Jobs Market

Baroness Sherlock Excerpts

Monday 13th October 2025 Lords Chamber

[Lord Hunt of Wirral]

To ask His Majesty’s Government what assessment they have made of the jobs market in the United Kingdom, and of the implications for the economy.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, economic growth remains this Government’s No. 1 mission and boosting labour market participation is central to achieving this. The UK jobs market continues to show resilience, with high employment and falling inactivity. However, there is more to do, which is why we are continuing with our Get Britain Working strategy to drive forward the biggest reforms to employment support in a generation.

[Lord Hunt of Wirral (Con)]

My Lords, given that every Labour Government in the last century have left office with unemployment higher than when they came in, will the Minister reconsider the Government’s opposition to those cross-party amendments to the Employment Rights Bill, achieved by substantial majorities in your Lordships’ House, which seek to protect jobs? In that way, she can prevent history repeating itself.

[Baroness Sherlock (Lab)]

My Lords, I am very fond of our traditions in the House of Lords, but we now have a new one: on a monthly basis, we relitigate the Employment Rights Bill in the form of an Oral Question. One reason why I do not like having this Question every month is that we end up having the kind of ding-dong that is more typical of the Commons, so let me try to answer in a more serious way without getting into scrapping about it.

This Government had to take some difficult decisions to strengthen the country’s finances. However, we believe the Employment Rights Bill was the right choice. We have looked at the evidence and it is backed by academic and business voices as a driver of productivity. I encourage the noble Lord to look carefully at the employment data, where he will see a positive trajectory. Employment is up, inactivity is down, wages are growing and vacancy levels remain healthy. These are clear signs of resilience in the labour market. However, there are clear global headwinds and, where there is slack, one of the most important things for our Government to do is to address supply-side measures, because if times get tough then the people who risk losing out are young people and those farther from the labour market. We have a strategy to support people, tackle the barriers into work and make that work. That is what we are trying to do. We are pushing forward and it is getting results.

[Baroness Winterton of Doncaster (Lab)]

My Lords, given the emphasis being put on gold-star vocational qualifications, what are the Government doing to encourage local businesses to horizon-scan with regard to future skills requirements and work with local educational institutions, so that courses properly reflect the local jobs market and we avoid the rather hit-and-miss approach where skills do not match the jobs on offer locally?

[Baroness Sherlock (Lab)]

My Lords, I thank my noble friend for an excellent question. I assume that she refers to the Government’s recent announcement that we are moving away from a target for university entrance to an ambition for two-thirds of young people to reach level 4 by age 25 and 10% to reach levels 4 and 5. In this country, we have traditionally done well on university degrees, but too few young people have level 4 and 5 qualifications—a missing middle that holds back our productivity and stops people getting those higher technical jobs. My noble friend’s point about horizon scanning is crucial. We know that by 2030 we will need 900,000 more skilled workers in priority sectors, two-thirds of whom will need qualifications at levels 4 and 5, so the DWP is working closely with business and, at a local level, local skills improvement plans are led by employers working with jobcentres and local partners. The detail is coming—the Government have a strategy for post-16 education and skills in the long term, which will come out in a White Paper on education and skills that I am assured is imminent.

[The Earl of Clancarty (CB)]

My Lords, more than 84,000 jobs have been lost in the hospitality industry since the last Budget. This is an industry that should be growing, not contracting, as I hope the Minister would agree. What is the Government’s assessment of why this is occurring and how will they address it?

[Baroness Sherlock (Lab)]

My Lords, within hospitality, there are still 78,000 vacancies in accommodation and food service activities. That is unchanged on the quarter and is only 7,000 below the pre-pandemic level. Of course, there are global headwinds across the economy, but retail and hospitality are sectors where there has always been a lot of churn. We need to make sure that there are the appropriate workers at the appropriate level.

Therefore, we have announced the rollout of the hospitality SWAP pilots—sector-based work academy programmes—launched in partnership with UKHospitality. We are spreading them to 26 new areas which are in need of jobs and opportunities, including 13 coastal towns like Scarborough and Blackpool. We are also working with other key sectors. One challenge we have is to make sure we match the skills of workers with the jobs that are available. A SWAP can get someone job-ready and able to move into one of those jobs when they become available. There will always be vacancies and part of our job is to ensure that everyone has a chance of getting one. That is what we are focused on.

[Lord Palmer of Childs Hill (LD)]

My Lords, the UK is experiencing a decline in payrolled employees and a significant drop in graduate job opportunities, with listings for entry-level graduate jobs at the lowest level for seven years. This does not really tie in with the wonderful statistics the Minister told us about. There is another set of statistics which are not very good. What are the Government doing to improve those statistics in real terms?

[Baroness Sherlock (Lab)]

My Lords, as I am sure the noble Lord is very aware, there is a whole range of statistics. If he goes through the official statistics, he will see a wide range of data, each of which tells us something slightly different. He is right about nudging at payroll data, but I am absolutely right that the employment rate of the UK is at record levels—that is a fact; it is from the Office for National Statistics.

One of the challenges for the Government is to ensure that even when times are tough, we have a strategy to do three things. We must continue to develop growth and investment in our economy to make sure that the labour market is functioning. We then need to make sure that it is an inclusive labour market, and that those who are farthest from it get the skills they need to have a chance of getting the jobs, so employers can have the workers they need. Finally, we need to make sure that every area of the country works. Some local labour markets have 80% employment already, but others do not. The Government’s job is to target those three things, and that is what we are doing.

[Viscount Younger of Leckie (Con)]

My Lords, there are woeful and worrying figures showing that the number of working-age people signing off work for sickness benefits has gone up from 2,000 to 5,000 per day—per day—with a direct negative impact on employment. What are the Government going to do now, before the publication of the Timms review? I remind the House that we have a whole year to wait until then, which will be one of inaction, inactivity and spiralling costs, will it not?

[Baroness Sherlock (Lab)]

My Lords, given the levels of inactivity due to health over which the noble Viscount’s Government presided, that is a brave question, but let me answer it none the less. This Government are not simply waiting for the review. The Timms review is looking specifically at PIP which, as the noble Viscount knows, is a benefit that applies in and out of work. As I have told the House before, this Government have looked carefully at three things. One is what happens to people who are on benefits. This House backed the Government in making the difficult choice to change the incentives so that for new people coming in, we would reduce by about half the extra amount of money you get on universal credit. The second is to invest up to £1 billion over the scorecard in making sure we give people the support they need. People out there want to get jobs, and we have to help them. Finally, we have invited Charlie Mayfield to produce a report looking at employers. Every time someone loses a job, it can be an £8,000 loss to the employer from lost productivity. We are investing in all three of those things.

[Lord Vaux of Harrowden (CB)]

My Lords—

--- Later in debate ---

[Lord Vaux of Harrowden (CB)]

The Minister quite rightly mentioned young people and the importance of opportunities for them, but there seems to be increasing evidence that entry-level opportunities are reducing and that it is becoming more difficult for young people to take that all-important first step into work. So can the Minister explain why the Government are still insisting on pushing through a change to employment law that their own impact assessment says will actually make it harder for young people to find a job?

[Baroness Sherlock (Lab)]

My Lords, the Government are making a significant investment in young people. I assume the noble Lord is referring to employer national insurance.

[Lord Vaux of Harrowden (CB)]

Day one unfair dismissal rights.

[Baroness Sherlock (Lab)]

We have to have a level playing field in employment rights. We are investing in supporting young people with a youth guarantee. For young people who are intensively looking for work, there should be no fourth alternative to education, training or a job. To put our money where our mouth is, we have announced that we will give young people who have spent 18 months looking for a job on universal credit a guaranteed job. Young people should be out there either earning or learning; we will make sure they can.

[Lord Baker of Dorking (Con)]

Does the Minister appreciate that her Chief Whip opened by asking for shorter answers?

Youth Unemployment

Baroness Sherlock Excerpts

Thursday 11th September 2025 Lords Chamber

[Lord Altrincham]

To ask His Majesty’s Government what steps they are taking to reduce the youth unemployment rate.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, too many young people are at risk of being left behind, without the right skills, opportunities and support to get started in work. This Government are determined to change that. We are developing a new youth guarantee with the ambition to give all young people access to high quality learning and earning opportunities. As a first step, eight mayoral strategic authorities began mobilising trailblazers to inform the future design of the youth guarantee. With adult skills moving into DWP, we are excited about the opportunities that we now have to bring together skills and employment to drive growth and opportunity in the labour market.

[Lord Altrincham (Con)]

I thank the Minister for her Answer and for her work and her commitment to young people. Unemployment for those under 30 is rising steadily. HMRC data every month this year has shown falls in payrolled employment of young people, offset by a small rise in employment for those over 65. Given welfare expansion, the enormous step up in personal independent payment expectations and the fiscal tightening on employers, where do the Government think that unemployment for young people under 30 will be in exactly one year’s time?

[Baroness Sherlock (Lab)]

My Lords, the noble Lord is right to flag that youth unemployment has been rising over the last three years. It is probably worth noting that there is always a higher rate of unemployment for young people than for older age groups; they tend to have higher rates of unemployment mainly because they are more likely to cycle in and out of the labour market around the age that they start into work. However, the trend is one that we need to watch, and he is right to raise it.

The noble Lord is also right to raise the fiscal context, but the real reason that I want to do something about this is not just for my colleague, the Chancellor of the Exchequer—keen though she would be—but because we do not want any young person to leave school and not have the opportunity to learn more or to work. We have tried various things in different Governments, and we have now decided not to leave anyone behind. We are developing a new youth guarantee with a clear commitment that every young person should be earning or learning. We have people in different parts of the country trying to work out what works in their locality, for their young people and their employers. We are transforming apprenticeships, investing in greater support for young people and making sure we identify those young people who are at risk. Frankly, if they are not in education, employment or training at 18 or 19, that is a real risk for the future. We need to find them and support them.

[Lord Blunkett (Lab)]

My Lords, I pay tribute to my noble friend’s energy, commitment and drive on this issue. Would she talk to her new Secretary of State, whose team might then talk to the Chancellor, about examining how we might learn from the New Deal for Young People, which was introduced in 1998? The number of young people aged 16 to 24 who are out of everything is not just a personal and moral challenge but a societal and economic disaster. We absolutely need to make this one of the main pillars of this Government’s policy in the next three years.

[Baroness Sherlock (Lab)]

I thank my noble friend and pay tribute to him. He was a reforming Minister in the last Labour Government and did lots of work in this area. I am conscious that I learned a lot from him in those days. He is absolutely right that this is both a scandal and a challenge for the economy.

One of the difficulties we have nowadays is trying to work out how we reach young people if they are not engaged in society. I was talking to an experienced youth worker recently, who said that she is worried about the range of young people who are simply off-grid. It is not just that we are not aware of them: they are not on benefits or claiming anything; they are simply disappearing. Part of our job is to go out there and find out where they are. For example, trailblazers in different parts of the country are looking at how you track down young people who are not on our radar and then support them, draw them in and engage them in their spaces.

We are trying to find more creative ways to do this. I have talked to young people for whom school just did not work—they failed or were failed by school. But it is possible that they will engage in different kinds of apprenticeships or skills-based training, and that work experience might draw them back in. Our job is to find these young people, work out what will make the difference for them individually and give it to them.

[The Lord Bishop of Oxford]

My Lords, I too welcome and commend the Minister’s passion and commitment. I recently met around 100 young people, as part of the work our diocese is doing, and their number one concern is the impact of technology and AI on their future jobs. There is now robust research in the United States on the likely impact of AI on entry-level jobs. Are the Government aware of that research and do they intend to commission research on the likely impact on the UK of artificial intelligence and strategies that might emerge?

[Baroness Sherlock (Lab)]

The right reverend Prelate raises a really interesting point, and I am very glad to hear that he is talking to young people individually. I would always be interested to hear more about what they say to him, because I find that I learn a lot more from what young people say than from what anybody else says.

He raised a really important point about AI, which I know is an area in which he does a lot of work. We are starting to witness the impact of AI in the labour market, but there is uncertainty over the scale of that impact, especially over the next four years. The Government are planning against a range of plausible future outcomes. A lot of work is going into this in government. Most forecasters project that, in the end, AI will lead to a net increase in employment but with varying impacts across different sectors and for different people. When you get this kind of change and churn in the labour market, the people who lose out most are those at the margins. Our job is to try to make sure that we give those who would otherwise not succeed the skills to do so. For example, the Government are investing to transform apprenticeships and looking at more shorter courses and ways to give young people a chance to gain skills in new areas, such as digital and AI. We are conscious of it and are very much working on it.

[Lord Palmer of Childs Hill (LD)]

My Lords—

--- Later in debate ---

[Lord Palmer of Childs Hill (LD)]

My Lords, building on an earlier question and the Minister’s reply, she will be aware that, as well as young people claiming unemployment benefits, large numbers of them are not in education, employment or training. Given the lasting damage that long periods out of the labour market can have, especially at the start of a young person’s working life, what urgent steps—I stress the word “urgent”—is the Minister taking to meet the particular needs of this group? She has explained what we are doing long term, and I am grateful for that, but this is an urgent matter and so I would like to know what we are doing urgently.

[Baroness Sherlock (Lab)]

I have just talked about what happens with young people who are hidden NEETs, as he describes. Let me turn to those who are NEET who we do know about—for example, those on sickness or disability benefits. The Government are determined to transform that. The noble Lord will have seen our Pathways to Work Green Paper, in which we describe wanting to create a new transition phase for young people from 18 to 21, such that, if they are looking to go on to sickness or disability benefits, we will treat them in a special way. We will support them from the beginning and give them the kind of help that they need. A lot of help is already out there; there is help for people with mental health and physical health issues. The bottom line is that almost everybody should be able to get a job. A small minority will not, but most will. Our job is to help them.

[Baroness Stedman-Scott (Con)]

My Lords, KPMG and the Recruitment and Employment Confederation have launched their August 2025 jobs report. Permanent placements fell for the 17th consecutive month. The number of candidates looking for work has increased, fuelled by redundancies, fewer job openings and economic business threats. Merck has pulled the plug on a £1 billion research site, and the prospect of the Employment Rights Bill and its impact is sending economic shivers down the spines of business. At the end of the list, as the Minister has said, are young people who are struggling to enter the labour market for the first time. I am grateful for the explanation about the programmes that the Government are undertaking, but can the Minister tell us what work they are doing with employers—the only ones that can create jobs—to incentivise them to help young people and integrate them into their workforce?

[Baroness Sherlock (Lab)]

My Lords, the noble Baroness commented on vacancies. She is very aware, as I am, of the facts of the economy and will know that vacancies have been declining steadily since spring 2022, when they reached a historic high. The decline in vacancies is a continuation of longer-term trends, but the noble Baroness is absolutely right: our job is to make sure that we give young people the chance to do this. She will know, for example, that employers who take on a young person under 21 or an apprentice under 25 are given complete relief on basic national insurance class 1 contributions until they hit £50,000. That makes a real difference. Above all, what will make a difference, if we want employers to take on young people, is to make them worth having. We have to skill them up, and give them the confidence to get out there and the ability to work in the workplace. That is what we are investing in now.

Sickness Benefits: In-person Interviews

Baroness Sherlock Excerpts

Wednesday 10th September 2025 Lords Chamber

[Lord Balfe]

To ask His Majesty’s Government whether they plan to reinstate in-person interviews for all applicants for sickness benefits.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, we already undertake a number of face-to-face health assessments for people applying for sickness benefits. However, as announced in the Pathways to Work Green Paper, we are planning to increase the number of face-to-face assessments while preserving alternative health assessment channels in order to meet the specific needs of people who require a different channel, for example, as a reasonable adjustment.

[Lord Balfe (Con)]

I thank the Minister for her Answer. This problem goes back a long time. I saw in the Times on 28 June that assessors in the department are apparently paid a bonus on interview numbers—the higher the number, the higher their bonus. This may or may not be reasonable but, at a time when there is a need to reduce expenditure on benefits and we know that in-person interviews tend to lead to a stricter application of the rules, would the Minister consider reintroducing in-person interviews before new benefits are awarded or existing benefits are confirmed?

[Baroness Sherlock (Lab)]

My Lords, face-to-face assessments were stopped during Covid, as they clearly could not happen on public health grounds. They resumed in mid-2021, but the fact is that the levels have been left far too low. In the middle of last year, just 7% of assessments were face to face across PIP and the work capability assessment. That said, the assumption that the benefit bill will automatically come down if we change everything to face to face is not straightforward, based on the available evidence. I assure the noble Lord that, as he may know, in our Pathways to Work Green Paper, we committed to doing more face-to-face assessments while preserving alternative health assessment channels, because those who will not be able to do that will need a reasonable adjustment and another alternative. We will increase them as fast as possible and do it in the right way in order to make sure that we can recruit enough people and provide a good service. I am pleased to tell the noble Lord that that is our plan.

[Lord Cryer (Lab)]

My Lords, I am all in favour of face-to-face interviews, but they would be made a lot easier if we had not seen the closure of many jobcentres prior to 2024. In the last round of closures around eight years ago, 11 Jobcentre Plus offices were shut in London alone. Many of those closures contravened the Government’s own guidelines, and it was purely a cost-cutting exercise.

[Baroness Sherlock (Lab)]

My Lords, most assessments are done in assessment centres. Many of those are conducted by providers because we have to have health providers to do them. My noble friend may be glad to know that we have specific, clear rules about what an assessment centre must do. For example, it must be appropriately accessible and reasonably easy to get to—so that someone can get from their transport to the front door—as well as DDA-compliant in terms of ramps and areas of ground-floor space, et cetera. There are specific assessment centres designed to be suited to this purpose.

[Lord Palmer of Childs Hill (LD)]

My Lords, can the Minister expand on the purpose of a face-to-face assessment? Is this to help people get the sickness benefit they want and need, or is it in some way to make it more difficult for people to get sickness benefit? What is the overriding reason for such attendance at an interview?

[Baroness Sherlock (Lab)]

There are various ways in which you can do an assessment. The starting point is that assessments can be done on paper where there is clear medical evidence of somebody’s diagnosis and functional needs. Some of them are really straightforward. It may be for somebody who is nearer the end of life or somebody who, for example, engages a lot with a physiotherapist or a rehab team after a stroke or a brain injury, where there is clear evidence and a clear track record. There are other people where there is not any evidence for a range of reasons. In those cases, there would need to be an assessment. It can be done on the telephone, by video or face to face.

There are different reasons for different people. Some people are unable to get to a face-to-face assessment. They may be bed-bound or may suffer from a severe mental health affliction, but they can perhaps do a video interview. Some people prefer face-to-face interviews; they feel that they will be seen better and understood better. Our aim is to try to keep all channels available and to get the right balance, both to make sure that we get the right conditions for the claimant and the right decision for the Government and to make sure that we have all the people we need there in order to try to move as fast as possible on assessments.

[Lord Hannan of Kingsclere (Con)]

My Lords, how does the Minister explain some of the following statistics, all of which come from government sources? The number of people expected to go on to long-term benefits will rise from 3.3 million to 4.1 million over this Parliament. Some 3,000 people are signing on every day. In our second city, Birmingham, one in four working-age adults is not working. That is higher than it was during the great depression. In those days, it was considered the greatest problem in politics; now, we just shrug. I think it was Charlie Munger who said, “Show me the incentive and I’ll show you the outcome”. What does the Minister plan to do to switch the incentives for some of the people who are choosing to go on to benefits when they are capable of working?

[Baroness Sherlock (Lab)]

My Lords, I am sure that, if the noble Lord tracked those statistics back, he would see when the numbers began to rise—it was not under this Government. I know that he is making not a partisan point but a broader point; I fully accept that.

The good news is that, as the noble Lord may have noticed from the last labour market statistics, for the first time ever, we have managed to stop that growth in economic inactivity related to sickness and disability. We have a long way to go to bring that down. He is absolutely right to raise this as a major issue. We have seen such a significant rise in the number of people claiming sickness and disability benefits. Broadly speaking, one in 10 of our working-age population is claiming a sickness or disability benefit, and our population is ageing.

In terms of what we will do, it is partly about incentives. The noble Lord will be aware that we recently changed the incentives in the then Universal Credit Bill. For example, we halved the amount of money that someone gets on the standard allowance for sickness and disability and increased the standard allowance overall to reduce those incentives. The truth is that there will be some people who just do not want to work. There are an awful lot of other people out there who would love to work but either cannot find the right job or do not have the confidence, skills, opportunity or support. Our job is to tackle this on all of those fronts. We are trying to transform the whole of employment support so that it is tailored to give people the chance to get into a job, to move up in a job and to get the skills they need, which will serve them and the British economy.

[Baroness Maclean of Redditch (Con)]

My Lords, the Health Minister has reported concerns about the over-medicalisation of normal human emotions such as sadness and anxiety and the labelling of those as mental health conditions. I am sure that the Minister will know—indeed, I am sure that the whole House will be aware of this—that that is behind much of the rise in the numbers of sickness and disability claims. In the Minister’s excellent work, on which I commend her, in bringing back these face-to-face assessments, will she review the process of assessing these mental health conditions so that this can be targeted at the people who are in genuine and serious need?

[Baroness Sherlock (Lab)]

The noble Baroness is absolutely right: there is no doubt that there has been a growth in people claiming support and not being in work as a result of mental health conditions, but also because of other conditions as well. There are other clear patterns, such as musculoskeletal conditions and a range of other things. That is partly about changes in our population and about trends in society.

Our job is to invest in trying to tackle those early enough. One thing that the Government have done is invest money in putting mental health support into schools. In the case of young people, let us tackle those questions early. We consulted in the Green Paper about what we will do in future, but we have announced that we are going to have a youth guarantee. We have a Question tomorrow on youth unemployment. For those who are aged 18 to 21 and are perhaps heading for sickness and disability benefits, let us find a transition phase for them where we find out what the challenges are, figure out how we can support them and then, hopefully, get them on to a path. Sadly, some people will never be able to work, but, for many people, the evidence is that good work is good for their physical and mental health—we just need to help them get into it.

[Baroness Stedman-Scott (Con)]

My Lords, can the Minister set out how increasing in-person assessments, which we on these Benches fully support, will help reduce fraud and error, thus protecting taxpayers’ money, while ensuring another thing that we on these Benches support—that those who can work, do, and those who cannot, get the support they need? Will the Minister encourage her colleagues and the Secretary of State at the DWP to take up the serious and mature offer made by the leader of the Opposition to work with the Government in order to help them cut and reduce benefits?

--- Later in debate ---

[Baroness Sherlock (Lab)]

The noble Baroness asks an interesting question. I do not know whether it was on her watch but she may remember that, in 2022, under the previous Government, the department ran a trial to evaluate whether health assessments conducted by different channels led to different outcomes—that is, did it matter if you did it by video, on the telephone or face to face? The trial data showed no substantial differences between work capability assessment and PIP award rates, lengths or average amounts.

Having said that, my observation is that that does not tell us whether the outcomes of individual claims were affected by the channels used. Also, at the time, there were so few face-to-face assessments being conducted that I do not think it can tell us whether the move to remote assessments under Covid had an impact on the volume of claims. Of course, behaviour changes over time, too. We have committed to increasing face-to-face assessments while preserving the alternatives; we can look carefully at whether that makes a difference.

On the noble Baroness’s broader point, there may be some way to go before the leader of the Opposition in the Commons gains the trust of her opposite number, given what has happened recently. However, I am always very happy to work with the noble Baroness; we can talk about these things day to day.

Child Poverty Strategy

Baroness Sherlock Excerpts

Wednesday 10th September 2025 Lords Chamber

[Lord Liddle]

To ask His Majesty’s Government what progress they have made towards developing their child poverty strategy.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the Government will publish a strategy in the autumn to deliver measures to tackle the structural and root causes of child poverty. As a significant downpayment ahead of strategy publication, we have already taken substantive action across major drivers of child poverty. This includes an expansion of free school meals, a £39 billion investment in social and affordable housing and a commitment to roll out Best Start family hubs in every local authority.

[Lord Liddle (Lab)]

I very much welcome what the Minister has said about producing a strategy and the actions in the face of economic difficulties that the Government have already taken, but does the Minister accept that further progress is going to be challenging, given the need to make the benefits bill fiscally sustainable, not least because of the legacy we inherited on PIP, disability and SEND? Does she agree that, in addition to the priority for getting NEETs and people on sick benefits back into work where we can, tackling child poverty by putting extra money into the purses and wallets of our poorest families remains a key government priority?

[Baroness Sherlock (Lab)]

My Lords, I thank my noble friend for his encouragement on what the Government have done so far. It is significant. As he knows, we have already committed to extending free school meals to all children from households in receipt of universal credit from September next year. That alone will lift 100,000 children across England out of poverty by the end of this Parliament and put £500 back in those families’ pockets. That is really significant. But there is so much more to do; my noble friend is quite right about that. The child poverty strategy in the autumn will set out measures across the piece on dealing with child poverty.

My noble friend mentioned the need to make our system sustainable, and he is quite right. There is no doubt that the social security system is not fit for purpose. It is not serving those who need to depend on it and it is not serving the taxpayer, but we have plans to get involved in making sure the system works well. Getting people into good jobs makes all the difference. It will also lift out of poverty the children in those families, so I look forward to doing that and I hope the whole House will support us.

[Lord Harper (Con)]

My Lords, as the Government are considering their child poverty strategy, can I urge them, particularly in the light of the comments made by the Minister and the noble Lord, Lord Liddle, about constraining the benefits bill, to retain the two-child benefit cap? This is a very important measure to ensure that families on benefits face the same choices as those who are not. If it were removed, rather than being a measure of fairness, it would be unfair to those who work hard, pay their taxes and strive to live within their means.

[Baroness Sherlock (Lab)]

My Lords, I will not be commenting on the future, because the child poverty strategy will look at the ways in which the Government will make changes, not just to the benefits system but across the piece, to tackle child poverty. But I say to the noble Lord, Lord Harper, that the benefits system has so many flaws in it at the moment that we have had to go in and try to look at the way it works across the piece. We have had to recognise, for example, that the way we support people who are sick or disabled does not serve either them or the taxpayer. We are not supporting families in the appropriate way. Our job is to try to make the system work for everyone, so that those who can work and support their families do so and those who cannot work will know the state is there to support them. That is our job.

[Lord Palmer of Childs Hill (LD)]

My Lords, regarding the two-child benefit and the restriction of it, I was disappointed in the things that the Minister said that the Government are doing. There was no mention of it. There needs to be not only a mention of it but a date for when it will happen. The idea that people in poverty, children in poverty, can wait while the Government pontificate on whether they will produce a change to the two-child benefit cap is a disgrace.

[Baroness Sherlock (Lab)]

My Lords, it is clear today that I cannot satisfy the whole House, whichever way I look. I understand the noble Lord’s position on this, but every time he raises it, he accuses the Government of sitting and pontificating and doing nothing. Perhaps he did not hear my last answer. This Government are committed to extending free school meals across the whole of the universal credit spectrum, which will lift 100,000 children out of poverty in this Parliament—and we are going farther. Please can he encourage us in that, not just attack us?

[Lord Sahota (Lab)]

My Lords, removing the two-child benefit cap would significantly impact minority communities, particularly those who have large families and are on low income. This would lead to improved health, education and social outcomes for these children. I am talking about minority community children. You only have to look at places such as Tower Hamlets in London, where child poverty is over 40%. Do the Government have any plans to overcome this and introduce two-child benefits, or to remove the cap?

[Baroness Sherlock (Lab)]

My Lords, if I can persuade the Cross Benches and the Bishops to raise it, I will have a full house. I completely understand the wider point that my noble friend makes. There is an issue in this country for larger families who are facing poverty. However, perhaps I can reassure him by pointing out the impact of some of the things we are doing: for example, expanding free school meals to all children in households. Those meals go to each of the children in that household. We have tripled investment in breakfast clubs to over £30 million, which is worth another £450 to parents. The Healthy Start scheme supports over 356,000 children. We are extending the household support fund, bringing in a new crisis and resilience fund. All these things help families, and bigger families most of all. I hope that reassures him.

[Baroness Stedman-Scott (Con)]

My Lords, I am not going to mention the two-child benefit cap. Can I say how pleased I am to see the Minister in her place? As always, I look forward to working with her. Can she reassure the House that the child poverty strategy will avoid a narrow focus on short-term income measures and instead promote long-term opportunity, resilience and self-reliance for families?

[Baroness Sherlock (Lab)]

I thank the noble Baroness for her kind words. I am very grateful and I agree with her very much indeed on that—I am very glad to be here as well.

She makes a really important point. One of the reasons we have taken our time and been thoughtful about the child poverty strategy is that it cannot ever be just about income transfers. The strategy will be looking across four key themes. Increasing incomes is one of them, but so is reducing essential costs, increasing financial resilience for families and looking at better local support, especially in the early years. We must take action across all those if we are to find a way to tackle the scourge of child poverty in this country in a way that builds in structural improvements for the future. She makes an important point.

[The Lord Bishop of Leicester]

My Lords, my question is also not about the two-child limit, though I am fully supportive of its removal. Can the Minister say something about listening to the voices of children and young people within the formation of the strategy and give some examples of how the voices of children and young people have maybe changed the mind of the Government in their approach?

[Baroness Sherlock (Lab)]

I am grateful to the right reverend Prelate. The task force has engaged astonishingly widely. The Children’s Commissioner was commissioned to do listening events directly with children, to hear their voices. A lot of work has gone on listening to organisations, families and parents, but listening to children describing their own experiences sometimes brings out things that the Government and even those organisations would not have thought of.

In terms of the wider groups, I have been able to do a little bit of this, even though it is not quite in my portfolio. However, the right reverend Prelate’s right reverend friend the Bishop of Derby very kindly invited me up to Derby to meet families at a family hub and to look at what the local authority and the faith groups were doing. Every time this happens, I am blown away by the resilience of individual families and the power of local communities, faith groups and local authorities to work together to make the lives of their communities better. The more we can engage with that and the more we can hear their voices, the better we are going to do this.

[Baroness Watkins of Tavistock (CB)]

My Lords, the recent Children’s Commissioner’s report identifies, through children as well as their parents, that one of the most difficult things that children in poverty have to put up with is temporary accommodation. Moving accommodation often disrupts their education, because they have to move school. Will the child poverty strategy look at this as seriously as it looks at income?

[Baroness Sherlock (Lab)]

I thank the noble Baroness for her question. The Children’s Commissioner’s report, as I am sure she knows, made pretty harrowing reading—as it should. If we are going to tackle these questions, we have to look at the reality of children’s lives nowadays. Her point was very well made. The Government are very aware that homelessness levels are far too high and temporary accommodation is not working. That is really clear. We are committed to delivering long-term solutions to ensure that temporary accommodation is sustainable for local authorities and delivers value for money, because a lot of money is going into something that is not doing a good job for the families using it. That is why the spending review made it clear that we want to encourage better investment in temporary accommodation stock up front and announced £950 million in the latest round of the local authority housing fund.

Public Authorities (Fraud, Error and Recovery) Bill

Baroness Sherlock Excerpts

Monday 8th September 2025 Lords Chamber

Moved by

[Baroness Sherlock]

That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 to 7, Schedule 1, Clauses 8 to 70, Schedule 2, Clauses 71 to 75, Schedule 3, Clauses 76 to 78, Schedule 4, Clauses 79 to 92, Schedule 5, Clause 93, Schedule 6, Clauses 94 to 107, Title.

Motion agreed.

Labour Market

Baroness Sherlock Excerpts

Monday 8th September 2025 Lords Chamber

[Lord Londesborough]

To ask His Majesty’s Government what assessment they have made of the state of the labour market.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the labour market is resilient, with high employment and falling inactivity, but we acknowledge that there is more to be done, particularly for young people and those with health conditions. The Get Britain Working strategy is driving forward reforms and helping create a more inclusive labour market that supports economic growth and opportunity for individuals.

[Lord Londesborough (CB)]

I thank the Minister for her response, although I point out, in the interests of balance, that unemployment is rising while job vacancies are falling fast. In fact, graduate vacancies have now dropped to their lowest level since 2018, with some 40% of our graduates either in low-skilled jobs or unemployed, yet employers report that skills shortages are frustrating job creation and holding back productivity—the two key ingredients of economic growth. Can the Minister tell us how phase 2 or the reset will address this damaging mismatch?

[Baroness Sherlock (Lab)]

My Lords, I do not want to trade stats with the noble Lord but, hey, why not? If he looks carefully, as I am sure he has, at the most recent set of local labour market data, he will see that employment is up to record levels, economic inactivity is down, wages continue to grow and we have a healthy number of vacancies in the labour market. However, he raises an important point about the skills needed by employers at the moment, and the fact is that the labour market is changing.

The noble Lord mentioned graduates, the most recent data for which show that there is still a strong graduate employment market and that graduate employment is still above average. I do not want to send out any messages that degrees are not worth having. Graduate employment is important. However, there are signs of the beginnings of changes in that market.

What the Government are doing is not just for graduates but for all people, as we risk too many young people being left behind if they do not have the right skills or opportunities. As the noble Lord may know, Skills England recently published a report providing an assessment of the Government’s priority skills to 2030. It gave a detailed analysis of future employment needs across 10 critical sectors, aligned with the industrial strategy and the plan for change. I hope he will appreciate that moving adult skills into the DWP strengthens the Government’s focus on the importance of a highly skilled workforce and accompanying economic growth. The DWP has a lot of experience of helping to retrain and reskill workers; that focus will make the difference in future.

[Lord Sharpe of Epsom (Con)]

My Lords, the Minister just said that salaries are increasing, but starting salaries are at their weakest in years, according to the KPMG and Recruitment and Employment Confederation report from yesterday. I quote:

“Shrinking demand for staff and concerns around payroll costs dampened rates of starting pay in August”.


Will the Government now finally commit to reforming the provisions in the Employment Rights Bill, so that they genuinely support both businesses and workers, rather than adding to their costs?

[Baroness Sherlock (Lab)]

My Lords, if ever a Bill was set to be relitigated on a weekly basis, this House is the place to do it. The Government remain committed to our Employment Rights Bill. We believe that having appropriate rights for workers increases productivity and strengthens the labour market. On the broader point, unemployment is dipping down and there is a range of reasons for that. One is that the labour force is growing, and we know that people are moving from inactivity to looking for work. Our challenge, as we face the global headwinds we do, is to make sure that we invest in infrastructure and create jobs across the country. Crucially, when there is any tightening in the labour market, the people who struggle are those farthest from the market. Our job is to make sure that we upskill people and invest in every part of the country, and that the jobs that are there go to the right people. There is a healthy number of vacancies out there. Our job is to make sure that everybody has the chance of a good job, moving on and progressing in work.

[Baroness Winterton of Doncaster (Lab)]

My Lords, does my noble friend the Minister agree that introducing digital identity cards could make a real difference to tackling illegal working? This is very often connected with human trafficking and even modern slavery. Can she assure me that the Government are looking seriously at this and that work on it is happening at pace?

[Baroness Sherlock (Lab)]

My noble friend raises a very important point about illegal working. There are certainly all kinds of difficulties attached to it. She mentioned human trafficking, but there is also the abuse of workers who are not in a position to report abuse or breaches of legislation because of their status. I reassure my noble friend that, when it comes to tackling illegal immigration and illegal working, the Government are already rolling out forms of digital ID through e-visas so that we have a digital record of someone’s ability to work and their ability to enter this country lawfully. We are determined to look at any serious proposals to help strengthen our border security and to benefit society. I can assure my noble friend that this includes digital ID.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for telling us what the Government are doing. When the Chancellor increased employers’ NI in last year’s Budget, she chose to lower the starting point for paying national insurance contributions. In practice, this has meant that employers of part-time workers have been disproportionately affected. Given that part-time and starter jobs are a good way for the unemployed to get a foot in the jobs market, does this decision not undermine the Government’s welfare to work efforts and all the positive points which the Minister has made?

[Baroness Sherlock (Lab)]

The answer to the noble Lord’s question is no. The Government have had to take tough decisions and we knew that they would have some impact. However, all the signs are going in the right direction—there are real signs of progress out there. When it comes to part-time workers, I assure the noble Lord that one of the good things about the way in which the DWP is now organised is that it is tailoring and personalising the employment support it gives people in two ways: first, to get those who are not in jobs into them; and, secondly, to get those in jobs moving on within them, whether that is through more hours, better work or more skills. For example, through our new jobs and careers service, we bring together people who are not on benefits at the moment—perhaps they are working at the margin only for a few hours and do not need to claim—to be part of that. As a country, if we are to have economic growth, we will need a skilled and motivated labour force. I am confident that we are doing that well.

[Lord Forsyth of Drumlean (Con)]

My Lords, if people are better off not working and being on benefits than they are working at the minimum wage, is the Minister surprised that we have millions of people who should be working and who are not?

[Baroness Sherlock (Lab)]

My Lords, I presume the noble Lord is referring to the stories about universal credit. The structure of universal credit was created by the last Government. It was designed to operate in and out of work. We have become aware that there were some imbalances in the system. As the noble Lord will be aware, the Universal Credit Bill that we put through just before the recess has rebalanced the rates of universal credit by halving the amounts that will be paid in future to those who are out of work on grounds of illness or disability. It will increase the standard allowance to help raise incentives to work. I think most people want to work and have a fulfilling life. Our job is both to put the incentives in the right place and to make sure that the jobs are there and that people are skilled to do them. We are determined to do all this.

[Baroness Deech (CB)]

My Lords, thousands of workers who want to go to work today are unable to do so because of the Tube strike. Thousands of Tube drivers who should be at work have stayed at home. Will the Government reverse their policy of giving in to every trade union demand, thereby putting up prices, encouraging inflation and making more people stay at home and not go to work?

[Baroness Sherlock (Lab)]

My Lords, as I am sure the noble Baroness knows, transport in London is devolved to the Mayor and Transport for London.

[Noble Lords]

Oh!

[Baroness Sherlock (Lab)]

Are you finished? As I was saying, the Government understand that this is very disappointing for passengers, including the noble Baroness, and for businesses. We continue to encourage all sides to work together to resolve the dispute as quickly as possible.

[Baroness Northover (LD)]

Has the Minister seen the report from Cancer Research UK that shows that smokers are three times more likely to be out of work owing to poor health than non-smokers? Can she encourage her noble colleague alongside her to bring back the very welcome smoking and vaping Bill initiated by Rishi Sunak, so that we can better protect public health and get people back to work?

[Baroness Sherlock (Lab)]

I am advised that legislation is making its way through Parliament and will come to this House in due course, so we will have plenty of opportunity to debate it.

[Lord Sikka (Lab)]

My Lords, jobs depend on people’s ability to buy goods and services. That ability has been severely eroded. Some 16 million people live in poverty and 1.2 million are on insecure zero-hour contracts. Can the Minister confirm that there will be no rollback of any part of the Employment Rights Bill? What steps will the Government take to increase workers’ share of the gross domestic product?

[Baroness Sherlock (Lab)]

As I have said before, I can reassure the House that the Government are committed to their Employment Rights Bill and will make sure that the measures in it go ahead. There is a great deal of detail yet to be worked out. A lot of consultation is going on, but our job is clear: we want to make sure that people who go to work and work hard are appropriately protected and not exploited. We think that will make them more productive and the economy healthier.

Universal Credit Bill

Baroness Sherlock Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 22nd July 2025 Lords Chamber

Moved by

[Baroness Sherlock]

That the Bill be now read a second time.

Northern Ireland legislative consent sought.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, on top of the usual joys of a debate such as this, we are blessed today by the unusual combination of a maiden and a valedictory. I look forward very much to the maiden speech of the noble Baroness, Lady Shawcross-Wolfson, but I am very much touched with sadness that we will hear the valedictory speech of my noble friend Lady Bryan of Partick. This is an important debate for such important occasions.

This Universal Credit Bill forms part of the Government’s reforms to our social security system. Our welfare state sits alongside the NHS as a key pillar of our society. Both represent the principle that, when our people need help, they should get it. This Government’s commitment to both these pillars is absolute, but that commitment cannot mean, in either case, that reform is never possible.

I do not think that many noble Lords would disagree that some reform is needed. We have a lower rate of employment today than we had before the pandemic, and progress in closing the disability employment gap has stalled. One in eight of all our young people is not in education, employment or training. Some 2.8 million people are now out of work for long-term sickness. The number of people claiming health-related benefits with no requirement to work has increased since 2019-20 by 800,000—that is 45%. This is not just about worsening health. Claims for these benefits have been rising far faster than the overall prevalence of self-declared health conditions. So things have to change.

One problem is the structure of our current system. At present, everyone presenting for out-of-work support is put in one of two categories: they are classed as “can work” or “can’t work”. Having created this divide, the system reinforces it financially. Someone labelled as “can work” is expected and supported to find a job, and given £92 a week to live on in the meantime—less if they are aged under 25. Someone classed as “can’t work” is given more than twice as much money but little or no help to take any steps towards work.

This is an unhelpful binary when we know there are hundreds of thousands of people claiming health and disability benefits who are ready for work now, if the right job or support were available. The system is failing them and failing taxpayers. This Bill addresses the problem by rebalancing universal credit, while protecting those we do not ever expect to work from reassessment. We will underpin this by investing record amounts in employment support for sick and disabled people.

These changes are based on three rules: if you can work, you should; if you need help to get into work, the Government should give it to you; and if you cannot work, you should be supported to live with dignity. Crucially, this Bill is part of a wider package of reforms that includes that record investment in employment support for sick and disabled people, totalling £3.8 billion over this Parliament. We have published draft regulations on our right to try guarantee, so that work, in and of itself, will never lead to a benefits reassessment, to give people the confidence to try out work. We are delivering the biggest reforms to employment support in a generation, overhauling jobcentres to create a new jobs and careers service, delivering our youth guarantee, and joining up work, health and skills support at a local level. This is on top of investing billions in the NHS and moving to create more good jobs across the country, plus reforming Access to Work so it is fit for the future and working with businesses on the role that they can play in creating healthy, inclusive workplaces. We want everyone who could work to have that opportunity, not least because work is the best route out of poverty.

I am aware that the amendment tabled by the noble Baroness, Lady Bennett of Manor Castle, refers to the impacts of the Bill. I look forward to hearing her contribution, and I will try to address her concerns in my closing speech. However, it is worth noting here that, after the recent changes, we estimate that the package of benefits changes announced at the Spring Statement, revised to account for the changes to the Bill, will lift 50,000 people out of poverty in 2029-30, something that I hope the whole House will welcome. These estimates do not include any impact that our record investment in employment support for sick and disabled people may have on poverty levels.

I turn to the specific measures in this Bill. Previous freezes to the universal credit standard allowance, and below-inflation increases, have built disincentives to work into the system. The Bill starts to address this by rebalancing payments in universal credit, including through the first ever sustained, above-inflation rise to the standard allowance, which the Bill introduces through Clause 1. This will be the largest permanent real-terms increase in the headline rate of an out of work benefit in decades. It will mean that a single person aged 25 or over will receive an income boost worth around £725 a year by 2029-30. This is balanced by a reduction in the health top-up of universal credit for most new claims, with the new rate set out in Clause 2. This clause, together with Schedule 1, also sets out to whom this lower rate will and will not apply.

Existing claimants, as well as those with severe, lifelong conditions whom we never expect to be able to work, and those nearing the end of life, will continue to receive the current, higher rate of top-up. For these groups, we will ensure, through the calculation in Clause 4, that the combined rate of their standard allowance and their health top-up in any tax year will rise at least in line with inflation between 2026-27 and 2029-30. That means that the income from these benefits will be protected, in real terms, for every year of this Parliament. Clause 3 makes it possible to offer this protection and to freeze the new lower health top-up rate by removing the relevant rates from the Secretary of State’s uprating review.

Clause 5 of the Bill mirrors the changes that we are making in universal credit through Clauses 1 to 4 in employment support allowance, while Clause 6, along with Schedule 2, makes the corresponding provisions for Northern Ireland. We believe that these changes strike the right and fair balance. They allow us to build a more proactive, pro-work system for the future, giving people the right incentives and support to build a better life. They also protect existing claimants who are already familiar with a certain level of support and who might find it particularly difficult to readjust if that were to change. They protect the most vulnerable, regardless of whether they are already claiming the top-up or will do in the years to come. We will always protect the most vulnerable, which is why Schedule 1 will ensure that people with severe, lifelong health conditions will never be reassessed, preventing unnecessary anxiety and giving them the dignity and security they deserve.

As I have said before, welfare reform is not easy and it never has been, but it is really important that we get it right. That is why we always said that we would listen to disabled people, their organisations and others as we deliver our reforms. The House will be well aware that this Bill originally set out to reform the personal independence payment, PIP, as well as universal credit. However, having listened carefully to a full range of opinions in the Commons and beyond, the Government have removed from the Bill the clauses relating to PIP. We will now look at PIP in the round, within the wider Timms review. We have already published the terms of reference for this review, and we expect it to conclude by autumn next year. It will be led by my honourable friend Sir Stephen Timms, my fellow Minister, and will be co-produced with disabled people and other stakeholders as we work to make PIP fit and fair for the future.

This Bill is an important part of our wider reforms to give disabled people and people with health conditions the same rights, chances and choices to work as everybody else. It rebalances universal credit to remove work disincentives, and it gives existing claimants the security and certainty they need, while providing new protections against unnecessary benefit reassessments for the most vulnerable. There is more work to be done, and much of that is already under way, but this Bill, to become the Universal Credit Act 2025, will take us another significant step closer to fulfilling our vision of giving everybody who can work a pathway to work. I beg to move.

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords for their contributions this evening. It has been a really interesting debate. I particularly thank the noble Baroness, Lady Shawcross-Wolfson. What an astonishing story and what an incredible heritage. I can only think that her forebears must be so very proud of her. It is a real joy to have her here with us today.

I thank my noble friend Lady Bryan. It was a privilege to be her Whip. I cannot say that I was always successful in persuading her of my point of view, but it was an absolute delight to work with her and we will miss her very much. I know that retirement for her will not mean walking away from the cause of social justice; indeed, she may be the first person to leave the House of Lords to spend more time in politics. We thank her for her contribution and we hope that she stays in touch.

Before I turn to the specific points raised, I say from the outset that this Bill is simply one part of the Government’s wider programme to reform our social security system so that it is sustainable and helps people to build a better life. That is what it is there to do, but it is part of a much wider programme. Let us bear that in mind as we go through.

Let us look at the specifics. I will try to talk on as many points as possible, but in 20 minutes I will not get to them all and I will not name everybody. I apologise in advance.

On the comments from the noble Baroness, Lady Bennett, the right reverend Prelate the Bishop of Newcastle, and others that the Bill pushes people into poverty, let me be clear that nobody will find themselves pushed into poverty as a result of the changes in the Bill. People who are claiming benefits are not going to be subject to these changes. As I said at the start, we estimate that the benefits changes announced at the Spring Statement, revised to account for changes in the Bill, will now lift 50,000 people out of poverty in 2029-30. That is without any impacts of our record £3.8 billion investment in employment support. It is absolutely the case that those who qualify in future will get a higher standard allowance in universal credit and will still get a health top-up in universal credit, albeit at a lower level than now, as a result of the rebalancing. They will also get much more support in their journey towards work.

As for those with the highest needs, we recognise that some people will never be able to work. That is why those with the most severe, lifelong conditions whom we do not ever expect to be able to work, and those nearing the end of their lives, will receive the current higher rate of health top-up when they apply, and we will not be calling people in for pointless assessments.

My noble friend Lord Rook and the noble Baroness, Lady Stedman-Scott, focused particularly on young people. We have a special responsibility to make sure that nobody is written off before their adult life even begins. That is the basis of our new youth guarantee, to ensure that all 18 to 21 year-olds can access quality training opportunities, an apprenticeship or help to find a job. That will include targeted support for, for example, young people with learning disabilities. Our youth guarantee trailblazers are already doing brilliant work, testing and delivering new ways to help young people. We are working in partnership with all kinds of organisations, including the Premier League, Channel 4 and the Royal Shakespeare Company, to engage and inspire young people on their journey towards work. Perhaps the Salvation Army needs to be added to that list now—I can take a hint from both Benches.

My noble friend mentioned mental health. I reassure him that we are expanding mental health support teams, so that more schools can offer early, specialist help. All pupils will have access to mental health support in school by the end of the decade. Through the youth guarantee, we are improving access to mental health services for 18 to 21 year-olds.

A number of noble Lords mentioned the proposal we consulted on in the Green Paper, which is not part of this Bill, as to whether we should delay access to the health top-up of universal credit until someone is 22. I make no apology that we have to explore every option to make sure that young people are making the best possible start to their adult lives. However, there was a consultation. No decision has been taken, nor will it be taken until we have had the opportunity to review responses to the consultation. I reassure the House that, if we decide to go ahead with that, the savings will be reinvested in training and work opportunities for that age group and we will consider carefully what special provisions are needed for those young people for whom the youth guarantee will never be a realistic option.

I heard the comments of my noble friend Lord Hendy and others about the questions raised by the UNCRPD. I say to the House that we take our international obligations seriously. We have had a letter, we are considering the issues raised and we will respond in due course.

The noble Baroness, Lady Grey-Thompson, made some very important points about the way we debate these questions. I share her concern that the narrative can become regrettable and focused in ways that are just not helpful to the debate, never mind to the individuals. I reassure the noble Baroness, Lady Brinton, that my honourable friend the Secretary of State—I know this because I know her well—does not believe that disabled people are work-shy and wants to give them opportunities to move into work. I want to see a much better debate all round. We have to find a way, as a country, to be able to discuss reform of social security without running into problems where either we are not able to discuss it or we are doing it in ways that cause fear and anxiety, which do not need to be there. I hope we can all work together to find ways to do that.

I was shocked to hear of the website described by the noble Baroness, Lady Grey-Thompson, identifying Motability users. We have checked and the Motability Foundation has confirmed that no data was provided to the developers and any information returned is not accurate. I am glad that the website has been taken down, but the bottom line is that that should not be happening. That is not what this is about. It is shocking.

I agree with the noble Baroness that we need to make sure that we regain trust among those who use our services. A couple of noble Lords made points on this. We made clear in our Green Paper that this is our mission. We announced that we are reviewing our entire safeguarding processes and strengthening our clinical governance. I say to the noble Baroness, Lady Scott of Needham Market, that that includes the training of assessors, because we want to make sure that we get this right. A lot of time and effort is being invested in this and we have some really good people from the clinical side who are working with us internally in doing that. I am glad that the noble Baroness found the training helpful, even if it was not as long as she would want it to be. We are moving to bring back face-to-face assessments and will record them as standard. We think that those things taken together will help make a difference to the way the assessments happen and are perceived.

The noble Lord, Lord Elliott of Mickle Fell, touched on the challenge of making sure that the right jobs are there in the first place, and he is absolutely right. We are creating good jobs across the country, including using our modern industrial strategy and investing in such things as clean energy. However, our local Get Britain Working plans are based on the recognition that we do not have a single labour market in this country but a number of different labour markets that depend on local conditions.

I say to the noble Baroness, Lady Stedman-Scott, that this Bill does what this Bill does. If she wants to find hope and opportunity, she should go out there and look at Get Britain Working, the inactivity pilots, our youth guarantee pilots, and the independent review that we have commissioned from Sir Charlie Mayfield, former boss of John Lewis, into what employers can do to create inclusive workplaces where people can stay in work and not fall out of it when they hit health problems. There is a huge amount going on beyond this.

I take the point from the noble Lord, Lord Elliott of Mickle Fell; he is not the first person to make it to me. I will share it where it can best be used. We want to find ways of making sure that there are jobs there for people who want to get into them and that we can support them to do it.

Fluctuating conditions were mentioned a lot. This is an area where there has clearly been some confusion. Let me clarify for noble Lords who are not familiar with this that the work capability assessment is not specific to a condition; it is based on the impacts of a condition rather than the condition itself. Some conditions will have different impacts on different people or at different stages of a person’s life. The assessment includes provisions to ensure consideration of how someone’s condition might fluctuate, hence the use of the terms “reliably” and “repeatedly” in some of the descriptors. This Bill does not change that. The idea that we have somehow changed that through using the word “constantly” is not the case. In some of the descriptors embedded in legislation, the concept of fluctuation in a condition is explicit within the use of those terms “reliably” and “repeatedly”. The bottom line is that, if a person cannot repeat an activity within a reasonable time, they should be considered unable to complete the task at all. I hope that is reassuring.

The severe conditions criteria are existing criteria which we are now going to use to determine who gets the higher, protected amount of health top-up. The wording in the Bill reflects how the functional tests are applied at present, and those tests take account of fluctuations. The healthcare professional has to look at how someone can undertake a task; if they cannot do it reliably and repeatedly, they should be assumed to be unable to complete it at all. I hope that provides reassurance.

NHS diagnosis came up a couple of times, so I would like to take the opportunity to clarify this. To meet the severe conditions criteria, the condition needs to be recorded somewhere in the NHS, following a proper clinical investigation and a formal medical diagnosis in line with NHS best practice. That does not mean the initial diagnosis has to be done by the NHS, but it has to be recorded somewhere in the NHS system. For a person who has a severe, lifelong health condition, their diagnosis will be in their GP record, even if it was made privately. I hope that helps reassure noble Lords.

A number of noble Lords raised the issue of unpaid carers. I once again put on record how much the Government appreciate their work and contribution. The increase to the UC standard allowance will benefit around a million unpaid carers. For any carers currently getting the universal credit health top-up, this Bill will not change that. My noble friend Lady Andrews and the noble Baroness, Lady Tyler, gave me a strong challenge on the review of PIP being co-produced with disabled people and other stakeholders. I reassure them that that will include carers’ organisations, so the voices of unpaid carers will be heard in that process.

On the two-tier system—I hate this phrase anyway, for all kinds of reasons that will be obvious—it is really common in social security when you make a significant change that some people on an existing system will stay on the old terms. Take the example of the limited capability for work premium in universal credit, which the last Government changed in 2017: people who were getting it then are still getting it today and will carry on doing so. There are only two ways to do this: either you change it overnight for everybody or you allow those already getting something to carry on getting it for a time while you change it. We cannot have both no two-tier system and no cliff edge. All this is doing is allowing people who have already got used to this to carry on with it, and adjusting it, which is the right thing to do.

The noble Viscount, Lord Younger, asked for details on exactly what the employment support will be. I do not have time to go into this now, but I reassure him that we are scaling up fast, with £600 million in 2026-27. The support we are delivering includes Connect to Work, WorkWell, nine inactivity trailblazers and access to 1,000 pathways to work advisers. I assure him that anyone affected by the reduction of the UC health top-up will be offered work, health and skills support through an adviser.

A number of noble Lords talked about the challenges we are facing in the system. It is true that making our social security system sustainable is a real objective for this Government, as it must be for every Government. That needs action on various fronts. It needs action to reduce the drivers of ill health, as the right reverend Prelate the Bishop of Newcastle said. It needs action, which we are doing, through our record levels of investment in and reform of the NHS. It needs investment in jobs in poor areas and in employment support, all of which we are doing at scale. It also needs reform of the benefits system, which we are committed to doing.

In response to the noble Viscount, who wants everything to have happened yesterday—even though I am not sure that characterised his Government’s period in office—for reforms of this scale, we need as far as possible to take people with us. I want these reforms to last for generations to come, because I want the welfare state to last for generations to come. Let us try to get this right, work together and be sensible about change. The real prize here is long-term reform and that is what we are shooting for.

A couple of noble Lords asked whether we are still saving money. Obviously, the removal of the PIP measure from this Bill will come with a cost, but the updated impact assessment shows that the Bill will still deliver some savings by 2029-30. However, the OBR will certify these as part of its next economic and fiscal outlook.

My noble friend Lady Ritchie asked what would happen to people on ESA. Existing claimants and anyone declaring a health condition before 6 April next year, and who become entitled to LCWRA because of that declaration, will get the higher rate. That includes claimants who currently receive income-related ESA and migrate to universal credit with no break in their claim. I hope that reassures her on that point.

The noble Viscount, Lord Younger, asked about fit note reform. It is not working, so through interventions such as WorkWell, we are testing different approaches to the role it can play as part of a joined-up work, health and skills system. He also asked about the right to try regulations; we aim to have those in place before April 2026. I hope that reassures him.

The noble Baroness, Lady Smith, asked about the position in Wales. Obviously, we published impact assessments that looked at Britain as a whole, because UC is reserved in Scotland and Wales, so the policies are not specific to a country—but I take her point. The Department for Communities in Northern Ireland has published detailed impact assessments as well. In response to her comments, we want to make sure that the positive changes in the Bill make a difference as far and wide as possible, but I stress again this Bill is only about the changes I have described so far. Some of our wider programmes are devolved and some are reserved, and we are absolutely committed to engaging closely with the devolved Governments to make sure we join those up, so that the benefits will spread across Wales as well as other parts of the United Kingdom.

I hope I have addressed as far as I can the points made about the impacts. On process, I know noble Lords do not like it being money Bill. I am sure noble Lords know that this was not the Government’s decision. It was a decision made by the Speaker of the House of Commons, on the advice of the authorities. I can only say to noble Lords that if Governments chose to make Bills money Bills, I suspect in all cases we would see an awful lot more of them. But this was not the decision of this Government at all.

I cannot pick up all the points that were raised. Let me say that we have published impact assessments; we are confident that the Bill complies with the Equality Act 2010; and we have engaged, and will continue to engage, with disabled people and their organisations. To be clear about the process on the Timms review, we expect it to conclude by autumn of next year and we are absolutely committed that it will be co-produced with disabled people and others to ensure that a wide range of views and voices are heard. We have already started, and will engage widely over the summer, on the details of the process and co-production. The review is reporting to the Secretary of State, but she has committed to reporting its findings to Parliament, so they will be coming here.

I hope I have addressed as many of the points as I can in the limited amount of time. I want to say a couple of things. One is that I am not ashamed to be part of a Government who listen, even if people have to shout quite loudly. Sometimes, we have to find ways of listening as carefully as we can. One of my noble friends suggested that you legislate at haste and repent a leisure. Well, we have had plenty of time to reflect on how we shape this Bill in the first place and I am really happy with it.

However, I want to stress the Bill has two parts. The PIP discussions will carry on, in the context of the Timms review, but this half of the Bill is about reforming universal credit, and that is absolutely worth doing. It is a prize worth having and we have to carry on with it. I am really proud that we have been able to push ahead and look at these details. The real difference is going to be made in the lives of people on the ground, in their engagement with our work coaches, the various services we can provide and the programmes we refer them to. We are trying to invest in getting people’s lives to be better.

In the end, we have to hope. We acknowledge that there will be some people who will never be able to work, and they should be supported. But there are plenty of other people who could have the opportunity to work if we could give them the right support and make sure they had the confidence to try a job; if we can get employers to listen and to take them seriously, and to want to bring on people with a history; if we can provide them with the skills or health support they need. We are setting out to join up all those things. For far too long, they have been separate. We have to join up health with skills, education and social security. If we can do that, the prize is enormous.

I do not want to write off people at 18. I do not want to write off people who have been given benefits for 20 years but nobody comes near them to offer help—that is not how I want it to be. I have heard the concerns around the House from different quarters and from all directions, and I understand that people worry about this. I very much hope that when not only this Bill but the Government’s programme of reforms get under way, people will begin to see that we really can make a difference—and that is a prize worth having.

--- Later in debate ---

Bill read a second time. Committee negatived.

[Baroness Sherlock (Lab)]

My Lords, social security is transferred in Northern Ireland, but there is a long-standing principle of parity between the social security systems of the Northern Ireland Executive and the UK Government. We want to ensure that Northern Ireland will also benefit from these important changes, and have included provision for Northern Ireland, engaging with the Department for Communities in the usual way regarding legislative consent.

The Northern Ireland Minister for Communities has been clear that, although the Northern Ireland Executive disagree with these reforms and therefore did not put forward a Legislative Consent Motion, it is not feasible or affordable for the NIE to diverge from the UK Government. Reluctantly, the UK Government have therefore decided that there was little choice but to proceed without consent from the Northern Ireland Assembly. This is not a decision that the UK Government have taken lightly, nor does it indicate a general change in our commitment to the Sewel convention. We will continue to engage closely with the devolved Governments as we move forward, including on the Timms review.

Standing Order 44 having been dispensed with, the Bill was read a third time and passed.

National Accident Prevention Strategy

Baroness Sherlock Excerpts

Thursday 17th July 2025 Grand Committee

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I am very grateful to my noble friend Lady Crawley for her powerful introduction to this short decade and to all noble Lords for their contributions. What a lot of expertise there is in the room for a short debate. I have to say that RoSPA has made a very wise choice in bringing my noble friend Lady Crawley on board. It could not have a better advocate, with the possible exception of my other noble friend Lord Jordan, its life president. I do not want to set a competition up here, but really it could not have done better in choosing advocates from this side. I pay tribute to my noble friend Lord Jordan—what an astonishing career he has had in standing up for workers and for safety in the workplace and safety more generally. I really commend him for that.

I also thank the noble Viscount, Lord Younger, for noting the importance of what can be done within the workplace, within HR and from a professional standpoint, and also the noble Baroness, Lady Jones, for her work on road death prevention. Again, we have all learned a lot from that, and we are very glad that she emerged relatively unscathed from her encounters with other traffic. I take the point made by the noble Baroness, Lady Jones, about when an accident is not an accident. It is interesting, and I do not know whether it is down to her, but I gather that the Department for Transport also now talks about road traffic “collisions”, not road traffic “accidents”. I think that there probably are some accidents—noble Lords may have seen me shortly after Christmas, returning from the Recess and hobbling around in a moon boot. I think that that was an accident; I like to try to imply that it might have been a snowboarding accident, rather than me slipping on the wet floor of a cottage somewhere in Northumberland while cooking—I think that even things with the best design in the world could not stop someone like me falling over. That has been the case ever since I was a child and probably will not stop now.

The noble Baroness’s bigger point is really important: we should not assume that these things are not preventable. In a sense, that is the whole point of the RoSPA report. It is about trying to prevent what is preventable, which is what we are all here to discuss. The report presents a striking analysis of the scale and impact of accidental injuries and deaths across the UK. My noble friend Lady Crawley talked about accidental deaths rising by 42% over the past decade—21,000 lives were lost in 2022 alone. Her vision of the O2 stadium is really powerful.

Of course, these are not just statistics: every one represents a family member or friend and a future that has been lost. The report highlights the cost of £12 billion a year, as well as the disproportionality—as mentioned by the noble Viscount, Lord Younger and others—among different vulnerable groups, including older people, children or those in areas of deprivation. I assure the Committee that the Government have noted the report’s recommendations. I commend RoSPA for the report; it is an important piece of work and we are looking at it.

We also absolutely recognise the value that strategic leadership can provide in tackling complex cross-cutting issues. We are committed to working across government to ensure that our approach to accident prevention or incident prevention is coherent, proportionate and responsive to the needs of people across the country. That is reflected in one example in the report. It mentions climate change as an emerging risk that will make accident rates worse in the future. The Government are focused on taking a coherent, mission-led approach to address that risk. We are working across regulators and across departments to take co-ordinated action to deliver the legislated 2050 net-zero target.

My noble friend Lady Crawley mentioned the key ask: that there should be a Minister. I am very grateful to the noble Baroness, Lady Jones, for volunteering—I shall be sure to pass that along to the Chief Whip. My noble friend will not be surprised to find that I am not in a position today to agree to that proposal, but the Government will continue to reflect on that proposal and on the report as we consider how best to continually improve effective co-ordination across government.

My friends Lady Crawley and Lord Jordan and, I think, the noble Viscount, Lord Younger, asked about the NHS 10-year plan. The Government’s 10-year health plan for England, published earlier this month, is backed by £29 billion of investment and deliberately sets out a strong preventive approach for improving the nation’s health, rooted in social justice and focusing on reducing health inequalities. It outlines a cross-societal approach to prevention, including action on, for example, tobacco, alcohol and air pollution, alongside strengthened screening and vaccination programmes. I acknowledge that it does not focus specifically on accident prevention, which was a point made by my noble friend Lord Jordan, but it does have a core commitment to shift from sickness to prevention. Through the plan, we will see, for example, primary care, pharmacies and community healthcare working together to help people. If they are managing their conditions at home and living independently, the support should be there to help minimise the risk of accidents and other incidents that require hospitalisation.

My noble friend Lady Crawley also mentioned something dear to my heart in the DWP: the Get Britain Working reforms—as she says, I am very familiar with them. I will keep my remarks short on those, otherwise we may be here some time. They are a real move to try to address the various things that get in the way of people working, either on grounds of sickness or disability. There is a series of partnerships with the health service, the Government and local councils, looking at the interface and looking at supporting people back into work or stopping them falling out of work. We have also, for example, asked Sir Charlie Mayfield, the former John Lewis boss, to do a report on employers and what they can do in this space. I will have a look when that comes out to see whether there are things that we could think about and what are the causes that are driving this in the first place. It is a really well-made point and I thank her for it.

However, if we are getting people into workplaces, we want them to be safe workplaces. My noble friend Lord Jordan mentioned the breakthrough of the Health and Safety at Work etc Act 1974. I was very pleased to see RoSPA highlighting the work of the Health and Safety Executive as an example of where accident prevention is working. There is a robust regulatory environment for workplace safety, owned and enforced by HSE, with the Secretary of State for Work and Pensions ultimately accountable to Parliament and for ensuring the HSE performs its duties in accordance with the law. Since the Health and Safety at Work etc Act 1974 was established, annual workplace fatalities have fallen from 651 down to 124 in 2024-25, a reduction of 81%.

My noble friend Lady Crawley and the noble Viscount, Lord Younger, asked about the role of the Government in co-ordinating data use, funding and accountability across sectors. There are some encouraging examples of cross-sector collaboration on accident prevention. The HSE’s 10-year strategy—Protecting People and Places—is a good example. The strategy spans a wide range of areas, including workplace safety, chemical regulation, environmental protection, and the adoption of emerging technologies. All those areas require co-ordinated action across government departments and industry, and the efforts there reflect a broader recognition that many of the risks people face in daily life do not fall neatly within the remit of a single agency or sector.

Similarly, the recent independent review of patient safety across the health and care landscape, which came out earlier this month, highlighted the importance of aligning roles and responsibilities to improve outcomes. It brought together multiple organisations to examine how oversight and accountability can be better co-ordinated to protect patients and the public. Collaboration, data sharing and efficient use of resources are crucial for co-ordination and accountability in accident prevention. We remain committed to working with partners to explore how best to support joined-up action. I take the point my noble friend made about the interoperability of systems between England and devolved regions, and I am happy to take another look at that.

Noble Lords will know that one of the Government’s main means of preventing accidents occurring is through regulation, which protects individuals and the environment from harm and reduces public health risks, as well as safeguarding employees from harm at work and enabling a healthy and productive workforce. It can also uphold standards in building safety—a point alluded to by the noble Baroness, Lady Jones. It is vital, though, that regulation and the actions of regulators are proportionate.

We should regulate, where necessary, allowing space for discretion and responsible behaviour, but the RoSPA report addresses the whole of society and touches on the legislation and regulatory duties of multiple government departments and their regulators. Although it is complex, our current regulatory approach does provide a focus on accident prevention that responds to those multifaceted needs. On the protections provided by that sort of regulatory and policy framework, there might be a complicated diagram, but it does mean that the best-placed organisation takes the lead on specific issues, and that is crucial to our response.

The need for data to inform accident prevention is crucial, and departments are working to improve the collection and use of accident-related data. So, for example, DBT’s Office for Product Safety & Standards works with a range of stakeholders to gather information around incidents that might be linked to product safety issues. That includes fire and rescue services, other regulators, consumer bodies and safety charities, which allows emerging issues and serious incidents to be responded to.

My noble friend Lady Crawley raised the importance of public education in preventing accidents, and I am grateful for and absolutely agree with her highlighting things such as the Green Cross Code—things I think those of us of a certain age will never quite forget, which just shows that campaigns well done stick in the mind. I can still see Tufty, I can still do “Clunk Click”. It is all in there somewhere, even though sometimes I cannot remember where I am meant to be. Those things get in very early on, and we agree that education has a vital role to play in shaping safer behaviours today. The Department for Transport’s THINK! campaign continues to raise awareness of road safety with targeted initiatives such as the Safe Adventures campaign, which helps parents prepare children for independent travel. I commend that to her, and indeed to the Committee.

I turn to the issue of road safety, raised by the noble Baroness, Lady Jones. She made some very important points, and I commend the work of the London Assembly and the work that she did, along with Ken Livingstone, in collaboration or in whatever way—it is extremely important. I reassure her that the Government remain absolutely committed to improving road safety and reducing the number of people killed or seriously injured on our roads. We recognise the importance of continued education but also of enforcement and infrastructure improvements to protect all road users. It is good to see that, between 2000 and 2024, the number of reported road fatalities fell from 3,409 to 1,633, coming down by over half, but we need to keep driving that down. The noble Baroness may be aware that the Department for Transport is currently developing a new road safety strategy that will set out our future direction in this area, and that will be published in due course.

The noble Viscount, Lord Younger, raised the question of monitoring products from abroad. The Office for Product Safety & Standards has established a co-ordinated system of product safety checks at the border, which involves proactive checks on high-risk products as well as working with businesses and supply chains to create sustainable behaviour change. In 2022-23, activity funded by that programme stopped 10 million non-compliant or unsafe products from entering the UK market.

The noble Viscount also asked about the number of poisonings. This is rather less Agatha Christie and slightly more something else. In fact, the RoSPA report attributes the high number of accidental poisonings primarily to drug and alcohol-related incidents, often exacerbated by deprivation. The Government are committed to reducing drug and alcohol-related deaths, and DHSC is currently reviewing its action plan to achieve this.

The noble Viscount mentioned the difference in different parts of the country, which is interesting. Again, the report attributes the higher level of accidental deaths in Scotland and Northern Ireland to a combination of a higher number of transport-related fatalities and socioeconomic deprivation. I do not have much more background to that, but it is an area that it would be interesting to dig into.

The noble Baroness, Lady Jones, touched on building standards and the need to tackle vested interests. Just to reassure her, because she mentioned Grenfell, the Government have accepted all 58 recommendations of the Grenfell Tower Inquiry and are implementing them all. Just to add, the Building Safety Regulator, established under the Building Safety Act 2022, is now operational, and more will be done in that area.

Finally, as I have run out of time and the machine is flashing at me, the Government are not complacent. We recognise the importance of prevention in reducing harm, protecting lives and easing pressure on public services. We also appreciate that the landscape of accident prevention is evolving, as the noble Viscount, Lord Younger, said, with emerging risks coming in—not just climate change but artificial intelligence and autonomous technologies. We may think, as he says, that we get safer and look after ourselves, but maybe we just find new ways in which to damage ourselves and other people. One day, when my promised jetpack finally arrives, I want there to be some system for making sure that I do not hurt myself and other people in the process.

No matter what the challenges are, it is the job of government to make sure that we are ready for them. The RoSPA report is a valuable contribution to the national conversation on safety, and we welcome its insights and ambition. We will continue to work across departments, with local authorities, industry and the voluntary sector, to ensure that our approach to accident prevention is evidence-led, proportionate and responsive to the needs of the country. We are committed to building a safer, healthier and more resilient society.

I thank all noble Lords and RoSPA, as well as all others involved in this work, for the continued contribution that they make.

Universal Credit: Two-child Limit

Baroness Sherlock Excerpts

Wednesday 9th July 2025 Lords Chamber

[Baroness Lister of Burtersett]

To ask His Majesty’s Government what assessment they have made of the cost of abolishing the two-child limit for Universal Credit.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the Government do not routinely publish costings of policy alternatives. However, estimates have been produced by independent think tanks, including the IFS, the Resolution Foundation and IPPR. Their costings range from £2.5 billion to £3.5 billion a year in steady state. This Government are committed to tackling child poverty and will publish an ambitious child poverty strategy in the autumn.

[Baroness Lister of Burtersett (Lab)]

My Lords, it is generally accepted that the abolition of the two-child limit and, many would argue, the benefit cap must be, in the words of the Children’s Commissioner, “the foundation” of the much-anticipated child poverty strategy. Does my noble friend therefore agree with charities in the field and former Prime Minister and Chancellor Gordon Brown that the immediate cost to the Exchequer must be weighed against the economic, financial and social costs of this key driver of child poverty, including the cost to the NHS, education, children’s care services, homelessness provisions, local economies and, indeed, to the Government’s own missions?

[Baroness Sherlock (Lab)]

My Lords, my noble friend mentioned the Children’s Commissioner. She will be aware that the Government commissioned the Children’s Commissioner to look at the experience of children in poverty. I am sure that, like me, she has read their comments, and they make for uncomfortable reading. But we cannot tackle child poverty in this country if we are not willing to look in the face the reality of the lives of our children. Importantly, having set up a Child Poverty Taskforce, the Government have pledged to look at the full range of the underlying causes of poverty and will continue to do that work.

I reassure my noble friend that the Child Poverty Taskforce is continuing to look at all available levers to lift our children out of poverty. We are looking at everything, including social security measures, housing, education and health, and the Government will bring forward an ambitious child poverty strategy in the autumn. But I want to reassure her that the last Labour Government lifted the best part of 1 million kids out of poverty, and we have a manifesto commitment to tackle child poverty. The Prime Minister set up this task force very early in his time in office. We are determined to tackle this scourge in our country.

[Lord Brownlow of Shurlock Row (Con)]

I apologise to your Lordships for not being in as often as I would like; I have had some health issues, but I have been watching the proceedings of your Lordships’ House and the other place on television. Given everything that the Minister has just said could be brought forward, does she think she will have the backing of the Back Benches on the other side of the House?

[Baroness Sherlock (Lab)]

I am sorry to hear about the noble Lord’s health; we are very pleased to see him here today, and as often as he is able to make it. I wish I could be in two places at once, because then I would watch what is happening down the other end of the Corridor, as well as at the better end, but so be it.

Noble Lords will be aware that the Government set out a Bill looking at reforming support for sick and disabled people. It came in two parts, addressing PIP and the extra cost benefit, and universal credit. As the result of the proceedings in the Commons last week, the Government, having listened to comments from around and beyond the House, will now look again at the PIP part after the review being led by my right honourable friend Sir Stephen Timms, co-produced with disability charities and disabled people.

However, down the other end they are discussing a Bill, which will soon arrive in this House, dealing with important issues such as rebalancing universal credit. We will be looking at producing the biggest sustained increase in the basic standard allowance of universal credit since it was set up, but also at how to balance that by making sure the gap between that and the amount people get as a health top-up is less. It will introduce lots of other things, including a right to try, bringing forward regulations so that trying a job will never mean in and of itself that you get reassessed. There is a lot of welfare reform to be done yet. It is tough going but we are determined to keep doing it, and I hope to see the noble Lord at the debate, if he is well enough, in the next few weeks.

[Lord Palmer of Childs Hill (LD)]

I thank the Minister for explaining the Government’s position, but it always seems to be that the real position is how much money we can save and how we can make the system financially viable. What analysis has the department conducted of the effects of the policy on children’s life chances, educational achievements and mental health? You cannot measure it all in how much money is saved.

[Baroness Sherlock (Lab)]

If the noble Lord is referring to the two-child limit, he will be aware that the policy was introduced not by a Labour Government but by a Conservative Government, and it is not a policy we would have introduced. We are working our way through the entire landscape we inherited. In tackling child poverty, we are setting out not to save money but to make children’s lives better. We understand that poverty is not just about one thing. Look at the things we have already done. We have announced a fair repayment rate to try to make sure that being in debt to the Government does not drive you further into poverty. Some 100,000 children will be lifted out of poverty by extending free school meals to all those on universal credit. We have raised the minimum wage by so much that an average full-time worker on the national living wage will get a pay rise of £1,400 a year on average. We are looking at the full range, and we have already taken steps to try to make the lives of our citizens better, particularly of our children. The child poverty strategy is not about money; it is designed to make children’s lives better, and I commend it to him.

[Lord Londesborough (CB)]

My Lords, is there any evidence that the two-child benefit cap has contributed to the rapid decline in our total fertility rates? In its latest Fiscal Risk and Sustainability report, the OBR highlights this as one of the UK’s daunting challenges—and, notably, the shrinking of our future workforce in an ageing society. What policies, if any, are the Government considering to address this disturbing decline in birth rates?

[Baroness Sherlock (Lab)]

The noble Lord raises a really important point. I am not aware of any evidence connecting those but, if he is, I would be interested in it. I periodically survey the global evidence. If the noble Lord has looked into this, he may know that a declining birth rate is a common problem in many developed economies. A number of different countries have tried different strategies to tackle it, but they have been remarkably unsuccessful. So I am not aware of evidence of clear policies that Governments can use to tackle this.

It is my personal view that women have children for all kinds of reasons. While it is possible to remove barriers, it is never about just a single thing. It will be about things like childcare, so the Government are investing heavily in providing childcare for working families to make it possible for families to do that. It is about making sure that work pays enough to support a family, so we are investing in the minimum wage. We are doing a number of different things, but this is a House full of expertise and if any noble Lord has good ideas or evidence on this, I am open to it.

[Viscount Younger of Leckie (Con)]

Following on from the question from my noble friend Lord Brownlow, what decisions are being made and what coherent plan will there be to tackle the welfare Bill? It is extraordinary that the Timms review will report—before any legislation —two years and three months after the last general election, with no meaningful progress having been made at all.

My question is on the two-child cap. Can the Minister remind the House what the exceptions are to that policy, meaning that difficulties or hardship arising for those who have chosen to have more than two children can be mitigated substantially with extra funding from the taxpayer?

[Baroness Sherlock (Lab)]

My Lords, since the noble Viscount’s Government brought in the policy, he probably does not need me to remind him there are exceptions—for example, those involved in kinship care and those who have produced a child as a result of non-consensual conception, who can be exempted if they can produce evidence of having been raped and the conception being the result of that, or if they can find another way to account for that. However, this is not the driver behind the Government’s action. This Government want to make the lives of children and families better. I make no apologies for starting off by looking at the terrible rise in child poverty over the last 14 years, and I cheered the Prime Minister when one of his early actions was to set up a cross-government child poverty task force and a unit to look at the full range of drivers of that. If our children grow up in poverty, it has a scarring effect that they do not recover from. If we do nothing else in our time in government, we need to find a way to address this, and I hope this could eventually be the cross-party view.

During the last Labour Government, I worked in the Treasury advising Gordon Brown and had to tackle child poverty. We set up Sure Start and invested in all kinds of programmes, and I sat in this House and watched many of them being dismantled when I went into opposition. If we are going to find a way to make the country better for all our children, we surely need to agree on how we tackle child poverty and stop it recurring generation after generation.

[The Lord Bishop of Leicester]

My Lords, reference has already been made to the Children’s Commissioner’s report published yesterday, which gives voice to the experiences of children and young people in poverty. It makes for harrowing reading, including one boy who was faced with the choice of going hungry or eating mouldy food, and many other such difficult stories. Will the Minister commit to ensuring that all the Government’s work on welfare will be based on the human dignity and equal value of every person in this country?

[Baroness Sherlock (Lab)]

I thank the right reverend Prelate for that, and, indeed, for the work that he and his colleagues do in this area. Like him, one of the reasons I was so glad to see the report, even though it is hard reading for the Government and for everyone, is that it talks about individual stories and the experience of individuals. There is always a risk when we are trying to make decisions at a macro level that we forget how they are experienced at the micro level of the individual. One of the things the task force has done is to have lots of encounters with families and children. It has worked with Save the Children to hear from children, and it has worked with the Children’s Commissioner. I was very grateful that, as part of the process, his colleague the right reverend Prelate the Bishop of Derby welcomed me to Derby to meet a range of faith organisations working on many different aspects and trying to join up the support given to families with children. His point about, in essence, the inalienable worth of every individual is one I am very happy to approve.

Welfare Reform

Baroness Sherlock Excerpts

Wednesday 2nd July 2025 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the noble Baroness, Lady Stedman-Scott, for introducing questions on the Statement. She quite rightly talks about missed opportunities of not only the current Government but the previous Government.

Welfare provision is a broken system. We should not proceed until we hear from the Timms review. I hope the Minister will comment on that. There is no doubt that we are abandoning valuable members of our society. People within the leadership of the Labour Party who described PIP as “pocket money” should know better. We are enshrining in law that we have a system that all disabled people are equal, but some are more equal than others—this is an early proclamation by the pigs who control government in Animal Farm; the phrase is a comment on the hypocrisy of Governments.

Let us be clear: the proposals are a leap in the dark and not even the Ministers know where they are going to land. The proposals are ill thought-out, rushed and continually amended. As days, weeks and months pass, we will see the unedifying and unintended consequences.

The access to work scheme for those with a disability needs to be urgently fixed. Could the Minister tell the House what consultations have been made with carers about this legislation?

The Universal Credit and Personal Independence Payment Bill sends a message to disabled children that those who have gone down the path of their disability degenerating to the extent that they can claim PIP will be over the line, but those youngsters who know they have a degenerative condition can look forward to no PIP under the Bill.

PIP is a passport to other levels of support, such as blue badges or railcards, which give people the opportunity of getting out and living their best lives. Perhaps the most passported benefit from PIP is the carer’s allowance. On these Benches, we have grave concerns about the Bill’s impact on those families who will no longer benefit from carer’s allowances. They will be robbed of up to £12,000 a year.

We recognise the benefit system is broken and needs resolving, but it needs to be co-designed with disabled groups and carers groups to make sure that we get it right for our people.

The root of the problem, sadly, is the NHS, which is where a lot of these problems start. We really need to sort out the National Health Service and social care. They are part of the problem and the solution. This so-called reform sticks a piece of sticking plaster over it, pats it on the head and says, “Now leave it to Auntie”. Sadly, Auntie has not a clue.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I thank both noble Lords for their contributions. I thank the noble Baroness, Lady Stedman-Scott, for the tone of her contribution. She and I may sometimes disagree on analysis and solutions, but we both recognise the system is flawed and want to find ways of making it better, and I am grateful to her for that.

Before I turn to the specifics that were raised, it is worth reiterating the principles behind our reform, because that is what the noble Baroness challenged me to do—to have a principles or evidence-based approach to reform. Our principles are quite simple: those who can work should work; if you need help into work, the Government should support you; if you cannot work, you should be supported to live with dignity.

The Universal Credit and Personal Independence Payment Bill sets out to do two things: to reform PIP and to reform universal credit. As was announced yesterday, and I suspect most noble Lords will know by now, we will now be looking at PIP in the round, in the context of the review being led by my right honourable friend Stephen Timms. I will return to that and the question from the noble Lord in a moment.

The rest of the Bill makes crucial changes to universal credit, so our social security system can offer the right incentives and support to sick and disabled people. It introduces the first-ever sustained, above-inflation rise to the universal credit standard allowance. According to the IFS, that is the largest permanent, real-terms increase in the headline rate of out-of-work benefit in decades. It ensures that those with severe, life-long health conditions, who we do not ever expect to work, will never be reassessed.

The changes in the Bill are part of a wider package of reforms, including our right to try guarantee, scrapping the work capability assessment and our massive investment in employment support for sick and disabled people.

I absolutely agree with the noble Baroness, Lady Stedman-Scott, that this cannot be done top-down. We are working with councils, regional authorities and mayors to try and build these from the bottom up by getting local “Get Britain working” plans and devolving support working in partnership. What helps you to get to work in Liverpool is not the same as in Lincoln or in parts of Cornwall. We are doing that and making sure that it works.

However, this is going to be a record amount of money: across this Parliament, a total of £3.8 billion of health and disability support. This remains an important piece of legislation, and we all seem to agree that the current system is clearly in need of reform. But the truth is that welfare reform is never easy. If I ever thought it was, I now know that it definitely never is. It is perhaps particularly hard for Labour, because a lot of my colleagues care passionately about this and it really matters. I know other colleagues do as well.

We always said that we would listen: to disabled people and their organisations, and to MPs, and no one can say we have not been listening. We have definitely listened. Having listened carefully, we have tabled amendments in the other place to remove Clause 5 from the Bill, and the corresponding provisions for Northern Ireland. That means that we will move straight to the wider PIP review, mentioned by the noble Lord, Lord Palmer, and will let that conclude before we make changes to PIP.

The noble Baroness, Lady Stedman-Scott, mentioned how we got here. The reality is that we are doing the difficult work required to fix a fundamentally broken system. I know she knows how hard this is. She is right—we do not want to throw bottles at each other—but her Government invented PIP to try to solve the problems with DLA, and now PIP has the problems that we see here. Having inherited a system that is not working, we have to try to find a way to make it work properly.

We also have to do something about proper employment support. One of the many things the last Labour Government did, through measures such as the New Deal for Disabled People, was narrow the disability gap. I am sorry to say that when the coalition came in and scrapped it, the gap began to widen and has never really shifted since. We have to give good, proper investment in employment support of the kind that I know the noble Baroness has experience of.

I think one speaker asked about the fiscal consequences. Obviously, we are well aware that these changes will have a cost, but the cost will be certified by the OBR in the usual way. However, the real prize here is long-term reform. It is long-term reform that will start to shift the dial on the way we approach social security.

To answer the questions about the Timms review, it will be led by my right honourable friend the Minister for Social Security and Disability, and it will be co-produced with disabled people, disability charities, other experts and parliamentarians. We have already published the terms of reference. The work begins now and I hope that reassures the noble Lord about the work that it will be doing. Our aim is to get a new assessment that commands the widest support possible so that we can ensure that PIP is fit for the future in a changing world.

While the work begins on the Timms review, the Bill presses ahead with important reforms to universal credit. Crucially, it addresses the disincentives to work that have been allowed to build up. Because the previous Government froze the standard allowance repeatedly, we ended up in a situation where someone who gets the health top-up in universal credit gets more than double what a single person just getting the standard allowance gets. That traps some people in the system entirely unnecessarily by incentivising people to define themselves as incapable of work. Our permanent real-terms increase to the standard allowance will mean nearly 4 million households getting an income boost worth around £725 a year by 2029-30 for someone aged 25 or over. That is balanced by a reduction in the health top-up for new health claims from next April.

I also listen because some people expressed concerns about our original proposal of a freeze to the health top-up for existing claimants. We are committed now, in another change, to ensure that the combined value of the standard allowance and the health top-up rises at least in line with inflation for existing claimants. That will protect their income and these benefits in real terms every year for the rest of this Parliament—that is, for existing claimants. That will also apply to those who have severe lifelong conditions who we do not expect ever to be able to work, and those near the end of life. We think that strikes the right and fair balance.

I have probably answered most of the questions. To make a general point, however, we have just closed a consultation on a Green Paper. There is a lot of reform going on. We have this Bill, with all the universal credit measures still here, but with the Timms review looking at PIP, which will be engaging and co-producing it with disability organisations and other experts. There is also a big consultation out on major changes in this space. But for all of us, the country needs us to get this right. We know we need to get it right. I am one of those people in politics who thinks listening is a good thing. If you listen and you want to change your mind, you change what you are going to do. That is what we have done. I think we are doing a better job and I commend this Statement to the House.

[Baroness Browning (Con)]

My Lords, I have power of attorney for two adults, close relatives, who are in receipt of PIP. As a carer and a mother, I have had to deal with the DWP for most of my life and most of theirs.

I just say to the noble Baroness that I was as critical of the Conservative Government’s methodology in reforming disability benefits as I am of this Government’s. If I ask her just one thing in this short period, it is this. When my noble friend opened on behalf of the Conservatives on this Statement, her experience shone through. There are ways of helping people who have lifelong disabilities to get into work, even people who have been out of work or never been in work. I have raised many of these issues with the noble Baroness; she knows my criticisms. Please, train the people in Jobcentre Plus. Use the examples that charities use—for example, to get autistic people into work—because they know how to do it. Please do it. The money will seem far less over time once those methodologies have been changed.

As a carer, I am exhausted. I am exhausted by having to try to explain to people who are really anxious about their financial futures, “Don’t worry about it, it’s all going to be sorted out—it’ll be all right”. In fact, I am genuinely worried. I am 80 next year and, like many elderly carers, I do not want to leave my relatives for whom I have responsibility with this sort of mess.

[Baroness Sherlock (Lab)]

I am very grateful to the noble Baroness, Lady Browning. The House has benefited, as have I personally, many times, from her expertise and the care with which she expresses what she does. I commend her on what she has done personally and express my regret that the pressure on her and so many other carers is as great as it is. She stands as a shining example. The points she makes are really important; I will pick up a couple of them.

First, I should have said in response to the noble Lord, Lord Palmer, and to reassure anyone listening, that we are not making any changes to PIP until we have had the results of the Timms review. Nothing in the Bill when it comes to this House will affect people’s entitlement to PIP. I think we made that very clear yesterday. To be clear, we have tabled amendments in the Commons to remove Clause 5, which said you needed a minimum of four points. That will not happen, so I hope that will give some assurance to people.

I hope that the noble Baroness will see, as we begin to unfold our reforms to jobcentres, that we are going with the grain of exactly what she says. One of our concerns is that the system in jobcentres has become too box-ticking. We really need to release our work coaches to spend less time checking everybody in and more time focusing on the person in front of them and figuring out what they can get. What do they need? What help can they get? How do we support them? For some people, that is getting into a job, for others, it is moving closer to the labour market, and for some it is leaving the house. Our job is to support our work coaches. We are doing some incredibly interesting work with piloting and evaluation, trying different ways of supporting people and trying to go with what works— I am sorry: I am taking too long. I am grateful to the noble Baroness and we will absolutely take on her points.

[Baroness Thornton (Lab)]

I would like my noble friend to expand on why it is so important that we tackle the issue of ill and disabled people being disproportionately out of work, looking not only at universal credit and the broken system of access to work but at ingrained prejudice and broken mental health services, particularly for young people. I welcome the Statement from my noble friend.

I just want to make a comment about PIP. I have a very close relative who has been working with one of our disability charities for the whole of her working life. She says that she is very irritated—this is not about the Government—by the misunderstanding that PIP is something that prevents people returning to work. It is clear that it is a non-means-tested benefit. Disabled or ill people who work do not lose their PIP, and people who work can claim it to help them with additional costs. The narrative that PIP is keeping people out of work is one that she and her organisation profoundly disagree with.

[Baroness Sherlock (Lab)]

I thank my noble friend, and I am really grateful to her for clarifying that. Those of us who spend a lot of time in the weeds of social security policy have to remember to be clear what we are talking about at different times. To be absolutely clear—I know that Members of this House will know—PIP is a non-means-tested, non-taxable benefit and will stay so, and it is claimable in and out of work. Roughly 17% of people who get it are in work, and we hope that more will do so in future.

My noble friend’s broader point is extremely important. To tackle the disability employment gap, we need to do a number of different things. One is to tackle the underlying conditions. For example, she mentioned mental health. We have seen growing challenges in mental health in this country, but the Government have invested very heavily—for example, with young people, in specialist mental health professionals in every school. Our youth guarantee for young people will improve access to mental health services. We are also investing heavily in the NHS to try to get waiting lists down and to support people into mental health services.

We also have to make sure that employers are able to do their bit. I am really excited and looking forward to the report that we will get soon from the former chair of John Lewis, which will look at how we can support employers, what more employers can do and what barriers there are to employers taking on sick and disabled people. We are going to tackle it on all fronts, but I am grateful to her for raising that.

[Baroness Watkins of Tavistock (CB)]

My Lords, I declare my interest as a current non-executive director of NHS England. Will the Minister explain whether it the Government intend to return to face-to-face PIP claims, including a biannual review for the majority of claimants? If not, what are the reasons behind that? The Timms review continues, and none of us wants people who are genuinely disabled to lose out, but we also know that the online system has resulted in a lot of inappropriate claimants who have been successful. We need to deal with that, rather than wait for the outcome of the Timms review. In addition, will the Government review the Motability scheme, which the majority of taxpayers, particularly the lower paid, consider unnecessarily expensive, as new vehicles are normally provided every three years?

[Baroness Sherlock (Lab)]

My Lords, the noble Baroness raises a very important point about face-to-face assessments. There used to be face-to-face assessments; they were stopped during Covid and restarted only slowly and at quite a low level. We have said publicly that we want to ramp those back up again, so she raises an important point. On the Motability scheme, just for clarity, nothing in the proposals in the Bill now or in earlier incarnations affects the mobility element of PIP, only the daily living allowance, but I take her broader point and I will be happy to have a look at that.

[Lord Shipley (LD)]

My Lords, I will ask the Minister a very specific question about young people. The Statement says that almost 1 million young people are not in education, employment or training—they are NEETs. It then says that that is one in eight of all young people. That figure is true if you count 16 to 24 year-olds, but if you take 18 to 24 year-olds, it is 14.8%, which amounts to one in seven of our young people. Indeed, over the past five years, as the Minister probably knows, the number has been rising. One of the big problems is that 29% of 16 to 24 year-olds with a disability are NEET, but only 9% of that age range without a disability are NEET. What are the Government planning to do to help young people, far too many of whom are not in education, employment or training?

[Baroness Sherlock (Lab)]

I am grateful to the noble Lord, because that is a really important point. We should all be worried about the number of young people who are not in education, employment or training. What chance do you have in your adult life if you do not get anything at the start? He also raised an important point about why. The truth is that the evidence takes you so far.

We are bringing in a youth guarantee for all 18 to 21 year-olds to ensure that they can easily access quality training, an apprenticeship or help to find work. We will also shortly be running trailblazers around the country for 12 months and we will use them to inform the design. They will try different things, because we want to try to find out what works for different kinds of young people. We talk about young people as though they are all the same, and of course they clearly are not. Some young people who are severely disabled will never work and we will need to give them appropriate support. There may be others who are having, for example, mental or some physical health challenges and, with the appropriate support, health support, encouragement and other forms of local support, they could begin to move back towards the workplace. I am really looking forward, as the pilots start to be evaluated, to finding evidence about what works, taking that out and changing things.

[Baroness Fraser of Craigmaddie (Con)]

My Lords—

--- Later in debate ---

[Baroness Fraser of Craigmaddie (Con)]

Thank you very much. I declare my interest as chief executive of Cerebral Palsy Scotland. I want to continue in the tone of my noble friend Lady Stedman-Scott and support the Minister on the importance of supporting people to work. She will know, because she confirmed in a Written Question to me in April, that the average waiting time for applicants on Access to Work to receive a decision is 84.6 days, and 62,000 people are waiting for their applications to be processed. I will read the Minister an email I got from an adult with cerebral palsy this week, who said:

“The government has … cut Access to Work support … without any warning. All of a sudden they don’t fund things that they did until recently. So people are losing their jobs, purpose and ultimately their sanity. They will end up back on the benefits that are being cut”.


What is the Minister doing about Access to Work now, rather than waiting for all the various reviews?

[Baroness Sherlock (Lab)]

I am sure that the noble Baroness knows, given her connection to the sector, that we specifically consulted on the future of Access to Work in the Green Paper. We are now working our way through the responses, and will make decisions on that basis. The demand for Access to Work has been growing at a very high rate—the previous Government will have been aware of this. It is very challenging. We want to consult on it and then look at how we can reform the system to make sure it helps as many people as possible.

[Baroness Lister of Burtersett (Lab)]

My Lords, I welcome the fact that common sense finally prevailed, so that the review of PIP will be undertaken before any decisions about eligibility. I hope that that will help to allay the anxieties expressed so powerfully by the noble Baroness, Lady Browning, and that we have all received in our inboxes. It is also welcome that the review will be co-produced with disabled people and organisations that represent them—something that was not done under Conservative Governments. Although, as the Secretary of State said, the precise methods of co-production will need to be worked out with disabled people and other stakeholders, can my noble friend assure us that co-production will mean that they have a full and genuine say throughout the policy process? Will the DWP consider extending the same approach to its ongoing review of universal credit?

[Baroness Sherlock (Lab)]

I thank my noble friend for appreciating the decisions that we have taken. In terms of co-production, the Secretary of State and my colleague, the Minister for Social Security and Disability, have been very clear that this review will be led by Minister Timms and co-produced with disabled people, their representative organisations and other experts. Work has already begun on scoping. We have published the terms of reference. We are already beginning to engage and we will make sure that that is a genuine process.

We understand, if we are to have this level of reform, that we need to try to build a consensus around what a good PIP assessment process will look like. We also need to try to have popular public confidence in the system. If we are to sustain the level of investment that we have in our social security system, we need to make sure that people feel that it is being done well, appropriately and given to the right people.

On the universal credit review, which is looking at the way that universal credit operates, I can reassure my noble friend that we are doing focus groups with Changing Realities to look at specific aspects of the way the system works at the moment. I hope that that will reassure her.

[Baroness Coffey (Con)]

My Lords, I am very conscious, having run the DWP for three weeks—three years, rather; in some ways, it did go by in a flash—during Covid, of how challenging this was for the Government. The principles that the Minister set out are exactly the same ones that were there when the Conservative Government were in office.

I am trying to find one of the things that came through in the press release and the Written Statement; I cannot find the regulations for the right to work, because that is building on reforms that we introduced, or were starting to introduce, and some other matters. The key issue is about the increase in mental anxiety, depression and similar. I know that the IPS has been expanded, but I would be very grateful to know what the Minister is doing with Ministers in the Health Department to focus on mental health treatment in order to help people who really would be better off in work but need that extra support to get them there.

[Baroness Sherlock (Lab)]

I am grateful to the noble Baroness and obviously respect her experience. I can assure her that the last week has felt like a year, so I can understand her confusion. She raises two very important points. First, the regulations will be published. We are absolutely committed to regulations guaranteeing that trying a job will never in and of itself be a reason for being reassessed for a benefit. That feels important, because we must do everything possible to help people. People must not be in a position where they get twice as much money for not being able to work and then are afraid of trying out a job because of what would happen if does not work out. She has hit on an important thing. I hope that she will be assured when she sees the regulations that they are doing what she wants.

On the question of mental health support, we are working very closely with Health Ministers. This week, we are launching our 10-year health plan, which sets out very ambitious plans. Patients will get better access to support, including, for example, self-referral for talking therapies without needing a GP appointment. There will be 85 new dedicated mental health emergency departments and, as I mentioned earlier, significant extra support in schools—our youth guarantee of helping young people to get access to mental health support. We must find ways of supporting people. The noble Lord, Lord Shipley, made the point that, whatever their barrier is, we must help them overcome it. We cannot just tell them to go and work. That simply will not work. So I am grateful to the noble Baroness for raising two important points.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I welcome the concessions from the Government on welfare reform. Having been a Minister in the Northern Ireland Executive with responsibility for welfare reform and disability benefits, I know that this is a difficult issue.

These concessions will cause a funding gap for the Treasury. Can the Minister say that these concessions regarding welfare reform will not be filled by below-inflation increases to social security benefits, in particular universal credit?

[Baroness Sherlock (Lab)]

I am grateful to my noble friend. Any official decisions will be made in the Budget in the usual way. They are matters for the Treasury. To reassure her on the specific point, the Bill says that we are guaranteeing an above-inflation increase to the UC standard allowance in each of the next four years. That means that, if you are a single person aged 25 or over, the allowance will increase to £106 a week by 2029-30. That is unheard of. As the IFS has said, it is the first time in decades that we have increased beyond inflation the rate of universal credit. So I hope she is not only reassured but delighted.

[Lord Grayling (Con)]

My Lords, the work capability assessment was introduced by the last Labour Government. Back in 2010, when I was Employment Minister, I and my noble friend Lady Stedman-Scott worked hard to improve it. I believe very strongly, having sat through many assessments, that some kind of challenge is needed in the system to make sure that those who have the potential to work are given the right incentives and push to do so. The abandonment of the work capability assessment leaves a vacuum in the system. How will the Government fill it?

[Baroness Sherlock (Lab)]

I probably have not explained this as well as I could have—I apologise to the noble Lord. We absolutely regard as the single biggest challenge the fact that the incentives are in the wrong place when it comes to universal credit. So we are doing two different things. First, we are separating support from your capability to work, abolishing the work capability assessment and looking at how a single assessment can be used to make the appropriate judgments, giving support on the basis of need.

Secondly, we are making absolutely sure that we do not put you in the position of there being perverse incentives, so you end up making decisions that would not be good for you in the long run. There are 200,000 disabled people who reckon that they could work now with the right support and would like to. We should start by giving the right support to those who want to work but simply are not able to. The noble Lord is right that we should be challenging everybody, making sure that they are making the right choices and supporting them, but the first thing to do is to get the incentives in the right place, or it will never work.

[Baroness Bennett of Manor Castle (GP)]

My Lords, in continuing the cuts to the health element of universal credit and denying it entirely to people under the age of 22, the Government are offering in recompense the fast-track £1 billion support plan to get people back into work. Yet in a BBC report on 27 June, a senior DWP official was quoted as saying that the Government did not have

“a properly considered or deliverable programme”.

Another DWP official was quoted as saying that not much has been done since this plan was announced in March. How many officials are working on that plan and how far has it progressed?

[Baroness Sherlock (Lab)]

I assure the noble Baroness that the department is absolutely focused on this. There is not one single aspect of these changes. We are trying to turn around the entire department, from one that had a very heavy focus, understandably, on processing benefits, to one that is focusing on supporting people into work. The crucial bit, as I mentioned earlier, is helping every individual work coach to focus on how we get somebody into work and support them appropriately. To correct one thing that the noble Baroness said, she mentioned access to PIP for young people. We consulted on that—

[Baroness Bennett of Manor Castle (GP)]

It was universal credit.

[Baroness Sherlock (Lab)]

I apologise. We consulted on support for young people in the Green Paper and will look carefully at the results.

This Government are committed to making the lives of sick and disabled people better. If people have severe conditions and are never going to be able to work, they deserve to live in dignity and we will support them. However, if they could get a job and improve their own lives and those of their families, we will support them in that too. I hope that the whole House will want to support me in doing that.