Financial Guidance and Claims Act 2018 (Naming and Consequential Amendments) Regulations 2019
Baroness Janke Excerpts(5 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Janke (LD)
My Lords, I did not participate in this Bill but I share the sentiments expressed so far about the need for financial guidance, advice and education to help people come to better decisions. I support the remarks of the noble Baroness, Lady Neville-Rolfe, about the importance of including this as a regular part of the curriculum. As a teacher, I have spent some time trying to teach basic financial skills as part of personal and social education, but it is very difficult when there is not proper time allowed for this in the curriculum. I agree that it needs to be given much greater importance. That is even truer now when so many young people have easy access to the internet and easily become fair game to scams, complex bogus schemes and systems of advice which are really there to deceive and take their money. Therefore, I broadly welcome the scheme.
I was interested to hear the remarks of the noble Lord, Lord Stevenson, about debt and debt management and the importance of the latter not just to the economy but to individuals who may be going through a particularly dreadful period in their lives.
As I said, I did not work on the Bill, but I wanted to ask a few things about the Act’s progress. Section 3(7)(b)(i) commits the Minister to publishing,
“an assessment of whether unsolicited direct marketing is, or may be, having a detrimental effect on consumers”.
Has any analysis of that been done yet? If not, could something to do with the quality of advice and the qualification of some of the advisers be included in that? I do not know whether there was debate on that during the passage of the Bill. Section 4(1) says that the single financial guidance body must provide advice to a member of a pension scheme or an inheritor on what to do with the flexible benefits. Are there any early thoughts or a timetable on that?
I know that with regard to Section 22 there was an issue about whether the Government would limit or control the direct marketing of financial services. Again, has any progress been made on that? If not, is there a timeframe in view? My observation—I speak as a counsellor who has given advice on debt and other topics—is that the question of resources is very important. As part of the programme of austerity, financial and legal advice were two of the areas that were severely cut back. I would welcome assurance that the finance for this will be protected, as has previously been mentioned.
I also wonder about declarations of interest and vested interests. How can customers know whether their advisers have these, and what they are? We talked about lists online about people taking advice. There may be a provision already about who is registered to give advice.
There is also the issue of redress. The legislation talks about the FCA, but my experience is that redress can be very difficult for people who are not knowledgeable about these things. It can be very long and very inaccessible. I hope the Minister can enlighten me on that. Having said that, this seems a very good measure and I look forward to hearing more as the measures in the Act are introduced.
The Archbishop of York
My Lords, I want to support the main thrust of the speech from the noble Lord, Lord Stevenson, about debt. Julia Unwin, who was chief executive of the Joseph Rowntree Foundation, did a big research project on why people were going to Wonga. They went to Wonga because it asked no questions; people knew they could get their payday loan. Other lenders asked more questions and were far more intrusive and credit was not readily available. Noble Lords know that my archiepiscopal colleague, the most reverend Primate the Archbishop of Canterbury, said that he intended not only to reform Wonga but to do away with it, and we know what has happened to Wonga.
Credit unions have been set up, which the most reverend Primate and I support. However, people still find it hard to get credit easily and the organisations responsible have caused a lot of people to go deeper and deeper into debt. When he was Archbishop of Canterbury, William Temple suggested that interest rates should be set only by the Bank of England, and not by credit companies, because the Bank of England is accountable to Parliament, which can ask it questions. Noble Lords know what happened with subprime mortgages, with debt being put into little parcels and sent all over the globe until eventually there was no money anywhere. We all know what happened in 2008 with the credit crunch, which was caused purely by excessive debt.
I welcome the Financial Guidance and Claims Act 2018. The noble Baroness, Lady Neville-Rolfe, is right that education about the dangers of debt should start at a young age. Nevertheless, in the meantime, is there a way for those who genuinely find themselves in real trouble to get support and help in a similar way to how food banks work? A lot of people have found that their money is sometimes not enough to meet their needs and so they have gone to food banks. The good thing about food banks is that they do not give food all the time. People know when to collect it and when they last collected it. This has become a marvellous way of taking people out of great debt.
Will the issues raised in the Financial Guidance and Claims Act 2018 and by the noble Lord, Lord Stevenson, be taken seriously by all of us and particularly by the Government? It is their responsibility to provide the guidance required to ensure that Wonga—this payday lending stuff—will not be resurrected and that the people who genuinely need credit can get it in a sensible way. I am very glad that the Government are trying to say that we should be responsible citizens, not only for pensions but for the whole question of social care, with people beginning to put a little money aside for their social care.
It sounds a bit simplistic, but could we not create some sort of food bank-type arrangement? This would help ensure that people on low incomes do not find themselves borrowing from places that will demand more and more money. Noble Lords know what happened with people being given interest; banks also behaved very badly. In a wonderful economy such as this, could some thought be given to ensure that those who are really up against it do not get into greater and greater debt? They may find that their houses are repossessed or their goods taken away and this again throws them back to bad lenders. They find themselves in a cycle of bad debt, which goes through the family for years. If I took your Lordships around Middlesbrough, you would realise that unless you actually tackle debt, some children are condemned to it and, even if we educate them properly, this will not bite.
Universal Credit and Child Tax Credit: Two-child Limit
Baroness Janke Excerpts(5 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Buscombe
There is no doubt that a cross-governmental strategy is incredibly important, and that is why we are working across government with our colleagues in the Department of Health and the Department for Education. We of course want to see child poverty fall and child development improve, and we remain determined to tackle this. We will look at what more can be done to help the most vulnerable and improve their life chances by tackling the root causes of poverty, ensuring that children have the best possible start in life.
Baroness Janke (LD)
My Lords, nearly half of children from lone-parent families are in poverty, due not to worklessness but to disproportionately high housing costs and low wages. What are the Government doing to ensure that these children, already suffering disadvantage, are not doubly disadvantaged by the continuation of the benefits freeze?
Baroness Buscombe
My Lords, a very important point in relation to universal credit is that when somebody is homeless, the first thing our work coaches do—through support, understanding and signposting as necessary—is ensure that that person and their children are properly housed. We then go to the next stage, to see how we can support them to ensure they can manage both in work and in looking after their children.
Social Security Coordination (Council Regulation (EEC) No 1408/71 and Council Regulation (EC) No 859/2003) (Amendment) (EU Exit) Regulations 2019
Baroness Janke Excerpts(5 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Janke (LD)
My Lords, I too have some questions. In May 2018, the Commons European Scrutiny Committee raised very strong concerns about providing legally binding arrangements to protect existing rights. We have already heard mention of non-emergency healthcare; these regulations apparently do not provide that. There are also issues about EU-wide dealings or the need for bilateral arrangements with EU and third countries.
The noble Baroness spoke about data and information sharing. Again, this is a vexed area of negotiation. Certain laws govern the ability to share information and, unless we have some form of legally binding agreement, I cannot really see how this can happen, having looked at the evidence of various people who have looked into data sharing with the EU after Brexit.
We are talking about removing inoperable clauses, under the withdrawal Bill, in relation to the administrative commission. We have mention of disputes; who will settle disputes? There will be a need for medical assessments if they are not provided by individual countries.
It is not clear what is meant by “evidence”. I know that, in my own city, EU citizens have had a very hard time providing evidence of residence in this country, even though some of them have lived here for 40 years. I would like to know what sort of guidance will be given on the quality of the evidence, and how that will be provided to people.
On disputes and the removal of provisional payments, again it is not clear how and under what authority disputes are to be resolved. What is the final authority? This is left fairly open, and could be open to legal action. How will rulings be managed if we come out without a deal and are not proposing to recognise the European Court of Justice?
I am sure it is important that the Government look ahead to the possibility of no deal, but it seems to me that there are lots of very open areas in these regulations that need to be fleshed out. We are talking about the rights of individuals and how they can manage without benefits—where there are disputes, for example.
I very much echo the calls made by other Members here for an impact assessment. It seems to me that there is a fundamental need, given the potential impact of these systems not working after Brexit day, for an impact assessment to be carried out.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for her introduction and all noble Lords for their contributions. I start with an apology, because I will not be brief. I do not often make lengthy speeches in this House, but I have been through these regulations as best as I can—and there are a lot of them—read the Explanatory Memorandum and listened carefully to the Minister’s introduction, and all that I have read in the Memorandum and the introduction implies that these are simply technical amendments which will not make much difference or have much impact. I must therefore have misunderstood them, so I apologise because I will ask quite a lot of questions, since I can only conclude that my understanding of their impact is in some way erroneous. I look forward to having that corrected.
First, my understanding is that the current rules about social security co-ordination within the EU are based on four principles: the single state principle, which means that at any point in time I am covered only by the social security system of one country and pay contributions only in one country; equal treatment, which means that if I am in another member state then I am treated by it the same way as one of its nationals; aggregation, by which periods of insurance, employment or residence in another member state count when determining my eligibility for benefits; and exportability, which means I can receive benefits from one member state even when I am living in another one.
If we have a deal, the withdrawal agreement will cover the transition period during which EU social security co-ordination will continue to include the UK and our citizens, and the political declaration says that the UK and the EU agree to consider future social security co-ordination in the light of future movement of persons. I guess that the presumption, therefore, is that the UK will seek to strike a single deal with the EU rather than bilateral agreements with member states.
However, if there is no deal, there are no provisional transitions, and in the absence of comprehensive alternative arrangements, problems could arise on all those fronts, including whether you can aggregate contributions, export benefits to other member states, the risk of having to pay double national insurance contributions, a lack of clarity about which country is responsible for paying someone’s benefits, and no mechanism for resolving disputes.
The scale is significant. The House of Commons Library briefing on the immigration Bill said:
“In 2017-18, UK benefits totalling around £2 billion were exported to around 500,000 claimants living in EEA countries. Over 90% … was on State Pensions, and over 90% of the recipients … were UK or Irish nationals.”.
In addition, more than 1 million people will be affected by the aggregation issues, according to evidence given to the Commons committee on the immigration Bill by British in Europe.
My first question for the Minister is this. There were some bilateral agreements between the UK and some EU member states, which predate either their or our entry into the EU. Would any of those still be applicable in a no-deal scenario? Would we seek to update them, would we want to negotiate additional unilateral arrangements with other member states, or is it our intention to seek a whole EU deal in the event of there being no deal?
If we end up with no deal, we could see UK citizens returning to the UK, perhaps in significant numbers, and needing help. DExEU published a policy paper on 6 December called Citizens’ Rights—EU Citizens in the UK and UK Nationals in the EU, which accepted the importance of returning UK nationals being able quickly to access benefits and housing. Paragraph 24 stated:
“Arrangements will be made to ensure continuity of payments for those who return and are already in receipt of UK state pension or other UK benefits while living in the EU. We are considering how support could be offered to returning UK nationals where new claims are made and will set out further details in due course”.
Given that “in due course” is running out, can the Minister tell the House what continuity arrangements have been put in place for those whose benefits are already in payment, and what support will be offered to new claimants?
The European Commission has called on member states to protect citizens by taking account of periods of work or insurance in the UK before Brexit for both EU 27 and UK nationals, by ensuring the aggregation benefits for those who carry on living in the UK, and more crucially, by encouraging member states to carry on exporting pensions to the UK even though it will then be a third country. But we do not know what will happen in practice. The Government’s website has a page entitled “UK nationals in the EU: benefits and pensions in a ‘no deal’ scenario”. However, it tells you very little at all, except that if someone is already getting UK benefits for a state pension transferred to another member state, that can carry on being paid there, and that their entitlement to any in-country benefits will depend on what the EU decides. So we are very much in the dark.
As my noble friend Lord McKenzie said, the whole system of social security co-ordination relies on reciprocity, which cannot be assumed in a no-deal world, so we cannot make other states give us information or co-operate, or require them to apply the current rules to us. The Explanatory Memorandum said—and the Minister has said—
“These regulations aim to address deficiencies in retained law caused by the UK withdrawing from the EU and ensure citizens’ rights are protected as far as possible in a no deal scenario”.
In other words, they are designed to maintain the status quo. I have never liked this language of “deficiencies”, because these are not accidental deficiencies but a direct consequence of the Government refusing to rule out no deal. Those deficiencies are a loss of all kinds of rights, acquired in some cases over decades, which people may experience. This is entirely avoidable—it is simply because we could be in a no-deal situation.
These regulations are intended to maintain the status quo, so I want to try to test the veracity of that claim in a no-deal scenario. The current rules allow you to use periods of insurance contributions elsewhere which can be aggregated together. So someone who has worked in other member states can make one application to the relevant agency in the country in which they live. In the UK, this is the International Pension Centre in Newcastle.
The Commons brief on the immigration Bill gives a really good example, if noble Lords will allow me to describe it. Someone called Jo worked in France, after leaving university, before returning to the UK in 2008. He carried on working here, paying UK national insurance contributions until he reached state pension age in November 2018. As things then stood, Jo did not have to make separate claims to get his French and UK pensions. He had to submit a single claim to the international pension authority, and the centre in Newcastle contacted the French pension authorities. They calculated his entitlement to a French pension and put it into payment. The centre also calculated that Jo was entitled to 9/35ths of a full UK state pension because he had paid nine years of contributions here. That was put into payment as well. The only reason he got it was because his period of insurance in France meant that this tipped him over the minimum of 10 years of national insurance contributions that you have to have to get into the British state system in the first place.
My primary question is: do these regulations preserve the right of UK and EU nationals to aggregate periods working in other EU member states when determining entitlement to UK benefits and the state pension? Where is this spelled out? Is it in domestic legislation? Is it remaining unchanged? Does it include EEA states? Where is it laid out unequivocally?
Secondly, the regulations allow the DWP to ask claimants to provide the relevant evidence where the EU member state cannot or will not. The Explanatory Memorandum says, at paragraph 7.2:
“in the event that the information provided by the claimant is insufficient, the UK will no longer be required to fulfil any obligation under the Coordination Regulations”.
This sounds quite harsh. What would happen to Jo if he retired after a no-deal Brexit? He would have to do two things. First, he would have to access his French pension. Would this be done through the International Pension Centre, as it is at the moment? Or would he have to apply directly to the French authorities? Crucially, would he definitely be able to have that French pension paid to him in the UK? In other words, would France export the pension, as requested by the Commission? If not, Jo could be in an impossible position. He might need to return to the UK to care for elderly parents, but if he could not get the bulk of his pension here, what would he do? What if some of our citizens found that they had no residence rights anywhere else, so were forced back to the UK and yet could not access the benefits or pensions they needed because they had entitlement in other member states? What would happen to them?
Then Jo would need to access his UK pension. To get that, he would need evidence that he had paid national insurance contributions in France, as he would need a minimum of 10 qualifying years to get into the UK system. This would raise other questions. Would the International Pension Centre in Newcastle contact the French pension authorities to get this evidence for Jo, or would he have to get it himself? Either way, if the French did not oblige, what would Jo have to produce? If he did not have documents that the DWP liked, he would get no pension at all in the UK, even though he was legally entitled to it. Would he have to pay to get documents translated and notarised? How long would this all take?
As the noble Baroness, Lady Janke, said, it is crucial to know what would count as evidence. I could not produce payslips from 20 years ago, and I think a lot of noble Lords could not either. So, if the authorities in another EU state refuse to co-operate, what should people do? They could go back to their employer, but firms go out of business or merge. In most countries, they would not be required to keep records dating back decades. So, would other forms of evidence be accepted—for example, witness statements from co-workers, neighbours or doctors? Has the evidential basis been published? If not, will the Minister guarantee to conduct a consultation on it at once, so that we can see what would happen?
If a UK firm posted a worker abroad, could the firm be compelled to provide the necessary information to the DWP? If Jo were legally entitled to a state pension here, but could not prove it because the French Government would not co-operate, who would decide that he would not get that to which he was entitled? How could he appeal a refusal?
I have a few more short questions. The Commons brief points out that these regulations remove entirely article 4 of EU regulation 883/2004 which contains the equal treatment provisions to which I referred at the outset. The Explanatory Memorandum does not explain why this provision has been removed. Can the Minister tell us why it was? UK nationals working in the EU and EU residents working in the UK could be required to pay national contributions here as well as paying contributions in another EU member state, so a worker posted to Germany by her British company could end up paying double national insurance contributions. Did the Government consider waiving NICs for someone in this country, which would of course replicate the status quo rather more precisely that what seems to be in here? If not, as my noble friend asked, how could they then say that there are no costs attached to these regulations?
The regulations abolish provisional payments while a dispute is being resolved with an EU member state. The memorandum says that these provisions are hardly ever used, but since there will not be any resolution mechanisms in the future and there will not be a common rulebook, it is entirely possible that the situations which might require them to be used could be far more numerous. What assessment was made of the likelihood of disputes arising in no deal which would trigger payments of this sort? While these regulations are operational, if they ever come to be, what is the status of post-Brexit contributions in other EU states? Will UK state pensions be uprated when paid in other EU member states after no deal? Ministers have said that they will be for 2019-20, but what happens after that?
I want to say a brief word on the point raised by my noble friend Lady Lister about the Immigration and Social Security Co-ordination (EU Withdrawal) Bill, which has been debated in another place and which in its territory overlaps very much with this instrument. As we have heard, that Bill contains eye-watering Henry VIII powers that basically would allow Ministers to rewrite the social security co-ordination rules at will. I am not a Brexit specialist, so can the Minister can explain this to me? If there is no deal, does that Bill fall? If it does not, how do the Government intend to honour the commitments spelt out by the Minister herself and spelt out in the memorandum when they have the power to rewrite them entirely? Will they commit to use those Henry VIII powers only to replicate the provisions of these regulations?
Finally, if there is a deal, what is the status of these regulations?
I apologise for asking so many questions, but they are all important for the great many people who could be affected. I gave the Minister notice of my technical questions, albeit only yesterday, but my priority is to get things answered on the record. The date of 29 March is only three weeks away. If the Government allow a no-deal scenario, these problems will become a reality for many UK citizens living in the EU and vice versa. They and I look forward to the Minister’s reply.
Social Security Benefits Up-rating Order 2019
Baroness Janke Excerpts(5 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Janke (LD)
My Lords, I too thank the Minister for her announcement today. It is always a privilege to follow the noble Baroness, Lady Lister, who knows so much about this subject. I too feel struck by the benefits that are not in this order. I suspect we will all today mention the Joseph Rowntree Foundation, which described this as “the biggest policy driver” of poverty. The Joseph Rowntree Foundation is the organisation that established the concept of the minimum income standard. The statistics for that are breathtaking. The noble Baroness, Lady Lister, has given us important figures and shocking facts but we should look at the minimum income standard.
A single person has to earn £18,400 to reach the minimum income standard. Each parent in a working family must earn £20,000. The minimum wage is too low to reach the minimum income standard. A lone parent with two children, working full-time, had disposable income 4% below the minimum income standard in 2008; today it is 20% below it. The freeze is set to cost working-age families £4.4 billion a year in 2019-20, and the average single parent will be £710 worse off—that is 3% to 7% of their income.
We have talked about removing the freeze a year early and we would support that. As the noble Baroness, Lady Lister, said, where there is a will there is a way. If we removed the freeze for the last year, the result would be to reduce the number of people in poverty by 200,000 in 2020-21; 27.5 million people would gain, at a cost of £1.4 billion to the Treasury; and a proposed cut of £250 to single parents’ budgets would be prevented.
In the last Budget, the OBR found £13 billion in extra headroom, £1.3 billion of which went to cut tax for higher earners. Commentators today are saying that they expect the forecast for public finances to improve, so will the Government consider using the £1.4 billion to end the benefits freeze a year early? Can the Minister explain the freezing of bereavement support payments for the coming year, even though the widowed parent allowance it replaces has been raised in line with inflation?
I support and associate myself with the remarks of the noble Baroness, Lady Lister. I hope the Government will listen and look at this issue again. It is getting to alarming proportions and should shock us about the state of our country.
Guaranteed Minimum Pensions Increase Order 2019
Baroness Janke Excerpts(5 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Drake (Lab)
My Lords, I will take the opportunity of the GMP increase order to raise the recent High Court decision in the Lloyds Banking Group case, which now requires trustees to amend their pension schemes to equalise GMP benefits. The inequalities arose because between April 1978 and April 1997 an employer could contract its company scheme out of the second-tier state pension if it provided a guaranteed minimum pension—the GMP component of a member’s company pension. A calculation of the GMP accrual is set in legislation and results in inequalities because GMPs are payable from the age of 65 for men and 60 for women, so they accrue at different rates, with female benefits accruing more quickly.
That is further complicated by different schemes’ normal pension payment ages, which create a result that is sometimes more favourable to men and sometimes more favourable to women. Following the 1990 European court decision, occupational pension schemes “equalised” their retirement ages for men and women, often to 65, but the GMP component continued to apply at 60 for women and 65 for men. Following consultation in 2016, the DWP proposed a GMP equalisation method but did not commit to it being a safe harbour for achieving equalisation.
The High Court decision in the Lloyds Bank case required schemes to implement GMP equalisation from 1990, and identified approaches to achieving it. That decision still left uncertainties—for example, over how previous transfers out and buyouts should be addressed and the position of survivors’ benefits in payment. In March 2017, the DWP advised that it would consider its position in the light of any legal decisions resulting from the Lloyds Bank case. Will the Government press ahead with their planned changes to GMP conversion? Will they make variations to their proposed methods more generally? Are they considering any legislation on GMP equalisation?
The Explanatory Memorandum advises that the Secretary of State’s decision on the values of the qualifying earnings band and trigger for auto-enrolment for the tax year 2019-20 is based on established policy principles: namely, the right people being brought into pensions saving; the appropriate minimum level of saving for people automatically enrolled; and the costs and benefits to individuals and employers being appropriately balanced. I can understand why the Government would hold to the current interpretation of those principles for the 2019-20 tax year. A priority is the phasing to the 8% contribution rate from April 2019 with negligible impact on the opt-out rate. However, we know that the Government want to change the future interpretation of those principles as, following their auto-enrolment review, they announced reforms to lower the age limit for auto-enrolment from 22 to 18, and to remove the lower earnings limit of the qualifying earnings band and calculate the 8% contribution from the first pound earned.
There is no confirmed date for the implementation of these reforms, other than a loose reference to the mid-2020s. The Government could announce a forward date, which would allow time for consultation and legislative change, and give employers good notice. The reforms could bring an extra £3.8 billion into pension saving annually, increasing the pot of the lowest earners by about 80% and the median earner by 40%. When will the Government name the implementation date for these reforms and when do they anticipate bringing forward legislation to give the Secretary of State the necessary powers to implement them?
Finally, the earnings trigger—earning £10,000 or more in one job—is a factor in determining which workers get automatically enrolled into a workplace pension. Some 37% of the eligible population for auto-enrolment is female and 63% male—a glaring example of the lifetime caring penalty that women pay. Predominantly because of caring, millions of working women—some 45%—are in part-time jobs and earning less, which excludes many from auto-enrolment. Although the £10,000 earning trigger is frozen, decreasing in real terms against assumed wage growth, that 37% still rises only to 38%. Yes, once in the eligible population women are saving at the same rate as men—one would expect that; women are not stupid—and they still gain from having their inertia mobilised into savings. It is not getting into the eligible population that excludes many women from the benefits of saving.
The Government’s argument for not lowering that £10,000 is that,
“the predominant impact will be upon people for whom it could make little economic sense”,
to save. Such a sweeping assumption sustains a gender stereotype that is not fair on the women impacted, for several reasons. Many women will be in households with income that would support them as the right people to be brought into pension saving. Some women earn more than £10,000 but will not qualify because they do not earn £10,000 in any one job. Many women work part-time during periods of caring, outside of which they work full-time. For them, the assumption that it would not make economic sense to save is wrong and simply undermines their persistency of saving.
Fully 100% of pension contributions are deducted from employed earnings when calculating entitlement to universal credit and tax credits—an incentive to save for low-income earners. Excluding them from auto-enrolment undermines that incentive. Under pension freedoms people do not need to secure an income stream in retirement, so the concept of replacement rates is more tenuous. Older women on low incomes have lower financial resilience—lack of financial resilience has been reported on copiously in the last year or two—so supporting women during their working life to build up a pot of savings, accessible from age 55, will increase their resilience and mitigate their exposure to debt.
The Government consider that opting in to pensions is the most appropriate option for these people. Their published review of the earnings trigger refers to Institute for Fiscal Studies research showing that the impact of auto-enrolment has also increased pension membership among those earning below £10,000. However, I read that research, and the institute’s researchers observed that “it might be unlikely” that employees ineligible for auto-enrolment asking to opt in to workplace pension “is the major driver” of this increase. They referred to other influences more likely to account for the increase, such as some employers choosing to contractually enrol their workers who earn below £10,000—either from,
“a paternalistic desire to provide”,
low earners with some saving,
“or to reduce the … burden of monitoring whether staff”,
with variable earnings,
“do or do not earn over”,
the earnings trigger during a relevant pay period. So the research quoted does not support the assumption that low-paid women being able to opt in to pensions is translating into them saving more.
I ask the Minister what measures the Government intend to take to address the problem that, even with the changes in this order, still only 37% of the auto-enrolment population is female.
Baroness Janke (LD)
I thank the Minister for her introduction of the orders and I am privileged to follow the noble Baroness, Lady Drake, who is such an expert on this matter. I too will raise a few points about how inclusive the scheme is. It has been a success; we all recognise that. It has been a very good example of cross-party working on a crucial issue.
On inclusivity, the latest figures from the department show that 37% of women workers, 33% of workers with a disability and 28% of black and minority-ethnic workers are not eligible for master trust saving through auto-enrolment. Auto-enrolment does not cover the self-employed or workers in the gig economy. Both the noble Baronesses, Lady McIntosh and Lady Drake, mentioned the cumulative earnings of people who work part-time and in more than one job. What plans do the Government have to further extend the scheme to include those groups? How can it be made more accessible to enable those who need it most to benefit from it?
Social Metrics Commission
Baroness Janke Excerpts(5 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Janke (LD)
My Lords, given the variations in poverty rates across the regions—as much as 10%, according to the report—what plans do the Government have to address the specific causes, issues and needs of the regions and to improve the conditions of those in poverty across the country?
Baroness Buscombe
My Lords, it is important to say that we are committed to action that will make a meaningful difference to the lives of disadvantaged children and families, and that goes beyond a focus on the safety net of the welfare system to tackle the root causes of poverty and disadvantage. I am taking a particular interest in debt, working with my honourable friend the Minister for Pensions and Financial Inclusion. We are also very much looking at housing, working across government with the Ministry of Housing, Communities and Local Government. These issues matter very much when looking at the root causes, as does low pay, and that applies not just to the private sector; it is important that we also look at the third sector and other institutions that might not be paying sufficient wages to those whom they employ.
Universal Credit
Baroness Janke Excerpts(5 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Buscombe
Well, it is helpful because it is constructive. No, we do not expect people to disclose the details of domestic abuse. Any individual can be accompanied by a third-party organisation to provide expert support when discussing their situation with a work coach. Each case is unique and the work coach will therefore ensure that the process is claimant-centric, to best support the needs of the individual. We treat all personal information in confidence and do not disclose it to third parties without explicit consent, but we also ensure mandatory training for our work coaches to give the support that people who are in a vulnerable situation require.
Baroness Janke (LD)
My Lords, what assurance can the Minister give that split payments will be part of the test and learn DWP pilot scheme to be introduced early next year? Can she also give assurances that any results will be published before the managed migration takes place in 2019?
Baroness Buscombe
My Lords, the noble Baroness may know that during the test and learn phase, we will be working within a co-design phase for seven months on a number of projects with stakeholders from all parts of the welfare system to assist us in the kinds of questions that we need to ask. But we are also going to look at how Scotland implements this. Scotland has made its own decision, which it is entitled to make, to go ahead and implement split payments. We want to learn from Scotland, too, about how this can be done, what challenges there might be and how practical it will actually be when six benefits are being brought into one under UC.