Pension Schemes

Stephen Timms Excerpts

Thursday 2nd May 2024 Commons Chamber

[Sir Stephen Timms (East Ham) (Lab)]

I welcome the debate, and congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing it at a time when a lot is happening in pensions policy. I will take advantage of its broad scope to comment on wider issues, as well as picking up on the points that he made. I agree with a great deal of what he said.

Auto-enrolment, which was devised by a Labour Government, legislated for under the coalition, and implemented under subsequent Conservative Governments, has been a huge success in increasing the number of employees saving for a pension, but a lot of challenges remain. Above all, the amounts that people are saving under auto-enrolment are not enough for an adequate retirement income, and if we do not increase pension saving soon, we will have a crisis of inadequate pension incomes before very long. The gender pension gap remains much too big. Pension saving among self-employed people, to whom auto-enrolment does not apply, has plummeted.

The Chancellor is rightly looking at how he can boost investment in the UK economy from pension funds, but UK pension funds, for understandable reasons, some of which the right hon. Member for Orkney and Shetland touched on, have largely withdrawn from investments in companies, as regulation has pushed them to reduce the risks that they face. We must not force those defined benefit funds that are still open and investing to close prematurely.

The right hon. Gentleman highlighted this afternoon, as he has previously—he mentioned his debate in Westminster Hall—that members of some defined benefit pension schemes, such as those of BP and Shell, and I think ExxonMobil, as the right hon. Member for New Forest East (Sir Julian Lewis) pointed out, have in recent years not received the discretionary increases that they used to. We looked at that issue in the Select Committee report on defined benefit pension schemes, which we published on 26 March. We took oral evidence from the BP Pensioner Group, and we also heard from the HP Pension Association—the right hon. Member for Orkney and Shetland also mentioned that company. The association represents people who previously worked for the computer company Digital, which Hewlett-Packard acquired. Much of those people’s working lives was before 1997. There was no general requirement to uprate pensions in payment before 1997, and our witness told us that Hewlett-Packard pensioners had received only three discretionary increases to pre-1997 benefits, amounting to 5% in total, since 2002, which is just over 20 years.

In our report we called for the Pensions Regulator to find out how many schemes had discretionary increases on pre-1997 benefits in their rules and how that discretion has been exercised in recent years. Given recent improvements in scheme funding levels, we also called for DWP to look at

“ways to ensure that scheme members’ reasonable expectations for benefit enhancement are met, particularly where there has been a history of discretionary increases.”

Perhaps the Minister, when he winds up, would comment on whether he will look at the reasonable expectations for benefit enhancements for scheme members with a lot of pre-1997 service, and whether they can be met. The Hewlett-Packard Pension Association is calling for a code of ethical practice to be drawn up between the Pensions Regulator and DWP, particularly on pre-1997 pensions, and for their former employer and its pension trustees to work out a policy for sustainable future discretionary increases.

[Mr Carmichael]

I am grateful to the right hon. Gentleman for touching on an area that I should perhaps have given more attention to. The most important protection we can give the beneficiaries is through ensuring that there are independent trustees, and that the office of trustee cannot be manipulated by the company. Does the Select Committee have any proposals for improvement in that regard?

[Sir Stephen Timms]

The right hon. Gentleman is quite right. We have noted a bit of a move towards sole trustees in a number of cases, which clearly gives rise to concerns about how one person can represent the interests of the members of a pension scheme. We are reflecting on that in our work, but one of the members of the Hewlett-Packard scheme wrote to me this week—he may well also have written to other Members—about

“the further fear and despair they are now feeling as it dawns upon them that their company and pension scheme trustees are meanwhile preparing plans to derisk by transferring their Pensioner responsibilities to an Insurance Company”—

something the right hon. Gentleman touched on. That transfer will quite possibly mean

“no subsequent possibility ever for pre-1997 increases.”

He calls that “a frightening prospect”, and it is hard to disagree.

The Committee also looked at concerns about the new defined benefit funding regime to be introduced for scheme valuations from September. We noted that the regime had been developed

“in a different era when the vast majority of DB schemes were in deficit and amidst concern that employers were seeking to evade their responsibility to underfunded schemes.”

There have been big changes since then, especially in the wake of the liability-driven investment crisis following the Budget of 18 months or so ago. In particular, there have been significant improvements in scheme funding, but the principles of the new regime have not been changed. Schemes are expected to target a position of low dependency on the sponsoring employer, meaning low-investment risk at the point of significant maturity. That has promoted concerns that the funding code will, when introduced, force more unnecessary de-risking, particularly among open schemes, as well as among those that are closed but have long time horizons, which would increase costs to employers and result in premature closure.

We said that the DWP and the Pensions Regulator needed

“to act urgently to ensure they do not inadvertently finish off what few open schemes remain by further increasing the risk aversion”.

In a letter to the Committee on 18 December, the Minister told us that both the Department and the Pensions Regulator were

“acutely aware of the need to take account of the specific needs of open schemes,”

and he agreed that

“open schemes should not be forced into an inappropriate de-risking journey.”

We welcomed that assurance, but it needs now to be reflected in the final wording of the funding code and in the regulator’s approach.

The vote in Parliament on the statutory instrument came before the final version of the funding code was published, so Members did not quite know what they were voting for at that point. We recommended that the Department and the Pensions Regulator should work with open schemes to address their concerns, particularly on the employer covenant horizon—the length of time for which they are confident in the sponsoring employer’s willingness and ability to support the scheme—and report back to us on how they will do so before the new funding code is laid before Parliament.

Since our report was published, feedback from schemes suggests that things may not be moving in the right direction. In a consultation response last week, the University Superannuation Scheme—a large and still open scheme—described the regulator’s proposed approach as

“university superannuation schemes”.

In its view, the statement that it will be required to complete under the terms of the new code will demand

“significant…resource for little or no benefit to our members.”

To the USS, and to me, that appears inconsistent with the assurances that open schemes will not be adversely impacted by the new funding regime. The USS adds:

“Not…having had sight of the revised…Funding Code and accompanying covenant guidance has exacerbated”

their worries.

I know that the Minister understands these concerns well. Closure of those schemes would reduce pension fund investment in the productive economy at a time when the Chancellor wants—absolutely rightly—to increase investment from pension schemes into the productive economy. Can the Minister tell us when he expects the new funding code to be published, whether he will report back to the Committee before then on how the concerns of open schemes have been addressed, and whether he is open to considering a separate chapter in the funding code, setting out how the code will apply to open schemes?

Let me take a few minutes to talk about what is happening on the defined contribution side of the picture.

[Sir Julian Lewis]

I wonder whether the Chair of the Select Committee shares my concern that when those schemes go wrong, it seems to take an interminable time to get any form of resolution. I have in mind a scheme that I am sure he is familiar with: the Atomic Energy Authority Technology pension scheme. The Government gave strong guarantees from the Dispatch Box that transferring into that scheme would give benefits roughly similar to those of remaining in the original Atomic Energy Authority scheme, but that did not happen. I first quoted the concerns of my constituent, Dr Keith Brown, in 2016. The most recent answer that I received to a question on this subject was:

“This is a complex issue requiring further consideration”

between the DWP and the Cabinet Office. I first raised the matter in 2016, but the Government are still saying that in 2024.

[Sir Stephen Timms]

The right hon. Gentleman makes a very fair point. That is certainly a very long-running case, and the Select Committee has recently been looking at a notable pension scam case—the Norton Motorcycle Company pension schemes, which was a straightforward scam—that has been running for years and years. He is right that we need to find ways to speed up some of these processes, because the victims in these cases have their lives really blighted. We are allowing that blight to last for years and years, and that needs to change.

On the issue of defined-contribution schemes, the Committee published a report in September 2022 on saving for later life, which pointed out that auto-enrolment has been a very big success, doubling the proportion of eligible workers saving in a pension. I applaud the approach now being taken by Uber following the Supreme Court case that it lost, and the recognition agreement that it now has with the GMB trade union. It is now auto-enrolling large numbers of its drivers into a pension scheme, albeit with higher opt-out rates than elsewhere, which is making some real inroads into pension scheme saving in the gig economy. We need much more of that among other gig economy workers. However, many auto-enrolled people are not contributing enough at the moment for an adequate retirement income, and quite a lot of them are probably not aware of that. Contribution rates need to go up.

As such, the Committee recommended that the Government should first implement the recommendations of the 2017 auto-enrolment review: reducing the minimum age for auto-enrolment from 22 to 18, and minimum contributions being paid from the first pound of earnings. Almost all of our witnesses supported those measures, and we welcome Royal Assent being given to the legislation that will implement them. That legislation requires a public consultation on implementation, and for its findings to be reported to Parliament before the regulations are made. However, as yet there has been no consultation, and nor has any date been announced for it, so can the Minister tell us when the Department will be consulting on implementation of those regulations? Will that consultation be launched before the end of this Parliament, and does he still expect—as the Government have long maintained—that those changes will be implemented by the mid-2020s?

We always knew that auto-enrolment would lead to many small pension pots. People change jobs, so they accumulate, on average, 10 pension pots across their working life. By November 2022, there were over 12 million deferred pots under £1,000. The Department for Work and Pensions has proposed automatic default consolidation to deal with small pots, but that will not in itself stop small pots from building up in future. As such, the Department has proposed a lifetime provider model with member choice, so that employees tell their employer which pot to put their contributions into, and a pot for life, so that employees stay in the pension scheme they started out in throughout their working life unless they choose to move.

Consultation responses on those proposals raised some very serious concerns from the TUC, Age UK, and the Pensions and Lifetime Savings Association and the Association of British Insurers—the main industry bodies. Age UK, for example, said that the proposals would be

“highly disruptive and lead to poor outcomes for mass market savers.”

Major concerns raised in the responses include potentially unwinding the consensus on auto-enrolment; that other measures in train, such as pensions dashboards, value for money and consolidation, will reduce the number of small pots anyway and improve value; that the proposals would benefit savers with larger pots, but harm lower-income savers; and that they would increase employers’ costs while entirely removing their role in selecting a pension scheme for their staff.

I have heard time and again, as I am sure the Minister has, how important employers are to trust in pension savings and that employers have delivered in auto-enrolment what we have asked them to deliver. Other such concerns are that these changes would require a new infrastructure, which would be hard to build, as pensions dashboards have certainly proved to be; and that they distract attention from the important effort to increase auto-enrolment contributions over time, which the responses argue—correctly, I think—should be the main focus of changes over the next few years. The Minister will be very familiar with all those concerns. Will he tell us when the Department will publish its response to the lifetime provider model consultation, and does he acknowledge that responses to the consultation so far have indicated very significant risks in the Government’s proposal for rather limited gains?

There is a lot going on in this area. I am very grateful to the right hon. Member for Orkney and Shetland for giving the House the opportunity to reflect on all this at this particular time. There has been some good progress, for example with auto-enrolment, but a lot more work is needed. I look forward to hearing the Minister’s reply.

--- Later in debate ---

[Paul Maynard]

My right hon. Friend has pre-empted a topic that I was about to come to, because I could see that it was going to come up in the discussion on the Select Committee report. I have now been to see the Cabinet Office Minister with my officials, and my officials then went back for a second visit. So although I cannot give him a timeline, I can say that I am motoring this issue along as rapidly as I can. When I say that this is complex, it is because it is complex; it is not merely because that is a useful and convenient word to cover a multitude of things. We continue to work as fast as we can to try to reach a conclusion. I hear the points that he has made to me, both in this place and outside, about wanting to draw this to a conclusion as best we can.

The regulations that I referred to on the funding and investment strategy clarify what prudent funding plans look like, allow open schemes to take account of new members and future accrual, make it explicit that there is headroom in the regulatory environment for schemes to invest more productively, and require all schemes to be clear about their long-term strategy to protect member benefits.

DB funding levels have improved in recent years, and it is important that schemes take advantage of the opportunities that this brings. The scheme funding regulations will help schemes get the most from their assets, while at the same time ensuring that scheme members can be confident that they will receive the benefits that they are promised.

The regulations embed good practice and build on the existing funding regime for DB schemes by providing clearer funding standards, which will ensure, as far as possible, that schemes are properly funded over the long term. Scheme members can and should be confident that the regulations provide increased security for their promised pensions, which is important to many of the people whom the right hon. Member for Orkney and Shetland is trying to support through this debate.

In addition, the new general code for the Pensions Regulator has come into effect since we last discussed these issues. The new general code consolidated and simplified 10 of the existing codes to make it easier for trustees and those running occupational pension schemes to find the information they need on the regulators’ standards of conduct and practice. It came into force at the end of March this year.

I will do my best to reply to some of the points that have been raised in the debate before I continue with my speech. I am grateful to the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), for covering many of the issues in what was a very helpful report on DB schemes. I know that we often discuss Select Committee reports in this place on a Thursday, and it is quite right that we should do so. Normally, however, we do so after the Government have issued their official response to that Committee report. If the Chair of the Select Committee will forgive me, I will not pre-empt every recommendation in the report. But I can assure him that I sat down for a marathon session with my officials not so long ago, going through every last sentence in the report, so I can tell him that I am giving the matter full consideration.

It is worth noting that both the right hon. Member for East Ham and the hon. Member for Strangford (Jim Shannon) mentioned the auto-enrolment reforms. I am happy to place on the record today our ongoing commitment to consult in the mid-2020s on that issue. I am keen to make progress. I hear all across the Chamber that there is a recognition of why it is important that we make as rapid progress as we can.

The right hon. Gentleman mentioned that he will have to provide a consultation. He summarised the general tone of the contributions very well. Certainly there have been more responses to that consultation than to any other during my time in the Department. I have read most of them myself, rather than just waiting for the summary. I have absorbed similar mood music to the right hon. Member for East Ham, and I hope that we can have a proper Government response very soon.

[Sir Stephen Timms]

I thank the Minister for the attention that he is paying to the recommendations in our report. On the auto-enrolment review recommendations, does he envisage the consultation on implementation happening this side of the election?

[Paul Maynard]

No decision has yet been taken on when that might be. It would be wrong for me to speculate at the Dispatch Box about when it might occur but, as I say, I am keen for it to happen as soon as we can manage it.

The hon. Member for Cardiff South and Penarth (Stephen Doughty) rightly raised his constituents and the AWS pensioners. As he may be aware from the oral evidence I gave to the Work and Pensions Committee, I have met with the pensioners. I fear this always sounds like a cliché, but I listened carefully, commissioned work on the back of that meeting, received that work and reviewed it, and then commissioned some further work on the back of that. The policy development process is ongoing. I am happy to meet the hon. Gentleman. He asked for a timeline. He actually read out my timeline when he quoted my reply to him from 18 April, so he answered his own question. As I say, I will happily meet with him and the pensioners, but I caution him that I doubt that I can say very much more at this stage than I have already. He may want to consider at what point he wishes to have a further meeting, given that it is a long way for them to come from south Wales to hear me say what I already said to them a few months ago, but I am working hard on the issue.

My right hon. Friend the Member for Suffolk Coastal (Dr Coffey) spoke eloquently about the potential value of CDCs, not least in this place. I cannot wait for the Royal Mail one to get off the ground. I welcome her comments on the importance of employers doing right by their employees. We should always note just how many do that. She asked for an update on the pensions dashboards. As I am sure the House knows, there was a reset of the pensions dashboards shortly before I arrived in the Department. I have taken a close personal interest in it, having overseen a few rail infrastructure projects in my time that also needed a bit of a reset. The chief executive of the Money and Pensions Service, Oliver Morley, and I are taking a careful, scrupulous and in-depth interest in the progress of the reset. I am satisfied that we are making good progress. The timetable for connections has now been issued, and we are very much on track.

The hon. Members for Strangford and for Ayr, Carrick and Cumnock (Allan Dorans) mentioned WASPI. I am not sure that there is much that I can usefully add right now, because I do not think that this is the debate for it. I note the comments that were made and entirely understand them. As the hon. Member for Strangford mentioned, there will be a debate on WASPI in this place very soon, as an important part of the engagement with Parliament that the ombudsman identified. I look forward to hearing what Members have to say.

I will do my best to cover a few issues around discretionary increases, because it is important to put on record the legal situation. There are clear legal requirements for schemes to provide indexation on all defined-benefit rights accrued after 1997, and on guaranteed minimum pension rights accrued between 1988 and 1997. Some pension schemes go beyond the legal requirements and provide more generous indexation. If higher levels of indexation are set out in the scheme rules, those levels of indexation must be paid. The scheme rules set out the pension package that members have the right to receive. Some schemes provide additional indexation on a discretionary basis. In some cases, these payments may have been made regularly in the past, but they are not part of the pension package promised by the employer; rather, they are, and remain by definition, discretionary.

I understand the frustration that will cause for pension scheme members no longer receiving such discretionary increases, and during a previous debate I committed to looking closely at the situation in order to better understand whether the arrangements that we have in place are working as intended. That commitment still stands, and I recently met with the Pensions Regulator to personally discuss the issue, along with many of the other concerns that were raised in January, and indeed some of those raised today. I have to stress that the legislation does not and cannot seek to set out exactly what every scheme must do in each and every circumstance. The legislation sets out some minimum standards for indexation. That does not prevent more generous arrangements, which may be brought into a scheme through its rules or provided on a discretionary basis. Those arrangements are the concern of the scheme trustees.

The Government set a minimum legal requirement, which trustees and sponsoring employers can exceed if they choose, if they judge that scheme can afford it in the short and the long term. It is important to achieve a balance, providing members with some measure of protection against inflation while not increasing a scheme’s costs beyond what most schemes can generally afford. Trustees, whether of big firms or small ones, must have an eye to the future viability of their scheme.

I am very grateful to all Members who have contributed to this debate. It has been wide-ranging, partly because, being called “Pension Schemes”, it covers a multitude of issues beyond the more precise ones that the right hon. Member for Orkney and Shetland raised. I am grateful to all who have participated, and I commit to working much harder on this issue in the future, because I know how important it is to many of our constituents.

Health and Disability Reform

Stephen Timms Excerpts

Monday 29th April 2024 Commons Chamber

[Sir Stephen Timms (East Ham) (Lab)]

PIP assessment providers confirm that worsening delays in NHS treatment are a big factor in the increase in the number of people applying for PIP. The Secretary of State has confirmed this afternoon that the work capability assessment is to be scrapped and replaced by PIP assessments. There are people who are too ill to work, but not disabled, and so not eligible for PIP. How will their support be assessed in the absence of work capability assessments?

[Mel Stride]

As I have set out, we will need to look at the conclusions that can be drawn from the consultation in the context of the replacement of the work capability assessment and PIP becoming the gateway to future universal credit health benefits, as the right hon. Gentleman mentioned. These are questions that are being asked in the consultation.

Buckland Review of Autism Employment

Stephen Timms Excerpts

Thursday 25th April 2024 Commons Chamber

[Sir Stephen Timms (East Ham) (Lab)]

I am very pleased to follow the right hon. and learned Member for South Swindon (Sir Robert Buckland); I congratulate him on securing this debate and on the report, which makes a very valuable contribution on this extremely important topic. The report does a good job of laying bare the obstacles facing autistic people in the workplace—obstacles that, as he rightly says, we need to overcome. I applaud the obvious passion that he has shown in presenting the report to us. I did not know about his own family link, and I am grateful to him for explaining that to us.

The Work and Pensions Committee has recently launched our own inquiry into disability employment, to follow up the report that we published in 2021 on the disability employment gap. We have just closed our call for evidence for that inquiry—I am glad that we have received evidence from Autistica, among others—and we will soon start to take oral evidence from disability charities and others. The review will help us to frame particular questions on autism employment in the context of that inquiry. As the review points out, the employment gap is much worse for autistic people than for disabled people more broadly.

A disappointing feature of the report for me, though, is the rather unambitious nature of the recommendations, which are along the lines of, “The Government ought to try a bit harder on this, and do a bit more of that.” There are no targets set out in the report, and nothing to help us to monitor progress. I fear that when, in two or five years’ time, we ask whether the recommendations have been delivered, the answer will be a bit unclear. I do not blame the right hon. and learned Member for South Swindon for that—no doubt Ministers would not have gone along with a higher level of ambition—but I fear that the Government will be able to accept all the recommendations without really changing anything. It does seem to be a bit of a missed opportunity.

The report rightly highlights the huge size of the autism employment gap. By how much should we aim to reduce it? In his speech a moment ago, the right hon. and learned Gentleman suggested that the aim should be to increase the rate of employment among people with autism at least up to the overall disability employment rate. That would have been a really substantial target against which to measure progress to include in the report, but it is not in there. My fear is that a lack of ambition has regrettably marked the Government’s efforts on disability employment for some time.

There was a moment not long ago when a higher level of ambition was announced. Government Members may well remember that they campaigned in the 2015 general election on a target announced by David Cameron to halve the wider disability employment gap. That gap fell sharply from 1998 to 2010 through the new deal for disabled people, but it has been stuck at around 30 percentage points ever since; it went down for a bit after 2015, but perhaps unsurprisingly during the pandemic it went back up. Unfortunately, the target of halving the gap was abandoned shortly after the 2015 election was safely won, which strikes me as the kind of move that gives politicians a bad name.

In our 2021 report, the Work and Pensions Committee called unanimously, on a cross-party basis, for that target to be reinstated. The report we are debating this afternoon refers in paragraph 2.7 to making progress on closing the employment gap, and I call on the Government, in responding to that report, to set an ambitious target for increasing the employment rate among people with autism—perhaps, as the right hon. and learned Member for South Swindon has just suggested, up to at least the overall disability employment rate. As the right hon. and learned Gentleman spells out with passion in his foreword, at the moment, we are

“missing out on the skills and energy that autistic people could be contributing, to the detriment of us all.”

He is absolutely right about that. The danger, I fear, is that without targets against which to measure progress, the report may not really change things.

[Sir Robert Buckland]

I am grateful to the right hon. Gentleman for engaging so closely. I absolutely agree that without a means of accountability, the work that we have done may well be lost. I think that the task group will play an important role; it will have the freedom to start developing some more hard-and-fast approaches where necessary, and to hold the Government’s feet to the fire—whatever that Government’s complexion. I hope that gives the right hon. Gentleman some reassurance.

[Sir Stephen Timms]

I am grateful to the right hon. and learned Gentleman for that intervention. Perhaps he could use his influence with the task group—I do not know whether he is a member of it; I am not sure how that will work out, but I am sure he will have influence with it—to urge it to adopt the target that he set out a few minutes ago, which I think could make a substantial difference.

I welcome the call in the report for

“processes and support mechanisms that enable autistic staff to be recruited and to succeed.”

In that context, I want to draw attention to a concept that is not mentioned in the report—I am a bit disappointed that it was not—but which has been referred to elsewhere, not least in our Select Committee report.

The concept of job carving means assessing a person’s skills and then tailoring an employee role to those skills. Catherine Hale, director of the Chronic Illness Inclusion project, told our 2021 inquiry that job carving was particularly effective in supporting people with learning disabilities; given the big overlap between autism and learning disability, I think that job carving could certainly help. The charity Mind says that job carving roles for people with learning disabilities can benefit employers by removing tasks from other employees and freeing up time. In its “Working Better” report, the Equality and Human Rights Commission described job carving as a

“a flexible way of managing a workforce, which allows employers to utilise their staff skills in the most productive way whilst enabling disabled people to make a valuable contribution to the world of work.”

Our 2021 report called on the Government as part of their then forthcoming national disability strategy to provide detailed guidance to employers and providers of employment support on how they could job carve roles for disabled people, and called on Jobcentre Plus to encourage local employers in their area to job carve. The Government’s response to our report did not pick up the concept of job carving, but Ministers could still pick it up in responding to the report we are debating this afternoon. I wonder whether the Minister, who I know takes a very close interest in this area, recognises that job carving could make a significant difference to the employment prospects of many autistic people.

One thing the Government response to our 2021 inquiry did refer to was the plan at that time to increase the number of places on the intensive personalised employment support scheme. IPES provides voluntary employment support to people with disabilities and complex barriers to employment. As we noted in our report, the guidance to IPES providers explicitly mentions job carving as an intervention that can help disabled people to find and stay in work. IPES is referred to in paragraph 2.11 of the right hon. and learned Gentleman’s report, which rightly points out that referrals to IPES have now ended, as our Select Committee heard in a one-off evidence session last week on the Government’s back to work plan. There will be no more IPES referrals.

We were told by providers at our evidence session last week that the work and health programme, also referred to in paragraph 2.11 of the report, is also coming to an end. Those are two programmes that the report rightly identifies as providing valuable help for people with autism to move into employment which are being shut down. The Minister may want to comment on this in due course, but, as far as I can tell, it does not appear that any of the newer employment support programmes, such as WorkWell and universal support, will provide support comparable to that which is being closed down, and which the report has rightly identified as very helpful. The fear is that, despite the laudable aims set out in the report, which I know the Minister will endorse, we are in reality going backwards. The provision at the moment, which has been there for some time, is being removed. It would be helpful if the Minister could tell us why IPES and the work and health programme are being closed down, and where the new initiatives are to close what looks like an emerging gap in provision for people with autism.

Employers are struggling at the moment to fill vacancies. The right hon. and learned Member for South Swindon is absolutely right that there is a big opportunity here to boost disability employment if we can just find a way to enable employers to tap into it. The hon. Member for Worcester (Mr Walker) is absolutely right that employers are willing to do so, if only they knew how—it is a bit of a closed book to them. I do not think there is a lack of willingness on the part of employers, but there is a lack of information.

It was very interesting to read in the right hon. and learned Gentleman’s review about Auticon, which I had not heard of before. It is an IT consultancy in which 80% of the workforce are autistic, highly talented IT consultants. The founders—I think they were in Scandinavia —recognised that many autistic adults have extraordinary abilities, such as pattern recognition, sustained concentration and attention to detail, which are valuable qualities in many employment contexts. However, autistic people need support to secure and maintain those jobs, and Auticon specifically provides that support, understanding the needs of its employees, and has built a successful business on that basis.

[Mr Robin Walker]

I am glad that the report also highlights in that respect the good work of GCHQ, which is a big employer in my neck of the woods. Another example along those lines is an IT security company in Worcester called Titania. Its chief executive is an autistic woman, and it has tailored its recruitment process specifically to address some of the challenges that my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) has identified in his report, so that it can recruit more autistic people, who it finds are such valuable and productive employees.

[Sir Stephen Timms]

That sounds like a wonderful model. The more of that kind of initiative around the country, the better.

The report makes the point that a line manager in a mainstream business may well not know that somebody they are managing is autistic. Whether the employer can agree reasonable adjustments for the employee, as is their right under the Equality Act, will depend on them self-disclosing their diagnosis to their line manager. As the review notes, whatever the level of understanding among company directors or senior staff, if the line manager is unable or unwilling to provide support, the employee will struggle to stay in their job.

The review is right to point out that at the moment there is no easily accessible guidance for employers and line managers on how to support autistic staff. Evidence to our inquiry so far suggests that, as the hon. Member for Worcester rightly said, employers want to do the right thing but often simply do not know how. When they are pointed in the right direction and try it, it turns out to be a positive experience. What can the Government do to give employers confidence in this area?

The review calls on the Department to

“Continue to develop Disability Confident, increasing the rigour of developmental work needed to achieve the higher Disability Confident levels”.

I think that is a very kind way of expressing the point. The noble Lord Shinkwin, who sits on the Government Benches in the other place and chaired the disability commission for the Centre for Social Justice, spoke for many of our witnesses when he said that Disability Confident

“is not making a measurable impact”

at the moment. Employers can, as things stand, achieve the highest level of Disability Confident accreditation without employing a single disabled person.

In response to our predecessor Select Committee six years ago, the Department said that it was developing proposals for an evaluation of Disability Confident. That commitment, first expressed six years ago, was announced again in response to our report almost three years ago in November 2021. However, I have still seen no sign of anything happening. Perhaps the Minister can update us. Is that evaluation of Disability Confident now complete, and when can we expect Disability Confident finally to be reformed?

The review is absolutely right to highlight the importance of Access to Work and to call for improvements there. It makes the point—I think the right hon. and learned Member for South Swindon referred to this in his speech—that almost two thirds of disabled people stated that it took over three months for their application to be processed, and 20% said that it took over six months. He is absolutely right that that is far too slow. I agree that, as the review suggests, if the adjustment passport produces positive results, it should be rolled out nationally as soon as possible. However, in response to our Committee’s report three years ago in November 2021, we were promised that the adjustment passport would be piloted from November 2021 and, if successful, would be expanded to support all Access to Work customers. As far as I can tell, we seem to be no further forward in 2024 than we were in November 2021. When are these long-promised improvements actually going to materialise?

One other policy lever the Government could pull is mandatory disability workforce reporting, which was recommended unanimously, on a cross-party basis, in our 2021 report. There is a voluntary framework through which employers can choose to report, but in late 2021 the Government launched a consultation on whether to require large employers to report the number of disabled people they were employing. That work was then paused, but I understand that it has now been resumed, and that the Government plan to publish their findings and next steps in the course of this year. I wonder whether the Minister can update us on when we can expect to see that work. Does she agree that requiring employers to report on the number of disabled people they employ and, within that, perhaps the number of autistic people, could be effective in encouraging the employment of people with autism and other health impairments?

I very much welcome the report, which has highlighted important issues, and the opportunity to debate it today. I also welcome the positive approach that the right hon. and learned Gentleman took, when introducing the report earlier, in seeing the scale of opportunity if we get this right. However, laudable aspirations in this area are just not enough if delivery is delayed for years. We need an ambitious target to increase the rate of employment among people with autism and other disabled people. We need worked-up plans and timescales to deliver them. I very much hope that—perhaps as a result of the work of the task group that he mentioned—we will finally see some of that when the Government respond formally to this very welcome report.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

--- Later in debate ---

[The Minister for Disabled People, Health and Work (Mims Davies)]

I thank my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) for introducing this important debate on autism employment. It is a pleasure to follow the Lesbian Visibility Week debate. I had the pleasure of hearing Dame Kelly Holmes talk about how it had changed her life at an Inspiring Leadership Awards this week. Let me take the opportunity to put on record our covenant that covers disadvantaged girls and vulnerable young women.

I thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for mentioning Dame Cheryl Gillan. I pay tribute to her passion and commitment in championing autism and its opportunities, and understanding of the individual, which is so important. My right hon. and learned Friend the Member for South Swindon also does that so well. I firmly believe that autism should not be a barrier to starting, staying or succeeding in employment. I know that all Members present and those watching share that vision. Although not every autistic person can work, given the right long-term support—not just to get into work, but to progress in work—the vast majority could. One in 70 people is autistic, which is about a million people across the UK. Giving more autistic people the chance to get into work is incredibly good for them, as we heard from my right hon. and learned Friend the Member for South Swindon today.

There is a huge opportunity to tackle economic inactivity. The talent range and myriad potential must be realised, and I will do my utmost today to give an update on many of the questions raised and what comes next. We know it is good for employers, in building that diverse workforce, to work with more diverse customers. In my role, in answer to the hon. Member for Wallasey (Dame Angela Eagle), it is about proper inclusion and action, and turning warm words—not just from me, but from employers and sectors—into action. I can promise her that there has been no railroading on what my right hon. and learned Friend the Member for South Swindon should include in his review. I will come on to the next steps, and there will also be a further update on the disability action plan in July. Hopefully we are starting off well in answering questions.

In 2017 the Government set a goal to see a million more disabled people in employment by 2027. I am proud to say that in the first quarter of 2022 the number of disabled people in employment had increased by 1.3 million, meaning that the goal had been met within five years. In the first quarter of 2023 disability employment had risen by 1.6 million in total since the goal was announced. I am aware that progress has been good but not even. I feel this week I am under scrutiny again from the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms). I am focused on this next goal and how we review and shape what is next. Members should watch this space.

It is sad but true, as we have heard today, that currently only three in 10 working-age autistic people are in employment, even though we know that the majority of autistic people would like to be in work. Indeed, their families would love to see them progressing. My right hon. and learned Friend the Member for South Swindon says the dial needs to be moved on autism and neuro- diversity more widely, and we do need to move that dial. The design we are working on for universal support and engagement with the Department for Education, whether that is supportive internships or broader apprenticeships, has to work for young people and the people in our communities. Seven in 10 working-age autistic people being unable to access independence and the sense of fulfilment that employment can bring is far too many.

[Sir Stephen Timms]

As the Minister heard, the right hon. and learned Gentleman suggested a few minutes ago that there should be a target for raising the level of employment among autistic people at least up to the wider disability employment rate. Will she consider adopting that target?

[Mims Davies]

I am absolutely looking at the right way forward, because for me, if someone acquires a disability, we need to be looking at how they are retained in work and whether they have a particular impairment or need. I am looking at that in the round. As part of the Disability Confident challenges, the new guidance for leadership, working with the CIPD, is important. We need to be talent confident. Many employers want to employ more inclusively. They just struggle with how to do it and so regress to the same old recruitment.

[Mims Davies]

I thank the hon. Lady for raising that important point for all of us. My hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) mentioned the Fair Shot café in Covent Garden. I think we will all be popping down for coffee and banana cake. My predecessor enjoyed his visit there, and I am looking forward to seeing more work like that, because these things are incredibly important.

The Chair of the Select Committee, the right hon. Member for East Ham, talked about job carving, and I call it job design. It is about working with employers, looking at the roles they have, interviewing in the way that suits people and giving long-term support. I totally agree with all the charities that talk about jobcentres always having that individualised approach. I promise the hon. Member for Motherwell and Wishaw and all those watching that it is about the right role for the right person in front of us at DWP, so that we can actively change people’s lives. That is what we are in the business of doing; it is not just warm words.

The point on self-employment that my right hon. and learned Friend the Member for South Swindon mentioned links to the Lilac review and active, positive choices for disabled people. We recognise talent, ability and entrepreneurship. There is a positive choice there, and access to cash is important.

I will turn to my right hon. and learned Friend’s point on autistic people and the recruitment process. I thank Helen Tomlinson, the Government’s menopause champion, who is also the head of talent at the Adecco Group. Thanks to her support, my officials are working with Adecco and the Recruitment and Employment Confederation to develop new methods for recruitment that work effectively for both autistic and neurotypical applicants, ensuring that employers are more able to secure the talent they need to thrive. The Government are determined to provide the right support. I also note and agree with the point about career progression for autistic people.

Access to Work continues to provide grants for extra costs, and those adjustment passports are key. We are focusing on new employment. I recognise that there have been delays, and that is partly because more people know and understand the value of Access to Work. We are continuing to develop a universal support scheme. I recognise the point that the right hon. Member for East Ham has made, and I hope I have reassured him about the design on that. I cannot cover all the wide-ranging points he made in this debate, but I am happy to write to him on those.

On the challenge of being ambitious and on what comes next, and in terms of what we are looking to achieve, I can announce that my officials will shortly be going out to the autism community to seek expressions of interest in joining the group, starting with the role of chair. It will be a transparent, inclusive process, and the selection panel will be entirely independent of Government. I fully expect that that is where outcomes and what comes next will be realised when it comes to the review’s ambitions.

To conclude, this report is a big and extremely welcome step forward. It has not only produced a plan to overcome barriers for autistic people, but shows a path that can be followed for other groups facing barriers to employment and those with other types of neurodiversity and learning. I thank my right hon. and learned Friend the Member for South Swindon once again.

[Sir Stephen Timms]

The review made the point about the reform of Disability Confident. Can the Minister give an update on that? Has the evaluation been completed? When will the changes be brought forward?

[Mims Davies]

There have been some changes, and I have mentioned some of the updates. There is more to come, which I think the right hon. Gentleman will be interested in and will welcome, if he can just bear with me. If I am not constantly in the Chamber being examined, I can get on with the bits that I want to bring forward to the House, if that makes sense to those watching. We are seeing some great progress and some best practice. Things always work best when there is real change in getting autistic people into employment. I agree with the hon. Member for Wallasey. I agree with the whole reason for the report, and I thank James and the charity and all those who brought the report together. We need to deliver for autistic people. This is just the start, and may we long continue to deliver on that ambition.

Carer’s Allowance

Stephen Timms Excerpts

Monday 22nd April 2024 Westminster Hall

[Sir Stephen Timms (East Ham) (Lab)]

I congratulate my hon. Friend the Member for Neath (Christina Rees) on the good way in which she opened this important debate on behalf of the Petitions Committee. It is a pleasure to serve with you in the Chair, Ms Elliot.

The Work and Pensions Committee is taking a close interest in the discussions around carers, and I am delighted to see my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) here; she has taken a lot of interest in this issue. I have a particular personal interest in the debate because my constituency accounts for the largest number of signatures on the petition—73—so I thought it was particularly important for me to be here.

As others have said, for the best part of two decades now the Work and Pensions Committee and its predecessors have been calling on the Government to reform carer’s allowance, including the rate at which it is paid. A 2008 Select Committee report, “Valuing and Supporting Carers”, concluded that carer’s allowance was “outdated” and

“should be radically overhauled at the earliest opportunity to recognise the contribution carers make”.

Well, that “earliest opportunity” still has not arrived. Challenges raised in that report remain unaddressed 16 years later.

We know that the Department has conducted research to support policy development on carer’s allowance. In the response to a 2019 Select Committee report, it promised to publish that research. It has never been published—we still have not seen it. The Select Committee is very much looking forward to hearing from the Minister about carer’s allowance on Wednesday. Will she tell us when the policy development will conclude and whether the research will finally be published, as promised in 2019?

As we have heard, carer’s allowance is paid at a weekly rate of £81.90, which is less than other income-replacement benefits—jobseekers’ allowance is nearly £10 a week more. In my Committee’s recent inquiry on benefit levels in the UK, we heard that carer’s allowance was paid at too low a rate and that as a result carers often had to cut back on food and were struggling to make ends meet.

Last month, in a one-off evidence session on carer’s allowance, we heard from Terry Kirton, a full-time carer for his father. He said, of caring and of receiving carer’s allowance:

“I am tired of struggling. I want to be able to look after my father. I want to make sure he does not have to go without things, and I would like to be able to have bit of a life myself without having to fight with my finances every day.”

I know the Minister has substantial experience of caring; does she recognise that the rate of carer’s allowance today is just not enough?

Terry is a registered nurse by profession. To retain his registration he would have to work a certain number of hours a week, but that would take him over the carer’s allowance earnings limit. It is impossible for him to maintain his registration and continue to receive carer’s allowance. To balance his caring role and his finances, he has had to leave the profession—to give up work altogether—and care for his father. He now just about survives on carer’s allowance.

That brings me to the second challenge: the earnings limit for carer’s allowance. In the same session of our Committee, we heard how the carer’s allowance earnings limit acts as a disincentive for carers who would like to work, either because they would be worse off financially should they lose carer’s allowance because of their work, or—this is the really big problem—due to fears that they would accidentally slip over the limit for carer’s allowance, giving rise to the overpayments we have just heard about. The earnings limit effectively traps carers only in low-paid work, whatever their skills or training.

The carer’s allowance earnings limit is not increased in line with the national minimum wage. As my hon. Friend the Member for Neath rightly told us, Carers UK has pointed out that the number of hours that a carer has been able to work at the national living wage while also receiving carer’s allowance has decreased over the last few years. Our report called on the Government to commit to uprating the earnings threshold for carer’s allowance annually. There should be a commitment to increase it every year.

A similar point was made in the 2019 report. In their response, the Government said:

“We will look at the findings from the research”—

to which I have referred—

“with an open mind, and would consider any changes to the earnings limit to be a priority.”

However, since then, nothing has happened. Will the Minister tell us today whether there are plans to review an increase on the earnings limit on the carer’s allowance, such as by linking increases each year with rises in the national living wage?

We have also heard that the earnings limit is just one of several eligibility restrictions. Another is the 21-hour rule, which prevents carers in full-time education— those attending 21 or more hours a week—from claiming carer’s allowance. Last month, Carers UK made the point to our Committee that a young adult carer has to

“choose between getting an education and qualifications and getting some financial support”.

They added:

“That is not right. It will affect people for the rest of their lives”.

Has the Department looked at the effect of that rule specifically on young and young adult carers, including on their opportunities later in life? The restriction on learning and caring is, we understand, being lifted in Scotland, with obvious advantages for young carers.

My final concern is overpayments, which we have touched on, and which have featured in recent news reports. It is not a new issue; our predecessor Committee published a report specifically on this issue in 2019. Data from the Department shows that in the year 2022-23, the Department was pursuing more than 30,000 overpayments of up to £2,000, and more than 7,000 payments of over £2,000, including 36 overpayments of over £20,000.

How has the Department allowed overpayments which, in some cases, clearly cover quite a few years, to accumulate? From real-time information from His Majesty’s Revenue and Customs, the Department knows what people are earning, and it can stop payment of carer’s allowance to those who are no longer eligible. Indeed, the Government’s response to the 2019 report confirmed that there is an automatic notification when weekly net pay exceeds the carer’s allowance earnings limit, yet the Department does nothing, instead allowing people to build up these huge overpayments, and then prosecuting them. Carrying on in that way is not right. I recognise that the Minister may not have the detailed data for 2023-24, as we have been given for ’22-23, but it would be helpful if she asked her officials to provide that to the Committee in the coming weeks. I very much look forward to the Minister’s response, and to her appearance before the Committee on Wednesday, when we will have an opportunity to explore these issues in further detail.

--- Later in debate ---

[Mims Davies]

I thank the hon. Lady for making that point. The right hon. Member for East Ham (Sir Stephen Timms) took us back nearly two decades to 2008, the year that he was Minister of State in the Department holding the welfare reform portfolio. This is not new; this is challenging. The hon. Lady makes an important point, to which I will try to reply in my wider remarks. When we discuss this issue at the Select Committee, I am keen to get to the crux of all the challenges, but that is too wide a subject for this debate.

The hon. Member for Lewisham, Deptford (Vicky Foxcroft) talked about benefit delays and the challenge of the long-standing principle that the carer’s allowance can being awarded only once a decision has been made to trigger a disability benefit to the person being cared for. Carer’s allowance can be backdated, however, to the date from which the disability is payable. I believe about 100,000 people are on PIP and the carer’s allowance. I hope that goes some way to answering her questions.

The hon. Member for Motherwell and Wishaw (Marion Fellows), with her characteristic approach, raised the work being done in Scotland. We will look fully and with interest at the evaluation of the changes that the Scottish Government make. At the DWP, we are supporting those changes, so we will engage on them. That also goes to the earlier point about looking and learning, which is exactly what we should do.

Many hon. Members spoke about young adult carers and the impact of study. We are engaging with the Department for Education and the cross-Government working group is meeting again soon. It is important that carers maintain links with the education system, so that they can receive part-time education and a carer’s allowance. We rightly recognise the aspirations of young carers to not only complete their studies and build a successful career, but be there for their loved one.

That is true not just for young carers: we need to ensure that carers understand that, while caring, they have developed amazing skills that an employer will find invaluable, such as managing finances, the resilience that has been spoken about today, dealing with crisis, organisation and planning, and that level of interpersonal skills. We need to ensure that our young people in particular get the financial support that they need while studying, so they can rightly progress into the career that they want.

On the latest data on overpayments, our most recent statistics are that carer’s allowance overpayments relating to earnings and employment represent about 2.1% of our £3.3 billion of carer’s allowance expenditure, which is approximately £70 million. I welcome the opportunity to discuss that further with the Select Committee later this week.

[Sir Stephen Timms]

Will the Minister respond specifically to my point about the Government’s response to the Select Committee report five years ago? Paragraph 20 says:

“The VEP Service receives the same information Universal Credit…receives from HMRC…A notification is automatically received by VEP when the weekly net pay exceeds the CA”—

carer’s allowance—

“earnings limit…The VEP Service then applies a series of…rules…to determine if a VEP Alert should be sent on to the CA Unit to action.”

It is puzzling that the Department knows when that is being overpaid, but seems not to be doing anything. Why is that?

[Mims Davies]

I was just coming on to overpayments and what has been in the press. I am not the Minister leading on the fraud side of the policy, but we will discuss that on Wednesday. I am keenly looking at it in the round and working with the right hon. Gentleman. There is a lot of interest, but there is always more to matters and more to discuss, although we should refrain from discussing individual cases.

Disability Benefits

Stephen Timms Excerpts

Tuesday 26th March 2024 Westminster Hall

[Sir Stephen Timms (East Ham) (Lab)]

I congratulate my hon. Friend the Member for Slough (Mr Dhesi) on securing the debate. There are two points that emerge from the recent work of the Work and Pensions Committee. First, PIP assessments should routinely be recorded. We know that the assessments very often go wrong—we have heard lots of examples of that already—but we do not know why. They should routinely be recorded, with an opt-out available for claimants who do not want a recording to be taken. All the providers agree with that proposal, but for some reason the Government will not accept it. The Minister’s predecessor gave a number of reasons, which were all valid but all surmountable. Because we do not record the assessments, we do not know what is going on, so the problems just carry on and will not be fixed.

Secondly, the cash provided by PIP is designed to cover the extra costs arising from people’s disabilities. Of course, the amounts will vary from one person to another, but during the Select Committee’s recent inquiry on benefit levels, the New Economics Foundation told us that on average PIP covers only just over a third of the additional income that a disabled person requires to afford a decent standard of living. I welcome the Government’s commitment, in last month’s disability action plan, to set up an extra costs taskforce that will assess those extra costs. Can the Minister tell us when that taskforce will start its work? One practical proposition is to increase the number of levels in PIP—there were more in DLA—so that a better proxy for people’s extra costs could be provided.

--- Later in debate ---

[Mims Davies]

We have a new chief medical adviser and 4,000 clinicians in this area, with a statutory duty and an understanding that is very much among the learnings that we have gained. I hope that that reassures the hon. Gentleman, but if there is more to say, I will write to him. Questions have been raised about how the evidence is looked at and how it works; I am asking those questions myself, individually, and am happy to continue to do so.

[Sir Stephen Timms]

I am grateful to the Minister for picking up my point about default recording and for her offer to look into it. When she does so, will she bear it in mind that all the companies that provide these assessments favour default recordings?

[Mims Davies]

The right hon. Gentleman makes a good point. The companies want to get it right and they are keen to do what is right. I am very happy to look at that, feed back to him my thoughts and pick that issue up in the Department under my tenure.

Of course we aim to make the right decision as early as possible. We recognise that the numbers are high. By the very nature of things, anybody who comes to an MP’s constituency surgery has invariably had a very poor experience; they would not come to us otherwise. That is why I want to take away the particular cases that have been raised today. However, those cases must be seen in the context of overall decisions—

Women’s State Pension Age

Stephen Timms Excerpts

Monday 25th March 2024 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

I call the Chair of the Work and Pensions Committee.

[Sir Stephen Timms (East Ham) (Lab)]

Does the Secretary of State agree with the Chair of the Women and Equalities Committee, as I do, that those affected should not have to wait for the outcome of a Select Committee inquiry before learning the Government’s response? The equalisation of the state pension age was legislated for in 1995, giving 15 years’ notice to those affected. The 2011 changes, which accelerated the process, gave much less than 10 years’ notice to those affected. Is one of the lessons about what has gone wrong that we must ensure major changes of this kind provide at least 10 years’ notice, or preferably 15 years’ notice, before those changes take effect?

[Mel Stride]

The right hon. Gentleman raises the potential role of Select Committees in these matters. As the Chair of the Work and Pensions Committee, he would have the authority to implement such ideas, if he were minded to do so. However, it is important that I and my Department seriously consider the findings in the report before we come to our conclusions, and that we then come to the House to present those conclusions. That is the most important point.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 18th March 2024 Commons Chamber

[Mr Speaker]

I call the Chair of the Select Committee.

[Sir Stephen Timms (East Ham) (Lab)]

A large number of people in Banff and Buchan are economically inactive. They are not claiming benefits so they are not eligible for employment support from jobcentres, but the Select Committee recommended last summer that such people should be eligible. Would that not be in their interests and in the interests of employers struggling to fill vacant posts at the moment, and therefore supportive of much-needed economic growth?

[Jo Churchill]

We always take these matters very seriously and keep them under full review.

Budget Resolutions

Stephen Timms Excerpts

Thursday 7th March 2024 Commons Chamber

[Mel Stride]

There is no immediate Government approach to merging income tax and national insurance, and I rather put that in the category of those comments about the apparent commitment of £46 billion, although I think the hon. Member for Bethnal Green and Bow nudged it up in a typical Labour way to £48 billion a moment ago.

Let me turn to the remarks that the right hon. Member for Leeds West made about growth. As she knows, we have had a technical recession of two quarters of negative growth—one of which was the princely amount of 0.1%—and most of the purchasing managers index data makes it clear that the economy is on a very different path. Indeed, to return to the comments of the hon. Member for Bethnal Green and Bow, the OBR makes it clear that over the period of the forecast, there will be reasonable and decent growth—greater than that of France, Italy and Germany. That is on the back of exactly the kind of growth record that this Government have had since 2010.

[Sir Stephen Timms (East Ham) (Lab)]

On growth, it was the former Prime Minister, when seeking election as leader of her party, who characterised the growth record since 2010 as lamentable. She was surely absolutely right about that particular point.

[Mel Stride]

My point is that the externalities that I referred to, such as covid and the war between Ukraine and Russia, have impacted economies around the world. Relative to other economies, and looking at the OBR’s forecast over the next five years, we will have a growth record that is up there and better than many of our major competitors, including countries such as Germany.

--- Later in debate ---

[Mel Stride]

I will not get into the weeds of the issue that the hon. Gentleman is attempting to draw me into, other than to say that he made at least one comment that I agree with: I am indeed a decent man. I thank him very much for that.

Inflation is falling faster than expected. People’s wages are rising in real terms, and have done for the last seven months. Under this Government, our labour market has been strong and resilient, delivering opportunities despite the headwinds. We have put incentives at the heart of our welfare. We have grown faster than Germany, France or Italy. According to the OBR, we will continue to do so over the next five years. We are attracting the business investment that is key to growth, delivering high- quality jobs across the country—from Nissan to Google to AstraZeneca, which announced £650 million of investment only yesterday.

No matter how much the Labour party seeks to talk down Britain, the investment flowing into our economy is a huge vote of confidence in our country. It shows that our plan is working. By contrast, as has been laid all too bare this afternoon, the Labour party has no plan or credible record. I have already gone through the tale of woe about the level of unemployment that Labour has left us in the past. Those poor young people had a 45% increase in youth employment on the watch of the shadow Chancellor’s party, and over 1 million people were left on out-of-work benefits for almost a decade.

On the Government Benches, we believe that work, not welfare is key to improving living standards. That is why we are incentivising and rewarding work in this Budget. Making work pay and ensuring families are better off means tackling the global inflation that I have referred to, on which we are making significant progress. As inflation decreases, we recognise that there are still some people who need extra help. I was pleased to see the extension of the household support fund for a further six months from April, which was also pushed for by the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms).

[Sir Stephen Timms]

The Minister is right that I warmly welcome that extension. Is there not a strong case for making the household support fund permanent, not just extending it for another six months?

[Mel Stride]

Six months is a meaningful period of time. Inflation is coming down. As the OBR says in its report, inflation is expected to hit target within the next few months, which will make a huge difference. It highlights some uncertainties around that, but £500 million of investment over six months, including Barnett consequentials, is a major move forward to support the most vulnerable.

The sustainable way to change lives is through work, and the evidence could not be clearer. It is good for the economy, communities and the individuals concerned. I want everyone who can work to have the opportunity to do so. One of the great labour market challenges is economic inactivity, and I want to put that into context. In the UK, inactivity has come down since its pandemic peak and remains lower than the average across the G7, the OECD and the European Union. Our progress has seen a significant fall in the number of people who are inactive because of caring responsibilities. We have the second lowest youth inactivity rate in the G7, and thousands of over-50s are returning to work.

However, the rise in the number of people out of work due to ill health and disability is stifling potential—potential that I am determined to realise. That is why, as we cut taxes for working people, our multibillion-pound back to work plan is providing substantial support to help the long-term sick return to work and keep people in the workforce. That includes doubling the number of placements on universal support, expanding access to mental health support, delivering Work Well, giving people earlier and better access to integrated work and health support, reforming fit notes and working with employers to improve occupational health. Through our next generation of welfare reforms, we are breaking down the barriers to work. Our chance to work guarantee will enable people on incapacity benefits to try work without fear of losing their benefits if a job does not work out. As the OBR has confirmed, our reforms to the work capability assessment will reduce the number of people on those benefits by 371,000. That is 371,000 more people getting the support they need to enter employment.

As part of our back to work plan, we are also tackling long-term unemployment, because the longer people stay in unemployment, the less likely they are to rejoin the workforce. That is why we are phasing in more rigorous requirements for fit and able jobseekers, with more time with work coaches, more intensive support and mandatory work placements. Ultimately, if a claimant does not engage with the support they are being offered, they will lose their benefits, underscoring our belief that we should always be there for those who need our support, but we must equally be fair to taxpayers.

By contrast, for all the protestations from the Opposition that they have changed, they are not fooling anybody. They are squeamish on conditionality, weak on sanctions and completely out of touch with the British public, who rightly expect a welfare system in which everyone meets their obligations.

Child Maintenance Service

Stephen Timms Excerpts

Tuesday 27th February 2024 Westminster Hall

[Sir Stephen Timms (East Ham) (Lab)]

I beg to move,

That this House has considered the Child Maintenance Service.

I am delighted to serve under your chairmanship, Sir Charles.

I am grateful to the Backbench Business Committee for allocating this debate, prompted by the Select Committee on Work and Pensions inquiry on the Child Maintenance Service. We published our report last April, and the Government their response in July. The Child Maintenance Service, which I shall refer to as the CMS, was introduced in 2012 to replace the Child Support Agency.

Child maintenance is paid in three ways: non-statutory, family-based arrangements, in which the CMS plays no part; direct pay, where the CMS calculates the amount due and draws up a schedule, but the parents themselves arrange payment; and, thirdly, collect and pay, where the CMS calculates the maintenance owed, collects it from the paying parent and transfers it to the receiving parent. For direct pay, there was, until yesterday I think, a £20 application fee, waived for under-19s and in cases of domestic abuse. For collect and pay, the paying parent pays an extra 20% of the maintenance owed and the receiving parent receives just 96% of what they would have under direct pay.

The Department for Work and Pensions reported 2.5 million separated families in Great Britain in March 2022, with 4 million children in those families. The National Audit Office says that about half receive at least some child maintenance, and one in three has an arrangement that is satisfied in full. Of those with any arrangement, around 500,000 were on direct pay or collect and pay, but nearly 1 million had a family-based, non-statutory arrangement. The National Audit Office made the point that take up of the CMS has been lower than expected, for reasons that the Department does not know, and that setting up the CMS has not increased the number of effective child maintenance arrangements.

Our report made recommendations about the calculation of child maintenance. The maintenance assessed for some parents—I think this is now widely acknowledged—is unaffordable in some cases, causing serious hardship. The bands for calculating maintenance are in primary legislation, so it is hard to change them. Christine Davies, who is honorary senior lecturer in mathematics at Royal Holloway, University of London, told us that because inflation over the past quarter of a century has not been allowed for, someone earning £15,000 today should, according to the scheme’s original intentions, be paying £364 per year in maintenance, but is actually required to pay almost 10 times that or £3,500 per year.

The Callan review called for the formula to include both parents’ income, instead of only the paying parent’s. The Government rejected that, but said they would explore the possibility in their review of the calculation formula. The Government have committed—I welcome this—to a “fundamental review” of the child maintenance calculation. The Minister in the Lords told us in correspondence that the review would be wide ranging and take some time. When the Minister winds up, will he tell us whether we can expect changes before the election?

This is urgent. We have heard of paying parents taking their own lives, because the demands being made of them are simply impossible for them to meet. I was in touch yesterday with Mr Ian Briggs, whose son, Gavin Briggs, took his own life. Mr Ian Briggs told me that on 26 June 2020, the CMS sent his son a letter telling him he owed nearly £16,000. His son took his life a few days after that on 1 July, and on that day his account showed less than £4,000 in arrears. Mr Briggs asks:

“How can this be possible?”

He has had no answer to that question.

The CMS was established to deliver more effective maintenance arrangements, but there is little data on how many direct pay arrangements are effective. We do not know how much child maintenance is not being paid. We asked DWP to monitor the effectiveness of the arrangements proactively—for example, with yearly surveys of parents with direct pay arrangements—but the Government said no to that. My question to the Minister is: what are the Government’s plans for monitoring that for research on the subject? Does the Department think that it understands the effectiveness of direct pay? If so, what evidence is it using? We do not think that it does. How many direct pay arrangements switched to collect and pay or family-based arrangements in the first 12 months? Does the Department know why that is happening?

The Committee also raised concerns about collect and pay. About half of paying parents with those arrangements do not pay or pay less than they should. We heard that enforcement is slow and often ineffective, so we welcomed the Child Support (Enforcement) Act 2023. That was taken through the House by the hon. Member for Stroud (Siobhan Baillie), who I am delighted is in her place this morning and who makes a distinguished contribution to the work of the Committee. The Act aims to speed up enforcement by allowing CMS to make administrative liability orders when a paying parent has not paid and deduction of earnings is not appropriate. Previously, CMS needed to apply to a court for a liability order, taking up to 22 weeks. The secondary legislation on that will specify the notice that CMS must give to the paying parent before making an order—seven days for those living in the UK and 28 days for those overseas—and set out the process for paying parents who want to challenge a liability order. The Government published their response to the consultation on that two weeks ago, on 12 February. Can the Minister tell us when the secondary legislation will be introduced?

Another set of recommendations in our report was about domestic abuse. In October 2021, the Government asked Dr Samantha Callan, who I already mentioned briefly, to conduct an independent review of CMS processes and procedures for supporting parents subject to domestic abuse. Her report was published in January 2023, and the Government accepted eight of its 10 recommendations. On the first recommendation, the Child Support Collection (Domestic Abuse) Act 2023 received Royal Assent last July; I am pleased to see the hon. Member for Hastings and Rye (Sally-Ann Hart) in her place this morning as well. Where there is evidence of domestic abuse, a parent can set up collect and pay at the start instead of first trying direct pay, so the two parents need not be in contact. Last September, a written answer said that bringing the Act into force would require consultation and secondary legislation. Can the Minister tell us what the timetable is for those?

Our report asked for a timetable for all the work arising from the Callan review. One strand of that is a pilot of single, named caseworkers for complex domestic abuse cases. In the written answer that I referred to earlier, the Minister said that the Department had started a pilot and it would be evaluated. Can the Minister tell us when that will be and how the pilots went?

I am worried about that, because yesterday I spoke to Rachel Parkin, who gave evidence to the Committee’s inquiry. She is an abuse victim. The former CMS chief executive apologised to Rachel for how her case was handled, assured her that she would be on collect and pay permanently and that she would be in the pilot of a single caseworker. She had a single caseworker for a period of eight months. Her calls in that period were automatically routed to the right caseworker—it worked very well—and she made real headway in resolving long-standing difficulties, but now, without any explanation, she is being put back on direct pay. She has simply been told by the service that it is not bound by promises made to her by a former chief executive. She will be back to random caseworkers and the debilitating need to go through her story every time, which so many people talked to us about during our inquiry.

[Peter Grant (Glenrothes) (SNP)]

I am reluctant to interrupt the right hon. Member in full flow, but while he is talking about the failures to give adequate support to people who report that they have been living in an abusive relationship, may I ask whether he was as concerned as I was to realise how completely unaware CMS senior management seem to be that very often the abuse or controlling behaviour starts only after the relationship has ended, and that until about a year ago that was something that just did not seem to have occurred to anybody at the CMS?

[Sir Stephen Timms]

The hon. Member makes a very important point, and I think he is right. I very much welcome his work and that of his colleagues on the Public Accounts Committee in drawing attention to a number of these problems.

I ask the Minister whether the idea of a single caseworker has now been abandoned. Is a domestic abuse team still in place or has that whole initiative, which the CMS talked to the Public Accounts Committee about last year, I think, now been given up? Why is it that someone such as Rachel Parkin has gone back to the arrangements that she was promised she would not?

In our report, we also raised concerns about paying parents who fraudulently attempt to reduce their maintenance assessment and about the fact that the Department does not estimate levels of fraud and error. The Public Accounts Committee, in its 2022 report— two years ago—said that the Department had

“not taken responsibility for detecting child maintenance fraud”

and had shifted the burden to receiving parents, who were expected to challenge false assessments. The Committee pointed out that a paying parent who was notified of being investigated for understating their income would no doubt guess that their ex-partner had reported them, and as a result, the Committee warned, many receiving parents would not report. I think that the Committee was right to make that point. In response, the Department said that it used risk profiling and threat scanning to target fraud in the child maintenance system and that it already had proportionate and cost-effective controls. Can the Minister tell us what exactly risk profiling and threat scanning are in practice?

We recommended that there should be specialist caseworkers for cases in which the paying parent’s income is from self-employment. In correspondence, the Minister in the other place who has responsibility for this part of the Department’s work, Lord Younger, pushed back on that, on the grounds of “funding implications”. However, the Department has said that it will legislate to ensure that unearned income, such as savings, investments, dividends and property income, is taken into account automatically when maintenance is calculated, to make it more difficult for

“the small number of parents who avoid paying the correct amount.”

Can this Minister tell us when that legislation will be introduced?

The Government have just introduced, as I mentioned earlier, secondary legislation to remove the £20 fee for all parents who apply for a statutory maintenance arrangement. I would be grateful if the Minister could confirm that that took effect yesterday as planned. The same secondary legislation also introduced new powers for the Secretary of State to write off maintenance arrears under £7 in certain circumstances.

Finally, I want to make this point. There are, as all of us in the House well know, unending complaints about very poor customer service from the CMS. It is very difficult to get through; calls go unanswered. There are incorrect assessments, and people are having to tell their story again from scratch on every call. The service does have a very tough job, against a backdrop of pain and conflict; it is very difficult to provide a good service in that situation, but can the Minister offer us any prospect that the improvements needed will be made?

[Sir Charles Walker (in the Chair)]

Seven colleagues wish to speak. You have six minutes each. If you are on the list to speak and you intervene, that might reduce your time to four or five minutes if you are at the end of the list. I call Dr Thérèse Coffey—six minutes, please.

--- Later in debate ---

[Paul Maynard]

The hon. Member makes an interesting point that may risk becoming a digression. I note that the secondary legislation he refers to is regarding automatic uprating of particular indicators. This is a more fundamental change to how the entire structure of child maintenance is conducted, so is perhaps not suited to secondary legislation. We often hear criticism that too much goes through secondary legislation, unscrutinised by this place. As a Member rather than a Minister, I always think that I would rather such a fundamental change be scrutinised properly in the form of a Government Bill. That is an important point.

[Sir Stephen Timms]

Will the Minister give way?

[Paul Maynard]

I will. I am in danger of making things up now, which I should not do.

[Sir Stephen Timms]

I take the point entirely about the complexity of the review’s underlying formula, which the Minister has just been talking about. Can he give us any sense of how long he envisages that review will take to complete?

[Paul Maynard]

I have made a lot of comments today about the drumbeat of ongoing changes and how we implement some of the private Members’ Bills that have gone through, for example. I hear what the right hon. Gentleman says about the progress and the drumbeat, but I am not sufficiently close to the actual data and the information that he seeks. I will ensure that he is written to, along with other Members present today. I am sure that will be discussed when he meets Viscount Younger.

--- Later in debate ---

[Sir Stephen Timms]

I thank everybody who has contributed to this important debate. We all deal with people who struggle with the Child Maintenance Service, so I am grateful for all the contributions that have been made. I welcomed the very constructive contribution that my hon. Friend the Member for Wirral South (Alison McGovern) made from the Front Bench. She is absolutely right that if there were more regular updates to Members about what is going on, that would be really helpful, given the changes that are happening.

On a couple of areas that we have touched on in the debate, first is the concern about paying parents. I am grateful to the Minister for his commitment that that fundamental review is under way. It would certainly be helpful to know how long he anticipates that review is going to take.

I was struck by the example given by the right hon. Member for Romsey and Southampton North (Caroline Nokes) about somebody who was told over the phone that he did not have any arrears, and yet he received a demand and deduction of earnings order to pay arrears. The hon. Member for Amber Valley (Nigel Mills) made a point about people receiving several notices with contradictory figures. Such muddle and confusion is terribly damaging. The stakes are really high. People are losing their lives. We must be able to come up with a system that delivers basic competence.

On the single caseworker, I was very concerned— I am grateful to the Minister for his assurance about a letter about that—but the implication was that that would be spread out to the whole system. I really hope that it is.

Motion lapsed (Standing Order No. 10(6)).

Disability Action Plan

Stephen Timms Excerpts

Monday 5th February 2024 Commons Chamber

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chair of the Work and Pensions Committee.

[Sir Stephen Timms (East Ham) (Lab)]

The Select Committee called for a review of the underperforming Disability Confident scheme. That review was delayed by the pandemic, but in October we were told that officials were refining the recommendations. Can the Minister tell us what the plan says about Disability Confident, and does it hold out the prospect of shorter waiting times for Access to Work?

[Mims Davies]

It was remiss of me not to reply just now to the point raised by my right hon. Friend the Member for Norwich North (Chloe Smith) about the strong voice across Government. That is, of course, the Secretary of State, who sits in the Cabinet and works alongside me to represent disabled people’s voices.

To respond to the Chair of the Select Committee, Access to Work grants, which helping with extra costs beyond standard reasonable adjustments, are important for my Department as we smash the employment goal and try to do more on disability employment. He is right to ask about that and to challenge Disability Confident. It is not just a nice thing that companies put on their website; it needs to deliver change for disabled people in the workplace. We will look at the disability employment goal; I am looking at Access to Work, and I will look at Disability Confident, just as the Select Committee has done. I urge him to watch this space.