Occupational Pension Schemes (Collective Money Purchase Schemes) (Amendment) Regulations 2023

Viscount Younger of Leckie Excerpts

Tuesday 13th February 2024 Grand Committee

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Occupational Pension Schemes (Collective Money Purchase Schemes) (Amendment) Regulations 2023.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am pleased to introduce this instrument. Subject to your Lordships’ approval, these regulations will make two small technical amendments to the landmark Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 to ensure that they operate in accordance with our published policy. The instrument clarifies requirements on trustees of authorised collective money purchase schemes, more commonly known as collective defined contribution, or CDC, schemes.

I will first set out the context. The Pension Schemes Act 2021 provided the statutory framework for CDC schemes in the UK. The guiding principle of our approach has been to ensure that it protects the interests of members. The Government believe that CDC schemes have an integral role in the future of pensions in this country. CDC schemes offer members a seamless transition from saving to receiving a regular retirement income.

We know that many people do not want, or feel ill equipped, to make complex financial decisions at retirement. The Government want to ensure that as many savers as possible can take advantage of the numerous benefits of CDC. By pooling longevity and investment risk across the membership, CDC schemes can shield savers from much of the uncertainty faced by members of DC schemes. This also allows the scheme actively to target higher investment returns for their members than a DC scheme through increased investment in growth-seeking assets. This in turn can lead directly to greater investment in vital UK infrastructure and the technologies of the future, such as transport and renewable energy. That is why the Government have provided the legislative framework for single or connected employer CDC schemes to be set up in the UK. The CDC regulations came into force on 1 August 2022.

Throughout the development of our policy, the Government have been engaging with stakeholders on how best to deliver CDC schemes in the UK and inviting challenge and scrutiny. In that vein, we have been helpfully advised that two areas of the current framework do not meet our published policy intent. CDC schemes can succeed only if there is confidence in this new type of provision. That is why it is important that we provide immediate clarity. This instrument ensures that, from the start, prospective schemes are set up to work as we intend.

I will now take noble Lords into the detail of this instrument. With regards to the first amendment, the existing regulations make provision in relation to the annual actuarial valuation and benefit adjustment process for CDC schemes. This means that each year benefits are reviewed and adjusted where required so that the value of assets held is in balance with the projected costs of benefits. This protects members from the need to fund a surplus and means that reductions to benefits are not deferred and stored up. Doing so would have a detrimental impact on future years and younger members, which would be unfair. It is important that CDC schemes follow strict rules around benefit adjustment to ensure that all members, without bias or favour, are subject to the same adjustments.

It is important that a balance is maintained between the value of the available assets of the scheme and the amount needed to provide the target benefits to members on an ongoing basis. If, for example, the value of the assets is lower than the amount needed to pay the benefits, the scheme may be required to make a cut to benefits to regain that balance. Conversely, if the value of the assets is more than the amount needed to pay the benefits, the trustees will be required to pay an increase to the members.

The policy intention is to provide that, where a cut to benefits must be made, the trustees of the CDC scheme can smooth the impact of the cut on members over three years. This is called a multiannual reduction. Regulation 17 currently provides that, if a subsequent annual valuation that occurs during a multiannual reduction shows that an increase in benefits is required, the trustees, having taken advice from the scheme actuary, will be required to apply that increase in addition to the planned reduction for that year under the multiannual reduction that is in effect.

I appreciate that this is quite complex, so let me provide an example of how it is intended to work in practice. In a period of extreme economic downturn where equities fall significantly in value, it is possible that a CDC scheme would have to make a cut to members’ benefits. Regulation 17 enables the trustees of the scheme to mitigate the impact of this market volatility on member benefits by spreading the overall cut over three years. To use an easy example, if the overall cut necessary were 6%—my maths is not too good, but here we go—the members’ benefits could be cut by 2% a year over the three-year period.

This mechanism helps to reduce volatility and ensures that current and future benefits remain relatively stable. It contrasts with individual DC schemes, where there is no pension-smoothing mechanism. Members of these schemes would have experienced a significant reduction in the value of their retirement savings immediately, which for savers closer to retirement may be unrecoverable. The intention of Regulation 17 was that, where a market recovered during the period of such a reduction, increases in benefits resulting from subsequent annual valuation would offset, in whole or in part, planned cuts under a multiyear adjustment before being applied as an increase to future benefits in the normal way. This would have the benefit that any bounce-back immediately after a period of very poor performance could help to smooth outcomes and avoid cuts, which would then be unnecessary, while maintaining the principle that the costs of current and future benefits remain in balance with the value of scheme assets.

If we did not do this, the benefit of the recovery would instead be likely to go to future pensioners. This would run against our principle that, as far as possible, all members—current pensioners, those who are currently accruing benefits and those who are not contributing but have rights to a future pension from the scheme—should all share in upsides and downsides at the same time.

The instrument also makes a consequential change to Regulation 19. Any variation to a multiannual reduction as a result of offsetting an increase against must be reported to the Pensions Regulator, ensuring proper oversight.

I turn to the second of these amendments, which addresses an issue that may arise where a scheme winds up and the value of members’ accrued rights are transferred to suitable pension schemes or alternative payment arrangements. A key element of the wind-up process is calculating the share of the fund for each person who is a beneficiary at that time. The scheme rules may provide that the person may be a member or a successor of that member. Potential successors will be determined by the scheme rules, but could include a spouse, a child, a cohabitant or a person financially dependent on the deceased beneficiary. That share of the fund is applied to the scheme’s assets at the end of the winding-up to produce the beneficiary’s pot, which is then used to discharge the scheme’s obligations to the member by transfer to another scheme offering flexi-access income drawdown.

I ask noble Lords to imagine a scheme that has provided for these categories of people to be a beneficiary under its rules. If a member of that scheme dies during the winding-up process, their benefits are reallocated to the deceased’s stipulated beneficiary. They are not reallocated among the collective. The policy intention has always been that, if the beneficiary dies during the winding-up period, the pot allocated to them would not be extinguished but would instead be reallocated among their successors, where a scheme’s rules provide for that. This instrument therefore amends Schedule 6 to the regulations to ensure that the deceased member’s accrued rights in wind-up may be discharged in this way.

In conclusion, CDC schemes are an important addition to the UK pensions landscape and, when well designed and run, have the potential to provide a good retirement outcome for members. The effect of this instrument will be to provide clarity for schemes moving forward by more accurately reflecting the intent of the regulations that it is amending. I commend it to the Committee and beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the noble Viscount for his clarification of the papers, which is very welcome—as usual. This is a statutory instrument with a more than usually snappy title, which will probably be more noted than some of the things in the instrument.

This statutory instrument is good news. It helps pave the way, as I understand it, for the introduction of the UK’s first collective defined contribution pension scheme, which I believe is by the Royal Mail. Collective defined contribution schemes in various forms are common in Scandinavia, the Netherlands and Canada. Work on these risk-pooling arrangements started during the coalition years when we, the Liberal Democrats, worked collaboratively with the Labour Front Bench and the Communication Workers Union to get the Royal Mail to implement the first scheme of this sort. I believe that it has not yet gone live, although perhaps the noble Viscount can tell me more about that.

The next developments of CDC, in my view, are, first, the extension of multi-employer or industry-wide CDC—when does the Minister expect to publish the next consultation on this?—and, secondly, the development of retirement-only or decumulation-only CDC schemes, so that a person could take his or her own pot and pool it with other people’s. Any comments on that would be gratefully received.

These regulations tidy up some issues that are causing practical problems. The main part is to do with what happens each year, as the noble Viscount said, when a scheme reviews whether it has enough money to meet its target pension payouts. As things stand, if the scheme is short, it can reduce planned pensions. But what happens if, a year later, it thinks that things are better? What these regulations appear to make clear is that the first thing you do is reduce or eliminate the planned pensions cuts. I think this was covered by the Minister’s comment about “a smoothing mechanism”.

One thing that comes out of this SI is that, as so often, there seems to be a lot more valuation work for actuaries. I am sure they will be very grateful. I am very grateful for the guidance in the papers and the elucidation from the Minister. I think the principles are right and we on these Benches agree with the instrument.

--- Later in debate ---

Can the Minister tell us what the delay is with the Royal Mail scheme? Secondly, given the need for that confidence, can he assure the Committee that the DWP remains confident in the ability of Royal Mail to deliver the required level and flow of contributions into its CDC scheme over the very long term? More broadly, what is the Government’s view about why CDC has not taken off more widely? Do they have plans to take steps to drive up the expansion of CDC schemes in future? I look forward to the Minister’s reply.

[Viscount Younger of Leckie (Con)]

My Lords, I thank all noble Lords for their helpful contributions to this short debate. Furthermore, I thank some noble Lords for the advance notice of their questions, particularly because this is quite a technical set of regulations, as I think we all understand. Given the incessant rain that we have been suffering over the past weeks, frankly, the drier the better—and that goes for this subject, too.

For an individual member of a CDC scheme, this instrument’s key effect will be to help to ensure that in a period of extreme economic downturn the principles of CDC continue to operate correctly. When, as expected, Royal Mail launches its CDC scheme later this year—I hope that this answers the questions from the noble Baroness, Lady Sherlock and the noble Lord, Lord Palmer—that member and their approximately 115,000 colleagues will be able to have more confidence that their new scheme will provide them with a regular income in retirement, with less exposure to the unexpected market shocks than might otherwise be the case. The noble Baroness, Lady Sherlock, raised a number of questions about the future of CDC schemes and Royal Mail, and I shall attempt to answer them in more detail later in my speech.

Noble Lords raised a number of questions about the multiannual reduction provisions, which I shall attempt to answer. First, the noble Baroness, Lady Sherlock, asked why the weakness in the current drafting was not identified before. It is important that all new legislation is monitored carefully to ensure that it works as we intended it to. It is through this monitoring process that we identified that the current drafting did not meet all of our published policy intention. If CDC schemes are to succeed, it is essential that prospective schemes are clear about those requirements. I hope that answers one of the questions from the noble Baroness.

The noble Baroness, Lady Sherlock, also asked whether approval from the Pensions Regulator was required or needed before any offsetting could be implemented. The decision to implement a multiannual reduction, including any offsetting, rests with the trustees of the scheme. It is based on the most recent actuarial valuation prepared by the scheme actuary and is subject to the scheme rules. Pre-approval is not required, but the Pensions Regulator will have ongoing scrutiny over such decisions in the normal way and the trustees are required to share the actuarial valuation with the regulator, again in the normal way.

The noble Baroness, Lady Sherlock, queried whether the trustees could be penalised if they failed to provide relevant information to the Pensions Regulator. As she may know, the standard civil penalties provided for in legislation, for example up to £5,000 in the case of an individual and up to £50,000 in any other case, can be imposed by the Pensions Regulator if the requirements are not met.

Both the noble Baroness, Lady Sherlock, and the noble Baroness, Lady Drake, asked whether offsetting following a bounce-back in investment performance could be applied retrospectively. Perhaps I can reassure them that it cannot be applied retrospectively because a key principle of this provision is that any bounce-back should smooth outcomes going forward and avoid the need for cuts, where possible, while ensuring that the costs of current and future benefits remain in balance with the value of the scheme’s assets. I think that chimes with some of my opening remarks, and I hope that it answers the question.

The noble Baroness, Lady Drake, asked whether an actuarial threshold was required before the full three years of a multiannual reduction could be deployed. I will answer that. There is no threshold, as it is for the trustees, who are independent and acting in the interests of the members, to decide whether to apply a multiannual reduction based on the information contained in the most recent annual valuation, which is prepared by the scheme actuary. A significant cut to benefits would likely be required only in extreme circumstances, but we would expect the trustees to utilise the multiannual reduction mechanism in this scenario, if it is provided for in the scheme rules. If they did not do this, they would need to explain their reasoning to the Pensions Regulator.

The noble Baronesses, Lady Sherlock and Lady Drake, and the noble Lord, Lord Palmer, all queried the policy intention of Regulation 3(5) and what implications it had for the front-ending or back-ending of the offsetting of the remaining planned reductions of the multiannual reduction. I would argue that this gets to the meat and granularity of the policy. The aim is to ensure that, while a degree of smoothing is allowed over a multiannual reduction, as we know, over three years, cuts are not stored up and deferred by backloading the cuts. That is why the legislation ensures that the reduction applied during each year of a multiannual reduction must not be greater than that applied in the previous year: that is very clear.

The noble Baroness, Lady Drake, asked how a transfer value would incorporate a scenario where the member transferred out before the multiannual reduction was completed or any potential offsetting was applied. Transfer values will be based on the conditions applicable at the time the member requested the transfer and when they actually transferred out of the scheme. Their transfer value will reflect any cuts planned for future years under a multiannual reduction. This means that nobody choosing to leave a CDC scheme will get more or less than the value of their benefits at that particular point.

I move on to the theme of wind-ups, which was raised by the noble Baronesses, Lady Drake and Lady Sherlock, who asked who qualifies as a successor and how you define one. I hope that I helped to answer that in my opening remarks, but perhaps I can go a bit further. Subject to scheme rules, this is an individual nominated by a dependant nominee or another successor to receive benefits following their death. Also, the scheme administrator can nominate a successor when, after that beneficiary’s death, there is no individual or charity nominated by that beneficiary.

I shall go a bit further on the question of transfers, which was raised by the noble Baroness, Lady Drake. The beneficiary has a number of discharge options they can choose from that are set out in the regulations. They include a flexi-access drawdown, which is where, subject to what the pension scheme rules allow, in any year the beneficiary can choose to take no payment of drawdown pension, a regular series of payments, an irregular payment stream or their whole flexi-access drawdown fund as a single payment. So there are a number of options there. Trustees must have completed the transfer process before the wind-up of the scheme can be completed. The value of the accrued rights to benefits transferred would be calculated based on the circumstances at the point of the transfer request.

The noble Baroness, Lady Drake, asked a number of questions about how the Royal Mail CDC scheme will operate. Royal Mail has informed us that it and its unions have agreed that the vast majority of existing employees with more than 12 months’ service will be enrolled into its collective plan at the so-called go live. It has also informed us that eligible new employees who join after go live will not be required to make an active decision unless they decide to opt out of contractual enrolment to the collective plan once they reach at least 12 months’ service with the employer. Which scheme Royal Mail chooses to use as a nursery scheme for its employees’ first 12 months of service is a decision for it and its union, as long as it meets the requirements of automatic enrolment.

The noble Baronesses, Lady Drake and Lady Sherlock, asked about the take-up of CDC in the UK. The Government are proud of the progress that we have made so far. During this Parliament, my officials worked closely with industry stakeholders to develop and bring into force legislation in 2021 to facilitate the introduction of single or connected employer CDC schemes. Over the past 12 months, the Government have announced a comprehensive package of pension reforms to provide better outcomes for savers and better support the UK economy. As part of that, we have been exploring the role that CDC can play in these reforms.

In answer to questions from the noble Lord, Lord Palmer, and the noble Baroness, Lady Drake, I am pleased to say that our consultation on CDC provision for unconnected multi-employer schemes and master trusts demonstrated significant appetite for it. A number of noble Lords mentioned timing; we intend to consult on regulations this spring.

The noble Lord, Lord Palmer, asked when we will extend the CDC provision to unconnected multi-employer schemes, including master trusts. We are committed to facilitating further CDC provision as quickly as possible, but we want to make sure that we get the legislation right to help ensure that the interests of members in these new schemes are generally protected. We engaged extensively with industry during the drafting process to ensure that this will be the case. As was mentioned earlier, we will consult on draft regulations to facilitate whole-life, multi-employer CDC schemes later this year. Subject to parliamentary approval, we intend for them to come into force in 2025.

The noble Lord asked what work is being done to legislate for decumulation-only CDC. The answer is the same: we are keen to facilitate access to CDC schemes where this would provide better outcomes for members, as long as we can ensure the necessary member protections. I come back to that important word, “protections”. Building on our work to develop a whole-life, multi-employer legislative framework, we are working closely with the pensions industry and regulators to explore what will be needed.

I thank all noble Lords for this fairly short but valuable and constructive debate. I also thank noble Lords for giving me their questions in advance. I see that the noble Baroness, Lady Drake, is itching to get up so I will give way.

[Baroness Drake (Lab)]

I did not want to get up too quickly. I do not want to hold up the closure of the debate on these regulations, but I was disconcerted by the Minister’s response on successors. Could he write to formally record what he said about that? For a trustee, a set of tax rules apply when the pension savings go into the estate and inheritance tax and a further set apply when the pension pot is handed over to a nominated beneficiary. Here we are talking about a second tier—a nominated successor to a nominated beneficiary. Trustees have to be very careful under which tax regime and to whom pension pots are being allocated. I struggled to follow what he said on that—because it is complicated, not because he did not explain it. I was thrown by the word “successor” when I read the regulations. It would be helpful if what he said could be written down, if we need to interrogate it further, rather than deal with it now.

[Viscount Younger of Leckie (Con)]

I quite accept what the noble Baroness has raised. She acknowledged that I gave out a lot of detail in defining what we think is right in terms of who would be a successor, cascading along the process if the successor had died and so on. However, if there is more to say—I hope that there might be—I shall write to the noble Baroness and copy in all noble Lords who have taken part in this debate. I thank her for her question.

Motion agreed.

Workers (Economic Affairs Committee Report)

Viscount Younger of Leckie Excerpts

Thursday 8th February 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am very pleased to close this debate on the Lords Economic Affairs Committee report Where Have All the Workers Gone?. I thank all noble Lords for their valuable contributions, particularly my noble friend Lord Bridges of Headley for initiating the debate. I also thank his committee for the work undertaken in producing its report. This topic is one close to my heart, following my long career in human resources in industry and the City. I really do know how important it is that businesses are able to get the right people with the right skills in a competitive labour market.

Where have all the workers gone? I start by echoing the views of the noble Baroness, Lady Sherlock, also picked up by the noble Lords, Lord Sikka and Lord Hendy, and my noble friend Lord Balfe, about the importance and value of the workforce. The noble Lord, Lord Hendy, spoke—quite rightly, too—about the importance of the unions, and my noble friend Lord Balfe mentioned looking after the workers and their dignity, giving them compassion and respect from the employer’s point of view, and of course he is quite right.

My messages today are the following. Workers must feel that they want to go to work. They should feel that they are paid properly—indeed they should be paid properly—and that they have a stake in the business. That does not have to be a financial stake, but they should at least feel that their views are heard and their skills respected, nurtured and optimally utilised.

To pick up an important point about pay raised by the noble Lord, Lord Hendy, he will know that we expect the increases to the national living wage and the national minimum wage to give a pay rise to around 3 million workers. My noble friend Lord Griffiths and the noble Baroness, Lady Kramer, made some good points about the spirit of this debate. The working population, their health and the numbers in employment really matter, with all the knock-on effects on the economy, particularly of inactivity. Those are my opening points.

This is an appropriate moment to take a step back and reflect on just how much the labour market has changed over time. Just over 50 years ago, four in 10 women were economically inactive, largely due to caring responsibilities. Today, I am pleased to say that the figure is down to 25%, with more women choosing to enter and remain in the workplace to build a career. To address a question raised by my noble friend Lord Griffiths, expanding the opportunities for people to do work that they find fulfilling and rewarding is very much at the heart of what we are trying to do in government.

This report focuses on the rise in both vacancies and economic inactivity following the pandemic. However, the House will note, as pointed out by my noble friend Lord Bridges himself, that the publication goes back to December 2022. To reassure the noble Lord, Lord Bilimoria, I am keen to emphasise that the Government understand the scale of this challenge and have since announced an additional £6 billion of investment in additional support aimed at increasing workforce participation—I will expand on that.

The UK is also not alone in the challenges we face, as most countries for which we have data have higher vacancies than before the pandemic. This issue was raised by my noble friends Lord Bridges and Lord Griffiths, and the key question was: are the statistics fit for purpose? Getting the data on the labour market right is vital. My noble friends will know that the ONS is an independent organisation that decides for itself the best way to produce labour market statistics. However, we engage regularly with it and understand that it has taken a number of steps to improve the quality of the Labour Force Survey, and that survey data is being reintroduced from next week. We review and monitor a wide range of labour market statistics to inform our view, not just the LFS.

The noble Lords, Lord Skidelsky and Lord Bilimoria, expanded on this and stated that we are worse than other countries. That is not entirely true. The UK still has economic inactivity rates that are well below the average for the European Union and the OECD, as well as being the fourth lowest in the G7—but I acknowledge the higher levels of inactivity, which of course is the theme of this debate.

The report makes a number of recommendations, which centre on three main themes: the rise in economic inactivity due to long-term sickness and disability; those choosing to retire and leave the labour market early; and the impact that migration changes may have on certain sectors. I will address each of these in turn. They largely mirror the main points raised in the speech of my noble friend Lord Bridges; I appreciate the detailed analyses of the reasons behind the inactivity from the noble Lord, Lord Skidelsky.

First, on the important issue of long-term sickness and disability, which is now the most common reason stated for economic inactivity, the Government share the concern of noble Lords here today regarding increased economic inactivity levels for those who are disabled or long-term sick. I share the comments of my noble friend Lord Bridges on the statistic that one in five in the 16 to 64 group are inactive. The 2.8 million long-term sick figure is certainly one for great concern.

As the noble Lords, Lord Londesborough and Lord Layard, and the right reverend Prelate the Bishop of Bristol mentioned, we know that rewarding work is hugely beneficial for mental health and well-being, which is why this Government have an ambitious programme of initiatives to support disabled people and people with health conditions, including mental health conditions, into employment. They include increased work coach support and disability employment advisers in jobcentres; the Work and Health Programme and intensive personalised employment support; Access to Work grants—I reassure the noble Baroness, Lady Sherlock, that the backlog is reducing; I will follow up with her on that and give some figures proving that that is correct—the Disability Confident scheme; the information and advice service; and employment advice in NHS Talking Therapies, which was raised by the noble Lord, Lord Layard.

The noble Lord, Lord Layard, made a point about support for addiction. We are investing £39 million to expand our individual placement support programme for drug and alcohol dependency across England by 2025. This programme provides employment support alongside clinical treatment, making employment a key aim of recovery. The NHS is also expanding the mental health aim of this important programme and we are testing a peer mentoring programme in selected jobcentre areas; peer mentors use their lived experience of addiction and recovery to inspire, motivate and support others to manage their dependency, access appropriate support and move towards employment.

My noble friend Lord Griffiths asked about the knowingly economically inactive and their wish to work. He is right: the ONS figures indicate that more than 600,000 people who are inactive due to long-term sickness would very much like a job.

The right reverend Prelate the Bishop of Bristol spoke about disabled people. Let me say a few words about them. The Government are determined to do more to help close the disability employment gap and help more disabled and long-term sick people into work. That is why we have announced even more support targeted at this group over the past year. I will quickly reel some examples off: expanding the existing additional Work Coach support programme; introducing universal support, a new supported employment programme for disabled people; launching WorkWell, which will bring together the NHS, local authorities and other partners in collaboration with jobcentres; introducing employment advisers to musculoskeletal conditions services in England; and, importantly, consulting on occupational health provision in the workplace, as well as expanding the funding for the forthcoming small and medium-sized enterprise subsidy pilot for occupational health services. This week, we also published the Disability Action Plan, setting out 32 practical actions that the Government will take forward over the next 12 months to improve disabled people’s daily lives; noble Lords will be aware that I updated the House on this on Tuesday evening.

The noble Lord, Lord Londesborough, asked whether the Government have up-to-date statistics on those taken out of the workforce for each year between 2020 and 2023 because of sickness, as well as on how many were able to rejoin in each of those years. It was a precise question, and I hope I can give a precise answer. The ONS data suggests that, between those years, almost half a million more people were inactive due to long-term sickness. The most common conditions among this group were depression, anxiety and nervous dispositions, which also had the largest increase. Once people become economically inactive and the main reason for doing so is long-term sickness, relatively few of them move back into employment; that is rather sobering. Between 2019 and 2021, only around 3% of those who were long-term sick inactive moved into employment, so the noble Lord makes an important point.

I turn to the next issue raised in by the report. When we are talking about early retirement, I say to the noble Baroness, Lady Sherlock, “Yes, we take this matter extremely seriously”. I am pleased to note that data from the ONS shows that the number of those who state they are economically inactive due to early retirement has been decreasing. I think it was mentioned that the average age of Members of this House is 72; perhaps we are a good example, as we should be, of a cohort—a very distinguished one—working past retirement age.

Picking up on the remark by the noble Lord, Lord Skidelsky, I believe that our role in this Chamber at least is a decent job. To pick up another point, raised by the noble Lord, Lord Turnbull, perhaps we should be defined as being of working age. We can mull that over after this debate. However, we know that those over 50 seeking employment may face additional barriers, which is why the Government are committed to continuing to deliver a comprehensive package of support to help older workers remain in and return to work. I think that answers the second question from my noble friend Lord Bridges. This includes the additional work coach time for eligible jobseekers aged 50-plus on UC, dedicated 50-plus champions working out of every job centre across the UK, and the midlife MOT, which I am sure the House has heard of. It is a review for workers in their 40s, 50s and 60s that helps them take stock of their finances, skills and health.

The report also questions whether pensions freedoms in the UK are driving more people aged over 55 to become inactive. I took careful note of the remarks made on this subject by my noble friend Lord Willetts and the right reverend Prelate the Bishop of Bristol. Where individuals do access their pension using pension freedoms, this does not necessarily mean they have become economically inactive, and the evidence supports this conclusion. The DWP’s research shows that people use pension income to supplement other activities such as childcare and helping to support younger generations in work. Importantly, accessing pension income can help significant numbers of individuals to change vocation, work flexibly or go part-time, which allows them to stay in employment where they may otherwise have left the workforce.

I will now turn to the last main theme of the report—migration. On 4 December 2023 the Government announced a new package of measures to curb immigration abuse and further reduce net migration. The Government have been mindful of the need to balance the impacts on the labour market against the need to reduce net migration. These reforms are the right package to support reducing net migration to sustainable levels while enabling the UK economy to access the skills and talent we need. We understand that some sectors may be concerned about their ability to fill certain roles. I strongly encourage any employer, of whatever size, sector or place, to engage with their local jobcentre or the DWP nationally if they are looking to recruit. Our jobcentres have a fantastic offer for employers, including help with job adverts and recruitment opportunities to connect directly with jobseekers at job fairs and other events, and access to government-funded training.

The hospitality sector, which is very close to the heart of the noble Lord, Lord Bilimoria, is mentioned in the report. This is a fantastic example of the DWP supporting vital sectors. Working with UK hospitality and employers such as Greene King, Hilton and Premier Inn Limited—and, I am sure, Cobra Beer—we recently launched a new destination hospitality pilot. These are innovative new schemes which combine training, work experience and a guaranteed job interview, and demonstrate the availability of motivated jobseekers for firms that are looking to recruit.

Turning to the theme of childminders and universal credit, my noble friend Lord Willetts and the noble Baroness, Lady Kramer, alluded to the relevant issue of parents entering the workplace. The Government very much know that the cost of childcare remains a critical barrier preventing many people re-entering the workforce. This is why we are delivering the biggest expansion in childcare support in England’s history—to help parents on universal credit who are moving into work or increasing their hours. Since last June, the Government have been providing additional support with upfront childcare costs. Last June, we also increased the childcare costs that parents on UC can claim back by nearly 50%, to up to £951 per month for one child and £1,630 for two or more children. Also, the Government are aware of the demand/supply issue in childcare and the increased demand for nurseries, and we are working very closely with the DfE to address this very point.

The noble Baroness, Lady Kramer, mentioned apprenticeships, and as you can see from the badge with the big capital A that I am wearing, this is National Apprenticeship Week. It would be remiss of me not to take this opportunity to promote apprenticeships as a further example of how firms can secure the staff that they need and support them to build their skills. My noble friend Lady Noakes, the noble Viscount, Lord Chandos, and the noble Baroness, Lady Sherlock, spoke about the workforce participation review, and the gist of their question was: is this the end of it all? Since last year’s Spring Budget, we have announced our back to work plan, investing another £2.5 billion to boost workforce participation. We continue to work across government to tackle barriers to work and decreases in activity. This is not the end of the story, as the announcements made at the Autumn Statement show. However, the Government will continue to consider how we can increase workforce participation. The best thing to do would be to write further on this because it is an important point.

We know that the labour market is complex; as the noble Viscount, Lord Chandos, put it succinctly, it is rather complicated. It is an oversimplification to think that, because we have nearly a million vacancies and many more millions of inactive people, it is straightforward to match the two to ease labour shortages. The Lords Economic Affairs Committee’s report skilfully set out many of the challenges in filling vacancies amid a changing labour market. As such, the DWP is continually analysing what skills are required to ensure that there is a plethora of support for our customers in this ever-changing landscape and to take the steps to tackle whatever barriers they face. For the avoidance of doubt, and for the benefit of the noble Viscount, I say that we certainly get the importance of this subject, but I hope I have given a flavour of the huge number of initiatives that my department is taking and how it is working across government on this important area.

I opened by reflecting on the significant progress we have made as a country over the last 50 years on female labour market participation. I will turn to the future of the labour market and the role that technology will play but, before I do, I will pick up a few more brief points. The noble Lord, Lord Bilimoria, mentioned that he was on the New Deal task force and asked if such a thing still exists. It does not, but the Government work with a wide range of stakeholders when developing and evaluating our policy interventions. He also spoke passionately about dentistry. As part of the NHS long-term workforce plan, we will build a pipeline of new dentists for the future by expanding dental undergraduate training places by 40% to more than 1,100 per year by 2031 up to 2032, with an additional 24% increase to 1,000 places by 2028-29. The Government will also consult this spring on the tie-ins for dentist graduates to the NHS and increase the number of dental therapists and other dental care professionals through a 40% increase to more than 500 training places per year by 2031-32. Lastly, the Government will make it easier for NHS practices to recruit overseas dentists who meet the UK’s highest regulatory standards.

My noble friend Lord Balfe raised a point that I alluded to at the beginning of my remarks about treating workers better, and he is right. The 2019 manifesto pledged changes to enhance workers’ rights and support people to stay in work. The Government have delivered on these commitments by supporting a package of six Private Members’ Bills, helping new parents, unpaid carers and hospitality workers, and giving all employees easier access to flexible working and giving all workers a right to request a more predictable working pattern.

Just before I conclude, I will address a couple more points that were raised by the right reverend Prelate the Bishop of Bristol and alluded to by the noble Baroness, Lady Kramer, on AI—a very important subject generally. The priority of the Department for Work and Pensions in the labour market is to ensure that people continue to have access to good and meaningful work. This involves adapting to structural changes in the labour market now and in the longer term. There is a lot going on in my department on AI, and I will add that to the letter I am writing, and I will copy in all Peers.

I conclude by reflecting on the fact that, this month 40 years ago, this House was debating the degree of emphasis on new technologies in youth training schemes. We have seen the positive impact that computers have had on the workplace since then. As new technologies such as AI emerge, the DWP’s key focus will be to understand their impacts on the labour market and harness their potential to better support people to work. I hope that, in another 40 years, this House will reflect on the contribution that these new technologies have made to similar improvements in the labour market participation of other groups.

Disability Action Plan

Viscount Younger of Leckie Excerpts

Tuesday 6th February 2024 Lords Chamber

[Baroness Brinton (LD)]

My Lords, I declare an interest as vice-president of the Local Government Association. In that capacity, I am currently chairing the LGA disability forum for council officers and for members.

I am grateful to follow on from the noble Baroness, Lady Sherlock, partly because she summarises the issues about benefits so well. It also means that I do not have to say them again, because I completely agree with her concerns and her questions.

I am going to pick three or four things from the areas for action that give me real cause for concern that this new plan does not recognise the mess that the Government have got themselves into in the past. I want to start with the support for disabled people who want to be elected to public office. It says on page 15 of the Disability Action Plan that the coalition Government

“provided some financial support in the past, such as the Access to Elected Office Fund, which ran between 2012 and 2015”.

I wonder why it stopped in 2015. Who cancelled it? It was created by my noble friend Lady Featherstone when she was a Minister in the other place. It was cut the moment that we left government. The onus was put on political parties to provide it. That may be fine if you are the Conservative Party with millions and millions of pounds, but small parties do not have the capacity to fund the sort of things that are needed, such as BSL interpreters for a candidate. As far as I am aware, there has never been either a Member of Parliament or a Peer who uses BSL as their first language. That is because the barrier to get them into Parliament is too high for them to bear on their own. Action 2 in the Disability Action Plan states that the

“DU will develop and publish new guidance by summer”,

but until then the current arrangement will continue—so great words, but no change really.

The second action is another that has been raised in your Lordships’ House on a number of occasions: disabled people’s needs in emergency and resilience planning. About a year ago, when we were concerned about energy prices and the shortage of energy as a result of Russia’s invasion of Ukraine, I asked a Minister in the then BEIS to look at how we could ensure that significant power outages did not hurt the people who relied entirely on emergency support when the power went out for more than an hour or two once their own batteries had gone down. People such as our own colleague, the noble Baroness, Lady Campbell of Surbiton, would be one of those affected.

The plan says:

“Government departments already consider disabled people’s needs in emergency and resilience planning, in line with the Public Sector Equality Duty”.


On 16 January, however, the Department for Health and Social Care—which, somehow, in the game of “Don’t sit down last,” ended up taking on responsibility from BEIS for the negotiations with the energy companies on what to do in power outages—wrote to John Pring of Disability News Service saying:

“We have concluded that, due to the specificity of individual needs and circumstances, individuals and their care teams are best placed to develop plans for how they can prepare for and respond to loss of power to their home”.

That is not government departments working together; it is worse than that. A year on, there is now no way that any disabled person who relies on power can go to anybody in government to say, “My energy company is not helping me”. My baby granddaughter, who was on a ventilator for the first three years of her life, had one such power outage in her area. Had she not been in a carrycot and been able to be brought out of the outage—which adults cannot do—she would have hit very serious problems, so, for me, this is a very personal matter.

The plan says that the Government were learning from previous events such as the Covid-19 pandemic and the Grenfell Tower fire. I remind the House that we still do not have PEEPs post-Grenfell fire, which is a very serious issue if you are in a wheelchair and are trying to get down even five flights of stairs—let me put it more bluntly: even one flight of stairs. I am afraid that the actions on that are unworkable.

The section on families in which someone is disabled says the right words, but this Government have consistently starved local government of funding for children’s services, including for education, health and care plans. As a result, schools and the local authorities have zero money to be able to provide, which is why many children are not able to access the help that they are entitled to under the law.

The noble Baroness, Lady Sherlock, mentioned issues relating to assistance dogs. Dr Amy Kavanagh, who is a blind activist, said today on social media:

“We don’t need to define assistance dogs. The law does this already. I would welcome an ADA ‘legal questions you can ask’ model. Is the dog supporting a disability?”—


what on earth does that mean? She continues:

“What tasks does the dog perform?”


Frankly, once somebody has an assistance dog, it should not be necessary for a taxi driver to say, “What task does your dog perform?” That is the point at which there is a problem, and the answer is very simple: it is illegal to stop it. Yes, the Government are right: we need to make sure that more businesses know what they are doing.

Katie Pennick, from Transport for All, said that there is:

“Nothing on transport, nothing on housing, nothing on social care, nothing on PIP, nothing on hate crime, nothing on urban planning, nothing on healthcare, nothing nothing nothing…”


Rachel Charlton-Dailey said that, this week:

“Many disabled people are once again missing out on the gov cost of living payment … those on personal independence payment (PIP) or its predecessor disability living allowance (DLA) have received … £300, while those on benefits such as universal credit, child tax credits and employment support allowance will have got £900”.


That is discrimination against disabled people who, as we have heard, have much higher energy costs.

I will not repeat the data mentioned by the noble Baroness, Lady Sherlock, but I want to mention one final thing about the two Bills that are cited in the plan: the British Sign Language Act 2022 and the Down Syndrome Act 2022. When the Down Syndrome Act went through your Lordships’ House, we were promised that other genetic conditions would be looked at. Nobody understood why just one condition got the support. Nothing to date has happened. Worse than that, no funding has been allocated whatever, even under the terms of the Down Syndrome Act. It feels like everything else that I covered so far: warm words but no actual benefits to disabled people.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I thank the noble Baronesses, Lady Sherlock and Lady Brinton, for responding to the Disability Action Plan. I appreciate that the noble Baroness, Lady Sherlock, said that there were some positives in it, but I acknowledge that the noble Baroness, Lady Brinton, is not in that position. I hope that in answering all, or nearly all, of the questions that they have raised, I can change her mind, but I am not sure that I will be able to.

The noble Baroness, Lady Sherlock, spoke about our track record. I want to give her a very brief potted history of what has happened here and where we have got to. I hope that will help to provide some perspective for the noble Baroness, Lady Brinton. As the noble Baronesses will know, the Government published a draft plan for consultation over the summer so that disabled people, disabled people’s organisations and other interested parties had the opportunity to have their say. The consultation was open for 12 weeks and we received more than 1,300 written responses. In addition to that, we held a series of 25 events during the consultation period, with more than 130 attendees, including experts from a range of sectors. Jumping forward, on 5 February 2024, the Government published the Disability Action Plan.

The Disability Action Plan complements the long-term vision set out in the cross-government national disability strategy. They will be taken forward in parallel, sharing the Government’s commitment to improving the daily lives of disabled people in the here and now and in the years to come. It is the short term and the long term. Significant work is already being taken forward by individual government departments in areas that disabled people have told us are a priority. This includes reforms to employment and welfare via DWP’s Transforming Support: The Health and Disability White Paper and strategies to address health and social care via DHSC’s People at the Heart of Care White Paper.

These long-term reform efforts are already under way, so I make the point that there is some good work under way; it is not just that we have been waiting for those consultations. I will also say that this Government are aware that there are many suggested areas where people highlighted that the consultation was not within the scope of the action plan, and therefore that they had not been included in it. That does not mean that work has not been happening in these areas. It is important to remember that the action plan is only one pillar among many pillars of work being taken forward by this Government to improve the daily lives of disabled people. The plan also sits alongside the national disability strategy and other long-term work across government supporting disabled people, including support with the cost of living, which I will come to in a moment, through Help for Households, as well as the SEND and alternative provision improvement plans.

That takes me neatly on to the cost of living, which was raised with some passion by the noble Baroness, Lady Sherlock. We have committed to continue working across government to highlight disabled people’s concerns, experiences and insights on this topic. That includes sharing findings from this consultation and from disabled people’s experience panels. This work is in addition to broader work across government to support the people most significantly impacted by the rising cost of living.

Both noble Baronesses will know about the statistics, but they are worth repeating. In doing so, I for one understand that there are severe hardships around; I will not cover over those. Taken together, support for households to help with the high costs of living is worth £104 billion over 2022-23 to 2024-25. Over 8 million UK households on eligible means-tested benefits will receive up to three additional cost of living payments, totalling up to £900. The noble Baronesses will know that, from yesterday, the final payment will be paid at £299. I do not think that it is worth rehearsing now all the other aspects, because the noble Baronesses will be well aware of them. But perhaps it will be helpful for me to say that we really are aware of the pressures, particularly for disabled groups.

I will address the point raised by the noble Baroness, Lady Sherlock, on the work capability assessment reforms. We are committed to ensuring that our welfare system encourages and supports people into work, while providing a vital safety net for those who need it most. As she will know, from 2025 we will reform the work capability assessment to reflect new flexibilities in the labour market and greater employment opportunities for disabled people and people with health conditions, while maintaining protections for those with the most significant health conditions. Our expanded employment and health offer will provide integrated and tailored support for disabled people to support them and help move claimants closer to work.

I will go a little further: the work capability assessment reforms are not about sanctioning people or forcing them into work where it is not appropriate. I reassure both noble Baronesses that we will continue to protect those with the most severe conditions, while ensuring that those who can work are supported in doing so. In the future, removing the WCA will reduce the number of assessments that people need to take to access benefits, give people the confidence to try work and—this is a very important point—enable us to provide more personalised support so they will meet a real human being.

The noble Baroness, Lady Sherlock, asked about PIP and whether there was a place for vulnerable PIP claimants. The answer is yes. We have some extremely vulnerable customers, which is why we provide additional support during the claims process, if required. This support can include help with filling in the form or questionnaire, and additional protections for failing to return the questionnaire or for failing to attend an assessment. Before attending a face-to-face, telephone or video consultation, claimants are given the opportunity to alert their assessment provider to any additional requirements they may have, and the providers will meet any such reasonable requests. Again, it is important to get the message across that, for the most vulnerable, we really are there to hold their hand and make sure that the process is made easier for them.

The noble Baroness, Lady Brinton, raised an interesting point about the areas we are focusing on to encourage more disabled people to stand for election. We do think this is incredibly important—as are the points that she raised. The new fund will be launched in 2025, following the design and development work informed by and through engagement with disabled people. This will ensure a long-term solution that meets users’ needs, learning lessons from previous elected office funds.

The noble Baroness made a point about timing. She will know—and said, I think—that, in the meantime, the disability unit will develop and publish new guidance by summer 2024. Yes, those are words, but there are also actions. I am making the point that this needs to be done over the long term. It is very important that political parties and elected public bodies can best support disabled candidates, drawing lessons from the Local Government Association’s work and other sources. That will help to improve support in the short term, while we establish—I make this emphasis again—a new long-term approach.

The noble Baroness, Lady Brinton, asked about addressing the question of public health and emergency planning information—which is another important point. The Minister for Disabled People, Health and Work will lead a discussion with the ministerial disability champions on the importance of accessible communications, with a particular focus on improving accessible communications and information regarding resilience and emergencies. That is just one action among a series of actions being taken to improve the accessibility of government communications.

I have just a few more points to make, including on families, which was a subject raised by the noble Baroness, Lady Sherlock. Yes, families are important. The disability unit will explore and develop a new accessible online information hub for families with disabled members. That work complements work led by the DfE to roll out family hubs. The DU will work with partners to develop new products addressing specific issues experienced by families with disabled members. I cannot quite recall the noble Baroness’s precise question, but I reassure her that this is important; it is a key area. She may want more action, so I will read Hansard and write to her if there is more that we can say on that.

Finally, the noble Baroness, Lady Brinton, raised a point about assistance dogs. Our focus is on all assistance dogs, but we are seeking to build on the excellent work of Guide Dogs UK. I attended a reception it led the other day. Its “Open Doors” campaign seeks the fullest possible access to public places for people with guide dogs. Progress on educating the business sector on the law and the negative impact that access refusals can have on people’s confidence and ability to live an independent life will have a positive impact on all assistance dog users.

[Lord Young of Cookham (Con)]

My Lords, the Disability Action Plan deserves a slightly warmer welcome than it has received so far. The 32 actions will make a difference in the daily lives of disabled people, but we have further progress to make.

I will pick up on two points, one of which was touched on by the noble Baroness, Lady Brinton. The summary of the consultation findings at page 18 says:

“The need for more disability inclusion in local and national planning was another strong theme”.


I do not know whether my noble friend was in his place yesterday when there was an exchange about the building regulations and the proposed improved accessibility for new homes. Everybody welcomed the decision to move to the new standards, but there was some difficulty in finding a date when they would be introduced. Can my noble friend liaise with his colleagues in DLUHC and use his influence to ensure that the remaining consultations that still need to take place can be done very quickly so that we can have a start date for these new accessible homes?

The second point relates to parents with a child who has a learning difficulty. I welcome the recent announcements extending free childcare, which will be rolled out first in April, then in September and again next year. There is some anecdotal evidence that parents with a child who has a learning disability are finding it difficult to find a place in a nursery or other daycare facility for their child. I know that there is some assistance available if the child gets DLA. There may be other forms of assistance to day nurseries in other circumstances, but they sound a bit bureaucratic. Can my noble friend liaise with colleagues in the DfE to make sure that children under five with a learning disability get the support they need? They need that support every bit as much as, if not more than, children without a learning disability.

[Viscount Younger of Leckie (Con)]

I thank my noble friend for not one but two questions. Perhaps I can answer the first one by saying, as I think my noble friend said, that the Government have set out their intention to mandate higher accessibility standards for all new homes by raising the minimum standard in building regulations in England. I am not sure that I can help with the date, but I will certainly take that back to my colleagues in DLUHC. We will consult further on the technical changes needed to mandate the higher M4(2) accessibility standard, on changes to statutory guidance and on our approach to how exceptions will apply. Making the M4(2) the new default standard will require additional features, including a living area at entrance level, step-free access to all entrance-level rooms and facilities, and wider doorways and corridors, as well as clear access routes to windows. I hope that helps my noble friend.

He asked about day nurseries and support for disabled children under five. I happened to hear the Secretary of State for Education say that she was confident about the demand for nurseries being in a better place. I had better write to my noble friend about this specific issue. I hope I can provide similar reassurances.

[Lord Dodds of Duncairn (DUP)]

My Lords, I welcome the repeat of the Statement and the launch of the Disability Action Plan. One of the action areas that particularly struck me was about making playgrounds more accessible for everybody. That is an extremely important issue that a number of my colleagues in local councils in Northern Ireland have very successfully made a priority. I very much welcome its inclusion here; I commend the plan on that.

The Minister referred to other areas of work that disabled people have told us are priorities. These include employment and welfare reforms. As the Minister will know, the newly reformed Northern Ireland Executive and Assembly have responsibility for welfare, although we follow the principle of parity across the board in social security and so forth, for the obvious reason that to depart from what happens in the rest of the UK would cost an enormous amount of money to the block grant. While this is devolved in Northern Ireland, in effect we have to follow the same rules. Can the Minister assure me that, when proposals and their impacts are considered, there will be the closest possible consultation and work with the relevant departments in Northern Ireland and with the people who will be affected?

[Viscount Younger of Leckie (Con)]

Absolutely. I start by saying how pleased I am that the Northern Ireland Assembly is up and running. I was a Government Whip for the Northern Ireland Office, so I am very aware of many of the issues.

On the second point, as the noble Lord said, the remit of the Disability Action Plan is very much within the competence of the UK Government. However, we have engaged officials in all the devolved Administrations. I am pleased to say that we will work together with our counterparts where appropriate to our mutual benefit. One example is the foresight research that we will undertake, on which the devolved Administrations have expressed interest in working with us. I am sure the noble Lord will know that we have had and continue to have more than cordial relations with senior officials in Northern Ireland in order to maintain the necessary stability during the past two years.

On the noble Lord’s first point, about playgrounds, I am very pleased that he applauds this approach. I reiterate what we are planning to do. The disability unit will create an online hub of information for local authorities on creating accessible playgrounds and will explore the most effective way of creating guidance on how to develop more inclusive and accessible playgrounds. This is on the back of stakeholders having highlighted a lack of funding for local authorities, which is often a big issue. Obviously, we are exploring this with families with disabled members and with service providers to see how we will take it forward.

House adjourned at 8.24 pm.

Household Support Fund

Viscount Younger of Leckie Excerpts

Tuesday 30th January 2024 Lords Chamber

[Baroness Lister of Burtersett]

To ask His Majesty’s Government what assessment they have made of the impact of the Household Support Fund; and what plans they have for (1) the future of the fund, and (2) the role of local crisis support generally.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, an evaluation of the current household support fund scheme is under way to better understand the impact of the funding. The current household support fund runs until the end of March 2024, and the Government continue to keep all their existing programmes under review. Councils continue to have the flexibility to use funding from the local government finance settlement to provide local welfare assistance. As with all government policies, this remains under review.

[Baroness Lister of Burtersett (Lab)]

My Lords, the discretionary household support fund has acted as a vital lifeline come sticking plaster, filling some of the holes in our totally inadequate social security safety net. If, as is feared, the sticking plaster is torn off from April—just two months away—it will leave and deepen a gaping wound of dire hardship. Will the Minister therefore convey to the Chancellor the urgency of the calls from local authorities and civil society groups for the fund to continue for at least a year, followed by a proper long-term strategy for local crisis support in place of last-minute, ad hoc funding decisions?

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

I will certainly convey the noble Baroness’s entreaties on that front. I am the first to be aware that the Government recognise that pressures remain on certain household budgets. The household support fund primarily includes help with food and energy bills but also support for other household essentials and bills, such as broadband or phone bills, clothing and essential transport-related costs. On average, households in the poorest income deciles are gaining the most in cash terms as a percentage of net income in 2023-2024 as a result of this Governments’ policies announced in the Autumn Statement of 2022.

[Baroness Redfern (Con)]

My Lords, my noble friend the Minister stated that an evaluation is under way to better understand the impact of the household support fund. Does he agree that the scheme is allocated fairly to local authorities, and, importantly, who decides where funds are targeted?

[Viscount Younger of Leckie (Con)]

I can reassure the House that allocations are targeted fairly and proportionally on the basis of population, weighted by the index of multiple deprivation. The distribution of funding is targeted at the areas of the country with the most vulnerable households. This ensures that funding proportionally reaches those areas in England with the most need. It is for each local council to decide, as my noble friend may know, where and when they distribute their funding, within the parameters of the fund’s terms and conditions.

[Lord Palmer of Childs Hill (LD)]

My Lords, the term “impact assessment” has been used by other speakers. I am sure that the Government have carried out impact assessments of what will happen if this fund is removed or reduced. Can the Minister tell the House how much funding will remain available to local authorities for discretionary local welfare assistance should the household support fund be reduced or discontinued? The idea is that it will come out in the wash, more or less, as the Minister says, but we want to know in advance what the situation will be. For instance, is there an estimate in the Minister’s file of the number of children in England who will no longer be eligible for free school meals during the school holidays once the household support fund is ended or reduced?

[Viscount Younger of Leckie (Con)]

To date, over £2 billion-worth of support has been allocated to local authorities in England via the household support fund to support those most in need. As I said, it is up to local councils to decide how it is disbursed. Local authorities in England are funded through the finance settlement to deliver local welfare provision.

[Lord Blunkett (Lab)]

My Lords, it would be deception of the worst order if the Government were to announce, as they have over the last few days, a £600 million uplift to upper-tier local authorities only then, a few days later, to pull the plug on £2 billion. The £10 million that goes to Sheffield has been crucial in maintaining the well-being of thousands of children. I appeal to the Minister to go back to his colleagues and ensure that there is no duplicity and that the most vulnerable can continue to get help from 1 April.

[Viscount Younger of Leckie (Con)]

I hope I can provide some further reassurance to the House and to the noble Lord. He will know that the Government have announced initial measures for local authorities in England worth £600 million. This includes £500 million for new funding for councils with responsibility for adult and children’s social care, distributed through the social care grant.

[Baroness Lawrence of Clarendon (Lab)]

My Lords, what discussion have the Government had with local authorities about sustaining a local crisis support service, given that the majority of the funding is about to vanish in March with the household support fund?

[Viscount Younger of Leckie (Con)]

I alluded earlier to the fact that we were undertaking an evaluation of the household support fund; the HSF4 scheme is under way, which will seek to understand the delivery and impact of the HSF4 funding provided to local authorities. We expected this to be completed in the summer, so I hope that this answers the noble Baroness’s question.

[The Lord Bishop of London]

My Lords, groups such as those with English as an additional language and disabled people face higher barriers to accessing local crisis support. Will the Government in their evaluation consider the strategies that are in place, or could be put in place, to ensure that those who face barriers can access local crisis support?

[Viscount Younger of Leckie (Con)]

Absolutely. That is a very good point, because local authorities have the funding and the autonomy to decide how it is directed. The government guidance is that the most vulnerable must be targeted first. I think the categories the right reverend Prelate has raised would fit into that area.

[Baroness Thornton (Lab)]

My Lords, I would like to return to my noble friend’s original Question about the temporary sticking-plaster measures. Decisions made at the last minute are not a substitute for a proper social security system that offers families a safety net in difficult circumstances. I want to ask the Minister about the plan, beyond the decision about the household support fund, which will come very late for families and local authorities. How will the Government ensure proper stability and security for families during difficult circumstances?

[Viscount Younger of Leckie (Con)]

I have outlined some of the measures. Perhaps the noble Baroness is alluding to the benefit cap, which we always keep an eye on. We believe that this provides a very strong work incentive and fairness for hard-working, tax-paying households and encourages people to move into work where possible. I reassure the noble Baroness that we are keeping that under review. The Secretary of State is not minded to review the levels, as there is no statutory obligation to do so. There was a significant increase, as the noble Baroness will know, following the review in November 2022.

[Lord Young of Cookham (Con)]

My Lords, the house- hold support fund has given a lot of help to vulnerable families, not least unpaid carers. I very much hope it will be possible to continue it. However, if the resources are not there, could my noble friend consider some sort of tapering, rather than a sharp cut-off at the end of March?

[Viscount Younger of Leckie (Con)]

My noble friend is right that we should continue to recognise the important role that unpaid carers play around the country. Our guidance asks that local authorities consider the needs of various households, including unpaid carers. The Government have increased carer’s allowance by around £1,200 per year since 2010-11.

[Baroness Scott of Needham Market (LD)]

Will this evaluation include full consultation and discussions with the charity and voluntary sector, which, after all, understands very well the impact that reducing or removing this fund would have? That sector will be at the front line of picking up the problems should it be removed.

[Viscount Younger of Leckie (Con)]

I will need to check, but I feel certain that that will be the case. I will write to the noble Baroness if I am wrong. It is a very good point.

[Baroness Royall of Blaisdon (Lab)]

My Lords, in answer to my noble friend Lord Blunkett, the Minister mentioned the £600 million recently announced for local councils. My noble friend suggested that, even when Sheffield has its allocation of that money, it will still not be enough and will not provide the desperately needed assistance that clearly comes at the moment from the household support fund. How do the Government think that local councils will be able to provide the sort of support that the household support fund gives if it is not there?

[Viscount Younger of Leckie (Con)]

Fairness should be at the heart of this. I reassure the noble Baroness that we are providing support to households, directly and indirectly, to help with the high cost of living, worth around £104 billion over 2022-23 and 2024-25. This includes raising working-age benefits by 6.7% and state pensions by 8.5% from April next year.

Engineered Stone and Silicosis

Viscount Younger of Leckie Excerpts

Monday 15th January 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, the Health and Safety Executive, HSE, is not currently considering restricting the use of engineered stone. The Control of Substances Hazardous to Health Regulations already require employers to put in place measures to prevent workers being exposed to respirable crystalline silica. This includes adequate controls ensuring compliance with the workplace exposure limit and health surveillance identifying potential ill health. HSE keeps requirements for reporting occupational diseases under review and is not currently making silicosis reportable.

[Baroness Bennett of Manor Castle (GP)]

I thank the Minister for his Answer, but Australia acted after it found that one in four stonemasons had incurable, debilitating and sometimes fatal silicosis. Estimates suggest that, in the UK, 1,000 people a year die from silicosis as a workplace disease and many more suffer from debilitating conditions—not just stonemasons but construction workers, engineers and agricultural workers. Surely the Government should at least look into this further and get more data on a problem on which Australia, which is broadly comparable to us, has found it crucial and essential to act.

[Viscount Younger of Leckie (Con)]

I am pleased that the noble Baroness has raised this point. She will know that the HSE is different from Safe Work Australia because the latter does not work as a national workplace regulator and instead sets policy. According to our figures, Australia has reported 260 cases of silicosis. However, a significant number of workers using engineered stone in Australia are known to be SMEs or sole traders, who remain hard to reach. To answer the question of the noble Baroness, we are very much in touch with Australia on this important matter.

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

My Lords, as someone with former downstream involvement in the industry, I welcome this important Question. I suggest that we confine any debate on further restriction to the dry cut of granite, cement and quartz and not to other products. Engineered stone is primarily quartz; if cut wet, there is little problem but, if cut dry, it can lead to dust and lung problems and may well require further regulation. This is a problem primarily in Europe, as there is now very little dry-cut activity in the United Kingdom.

[Viscount Younger of Leckie (Con)]

The noble Lord makes some very helpful comments. He is right that individuals are most at risk when dry cutting and polishing are being performed. In Great Britain, as I think he alluded to, engineered stone is mostly imported. He makes an interesting point about the amount of silica content found in engineered stone: yes, it is high, but sandstone also contains 70% to 90% and granite 25% to 60%. The Health and Safety Executive and COSHH have taken good measures on that over many years.

[Lord Palmer of Childs Hill (LD)]

My Lords, I am not very reassured by the Minister’s comments on British health and safety precautions and enforcement. Can he explain in greater detail what we are doing, rather than just hoping that this will go away? Are cases increasing, and are there numbers for illness in the UK, not Australia, from these causes?

[Viscount Younger of Leckie (Con)]

In contradiction to what the noble Baroness, Lady Bennett, said, our information is that nobody has suffered any long-term exposure to silicosis. There are instances of non-compliance, which have reduced from 19% to 11%, but the HSE has been tackling exposure to RCS for many years through a mature regulatory model that combines targeted inspection activity on high-risk activity, communications activity and working with stakeholders.

[Lord Winston (Lab)]

My Lords, the issue of silicosis from stone grinding has been known since the 1940s, when it was first described by the late Dr Donald Hunter, an expert on industrial disease. He recommended a number of precautions. Are the available precautions, which should be enforced, now clear and do the Government understand them? Are they similar to those introduced in Australia?

[Viscount Younger of Leckie (Con)]

I can reassure the House that, as mentioned before, most engineered stone in the UK is imported. There could be an issue where engineered stone is used for fitting kitchen worktops, where the importance of PPE and masks is understandably difficult to monitor. However, the HSE and COSHH have been looking at this over many years.

[Baroness Watkins of Tavistock (CB)]

My Lords, can the Minister explain what is behind the reluctance to make silicosis a recordable disease? If we did so, we would be able to monitor the size of the problem and put in place further preventative interventions and thus, in the long term, save the public purse in both the NHS and the benefits system.

[Viscount Younger of Leckie (Con)]

The Health and Safety Executive recently carried out a post-implementation review, or PIR, of RIDDOR, which, as the noble Baroness will know, deal with the reporting of injuries, diseases and dangerous occurrences, with a view to expanding that to include areas where HSE regulatory intervention can add value. HSE will start the process of reviewing the remaining recommendations—including the inclusion of pneumoconiosis, which is, in effect, silicosis—within the next business year.

[Baroness Sherlock (Lab)]

My Lords, the HSE’s own website says:

“Silica is the biggest risk to construction workers after asbestos”.


As the Minister said, it is found in engineered stone which is used extensively in kitchens and bathrooms for counter-tops. The UK has a silica exposure limit of 0.1 milligrams per cubic metre. As I understand it, that is twice the legal limit in the United States and Germany, and four times that in Portugal. I ask the Minister: has this has been looked at recently? Is he aware that the first case of someone getting silicosis was in Australia in only 2015? Since then, hundreds more cases have come online. In Australia, this is being talked about as the asbestos of the 2020s. I urge the Government not to be complacent about it.

[Viscount Younger of Leckie (Con)]

The noble Baroness is absolutely right. I reassure the House that Great Britain has a very good record in this area and the European Union reflects our approach. For example, the silica limit in Great Britain—as the noble Baroness has pointed out—is 0.1 milligrams per metre cubed, which was set in 2006 and is now comparative across the world. The EU considered a lower limit, but it was not adopted due to uncertainties about the reliability of measuring techniques below the limit we are at.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, has the Minister seen the reports in the Scottish media that part of the Stone of Destiny has been taken into private ownership by a member of the Scottish National Party? Which department is responsible for recovering it, and what are they doing about it?

[Viscount Younger of Leckie (Con)]

It is certainly not mine.

[Lord Hendy (Lab)]

My Lords, one of the problems with silicosis is that it is not necessarily diagnosed by doctors and recorded on death certificates. That is because it is not a well-recognised condition apart from among experts. This means that deaths as a consequence of chronic obstructive pul—

[Lord Hendy (Lab)]

Noble Lords know what word I mean: COPD. Deaths that are consequent on COPD do not necessarily record silicosis. Do His Majesty’s Government support the recommendations of the APPG on respiratory diseases, particularly the need for an industry awareness campaign on silicosis?

[Viscount Younger of Leckie (Con)]

Yes, the noble Lord makes some very good points. I reassure him that the current HSE silica intervention continues to raise awareness of the requirement to adequately control exposure to RCS, for those in the construction sector and those providing materials for construction, such as brick manufacturers and stone fabricators. These campaigns will continue through 2024.

[Baroness Bennett of Manor Castle (GP)]

My Lords, the sense of complacency has been very strong. I draw noble Lords’ attention to the fact that, in many cases, exposure to silica is producing diseases in young people aged 19 to 26 in Australia. Given the concern about the health and well-being of our workforce, are the Government considering that this and other issues in workplace safety are a significant contributor to our problem of so many people of working age being unable to work because of health?

[Viscount Younger of Leckie (Con)]

It is easy for the noble Baroness to say that we are complacent, but we are not. I have laid out a number of actions that we are taking. The HSE has continued to deliver inspection campaigns in industries associated with RCS exposure. The HSE also investigates concerns about inadequate risk management, which has been going on for many years. I mentioned the post-implementation review, and HSE will start the process of reviewing the remaining recommendations—including the inclusion of pneumoconiosis—within the next business year, as I said earlier.

Child Support (Management of Payments and Arrears and Fees) (Amendment) Regulations 2023

Viscount Younger of Leckie Excerpts

Monday 18th December 2023 Grand Committee

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Child Support (Management of Payments and Arrears and Fees) (Amendment) Regulations 2023.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am pleased to introduce this statutory instrument, which, subject to approval, will help more families to access the vital support that is available through the Child Maintenance Service. It will also ensure that efforts and resources can be focused on taking action to collect unpaid arrears in those cases that will make the biggest difference to children. These changes build on a number of improvements that we have already made and are among the first in a further wave of legislative measures that we plan to bring forward to ensure that the service is more accessible, simpler and speedier and ultimately gets more money to more children more quickly.

Families are the cornerstone of our communities. Each family is unique, but the importance of the bonds that bind them together is universal. When these bonds fray or falter, the impact on children can be significant, including where parents separate. It is therefore right that we continue to take action to promote family cohesion and reduce conflict, so that children grow up with the love and support that they need.

It was an honour to respond to the recent debate on the Love Matters report, commissioned by the most reverend Primates the Archbishop of Canterbury and the Archbishop of York. The report delivered a powerful reminder of why love and support matter and the importance of strengthening and supporting family life, including ensuring that children get the best start in life.

The Child Maintenance Service plays a key part in that endeavour. It is part of a wide-ranging set of programmes and initiatives that my department is leading on. For example, through the reducing parental conflict programme, we are supporting parents to reduce the impact of frequent conflict. Delivered through local authority family services and with local community and faith partners, we are on track to have directly supported 40,000 parents in the last two years. Since we introduced it in 2014, the family test has been guiding policymakers in looking at the potential impact of policies on the family. It is something that I have actively supported in my role and I am committed to promoting it across government. Our new childcare offer has removed one of the biggest barriers to parents working and providing for their family, with a nearly 50% increase in the amount of childcare costs that parents on universal credit can claim back.

I will just highlight a number of other linked programmes happening across government. In addition to the childcare change for parents on universal credit, the Government are also substantially increasing the amount of free childcare that working parents in England can access, with 30 hours of free childcare a week all the way through from nine months up to their child starting school. Our £2.4 billion Supporting Families programme is showing how intervening early can improve outcomes for families in the long run. The Start for Life and family hubs programmes have created a network of centres and extra support for families with children.

I return to the Child Maintenance Service, which I oversee. Alongside the range of help that I have just outlined, it plays a crucial role in securing financial support for children where parents have separated, mandating, and where necessary, enforcing arrangements so that money flows from paying parents to receiving parents. This can benefit children and help to prevent them from falling into poverty. The Child Maintenance Service is currently supporting nearly a million children through maintenance arrangements. Between 2020 and 2022—the latest figures available—160,000 children were kept out of poverty each year because of parents coming to private arrangements and with our interventions through the Child Maintenance Service.

Furthermore, the Government supported two child maintenance Private Members’ Bills, which gained Royal Assent earlier this year. This included the Child Support (Enforcement) Act 2023, which we consulted on in November to seek views on how we accelerate enforcement by replacing the slow and outdated court-based process to obtain a liability order. Once implemented, this will reduce the process from 22 weeks to as low as six weeks, making it quicker to see money flow through for children.

These regulations are intended to further improve access to the Child Maintenance Service for all families and to ensure that it runs effectively to focus on getting more money to children. First, to improve access, the regulations remove the £20 application fee that currently needs to be paid to access the Child Maintenance Service. By way of background, the original rationale for introducing the fee in 2014 was to help parents to think twice before going down the statutory route by default and encourage them to come to their own arrangements. However, as part of an evaluation of the fee and its impact, we found that it has not quite worked as intended.

Research published by my department found that the fee is not a major factor for parents when making decisions about whether to apply to the Child Maintenance Service. Indeed, the evaluation found that families on lower incomes, who we know disproportionately experience conflict and are therefore often in need of support, can find the application fee a financial barrier to accessing the service. It is important to highlight that around 54% of all applicants already pay no fee because of existing waivers, such as victims of domestic abuse and those aged under 19. Therefore, we think it sensible to remove the application fee completely for all, ensuring that those most in need can get support more easily.

Secondly, the regulations will ensure that the service can more efficiently focus resources on getting larger, more-recoverable unpaid payments flowing to children. We continue to engage with parents who refuse to pay child maintenance and fail to take responsibility for their children, through a range of enforcement powers to collect unpaid amounts. However, in these regulations, we are taking a pragmatic approach to bring forward powers to write off very minimal amounts of £7 or less, in a small number of inactive cases that would otherwise have been closed were it not for this outstanding balance.

We are doing this for two pragmatic reasons. First, the reality is that keeping these cases open requires considerable resource and taking action to recover such small amounts often costs more than the actual value of the debt. Left open, the cost of maintaining them could increase for decades with no greater chance of money being paid to receiving parents. We need to ensure that taxpayers’ money, as well as the time and effort of caseworkers, is being directed effectively, such as by focusing action against parents who owe significantly larger sums and where the impact on children missing out on that money is greater.

Secondly, given that we will close only the cases in which we have stopped calculating child maintenance payments, it is likely that they are longer needed. This could be because the child has become an adult, the parents have reconciled or the absent parent has unfortunately died. It therefore makes sense to close these cases, not least for the certainty and clarity that it would provide for families. As I said, we expect only a small number of cases to qualify and the vast majority are likely to have outstanding arrears of less than £1. The full details of the criteria permitting write-off of a debt are set out in the regulations. As I said, they include cases where maintenance calculations have ceased and no payments have been made in the previous three months. In addition, the Child Support Act 1991 provides that, in order for write-off powers to be exercised, we need to be satisfied that it would be unfair or otherwise inappropriate to enforce liability in respect of the debt.

I believe both these measures to be proportionate common-sense changes that will further improve the Child Maintenance Service. The changes are good for parents, good for the taxpayer and, more important still, good for children. I hope that colleagues will join me in supporting these draft regulations and I commend them to the Committee. I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for his overview of the whole system. He eventually got to the regulations in front of us, but he gave us a good idea of the various things that the Government are attempting to do; I thank him for that.

I come to the regulations themselves. The Minister will, I am sure, be pleased to know that I and my party agree with the removal of the £20 application fee; it has been my party’s policy in the past couple of manifestos. We would, however, make an additional change: in addition to removing the £20 charge, it is Liberal Democrat party policy to remove the 4% charge for receiving parents using the collect and pay service. I would appreciate his view on the possibility of this.

The Minister pointed out that the Government are trying to be pragmatic in dealing with the rest of the instrument. I welcome the suggestion that up to £7 of arrears could be written off but I hope that the Minister can clarify whether that would be a one-off £7 at the end—with which we would have no problem—or could apply to more than one item of £7. Is this meant to be a generous action or is it to save administration costs, or a bit of both? He did say that it was pragmatic. Who gains and loses on this £7? I read the provision through and was not quite sure—perhaps it is just me—whether the receiving parents loses £7 or that the Child Maintenance Service in some way writes it off internally. I am not calling for it to be increased but does the Minister have any information as to whether an increase in the write-off—let us say it was £10; I am just dealing with the theory of it—would have any administrative effect? Would we save money? If it is meant to save on administration, is £7 an appropriate cut-off? I think that it is, but it is worth asking.

I will move on in dealing with this £7 write-off. My reading of the statutory instrument is that time arrears will be written off in only these limited circumstances: maintenance arrangements have come to an end because the payee parent has requested it; the paying parent has died; the child has died; the child is no longer a child; the parents have been cohabiting for more than six months; a new arrangement has been put in place; or the parent has failed to pay anything for the final three months. Presumably, there would be only one £7 sum of arrears rather than a series of £7 sums that could be written off unless a new arrangement were later put in place—for instance, if the couple got back together, then broke up or the payee parent requested that a new arrangement be put in place—but subsequently ended again. However, that would be some months or years down the track and would not happen too often, I hope. It may seem fairly obvious to the Minister but I have read the SI and it really is not that specific. The ambiguity is such that I would appreciate, for the purposes of Hansard, it being set out.

--- Later in debate ---

Is the department following these recommendations? What else is being done to make direct pay more effective? I look forward to the Minister’s reply.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Lord, Lord Palmer of Childs Hill, and the noble Baroness, Lady Sherlock, for their general support for these regulations. Certainly, the noble Lord, Lord Palmer, was fully in agreement with what we are doing with the £20 application fee. I appreciate the noble Baroness’s very complimentary remarks about the regulations. We work hard to get them right and I will certainly pass her remarks on. I thank both Members for their valuable contributions during this short debate.

Providing for our children is a fundamental responsibility. Most people can independently reach agreement about arrangements under the Child Maintenance Service, but there will always be circumstances where this does not happen or is not possible, as I said. Sometimes relationships are complicated and conflicted and, of course, there are reasons due to domestic abuse. That is why the work of the Child Maintenance Service is so vital. To add to what I said in opening, it provides that safe service for parents who specifically face safety concerns, and it ensures that both parents actively play their part to support their children, whether they live with them or not.

I will answer the questions of the noble Lord, Lord Palmer, about writing off £7 arrears. This legislation will permit the Child Maintenance Service to write off small volumes of very low-value debt in cases that meet certain criteria and that would otherwise have closed if it were not for that outstanding balance. Writing off low-level debt will be permitted only in cases where it would be unfair or otherwise inappropriate to enforce liability in respect of the arrears. I will explain more in a moment but, broadly speaking, it applies where a maintenance calculation has ceased, under specific provisions of the Child Support Act 1991 and where no payments have been made towards the arrears in the last three months.

We believe that setting the threshold higher, which I think was the gist of the noble Lord’s question, would give the wrong message to paying parents about their obligations. As the flat rate for child maintenance—the minimum amount a parent is expected to pay to meet their statutory duty to maintain their children—is £7 per week, we consider setting the threshold just below that amount the best way to strike that difficult balance. I hope that helps to explain our rationale behind the policy.

The noble Lord, Lord Palmer, asked why we are removing the application fee, why it was not removed sooner and whether we are doing this for the benefit of the customers. As I set out, the application fee was introduced partly to provide an incentive for separated parents to make collaborative family-based arrangements to facilitate better outcomes for children. In removing the fee, we first needed to allow enough time to properly evaluate the impact of this measure. As part of this evaluation, evidence published by my department has shown that the fee is not a significant factor when making decisions, as mentioned earlier. Most importantly, evidence has also found that families on lower incomes disproportionately experience conflict and are less able to make a family-based arrangement. Therefore, the fee could act as a financial barrier to those families accessing the service. The removal of the fee is expected to lead to a relatively modest loss of income of around £1 million to £2 million per annum. Looking at this, we think that, on balance, this is the right thing to do.

The noble Lord, Lord Palmer, asked about collection charges. They are applied to all Child Maintenance Service collect and pay cases. Our research suggests that this encourages some parents to use direct pay. The charges are 20%, as he knows, on top of the liability for the paying parent, and—the gist of his question—4% of the maintenance received by the receiving parent. Charges such as the application fee were originally introduced to provide both parents with an incentive to collaborate. Running the collect and pay service incurs costs for the taxpayer, especially where collection and enforcement action is required to secure payments. Therefore, it is reasonable for most parents to contribute towards running such a service. In a survey conducted between 2017 and 2019, 44% of receiving parents said that collect and pay charges influenced their decision to use direct pay. To answer the question directly, the Government continue to keep the other Child Maintenance Service measures, including the 4%, under review. No decision is being made, but we are keeping it under review.

[Lord Palmer of Childs Hill (LD)]

Can that be changed without it coming back? It cannot, can it? The Government are missing an opportunity. The Minister said £7 per week. Is that what he meant?

[Viscount Younger of Leckie (Con)]

No, I did not mean £7 per week. I should have said £7 arrears. On the £4, I understand that we have to use legislation to take that forward, should we wish. However, it is not on the agenda and we are keeping that under review.

The noble Baroness, Lady Sherlock, raised a number of questions. I shall first address the points made about the NAO. The Government also thank the NAO for conducting such a thorough report on the value for money audit of the CMS. The Government’s response partially and fully accepted a number of the NAO’s recommendations, as the noble Baroness probably knows, including investigating why fewer people are taking up the CMS than expected, tackling any inappropriate barriers that prevent families using its services and improving the effectiveness of direct pay and collect and pay arrangements.

Another question the noble Baroness asked was about what evidence the department has relating to the drivers of the fall in usage of the statutory system. Having a maintenance arrangement is not right for all parents. We know that many who do not have one want one. The department is investigating existing research and data to understand why some parents chose not to have a child maintenance arrangement and to improve its knowledge of customers who use its service. This is work in progress and the noble Baroness raised an important question. It is also important to note that, since the conclusion of the value for money audit, we have already seen greater take-up from parents wanting to use the service, so that perhaps helps to answer the question.

The noble Baroness also asked whether there is any more information that we can share with her about what we are doing to improve the effectiveness of the arrangements. Over the past few years, the Child Maintenance Service has developed and delivered significant improvements to its online services. These services make it easier and quicker for parents to engage with the service and the majority of applications are now made online. We are also continuing to work towards implementing the recommendations on improving the effectiveness of direct pay and collect and pay arrangements. Customers on direct pay can now report missed payments via their online account. In addition, the CMS developed an email campaign in 2022 to prompt direct pay customers to get in contact if their direct pay case was not working for them. This capability will be considered for future campaigns to communicate better with parents. For collect and pay cases, the department has set out its fast enforcement plan, which includes specific test and learn campaigns and greater use of risk and intelligence to drive compliance. As part of this regulations package, we will be extending our write-off powers for arrears of less than £7 when, as I said, certain circumstances are met. This aligns with the NAO’s recommendation to review the approach to managing arrears. The Committee will also be aware of our plans to improve and accelerate our enforcement of CMS, as outlined earlier, and our plans to consult more broadly on the service types.

The noble Baroness, Lady Sherlock, was also concerned about take-up more broadly. I am sure she will appreciate that these regulations will make it easier for people to access the CMS.

There is a lot more that we could be doing. There is a major programme in my department on using AI and making it effective for not just this service but others within the department. I think the noble Baroness is aware of that from the Question I answered not so long ago. I make the point that human contact is incredibly important. In the various products that we have, we are all the time dealing with some of the most vulnerable customers in the country, as she will be aware.

--- Later in debate ---

[Baroness Sherlock (Lab)]

I do not know whether it is too historic, but I possibly should have drawn the Committee’s attention to the fact that I have a historic pecuniary interest as a former director of the Child Maintenance and Enforcement Commission; I just want to place that on record.

I am grateful for and appreciate the Minister’s thorough response. He mentioned that the Government are doing more research. Will that be published? He also mentioned an email campaign in relation to direct pay. How is that going?

[Viscount Younger of Leckie (Con)]

On the latter point, which is a good one, I shall certainly need to write to the noble Baroness. On the former one, it is fair to say that we will write as well. Those will be added to a number of other questions that I may have to answer.

Motion agreed.

Love Matters (Archbishops’ Commission on Families and Households Report)

Viscount Younger of Leckie Excerpts

Friday 8th December 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, it is an honour to close this debate on Love Matters, the report of the Archbishops’ Commission on Families and Households. I start by thanking all noble Lords for their valuable contributions today and, in particular, the most reverend Primate the Archbishop of Canterbury for initiating this important debate and for treating the House to a moving and passionate speech. If noble Lords will excuse the pun, in looking up to the gods, I thank the commission for its work in producing the report. It is a landmark report for the Church which makes valuable recommendations. I assure the House that these have been closely studied by the Government and are reflected in our plans and actions across the families agenda.

I add that it is a delightful change to see that there are more recommendations for the Church than for the Government on this occasion. However, just to reassure the House, there still remains much for us to do. As my noble friend Lady Bottomley said, faith groups and the Church are a crucial element in communities around the country and support many families. We have strong partnerships with the Church, including on the delivery of high-quality education in schools, and I will say more about that later.

Before I begin, I will just round up some of the themes. There were a lot of wide-ranging themes this afternoon: the importance and value of marriage, including same-sex marriage and in the traditional sense; a focus on children; views on single-person households and lone parents; relationships generally, and relating better, and how much this matters; a focus on the elderly from the noble Lord, Lord Davies; the joys or otherwise of being married to an MP; national service for young people cropped up; and, it is fair to say, bad days at the office for benefits officials struck me as being quite interesting. There was an emphasis on friends and “Neighbours”, and we have been exhorted to watch “Coronation Street” next Wednesday—I must make sure to put that into my diary.

I happen to be wearing a tie with an elephant on today, and the House will know that elephants have deep family bonds. They are loyal to a fault and they are known to spend time with the relics of their ancestors, so clearly, in that respect, love matters. I welcome the report’s focus on love, which provides an important reminder of the human element, the unconditional bond that underlies the entire families agenda. We all know that children benefit from growing up in a family that provides love and support and is part of a community. These are the things that ultimately make a difference to children’s happiness and success throughout childhood and up through as far as employment.

We also know, sadly, that this is not the case for all children, and that some families require greater support. As a result, providing such support to create an environment where all children can thrive is a key priority for this Government. That is why, in February, we published Stable Homes, Built on Love, which sets out our vision for a social care system built on love, safety and stability, along with the actions being taken to reform children’s social care, a focus shared by the report. This is just one part of our wider support for families, and I will highlight some of the further initiatives shortly.

The term “family” does not automatically imply everyone living together under one roof, nor only those who find themselves under the branches of the same family tree, so I welcome the report’s broad definition of family. In preparation for this debate, I was struck by one definition I happened to come across. It goes as follows.

“Family is loving and supporting one another even when it’s not easy to do so. It’s being the best person you could be so that you may inspire your loved ones”.


Indeed, as my right honourable friend the Prime Minister puts it, quoted by the report,

“whatever your family looks like, it doesn’t matter as long as the common bond is love”.

I echo the report’s celebration of all forms of loving relationships. As the most reverend Primate and the right reverend Prelate the Bishop of Durham said, they are significant for every individual, whether they opt for a life as a pair within a family unit or as a single person. We must respect and recognise the different family arrangements and structures, so that we can provide the right types of support. However, I listened very carefully to my noble friends Lady Stowell, Lord Cormack and Lord Robathan. They spoke passionately, particularly my noble friend Lady Stowell, about the value and benefit of marriage and the need to keep promoting this, and they are absolutely right.

The right reverend Prelate the Bishop of Durham echoed the view, which was also raised by the noble Baroness, Lady Twycross, that the marriage ceremony is enormously important, and the preparation for the ceremony—preparing for the commitment of marriage—was at the heart of this. The right reverend Prelate cited a role model for this at the Holy Trinity Brompton. I also declare an interest that I believe that I am a beneficiary of good preparation for marriage, having just, last June, celebrated 35 years—not quite as many as some others in the Chamber. I also noted the question raised by the right reverend Prelate the Bishop of Durham about the registrar possibly doing some signposting. I will reflect on that, and I will certainly get back to him, and put a letter in the House Library regarding that important point.

In terms of supporting marriage, I remind the House that the Government do indeed support the institution of marriage. The House will know that we introduced the marriage allowance in 2015 to recognise marriage and civil partnerships in the tax system as just one example of our support for marriage. The Government also have a strong track record of advancing LGBT rights, including the introduction of same-sex marriage in 2013. I was deeply moved by the speech from my noble friend Lord Herbert.

The most reverend Primate mentioned the importance of state intervention where needed. The noble Lord, Lord Davies, added in at different stages, and I think he alluded to the reference made to the elderly. I will come back to that, hopefully, with time later.

I will directly address what support the Government are providing on issues that affect families. As my noble friend Lady Bottomley highlighted, my own department, DWP, oversees the reducing parental conflict programme, which shows that supporting parents, inter alia, to reduce the damage of frequent arguing—I make the point that it is frequent arguing, not just arguing, that is very damaging—achieves positive and sustained impacts for children. This programme is delivered through local authority family services and with local community and faith partners. The most reverend Primate emphasised the importance of local action in this respect, and he is right. We continue to provide ongoing support for local authorities across England on this programme and are on track to have directly supported 40,000 parents in the last two years.

In addition, the start for life and family hubs programme has created a network of centres for families with children up to 19, or up to 25 where the child has a disability. These family hubs link professionals, local partners and faith groups to support families. The right reverend Prelate the Bishop of Durham spoke about family hubs very eloquently. They also support the very important early years development, which I know is a priority for the Royal Foundation and her Royal Highness the Princess of Wales. I am sure that the House will welcome the joined-up support being given by midwives and family hub workers to expectant and new parents, helping them with both their child’s and their own health and well-being.

The right reverend Prelate the Bishop of Durham asked how the Government will ensure that faith groups are involved in family hubs, and that they provide the necessary relationships advice. He is right: faith groups are at the heart of many communities and therefore are a key component of the family hub model. We have published guidance for local authorities on the services we expect family hubs to offer, including helping families access support for separating and separated parents, and to reduce parental conflict.

In another passionate speech, the right reverend Prelate the Bishop of Gloucester spoke about children with a parent in prison—a very important subject. A parent going into prison can have a profound impact on children, which I would say is an understatement. Local agencies are best placed here to determine what support is needed, for example, Keeping Children Safe in Education 2023: Statutory Guidance for Schools and Colleges states that the additional needs of children with a family member in prison or who are affected by parental offending should be considered.

Healthy relationships are built on a foundation of mutual respect, trust and honest communication. In schools, our children are being taught about the importance of healthy relationships through the inclusion of age-appropriate relationships, sex and health education within the curriculum. This helps them to develop mutually respectful relationships more broadly, but that is not all the help that they get on relationships. School mental health teams are already making a difference when relationships get tough, to help children address problems early before they escalate.

The reality is that not all relationships stand the test of time. The noble Lord, Lord Griffiths, put it very well when he said, “Bad things happen”, and indeed they do. In 2020, the Government introduced the Divorce, Dissolution and Separation Act. The legislation has modernised divorce laws and has created an online divorce service to help with financial settlements and childcare arrangements after separation.

In addition, the Child Maintenance Service—which I am directly responsible for—plays a crucial role in securing financial support for children where parents have separated. It mandates—and, where necessary, enforces—appropriate arrangements so that children have the best start in life with a solid financial foundation. Through both private family-based arrangements and more formal Child Maintenance Service arrangements, looking at the years 2020 to 2022, on average 160,000 children were kept out of absolute low income on an after-housing-costs basis.

Despite this progress, however, there is much more we can do. That is why, in October, my department announced measures to strengthen the Child Maintenance Service by accelerating our enforcement powers and removing the £20 application fee. We will also consult on the ways in which the Child Maintenance Service collects and transfers maintenance payments, all with the primary aim of getting more funds to children. My noble friend Lord Robathan is right to mention that it is mainly men—93%—who have strayed in a marriage. However, I emphasise that not all do not take responsibility for their children, so it is a complicated story.

The right reverend Prelate the Bishop of Durham spoke about the two-child limit, which I was certainly expecting to speak about this afternoon. He will probably know what my answer will be; my noble friend Lady Stowell alluded to it. The two-child limit has been extensively debated in this House. On inception, the policy had two clear intentions: first, to make universal credit fairer and more affordable to the taxpayer; secondly, to make sure those supporting themselves through benefits face the same financial choices around the number of children they can afford to have as those not on benefits. The House will be aware of the exceptions that apply. Child benefit continues to be paid for all children in eligible families.

Going further, in 2014—as the most reverend Primate highlighted—we introduced the family test, which guides policy-makers in assessing the potential effects of their decisions on family dynamics, including elements related to marriage. The family test is for individual departments to apply. The approach allows for flexibility to consider the test at the most appropriate points in the policy-making process. In my role, I have actively supported the family test and I remain committed to promoting it across government.

I know the most reverend Primate regards this as being very important. We acknowledge that some people, including himself, might like to see the consideration and publication of the family test become a statutory obligation. To work best, an assessment of the potential family impacts of policies needs to be done early in the policy development process, so that consideration can be given to adapting proposals. Feedback from policy-makers tells us that statutory tests risk becoming a box-ticking exercise at the end of the policy process, with pass or fail outcomes. However, perhaps I can reassure him and the House that we continue to work across government to support officials developing policy to apply the family test from the earliest policy development stages and encourage the sharing of best practice. We are also starting work across government to consider the language of the family test questions and supporting guidance. We really do want to ensure that it continues to be relevant and appropriate. We acknowledge the recommendations in the report, but also in the Children’s Commissioner’s report.

I will turn to some other matters raised in the report. On reducing poverty and supporting low-income families, the Government believe they have a strong track record of helping vulnerable families. There were a number of questions from the noble Baroness, Lady Twycross, and I will need to write a letter as there were an awful lot of them. I will be touching on housing later, however, which was a general theme during the debate, so I hope that some answers may come to her from that.

The House will be aware of the £276 billion spent on welfare in Great Britain over 2023-24. I will not rehearse all the Autumn Statement announcements, because the House has heard them on several occasions over the past two weeks or so. However, as I said earlier, I will focus on housing. The noble Lord, Lord Mann, raised this, and the most reverend Primate also spoke about the importance of family, where they live and how they live, and the right reverend Prelate the Bishop of Chelmsford spoke about the types of houses, the intergenerational focus on the buildings and, frankly, making it a lot better for families to live near each other so that we have the influence of the intergenerational aspects. Those are incredibly important points, which I certainly take on board.

In the meantime, as the House will know, in the Autumn Statement the Government are raising the local housing allowance rates to the 30th percentile of local market rents in April 2024, which will benefit 1.6 million low-income households by on average £800 a year in 2024-25, and of course help many who are in poverty. The right reverend Prelate the Bishop of Chelmsford asked about timing. I will certainly take her point back about perhaps bringing the date forward but I certainly cannot offer any reassurance on that.

The report rightly identifies many of the features that support families’ flourishing, including friendship, shelter and the ability to deal with conflict. However, I highlight the importance of work. I have to say that I am slightly amazed that this has not been raised at all during this debate, so I will take this opportunity to focus on it. It has been a long-standing principle for the Government that the most effective and sustainable way to tackle poverty is by championing employment, acknowledging the mental health benefit that this brings and supporting people, including parents, to progress in work. Work can be an important part of bringing families together, supporting their mental health, and role-modelling positive behaviours for younger generations. The Government are committed to improving lives by ensuring that more people can reap the rewards of work. The voluntary in-work progression offer is now available in all jobcentres across Great Britain. We estimate that around 1.2 million low-paid workers will be eligible for support to progress into higher-paid work, and we will encourage them to take up this offer.

On childcare and the actions of my department to support parents into work, from June 2023 we increased the universal credit childcare cost caps by 47% to £951 a month for one child and £1,630 a month for families with two or more children. Importantly, we can now also provide even more help with up-front childcare costs when parents move into work or increase their hours. I reiterate my appreciation to faith groups and their commitment to parents, carers and children, and I am grateful to the commission for its invaluable contributions to supporting and strengthening family life since it was established in March 2021.

I want to raise one very important point, which is the role of grandparents—the noble Lord, Lord Davies, referenced the elderly in his remarks, but I also thank the noble Lord, Lord Mann, profusely for raising this important subject. The intergenerational aspects of grandparents—the way they play a pivotal role in families, often stepping up to provide kinship care and support to children and their parents—are important. Many kinship carers, especially grandparents, take on this role at a time in their lives when they least expect to raise a family, we would guess. They provide support, sage advice and stability, forging strong relationships not out of duty but because love matters.

I will answer a question raised by the noble Lord, Lord Davies, to do with having a Cabinet-level Minister for Children. Perhaps I can be helpful by saying that of course he will know that we have a Children’s Minister, but that was not his point. The Secretary of State for Education fulfils the role of Cabinet-level Minister. She makes sure that the best interests of children and families are front and centre in policy and decision-making at this highest level of government. She has a statutory duty to promote the well-being of children in England under the Children and Young Persons Act 2008, and is responsible for overseeing domestic implementation of the United Nations Convention on the Rights of the Child and leading the reporting process on behalf of the UK to the UN.

The Minister for Children, Families and Wellbeing also chairs a cross-government child protection ministerial group. This group helps to ensure that safeguarding is championed at the highest level by government departments that provide services to children and families. Through this group, the Secretary of State also ensures that other government departments are held to account in delivering for children.

This Government are committed to delivering on issues that matter to the British people. That is why we will continue with our mission to help all families to thrive, and our young people growing up within them to flourish.

[Lord Davies of Brixton (Lab)]

Before the Minister sits down, can I ask him whether he used a word in his section on divorce advisedly? He referred to a proportion or percentage of men who had “strayed”. To me, that suggests an element of blame, whereas I thought that the whole thrust of developments in divorce law is for the law to avoid allocating blame.

[Viscount Younger of Leckie (Con)]

The noble Lord is absolutely right. I clarify that I was not attaching any blame; I was just making a factual point that it is the 93% of men who stray. There is a balance that we strike within the Child Maintenance Service to be sure that we take account of the issues relating to paying parents and receiving parents. It is very important that we do not take sides, but we also have to look at the facts.

Universal Credit

Viscount Younger of Leckie Excerpts

Thursday 7th December 2023 Lords Chamber

[Lord Rooker]

To ask His Majesty’s Government what consideration they have given to the proposal from the Joseph Rowntree Foundation and the Trussell Trust for an ‘Essentials Guarantee’ in Universal Credit.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, the department has taken note of the report and recommendations. We are aware of the continuing pressures people on lower incomes face. We will spend £276 billion through the welfare system in 2023-24 in Great Britain. From April 2024, benefits will increase by 6.7% and the national living wage will increase by 9.8% to £11.44. We are investing £1.2 billion in restoring local housing allowance rates, which ensure that 1.6 million low-income private renters gain, on average, £800 per year.

[Lord Rooker (Lab)]

My Lords, I remind the Minister that, of the 6.2 million people on universal credit, 38% are in full-time work. Has he read the latest report from Barnardo’s on bed poverty, published only in September? The research showed that, due to the lack of an essentials guarantee, 900,000 children share a bed or sleep on the floor. Can he imagine the anxiety and tiredness that this creates? There is a lack of an essentials guarantee, which could be monitored by an independent body. It is not just a question of upping the benefits; there ought to be some serious effort put into this.

[Viscount Younger of Leckie (Con)]

Yes, absolutely. The noble Lord’s points chime with what I said earlier about the fact that we understand the pressures that some people are experiencing. The Government have demonstrated their commitment to supporting the most vulnerable by providing one of the largest support packages in Europe. Taken together, the Government are providing total support of £104 billion from 2022 to 2025 to help households. I am aware of the Barnardo’s report. What we are doing for the household support fund includes funding to enable local authorities to help people with the cost of essentials in houses, including food, energy and furniture.

[Lord Forsyth of Drumlean (Con)]

My Lords, has my noble friend had the opportunity to read the report of the Economic Affairs Committee on universal credit, which pointed out the injustice of people who moved on to universal credit and who received overpayments under the previous system, through no fault of their own, having their universal credit reduced? Surely at a time of such pressures, the Treasury should write off the sum and acknowledge it was a mistake made by government, for which people who are under very stressed circumstances should not be paying?

[Viscount Younger of Leckie (Con)]

I take note of the point raised by my noble friend. I am not able to comment directly on that, but I will take his points back to the Treasury.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, will the Minister give due consideration, along with his ministerial colleagues in government, for the need to reform the social security system to ensure that poverty, particularly food poverty and child poverty, is put at the centre of any new policy, to ensure that there is an elimination over the next number of years?

[Viscount Younger of Leckie (Con)]

Indeed, the noble Baroness is right that poverty is incredibly important. Absolute poverty is the Government’s preferred measure, as the poverty line is fixed in real terms. There is some debate over how one defines poverty; we are very alert to that, particularly in the field of child poverty. We take it very seriously, and although there is not time to go through all the measures we are taking, it is very important that as many children as possible—all children—are taken out of poverty.

[The Lord Bishop of Worcester]

My Lords, thinking of the effects of poverty, the Mental Health Foundation has recommended that all front-line workers, including those who work in essential services and government, should be given training and support to know how to respond effectively to the mental health effects of financial stress and strain. Will the Minister agree that this training and support is both vital and necessary?

[Viscount Younger of Leckie (Con)]

The right reverend Prelate is absolutely right. Across government, we are putting a lot of work into tackling mental health, particularly post pandemic. We have a sustainable long-term approach to tackling poverty and, as I said earlier, supporting people on lower incomes. Perhaps I can say to the right reverend Prelate that, in 2021-22, there were 1.7 million fewer people in absolute poverty after housing costs than in 2009-10, including 400,000 fewer children.

[Lord Palmer of Childs Hill (LD)]

My Lords, one group ignored by the Government in the Autumn Statement is unpaid carers. The Chancellor’s speech in the other place failed to mention the estimated 10.6 million people providing care, while the statement document itself mentions them only in relation to technical changes. In recent research by Carers UK, 60% of all carers said that they were worried about the impact of caring on their finances, while over a third of carers receiving carer’s allowance say they are struggling to afford the cost of food. Will the Minister look at reforming the rate of carer’s allowance and taking further steps to prevent eligibility restrictions acting as a barrier to employment?

[Viscount Younger of Leckie (Con)]

Indeed, the noble Lord raised an important point about carers, who play a vital role in our country. We are very alert to this; I will certainly take the point he raised back to the Treasury, but I am unable to comment on whether we can or cannot do it. In terms of carers, we have strong evidence that some carers would also like to take on some work if it is appropriate, so there is much work going on with job coaches, to encourage them to speak to carers to see whether it is possible for them to combine work as well as their caring responsibilities, if it is appropriate.

[Baroness Sherlock (Lab)]

My Lords, the Minister says that the Government are concerned about poverty, and he describes the things the Government have done, but we have to look at the results, because I am afraid that the Government do not get to mark their own homework. If the Minister does not like the Barnardo’s study cited by my noble friend, does he like the Joseph Rowntree Foundation finding that last year a million children experienced destitution? What about UNICEF, which found recently that the world’s worst rise in child poverty between 2012 and 2019 was in the UK—the worst of the 39 richest countries in the world? Is the Minister proud of that?

[Viscount Younger of Leckie (Con)]

I am certainly not proud of that, but, as I say, there are a number of reports that have come out, and some that have come out recently. I can only repeat again that we are aware of the pressures involved; some families find it difficult even with where they can find the next meal. We are very aware of and alert to that; I think the noble Baroness will know that we are particularly busy in looking at what more can be done to help those in absolute poverty. She will know from the Autumn Statement the measures we have taken forward, and I can only repeat again that we are very alert to this.

[Lord Farmer (Con)]

My Lords, food inflation remains stubbornly high, at slightly over 10%, although thankfully it is 9 percentage points down from its peak in March this year. On this vital household metric, there is significant risk that prices will stay unaffordably high. What measures will the Government take to encourage the price of essential food items to come down from current levels in retail, local shops and supermarkets?

[Viscount Younger of Leckie (Con)]

My noble friend raises another pressure, which we are also aware of. First, tackling inflation is the Government’s number one priority, and that is coming down. The Government monitor consumer food prices using the consumer prices index, as my noble friend will know, and in October 2023 CPI food price inflation reported by the ONS was 10.1%, down from 12.1% in September 2023. I reassure him that, through regular engagement, Defra will continue to work with food retailers and producers to explore the range of measures they can take to ensure the availability of affordable food.

[Baroness Boycott (CB)]

As the Minister has just said, and the House agrees, the price of food is very high. Could the Minister explain to the House—or maybe help me—why we have a very good system called Healthy Start, which provides a supplementary bit of money to pregnant mums and kids under four, yet 40% of the people who are eligible for this are not registered, because the system is really complicated? NGOs such as the one I chair, Feeding Britain, have been campaigning for a long time for automatic registration. The money is there; it is not drastically expensive. Could the Minister agree to look into this very simple process that would help a lot of people?

[Viscount Younger of Leckie (Con)]

Again, I will certainly take that point back. The Healthy Start scheme is an important point of the Government’s programme. Through healthy food schemes, the Government provide a nutritional safety net to those families who need it most. In terms of the uptake, the latest Healthy Start uptake figures were published, as the noble Baroness may be aware, on 31 October. The uptake for the NHS Healthy Start scheme was 70%.

Department for Work and Pensions: AI

Viscount Younger of Leckie Excerpts

Tuesday 5th December 2023 Lords Chamber

[Baroness Sherlock]

To ask His Majesty’s Government how the Department for Work and Pensions is using artificial intelligence and what governance process is in place for such use.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, DWP has used forms of AI for some time and we continue to investigate new opportunities. This includes looking at how generative AI can help us deliver high-quality services to improve customer experience and colleague efficiency. We are aware of the transformative benefits of AI, as well as the potential risks. We have created the AI Lighthouse programme to explore opportunities, and we have a framework ensuring that we work safely, ethically and transparently.

[Baroness Sherlock (Lab)]

My Lords, this Question has become topical since I tabled it, since the Government have started to take powers to look into the bank account of every pensioner in the country. But that has made me even keener to understand exactly how DWP is using AI. Can the Minister tell the House whether it is used to select people for health reassessments, or to decide who to investigate or who to sanction? If so, what safeguards are in place to ensure that it is used transparently and fairly? How do we avoid it becoming a sort of digital version of stop and search?

[Viscount Younger of Leckie (Con)]

I hope I can reassure the noble Baroness that we already have a proven track record in delivering technology in a responsible and well-governed way. We have extended our governance to include an AI steering board and an assurance and advisory group. DWP always ensures that appropriate safeguards are in place for the proportionate, ethical and legal use of data, with internal monitoring protocols adhered to. I further reassure her that the Cabinet Office’s Central Digital and Data Office has recognised our Lighthouse programme’s safe acceleration framework as an exemplar for AI development in government.

[Baroness Buscombe (Con)]

My Lords, given that the DWP’s proposed total expenditure for 2023-24 is a staggering £279.3 billion, can my noble friend tell the House whether this use of AI will contribute and is contributing to cost efficiencies within the department?

[Viscount Younger of Leckie (Con)]

I can reassure my noble friend that it will. I shall give a bit of granular detail: a 2021 DSIT report highlighted the potential impact of AI on the UK labour market, and this of course includes DWP. Automation is forecast to increase, rising from an estimated 7% to 30%, but I can reassure my noble friend that, with the changes, there will be a net gain. We have an average of about 900,000 employees per quarter moving from one job to another, so I can reassure my noble friend that my department’s employees will reduce, but there will be opportunities for those in AI.

[Lord Palmer of Childs Hill (LD)]

My Lords, as the Minister said, the Government are rolling out massively complex new systems, with significant risk to claimants because they have not got their original systems in order. We hear constant reports of backlogs at the Future Pension Centre, payments for national insurance credits being lost within the system and more and more historic pension errors coming to light when it comes to things such as home responsibilities protection. Can the Minister update the House on the steps to get those existing systems in order and on what learning exercises will be carried out to ensure that no such errors will be carried forward on the new and potentially more powerful systems that he has outlined?

[Viscount Younger of Leckie (Con)]

We are certainly working very hard to look at and mitigate delays, and AI will over time be a game-changer for that. To manage and mitigate risk, we have produced a risk framework, in line with the Department for Science, Innovation and Technology. We are setting out AI governance and an approach to AI enablement which will be transformational.

[Baroness Lister of Burtersett (Lab)]

My Lords, I shall pick up on what my noble friend said about digital stop and search, because there is growing concern about the potential for hidden bias in the use of algorithms to detect social security fraud. What steps has the DWP taken to prevent such bias, with potentially discriminatory outcomes?

[Viscount Younger of Leckie (Con)]

The noble Baroness raises an important point. We are committed to building trust in our use of AI and are fully aware of the risks of the technology, as discussed at the UK AI safety summit. Where AI is used to assist its activities in the prevention and detection of fraud within UC applications, DWP always ensures appropriate safeguards, and bias is something we are very alive to. It will very much depend on the input of data and we have some risk profiles in place to ensure that we adopt best practice in that respect.

[Lord Bellingham (Con)]

My Lords, given the appalling amount of fraud within the DWP, costing billions per year, surely we should welcome the fact that DWP is using AI and algorithms to target this problem. The key is presumably that, once AI has reached a conclusion, actual human beings should review the situation. Can the Minister tell the House whether the DWP has robust internal quality assessment procedures?

[Viscount Younger of Leckie (Con)]

There are couple of questions there. We continue to explore the potential of AI in combating fraud. This includes the integrated risk and intelligence service, using AI to assist in identifying possible fraud in processing universal credit advances. To answer my noble friend’s question, importantly, DWP does not use AI to replace human judgment when considering the potential for incorrectness to either determine or deny payment to a claimant. The NAO and the ICO looked at this issue recently and found no areas of immediate concern.

[Baroness Jones of Whitchurch (Lab)]

My Lords, the issue that my noble friend raised about access to millions of people’s bank accounts came up at a very late stage—Report—of Commons dealings with the Data Protection and Digital Information Bill. Can the Minister outline why such contentious measures were introduced only after the line-by-line consideration of the Bill in the elected House? Why did the Government refuse the Opposition’s request that the legislation go back to Committee, as did the Online Safety Bill in the last Session? Can the Minister justify why this very contentious piece of legislation is being rushed through?

[Viscount Younger of Leckie (Con)]

I will not be drawn into answering questions on that, but I can say that it is important that the scrutiny of the Bill is done in an effective way and, of course, this House is very good at doing that. As I have mentioned before, it is very important that there is trust in AI solutions; this must be a prevalent issue among all users of AI.

[Lord Bird (CB)]

Will this AI enable people who are on social security to get a better deal and get off social security, so that we can tap into the skills and abilities of millions of people who are caught in the Bastille of poverty and social security?

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

Yes, and I can outline that a lot of very good work has been done so far. As I said earlier, the work still has to include human judgment, but AI is being used to assist with improving on repetitive processes for staff. We are introducing conversational platforms for triaging, which will lead directly to having a human face. The whole point is to speed up the process and include more human judgment in ensuring that more people get into work, and faster.

[Lord Brooke of Alverthorpe (Lab)]

Has the Minister seen the Paradot website? If not, will he look at it? Is the department examining whether the buddy concept developed there could be used in the department that he represents and in other government departments, and what the consequences of using that in government service would be?

[Viscount Younger of Leckie (Con)]

I am not aware of that, but I will most certainly look at it.

[Lord Scriven (LD)]

Can the Minister say what percentage of staff within the department are fully skilled and trained on the use, application and assessment of AI decisions?

[Viscount Younger of Leckie (Con)]

I will need to write to the noble Lord with those specific figures.

[Lord Harris of Haringey (Lab)]

The Minister has said repeatedly that he wants the public to have trust in the use of AI in the system. Can he therefore tell us what proportion of cases where AI has been used are subsequently checked by a human? Will he publish the results of that analysis to show whether the AI decisions are the same as human decisions, or perhaps better, or worse?

[Viscount Younger of Leckie (Con)]

I can give the noble Lord some reassurance on the processes that we have in place. AI is an evolving, iterative process and it is important to highlight the fact that we have a test- and-learn approach. We must proceed with extreme caution in what we are doing. Test-and-learn means that we need to get to a point where we are assured that this will work and that nobody will be affected detrimentally. Then we can accelerate our programmes.

Benefit Claimants: Free Prescriptions

Viscount Younger of Leckie Excerpts

Thursday 30th November 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I begin by expressing my own condolences at the loss of the noble Lord, Lord Darling. I was shocked and greatly saddened when I heard the news earlier today. He was a giant of a man, and he was extremely helpful, indeed instrumental, in helping the country through the financial crisis back in 2008 and onwards.

It is a pleasure to close this important debate which, at its heart, is about ensuring that more people who can work are supported to do so and benefit from all the rewards of work. I start by thanking all noble Lords for their valuable contributions, in particular the right reverend Prelate the Bishop of London for initiating this debate. I also thank her for our meeting earlier this week, which was greatly appreciated. Getting into work and ensuring that work pays remains a key government priority. Building on the £7 billion employment package announced in the Spring Budget, the Autumn Statement set out a further £2.5 billion investment in employment support over the next five years. This support will ensure that no claimant reaches 18 months of unemployment if they have taken every reasonable step to comply with the jobcentre support offered to them.

I will cover two or three points upfront. I was interested in the very hard-hitting speeches from the noble Lord, Lord Davies of Brixton, and the noble Baroness, Lady Bennett. They both opined about the issues of sanctions more broadly. It is fair to say that the right reverend Prelate the Bishop of London alluded to some misrepresentation in the press. I can think only that the noble Lord and noble Baroness have maybe been reading too much in the papers, but their questions were fair.

I say at the outset that conditionality supported by sanctions has been a long-standing feature of benefit entitlement and a policy of past Governments, including past Labour Governments. Claimants on work-related benefits are generally expected to take responsibility for meeting the conditionality requirements that they have agreed to with their work coach. Where a claimant fails to attend a mandatory appointment or fails to comply with specific work-related activities without good reason, an open-ended sanction is applied. Open-ended sanctions are applied from the date of the failure up until the date that the claimant complies with the agreed requirement—I will say more about this later. I am grateful to the noble Baroness, Lady Sherlock, for her general acknowledgment of this policy.

The right reverend Prelate the Bishop of London understandably asked about continued disengagement and whether the policies we are taking forward are a bit harsh—I think that is the general principle of what she said. Perhaps I can be helpful by saying that claimants are set mandatory work-related requirements based on the benefit regime that they are in. All mandatory requirements are tailored to the claimant’s circumstances and are discussed with them beforehand, as are the consequences of failing to comply. We have also hugely increased the training that job coaches have. I reassure the House that the quality of job coaches is increasing the whole time, and there is a great deal of sensitivity involved, as the House will imagine.

Following a failure to comply, the claimant has the opportunity to provide good reason. Additionally, a pre-referral quality check is in place to check for known vulnerabilities before a sanction referral is made. Following a referral, cases are reviewed to ensure that the mandatory requirement was fairly set in the first place and to check whether a conditionality easement should have been applied. Claimants will be contacted through the normal channels from the point of sanction decision. These include a digital nudge at six weeks following the decision. Where a claimant remains disengaged following an open-ended sanction, they will receive a notification at month five that will inform them of the claimant closure intention and prompt them to re-engage or to inform us of any new circumstances that may impact this.

The right reverend Prelate asked, reasonably, about the cost of living. We remain very aware of the pressures that people are facing with the cost of living. That is why we have provided £94 billion of support across last year and this year, 2023-24, to help households and individuals with the rising cost of bills. In addition, subject to parliamentary approval, working-age benefits will rise by 6.7% from April 2024, in line with inflation. The House is well aware of the Autumn Statement announcement on the local housing allowance rates, which I know will make a considerable difference.

The right reverend Prelate asked about statutory sick pay. There is a very short answer: we will absolutely continue to keep it under review. She also asked about primary legislation and timing. Although I cannot give her any precise information on the timing, I can say that it is very unlikely that we will be able to bring this forward during this Parliament. That helps perhaps to answer a question from the noble Lord, Lord Allan of Hallam.

Turning to the issue of disengagement, I should explain that for the quarter ending August 2023, 95.3% of sanctions were for universal credit claimants failing to attend a mandatory appointment with their work coach, as opposed to refusing a job interview. These sanctions are typically open-ended, as mentioned earlier, meaning that they can easily be ended at any time by the claimant re-engaging with their work coach. We know that the majority of people who have open-ended sanctions do re-engage with the support on offer within six months. However, there is still a growing number who are choosing not to engage with employment support, despite support being available to them.

It is important to place this area in the context of the Government’s wider Back to Work plan. A key part of this is about ensuring that a short spell out of work does not turn into a period of longer-term unemployment. I am sure that we all agree with that, because the longer someone remains unemployed, the harder it is for them to return to the labour market. This can have detrimental impacts on the individual, as well as the wider economy. That is why, as part of our plan, we are bringing in much more intensive back to work support earlier on in someone’s claim. This includes upskilling, job search support, practical work experience and tailored advice to support claimants. Those claimants who remain unemployed after 18 months of intensive support will undergo a review by a work coach and will be expected to either take up a job or mandatory work placement, or engage in a programme of intensive activity.

To ensure fairness to the taxpayer, it is right that there are consequences for those who refuse to engage with the support on offer. It comes back to my initial comments at the beginning of my remarks. As a result of this new approach, no claimant should reach 18 months of unemployment in receipt of their full benefits if they have not taken every reasonable step to comply with jobcentre support. The noble Baroness, Lady Bennett of Manor Castle, asked about the additional jobcentre support—the AJS. She asked whether this was even proven to work. Perhaps I can reassure her that there is good evidence to show that work is generally good for physical and mental health and well-being, whereas worklessness is associated with poorer physical and mental health and well-being. Work can be therapeutic and can reverse the adverse health effects of unemployment. This is why the AJS aims to support those closest to the labour market to return to work as quickly as possible and prevent long-term unemployment. So we do think this is a very worthwhile project. It will send a clear message to claimants who can work about engaging properly with support.

Having covered that area, I will now focus on the important points that were raised about claim closure. I would like to, I hope, give some reassurance, and dispel a few myths which were put about. I listened carefully to the remarks made by the noble Lord, Lord Davies, whom I have much respect for. However, I am afraid that I just did not agree with much of what he said in this respect. It is important to underline that not everyone who fails to meet with their work coach is subject to a sanction. If you have good reason, you will not be sanctioned, nor will your claim be closed. The examples of “acceptable good reasons” include new or worsening illnesses, health condition flare-ups and periods of mental ill-health—which answers a question raised by another noble Lord. They also include working or attending an interview, unexpected childcare, attending the funeral of a close family member or friend, or transport failures.

Even if there is no evidence of good reason, work coaches can also apply discretionary easements, as mentioned earlier, such as domestic emergencies. When an easement is in place, we relax our requirements so that individuals will not be sanctioned, nor will the claim be closed. Still, if you do not have a good reason for a failure but you take corrective action and re-engage with the support on offer within six months, your sanction will end and your claim will not be closed.

The noble Baroness, Lady Sherlock, asked who these people were, and I hope I can help to answer that. There is a rapidly growing group of disengaged claimants, as the right reverend Prelate acknowledged, on nil award, who have had a failure without good reason and have failed to re-engage for more than six months. They have no housing or child elements attached to their claim. Crucially, this means that claimants who do have housing costs or children can rest assured that they will not be at risk of losing the income that they have come to depend on.

In addition, the people in the impacted group have not declared that they are homeless or, because they have no housing element, they are likely living with family, possibly including their parents, or their friends. We also exclude any claimant with a health condition that impedes their ability to look for or carry out work—which might play into the questions raised by the noble Baroness, Lady Bennett. It is therefore only right that we close the loophole that allows people to continue to maintain a claim without complying with any commitments.

In the remaining time, I will focus particularly on free prescriptions. This was another theme raised by the right reverend Prelate. Not everyone who is subject to a claim closure will lose access to free prescriptions. There is a variety of exemption criteria beyond receiving universal credit that would qualify an individual for free prescriptions. Claimants are entitled to help with health costs, including free prescriptions, only if they are in receipt of a monetary award of universal credit that is above zero and if their earnings in their last assessment period were below the income thresholds. Many will have stopped receiving access to free prescriptions when their claims were fully reduced by the sanction.

As always, if entitlement to other benefits is reliant solely on a universal credit claim to establish eligibility, that eligibility will cease if the claim is closed. By excluding the claimants who have more severe health conditions and vulnerabilities from sanctions, we believe that the claim closure group would likely be claiming prescriptions for only minor health conditions. I think the right reverend Prelate acknowledged this in her remarks.

There were a number of questions, particularly from the noble Lord, Lord Davies of Brixton, pressing me on the lack of support for the most vulnerable. I hope I can be a bit more helpful. A well-established system of hardship payments is available as a safeguard if a claimant demonstrates that they cannot meet their immediate and most essential needs, including accommodation, heating, food and hygiene, as a result of their sanction. In universal credit, claimants are able to apply for a hardship payment from the first assessment period the sanction reduction is applied.

The noble Lord, Lord Davies, asked about work being the best route out of poverty. He knows what my reply will be, which is that the Government are committed to a sustainable long-term approach to tackling poverty and supporting people on lower incomes. He is well aware of the expenditure that the Government are making in this area and we believe that the best route out of poverty is through work. The Government remain committed to a sustainable, long-term approach in this respect.

The noble Baroness, Lady Bennett, asked about abolishing the prescription charge. I say very briefly that the Government have no plans to abolish the prescription charge in England or to review the medical exemption qualifying list. Our policy remains to help those whose need is greatest through the rules we currently have in place.

I really ought to finish. There are a number of questions that I will most certainly answer—

[Baroness Sherlock (Lab)]

I am sure that the Minister will write, but I will ask one simple question before we are timed out: how many people could be affected by this policy?

[Viscount Younger of Leckie (Con)]

I have asked about that figure. I will need to check whether I can give it to the noble Baroness, as it is not in the public domain. It is substantial. I will write to her to give her whatever answer I can. It is a very fair question, which was also raised by the right reverend Prelate the Bishop of London. However, that is as far as I am able to go.

[Baroness Bennett of Manor Castle (GP)]

Could the noble Viscount put that in the Library and share it with everyone in this debate?

[Viscount Younger of Leckie (Con)]

I will most certainly do that.

I will conclude briefly, because time has run out. I have not had a chance to focus on safeguards, which the noble Baroness, Lady Sherlock, raised. I will write to her on that as there is quite a lot to say. I close by saying that our Back to Work plan is about putting fairness at the heart of our welfare system: fairness for claimants who play by the rules and try their best, and fairness for taxpayers who contribute to the welfare system. Above all, it is about helping those who can work to move into jobs, which will grow our economy, change lives and, indeed, change their own lives.