Health-related Benefit Claims

Viscount Younger of Leckie Excerpts

Tuesday 5th November 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the noble Lord points out another of the contributory factors. A complex web of things brings people to this point. As far as we understand it, a number of contributory factors are driving the rise in health-related benefits. Disability has gone up in prevalence over the last 25 years, including a rise in mental health issues. Also, longer NHS waiting lists are thought to increase claims for benefits before people are treated, because they are waiting longer, and potentially after they are treated, because they have poorer outcomes as a result of problems in the National Health Service.

This Government are absolutely committed to fixing our NHS. We have seen record investments, and the plans that came out in the Budget mean that we are absolutely committed both to engaging directly in supporting the NHS and to tackling some of these problems. As part of “Get Britain Working”, we will have trailblazer areas across England and Wales bringing together health, employment and skills services. In three of those areas, money will go to the NHS to develop evidence on how the health system can prevent ill-health-related economic activity. We are going to sort this.

[Viscount Younger of Leckie (Con)]

My Lords, I remain to be convinced that the measures the Government are taking to get more inactive people on benefits into work, including those with mental health challenges, will bear fruit—I hope that they will. I have lost count of the number of consultations that have been announced. Crucial for this is a willingness of employers to hire. Have the Government not made matters much worse with the rise in national insurance contributions for employers announced last week?

[Baroness Sherlock (Lab)]

My Lords, I ask the former Minister not to prejudge this—we have not even published the White Paper yet. He may not be convinced by it, but I hope to convince him yet. When it comes out, I will happily talk him through it as there are some excellent plans.

He raises an important point about employers. My department is doing a lot of work with them, and we have plans to do even more. If we are to get people into work—particularly people who have challenges, such as mental health issues or other barriers—we need to get the right people into the right jobs with the right support. Otherwise, the danger is that we get people into jobs but they fall back out of them and do not stay there. We are absolutely committed to working with employers, making sure that we can get employers the staff they need and people the jobs they need.

Food Banks

Viscount Younger of Leckie Excerpts

Thursday 31st October 2024 Lords Chamber

[Baroness Sherlock (Lab)]

I absolutely agree about the importance of access to healthy food and there are schemes out there to help the lowest-income families access it, particularly pregnant women and the parents of younger children. Having been asked by a noble Baroness previously about breakfast clubs in primary schools, I went off to check and discovered that they are to be covered by the school standards for food, so we will make sure that there are nutritious breakfasts there. But in the end the noble Baroness, Lady Janke, raises a really important point: we have to tackle the child poverty at the root of this if families are to be able to feed their kids appropriately. That brings us back again to the child property strategy but I am delighted that, in the short term, there were some down payments. One small thing, which will not have gone widely noticed, is that we will introduce a fair repayment rate for universal credit. It sounds really technical but reduces the total cap on deductions from universal credit from 25% to 15%. That means that 1.2 million of the poorest households have £420 a year more to spend, which makes a real difference.

[Viscount Younger of Leckie (Con)]

My Lords, compared to pre-Covid times, when people tended to visit a food bank for emergency purposes—as a result of a home emergency—there is anecdotal evidence, as I am sure the noble Baroness is aware, that visits per head are more sustained and that the needs of those visitors are more varied. It is not just about poverty. It is about rising cases of mental health and domestic abuse, so what are the Government doing to help food bank volunteers to cope and to spot these signs in customers?

[Baroness Sherlock (Lab)]

My Lords, our local jobcentres are doing very good work, as I am sure the noble Viscount will know from his time doing my job. There are incredibly good arrangements, including partnership schemes to engage with all kinds of local charities to make the connections, but the most important thing is to have somewhere to refer people to. I am afraid that our mental health service has been in such decline that, even if problems are identified, it is quite hard for volunteers to know where people can go. This Government are committed to restoring our mental health support and investing in child and adolescent mental health. As a down payment on that, we will recruit another 8,500 mental health professionals to work with children and adults. I am really grateful to the noble Viscount for raising that really important point.

Pensioners: Winter Support

Viscount Younger of Leckie Excerpts

Tuesday 29th October 2024 Lords Chamber

Asked by

[Viscount Younger of Leckie]

To ask His Majesty’s Government what steps they are taking to support pensioners this winter.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the Government are committed to ensuring that pensioners remain safe and healthy throughout the winter months. Thanks to the triple lock, most pensioners will see their state pension rise by over £1,000 during this Parliament. The lowest-income pensioners are entitled to pension credit, and winter fuel and cold weather payments to assist with heating and other costs. Additionally, all pensioners benefit from free flu jabs, transport concessions and community programmes to support mental well-being.

[Viscount Younger of Leckie (Con)]

That is all very well, but I want to raise a particular concern about pensioners living in rural and coastal communities. As the Minister may be aware, Age UK and Public Health England have been working in tandem to explore and understand the underlying issues, including loneliness, the digital divide, lack of support networks, poor house insulation and gaps in transport links, with attendant increased living costs. The withdrawal of the winter fuel allowance is a major blow to thousands of pensioners, many of whom are simply not wealthy by any stretch of the imagination. What are the Government doing to ensure place-based financial support for those in this category, also bearing in mind energy costs rising in advance of this winter?

[Baroness Sherlock (Lab)]

My Lords, on energy costs, the price cap has risen this year compared to last year, as the noble Viscount will know. However, it is £117 lower than it was last winter and the state pension, as he also knows, is £900 higher. I want to get the message out to pensioners that things may have gone up recently, but they are a lot lower than they were last year.

For rural or off-grid pensioners, energy support is provided by local authorities, DESNZ and devolved Governments. We are encouraging energy suppliers to do all that they can. The noble Viscount may know that the warm home discount is available to eligible low-income households, and the key thing is that it is paid through their electricity bill, so they do not have to be connected to the gas supply to get that help. There is even a specific scheme to support people who live in park homes to apply. There is also a home upgrade grant that provides grants for low-income households to upgrade the energy performance of the worst-quality off-grid gas homes in England by installing energy-efficiency measures and low-carbon heating.

On the broader point about placed-based support, the noble Viscount will know that the Government found the money to extend the household support fund for a further six months, so I would encourage any person in this situation to go to their local authority for local help.

Employment, Education and Training: Young People

Viscount Younger of Leckie Excerpts

Tuesday 29th October 2024 Lords Chamber

[Baroness Sherlock (Lab)]

We are looking very closely at these issues—I also have responsibility in my department for people who are experiencing homelessness. We are doing a number of things in this space, and I recognise the problem the noble Baroness describes. I have recently met some of the charities working on this, looking at some of the interesting solutions that they have been offering in supported housing. From the other side, we were one of the departments that helped launch a new homelessness covenant for employers. I recently went to an event to celebrate its first year of operation, and it was brilliant to hear employers talking about what they got out of it, not just recruiting young people who are themselves homeless but understanding that, in many cases in their own workforce, people were at risk of homelessness, had experience of homelessness or were in very precarious situations. We all have a lot to learn about the range of experience that young people have in that space and what more we can do about it. I thank the noble Baroness for raising the question.

[Viscount Younger of Leckie (Con)]

My Lords, the Youth Futures Foundation—an independent not-for-profit organisation—calls the number of NEETs a “crisis”. As we know, 66% fall into the economically inactive category. I acknowledge the need for better mental health support, but the head of the Government’s new Labour Market Advisory Board, who advocated for

“quicker, clearer and more effective”

sanctions in his advisory role prior to 2010, now suggests a universal income for those out of work and states that sanctions are not a priority. Can the Minister explain what is going on? Is this official Labour policy?

[Baroness Sherlock (Lab)]

I am not sure who the noble Viscount is talking about but, if he would like to speak to me afterwards, I am very happy to look into it. We want to try to reform support to make sure that every young person has the opportunity of either quality training, quality education or a job. That is our priority and that is what people need. Young people want to have a future and to get on in life, but they have to be given all the support they need to get to that point. We have a crisis among the young. We should not have as many young people between 18 and 24 not in employment, education or training as we have. This Government are determined to reduce that number.

Women’s State Pension Age: PHSO Report

Viscount Younger of Leckie Excerpts

Monday 28th October 2024 Lords Chamber

[Baroness Sherlock (Lab)]

I am grateful to the noble Baroness for raising a really important point. The gender pensions gap starts with the gender pay gap. Therefore, the first thing the Government need to do is address the gender pay gap and we are committed to doing that. The national pay gap still stands at over 14%, which is really shocking. We know that most employers understand that, when women succeed, so does their business. We are committed to making sure reports are given. For example, gender pay gap action plans will be mandatory and will reflect the hard work of outsourced workers as well as employees.

The kinds of reforms that have taken place under successive Governments are beginning to change at least the way the state pension addresses the gap between men and women. In the new state pension, there is less of a difference because the old state pension was much more dependent on national insurance contributions and pay-related additional pensions, whereas the new one does not have that. The gap is closing, but in private pensions it is still significant, and we need to do more about that.

[Viscount Younger of Leckie (Con)]

My Lords, the final PHSO report in March cited maladministration, as the noble Lord, Lord Sikka, said. This is regarding communications by the DWP for 28 months from August 2005. But a ministerial submission in 2009 admitted that, despite steps taken to disseminate leaflets with pension forecasts and the rest, all this had failed to raise awareness among those directly impacted. What assurances can the noble Baroness give that the department has learned its lessons on how best to target its audience and to do it rapidly and in large volume?

[Baroness Sherlock (Lab)]

My Lords, the department is carefully considering the findings of the report. Since 1995, successive Governments have used a range of methods to communicate changes to the state pension age, from leaflets to advertising campaigns and direct mailings. We are making sure that the department is looking more closely at this. For example, we have written letters to people at different stages. Women who were affected by the Pensions Act 1995 were written to between April 2009 and March 2011. People impacted by the 1995 and 2011 Acts were written to between 2012 and 2013, and so on. People in the transitional group—those whose pension age is rising from 66 to 67, in which I count myself—got letters from the department between 2016 and 2018.

I think we are getting better. In the 2021 Planning and Preparing for Later Life survey, people whose state pension age falls between 66 and 67 were surveyed and 94% of respondents either got their state pension age right or underestimated it. Hopefully, this work is paying off.

Pensions Regulator Defined Benefit Funding Code of Practice 2024

Viscount Younger of Leckie Excerpts

Monday 21st October 2024 Grand Committee

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the noble Lord, Lord Davies. Indeed, I thank all the speakers for the expertise gathered in this Room on what is an unlikely subject for many people.

On the DB funding code, first, with all the expertise that has been expressed—and for those reading Hansard who have no expertise—perhaps I ought to say something basic. For the record, what is a defined benefit pension? It is a type of workplace pension that guarantees you a specific income for life throughout retirement. The amount that it pays out depends on things such as your final salary, your average salary and how long you have been a member of your employer’s scheme. I know that everyone in the Room knows that, but people outside it may not.

The DB code has been many years in the making, as the noble Lord, Lord Davies, said. It sets out in detail how defined benefit pension schemes will have to approach funding in future, including things such as how quickly they must deal with any deficit that may arise. The code was arguably written in an era of deficits, whereas the majority of DB schemes are now in surplus, but I agree that you still need a set of rules for those schemes that are short of funds.

Despite all the worthy speeches, most of the code is uncontroversial, in my view, and has my general support. The response from the industry has been broadly positive; it appears to give trustees and scheme sponsors flexibility while ensuring that they carry out proper risk management as it relates to their pension products. Numerous articles have been written on it; given the length of this debate, I will not go into them in any great detail, but I highlight an article entitled “PwC Comments on The Pensions Regulator’s New Defined Benefit Funding Code of Practice” and an article in Pensions Age Magazine headed “Industry expresses ‘relief’ as TPR confirms final DB Funding Code”. So the industry and commentators have been complimentary in general terms.

However, I wish to raise some issues on which I would appreciate the Minister’s views. First, how far does the code truly accommodate the needs of remaining open DB schemes? This was a big topic of debate in the Lords during the passage of the Pension Schemes Act 2021. Does it allow them to take an appropriate level of investment risk for the long term, rather than having to go for lower-risk assets prematurely? This simply means that they cost more to run, as the noble Baroness, Lady Altmann, said in another way.

Secondly, how far does the code recognise the particular position of charities and other not-for-profit sponsors of pension schemes? Is there a risk of charities being forced to close deficits too quickly and, therefore, having to divert a loss of revenue income into the pension scheme? There would then be a risk of it appearing to donors to those charities that their money is not being used for front-line charitable purposes, thereby weakening the charities’ futures. I would appreciate the Minister’s comments on that.

Finally, I am sure the Minister has read the blog by David Fairs, who worked at the Pensions Regulator. It was headed: “At long last, new regulations fire the starting gun for the new funding regime”. He stresses the challenges and opportunities missed. He queries—and he is an expert—whether the new funding code will make a significant difference. I ask the Minister the same question.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Lord, Lord Davies, for giving us the opportunity to have the first pensions debate in this House since the general election. This Committee is my first experience of swapping sides with the Minister, and it gives me the opportunity to wish her well in her role with all its responsibilities, with which I am all too familiar.

This debate on the defined benefit code of practice is interesting in that, as has been said, it is not an SI but arises out of one in the form of delegated powers from the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024. It seems that every decade or so there is a requirement for a code update: there was one in 2006, leading to the current version in 2014, and now in 2024 we are debating another code of practice—number four, I believe. Updates are based on the premise that the pensions landscape changes, and of course it does, as now with the need for scrutiny of liabilities in DB schemes, the plethora of closed and maturing schemes and the need to ensure risk management, greater robustness over the longer term and optimum management of open schemes, which have been alluded to in this debate.

Ensuring that pension schemes are well managed is essential in safeguarding the incomes and welfare of pensioners. This is especially important at a time when the cost of living is high and the Government are restricting the financial support available to pensioners—more of which later. I welcome the publication of this code and its stated aim of helping trustees comply with their responsibilities under the defined benefit pension funding requirements. The focus is necessarily on supportable risk and ensuring that trustees and sponsoring employers are not caught unawares and plan well ahead, in particular where schemes are nearing maturity.

The work on the code was undertaken by the regulator under the previous Government, and I am pleased that the consultation on the code—there have actually been several, as the noble Lord, Lord Davies, and others alluded to—has been widely accepted by a broad range of stakeholders. I note that where there were concerns, such as on the need for flexible risk-taking at low dependency and not a one-size-catch-all approach, they were largely addressed and accepted in discussions with the industry.

I have listened with interest to the technical points raised by a number of noble Lords, in particular the noble Lord, Lord Davies, and I know that these points will be addressed—I say this with some relief—by the Minister. By his own admission, the noble Lord, Lord Davies, repeated some of the points made in the debate in March, such as about so-called box-ticking and the code being too prescriptive. In March he also mentioned his concern about the regulator misunderstanding its role, although I am not sure he alluded to that today.

My first question to the Minister leads on from this. It is simply: is the job done? Is the code an iterative process because we do not want another 10-year wait, or do we just accept that this is bringing it up to date and that, in effect, we wait for eight or 10 years? It does not particularly matter, I suppose.

I have some questions of my own on the code. The best-practice management of pension schemes is dependent on the effectiveness of trustees. How does the Minister regard the current landscape for recruiting trustees? There is a danger that too much guidance and steer towards adherence to codes, with the greater responsibilities attached, could act as a chilling factor.

What is her assessment about the training of trustees? This question plays into other questions, not least those of the noble Lord, Lord Davies, and the noble Baroness, Lady Drake, who quite rightly alluded to the important relationship between employers and their covenants, as well as the trustees. Who undertakes this training? This is important in assisting the chairs of trustees and, of course, the supporting employers.

Autism Employment: Buckland Review

Viscount Younger of Leckie Excerpts

Tuesday 10th September 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I confess that I have learned a lot about this in the last week. There is a huge range of schemes and support out there. For example, DWP has specialist coaches—people who can support our work coaches and work with people with autism who want to move into jobs or develop them. We have schemes of all kinds, such as internship schemes for young people with autism and other disabilities. We have ways of working directly with people and supporting them. We have schemes with employers, and there is Access to Work, through which people can apply for support directly. DWP is trying to make all the work we do as tailored as possible to individuals, so that we can give people the support they need to get them into a job, keep it, progress in it and stay there.

[Viscount Younger of Leckie (Con)]

My Lords, the previous Government saw it as a vital priority, on the back of the key recommendation from the Buckland review, to work with employers to encourage more employment of autistic people, which has been mentioned. How will the Government’s recent decision to change the PIP and WCA assessments under the new Health Assessment Advisory Service affect such progress, particularly as the Minister’s letter of 6 September states that there will be “an impact on service levels”?

[Baroness Sherlock (Lab)]

My Lords, as I took over as Minister from the noble Viscount, I am sure that he is quite aware of the contracting issues that led to the decisions that were made in the department.

Probably the single most important thing when dealing with somebody with autism or another disability coming forward is that the person who assesses the health condition is properly trained and has the resources needed to make an appropriate assessment. As of yesterday, we have brought the educational material for all our healthcare assessors in-house, so that we can control the quality, make sure we train people well and support them well, so that when they are making these important decisions about whether someone is entitled to support or not, they are able to understand what they are hearing, and the person can come forward and get the best possible support at the next stage. We are committed to supporting disabled people of all kinds into work, and we will make that a reality.

Pension Credit

Viscount Younger of Leckie Excerpts

Monday 9th September 2024 Lords Chamber

[Baroness Sherlock (Lab)]

The noble Lord makes an important point and I am grateful to him for doing so. Certainly, a significant number of pensioners do claim pension credit—1.4 million have managed to claim and do get it as a result. So, our job is to get the next surge of people to do that. DWP has a big campaign on: we had a week of action last week, and we work with partners such as charities and local authorities to go out and promote the campaign. From next week, we are running a national marketing campaign on a range of channels, including national print and radio. We will be targeting people of pension age but also friends and family, who can encourage them to apply. It can be tough, but sometimes we need to make people understand that there is lots of help out there. They can call the department free of charge and get charities to help them. If people are really stuck, we have a DWP home visiting team, which will visit the vulnerable and help them make a claim. So I urge all noble Lords: by all means let us have the fight in here, but please put the word out and let us get people to claim what they are entitled to.

[Viscount Younger of Leckie (Con)]

My Lords, allied to pension credit, the Government find themselves firmly between a rock and a hard place on this ill-judged decision to cut the winter fuel payment. On the one hand, if there is a substantial increase in the uptake of pension credit—and of course, we are all for that—the figures show that the increased costs will all but wipe out the net gain of £1.4 billion that the Treasury expects through the cut. On the other hand, with a poor or low uptake, it is apparent that many more of the most vulnerable pensioners will be hit. What mitigating measures are the Government looking at to reduce the impact of this decision, and when will they be announced and introduced? Mitigating measures there will need to be—and even better would be to see a reversal of the whole policy.

[Baroness Sherlock (Lab)]

My Lords, the noble Lord is talking about take-up. As I said, the best estimate of pension credit take-up as a whole is 63%: that is 63% of the number of people who could be claiming pension credit who we think are getting it. The amount of pension credit that is taken up is quite a bit higher than that, nearer to almost three-quarters of the total amount claimed. The challenge for us is to make sure that those who do not claim it do get it. However, the big difference this will make is this: if you are on the basic state pension and not claiming pension credit, you will get not just an extra £200 or £300 in winter fuel payments; you could get thousands of pounds in pension credit itself. Our job is therefore to make it as easy as possible for people not just to get this smaller amount, but to get the bigger amount as well, so let us all try to do that.

European Social Charter

Viscount Younger of Leckie Excerpts

Tuesday 3rd September 2024 Lords Chamber

[Baroness Sherlock (Lab)]

Nice try. Just to clarify, I should say that I was not talking about resources in terms of ratification. To ratify a treaty is to agree to be bound by its provisions. If UK domestic law and practice will not meet those provisions, the UK cannot ratify a treaty only to find that it would be instantly in breach of it. That is what this is about; it is not about resources. However, on the question of pension credit, we are in the middle of a week of action in which the Department for Work and Pensions is working with local authorities and other partners to encourage pensioners across the country to apply for pension credit. We are developing new plans to go further through the winter. We want everybody who is entitled to it to get pension credit, and will be out there working to make sure that they do.

[Viscount Younger of Leckie (Con)]

The noble Baroness mentioned the employment rights Bill. Many businesses are already facing uncertainty given these government plans to introduce French-style employment laws. The additional protocol of the European Social Charter is supposed to be a human rights protection system for social and economic rights, organised on a collective basis, providing a fast and effective procedure to support the charter. Will she agree that it is actually slow, very bureaucratic, expensive and acts as a chilling factor for businesses, which are struggling to raise their productivity?

[Baroness Sherlock (Lab)]

My Lords, if the noble Viscount is talking about the additional protocol, I should say that the UK is one of a majority of about two-thirds of states which are party to the European Social Charter that have not adopted the additional protocol. I expect he will know that, having done my job until about 20 minutes ago. It is not because we have any objection to engaging with social partners, but because we regard the current system, in which reports are made by national Governments indicating their compliance with the provisions of the charter, to be adequate.