, Lady Brinton, the HSE now has an enormous job to do. The Minister mentioned an increased head count. What I am interested in is whether she can assure the Grand Committee that her department has taken the view that the HSE has access to the numbers of people and the expertise that it needs to keep British people safe in this area. I look forward to her reply.
Baroness Stedman-Scott (Con)
I thank the noble Baronesses, Lady Brinton and Lady Sherlock, for their contributions. I shall try to answer those questions. If there are some that I cannot answer, I shall write and clarify at a later point.
First, the noble Baroness, Lady Brinton, asked about the backlog in the past three years. It is important to clarify that the HSE has been working on the backlog of biocidal product applications for only around a year. Three years is a misleading timeframe, because it fails to account for the EU exit implementation period and, after that, the time given to industry applicants to resubmit their applications to the HSE. In this year, the HSE has added the details of all resubmitted applications and associated data into their systems and initiated work on around 20% of these. This is in line with plans to clear the backlog of applications. The HSE’s operational planning assumptions are that it will commence 50 applications per year over the coming years, which means that, by the end of the five-year period, it anticipates having completed the roughly 200 applications received after the transition period or be on track to complete them with the normal timeframes in the legislation. After that, the HSE will return to operating within the existing deadlines so that the deadline extension can lapse.
The noble Baroness, Lady Brinton, also asked a question about having lost access to the EU databases. The EU databases contain certain historical information from the EU regime, which it would be too costly to recreate in Great Britain. Therefore, at the same time, the HSE is exploring options for how it can best operate the GB regime, on the assumption that this information will remain unavailable. Working on this is at an advanced stage, and appropriate solutions will be implemented as soon as they are fully developed and tested. I do not know how we would plan to communicate that once it is done, but I shall write to noble Lords.
Baroness Stedman-Scott (Con)
My understanding is that, with the information that the HSE has, it has to start from a very low point, but it will not be without anything—as I understand it. I am told that biocide evaluations are complex regulatory assessments involving a number of scientific specialisms, so developing solutions is inevitably taking some time. I am not sure that that answers the question that the noble Baroness has challenged us with—whether we are starting from scratch, or whether we have information with which we can start it off. In fact, I can now say that we are not starting from scratch, but I think that I owe both noble Lords a bit more on that, and I shall place a copy of a letter in the Library. They can be comforted that we are not starting from scratch, but I am not sure where we are starting from—but there we are.
The noble Baroness, Lady Brinton, asked about retained EU law. The Department for Work and Pensions and the Health and Safety Executive will continue to assess REUL to identify potential impacts. We are committed to ensuring that health and safety legislation continues to be fit for purpose and that our regulatory frameworks operate effectively following the sunset of the REUL—forgive me for not reading the term out in full.
The noble Baroness, Lady Sherlock, asked about mixing two authorised products into one—a chemistry set comes to mind when answering this question. The new product will require its own authorisation. It will not be allowed on the market until it has gone through its own risk assessment, biocidal product assessment and authorisation
The noble Baroness also asked when the Government found out that we had lost access to the EU databases. The EU withdrawal agreement provided that the UK would no longer have access to the relevant EU databases from the end of the implementation period. Since then, as I said, the HSE has been assessing a number of options to manage biocidal product authorisations, taking into account the loss of access to historical information in EU databases, such as use of publicly available information. I am sorry that it is not possible to give a timeline, but work is at an advanced stage and appropriate solutions will be implemented as soon as they are fully developed and tested.
The noble Baroness raised the issue of resources, which is important. The total budget for the HSE’s chemical regulation division has grown by 39%, from £22.4 million to £31.2 million between 2018-19 and 2022-23, reflecting the HSE’s need for increased resources for its post-EU exit responsibilities. The HSE’s current focus is on building out from our initial day one operating capacity and laying the foundations for its long-term future operation. The funding the HSE has received to date is sufficient to support that work, and I am not aware of any attempts to reduce it in the current climate.
The noble Baroness, Lady Sherlock, asked about the risks of leaving products on the market. There is a multi-regulator approach to the regulation of biocides not yet authorised under BPR using a jigsaw of legislation, including product safety law and earlier pesticides legislation. This provides proportionate powers for the appropriate authorities to take the regulatory action if products are identified that pose risk to people, animals or the environment.
The instrument will provide the necessary extension to the legal deadlines—
Baroness Sherlock (Lab)
On that last point, the question I was trying to ask—I probably phrased it very poorly—was that I realise that if information comes to the Government’s attention, by some tool or agency, a means will be found to do something about it. But it is quite possible that, for a product that has been on the market without review for a long time and is used around the world, evidence may have appeared elsewhere which has not been brought to the Government’s attention. The point about systematic reviews is that one presumably goes out looking at the evidence. Is there any concern that, the longer products are on the market, the greater the risk that some previously unclocked problem may arise?
Baroness Stedman-Scott (Con)
I will write to the noble Baroness about that. I would assume—correctly or incorrectly—that the Health and Safety Executive is keeping up with developments by other countries’ health and safety agencies, but let me write to the noble Baroness to clarify that point. If, when she gets the letter, she is still worried, she may come back to me and I will do further work on it.
To conclude, the instrument will provide the necessary extension to the legal deadlines to enable HSE to process effective biocidal product authorisation applications. This will provide legal certainty to businesses that biocidal products on the market awaiting their application to be processed can remain there. In turn, biocidal products essential to the functioning of society can continue to be made available and used. I commend the instrument.
Cessation of EU Law Relating to Prohibitions on Grounds of Nationality and Free Movement of Persons Regulations 2022
Baroness Sherlock Excerpts(1 year, 11 months ago)
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)
My Lords, this instrument was laid before the House on 20 October. It disapplies retained EU equal-treatment provisions relating to nationality and freedom of movement so that they cease to be recognised and available in domestic law in relation to access to social security, statutory payments, social assistance, housing assistance, education, training, apprenticeships and childcare-related matters.
These retained EU provisions have been redundant since the end of the transition period. The withdrawal agreement provides the necessary protections for those EU citizens who were resident in the UK before the end of the transition period and their family members. By disapplying the redundant provisions, this instrument furthers the Government’s aim of ensuring that all UK law is right for the UK. Correcting this deficiency in retained EU law will bring greater clarity to the UK statute book. I am satisfied that these regulations are compatible with the European Convention on Human Rights.
Prior to the UK’s exit from the EU, these equal-treatment provisions granted EEA and Swiss citizens rights to access benefits, services and educational entitlements on the same basis as UK nationals, if their presence in the UK was based in the exercise of specific freedom of movement rights. The UK voted to leave the EU and, as a result, freedom of movement between the UK and EEA countries came to an end on 31 December 2020. Equal-treatment provisions based in freedom of movement arrangements therefore became redundant.
Disapplying these redundant equal-treatment provisions clarifies the situation that is already in effect for EEA and Swiss nationals coming into the UK. In line with the Government’s manifesto commitment, EEA nationals are now treated on an equal basis with other non-UK nationals arriving in the UK after the end of the transition period, with the exception of those EEA or Swiss nationals granted status under the EU settlement scheme.
While the instrument does not effect a policy change for any group of EEA or Swiss nationals in the UK, I particularly emphasise that it in no way alters the rights of EEA or Swiss nationals that are protected under the EU-UK withdrawal agreement, the EEA European Free Trade Association separation agreement and the Swiss citizens’ rights agreement. They will continue to be able to access benefits and services on broadly the same basis as they did before the end of the transition period, and their rights to do so are protected by the European Union (Withdrawal Agreement) Act 2020. Additionally, we already have domestic law that protects individuals from discrimination. Retained EU provisions based on freedom of movement are therefore not only redundant but unnecessary.
In summary, this instrument is a technical correction of the statute book that will address a deficiency arising from retained EU law. I therefore commend the regulations to the Committee.
Baroness Sherlock (Lab)
No other takers—I am shocked, given that it is such an exciting instrument. I thank the Minister for her introduction to these regulations, in which I am interested. I was going to say, “and all noble Lords who have spoken”, but it is just me. I am also grateful for the briefing on the regulations from the Minister’s officials. I confess that, despite reading everything I could, I am struggling to work out what these regulations actually change, if anything.
I read a summary of this instrument done by the House of Commons Library for a colleague at the other end. It noted that Parliament has already legislated to end the underlying right of free movement for EU citizens moving to the UK. The Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020 repealed the main provisions of retained EU law relating to free movement and disapplied the equal treatment obligations supporting free movement, in so far as they were inconsistent with the UK’s immigration laws. However, the note went on to say that
“these equal treatment rights ‘would continue to apply in non-immigration contexts unless disapplied’. The draft measure now disapplies those equal treatment rights in the specific areas set out in the schedule, including social security payments and housing.”
The Minister said that these rights “became redundant” as a result of the 2020 Act having ended the underlying right to free movement. I am still not clear as to exactly what rights may still exist that this instrument is disapplying. Can the Minister clarify that? I can see that the aim is to make it clear that EEA nationals who are not subject to the settlement arrangements should have the same rights as anyone else subject to the points-based immigration system going forward. I am just not clear what, if any, rights they have now that they will not have once this instrument becomes law. If the answer is none, I ask the Minister to say that categorically for the record. It may be about legal clarity; I would just like to be really clear.
I want to make two other points. Regulation 4 makes changes to Regulation (EU) No. 492/2011. I looked this up; it turns out that it amends Article 7—it prohibits different treatment of EU nationals in respect of employment, social and tax advantages—to say that this will not apply in relation to the matters in the Schedule to this draft instrument, namely: social security, social assistance, housing, education and training, and childcare. Do Article 7 rights continue to apply to any other areas?
Finally, the instrument also removes Articles 9 and 10, which provide for the rights of EU nationals in relation to social housing and to state education for their children. Are there any other rights that EU or EEA nationals still enjoy that have not been repealed? If the answer is that any such rights that exist will be swept away by the sunset provisions of the advancing retained EU law Bill, why not wait for that rather than using Section 8 powers? I look forward to the Minister’s reply.
Baroness Stedman-Scott (Con)
I thank the noble Baroness, Lady Sherlock, for her contribution and questions and congratulate her on her stamina in these matters. I will try to answer all the points raised.
The noble Baroness asked how the EU provisions to be disapplied became deficient or redundant. Prior to the end of the transition period, through the EU freedom of movement of persons rights, EEA and Swiss citizens had access to certain benefits, services and education entitlements. When the freedom of movement of EEA citizens ceased at the end of the transition period, the application of these rights became redundant, as the rights granted by these provisions have been redundant since the close of the transition period. They represent the deficiency arising from retained EU law. The regulations clarify the situation already in effect.
The noble Baroness asked what rights the provisions to be disapplied still grant. First, let me clarify that these regulations should not be understood as implying that these provisions continue to grant rights outside of the relevant matters as per Regulation 1(4). The department involved in these regulations examined the provisions as they relate to the benefits and services covered in the relevant matters and is confident that these rights are redundant as they relate to the relevant matters. We are disapplying them to clarify the position that is already in effect.
The noble Baroness, Lady Sherlock, asked what would happen if these provisions were allowed to remain on the statute book. These redundant provisions are not in line with domestic legislation on immigration and access to benefits and services. They therefore create confusion in the statute book. Not disapplying them would leave this deficiency in UK law unaddressed. It could also mean that EEA nationals who are not eligible for benefits or services could bring legal challenges against the Government to try to bypass domestic legislation by instead relying on those retained EU freedom of movement provisions. This would set back progress on implementing the public’s decision to leave the EU and end freedom of movement.
The noble Baroness asked me to clarify whether that was a change in policy. The answer is categorically no. These regulations do not effect any policy change; they are a technical rectification of the statute book to clarify the position already in effect after the end of the transition period. She asked why the regulations were being laid now. Why not let these retained provisions be sunsetted by a reform and revocation Bill? Work on the regulations was initiated independently of the Retained EU Law (Revocation and Reform) Bill under Section 8 powers from the European Union (Withdrawal) Act 2018. Those powers allow Ministers to address deficiencies in retained law. Section 8 powers expire on 31 December 2022, thereby creating a need to lay these regulations.
The noble Baroness also asked whether any rights still applied. Rights and entitlement for EEA citizens set out in the withdrawal agreement and domestic legislation still apply.
These regulations are a technical rectification to ensure that UK law functions with legal clarity. The retained EU provisions that they disapply are redundant, and that deficiency should be corrected. This instrument will not change the policy in place regarding any rights currently enjoyed by EEA nationals in the UK. However, it will bring greater clarity to the UK statute book. I therefore commend the regulations to the Committee.
Carer’s Allowance
Baroness Sherlock Excerpts(1 year, 12 months ago)
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Baroness Stedman-Scott (Con)
I ask my noble friend Lord Markham, “Shall we talk?”. I am very happy to talk to anybody to make life better for people. Maybe my noble friend can follow that through in the next Question.
Baroness Sherlock (Lab)
My Lords, the Minister is rightly encouraging people to claim the benefits to which they are entitled, but can I take her back to the question asked by her noble friend Lady Fookes? Even people on benefits may be struggling at this point. The report showed that those who are caring have extra costs which others do not. The report was incredibly moving. One person said:
“My son is incontinent … if we don’t wash him in warm water several times a day this will cause him to physically decline. So how do we pay for the gas to heat the water if we are currently at max budget?”
Another said,
“my husband has terminal brain cancer, I am worried about how I will cope over the winter months as I can’t allow him to be cold—I need him to be as comfortable as possible in his final months at home”.
Those who are on just carer’s allowance do not get any extra help with fuel. What are the Government going to do to see whether the money given to those who are caring is enough to meet the costs they encounter?
Baroness Stedman-Scott (Con)
Those who are on carer’s allowance receive the £400. Those who are on carer’s allowance but who are entitled to the carer’s element of UC, where they are not required to look for work, can get another £2,000. The Government are helping, and we are four minutes away from finding out what more they might do around energy costs. The stories and case studies that the noble Baroness read out are harrowing, but the Government are doing everything they can, within the limits of their financial position.
Pensions Dashboards Regulations 2022
Baroness Sherlock Excerpts(1 year, 12 months ago)
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Baroness Sherlock (Lab)
My Lords, I thank the Minister for her comprehensive introduction to these regulations, and all noble Lords who have spoken. Most of us were involved in the passage of the Pension Schemes Bill, so it is nice to have the band back together again even if—it has to be said—we are a bit of a band of anoraks. I am also grateful to the Minister for the briefing that she arranged for us, and for her willingness to engage. It was helpful to be able to hear from Ministers—and, indeed, officials—about the work that has been done on the scheme, and really good to hear about the progress that has been made. We have supported the idea of a public dashboard and it is great to see that coming to life.
That said, I have a lot of questions to ask. I apologise to the House in advance, but this is the only chance that we will have to ask questions on a very complex, billion-pound project. Once we come out of here today, there is no automatic place where we will get to do it again, as the noble Lord, Lord Vaux, pointed out. So I hope that the Minister, and the House, will bear with me. I have tried to give notice of my questions to the Minister as many are quite technical.
First, we need clarity on timing, as mentioned by the noble Lord, Lord Vaux, but also on what schemes will be covered. Schemes with under 100 active or deferred members are outside the scope of these regulations. Can the Minister tell the House how many pension pots fall into that category, and can we expect all other pension pots to be included in due course? Schedule 2 shows when the different schemes will be brought on to the system. Can the Minister tell the House when data from personal and stakeholder pension schemes will be available to the public through the dashboard, and what is the position with group personal pension plans?
At the dashboards available point, or DAP, when the public can access dashboards, we expect to see some 99% of pension pots covered by the dashboards. Is that correct? How many pots does that leave out, and how many people will be in that position? Since some pots will not be displayed, how will I know as a consumer that I am not seeing all of my pensions? How will that be flagged up to me so that I can make an appropriate judgment?
My noble friend Lord Davies had some important questions about how the value of different pots will be displayed. I will be interested to hear the response to those. I also want to talk about handling data, on which the noble Lord, Lord Vaux, raised some important questions. But first, how confident is the Minister about the data quality? Has the work done so far thrown up any concerns?
My noble friends Lord Davies and Lady Drake raised some important questions about identity verification. It will be interesting to hear the answers to those but, once you have the identity, the next step is matching the consumer to the pension pot. That, essentially, is the central activity on which the whole system hangs, yet the Government have decided not to set a common data standard which has to be met to trigger the release of pensions data. Instead, firms are to be told to set their own data standards to trigger release; so, once a find request is received, a scheme will have to complete matching to identify whether they hold information on an individual’s pension matching that in the request. But rather than requiring trustees to use particular data criteria for determining matching, DWP expects schemes to take “reasonable, diligent steps” and to minimise the risk of data breaches or not returning any matches.
Regulation 28 requires information on the matching process used by schemes to be given to MaPS, TPR and the FCA. The idea is that the relevant regulator can, if they so decide, require a scheme to change its matching data requirements if it does not think them appropriate. There will be guidance from the Secretary of State, and the FCA will be seeking consistency of approach to identity matching for release of view data by its regulated providers, while the ICO will be issuing its own statement on matching data breaches. The DWP consultation points out that the whole thing rests on consent:
“The nature of an individual’s consent must be clear, explicit, understood, and informed. It cannot merely be … a tick box condition of usage”
That will be articulated more closely by the pensions dashboard programme in another publication. Given all that, why did the DWP not set particular minimum data standards for schemes for matching and releasing data to a view request, especially given the number of schemes involved? Can the Minister explain for the record what would happen if data submitted by a consumer are a partial match for data held by a firm? That is something I have had offline.
Can the Minister also tell me whether a member’s view data can be screen-scraped and stored by a third party? I am very exercised by this. I think the regulations say that a firm cannot store the data except during a session, but let us think through what this means in practice. Suppose a consumer is viewing her data on a firm’s dashboard, with an adviser from that firm sitting next to her. Can the firm screen-scrape the data from its own dashboard, retain it and immediately conduct a transaction off-dashboard, which might be a matter of pressing a button and jumping from one screen to another? If the answer is, “Only if the consumer consents”, how will the Government ensure that consent is meaningful, given the quotation I gave earlier from the DWP?
Sometimes the answer to this tends to be, “Don’t worry, because the FCA will have regulatory oversight of the firms and, where appropriate, the advisers”. This is where my noble friend Lord Jones comes in, because that was of course the case when British Steel’s pension scheme got into trouble and had to be restructured. Has the Minister read the report published in July by the Public Accounts Committee? It found that the FCA failed to protect British Steel pension scheme members from “unscrupulous financial advisers” who were incentivised by existing fee structures and regulation “to provide unsuitable advice” that led to around 7,800 steelworkers losing an average of £82,600 in life savings—I stress, an average of that—with some losing up to £489,000. The committee said:
“The FCA has consistently been behind the curve in responding to unsuitable pension transfer advice.”
The Minister cannot simply say that it is a matter for the FCA. If her Government choose to legislate to mandate the creation of commercial dashboards, on which we have expressed concern, and the release of data belonging to millions of consumers knowing that the Public Accounts Committee has said that the FCA is consistently behind the curve on protecting those consumers from unsuitable advice, then it is the Government who will bear responsibility for the consequences if people suffer losses. What assurance can the Minister give the House that the PAC will not be publishing another report in three or five years’ time on the fallout from commercial dashboards?
That takes us to the liability question. I am still not entirely clear about end-to-end liability in the system. Where does liability lie if a consumer makes a decision on the basis of view data which later prove inaccurate? If liability is with a trust-based scheme, ultimately that means the trustees. Is the Minister concerned that if some significant liability were established, many trustees simply would not have the personal wealth needed to fund any redress, and where would that leave consumers? Does this pose a risk that anyone other than corporate trustees will be deterred from serving as a trustee on a pensions board?
Next, where can consumers go to make a complaint? I understand that there is to be a single front door, but where does it lead and what is behind it? Which bodies will handle requests for redress from consumers who lose money as a result of making decisions which turned out to be based on wrong data? Can they go to the Pensions Ombudsman, the Financial Ombudsman Service or somewhere else?
Hackers and scammers were raised by my noble friend Lord Davies. I assume the plan is to warn consumers to be aware of scammers, but is there a strategy in place to counter the risks of scams within the system, as opposed to at the individual consumer’s end? Has it been designed to make it hard for scammers to operate and is there a plan to counter the risk of hacking or are we, as my noble friend said, going to see pensions view data being traded on the dark web, as we do credit card details? Are there back-up systems? If somebody were to lose a payslip, so that somebody picking it up simply had a name, address and national insurance number, could that be enough to hack their pensions data?
We have highlighted a range of concerns and some potentially serious risks of the project, but clearly there will be benefits too. I take the point made by the noble Baroness, Lady Bowles, about the importance of who benefits, not just that there should be benefits; we need the consumers too. Like the noble Lord, Lord Vaux, I read the impact assessment and I had a lot of fun with it. I know that it is a very anoraky thing to say but, my goodness, what a great document. Basically, it sets out low, central and high estimates for costs and benefits. In present value, the central estimate says that the project will cost £1.089 billion over 10 years. That is broken down as, roughly speaking, £850 million in industry costs and £240 million in public administration costs, or £1 billion over 10 years in today’s money.
As the noble Lord, Lord Vaux, said, the central estimate of the benefits comes in incredibly conveniently at just £29.5 million over. Of course, that is plus or minus £1 billion because the high and low estimates are literally £1 billion over or under. It is not a very meaningful aggregate figure anyway because it costs industry and government £1 billion and saves consumers a very notional £1 billion. But when we look at the benefits to consumers, that £1 billion of benefit in the central estimate is split almost equally between £541 million for the value of lost pots and £578 million for something called the consumer surplus. Digging further, it turns out that consumer surplus is the notional value deriving from consumers getting for free a service for which they would have been willing to pay. How do we know they would have been willing to pay? Researchers were sent out to ask them what they would pay for this service, then came up with this number. All I will say is “Hmm”, although we learned the interesting fact along the way that the number of users is expected to rise from 3 million in 2024-25 to 18.5 million in 2031-32.
We cannot incur all this risk and spend north of £1 billion for those two bits of value, particularly the consumer surplus. There must be other benefits. The Explanatory Memorandum has a really good section headed “What is being done and why?” at paragraph 7.4. It says that pensions dashboards
“will engender a greater sense of ownership of pensions, reconnect individuals with any lost pension pots, support the advice and guidance process, and enable more informed choices to be made when individuals access their pensions savings”.
The key question is: will people end up with higher pensions? The answer is “We don't know”, because the impact assessment says on page 23 that
“there is no robust evidence to attach causality and monetise the benefits in terms of increased retirement income that result from the dashboards”.
Could they end up with lower pensions? That might sound daft, but if someone sees their pension assets and decides to use them by taking some cash out—using the pension freedoms the Government gave them—to deal with their current living costs, they would end up with less to live on. Out of curiosity, is there any evidence that the process could lead to reduced retirement income? The IA did not address that.
Baroness Stedman-Scott (Con)
I note the noble Baroness’s point. This is something that we will take back with officials and to the relevant authorities, and it is something else that I shall write about and I hope give her a better answer than she has had to date.
The noble Baroness, Lady Bowles, raised the issue of risk of exploitation of data. Pensions dashboards and the technology behind them are designed to maximise data security. For example, pensions information is sent directly and securely from the scheme to the individual; it is not stored by qualifying pensions dashboard services or by the digital architecture. Individuals will always have control over who has access to their data, and will be able to revoke access at any time.
The noble Lord, Lord Jones, and the noble Baroness, Lady Sherlock, have raised to me individually the issue of British Steel pension schemes. The FCA is responsible for the regulation of the financial advice market and has looked closely at the advice provided to those BSPS members who decided to transfer out of the defined benefit scheme. It found that a very high proportion had received unsuitable advice, as has been said. The FCA has announced that it intends to take forward a scheme to provide compensation for BSPS members who received poor advice; it published a consultation on this scheme on 31 March, which has now closed. I think that the point that the noble Lord and the noble Baroness were making was that it must not happen again, and I am sure that message is understood.
The noble Baroness, Lady Sherlock, asked me to confirm when the data from personal and stakeholder pension schemes will be available to the public through the dashboard. She also asked what the position was with group personal pension plans. As set out in FCA rules, the majority of personal and stakeholder pension schemes are required to stage as part of the first cohort by the end of August 2023. That includes group personal pension plans. Until dashboards are launched to the public, schemes’ data must be available to invited users for testing purposes.
The noble Baroness raised a point about missing pots. Only a very small proportion of occupational pension scheme memberships are out of scope of the obligations to connect in our regulation and FCA rules. We expect that, at the point when dashboards are launched to the public, most individuals can be confident that all their pensions will be available to find via dashboards. When the value data for found pensions has not yet been provided—for example, if the member is new to the scheme, or when the value is still being calculated by the scheme—information to that effect will be displayed on the dashboard.
The noble Baroness asked how confident Ministers were about the quality of the data and whether the work has so far thrown up any concerns. It is critical that savers can 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 that organisations ensure that data remains accurate and up to date. The Pensions Regulator set out its expectations on data quality in its record-keeping guidance; this includes that data is measured at least once a year.
The noble Baroness asked why the DWP had not set particular minimum data standards for schemes for matching and releasing data. The regulations allow for the trustees and managers of schemes to set their own matching criteria. We believe that schemes should be given discretion over which data elements they use to suitably search their records for a match. It is important that any scheme’s matching policy is appropriate to the level of confidence that they have in their own data; a uniform approach across all schemes would be likely to result in suboptimal matching.
Just to divert the House for a moment, I am conscious of how long I have been speaking, and I am keeping others from their business, but I am absolutely committed to answering these questions. With the leave of the House, I hope that I can carry on.
The noble Baroness, Lady Sherlock, asked whether I could explain for the record what would happen if the data submitted by a consumer was a partial match with data held by a firm. Schemes have the option of returning a possible match if they believe that they hold a record for an individual but are not certain. When a scheme returns a possible match, an individual will receive a limited form of administrative data that will enable them to contact the scheme to see if the possible match is in fact a match made.
The noble Baroness asked about screen-scraping. The regulations prohibit the storing of dashboards of view data, unless for temporary caching and for the sole purpose of displaying the view data in a single session. Similarly, transactions are not possible through the dashboard ecosystem. Making it possible for consumers to find information about all their pensions in a single place and requiring the consumer to undertake an identity verification check before being able to access that information significantly reduces the consumer appeal or perceived benefit of agreeing to screen-scraping. I have much more that I could say on that issue, so I shall write and place a copy of the letter in the Library of the House.
The noble Baroness, Lady Sherlock, and the noble Lord, Lord Davies, raised the point about complaints and where the liability lies if a customer makes a decision on the basis of view data that later proves to be inaccurate. As set out in our response to the consultation on the draft regulations, trustees or managers are responsible for meeting the requirements, which include receiving fine data, as well as undertaking, matching and returning the correct view data. Trustees or managers are not responsible for verifying the identity of users, and the authorisation of view requests or any processing of view data carried out by dashboards. The question of liability in the event that something goes wrong to the detriment of the individual would have to be considered on a case-by-case basis.
The noble Baroness, Lady Sherlock, raised the issue of liability and risk for trustees. 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, so will be outside the scope of these regulations, unless they connected to pensions dashboards voluntarily. Although 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—we are talking about pension savings for millions of people.
The noble Baroness, Lady Sherlock, raised the issue of handling complaints and where consumers go to make a complaint. The dashboard ecosystem is made up of multiple different parts and, as such, dashboard users would potentially have complaints against a number of different parties. MaPS will therefore provide a central queries and complaints navigation tool, which qualifying pension dashboard services must direct individuals to, to help them understand their issues and know to whom they should direct their query or complaint if things go wrong, and the available routes to redress.
The noble Baroness, Lady Sherlock, raised the issue of scams and hackers and asked whether there is a strategy in place to counter the risk of scams within the system and whether this is being revisited regularly. It is crucial that dashboards give power to consumers and not scammers, which is why the dashboard ecosystem has been designed to ensure that only relevant pension schemes and authorised qualifying pension dashboard services have access. To maximise the effectiveness of the Money and Pensions Service pensions dashboard, users will have access to a retirement planning hub, which will provide onward planning journeys in a single place, supporting good decision-making. The FCA and MaPS will keep their rules and standards under review as dashboards emerge and evolve.
Baroness Sherlock (Lab)
If I can put the Minister out of her misery, I would be content from this point onward if she were to write to me with answers to the remaining questions. I just say for the record that I flagged up to the usual channels some time ago that this instrument would take rather longer than the normal time, and it would have been helpful if the planning for this evening had taken that into account. However, I am very grateful to her for having answered so fully and to have taken the time to do this—I really appreciate it.
Universal Credit
Baroness Sherlock Excerpts(3 years, 2 months ago)
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Baroness Sherlock (Lab)
My Lords, I thank the noble Baroness, Lady Tyler, and all noble Lords for their contributions. The Government have very few supporters on this matter, and nor should they.
We have heard about the impact on poverty. Citizens Advice has said that 2.3 million people could fall straight into debt. That is because £20 is not a small amount of money. Basic universal credit for a single person over 25 will fall by 21% when this comes in. If they are under 25, the fall is more than 25% overnight. The noble Baroness, Lady Eaton, may think the Government were clear about this, but Turn2us surveyed people last month and found that 36% of respondents were unaware this cut was coming. Rethink found that many severely mentally ill people, because they do not go online, have no idea this is coming down the track.
The defence we have heard from the Prime Minister, that the Government want to prioritise work, is simply misleading. We have been here before. Back in 2012, George Osborne tried to justify cutting £10 billion from social security by talking about the need for fairness
“for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next door neighbour sleeping off a life on benefits”,
even though he knew he was cutting in-work benefits. Now here we are again.
The Prime Minister will know that 38% of adults in families on universal credit are employed. This cut is a direct blow to low-paid workers, including many we feted as pandemic heroes not long ago. The RSA found that 660,000 low-paid key workers, including nurses, supermarket staff and carers, will be hit by this cut.
The noble Baroness, Lady Tyler, is right: when the Government take £1,000 a year from low-income families, they should remember that this money is spent in towns and cities across the country. Poorer families spend their money because they cannot afford not to. Taking that cash out of the economy, when the recovery is so fragile, damages us all—disproportionately so in the north and the Midlands.
Let us remember one thing. There is a reason why the Government had to increase universal credit when millions of people flooded on to it: because people could not live on the benefits at the level they were at previously. They had gone up under Labour Governments —historically, they have not always been bad—and the Government cut over £10 billion out of our system, so people could not afford to live on the system that was there. As my noble friend Lady Donaghy pointed out, that is why the Resolution Foundation is right that if this goes ahead, we will be back to the lowest level of basic benefits for three decades.
We deserve a decent social security system and an economy with secure, well-paid jobs. We do not get there by plunging the poorest people into deeper poverty. Can the Minister tell us now whether the FT is right? Is there really internal modelling saying that this will have a catastrophic effect, leading to a rise in homelessness and poverty and soaring use of food banks? Is that true? I find it impossible to credit that a Minister would look at that assessment, shrug their shoulders and do it anyway.