Social Security Benefits Up-rating Order 2021

Baroness Stedman-Scott Excerpts

Wednesday 10th February 2021 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Social Security Benefits Up-rating Order 2021.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, the draft Social Security Benefits Up-rating Order 2021 and the Guaranteed Minimum Pensions Increase Order 2021 were laid before this House on 18 January. In my view, the provisions in these orders are compatible with the European Convention on Human Rights.

The Guaranteed Minimum Pensions Increase Order is an entirely technical matter that we attend to each year. It provides for formerly contracted-out defined benefit occupational pension schemes to increase their members’ guaranteed minimum pension which built up from April 1988 to April 1997 by 0.5%. This is in line with the increase in the general level of prices as at September 2020.

The Social Security Benefits Up-rating Order reflects the Government’s continuing commitment to support working families and pensioners across the nation, especially during a particularly challenging time for many. It will increase the basic state pension and the new state pension in line with the triple lock; increase the pension credit standard minimum guarantee in line with the cash increase to the basic state pension; increase working-age benefits in line with prices; and increase carer’s benefits and benefits intended to meet additional disability needs in line with prices.

In November, Parliament passed the Social Security (Up-rating of Benefits) Act. Without this legislation, state pensions would have remained at 2020-21 levels, because under the existing legislation there is no power to bring forward an uprating order to increase these rates in the absence of an increase in the level of earnings. The legislation allows for state pension, pension credit and widows’ and widowers’ benefit in industrial death benefit rates to be uprated for the 2021-22 financial year, benefiting millions of pensioners.

Under the Government’s triple lock commitment, the basic state pension will continue to be uprated by the highest out of earnings, prices or 2.5%. This year, the Government will draw on the power in the Social Security (Up-rating of Benefits) Act to maintain this commitment to the triple lock. The triple lock has been an invaluable tool in combating pensioner poverty and demonstrates this Government’s commitment to pensioners. This year, the basic state pension will increase by 2.5%, which is the highest of the triple lock figures. The basic state pension will rise to £137.60 a week for a single person. From April this year, the basic state pension will be over £2,050 a year higher in cash terms than in April 2010.

Five years ago, the Government introduced the new state pension, which provides a transparent and sustainable foundation for private saving and retirement planning for people reaching state pension age from 6 April 2016 onwards. We have also committed to increasing the new state pension by the triple lock. From April 2021 the full rate of the new state pension will increase to £179.60 per week.

Turning to the additional state pension, from April state earnings-related pension schemes and the other state second pensions, as well as protected payments in the new state pension, will rise by 0.5% in line with prices.

We are continuing to take steps to protect the poorest pensioners. This includes the pension credit standard minimum guarantee, the means-tested threshold below which pensioner income should not fall. The pension credit standard minimum guarantee will rise by 1.9% to match the cash increase in the basic state pension. Therefore, from April 2021, the single-person rate of this benefit will rise to £177.10, providing a valuable safety net to pensioners.

Working-age benefits will increase in line with prices—or 0.5%. This includes people receiving jobseeker’s allowance, employment and support allowance, income support, housing benefit and universal credit. Those benefits linked to child tax and working tax credits will also be uprated in line with those benefits. This increase to working-age benefits is in addition to the unprecedented support that this Government have provided to those affected by Covid-19. To support individuals through this challenging time, we have mobilised our welfare system with a wide-ranging package of measures worth more than £7 billion, benefiting millions.

The uprating review did not include a decision on the £20 per week uplift to universal credit and working tax credits, announced by the Chancellor as a temporary measure in March 2020. The uplift was enacted for one year under different legislation to support those facing the most financial disruption as a result of the Covid-19 public health emergency, so it is not referenced in the order. This is still being kept under review in light of the ever changing situation we find ourselves in.

Universal credit work allowances will also rise in line with prices. This means that an individual is able to earn more before their universal credit payment is reduced and directs additional support to some of the most vulnerable low-paid working families.

Finally, I turn to disability benefits. Carers and those who face additional costs as a result of their disability will see their benefits increase in line with prices from April 2021 to ensure that they continue to get the support they need. These benefits are: disability living allowance, attendance allowance, carer’s allowance, incapacity benefit and personal independence payment. In addition, the carer and disability-related premiums paid with pension credit and working-age benefits, the employment and support allowance support group component, and the limited capability for work and work-related activity element of universal credit will also increase by 0.5%. The Government remain committed to protecting the most vulnerable.

To conclude, in this order the Government propose to spend an extra £2.7 billion in 2021-22 on increasing benefit and pension rates. With this spending, we are maintaining the triple lock, increasing spending on pensioner benefits by £2.2 billion and upholding our commitment to the country’s pensioners; helping the poorest pensioners who count on pension credit; and ensuring that working-age benefits maintain their value in relation to prices. This is in addition to the comprehensive support package already put in place to support those affected by the pandemic, providing essential support to disabled people and carers. On this basis, I beg to move.

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[Baroness Stedman-Scott (Con)]

My Lords, I begin by thanking all noble Lords who have spoken in the debate. They have demonstrated their vast experience of and commitment to the issues we have been talking about. The debate has covered a number of topics and, as ever, I will try to respond to them in the time available. However, I assure noble Lords that if that is not possible, I will write to them with answers to the questions put.

Let me start by answering the question put by the noble Baroness, Lady Bowles, and my noble friend Lady Altmann: whether the Government are committed to the triple lock. We are committed to ensuring that older people are able to live with the dignity and respect they deserve, and the state pension is the foundation of their support. As with all aspects of Government policy, we keep tax rates and spending under review, and any decision on future changes will be taken as part of the annual Budget process in the context of the wider public finances.

The noble Baroness, Lady Drake, and my noble friend Lady Altmann raised the issue of whether the standard minimum guarantee should be uprated by the same percentage as the state pension. It is right that we should protect the incomes of the poorest pensioner households receiving the standard minimum guarantee. That is why this year we are increasing the guarantee by 1.9% to ensure that, as in previous years when the triple lock has applied to the state pension, pensioners see the benefit of the cash increase in the basic state pension.

I come now to the point about pension credit which was raised by virtually all noble Lords. I thank the noble Lord, Lord Foulkes, for his contribution and for his reminder that this is a work in progress. After his Question about pension credit, we did meet, along with the Minister for Pensions, and we agreed on the actions to take away. We have written to the BBC. Officials have had a meeting with its representatives and we are awaiting the outcome of that meeting. As I say, this is a work in progress. At that meeting we also agreed to review advertising in places such as post offices and GP surgeries. That is a commitment, but there is little point in doing that while Covid is in full flow as not many pensioners are going into these places. However, we will revisit that as soon as things change.

The Minister for Pensions, Guy Opperman, also made a commitment to review all the correspondence sent by the DWP to see how we can change the wording in order to encourage people to apply for pension credit. The review has taken place and there are a few things we need to grapple with. When we write to people about attendance allowance and then about pension credit, we do not want the messages to become confused or for one to overtake the other. Again, officials are working on this. I can give an absolute commitment that when all this work has been completed, we will meet with the same noble Lords we met before as well as with stakeholders to advise them of the outcomes and actions arising from our deliberations.

The noble Baroness, Lady Drake, asked whether pension credit take-up had increased as a result of the BBC policy on free TV licences. I am told that it is too early to tell whether the BBC announcement about changes to the licence concession has translated into an increase in take-up. As I have said, the Minister for Pensions has written to the director-general of the BBC about its collaborating on pension credit. The noble Baroness, Lady Drake, and my noble friend Lady Altmann talked about the further campaign; I believe I have answered that question.

The noble Baroness, Lady Drake, and the noble Lord, Lord Foulkes, asked what we are doing to tackle the low take-up which means that 1 million pensioners will miss out on the pension credit uprating increase. More than 1.5 million older people across Great Britain already receive extra financial help through the pension credit. We want more eligible people to claim what they are entitled to, so in addition to the campaign we launched last February, we will take the actions that I have already outlined.

The noble Baroness, Lady Drake, made the point that statutory sick pay is not high enough. SSP is increased annually in line with CPI. Any greater increase in the rate of SSP would place an immediate and direct financial burden on employers at a time when we know that many of them are struggling. She also raised the question whether the rate is too low to live on. Statutory sick pay should not be looked at in isolation. Approximately 60% of employees receive more than the rate of statutory sick pay from their employer.

The noble Lord, Lord Empey, made the valid point that there are people who are prepared to accept a tax rise, even if only for a short period. I am sorry to say that I cannot make any further comment, other than to say that it is a matter for the Chancellor to take action on if he so desires.

The noble Baroness, Lady Bowles, asked whether the uprating of pension credit would be negated by changes made to other thresholds. Pension credit is not linked to the national insurance system; it takes into account income and capital according to its own rules. The noble Lord, Lord Dodds, raised the very important issue of uprating overseas pensions and the frozen pension situation. The current policy on this is a long-standing one under successive Governments; it has been in place for 70 years and with all respect to the noble Lord, we have no plans to change it.

We come now to the very topical point about the £20 uplift in universal credit. I understand noble Lords’ detailed interest in this matter, which was discussed yesterday at great length in the other place. Let me make the position absolutely clear. The £20 uplift to universal credit and working tax credit was announced by the Chancellor as a temporary measure in March 2020 to support those facing the greatest financial disruption. The measure remains in place until March 2021 and, as the Government have done throughout this crisis, they will continue to assess how best to support low-income families. That is why the Chancellor is looking at the economic and health contexts before making any decisions.

The noble Baroness, Lady Sherlock, and the noble Lords, Lord Dodds and Lord Davies, asked why the £20 uplift has not been extended to legacy benefits. Claimants on legacy benefits can make a claim for UC if they believe that they would be better off. Claimants need to check their entitlement under universal credit carefully before applying, as the legacy benefits will end when claimants submit their claim and they will not be able to return to them in the future. Again, with all due respect to noble Lords, we have no plans to extend it.

My noble friend Lord Naseby asked why the Government are no longer indexing the guaranteed minimum provision for those reaching state pension age. The additional state pension, and with it the option to contract out, ended with the introduction of the new state pension for people reaching state pension age from 6 April 2016. The calculation that provided, for benefits earned between 1978 and 1988, the effect of having their guaranteed minimum pension price protected ended as well. My noble friend also talked about the increase in national insurance contributions. Again, this is a matter for the Chancellor, but I will draw my noble friend’s points to his attention.

The noble Lord, Lord Truscott, asked whether the triple lock would be in place until the next election. As a result of the order, the Government announced measures to increase most state pension rates by 2.5%, in line with their triple lock manifesto commitment for this Parliament.

My noble friend Lady McIntosh asked about TV licence money and how the BBC has used its funding. I have an answer for my noble friend, but perhaps I may write to her, as I will on her point about ensuring that married women who have been underpaid state pension get what they are owed.

Time is short and I am sorry about that because I like to answer all the questions put to me. The noble Baroness, Lady Janke, asked about the benefit cap level, which, again, has been raised many times. The statutory duty is to review the levels of the cap in Parliament at least once a year. This will happen at the appropriate time. On the UC uplift and the reports of the Resolution Foundation, Joseph Rowntree and others, like the noble Baronesses, Lady Janke and Lady Sherlock, I am aware of them, as indeed is the department. The noble Baroness, Lady Janke, also asked about additional support for UC claimants if the uplift is not extended. We should await the outcome of the decision.

I am afraid that I will have to call time at this point. Having outlined the uprating orders for the guaranteed minimum pension and social security benefits, I commend them to the Grand Committee and I beg to move.

Motion agreed.

Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2021

Baroness Stedman-Scott Excerpts

Wednesday 10th February 2021 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2021.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, in moving these regulations, I will also speak to the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2021. I am required to confirm to the Committee that these provisions are compatible with the European Convention on Human Rights. I am happy to do so. These statutory instruments will increase the value of lump sum awards payable under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and the diffuse mesothelioma scheme, which was established by the Child Maintenance and Other Payments Act 2008.

These two schemes stand apart from the main social security benefits uprating procedure. However, through these statutory instruments, we will increase the amounts payable by the September 2020 consumer price index of 0.5%. This is the same rate that is being applied to the industrial injuries disablement benefit and other disability benefits under the main social security uprating provisions. These new amounts will be paid to those who satisfy all the conditions of entitlement, for the first time, on or after 1 April 2021.

The Government recognise that people suffering from diseases as a result of exposure to asbestos or one of a number of other listed agents may be unable to bring a successful claim for civil damages in relation to their disease. This is mainly due to the long latency period of their condition, but they can still claim compensation through these schemes. These schemes also aim, where possible, to ensure that sufferers receive compensation in their lifetime while they themselves can still benefit from it, without first having to await the outcome of civil litigation.

Although improvements in health and safety procedures have restricted the use of asbestos and provided a safer environment for its handling, the legacy of its widespread use is still with us. That is why we are ensuring that financial compensation from these schemes is available to those affected.

I will briefly summarise the specific purpose of the two compensation schemes. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979—for simplicity, I will refer to this as the 1979 Act scheme—provides a lump sum compensation payment to individuals who have one of five dust-related respiratory diseases covered by the scheme, who are unable to claim damages from employers because they have gone out of business and who have not brought any action against another party for damages. The five diseases covered by the 1979 Act scheme are diffuse mesothelioma, bilateral diffuse pleural thickening, pneumoconiosis, byssinosis and primary carcinoma of the lung if accompanied by asbestosis or bilateral diffuse pleural thickening.

The 2008 mesothelioma lump sum payments scheme, which I will refer to as the 2008 scheme, was introduced to provide compensation to people who contracted diffuse mesothelioma but were unable to claim compensation under the 1979 Act because, for example, they were self-employed or their exposure to asbestos was not due to their work. The 2008 scheme allows payments to be made quickly to people with diffuse mesothelioma at their time of greatest need. Under each scheme, a claim can be made by a dependant if the person with the disease has died before being able to make a claim.

The rates payable under the 1979 Act scheme are based on the level of the disablement assessment and age of the sufferer when the disease is diagnosed. The highest amounts are paid to those diagnosed at an early age and with the highest level of disablement. All payments for diffuse mesothelioma under the 1979 Act scheme are automatically made at the 100% disablement rate, the highest rate of payment, reflecting the serious nature of the disease. Similarly, all payments for this condition under the 2008 scheme are made at the 100% disablement rate and based on age, with the highest payments going to the youngest people with the disease. In the last full year for which data is available—April 2019 to March 2020—3,220 awards were paid under the 1979 Act, totalling £42.7 million, and 450 people received payments under the 2008 Act, totalling £9.7m million. Overall, 3,670 awards were made across both schemes in 2019-20 and expenditure was £52.4 million.

I am keen to address the impacts of the Covid-19 pandemic on sufferers of pneumoconiosis and mesothelioma. While this uprating debate is an annual event, this has been a far from normal year. We took the difficult decision at the outset of the pandemic to temporarily suspend all face-to-face health and disability assessments, including for the industrial injuries disablement benefit, to protect the health of claimants and staff. We have continued to process industrial injuries disablement claims for those individuals with terminal illnesses. Therefore, throughout the Covid-19 pandemic and the suspension of face-to-face interviews, service centres have continued to pay the D3, mesothelioma, D8, lung cancer with asbestosis, and D8a, lung cancer in the absence of asbestosis cases, for workers’ compensation.

In addition, since November 2020, we have been assessing claims for D1, pneumoconiosis, including silicosis and asbestosis, and D9, unilateral or bilateral diffuse pleural thickening, prescribed diseases, so that claimants can start to receive the payments they deserve. While we expect the number of people diagnosed with mesothelioma to begin to fall in the coming years, the Government are well aware that there will still be many people who develop this and other respiratory diseases. That is why we are committed to working with our agencies and arm’s-length bodies to improve the lives of those with respiratory diseases.

The Covid-19 pandemic has presented major challenges for all healthcare systems. The NHS has published a cancer service recovery plan, which has been developed with the Cancer Recovery Taskforce. The plan aims to prioritise long-term plan commitments, which identified respiratory disease as a clinical priority and will support recovery, including the delivery of targeted lung health checks. We know that research is crucial in the fight against cancers such as mesothelioma. That is why the Department of Health and Social Care invests £1 billion per year in health research through the National Institute for Health Research.

I am aware that people suffering from occupational lung diseases are likely to be at higher risk of complications resulting from Covid-19, at what continues to be a distressing time for sufferers of the diseases that we are discussing today. The Department of Health and Social Care is following advice from independent experts on the Joint Committee on Vaccination and Immunisation on which groups of people to prioritise for Covid-19 vaccines. They advise that the immediate priority should be to prevent deaths and protect health and care staff, with old age deemed the single biggest factor in determining mortality. The JCVI has decided that it is safe for people with long-term conditions and that people who are high-risk should be prioritised to get the vaccine first.

Returning to these important regulations, I am sure we all agree that, while no amount of money can ever compensate individuals and families for the suffering and loss caused by diffuse mesothelioma and the other dust-related diseases covered by the 1979 Act scheme, those who have them rightly deserve the financial compensation that these schemes can offer. I commend the increase of the payment scales for these schemes and ask approval to implement them. I beg to move.

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[Baroness Stedman-Scott (Con)]

My Lords, I thank everybody for their helpful contributions to this debate. The Government recognise that these two schemes form an important part of the support available to people with dust-related diseases such as pneumoconiosis, byssinosis, diffuse mesothelioma, bilateral diffuse pleural thickening and primary carcinoma of the lung. I hope to address all the points raised but, as always, if I run out of time, I will certainly write to noble Lords.

First, to pick up on the point the noble Baroness, Lady Sherlock, just raised about a letter, this came up in the office this week. My officials looked into it, and it seems that we did not write the letter as promised. That is being rectified at the moment, and I can assure the noble Baroness that it will be placed in the Library, as all other letters will be.

I thank the noble Lord, Lord Blunkett, for his contribution, and for paying tribute to the campaigners and eloquently telling us about the impact of these terrible diseases. Unless we have actually seen them, they are very difficult to appreciate. I add my thanks to all the health professionals for their support to people who require their help on this matter.

Moving to the noble Lord, Lord McNally, there is nothing I can say in relation to his dear sister. It is not a job done; we are on the case and we will keep it on the agenda. I say to all noble Lords that, on this matter and any other, my door is open to speak to them.

The noble Baroness, Lady Sherlock, raised the point that dependants are mostly women, and asked whether I have considered the equality issues by not equalising payments and about an impact assessment. The intention of this scheme was to compensate those who contracted diseases as a result of their working environment. Historically, those who worked in hazardous environments tended to be men, and this reflects the current gender balance of claims. Nevertheless, the 2008 Act compensates people regardless of whether they contracted their disease through work, and this recognises the indiscriminate nature of mesothelioma. We have not conducted an impact assessment on the uprating of the lump sum schemes, but the noble Baroness raised a very valid point which I will certainly take back to the department.

The noble Baroness, Lady Sherlock, asked why the uprating of the lump sum schemes has not been placed on a statutory footing. Each year, since 2004, Ministers have agreed that payments under the lump sum scheme can be uprated in line with inflation. Making this legally binding is extremely unlikely to make any actual monetary difference to those who benefit from these payments.

The noble Baroness, Lady Janke, and other noble Lords raised the point about government support and mesothelioma. This is absolutely critical in the fight against cancer, which is why the Department of Health and Social Care invests £1 billion a year in health research through the National Institute of Health Research. For several years, we have been working actively to stimulate an increase in the level of mesothelioma research activity from a low base. This includes a formal research priority setting exercise, a National Cancer Research Institute workshop and a specific call for research proposals through the National Institute of Health Research.

My noble friend Lady Gardner of Parkes asked whether we could offer more support. I will take this away and write to the noble Baroness to see if there is anything we can do.

The noble Lord, Lord Wigley, raised the point of payments made in the past 12 months and how many of those arose from the slate quarrying industry. My responses may be disappointing, but the information is not published or readily available, and it would require analysis of multiple datasets for the 1979 scheme. In the quarter ending March 2020, there were a total of 210 industrial injury prescribed disease first assessments in the mining and quarrying industry, which were accepted and payable. The noble Lord asked how many applications had been turned down and what the main factor was in these cases. Again, the information is not published or readily available, and it would require some intensive analysis of multiple datasets. Information on industrial industry first diagnosed prescribed diseases all assessments by standard industry classification is published in the industrial industries disablement benefit quarterly statistics. If the noble Lord needs any help in accessing those, I ask him to please let me know.

The noble Lord, Lord Wigley, also asked, in relation to mesothelioma, whether I can give some clarification on whether the rapid access clinics, which are so important to secure the vital early identification of the disease and thereby facilitate payment, have been negatively impacted by Covid-19. It is imperative that people get tested and that cancer patients continue to receive the treatment they need. Overall, cancer treatment services have been maintained throughout the pandemic. Between March and November last year, 203,000 people started treatment for cancer, and 95% of them did so within 31 days of a decision to treat.

In terms of the levy mentioned, it was £33.3 million for 2019-20 and £28.9 million for 2020-21. The noble Lord, Lord McKenzie, raised the point of equalising dependence payments for those made to people who have the disease. Again, the main intention of the scheme is to provide financial support to people living with certain diseases and to help them to deal with the issues the illness brings. It is right that funding is targeted where it is needed most, and around 90% of payments made under both schemes are paid to those who actually have the disease covered by these schemes. The noble Lord, Lord McKenzie, asked why we do not use money from recoveries towards the equalisation of dependence payments. The combined cost of the 1979 Act and 2008 Act scheme payments outweigh the money received from compensation recovery, so there is, of course, an overall cost to the Government.

The noble Lord, Lord Bradshaw, raised a number of points. The first was what the latest projections are of when diffuse mesothelioma deaths in Britain will peak. There is always a degree of uncertainty in predicting future disease incidence, but the annually published data from the Health and Safety Executive show that annual mesothelioma deaths have been broadly similar over the last seven years. Before that, annual deaths had been rising.

In response to the noble Baroness, Lady Whitaker, seafarers count as being in the UK. I will write to her with further information on that point.

On the point made by the noble Lord, Lord Desai, about how this compensation compares to legal decisions, I will certainly take him up on his offer. I will be in contact to do that.

The noble Baroness, Lady Whitaker, asked whether we will publish a breakdown of people with mesothelioma by age and occupation. Data on the incidence of mesothelioma was published on the Health and Safety Executive website. It can be found on the health and safety at work statistics page under the subheading of ill health. The breakdown is available by age, occupation and geographical location. Again, if the noble Baroness has any difficulty in accessing this, I hope that she will let me know.

The noble Lord, Lord Desai, made a point about anybody being worse off as a result of making a civil claim. The amounts paid under the 1979 Act were originally set at a lower rate than the usual amounts paid in damages in civil cases. It is therefore unlikely that the amount paid under the 1979 Act scheme or the 2008 Act scheme would be more than the damages received through a civil claim.

The noble Baroness, Lady Janke, and others mentioned research; I have dealt with that.

On the point made by the noble Baroness, Lady Sherlock, about the Health and Safety Executive having sufficient resources, I will go back to the Employment Minister, who has direct responsibility for this, and double-check before I answer. I will write to her.

I thank noble Lords for the way in which they have entered into this debate. This is a terrible disease with terrible consequences. Like the noble Baroness, Lady Sherlock, I hope that we will never debate this, as we do on an annual basis, without being moved by the impact of these diseases.

I commend the uprating of the payment scales for these schemes and ask approval to implement the regulations.

Motion agreed.

Guaranteed Minimum Pensions Increase Order 2021

Baroness Stedman-Scott Excerpts

Wednesday 10th February 2021 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Guaranteed Minimum Pensions Increase Order 2021.

Motion agreed.

Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2021

Baroness Stedman-Scott Excerpts

Wednesday 10th February 2021 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2021.

Motion agreed.

Covid-19: Youth Unemployment

Baroness Stedman-Scott Excerpts

Tuesday 2nd February 2021 Lords Chamber

[Lord Rose of Monewden]

To ask Her Majesty’s Government what assessment they have made of the impact of the COVID-19 pandemic on the employment of young people; and what steps they are taking to address youth unemployment.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

Let me assure the House and the noble Lord that the Government are committed to providing support to help young people move into work in these difficult times. Such support will help avoid the scarring effects of unemployment, and our £30 billion plan for jobs includes specific interventions targeted at young people. The Youth Offer and Kickstart schemes have been designed to move young people towards meaningful and sustained employment.

[Lord Rose of Monewden (Con) [V]]

I thank the Minister for her reply. The unemployment rate for young people aged between 16 and 24 is, at 14.2%, almost three times higher than the general rate of 5%. I applaud the Government for their Kickstart and apprenticeship programmes, which will, I hope, supported by industry, provide work-based learning and experience to give our young people the skills and confidence necessary to be successful in gaining work. Will the Minister join me in applauding the Fashion Retail Academy? Also supported by industry, it provides employer-led training and qualifications relevant to the current and future needs of our beleaguered retail sector.

[Baroness Stedman-Scott (Con)]

I agree with the noble Lord that young people today face an unprecedented challenge in accessing the world of work, as well as the skills they need to help them succeed. We are working closely with DfE to clarify the relationship between skills and employment provision. The DWP and DfE have put guidance in place to ensure that young apprentices made redundant due to Covid-19 can continue their learning. I thank the noble Lord for raising the excellent work of the Fashion Retail Academy. There are many other sector work-based academies doing great work to help young people in these difficult times.

[Lord Touhig (Lab) [V]]

I declare an interest as a vice-president of the National Autistic Society. Just 15 in every 100 people with autism get a job, so good education is vitally important. Since the Covid outbreak, seven in 10 autistic children are having difficulty understanding or completing schoolwork and around half—half, my Lords—will see their academic progress suffer. Can the Minister say something about what the Government are doing to mitigate this, so that in the years ahead we do not see even fewer people with autism getting a job?

[Baroness Stedman-Scott (Con)]

The noble Lord is well-known and well-respected for his commitment to this particular difficulty that people face. I would like to assure the House that we are committed to helping everyone into work, including those who need extra and intensive support due to autism. In respect of educational input, I will speak to my noble friend Lady Berridge, and we will jointly come back to him to answer the specifics of that question. However, I can tell noble Lords this: we have recruited 150 employability coaches across Great Britain, and I have heard a number of success stories. These work coaches work particularly with vulnerable people. I can tell noble Lords that a youth employability coach in Dartford has supported a claimant with Asperger’s syndrome, helping him to secure an apprenticeship in tech support. We understand the challenge and we are on the case.

[The Lord Bishop of Winchester [V]]

My Lords, in a recent survey by the Prince’s Trust, 21% of those aged 16 to 24 said that they felt their skills and training were no longer useful as a result of the pandemic. Given that about only 2,000 young people secured roles out of 120,000 approved placements in the Kickstart scheme, can the Minister say what action Her Majesty’s Government are taking to increase the numbers enrolled on placements and to ensure that they are all high quality?

[Baroness Stedman-Scott (Con)]

I thank the right reverend Prelate for his question, which is really valid. We have over 100,000 vacancies in Kickstart and I can assure him that everyone in the department is working at pace to secure good-quality outlets for young people. We are doing everything we can. We are working with the Prince’s Trust and all sorts of other organisations, and noble Lords will see Kickstart come into its own in the near future.

[Lord Baker of Dorking (Con) [V]]

Is the Minister aware—[Inaudible.]

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[Baroness Janke (LD) [V]]

My Lords, businesses in the creative, media and digital industries are typically very small and do not have the resources to support apprentices, internships and work experience. What plans do the Government have to support and enable these businesses to provide skills, training and experience to young people in this essential area?

[Baroness Stedman-Scott (Con)]

The creative industries are very important to our economy. I was in a meeting only yesterday with some people who are very significant in the industry and they told us about the number of jobs they need to fill, which is quite significant. We were talking about getting people skilled, not just in the big cities but across the board, so that we can meet our levelling-up agenda. This is another thing that we are focusing on.

[Baroness Fall (Con) [V]]

My Lords, while our focus has been rightly on trying to save the lives of those most vulnerable in our society, we are in danger of forgetting the huge sacrifices we have asked from young people. They have been shut up at home, had exams cancelled and missed out on precious university experiences. Now they face a grim economic outlook as they look to start their working lives. I first commend the Government on their Kickstart initiative and echo other questions in asking why the rate of take-up has been so low. Also, while we support existing jobs through the furlough scheme, I wonder if we could be doing more to encourage businesses not to press cancel on a generation of young recruits. These are relatively low-cost hires who are nevertheless the future of their businesses and our country.

[Baroness Stedman-Scott (Con)]

I have already referred to Kickstart and the progress we have made. Another point I will make is that there is a very intensive quality assurance programme for the vacancies to go through, but employers are doing their bit and falling into line with the programme, and we have great hopes for it. I agree with the noble Baroness that, as a country, we need to do all we can to help the younger generation to progress. I would be delighted to see business continue to work alongside government to achieve this aim, particularly in relation to internships.

[The Deputy Speaker (Lord Bates) (Con)]

We will now try the noble Lord, Lord Baker of Dorking, again.

[Lord Baker of Dorking (Con) [V]]

Is the Minister aware that youth unemployment was discovered to be at 20% by the Resolution Foundation last September? The Sutton Trust has said that graduate unemployment is at 45% and that the number of apprenticeships this year has been reduced by 70% or postponed. A recent government White Paper never mentioned youth unemployment. When will the Government realise that this is a major crisis that is rising and is going to get much worse, and that measures are needed?

[Baroness Stedman-Scott (Con)]

The noble Lord is right to point out the level of unemployment among young people and graduates; I take no argument with that. But he asks when the Government will recognise this: we are working flat out to ensure that young people get the help they need to get a meaningful job and the skills they need to compete effectively in the job market. I can assure the noble Lord and the whole House that we are working at pace to achieve this.

[Baroness Wheatcroft (CB) [V]]

My Lords, one thing that has become apparent during Covid is that initiatives work best when they are local rather than national. Needs for skills and therefore for training are also often local rather national. For instance, the noble Baroness, Lady Janke, referred to the creative industries. In this country film production is thriving in Yorkshire, while Leamington Spa is the capital of video games. So can the Minister reassure me that local authorities will have much more say in what training schemes are made available and how they will be funded locally?

[Baroness Stedman-Scott (Con)]

My noble friend raises a number of relevant points. As I have said, we are working with local authorities and businesses. There is absolute mileage in all my noble friend says about things being done locally, because people know one another best in their local community. My strapline for all that we are doing is “To be known nationally but felt locally”.

[Baroness Sherlock (Lab) [V]]

[Inaudible]—about the scale of the crisis. The Government want 250,000 placements but, as the right reverend Prelate pointed out, not even 2,000 young people are in place and, by November, nearly 600,000 young people were claiming unemployment benefits. So when will 250,000 young people actually be in jobs and what are the Government doing to help the other 350,000 young people who cannot access Kickstart?

[Baroness Stedman-Scott (Con)]

Let me be clear again that we are working at pace with employers to get the vacancies we need in Kickstart. We have started people, and that take-up will accelerate in the coming days. There is no lessening of effort on that. In terms of our offer, we have the youth unemployment programme; we have youth hubs—which are helping people; and we have our youth employability coaches as well as work coaches in jobcentres. With all those efforts combined we will do as much as we can to get as many as possible of the young people referred to by the noble Baroness back into work.

[The Deputy Speaker (Lord Bates) (Con)]

My Lords, the time allowed for this Question has now elapsed. I apologise to those whom I was unable to call. We now move to the fourth Oral Question.

Pension Schemes Bill [HL]

Baroness Stedman-Scott Excerpts

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Tuesday 19th January 2021 Lords Chamber

Moved by

[Baroness Stedman-Scott]

That this House do agree with the Commons in their Amendment 1.

1: Clause 27, page 17, line 38, leave out from beginning to end of line 40 and insert “The notice must specify—”

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, before turning to the Commons amendments, I will take a moment to remind the House of what the Bill does, as a lot has happened since it was last here.

If enacted, the Bill will affect the lives of millions of people throughout the country. It will make pensions better by creating a new style of pension scheme that has the potential to increase future returns for millions of working people, and by delivering pensions dashboards that will help individuals to make informed decisions about their financial futures. It will make them safer by helping to prevent scams and by clamping down on those who recklessly try to plunder the pension pots of hard-working employees. It will make them greener by requiring pension schemes to take the Government’s net-zero climate targets into account in managing their own climate risk. I know that your Lordships agree that this is a worthwhile and important piece of legislation, and it has received cross-party support in both Houses. I hope that we are now at the final stage of its passage, and that we can agree and allow it to move on for Royal Assent.

I turn to Amendment 1. We welcome the strong interest shown in both Houses on ensuring that CDC schemes treat their members fairly and, in particular, operate in a way that is intergenerationally fair. As we explained in both Houses, requiring trustees to assess fairness is likely to generate confusion, as the concept means different things to different people, and there would be uncertainty about what was required. That is why we have intentionally avoided referencing fairness in such a way within any of the CDC provisions. Instead, following consultation, we intend to use these regulations to set out clear principles and processes that schemes must follow to ensure that different types of members are treated the same where appropriate—for example, when accruing and calculating benefits and making adjustments to benefits. These requirements will form part of the authorisation process for CDC schemes overseen by the Pensions Regulator.

For example, we intend that regulations under Clause 18 will require CDC scheme rules to ensure that there is no difference in treatment when calculating and adjusting benefits between different cohorts or age groups of scheme members, or between members who are active, deferred or receiving a pension. This is a clear and effective approach to delivering fairness in practice that is not only easy to understand, but also easy for members and trustees to apply, because it avoids a subjective interpretation of what is fair. We are all pleased that Royal Mail agrees with our approach, and it is for these reasons that we do not consider the amendment to the Bill necessary.

I will move on to Commons Amendments 2 and 3. Pension dashboards will help to revolutionise the pensions industry and bring it into the 21st century. This innovative programme will help to reconnect consumers with their otherwise lost pension pots and engage millions of UK citizens with their pension savings in a safe, secure and convenient way. These amendments on delaying the introduction of dashboards from other providers and preventing transactions through dashboards were overturned in the other place. This was in recognition of the approach taken to ensure that consumers were protected as part of the development of dashboard services. In respect of multiple dashboards, it has always been the Government’s belief that individuals should be able to access information about their pension savings from a service of their choosing. I am delighted that, following the changes that we made in this House, consumers will be able to access a dashboard service that is publicly owned, provided by the Money and Pensions Service. I restate the commitment that was made by my noble friend Lord Howe in this House on 30 June last year that

“the Government wholeheartedly agree that such a dashboard should be available to all users from day one, alongside dashboards offered by other organisations.”—[Official Report, 30/6/20; col. 668.]

We will not allow any qualifying dashboard to be launched before that of the Money and Pensions Service. However, we remain firmly of the belief that allowing other properly regulated dashboard providers to operate is the best way to drive engagement, reaching out to consumers where they may already interact with digital services, and unlocking innovative potential. I have said before that dashboards will launch with a simple find-and-view capability; this remains the case. However, enabling transactions through dashboards can provide an innovative way of safely giving people more effective control of their pension savings. Functionality on dashboards will be increased only as a result of user testing, after careful review and with the right level of consumer protections in place. It is important that we maintain the ability to meet the needs of the user by not prohibiting functionality that can put individuals in control. The ability to have this type of functionality in the future could bring real and significant benefits for consumers—for example, when consolidating small pots of pensions savings.

Dashboards are a hugely exciting innovation that will benefit and empower millions of citizens. We should support the development of dashboards so that they reach their potential and change the way that people interact with their pensions savings by placing them in control of all their pensions.

Finally, Commons Amendment 5 removed the privilege amendment made in the Lords, as is the norm in these cases. I beg to move.

[Lord Vaux of Harrowden (CB) [V]]

My Lords, as there are no counterproposals to these Commons amendments, I shall try to brief, but there are a couple of points I would like to make in relation to Commons Amendments 1, 2 and 3.

Throughout the passage of the Bill, we have had lengthy discussions around the risk of unfairness, intergenerational or otherwise, that is inherent to collective money purchase schemes, or CDCs as they seem still to be called. I regret that the Government chose not to accept the amendment which required trustees to make an assessment of the extent to which a scheme is operating in a manner fair to all members; it has been removed by Commons Amendment 1. That seemed a fairly uncontroversial concept. However, the Minister has been very clear that the Government acknowledge the risk of unfairness, that they intend to learn from experiences in other countries, such as the Netherlands, and that they intend to deal with this issue in the regulations that they will publish in relation to Clause 18.

Commons Amendments 2 and 3 remove the amendments your Lordships agreed to in relation to pensions dashboards which required that there should be a period during which pensions dashboards are initially restricted to the MaPS dashboard and that they should not become transactional platforms without primary legislation. On the second point, I remain quite uncomfortable with the idea of a pensions dashboard becoming a transactional platform without very serious thought and experience. However, these matters will also be dealt with by regulations and I am confident that the Minister has heard the concerns that have been raised, even if she does not agree with the proposed method of dealing with them.

The Minister has been very generous with her time and commendably willing to meet to listen to and discuss concerns throughout the passage of the Bill. As a result of changes made to the Bill as it passed through your Lordships’ House, most of the regulations that will follow will be subject to the affirmative procedure. However, even under the affirmative procedure, it will not be possible to amend regulations. I therefore urge the Minister to continue her constructive and collaborative approach in relation to the regulations that will now follow by consulting across the House before draft regulations become set in stone. That way she will be able to take advantage of the very deep pensions knowledge and experience in this House and the regulations will be all the better for it.

--- Later in debate ---

[Baroness Sherlock (Lab) [V]]

My Lords, I, too, am grateful to the Minister for explaining why the Government asked the Commons to reject the amendments passed in this House. We have come a long way since the Bill had its First Reading in this House on 7 January—more than a year ago, although it seems more like a lifetime. The Bill now makes some important changes, creates CDC schemes, legislates for the pensions dashboard and strengthens the regulatory environment on pensions.

During the Bill’s passage through this House, the Government have made some welcome concessions. For example, we ran an amendment to require a public dashboard from the outset. The Government brought forward amendments requiring that, and I am grateful for the confirmation that the Minister has given today. We ran amendments saying that the FCA should regulate the provision of dashboard services, and the Minister has confirmed that that will happen. We ran an amendment to say that using the dashboard to see your own data must be free, and the Minister has confirmed that it will remain free.

The Bill initially made no reference to climate change, but my noble friend Lady Jones of Whitchurch, the noble Baroness, Lady Hayman, and Members from across the House worked together to persuade the Government to amend the Bill to require trustees and managers to take the Paris Agreement and domestic climate change targets into account in their overall governance and their disclosure of climate change risks and opportunities. This is the first time that the words “climate change” have featured in domestic pensions legislation.

This is a better Bill than it was when it started, and I am grateful to all noble Lords who have worked so hard on it, especially my noble friend Lady Drake and Dan Harris in our Opposition Whips team. I am also grateful to the Minister for engaging with our concerns and to the Bill team and all the officials who have engaged with us.

That said, the Government have rejected the amendments which this House voted for. On CDC schemes, I hope they will review the intergenerational impact of any schemes as they are developed and will keep an eye on that. I am particularly disappointed that our amendments on the pensions dashboard system were rejected. They would have put in place two essential safeguards: that the MaPS public dashboard should be in operation for a year and that the Secretary of State should lay a report before Parliament on its operation and effectiveness before commercial dashboards enter the market, and that the delegated powers in the Bill could not be used to authorise commercial dashboards to engage in transactions.

Like the noble Lord, Lord Vaux, I remain deeply concerned about the risks to consumers. Those amendments were especially important given the sheer breadth of the delegated powers the Bill grants and how little we know at the moment about how the dashboards will work. We still do not know how many dashboards there will be, who will run them, what information they will have, how it will be displayed or how consumers will respond. We do not know where liability will lie for each link in the chain or how consumers will be compensated if they lose out. We do not know what the charging model will be or how data security, identity verification or third-party access will be managed.

Given all those things that we do not know, I have sought to persuade the Government to come to Parliament to allow us to debate the proposals they make before the regulations are published. I regret that I have not succeeded in that. Given that this remains a very high-risk programme and that parliamentary scrutiny would surely be an advantage not an impediment, I hope that in her reply the Minister can give us some assurance of our continued involvement in debate on this process. I look forward to hearing her reply.

[Baroness Stedman-Scott (Con)]

First, I thank the noble Lord, Lord Vaux, and the noble Baronesses, Lady Janke and Lady Sherlock, for their contributions. I think it is right to say that we have listened, we have engaged and we have valued and appreciated all noble Lords’ contributions, and I assure noble Lords that that will continue.

I reassure the House that the Government are fully committed to continue transparency and engagement through the development, delivery and operation of pensions dashboards. We greatly value the insight and input from colleagues from across the House in shaping, testing and ensuring the proposals and want that to continue throughout the more detailed stages of development. The pension dashboards programme is committed to publishing six-monthly progress updates, the most recent of which, in October 2020, outlined the work undertaken to define the data standards and the work towards finalising the requirements for the digital architecture and the identity service. It also set out an indicative plan for delivery.

Future updates, in advance of the launch of dashboards, will provide greater detail, engagement opportunity and assurance on key areas of specific interest. These will include the digital architecture and identity service; user consents and permissions, including delegated or third-party access; the consumer protection regime, including the liability model; and further work on how data will be presented to consumers, based on a growing body of user research and a greater understanding of user needs.

I facilitated a meeting between noble Lords and the pensions dashboards programme team just before Christmas. As promised at that meeting, I will ensure that these regular meetings continue. They will provide your Lordships with the opportunity to have meaningful discussions directly with the programme team at the publication of each progress update report and a chance to scrutinise this work at an early stage of development. I will ensure that copies of these reports are placed in the House Library on their publication.

I recognise the concerns that many have expressed about the broad nature of the delegated powers within this area of the Bill. There is a statutory duty on the Secretary of State to consult before making regulations for pensions dashboards. Consultation will cover proposals across the range of areas which are critical to the safe, secure and effective delivery of dashboards, and give all those interested the opportunity to influence the detail before the regulations are laid in draft in this House under the affirmative procedure.

I know that some of your Lordships have asked whether we can go even further, requiring the Government to lay a report before Parliament for debate in advance of draft regulations being laid. I do not believe this to be the right way forward, as the consultation on the Government’s proposals for regulations will already have taken place.

I have listened further to the noble Baroness, Lady Sherlock, and, although we have not always been in agreement, we are together on Peers having ongoing future involvement, and we are prepared to engage, engage and engage. Therefore, in addition to updating the House in the usual manner, I am prepared to commit to the Government tabling Written Ministerial Statements during the consultation phases, prior to the debate on the proposed dashboard regulations.

I reassure the noble Baroness that I will continue to work with her collaboratively in the way we have done throughout the Bill’s progress. On the matter of facilitating further debate on the issue, I am sure that the Chief Whip has heard our debate today, and, when the Written Ministerial Statements are laid, I will draw them to his attention for him to consider further discussion in the usual channels.

Some concerns have been expressed about governance of the dashboard service going forward. The Money and Pensions Service has responsibility for delivery of the dashboard architecture and ongoing oversight and control, and it is clear that our focus for the foreseeable future must be on the development and implementation of the service. Meeting the demands of the scale and complexity of this challenge comes first. Reaching a live and steady state of operation will take a number of years, as set out in the pensions dashboards programme activity plan. As such, I confirm that the Government have no plan to move ownership of dashboards architecture away from the Money and Pensions Service.

My department has clear governance arrangements in place to ensure the delivery of dashboards. As well as the regular published updates that I mentioned earlier, there is an existing legislative requirement, in the Financial Guidance and Claims Act 2018, for MaPS to report to the Secretary of State annually on the exercise of its functions, which includes its responsibilities for pensions dashboards. This report is laid before Parliament.

Chris Curry, the senior responsible officer for the pensions dashboard programme, and Sir Hector Sants, chair of the Money and Pensions Service, regularly report progress to Ministers. The department also undertakes formal quarterly accountability reviews with the Money and Pensions Service. We recognise the importance of effective evaluation, including monitoring of consumer behaviours and outcomes. My department is responsible for overall evaluation of the policy and is working with the pensions dashboards programme and regulators to develop a comprehensive evaluation plan.

Research will also be undertaken with providers and users alike throughout the project life cycle. This will include user testing to understand likely reactions and behaviours, and research to understand the impact that dashboards will have on the market. My department is developing a joint set of critical success factors to complement delivery and measure the success of policy objectives. These are relevant to all stages of the programme and will give insights on, among other things, usage of the service, delivery and compliance. Review of the critical success factors will also play a part in evaluation and service developments.

I finish by repeating the commitment that I made in my opening remarks. We will not allow any dashboard to which schemes are required to supply data to be launched before that of the Money and Pensions Service. On the point raised by the noble Baroness, Lady Sherlock, about a review of intergenerational impact and fairness, we will of course review how CD schemes operate and will monitor how different groups are treated.

I hope that my comments reassure noble Lords that the Government are acting diligently and responsibly in the delivery of dashboards.

Motion on Amendment 1 agreed.

Moved by

[Baroness Stedman-Scott]

That this House do agree with the Commons in their Amendments 2 and 3.

2: Clause 118, page 104, leave out lines 20 to 22

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Moved by

[Baroness Stedman-Scott]

That this House do agree with the Commons in their Amendment 4.

4: Clause 123, page 118, line 1, leave out subsection (2)

[Baroness Stedman-Scott (Con)]

My Lords, this amendment was overturned in the House of Commons because, as the Minister for Pensions and Financial Inclusion explained in Committee in the Commons, no Government can commit to ensuring that all defined benefit pension schemes that are expected to remain open are treated differently from other schemes. Although, of course, the extent to which a scheme is open, and how that affects whether and how it will mature, must be considered, open schemes do not all share the same characteristics, and it would be wrong to treat them all in a similar way. Each scheme must be treated taking account of its own particular circumstances.

The original amendment touched on a number of important factors to be taken into account in the scheme funding arrangements. They are some, but by no means all, of the factors that we think trustees or managers should have to consider when setting a scheme’s funding and investment strategy. These are complex and inter- dependent metrics and most appropriate to be considered in secondary legislation rather than being put on the face of the Bill. The Bill provides for this through delegated powers that will enable secondary legislation to set out in some detail what the new funding and investment strategy will need to include.

Addressing those matters in regulations will give interested parties a chance to contribute to the consultation on draft regulations. It will also allow flexibility to ensure that the arrangements can be adapted as economic conditions change, so that the scheme funding system can continue to operate effectively over time. But we absolutely do not want to see good schemes close unnecessarily. We have made a clear commitment to ensuring that regulations work in a way that does not prevent appropriate open schemes investing in riskier investments where there are potentially higher returns, provided the risks taken can be supported and that members’ benefits and the Pension Protection Fund are effectively protected. With that explanation, I beg to move.

Motion 4A (as an amendment to the Motion on Amendment 4)

Moved by

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

My Lords, I will first respond to the question of my noble friend Lady Altmann on long-term horizons. The scheme funding measures in the Bill, together with secondary legislation and a revised scheme funding code of practice, seek to support trustees and employers to manage this scheme funding with a focus on longer term planning. As now, the scheme’s liquidity requirements, investment timelines and the amount of risk each scheme can support will depend on factors including its maturity and the strength of its employer covenant. Trustees can and do invest in illiquid assets such as infrastructure, and our measures do not seek to discourage such investments where they are appropriate.

I also thank the noble Lord, Lord Davies, for his contribution. The thought of being locked out of a sweet shop gives me more heartache than your Lordships will know. We will do our very best to make sure that it does not happen again. We welcome the noble Lord to the House and have no doubt that he will add a lot of expertise. He has joined the formidable band of brothers on pensions and we are very glad he is with us.

I am very grateful to the noble Baronesses, Lady Bowles and Lady Sherlock, for their amendments. I am also grateful to all those who have contributed to the debates we had relating to schemes that are open to new members. They have been highly influential and have helped us refine our thinking on how schemes in these circumstances should be treated. The Government are very sympathetic to the thinking behind these amendments, but there are good reasons why we do not want to deal with these matters on the face of the Bill.

One of the main drivers behind our reforms to the scheme funding arrangement is the desire to be able to more effectively tackle the small minority of schemes and employers who push the flexibilities of our scheme-specific arrangements further than is appropriate, to the detriment of their members. As the detail of the arrangements is necessarily complex, there is a real risk that attempting to deal with it in primary legislation will inadvertently weaken the funding regime as a whole and undermine the ability of the Pensions Regulator to tackle the very issues that these reforms were designed to address. Rather, we think that the best place to deal with these matters is in regulations—following a full consultation. That way, we can work closely with the full range of interested parties, effectively calibrate the system and get the right balance between member security and employer affordability. By placing such matters in regulations, we will retain the flexibility in the future to adjust the relevant parameters should the evolving economic situation demand it.

What I can do now is set out some key principles of how we will proceed with framing the secondary legislation, which I am happy to put on the record and am confident will provide noble Lords with the reassurance they are looking for. Much of our original thinking was driven by the fact that most schemes are closed and maturing, but we completely accept that we need to be clearer about our thinking on other important groups of schemes. These are the schemes that continue to admit new members. Many of these schemes will not be maturing in the same way as closed schemes and some of them will be admitting sufficient new members to avoid maturing at all. A genuinely scheme-specific approach has to recognise the characteristics of such schemes and treat them appropriately. I am therefore grateful to the noble Baroness, Lady Bowles, and others for helping us to focus our thinking on these schemes. Let me make it clear now that the Government, having further considered the debate on the Bill and feedback from the pensions industry, fully intend that the defined benefit funding regime will remain scheme specific, and any bespoke approach should build on this foundation. This regime will continue to apply flexibility to take account of individual scheme circumstances.

The department confirms that detailed provisions for ongoing defined benefit funding, including any necessary assessment criteria and metrics, will be set out in regulations and in the Pension Regulator’s defined benefit funding code of practice, which will acknowledge the position of open and less mature schemes. As noble Lords have said, Ministers at the DWP have gone to great lengths to make themselves available to those who have pressed them on the position of schemes that remain open to new members. Both Ministers and officials have had extensive discussions with interested Peers, and others, including on schemes that remain open to new members. I also understand that interested Peers have been able to discuss these matters in detail with senior officials at the Pensions Regulator. This has been a highly productive engagement and, as I have said, it has been instrumental in guiding us to a better and more refined policy position. That is something I expect to continue.

Prior to the publication of the draft regulations, the Government can commit to an engagement programme with interested parties, including a range of schemes. These will include those remaining open and immature. They will launch a consultation document informed by this engagement. The Government will also publish a regulatory impact assessment of the draft regulations and the Pensions Regulator will publish an impact assessment alongside its revised funding code. These will include analyses of different de-risking approaches on members and sponsors of all schemes, including those that are open or immature, and those that are not targeting buyout.

We absolutely do not want to see good and viable defined benefit schemes close unnecessarily. We want them to be treated on their merits in a truly scheme-specific regime. We have said that open schemes should be able to provide the same level of security for members as closed schemes. I want to make it absolutely clear that this does not mean that they necessarily need to invest in the same way. We simply mean that members in an open scheme should be able to enjoy the same level of confidence that the benefits they have worked hard to build up will be paid in full, as for members in a closed scheme. We completely agree that open schemes that are not maturing and have a strong employer covenant should not be forced into an inappropriate de-risking journey. We will ensure that such schemes and employers which can support a higher risk and higher expected reward investment strategy can continue to invest in this way. If they are already doing the right thing, they should not need to significantly increase contributions as a result of these new measures.

The Government accept that for some schemes, depending on the circumstances, de-risking is not the best way to safeguard members’ benefits. Member benefits can be best safeguarded by an appropriate integrated risk management strategy determined after careful analysis by the trustees, which takes account of time horizon, liquidity, employer covenant and appropriate diversification.

This is the way that we intend to proceed as, with the help of close engagement with interested parties, we work on the regulations that will set out the detail of how the funding regime will operate. I hope that what I have said reassures noble Lords of our intentions and that the noble Baroness will feel able to withdraw her amendment.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

My Lords, I have not received any requests to speak after the Minister, so I now call the noble Baroness, Lady Bowles of Berkhamsted, to reply.

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Moved by

[Baroness Stedman-Scott]

That this House do agree with the Commons in their Amendment 5.

5: Clause 132, page 125, line 17, leave out subsection (2)

Extreme Poverty

Baroness Stedman-Scott Excerpts

Tuesday 15th December 2020 Lords Chamber

[Baroness Lister of Burtersett]

To ask Her Majesty’s Government, further to the report by the Joseph Rowntree Foundation Destitution in the UK 2020, published on 9 December, what steps they are taking to address any (1) increase in, and (2) intensification of, extreme poverty in the United Kingdom.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, tackling poverty is a priority for this Government. Throughout this pandemic, this Government have sought to protect jobs and incomes, spending billions on strengthening welfare support and ensuring the most vulnerable can meet their basic needs. Our long-term ambition is to level up opportunity across the UK by helping people back into work as quickly as possible, based on clear and consistent evidence of the important role work can play in tackling poverty.

[Baroness Lister of Burtersett (Lab) [V]]

My Lords, is it not shocking that the JRF found that

“even before the COVID-19 outbreak destitution was rapidly growing in scale and intensity”,

with 2.4 million people, including over 500,000 children, in households unable to afford the essentials needed to eat and stay warm and dry? Given that this and other research identifies social security cuts and design flaws as the key cause of this hardship, what assessment have the Government made of the impact on extreme poverty of withdrawing the £20 UC uplift in April and refusing to extend it to disabled people, the unemployed and carers on legacy and related benefits?

[Baroness Stedman-Scott (Con)]

Tackling poverty, as I said, is an absolute commitment and a priority for this Government. The noble Baroness raises the issue of the £20 uplift, and I can only confirm that the £20 uplift is in place until April 2021. Discussions between our department, the Treasury and others are ongoing, and a decision will be made in due course.

[Lord Hendy (Lab) [V]]

My Lords, before the impact of lockdown, in 2018, the United Nations special rapporteur on extreme poverty found that 14 million people in the United Kingdom were below the poverty line, 9 million of them in households where at least one person worked. Wages need to be increased to reduce poverty. To this end, and to increase demand, the OECD and the ILO advocate the promotion of collective bargaining. Does the Minister agree with them? If so, what steps to restore collective bargaining in the United Kingdom will the Government take to enable the voice of workers to be heard in the determination of wages?

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[Baroness Stedman-Scott (Con)]

I am pleased that the noble Lord recognises that being in good, well-paid work is a good route out of poverty. On collective bargaining, I will need to come back to the noble Lord in writing.

[Baroness Janke (LD) [V]]

The noble Baroness will be aware that many people in poverty and destitution do not have access to computers. They are often deprived of support and advice as well as crucial referrals to such services as food banks. Often, they do not pick up DWP instructions, and they end up being sanctioned through no fault of their own, adding further insult to injury. What plans do the Government have to bridge the digital divide and ensure access for the poorest and most deprived to such essential services?

[Baroness Stedman-Scott (Con)]

The noble Baroness raises a really important point. As we move to more online activity, access to technology will be critical for people to get the information they need. I can confirm that our department is looking at how we can increase digital access as part of the work the Secretary of State is conducting across government on the cost of living. Indeed, this is one of the things the flexible support fund exists to help with. When people see their work coach and explain their difficulties with access to IT, the flexible support fund can help.

[Baroness Eaton (Con) [V]]

My Lords, to read the words “living in destitution” as a description of life for some people, particularly children, is acutely distressing. When will the Government bring forward a proper strategy for tackling poverty, which, as this latest report clearly shows, was rising and intensifying long before the pandemic?

[Baroness Stedman-Scott (Con)]

I can confirm to my noble friend, as I already have, that this Government have consistently supported the lowest-paid families by increasing the living wage and continually strengthening the welfare safety net, including with an injection of billions extra this year for those in need. Our long-term ambition is to support economic recovery in this country by getting people back to work as quickly as possible.

[Lord Woolley of Woodford (CB) [V]]

My Lords, there have been two worrying reports this week: Destitution in the UK by the Joseph Rowntree Foundation and the Covid-19 Marmot review by Sir Michael Marmot. These reports paint a bleak picture of deprivation and destitution in the UK made worse by Covid-19. Both highlight the shocking, disproportionate impact these are having on black, Asian and minority ethnic communities, including Gypsy, Roma and Traveller. When will the Government acknowledge this specific fact and, more importantly, ensure there is targeted action to deal with it effectively?

[Baroness Stedman-Scott (Con)]

This Government have acknowledged the issues the BAME community faces and taken action. In fact, the number of BAME community members going into work was increasing. The detail of the noble Lord’s question might warrant, I may suggest, a meeting between us to talk about them further and in more depth.

[Baroness Sherlock (Lab) [V]]

My Lords, we all want to help people into work, but this report shows people are destitute now. It highlights the fragility of our social security system, pointing out that half of destitute households were getting universal credit or had applied for it. It says that needing to repay advances was leaving them with little to live on, and it warns that Britain is increasingly reliant on food banks as a core welfare response to destitution. This is scandalous—does the Minister agree with me? If so, what are the Government going to do about it now?

[Baroness Stedman-Scott (Con)]

I certainly acknowledge the issues that people are facing; I do not shy away from that at all. But, at the risk of repeating myself, the Government are right now putting over £100 million extra into working-age welfare, we have the Covid winter support fund, we have the plan for jobs and the pandemic policies are under continual review. There are free school meals and money for food charities. I am not sure I agree with the noble Baroness’s implication that we are not doing enough.

[Lord Taylor of Goss Moor (LD) [V]]

My Lords, we clearly face a completely unprecedented shock to the system, in which families who have been hard working and supporting themselves are being plunged into poverty and destitution by the economic shocks associated with coronavirus. One group that is often forgotten is those in rural poverty, whose difficulties are often made worse by their difficulty in accessing services that have been centralised. Will the Government put a priority on ensuring that at least some services are directed to the more remote, rural communities, where people in destitution often find themselves unable to get the help that people in more urban areas take for granted?

[Baroness Stedman-Scott (Con)]

The noble Lord raises a very pertinent issue. I am well aware of the issues that rural communities face. What I would like to do, if he is happy with this, is go back to my colleagues in the jobcentre network in order to understand exactly what they are doing to target help at the rural communities, and come back to him in due course.

[The Lord Speaker (Lord Fowler)]

I call the noble Lord, Lord Desai. No? In that case, I call the noble Lord, Lord Young of Cookham.

[Lord Young of Cookham (Con)]

My Lords, the Government introduced a welcome measure to help up to 4 million people on low incomes in September, offering a grant of £500 to those who had to self-isolate but could not work from home and therefore faced a drop in income. However, some of the local authorities through which this grant is routed are running out of funds, thereby prejudicing the success of the scheme. What steps can my noble friend take to ensure that those who are entitled to these grants get them?

[Baroness Stedman-Scott (Con)]

The £15 million allocated for discretionary payments is a fixed envelope to cover cases of exceptional hardship that fall outside the scope of the main test and trace support payment scheme. In addition, the Government have made a range of other support available to those on low incomes who have to self-isolate. That includes changing the rules to allow claims for statutory sick pay, increasing the standard allowance of UC and the Self-employment Income Support Scheme.

[The Lord Speaker (Lord Fowler)]

My Lords, the time allowed for this Question has elapsed, and that brings Question Time to an end.

Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment etc.) (EU Exit) Regulations 2020

Baroness Stedman-Scott Excerpts

Monday 14th December 2020 Lords Chamber

Moved by

[Baroness Stedman-Scott]

That the draft Regulations laid before the House on 15 October be approved.

Considered in Grand Committee on 9 December.

Motion agreed.

Social Security Co-ordination (Revocation of Retained Direct EU Legislation and Related Amendments) (EU Exit) Regulations 2020

Baroness Stedman-Scott Excerpts

Wednesday 9th December 2020 Lords Chamber

Moved by

[Baroness Stedman-Scott]

That the draft Regulations laid before the House on 16 November be approved.

Considered in Grand Committee on 8 December.

Motion agreed.

Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment etc.) (EU Exit) Regulations 2020

Baroness Stedman-Scott Excerpts

Wednesday 9th December 2020 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment etc.) (EU Exit) Regulations 2020.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, this draft statutory instrument was laid before Parliament on 15 October. Through this instrument, we are making the necessary arrangements to implement the terms of the withdrawal agreement and the Northern Ireland protocol in law for chemicals regulations. This will ensure that these regulations function effectively from the end of the transition period and that the existing high standard of protection for human health and the environment will be maintained.

In preparation for our exit from the European Union, a statutory instrument was made last year to ensure that the regulatory framework for chemicals remained functional after exit and to provide certainty for businesses and the public. It achieved that by making technical amendments to the retained EU law, such as changing EU-specific references and transferring functions and powers currently held by the European Commission to the appropriate authorities in each of the UK’s constituent nations.

Since the 2019 regulations were made, the withdrawal agreement, including the Northern Ireland protocol, has been agreed. The protocol requires that EU legislation will continue to apply in Northern Ireland after the end of the transition period. The existing EU exit legislation therefore needs to be amended to reflect the fact that retained EU law will be substantively applicable in Great Britain only.

If approved, these draft regulations will make the necessary amendments to three retained EU regulations as well as to EU-derived domestic legislation. I appreciate that the technical and composite nature of the regulations makes this particularly complex; the decision to present these proposals as a single instrument was for the benefit of the House, to reduce pressure on parliamentary time and to ensure that we are able to deliver an orderly transition. As this is such a technical instrument, I shall provide a concise summary of the regulations and the changes that we are making for noble Lords.

Of the three retained EU regulations to be amended, the first is the biocidal products regulation. This governs the placing on the market and use of products that contain chemicals which protect humans, animals, materials or articles from harmful organisms like pests or bacteria. This market covers a wide range of products such as wood preservatives, insecticides such as wasp spray, or anti-fouling paint to remove barnacles from boats.

Secondly, the classification, labelling and packaging of substances and mixtures regulation ensures that the hazardous intrinsic properties of chemicals are properly identified and effectively communicated to those throughout the supply chain, including to the point of use. The current classification laws are sophisticated and incorporate a detailed technical system of classification criteria. This classification is partly done through standardised hazard pictograms and symbols and warning phrases associated with specific hazards, such as explosivity, acute toxicity, or carcinogenicity.

Lastly, the export and import of hazardous chemicals regulations require the export of listed chemicals to be notified to the importing country and, for some chemicals, the consent of the importing country must be obtained before export can proceed.

This instrument makes three main changes, which I shall summarise. First, we are updating some transitional provisions in the 2019 regulations so that they apply from the end of the transition period, when the retained law comes into force, rather than from exit day. It should be noted that while this instrument’s title references genetically modified organisms, the only amendments to the relevant legislation are to update two references to “exit day”.

Secondly, it removes Northern Ireland from the scope of the 2019 regulations by omitting references to Northern Ireland and changing UK-specific references to read “Great Britain”. The instrument also revokes changes made to domestic legislation in Northern Ireland in the 2019 regulations, which are no longer required due to the protocol. Lastly, this instrument legislates for the Government’s commitment on unfettered access for these chemical regulations as well as the need to ensure that UK authorities have the appropriate information and regulatory safeguards in respect of chemicals placed on the market in Great Britain.

The Health and Safety Executive currently acts as a UK competent authority within the EU regimes for chemicals regulation. Under this instrument, it will become the GB regulatory authority. The Health and Safety Executive for Northern Ireland will be the regulatory authority with responsibility for Northern Ireland, and we are working closely with Northern Irish colleagues to prepare for the end of the transition period and support them afterwards. Both organisations have demonstrated their resilience through the pandemic, and I am confident that they have the capacity to undertake any new responsibilities brought about by EU exit.

This instrument was not subject to consultation as it does not alter existing policy. Published guidance has been followed and, in line with it, a full impact assessment has not been conducted as the instrument does not meet the de minimis threshold. However, I assure noble Lords that the changes brought about by it have been communicated through a series of stakeholder events throughout autumn and guidance published on the HSE website in October.

The devolved Administrations have also been fully engaged in the development of this instrument and have provided consent for the elements that relate to them. We are also in the process of agreeing a provisional common framework for chemicals that aims to maintain existing standards and promote common approaches to chemicals policy in the future.

In conclusion, this instrument will provide important continuity and clarity to the chemicals industry, ensuring that the legal requirements that apply to chemicals regulation are clear following the end of the transition period. I hope that colleagues of all parties will join me in supporting the draft regulations, and I commend them to the Committee. I beg to move.

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

My Lords, I thank all noble Lords who have contributed to this debate. I too add my thanks to the officials, who have helped us understand the detail of this SI and whose support has proved invaluable.

In winding up, I will address some of the important points raised during the discussions. First, my noble friend Lady Altmann mentioned the CLP and the MCL list. This will copy all existing harmonised EU classifications on 1 January, and HSE will be able to carry out its responsibilities to update.

The noble Baroness, Lady Bennett, talked about the chemical cocktail effect. I will ensure that the Health and Safety Executive writes directly to her and that a record is sent to all Members in the Committee and placed in the Library. The noble Baroness also talked about REACH. The REACH regulation is not included in this SI. Defra has the policy responsibility for the REACH regulation and has brought forward separate legislation on it, which I understand was debated yesterday.

The noble Baroness, Lady Bennett, and my noble friend Lady McIntosh talked about GMOs. The responsibility for aspects of GMO policy is spread throughout government. However, regarding contained usage, there will be no reduction in standards, and existing protections covering human health and the environment are maintained and will continue to work in the same way post EU exit.

The noble Baroness, Lady Sherlock, and my noble friend Lady McIntosh talked about resourcing and recruitment. The Health and Safety Executive has identified a total of 147 posts to be filled by the end of the financial year. We have made good progress and at present we have filled 108 of the 147 posts—73%—and are confident that this means we will be ready for the end of the transition period. Of the 73% of posts we have filled to date, we expect the vast majority to start in January, with the remainder taking up post before April. Several campaigns are still ongoing and due for completion in January 2021. We will continue to seek recruitment into our outstanding posts as a priority until the end of March. In total, we are recruiting an additional 117 brand new posts into the Chemicals Regulation Division relating specifically to EU exit. This represents a 45% increase in our baseline staffing number—260—from January 2020, and demonstrates our significant commitment to take on the new functions required.

My noble friend Lady McIntosh raised the issue of animal testing and asked whether, if we cannot access animal testing data, that would require applicants to do more tests. The Health and Safety Executive will apply the principle in the biocidal products regulation that vertebrate tests “shall not be repeated” and may be undertaken

“only as a last resort.”

Therefore, if the data owner has not submitted the study to the HSE, we would expect the applicant to make every effort to obtain access to it. Should the applicant not be able to reach agreement on data access with the data owner, decisions would need to be made on a case-by-case basis and we would need to discuss options with the applicant. We would accept a vertebrate study only if all options had been exhausted; I understand that this is the “last resort” principle.

My noble friend also talked about GMOs and contained use. We will not reduce standards and changes to legislation will follow the usual scrutiny and consultation.

The noble Baroness, Lady Parminter, talked about timescale changes and Article 37 of the CLP. This instrument amends the timescales put in place by the SI made in 2019 due to operational concerns raised since then. These amendments will ensure that the HSE has sufficient time to carry out its operational responsibilities. In addition, the current wording of the EU regulation states that decisions are taken “without undue delay”. However, those affected by regulatory decisions should be clear about when those decisions will take place. Therefore, our amendments specify that a decision is required within three months of a recommendation being made to Ministers and that, within one month of the decision, the HSE must update the GB MCL list.

The noble Baroness also asked about certainty for business. The decision to amend the timescales so that they are operationally deliverable was made under the advice of and after consultation with the specialist regulatory scientists in the HSE and the devolved Administrations. The system mirrors the EU system as much as possible so that the industry will be familiar with the assessment process.

The noble Baroness, Lady Parminter, also mentioned environmental assessment as part of the process. As part of the technical assessment, the HSE must look at the impact that a substance’s intrinsic hazards may have on environmental end-points. The HSE is supported by the Environment Agency in undertaking this work.

The noble Baroness, Lady Sherlock, and my noble friend Lady Altmann referred to unfettered access. The Government’s approach to unfettered access and the Northern Ireland protocol was set out in the main Command Paper and subsequent business guidance. This outlines that there will be some specific requirements for movements from Northern Ireland to GB for items categorised as highly regulated goods. Chemicals are highly regulated goods because they can pose a significant risk to human health and the environment.

The noble Baroness, Lady Sherlock, asked whether the Health and Safety Executive undertakes assessments for biocidal products during the 90-day period. All chemicals are highly regulated goods because they can pose a significant risk to human health and the environment. There is a transparency requirement for a Northern Ireland business to notify the Health and Safety Executive with information that it would submit to the EU before the biocidal product is placed on the market.

On the noble Baroness’s question about finances, I can confirm that, for the 2020-21 financial year, an additional £6.1 million was made available, with £1.6 million for the DWP and £4.5 million to help Defra to prepare for delivering the new chemicals framework. This represents a 60% increase on the 2019-20 financial year.

As many noble Lords will attest to, our chemicals sector is world-leading and vital for other key industries, such as the pharmaceutical, automotive and aerospace industries. We want to make sure that this continues. We also need to provide certainty for businesses in Northern Ireland to ensure both that the statute book is fully functional for the end of the year and that those businesses have unfettered access to the market in Great Britain. This instrument seeks to do that and meet our obligations under the protocol.

I am sure that noble Lords are all with me on the fact that we need to provide continuity and clarity to the chemicals industry following the end of the transition period. I want to ensure that legal requirements that apply in relation to chemicals regulations are clear and provide certainty to all. We must maintain our high level of protection in the workplace and for others, which this instrument will do.

I hope that I have covered all the points that were made. I will look at Hansard and, if there any points that I have not covered, I will make sure that noble Lords are written to.

Motion agreed.