Employment, Education and Training: Young People

Baroness Sherlock Excerpts

Tuesday 29th October 2024 Lords Chamber

[The Lord Bishop of Newcastle]

To ask His Majesty’s Government what steps they are taking to reduce the number of young people not in employment, education, or training.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, this Government are fully committed to supporting our young people through the universal credit youth offer, and have invested £7 billion to ensure places in educational training for every 16 to 18 year-old. We plan to improve opportunities for 18 to 21 year-olds through a new youth guarantee, offering training, apprenticeships and support into employment, alongside launching Skills England and a new national jobs and careers service.

[The Lord Bishop of Newcastle]

My Lords, I thank the noble Baroness for her Answer. The north-east has the highest proportion of young people not in education, employment or training at 15%. What steps are His Majesty’s Government taking to offer targeted support to young people in regions of greater disadvantage?

[Baroness Sherlock (Lab)]

My Lords, the right reverend Prelate is right to highlight both the regional differences and the correlation with disadvantage in identifying levels of young people not in education, employment or training—or NEETs, as they are rather horribly known. The problem needs early intervention and targeting. The Department for Education is supporting local authorities to identify young people who are at risk of becoming NEET, so that they can be supported to stay in education and training in the first place. My own department, DWP, is reforming careers support and introducing a youth guarantee so that, right across England, every young person, from 18 to 21, has the option of apprenticeships, employment or quality training. We have also convened a small advisory group, including the mayoral combined authorities, local councils and others to make sure that we pursue a mission to reduce the number of young people who are NEET in a targeted way.

[Baroness Benjamin (LD)]

My Lords, the charity First Star Scholars—I declare an interest as patron—works with children in care and has a success rate of over 72% of them obtaining GCSEs and 50% attending university. Care-experienced children usually under- perform, with less than 20% achieving GCSEs and just 6% progressing to university. Will the Government agree to meet with me and First Star Scholars to address this so-called care cliff to help reduce the number of care leavers not in education, employment or training and enhance educational outcomes for these vulnerable young people?

[Baroness Sherlock (Lab)]

I am grateful to the noble Baroness for raising such an incredibly important point. I have the pleasure of having responsibility in my department for disadvantaged groups including care leavers, and I would be delighted to meet her and talk about this further. For a brief outline, here are some of the things the DWP does to support care leavers in different ways: they get priority access to universal credit and budgeting support and help; care leavers in staying-put arrangements can claim benefits under their own steam until 21 in many cases; and, crucially, we have a second-chance learning scheme, which means that if you are 18 to 21 and a care leaver, you can claim benefits and still study full-time to catch up on education you may have missed earlier. There is a lot more, which I cannot wait to tell her about. I look forward to meeting her.

[The Earl of Clancarty (CB)]

My Lords, we are aware of the numbers, and the Minister is suggesting some action, but can she say how much research is being carried out to find out why NEETs are NEETs? What encouragement are the Government giving to such research?

[Baroness Sherlock (Lab)]

What a great question. It is really interesting. Some people are NEET for short periods, but we know that vulnerable and disadvantaged young people can be NEET for much longer periods and may have complex needs. Some young people are overrepresented in the long-term NEET group, including people with low educational attainment; children who are looked after, as I was discussing just now; children who are permanently excluded, or in PRUs or alternative provision; those with health conditions; and those with special educational needs and/or disabilities. We are trying to attach each of these things separately, as well as looking at this as a category.

[Lord Clark of Windermere (Lab)]

My Lords, has my noble friend the Minister looked at other exciting things going on to try to get hold of these young people and make sure they get some training? Has she seen the examples of the professional league football teams that provide just this? They provide schooling and proper education and, alongside that, allow the young people—mainly young men, but also women—to come along and do some training with professional footballers. This has been very successful in places in the north, such as at Carlisle United, where we have a very successful scheme.

[Baroness Sherlock (Lab)]

My Lords, I have not thought about it from that angle, but it is really interesting. I wonder whether it may be necessary for me to go and look more closely at what is happening. Do they do it for cricket as well? If so, I am definitely interested.

[Baroness Redfern (Con)]

My Lords, the first secure school opened in May this year, with a new holistic offer for youth justice. It is designed to shift settings away from punishment and towards rehabilitation. What allocated support will be given to pupils and their families in the next stage of their lives after leaving?

[Baroness Sherlock (Lab)]

From my department’s point of view, we work quite closely with those who have been through the criminal justice system. For example, we have prison work coaches who can work inside not just prisons but young offender institutions, and we are working quite closely with colleagues in the Ministry of Justice to try to make sure we can address the reasons young people end up going through the criminal justice system and then come out the other side and find it difficult to get into education, employment or training. If there is anything specific that she thinks we can learn from that, I would be grateful to hear more.

[Baroness Bull (CB)]

My Lords, young people experiencing homelessness experience unique barriers to entering the workforce. Apparently, 43% of young people who are homeless have had to turn down work because of the impact it would have on their benefits. Does the Minister recognise the challenges for this part of the community, and what are the Government doing to ensure that people who are experiencing homelessness can enter the workforce?

[Baroness Sherlock (Lab)]

We are looking very closely at these issues—I also have responsibility in my department for people who are experiencing homelessness. We are doing a number of things in this space, and I recognise the problem the noble Baroness describes. I have recently met some of the charities working on this, looking at some of the interesting solutions that they have been offering in supported housing. From the other side, we were one of the departments that helped launch a new homelessness covenant for employers. I recently went to an event to celebrate its first year of operation, and it was brilliant to hear employers talking about what they got out of it, not just recruiting young people who are themselves homeless but understanding that, in many cases in their own workforce, people were at risk of homelessness, had experience of homelessness or were in very precarious situations. We all have a lot to learn about the range of experience that young people have in that space and what more we can do about it. I thank the noble Baroness for raising the question.

[Viscount Younger of Leckie (Con)]

My Lords, the Youth Futures Foundation—an independent not-for-profit organisation—calls the number of NEETs a “crisis”. As we know, 66% fall into the economically inactive category. I acknowledge the need for better mental health support, but the head of the Government’s new Labour Market Advisory Board, who advocated for

“quicker, clearer and more effective”

sanctions in his advisory role prior to 2010, now suggests a universal income for those out of work and states that sanctions are not a priority. Can the Minister explain what is going on? Is this official Labour policy?

[Baroness Sherlock (Lab)]

I am not sure who the noble Viscount is talking about but, if he would like to speak to me afterwards, I am very happy to look into it. We want to try to reform support to make sure that every young person has the opportunity of either quality training, quality education or a job. That is our priority and that is what people need. Young people want to have a future and to get on in life, but they have to be given all the support they need to get to that point. We have a crisis among the young. We should not have as many young people between 18 and 24 not in employment, education or training as we have. This Government are determined to reduce that number.

[Lord Allen of Kensington (Lab)]

My Lords, I welcome the action the Government are taking. Does the Minister agree with me that employers can take a more active role in recruiting young people who are in danger of being not in education, employment or training for life —like her, I hate the phrase NEETs—into earn and learn opportunities such as apprenticeships and graduate training programmes? Will she join with me in encouraging more employers to sign up to schemes such as the incredible 5% Club, which now has 1,100 members and is employing 100,000 employees in earn and learn roles, harnessing their incredible talent to increase productivity and growth?

[Baroness Sherlock (Lab)]

The noble Lord makes an excellent point and I thank him for flagging up the 5% Club to me. I am happy to commend the work that it does, and I will make sure I share information about the club with my DfE colleagues.

On the broader point, the Government are encouraging employers to hire apprentices and host T-level placements, but also to develop closer ties with colleges and universities and to strengthen their links with, and have input into, local skills improvement plans. The noble Lord might be interested to know that we have begun work on a new foundation apprenticeship. The idea is to give more young people a foot in the door—it is a pre-apprenticeship apprenticeship, if you like—and to create clear pathways into work-based training and employment. Again, that is the first step on the way to a youth guarantee of a promise of educational training or a job for young people across the country.

Women’s State Pension Age: PHSO Report

Baroness Sherlock Excerpts

Monday 28th October 2024 Lords Chamber

[Lord Sikka]

To ask His Majesty’s Government, further to the report Women’s State Pension age: our findings on injustice and associated issues, published by the Parliamentary and Health Service Ombudsman on 21 March, how much compensation they plan to pay to affected women, or to the families of affected women who have died; and on what timescale.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the issues outlined in the ombudsman’s report are significant and complex. As such, they require serious deliberation, and we need time to review and consider the report alongside the evidence and the views expressed. As part of that work, the Government recently met WASPI representatives to hear their experiences directly. Once we have undertaken that work, the Government will be able to outline their approach.

[Lord Sikka (Lab)]

My Lords, paragraph 19 of the parliamentary ombudsman’s report clearly states that

“complainants have suffered injustice as a result of maladministration”,

and the report recommends compensation. Thousands of women have died while awaiting compensation, but all that successive Ministers have done is kick the can down the road, saying, “We are still consulting”. There has already been an inquiry. Can the Minister specify the date by which this injustice will actually be addressed and compensation paid? In addition, will she agree to meet another delegation of the affected women?

[Baroness Sherlock (Lab)]

My Lords, we understand the human impact felt behind the issues raised in this report. Retirement is a significant milestone that should, one hopes, be greeted with excitement rather than surprise. But I say to my noble friend that I do not think this Government could be accused of kicking the can down the road; the ombudsman published its report in March, we became the Government only in July and it is now October. Although I fully understand that he would like me to articulate a response here, I am sorry that I am not able to do so. However, I assure him that the Minister for Pensions met WASPI representatives recently—the first Minister to do that since 2016.

[Baroness Janke (LD)]

My Lords, by the time they reach 65, women will typically have £69,000 in their pension pots compared with the £205,000 the average man will have by the same age. What practical measures will the Government take to address the injustice of the pensions gender gap and enable proper security for women in retirement and old age?

[Baroness Sherlock (Lab)]

I am grateful to the noble Baroness for raising a really important point. The gender pensions gap starts with the gender pay gap. Therefore, the first thing the Government need to do is address the gender pay gap and we are committed to doing that. The national pay gap still stands at over 14%, which is really shocking. We know that most employers understand that, when women succeed, so does their business. We are committed to making sure reports are given. For example, gender pay gap action plans will be mandatory and will reflect the hard work of outsourced workers as well as employees.

The kinds of reforms that have taken place under successive Governments are beginning to change at least the way the state pension addresses the gap between men and women. In the new state pension, there is less of a difference because the old state pension was much more dependent on national insurance contributions and pay-related additional pensions, whereas the new one does not have that. The gap is closing, but in private pensions it is still significant, and we need to do more about that.

[Viscount Younger of Leckie (Con)]

My Lords, the final PHSO report in March cited maladministration, as the noble Lord, Lord Sikka, said. This is regarding communications by the DWP for 28 months from August 2005. But a ministerial submission in 2009 admitted that, despite steps taken to disseminate leaflets with pension forecasts and the rest, all this had failed to raise awareness among those directly impacted. What assurances can the noble Baroness give that the department has learned its lessons on how best to target its audience and to do it rapidly and in large volume?

[Baroness Sherlock (Lab)]

My Lords, the department is carefully considering the findings of the report. Since 1995, successive Governments have used a range of methods to communicate changes to the state pension age, from leaflets to advertising campaigns and direct mailings. We are making sure that the department is looking more closely at this. For example, we have written letters to people at different stages. Women who were affected by the Pensions Act 1995 were written to between April 2009 and March 2011. People impacted by the 1995 and 2011 Acts were written to between 2012 and 2013, and so on. People in the transitional group—those whose pension age is rising from 66 to 67, in which I count myself—got letters from the department between 2016 and 2018.

I think we are getting better. In the 2021 Planning and Preparing for Later Life survey, people whose state pension age falls between 66 and 67 were surveyed and 94% of respondents either got their state pension age right or underestimated it. Hopefully, this work is paying off.

[Baroness Butler-Sloss (CB)]

My Lords, I do not take a state pension, but about seven or eight years ago I got an email telling me that I was entitled to a pension for being over 80. I replied and filled out everything. So far, I have not heard a word. I wonder whether, in fact, the DWP is doing better.

[Baroness Sherlock (Lab)]

My Lords, if I could persuade—with some trepidation—the noble and learned Baroness to share the details with me, I would be very happy to look into that.

[Lord Davies of Brixton (Lab)]

My Lords, the ombudsman made it clear that these women suffered from maladministration and that they are entitled to redress. I ask my noble friend to recognise the case for urgency, particularly because the delay is leaving the people affected prey to scammers, who are offering to assist them in making claims. This issue needs to be resolved as quickly as practical.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to my noble friend for raising that last point. To be absolutely clear, because there has been no response to the report, there is no compensation scheme. Anyone claiming to offer it is scamming and nobody should touch it—please can that message go out loud and clear. I understand my noble friend’s general point, and I know he will understand the position that this Government are in. At the risk of boring myself, never mind the House, all I can do is repeat that the Government are looking very closely at the findings of the ombudsman and will respond as soon as is practicable.

[Baroness Berridge (Con)]

My Lords, the Minister has outlined that she cannot currently give a date, but is she certain that this group of women is clearly defined in the department? There are representative groups, but when a decision is made, does the DWP know exactly whom they need to communicate with?

[Baroness Sherlock (Lab)]

My Lords, just to be clear, I am not making any assumptions about anything. In a sense, this is about when people were born. For example, we know that around 3.5 million 1950s-born women were impacted by state pension changes, as were a group of men. Most of those people have now reached state pension age, but I think there are 790,000 people born in the 1950s who have not yet reached that age. I am not saying that anything in this area is straightforward—it is not—but I understand the noble Baroness’s warning that any attempt to communicate with groups of people will need to be done carefully and with precision.

[Lord Wallace of Saltaire (LD)]

My Lords, when I reached my 80th birthday, I received a letter from the DWP telling me that in view of my advanced age my pension would be increased by 25p a week—I was overwhelmed by the generosity. That measure is no doubt 40 or 50 years old, and it would probably save the DWP considerable money if that aspect of the old age pension were discontinued.

[Baroness Sherlock (Lab)]

My Lords, I am shocked to find that the noble Lord is 80, but I commend him on his recent milestone. It is rarity that anyone in the House offers a way to save money, so I will take his point back.

Child Poverty: Benefit Cap

Baroness Sherlock Excerpts

Tuesday 22nd October 2024 Lords Chamber

[Baroness Lister of Burtersett]

To ask His Majesty’s Government what assessment they have made of the impact of the benefit cap on child poverty.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

Child poverty is a multifaceted issue and the benefit cap is just one factor that can influence the level of financial support available to children and families. Comprehensive action is essential to address the root causes of child poverty. This Government are committed to examining all the ways to dismantle barriers to opportunity, alleviate poverty and help families move towards sustainable employment. The child poverty task force is driving forward this work and will publish its strategy in the spring.

[Baroness Lister of Burtersett (Lab)]

My Lords, as my noble friend knows well, not only is the cap a driver of child poverty, especially deep poverty, but it undermines government goals with regard to homelessness and domestic abuse. Will she therefore impress on the child poverty task force the case for its abolition alongside the two-child limit and, in the meantime, do what she can to ensure that at least the cap is uprated in line with inflation as a matter of course so that some of the poorest families are not denied the protection of the annual uprating?

[Baroness Sherlock (Lab)]

My Lords, the Secretary of State is currently in the process of reviewing the levels of social security benefits that are uprated annually, and a statement will be made in due course. When the benefit cap was introduced by the coalition Government in 2013, the legislation required that it be reviewed every five years. The next review is due by November 2027. However, I hear my noble friend’s comments about the challenges facing many families in poverty. The child poverty task force, which is getting to work already, is determined to use all available levers to drive forward short-term and long-term actions across government to reduce child poverty. It is taking evidence from families, activists, local government and people across the country, and I will make sure that her comments are conveyed to it.

[Lord Palmer of Childs Hill (LD)]

My Lords, I welcome the Minister’s comments about the child poverty task force, but it is an urgent question and this idea is putting things into the long grass. We want to hear from the Minister how quickly this group will report and produce some action to stop children living in poverty in this country.

[Baroness Sherlock (Lab)]

My Lords, as I said, the child poverty task force has already started urgent work to address this, and it will publish a child poverty strategy in the spring. Given that the Government have not been in place for very long, looking across the whole of government to produce a strategy by spring reflects a real sense of urgency.

[Baroness Smith of Llanfaes (PC)]

My Lords, in Wales children are more likely to be living in poverty than those in other age groups. Will the Minister tell us what tangible steps the two Labour Governments will take to eradicate child poverty in Wales?

[Baroness Sherlock (Lab)]

I thank the noble Baroness for that question. I know that the Welsh Government take these matters very seriously. To make it clear, from the UK position the task force will work closely with the devolved Administrations. In fact, I can reassure her that the co-chairs of the task force have already written to the First Ministers to ensure that the strategy represents the interests of communities across the UK.

[Baroness Blower (Lab)]

My Lords, I hope that the child poverty strategy group will urgently take advice in particular from teachers, who often find themselves at the forefront of attempting to alleviate the grinding poverty in which some of our children arrive in school, particularly because of the two-child cap.

[Baroness Sherlock (Lab)]

My noble friend makes a very important point. I am very conscious that teachers are on the front line of this and that they see the day-to-day effects of the significant rise in child poverty we have seen in recent years. They are very much people who have things to say to us. That is why the strategy is being co-chaired by my boss, the Secretary of State for Work and Pensions, and my noble friend’s boss, the Secretary of State for Education. Child poverty is not restricted to a single aspect of anyone’s life. It has many different causes and many different solutions. We will work across government, as a joined-up Government, to tackle this properly.

[Lord Sikka (Lab)]

My Lords, the Government have indicated the financial cost of abolishing the two-child benefit cap. Can the Minister indicate the social cost of keeping 4.3 million children in poverty?

[Baroness Sherlock (Lab)]

My Lords, I will be nerdy for a moment. We inherited two different policies. One is the two-child limit, which limits the benefits paid to any family to the first two children, except in certain circumstances; the second is the benefit cap we are talking about here, which limits the total amount that can be given to any family. I apologise—nerdiness over. One of the reasons this matters is that those problems have different solutions. One of the reasons we are having a child poverty strategy is that the different policies we inherited, the state of the social security system and the series of piecemeal changes all combine with rises in the cost of living, problems in social housing, problems with energy and problems across our society to produce the effects my noble friend is describing. That is why they have to be tackled together.

[Lord Roberts of Llandudno (LD)]

Last week the blast furnaces at Port Talbot closed and 2,700 people lost their jobs. That surely has a massive influence on the number of children in poverty in Wales. In consultation with the Welsh Senedd, what proposals do the Government have to make sure that those workers are re-employed?

[Baroness Sherlock (Lab)]

I am so grateful to the noble Lord for raising that. One of the things we are determined to do is to revisit the way in which my department supports people into work. We need our jobcentres across the country to work closely with local, regional and devolved administrations to make sure we are addressing the problems in local labour markets and in local areas. In the near future we will publish a White Paper that sets out the new approach. But the noble Lord put his finger on it: we have to tackle the problems in communities to give people a chance of getting back to work. We need the country to be working—we want an 80% employment rate across our country. That is not just good for the economy or for the individuals; it is good for their children as well.

[Lord Evans of Rainow (Con)]

My Lords, we always welcome new initiatives to help unemployed people get back to work. With that in mind, will the Minister update the House on the current number of job vacancies?

[Baroness Sherlock (Lab)]

There is always something that you wish you had put in your pack when you stand up. Today it is that. I will write to the noble Lord.

[Baroness Morgan of Drefelin (Lab)]

My Lords, I do not think the Minister should apologise to the House for being “nerdy”. This is definitely an area where nerdiness is welcomed across the House. Can she reassure us that the work of the task force will be comprehensively supported by evidence looking across all aspects of the issue, with granularity around issues such as support for carers and people with disabilities? What has the experience of any exemptions been? How helpful has that been? We need to be sure that the work is not only comprehensive but evidence based and transparent.

[Baroness Sherlock (Lab)]

I am very grateful to my noble friend for the absolution and for the thought that I am among friends. Nerds are my people.

She makes an important point. We have a lot of evidence, but there are real gaps in it. The commission will gather the evidence that is there, listen to how people are experiencing these things on the ground and look at the impact of policies across government. To give one small example, she mentions disability. In the benefit cap, households are exempted if they get a whole series of benefits. If they are getting universal credit because of a disability—if they are getting the UC care element, carer’s allowance, PIP or ESA—they are exempt from the benefit cap, but that does not take away the problem that there is still a massive disability employment gap. We want people to get into work. If we are to hit that 80% employment target, a challenge is to look not just at the kind of jobs that are out there but at how we close the gap between people who want to work and employers who want employees. That is part of what we will do in the evidence process.

[Lord Laming (CB)]

My Lords, in respect of child poverty, will the Minister do all that she can to ensure that estranged parents, especially fathers, pay their proper maintenance agreements?

[Baroness Sherlock (Lab)]

Absolutely, my Lords. It is not only an area of my responsibility in the department but one of long-standing concern. A significant amount of money changes hands already but we are looking at each stage—how do we make the Child Maintenance Service operate ever better than it does at the moment? An awful lot of money changes hands, mostly relatively smoothly. There are challenges with some non-resident parents and some who simply do not wish to pay, so the Child Maintenance Service is constantly updating the range of powers it has to go after them.

We all take the same view: you may separate from your partner, but you do not separate from your children. We need to find ways to make sure that both parents contribute. We have a consultation out, which we are looking at. We are also reviewing the child maintenance calculation. We are committed to making sure that the service works well and that the principles are up to date, but no one gets away from the fact that you may leave your partner, but you do not leave your kids.

[Lord Davies of Gower (Con)]

My Lords, to continue the Welsh theme, 30% of children in Wales are living in poverty, according to the Children’s Commissioner for Wales, so I stress to the Minister the urgency of reducing child poverty across the UK.

[Baroness Sherlock (Lab)]

The noble Lord and I are as one mind on this. Child poverty is too high across the UK. It went up significantly under the last Administration. We are determined to bring it down, and we will do so.

Pensions Regulator Defined Benefit Funding Code of Practice 2024

Baroness Sherlock Excerpts

Monday 21st October 2024 Grand Committee

To conclude, I am aware that a code of practice is not a legal document but is designed to give clear guidance to those who have significant responsibility for managing our defined benefit schemes. To this extent it seems to have achieved its aims.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I thank my noble friend Lord Davies for securing and opening this debate and all noble Lords for their thoughtful and constructive contributions. I say to my opposite number, the noble Viscount, that it is easier asking questions than answering them in this space, so I hope that noble Lords will bear with me. More questions were asked today than I can conceivably answer in the time I have, but I will do my best to get through them. I assure noble Lords that we will carefully scrutinise Hansard and write to them with the answers to any questions that I cannot pick up.

First, by way of background, as my noble friend noted, earlier this year the House approved the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024. It is worth remembering that, alongside those regulations, the code of practice we are discussing is a key component of the new arrangements for the funding of DB occupational pension schemes. I am grateful to the noble Lord, Lord Palmer, for explaining what a DB scheme is to those watching at home. I hope that those watching at home who have never heard of a DB pension scheme are enjoying themselves, and I encourage them to read Hansard afterwards.

The code is designed to provide practical guidance for trustees and employers to meet their legal obligations, and it includes key metrics needed to implement the requirements. We moved very quickly to lay the code in the new Parliament to give schemes and industry the certainty they have been calling for. It may not be noticed from reading the debate that in fact the code has been well received. A lot of consultation has gone on.

The new scheme is designed to ensure the security and sustainability of DB pensions. Let us not forget the reason we needed to act at all: the damage done by schemes that were not appropriately run and the ensuing loss of benefits to members. Not taking action was not an option. These reforms strengthen the funding regime by providing clearer, more enforceable funding standards with a greater focus on long-term planning.

My noble friend Lord Davies noted that we have published two consultations on the code. The first, in 2020, considered the key principles to underpin the new regime and the proposed regulatory approach. The second was a consultation on the first draft of the code that we are debating today. DWP and the regulator worked collaboratively with and listened to a wide range of stakeholders. As a result, changes have been made to the code to provide more flexibility. For example, the regulator developed a chapter specifically for open schemes. When the code was published in July, it was welcomed for providing clarity and achieving a flexible approach. There is broad consensus that the code strikes the right balance between member security and employer affordability. Crucially, it provides sufficient scheme-specific flexibility to take account of the very wide range of scheme circumstances. I thank the noble Lord, Lord Palmer, for his support and the noble Viscount, Lord Younger, for the acknowledgment. Broadly speaking, we are looking at detail, but we think we are doing the right thing in the right way.

The new framework, including the code, has been revised following extensive engagement with industry to ensure that it provides flexibility for schemes to invest in a wide range of asset classes, including growth assets, both before and after significant maturity. Open schemes, like others, will have significant flexibility to invest in riskier investments with potentially higher returns, if the risk can be supported, so member benefits are protected. It also makes clear that the open schemes will not be made to derisk as long as they remain open to new members, are not maturing and the risk they are taking is supported by the employer covenant.

I will try to go through as many of noble Lords’ questions as I can. First, the phrase box-ticking has been used once or twice. I reassure noble Lords that this regime is absolutely not a box-ticking exercise. The regulator is taking the opportunity provided by the introduction of the new regime to evolve the way it regulates DB funding. This includes proportionate measures with flexibility for different schemes. The regime will be based on clear metrics designed to protect members’ benefits as well as to take account of employer affordability.

The Pensions Regulator operates on a risk-based and outcome-focused approach. We think that that proportionality is in the right space. The regulator is introducing a twin-track approach: fast-track and bespoke. This aims to help target its engagements with the sector effectively. Where a scheme meets a series of fast-track parameters, the regulator will ask for less information and is less likely to engage with trustees. On the other hand, the bespoke route allows schemes to take a different approach and to provide evidence of why this is appropriate. Many of them are unlikely to require further engagement between the regulator and trustees.

My noble friend Lord Davies asked about the use of scheme surplus. I remind the Committee that, in February, the options for defined benefit schemes consultation sought views on the potential benefits of introducing additional flexibilities for the use of surplus funding on DB pensions schemes. The Government will continue to consider the potential of such flexibilities to benefit scheme members and sponsoring employers while supporting economic growth.

The noble Viscount, Lord Younger, asked about low dependency investment allocation. The flexibility of the UK’s funding regime is one of its greatest assets and one that we have been careful not to undermine in the new arrangements. Pension schemes are many and varied and each has its own circumstances, so they are best managed through scheme-specific arrangements. That is why we try to balance clear metrics on how liabilities have to be calculated with scheme-specific flexibilities that allow trustees the discretion to react to changing circumstances and act in the best interests of their members while strengthening the ability of the regulator to intervene and act if things go wrong. Noble Lords may have other views. We believe that this balance is right and in the interests of members of schemes.

There was a question about whether trustees have the flexibility to take decisions in the light of the circumstances of their individual schemes. Flexibility is a key strength of the regime, but it is balanced with those funding standards and the key metrics of the new arrangements. The bottom line is that it is fine to take supportable risk. Taking investment risk to benefit from potentially higher returns is fine if there is enough time for asset values to recover or a sponsor with enough resources to pay more in the future. That is why the new regime focuses on the key metrics of maturity and covenant strength.

The noble Baronesses, Lady McIntosh and Lady Altmann, raised costs to scheme members. It is worth putting those absolute costs in the context of the scale of our pensions world. The impact assessment for the code indicates that costs will amount to around £7,000 per scheme on average, with ongoing administrative costs of approximately £1,100 on average per scheme. That excludes costs associated with changes in deficit repair contribution payments, of course. Those are small costs compared to the overall liabilities of a scheme. They are unlikely to have a significant impact, and certainly not on members. Most schemes are closed, and members of those schemes will not be paying contributions. Modestly increased costs are unlikely to have any impact on the probability of members’ benefits being paid in full. There are some members in schemes which share costs and are still open for accrual, but they are the minority. Only 4% of schemes are fully open; 20% are closed to new members. As the costs per scheme are estimated to be low, we do not anticipate any significant material impact on members overall. This must be seen in the context of the impact of clearer funding arrangements with more emphasis on long-term planning, which should make members more confident that their benefits will be paid in full.

We were asked what will be done to monitor the costs. We will continue to monitor the costs. Although there is some uncertainty about trustee behaviour and response, as we cannot know that, the impact assessment used data from March 2022 and modelled, on average, an overall net saving of around £20 million per year. I can write with more detail if Members would like that.

It is worth understanding that the regulations and code are principle-based. The code is practical guidance for implementing the regulations.

The noble Lord, Lord Davies, asked about different valuation methods. I will not get into TAS but will write to him on how TAS interacts. However, I have a word for the broader audience watching from home about the different valuation methods. There are two main ones. The technical provisions are, rightly, used to assess contributions and deficit recovery contributions because they are calibrated to balance member security with employer affordability. On the other hand, the solvency measure is much more generic and less scheme-specific. It is used to assess funding against the cost of insurance buyout. That is a much stronger measure. Schemes are not required to be funded to that level because that would make DB much more expensive, if not unsustainable. The use of these technical measures does not push schemes into inappropriate de-risking or into a risk-adverse approach. Schemes can choose a variety of approaches to setting their liabilities, including by reference to the investments that they intend to hold. They will be affected by a whole range of considerations, not least the route to compliance with TPR that they choose to use.

The new regime is extremely scheme-specific and flexible. Even at significant maturity, schemes can invest in a proportion of return-seeking assets provided that the risk can be supported. Most schemes are currently investing more prudently than the new regime requires. Indeed, the regime suggests that there is headroom for some schemes to take more investment risk than they are taking currently, of which I am sure the noble Baroness, Lady Altmann, will be very conscious. The requirement in this to derisk will, as intended, mostly impact outliers which have been pushing the scheme-specific flexibilities further than they were ever expected to stretch and, in doing so, putting members’ benefits at risk. It is right that those outliers should be required to derisk to protect members’ benefits through the clearer and more enforceable metrics of the revised regime.

Social Fund Winter Fuel Payment Regulations 2024

Baroness Sherlock Excerpts

Wednesday 11th September 2024 Lords Chamber

[Lord Hannan of Kingsclere (Con)]

My Lords, I will not detain the House for long, but I want to just say one thing. I may be the only person who speaks up for the Government Front Bench, for which I do not expect them to thank me.

It is appalling to suggest that Members of this House are somehow personally lacking in social conscience when it is other people’s money, rather than their own, that we are talking about. Again and again, we see this conflation between the public need for economy and people’s personal morality, as though it was their own meanness or generosity. We had the noble Lord, Lord Palmer, talking about them as Scrooge. Scrooge was dealing with his own assets, not somebody else’s. The noble Lord, Lord Morrow, who knows how much I admire him, just said that the Minister has a chance to re-establish her social conscience. It is not her social conscience.

We can disagree with this policy. I would have done many things differently from this Government, as they know. One thing, which will make me even more unpopular, is that I would not be putting up the cost of energy as we do in this self-congratulatory way in vote after vote and then complain about the consequences, as we have been doing today. But can we please conduct our debates on the basis that, if you happen to favour the idea of benefits as a last resort for the needy rather than a universal entitlement, that does not make you a bad person? People on both sides of this issue are motivated by humanity and decency and, ultimately, by a concern for the welfare of the nation as a whole.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, that seems a good place to start. I start by thanking all noble Lords who have contributed to tonight’s debate. We have covered a lot of ground and there have been many thoughtful and constructive contributions. I thank the noble Baroness, Lady Stedman-Scott, for her welcome and I welcome her, in turn, to her place on the Opposition Benches. We have worked well together over the years, although I must admit I prefer it this way round—if not tonight.

Before I turn to the specific issues and questions that have been raised, I want to start by clearly setting out why the Government feel the need to take action and what we are doing. Then I will do my best to answer all the questions that have been asked tonight. I might not manage to attach everybody’s name to them, but I want to try to hit all the questions, so please bear with me if that is what happens.

The reason for the change is simple: there is a huge hole in the public finances. The noble Baroness, Lady Stedman-Scott, started by addressing the projected £22 billion overspend for this year which the Chancellor found when she came into office. The noble Baroness seems to think that the OBR knew all about this. The OBR has clearly specified that it was not told about the overspend. It described it as

“one of the largest year-ahead overspends against … forecasts outside of the pandemic years”.

Beyond this figure that we are bouncing back and forth, what does it mean in practice? It means that the day-to-day departmental spending by the previous Government as set out in the Spring Budget was, frankly, not even close to reality. Some noble Lords might remember that my first appearance at this Dispatch Box was to answer questions from around the House calling to keep the household support fund, which helps local authorities to help people with the cost of living, until the end of the year. The fund was due to run out in September, and I was called upon not to let that happen in the middle of the financial year. I went back to the department, but there was money in the budget to fund it only until September; there was nothing for the second half of the financial year. We found the money to cover that, but doing so, plus the Barnett consequentials, came in at an estimated £500 million—which had to be found from nowhere.

Ask my colleagues on the Front Bench what they found—a £6.4 billion overspend on the asylum system; a £2.9 billion overspend on the transport budget; and new roads, hospitals and train stations promised but not funded. There has not been a spending review since 2021. As a result, the public sector pay rises were not budgeted for and our reserves were spent three times over. This needs to stop. I take very seriously the comments made by the noble Baronesses, Lady Stowell and Lady Fox, about the importance of public trust, but the manifesto on which we were elected began with a promise that we would regain economic stability and by that means deliver growth. To do that means that we have to take difficult financial decisions right now to stabilise our economy before we can start the rebuilding, and then we can start to give the people we are all here to serve the better future they deserve.

No one thinks that things are okay in our country—do they, really? Public services are struggling, the prisons are full to bursting, the courts are overrun, and NHS waiting lists are sky high. We must deliver the change the country needs, but none of that is possible if we simply ignore the overspends right in front of our faces and put economic stability and credibility at risk.

That is why, as well as our plans—the noble Lord, Lord Desai, may be glad to hear this; I cannot remember what economic rationalism is, but it probably does not include this—to scrap non-dom tax status, close the loophole enjoyed by private equity investors and introduce a proper windfall tax on energy company profits, we are having to make some difficult in-year spending decisions. This has included cancelling capital projects, stopping discretionary spend and, yes, means-testing the winter fuel payment so that it will no longer go to all pensioners—many of whom are clear that they do not need it—but to those who need it most.

I say to the noble Baroness, Lady Fox, that I am absolutely with her. I do not want to see this as being about pensioners versus young people or public sector workers versus pensioners. The fact is that pensioners are not a homogenous group—we can tell that by looking around the House. There are rich pensioners and poor pensioners, and our job is to try to have a system that does its best to be fair across the piece.

I think most noble Lords would agree that the winter fuel payment should not be going to the richest, so we are therefore going to target those who need it most. Let me be clear for the record: those on pension credit, and those over state pension age living in a household that gets universal credit, income-based JSA or ESA, income support or tax credits will still receive £200 or £300 a year. That is on top of the significant rises in the state pension, which I will come back to in a moment.

I am not saying that this was an easy decision, and nor were many of the other decisions the Chancellor has had to take; but she believes that it was a necessary decision, and so do we. These are difficult circumstances, and we should be targeting.

I have heard very few noble Lords, if any, call for no reform of the system, with the possible exception of the right reverend Prelate the Bishop of Southwark. I would love to have a conversation with him on another day about how we balance means-testing versus universal benefits, because there is an interesting conversation to be had. But when public money is tight as it is right now, it is completely legitimate to decide to prioritise those who need it most.

I would like to see an end to the stigma around benefits. The benefits system is like social security insurance for all of us—it is there because needing it could happen to any of us. That is why putting money into it should not be stigmatising, and we should all encourage people not to see it that way.

Autism Employment: Buckland Review

Baroness Sherlock Excerpts

Tuesday 10th September 2024 Lords Chamber

[Lord Touhig]

To ask His Majesty’s Government whether they intend to continue the work programme set out in the Buckland Review of Autism Employment.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, we believe everyone should have an equal opportunity to work. In Labour’s Plan to Make Work Pay, we committed to raising awareness of neurodiversity in the workplace. The Buckland review was independently led and explored the specific barriers that people with autism face when seeking employment and remaining in work, and it made some helpful recommendations to remove those barriers. We are exploring how to expand this to meet our commitment to provide the right support for all neurodiverse people to enter, remain in or return to employment.

[Lord Touhig (Lab)]

My Lords, just three in 10 autistic people are in employment. A report for Autistica found that doubling the employment rate of autistic people could boost the economy by £1.5 billion. I am sure that my right honourable friend the Prime Minister, whose key mission is to kick-start economic growth, would welcome that. The Buckland report showed us a way forward, but recruitment of the task force to put forward the recommendations of the report was put on hold when the general election was called. Can the Government confirm that they will now go ahead and commence the recruitment?

[Baroness Sherlock (Lab)]

My Lords, my noble friend is absolutely right about the shockingly low level of employment of autistic people. It is shocking to find that only about 35% of autistic employees feel able to be really open in work about being autistic—how can they develop, and how can the employers learn? We very much welcome the report from Sir Robert Buckland. The process had begun, in the sense that informal expressions of interest had been made about the task force, but the process was stopped by the general election. Ministers are meeting with Sir Robert Buckland next month to discuss the report’s recommendations and to look at expanding the scope to cover neurodiversity in general and not just autism. Recruitment for the task force is paused for the moment, but my department is working with colleagues across government to look at each of the recommendations under the five themes and to find ways in which we can apply that learning to neurodiversity in general.

[Lord Wigley (PC)]

My Lords, I pay tribute to the work that Sir Robert Buckland has undertaken in this sphere over many years. Can the Minister give any indication of how long the Government are likely to take to come to some positive conclusions regarding the report?

[Baroness Sherlock (Lab)]

My Lords, obviously, having only just come into government, we have only just begun to look at this, but there are things in the report that the department was already doing that we can therefore develop. For example, the review pointed to the need to develop a digital service we have that is aimed at employers and supports employee health and disability. We are looking at other ways to make that more visible and easier to reach, because employers often want to engage people but need help in understanding the barriers so they can work out how to get better at this. We can start learning from that already, but we will move on to this as fast as we can.

[Lord Addington (LD)]

My Lords, what are the Government doing about passporting when those identified in the education sector and training go into employment? If you have to reapply for support and help at any point, that puts on a further brake and, as this is not generally handled easily and quickly, it means the employer has extra costs. What are the Government doing in practical terms to address this? I remind the House of my declared interests.

[Baroness Sherlock (Lab)]

My Lords, I confess that I have learned a lot about this in the last week. There is a huge range of schemes and support out there. For example, DWP has specialist coaches—people who can support our work coaches and work with people with autism who want to move into jobs or develop them. We have schemes of all kinds, such as internship schemes for young people with autism and other disabilities. We have ways of working directly with people and supporting them. We have schemes with employers, and there is Access to Work, through which people can apply for support directly. DWP is trying to make all the work we do as tailored as possible to individuals, so that we can give people the support they need to get them into a job, keep it, progress in it and stay there.

[Viscount Younger of Leckie (Con)]

My Lords, the previous Government saw it as a vital priority, on the back of the key recommendation from the Buckland review, to work with employers to encourage more employment of autistic people, which has been mentioned. How will the Government’s recent decision to change the PIP and WCA assessments under the new Health Assessment Advisory Service affect such progress, particularly as the Minister’s letter of 6 September states that there will be “an impact on service levels”?

[Baroness Sherlock (Lab)]

My Lords, as I took over as Minister from the noble Viscount, I am sure that he is quite aware of the contracting issues that led to the decisions that were made in the department.

Probably the single most important thing when dealing with somebody with autism or another disability coming forward is that the person who assesses the health condition is properly trained and has the resources needed to make an appropriate assessment. As of yesterday, we have brought the educational material for all our healthcare assessors in-house, so that we can control the quality, make sure we train people well and support them well, so that when they are making these important decisions about whether someone is entitled to support or not, they are able to understand what they are hearing, and the person can come forward and get the best possible support at the next stage. We are committed to supporting disabled people of all kinds into work, and we will make that a reality.

[Baroness Bull (CB)]

My Lords, I appreciate that I may be expanding the Question into the remit of her noble friend sat alongside her. Work experience is a vital window into the world of work for people with learning disabilities and autism, yet I am not sure we can be convinced that young people with such disabilities have the same experience of work through work experience programmes. What will this Government do to help employers provide work experience placements and to encourage them to offer this opportunity to all children, regardless of neurodiverse conditions?

[Baroness Sherlock (Lab)]

My Lords, I confess that I do not have the details about what is being done about work experience, but we are developing the availability of supported employment, including for autistic people and those with other neurodivergent conditions, and across other disabilities. We are trying to tackle the problem of hidden worklessness. The idea is that we will start progressing towards the goal of a more collaborative, locally led approach to help people into work. Once it is fully rolled out, the aim is to support up to 100,000 disabled people, including people with health conditions and quite complex barriers. Eligible and suitable participants will get one-to-one support for up to 12 months, which will help them identify what they want to do, find a job that might be suitable, and get wraparound support. If we can get this right first time, we can support people to stay in work for a long time. That is a real benefit to the individual, and to the employer. I am hopeful that we can improve in this area over the months ahead.

[Lord Sterling of Plaistow (Con)]

My Lords, over many years I and many others have said that when people are being trained to teach, we also need them to be trained to know what a meltdown is about and how to handle it. There are still not enough people who truly understand SEND and what really happens. I am more than interested in this because I have a grandson who is autistic, and I have followed this through many times. We need at least 2,000 educational psychologists to identify people at an early enough stage that they have an opportunity to put something back into society. The whole thing must be sped up. I know many people who are disabled—through Motability, which I co-founded many years ago—who would be delighted to be able to put something back into society after having been helped for so many years.

[Baroness Sherlock (Lab)]

I thank the noble Lord for that question, and I pay tribute to his many years of work with Motability, a scheme which has helped many people. He makes an important point. I sometimes think that our system has had trouble, in that what looks like bad behaviour is in fact something quite different. One of the challenges for public sector professionals in all areas is to get the kind of training to understand what they see in front of them. If we do not have the experience or understanding, it is not unreasonable to misinterpret a pattern of behaviour we see. That is why DWP has put so much effort into trying to improve and develop the training. In any organisation, if we take the time to ask, we will find that many of our staff have relevant experience to bring and to share with their colleagues. I have no doubt that similar work is being done elsewhere. I know that my colleagues at the Department for Education are looking carefully at how the Government can better support SEND and children who are in that position.

I thank the noble Lord for that question—it is an important opportunity to highlight something about which there is too much misunderstanding. Many of the conditions we have talked about today are highly stigmatised. It is hard enough for people to deal with the consequences of a complex condition, without a total failure of the society around them to understand it.

[Lord Laming (CB)]

My Lords, does the Minister agree that the transition from school to employment is critical in the lives of many of these young people; that there are some outstanding examples of how that transition is being managed, but, unfortunately, they are few in number; and that the real challenge is to make sure that what is exceptional becomes general across the whole country?

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, it is typical of the extent of the noble Lord’s strategic experience that he puts his finger on the question: how do we take best practice and turn it into something the entire system can learn from? We have some really good practice out there. For example, I know that autistic young people on their transition to employment can benefit specifically from supported internships, which are aimed at young people with a learning disability or autism who have an education, health and care plan. One of the things we could do is look at what works from that and how we can learn from it, and transfer it not just to other young people with autism but to a broader category of disabled young people trying to make those transitions. I thank the noble Lord for that very wise suggestion.

Pension Credit

Baroness Sherlock Excerpts

Monday 9th September 2024 Lords Chamber

[Lord Davies of Brixton]

To ask His Majesty’s Government how many people (1) claimed, and (2) were eligible to claim, Pension Credit in each of the past three financial years.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, in answer to the first part of the Question, the numbers of people claiming pension credit were: in 2019-20, 1.49 million, in 2021, 1.41 million, and in 2021-22, 1.35 million. In answer to the second part, we cannot know precisely how many people are eligible to claim pension credit because we do not hold data on their circumstances, but we make estimates based on surveying pensioners and extrapolating from there. On that basis, we estimate that in 2019-20, 2.26 million were eligible. No figures are available for 2020-21 because the pandemic restricted the number of face-to-face interviews that could be done, and that were necessary to collect the data. In 2021-22, there were 2.15 million.

[Lord Davies of Brixton (Lab)]

I thank my noble friend for her Answer and express my great pleasure at seeing her in her place. But, her Answer makes it clear that many of the poorest pensioners—not just those who fail to claim credit, but those with an income slightly higher than that—will suffer from the cut to the winter fuel payment. Does she agree that seeking a replacement for the anomalous tax-free cash payment should only follow a thorough and detailed review, rather than this rushed, information-lite and damaging decision?

[Baroness Sherlock (Lab)]

I thank my noble friend—for everything up to the “But”. The Government are having to take what is a difficult decision at this time for the very simple reason that we inherited a £22 billion pressure on public finances.

[Noble Lords]

Oh!

[Baroness Sherlock (Lab)]

If only the Opposition had been as attentive when they were building up the deficit as they are now it is there. To be really straightforward, the Chancellor came in and looked at the public finances, which were the result of significant pressures having built up in departmental spending. Significant commitments had been made, but no spending review had been done since 2021 to make sure that the money was there to pay for things. As a result, this Government have had to make the hard decisions that were not made previously, and this is one of them. We have taken action to make sure that we are protecting the poorest pensioners. Everybody on pension credit will be entitled to the winter fuel payment. We are targeting it at those who need it most, not at the many pensioners who do not need it as much.

[Lord Sherbourne of Didsbury (Con)]

My Lords, when the Government looked at the various candidates for cutting public expenditure, why did they choose winter fuel payments?

[Baroness Sherlock (Lab)]

My Lords, the pressures were such that some of the money had to be found in this financial year, because a series of expenditure gaps came to light in this financial year. We have already cut other capital programmes, and departments are absorbing pressures. This was a cut that could be made in-year, so it was added to it.

I am sorry to say that this is not the last difficult decision this Government are going to be forced to make, but we will try to target things appropriately. I think most Members of the House would agree that something like a winter fuel payment should not be going to the roughly quarter of pensioners who have a million pounds in assets; it should not be going to those who can manage. What we should be doing is trying to target the money at those who need it most, and that is what we set out to do.

[Lord Palmer of Childs Hill (LD)]

My Lords, the Minister has talked about encouraging people who are entitled to pension credit to claim it. Does she agree that they do not claim it for reasons of pride, or perhaps because they are unable to cope with the system? How are the Government going to encourage this large number of people to claim pension credit, because if they do not, they will not have the winter fuel allowance? I have doubts that people will actually claim it to any great degree.

[Baroness Sherlock (Lab)]

The noble Lord makes an important point and I am grateful to him for doing so. Certainly, a significant number of pensioners do claim pension credit—1.4 million have managed to claim and do get it as a result. So, our job is to get the next surge of people to do that. DWP has a big campaign on: we had a week of action last week, and we work with partners such as charities and local authorities to go out and promote the campaign. From next week, we are running a national marketing campaign on a range of channels, including national print and radio. We will be targeting people of pension age but also friends and family, who can encourage them to apply. It can be tough, but sometimes we need to make people understand that there is lots of help out there. They can call the department free of charge and get charities to help them. If people are really stuck, we have a DWP home visiting team, which will visit the vulnerable and help them make a claim. So I urge all noble Lords: by all means let us have the fight in here, but please put the word out and let us get people to claim what they are entitled to.

[Viscount Younger of Leckie (Con)]

My Lords, allied to pension credit, the Government find themselves firmly between a rock and a hard place on this ill-judged decision to cut the winter fuel payment. On the one hand, if there is a substantial increase in the uptake of pension credit—and of course, we are all for that—the figures show that the increased costs will all but wipe out the net gain of £1.4 billion that the Treasury expects through the cut. On the other hand, with a poor or low uptake, it is apparent that many more of the most vulnerable pensioners will be hit. What mitigating measures are the Government looking at to reduce the impact of this decision, and when will they be announced and introduced? Mitigating measures there will need to be—and even better would be to see a reversal of the whole policy.

[Baroness Sherlock (Lab)]

My Lords, the noble Lord is talking about take-up. As I said, the best estimate of pension credit take-up as a whole is 63%: that is 63% of the number of people who could be claiming pension credit who we think are getting it. The amount of pension credit that is taken up is quite a bit higher than that, nearer to almost three-quarters of the total amount claimed. The challenge for us is to make sure that those who do not claim it do get it. However, the big difference this will make is this: if you are on the basic state pension and not claiming pension credit, you will get not just an extra £200 or £300 in winter fuel payments; you could get thousands of pounds in pension credit itself. Our job is therefore to make it as easy as possible for people not just to get this smaller amount, but to get the bigger amount as well, so let us all try to do that.

[Lord Watts (Lab)]

My Lords, many of us accept that the Government have inherited a black hole in the budget and need to take action on it, and we are also not against the principle of some form of means-testing. However, many of us also think that the threshold is too low. Will the Government look at the threshold again to ensure that poor pensioners are not excluded from the winter fuel allowance in the future?

[Baroness Sherlock (Lab)]

My Lords, I have had lots of very interesting suggestions from, and conversations with, Members from around the House, who have variously suggested trying different thresholds and creating a new, higher threshold. One of the challenges is that this is a single, once-a-year, one-off payment. There is already a means-testing process for pension credit. Creating a brand new means-testing system for a one-off payment would involve simply too much bureaucracy, complication and red tape for what is a once-a-year payment. So, we have ended up going for pension credit, which is already there. The great advantage is that, if somebody is on pension credit, we can pretty much automatically give them the winter fuel payment, so they will not have to apply for it, whereas, if we create a new special scheme, people will have to apply for it. We will continue to look at a range of alternatives, but this is clearly the only sensible way to do this in the short term. I stress again: everybody on pension credit is entitled to this money. Let us get them out and getting it.

[Lord Cameron of Chipping Norton (Con)]

My Lords, as someone who made a promise to Britain’s pensioners to keep the winter fuel payment, and kept that for six years as Prime Minister, may I make a gentle suggestion to the Government? Instead of this misguided attack on the winter fuel payment, why not simply say that pensioners who are higher-rate or additional-rate taxpayers do not receive it? You may only raise 10% of the money but you would save 90% of the shame and embarrassment of the current position.

[Baroness Sherlock (Lab)]

I am grateful to the noble Lord. He will remember that the previous Government decided to do something similar with child benefit. They wanted to means-test it, but because they could not find a way to do so, they decided to get just higher-rate taxpayers. He may also remember the massive complications that flowed from that—because the tax system is individual-based and the benefit system household-based—and that it caused huge complications and the Government effectively had to relitigate to do it all over again. We need to find something that works and is straightforward. The pension credit system is established; people know it is there. Our job is to make sure they can apply for it. If we can do that, we can ensure that they get not just this £200 or £300 but the thousands of pounds they might be entitled to under pension credit. We have absolutely committed to looking after pensioners. The triple lock gave people £970 the year before and £900 this year; who knows what the earnings data will be, but it could be several hundred pounds more this year as well. We will keep investing in pensioners, but we will direct more to those who need it most.

[Baroness Jones of Moulsecoomb (GP)]

Why do these tough decisions always hit the poor and not the fossil fuel companies and the water companies?

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, of course, the point is that most of the pensioners hit by this decision will not be the poor, among those who actually get money at the moment. But the noble Baroness absolutely has a point about making sure that polluters pay, and this Government are addressing those questions as well.

European Social Charter

Baroness Sherlock Excerpts

Tuesday 3rd September 2024 Lords Chamber

[Lord Hendy]

To ask His Majesty’s Government whether they plan to ratify the Additional Protocol to the European Social Charter to establish a system of collective complaints; and what plans they have to ratify the Revised European Social Charter 1996.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the Prime Minister made our commitment to the Council of Europe clear at the Blenheim summit in July. The UK ratified the European Social Charter in 1962 and signed the revised Social Charter in 1997. It is important that the UK is compliant with any new obligations before ratifying a treaty. It is therefore right to consider whether domestic law and practice, including government reforms, are compatible with the revised charter and additional protocol.

[Lord Hendy (Lab)]

I am grateful to the Minister for her Answer. The fact that the 1996 charter was signed in 1997 by the United Kingdom does not resolve the issue that the United Kingdom has not ratified the 1996 charter. Since 2014, the Council of Europe has been trying to reinvigorate the European Social Charter process through the Council of Ministers meeting that she mentioned and the high-level conference on the European Social Charter in July. I wonder whether she will agree that it is vital that the United Kingdom not only supports, but is seen to support and lead, efforts to reinvigorate the European Social Charter.

[Baroness Sherlock (Lab)]

My Lords, in signing a charter, the UK is indicating that it agrees with the contents as negotiated, but we can ratify it only when we know that we will be compliant with it, because to ratify a charter is to agree to be bound by its provisions. As I have indicated before, that would mean that the UK would need to make an assessment to be sure that it would in fact be compliant with the terms of the treaty before doing it. My noble friend will know that we have plans, including the employment rights Bill, which will change our position on some provisions in the revised charter, so we will certainly consider whether we can ratify the revised charter in the light of the Government’s reforms. On the collective complaints system, the UK has for some time held that it is among the majority of member states party to the European Social Charter who have not accepted that because we believe that the existing supervisory mechanisms are adequate.

[Baroness Blower (Lab)]

My Lords, Article 6.4 of the charter protects the right to strike. Under previous Governments, the UK built up an unenviable record of being in breach of its conformity every time that it was reviewed since 1984. Will the Government now take the opportunity of the forthcoming employment rights Bill to ensure that we are in conformity with the right to strike?

[Baroness Sherlock (Lab)]

My Lords, the Government have plans for reforming the whole landscape of employment. We value the important role that unions play in shaping employment rights, domestically and internationally, and we want to create a new partnership between businesses, trade unions and working people. That will include taking steps to strengthen the rights of UK workers and their representatives, such as repealing prohibitive restrictions. We will repeal the Strikes (Minimum Service Levels) Act to remove barriers to effective collective action and strengthen rights. It is right that the Government do the things that we consider right for this country, but we will in due course look at whether the changes we have made put us in a position to consider ratifying the revised Social Charter and make a judgment at that point as to whether that is the right thing for Britain to do.

[Lord Wigley (PC)]

My Lords, is it the intention of the Government—is it their aspiration—that they will be in a position to sign?

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, in a sense we have indicated our support for the contents of the revised charter by signing it. Deciding to ratify it is a decision to be bound by its provisions, so it makes sense to be able even to consider ratification only at the point at which the Government have been able to do an assessment and conclude that domestic law and practice will be compliant with it.

[Lord Palmer of Childs Hill (LD)]

My Lords, as I understand the Minister’s reply, the Government want to ratify the treaty only when and if there are adequate resources. On the basis of adequate resources, can she say what steps her department has taken to maximise the take up of pension credit by all those entitled to it?

[Baroness Sherlock (Lab)]

Nice try. Just to clarify, I should say that I was not talking about resources in terms of ratification. To ratify a treaty is to agree to be bound by its provisions. If UK domestic law and practice will not meet those provisions, the UK cannot ratify a treaty only to find that it would be instantly in breach of it. That is what this is about; it is not about resources. However, on the question of pension credit, we are in the middle of a week of action in which the Department for Work and Pensions is working with local authorities and other partners to encourage pensioners across the country to apply for pension credit. We are developing new plans to go further through the winter. We want everybody who is entitled to it to get pension credit, and will be out there working to make sure that they do.

[Viscount Younger of Leckie (Con)]

The noble Baroness mentioned the employment rights Bill. Many businesses are already facing uncertainty given these government plans to introduce French-style employment laws. The additional protocol of the European Social Charter is supposed to be a human rights protection system for social and economic rights, organised on a collective basis, providing a fast and effective procedure to support the charter. Will she agree that it is actually slow, very bureaucratic, expensive and acts as a chilling factor for businesses, which are struggling to raise their productivity?

[Baroness Sherlock (Lab)]

My Lords, if the noble Viscount is talking about the additional protocol, I should say that the UK is one of a majority of about two-thirds of states which are party to the European Social Charter that have not adopted the additional protocol. I expect he will know that, having done my job until about 20 minutes ago. It is not because we have any objection to engaging with social partners, but because we regard the current system, in which reports are made by national Governments indicating their compliance with the provisions of the charter, to be adequate.

[Lord Balfe (Con)]

My Lords, will the Minister commit the Government to work towards ratifying? It really is time to get this ratified. We must recognise that a prosperous society is based on working between trade unions and employers.

--- Later in debate ---

[Baroness Sherlock (Lab)]

I absolutely agree with the noble Lord. We regard a prosperous society as one in which a good partnership is built between businesses, Government, employers and workers. That is the way to develop our country’s success and shared prosperity. I understand that any country that signs a treaty agrees that it must work towards ratification. However, it has been impossible for the UK to do that when domestic law and practice have been so clearly in breach of the provisions.

Household Support Fund

Baroness Sherlock Excerpts

Wednesday 24th July 2024 Lords Chamber

[Baroness Lister of Burtersett]

To ask His Majesty’s Government what plans they have for the future of the local authority Household Support Fund, due to expire in September.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the household support fund is a scheme to provide local support to those most in need. For the period April to September 2024 DWP has provided £500 million, of which £421 million is for local authorities in England to spend at their discretion, with the balance going to the devolved Administrations. No funding was budgeted beyond September. As a new Government, we keep all policies under review, including the household support fund.

[Baroness Lister of Burtersett (Lab)]

My Lords, I welcome my noble friend to her rightful place. May I urge her to impress on her government colleagues the urgent need for the fund’s extension for at least six months, to give local authorities certainty and to enable the development of a longer-term, ring-fenced local crisis support scheme to replace also the discretionary welfare assistance that many authorities have scrapped and that is vulnerable to further cuts? As she knows, the alternative is even greater hardship for people in very vulnerable circumstances and even greater reliance on food banks.

[Baroness Sherlock (Lab)]

My Lords, I thank my noble friend for that question and for the warmth of her welcome. We appreciate very much the crucial role that local authorities are playing in providing crisis support to vulnerable people in their areas. Indeed, my department is engaging closely with each local authority in England to make sure that we understand the ways in which they are using the household support fund.

She mentioned that it is not the only source of support; some local authorities still have local welfare assistance schemes and there are other forms of localised support. But the Government are very conscious of the financial pressures facing local authorities and we are committed to ensuring that councils have the resources they need to provide public services to their communities. As I say, the policy is under review but my noble friend’s points are well made and I will take note of them.

[Baroness Pinnock (LD)]

My Lords, I have relevant interests recorded in the register. Prevention is better than cure, for the reason that it can improve lives at a lower cost. Does the Minister agree with that and will she consider working with councils and the Local Government Association to develop a scheme that enables preventive work, rather than the existing household support scheme?

[Baroness Sherlock (Lab)]

I am grateful; that is a really important point and I thank the noble Baroness for making it. Prevention is always better than cure, even if it is not always possible to replace cures entirely with prevention. There may always be the need for some support locally. The way that the fund runs has been designed deliberately so that every local authority can choose how it spends it; and they have chosen to do it in different ways. DWP has given guidance about the nature of the groups that need supporting, and it is for essential support. Some authorities have given grants to third parties; others have given money directly to people and some have even given food. But her broader point is well made. I certainly know that my colleagues in the Ministry for local government—MHCLG—are talking closely with local authorities about how we can get better at doing multiyear funding, giving stability to local government and engaging more effectively in the way that we spend this money.

[Lord Bird (CB)]

While we are talking about poverty and children, can I ask a very cheeky question? Why is it that the Government are punishing seven members of the Labour Party who have put the party behind the interests of the people? Why are they doing this? This is a very disgraceful thing to be doing so early in their Administration.

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, I assume that the noble Lord is talking about a vote in the other place on the two-child limit. I certainly would not comment on the decisions of the Chief Whip here—never mind at the other end—who is of course always right. I simply take gentle issue with the suggestion that people taking a particular view are putting party before country. I recognise that there is a concern about the two-child limit, but our new Prime Minister could not have shown a greater commitment on child poverty. One of the earliest major announcements he made, in his second week, was to create a major commission on child poverty, with Ministers drawn from across government. It will of course look at important questions such as household income, but poverty is not just about that. It is going to draw in and look at education, childcare and health—all the things that prevent our children having the best start in life—and I am really excited about that.

[Lord Young of Cookham (Con)]

Does the Minister recall that, the last time we debated this, the outgoing Government agreed to extend the household support fund for a further six months until September? Does she recall that, at that time, I intervened to suggest that, instead of a cliff edge at the end of September, there should be some form of taper? Will the Government consider that?

[Baroness Sherlock (Lab)]

I remember that very well. In fact, I read the Hansard of the last time this came up and noticed that the noble Lord made that point. When I looked at how the financing had been provided, I saw that the money had been provided for only six months. Therefore, there is currently nothing in the budget to go beyond that. But I take his broader point about cliff edges and short notice being unhelpful. As I said, we need to get back to a space where we can support councils with longer, multiyear funding to give them the kind of stability they need but simply have not had recently.

[The Lord Bishop of Manchester]

Something like seven out of every eight local authorities now use this money to alleviate holiday hunger among our children. Can we have any hope that the Government will look at a more strategic way of helping children cope with hunger during the school holidays? Many of the churches in my diocese, and those of my right reverend friends here, are having to put on voluntary projects to support children during those periods. What can we hope for?

[Baroness Sherlock (Lab)]

I pay tribute to the Church and other faith organisations, which do such important work with children, families and their communities. I commend them for that. The question of holiday hunger, and indeed of children and food, will clearly be considered by the child poverty strategy and the task force when it gets together. We will set up a child poverty unit in the Cabinet Office that will work with the task force. We have already begun talking to stakeholders of different kinds, asking for experiences and getting expertise from inside and outside government to look at the best ways we can make this better. But we are also making some specific starts. For example, we are committed to making sure we have breakfast clubs in every single primary school. That is a simple measure that helps with the cost of living for families and helps children to start the school day able to concentrate because they have had something to eat. So I fully accept the importance of ensuring children have food and of being consistent; that will be part of what we look at.

[Baroness Thornhill (LD)]

My Lords, it will be music to the local government sector’s ears that the Government are looking at multiyear funding. I ask them also to consider ending the begging-bowl regime, where councils have to bid every year against each other for funding. As we have heard in this House just in the last two days, funding is ending in September and ending in March. We need to move away from that to give much more financial sustainability to local government.

[Baroness Sherlock (Lab)]

My Lords, certainly in this Parliament, we will provide councils with more stability and certainty through multiyear funding settlements. The aim is to ensure that councils can plan their finances for the future properly. But we will also work with local leaders to try to end competitive bidding for pots of money, and to reform things such as the local audit system to ensure value for money for the taxpayer. I know that my colleagues in MHCLG are very interested in working together with local government to find a better way of funding local councils.

[Baroness Boycott (CB)]

My Lords, I am sure everyone welcomes the government scheme to introduce free breakfasts, but I am concerned about the rates of obesity, especially in lower-income areas. When kids come in at five, 25% are obese, and when they leave at 11, 47% are obese. What are the standards of these breakfasts? Many breakfasts that schools offer are bagels and high-sugar cereal, because these get donated by companies trying to “look good” in the eyes of their shareholders. I have not read anywhere what the standards of food are and I would be very interested to meet with the Minister to discuss this, because it is critical if we are to have a genuine health impact.

[Baroness Sherlock (Lab)]

The noble Baroness makes a good point and I commend her for raising it repeatedly in this House. It is an important question and I have two things to say. First, the breakfasts will be fully funded; they will not be done on the cheap. Secondly, colleagues in the Department for Education will consider carefully the question of the composition and health nature of the breakfasts; I am sure that will be taken into account. I will make sure that point gets passed back.

[Baroness Bull (CB)]

My Lords, despite household support fund guidance making it clear that local authorities should consider the needs of low-income families that cannot work, particularly those with disabilities, we know that people with learning disabilities are disproportionately impacted by the cost of living crisis. So can the Minister say whether the Government will commit to an additional tranche of funding that is strategically targeted at disabled people in crisis, while a longer-term plan for their financial well-being is implemented?

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, I regret that I am not in a position to commit to another tranche of funding. What I will say is that one reason why the scheme was designed to give maximum discretion to local authorities was a recognition of the difference in composition in local areas and different sets of needs, but also the different resources available. We have given some guidance out from DWP about the nature of the client groups, and we have said previously that at least part of the money should be available on application. I can certainly feed that point back in. At this stage we do not know what the future of the fund is—but it is an important point and I shall make sure that it is taken back to the department.