Domestic Abuse: Universal Credit Payments
Baroness Buscombe Excerpts(5 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Lister of Burtersett
To ask Her Majesty’s Government what assessment they have made of the implications for their proposed domestic abuse strategy of the default joint payment of universal credit to couples.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, there are no implications on the provision of the default joint payment of universal credit to couples as a result of the domestic abuse strategy and consultation. We already provide split payments and additional support to victims of domestic abuse who request them. More broadly, the Government are currently considering stakeholder responses to the consultation on domestic abuse that closed on 31 May and will publish a response and a draft Bill later this Session.
Baroness Lister of Burtersett (Lab)
My Lords, domestic violence, welfare rights and women’s organisations are all warning that default joint payments will undermine the new domestic abuse strategy—which rightly includes economic abuse. With all the money bundled together in UC, such payments increase the risk of economic abuse. Requiring a victim to request a split payment, as the Minister said, makes her vulnerable to retribution from a violent partner. Why are the Government not actively trying to find a way of meeting the widespread calls for default split payments?
Baroness Buscombe
My Lords, it is important to stress that most couples can and want to manage their finances jointly, without state intervention, so split payments should not be the default. When an individual suffering from domestic abuse and violence requests a split payment, we will support them in putting the arrangement in place—but split payments in universal credit cannot be the solution, the panacea, to what is a criminal act. They are provided to any individual who requests them as a result of domestic violence.
Baroness Burt of Solihull (LD)
My Lords, to get split payments, the survivor of domestic abuse has to disclose the abuse to their work coach and provide written evidence from an official. They are eligible for split payments only when the abuse has already reached crisis point in very exceptional circumstances. Why cannot each partner nominate a bank account, enabling separate payments to be made as routine? I am sure that that is not beyond the wit of man or woman to design a better, safer and fairer system.
Baroness Buscombe
My Lords, as I have already said in a previous answer, most people do not want split payments. They want to be able to judge their household affairs together as one. Therefore, it is important that we and our staff work hard with Women’s Aid and ManKind to develop as much as we can our support and training facilities to help people who are subject to domestic violence. It is not necessarily the case that domestic violence has reached crisis point. We treat this carefully as a private matter. We make training for our work coaches in Jobcentres Plus a priority so that we can give the right support at the right time.
Baroness Barran (Con)
How will the department ensure that victims of domestic abuse who are in receipt of universal credit can meet their basic needs? I am thinking particularly of those who suffer such severe financial abuse that they struggle to meet their accommodation costs and provide for their children.
Baroness Buscombe
My Lords, we have a range of measures to ensure that a family’s basic needs are met, including housing benefit and universal credit housing support. Victims do not need a bank account to claim immediate advance payments from universal credit to cover immediate needs. Fast-track payments can be made into alternative accounts to avoid rent arrears. In addition, child maintenance fees are excepted and a parent can apply for child benefit to be paid direct to them. Work coaches may also signpost and refer domestic violence victims to organisations that can provide further support.
Baroness Sherlock (Lab)
My Lords, I wonder whether the Minister has properly understood what Members of the House are saying to her today. The old system used to separate out payments for children, which were paid every two weeks to the main carer, and in-work benefits, which were paid directly into the bank account of the main earner. Universal credit has taken all these payments, and housing payment, and made them available only once a month, all into the bank account of one partner. What happens in practice if the relationship breaks down? The Government have been very good at recognising that financial and economic abuse are part of domestic abuse. It means that a person, often a woman, who is in that situation simply has no access to funds to protect herself and her children. Will the Government please listen? The Scottish Government consulted and decided to commit to going to split payments. Will the Government please think again?
Baroness Buscombe
My Lords, with regard to Scotland, the Scottish Government have discussed split payments with stakeholders and are now starting to think about developing their own policy. We will continue to watch and observe how that proceeds. But I have entirely understood what we are talking about today and I think it is really important to make clear that we want to simplify the system for everyone making claims under universal credit. It is important that we simplify the system. Noble Lords shake their heads, but we want to treat people in the normal way, whereby they have a joint approach, in most instances, to receipt of their income, to managing their household bills and to managing how they can cover their costs on a monthly basis—but with exceptions where people who are suffering abuse or any other kind of coercive action can ask for and will be given split payments as a matter of course.
Baroness Watkins of Tavistock (CB)
My Lords, will the Minister please answer two questions? First, is this purely because of cost savings, in that it may be more costly to deliver split payments? Secondly, what about preventing abuse in the first place? If women have their own money, it quite frequently prevents abuse.
Baroness Buscombe
On the latter point, I have to say that the charity Refuge has made it clear that it is not convinced that split payments help. In fact, they can exacerbate violence if the perpetrator of violence knows that their partner has her own pot of money. We have to be extremely careful about this: each individual case is different. This is nothing to do with cost savings. The reality, I know, is that this is all about the legacy. Noble Lords opposite prefer the legacy—the complex, difficult system that the party opposite preferred, which kept people trapped on welfare. It was much more complicated. We are simplifying this through universal credit, which is delivering a much simpler to understand system to support people into work and support them to manage their household finances.
Pensions: Online Dashboard
Baroness Buscombe Excerpts(5 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McKenzie of Luton
To ask Her Majesty’s Government what progress they have made towards establishing an online pensions dashboard.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, with automatic enrolment we are delivering a complete change in the UK’s savings culture. We are currently exploring the many complex issues associated with developing a pensions dashboard. Our feasibility work is nearing completion and we will report to Parliament in due course. The Government are committed to ensuring that people are supported to plan ahead for retirement, including with automatic enrolment, existing digital services and a new single financial guidance body, launching in January next year.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for that reply. At a time when 9 million new workplace savers are being auto-enrolled and the average worker changes jobs 11 times during their working life, there is clearly a compelling public policy argument for having mechanisms to track pension pots, including the state pension, throughout life. The DWP has estimated that 50 million pension pots, with some £3 billion in savings, would be lost without a dashboard. Already one in five adults admits to having lost a pension pot.
There is widespread support for the concept of the dashboard, although there are different propositions. We believe that the Government are right to give ownership to the DWP, as a government lead is essential. Does the Minister agree that lessons from overseas show that the best way of providing a comprehensive service is to make participation compulsory? That requires legislation. Given all the work the DWP has done, why are we considering changing tack now? What can we glean when Parliament is not sitting which we cannot not glean when it is? Is there not an issue of capacity, with the universal credit debacle overwhelming the department?
Baroness Buscombe
My Lords, let me first say that the figure of 50 million referred to is an estimate made in 2012 of the number of dormant, not lost, pension pots by 2050. To suggest that 50 million pension pots will be lost unless a pensions dashboard is introduced is wholly inaccurate: I want to make that very clear. We are looking through the whole process and at experience overseas in order to understand more about pensions dashboards. The noble Lord knows that the whole process is very complex. We are working through the options around scheme participation in any potential pensions dashboard. The decision whether to compel participation depends on a number of issues, such as the functionality, delivery model and governance of the dashboard. We will set out the Government’s view in due course.
Baroness Kramer (LD)
My Lords, can the Minister address this feet-dragging? George Osborne announced that this project would go ahead in 2016, it was meant to be up and running next year, and Guy Opperman, in his role, constantly says that he is actively supporting it. The industry is—to put it mildly—cross, having done all the work it needs to contribute towards creating a pensions dashboard. It is vital so that savers can make the best investments of their pension money, and it is key to fraud prevention. Both of those are crucial issues. Can the Minister confirm that the rumours that the scheme is in jeopardy are false, and can she please finally give us a timetable?
Baroness Buscombe
My Lords, the noble Baroness will know that we are talking about something quite complex. As we look at it, the more we explore and the more questions we ask ourselves and the industry. My honourable friend in another place was right to talk about what was set out in 2016. We want to be careful to ensure that we cover all the challenging issues associated with the dashboard, not least questions of governance, funding, what role the Government might have and whether legislation is necessary. The department has been working closely with stakeholders across the pensions and financial services industry, the regulators, consumer bodies and others, as part of this feasibility study.
Baroness Altmann (Con)
My Lords, I welcome the potential of the pensions dashboard and I thank the Minister for her answers so far. It does not sound as if the whole project has been parked, but can my noble friend comment on the accuracy of pensions data and whether the problems of errors in pension recording have led to some concerns about a dashboard containing past pension records? Can she perhaps reassure the House that, at the very least, all auto-enrolment pension records could be put on to a dashboard funded by the industry—not by government but facilitated by her department?
Baroness Buscombe
First, I congratulate my noble friend on being appointed as the chair of pensionsync. I noticed that the question she has just asked was on her blog this week, suggesting that it is perhaps due to errors. I entirely refute that suggestion. The reality is that we already have, as my noble friend well knows, the online Pension Tracing Service to help people more easily locate their pension savings. We have also established the “Check Your State Pension” service, which has provided more than 9 million estimates since its introduction in 2016. We also have the development of a single financial guidance body. This department is doing a huge amount towards a revolution in the way that we support people to save in their retirement. Auto-enrolment, to which nearly 10 million people have actually signed up in the last six years, is an example of where we are working with this quiet revolution.
Lord West of Spithead (Lab)
My Lords, the Minister will be aware that war pensions were included in the figure of 2% of GDP that is spent on defence. It is therefore a false figure. Can she assure us that this will be looked at within the ongoing modernising defence programme so that we actually have a realistic amount of money for defence to support the Armed Forces, not least to have some more ships so that when we are all away on holiday on the oceans, we see some grey funnel line around rather than anything else?
Baroness Buscombe
I thank the noble Lord for his question. He knows my particular affection for the Navy.
Baroness Buscombe
I have a personal interest. That said, I must be clear with the noble Lord that there has been growth in the budget for the Navy, which is ongoing, and for the Armed Forces overall. His point about war pensions is an important one and if I can enlighten him any further, I will certainly attempt to do so in writing. We are doing all we can at the Department for Work and Pensions to support the lives of those in our Armed Forces in every way that they impact upon our department. That is for both those who are serving and those who have served this country well.
Occupational Pension Schemes (Master Trusts) Regulations 2018
Baroness Buscombe Excerpts(5 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Buscombe
That the draft Regulations laid before the House on 18 June be approved.
Considered in Grand Committee on 18 July.
Employment and Support Allowance
Baroness Buscombe Excerpts(5 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, by leave of the House, I shall repeat as a Statement an Answer given to an Urgent Question in another place by my honourable friend the Minister for Disabled People, Health and Work. The Statement is as follows:
“Mr Speaker, in 2017 my department identified an error that had resulted in some claimants being underpaid employment and support allowance between 2011 and 2014 while their claim was being converted from incapacity benefit, a legacy disability payment. The department proactively informed the House of this problem in December 2017 through a Written Statement before briefing the media.
On 15 March this year, I tabled a Statement setting out how this work to correct the underpayments was progressing. I explained that the department would supply 400 staff for this exercise to ensure that we identified as quickly as possible any cases where underpayment had occurred.
Yesterday, I tabled a further Statement to confirm that this work is now under way. Staff are reviewing cases, contacting claimants and making payments; so far, we have paid out more than £40 million in arrears.
As outlined in yesterday’s Statement, the department has analysed the relationship between “official error” and Section 27 of the Social Security Act 1998 in regulating how and to what point in time arrears can be paid out. As a result of this analysis, we will now pay arrears to those affected back to their date of conversion to ESA. Where we have already corrected cases by paying backdated arrears up to 21 October 2014, we will review these cases again and pay any additional arrears that are due prior to that date.
As planned, my department will be contacting all those we have identified as potentially affected. Once an individual is contacted and the relevant information gathered, they can expect to receive any backdated payments within 12 weeks. Once contacted, individuals are provided with a dedicated free phone line on which they can contact the department to discuss their claim”.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for repeating that Answer—another day, another DWP mistake. Back in 2011, 70,000 sick and disabled people were underpaid thousands of pounds after they had been migrated from incapacity benefit to contributory-based employment support allowance, without the possibility being recognised that they had paid enough stamps to entitle them to non-contributory ESA. The result was to deny them access to additional premia that they might have been able to get had the Government done that correctly.
The error here is that the Government have now accepted their mistake but have decided that people’s payments could be backdated only to 2014, because in 2014 a tribunal judgment made it clear that the Government had been doing this the wrong way. Yet again, therefore, it took a small charity to go to court to judicially review the department. And yet again, at the very last minute the DWP caves in and says, “Fair enough, we will now backdate payments to 2011”.
This raises a couple of questions. The scale is enormous: the National Audit Office said that the decision not to go back before October 2014 would have resulted in that group of disabled claimants losing out to the tune of between £100 million and £150 million. Individuals might be entitled to up to £10,000 of wrongly underpaid benefits.
There is a pattern to this. Six reviews are in progress to identify disabled people who may be entitled to back-payments, five as a result of legal cases against the Government. I therefore have two questions for the Government. First, why did it yet again take a tiny charity—the CPAG, to which I pay tribute—to use money donated to it to go to court to get Ministers to do the right thing? Secondly, there is the systemic issue: the PAC, in its report on ESA, and the NAO, in its report on universal credit, described a department that was defensive when dealing with outside organisations, and unwilling to listen to warnings about problems that were occurring. What steps, therefore, is the Minister’s department taking to make sure that in future it listens to warnings—from inside and outside—and does not wait until someone takes it to court?
Baroness Buscombe
I thank the noble Baroness for her response. I turn straightaway to her point about restricting—as it were—the payments. Initially the department believed that we were legally restricted to calculating repayments from 2014 due to a statutory rule—Section 27 of the Social Security Act 1998—which governs the position with regard to payment of arrears when a court of tribunal finds that the department has made an error of law. Following a thorough investigation, however, we realised that this interpretation was incorrect. We have made this very clear in previous Statements to the House and we have made it clear that we have been working extremely hard to do everything we can to correct a mistake that should never have been made in the first place. We believed, however, that the law prevented our paying benefit back to the date of conversion. We now understand that we can do that. We have listened to a range of opinions, including those of the CPAG, undertaken a thorough investigation of the legal position and realised that the law that dictated that we could not do this in the first place was wrong.
We want to be sure, therefore, that we pay back everything that is owed. I would add that the staff have been working extremely hard to put this right and to help everybody who may have lost out from these payments since the whole process of migrating people from incapacity benefit to ESA began in 2008.
Lord Kirkwood of Kirkhope (LD)
My Lords, is the Minister satisfied that the reduction in the departmental expenditure limit that the DWP has experienced over the past five to 10 years has not contributed to this error? She has just said that the DWP is now putting 400 staff on the case. I have a serious concern about the extent to which staff shortages are occasioning these massive administrative blunders that cause not just inconvenience but serious financial difficulty to large numbers of the population. Can she confirm that passported benefits will also be paid by way of compensation, because some of the people who have been left out in these underpayments have also lost out on free dentistry, NHS treatment, travel and free school meals, to the extent that it would accumulate to large sums of money each year, in addition to not getting the benefits to which they are entitled?
Baroness Buscombe
My Lords, let me make it clear that we do not believe that this is attributable to staff reductions at the Department for Work and Pensions. We still have over 70,000 employees. We have also been working hard to do more since 2010. Since this Government came to power, we have spent £5.4 billion a year more than we were doing in 2010 to support people with disabilities. We continue to do so while upping our game and, yes, demanding more from our employees, who are working extremely hard. That is to ensure that we have the proper resource and the staff to make sure that we can review all these cases at pace. We have already started making payments—over £40 million in arrears so far—so we are doing everything we can to ensure that people get the support they are entitled to and at pace.
Based on my meetings with the Minister of State for Disability and our Permanent Secretary, who made a robust case for delivery by our department in front of the Public Accounts Committee last week, I can say that the department is working hard. Yes, we are doing more, so noble Lords could say we are a little stretched, but we are proud of what we are doing and delivering. We want to get this right. On passporting benefits over to UC, we are making sure that people will not lose out in what they are entitled to.
Lord Touhig (Lab)
My Lords, in the part of Gwent where I was born, the letters “dwp” form a word. It is pronounced “dup” and means stupid or daft. Could that account for why the accounting officer at the Department for Work and Pensions says that he does not understand all the letters that his office sends to claimants? If the author of the letters does not understand them, how on earth are the claimants supposed to do so?
Baroness Buscombe
My Lords, I hear noble Lords laughing but this is no laughing matter. I take great exception to the suggestion that I am working for anything that could be described as a dump. I am the lead Minister for the correspondence that goes out to claimants and we work through that correspondence with a fine-toothed comb to make sure it is in clear English, polite, responsive and on time. Since I have been in office, we have been at 100% in terms of our timing. We are doing everything we can to support so many people, particularly those with disabilities and health conditions, to improve and transform their lives. I therefore will not listen to the noble Lord talking about—
Baroness Buscombe
My Lords, no, somebody in the department may have said something but, as far as I am concerned, I am proud to work for the Department for Work and Pensions.
Lord Laming (CB)
My Lords, I am sure that most of the House accepts what the Minister says: the department is working extremely hard and trying very hard to get these things right. I do not think that is in doubt, but is it not also the case that each of these underpayments affects the quality of life of a very vulnerable person? Sometimes that degree of distress undermines their quality of life. Can the Minister continue to do all she can to ensure we all recognise that at the end of this process is somebody who will be much damaged by underpayments of this kind?
Baroness Buscombe
My Lords, I thank the noble Lord for his question, which gives me an opportunity to say that my honourable friend in another place, the Minister of State for Disabled People, Health and Work, is working tirelessly not only to do the job but to do so in an exemplary fashion. She absolutely understands that each individual life is affected when we get it wrong—where there is a mistake. As she said in another place only an hour ago, one mistake is one too many. But the reality is that we are working hard and we have wonderful staff who are very proud of what they do.
I am a little afraid of saying this in case it is misunderstood but, on underpayments, I should be clear that no one suffered a cash loss. We did not take any money away. That does not excuse the mistake that was made. The reality is that we needed to ensure that underpayments from the transfer were corrected as quickly as possible, and we continue to do so.
Occupational Pension Schemes (Master Trusts) Regulations 2018
Baroness Buscombe Excerpts(5 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Buscombe
That the Grand Committee do consider the Occupational Pension Schemes (Master Trusts) Regulations 2018.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, subject to Parliament’s approval, the regulations will introduce a new approach to how some occupational pension schemes are regulated. From 1 October, both existing and new master trust pension schemes will be required to be authorised by the Pensions Regulator and will be subject to ongoing supervision by the regulator to ensure that they are maintaining the standards required at authorisation. Any scheme that opts out of applying for authorisation, or which fails to meet the required standards upon application, will be required to wind up and transfer its members to an authorised scheme. These regulations will fully commence the authorisation and supervision regime for master trust schemes under the provisions of the Pension Schemes Act 2017. I am satisfied that the Occupational Pension Schemes (Master Trusts) Regulations 2018 are compatible with the European Convention on Human Rights.
The past eight years have seen a significant growth in the master trust pensions market. Membership has grown from 200,000 in 2010 to approaching 10 million today. This market now accounts for assets of over £16 billion and will continue to grow over the coming years. The rapid increase in both membership and assets is irrefutably linked to the phenomenal success of auto-enrolment. As a result of this success, we are introducing the new authorisation and supervisory regime, which will ensure that these new savers have assurance that they are saving into quality schemes where their money is well managed and protected.
We have always been clear that our expectation is that a significant number of schemes are unlikely to meet these standards and will need to leave the market. The regulator has worked closely with master trusts over the last two years to help them to prepare for these changes, including offering readiness reviews, which have been taken up by 33 schemes. As a result, it has a good understanding of those schemes that are most likely to close. Where this is the case, it is likely to be because they will not meet the quality standards being introduced, for example, because of poor administration or doubts about long-term financial viability.
I know that a number of noble Lords recently met with the regulator and raised concerns about what will happen to the members of those schemes that opt to close. The Pension Schemes Act 2017 introduced some retrospective measures to help to support the market and to protect members through the transition to full authorisation. These applied from the Bill’s introduction in October 2016 and came into effect on Royal Assent in April last year. They require that any scheme which is facing a triggering event, which is one that is likely to lead to it winding up, must immediately report the fact to the regulator, and charges made by schemes to members are fixed at October 2016 rates until the full regime comes into force.
During discussions on the Bill, noble Lords were clear that our expectation is that the market will respond to these changes. The emerging evidence shows that this is the case. The retrospective measures mean that the regulator is currently working closely and effectively with 20 schemes that have already either closed or signalled their intention to leave the market. This includes assisting them with finding appropriate destinations for their members. The introduction of new provisions earlier this year to ease and speed bulk transfers into and out of defined contribution schemes offers further support to members. In addition, where a scheme has started to wind up, the disclosure regulations ensure that members are made aware, allowing them to decide individually whether to accept the trustees’ default destination or make their own arrangements.
We expect that there will continue to be further consolidation of the market as we approach the October deadline. With this in mind, we are already aware of a number schemes that plan to promote their claim as a potential destination of choice for closing schemes by applying for authorisation at the earliest opportunity. In addition to the pull from schemes looking to expand their presence in the market by taking on members from closing schemes, there is a strong push from employers participating in those schemes as, regardless of the decisions made by the scheme, they remain obligated to meet their automatic enrolment responsibilities by ensuring that their employees are actively contributing to a pension scheme. We have always known that there would be a period of flux and change for the market, requiring close and active management by the Pensions Regulator, and the regulator is delivering.
I turn briefly to the policy. My officials have been working closely with both the Pensions Regulator and the industry to develop the detailed policy design for these regulations. This culminated in a public consultation on the draft regulations which was launched by my right honourable friend in another place, the Minister for Pensions and Financial Inclusion, in November last year. The consultation was well received and generated a number of supportive suggestions for technical improvements, which were most welcome. The only real issue of concern at that time was that we were not in a position to confirm the level of the authorisation fee. This was resolved by the time we published our response to the consultation in March this year, where we confirmed that existing schemes would be charged £41,000 and new schemes will pay £23,000. We recognise that this information may have an influence on a scheme’s decision whether to seek authorisation.
Your Lordships will be aware that the regulations have been the subject of scrutiny by the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee, neither of which found reason to draw the special attention of your Lordships’ House to these regulations.
I turn to the substance of the regulations. When the Pension Schemes Bill was before the House—ably stewarded by my noble friends Lord Freud, Lord Young and Lord Henley—the scope of the new regime was the subject of considerable debate. Our aim was always to design a regulatory regime that meets the needs of a very diverse market, ranging from long-established schemes, including many not-for-profit organisations, to new schemes set up in the wake of automatic enrolment.
However, during the passage of the Bill we were not able to confirm the details of how the powers to apply the regime to schemes that arguably fall outside the definition set out in the Act and to disapply it to schemes that otherwise would fall within the definition would be used. I can now confirm that the regulations will bring certain types of non-master trusts within scope—for example, what are often known as “cluster schemes” where schemes may have single employers but are run by the same people and are subject to the same rules. They also disapply the authorisation regime to some types of scheme which have specific characteristics that mean they meet the definition but do not face the same risks as master trusts—for example, certain small schemes where all the members are trustees and the majority of the trustees are members of the scheme. The intention remains to provide member protection proportionately.
To bring clarity to the application process, the regulations specify that the scheme must have a business plan approved by the trustees and the scheme funder. This will include detailed information about the ambition and financial strategy of the scheme, as well as providing details relating to the scheme funder, the systems and processes that are used and information on trustees and others in a position of influence over the running of the scheme. In addition, schemes and scheme funders will need to provide their audited accounts and the accounts of any third party funder.
The Act identified the five authorisation criteria that schemes must meet. First, fit and proper: the regulator will need to be satisfied that everyone running a scheme has the appropriate integrity and is competent. Secondly, financially sustainable: the regulator will need to be satisfied that the scheme can fund the operating costs, as well as the additional costs should it get into difficulty and possibly wind up. Thirdly, scheme funder: the regulator also needs to be satisfied that an appropriate entity is standing behind the scheme and is able to meet certain costs. Fourthly, systems and processes: when assessing whether the IT and wider systems and processes are sufficient to ensure that the scheme is run efficiently, the regulator must take account of the scheme’s need to provide an effective service to its members and to deliver the ambitions set out in its business plan. Fifthly, continuity strategy: prepared by the scheme strategist and signed off by the scheme funder, this will need to set out how the scheme plans to respond to and protect the interests of its members in the event of a triggering event. These are circumstances that could lead to the closure of the scheme.
It has always been our intention that once schemes have met the authorisation standard, the regulator’s role will turn to ensuring that standards are maintained. In extremis, the powers in the 2017 Act will enable the regulator to initiate a triggering event and require a scheme to wind up. This is an appropriately robust backstop for the most extreme cases. However, our intention is to avoid such extreme interventions through a supervisory process that supports high standards and encourages schemes to seek support when any difficulties are first identified. The regulator will require schemes to update their business plans regularly, including when significant changes occur, when there is a change to key personnel, or failure to meet a previously declared key milestone, target or planning assumption. The regulator will also be able periodically to request a supervisory return from any scheme. This will inform the regulator’s ongoing risk assessment of schemes and will be based on the five authorisation criteria. While the regulator can only request this return at most once a year, it will have some discretion over how regularly returns are requested, based on an ongoing assessment of the level of risk each scheme is carrying.
The master trust market is growing and vibrant and it is not our intention to interfere in it. We expect schemes to continue to join and exit the market over time. I have set out the process for those entering the market; I now turn to how the regulator will support the members of schemes that exit the market.I have previously described “triggering events”, which are those likely to risk the scheme being closed and wound up. When this occurs, the scheme is required to convert its continuity strategy into an implementation strategy, including setting a clear timetable for either resolving the issue or closing the scheme. The regulator will work with the scheme to ensure that appropriate action is taken at each stage, including notifying employers and members about what has happened and what their options are if the scheme is going to wind up. The financial sustainability requirements will mean that there are sufficient funds to see the scheme through the transition period. Restrictions on charges in the Act mean that additional costs cannot be passed on to members.
In conclusion, we are ensuring that master trust scheme members—particularly members of schemes that are opting to wind up—are protected and supported before the new regime is fully rolled out in October. This new approach is widely accepted and supported by the industry, which in turn is being ably supported in its preparation for the changes by the Pensions Regulator. These regulations introduce a robust new regime for master trust pension schemes that will provide added protection for millions of people saving towards their retirement, most of whom are doing so as a result of automatic enrolment. These changes are necessary, and I commend the regulations to the Committee.
Baroness Drake (Lab)
My Lords, I welcome these regulations, and I thank the Pensions Regulator for its courtesy in providing a briefing on master trusts to interested Peers. With approximately 10 million members and £16 billion of assets under management in these trusts—which will increase even further, particularly given the rise in automatic enrolment statutory contribution levels—the need for a robust authorisation, supervision and resolution regime to protect individual savers is compelling. The risks of not having such a regime were fully aired during consideration of the Pensions Act 2017.
These regulations cover the five criteria which authorised master trusts must meet, and I will refer to two in particular. The first criterion is that the scheme is financially sustainable. This requirement expects master trusts to hold sufficient financial resources in sufficiently liquid assets to cover certain costs and is at the heart of protecting individual savers from financial detriment in the event of a triggering event such as scheme failure or wind-up. However, nearly £6 billion of assets is currently held in master trusts which do not even have a voluntary master trust assurance. I also note that the impact assessment assumes one triggering event each year after “steady state” is reached in 2019. This seems high given the regulator’s assumption that only 56 master trusts will be authorised.
The master trust authorisation regime has, understandably, the flexibility to accommodate a wide range of financing requirements and different scheme funders. That also means, however, that the public need a high level of confidence that the financial sustainability requirement will be robust throughout that wide range. In setting the financial sustainability requirement covered in Schedule 2, what assurance—or further assurance—can the Minister give about the level of prudence expected in any estimates and strategy for meeting those relevant costs?
The definition of “prudency” has become somewhat loose in the DB funding regime and the regulator is taking steps to tighten up what is expected, so reassurance on prudency in the master trust financial sustainability regime is welcome. Will the Pension Regulator’s financial sustainability regime be benchmarked, for example against the Prudential Regulation Authority’s regime for capital adequacy? If an authorised master trust subsequently closes to new business but continues to run as a closed scheme, how will that impact on the financial sustainability assessment and will the trust automatically be required to transfer the members to another scheme?
Baroness Buscombe
My Lords, I thank all noble Lords for their considered contributions to this short debate. A number of issues were raised, which I will attempt to address—I say “attempt”, thinking of the noble Baroness, Lady Drake, who I have huge respect for, given her considerable expertise in this area.
The need for financial sustainability of the scheme must be at the heart of what we are doing to protect savers. We must be sure that the scheme is financially secure. We have always been clear that we expect that some master trusts will decide to exit the market. Also, over time the market will consolidate as many of the schemes are designed to work best when operating at scale. The regulator has been working closely with schemes, whether to support them to prepare for authorisation or to leave the market. We have always known that some schemes would not meet the standards because they would not be financially viable over the longer term. There are also schemes where the administration is not of an acceptable standard or where the people running them would not meet our requirements. It is important that members’ saving schemes are financially robust and of high quality, and we believe that the measures we have introduced are proportionate responses to the risks in the market. We also expect that new schemes will enter the market over time.
I have been asked whether we can be confident that the risk of a master trust failing in a catastrophic manner, if I can put it that way, is low. The system has been designed to protect against failure to the best of our ability. Measures such as the financial sustainability requirements and the need for an implementation strategy aim to make master trust closure as orderly and well-managed as possible. As the noble Lord, Lord Kirkwood, said, this is new territory, so it is critical that, through this process and going forward, we work closely with all stakeholders and ensure that the Pensions Regulator can work closely with master trust schemes and continue proactively to assess the level of risk in the master trust market so that it is alert to any significant changes in a particular scheme. One of the important points I made at the outset is that maintaining strong oversight to the best of our ability while continuing in a sense to maintain a light touch is an important balancing act for the regulator in this market.
The noble Lord, Lord Kirkwood, asked about inaccuracy of data and what processes are in place to ensure that the correct contributions are being paid if providers do not know the pensionable salary of an employee. As we know, automatic enrolment has been a great success and we have put in place a robust compliance framework, overseen by the Pensions Regulator, on how to abide by the law. An employer is required to select a qualifying pension scheme, enrol qualifying staff into that scheme and deduct any contributions payable under automatic enrolment. Employers are also required to pay those contributions across to their chosen pension provider by a set deadline. Although the deadlines for contribution payments vary depending on the type of scheme being used, there is an overall legal deadline of the 22nd day of the following month, which aligns with the HMRC deadline for paying tax and national insurance.
Qualifying pension schemes for automatic enrolment are subject to the same regulatory framework as all trust-based pension schemes, also overseen by the Pensions Regulator. There are published codes of practice on its website setting out how the trustees of defined contribution pension schemes and the managers of personal pension schemes should monitor the payment of contributions and report payment failures to the regulator.
The noble Lord, Lord Kirkwood, also asked how we can ensure that consumer interests are properly safeguarded and their information protected. We are talking about data in this context. Governance and security were considered as part of the pensions dashboard prototype project and subsequent interim phase. The recent Which? report, published in February 2018, also looked at and stressed the importance of regulation in this area to protect consumers. The Government will examine those findings alongside industry and the regulator as part of their feasibility work.
For many people, the state pension will form an important part of their overall retirement income, so people can access the online Check your State Pension service through GOV.UK to get a forecast of their state pension and information about how they might improve it, and to view their national insurance contribution record. We are considering the industry group project’s recommendation that state pension data should be available alongside private pension information from day one.
Schemes are required to provide details of the systems and processes used or intended to be used in running their scheme as part of the application. This applies whether the systems and processes used are devised, applied or maintained by the scheme or service provider. Schedule 4, on systems and processes requirements, sets out the information required, which includes the features that will be part of the system.
The noble Lord, Lord Kirkwood, referenced the pensions dashboard; I think he referenced a particular press item. We do not comment on press leaks, but I can say that the Government are working with the regulators, wider industry and other sectors on the options for the development of a pensions dashboard. We are in the concluding phase of the feasibility study and will share our findings in due course. I add to that something my honourable friend in another place said today before a Select Committee. To remind noble Lords, he said that,
“the chancellor, in 2016, set out … an enthusiasm for a dashboard”,
but,
“how it is then provided and what … form it takes, is … a matter for ongoing debate”.
There is an acceptance that there is a proper and legitimate debate as to whether this is a single, uniform dashboard. Indeed, I remember the level of detail that, for example, the noble Baroness, Lady Drake, referenced in Committee on the single financial guidance Bill, saying that we have to learn to crawl before we can walk and to walk before we can run. We have to get this right. That is as much as I am able to say.
There was also a question about the code of practice from the noble Lord, Lord Kirkwood. There is an eight-week consultation on this. The general consensus from industry is that this is an important part of the authorisation and supervisory role, but we very much have a strong eye on the application of the code of practice.
A number of questions were asked by the noble Lord, Lord McKenzie. For example, on the fraud compensation fund, he asked what happens about the levy if a scheme is waiting for authorisation under the Pension Schemes Act 2017, and why 1 April. Any master trust schemes authorised during the financial year 2019-20 can benefit from the lower levy cap of 30p per member for the whole of the year, irrespective of when during the year they are authorised. This is a transitional measure that applies only to the year 2019-20. New master trust schemes established after that financial year will be subject to the existing rules on the fraud compensation fund levy. They will pay for the portion of the year that they were registered.
It is important to reference the need for consistency when approving master trust applications. Of course, the Pension Schemes Act 2017 sets out the criteria that must be met for the scheme to be authorised. The regulator will take a risk-based approach based on the evidence provided. The evidence presented will be assessed objectively, with specialists assessing specific aspects of evidence. For example, IT specialists will be deployed to assess objectively the system schemes will use. For existing master trust schemes, the decision to authorise sits with the determinations panel—an independent committee of the regulator. For new master trust schemes, the decision to authorise will be made by the executive arm of the regulator.
Baroness Buscombe
I am grateful to the noble Lord. I will write to him and share what I write with all noble Lords who have taken part in the debate.
I want to touch on the kind words of the noble Lord, Lord Kirkwood, in reference to my noble friend Lord Trefgarne. All too often, committees that are not on the Floor of the House or in the Moses Room are quietly proceeding on the more technical and difficult issues and we do not pay them due regard in a public manner. I want to do that now. I thank the noble Lord, Lord Kirkwood, for complimenting the department on getting it right in terms of our consideration of and the detail in the regulations. That is important because we are protecting people’s lifetime savings. We want to do this to the best of our ability while allowing many more people to take part in the scheme.
I am sure I do not need to persuade your Lordships that with millions of hard-working people now saving towards their pensions, it is only fair and proper that their savings are protected and that the schemes they are saving with are of a high quality and offer good value. The regulations will help to achieve this by bringing into effect a new regulatory regime which will ensure that schemes are well run. For the past couple of years, the Pensions Regulator has been working closely with master trusts to help them prepare for these changes. Following the introduction of the regulations, my officials and staff at the Pensions Regulator will continue to work closely with the industry—that is an important point to make—to support it in its preparations for making an application for authorisation and going forward.
I wish to thank all noble Lords again for their excellent contributions. Some of their questions were very difficult, I have to say.
Universal Credit
Baroness Buscombe Excerpts(5 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, with the leave of the House, I shall repeat as a Statement an Answer given to an Urgent Question in another place by my right honourable friend the Secretary of State for Work and Pensions on the National Audit Office report.
“I had information on the Question being the letter I received yesterday, so that is obviously where we will be going on the letter that I received yesterday. Opening up on that letter was about a meeting that the Comptroller and Auditor-General had asked to have with me on 27 June, when he wrote, and our department got back at the end of the week. That meeting will be on Monday. There was possibly an inference from that that I had not accepted the meeting, or that there was not going to be one, but that had not been the case and it is diarised for Monday.
The next bit was about the information we received and accurate, up-to-date information being shared with the department, to which we agreed information had been shared up to 6 June. But what we talked about is when we signed off the factual information contained within it, raising the concern about the context and the conclusions drawn from that information and where we went from there. That goes on to the impact of those changes and if we look at the impact of those that were brought through—the waiting days being abolished on 14 February, the housing benefit being run on 11 April and the advance payment of 3 January—as I said in my apology yesterday, the impact of those changes is still being felt. Therefore the definition could not or cannot be that they have been fully taken into account by the NAO.
The Auditor-General also talked about slowing down the process, which we always agreed with, which is about the test-and-learn process. We will learn as we go along; that is what we agree with, too. But when he said,
‘I am also afraid that your statement in response to my report … has not been proven’—
the case for universal credit—that is where we differ in the conclusions. So while the NAO had the same factual information either way, depending on where you looked at it and how you then come to conclusions, we then came to very different conclusions because of the impact of those changes that we had brought in at the end of that period, which are still being felt.
That is where I would like to leave it. It said that you cannot measure the exact number of additional people in employment—we will agree with that. You cannot measure the exact number of additional people but we knew there was a plausible range which we had support on. There is a plausible range of people going into employment and we know that employment is increasing. Those are the key pertinent points from the letter and included with my apology yesterday for the phrasing of the words that I got wrong, which I fully accept, hence I came to the House. I will end that bit of the Statement there”.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for repeating that deeply unsatisfactory Statement. This is quite extraordinary. The Comptroller and Auditor-General has been forced to issue an open letter to the Secretary of State for Work and Pensions to point out that she repeatedly misrepresented to Parliament the content of the highly critical NAO report on the rollout of universal credit. She has now apologised, up to a point, for one of the errors, in which she wrongly claimed that the NAO wanted UC rolled out more quickly.
However, Sir Amyas challenged two other misleading claims for which she has not apologised. The Secretary of State claimed that the NAO report had not taken account of the impact of recent changes to universal credit, even though her department had agreed the report just one week earlier, based on the latest information, and she repeated her unfounded claim that universal credit is working. Sir Amyas pointed out that the DWP has not even measured how many UC claimants are facing difficulties and hardship. I was particularly disappointed to see her repeat the claim that universal credit will help an extra 200,000 people into work, even though the NAO said:
“The Department will never be able to measure whether Universal Credit actually leads to 200,000 more people in work”,
because it is not able to separate other factors.
Anyone can misspeak—goodness knows, I have done it myself—but if the NAO says there is not and never can be evidence for a claim, you cannot simply say that it is a matter of interpretation. This is dangerous ground. The Secretary of State is entitled to her own opinion; she is not entitled to her own facts. The Government have told this House too many times that all is well with universal credit when manifestly that is not the case, so I have just two questions for the Minister. First, will the Government stop pretending that all is well and will they, in particular, stop using the misleading 200,000 figure and start telling the House how things really are? Secondly, will they implement all the recommendations in the NAO report? The DWP needs to put things right before anybody else is put through the misery of universal credit.
Baroness Buscombe
My Lords, first, I make it absolutely clear to your Lordships’ House that right from the start, when the report was published, there has been no issue with the factual information that the National Audit Office has used. In collating that information, there has been and continues to be a strong relationship between the National Audit Office, the Department for Work and Pensions and the officials. That is important. It is the interpretation of these facts and the conclusions drawn as a result that the department questions, as I said in the Statement. A lot of it is about context rather than saying that there is any issue with the facts.
We are absolutely clear that, as the report says, the National Audit Office completed its independent review of the universal credit programme after analysing evidence that we collected between August 2017 and April 2018. The issue we have is that we are still not able to judge, and nor is anyone, the full impact of significant policy changes that we have announced and implemented since the Budget last autumn. They include extending advances, which was implemented in January 2018, removing waiting days in February 2018 and the housing benefit run-on. The report makes it clear that it is referencing evidence up to April 2018. On the housing benefit run-on, it was impossible for us to measure the extra two weeks’ additional cash to cover people transferring from the old legacy benefit on to universal credit, which they would not have to repay. Each of these measures will take time to impact on the experience of claimants and stakeholders. Although some of these measures were mentioned in the report, their impact would not have been felt during the evidence-gathering period.
Lord Kirkwood of Kirkhope (LD)
My Lords, I am absolutely in agreement with the noble Baroness, Lady Sherlock. This is a quite extraordinary state of affairs. I have been following social security since 1986. I have never seen such an explicit letter of correction from such a distinguished public servant as the Comptroller and Auditor-General, Sir Amyas Morse. Two things follow from it. First, I hope the noble Baroness can give the House an assurance that the Secretary of State will take whatever steps are necessary to repair the relationship between the political leadership of the DWP and the Comptroller and Auditor-General’s office. That is essential for the good conduct of the universal credit programme in future, and that work needs to be done.
What I find extraordinary, because I know how much trouble goes into negotiating reports—and this one was signed off on 8 June—is that if the Secretary of State is founding her defence on the fact that she does not think that the NAO knows about the recent changes to waiting days, advance payments and HP run-ons, she is demeaning the value of the historical analysis that is so valuable to the prosecution of public policy. That must be put right too. This is serious territory that needs to be addressed urgently.
Baroness Buscombe
My Lords, it is important for me to make clear that my right honourable friend the Secretary of State for Work and Pensions has already apologised, and that apology has been accepted by the House of Commons and the Speaker of the House of Commons. Following Oral Questions on Monday, my right honourable friend was afraid that she had mistakenly used a term that was not an accurate term reflected in the report. My right honourable friend therefore went to see the Speaker. This was entirely independent of the letter produced on Wednesday, so there is no question that my right honourable friend has tried to avoid, evade or do anything untoward. My right honourable friend was very clear that she was mistaken, she was wrong and she was very keen to put that right at the earliest opportunity. Hence, the Speaker accepted that apology yesterday.
The meeting on Monday will of course be extremely important. We accept the facts in the report. We do not deny the facts; we support the facts. In a sense, we are saying, “Please, please, National Audit Office, we want to demonstrate that the impact of the changes undertaken, particularly those made last autumn, is yet to be proven”. She will want to make that absolutely clear.
There is no question but that we will look with care at what has been said in the report. I am sure that we will implement those recommendations that we feel able to from the report.
Lord Cormack (Con)
My Lords, I do not think the House can ever have heard a less clear Statement than the one repeated today. I appeal to my noble friend to ask the Secretary of State—although I am not impugning her good faith in any way—to realise that it is important that when she communicates with either House of Parliament, directly or through another Minister, she does so with clarity and in plain English. Perhaps it would be a good idea if Sir Ernest Gowers’s book on plain English was circulated to all Ministers and civil servants before we have that gobbledegook reported from the Dispatch Box ever again.
Baroness Buscombe
I say to my noble friend that, given his extensive years in another place, he will appreciate that the job my right honourable friend is doing is very tough. She is involved with the most important, fundamental and huge piece of welfare reform that has taken place for many years. It is close to her heart, as it is to all of us in the department. We absolutely accept that it is important that we reflect the need to be agile. Indeed, one of the incredibly positive aspects of the NAO’s report is on page 15, which is all about the development of the full-service system. It talks about the department using an agile approach for the full service and the need to constantly test and learn, test and learn. We are doing this continuously.
I am sorry if my noble friend feels that my right honourable friend has been less than clear, but the reality is that we are very keen to explain to all noble Lords and Members of another place that what we are doing is the right thing. We just want to stress that it is important to reflect the impact of changes that are still coming through the system.
Disabled People
Baroness Buscombe Excerpts(5 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, let me begin by joining all other noble Lords in congratulating the right reverend Prelate the Bishop of London on her inspirational maiden speech. We look forward to many more contributions from her in the future.
This has been an excellent, thoughtful and—I feel in so many ways—a positive debate. I thank, in particular, the noble Baroness, Lady Thomas, very much for this opportunity for all of us to share information, and indeed to discuss, as she said right at the beginning, a debate that is widely drawn. I want to make it clear straightaway that I shall share this debate with our Minister of State for Disabled People because so many different issues have been raised, and I apologise in advance if I cannot address everyone on the Floor of the House this evening. I make it clear, too, that in those areas that are the responsibility of the Minister for Health or the Minister for the Department for Education, I will make sure that the concerns are passed on.
The Government are fully committed to making sure that disabled people can overcome the barriers they face in their day-to-day lives. With 13.9 million people in the UK—that is 22% of our population—reporting a disability, it is very clear we must do everything we can to break down the barriers so that disabled people can be empowered and achieve their aspirations. There are more than a few disabled role models in this House—both past and present—who have overcome those barriers to achieve great things in their careers. Indeed, as the noble Baroness, Lady Masham shows—I think she has been here even longer than me—it can be done. But this will not happen overnight; there will be no mythical day or year when disabled people will wake up and everything will be accessible and inclusive.
With reference to my noble friend Lady Wyld, we are making real progress and I feel strongly—I am an optimist, of course—that this is generational. Her children will wonder why there is a review. My children, who are older than hers, will feel that too. With an ageing society, where most people acquire a disability as they grow older, this is becoming even more important. We know that currently 45% of people at state pension age have a disability. I say to the noble Lord, Lord Bruce of Bennachie, that we are not separating the young from the old but we need to recognise that different people have different needs and we need to be as bespoke as possible.
Although we have made good progress, we are not complacent and know we all need to do more. This is not just about my department but about every department making sure that their policies and services are accessible and inclusive. Nor is this just about the public sector—the private and third sectors must play their parts as well to ensure that we all live in a country that is accessible and inclusive. We all know that there is no point in building accessible housing if the disabled tenants or owners cannot access the transport system. An accessible transport system does not help if disabled people cannot access their employer’s business or their school, college or university. And how do disabled people spend their money if they cannot access shops, leisure facilities or online services?
Numerous noble Lords raised very good points on a number of issues during this debate. I thank the noble Baroness, Lady Thomas, for raising the important issue of personal independence payment assessments and appeals in this House on 19 June in an Oral Question. I agree with her. We need to be more holistic in our approach, which is why I must commend the hard work that my colleague in another place, Sarah Newton MP, the Minister of State for Disabled People, has been doing to ensure that disabled people can meet their aspirations. I have to tell noble Lords that I have never seen a Minister work so hard.
As my honourable friend announced in May, she is setting up an inter-ministerial group which will drive forward co-ordinated action across government. It will be chaired by the Secretary of State and will focus this Government’s approach to breaking down the barriers that disabled people face. The inter-ministerial group will ensure that disabled people are at the centre of decisions that are made about their lives. We will be reinvigorating the way we work with disabled people and their representatives to inform the IMG. We are keen to ensure that more disabled people can be involved and we are exploring how we can maximise the use of technology to reach every region in England.
My noble friend Lady Wyld made the excellent point that diversity and inclusion make for better and inclusive decision-making across all protected characteristics. Since the 2012 Paralympic Games, we have seen a marked increase in disabled people on television in drama, comedy and current affairs. But it is not only visible impairments that are being discussed—Susan Calman’s “Mrs Brightside” podcast discusses depression, for example. The old attitudes that disabled people face are being eroded, albeit not as fast as we would all wish.
The next area to see an increase in participation for disabled people will be public appointments. I am pleased that my noble friend Lord Holmes will be using his vast knowledge and expertise to lead the review that will make recommendations on how to encourage more disabled people to apply for public appointments. This was a point also raised by noble friend Lady Wyld. Inclusive leadership is not just about our own country, but sharing that leadership with countries that have not achieved the level of access and inclusion we have achieved so far, a point made by my noble friend Lord Shinkwin. The Secretary of State for International Development will be hosting a global summit to galvanise the global effort to address disability inclusion in the world’s poorest countries.
A number of noble Lords asked what the Government have done to improve access for disabled people. This Government understand that to achieve real access and inclusion, departments need to work together where their interests overlap. We have set up the Work and Health Unit, a joint venture between the Department of Health and Social Care and my department. Its aim is to create a society where everyone is ambitious for disabled people in respect of work and to understand and act positively upon the important relationship between health and work, something that was touched on by a number of noble Lords and most particularly the noble Lord, Lord Luce. We published the Improving Lives Command Paper in November 2017. We have set a target of 1 million more disabled people in employment by 2027 and we really mean to meet that target.
The number of working-age disabled people in employment in the UK reached around 3.5 million in the second quarter of 2017. This was an increase of 104,000 since the second quarter of 2016 and an overall increase of nearly 600,000 since the second quarter of 2013, when the series started. I say to the noble Lord, Lord McKenzie, that I disagree entirely; we are not failing the disabled community. We are working to support disabled people to stay in work as well as supporting them into employment. We are prioritising interventions on mental health and musculo- skeletal conditions.
So many points were raised around the whole issue of learning disabilities, most notably by the noble Baroness, Lady Jolly, who spoke with real authority on the subject. We are encouraged by the early evidence of the impact of the implementation of our SEN reforms, improving the lives of children and young people with learning disabilities. But we are not complacent—far from it. There is much more to do and we are committed to seeing this through. As the SEN reforms continue, we are confident that they will make a significant difference to the life chances of children and young people with special educational needs. The noble Baroness referred to Easyread documents. Where appropriate, we provide these, but I will take back her concerns on the extent to which such documents are available.
The noble Baroness also referred to hate crime, as did my noble friend Lady Eaton in her passionate speech, which presented a different angle but one of equal importance with regard to this issue. I will certainly ensure that we look at what the Ruderman Family Foundation is doing to help people from different communities who also happen to have a disability, if I may put it that way. It is a double challenge that we need to confront. In terms of hate crime itself, we launched an action plan in July 2016 with five different criteria. Those criteria are Home Office-led and I understand that they will be refreshed with the hate crime action plan in 2018. We will work closely with our wide network of stakeholders to make sure that the action plan remains fit for purpose, is cross-governmental and absolutely respects those issues raised by noble Lords today.
I also listened with care to what the noble Lord, Lord Patel, had to say about the tough issue of care of children with life-threatening illnesses in hospices. I assure him that I will pass his questions and concerns to my noble friend Lord O’Shaughnessy, Minister for Health. The noble Baroness, Lady Brinton, also raised these issues. I am sure my noble friend will want to respond in writing, as will my noble friend the Minister for Education, on some of the issues raised by other noble Lords.
With reference to the speech by the noble Baroness, Lady Uddin, I have enormous sympathy—which I am sure all noble Lords will share—for her son and the appalling experience he endured. I am glad that, since that time 20 years ago, we have introduced—as the noble Baroness will well know—strong safeguarding measures across the public, private and third sectors. But of course, there is always more that we can do.
I turn now to the question from the noble Lord, Lord Luce, about progress on the evaluation that my department commissioned on the Fit for Work service. On 21 June, we published a report online presenting findings from the evaluation. We remain committed to that and will use our learning from Fit for Work to inform our thinking. We are also working closely with the new occupational health expert group established this year. This group is chaired by Professor Gina Radford and consists of clinicians, employers groups, academics and representatives of charities. My officials would be pleased to discuss this work further with the noble Lord.
One might ask what the point of having a job is if you cannot get to work. The Department for Transport consulted on a draft accessibility action plan last year and will publish an inclusive transport strategy later this year. It will set out our key policy and investment priorities for improving disabled people’s access to transport. This document will also confirm our timeframes and proposals for monitoring delivery.
Since 2006, around 200 railway stations have been made step-free, and 75% of rail journeys are now through step-free stations. This compares to only 50% in 2005. I am looking to the noble Baroness, Lady Ludford; I hope she and her husband will accept that this is progress. It is not perfect, but it is progress. Where toilets are provided on a train, an accessible toilet that meets the requirements of modern accessibility standards needs to be provided by 31 December 2019.
The noble Baroness, Lady Masham, referred to the blue badge. We consulted on introducing new blue badge eligibility criteria for people with hidden disabilities. The Department for Transport is currently considering the responses.
Before we can get to work, we need to be able to get out of our home and move into the built environment, a subject covered by a number of noble Lords. The Government’s National Planning Policy Framework, which is currently being revised, defines “inclusive design” as:
“Designing the built environment, including buildings and their surrounding spaces, to ensure that they can be accessed and used by everyone”.
However, the Government understand the concerns visually impaired people have about navigating around shared spaces. The Chartered Institution of Highways and Transportation’s review of shared space was published in January this year, and we are considering its recommendations.
We launched the Built Environment Professional Education Project in 2013, which was inspired by the 2012 Paralympic Games—the most accessible Games ever. The aim of the project is to make inclusive design an important part of the education and training of built environment professionals. To ensure a smooth transition from a Government-driven project to an industry-owned and led project, in 2016-17 the Construction Industry Council assumed responsibility for the project, but this Government are not just about new initiatives; they are also about improving what is already being done. An example of this is disabled students’ allowances, where we have commissioned an evaluation to seek disabled students’ views on support received from DSAs, as well as views from the higher education providers. This evaluation will report later this summer.
We are committed to ensuring that our welfare system is a strong safety net for those who need it. That is why we are spending £54 billion this year, noted by my noble friend Lord Shinkwin, on supporting disabled people and those with health conditions. That is a real-terms increase of £10 billion since 2009-10. This is around 2.5% of GDP and over 6% of all Government spending—up more than £7 billion in real terms since 2010.
We have also increased the amount of help an individual may receive from Access to Work. This is important in relation to some of the concerns raised by noble Lords. It depends on their individual needs and personal circumstances, but an individual can now have up to a maximum of £57,200 a year, which is an increase from £42,100 in April 2017. The grant is in addition to the Motability scheme and all other disability benefits. In September 2016 we launched the Access to Work digital service, so people can now apply online. In addition, we are continuing to develop our online offer and have introduced other channels to improve accessibility, for example through video relay service to assist BSL users.
I say to the noble Lord, Lord Bruce of Bennachie, that the Government are committed to ensuring that deaf people are enabled to fulfil their potential and play a full role in society. We fully support initiatives aimed at improving understanding of the needs of deaf people, giving them more say in how they access services and how the barriers they face can be removed or overcome. Deaf people are the largest group of customers supported by the Access to Work grant and their awards in general tend to be higher than those of other groups.
Technology has moved on. There are solutions that help both deaf and deafened people. Those in the deaf community have always been early adopters of new technology, email phones and video phones, as referenced by both the noble Lord, Lord Bruce, and also my noble friend Lord Borwick. The video relay service is an easy option for service providers to communicate with their deaf customers where that is reasonable. But we must not forget that in the deafened community, the majority of people with a hearing impairment are elderly, and that for the most part they do not use sign language. They need adjustments such as lip-speakers, speech to text, or note takers.
The noble Lord, Lord Addington, and other noble Lords, referenced technological solutions, which will continue to break down barriers, not only for the deaf community but for other impairment groups as well. We know about help for the visually impaired to navigate the London Underground, such as Wayfindr, and about Microsoft Seeing AI, which can read text and tell the user what is going on and can be downloaded by anyone.
But technology is not the only way: business can break down barriers. The Government continue to work with business to increase our understanding. The Disability Confident programme is part of that. We are challenging employers’ attitudes to disability, removing the barriers and ensuring that disabled people have opportunities to realise their aspirations. We are working with employers in this way to ensure a substantial contribution towards seeing 1 million more disabled people in work. Over 70% of local authorities are Disability Confident. The Government are leading by example: all main government departments have now received Disability Confident leader status. I could list a number of well-known companies that are already very supportive. However, the Government understand that disabled people still face innumerable barriers, and yes, the Government will continue to break those barriers down and drive all the sectors to do the same.
Several noble Lords, and in particular my noble friend Lord Holmes and the right reverend Prelate the Bishop of London, mentioned the Paralympics, as I did a few months ago. One of my proudest moments was representing Her Majesty’s Government at the Paralympics this year in South Korea. Indeed, I gave up trying to contain myself when the mother of one of our seven gold medallists hugged me and thanked me for being there. I was privileged to be there. Sport is one of the most brilliant catalysts for overcoming barriers.
The Government understand that there will always be more to be done, always another item on the access and inclusion shopping list. The Government will continue to take responsibility, working through that list. We understand that there will always be people who do not think that access and inclusion is happening quickly enough. Indeed, in contrast, at the Department for Work and Pensions we are lucky enough to share a brilliant special adviser with No. 10, Jean-Andre. He happens to have cerebral palsy, and he is ensuring that we constantly question, so that the list of what to do and what to do better is assessed.
In conclusion, the Government will continue to work with the public, private and third sectors to keep breaking down barriers until everyone, whether disabled or non-disabled, can participate in their community and aspire to and achieve their life goals. One of the most important words used in this entire debate is “talent”. There is plenty out there, and we want to make sure that we involve everyone with talent.
Automatic Workplace Pension Enrolment
Baroness Buscombe Excerpts(5 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, I thank the noble Lord, Lord McKenzie, for securing this debate, and thank all those who contributed to this evening’s discussion of this important issue.
The Government are proud of the progress of the automatic enrolment reforms, with over 9.7 million people enrolled into a workplace pension since the reforms began in 2012. In the last 12 months alone, hundreds of thousands of everyday employers have begun to offer a pension to their staff for the first time, helping their employees build up dedicated savings for a more secure retirement. I am especially pleased that all this good work has been achieved due to the commitment, support and collaboration between government, employers, the pensions industry and many other delivery partners. I should add that we welcome the cross-party support that has been evident throughout the delivery process. Given the scale of the technical challenges, the hundreds of hours of freely given time to help inform the most practical policy solutions and the sheer good will are a tribute to all those who have played their valuable part in successfully getting nearly 1.3 million employers to provide workplace pensions.
This year has seen the successful conclusion of the planned rollout of automatic enrolment duties to employers that existed prior to October 2017, known as the employer staging profile, which started with the largest employers in October 2012 and, following two extensions to help SMEs better prepare, saw the last cohort of existing micro-employers—those with only one or two staff—complete their declarations of compliance this spring. We are now delivering automatic enrolment as business as usual, with an estimated 180,000 to 210,000 new employers each year needing to comply with their automatic enrolment duties. We have also seen the first of two planned increases in contribution levels for automatic enrolment in April this year, with the latter increase following in April 2019.
I do not take lightly the challenge for employers in funding their share of these increases, and we are carefully monitoring the impact of this first upward shift in contributions for employers and their workers. I should stress, however, that these increases are essential to move savings rates up and will deliver more security in retirement. It is also important to note that many employers have chosen to pay contributions above the planned statutory increases, so faced no additional costs in April. It is important to add that, as automatic enrolment has been rolled out, the Pensions Regulator has been responsive to the need to help employers understand what they need to do. That included launching a simplified and much shorter step-by-step guide on its website, which has been adapted to the needs of small and micro-employers, which have less familiarity with pensions matters.
I turn now to the December 2017 review of automatic enrolment, Maintaining the Momentum, which sets out a clear direction for the future of workplace pension saving, and to which all noble Lords who have taken part in the debate have referred. Our ambition is bold and clearly builds on the success of automatic enrolment to date, with a comprehensive and balanced package of proposals which, crucially, recognises that costs will be shared between families and businesses and that they will need time to plan for change. Importantly, we are confirming that automatic enrolment should continue to be available to all eligible workers regardless of who their employer is. These reforms are focused on ensuring that retirement saving continues to be available to the widest possible number of workers in the UK.
We believe that the retirement saving habit needs to be established at the start of a working life. That is why we are going to make saving the norm for young people by lowering the age for automatic enrolment from 22 to 18, to bring an extra 900,000 people into workplace pensions. I can confirm for the noble Lord, Lord McKenzie, that research has shown that 18 year-olds are very keen for automatic enrolment to start—they care about their future and their retirement, which is very welcome.
We want to broaden and deepen the benefits of automatic enrolment, particularly for those with low earnings and multiple jobs, to which all noble Lords have referred. We want to help them to save more for retirement by removing the lower earnings limit so that their contributions are calculated from the first pound of earnings.
We intend to deliver on our manifesto commitment to use the principles and learning from automatic enrolment to improve retirement provision for the self-employed. We recognise the diversity of the 4.8 million people who classify themselves as self-employed, and the review highlighted—supported by the available evidence—that no single or straightforward saving intervention has been shown to bring self-employed people into pension saving. We are therefore moving quickly to find out what might actually work by testing targeted interventions aimed at the self-employed to identify the most effective options to increase pension saving among this group. In addition, as we set out in the 2017 review, many of those working in atypical or non-standard forms of employment potentially already come within the automatic enrolment framework and will be able to save into a workplace pension. We are working with the Pensions Regulator to ensure sufficient clarity for them and those who engage them, so that the automatic enrolment compliance regime continues to operate effectively.
In addition, the Government have responded to Matthew Taylor’s review of modern working practices and have been consulting on employment status with the aim of making it clearer and more certain for both individuals and business what their status is. The consultation has now closed. The Government are currently considering the submissions received and will respond in due course. We will ensure that any changes are also considered with care in relation to automatic enrolment so that there is sufficient coherence and certainty about the enforcement of automatic enrolment duties.
Noble Lords have raised several important points. I respect all their concerns and will do my best to address as many of those as possible this evening. The noble Lord, Lord McKenzie, raised the question of attrition. I can confirm that employers estimated that 16% of employees who had been automatically enrolled in the last financial year had ceased active membership. However, there is hope that a certain amount of those who ceased membership when they left one employer will start again with a new employer.
Other noble Lords, including the noble Lord, Lord McKenzie, asked about the earnings trigger. They suggested that too many of those on low incomes were still excluded from AE because of the earnings trigger, which determines who is eligible to be automatically enrolled by their employer into a pension. Freezing the trigger at £10,000 continues to strike a balance so that those who can most afford to save are automatically enrolled into a workplace pension. We fear that lowering the trigger could result in diverting income away from the day-to-day needs of the lowest earners, and that risks impacting significantly on their living standards. For those low earners who are in a position to contribute, the option remains to opt into automatic enrolment.
Considerable reference was made to women, particularly by the noble Baronesses, Lady Primarolo and Lady Drake. The question is, of course, whether automatic enrolment is helping women in work to save. There have been large increases in pension saving for women since the introduction of automatic enrolment. The private sector has seen the largest increases in participation in workplace pensions. In 2012, 65% of women employed full-time in the private sector did not have a workplace pension. By 2017 this had fallen to 24%.
The question also relates to multiple job holders—women who are juggling different jobs and caring duties—what are we doing about that and whether we should remove the lower earnings trigger. The proposal to remove the lower earnings limit and the entitled worker status in legislation will ensure that multiple job holders who are eligible for automatic enrolment, or who choose to opt in, will qualify for employer contributions in all jobs and will be able to pay their own contributions from the first pound of earnings. This will give multiple job holders the opportunity to build the same retirement savings as individuals who have only one job.
Over the coming year, we will work to build a renewed consensus to deliver the detail, design and implementation of our proposals. We recognise the importance of giving employers and savers sufficient time to plan for changes. There will be some people, particularly those on low incomes, for whom it makes little sense to divert income away from their working life, but for those low earners in a position to contribute, as I have said, the option remains to opt in. The earnings threshold is reviewed every year to ensure that it continues to strike the right balance between maximising the savings incentives for individuals and minimising costs for employers.
The Secretary of State has decided to freeze the earnings trigger this year at £10,000, which will bring an extra 100,000 people into automatic enrolment, of whom around 72% are women. It should also be noted that the IFS, in a 2016 report, found that automatic enrolment had also significantly increased workplace pension membership among those outside the eligible group, particularly those with incomes under the earnings threshold, whose membership has increased by 28 percentage points.
To answer a question asked by the noble Lord, Lord McKenzie, the analysis underpinning the automatic enrolment earnings threshold review suggests that freezing the trigger has no adverse effect on the proportion of black and minority ethnic individuals in the group eligible for automatic enrolment. Of the 100,000 people estimated to be newly saving as a result of freezing the trigger, 23,000 are black and minority ethnic individuals.
The noble Baroness, Lady Drake, asked about carers and how they are supported. The 2017 AE review concluded that there should be no change to the way that carers are currently treated through AE. Those who provide informal care are not subject to automatic enrolment as they have no employer to enrol them. However, bringing in individuals not subject to a contract of employment would be a fundamental change to the framework of AE, which works through an employee-employer relationship. Individuals who provide informal care for 20 hours per week are entitled to apply for carer’s credit, which helps to protect future entitlement to state pension. Alongside the wider work to address the challenges of social care for our ageing population, the Government are considering how to further support families and individuals who provide invaluable informal care.
I turn now to the net payment arrangements versus relief at source. Pensions tax relief is a matter for Her Majesty’s Treasury. The Government recognise the different impacts on pension contributions for workers earning below the personal allowance, but to date it has not been possible to identify any straightforward or proportionate means to align the effects of the net pay and relief at source mechanisms more closely for this population. However, alongside further work on the AE changes outlined in the review, the Government will examine the processes for payment of pensions tax relief for individuals to explore the current difference in treatment to ensure that we can make the most of any new opportunities that emerge, balancing simplicity, fairness and practicality while engaging with stakeholders to seek their views. It is important that employers are free to choose a scheme that best suits the needs of their businesses and workers.
I was asked why we did not look at increasing the contribution rate as part of the 2017 review. As I have said, millions of people are now saving or saving more as the result of AE. As noble Lords may be aware, the first planned increase in contribution rates took place this year. As such, it is important that we understand the effects that the planned increases will have and to carry out further work on the adequacy of retirement incomes. We will look again in due course at the right overall level of saving and the balance between prompted and voluntary saving. It is important that this should be evidence-based. We are testing targeted interventions to identify the most effective options to increase pension saving among self-employed people during 2018. We are harnessing the ideas and enthusiasm that exist in addition, as I have just said, to developing the evidence base as our work goes forward.
The noble Lord, Lord Kirkwood, referred to the pensions dashboard among many other issues. The Department for Work and Pensions is leading the development of the pensions dashboard. We have carried out a feasibility study, the main conclusions of which we will share in due course. How we achieve increased engagement is not straightforward and it will not be solved by the use of a single tool such as a pensions dashboard. We need to make people feel confident about managing their finances and able to make informed decisions. The noble Lord also referred to the single financial guidance body, which we believe and trust will be a huge support in that direction.
Finally, all noble Lords have commented that progress is too slow. I shall start with the noble Lord, Lord McKenzie, who asked why nothing is being done until the 2020s. The review sets a clear direction to build a more robust and inclusive savings culture, specifically supporting younger generations with the opportunity to save for a more secure retirement. Our review proposes a comprehensive and balanced package which recognises that the costs will be shared between individuals, families and businesses, and we will need time to plan for change. We are working to deliver detailed design and implementation. The support of employers and their advisers has been key to the success of AE and we want to make sure that we recognise their situation as well as that of savers. We want sufficient time to take those decisions with care.
Testing targeted interventions to identify the most effective options is critical. It is our ambition to implement changes to the AE enrolment framework in the mid-2020s, subject to learning from the contributions increases this year and in April 2019. There will be discussions with stakeholders around detailed design this year into next year, in order to find ways of making the changes affordable, and this will be followed by formal consultation with a view to introducing legislation in due course.
Noble Lords who know me know that I am always impatient for advancement in areas that will help everyone. I am looking in particular at one proposal made by the noble Lord, Lord Kirkwood. He knows that I am very keen on this, as is the Pensions Minister, my honourable friend in another place Guy Opperman. But we need to do this with care. We have to consult. We will work with stakeholders to build consensus on the shape and design, and that will help us to develop our detailed plans and an implementation timetable.
I hope that I have managed to answer most questions put by noble Lords, and again I thank the noble Lord, Lord McKenzie, for introducing this debate.
Bereavement Benefits
Baroness Buscombe Excerpts(5 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Polak
To ask Her Majesty’s Government what assessment they have made of the impact of changes made to bereavement benefits on 6 April 2017 on parents with dependent children.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
Bereavement support payment focuses support in the immediate months following a bereavement, when it is needed most. It is intended to meet the additional costs associated with bereavement, rather than providing an ongoing income replacement. Unlike its predecessors, it is not taken into account for income-related benefits, thus helping those on lowest incomes. We intend to assess the impact of these reforms once sufficient evidence is available.
Lord Polak (Con)
I thank the Minister for her response. At the most welcome announcement a few weeks ago of the establishment of the children’s funeral fund, following the brilliant and emotional campaign led by Carolyn Harris, the Prime Minister said this:
“In the darkest moment of any parent’s life there is little light—but there can be support”.
While I agree with the Government’s aim of cutting dependency and making work pay, in April 2017 the law changed and I argued then, as I do now, that the support for children of school age who have lost a parent should continue throughout their schooling and not be cut and limited to 18 months. I ask the Minister to urge her colleagues to restore the full amount for bereaved children. Clearly if a child loses a parent the child will experience dark moments, there will be little light and there should be continued support.
Baroness Buscombe
My Lords, my noble friend asked a Question about bereavement support payment and I have the greatest sympathy with people in this situation. However, we are talking about a system that was set up over 90 years ago to support women following World War I who would never be expected to work again and support their family, and who had no other means of support. This change restores fairness to the system by focusing on the 19-month period after a loved one dies. Unlike its predecessor, it applies to both men and women. It is not taxed and is not taken into account for income-related benefits to support children when in need, thus helping those on low incomes the most.
Baroness Thomas of Winchester (LD)
My Lords, how will Brexit affect the payment of this benefit to eligible EU nationals living here and British people living in the EU?
Lord Elton (Con)
My Lords, we have so far been considering the very young, but bereavement is a disabling condition that makes it very difficult for elderly people to manage their affairs. Can my noble friend assure us that people who qualify will be notified in simple language about the amount of their entitlement and the time it will last? Furthermore, would it not be a good idea to issue a warning notice or a reminder for those who may have lost track of what is happening, say a month before it ends?
Baroness Buscombe
My Lords, when an individual registers the death of their spouse or civil partner, the registrar provides information on how to contact the Department for Work and Pensions bereavement service. That includes giving advice on what benefits will be available, including the bereavement support payment. The time limit for claiming the initial lump sum is now more generous, at 12 months from the date of death—that is £2,500 for those who do not have dependent children and £3,500 for those who do. The time limit is three months from the date of death for claiming the additional monthly bereavement support payment, which is £100 a month for 18 months for those without children and £350 for those with dependent children. We take every opportunity to encourage claimants to make a claim for bereavement support as early as possible.
Baroness Sherlock (Lab)
My Lords, when the Government brought this in, they said that it was not about saving money—although, as it happens, it will cost less than half what the old system did. They said that the aims were to be simple and encourage self-dependency, but we are talking about people who got married, had children and thought that they would be looking after themselves as a family until the worst possible thing happened. We end up then with somebody becoming a single parent; they are themselves bereaved and having to raise children who are bereaved. That is surely the situation for which the welfare state was pretty much invented. If the Government are going to think again, would they please think really hard, recycle some of those savings and do the right thing?
Baroness Buscombe
The noble Baroness will know that those in need of additional income-related benefits will receive them, as well as child benefit for those with dependent children, for example. This is not a cost-cutting exercise. We are investing an extra £40 million in each of the first two years after the reform. This is a modernisation of an outdated system, which relates to a time when women were not expected to work and, indeed, there were not jobs available for them. We are spending more than £95 billion on working-age benefits to help those in need. People in receipt of the bereavement support payment can access other parts of the welfare system if they need it. With regard to being a lone parent, it is important to add that the problem with the old system was that, if one remarried or went into a civil partnership, one lost that entitlement altogether. People do not lose it under this system.
Baroness Altmann (Con)
My Lords, I understand that my noble friend has her brief from the department, but I urge her please to go back to her officials and question them about what they perceive as the fairness of these changes. Money is being taken away from families with young children, three-quarters of whom will lose out and 90% of whom will receive support for less time. That money is being recycled to families without children, while the 21% of families whose parents choose not to marry or decide to cohabit receive absolutely nothing. Overall, by 2020, the cost savings will be in the tens of millions of pounds. Before the 18 month-period expires around November this year, I urge her to look into the possibility of devising a bereavement payment specifically designed for children, so that their parents can be there for them. The damage to their mental health and educational attainment has been well documented.
Baroness Buscombe
My noble friend does not have the facts correct. May I make it absolutely clear that this payment is designed for people after the terrifically difficult loss of a loved one? It is not intended to be equivalent to the period of grief following spousal bereavement: it is designed to support people with the additional costs associated with bereavement rather than to provide an income replacement. Income-based benefits are more suited to provide that longer-term assistance with everyday living costs. With this benefit, the Government are therefore seeking to provide financial support through the acute period to facilitate the process of readjustment. This is nothing to do with families losing money. Noble Lords should take care before seeking to scaremonger in this way.
Lord Tomlinson (Lab)
In reply to an earlier question, the noble Baroness suggested that Brexit would make no difference to the circumstances that have been discussed. As the Minister responsible for Brexit has failed to give us clear answers on almost every aspect of Brexit, can she now spell out for us the specific basis on which she gave the House that assurance?
Baroness Buscombe
I thank the noble Lord for his question, as indeed I am advised that we cannot be absolutely sure, and I therefore apologise to the House for initially saying that.
Baroness Buscombe
To the best of my knowledge—it was and still is my understanding—through the whole process of leaving the EU, we seek to transport into UK law all those laws that impact on EU citizens and on British citizens living abroad. During that process, there is no question of us impacting on this important payment.
Personal Independence Payment
Baroness Buscombe Excerpts(5 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, by the leave of the House I shall repeat as a Statement an Answer given to an Urgent Question in another place by my right honourable friend the Secretary of State for Work and Pensions on the withdrawal of her appeal—Secretary of State for Work and Pensions v AN & JM CPIP/1882/2015 CPIP/1159/2016—in relation to personal independent payments:
“I am absolutely committed to ensuring that disabled people and people with health conditions get the right support they need. PIP is a modern, personalised benefit that assesses claimants on needs, not conditions. It continues to be a better benefit than its predecessor, DLA, for claimants with chronic conditions. Under DLA, only 16% of claimants with diabetes received the top rate, whereas under PIP 29% receive the top rate.
I carefully considered these historic cases and decided to no longer continue with these appeals in order to provide certainty to the claimants. Since withdrawing the appeals, I have provided instructions to operational colleagues to put these claims in payment urgently. These claimants will receive any backdated moneys owed and should receive their first payment within the coming days.
These cases were decided prior to the March 2017 amending regulations, where the Government clarified their policy for managing therapy under PIP daily living activity 3. These regulations are not affected by our decision to withdraw these appeals”.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for repeating that Answer. This refers to the fact that the First-tier Tribunal ruled that two claimants with chronic conditions were entitled to PIP. The Secretary of State appealed but withdrew the appeals shortly before the Upper Tribunal was due to hear them on 21 May. The appeals concerned the meaning of daily living activity 3. One claimant needed watching at night in case urgent treatment were needed to prevent him falling into a fatal diabetic coma. The tribunal decided that he should qualify for PIP. According to the lawyers representing him, the Government argued in the appeal that he should be awarded only one of the minimum eight points needed to qualify for PIP.
This is the second time in a year that we are debating a serious error of judgment by the DWP in lawfully implementing the benefit it created. Noble Lords will remember that the High Court previously ruled against the Government on mobility payments, and in January the Government said that they were no longer appealing that judgment, either.
Normally when we ask questions on the meaning of judgments—and in the past when I have raised questions—Ministers stand up and say, “We are really generous to disabled people”, and the same thing has happened in another place. That is not a conversation. So I urge the Minister today to listen carefully to the questions and to try to answer them as best she can, and to write to us if she cannot. I have two. First, will she tell the House how many other cases are potentially affected by this ruling, and over what period and by what means her department will identify these people and notify them? Secondly, have Ministers taken legal advice on whether the regulations rushed through in March 2017 are definitely lawful?
Baroness Buscombe
My Lords, it gives me pleasure to respond to the noble Baroness. First, let me make it clear that, in our amendments to the regulations in March 2017, we were responding not to an error in the policy or in the PIP system but to a lack of clarity. The March 2017 amendments clarify the department’s position going forward, and further litigation is therefore unnecessary. The Secretary of State made it clear when she first arrived at the department that she wanted to withdraw these appeals on the basis that she wanted to provide these claimants with certainty. I want to be clear that this Urgent Question relates to the withdrawal of two appeals on 18 May and is about two specific cases. Therefore, there is no question about how many other cases it is concerned with and over what period.
On legal advice, we always confer and consult with lawyers to ensure that we are, to the best of our ability, making the right decisions on the regulations. We are clear in our minds that the regulations as they stand are lawful.
Baroness Thomas of Winchester (LD)
My Lords, presumably the department had advice before it brought in the descriptors that have been found not to be right, so I am not sure whether the legal advice is worth the paper it is written on. Can the Minister tell us whether there was any consultation on the amended regulations? After all, there are many rare and ultra-rare conditions. The people who needed watching over at night may be just two people from a cohort of many who need that kind of support when they are taking therapy. Will the Minister tell me about the consultation?
Baroness Buscombe
My Lords, I can confirm that the PIP assessment criteria were extensively consulted on prior to their introduction and were developed in collaboration with disabled people and independent specialists. The 2017 amending regulations did not represent a policy change. They were introduced to restore the original policy intent and to clarify the distinction between the needs of claimants who require assistance to manage therapy and those who require assistance for medication or in monitoring a health condition under daily living activity 3.
For the benefit of all noble Lords, let me explain that what we are talking about is, unlike DLA, a very personalised system of support. It is not based on condition; it is based on need. The important point is that it focuses on managing the condition at one end of the scale and actually requiring extensive therapy at the other end of the scale within the particular 3b criteria that have to be followed. Each case has to be considered on its individual merits. That is one of the flexible and important aspects of PIP. Of course, the outcome of that is that many more people are receiving the highest rate of award under PIP than under DLA.
Baroness Primarolo (Lab)
My Lords, in the interests of clarity for the Government and certainty for the claimants, can I return the Minister to the question raised by my noble friend Lady Sherlock? Will the Minister explain to the House how the Government intend to move forward in ensuring that they have identified other cases that are potentially affected by this judgment and the lack of clarity—some might call it error—in the regulations originally drafted by the Government?
Baroness Buscombe
My Lords, it is important to re-emphasise the fact that this Urgent Question is about two specific cases that occurred before the regulations were amended in March 2017. It is about a five-month period. We are focusing on support for those two particular claimants and will ensure that any loss will be recovered and paid to them, literally within the coming days.
I sense that the House is perhaps referring to a judicial review decision that was made in the sense that the Secretary of State decided not to appeal a judgment towards the end of 2017 in relation to mobility activity 1, which is different from today’s Question. However, in relation to that, we will be carrying out an administrative exercise to identify claimants who may be eligible for more support under PIP and we need to screen the whole PIP caseload of 1.6 million to identify those people as a result of that JR judgment. The actual number of people whose award will be affected is much smaller. The judgment relates to people who suffer from overwhelming psychological distress that affects their ability to plan and follow a journey. Anyone who is identified as affected will be contacted by DWP and their payments will be backdated to the effective date in each claim.
Baroness Browning (Con)
My Lords, I declare a personal family interest. While I appreciate the constraints of this particular Question and judgment, my noble friend referred to the judicial review that was debated in this House. There have been many changes since the initial legislation came in. Can she tell the House how many existing people remain on DLA and are still waiting for their PIP assessment from DLA to PIP?
Baroness Buscombe
My Lords, I apologise. I hope that my noble friend will appreciate that this was given to me as an Urgent Question. I know that since PIP was introduced, 3.1 million decisions have been made, which will include some who were on DLA as well as new applicants for PIP, 9% of which have been appealed and 4% overturned. I am struggling to give the exact figure of the number of people who have moved from DLA to PIP. In that case, I am happy to write to my noble friend.