Cessation of EU Law Relating to Prohibitions on Grounds of Nationality and Free Movement of Persons Regulations 2022

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 21st November 2022 Grand Committee

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

My Lords, this instrument was laid before the House on 20 October. It disapplies retained EU equal-treatment provisions relating to nationality and freedom of movement so that they cease to be recognised and available in domestic law in relation to access to social security, statutory payments, social assistance, housing assistance, education, training, apprenticeships and childcare-related matters.

These retained EU provisions have been redundant since the end of the transition period. The withdrawal agreement provides the necessary protections for those EU citizens who were resident in the UK before the end of the transition period and their family members. By disapplying the redundant provisions, this instrument furthers the Government’s aim of ensuring that all UK law is right for the UK. Correcting this deficiency in retained EU law will bring greater clarity to the UK statute book. I am satisfied that these regulations are compatible with the European Convention on Human Rights.

Prior to the UK’s exit from the EU, these equal-treatment provisions granted EEA and Swiss citizens rights to access benefits, services and educational entitlements on the same basis as UK nationals, if their presence in the UK was based in the exercise of specific freedom of movement rights. The UK voted to leave the EU and, as a result, freedom of movement between the UK and EEA countries came to an end on 31 December 2020. Equal-treatment provisions based in freedom of movement arrangements therefore became redundant.

Disapplying these redundant equal-treatment provisions clarifies the situation that is already in effect for EEA and Swiss nationals coming into the UK. In line with the Government’s manifesto commitment, EEA nationals are now treated on an equal basis with other non-UK nationals arriving in the UK after the end of the transition period, with the exception of those EEA or Swiss nationals granted status under the EU settlement scheme.

While the instrument does not effect a policy change for any group of EEA or Swiss nationals in the UK, I particularly emphasise that it in no way alters the rights of EEA or Swiss nationals that are protected under the EU-UK withdrawal agreement, the EEA European Free Trade Association separation agreement and the Swiss citizens’ rights agreement. They will continue to be able to access benefits and services on broadly the same basis as they did before the end of the transition period, and their rights to do so are protected by the European Union (Withdrawal Agreement) Act 2020. Additionally, we already have domestic law that protects individuals from discrimination. Retained EU provisions based on freedom of movement are therefore not only redundant but unnecessary.

In summary, this instrument is a technical correction of the statute book that will address a deficiency arising from retained EU law. I therefore commend the regulations to the Committee.

[Baroness Sherlock (Lab)]

No other takers—I am shocked, given that it is such an exciting instrument. I thank the Minister for her introduction to these regulations, in which I am interested. I was going to say, “and all noble Lords who have spoken”, but it is just me. I am also grateful for the briefing on the regulations from the Minister’s officials. I confess that, despite reading everything I could, I am struggling to work out what these regulations actually change, if anything.

I read a summary of this instrument done by the House of Commons Library for a colleague at the other end. It noted that Parliament has already legislated to end the underlying right of free movement for EU citizens moving to the UK. The Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020 repealed the main provisions of retained EU law relating to free movement and disapplied the equal treatment obligations supporting free movement, in so far as they were inconsistent with the UK’s immigration laws. However, the note went on to say that

“these equal treatment rights ‘would continue to apply in non-immigration contexts unless disapplied’. The draft measure now disapplies those equal treatment rights in the specific areas set out in the schedule, including social security payments and housing.”

The Minister said that these rights “became redundant” as a result of the 2020 Act having ended the underlying right to free movement. I am still not clear as to exactly what rights may still exist that this instrument is disapplying. Can the Minister clarify that? I can see that the aim is to make it clear that EEA nationals who are not subject to the settlement arrangements should have the same rights as anyone else subject to the points-based immigration system going forward. I am just not clear what, if any, rights they have now that they will not have once this instrument becomes law. If the answer is none, I ask the Minister to say that categorically for the record. It may be about legal clarity; I would just like to be really clear.

I want to make two other points. Regulation 4 makes changes to Regulation (EU) No. 492/2011. I looked this up; it turns out that it amends Article 7—it prohibits different treatment of EU nationals in respect of employment, social and tax advantages—to say that this will not apply in relation to the matters in the Schedule to this draft instrument, namely: social security, social assistance, housing, education and training, and childcare. Do Article 7 rights continue to apply to any other areas?

Finally, the instrument also removes Articles 9 and 10, which provide for the rights of EU nationals in relation to social housing and to state education for their children. Are there any other rights that EU or EEA nationals still enjoy that have not been repealed? If the answer is that any such rights that exist will be swept away by the sunset provisions of the advancing retained EU law Bill, why not wait for that rather than using Section 8 powers? I look forward to the Minister’s reply.

[Baroness Stedman-Scott (Con)]

I thank the noble Baroness, Lady Sherlock, for her contribution and questions and congratulate her on her stamina in these matters. I will try to answer all the points raised.

The noble Baroness asked how the EU provisions to be disapplied became deficient or redundant. Prior to the end of the transition period, through the EU freedom of movement of persons rights, EEA and Swiss citizens had access to certain benefits, services and education entitlements. When the freedom of movement of EEA citizens ceased at the end of the transition period, the application of these rights became redundant, as the rights granted by these provisions have been redundant since the close of the transition period. They represent the deficiency arising from retained EU law. The regulations clarify the situation already in effect.

The noble Baroness asked what rights the provisions to be disapplied still grant. First, let me clarify that these regulations should not be understood as implying that these provisions continue to grant rights outside of the relevant matters as per Regulation 1(4). The department involved in these regulations examined the provisions as they relate to the benefits and services covered in the relevant matters and is confident that these rights are redundant as they relate to the relevant matters. We are disapplying them to clarify the position that is already in effect.

The noble Baroness, Lady Sherlock, asked what would happen if these provisions were allowed to remain on the statute book. These redundant provisions are not in line with domestic legislation on immigration and access to benefits and services. They therefore create confusion in the statute book. Not disapplying them would leave this deficiency in UK law unaddressed. It could also mean that EEA nationals who are not eligible for benefits or services could bring legal challenges against the Government to try to bypass domestic legislation by instead relying on those retained EU freedom of movement provisions. This would set back progress on implementing the public’s decision to leave the EU and end freedom of movement.

The noble Baroness asked me to clarify whether that was a change in policy. The answer is categorically no. These regulations do not effect any policy change; they are a technical rectification of the statute book to clarify the position already in effect after the end of the transition period. She asked why the regulations were being laid now. Why not let these retained provisions be sunsetted by a reform and revocation Bill? Work on the regulations was initiated independently of the Retained EU Law (Revocation and Reform) Bill under Section 8 powers from the European Union (Withdrawal) Act 2018. Those powers allow Ministers to address deficiencies in retained law. Section 8 powers expire on 31 December 2022, thereby creating a need to lay these regulations.

The noble Baroness also asked whether any rights still applied. Rights and entitlement for EEA citizens set out in the withdrawal agreement and domestic legislation still apply.

These regulations are a technical rectification to ensure that UK law functions with legal clarity. The retained EU provisions that they disapply are redundant, and that deficiency should be corrected. This instrument will not change the policy in place regarding any rights currently enjoyed by EEA nationals in the UK. However, it will bring greater clarity to the UK statute book. I therefore commend the regulations to the Committee.

Biocidal Products (Health and Safety) (Amendment) Regulations 2022

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 21st November 2022 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her introduction to these regulations, the noble Baroness, Lady Brinton, for her very interesting contribution, and officials for supplying some useful information.

As we have heard, these regulations are needed because the post-Brexit arrangements made for authorising biocidal products in Great Britain are not, shall we say, working quite as smoothly as one might have hoped at an early stage of the process. After Brexit, the process of authorising the “active substances” in biocidal products was transferred from the EU to the Health and Safety Executive. There was a three-year transition period during which products whose active substances had previously been authorised could continue to be sold in GB using the certification. These regulations propose that those products can carry on being sold in Great Britain until the end of 2027, whether or not the HSE has processed their application for authorisation—I hope I have that right; I read them several times but I would not swear to it. However, the Minister can correct me in her response if I have not.

The noble Baroness, Lady Brinton, mentioned the comments by the Secondary Legislation Scrutiny Committee, which helped us to understand that the big problem is in fact a huge backlog primarily caused by the fact that the HSE no longer has access to much of the data stored in EU databases on which previous assessments have been made. Therefore, we need this instrument to give legal certainty that at least until the end of 2027 biocidal products can continue to be sold and used legally while the HSE works its way through the backlog of applications for authorisation.

I too have some questions. First, when did the HSE know that it would not have access to the data in the relevant databases that was needed to make these assessments? Presumably, it was part of the negotiations for Brexit; did it know in plenty of time? If so, why were alternative arrangements not put in place for some time? Nobody could suggest that the Brexit process passed swiftly—I feel that it has been happening for most of my adult life, but even if it was not that long, it was not a speedy process. Was there not time to get ahead of the curve?

I would be interested in the response to the questions raised by the noble Baroness, Lady Brinton, about what the agency is doing to build up its own database and what progress it is making on reducing the backlog.

What assessment has been made of the possible risks of the HSE not having access to the data it needs to make timely and expert assessments of biocidal products? I understand that the EU was doing a rolling review of active biocidal substances, so presumably there are products awaiting authorisation that have not been reached. So their active substances had not yet been reviewed by the EU, yet, at the moment, these regs provide for them to be legally marketed until the end of 2027 without any HSE authorisation. Can the Minister therefore tell us what is the longest period a product could be on the market since either its active substances were approved either by the EU or the HSE?

What happens if evidence emerges that an active substance is not as safe as it had perhaps been thought or indeed as it was known to be when it was approved by the EU? I presume that the HSE or other bodies have powers to act if someone brings evidence to them saying, “Evidence has emerged that this product is not as safe as we thought it was.” However, since there will not be any guaranteed systematic review of the evidence for quite a long time, what if that evidence emerges elsewhere and is not drawn to the attention of the agency? Has a plan been put in place to consider the impact of that? If a product were to contain, say, two active substances which had been approved separately by the EU, how would we know if they would interact and whether the product is safe if the product is not being authorised by the HSE for, potentially, a number of years?

Finally, to follow on from the question from the noble Baroness, Lady Brinton, the HSE now has an enormous job to do. The Minister mentioned an increased head count. What I am interested in is whether she can assure the Grand Committee that her department has taken the view that the HSE has access to the numbers of people and the expertise that it needs to keep British people safe in this area. I look forward to her reply.

[Baroness Stedman-Scott (Con)]

I thank the noble Baronesses, Lady Brinton and Lady Sherlock, for their contributions. I shall try to answer those questions. If there are some that I cannot answer, I shall write and clarify at a later point.

First, the noble Baroness, Lady Brinton, asked about the backlog in the past three years. It is important to clarify that the HSE has been working on the backlog of biocidal product applications for only around a year. Three years is a misleading timeframe, because it fails to account for the EU exit implementation period and, after that, the time given to industry applicants to resubmit their applications to the HSE. In this year, the HSE has added the details of all resubmitted applications and associated data into their systems and initiated work on around 20% of these. This is in line with plans to clear the backlog of applications. The HSE’s operational planning assumptions are that it will commence 50 applications per year over the coming years, which means that, by the end of the five-year period, it anticipates having completed the roughly 200 applications received after the transition period or be on track to complete them with the normal timeframes in the legislation. After that, the HSE will return to operating within the existing deadlines so that the deadline extension can lapse.

The noble Baroness, Lady Brinton, also asked a question about having lost access to the EU databases. The EU databases contain certain historical information from the EU regime, which it would be too costly to recreate in Great Britain. Therefore, at the same time, the HSE is exploring options for how it can best operate the GB regime, on the assumption that this information will remain unavailable. Working on this is at an advanced stage, and appropriate solutions will be implemented as soon as they are fully developed and tested. I do not know how we would plan to communicate that once it is done, but I shall write to noble Lords.

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[Baroness Stedman-Scott (Con)]

My understanding is that, with the information that the HSE has, it has to start from a very low point, but it will not be without anything—as I understand it. I am told that biocide evaluations are complex regulatory assessments involving a number of scientific specialisms, so developing solutions is inevitably taking some time. I am not sure that that answers the question that the noble Baroness has challenged us with—whether we are starting from scratch, or whether we have information with which we can start it off. In fact, I can now say that we are not starting from scratch, but I think that I owe both noble Lords a bit more on that, and I shall place a copy of a letter in the Library. They can be comforted that we are not starting from scratch, but I am not sure where we are starting from—but there we are.

The noble Baroness, Lady Brinton, asked about retained EU law. The Department for Work and Pensions and the Health and Safety Executive will continue to assess REUL to identify potential impacts. We are committed to ensuring that health and safety legislation continues to be fit for purpose and that our regulatory frameworks operate effectively following the sunset of the REUL—forgive me for not reading the term out in full.

The noble Baroness, Lady Sherlock, asked about mixing two authorised products into one—a chemistry set comes to mind when answering this question. The new product will require its own authorisation. It will not be allowed on the market until it has gone through its own risk assessment, biocidal product assessment and authorisation

The noble Baroness also asked when the Government found out that we had lost access to the EU databases. The EU withdrawal agreement provided that the UK would no longer have access to the relevant EU databases from the end of the implementation period. Since then, as I said, the HSE has been assessing a number of options to manage biocidal product authorisations, taking into account the loss of access to historical information in EU databases, such as use of publicly available information. I am sorry that it is not possible to give a timeline, but work is at an advanced stage and appropriate solutions will be implemented as soon as they are fully developed and tested.

The noble Baroness raised the issue of resources, which is important. The total budget for the HSE’s chemical regulation division has grown by 39%, from £22.4 million to £31.2 million between 2018-19 and 2022-23, reflecting the HSE’s need for increased resources for its post-EU exit responsibilities. The HSE’s current focus is on building out from our initial day one operating capacity and laying the foundations for its long-term future operation. The funding the HSE has received to date is sufficient to support that work, and I am not aware of any attempts to reduce it in the current climate.

The noble Baroness, Lady Sherlock, asked about the risks of leaving products on the market. There is a multi-regulator approach to the regulation of biocides not yet authorised under BPR using a jigsaw of legislation, including product safety law and earlier pesticides legislation. This provides proportionate powers for the appropriate authorities to take the regulatory action if products are identified that pose risk to people, animals or the environment.

The instrument will provide the necessary extension to the legal deadlines—

[Baroness Sherlock (Lab)]

On that last point, the question I was trying to ask—I probably phrased it very poorly—was that I realise that if information comes to the Government’s attention, by some tool or agency, a means will be found to do something about it. But it is quite possible that, for a product that has been on the market without review for a long time and is used around the world, evidence may have appeared elsewhere which has not been brought to the Government’s attention. The point about systematic reviews is that one presumably goes out looking at the evidence. Is there any concern that, the longer products are on the market, the greater the risk that some previously unclocked problem may arise?

[Baroness Stedman-Scott (Con)]

I will write to the noble Baroness about that. I would assume—correctly or incorrectly—that the Health and Safety Executive is keeping up with developments by other countries’ health and safety agencies, but let me write to the noble Baroness to clarify that point. If, when she gets the letter, she is still worried, she may come back to me and I will do further work on it.

To conclude, the instrument will provide the necessary extension to the legal deadlines to enable HSE to process effective biocidal product authorisation applications. This will provide legal certainty to businesses that biocidal products on the market awaiting their application to be processed can remain there. In turn, biocidal products essential to the functioning of society can continue to be made available and used. I commend the instrument.

Carer’s Allowance

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 17th November 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

I ask my noble friend Lord Markham, “Shall we talk?”. I am very happy to talk to anybody to make life better for people. Maybe my noble friend can follow that through in the next Question.

[Baroness Sherlock (Lab)]

My Lords, the Minister is rightly encouraging people to claim the benefits to which they are entitled, but can I take her back to the question asked by her noble friend Lady Fookes? Even people on benefits may be struggling at this point. The report showed that those who are caring have extra costs which others do not. The report was incredibly moving. One person said:

“My son is incontinent … if we don’t wash him in warm water several times a day this will cause him to physically decline. So how do we pay for the gas to heat the water if we are currently at max budget?”


Another said,

“my husband has terminal brain cancer, I am worried about how I will cope over the winter months as I can’t allow him to be cold—I need him to be as comfortable as possible in his final months at home”.

Those who are on just carer’s allowance do not get any extra help with fuel. What are the Government going to do to see whether the money given to those who are caring is enough to meet the costs they encounter?

[Baroness Stedman-Scott (Con)]

Those who are on carer’s allowance receive the £400. Those who are on carer’s allowance but who are entitled to the carer’s element of UC, where they are not required to look for work, can get another £2,000. The Government are helping, and we are four minutes away from finding out what more they might do around energy costs. The stories and case studies that the noble Baroness read out are harrowing, but the Government are doing everything they can, within the limits of their financial position.

Pensions Dashboards Regulations 2022

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 15th November 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

I note the noble Baroness’s point. This is something that we will take back with officials and to the relevant authorities, and it is something else that I shall write about and I hope give her a better answer than she has had to date.

The noble Baroness, Lady Bowles, raised the issue of risk of exploitation of data. Pensions dashboards and the technology behind them are designed to maximise data security. For example, pensions information is sent directly and securely from the scheme to the individual; it is not stored by qualifying pensions dashboard services or by the digital architecture. Individuals will always have control over who has access to their data, and will be able to revoke access at any time.

The noble Lord, Lord Jones, and the noble Baroness, Lady Sherlock, have raised to me individually the issue of British Steel pension schemes. The FCA is responsible for the regulation of the financial advice market and has looked closely at the advice provided to those BSPS members who decided to transfer out of the defined benefit scheme. It found that a very high proportion had received unsuitable advice, as has been said. The FCA has announced that it intends to take forward a scheme to provide compensation for BSPS members who received poor advice; it published a consultation on this scheme on 31 March, which has now closed. I think that the point that the noble Lord and the noble Baroness were making was that it must not happen again, and I am sure that message is understood.

The noble Baroness, Lady Sherlock, asked me to confirm when the data from personal and stakeholder pension schemes will be available to the public through the dashboard. She also asked what the position was with group personal pension plans. As set out in FCA rules, the majority of personal and stakeholder pension schemes are required to stage as part of the first cohort by the end of August 2023. That includes group personal pension plans. Until dashboards are launched to the public, schemes’ data must be available to invited users for testing purposes.

The noble Baroness raised a point about missing pots. Only a very small proportion of occupational pension scheme memberships are out of scope of the obligations to connect in our regulation and FCA rules. We expect that, at the point when dashboards are launched to the public, most individuals can be confident that all their pensions will be available to find via dashboards. When the value data for found pensions has not yet been provided—for example, if the member is new to the scheme, or when the value is still being calculated by the scheme—information to that effect will be displayed on the dashboard.

The noble Baroness asked how confident Ministers were about the quality of the data and whether the work has so far thrown up any concerns. It is critical that savers can trust the information in front of them; trustees and managers have existing legal obligations in respect of data quality, including the accuracy principle under UK GDPR, which requires that organisations ensure that data remains accurate and up to date. The Pensions Regulator set out its expectations on data quality in its record-keeping guidance; this includes that data is measured at least once a year.

The noble Baroness asked why the DWP had not set particular minimum data standards for schemes for matching and releasing data. The regulations allow for the trustees and managers of schemes to set their own matching criteria. We believe that schemes should be given discretion over which data elements they use to suitably search their records for a match. It is important that any scheme’s matching policy is appropriate to the level of confidence that they have in their own data; a uniform approach across all schemes would be likely to result in suboptimal matching.

Just to divert the House for a moment, I am conscious of how long I have been speaking, and I am keeping others from their business, but I am absolutely committed to answering these questions. With the leave of the House, I hope that I can carry on.

The noble Baroness, Lady Sherlock, asked whether I could explain for the record what would happen if the data submitted by a consumer was a partial match with data held by a firm. Schemes have the option of returning a possible match if they believe that they hold a record for an individual but are not certain. When a scheme returns a possible match, an individual will receive a limited form of administrative data that will enable them to contact the scheme to see if the possible match is in fact a match made.

The noble Baroness asked about screen-scraping. The regulations prohibit the storing of dashboards of view data, unless for temporary caching and for the sole purpose of displaying the view data in a single session. Similarly, transactions are not possible through the dashboard ecosystem. Making it possible for consumers to find information about all their pensions in a single place and requiring the consumer to undertake an identity verification check before being able to access that information significantly reduces the consumer appeal or perceived benefit of agreeing to screen-scraping. I have much more that I could say on that issue, so I shall write and place a copy of the letter in the Library of the House.

The noble Baroness, Lady Sherlock, and the noble Lord, Lord Davies, raised the point about complaints and where the liability lies if a customer makes a decision on the basis of view data that later proves to be inaccurate. As set out in our response to the consultation on the draft regulations, trustees or managers are responsible for meeting the requirements, which include receiving fine data, as well as undertaking, matching and returning the correct view data. Trustees or managers are not responsible for verifying the identity of users, and the authorisation of view requests or any processing of view data carried out by dashboards. The question of liability in the event that something goes wrong to the detriment of the individual would have to be considered on a case-by-case basis.

The noble Baroness, Lady Sherlock, raised the issue of liability and risk for trustees. The Government acknowledge that many trustees do an excellent job, often on a voluntary basis. The vast majority of trustees are in schemes with fewer than 99 members, so will be outside the scope of these regulations, unless they connected to pensions dashboards voluntarily. Although we accept that the regulatory requirements on trustees have grown a great deal over the years, this is only right, given what is at stake—we are talking about pension savings for millions of people.

The noble Baroness, Lady Sherlock, raised the issue of handling complaints and where consumers go to make a complaint. The dashboard ecosystem is made up of multiple different parts and, as such, dashboard users would potentially have complaints against a number of different parties. MaPS will therefore provide a central queries and complaints navigation tool, which qualifying pension dashboard services must direct individuals to, to help them understand their issues and know to whom they should direct their query or complaint if things go wrong, and the available routes to redress.

The noble Baroness, Lady Sherlock, raised the issue of scams and hackers and asked whether there is a strategy in place to counter the risk of scams within the system and whether this is being revisited regularly. It is crucial that dashboards give power to consumers and not scammers, which is why the dashboard ecosystem has been designed to ensure that only relevant pension schemes and authorised qualifying pension dashboard services have access. To maximise the effectiveness of the Money and Pensions Service pensions dashboard, users will have access to a retirement planning hub, which will provide onward planning journeys in a single place, supporting good decision-making. The FCA and MaPS will keep their rules and standards under review as dashboards emerge and evolve.

[Baroness Sherlock (Lab)]

If I can put the Minister out of her misery, I would be content from this point onward if she were to write to me with answers to the remaining questions. I just say for the record that I flagged up to the usual channels some time ago that this instrument would take rather longer than the normal time, and it would have been helpful if the planning for this evening had taken that into account. However, I am very grateful to her for having answered so fully and to have taken the time to do this—I really appreciate it.

Universal Credit (Transitional Provisions) Amendment Regulations 2022

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 24th October 2022 Lords Chamber

[Baroness Sherlock (Lab)]

Just to clarify, nobody who has raised the question of uprating has asked the Minister to comment on the amount by which benefits will be or should be uprated. On the assumption that every year there is some uprating, the value of transitional protection will be different before the next financial year or after, so if somebody moves before, they will be worse off than if they move after. The questions are, first, whatever those rates are, will the Government do anything about that? Secondly, will the department warn a claimant who could choose to migrate either side of the line that they will be worse off if they go this side of the line?

[Baroness Stedman-Scott (Con)]

The answer to that question is that I will need to write to the noble Baroness. She raised it in our meeting and I have asked my officials to prepare me a written answer so that I get it correct. I will write to the noble Baroness and place a copy in the Library.

All noble Lords who have taken part today have asked a number of justifiable and understandable questions. I will make sure with my officials that they are all answered in a subsequent letter. I thank all noble Lords who spoke whose questions enable us to clarify in more detail. Be reassured that the Government are fully aware of the concerns over the scrutiny of managed migration. We believe that managed migration to UC is the right step for claimants and that this is the right time. We believe we know how to protect claimants and are learning from the discovery phase. Given my response, I respectfully ask the noble Baroness to withdraw her Motion to Regret.

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lord who have spoken tonight and thank the noble Lord, Lord Storey, for making some important points about the position of vulnerable claimants and asking some good questions. I thank my noble friend Lady Lister for a powerful speech illustrating the range of issues that will have to be considered very carefully over the weeks and months ahead. I am grateful to the noble Lord, Lord Farmer, for raising the questions he did and to the Minister for answering them.

Given the lateness of the hour and the business ahead of the House, I will not respond at great length, but I want to say a couple of things. First, the Minister said that my Motion was “mis-founded” because universal credit is good for claimants, so they should be encouraged to move across, and they do not want to do anything that gets in the way of that. She is right that many people will be better off on universal credit, but others will not. For those who will be worse off, it is small comfort that someone else will be better off. It is incredibly important that those who will be worse off, and especially the significant numbers who are vulnerable, are given appropriate support, that their needs are properly attended to and they are not simply left behind, as she said, when others are moved across.

Secondly, she is right that a number of people are worried about universal credit, but not just on the grounds of media comment. The experience of some universal credit claimants has not been good: waiting a long time for benefits, complicated processes, things that they did not understand. I know, just from the charities and churches that I have spoken to, that the experience has not always been straightforward. There are good reasons for people to be concerned.

There are a number of questions here. The Minister is right: she said the Government wanted to change the regulations because the new approach better fits with their strategy and the old approach placed some regulatory constraint. That was the point: the point was to place some constraint. That is why the Secretary of State did it; that is what it was for; and that is what the Government have simply abandoned.

The Minister has said several times that she will update Parliament at the appropriate stages. The fact is, once these regulations go through, there is nothing to require her to come to the Floor of this House and say anything. The only reason she is here tonight is because I tabled a Motion against these regulations, so once they go through, the department will have complete freedom to whatever it wishes. I am really grateful for the time and the detailed responses she has given, but will she please commit to going through Hansard with some care? I think she will find when she does that there were questions that were not answered, or not answered fully. Secondly, will she please look for opportunities to engage this House and not simply the Work and Pensions Select Committee, so that we, as well as the other place, can properly have our say?

[Baroness Stedman-Scott (Con)]

I think I have emphasised the value of regular meetings, updating people and giving them the opportunity to advise us of things they are worried about and things that have gone wrong. I have given my word here. I know our Secretary of State—

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[Baroness Stedman-Scott (Con)]

I have no intention of talking as if that is the answer and nothing will be wrong after that. I understand that it has a fixed life. Our job is to work with these people, and I understand the vulnerabilities. I understand the barriers people face when work coaches are trying to find them extra hours they can do, taking into account the things that are stopping them now. The relationship with their work coach will be invaluable. There is nothing in a work coach’s job description that says they must say, “You’ve just got to do this”. I hope that the relationship with the work coach will make a huge difference, and that they will go to their superiors when there are real issues that cannot be overcome through those channels.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her answers. There are still some outstanding questions, and I remain very worried about the impact on people who are utterly dependent on the benefits they get to keep body and soul together. I very much hope that we will have opportunities to discuss this. However, I have reached the limit of what I can do about these regulations, and voting on this Motion would not change them. In the light of that, I beg leave to withdraw the Motion.

Unemployment Figures

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 20th October 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

I believe that the Secretary of State for Health, Thérèse Coffey, is focusing on this. I am sorry; I am really not trying to duck the issue, but the fact of the matter is that it is one for the Department of Health to look at. Clearly, we need more people to clear the backlog.

[Baroness Sherlock (Lab)]

My Lords, I think the Minister is here to answer—

--- Later in debate ---

[Baroness Sherlock (Lab)]

I am grateful to my noble friend and will try again. The Minister is here to answer for the whole Government, but if she does not want to answer for anything but her own department, can I tell her that one-fifth of adults between 50 and 65 who have left work are currently on NHS waiting lists? Does she accept that the very least her department could do is ensure that it can assure those people that, as well as that problem, it is not about to cut the value of their benefits as well?

[Baroness Stedman-Scott (Con)]

We will have to wait and see what is in the Secretary of State’s review of uprating. We have honoured the pledge we made on the triple lock and I am afraid that until we get to 25 November I will not be able to answer that question in all truth.

Out-of-work Benefits

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 17th October 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

I am very happy to look into it. Before I do so, maybe I can speak with the noble Baroness to get some more information to share with my colleagues in the department.

[Baroness Sherlock (Lab)]

My Lords, the Minister mentioned people with ill health. The group falling out of the labour market fastest are the over-50s, and the ONS has found that more than half of over-50s who have left the labour market since the pandemic have done so because of physical or mental ill-health. What is the Minister’s department doing to target over-50s who have left the labour market, who are much needed out there and who want to get back into work? Some of them are not technically unemployed; some are not even getting benefits. What are jobcentres doing about those people?

[Baroness Stedman-Scott (Con)]

We have our programme for over-50s and our over-50s champions. If somebody over 50 is on a benefit, they will be engaged with a work coach, who will have to identify the barriers and put interventions in place to overcome them. People not involved in benefits will get a mid-life MOT and direction to Jobcentre Plus.

Chemicals (Health and Safety) Trade and Miscellaneous Amendments Regulations 2022

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 19th July 2022 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her introduction to these regulations and for explaining them. I confess that I read both the regulations and the Explanatory Memorandum more than once, and stopped only when I realised that every successive reading was adding nothing to my understanding or indeed knowledge of the subject in question. So, I appreciate her summary.

I thank the noble Baroness, Lady Barker, for some great questions. She is absolutely right that, while they seem dry, questions such as the easily comprehensible labelling of dangerous objects could hardly be more important in terms of protecting life and limb. I will ask some questions, and I apologise in advance if they are basic. However, I trust that the Minister has cavalry behind her who can assist should that be necessary.

As far as I can understand it—I know that the Minister will correct me when she responds if I have got it wrong—the instrument appears to do two main things. First, it provides for the creation of an information- sharing gateway so that the Health and Safety Executive can disclose information that it is required to disclose under the terms of the trade agreement between the UK and the EEA/EFTA. My first question is: what is it? What will the gateway look like? Is it a process or a piece of software? Is it online and is it secure?

The second question is fairly obvious: what will it do? The Explanatory Memorandum says:

“HSE needs a power in order to share information such as individual substance evaluations and risk assessments that it holds on chemicals to assist the UK in meeting its obligations on regulatory co-operation contained in the Chemicals Annex of this trade agreement.”


Can the Minister give me an example—I am a bear of very little brain—of some information that the UK is required to disclose as a result of this trade agreement which is in the gift of the HSE and which it currently does not have the power to disclose but, as a result of this regulation, will then be able to disclose?

Can the Minister also tell us where the information is coming from? She mentioned information coming from EFTA or EEA trade partners, but are we also talking about information that British firms have supplied to the HSE in the ordinary run of business? I am interested in the line of liability and the control of the data. Whose data is it, who controls it and where will it end up?

What are the limits on disclosure? Regulation 3 sets out three “permitted purposes” under which this information can be disclosed:

“to ensure health and safety … to ensure protection of consumers”

and

“to ensure protection of the environment.”

That is pretty broad. Given that it is that wide-reaching, can the Minister say what the boundaries are for disclosure and whether there will be any monitoring of the HSE’s decision-making in relation to it? Since the received information can be used only for a permitted purpose, what will be in place to monitor the use after the information has been disclosed?

There is a lot of amending and repealing going on here—amending the biocides regulation, amending and repealing two EU directives. How can you amend and repeal things? Do you amend them and then repeal them? I suppose it would not make any sense the other way around, but perhaps the Minister can shed some light on that. There was also amendment of the CLP regulation, the PIC regulation and related retained legislation

“to ensure the regulations continue to operate effectively.”

At this point I had completely lost any sense of which regulations were being enabled to operate effectively.

I am trying to get at what the end state is—the noble Baroness, Lady Barker, put it much more crisply. Where will we land once all this amending and repealing has happened? Are we back where we were before Brexit? Are we in a parallel space to where our EEA/EFTA trade partners are? Are we on some different diverging path? Where will we land? Also, can she assure us that, once all this amending and repealing has happened, the legislation—both retained and secondary—relating to health and safety in chemicals will be fit for purpose?

To give the Minister a bit of time, I will summarise the questions. What is the gateway? What information will go through it? Can we have an example of it? Where does the information come from? What are the limits on the information that can be disclosed, given the very wide-ranging parameters in the regulations? Where will we land once all this has happened? I am very excited to hear her reply.

[Baroness Stedman-Scott (Con)]

I thank the eloquent noble Baronesses for their questions. As they say, this is a very technical piece of work, but I will do my best to respond. My cavalry is working very hard to ensure that I can do so with accuracy. I thank both noble Baronesses for contributing to this debate. In closing, I will try to deal with some of the issues. If I do not, noble Lords know that I will go away and do my homework to get the answers they deserve.

The noble Baroness, Lady Barker, asked about the Northern Ireland protocol. This instrument makes no changes in relation to Northern Ireland beyond correcting references in EU-derived domestic legislation to EU law which should reference the Protocol on Ireland/Northern Ireland and ensuring that the definition of “export” in the GB PIC regulation clearly captures the removal of chemicals from Great Britain to Northern Ireland, as intended.

The noble Baroness also asked whether the regulations simply return GB regulations to their state when we left the EU. The CLP regulation has been retained as domestic law and now establishes a GB CLP system that is independent from the EU CLP regulation. It is therefore necessary to ensure our regulations no longer make deficient references to EU institutions or their processes and authority. These proposed changes ensure the last remaining references to the European Commission and its delegated powers to make amendments to specified articles and annexes are removed from the retained GB CLP regulation.

The noble Baroness, Lady Barker, referred to the biocidal products regulation, or BPR. The regulations were brought into GB from EU BPR, but during this process, as I have said, some EU references within the legislation were not removed, so the changes in this SI ensure that GB BPR works as a piece of domestic legislation.

The noble Baroness also asked about estimated costs. There will be no costs to businesses arising from the regulatory information-sharing arrangements in the UK-EEA/EFTA trade agreement. The corrections to the retained chemicals regulations are to address deficiencies and inoperabilities. They allow the regulations to function as originally intended and do not have any financial implications.

The noble Baroness, Lady Sherlock, challenged us on what the information-sharing gateway will look like. It will be mostly regulatory information held by the HSE or parties to agreements, so it will be information on risk assessments—not confidential business info. Trade data will be for the Department for International Trade.

The noble Baroness, Lady Sherlock, raised the issue of disclosure. The GB PIC regulation implements the UK’s international obligations under the Rotterdam convention on the prior informed consent procedure for severely hazardous pesticides. The regulation establishes a system of export notification and information exchange to allow countries to make informed decisions about the chemicals they import. The GB regulation has been retained as domestic law, and now establishes a GB PIC export notification system that is independent from the EU PIC regulation.

--- Later in debate ---

[Baroness Sherlock (Lab)]

I shall not press the Minister any further now. She has helpfully described what the regulations are intended to do, but she has not helped laypeople such as the noble Baroness, Lady Barker, and I to understand what the end state will look like as a result of them. For example, she said that through removing deficiencies, we will have an independent GB CLP regulation process. It is great that it will not be deficient any more; I have no idea what it will look like, and I realise I should. If possible, when she writes, given the complexity of the regulations and the question, if she could describe the end state, we would be very grateful.

[Baroness Stedman-Scott (Con)]

I am very happy to commit to doing that, subject to agreement from my officials. We are fine.

To conclude, the instrument will give HSE the power it needs to share regulatory information it holds on chemicals to assist the UK in meeting its obligations on regulatory co-operation contained in the chemicals annexe to the free trade agreement with the EEA/EFTA countries. This removes the barrier which was stopping information sharing under the free trade agreement, which would have been detrimental to HSE making informed decisions about the chemicals being imported and exported. By also correcting the outstanding deficiencies related to EU exit, we will ensure that retained and EU-derived domestic chemicals legislation continues to operate effectively. Therefore, I commend the instrument.

Cost of Living: Low Income Families with Children

Debate between Baroness Stedman-Scott and Baroness Sherlock

Wednesday 13th July 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

I have listened to the questions today and there is a real swell of opinion that the payments are not enough—I doubt that we could ever do enough. The package of measures we have provided is designed to target support to those most in need. It will make a real difference and, I am sure, help people through these very difficult times.

[Baroness Sherlock (Lab)]

My Lords, I fully accept that the Government cannot solve every problem, but one of the problems is that they cut billions off the value of benefits and tax credits, which meant that we went into the pandemic and then the cost of living crisis with families unable to manage. The Government’s response, which is welcome, is to give exactly the same amount of money to a single person living on their own as to a couple with three children, even though their costs of energy, clothes, shoes and everything else are way higher. Does the Minister not accept that families out there are seriously desperate and need more help?

[Baroness Stedman-Scott (Con)]

I accept that families are struggling and that some are desperate. We have tried to make the process of giving the money we are giving as simple and unbureaucratic as possible. That is why we are making the payments as we are, starting this week, I think. We hope to have them all done by the end of July.

Universal Credit (Removal of Two Child Limit) Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Sherlock

2nd reading
Friday 8th July 2022 Lords Chamber

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

I thank the right reverend Prelate the Bishop of Durham for introducing this Bill and for the opportunity to debate again a subject dear to his heart and to those of others in the House.

My department is committed to supporting families and helping parents into work. This requires a balanced system that provides strong work incentives and support for those who need it, but also ensures a sense of fairness to the taxpayer and to the many working families who do not see their incomes rise when they have more children. We judge that the policy to support a maximum of two children is a proportionate way to achieve these objectives. Our overall approach is working, as evidenced by the fact that, between 2016 and 2021, the number of couples in employment who have children increased by 460,000—a 2.3 percentage point increase in the employment rate for this group.

The two-child policy was introduced five years ago and, since 6 April 2017, families have been able to claim support for up to two children. There may be further entitlement for other children if they were born before that 6 April or if an exception applies. The child element of universal credit is worth £290 for the first child born before 6 April 2017. It is worth a standard rate of £244.58 per child for the second and any other eligible children. Child benefit continues to be paid for all children, plus the additional element in child tax credit or universal credit for any disabled children. Additional help for eligible childcare costs through working tax credit and universal credit are also available, regardless of the total number of children in the household.

We recognise that some claimants are not able to make the same choices about the number of children in their family. That is why exceptions have been put in place to protect certain groups. Exceptions apply to third and subsequent children who are: additional children in a multiple birth, where an extra amount is payable for all children other than the first child; or likely to have been born as a result of non-consensual conception, which for this purpose includes rape or where a claimant was in a controlling or coercive relationship with the child’s other biological parent at the time of conception. An exception also applies to any children in a household who are: adopted when they would otherwise be in local authority care; living long-term with friends or family and would otherwise be at risk of entering the care system; or where a child under 16 living with their parents or carers has a child of their own, until they make a separate claim upon turning 16.

Statistics from the Office for National Statistics show that in 2020, of all families with dependent children, 85% had a maximum of two in their family. For lone parents, this was 83%. On the latest figures, 62% of households with a third or subsequent child who are in receipt of universal credit or child tax credit are not affected by the two-child policy.

This Government have always believed, and continue to believe, that the most sustainable way to lift children out of poverty is by supporting parents into work and, importantly, to progress in it, wherever possible. As I said, there has been a significant rise in the number of couples with children in employment between 2016 and 2021. I take the point the noble Baroness made that many of these people are in work, but one of the ways that we can help them is by them getting a better job and earning more income. That is a policy of this Government and one that we will be pursuing vigorously.

With 1.3 million vacancies across the United Kingdom, our focus remains on continuing to support parents into work and to progress in work, as I have already said. This approach is based on clear evidence about the importance of parental employment, particularly where it is full-time, in substantially reducing the risks of poverty and improving long-term outcomes for children.

[Baroness Sherlock (Lab)]

Does the Minister accept that encouraging parents to get better jobs and allowing them to have benefits for all their children are not mutually exclusive?

[Baroness Stedman-Scott (Con)]

I think it is fair to say that the Government have a differing view from that of the noble Baroness and people on the Opposition Benches. It is exactly that our helping people to get a better job, if they can, and more income—plus all the support that we are putting through the welfare system—is the policy that the Government are pursuing. We want everybody to be able to find a job, progress in work and thrive in the labour market, whoever they are and wherever they live. Our support for people out of work is tailored—

Shortage of Workers

Debate between Baroness Stedman-Scott and Baroness Sherlock

Wednesday 6th July 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

I know that he is full of ideas, and I am sure we will hear from him very soon.

[Baroness Sherlock (Lab)]

My Lords, there are indeed lots of vacant jobs with no applicants, but that is just for government Ministers of course.

The Government approach the problem of vacancies as though the basic problem is lots of idle, unemployed people. They pour money into restarting Kickstart and start big sanctions, but what we have is a crisis of economic inactivity. For example, we have a whole load of people aged over 50 who either lost or left their jobs in the pandemic and never came back, and we have a post-pandemic crisis of mental and physical ill-health. Is not that where the Government should direct their energies?

[Baroness Stedman-Scott (Con)]

I am very pleased to tell the noble Baroness that that is exactly what we are doing. For older workers—those over 50—there is a £22 million fund to boost employment support. I can assure the whole House that we are not looking at people as being idle; we are looking at them as people with potential and the ability to add value to an employer. We are working very carefully with them to get them in a position to do that.

Social Security (Additional Payments) Bill

Debate between Baroness Stedman-Scott and Baroness Sherlock

3rd reading & 2nd reading & Committee negatived
Monday 27th June 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

On the impact of the cost of living crisis on poverty, the latest available poverty statistics cover 2021 and projecting what has happened to poverty since then is complex and inherently speculative. It requires projecting how incomes will change for every individual in society; these are affected by a huge range of unknown factors. However, the Treasury published distributional analysis showing that the full package of measures announced on 26 May is well targeted at households on low incomes.

The noble Baroness, Lady Sherlock, asked why we waited so long to bring the measure forward. As the Chancellor set out, by waiting to know what the autumn and winter energy price cap is, we were better able to design and scale our policies across the package.

I am conscious that I have not answered every question—oh, here we go.

[Baroness Sherlock (Lab)]

Essentially, noble Lords all around the House have said, “This system is so simple but it’s creating rough justice. What will the Minister do?” The Minister’s answer is, “Give us rough justice, but that’s because the system is so simple”. All that everybody has asked today is, does the Minister understand that lots of people will miss out and others will get much less than they need? Are the Government going to even begin to think about addressing that in some way to mitigate it—yes or no?

[Baroness Stedman-Scott (Con)]

I cannot accurately answer that question because I honestly do not know, but I do know that, all the way through Covid and this cost of living crisis, the Government have responded at different times to issues raised in relation to additional support. All I can say is that I do not see that changing. I am sorry but I am afraid that I cannot give the noble Baroness the answer she wants, although I am quite sure that the Government will want to—I see that the noble Baroness is standing up; would she like to speak again?

[Baroness Sherlock (Lab)]

No.

[Baroness Stedman-Scott (Con)]

We will have to invent a board game for the Chamber. I know that I have not answered some questions, and I am sorry, but time is marching on. I will endeavour to write to all noble Lords whose questions I have not answered and to those to whom I have promised to write.

This Bill will enable the Government to provide support to families most in need across the country. I thank all noble Lords again for their contributions. As ever, I would be happy to speak to any noble Lord who wants to discuss particular issues further and, as ever, my door does not know how to close; it is open.

Gender Pensions Gap

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 27th June 2022 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, to get a sense of scale, I wonder whether the Minister has read the 2019 report from the Pension Policy Institute. It found that, by the time they got to their early 60s, women’s median private pension worth was a third of what it was for men. Given that women tend to live longer than men, that is a massive problem. It means that they are going to be poor in retirement. There have been lots of different reasons but the report found that key drivers were women taking time out of the labour market, as has been mentioned, caring for older relatives and children. If the things that the Minister describes were working, we would not have this problem, would we? What is the Government’s plan to put it right?

[Baroness Stedman-Scott (Con)]

In relation to the point that many noble Lords have made about the time women have out of the workplace, I have outlined national insurance credits. In terms of the specifics that the Government are doing, I will need to write to the noble Baroness because I am not fully up to date on them.

Social Security (Special Rules for End of Life) Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Sherlock

3rd reading
Wednesday 22nd June 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, I beg to move that the Bill do now pass.

At Second Reading, all who spoke acknowledged the importance of our social security system providing support as quickly as possible for those who are nearing the end of their lives. This Bill will ensure that more people in their final year of life can access the benefits for which they are eligible in a fast-tracked and simplified way. It is right that the Government are making eligibility changes for this fast-tracked access, so that those expected to live for 12 months or less, rather than the current six months, can benefit. This Bill will mean that thousands more people at the end of their lives will be able to access benefits earlier than they currently do. It will also result in a consistent end-of-life definition being used across health and welfare services in England and Wales, which will be more easily understood by clinicians and end-of-life charities.

I thank all noble Lords for their support in ensuring that this Bill passes through the House quickly. Clearly, we all recognise the significant positive impact this change will have for people who are nearing the end of their lives, and their families. I was also very grateful to noble Lords who engaged with me so constructively while the Bill was passing through this House. Several noble Lords signalled their overall support while also raising important issues, which I will ensure are taken into account as we work to implement the changes that we progress.

I end by paying tribute to all the campaigners and charities that have worked in this area; their support has been crucial in reaching this point and I am sure that all noble Lords join me in recognising the admirable support they provide people nearing the end of their lives.

The Social Security (Special Rules for End of Life) Bill will provide thousands more people with vital financial support, so that they can worry a little less about their finances and focus more on sharing the valuable time they have left with the people who matter to them the most.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her remarks and thank all noble Lords who participated in this Bill at the previous stage. It is a short Bill, but one which will have real benefits to people who have been told they have less than 12 months to live. The House can do few things that matter more than to make people’s final months easier than they might otherwise be. The change is long overdue, and we are very pleased to support it. Once again, I commend Marie Curie, MNDA and all the charities that have campaigned to get to this point.

We chose not to table amendments to the Bill, even though I would have liked the opportunity to explore some of the issues about the support available to people nearing the end of their life. However, it is really important to get this onto the statute book as soon as possible because, at the moment, some benefits are available only to those with six months to live and others are for those with 12. That is confusing for clinicians and patients, so we want to support this getting there as fast as possible. I hope that the Minister can assure the House that the Government will reward our restraint by ensuring that the Bill gets through the other place before the Summer Recess.

Since we are not having a Committee or Report stage, I would like to ask two quick questions, of which I have given notice to the Minister. She is aware that various stakeholders, while supporting the Bill, had argued for a more open-ended approach than the one the Government chose to take. This Bill will allow special rules awards to be made for three years, whereas the Scottish Government have taken a different, more open-ended approach. Can the Minister assure the House that the Government intend to evaluate the effectiveness of the approach they have chosen to take in this Bill? Will they take advantage of the opportunity afforded by devolution to compare their approach with that taken by the Scottish Government, and implemented only recently?

In that vein, I ask about the success metrics for this policy change. Will the Minister’s department monitor whether more people are able to fast-track their claims? Will they monitor if fewer people are dying before their claims for benefits under the normal rules have been cleared? That has been an issue; it takes so long to process claims for PIP that people are dying before their claims are processed. Will the Government monitor if claimants find the process easy to manage?

I would like to express my thanks to the Minister and her officials for involving us, and to colleagues for their thoughtful contributions. We send the Bill to the Commons with our full support, and we wish it Godspeed.

Cost of Living: Pensioners

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 26th May 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

As I said earlier, since 2010, the state pension has risen by £2,300 in cash terms and the full-year basic state pension is now over 45% higher than in 2010.

[Baroness Sherlock (Lab)]

My Lords, I am glad the Chancellor is finally putting something on the table, although we do not know what yet, but does the Minister agree that the process is not great? The Spring Budget was only two months ago. We begged the Chancellor to do more on the cost of living and he ignored us. We suggested a windfall tax and the Prime Minister ridiculed it. The Government did not have to legislate for the biggest real-terms cut in the value of the state pension for 50 years. We do not yet know what the Chancellor is going to do, but the rumours always appear to be about one-off payments. Even if there is something to tide people over, it will not deal with the collapse in the standards of living. Why have Ministers ruled out bringing forward pension and benefit increases? Does the Minister accept that prices are unlikely suddenly to slump again but, if they did, upratings would pick that up next time round anyway? Or will the Chancellor be back here again in a few months?

[Baroness Stedman-Scott (Con)]

If the noble Baroness does not mind, I do not agree that the Chancellor has ignored things. He has had to deal with a pretty difficult set of circumstances. Due to legacy benefits, we can do an uprating only once a year, the reasons for which all noble Lords know. Since 1987, we have consistently used the September inflation figure and that will continue.

Social Security (Special Rules for End of Life) Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Sherlock

2nd reading
Tuesday 24th May 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, I thank your Lordships for your contributions to the debate today. I am sure we all agree that this is a matter of huge importance for those at this stage of their life and their loved ones. The Government are committed to improving how the benefits system supports people nearing the end of their lives.

This Bill will ensure that thousands more people at the end of their lives can get fast-tracked access to three disability benefits—the personal independence payment, attendance allowance and disability living allowance—earlier than they currently do. It will change eligibility so that those expected to live for 12 months or less, as opposed to six months, which is the current rule, will receive vital support. The changes ensure a consistent definition of end of life across health and welfare services and introduce easily understood criteria, which will support implementation. The changes will ensure we have a system that works and that gives those affected the support they need when they need it, and that clinicians and charities can engage in with confidence.

I will try to answer some of the many questions raised by noble Lords. The noble Baronesses, Lady Brinton and Lady Sherlock, asked about the response time for fast-tracked claims. PIP end-of-life claims are fast-tracked: it currently takes three working days for new claims and four working days for reassessments. This compares to the current average end-to-end process for new PIP claims of 22 weeks.

The noble Baronesses, Lady Brinton and Lady Sherlock, raised the mobility component of disability living allowance for children under three. Only children over the age of three can claim the higher-rate mobility component of DLA, as all younger children have substantially fewer mobility needs. This group can however still access other forms of support, including the care component of child DLA. There are no current proposals to change the current age restrictions for the mobility component of child disability living allowance. However, the department recognises the difficulties that some families with severely disabled children under the age of three may face, particularly those whose reliance on bulky medical equipment makes transport difficult. As a consequence, the department has been in discussions with the charities Motability and Family Fund to explore options for helping this group of children. A pilot scheme has been developed and is making good progress. Family Fund is selecting children with a profound disability who are under the age of three and are therefore ineligible for DLA but who would benefit from the use of a vehicle provided by Motability Operations. I am sure that the Minister for Disabled People will be very happy to meet the noble Baroness, Lady Brinton, and Together for Short Lives. I will go back to the department and put the wheels in motion for that.

The right reverend Prelate and the noble Baroness, Lady Finlay, raised the difficulty of accurate prognosis, which gets worse the longer it is. The department recognises that determining a prognosis is not an exact science. The definition in legislation is clear that it applies where there is a reasonable expectation that death in consequence of a progressive disease is expected in the next 12 months. We support this in our guidance for clinicians, where we ask whether they would be surprised if their patient were to die in the next 12 months and to consider the expected prognosis. We expect the new 12-month approach to mean that thousands more people will be able to benefit, and we have already heard back from senior clinicians that the 12-month approach helps clinicians feel more confident when determining whether someone meets the special rules in the benefits where it has already been implemented. The department is clear: we are relying on the best judgment of clinicians, there are no repercussions for clinicians whose patients live beyond the time period, and claimants receive three-year awards in recognition of that fact.

The right reverend Prelate raised the issue of ensuring that financial assistance does not come at the expense of better or more widespread palliative care for all. The department has chosen 12 months to align with the NHS definition of end of life and to link up with existing initiatives for clinicians to identify people in their final year of life. We hope that, as part of clinicians’ holistic approach to considering their patients’ needs when they enter the final year of life, the financial support available to a patient is considered alongside their physical, spiritual and other support requirements.

My noble friend Lady Noakes raised the point about the DWP committing to monitoring impact and being prepared to make changes based on evidence and data. I have no doubt that this will happen in the department, but I will go back, raise the specific point and write to my noble friend to clarify.

The noble Baroness, Lady Brinton, wanted to know how doctors, who are key to this, will hear about these changes. We have had extensive engagement with health professionals and others. Let me just read a few, because there are pages of them. The Minister for Disabled People led an update call with policy representatives from Marie Curie, Macmillan and MNDA. We have had royal college round tables with the Royal College of General Practitioners, the Royal College of Physicians and the Royal College of Nursing. We had a workshop with Macmillan benefits advisers. We have had the Westminster Health Forum, the next steps for palliative and end-of-life care bulletin in hospice leaders’ brief and the Association for Palliative Medicine bulletin. I can assure noble Lords that there has been extensive communication. We are developing a bulletin jointly with the Association for Palliative Medicine, a Hospice UK Project ECHO newsletter, learning models for clinicians, royal college features in their communications, a palliative and end-of-life care information session and further workers’ engagement sessions.

The noble Baroness, Lady Finlay, made the important point about claimants being informed when they are coming to the end of their three-year award. A letter is sent ahead of the end of the award inviting them to resubmit information. If they continue to meet the special rules criteria, they will receive another three-year award.

The noble Baroness also asked about doctors signing medical evidence and how we will monitor the evidence received. The medical evidence forms used in support of a special rules claim can be requested only by clinicians and are not publicly available. The DWP’s in-house clinical team also undertakes occasional audits of medical evidence and uses feedback from the process to further improve forms and guidance. Where the DWP is unsure about the information provided or needs to clarify, clinicians from the DWP assessment provider can contact the clinician to ensure that the claim can be processed quickly. She asked what would happen to those claims if identified and what AI programmes are being developed. The DWP is also looking at making process improvements for the special rules end-to-end customer journey. I can ask officials to consider this moving forward.

I take fully the points noble Lords have made about engaging with patients and people using the system. The noble Baroness, Lady Finlay, specifically asked to meet Ministers to discuss the guidance and the forms. I can only say that my officials will be very happy to discuss the existing guidance for commissions; where it can be further improved, we will do so.

The noble Baroness, Lady Finlay, asked what financial support we can give parents when children die. Child DLA stops when the child dies because it is an extra cost benefit for the child and not an income maintenance benefit for the family. She also asked for the latest on the severe disability group; we recognise that people who may not meet the special rules criteria may still have severe and lifelong conditions that will not improve and will always need extra financial support to live independently. That is why we want to test an approach for a new severe disability group, or SDG, so that those people can benefit from a simplified process that does not involve a face-to-face assessment. The department will work closely with the MNDA, Marie Curie and other stakeholders to understand how best to orientate claimants to the new SDG application gateway and design a process that best meets their needs.

The noble Baroness, Lady Finlay, asked what happens if a person outlives their prognosis. Where someone makes a claim under the special rules, they are given a three-year award. This recognises that making a prognosis is not an exact science. Where people live longer than expected, they should continue to receive the support provided to them by the benefits system. She also asked how relatives will be informed about the cut-off point, which I believe I have answered, and what we are doing about people with longer prognoses. The Shaping Future Support: The Health and Disability Green Paper recognises that people who may not meet the special rules criteria may still have severe and lifelong conditions that will not improve and will always need extra financial support to live independently.

My noble friend Lord Balfe and the noble Baroness, Lady Sherlock, raised the issue of secondary legislation. We are currently in primary legislation. There are no plans to change the law again, so this Bill takes the simplest approach to change to 12 months.

My noble friend raised a really important point about whether terminally ill people can still work. Where work is therapeutic and gives them a purpose in life, in very difficult circumstances, the answer is absolutely yes. Those on universal credit can voluntarily take up work where appropriate.

The noble Baroness, Lady Janke, asked about the specialist unit in the DWP. We are actively considering how we can improve the special rules processes; we will keep all noble Lords apprised of that.

The noble Baroness also raised specific guidance and training being provided. The DWP is working closely with clinicians from charities, royal colleges and, in particular, the ambitious partnership for palliative and end-of-life care, as it has done throughout this process, to consider specific communication and training for clinicians about how to support their patients in claiming under the special rules and raise awareness of the eligibility criteria and process. The department worked with senior clinicians to develop a special rules guide for clinicians and, to support them in this process, will continue to monitor the guide’s effectiveness and whether further support is required. My officials would be happy to discuss where the existing guidance for clinicians could be further improved.

The noble Baroness also asked why we are not adopting an open-ended approach with no time limit, based on clinical judgment. The department considered all the feedback it received from the evaluation and decided to adopt an approach that mirrors the one used in the health system; there was significant support from clinicians for this.

The noble Baroness, Lady Sherlock, raised the fact that charities such as the MNDA have called for award lengths to be extended. Although we have already touched on this, a three-year award strikes a balance around recognising that making a prognosis is not an exact science. Where people do live longer, as I have said, support will be provided to them by the benefits system.

The noble Baroness made a point about the PIP assessment times. I can say to her only that we want them to be much shorter. The Minister for Disabled People is working hard to do that and I am sure that, in due course, an all-Peers briefing session in which noble Lords will have a chance to make their points will be available on this issue. The noble Baroness asked for some stats. We will write to her on that point and place a copy in the Library to share it with everyone.

We have only recently got the Marie Curie report. We are seriously considering it but, having listened to everybody, it seems that it is welcome. We will respond in due course.

The noble Baroness, Lady Sherlock, asked how the benefits system links to the NHS. We hope that, as part of clinicians’ holistic approach, financial support is discussed alongside physical, emotional and spiritual needs as a patient enters their final year. The DWP has worked with DHSC and many key stakeholders to create guidance to support clinicians.

The noble Baroness asked what the department’s position is on the recommendation in the Marie Curie report that recommends early access to the state pension. We are still considering the report at this early stage, as I have said. We value Marie Curie as a key stakeholder and welcome our ongoing dialogue. The Government are committed to improving fast-track access to benefits for people nearing the end of their lives; I hope we have demonstrated that. The Bill makes similar changes to DLA, PIP and AA collectively; these changes will enable thousands more people thought to be in the final year of their lives to get fast-track access to the benefits they are entitled to.

The noble Baroness, Lady Sherlock, made a point about a SSAC report in 2020. I must confess, I am struggling—

[Baroness Sherlock (Lab)]

If I may help, the 2020 SSAC report recommended that the Government review whether children aged under three could be eligible for the higher rate component of DLA.

[Baroness Stedman-Scott (Con)]

I thank the noble Baroness; that is helpful. Other questions were raised and I will, as always, go back to Hansard and ensure that I answer them in writing and place a copy in the Library.

I again put on record my thanks to the individuals, charities, clinical groups and all the others, including the trade unions, who have supported the Department for Work and Pensions since the then Secretary of State launched an in-depth evaluation of how the benefits system supports people nearing the end of their lives in 2019. We recognise the vital role they play and are committed to continuing our engagement with them as the changes the Bill will make are implemented. I thank all noble Lords again for their contributions today and I hope I have managed to reply to everyone. As always, I am happy to speak to any noble Lords who want to discuss particular issues further before Committee stage; as ever, the door is open. I beg to move.

Senior Citizens: Means-tested Benefits

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 23rd May 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

I reiterate what the Prime Minister has said: no option is off the table. We will do what we can but noble Lords will have to wait a little longer for those announcements to be made.

[Baroness Sherlock (Lab)]

My Lords, I am glad that nothing is off the table but I would quite like to see something on the table. Maybe the Chancellor could be encouraged to think that there is a bit of urgency about this. One reason take-up is not always the answer is that the amount of pension credit that goes unclaimed is around £1,900 for every family entitled to receive it. That is why the state pension matters so much and why abolishing the triple lock this year—of all years—was so damaging. However, as this is about take-up, I looked at the stats and found that take-up is lower among older pensioners than younger ones. It is markedly lower for pensioners who are single rather than in couples. What does that tell the Government and what are they going to do to make sure that the money gets to where it is most needed?

[Baroness Stedman-Scott (Con)]

On pension credit take-up, the noble Baroness has made interesting and accurate points. We have this campaign. The Minister for Pensions is working with the BBC, other media outlets, GP surgeries, post offices and so on. It is our job to make sure that people are aware of the benefits of pension credit and to encourage take-up, but there is only so much we can do in that way. We really believe that families could be helping relatives entitled to pension credit to claim it.

Social Security System: Rising Cost of Living

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 17th May 2022 Lords Chamber

[Baroness Sherlock]

To ask Her Majesty’s Government what assessment they have made of the effectiveness of the social security system in the context of the rising cost of living.

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

My Lords, no specific assessment has been made. We are committed to supporting those on low incomes and will spend around £255 billion through the welfare system in 2022-23. We are supporting households with cost-of-living measures worth over £22 billion this year, including changes to universal credit to make work pay, the £9.1 billion energy package to help us with rising energy bills and an additional £500 million to help households with the costs of essentials.

[Baroness Sherlock (Lab)]

My Lords, it is not enough. The welfare state was created to provide security in retirement and to make sure that life events did not result in destitution. Last month, the state pension went up by 3% for the year, as did benefits for children, disabled people and low-earners. In the real world, we all know that inflation is heading for 10% and energy prices have gone mad. The Governor of the Bank of England has just said that food prices will be rising apocalyptically. Does the Minister accept that growing numbers of both older and younger people literally do not have enough money to buy food and pay their bills? If so, will the Government bring forward benefit increases or find some other way to stop people falling into modern-day destitution?

[Baroness Stedman-Scott (Con)]

The Government, of which I am a member, acknowledge that these are very difficult times, particularly for pensioners and young people with families. The uprating of benefits has been done in September; that is how the Secretary of State uses the CPI figure. However, I can confirm that the Government have convened a new cost of living ministerial committee and the PM has urged Ministers to go faster and be as creative as possible in ensuring that the Government are doing everything they can on this important issue. The Chancellor and Prime Minister are working extremely closely on this and will continue to do so because they are cognisant of the very communities that the noble Baroness is representing.

Scotland Act 2016 (Social Security) (Adult Disability Payment and Child Disability Payment) (Amendment) Regulations 2022

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 10th March 2022 Grand Committee

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

My Lords, I beg to move that the draft Scotland Act 2016 (Social Security) (Adult Disability Payment and Child Disability Payment) (Amendment) Regulations 2022, laid before the House on 24 January 2022, be approved. I am pleased to introduce this instrument. Subject to approval, it will make some necessary legislative changes to prevent overlapping entitlements of the soon-to-be-introduced Scottish adult disability payment, with UK disability benefits.

In consequence of the Scottish Government’s child disability payment, very similar regulations were made in July 2021. As these regulations mirror, in relation to adult disability payment, much of the policy intent and technical application of the previous instrument, I hope that noble Lords will forgive me if I repeat much of what was said during the debate on those previous regulations. My honourable colleague the Minister for Disabled People, Health and Work brought this instrument before the other place on Monday, so there is little new to outline in my opening remarks. I am satisfied that the Scotland Act 2016 (Social Security) (Adult Disability Payment and Child Disability Payment) (Amendment) Regulations 2022 are compatible with the European Convention on Human Rights.

The UK Government are committed to making devolution work and to ensuring the transition of powers to the Scottish Government under the Scotland Act 2016. This is a long-standing commitment. As a result of the devolution of social security powers to the Scottish Parliament under this Act, the Department for Work and Pensions will need to update its legislation from time to time to reflect the introduction of the Scottish Government’s replacement benefits. Section 71 of this Act allows for the necessary legislative amendments, in this case as a result of benefits introduced under the Social Security (Scotland) Act 2018.

I am grateful for the opportunity to debate these regulations today. They will effect some purely technical, administrative changes. They will prevent overlapping payment of the Scottish adult disability payment and UK disability benefits such as the personal independence payment and Armed Forces independence payment. The instrument also includes some time-limited overlapping provisions for Northern Ireland.

Noble Lords will be aware that the Social Security (Scotland) Act 2018 established the legislative framework for the Scottish Government to introduce new forms of assistance using the social security powers devolved under Section 22 of the Scotland Act 2016. Specifically, Section 31 of the 2018 Act allows the Scottish Government to introduce legislation to provide financial support through its disability assistance for people in Scotland with long-term additional health needs.

The Scottish Government recently legislated to provide for its disability assistance for working-age people, which will be introduced from the 21st of this month. They are calling this “adult disability payment” and I will refer to this as ADP from now on. If the regulations are passed today, they will ensure that there are clear boundaries between entitlement to ADP and entitlement to a relevant UK Government benefit to ensure that there is no overlapping provision of payments. It will do that by making it clear that a Scottish resident cannot be entitled to a relevant UK Government benefit and that in the case of those who move cross-border, a DWP payment will not start until the day after payment of ADP has ended. This will not only protect the public purse by avoiding double payment to the same claimant for the same need but help prevent the need for complicated overpayment calculations and recovery. Furthermore, it is also in the best interests of the claimant, who will have clear expectations of which Government are responsible for paying their benefits at which point in their claim or award.

As just noted, as part of the offer, although ADP has residency-based conditions attached, the Scottish Government will continue to pay ADP for a period of 13 weeks after a claimant has left Scotland and moved to another part of the UK. This will allow claimants time to sort out new benefit arrangements, should they wish to, and the instrument sets out that a successful claim to a UK Government benefit will start the day after the end of that 13-week period.

Our intention is to offer later this year a similar facility for those moving to Scotland, and this is not the subject of these regulations brought before this Committee today. What are needed now are modest but necessary legislative amendments to avoid overlapping payments in order to both support the devolution agenda and strengthen a union that works together in the best interests of our shared citizens. The instrument also includes provisions on behalf of the Ministry of Defence to ensure that Armed Forces independence payments will similarly not overlap with ADP.

Finally, provisions have been included to prevent overlapping entitlement when a claimant moves to Northern Ireland and is in receipt of the 13-week run-on payment from the Scottish Government. I commend this instrument to the Committee.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing these regulations. As we have heard, following devolution of responsibility for certain social security benefits, the Scottish Government are introducing ADP for applicants ordinarily resident in Scotland. It will start to replace personal independence payment, PIP, in Scotland from this month.

The primary purpose of these regulations, as the Minister has explained, is to prevent overlapping payments of attendance allowance, DLA, PIP or Armed Forces independence payment when a claimant is getting ADP. We support the instrument and are pleased to see the Scottish Government using the powers transferred to them under the 2016 Act and subsequent legislation—although I express a bit of disappointment that it has taken such a long time for this to happen. It is critical that the rollout of ADP goes well, and that the transition from the current regime is smooth. Since these regulations are part of that process, we want to see them succeed and are pleased to support them.

The Minister mentioned that ADP will carry on being paid for a period of 13 weeks following a move from Scotland to England or Wales or Northern Ireland, to allow the claimant time to make a claim for the relevant benefit. When the Social Security (Scotland) Act (Disability Assistance and Information-Sharing) (Consequential Provision and Modifications) Order 2022 was discussed in the other place on 2 March, the Minister Iain Stewart said:

“At its introduction, adult disability payment will operate in broadly the same way and for broadly the same group of people as personal independence payment.”—[Official Report, Commons, Delegated Legislation Committee, 2/3/22; col. 3.]


So can the Minister tell the Committee whether the conditions for eligibility for ADP are the same as they are for PIP, or will someone moving from Scotland to another part of the UK have to undergo a fresh assessment to get PIP? If they do have to be assessed, is that classed as an assessment or a reassessment? There is a distinction in terms of time, as the Minister will know, and priority for processing a claim.

The Minister Iain Stewart also said:

“The 13 weeks is a safety net, and applications can be made in advance. It is there to ensure that payments can continue if there is some delay, so that no one is disadvantaged.”—[Official Report, Commons, Delegated Legislation Committee, 2/3/22; col. 8.]


The intention clearly is that there should not be a gap in payment between somebody moving from Scotland on ADP and coming to England, say, and claiming PIP. So can the Minister tell the Committee how long it takes to process a claim for PIP? Is she confident that 13 weeks will be long enough to ensure that there is no break in payment?

I dug out what I think are the latest official statistics, which were for last October, and which showed that clearance times for normal-rules new claims were 24 weeks from registration to a decision being made—and that is assuming the claimant was not one of the millions who end up having to go for mandatory reconsideration to get their benefit established in the first place. That adds another 11 weeks to the process. So can the Minister tell the Committee whether this means that, if someone moves from Scotland to England—just across the border, say, to Berwick—then makes a claim, and it takes either 24 or potentially 35 weeks, they will still get only 13 weeks’ run-on? What happens to them during those remaining weeks when they are still waiting for their claim to be processed? Also, does the comment by Iain Stewart about applications being made in advance mean that someone preparing to move from Scotland to England or Wales could make a claim for PIP while they were still living in Scotland in advance, as they prepared for their move to England—again, to avoid any gap in payments? That might deal with the problem that it takes longer than 13 weeks to process a claim.

I understand that applications for ADP will open at different times in different parts of Scotland. I think it will be piloted in some parts. Does the Minister know when it will be fully rolled out? If somebody were to move now from England and they happened to land in the bit of Scotland where it is being piloted, presumably they would have to make a fresh application for ADP. The Minister mentioned that the intention of the Government was to arrange this so that the run-on is a two-way street—so that, in due course, if you move from England to Scotland, you will get a 13-week run-on of PIP while you make an application for ADP. In fact, Iain Stewart said in the Commons that

“the situation does apply both ways. If a person in England claims PIP or one of the other benefits and moves to Scotland, the DWP would look to ensure they had an equivalent transition period.”—[Official Report, Commons, Delegated Legislation Committee, 2/3/22; cols. 7-8.]

But if somebody on 1 April were to move to Scotland and happened to be in an area where they had started doing ADP, would they get a run-on or no run-on? Would they suddenly find that their PIP stopped immediately and they had no benefits at all until their ADP was processed?

Finally, the Minister said something about the regulations also introducing some time-limited overlapping provisions for Northern Ireland. Can she tell us what they are, because I could not figure it out? I apologise for that and look forward to her reply.

[Baroness Stedman-Scott (Con)]

My Lords, I thank the noble Baroness, Lady Sherlock, for the points she has made. I shall try to deal with them.

I turn first to what happens to a person if they move now. While DWP is administering the existing disability benefits on behalf of the Scottish Government under agency agreements, any customer moving to Scotland will be handled as a routine change of circumstances. This means that these cases will continue in payment on the same benefits as now and form part of the Scottish caseload administered on behalf of the Scottish Government. DWP will continue to manage their claim until they are transferred to Social Security Scotland. The case transfer process has been agreed with the Scottish Government and claimants will not see any disruption to their payments.

--- Later in debate ---

[Baroness Sherlock (Lab)]

I am grateful for the considerable information that the Minister has given me. In fact, I was not asking or generally complaining about PIP being slow, which is what she said. I do think that it is too slow, but that was not my point; my point is that everything about the description of ADP suggests that the intention is that there will not be a break in payment. The Minister in reply to me has just said that the 13-week run-on will reduce the risk of a break in payment, but it is the claimants’ responsibility to apply quickly. As she seems to be suggesting that a claim cannot be made until the claimant has actually moved to England, and if there is only a 13-week run-on, and even if she applies on day one, it takes 24 weeks to process the claim, even if she discharges her responsibility with impressive speed, it seems impossible to avoid there being a break. That is what I am interested in. What are the Government going to do about that?

[Baroness Stedman-Scott (Con)]

I think that I was trying to make the point, although I accept that I made it badly, that on the specific point that the noble Baroness has just raised I want to go back to the officials to get more detail, because this must have crossed their desks as a risk. If the noble Baroness will allow me, I shall write to confirm.

As I have said, the UK Government are working collaboratively with the Scottish Government to ensure that the two systems of social security will operate effectively alongside each other, and the required legislation that underpins them is delivered successfully for the people of Scotland and, where relevant, claimants in England, Wales and Northern Ireland. The order highlights the importance that the UK Government place on the effective functioning of devolution. I commend the order to the House.

Women: Cost of Living

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 10th March 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

Many noble Lords have made the point about the £20 uplift. To be absolutely straightforward and open, there is nothing I can say about it, other than that for those on universal credit the taper rate compensated for some of the withdrawal. There are moments when I wish I was Chancellor.

[Baroness Sherlock (Lab)]

My Lords, let me spell out what this is going to do. Inflation is running at record rates. The Bank of England forecasts that, next month, it will go up to 7.25%. That forecast was made before the war in Ukraine. Benefits are going to go up by 3%. Next month, the energy price cap will go up to £2,000. People are currently being offered £3,500 fixed-price tariffs. To put that in context, that is £67 a week. We give an adult on universal credit or JSA £75 a week to live on. How are they possibly meant to manage?

Social Security Benefits Up-rating Order 2022

Debate between Baroness Stedman-Scott and Baroness Sherlock

Wednesday 9th March 2022 Grand Committee

[Baroness Sherlock (Lab)]

I thank the Minister; I definitely have not had that answer before. In her mind, then, what is the point of this debate?

[Baroness Stedman-Scott (Con)]

The point of the debate is to approve the order. Here we go.

[Baroness Sherlock (Lab)]

Perhaps the Lord Chairman will allow me a little licence. I understand why the Minister said that, but I want to get to the bottom of what it is we think we are doing here. So the computers are changed in December and, if either House rejects this order, the increase goes ahead anyway; it just does not have any legal underpinning. Perhaps I have been spoiled, but I am accustomed to thinking that, when the House is asked to take a decision, that has a consequence: if we say yes, something happens; if we say no, something does not happen. This is the first time that I have been aware of being asked to take a decision and being told that, if we said no, it would not make any difference. Does the Minister not think that that is a little unusual?

[Baroness Stedman-Scott (Con)]

Further information: if the House votes the order down, that is a sign that the Government must change the process.

--- Later in debate ---

[Baroness Sherlock (Lab)]

May I suggest a pay rise for whichever member of the cavalry sent a note in her direction? To be clear, we will not oppose the order. I just wanted that point to be clear and I thank her very much.

[Baroness Stedman-Scott (Con)]

I am not giving pay rises, I can assure the noble Baroness.

[Baroness Stedman-Scott (Con)]

As I said, I fully appreciate the issue of people who use keys to pay their energy costs, which are higher. Let me take that back as a special project. I will speak to the Secretary of State, who I will see tomorrow, and she may well have a thought on that. When it comes to the Spring Statement, all noble Lords tell me to speak to the Treasury. I have nothing to tell your Lordships about the Spring Statement; we will have to wait to see what, if anything, comes out in relation to this. I take the point of the noble Lord, Lord Shipley, about charities, but that is an indirect effect, if it happens. I cannot add more than that at this stage.

The noble Baroness, Lady Sherlock, talked about poverty, a subject that we have discussed many times. The Government are committed to a sustainable long-term approach to tackling poverty, and to supporting people on lower incomes. We will spend £110 billion on welfare support for people of working age in 2021-22. With around 1.29 million vacancies across the UK, our focus is firmly to support people to progress into work as the best way to substantially reduce the risks of poverty.

I know that there are people who cannot work, and I know the passion with which the noble Baronesses, Lady Lister and Lady Sherlock, and others talk about us wanting to help that group. Our multi-billion-pound plan for jobs, which has been expanded by £500 million, is helping people across the country into work. I know that our new Way to Work programme has raised some issues. As I have said before, when I opened the jobcentre in Hastings, the staff were alive with the freedom that it would give them to do more, and in more detail, to help people at the lowest point of their lives. I trust those work coaches implicitly to do what they can and, more importantly, to feed back if something is not working so that we can fix it.

The noble Baroness, Lady Sherlock, asked whether I still believed a Statement that I made. Perhaps she can write to me, as I did not quite catch the context. I will be very happy to write back.

[Baroness Sherlock (Lab)]

If the Minister reads Hansard, that might cut out a stage.

Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022

Debate between Baroness Stedman-Scott and Baroness Sherlock

Wednesday 23rd February 2022 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her introduction to these regulations and all noble Lords for their contributions. As some noble Lords will remember, we spent a long time debating the Pension Schemes Act in this House. We asked lots and lots of questions about the establishment of CDC pension schemes. When we asked questions of the Minister, at least some of the time the answer came back: “The detail will be in the regulations”. Now here we are; here are the regulations and they will implement the authorisation and supervisory regime for CDC schemes. It is not surprising that so many questions have come from my noble friend Lady Drake and other noble Lords, and I am afraid I have more to add to the list. I very much hope the Minister can answer them, because this is our last chance before the scheme is created and it is incredibly important.

Here are my questions, starting with the future of CDC schemes. In his foreword to the consultation document in 2019, the Pensions Minister, Guy Opperman, said:

“There were encouraging signs of a growing interest in CDC amongst employers and commercial providers, outside of the Royal Mail and CWU. I expect this will increase further”.


It is three years down the road, and still only Royal Mail has committed to establishing a scheme. The Government admit that future take-up is still unknown.

In her contribution, my noble friend Lady Drake highlighted some of the concerns that flow from devising the details of a scheme with only one employer in mind. The future will not be the same, of course. The noble Baroness, Lady Janke, and my noble friend Lord Davies of Brixton asked what happens if other employers want to join in future. It is my understanding that we would need additional legislation if we got developments such as unconnected multi-employer schemes or commercial master trusts operating CDC schemes. The Minister can confirm that.

In such scenarios, different risks would need to be considered. One would expect the regulations and the code of practice provisions on things such as financial sustainability and trustee discretion to be more robust. For example, I would expect to see a definite requirement to ring-fence reserves to meet the costs of a triggering event or implement a continuity option; or, for example, a strengthening of trustee discretion over things such as opening new sections or the appointment of the chair of trustees. Can the Minister confirm that these regulations and the draft code of practice under consultation will not be considered fit for purpose for unconnected multi-employer and commercial master trust schemes?

The Government have acknowledged that there is considerable uncertainty as to the impact of the CDC proposal. I take the point made by my noble friend Lord Davies that, when one starts something, of course one will never fully know until it is out there. However, it is probably because of that uncertainty that the regulations and the draft code are long and complicated —because they are trying to cover for a range of circumstances. In turn, I suspect that that will mean that the CDC scheme rules are likely to be long and require a high level of understanding by trustees and their advisers. That complexity adds to the importance of clear member communications, and good systems and processes.

However, because of the way in which the rules are framed—my noble friend Lord Davies is right—a lot of responsibility will have to be borne by the regulator on some complex technical issues. If CDC schemes grow in number, as is hoped, how will the regulator, given its increasingly complex pensions remit generally, build and maintain the necessary capacity and capability to authorise and supervise such schemes? This is highly technical stuff but with a lot at stake. How is the regulator going to be able to manage it?

Next, I want to turn to the fit and proper person test for trustees. These regulations, in Regulation 8 and Schedule 1, together with the code of practice, set tough fit and proper person requirements for assessing whether a person can be a trustee of a CDC scheme, especially around skills, knowledge and experience. I am clear about the importance of ensuring that members’ interests are protected by an informed, knowledgeable and balanced team of trustees. However, the detail in the draft code leads me to ask a couple of questions. Is the Minister at all worried that the bar is perhaps set too high for committed and conscientious member-nominated trustees to meet? Is it perhaps the policy intention to squeeze out member-nominated trustees from single or connected employer CDC schemes? Is it perhaps the intention to have CDC schemes run only by professional trustees?

I realise that the scheme rules are complicated but, if schemes end up relying increasingly on professional trustees, that potentially brings a different risk: groupthink. Corporate trustees are more likely to come from the industry and may be more concerned with compliance than looking beyond it to see emerging risks. Further, a single employer or connected employer CDC scheme is established under an irrevocable trust by an employer. Could the terms of such a trust fetter the discretion of the trustees to a point and remove the chair of trustees?

Then there is the key issue of financial sustainability, about which my noble friend Lady Drake asked some crucial questions to which the Committee needs clear answers today. I am going to go back a little in history and remind the Minister of a couple of exchanges during the passage of the Bill. I must say, I was a lot more articulate in my head at the time than I was when I read it in Hansard afterwards; it is amazing how much less impressive it is when one reads it later, but bear with me. In Committee, I put this to the Minister:

“I think I understood her to say that the regulator would not approve a scheme unless the sustainability criteria had been met and that they could be met only if an adequate amount of money was placed in, for example, escrow. Is she saying that a scheme would be approved only if the regulator was satisfied that enough money had been provided up front by the sponsoring employer to fund the continuity options in the event of a triggering event?”


She replied:

“The answer to the question asked by the noble Baroness, Lady Sherlock, is yes, the money would be in an escrow account if needed.”


I pressed her further and asked:

“So could it never be the case that in the event of a triggering event, such as a wind-up, an employer pulling out or an employer downsizing, money would have to come from members’ contributions to fund the continuity option?”


The Minister’s answer was clear. She said:

“The answer to that question is no, it should not be.”—[Official Report, 24/2/20; col. GC 18.]


How can we be assured of that?

My noble friend Lady Drake had an exchange with the Minister on the same issue on Report. I hope that the Committee will bear with me if I quote again briefly. The Minister said:

“For the financial sustainability requirement at Clause 14 to be met, the trustees must provide evidence that they can access sufficient financial resources to cover the costs associated with setting up and running the scheme, as well as those associated with dealing with triggering events. If the regulator is not satisfied about the security of these resources and that they can be accessed as needed, the requirement will not be met and the scheme will not be authorised. It may well be that, in the early days of a CDC scheme, initial funding comes from the employer, but our approach does not just rely on employer-provided financial support; it enables trustees to draw on other options, including funds held in escrow, insurance policies or contingent assets. These should be available to cover any costs arising from a triggering event.”—[Official Report, 30/6/20; cols. 604.]


That raises a key question: how can the Minister assure the Committee that there will always be enough money available to meet the cost of a triggering event and implement the continuity strategy without recourse to members’ funds, as she promised on Report? Despite all our pressure, the Government chose not to require the reserves to be more obviously ring-fenced, as in a master trust. As my noble friend Lady Drake has pointed out, the requirements in the regulations and the draft code are pretty soft and unspecific. I look forward to hearing the Minister’s answer to her question as to whether there will be hard triggers—such as ratios—when we come to make those assessments.

I have gone on quite a bit but I think this is incredibly important. A lot of people will read this record—more than the number in this Room—because huge amounts of money will be at stake. If the Minister is asking the House in due course to pass these regulations, it is really important that we get some concrete reassurances on the safety of those members’ assets.

Finally on this issue, can the Minister assure the Committee that, when moves are made to extend the CDC authorisation to unconnected multi-employer schemes or commercial master trusts operating CDC schemes, the financial sustainability requirements will be more robust, given the nature of the risks and the increased scale that would bring?

The Pension Schemes Act 2021 created a whole new kind of pension scheme. That does not come along very often. These regulations are the only chance that the House of Lords will have to gain clarity on how those schemes will operate and how members’ assets will be protected. I therefore really hope that the Minister has come armed with some detailed answers. I look forward to her reply.

[Baroness Stedman-Scott (Con)]

My Lords, I thank all noble Lords for their helpful contributions to this debate. Before the noble Baroness, Lady Sherlock, raised it, memories came flooding back of our discussions on the Bill, which were lengthy and in depth.

I start by raising the points made by all noble Lords; I will try to answer at the level and detail for which the challenge has been set down. The noble Baronesses, Lady Janke and Lady Sherlock, asked how we will ensure that the CDC scheme has sufficient financial resources to cover the cost of operating the scheme if things go wrong. As part of the financial sustainability and continuity strategy authorisation criteria, the scheme must show how members will be protected against impacts, including costs, if a triggering event occurs, and must satisfy the regulator that there are sufficient protections. The financial sustainability requirements include demonstrating that there are sufficient financial resources to cover the cost of establishing and operating the scheme as well as costs arising from addressing a triggering event. This must be available to be used as and when needed.

If the regulator is not satisfied that the criteria are met, it must not authorise the scheme. The scheme will also need to satisfy the regulator on an ongoing basis that it continues to meet the authorisation criteria; for example, if the costs associated with addressing a triggering event change, the scheme must be able to show that it has sufficient resources to cover this. The regulator can require information relevant to the authorisation criteria to be included in a supervisory return. It is a significant event if the scheme is unable or unlikely to be able to meet the cost of a triggering event occurring.

Again, the noble Baronesses, Lady Janke and Lady Sherlock, raised the appointment of trustees and asked how we will ensure diversity on the board of the trustees. Our primary focus is on ensuring that trustees in all occupational pension schemes meet the standards of honesty, integrity and knowledge appropriate to their role. The regulator’s draft code of practice, published in January, sets out that trustee boards should have policies on diversity and inclusion, including objective selection criteria, and should demonstrate that they have the ability to capture, process and monitor data on diversity and inclusion. This would need to be demonstrated to the regulator for it to be satisfied both that the scheme satisfies the authorisation criterion and that the scheme’s systems and processes are sufficient to ensure that it is run effectively. The regulator will continue to supervise trustee action in this area and has established a working group to look at data, research, best practice, practical tools and employer engagement. We will look at the outcomes from the working group and consider what measures are needed.

--- Later in debate ---

[Baroness Sherlock (Lab)]

I apologise, I was not clear enough. My question is not about diversity in the sense that it is mostly understood; I was specifically asking whether the requirements had been framed in such a way as to be too difficult for member-nominated trustees to meet, with the effect that they would be driven out in favour of corporate trustees, which would lead to us not having a diversity of views. I was not referring to the other, more traditional, understanding of diversity.

[Baroness Stedman-Scott (Con)]

The point is very well made. We will have to work with member trustees to make sure that they are trained and that they understand the requirements prior to taking on responsibilities. I will consult my colleagues and answer in more depth in writing.

The noble Baroness, Lady Sherlock, asked whether the policy intention is to squeeze out member-nominated trustees from single or connected employer CDC schemes. The answer is no. She also asked whether the intention is to have CDC schemes run wholly by professional trustees. Again, the answer is no. She also asked a further question: “A single employer or connected employer CDC scheme is established under an irrevocable trust by an employer. Could the terms of such a trust fetter the discretion of the trustees to appoint and remove the chair of trustees?” I am advised that this is not the case and that there is no change from other schemes.

The noble Baroness also asked whether I can assure noble Lords that there will always be enough money available to meet the cost of a triggering event. As part of the financial sustainability and continuity strategy authorisation criteria, the scheme must show how members will be protected against impacts, including cost, if a triggering event occurs and satisfy the regulator that there are sufficient protections. The financial sustainability requirements include demonstrating that there are sufficient financial resources to cover the cost of establishing and operating the scheme, as well as costs arising from addressing a triggering event. They must be available to be used as and when needed. If the regulator is not satisfied that the criteria are met, it must not authorise the scheme.

The scheme will also need to satisfy the regulator on an ongoing basis that it continues to meet the authorisation criteria. For example, if the costs associated with addressing a triggering event change, the scheme must be able to show that it has sufficient resources to cover them. The regulator can require information relevant to the authorisation criteria to be included in a supervisory return. It is a significant event if the scheme is unable or unlikely to be able to meet the cost of a triggering event.

The noble Baroness asked about member-nominated trust rules applying to CDC schemes. Generally, trustees are required to ensure that arrangements are in place and implemented that provide for at least one-third of trustees or at least one-third of directors at the trustee company to be member-nominated.

The noble Baroness, Lady Sherlock, asked would— I apologise, I am struggling to read this piece of paper. I will write to the noble Baroness and place a copy in the Library so all noble Lords understand.

Benefit Sanctions on Jobseekers

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 3rd February 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

The noble Baroness makes a very good point. The work coaches are well trained and their relationship with employers is gathering momentum. In fact, I heard today that employers are more prepared to take people with no experience in their industry and in fact are also considering taking people they would not normally have taken, such as ex-offenders and those with autism. So, yes, I agree.

[Baroness Sherlock (Lab)]

My Lords, let us take a step back. What the Government are doing is saying to somebody who has lost their job, “If you don’t get back into your own field within four weeks, you should go and find any job and get in there fast”. The Government put out a massive press release last week saying, “We’re going to get half a million people into over a million vacancies”, and the centrepiece was the idea that you could be sanctioned within four weeks—ironically, before you even get your first universal credit payment, which takes six weeks.

Given that only 3% of universal credit claimants are even in this category—and given that all the evidence shows that most of them get back into work really quickly anyway—rather than blaming people who have lost their jobs, why not focus on long-term unemployment, people leaving the labour market and people retiring early? Let us concentrate on the real problems. Would that not be a better idea?

[Baroness Stedman-Scott (Con)]

I am afraid that on this occasion I cannot quite agree with everything that the noble Baroness said, or indeed the sentiment in which it was said. That will come as no surprise to people. The fact is that we have been working with long-term unemployed people to try to overcome their barriers and put solutions in place. I say again that when someone does not have a job and they cannot get one within the field that they are used to and skilled in, their skills can be applied to other sectors, so they can take jobs and be in work and then, when a job comes up in the field they want, we can help them apply for it. So I do not hold with what the noble Baroness says.

Underpayment of Benefits: Compensation

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 18th January 2022 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, a vulnerable person with multiple health needs recovering from a heart bypass was left for years living on half the money she was entitled to when the DWP moved her on to ESA, which also stopped her getting free prescriptions and other passported benefits. The ombudsman looked into her case and reported that Ms U, as she is known, could not afford to eat properly or heat her home, and that:

“Her mental and physical health declined drastically”.


Over 118,000 other people were similarly affected. The DWP eventually paid arrears but is refusing to pay compensation. The ombudsman recommended it paid compensation

“in recognition of its error and the potentially devastating impact it has had on people’s lives.”

When this matter was debated in the Commons last week, the Minister in the other place said that the Government had published the previous Thursday an update of these cases on GOV.UK. I have searched GOV.UK, as has the Library, and have found no such documentation, so I am dependent on the Minister to answer these two questions. First, can she say whether the DWP has now complied fully with the ombudsman’s recommendation to pay Ms U £7,500 in compensation and interest on her £19,832 of arrears? Secondly, will the Government also follow the ombudsman’s recommendation to provide remedies to the others who have suffered injustice or hardship as a result of the same maladministration?

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

I will go back to the department and check the first point that the noble Baroness raised. This situation is appalling and awful, and I apologise to all those affected on behalf of the Government and the department. I can confirm that Ms U has had a £7,500 compensation payment and a further payment of interest on the benefit arrears payment of £19,832. There is little more that I can say about her, other than that we have complied completely with the PHSO’s point.

On others affected—and I understand the depth of feeling on this—the department has a discretionary scheme that allows special payments to be made to customers to address any hardship or injustice caused by DWP maladministration. Consistent with other large-scale LEAP exercises, special payments under the DWP discretionary scheme will not routinely be made. There is no legal requirement to make special payments as the scheme is discretionary. However, as the Minister for Welfare Delivery said in the other place on Thursday, if anybody believes that they are a special case, they are quite free to make representation to the department.

State Pension Age

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 18th January 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

Since 1994-95, rates of female pensioners in poverty, by all measures, have fallen by a larger amount than rates of male pensioners in poverty over the same period. The proportion of pensioners in absolute poverty, after housing costs, has halved since 2002-03. Pension credit is the safety net—I know that will open the floodgates for a raft of other questions—and we must make sure that as many people as possible apply for that benefit.

[Baroness Sherlock (Lab)]

My Lords, I cannot let that go: relative poverty among pensioners is on the rise again, having fallen considerably for years. However, controversially, I will come back to the Question. The latest ONS tables show that life expectancy at birth in the UK is 79 for men and 83 for women. But life expectancy is lower in Wales and Northern Ireland, and especially Scotland, than it is in England. What are the Government doing to engage with the devolved Administrations, and how might pension policy take account of that?

[Baroness Stedman-Scott (Con)]

I hope that, during the review, the devolved Administrations will be consulted. I will certainly go back to the department and speak to the Secretary of State to make sure that that is included in the review. The review will then report, and the noble Baroness will get the answers that she is looking for.

Sick Pay

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 17th January 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

The noble Lord is very eloquent in the way he holds the Government to account. I cannot say that it has been tested on Ministers, but I will go back to the department to understand how that figure has been arrived at and then write to the noble Lord and place a copy in the Library.

[Baroness Sherlock (Lab)]

My Lords, I am glad that the Government are thinking about this, but they have been doing so for a very long time. They have consulted more than once on this but they simply say, yet again, as they did last year, that it is not the right time. If the pandemic taught us anything it is that if you are on low wages, in insecure work or self-employed, you cannot afford to get sick and you cannot afford to do the right thing. Rather than wait for the next pandemic, the next bout of flu or the next difficult infectious disease to hit our country, can we please do something to enable people to do the right thing? We are a rich country; surely people should not have to go to work when they are sick.

[Baroness Stedman-Scott (Con)]

I completely agree with the noble Baroness that people should not be forced to go to work when they are sick, especially with Covid, given the danger of it spreading. I know it probably will not go down very well, but I can confirm that this is in train, and I am dreadfully sorry that I cannot say when it will be done. When I go back and talk to the department about the keenness and urgency of Lord Hendy, I shall certainly add that to the shopping list.

DWP: Support for Larger Families

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 11th January 2022 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I am not so sure. The Government may not have made any assessment of the position of families, but let me give the Minister one assessment. The director of the IFS has said that the cost of living crisis we are facing right now could hit someone on average earnings harder than the financial crash of 2008. Taxes are rising, inflation is soaring and energy prices are going through the roof. Earnings and benefits simply cannot keep up. If the average worker is in trouble, what of larger families? The two-child limit caps what they get and they have already been hit by the £20 limit. They are in the position right now of having to decide whether to feed the meter or feed the kids. What are the Government going to do about that?

[Baroness Stedman-Scott (Con)]

On the two-child policy, families can claim for up to two children and there may be further entitlement for other children if they were born before 6 April. There are also exceptions, but at the end of the day we are trying to make it possible for people who are working to make decisions about how many children they have over affordability. We have no intention of changing the Government’s two-child policy.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Stedman-Scott and Baroness Sherlock

Consideration of Commons amendments
Tuesday 16th November 2021 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing her Motion and all noble Lords who have spoken. I am going to get a new T-shirt for Christmas: “Proud to Be an Irritant”. Perhaps they should start selling them in the House of Lords gift shop; they might sell quite well. A nice note for the noble Lord, Lord Desai.

I must say that I am disappointed. The House voted by a healthy majority for the amendment in the name of the noble Baroness, Lady Altmann, which would have kept the link between pensions and earnings. It is worth noting that the amendment won support from around the House, whereas the Government were able to persuade only 13 Members who do not take the government Whip to vote against. The reason is clear: the case was unpersuasive.

The Government came to power on the back of a manifesto commitment to the triple lock, which we also supported at the last election, as did the Liberal Democrats and other major parties. The Government now want to ditch it for next year on the grounds that the rise in earnings over the year to last summer was artificially high as a result of Covid. We accept that earnings growth was distorted as a result of the pandemic, but that does not mean that the Government should just ditch their promises. They could and should have found a way to maintain the earnings link in pensions while adjusting for the Covid effect.

I will not relitigate this but, during the passage of the Bill, we looked at lots of ways we could do it, and lots of constructive suggestions emerged, and in the end the House coalesced around a very reasonable amendment in the name of the noble Baroness, Lady Altmann, with cross-party support, which simply said that the Government should use a figure for earnings chosen

“in the light of reasonable adjustments to take account of the impact of the COVID-19 pandemic based on the Office for National Statistics reported earnings figure.”

It could not have been more reasonable, and it left the Government considerable latitude: we were not telling the other place what to do but simply giving them a chance to think again.

But the Government flat out rejected that. The Pensions Minister in the other place did comment on the merits of the amendment, but he caricatured it by saying that it

“invites the Secretary of State to measure earnings as if they were not actually growing by 8.3%.”—[Official Report, Commons, 15/11/21; col. 359.]

So are the Government now saying that earnings growth actually is 8.3%? If so, why are they ditching the triple lock? And if it is not 8.3%, why did they not take the chance this House afforded them to look at alternatives?

The Minister again mentioned time pressure, so I put to her again a question I put at an earlier stage in the Bill. She told noble Lords there were two reasons why it was so time-critical. The first was that the computers have to be changed by a date—I think it was 26 November, or another date late this month that was the last date that computers could be changed to adjust the rates for next year. She also said that the House will then have to approve the uprating order, which we normally do in the spring. So what happens if they change the computers deep in the bowels of DWP and then the House chooses to reject the uprating order? What happens then?

While we are here, by refusing to look again, we are left with a Bill which will uprate pensions by the CPI inflation rate prevailing last September. Meanwhile, we all know that the costs of things that all pensioners use—food and fuel, for example—are spiralling up. Pensioner poverty is on the rise again. The last Labour Government managed to bring it way down, but it started to rise again in 2012. It is now on the rise and it will get worse yet.

I am sorry to say that this short Bill is a mistake. It steps away from the earnings link and, in walking away from their manifesto commitment for the third time, the Government are breaking trust with the electorate. Why are they so determined to do it? Ministers tell us that it is for one year only. Great, but I worry that their refusal to be creative in finding a way to deal with the fallout from the pandemic raises fears that they really are planning to walk away from this longer term.

My noble friend Lord Rooker is, as always, right. We have done what we can. We have asked the elected House to think again. The Government whipped their people to say that they did not want to do so. I think they are wrong. Pensioners will pay the price for this and they will not likely forget this breach of trust. I hope the Government think it was worth it.

[Baroness Stedman-Scott (Con)]

My Lords, I thank all noble Lords for their contributions. To answer the question put by the noble Lord, Lord Davies, about the Government believing in the long-term earnings link, yes, this Bill is for one year only. After that, it will revert to the current legislation, and state pensions will increase at least in line with earnings. The triple lock will be applied in the usual way for the remainder of the Parliament. We believe that 8.3% is atypical growth, just as we considered minus 1% to be atypical last year, which is why we increased state pensions by 2.5% instead.

Again, to the noble Lord, Lord Davies, inflation is forecast to be higher than 3.1%. Do pensioners not need a higher increase? The uprating order for all benefits will take effect from April 2022 and, last year, pensioners saw an increase of 2.5% when CPI for the uprating review period was 0.5%. Average actual CPI over the first six months of this financial year was lower, at 2.4% at the Budget, and the OBR forecast that CPI would average 4.1% for the second six months of this financial year. If this turns out to be the case in September, the CPI figure will be a good reflection of average inflation over whole of 2021 and 2022.

The noble Lord, Lord Sikka, said that the state pension is the lowest in the developed world and is still below the 1979 level relative to average earnings. This comparison is misleading. There are many factors to take into account: tax systems, healthcare systems, pension ages, cost of living, access to occupational pensions and the availability of other social security benefits, as well as the provision of services and goods free to pensioners or at a concessionary rate. The Government provide considerable additional support for pensioners. People over state pension age are entitled to free winter fuel payments worth £2 billion every year, free eyesight tests, NHS prescriptions worth around £900 million every year, and free bus passes worth £1 billion every year. In addition, the BBC has made provisions so that those aged 75 or over who are in receipt of pension credit are eligible for free TV licences.

To answer the question put by the noble Baroness, Lady Sherlock, if there is no Royal Assent, we need to use the current legislation at 8.3%.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Stedman-Scott and Baroness Sherlock

3rd reading
Monday 8th November 2021 Lords Chamber

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

My Lords, as this is a two-clause Bill and the main clause was an amendment, I will use this opportunity to thank all noble Lords for the positive engagement and feedback they have provided thus far. We have had some truly wide-ranging debates, and I deeply appreciate the House’s passion for and knowledge of social security and pensions. I am enormously grateful to my noble friend Lady Scott, who has supported me at each stage of the Bill’s progress, both on and off the Floor of the House. I extend my thanks to the noble Baronesses, Lady Sherlock, Lady Janke, Lady Altmann and Lady Stroud, and the noble Lords, Lord Sikka and Lord Davies, for their amendments, ensuring thorough scrutiny of the Bill. I extend my thanks to the countless other noble Lords who have provided an abundance of constructive support and knowledge, and I thank all noble Lords for taking part.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her remarks and thank all noble Lords who participated in the debate on the Bill. For a short Bill, its impact is quite wide, affecting millions of people. Our debates have raised some crucial issues around approaches to uprating and the government strategy for retirement saving, and especially around the position of pensioners on lower incomes as we enter a season of spiralling prices. Not for the first time, it is possible that our deliberations may have a broader impact in parts of Westminster and Whitehall than perhaps we realise or will ever know—at least until the autobiographies of the future come to be written.

On the matter of memoirs, these proceedings have also been notable for the return to the fray of the former Minister for Welfare Reform, the noble Lord, Lord Freud, whose frank demolition of the Government’s case for social security cuts and policies such as the benefits cap will, I predict, turn out to have a half-life somewhere around that of uranium.

I thank the Minister for her concession on Report, in response to my amendment on pensioner poverty, that an impact assessment should be published. That happened on Friday. I look forward to having the opportunity, if we can, to discuss that with her and her officials in due course. Most importantly, we have amended the Bill to require the Government to find a way to adjust pension uprating and to maintain the earnings link, while making allowance for the pandemic. I urge the Government to take that seriously and to use the time they now have to find a better solution than that offered by the Bill.

Public trust in politics has taken a bit of a hit in recent times. If there were a way of pursuing this objective without dumping a manifesto commitment, we would all want that. In the meantime, I thank the Minister and her officials, colleagues across the House for their thoughtful contributions, and Dan Harris of our staff team for his marvellous support. We send the Bill back to the Commons with our best wishes, hoping that it will embrace it and hold on to it as it is.

Benefit Cap: Review

Debate between Baroness Stedman-Scott and Baroness Sherlock

Wednesday 3rd November 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

As I said, the benefit cap will be reviewed at a time to be determined by the Secretary of State, but we have a range of measures designed to support people who flee abusive and violent households, as it is quite unacceptable that they should have to do this. We have provisions in housing benefit and universal credit, and I can assure the House that, where necessary, we arrange split payments for people in order for them to be able to maintain an independent life.

[Baroness Sherlock (Lab)]

My Lords, in his recent book, the noble Lord, Lord Freud, said:

“The benefit cap made little sense in a system designed to provide each family what it needed.”


Quite, so why do it? Yesterday, the noble Lord, Lord Freud, told the House why. He said that George Osborne’s chief of staff had said to him:

“I knew it didn’t make much in the way of savings, but when we tested the policy, it polled off the charts.”—[Official Report, 2/11/2021; col. 1128.]


The cap has caused huge hardship and driven kids into poverty, but it was not because it was right, but because it polled off the charts, helped by rhetoric demonising the poor and those who could not work. Labour would scrap it to lift people out of poverty; will the Government now do the right thing?

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Stedman-Scott and Baroness Sherlock

Report stage
Tuesday 2nd November 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords—

[Baroness Sherlock (Lab)]

My Lords, my apologies: I was too slow to leap up. I thank my noble friend Lord Davies for introducing his Motion and thank all noble Lords who have spoken. As I said in Committee, I think we all share an underlying concern, which is about the living conditions of pensioners—particularly poorer pensioners—in our society. I will not rehearse our debates on pensioner poverty, but I am grateful to my noble friend Lord Davies for opening up the question of a strategic approach to the state pension.

The assumption had been that the state pension, old or new, was the basis, or the foundation, of developing retirement income and that any private provision would be on top. Given that we have rising levels of pensioner poverty now, and looking across the landscape of current saving rates on auto-enrolment, are the Government confident that this strategy is working and that people will have adequate income in retirement on the basis of the figures that she is seeing? I should be interested to hear her response to that.

My noble friend Lord Sikka again mentioned the question of people who are struggling. We are very anxious about the cost of living facing pensioners in the difficult months ahead, which is why I very much hope that the Government are tackling pensioner poverty in the ways that we have discussed.

Taking my noble friend Lord Davies at his word, he did not in fact raise this with the intention of pressing the Government for 8.1% now but to raise the broader questions. I hope the Minister will take him on that basis and give him a response that will help to answer the kind of questions he has raised.

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Altmann, for explaining her amendments, and all noble Lords who have spoken. I welcome my noble friend Lady Ritchie to the debate and thank her for sharing her perspective on Northern Ireland with us and the position of women. That was very helpful.

We had a good discussion at earlier stages of the Bill about the way the Government have gone about finding an alternative to the triple lock which will deal in some way with the impact of the pandemic on earnings data. As the noble Baroness, Lady Janke, has just indicated, I do not think many of us are very happy with where the Government have landed; I think that is safe to say. I will not rehearse all the arguments from Committee, but I am going to summarise them because noble Lords have made some very important points about poverty. There is an additional dimension to this amendment about the question of principle.

The Government came to power on the back of a manifesto commitment to the triple lock. Labour also supported the triple lock at the last election. Therefore, for all of us, the starting point is that the triple lock should apply. We on these Benches accept that the earnings growth data have been distorted by the effects of the pandemic directly, and the effects of the furlough scheme and changes in hours. But that does not mean the Government should just ditch their manifesto promises.

As my Commons colleague, the shadow Pensions Minister Matt Rodda MP put it at Second Reading:

“At the very least, Ministers should maintain an earnings link, explain their decisions, offer binding commitments to protect the triple lock and protect the incomes of less well-off pensioners.”—[Official Report, Commons, 20/0/21; col 63.]


Well, quite. Both in the Commons and in this House, Labour has made clear its view that the Government should have found a way to deal with this that maintained the earnings link. The importance of the earnings link has been very well explained by the noble Baronesses, Lady Wheatcroft and Lady Greengross, my noble friend Lady Lister, and others.

But how should that be done? In the Commons, Labour suggested using an average rise in earnings over a longer period of time. In this House, I first suggested that to the Minister not in this Bill but in the passage of the Social Security (Up-rating of Benefits) Act 2020. That was the emergency Bill designed to deal with the fact that earnings were negative last year, therefore something had to be done to uprate it. This year in Committee, again I raised the question of why the Government did not smooth the effects over two years, but I got no satisfactory answer and I accept that time has moved on. So where does that leave us?

The Government will say that we cannot pin down precisely the size of the pandemic effect on earnings growth. That is true, but the best we have is the work that the ONS has done. Its modelling stripped out the two main things: the base effects and the compositional effects. If noble Lords will forgive me for “nerding” for a moment, I will explain them.

The base effect is essentially that, a year earlier, people were on furlough and worked fewer hours; when you measure earnings a year later, more of them have gone back to work and are on full hours, so earnings appear to have jumped a lot. That is one effect. The compositional effect is a change in the composition of the workforce—people on lower incomes were more likely to lose their jobs in the pandemic.

The ONS modelled stripping both of those effects out to try to get a figure for real underlying earnings growth across the year to use as a reference point. It came up with a range for that underlying growth. The Government do not like it because they think it is not robust enough to use as a measure for uprating earnings. If they do not like those figures, I suggest that it is up to the Government to go away and find some other way to show that the earnings link is being maintained. Amendment 3 does not specify any figure, and Amendment 4 merely says that the Government should use a figure for earnings chosen

“in the light of reasonable adjustments to take account of the impact of the COVID-19 pandemic based on the Office for National Statistics reported earnings figure.”

In the Commons, my colleague, the shadow Work and Pensions Secretary, Jonny Reynolds, said:

“I do believe there is a need to maintain the value of the state pension and the objectives of the triple lock are ones we should keep to”.—[Official Report, Commons, 20/9/21; col. 84.]


That is the problem with the Government’s approach in a nutshell. Their proposals in the Bill mean stepping away from the fundamental principle that pensions should keep up with earnings. They also breach the manifesto commitment to the triple lock, which, as my noble friend Lord Davies said, is a breach of trust with the electorate—that is the third, coming after the cut in overseas aid and the national insurance rise. There must be a better way than this, and this amendment directs the Government to find it. If they do not like this wording, they can bring back an amendment in lieu.

I realise that the Bill needs to be on the statute book by 26 November, for reasons to do with IT, but that is more than three weeks away. The Government managed to get the whole Bill, in all its stages, through the Commons in a few hours, so I do not believe it is beyond their wit to be able to come up with an alternative and come back to the House in due course.

For us, this is a matter of principle. It is not just about the amounts of money. That is why we are supporting this amendment, specifically on the earnings link for the state pension. The Government should find a way to keep their manifesto promise and maintain the earnings link, and to do so in an appropriate way. I hope the Minister will accept it.

[Baroness Stedman-Scott (Con)]

My Lords, I thank the noble Baronesses, Lady Altmann, Lady Janke and Lady Wheatcroft, and the noble Lord, Lord Hain, for their amendment. The Government’s reasons for not adopting an altered measure of earnings have not changed. That includes the unacceptable level of risk that would be attached to changing the definition of earnings using the current legislation. I remind your Lordships again that the cost of failing to secure Royal Assent to this Bill by mid-November would be in the range of £4 billion to £5 billion.

I very much understand my noble friend Lady Altmann’s concern about a temporary suspension of the earnings link, for all the reasons she and others have so eloquently outlined. But the fact remains that the figures quoted from the Office for National Statistics have no official status and have been taken from a blog that the ONS published, alongside the usual earnings statistics, first in July this year and then in subsequent months.

The key reason why the Government cannot accept this amendment is that the ONS figures are just not robust enough to form the basis for an uprating decision. This is best demonstrated by two quotes from the ONS:

“The blog explains that there are a number of ways you can try to strip out these base effects, but there is no single method everyone would agree on. We have tried a couple of simple approaches. Neither approach is perfect … Our calculations of an underlying rate are there to help users understand base and compositional effects, but there remains a lot of uncertainty about how best to control for these effects, so they need to be treated with caution.”


Using a range of possible estimates based on a method that cannot be agreed on does not provide a sufficiently robust basis for making critical decisions about billions of pounds-worth of expenditure.

A further point is that the ONS has calculated its range of adjusted underlying earnings growth for a measure of regular pay. The usual measure of earnings used for uprating is total pay, which is regular pay plus bonuses, because this gives a more complete picture of earnings, as bonuses can play an important part in earnings. There are no such problems with CPI inflation, which is a robust national statistic and provides a clear and sound basis for this year’s uprating, with no need for any complex adjustments.

I must remind the House that this Bill is for one year only. From 2023-24, the legislation will revert to the existing requirement to uprate by at least earnings growth, and the Government’s triple lock manifesto commitment remains in place.

Finally, I point out that, if a percentage of 3.1% or more is applied in 2022-23 to the current rate of the basic state pension, this would mean that the full yearly rate will have increased since 2010 by £570 more than if it had been uprated by prices; that is over £2,300 pounds more in cash terms. In addition, people over state pension age are entitled to free winter fuel payments worth £2 billion every year, free eye tests and NHS prescriptions worth around £900 million every year, and free bus passes worth £1 billion every year.

My noble friend Lady Altmann talked about the cost-of-living crisis in relation to energy and inflation. Ofgem’s energy price cap has protected consumers from the recent fluctuations in wholesale gas prices. Millions of low-income households will be supported with the cost of essentials through the £500 million household support fund. This builds on the £140 warm homes discount, which helps 2.2 million low-income households with their energy costs, and the winter fuel payment, which provides £200 toward energy bills for households with a member at or above state pension age and £300 for households with a member at or above 80 years old.

The noble Baroness, Lady Lister, talked about not receiving a letter. I am assured that the letters have gone out. If, by the end of this debate, she still has not received one, I hope she will let me know and I will make sure this is rectified. I say the same to everybody in the House: I am sure that those letters have been sent. In the light of my remarks, I ask the noble Baroness to withdraw her amendment.

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, I normally think my job is basically to help the House by offering an idiot’s guide to how things work, but I think it is beyond me this evening. My noble friend has asked so many questions that I want to add only a couple.

First, I want to see whether I can understand what the Minister was saying in her letter on 25 October. I think she was saying that the national insurance scheme is financed on a pay-as-you-go basis, with contribution rates set broadly at a level necessary to meet the likely cost of contributing benefits and pensions in that year, taking into account any other payments and receipts and the need to maintain a working balance, which seems to be targeted at 16.7% of benefit expenditure. That is an oddly precise figure, whose basis completely eluded me, but maybe she can enlighten me.

The Minister’s response said the fund may be in surplus now but it was forecast to be in deficit next year so there would not be a surplus to draw on. I think her case is that the context of surplus is not meaningful, because the fund is designed to wash its face, and therefore, if income is lower or expenditure higher than expected, the Treasury tops it up and reverses those ships back out again. Is my idiot’s guide right—have I understood the Minister’s case? If so, can she answer some questions?

If there is a surplus of £37 billion, why is it so high this year? What is the projected deficit for next year, and why is it projected as that? I think my noble friend addressed my next question on the hypothecation of funds for the NHS. When the Secretary of State makes her statutory decisions on uprating, is any reference made to the state of the National Insurance Fund?

Finally, on a slightly tangential point, anyone who has ever knocked on doors during elections will know that a certain proportion of voters is still convinced that the National Insurance Fund is hypothecated at the level of the individual: “There is a savings account somewhere in the Treasury with my name on it; my national insurance contributions go into that and pay my benefits and pension when I retire.” I think that is one of the reasons why so many people are outraged when they find their state pension age pushed back or, after years of paying contributions, they finally claim benefits and find they are incredibly low—far lower than the tabloid coverage had led them for many years to believe was being offered in largesse to the poor.

In practice it is a pool system, not an individual one, and today’s workers pay for today’s pensions, not their own pension. Given that, does the Minister think there is enough transparency on the way the National Insurance Fund works? People are now paying 20% standard rate tax and 12.5% NI, so most workers are going to be paying 32.5%; and NI kicks in at a lower threshold. Does she think the Government are sufficiently accountable for all that and the way it is spent? I would be interested in her comments.

[Baroness Stedman-Scott (Con)]

My Lords, out of courtesy to the noble Lord, Lord Sikka, and the noble Baroness, Lady Sherlock, for the points that she has made, and to bring some clarity to the questions raised, I hope that the House will agree that I sent the letter in good faith, and will allow me to take it back to officials with the points that have been raised and come back with, I hope, the re-emphasis that is needed to clarify the position on the fund. However, I am advised that the first point raised by the noble Baroness, Lady Sherlock, in her summing up, is correct.

As the noble Lord, Lord Sikka, will be aware, there is an existing statutory requirement under the Social Security Administration Act 1992 for a GAD report on the likely effect on the national insurance fund of the draft Social Security Benefits Up-rating Order and the draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations. There is no equivalent statutory requirement for this Bill, and GAD will conduct its assessment in the round based on the draft uprating order, which will include all benefits paid out of the national insurance fund, not just the ones covered by this Bill.

With respect to an assessment of the impact on the fund if this legislation is not passed, it is important that the working balance of the national insurance fund remains positive, as this ensures that there are always enough funds to pay for these benefits and allows the Government to deal with short-term fluctuations in spending or receipts. If the balance of the fund is expected to fall below one-sixth of forecast annual benefit expenditure, the Government will transfer a Treasury grant, paid from general taxation, into the fund. This ensures that benefits such as the state pension can always be paid as necessary.

I know that several noble Lords have suggested that, when in surplus, the fund can be used to increase expenditure beyond the level originally planned, but I am afraid that that is a misconception. The balance of the national insurance fund is managed as part of the Government’s overall management of public finances and reduces the need for it to borrow from elsewhere. Therefore, any additional spending from the national insurance fund would represent an increase in overall government spending and, without cuts in other areas of spend or additional taxes, an increase in government borrowing.

Not passing this Bill would not only increase state pension payments from the fund this year by an anomalously high figure of 8.3% but have a long-lasting compounded impact for decades to come as the anomalous figure would be baked into the baseline. The Government do not believe that this would be fair to younger taxpayers. Based on these arguments and the commitment that I have given to review the letter and the questions raised today, I ask the noble Lord to withdraw his amendment.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Stedman-Scott and Baroness Sherlock

Committee stage
Tuesday 26th October 2021 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I have two quick questions. I am not advocating smoothing, but the Minister’s argument against it was that there would be a compositional effect. From memory, the base effect was many times more than the compositional effect, in terms of the impact on earnings data. The composition effect was less than 1% and the base effect was 3% or 4%, so is that really an argument?

The second question is something I have always wondered. The argument she gave to noble Lords who asked about timing was that two of the reasons why it had to be decided now were that the computers must be programmed in November and that the order usually has to be put through in January. What would happen if the computers had been programmed and the order was rejected by Parliament?

[Baroness Stedman-Scott (Con)]

I will have to come back to the noble Baroness on her latter point, as I do not know at the moment.

[Baroness Sherlock (Lab)]

On base and compositional effects, is not the compositional effect on which she was relying as a defence against smoothing very small? Does not the base effect account for most of the difference in earnings data?

[Baroness Stedman-Scott (Con)]

That is another technical point that, rather than give an incorrect answer, I will come back to the noble Baroness on.

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Stroud, for introducing Amendment 9 and speaking so passionately on its content. We tried everything to get an amendment on universal credit into scope, so I am not surprised that, despite all her ingenuity and application, the noble Baroness was unable to get anything past the clerks. I have some sympathy for the efforts that must have gone into that; the nearest I could get was Amendment 6 in my name on mixed-age couples—“close but no cigar” is, I think, the technical term for it.

I understand that these issues are complex and sensitive. I have learned a lot today, in fact, about what happens in practice. Having listened to both the Leader and the noble Baroness, Lady Stroud, I now understand that, in effect, the House will decide the admissibility of an amendment only at the point at which it decides whether or not to accept or vote for it. So basically, we will not find out tonight at all. Given that, I will take the opportunity to talk yet again about universal credit; I have been banging on about it for quite a long time. I will do so briefly.

I have been talking about this £20 for a boringly long time. I cannot tell noble Lords how happy I am to have such an illustrious array of support coming in behind the issue—what a delight that is. It has been very interesting to listen to some of the contributions, which I passionately agree with. I am grateful to the noble Lord, Lord Crisp, for pointing out the impact of this cut on health, to the noble Baroness, Lady Boycott, for pointing out the impact on food, people’s poverty, and the quality of their lifestyles, and to the noble Lord, Lord Shinkwin, for pointing out the impact on disabled people.

I still believe that it is not just bad but one of the most shocking decisions to remove £20 a week from universal credit at the point at which we are dealing with the effects of a pandemic which, as the noble Lord, Lord Porter, pointed out, has decimated communities, and is still having that effect. People have lost jobs and hours. We are in a cost-of-living crisis. To proceed at this point with what the Economist called

“the biggest single cut to social security since the foundation of the modern welfare state”,

frankly, beggars belief.

I warn the Minister that, the next time she tries to defend this cut by pointing to the £500 million discretionary fund, I am going to get up and quote the noble Lord, Lord Freud, at her. I may even look at a combination of the noble Lord, Lord Freud, and my noble friend Lady Lister—if I am honest, not an alliance I have seen a lot of in the past, but I shall be quoting them at her together. Frankly, at that point, she should just put up her hands and give up; if the two of them are agreed, she may be on to a loser.

The other defence that will be used—indeed, it is already starting to be—is about what is happening with the rise in the national living wage. Obviously, it is good that the Government have accepted the Low Pay Commission recommendation and that the minimum national living wage will rise, but this simply does not make up for the universal credit cut, for three basic reasons.

First, there are well over 5 million adults on universal credit, but only 2 million people get the national living wage and many of those do not get universal credit. Secondly, it is not enough. The Resolution Foundation has done the sums and a full-time worker on universal credit who gets the national living wage would see their pre-tax pay rise by just over £1,000 as a result of this increase. However, their take-home pay would go up by only £265 because of the UC taper, because they pay more tax and will be paying more national insurance come April. Losing £1,040 and gaining £265 is not a win. That is in cash terms. In fact, most of that increase will have to go to cover the cost of inflation in any case.

The noble Baroness, Lady Stowell of Beeston, may be right and the Chancellor may be doing something in the Budget. None of us knows what is going to happen. Maybe he will knock a couple of percentage points off the taper rate. I really hope he cuts the taper rate but that will not be enough to make up for the damage that this cut has wrought.

The third point is that improvements in the living wage and the taper rate help only those in work. Just 38% of adults in families on universal credit are employed. What happens to the rest? What about the sick and disabled people who are not able to work? What about those with caring responsibilities? How are they meant to feed their kids and heat their home? What happens to them? Let us not forget the hit to local economies when families who have to spend every penny they get suddenly have £1,000 less to spend a year in local shops and businesses because it has been taken away from them.

That is enough for one day. We have had a very interesting debate. I shall read Hansard with care. Perhaps the Chancellor will take the advice of the noble Lord, Lord Shinkwin. Perhaps the best favour he could do for the Leader of the House and the Minister is to take this problem away from them by acting tomorrow. We look forward to seeing that. I hope the Minister can give us some hints.

[Baroness Stedman-Scott (Con)]

My Lords, we will have to wait until the Chancellor gets up to speak to find out what he has to say in his Statement. I thank my noble friends Lady Stroud and Lord Freud, and the noble Baronesses, Lady Janke and Lady Boycott, for their amendment. My noble friends Lady Stroud and Lord Freud were, of course, prominent architects of universal credit and noble Lords will, I am sure, join me in appreciating their depth of knowledge and strength of feeling on the issue. I know from all that has been said that others in this House share many of their concerns. I will not take time to repeat them now.

I must inform your Lordships that this amendment, if passed, would challenge the broader constitutional balance between the two Houses of Parliament. I am sure it is not the intention of noble Lords to open such a Pandora’s box, but I would be failing in my duty to your Lordships’ House if I did not clearly spell out the unintended effects.

Since the other place has already approved the Bill, I urge your Lordships not to risk its effects being negated by ping-pong between the Houses that takes us beyond the hard deadline for reprogramming the relevant DWP IT systems. This amendment deals with matters of public expenditure which are the province of the elected Chamber. It also effectively asks this House to decide how that Chamber should conduct its business, what it should debate, what it should choose to vote on and when that should be done—in this case, within one month of Royal Assent.

Taking into account all the constitutional points I have raised, I invite my noble friend to withdraw her amendment and, if she feels unable to do so, I strongly urge noble Lords not to vote in its favour.

Child Poverty: Nuffield Foundation Review

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 19th October 2021 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the Nuffield report said that last year over 54% of families with young children in poverty had three or more kids, and that the recent rise in early childhood poverty is largely the result of changes to benefits policy, including the recent two-child limit. The right reverend Prelate the Bishop of Durham could not have done more—he comes back at least once a year with new evidence. The government response is always “just a little bit more”. The evidence is clear: this policy is having one effect—pushing large families into poverty. So I ask the Minister: how bad would that poverty have to get for the Government to change their mind?

[Baroness Stedman-Scott (Con)]

The noble Baroness is right to mention the great tenacity of the right reverend Prelate in this area. The Government, however, have had to take difficult decisions—

Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 6th September 2021 Grand Committee

[Baroness Stedman-Scott (Con)]

The noble Baroness, Lady Drake, referred to the PM and the Chancellor calling for an “investment big bang” and said that these measures wrongly force schemes to invest in illiquid assets. The Government do not wish to direct trustees of pension scheme investments. Trustees must invest in line with their fiduciary duty; that is, in the best financial interest of their beneficiaries. Instead, we are seeking to remove barriers to investments in illiquid assets. The provisions in this instrument have received support from the pensions industry.

The noble Lord, Lord Davies, talked about default schemes. He is correct that almost all members save into the default arrangement. Those who self-select still receive regular information on charges and are generally engaged. He raised the subject of the threshold for “value for members” assessment being set at less than £100 million, which had increased from £10 million at consultation. He asked whether it would increase further in future. The Government increased the “value for members” assessment threshold following consultation with industry. The reason for this was to capture as many potential poorly performing occupational DC schemes as possible. We have evidence that the smaller a scheme is, the more likely it is to be poorly governed. By our moving the “value for members” assessment threshold from assets under £10 million to £100 million, more occupational DC schemes will have to undergo this rigorous new assessment. This will mean that more members will benefit from improved governance, administration and returns as a result. We will review the assets under the £100 million threshold regularly but have no plans to change it at present.

The noble Lord, Lord Davies, asked how meaningful to members the information would be. The Government are taking forward several measures—dashboards and simpler statements among others. The SI is about how these schemes are governed internally. We are intervening to prevent members languishing in poor schemes.

The noble Baroness, Lady Sherlock, raised a point about CDC. I am advised that we will write to her on that. She also asked what the instrument would mean for the future of look-through and said that the Government had said that they would advise on a policy in July. The instrument does not amend the Government’s policy on treatment of such costs. In our consultation response on improving outcomes for members, published on 21 June, we state that occupational DC pension schemes should continue to look through closed-ended funds as they would all funds of funds and incorporate such costs within their regime of charges levied on members.

If there are points raised by noble Lords that I have not dealt with—

[Baroness Sherlock (Lab)]

I am grateful to the Minister. Could she write to me with that last point, as I did not quite catch the bit about look-through funds and look-through operations of closed-ended funds? I asked two questions. First, my noble friend Lady Drake and I both asked what the Government’s optimal number of schemes is. Would it be one big or enormous scheme—would that be fine? Is it fine to have lots of schemes? Can the Minister give some idea what the centre is in that? The other thing I asked about, which I do not think she answered, was what guidance would be given to trustees or employers who might want to consolidate but were concerned that the moving goalposts would mean that they could end up simply being moved again and, potentially, again. If she did respond to that, I apologise for having missed it.

[Baroness Stedman-Scott (Con)]

I will write to the noble Baroness on the three points she has raised and put a copy in the Library for everybody to see. If there is anything, having looked at Hansard¸ that we have not dealt with, other than that which the noble Baroness raised, I will write to all noble Lords.

This instrument makes several different changes to several different sets of regulations. It has one theme at its core: improving outcomes for pension savers. We have a duty to ensure that those who have engaged in pension saving in their workplace as a result of automatic enrolment can rest assured that their occupational DC pension scheme is on course to deliver the best possible outcome for them. This instrument does this by tackling poor levels of governance, shifting the attention of the market from a narrow focus on cost to overall value, and removing barriers to schemes allocating to a wide range of different assets. I therefore commend it to the House and beg to move.

Armed Forces: Transition to Civilian Life

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 15th June 2021 Lords Chamber

[Baroness Sherlock]

To ask Her Majesty’s Government what assessment they have made of the support provided by the Department for Work and Pensions to members of the Armed Forces in their transition to civilian life.

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

My Lords, the vast majority of veterans are able to make a successful transition to life outside the Armed Forces; 84% of veterans are employed within six months of discharge, and these rates compare very favourably with the wider population, where 76% are in employment. The DWP provides support to veterans in a number of ways, including through the early voluntary entry to the work and health programme, and support from its network of Armed Forces champions.

[Baroness Sherlock (Lab) [V]]

My Lords, in 2019 the Government committed up to £6 million to fund more than 100 Armed Forces champions. They are there to provide personnel, veterans and families with specialist support to find work and transition to civilian life, and they are a key part of the Government’s commitment to the Armed Forces covenant. The Minister has now told me in a Written Answer that they now aim to hire only 50 champions and have a record low of just 34 in post. So why have the Government abandoned this commitment to our Armed Forces, and how much of that £6 million has actually been spent?

Kickstart Scheme

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 29th April 2021 Lords Chamber

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the Lord Speaker for his service, and I beg leave to ask the Question standing in my name on the Order Paper.

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

I am very pleased to advise the House today that we have now approved 195,000 vacancies on the Kickstart scheme. During the pandemic and the lockdown, employers were very keen to become involved in the Kickstart programme and make opportunities available for young people, but they wanted to wait until we came out of lockdown, when their businesses could start to trade. I can say to the noble Baroness and the whole House that progress is being made day by day and the number of young people going into vacancies is accelerating fast.

[Baroness Sherlock (Lab) [V]]

My Lords, is it not the case that only 16,500 young people have actually started work? That is out of some 575,000 who are unemployed. Last June, Ministers said that Kickstart would create new jobs for a quarter of a million young people. Can the Minister tell the House two things? First, what is the new target date for getting 250,000 young people into jobs? Secondly, given that only 490 placements have happened in the whole north-east of England, what is the plan for making sure that poorer regions are not left behind?

[Baroness Stedman-Scott (Con)]

As I originally said, we have 195,000 vacancies and more are still coming in, so we are positive that we will create hundreds of thousands of jobs for Kickstarters. We are well aware of the difficulties associated with the north-east. We are doing a deep dive on Friday with departmental officials, and we are working at pace to secure adequate opportunities for the plan for jobs. I am confident that we will meet our target in the timeframe allocated for Kickstart.

Unemployment: Over-50s

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 9th March 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

That is a great idea. I will take it back to the department because I can promise the whole House that our Secretary of State and our team are looking at innovative ways to get people back into work.

[Baroness Sherlock (Lab) [V]]

My Lords, to build on that, the pandemic has certainly caused job losses for older people and led to people retiring early, or indeed delaying retirement. That hurts those individuals and their families, but it also affects the labour supply and the pensions landscape. It is a big public policy issue. Have Ministers considered developing a focused strategy, with ring-fenced funding and targeted interventions, and perhaps adapted conditionality for older workers?

[Baroness Stedman-Scott (Con)]

In respect of conditionality and targeted support, the work that we are doing through the work coaches is tailored and individual. We are using the conditionality rules as compassionately and sensibly as we can.

Pension Credit

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 8th March 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

The noble Baroness has obviously had a great career supporting, promoting and championing pensioners in need. On the use of taxpayers’ money, I am not aware of any plans to do as the noble Baroness suggests.

[Baroness Sherlock (Lab) [V]]

On International Women’s Day, we should note that women pensioners are more likely to be poor than men. A DWP official told the Scottish Social Security Committee that if all poor pensioners claimed pension credit, housing benefit and the council tax reduction, pensioner poverty would reduce to almost zero. The DWP take-up campaign last year has not worked. Peers keep asking Ministers to meet with us, together with charities, because we need more energy and creativity behind a campaign. I do not understand why the Minister keeps side-stepping that request. Can she explain that?

[Baroness Stedman-Scott (Con)]

I am really not aware that I or any of my colleagues have side-stepped meeting with Peers to talk about creativity, and I do not agree with the noble Baroness on that point. There will be a meeting where people will have the opportunity to discuss and put forward their ideas. I am sure that the department will consider them carefully.

Covid-19: Universal Credit

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 2nd March 2021 Lords Chamber

[Baroness Sherlock (Lab) [V]]

I am so sorry; I am out of practice. I beg leave to ask the Question standing in my name on the Order Paper.

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

My Lords, where do I start? I am so proud of the work that my department has done in supporting people during the pandemic. Time does not allow me to reel off everything that we have done, but I shall list these: our plan for jobs; a £2 billion kick-start scheme; increased support for 40,000 jobseekers of all ages; sector work-based academies; the job-finding support service; the help that we have given to 160,000 people; and our £238 million job entry targeted support. There is much more that I could say to the whole House. The department has done an outstanding job.

--- Later in debate ---

[Baroness Sherlock (Lab) [V]]

I am grateful to the Minister for having got that list out of the way, because now she can answer one very simple question from me. Does she accept that cutting £20 a week from the incomes of people on universal credit, whether now or in six months, will push children into poverty and leave out-of-work support at its lowest level in decades, just when unemployment is set to peak? Will she take back to the Chancellor a clear message that he should cancel this cut, extend the £20 to legacy benefits and ensure that our social security system offers a proper safety net to everyone who needs it?

[Baroness Stedman-Scott (Con)]

The £20 uplift in universal credit has done an outstanding job. The Chancellor put it in place in a temporary way, and I guess tomorrow we will find out the intentions for the future. But please be assured that I am very happy to go back to the Chancellor and share the views of the noble Baroness and many others who have made that point.

Commonwealth Countries: Reciprocal Pension Agreements

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 1st March 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

The decision to move abroad is voluntary and a personal choice dependent on the circumstances of the individual. For many years now, advice has been provided on the GOV.UK website that the UK state pension is not uprated overseas, except where there is a legal requirement to do so.

[Baroness Sherlock (Lab) [V]]

My Lords, during the passage of the Immigration and Social Security Bill, we discussed the case of Monica Philip who emigrated to the UK in 1959. After 37 years working here as a civil servant, she returned to Antigua to care for her mother, at which point her pension was frozen. The Minister told me during that debate that she did not know how many of the Windrush generation are affected by this policy. Do the Government plan to look into this any further?

[Baroness Stedman-Scott (Con)]

I regret that I do not have figures for how many Windrush victims have been impacted. The UK state pension is payable worldwide and members of the Windrush generation who have chosen to leave the UK and have reached state pension age will receive annual index-linked increases if they reside in a country where there is a legal requirement to uprate, such as Barbados or Jamaica.

Covid-19: Youth Unemployment

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 2nd February 2021 Lords Chamber

[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.

Pension Schemes Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Sherlock

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

[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.

Extreme Poverty

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 15th December 2020 Lords Chamber

[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.

Arcadia Pension Fund

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 8th December 2020 Lords Chamber

[Baroness Stedman-Scott (Con)]

I understand the noble Lord’s point and the spirit in which he makes it, but it would be inappropriate for Ministers to comment at this stage on this individual case. It is too early to know the position of the pension scheme—whether there is a deficit or how big it is—and, indeed, whether anybody has behaved inappropriately. We need to let the Pension Protection Fund and the Pensions Regulator do their job. If there is any cause for concern, they have a range of powers which they will use.

[Baroness Sherlock (Lab) [V]]

My Lords, many Arcadia pension scheme members are facing possible job loss and uncertainty, which are the perfect conditions for scammers to exploit anxious people who are looking to access their pension savings. The experience of too many British Steel workers stands as a warning. Once savings are transferred out of the pension scheme, there is no way back and access to the PPF is gone. What active steps will the Government take to apply the lessons of the Rookes review to ensure that Arcadia scheme members are not exposed to financial advisers who may provide poor advice, nor persuaded to put their savings in the hands of fraudsters?

[Baroness Stedman-Scott (Con)]

As always, the noble Baroness raises an important point for people who are in difficult positions. Since January 2018, following its work on the British Steel pension scheme, the Financial Conduct Authority has been working closely with the Pensions Regulator and the Money and Pensions Service to ensure that they monitor pension transfer activity in defined benefit pension schemes that may be subject to increased transfer activity. The three organisations have increased the frequency of their meetings during Covid-19 to consider schemes at risk of higher transfer activity.

Universal Credit

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 1st December 2020 Lords Chamber

[Baroness Stedman-Scott (Con)]

At the risk of repeating myself, I say that we are waiting for the Chancellor to assess the situation before making a decision about how best to support low-income families. As for what we are doing for children, there are free school meal vouchers and we are providing £16 million for food charities to get food to those who are struggling and 4.5 million food boxes for vulnerable people. We are expanding free school meals, establishing a new £1 billion fund to create more high-quality, affordable childcare and putting £35 million into the national school breakfast programme. We are not taking our foot off the accelerator on any support we give.

[Baroness Sherlock (Lab) [V]]

My Lords, I watched the BBC news report from Burnley last night and I am not ashamed to say that I cried through it. It showed children so hungry that they were ripping open bags of donated food before they hit the floor. There was a vicar sobbing at the level of need around him. People are desperate, so I ask the Minister: has the DWP modelled the impact of cutting £1,000 from the incomes of 6 million families in the middle of a pandemic and a recession, when unemployment is still rising? Will she join me in meeting people who are providing food on the front line to poor communities, so that we can both hear what they really need from their Government?

[Baroness Stedman-Scott (Con)]

First, I affirm that, as always, I am very happy to meet people, as the noble Baroness suggested. The Chancellor has said that, once we have a better understanding of the impact of the £20 uplift on the social and economic situation, he will make his assessment and decide what to do.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Stedman-Scott and Baroness Sherlock

3rd reading & Report stage & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 17th November 2020 Lords Chamber

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

My Lords, in moving this Motion, I would like to confirm how pleased I am to have introduced the Social Security (Up-rating of Benefits) Bill into this House. I thank all noble Lords for their positive engagement and the feedback that they have provided thus far. I thank in particular the noble Lords, Lord Addington, Lord Randall and Lord Shipley¸ and the noble Baronesses, Lady Sherlock and Lady Janke, for their constructive contributions. I also thank the officials on the Bill team for their tireless work in helping all of us see the Bill proceed in a proper manner and to have the information needed.

The Bill reflects the Government’s commitment to maintaining the income of pensioners in these difficult times. It allows for the uprating of the safety net in pension credit and of widows’ and widowers’ benefits in industrial death benefit. I am grateful, too, to noble Lords for ensuring that the Bill will be passed in time to receive Royal Assent before the Work and Pensions Secretary must conclude her uprating review of benefits and pensions. In doing so, the state pension and pension credit standard minimum guarantee can and will be uprated next year. I beg to move.

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the Minister for her remarks. As I made clear at the outset, we support the Bill, while deeply regretting the economic circumstances that have made it necessary. During its brief passage, some important issues have been raised. I hope the Government have taken note of those issues and will apply themselves to them in the near future. During our consideration of the Bill many noble Lords raised the question of support for those of working age. I keep hoping that we will hear some good news on that—especially on universal credit and other working-age benefits—soon.

We have had some really interesting discussions about the difficult and growing issue of pensioner poverty. We now have 1.9 million pensioners living in relative poverty and the Government need to develop and implement a strategy for tackling pensioner poverty. That will require a proactive plan to boost take-up of pension credit. I regret that I was unable to attend the rearranged meeting with the Pensions Minister on this matter but I look forward to hearing what went on there. At the moment, four out of 10 eligible pensioners do not claim it, so they are missing out on that and on other benefits, including, increasingly, free TV licences for the over-75s.

Then there is the fact that the triple lock does not apply to pension credit. The Minister said in her opening remarks that there will be an uprating to the standard minimum guarantee in pension credit but I did not catch whether she said by how much. In Committee she told my noble friend Lady Drake that she would write to her to tell her whether the Government intend to pass through the triple-lock payment to pensioners on pension credit—which is of course crucial, because if they do not, the richest pensioners will get the full benefit of the triple lock but the poorest will not because it will be clawed back from pension credit. Can she clarify the position on that? If she has written to my noble friend Lady Drake, I apologise; I have missed the letter.

I am very glad that we were able to get the Bill through the House in good time. It was a pleasure to welcome two maiden speakers in Committee: the noble Lord, Lord Field of Birkenhead, and the noble Baroness, Lady Stuart of Edgbaston. I would like to express my thanks to the Minister and her officials who have met us and answered questions; it is a very co-operative department and I am very grateful. I thank colleagues across the House for their thoughtful contributions; Dan Stevens of our staff team for his support with the Bill; and the House officials and the broadcast team.

Pensioners deserve to spend their retirement in financial security. This Bill will enable the Government to fulfil their manifesto commitment to apply the triple lock to the state pension and we have been pleased to support it.

Universal Credit

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 12th November 2020 Lords Chamber

[Baroness Stedman-Scott (Con)]

The noble Baroness raises the important issue of evidence. Analysis shows that the Government’s interventions have supported the poorest working households, as a proportion of February income, the most, with those in the bottom 10% of the income distribution seeing no reduction in their income.

[Baroness Sherlock (Lab) [V]]

My Lords, because the £20 uplift was not extended to legacy benefits, an adult on universal credit is given £94 a week to live on but her neighbour on JSA or ESA gets just £74 a week. The Minister told the right reverend Prelate the Bishop of Durham that there were no plans to change this, but she did not tell him why. Could she please explain to the House and the 2 million people on JSA and ESA why they do not deserve the same help when their food and bills cost every bit as much as those for people on universal credit?

[Baroness Stedman-Scott (Con)]

I note the point that the noble Baroness makes and it is well made, but as I said, the Government’s position is that we have no plans to increase legacy benefits further. People on legacy benefits can transfer to universal credit and they can do a calculation before they transfer to make sure they will be better off.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Stedman-Scott and Baroness Sherlock

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 27th October 2020 Lords Chamber

[Baroness Sherlock (Lab) [V]]

My Lords, I am grateful to the noble Lord, Lord Addington, for explaining what his amendment would do, and to other noble Lords who have spoken in pursuit of clarity. The noble Baroness, Lady Altmann, raised the issue of the uprating of pension credit and the standard minimum guarantee in particular. I will return to that in more detail when I move my Amendment 3 shortly.

The Bill is permissive rather than prescriptive. The Explanatory Notes say that it will

“allow the Government to meet its commitment to the Triple Lock.”

At Second Reading, the Minister was invited by many noble Lords to tell the House if it was indeed the Government’s intention to increase the state pension in line with the triple lock, but she simply repeated the formula that the Bill

“will allow the Government to maintain their manifesto commitment to the triple lock.”—[Official Report, 13/10/20; col. GC 309.]

Had she been able to go further, she might have obviated the need for much of the debate we are having at the moment.

The Minister was also asked at Second Reading whether the Government intended to stand by the manifesto commitment to the triple lock for the rest of this Parliament. As the noble Baroness, Lady Janke, pointed out, there have been various rumours and briefings swirling around that have cast some doubt on the future of the triple lock. But answer came there none.

I realise that the Minister is in a difficult position. She probably thinks it unreasonable of us to ask her to answer these questions because the decisions are not hers, but she speaks for the Government in this House. We are being asked to fast-track this Bill to enable the governing party to fulfil a manifesto commitment, although the Government will not tell us whether they are going to fulfil it. It does not seem unreasonable to ask for a bit more clarity. I look forward to her reply.

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

My Lords, I thank the noble Lord, Lord Addington, for the first amendment and for clarifying the date to which he referred. His charm clearly works better than mine.

The purpose of the Bill is to allow the Secretary of State to increase the specified pensions and benefits for 2021-22. This then allows the Government to deliver their triple lock commitment. However, the actual rates of increase for each of these pensions and benefits are subject to the Secretary of State’s annual statutory uprating review. In presenting this urgent Bill, the Government have sought to replicate the powers given to the Secretary of State in the founding legislation, as was also the case in 2009.

This amendment would also apply the triple-lock formula to the pension credit standard minimum guarantee and to widows’ and widowers’ industrial death benefit for 2021-22. The triple-lock commitment does not apply to those benefits. By convention, the relevant widows’ and widowers’ benefits keep pace with the basic state pension.

In previous years the Government have sought to match the basic state pension cash increase in the pension credit standard minimum guarantee, where this increase has been higher than an amount generated by the increase in average earnings; that is the statutory minimum for uprating the standard minimum guarantee. As a result, the standard minimum guarantee for a single person is now nearly £10 a week higher than it would otherwise have been. For a couple, it is nearly £15 a week higher. The decision on how to uprate the standard minimum guarantee next April will be made during the Secretary of State’s uprating review and will be announced in November. These rates too will be subject to the Secretary of State’s statutory review in November.

The noble Baronesses, Lady Altmann and Lady Janke, asked whether the Government are going to honour their commitment to the triple lock and introduce the 2.5% element. As I have said, the Bill makes technical changes for 2020-21 which will ensure that state pensions can be uprated even though there has been no growth in earnings. This will allow the Government to maintain their manifesto commitment to the triple lock, including the 2.5% element.

The noble Baroness, Lady Janke, asked by how much the state pension will be increased this year. The Bill enables the Secretary of State to uprate state pensions in 2021-22. Every autumn, the rate of state pension increase is subject to the Secretary of State’s uprating review to which I have already referred. It would not be right to pre-empt the outcome of this review. The triple lock is a manifesto commitment under which the rate of the state pension will increase by the highest of the growth in earnings and prices, or 2.5%.

The noble Baronesses, Lady Altmann and Lady Sherlock, raised the uprating of pension credit. Without this Bill, the core component of pension credit—the standard minimum guarantee—will be frozen in 2021-22. The decision on how to uprate the standard minimum guarantee will be made during the Secretary of State’s uprating review. Your Lordships will have the opportunity to debate the uprating of the state pension, pension credit and other benefits when the draft order implementing the Secretary of State’s decision is brought before Parliament for approval in the normal way. I therefore ask the noble Lord to withdraw the amendment.

--- Later in debate ---

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the noble Lord, Lord Randall of Uxbridge, for explaining his amendment to us. He is a strong advocate for this cause and I am very sympathetic to the position in which many pensioners find themselves. However, it is a difficult issue, which successive Governments have struggled to resolve.

Perhaps I may ask the Minister some specific questions. First, we have heard that 500,000 people living in other countries are affected in this way. Can the Minister confirm that figure? How much does she believe that it would now cost to change the rules?

Secondly, the noble Lord, Lord Randall, both today and at Second Reading, highlighted two particularly difficult sets of cases. The first was the position of veterans. Today, he mentioned Harry Penny, Roger Edwards, Patricia Coulthard and others, and I am still thinking about Anne Puckridge, whom he mentioned at Second Reading—the 95 year-old World War II veteran whose pension was frozen when she moved to Canada at the age of 76 to be near her family. It is hard to see the justice in those who fought for this country being denied the pensions that they earned simply because they moved abroad to be with their families in their later years and did not realise what would happen. Do the Government know how many veterans are in this position?

The noble Lord also mentioned at Second Reading the case of Monica Phillips, who emigrated to the UK in 1959 as part of the Windrush generation. After 37 years working here, she returned to Antigua to look after her mum and her pension was then frozen. Again, do the Government know how many of the Windrush generation are affected by this measure? Have they looked into it?

Thirdly, the noble Lord, Lord Randall, also raised today the issue of reciprocal agreements in the wake of Brexit. I have to say to him that I have pursued that issue for some time but have got precisely nowhere. All that Ministers will ever say is that they hope to get a deal, so the position will be as set out in the negotiating documents. However, I will be very interested to see whether he gets any more information than I have been able to obtain.

This issue is so difficult because so many people assume that their pension is determined by what they pay in national insurance contributions rather than where they live when they retire. Therefore, can the Minister assure the Committee that the position is now made abundantly clear to all pensioners, especially as they approach pension age? I look forward to her reply.

[Baroness Stedman-Scott (Con)]

My Lords, I turn to the amendment to Clause 1 tabled by my noble friend Lord Randall of Uxbridge. As he is aware, it would in practice have no effect because it simply commits the Government to uprating UK state pensions, as they do now.

However, my noble friend spoke passionately at Second Reading, and again with great passion and commitment today. He eloquently shared with us the case studies of people impacted by the lack of reciprocal arrangements and the freezing of pensions. The long-standing policy of successive Governments for over 70 years has been that UK state pensions are payable worldwide and are uprated in countries overseas where there is a legal requirement to do so—for example, in countries where the UK has a reciprocal agreement that requires uprating. I look forward to the debate on the issue but, first, I would like to make some points about our reciprocal agreements with other countries.

The UK has reciprocal agreements with several countries, and most of these require uprating. There are only two reciprocal agreements which do not allow for uprating: those with Canada and New Zealand. A similar agreement existed with Australia until early 2001, when the Australian Government withdrew from it. Unlike the UK, Canada and New Zealand have residence-based state pensions. The reciprocal agreements with them broadly allow for periods of residence, employment or contributions in one country to be considered as periods of residence, et cetera, in the other for the purposes of entitlement to a state pension.

The systems in New Zealand and Canada are also means-tested to some extent. For example, New Zealand takes overseas pensions fully into account in its superannuation schemes. New Zealand law also requires that notional income is calculated if a pensioner does not claim his or her state pension from an overseas country. This means that any future state pension increases would be taken into account and the moneys would go to the respective Treasuries, so pensioners on the lowest incomes are unlikely to benefit from increases in their UK state pension. It might also mean an increased tax bill for some overseas residents and the loss of their welfare benefits in their chosen country of residence. This Government believe that our responsibility is to pensioners living in this country, rather than effectively making payments to other Treasuries.

The agreements with Canada and New Zealand were negotiated and agreed some time ago. The pattern of the UK’s reciprocal agreements with other countries is historic. It is based in part on Commonwealth ties but also on the political context at the time of concluding the agreement. That gives rise to inconsistencies. For example, we have an agreement with some Caribbean countries, such as Jamaica, but not with others. The agreement with Jamaica requires uprating. It has been suggested by some that uprating could form part of discussions on future free trade agreements—for example, with Australia and Canada. However, state pensions are not in scope of free trade agreements.

There are no plans to change the policy on uprating UK state pensions overseas. The Government have not entered into a new reciprocal social security agreement since 1992, as my noble friend Lord Randall referred to, and have no plans to enter into new agreements.

The noble Baroness, Lady Sherlock, asked about the number of pensioners living in frozen-rate countries. It is approximately 500,000. I regret that I do not have any numbers for veterans.

My noble friend Lord Randall raised, as did other noble Lords, the question of a moral obligation to rectify this anomaly. The policy on this issue is long-standing, as I have already said, and one of successive Governments. It has been in place for some 70 years and, although I know this will disappoint noble Lords, there are no plans to change it.

My noble friend and the noble Baroness, Lady Sherlock, talked about the impacts on the Windrush generation. UK state pensions are payable worldwide to eligible people based on their NI record. I regret to tell the noble Baroness that we do not know the number of people affected among the Windrush community.

My noble friend Lord Randall asked about pensioners who are resident overseas who have paid their NI contributions, so pensions payable abroad should be fully indexed. The rate of contribution paid is never earned entitlement to the indexation of pensions payable abroad. This reflects the fact that the UK scheme is primarily designed for those living in the UK.

My noble friend Lord Randall raised the issue of consistency across countries, and a particular point about Canada. Canada has a bilateral agreement with the UK that does not cover uprating. The UK sought a reciprocal agreement with Canada that included uprating, but this was rejected as legislation prevented Canada paying its pensions overseas.

My noble friend Lord Randall and other noble Lords raised the issue of the Government’s moral duty to uprate state pensions overseas. The decision to move abroad is voluntary and remains a personal choice, dependent on the circumstances of the individual. For a number of years, advice has been provided to the public that the UK state pension is not uprated overseas except where there is a legal requirement to do so.

Given that the amendment states that any uprating order made under the Bill would uprate abroad in cases where there was already a legal requirement to do so, I urge my noble friend to withdraw it because it has no practical effect, given that the Government are already required to do that in law. However, I welcome the opportunity he has presented to debate the broader issue of uprating overseas.

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

I say to the noble Baroness, Lady Sherlock, and all noble Lords, that I have taken on board the ideas that have been put forward about pension credit: the campaign, and the importance of how it can lift people out of poverty and improve their lives. I will go back to the department, then return and answer the questions asked by the noble Baroness. I will always make that undertaking and will never shy away from answering questions, but I would rather get the right answers rather than give a wrong one and create another little tsunami on pension credit. If the noble Baroness can accept that, I will be grateful.

[Baroness Sherlock (Lab) [V]]

I am very grateful to the Minister for coming back on this. I will look out for those responses, and for the opportunity to discuss them on the Floor of this House. I thank her for her intervention, for addressing the questions and for her constant willingness to talk to us. These things make our debates much better.

Pension Credit

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 26th October 2020 Lords Chamber

[Baroness Stedman-Scott (Con)]

The noble Baroness raises a very important point about the reasons why people do not claim pension credit. Some believe that they are not eligible; others think that they have too many savings; others think that there is a stigma to it; and others think that they might get only a small amount, so it is just not worth the effort. The noble Baroness raises valid points about the vulnerable; we must do all we can to make sure that those people are aware of pension credit and that they make a claim where appropriate.

[Baroness Sherlock (Lab) [V]]

My Lords, the take-up campaign launched in February, which has been mentioned, does not seem to have had much of an effect. The government website said that its main feature was a video to be shown in 800 GP surgeries and some post offices. However, once the pandemic hit, the chance of its target audience being in GPs’ surgeries and post offices went through the floor. So did the DWP refocus its work in the light of the pandemic, or is it planning a fresh campaign—and how much money is it putting behind it?

[Baroness Stedman-Scott (Con)]

The noble Baroness raises a valid point about the impact of Covid on GPs’ surgeries and post offices, and that people were not able to access the information. At the moment there are no plans for a new campaign. We are working with stakeholders, who again are absolutely swamped by the impact of Covid, to ensure that the message gets out. Once I have gone back and spoken to the department, I will come back to the noble Baroness with a written response, as I will to the noble Lord, Lord Foulkes, and the noble Baroness, Lady Watkins.

Pension Scams

Debate between Baroness Stedman-Scott and Baroness Sherlock

Wednesday 14th October 2020 Lords Chamber

[Baroness Stedman-Scott (Con)]

I take my noble friend’s point. The contribution that he has made just heightens the need for us to have more dialogue on this with the Minister for Pensions. However, as I have already said, the Government are taking further legislative action through the Pension Schemes Bill to enable regulations to be made prescribing conditions that, if not met, will limit an individual’s statutory right to transfer.

[Baroness Sherlock (Lab) [V]]

My Lords, the FCA acknowledges the increasing role of online platforms, including social media, in promoting harmful information to consumers, including from pension scammers. However, the cold-calling ban that came into effect last year does not cover online activity, and scammers can get around the ban by first building relationships with consumers so that they then consent to a cold call. How will the Government update the law to keep pace with this very fast-moving digital environment, since it is clearly increasing consumer vulnerability to scams?

[Baroness Stedman-Scott (Con)]

I can confirm that the Government are well aware of this issue. I referred earlier to Project Bloom, which brings together government departments, regulators, enforcement agencies and industry representatives to share information and co-ordinate actions that will deal with situations such as this. I can confirm that we, particularly the Department for Digital, Culture, Media and Sport, are already engaging with technology companies.

Covid-19: Over-60s

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 12th October 2020 Lords Chamber

[Baroness Stedman-Scott (Con)]

My understanding is that if somebody’s job has gone—and I take what the noble Lord says about the creative industries—they can apply for universal credit. They will get the support of a work coach, who will help them in the next phase of their journey, in working out what work they could do and what transferable skills they have, and then turning every stone to make sure that they secure alternative employment.

[Baroness Sherlock (Lab) [V]]

My Lords, just as unemployment started to rise, the Government decided to reinstate conditionality and sanctions. From what the Minister has just said, is she really saying that if somebody who is clinically extremely vulnerable—on grounds of either age or condition—or who lives with someone like that, refuses to take a job, because they think they would put themselves or their partner at risk, the Government would sanction them and take away some of their benefits? Is she really saying that?

[Baroness Stedman-Scott (Con)]

I respond by saying to the noble Baroness that the work coaches are exercising caution and compassion when considering sanctions. Only if there is no good reason for somebody to turn down an opportunity will sanctions be applied.

Covid-19: Low-income Families

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 8th October 2020 Lords Chamber

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

A direct assessment of Covid-19’s impact on low-income families with children has not been made. However, we are monitoring several data sources, including Her Majesty’s Treasury’s recent distribution analysis of Covid-19’s impact on working households. The Treasury analysis has shown that the Government’s unprecedented support package, including job retention, self-employment protection schemes and an additional £9 billion to strengthen the welfare system, has supported the poorest working households the most, with those in the bottom 10% seeing no income reduction.

[Baroness Sherlock (Lab) [V]]

My Lords, the Government may not make an assessment but I am seriously worried by mounting evidence from Action for Children, CPAG and the Trussell Trust of parents struggling to pay the bills and to feed their kids in this pandemic. We could help by lifting the benefit cap and the two-child limit and topping up legacy benefits, but Ministers have said no and now the Chancellor is threatening to scrap the £20 a week he put on universal credit. I have two simple questions. Does the Minister accept the evidence that a growing number of parents are struggling financially? If she does, what are the Government going to do about it?

[Baroness Stedman-Scott (Con)]

I take the noble Baroness’s point well. I assure her that we are considering all evaluations—the Trussell Trust, Joseph Rowntree and Action for Children, as well as Understanding Society, the Covid-19 survey and the opinions and lifestyle survey by the Office for National Statistics. I am sure this question will come up many times today, so I say that the £20 UC increase was put in for one year only. As my colleague the Secretary of State for Work and Pensions in the other place said, dialogue is continuing with HMT on this, and the Prime Minister confirmed yesterday that it is under constant review.

Immigration and Social Security Co-ordination (EU Withdrawal) Bill

Debate between Baroness Stedman-Scott and Baroness Sherlock

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Tuesday 6th October 2020 Lords Chamber

[Baroness Sherlock (Lab) [V]]

My Lords, as we heard from the noble Lord, Lord Flight, this amendment would prevent regulations made under Clause 5 including any provisions that could be inconsistent with the withdrawal agreement. I presume that the aim is to avoid any action that might serve to undermine the rights of UK citizens in the EU and EU citizens here that were guaranteed under the withdrawal agreement.

As the noble Baroness, Lady Hamwee, said, we have had this debate at earlier stages and on Clause 4. On the basis of those past debates, I think there is a decent chance that the Minister will say that this amendment is unnecessary. But as the noble Lord, Lord Flight, pointed out: what is the downside? Given the uncertainty caused by statements elsewhere about the nature of the withdrawal agreement and the extent to which the UK is committed to it, the Minister will understand why some noble Lords are nervous and want the kind of assurances that one would hope she should be able to give without difficulty.

The noble Lord, Lord Flight, explained the terribly important issues that are covered by Clause 5. This will be our only engagement on Report with the subtle joys of this clause. I raised many of the issues about social security co-ordination at Second Reading and in Committee, and felt that I did not get satisfactory answers in Committee. However, I have now received a letter from the Minister, the noble Baroness, Lady Stedman- Scott, which has provided more information. In the light of that, I do not intend to move Amendment 29 in my name in the next group.

I remain very concerned about the implications for too many people of the loss of reciprocal arrangements for social security co-ordination, but I recognise that we will not get anything more at this stage of the Bill. I hope that the letter I mentioned will be placed in both Libraries. Because it contains information about new developments which were not reflected in the draft regulations shared with us in Committee, it would be helpful if the letter were displayed as soon as possible in the relevant place under the “will write” section of Bills before Parliament, so that its contents are readily accessible to those who are interested.

These are very important issues. I look forward to hearing what the Minister has to say.

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

My Lords, I am grateful to the noble Lord, Lord Flight, and the noble Baroness, Lady Hamwee, for speaking to this amendment. The Government have given written assurances in every Bill document throughout the passage of the Bill on this point; I have reiterated those assurances in Committee, and I will do so again here.

I can assure the House that Clause 5 does not enable the Government to alter the rights guaranteed to those in scope of the withdrawal agreement. The entitlements of this cohort are guaranteed by Sections 7A and 7B of the European Union (Withdrawal) Act 2018, as amended by the European Union (Withdrawal Agreement) Act 2020. The power at Clause 5 will not and cannot affect those provisions. Rather, it allows for EU law retained by Section 3 of the European Union (Withdrawal) Act 2018 to be modified. The rights under the withdrawal agreement are therefore provided by a distinct and separate legal mechanism in relation to that of retained EU law, and this power will not affect the rights of those within the scope of the agreement. This includes those examples given by the noble Lord, Lord Flight, such as state pension uprating, the S1 scheme and the aggregation of contributions. It is therefore the Government’s view that Amendment 28 is unnecessary, on the grounds I have set out.

I note the request of the noble Baroness, Lady Sherlock, for my letter to her to be placed under the “will write” section—I am so pleased that that makes sense—of Bills before Parliament.

I reiterate that it is the Government’s view that Amendment 28 is unnecessary, on the grounds I have set out. I hope that with this explanation, the noble Lord, Lord Flight, will withdraw his amendment.

Pension Schemes Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Sherlock

3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Wednesday 15th July 2020 Lords Chamber

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

My Lords, before we move to the technicalities of closing our debates on the Bill in this House and it moves for consideration in the other place, I want to take a moment to reflect on the Bill and its passage through your Lordships’ House.

This is important legislation that will benefit members of the public and will help people plan for their future. As I said at Second Reading, the Bill will have a far-reaching impact for people saving into pensions for their retirement. It ensures that reckless bosses cannot gamble with people’s savings; it transforms the way people get information about their retirement savings; and it introduces a whole new type of pension to the market.

It is clear from the excellent contributions and speeches made as the Bill progressed through this House that many of your Lordships agreed with its principles. Contributions and questions from all sides have been thorough and searching. I would not have expected anything different.

The Government listened to your Lordships’ arguments and concerns as the Bill progressed and made a number of amendments both in Committee and on Report— 73 in total, which I think you will agree have strengthened the Bill. We recognised the concerns of the DPRRC and this House in respect of delegated powers; we listened to your thoughts about a public dashboard; we introduced measures in respect of climate reporting and the Paris Agreement; and we have responded to the threat of scams by tightening the rules on transfers.

Your Lordships made further amendments to the Bill on Report concerning intergenerational fairness, consumer protection and scheme funding. We will look at these carefully along with the strong arguments made in support of them as the Bill progresses in the other place.

I thank all those who have engaged on the Floor of the House and in the many meetings that we have had outside, which I hope you found helpful. I thank my noble friends Lord Howe and Lady Scott for all the help and support they have given me throughout this process. This was my first Bill, and they have helped enormously to keep me on the straight and narrow. I thank the Whips office, the House staff, my private office, led by Vanessa Drury, and all those involved in helping us through the hybrid proceedings. These have been very testing times for everyone, and the fact that we are here at all bears testimony to the work they have put in.

Finally, I want to thank the Bill team and all the officials across DWP. I thank them for the extensive engagement programme that they helped me with. I thank Jo Gibson, Jane Woolley, Mike Jewell and Debbie Bullen—to name but four—but there are many support people behind them, and I would not want to miss anybody out in trying to name them all. They have put in incredibly long hours to support my noble friends and me during debates, to facilitate briefing meetings, and to provide the updates, letters and briefings that noble Lords have received. They have done this at a time of great uncertainty, with many teams reduced to help support front-line services. I hope that they will manage to get some well-deserved time away over the summer.

On that note, I thank you all again for your patience and support. I beg to move that the Bill do now pass.

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the Minister for those remarks and concur with them. We have agreed on so much about this Bill: we support the new CDC pension schemes; we all want to see financial technology harnessed to benefit consumers and to make the financial markets work more efficiently; and we are keen to work constructively with the Government to bring innovations such as the dashboard to fruition.

Where we have differed is on the extent of the protections needed to mitigate the risk of consumer detriment and poor outcomes. We still believe that the weight of evidence is with our arguments, as are reports from various regulators. I hope that by the time the Bill is debated in another place, the reasoning behind our Report amendments on the head start for the public dashboard, on the risks of dashboard transactions and on questions of fairness will find favour.

The pandemic has pushed many consumers into digital engagement far faster than they may naturally have adapted to it. While that has kept our economy and society functioning, it has also exposed some consumers to greater risk of detriment. We might not see any consequential increase in the number scams until later in the year, but that means that the provisions in this Bill will be timely and welcome. More risks will emerge, including new ones as a result of Covid, so I urge Ministers to keep the House informed as regulators scan the landscape and the Financial Ombudsman monitors new kinds of complaint. Although they are not covered in this Bill, we wait with interest to see how the Government will regulate the newly emerging superfunds, given the economic impact of Covid.

Pensions are very long term, and it will take decades for the full effects of public policy decisions by any Government to be seen. That is why it is so desirable that pensions policy be built on the foundations of political consensus, and it is why I am grateful for the significant concessions that have been given during the passage of this Bill.

I pay tribute to my noble friend Lady Drake, whose expertise and determination underpinned our campaign for the Government to commit to a public dashboard and have it operating from the start. I am grateful for support from across the House for that and for all the shared support for moves to secure commitments on governance, including ensuring that dashboard services will be regulated by the FCA. It was great to see cross-party working on climate issues, led by my noble friend Lady Jones of Whitchurch and the noble Baroness, Lady Hayman, result in an agreed position with government and the first ever reference to climate change in domestic pensions legislation. I am grateful to the Minister for yielding to pressure from many quarters for amendments on transfers and on delegated legislation.

This is a better Bill than the one which entered the House, and I give thanks to all who made that possible. I thank my noble friend Lord McKenzie of Luton, but I am sad that it will be my last time sharing the Front Bench with him. He has given so much to this House and to our country in his decades of public service. I look forward to his continued contributions from the Back Benches.

I am a grateful to Dan Harris of our staff team, who has done sterling work on this Bill and is a joy to work with, as are all my colleagues who joined in during our proceedings. I am grateful to House officials and the broadcast teams. I am very grateful to the Bill team and all the officials who have met us repeatedly and patiently answered our many questions. I am grateful, too, to colleagues across the House for intelligent and thoughtful debates. I am grateful also to the Ministers: to the noble Earl, Lord Howe, for his gentle engagement and to the noble Baroness, Lady Stedman-Scott, for her co-operative spirit and her willingness to engage and to concede. This may have been her first Bill; I am sure that it will not be the last. I look forward to joining in and occasionally doing battle yet again.

We did the Committee stage of this Bill before Covid, crammed into the Moses Room with not a hint of social distancing. We did the Report stage in hybrid mode. To be honest, I will never get to love voting on my phone or get used to making passionate speeches to my iPad, but it has shown that this process can work. We have thoroughly scrutinised a vital and highly technical Bill, and we have made it better than it was. That is the job of the House of Lords in a nutshell. I am so glad we can still do it.

Children Living in Poverty

Debate between Baroness Stedman-Scott and Baroness Sherlock

Wednesday 15th July 2020 Lords Chamber

[Baroness Stedman-Scott]

There is clear evidence of the important role of work in reducing child poverty. I acknowledge that we are in very difficult circumstances, but the Government are doing everything they can to ensure that people can be supported through this difficult time. Huge amounts of support are available. We have a £30 billion plan to support, protect and create jobs, and a £2 billion Kickstart scheme; we are doubling the number of work coaches; there is an expanded youth offer; the work and health programme is being expanded; and we are increasing participation in our sector-based work academies. In addition, there is £150 million to boost the Flexible Support Fund to make sure that people can be given support—and this money will filter into the lives of children.

[Baroness Sherlock (Lab) [V]]

My Lords, the Minister keeps mentioning work, but TUC research found that the number of poor children in working households rose by 38% between 2010 and 2018—and that was before Covid. Yet poverty was mentioned just twice in last week’s summer statement document: in the title of an IMF body and in the list of abbreviations at the end. We keep making suggestions, such as sorting out universal credit, increasing legacy benefits and ending the two-child limit, but they are all rejected. Can the Minister assure the House that the Government are taking working poverty seriously and tell us what their plans are to stop more of our kids growing up scarred by poverty?

[Baroness Stedman-Scott]

I assure the whole House that the Government take in-work poverty really seriously. Our plan is to build an economy that will support work, as we have said many times. Universal credit is designed to help people to move into work faster, although that can be challenging in the current circumstances. We have also set up the In-Work Progression Commission. As I have said before, people put forward ideas all the time and they are taken to the department. I assure the noble Baroness that we are taking this seriously. We might not be answering at the speed that she would like, but we are very genuine and sincere.

Universal Credit: Court of Appeal Judgment

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 29th June 2020 Lords Chamber

[Baroness Sherlock (Lab) [V]]

My Lords, universal credit works on fixed assessment periods. But if, like NHS workers, you get paid at the end of the month, you can find two pay days falling in one universal credit period. The system then assumes that you have had a 100% pay rise and slashes your benefit, or even stops it altogether, thinking that you are now too rich to need it. We have raised this with Ministers repeatedly, but to no avail. It should not take four single mums going all the way to the Court of Appeal to have this obviously daft policy declared irrational. How will the Government find and compensate all those who have lost out? When will the system be changed to stop this happening in future?

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

I can advise the noble Baroness that, during our consideration of the outcome of the court’s verdict, we will consider any necessary retrospective payments.

Covid-19: Child Poverty

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 15th June 2020 Lords Chamber

[Baroness Stedman-Scott [V]]

I completely understand the point the noble Baroness is making. To answer her question, I will need to go away, get the facts and write to her.

[Baroness Sherlock (Lab) [V]]

My Lords, as well as the Social Mobility Commission, the Minister could have cited the IPPR calculations that the pandemic could put 200,000 more children in poverty this year, the Trussell Trust figures showing the numbers of families with kids needing emergency food parcels twice as high as this time last year, or even the powerful open letter from Marcus Rashford today highlighting child hunger. I am sure the Minister is doing her best, but if the Government will not buy our proposals to suspend the two-child limit and the benefit cap, what is the Government’s alternative to stop more kids in Britain going hungry?

[Baroness Stedman-Scott [V]]

I am aware of the letter and the Trussell Trust figures the noble Baroness refers to, but we have put more money into helping with food poverty, as I have said before. We had an all-Peers briefing about universal credit at which the two-child limit and benefit cap were talked about at great length. I am sorry that I cannot add anything to that at the moment.

Universal Credit

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 2nd June 2020 Lords Chamber

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

The universal credit assessment period and payment structure are fundamental parts of its design. An assessment period must run its course, which includes a feed of earnings data from HMRC, before an award reflecting actual household circumstances can be calculated. This can be achieved only by having a model based on paying in arrears, and we have no plans to change that.

[Baroness Sherlock (Lab)]

I thank the Minister for that Answer. There have been 2.8 million claimants for universal credit since lockdown, and I fear many more will come. They are all being hit by the five-week wait. The Resolution Foundation found that on average, people going on to universal credit see their disposable income almost halved. All Ministers will offer is an advance, but that pushes people into debt and asks them to live on less than universal credit for a whole year to repay the debt. The Government have steadfastly resisted a deluge of calls from across the board to abolish the five-week wait or at least to turn advances into grants that do not have to be repaid. Why will they not do it?

[Baroness Stedman-Scott]

Non-repayable advances cannot be implemented without significant development of the universal credit system. No one has to wait five weeks. Advances are available urgently. The repayment schedule is to be extended to 24 months in 2021. Repayment can be delayed by three months in certain circumstances, and we removed the seven-day waiting period. This is all backed up by support from work coaches.

Unemployment: Support

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 21st May 2020 Lords Chamber

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

Without wishing to denigrate the size of the issue that we are facing, I make the point that although we have 2 million new claims to universal credit, this does not equate to the number of people who are becoming unemployed. Some are claiming because they are on part-time hours or their pay has decreased. Government employment Ministers are engaging with all government departments, businesses, stakeholders and front-line staff, to hear their views, learn from them, listen to ideas and make sure that we can provide the best possible support in this difficult time. I can assure all noble Lords that much is going on across government and that, in time, we will update the House with our progress.

[Baroness Sherlock (Lab)]

My Lords, those 2 million claims are up 856,000 in a month, and with one-quarter of the workforce on furlough this could get a lot worse soon. I welcome the changes that the Government have made but they do not match the scale of the crisis. People are losing jobs and hours but finding that the standard rate of universal credit is only £94 a week and the JSA just £74. When will the Government remove the savings threshold for universal credit and level up legacy benefits? Crucially, what is their plan to stop rising unemployment leading to home repossessions and widespread poverty?

[Baroness Stedman-Scott]

I am unaware of any plans to change the savings threshold at present, nor indeed to level up legacy benefits. The noble Baroness is right to keep us focused on the potential size of the problem that could be coming down the road, and I assure the House that we are closely monitoring the evolving labour market and the public health situation to identify and implement the most effective way to help people to stay in work and stay close to work.

Universal Credit

Debate between Baroness Stedman-Scott and Baroness Sherlock

Wednesday 13th May 2020 Lords Chamber

[Baroness Stedman-Scott]

The noble Baroness makes an excellent point: these are very difficult times. People are struggling in all sorts of ways, and we are mindful of the impact of mental health issues. I am afraid that I am unable to make any commitments around the points that the noble Baroness made, but I will say that, in these very difficult times, nobody has to wait five weeks. Since 16 March, we have issued 700,000 advances, and the majority have received their money within 72 hours.

[Baroness Sherlock (Lab)]

My Lords, can I bring the Minister back to the point made by my noble friend Lady Lister? The Government’s argument for the benefit cap was that you can always escape it by just going and getting a job or moving to a cheaper house. But that is simply not possible at the moment. The Minister says that the Government are not going to lift the cap. Given the demand from the IFS and over 50 organisations, and given the Commons Library estimates that an extra 18,000 families are being drawn into the benefit cap as a result of the Government’s actions, can she tell the House not merely that they will not do it but why they will not do it?

[Baroness Stedman-Scott]

I draw the noble Baroness’s attention to the fact that, in a repeated Oral Statement and at Oral Questions, the Secretary of State was absolutely clear that this benefit will not be changed. I agree with her that things are very difficult at the moment. That is why we have tried to be as flexible as we can by introducing this £7 billion package which gets to the people who are in the most difficult group, removing the minimum income floor, increasing UC, pausing deductions for historic debts, introducing statutory sick pay from day one and increasing working tax credits from over £1,000 to £3,000. I cannot give her any other answer than that, but I can make a commitment to take her question back to the department and again ask what she and others would like me to ask.

Pension Schemes Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Sherlock

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th March 2020 Grand Committee

[Baroness Sherlock]

I think I am right in saying that the argument for not proceeding was that there was no consensus around the aims or the remit. What attempt have the Government made to achieve consensus?

[Baroness Stedman-Scott]

The best answer I can give is that I will find out and write to the noble Baroness, because I do not have that information at the tip of my fingers.

The Bill will deliver further improvements, including strengthening consumer protections, improving scheme governance and communications, and facilitating the creation of pension dashboards. We will continue to review these improvements, including a contribution that a pensions commission could make in future. I respectfully ask the noble Lord, Lord McKenzie, to withdraw his amendment.

--- Later in debate ---

[Baroness Sherlock]

My Lords, I, too, share the aspiration of the noble Baroness, Lady Bowles, to constrain somewhat the use of the extensive powers that the Government are blessing themselves through this Bill. I will not, however, reopen that debate in any great detail, although there is a temptation to say “We have another whole hour of Committee, we can debate this at great length”. The danger of a list is that some noble Lords will have concerns about particular aspects, such as constraining trustee power, while some will be in favour of multi-employer collective money purchase schemes. Most of us, however, would have reservations about the ability to amend primary legislation.

Although it may not feel as though Bills come along in super abundance, in the field of pensions it feels like they come along all the time like the number 19 bus, but I take the point. In fact, if we are going to have a list I would like to add to it: I would start with not allowing dashboards to do transactions without covering that in primary legislation. I have a long list in my notes which I will develop at length should we return to this. What might be helpful is if the Minister, in replying, would tell Committee whether the Government intend to do any of these things.

[Baroness Stedman-Scott]

My Lords, the question of delegated powers has already been extensively discussed in relation to the relevant clauses. My noble friend Lord Howe has already eloquently covered the Government’s position on these powers. As I said before to this Committee, the use of secondary legislation to set out more detailed technical matters, or to amend primary legislation for specified purposes, is consistent with the general approach in pensions legislation.

As with other pensions legislation, the provisions in the Bill embody the fundamental policy, while provisions of a more technical nature, or which are by their nature liable to change, are delegated to secondary legislation. This staged approach has two benefits. First, it enables flexibility to ensure that the legal framework remains appropriately tailored to developments in the pensions industry. Secondly, it enables government to provide legal certainty more quickly. This is important for the pensions industry and for member protection. It is a common feature of pensions legislation, which is by its nature very technical and can be subject to change.

--- Later in debate ---

[Baroness Sherlock]

I am grateful to the noble Baroness for giving way, especially as I am about to abuse her generosity by asking a more general question. It is directed across the table, and is something that I forgot to ask in my own contribution.

The noble Baroness asked for assurance on various points. At various times during the Committee, the Minister has kindly agreed to write to noble Lords. Can the Minister confirm that those letters will come before Report?

[Baroness Stedman-Scott]

I can absolutely ensure that those letters will be with all Committee members before Report. We have debated these issues and I have listened to the concerns raised by noble Lords. We believe that all the powers are suitable and appropriate.

Pension Schemes Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Sherlock

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd March 2020 Grand Committee

[Baroness Sherlock]

My Lords, I want to ask a question before the Minister comes back on this. In her reply, she gave a rather forceful defence of the current situation and directed the Committee’s attention to the courts as a means of settling this. However, she made the point that an agreement on pension sharing may already be in place. The problem is that this allows an agreement that had previously been reached to be frustrated by someone taking advantage of the pension freedoms. If the Minister does not like the way that this is being is sold, will she go back to the department and ask for some advice on whether there is a problem here? Then, when we come back on Wednesday, we can at least have a conversation about whether we agree that there is a problem here, and then we can think about the best way to address it.

[Baroness Stedman-Scott]

The suggestion made by the noble Baroness, Lady Sherlock, is very helpful. I would be happy to do that before we come back to this on Wednesday.

Universal Credit

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 2nd March 2020 Lords Chamber

[Baroness Stedman-Scott]

I thank my noble friend for that question. Mental health is a major issue for people on universal credit, and in other walks of life. At present, we are introducing health model offices in 11 jobcentres. These focus on claimants with health conditions. Blackburn jobcentre has agreed a new initiative, “advance to ausome”, for people with autism. Another jobcentre, in north London, is running quiet sessions for people who cannot cope with coming in.

This is what I would like noble Lords to go away with today. A young man came to the jobcentre who was working full-time, had mental health issues and did not know how he was going to keep his job. He was in a bad way. Our work coaches worked with him and, through the Access to Work mental health support programme, he is now back at work and working towards a promotion. None of that would have been possible without that support. We are doing everything we can—and there is more to be done—to help people with these issues.

[Baroness Sherlock (Lab)]

My Lords, may I ask the Minister something quite specific? What plans does DWP have to deal with the outbreak of coronavirus? For example, can people on zero-hours contracts who cannot go to work get universal credit to support them if they have to isolate themselves at home and are unable to work? In a similar vein, can she guarantee that those on universal credit will not be sanctioned if they cannot go to a job interview, to the jobcentre or fulfil their commitments because they are isolating themselves at home? Will the Government suspend sanctions and advertise universal credit for those affected by isolation patterns?

[Baroness Stedman-Scott]

I was not prepared for that one, that is for sure. I know that the Permanent Secretary has a plan to make sure that people get paid and get the help they need. However, I will be really upset if people are sanctioned because of this. I will go back to the department and write to the noble Baroness, to make sure that the issue is understood.

Pension Schemes Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Sherlock

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 26th February 2020 Grand Committee

[Baroness Stedman-Scott]

The noble Baroness makes some valid points. We consider that dividends are paid at a point in time. The regulator needs to form a picture of the employers’ ability to pay and, for a period in the future, needs to see the whole picture.

[Baroness Sherlock]

Can we try to narrow the point of difference? The Minister is often being given briefings which cover points with which no one disagrees. To interpret her last answer to me, the Government are saying that they do not want every company to tell them why they are paying a dividend because there will be too much information and it will take too much resource to process, rather than focusing on things that raise a particular problem. However, the amendment from the noble Lord, Lord Vaux, does not suggest that; it simply suggests that, in some very specific circumstances, there should be a notification of a declaration to pay a dividend. He suggested that those circumstances are that there will be a dividend, there is a deficit on the scheme, the amount of the dividend exceeds the DRC and a ratio between the different on the valuation. If the Government think that those are the wrong criteria, they could suggest alternative criteria. I am trying to get to the bottom of what is the problem of saying, “In certain circumstances where there could be a risk, it will be helpful to have a requirement on companies to notify the regulator as part of the notifiable events regime so that it can then do something about those risk situations”? Why is that a problem?

[Baroness Stedman-Scott]

The last word I would use to describe the noble Baroness is simple; that is not the case. She and other noble Lords have raised some interesting, valid and appropriate points on this issue. I believe that the best way that we can delve down into this and, I hope, give the comfort that they are looking for, is to meet to discuss it outside the Committee, which we are happy to do.

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[Baroness Stedman-Scott]

I thank noble Lords for tabling these amendments and I will do my best to answer all their questions. Clause 112 inserts new provisions for the Pensions Regulator to impose fixed and escalating civil penalties where a person has not complied with the regulator’s information-gathering powers. The level of the penalties is to be set in regulations, but the fixed penalty cannot exceed £50,000 and the rate of the escalating penalty cannot exceed £10,000 a day.

Clause 115 provides for a new financial penalty in the Pensions Act 2004 which can be issued by the Pensions Regulator, and sets the maximum amount of this financial penalty at £1 million. Amendments 29 and 30, in the name of the noble Lord, Lord Sharkey, seek to raise the penalty levels for both the fixed and escalating penalties. Fixed and escalating penalties are already available to the regulator for non-compliance with information-gathering provisions in connection with automatic enrolment and master trusts. We consider that it would be inconsistent and unfair to have a much higher maximum, as introduced by these amendments, for similar breaches connected to other types of pension schemes.

We have no evidence that these maximum levels are inadequate or not working. On the contrary, the regulator confirms that the current levels of fixed and escalating penalties provide an adequate deterrent in automatic enrolment: issuing a fixed penalty results in compliance in the majority of cases, with only a few cases resulting in escalating penalties. The noble Lord’s amendment would introduce a maximum fixed penalty of £1 million, but that is the maximum level of the financial penalty that the Bill is introducing for serious breaches of pension legislation—for example, deliberately giving the regulator false information, or conduct that puts members’ benefits at risk.

I know that some noble Lords feel that the financial penalty should be higher, but we believe it is set at the right level. It would not be right for the penalty for not complying with an information request to be as high as for serious breaches of pension legislation. I should also make it clear that not complying with information requests, or obstructing an inspector, is a criminal offence and will remain so, with the potential for an unlimited fine. The intention is that these fixed and escalating penalties will be imposed for less serious breaches, where the regulator thinks a civil penalty is more appropriate than a criminal prosecution. Imposing a civil penalty is likely to take less time than instituting criminal proceedings, therefore the regulator can receive the necessary information and conclude an investigation more quickly. In the 2018 consultation on the regulator’s powers, mirroring the approach for automatic enrolment and master trusts was supported by industry representatives.

Amendment 31, in the names of the noble Baronesses, Lady Bowles and Lady Janke, and Amendment 32 in the name of the noble Lord, Lord Sharkey, seek to raise the maximum amount of the new financial penalty. We consulted on our proposals in 2018 and they were developed from the Green Paper consultation in 2017. The £1 million maximum penalty was supported by the majority of respondents. The £1 million penalty is positioned as a mid-level sanction, between the lower £50,000 penalty for acts of non-compliance by corporates and £5,000 by individuals and the new higher-level criminal offences for serious wrongdoing that has an unlimited fine. The £1 million maximum level was also deemed to be appropriate as it is comparable with the average level of equivalent sanctions for financial crimes in the financial sector issued to individuals by the Financial Conduct Authority.

The new financial penalty can be applied to a number of offences, and changing the maximum penalty to the levels in the noble Baronesses’ amendment would be inappropriate in the case of some of these offences. Moreover, the people who are within scope of these penalties vary. In some cases, the target of the penalty may not have any direct connection to the sponsoring employer’s company or to the scheme itself. It would therefore be difficult to justify why such a person should be liable to pay a penalty of up to a maximum of double the scheme deficit or a percentage of the employer’s turnover. In such cases, a maximum level of £1 million is more proportionate and provides clarity. The introduction of the new financial penalty in this clause was also an integral part of enabling the Pensions Regulator to take action more swiftly, thereby becoming a “clearer, quicker, tougher” regulator.

The new maximum penalty levels proposed in Amendment 31 in particular go against this intention, as the precise meaning of the terms “deficit” and “turnover” is uncertain, and how these are to be calculated is unclear. This leads to uncertainty for any targets of the penalty and will place an unnecessary burden on the regulator. For example, the regulator would need to interpret what is an appropriate definition of deficit to use for the purposes of the penalty and then estimate what this deficit would be. Similarly, the regulator would need to dedicate resources to estimating what constitutes the employer’s annual global turnover and what would be relevant turnover for this calculation. Further, a question arises about the time at which the deficit or turnover should be assessed. For example, should it be calculated from the time the act took place or at the point of instituting proceedings? If the act is part of a series, at which point in the series should the deficit or turnover be calculated?

Until the regulator had carried out these assessments, the maximum penalty that could be charged would be uncertain. The assumptions that the regulator would need to use would also be open to challenge by the target. This would impede the regulator’s ability to take swift action and could tie enforcement up in lengthy challenges over the penalty amount. This would also put a drain on the resources the regulator has to undertake its functions.

The clause contains a power to increase the maximum amount of the financial penalties if required. This is to ensure that the penalty remains an effective deterrent in the future and accounts for factors such as inflation.

The noble Lord, Lord Sharkey, asked why we were consulting on the level of penalties rather than putting these figures in the Bill. The maximum level of penalties is included in the Bill. The level and daily rate of the existing fixed and escalating penalties which relate to automatic enrolment and master trusts are set in regulations. These provisions mirror that approach. Feedback during the consultation on the regulator’s powers indicated strong agreement on similar fixed and escalating civil penalties, but little consensus on the detail of the exact levels. We need to consult further to ensure that the penalties are set at an appropriate level.

The noble Baroness, Lady Bowles, asked why we do not follow the method of imposing fines used by the Information Commissioner’s Office. The ICO has a fining power as required in accordance with the 2016 general data protection regulation. Article 83 of the GDPR states that the penalties must be at particular levels.

The noble Baroness, Lady Sherlock, asked what modelling or consultation took place to set the maximum financial penalty at £1 million. The Government consulted on the proposals for strengthening the regulator’s powers in 2018, which were developed from the Green Paper consultation in 2017. As I have said, the £1 million maximum penalty was supported by the majority of respondents to the consultation.

The noble Baroness, Lady Sherlock, also asked about different fines decided by the FCA rather than by averages. I am afraid that I will have to write to her to answer her question on whether others have the power to change the maximum.

I hope that I have reassured noble Lords that the Government have thought carefully about these penalty amounts and struck the right balance between protecting members and being proportionate to the business. Therefore, I urge noble Lords not to press their amendments.

[Baroness Sherlock]

I realise that my questions were quite detailed, so could I ask the Minister to look at the record and write to me to answer each of them in turn? Could I encourage her to draw on the expertise behind her to answer the questions? Sometimes one gets letters after a debate and, while they relate to the general area of the questions, they are maybe not quite as well targeted as one would hope. I encourage her to do that and would be delighted to leave it at that at this time.

[Baroness Stedman-Scott]

I thank the noble Baroness for this homework. I will ensure it is delivered to her and that it is accurate.

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[Baroness Sherlock]

My Lords, I can add little to that careful explanation of the amendment; I know a lot more than I did five minutes ago. However, as the Minister responds, perhaps she could tell us a little more about what happens both now and when the Bill becomes law: that is, what the TPR does when someone has committed an offence, what is its understanding of to whom this should be reported, in what circumstances, and how its enforcement team works with the supervision team and with the FCA’s enforcement supervision arrangements. That is not directly the point which the noble Baroness, Lady Bowles, was making but I very much endorse her approach, which is to put the importance of pensions on a par with the importance of threats in other parts of the economy. That is interesting, and I am interested in the Government’s response to it.

[Baroness Stedman-Scott]

I thank the noble Baroness, Lady Bowles, for tabling this amendment, which would require the Pensions Regulator to provide a report to the Secretary of State for the purposes of the Company Directors Disqualification Act 1986. Director disqualification is within the remit of the Insolvency Service, which has the powers, resources and expertise to disqualify directors. As such, the Pensions Regulator does not have the power to disqualify directors, as this would be unnecessary, costly and inefficient. However, the Pensions Regulator is already able to share information with the Insolvency Service if it meets the “gateway” criteria as outlined in its restricted information regime under Section 82 of the Pensions Act 2004. The regulator can use this gateway in circumstances where the sharing of information is with a view to instigating director disqualification proceedings.

As such, the regulator is already able to share information with the Insolvency Service where it has identified persistent wrongdoing by a director or where it has already taken regulatory action. Under Section 8 of the Company Directors Disqualification Act 1986, the Insolvency Service is then able to apply to the court for a disqualification order on behalf of the Secretary of State, based on investigative material provided by other agencies or departments. Whether or not the Insolvency Service takes action to disqualify a director on the basis of information provided by others, such as the Pensions Regulator, will depend upon its assessment of the case in question. The Pensions Regulator and the Insolvency Service regularly engage with each other to discuss areas of joint interest. They continue to monitor the effectiveness of the disclosure process and are taking steps to streamline it when necessary. This will help to ensure that the organisations are able to work together to achieve successful outcomes and better protect the public.

In summary, the amendment is looking to introduce a process which is already in place. The Pensions Regulator and the Insolvency Service continue to work closely together to streamline this disclosure process and ensure that both organisations have a good working knowledge of each other’s remits. On that basis, I urge the noble Baroness to withdraw her amendment.

Pension Schemes Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Sherlock

Committee stage & Committee: 1st sitting & Committee: 1st sitting : House of Lords
Monday 24th February 2020 Grand Committee

[Lord Sharkey]

I should like to ask one or two questions about the buffer concept. It seemed to me that a lot of what was being described was the equivalent of a buffer in some ways, but it was not entirely clear how it would be produced, brought forward and exercised. It was not entirely clear to me whether the members of any proposed CDC scheme would be given a choice or say in whether the scheme should go ahead without buffers, as the RM scheme will, or whether it should include buffers. It seems to me that there is merit in consulting the workforce about which they prefer.

In paragraph 1.3 of the consultation response the Government said:

“We do not want to preclude or legislate against buffers in CDC schemes—there are perfectly good reasons why employers and workforces may wish to provide for a scheme that mitigates volatility in this way, and we agree that a buffered scheme could be appropriate in some circumstances.”


Those circumstances might very well include avoiding frequent and disconcerting changes in benefits but also the provision of wind-up or restructuring costs, even if that does somewhat impact intergenerational fairness. My request is for clarity about this cloud of assets or obligations that might substitute in some way for capital. I am not clear about how that will happen. It would be good idea to make sure that in any future schemes the workforce is consulted about whether or not they prefer a buffer.

[Baroness Sherlock (Lab)]

May I, too, seek clarification? I was not entirely sure what the Minister was saying about where the money could come from for a buffer. I think I understood her to say that the regulator would not approve a scheme unless the sustainability criteria had been met and that they could be met only if an adequate amount of money was placed in, for example, escrow. Is she saying that a scheme would be approved only if the regulator was satisfied that enough money had been provided up front by the sponsoring employer to fund the continuity options in the event of a triggering event? If so, why does she not simply accept this amendment? That is all it says.

[Baroness Stedman-Scott]

I shall turn first to the point raised by the noble Lord, Lord Sharkey. The funding of future inflation increases provides the headroom funding that is required. The answer to the question asked by the noble Baroness, Lady Sherlock, is yes, the money would be in an escrow account if needed.

[Baroness Sherlock]

So could it never be the case that in the event of a triggering event, such as a wind-up, an employer pulling out or an employer downsizing, money would have to come from members’ contributions to fund the continuity option? I am sorry to push this, but this kind of clarity is important.

[Baroness Stedman-Scott]

Noble Lords must forgive me for turning to my friends. This is my first Bill. The answer to that question is no, it should not be.

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[Baroness Neville-Rolfe (Con)]

I think this shows that it is important that we understand what the statutory instruments in this area are going to look like. It will obviously lead to a clearer conversation if the Government are able to move on that. The second thing is that, in my experience, things do not necessarily go the way you expect. When I sought my pension estimate before I retired, I ended up a year later getting a less generous pension than I had anticipated, perhaps because things had changed on the underlying demographics—health or whatever. We have to be quite careful to take account of the complexity of these things in the sorts of SIs that we make. Clearly, we need to consult on them for that very reason.

[Baroness Sherlock]

On a final point of clarification, if I have heard the Minister correctly—and I will read the record—I think she is trying to reassure us that she will consult and that this will be dealt with in regulations. The problem is that Clause 14(4)(b) states that regulations may include provision,

“specifying requirements to be met by the scheme relating to its financing, such as requirements,”

et cetera. All this amendment does is insert the words, “or by an employer”, because of the concern that the Bill may allow regulations to be made requiring the scheme to put money in. We want to be sure that the Bill will require the employer, rather than the scheme, to provide the money. That is why the amendment is written as it is, accepting that the Government will have to work out what is in the regulations and then what the regulator actually did as a result. Are the Government confident that the wording of the Bill will allow them to place a requirement on the sponsoring employer to do what the Minister has described?

[Baroness Stedman-Scott]

I am advised that we are confident that that will be the case.

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[Baroness Sherlock]

Would the Minister be kind enough to write in any case, clarifying the helpful points that she has made here? They came in bits, so it might be useful to have a note setting them all out together, if that would be okay.

[Baroness Stedman-Scott]

I am happy to make sure that that happens.

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[Baroness Sherlock]

My Lords, I thank the noble Baroness, Lady Bennett of Manor Castle, for raising this issue and for starting so gently with us—we look forward to seeing where she will take us in future. We do not get much excitement on pensions Bills, so we are looking forward to her giving us some.

I am glad that the noble Baroness raised diversity, because it is something that we are certainly concerned about, as most people interested in pensions should be. She is not alone in raising these concerns; the Pensions Regulator raised them, too. It published a consultation document last year on the future of trusteeship and governance, in which it made a strong case for the need to improve diversity in pension boards. It made many of the points that the noble Baroness raised about the size of the gender pensions gap, but it also flagged up the gap that those who are disabled or from a black, Asian and minority ethnic background have poorer pension outcomes than other workers.

A lack of diversity on pension scheme boards has long been acknowledged as a problem. The 2016 PLSA annual survey found that, on average, schemes had more than 83% male trustees, with one-quarter of trustee boards being all-male. We are not talking about these things not being entirely balanced. If in this day and age a quarter of trustee boards are all-male, something needs addressing.

The idea behind the noble Baroness’s Amendment 12 is that schemes should report on the action that they are taking to address diversity. It does not even mandate an outcome; it asks simply, “What are you doing about it?” In fact, TPR put that option in its consultation document. It said in response to the consultation that opinion was divided, pretty much down the middle, with half the people thinking that this was a good idea and the other half thinking that it was a bad idea. Therefore, it decided not to do it.

Obviously, I could make an alternative argument based on those same facts, but I just want to ask the Minister: if not this, then what and when? The back-up position from TPR was that it was going to have an industry working group to look at improving the diversity of scheme boards. Will that go ahead? If so, has it launched or when will it launch? Crucially, how will we know whether it works? What would success look like? If we are not going to ask people even to report on the actions they are taking, we would want to know that the alternative will make a difference. If TPR and the noble Baroness, Lady Bennett, are of one mind in saying not only that the lack of diversity is a problem but that more diverse boards make better decisions—and they are making decisions about diverse scheme membership—this is an issue on which the Government have to take some kind of action. So if not this, then what?

[Baroness Stedman-Scott]

My Lords, the two amendments tabled by the noble Baroness, Lady Bennett, to Clauses 46 and 119, both relate to issues of diversity and protected characteristics.

I will speak first to Amendment 12. I note that the aim of Clause 46, which contains requirements relating to the publication of information concerning CDC schemes, is to drive transparency about how they operate. The noble Baroness’s amendment would require CDC schemes to provide diversity information to the Pensions Regulator on what actions the scheme has taken to ensure diversity with regard to age, gender and ethnicity in its trustee recruitment. As we heard from the contributions, particularly that of the noble Baroness, Lady Sherlock, there is work to be done on this.

We recognise the importance of diversity in trustee boards, not just for CDC schemes, but across all trust-based schemes. Indeed, the Pensions Regulator has recently published its response on the future of trusteeship consultation, which considered specifically whether there should be a requirement for pension schemes to report to the regulator what actions they are taking to ensure diversity on their board of trustees.

The response to the consultation advised that there was a lack of consensus on this issue, as has been referred to, with some respondents in favour of it and others suggesting that there were initiatives already in place or that such a reporting regime would place an unnecessary additional burden on schemes. The noble Baroness, Lady Sherlock, asked, “If not this, then what?” I can tell her only that the regulator concluded that

“it would be beneficial to create an industry working group”

to further investigate raising the profile of this important issue, with a view to developing additional guidance and supporting material to help improve the diversity of trustee boards. So, I think that will happen. As I am sure noble Lords will appreciate, I would not want to pre-empt this significant work, but we will keep it under review and consider it further as it progresses.

The Government’s focus on the trustee landscape, including for CDCs, is to ensure that trustees meet standards of honesty, integrity and knowledge appropriate to their role. I think that employers and members participating in these schemes would reasonably expect that to be the case.

Together with Clause 9, Clause 11 means that the Pensions Regulator must be satisfied that the persons involved in the CDC scheme are fit and proper persons to act in relation to it. If the regulator is not satisfied, authorisation of a CDC scheme cannot be granted. We recognise that if we want to engender confidence in CDC, and ensure that the interests of members are protected, it is vital that the schemes be managed by appropriate individuals.

On Amendment 15, relating to pensions dashboards, again the Government recognise the importance of diversity on trustee boards. However, we have had to consider what information to prioritise as being required from day one. As we set out in the Government’s response to the consultation on pensions dashboards, the intention is to start with the provision of basic pensions information. This initial information is intended to help consumers plan for their retirement, in line with our primary policy objectives.

The success of dashboards is predicated on there being a good level of coverage across pension schemes. Achieving good coverage is a complex task. There are over 40,000 pension schemes, with data varying in quality and stored to different standards. The Government expect that it will take three to four years for there to be adequate coverage, with pension schemes initially providing simple levels of information. Increasing the amount and complexity of information required from pension schemes in the early stages may significantly delay delivery. The development of dashboards will be iterative, and we will continue to consider what information is placed on them following their initial delivery to the public.

TPR has not launched the working group yet, and its timescale is not confirmed, but we will monitor the situation. For the reasons that I have given, I hope that the noble Baroness will withdraw her amendment, but I am sure that she will never let up on her campaign.

Bereavement Services

Debate between Baroness Stedman-Scott and Baroness Sherlock

Thursday 13th February 2020 Lords Chamber

[Baroness Stedman-Scott]

I fully appreciate the impact of a bereavement on individuals; I am sure that all noble Lords have had that at some point in their lives. We have talked about the Tell Us Once service. The noble Baroness—I am saying this respectfully—in true spirit raises a challenge. It is not one that we should dismiss, although people are saying that it cannot be done. I talked to Cruse yesterday after our meeting. It has a campaign called Bereaved Customers First, and it is trying to get banks, building societies, utility companies and other organisations to collaborate and to have what my pension friends would call a dashboard. I would like to speak to Cruse further. I urge the noble Baroness to carry on with this thinking. If it would help, I would be very happy to meet with her to take that forward.

[Baroness Sherlock (Lab)]

My Lords, in the Pensions Act 2014 the Government rather controversially reformed bereavement payments to families who had lost a parent. However, last Friday they lost a case in the High Court in which the court ruled against them, saying that the policy was in conflict with the Human Rights Act because it did not extend bereavement support payments to fathers who had been living with the mother of their children for many years but were not married. I am interested in what the Government are going to do about this. They lost an equivalent case on the old system, Widowed Parent’s Allowance, 18 months ago and we have been waiting for a response to that court case ever since. Yesterday at PMQs, the Prime Minister had this case raised with him. He described the latest case as an injustice and said that

“we will do all we can to remedy it.”—[Official Report, Commons, 12/02/20; col. 852.]

When are we going to get a review both of the new bereavement support arrangements and, crucially, of the position of cohabiting couples?

[Baroness Stedman-Scott]

I am not one to contradict the Prime Minister, and I am not going to try to do that. [Laughter.] I was really trying hard not to make fun of today, given the subject matter, but noble Lords are spot on. We have the judgment on the Jackson case, and officials are considering it. The Prime Minister has said more than I have been allowed to, so let us just let what he has said stand. The McLaughlin case that the noble Baroness has referred to is a bit more complicated—this is not an excuse—and our officials are working with Northern Ireland officials to see what can be done.

Universal Credit

Debate between Baroness Stedman-Scott and Baroness Sherlock

Tuesday 4th February 2020 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Answer. Universal credit should have been rolled out by April 2017. It will now be September 2024—seven and a half years late. There have been many delays. After each one, Ministers normally get up and say something like: “We’d rather be right than on time.” At this stage, I would settle for either. We are not very close to either of these happening.

We were told in the Statement and the noble Baroness’s letter that the reason for the delay this time was that fewer people had had a change in their circumstances that meant they moved across to universal credit early rather than waiting for their benefits to be shut down. That was due to good news, like the labour market. Alongside the official Statement, yesterday the BBC—which is filming in DWP for a series on universal credit—filmed the director-general in charge of universal credit, who said this:

“We’ve got a lot of anecdotal evidence of people being scared to come to universal credit.”


This is another way of thinking about the delay.

People are scared, but in the Commons today the Minister blamed the Opposition for scaremongering, which I find disappointing. I am relieved to be in the House where I know the Minister will not try out a line like that. People are scared because universal credit is full of problems. They are especially scared because you wait five weeks for your first payment. You can get an advance, but that is just debt that gets taken off your universal credit week by week. People can only live on it as it is, so they are scared of that as well. I have only one question for the Minister: will the Government please abolish the five-week wait in universal credit once and for all?

[Baroness Stedman-Scott]

My Lords, the five-week wait is a cause for concern for many people; I am not denying that at all. I have been out on visits and spoken to various work coaches and Jobcentre Plus staff, and I am assured that if people come with the right paperwork—I accept that some do not—and need an advance there and then, they will get it. I accept that it has to be paid back. At the moment, many people are raising the five-week wait. I hope all noble Lords believe that we are listening. We are aware of the vulnerability of the client group, but our work coaches are doing a great job. We are listening and hearing.

Low-income Families: Benefits Freeze

Debate between Baroness Stedman-Scott and Baroness Sherlock

Monday 13th January 2020 Lords Chamber

[Baroness Stedman-Scott]

Again, I understand the points that the noble Baroness makes. We can all recall incidents in our families—I can in my own; my niece is a single parent, and life is a challenge at the best of times. The benefit cap levels were put in place to try to restore some fairness to the system. Due to the election taking place, the levels were not reviewed in the last Parliament, but there remains a statutory duty to look at them, which will be done at an appropriate time.

[Baroness Sherlock (Lab)]

My Lords, the benefit freeze was not a reform but a straightforward cut: it simply cuts the value of certain benefits every single year, year on year, for five years. The result is that the welfare state, the point of which is to support children and families when the parents cannot earn money, is now providing a record low level of benefits compared to average wages. The basic JSA of £73 a week is just 14% of average earnings, according to the Resolution Foundation. When Beveridge started his system, the figure was 27%. We cannot have a welfare state in which, if you find yourself unable to work, you are literally thrown on to the scrapheap and become dependent on food banks. Therefore, if the Prime Minister, as he said, believes that austerity was the wrong choice, is not the logical step to accept that, since these cuts should not have been made, they should now be made good?

[Baroness Stedman-Scott]

I would not want to contradict the noble Baroness—I have the greatest respect for her—but I think the Prime Minister said that austerity must stop, and that it was necessary at the time. I do not want to go over all those arguments again. In the eight years following the financial crisis and leading up to the benefits freeze, jobseeker’s allowance grew by 21%, whereas median earnings grew by only 12%. We want a welfare state that works for people and enables them to have a decent way of life, but the legacy benefit system was unsustainable, and I am afraid we have taken very difficult decisions to try to balance it out and to make work pay for people. I know that the noble Baroness does not agree with me, but we now have more people in work than we have ever had—