Personal Independence Payments
Lord McKenzie of Luton Excerpts(5 years, 4 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for repeating an Answer to a UQ concerning a landmark judgment of the Supreme Court. The judgment, as we have heard, is to be welcomed and will mean that people with mental health problems who find social situations debilitating can now be assessed as having sufficient points to be eligible for the personal independence regime.
However, Mind—which should be thanked for its intervention in the case—suggests that, since the introduction of PIP, as many as 425,000 people with psychiatric disorders have been turned down for the benefit. Will the Minister say, therefore, what additional resources have been made available to enable past assessments to be reviewed and if necessary rectified, and what additional training is being provided to staff to enable them to better assess the needs of individuals with these conditions?
Baroness Buscombe
My Lords, I thank the noble Lord for his response and his understanding that we welcome this judgment. As he will know, we regularly consult stakeholders to help shape the training of DWP staff, and I am proud that we now have, in respect of training, a mental health champion in each of our personal independence payment assessment centres.
We welcome this judgment, as it helps us to gain a much deeper understanding of mental health issues and conditions across society. This will, however, be a complex process, which we are committed to doing, and we will report back to the House with further information. The vast majority of the appeals require additional medical information. That is why we are piloting the scheme: so that claimants can provide this evidence at the mandatory reconsideration stage, rather than at tribunal. We are, in other words, doing all we can to continue to improve the system to support those who need help.
Universal Credit: Managed Migration
Lord McKenzie of Luton Excerpts(5 years, 4 months ago)
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Baroness Buscombe
I thank the right reverend Prelate for his positive response to these regulations. I appreciate the frustration of noble Lords who feel that they seem to have come late in the day. As I said, the key reason for that relates to the judgment, which we needed to respond to. We needed to get it right. The judgment said that there was an unintended consequence and we were not being quite fair in how we were treating people in terms of the severe disability premium. We are really keen to get that right. From tomorrow, we can start working on how we can support those people, backdating their pay and so on to ensure that they are properly supported financially.
I want to be very positive about universal credit and about how the pilot will help more people into work. It is really important to stress that managed migration will open up the world of work for thousands and deliver financial support for those whose circumstances have not changed. The good news stories that our department reads about, listens to and sees on our videos and on social media on a daily basis are very different from some of the scaremongering that has gone on over the many months and years during which universal credit has been developed. It is fantastic when one meets people who feel for the first time an extraordinary sense of dignity and pride, and a sense of “can do”—a phrase used by the person who will become our Prime Minister tomorrow. That is really important, because these are people whose families, sometimes over generations, have not worked. They have lived in families who do not understand what the word “work” means and they have had no sense of self-worth. Now, they have that and it is fabulous. Therefore, I hope that the right reverend Prelate will support—
Lord McKenzie of Luton
Does the Minister accept that this Government were not the first to understand the importance of getting people into work? If she goes back just a few years in history to previous Governments, she will see that it was a Labour Government who started the process of engagement with people, rather than leaving them to rot on disability benefits. The game plan of the noble Baroness’s Government was to push people on to disability benefits so they would not count as part of the unemployment statistics. It was only when a Labour Government came in that programmes such as New Deal and many others were started.
Baroness Buscombe
One reason I became a Conservative was that there was an incredible advertisement in 1979 that said, “Labour Isn’t Working”. It showed lines and lines of people outside what we then called the employment exchange. That was a long time ago, but in 2010—the noble Lord knows this—20% of working-age households were still entirely workless. We have got that down to 13.9%. It is still not good enough but we are doing all we can. I accept that in the past the party opposite encouraged people into work but we feel that this reform has made a huge difference. A thousand people have entered work every day since 2010, and that is an incredible legacy. The reality is that we have record employment and extraordinarily low unemployment. Indeed, I am rather proud that unemployment among women is lower than it is among men. We are working hard to encourage as many people as possible to contribute to the country they live in and to feel proud that they can work for and support their families.
In terms of the two-child policy, I say to the right reverend Prelate that I have made it clear several times at the Dispatch Box, and I will make it very clear again, that we believe strongly that people who would like to have more than two children must make the same tough decisions as everyone else and ask themselves whether they can support those children in the same way as people who do not turn daily to the state for support. My children’s generation are all asking themselves, “Can we afford to have more children who we look after, contribute to and support ourselves rather than expecting others to pay for them?”. I have to be really blunt about this.
Child Support (Miscellaneous Amendments) Regulations 2019
Lord McKenzie of Luton Excerpts(5 years, 4 months ago)
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Baroness Janke (LD)
My Lords, clearly, we are in favour of all measures to ensure that children are getting the financial support they need. A large part of this is making sure that both parents contribute to the raising of a child, through official child support or otherwise. According to the charity Gingerbread, child maintenance alone lifts a fifth of low-income single parents out of poverty. Where parents are unequal in income, as is often the case after a separation, it is right that suitable payments for child maintenance are made. It is good to hear of the proposed changes to the Child Maintenance Service scheme, which has been a long, infamous project, causing disastrous circumstances for children and families and costing a great deal in time and resources for all involved, including the Government.
Although we are generally wary over giving powers of enforcement, we are in favour of the proposed changes to inspection. Requesting information from mortgage lenders will cut down on the number and intrusiveness of current inspections. It is important that both parents support their children; the cost of bringing up a child is considerable and generally falls on the mother, who is more likely to be in low-paid, insecure employment. Some 90% of single parents are women, and they are twice as likely to be in poverty as any other group.
However, in recognising and enforcing payments for child support, the Government need to recognise and act on the issues that drive child poverty. For example, the two-child limit, which restricts support to a family’s first two children, is one of the key factors of child poverty, as demonstrated by many recent reports. The benefit cap also hurts families and households with multiple children, or those who live in expensive areas.
I draw the Minister’s attention to the report published last week, All Kids Count: The Impact of the Two-Child Limit After Two Years, produced jointly by the Church of England and the Child Poverty Action Group. This presents detailed and disturbing evidence of this policy’s impact after two years. It is based on interviews with more than 430 families. I urge the Minister and all Members of your Lordships’ House to give the report careful consideration, and the Government to take action on its findings.
I would welcome a new approach by the Government towards child poverty, which is widely acknowledged to be growing. Having said that, I broadly support this statutory instrument.
Lord McKenzie of Luton (Lab)
My Lords, I have just two quick questions. First, where the recipient who is due to make payment is subject to a benefit sanction, what impact does that have on the amounts that are collectable, as proposed in this order? Secondly, the £8.40 can be an amalgam of the collection fee and the maintenance payment. So far as the government accounts are concerned, how is that split and dealt with?
Baroness Sherlock (Lab)
My Lords, I thank the Minister for her explanation of these regulations, and all noble Lords who have spoken, particularly my noble friend Lord McKenzie; he always comes up with questions I would never have thought to ask, and they are always excellent. I hope the Minister had thought further ahead than I did—although I see someone running to the Box so perhaps she had not.
I very much agree with the points made about child poverty and the role that child support plays in helping to provide a platform on which single parents can build an income which helps lift their children out of poverty. So we do not oppose these regulations. It is important, wherever possible, that both parents should contribute towards the cost of raising a child after a break-up. An adult may leave their partner but they do not get to leave responsibility for their children.
I accept that the regulations are designed to provide a series of changes and clarifications to make it easier to collect arrears and maintenance payments under the Child Maintenance Service scheme. I will concentrate on a few specific points: the proposal to allow deductions for child maintenance to be made from universal credit where a non-resident parent has earnings and meets the criteria to be eligible for the flat rate; the increase in the amount, plus collection charges, that can go towards paying arrears; extending the scope; and the enforcement points.
The proposal to allow deductions of £8.40 from benefits for arrears in cases where the non-resident parent is no longer paying ongoing maintenance seems sensible. I can understand that for someone on a low income, £8.40 is a lot of money, but it is entirely possible that the single parent on a low income could also be on benefits, and both parents may well have suffered from the cut in living standards brought about by the benefits freeze and the other cuts in benefits. That seems to be an element of fairness that has to be addressed.
It is also very important that non-resident parents are clear that they will be chased for any arrears they owe. I ask the Minister for a broader update on this. She mentioned that we debated some child maintenance regulations last November. At that point the key thing the Government did was to write off billions of pounds of arrears from the old CSA system, and the quid pro quo for that, because we pushed them at the time, was that they would promise to pursue enforcement. This really matters because otherwise there is a moral hazard question. If a message goes out to parents: “If you just hold off long enough and don’t pay, in the end the Government will give in and write it off”, clearly that creates a disincentive to pay the money that should be paid for your children. So it is really important that we do not get back into that question. Ministers made the case in those regulations for a clean break with the old system, but that places a huge onus on them to make sure that arrears do not build up again in the new system.
I looked at the latest statistics and I am a bit worried. Since the new Child Maintenance Service began, a total of £259.2 million of child maintenance is unpaid, which should now be paid through the collect and pay service. That is 11% of all child maintenance due to have been paid since the service began. In the last quarter of last year, only 66% of paying parents using that collect and pay system were compliant; and compliant does not mean that they pay all of it but that they are paying some of it. So only two-thirds who were using the actual statutory system of compliance were paying anything at all. I may have misread those figures, but can the Minister confirm whether that is right? If the figures are right, is she happy with them? If she is not happy with them, how much difference does she expect these regulations to make to that performance?
Benefit Changes: Vulnerable People
Lord McKenzie of Luton Excerpts(5 years, 5 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, I thank the noble Baroness, Lady Janke, for securing this debate and for the wide-ranging manner in which it was introduced. She referred to the fact that we have seen a host of reports recently, to issues with schools having to buy food for their pupils, to the increase in homelessness and rough sleeping, to universal credit, of course—to which I will return—and to the five-week waiting period and sanctions. It gave us a good start.
My noble friend Lord Livermore gave a powerful critique of where we are on these matters. He challenged the idea regarding the position that we should take in times of austerity. He said that it does not preclude progressive tax and benefits reform; that there are choices even in a period of austerity. He was concerned about the lack of work incentives for low earners, which has still not been addressed, and second earners’ progression to work. He noted with some regret that the Chancellor did not cancel the fourth year of the freeze. Perhaps the Minister will address that issue.
In a moving contribution, the right reverend Prelate the Bishop of Chichester said that we should scrap the two-child policy, and that the Church was speaking out on this and would continue to do so. I am sure many other noble Lords welcome that. He made a compelling case for the removal of the policy. His reference to parents having to eat just toast was a telling part of what he had to say.
The noble Baroness, Lady Thomas, said there is no reason why we cannot change the way in which benefits are administered even if, given the wider political climate, fundamental reform is difficult. She mentioned the growth in food banks and appointments and referred to the PIP assessment. I think I am right in saying that she did not support the merging of the WCA and the PIP assessment; but perhaps that is a little unclear.
The noble Lord, Lord Kirkwood, queried whether a deaf ear was being cocked at some complaints but recognised that that was an unfair criticism. He referred to what happens in Scotland, but I do not know whether we have ready means of tracking that.
The noble Lord, Lord Greaves, referred to his case work as a local councillor. I warmed to that. I can remember hours of council surgeries. Sometimes you got a good result from a query; sometimes you did not, however hard you worked. However, it is a good training ground for knowing what is happening at grass-roots level.
My noble friend Lady Armstrong made a compelling case in referring to her work with Changing Lives and the complex needs associated with childhood sexual exploitation. If the system cannot adequately support the people to whom my noble friend refers, then it is not fit for purpose. How will the Minister respond to that? What changes will be needed? My noble friend referred to removing the wait before payment, the vouchers option and issues associated with the verification of bank accounts.
The noble Lord, Lord Low, explained—powerfully, as ever—that he spoke on the basis of RNIB briefings and referred to partially sighted people and universal credit. His position was that the sample to date is too small for concrete conclusions to be drawn, but there were emerging concerns about accessibility issues. He said that 90% of PIP appeals are successful and commented on the WCA and PIP assessments being brought closer together, which caused him some concern.
The noble Lord, Lord Shipley, defined “recent” as 2015. If he does not mind, I might take issue with that: 2010 seems a more appropriate date of change of government. Whatever their defence, frankly, the Liberal Democrats have to step up to the plate regarding their contribution to the most savage of the cuts that we are enduring.
I now turn to those cuts. In his first Budget, in June 2010—not 2015—George Osborne announced spending cuts of £32 billion, to take place by 2014-15, £21 billion of which was to come from welfare reform. It is a staggering amount. Changes included removing £14.5 billion from social security spend through a combination of restrictions on eligibility and reducing the value of benefits. Protecting pensioner benefits by the triple lock added to the burden falling on working-age claimants and families with children.
I am sure all noble Lords have received extensive lists of the individual changes, which are overwhelmingly detrimental to claimants. Some 3.5 million households were affected by the increase in the tax credit taper. The basic and 30-hour elements of working tax credit were frozen for three years; local housing rates were capped and uprated in line with CPI, and then by just 1%—at a time when rents were soaring; and child benefits were frozen. Further cuts post 2015—I absolve the noble Lord of responsibility for them—included the freezing of most working-age benefits; the reduction of the benefit cap, which was projected to affect 88,000 households; the abolition of the family element of tax credits; the imposition of the two-child limit; restrictive changes to mobility assessment criteria; and restrictions in the Sure Start maternity grant, which was a classic example of how enlightened public policy can make a real difference to people’s lives. These are but some of the changes. Overwhelmingly, these cuts were focused on poor and vulnerable people, and seemingly delivered without regret. They were nowhere near compensated for, as is sometimes claimed, by the national living wage, increases in personal tax allowances and childcare provision.
The issue which has dominated consideration of social security policy, and which to a certain extent has pervaded our debate today, is the introduction of universal credit. Its original concept—the merging of six benefits, smoothing transition into and out of work—seemed entirely reasonable, but more detailed analysis has suggested that payments for disabled people are lower than under the legacy system, and it has suffered an alarming range of cuts since being enacted. The Office for Budget Responsibility has confirmed that, on average, universal credit is less generous than the system it is replacing, that 2.1 million families will lose on transfer to the system and that only 1.8 million will gain. There has been a raft of design and implementation problems with the scheme, which are covered in a range of reports by the PAC, the NAO and the Work and Pensions Select Committee. Many of these problems were predicted when the legislation was in progress. The NAO has concluded that the DWP underestimated the amount of money claimants have in order to manage the initial waiting period, and that one in five claimants are not receiving payment on time. A scheme that is meant to help is pushing more people into poverty. The PAC concluded that the DWP’s systematic culture of denial and defensiveness in the face of adverse evidence is a significant risk to the programme. Does the Minister agree, or does she deny that that is the case?
When we address these matters, we are in danger of talking of statistics in the abstract when we should be focusing on individuals’ lives and how they are affected, as my noble friend Lady Armstrong did. I hope that we can get justice. We should build a system that is fit for purpose to serve all the vulnerable people in our communities.
Severe Disability Premium: Transfer to Universal Credit
Lord McKenzie of Luton Excerpts(5 years, 6 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for repeating the Answer to the Urgent Question. On their flagship social security policy, the Government have yet again found themselves before the courts, subject to a judgment of illegality, and mired in complexity.
As we have heard, on 7 June last year the Government pledged that severe disability premium claimants would no longer have to transfer to universal credit until managed migration started. Yet for months afterwards, they were still required to do this until the Government finally introduced the statutory instrument that came into force on 16 January. In the interim, because the severe disability premium does not exist in universal credit, in transferring they have lost about £180 per month. The Government plan to pay them only £80 a month in compensation, but if they were to move under managed migration, transitional protection would cover the full amount. Little wonder the High Court said in its damning judgment on Friday that this had no logical foundation. Payments to former SDP claimants are part of the regulations for the managed migration pilot but the Government have still not scheduled those for debate, so no payments at all have been made.
Will the Government ensure that the payments to former SDP claimants who have transferred to universal credit fully reflect the loss that they have suffered? From what the Minister said in her introduction, I am not sure that that is the commitment that the Government are making. Also, what assessment have they made of the hardship that claimants might have suffered as a result of this loss of income and, in particular, of the impact on their children, who have had to take on additional care responsibilities as a result of their family’s loss of income?
Baroness Buscombe
My Lords, as I have already said, Ministers are considering the judgment in detail and will make a decision about their response in due course. When designing universal credit, it was important to provide a simpler system, and a conscious choice was made not to replicate every aspect of disability provision in the legacy system, which contains seven different disability payments. These are difficult to deliver and prone to error, and they can be confusing for claimants. Therefore, we are replacing those seven complex and overlapping disability benefits.
Under the legacy benefit system, 500,000 disabled people did not claim what they were entitled to. Therefore, in terms of families losing out, about £2.4 billion of benefits went unclaimed in the legacy system as a whole. We have now moved to a much fairer system. For example, the rate per month under UC for claimants determined as having limited capability for work and work-related activity is more than twice the amount payable through the equivalent support group component of ESA. Under universal credit, it is now £336.20 per month per household, compared with £167.05 per month through the equivalent ESA support group. This means that around 1 million disabled households will gain an average of £100 more per month on universal credit than on legacy benefits.
Financial Guidance and Claims Act 2018 (Naming and Consequential Amendments) Regulations 2019
Lord McKenzie of Luton Excerpts(5 years, 6 months ago)
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The Archbishop of York
My Lords, I want to support the main thrust of the speech from the noble Lord, Lord Stevenson, about debt. Julia Unwin, who was chief executive of the Joseph Rowntree Foundation, did a big research project on why people were going to Wonga. They went to Wonga because it asked no questions; people knew they could get their payday loan. Other lenders asked more questions and were far more intrusive and credit was not readily available. Noble Lords know that my archiepiscopal colleague, the most reverend Primate the Archbishop of Canterbury, said that he intended not only to reform Wonga but to do away with it, and we know what has happened to Wonga.
Credit unions have been set up, which the most reverend Primate and I support. However, people still find it hard to get credit easily and the organisations responsible have caused a lot of people to go deeper and deeper into debt. When he was Archbishop of Canterbury, William Temple suggested that interest rates should be set only by the Bank of England, and not by credit companies, because the Bank of England is accountable to Parliament, which can ask it questions. Noble Lords know what happened with subprime mortgages, with debt being put into little parcels and sent all over the globe until eventually there was no money anywhere. We all know what happened in 2008 with the credit crunch, which was caused purely by excessive debt.
I welcome the Financial Guidance and Claims Act 2018. The noble Baroness, Lady Neville-Rolfe, is right that education about the dangers of debt should start at a young age. Nevertheless, in the meantime, is there a way for those who genuinely find themselves in real trouble to get support and help in a similar way to how food banks work? A lot of people have found that their money is sometimes not enough to meet their needs and so they have gone to food banks. The good thing about food banks is that they do not give food all the time. People know when to collect it and when they last collected it. This has become a marvellous way of taking people out of great debt.
Will the issues raised in the Financial Guidance and Claims Act 2018 and by the noble Lord, Lord Stevenson, be taken seriously by all of us and particularly by the Government? It is their responsibility to provide the guidance required to ensure that Wonga—this payday lending stuff—will not be resurrected and that the people who genuinely need credit can get it in a sensible way. I am very glad that the Government are trying to say that we should be responsible citizens, not only for pensions but for the whole question of social care, with people beginning to put a little money aside for their social care.
It sounds a bit simplistic, but could we not create some sort of food bank-type arrangement? This would help ensure that people on low incomes do not find themselves borrowing from places that will demand more and more money. Noble Lords know what happened with people being given interest; banks also behaved very badly. In a wonderful economy such as this, could some thought be given to ensure that those who are really up against it do not get into greater and greater debt? They may find that their houses are repossessed or their goods taken away and this again throws them back to bad lenders. They find themselves in a cycle of bad debt, which goes through the family for years. If I took your Lordships around Middlesbrough, you would realise that unless you actually tackle debt, some children are condemned to it and, even if we educate them properly, this will not bite.
Lord McKenzie of Luton (Lab)
My Lords, with this take-note Motion my noble friend Lord Stevenson has made an important intervention and it is a timely reminder that we should be making progress on matters covered by the Act. Indeed, he has covered a lot of ground, so I can be brief—or briefish.
We are reminded that the decision to name the body the Money and Pensions Service through regulation was to minimise the risk that individuals and organisations might impersonate it prior to its launch. In the event, it seems that it would not have taken a team from Bletchley Park to get close to its actual name. Could the Minister say whether there have, in practice, been successful attempts to impersonate the body before today? To what extent is the juxtaposition of pensions and money guidance in the title considered sufficient to repel impersonators?
This is not just about a name. Getting the business infrastructure of the body in place should involve the making of transfer schemes under Schedules 1 and 2. Are these now complete? So far as its members are concerned, could the Minister confirm that the appropriate proportion of execs and non-execs has been secured for its governance? We do not have the benefit of an impact assessment, but we have an explanation of why not. Could we be told the key monetary amounts attached to these transfers?
We have been reminded of the Act’s key provisions, which were the establishment of a single financial guidance body with the objective, inter alia, of improving the ability of members of the public to make informed financial decisions. The strategic function of the body is the development and co-ordination of,
“a national strategy to improve … financial capability”,
and to improve,
“the provision of financial education to children and young people”.
A number of noble Lords focused on this aspect of the Act and its ambition. We debated this latter point at some length and the extent to which there was scope to use the national curriculum, which had less than full mandatory configuration. I think that we on the Financial Exclusion Committee were surprised by just what a small percentage of the total education infrastructure was subject to the mandatory national curriculum. I cannot remember the precise statistic, but it was less than half. Therefore, that mechanism could not be used effectively to undertake the education one would ideally want. Can the Minister say whether there has been any early planning to enhance the education of young people? It featured strongly in our debates.
There has already been delivery on some aspects of the Act, such as the banning of pensions cold calling, but for other key aspects it seems we have hardly got to first base. It may be a bit early, but can the Minister say anything about how effective the cold calling ban is proving? It is a vital power to stop the scammers. What are the key challenges in making it more effective?
The debt respite scheme, referred to extensively by my noble friend, is increasingly relevant to consumers. As we heard, StepChange, in its 2018 statistics yearbook covering personal debt, set out the scale of problem debt. I will not repeat it, but there was the staggering statistic that it had one new client every 48 seconds. As for the age profile, as we have heard, there is a continuing increase in the proportion of younger clients. Over half its clients or their partners are actually in work. Not surprisingly, a rising proportion of clients rent their homes. To focus on housing and its impact on spirals of debt is absolutely right. I recall from my time as a local councillor, going back a bit, when right to buy came in and people had a bright new shiny door for a little while, then they mortgaged the property again to have some improvements and then again to have an overseas holiday. They ended up homeless and back with the local authority. It is a very important area.
Council tax arrears feature at the top of the list of the bills that create household debt. There, we can put the blame squarely at the feet of the Government for changing the benefit rules and grinding down on local authority support for these matters.
Lord McKenzie of Luton
The issue seems not so much to be what is covered by the national curriculum as the extent to which schools have to comply with it. That is the challenge. As I understand it, free schools and others do not have to. That is the stumbling block that we hit last time. We need to unlock that.
Baroness Buscombe
I thank the most reverend Primate the Archbishop of York and the noble Lord, Lord McKenzie, for giving me a further springboard to have discussions on this with my ministerial colleagues in the Department for Education. It is something that we worked on during the passage of the Bill. We did not get as far as we would have liked. We will try again, but we will also keep talking to the Treasury about this and hope to make progress.
Households Below Average Incomes Statistics
Lord McKenzie of Luton Excerpts(5 years, 8 months ago)
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Baroness Buscombe
My Lords, in many ways we are approaching our support and the welfare system slightly differently from how we did it in the past in terms of where the money goes. We do not necessarily agree that just reinjecting into the system money that might have been saved is the right thing to do. Obviously we want to support people to the best of our ability, but part of that should be practical support. Therefore, although we are putting money into the welfare system with the £1.7 billion a year boost announced in the last Budget, enabling 2.4 million households to keep more of what they earn, our focus is on how much more we can do to help children out of poverty.
As I said, children in workless households are around five times more likely to be in poverty than those in working households. We are supporting people into full-time work where possible—for example, by offering 30 hours of free childcare to parents of three and four year-olds. However, importantly, in addition we are trying to deal with the practical barriers. For example, following a speech in January by my right honourable friend the Secretary of State for Work and Pensions, we will trial paying mothers their first childcare costs up front so that they can start work with their children looked after. Importantly, we want to be more practical in our support but, as the economy has continued to grow, we have been able to share the proceeds of growth to support some of the most vulnerable in society. We have seen increases to the income tax threshold, which will reach £12,500 this year, taking 4 million of the lowest earners out of paying any income tax at all, and that will of course help children. Whereas spending on children was £4 billion in 2010, it will be £6 billion by 2020, which is a 50% increase in the last nine years. However, more can be done.
On the national living wage, this is an important review. We must be careful in increasing the national living wage to ensure that jobs are still sustainable. This review will be very much a cross-government task. I take the risk of saying at the Dispatch Box that I suspect it will be led by the Treasury, which the noble Earl will not be surprised to hear. That is quite right, because we have to balance the degree to which we can increase wages, which is crucial, while keeping people in jobs. We are very proud of our employment rate and we want to keep it. Of course, low wages are across the piece—not only in the private sector but in other sectors.
Lord McKenzie of Luton (Lab)
My Lords, might the Minister apply herself succinctly to the points raised? We are using up all this valuable time.
Baroness Buscombe
My Lords, I reassure the noble Baroness that we spend hours and hours crafting what we will say at the Dispatch Box because it is hugely important that what we say is accurate. I can confirm to the best of my ability that the noble Baroness should believe what I have said, because I can say categorically that life is tough if we get it wrong.
The noble Baroness is right, of course, that we need to do more to ensure that people are able to feed themselves well and live a full life in terms of their life chances, their life expectancy and their health and welfare. That is exactly what we are focused on, and it is why we are running all sorts of programmes within the department relating to healthy lives, along with work programmes to encourage people who have not felt able to join the workforce. We want not only to give people the right financial support but to see that they have dignity and the ability to live their lives fully and reach their full potential. It is important to say that we absolutely believe in helping the vulnerable through our world-class public services, and we are injecting more and more money so that we can help disadvantaged pupils in schools, help people through the NHS system and help people through what we do at the Department for Work and Pensions.
Lord McKenzie of Luton
My Lords, what does the Minister consider to be the veracity of the statement that the previous Government just dumped people on inactive benefits and required nothing from them? Is the case not actually the reverse—that it was Mrs Thatcher’s Government who moved people from unemployment benefit on to incapacity benefit in order to massage the unemployment figures? Was it not the Labour Government who introduced proactive programmes such as New Deal that required conditionality and engagement for people to get them into work, which were successful? We cannot allow that rewriting of history to continue any longer.
Baroness Buscombe
My Lords, I remember well, when I was a shadow Minister, sitting where the noble Baroness, Lady Sherlock, sits, listening to history being written on an almost daily basis. I respect the noble Lord’s question but I have to say to him: if that is the case, why were 20% of all households in this country entirely workless back in 2010? I think that is a disgraceful figure, and we are doing everything that we can to bring it down.
Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment etc.) (EU Exit) Regulations 2019
Lord McKenzie of Luton Excerpts(5 years, 8 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for her introduction and explanation of these regulations. I acknowledge the contribution of the noble Lord, Lord Fox. Perhaps he might see it as a starter for 10 for Tuesday’s main event. He made some important points, particularly on data, and I am interested in the Minister’s response on that.
As should be clear from debate in the other place, we will not oppose the instrument, given its expressed intent to ensure that the regulation of UK chemicals and genetically modified organisms will operate effectively when the UK leaves the EU. We are mindful of other regulations that have been referred to and which have been tabled, including the draft REACH etc. (Amendment etc.) (EU Exit) Regulations 2019, which have been the subject of comment by Secondary Legislation Scrutiny Sub-Committee B. Its report has been drawn to the special attention of the House on the basis that the explanatory material laid in support of the draft regulations provides insufficient information on their expected impact and gives rise to issues of public policy likely to be of interest to the House. These regulations have been scheduled for consideration next week and are the responsibility of Defra. I do not propose to stray into this territory this afternoon in any detail, except where there is an overlap with these regulations.
My understanding is that the DWP has responsibility for the regulations before us today as it is the host department for the HSE. The HSE and Defra oversee several regulatory regimes which impact the chemicals sector. When approved, it is understood that the regulations will cover the whole of the UK and provide for an independent UK regulatory regime which maintains existing standards and protections. As the Minister spelled out, this afternoon we are concerned with: the biocidal products regulations, which govern the use and placing on the market of biocidal products; the classification, labelling and packaging of substances and mixtures regulations, a single market measure which applies to the supply of chemicals; the export and import of hazardous chemicals regulations, which require exports of limited chemicals to be notified to the importing country, with consent needed for some; and minor technical amendments to the GMO provisions, as we have heard.
Referring to the list in paragraph 2.6 of the Explanatory Memorandum, paragraph 2.7 states:
“If these changes were not made, several chemicals regimes in the scope of the instrument would not be fully operable when the UK leaves the EU”.
Can the Minister expand on that point and give us some specific examples?
The Government have chosen to amalgamate these instruments in one set of regulations and assert that this decision was taken to reduce the pressure on parliamentary time. These are complex issues. If the Government are following this route, it should be incumbent on them at least to produce an impact assessment. It is understood that one is available for the REACH regulations but not for those before us today. It has apparently been asserted that if the direct financial impact of the measure is below £5 million, there is no requirement for an impact assessment. If that is the basis of the claim for there being no need for an impact assessment, perhaps we could see a copy of that £5 million calculation.
Currently, scientific and technical updates are proposed, considered and adopted through the EU’s delegated decision-making arrangements. Under these new regulations, this will be done by ministerial decision following recommendations from a relevant competent authority or agency. Can the Minister give us a list of who was included in competent authorities and agencies for these purposes? Is there a risk that, in comparison to the breadth of the current arrangements, the UK will have a narrower updating arrangement? How can we be assured that best practice will prevail? The Explanatory Memorandum argues for this administrative procedure on the basis of efficiency and speed, and points to the precedent of the Veterinary Medicines Directorate. It seems that Defra is pursuing such an option for plant protection products. What happens when the UK advice under these arrangements diverges from the EU advice provided to entities within the EU? Is any process envisaged to reconcile the differing positions to get some impact on the market?
The HSE briefing reminds us that for biocides and pesticides regulations in future, the HSE will no longer be able to act as “lead authority” for active substance approvals and some product authorisations. Who will, and what does the Minister consider the consequences of this to be? How assured can we be that this will not lead to a change of policy?
As for classification, labelling and packaging, it is envisaged that all existing main duties of classification would remain the same and that we would adopt the UN globally harmonised system. This new UK mandatory classification is also to be hosted by the HSE. It is understood that this will involve all existing MCL substances plus new and revised entries as agreed. Can the Minister say something about how the process of agreement in these circumstances will proceed? What enforcement arrangements are envisaged?
We know that the HSE would also take on responsibility for an independent UK system in respect of biocidal products. This would involve applications for approval and authorisation going to the HSE, which would take on the role of ECHA. It is understood—this point was made by the noble Lord, Lord Fox—that active substance approvals and product authorisations would remain valid, but ongoing applications with the HSE for evaluation would need to be resubmitted. At what and whose cost?
Apart from its increased responsibilities arising under these regulations, as the debate on REACH identified, considerable additional responsibilities are envisaged for the HSE at a time when the organisation is going through significant budget cuts—I am reminded that the HSE has been six months without a chief executive. What assessment has been made of the capacity of the HSE to cope, as well as that of Defra and the Environment Agency? I have no doubt about the intellectual capacity of the HSE; it is one of the jewels in the crown of our regulatory firmament, although that is not always acknowledged by some members of the government party.
The Explanatory Memorandum seeks to address the financial position of the HSE. It appears to recite three situations—first,
“fees to recover the full costs of its regulatory activities”;
secondly,
“variable fees and charges dependent on the size of organisation involved”;
and thirdly,
“domestic fees and charges systems … proportionate to the actual cost incurred of intervening”.
The latter are seemingly adopted for these regulations and mean that there will not be full cost recovery. Is this correct? What is the estimated annual shortfall?
The SLSC specifically regrets that a financial analysis has not been provided which identifies the potential cost of the proposed regulatory regime, nor an assessment for the industry of a no-deal scenario. Will the Minister undertake to provide these? Debating these regulations has, if nothing else, reminded us how important the chemical sector is to the UK economy. This must be underpinned by robust and secure regulatory provisions. We look forward to the further deliberations next week.
Social Security Benefits Up-rating Order 2019
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Baroness Buscombe
My Lords, I thank all noble Lords who have taken part in this debate. It has certainly focused on things outside the order itself, but I thank noble Lords for appreciating the upratings made in the order. It feels like 10 minutes ago that we were debating this last year, so I was, to some degree, ready for some of the points that would be raised; I expected there to be references to the benefit freeze and various other issues.
I begin by referencing something that my honourable friend, Justin Tomlinson MP, stated last night in a similar debate in another place. He said that we will always share the proceeds of economic growth to target our support for the most vulnerable in our society. That is why we are spending £7 billion more than in 2010 to support those with severe disabilities and mental health issues.
It is true that things have changed. Our approach is, to some degree, different to that of the party opposite when it was in government. We want to incentivise people; we want to look at the root causes of poverty and lift people out of it. We know—we have research that tells us this—that lifting people out of poverty and into work is the best route. Our welfare reforms incentivise moves into work and support working families. What we are providing is different in some ways, but we know this approach is working. The number of people in work is now at a record high. Through our welfare reforms, the Government have introduced 30 hours of free childcare a week for working families in England; cut income tax for 31 million people; and provided the lowest earners with their fastest pay rise in 20 years through the national living wage.
Our reforms have been highly redistributive. The latest analysis shows that, since taking office in 2016, the poorest households have gained the most as a percentage of net income. The annual average income of the poorest fifth of households has risen in real terms by more than £400 since 2010, while incomes of the richest fifth have fallen. Income inequality is lower than it was in 2010. In 2019-20, the 10% of households with the lowest incomes will receive more than four times as much support in public spending as they contribute in tax. We believe it is right that the poorest households should gain the most as a percentage of net income.
The noble Baroness, Lady Lister, referenced several studies showing that the number of children in poverty will increase substantially over the next few years. However, experts such as the IFS, who undertake these forecasts, acknowledge a degree of uncertainty around them. We stay with our firm belief and principle that work offers the best chance for families to get out of poverty.
Since 2010, there are more than 3.4 million more people in work and around 637,000 fewer children living in workless households. Children are about five times more likely to be in poverty if they live in a workless household, compared to a household where all adults work. There are 300,000 fewer children in absolute poverty, both before and after housing costs, compared to 2010, meaning we are currently at a historic low. We know that children in workless families can face real disadvantages to their development and prospects. This is why we will continue with policies that support and encourage employment, reform the welfare system to make work pay—as I always say, to make work transforms lives—and introduce universal credit to strengthen incentives for parents to move into and progress in work.
The rates of children in material deprivation have never been lower. As I said, children in households where no one works are more likely to be in poverty, but we will be investing more than £6 billion a year in childcare by 2020. There are a number of key ways in which we are demonstrating that our approach is different.
Lord McKenzie of Luton (Lab)
My Lords, the Minister has touched on the Opposition’s policy for work in previous debates. How would she respond to the executive summary of a White Paper produced when we were in government, which states:
“This White Paper sets out a vision and route map for a welfare state where everyone is given the help they need to get back to work, matched by an expectation that they take up that support”—
a concept supported by the noble Lord, Lord Freud? Indeed, he worked on that programme for the DWP.
Baroness Buscombe
My Lords, what the noble Lord just referenced goes to the heart of what we are trying to achieve. The reality is that we are providing support in every which way to help people into work, and to help people through our jobcentres with our work coaches and case managers. The important thing is that the first thing people do when they go into a jobcentre is talk to a work coach who is interested in ensuring that they have the right support, the right benefits and a roof over their head. We signpost them to the right support where that is lacking. From there, we do all we can, working with a bespoke work coach and case managers. It could take months, weeks or days to encourage people to go into work. Of course, as we know, some of these people have never been in work. Indeed, in 2010 a fifth, of all households in the United Kingdom—20%—were entirely workless. We have brought that down to 13.9% of all UK households. That is still an enormous number of households where nobody is actually working. We genuinely believe it is crucial that we change that, and we are changing it.
Lord McKenzie of Luton
Can the Minister tell me what the figure was when the Conservative Government left office previously?
Baroness Buscombe
I am not able to share that figure with the noble Lord, but I believe so strongly that what we are doing in introducing and developing universal credit with bespoke and universal support is a far cry from what previous Conservative Governments prior to 1997 and the party opposite in Government up to 2010 did with legacy benefits, when people had no contact.
Social Security Coordination (Council Regulation (EEC) No 1408/71 and Council Regulation (EC) No 859/2003) (Amendment) (EU Exit) Regulations 2019
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, I thank all noble Lords who have supported the presentation of these four statutory instruments, and I will also speak to the remaining three.
These regulations were laid before both Houses on 30 January. They enable the Government to address deficiencies in retained EU law caused by the United Kingdom withdrawing from the EU, which would impact the operation of the retained social security co-ordination regulations in a no-deal scenario. The whole system of social security co-ordination across the EU relies on co-operation and reciprocity. The legal framework for this will cease in a no-deal scenario. The UK will have no means of enforcing reciprocal obligations on EU member states and cannot therefore legislate for this when correcting deficiencies in the co-ordination regulations.
These instruments aim to maintain the status quo on a unilateral basis, ensuring that citizens’ rights are protected as far as possible in a no-deal scenario in relation to social security. They are intended to ensure a functioning statute book in the event of no deal, by fixing deficiencies in retained EU law, in line with the power provided by Section 8 of the EU withdrawal Act.
The list of specific legislation that these regulations amend is lengthy but can broadly be split into three categories. The first is data and information sharing. The co-ordination regulations require EU member states to exchange information through specific administrative procedures laid down in the regulations. Data shared is used, for example, to establish which member state is responsible for payment of benefits to avoid overlapping benefits being paid in different member states. These instruments will enable us to ask claimants to provide, within reasonable time, the relevant information to determine competence in cases where the relevant member state does not do so when asked. They also include provisions to ensure that the UK can continue to share data with member states when they are applying the co-ordination regulations.
These SIs also remove provisions within the retained co-ordination regulations that will be inoperable if the UK leaves the European Union without a deal. For example, the co-ordination regulations make provision for a number of bodies at EU level to deal with administrative and technical issues or disputes arising from the application of the social security co-ordination regulations—the administrative commission being the main one. These instruments remove references to these bodies on the basis that they will be inoperable when the UK withdraws from the EU in a no-deal scenario.
Finally, they deal with applicable legislation. The co-ordination regulations state that an individual shall be subject to only one EU member state’s legislation at a time. These arrangements rely on co-ordination between member states in order to operate effectively. These instruments amend the co-ordination regulations to maintain the status quo for when UK legislation does, and does not, apply. These regulations are made using powers in the European Union (Withdrawal) Act 2018 to fix legal inoperabilities and other deficiencies that will arise on exit in retained EU law, so that the converted law continues to operate effectively post exit, and to make consequential provision.
The legal powers used are those provided for under the EU withdrawal Act, and the amendments made are completely in line with both the policy and legal intent of that Act. The use of secondary legislation to amend primary legislation—the so-called Henry VIII powers—was debated at length during the passage of the Act.
These statutory instruments are part of a wider legislative package that my department is laying. We have already laid SIs relating to private pensions, the European job mobility portal regime—more commonly known as EURES—and consequential powers. My officials will be happy to provide noble Lords with more information on the department’s legislative programme following the debate.
No formal consultation on the regulations has been carried out by the Department for Work and Pensions as the instruments address deficiencies in retained EU law and there is no significant impact as a result. My officials, nevertheless, had informal discussions with the Social Security Advisory Committee on these instruments; these focused on technical issues and policy considerations. Similarly, we expect the regulations to have no impact on business, charities, voluntary bodies or the public sector.
In my view, the provisions in these statutory instruments are compatible with the European Convention on Human Rights. The Minister of State for Employment has also made the same statement.
All noble Lords will know that the EU withdrawal Act is a crucial piece of legislation that will ensure that whatever the outcome of negotiations, we have a functioning statute book on exit day, providing certainty to people and business across the UK. The Act enables this by providing a power for Ministers in the UK Government and devolved Administrations to deal with deficiencies in the law arising as a result of our exit from the EU.
These regulations are an essential part of the legislative programme that my department is laying in preparation for a no-deal scenario. They are needed to correct deficiencies so that the system can function, albeit unilaterally, and to retain the department’s ability to make payments to claimants and to determine claims. Not proceeding with this legislation would result in a statute book that does not function correctly and would fail to protect citizens’ rights. Passing these SIs will ensure that we are ready for all eventualities.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for introducing these regulations. As we have heard, they seek to address deficiencies in retained law caused by the UK withdrawing from the EU. They amend the retained EU regulations comprising the co-ordination regulations, which currently co-ordinate social security systems throughout the EU.
Given that the changes these regulations cover potentially create new imposts and a move away from the status quo, it seems to us that there is a case for an impact assessment and some consultation. Change is necessary, as we have heard, because the current system relies on co-operation and reciprocity from other member states and that cannot be guaranteed when we withdraw in all respects. It will not be possible, for example, to impose reciprocal obligations on member states when correcting deficiencies, or say when co-ordinating rules relate to individuals moving to or from the UK. We understand and accept that.
The regulations will amend retained co-ordination regulations covering provisions that will not apply to the UK, confer functions on EU entities that will no longer have functions in relation to the UK, and make provision for reciprocal arrangements between the UK and other European Union member states. According to the Explanatory Memorandum:
“The instruments aim to ensure that citizens’ rights are protected as far as possible in a no-deal scenario”.
How? It is asserted that this is about maintaining the status quo, but will the Minister say to what extent the instrument varies from the maintenance of the status quo in practice? How does she characterise this?
The legal framework, as we have heard, for co-operation and enforcing reciprocal obligations in a no-deal scenario will cease. The Explanatory Memorandum states that:
“These instruments aim to maintain the status quo on a unilateral basis”,
but there will be arrangements which are inoperable. These include the denial of membership of such bodies as the administrative commission, the advisory body and the audit board. Will the Minister say in more detail what the implications of this are? It is noted that the ability to make provisional payments in the event of an unresolved dispute will no longer exist, although it is understood that these are in fact little used.
The approach to amending the co-ordination regulations is to focus on circumstances where the UK legislation does apply. Will the Minister please expand on that assertion? The Explanatory Memorandum identifies that the change,
“may give rise to occasions where an individual becomes subject to the legislation of more than one state at a time”,
and possibly to the legislation of two or more states. This is noted as being an unavoidable consequence of a no-deal exit which cannot be managed using powers in the withdrawal Act, but has any assessment been undertaken of the consequences? On what basis does the Minister conclude that the changes,
“do not give rise to any new costs or any financial or economic impact”?
Further, it is understood that fixes for deficiencies relating to healthcare are not provided for in these SIs. How and where are they to be provided for? We know that, by virtue of the EEA agreement and the Swiss free movement of people agreement, the co-ordination regulations also apply in the EEA. Will she outline the full consequences of that for us tonight? I am conscious that there were one or two technical questions there, but this is a technical document and we are entitled to ask them, although I do not believe that we will have undue problems in supporting the regulations.
Baroness Lister of Burtersett (Lab)
My Lords, I also thank the Minister for introducing this rather hefty set of statutory instruments and I echo my noble friend Lord McKenzie in citing paragraph 2.6 in the Explanatory Memorandum—which the Minister also cited:
“These instruments aim to ensure that citizens’ rights are protected as far as possible in a no-deal scenario”.
Phrases such as “as far as possible” rather leap out at us when we are looking at these things. What does it mean exactly? Will the Minister tell us what scenarios are envisaged in which it will not be possible to protect existing citizens’ rights?
Noble Lords will be pleased to know that I will be very brief, after my rather lengthy speech earlier, but I am more worried having read the debates in the Public Bill Committee on the Immigration and Social Security Co-ordination (EU Withdrawal) Bill. A number of those giving evidence to the Committee raised serious concerns about Clause 5, which deals with future social security co-ordination and which, in the words of the Delegated Powers and Regulatory Reform Committee is,
“so lacking in any substance whatsoever that it cannot even be described as a skeleton … There is, moreover, no indication at all in the Explanatory Notes or Memorandum that the Government have even begun to devise their policy on the future of social security co-ordination post EU exit”.
Will the Minister explain how the regulations and this thinner-than-a-skeleton clause in the Bill relate to each other? Can she give us some assurance that the Government have begun to devise their policy regarding future social security co-ordination post EU exit, and perhaps some inkling of the lines on which they are thinking?