Autumn Budget 2025

Baroness Pitkeathley Excerpts

Thursday 4th December 2025 Lords Chamber

[Baroness Pitkeathley (Lab)]

My Lords, I congratulate the right reverend Prelate the Bishop of Portsmouth on his first contribution. I too have a couple of firsts to record in my contribution today. In my 28 years in your Lordships’ House, this is the first time I have ever spoken in a Budget debate, and it is also the first time I have spoken in the same debate as my noble kinsman Lord Pitkeathley of Camden Town.

I may be in a minority, but I am recording great and unequivocal satisfaction with a Budget announcement, and that is the announcement that the Government are to right a long-standing wrong. The Chancellor has set aside £75 million to fix systematic failures that cause hundreds of thousands of unpaid carers to be hit with huge bills after unwittingly breaching complex and confusing benefit rules. Unpaid carers who look after loved ones for at least 35 hours a week are entitled to £83.30 a week in carer’s allowance, provided their weekly earnings from part-time jobs do not exceed £196. If they exceed this limit, even by as little as a penny, under the cliff-edge rules, they must repay the entire week’s allowance. So a carer who oversteps the threshold by one penny a week for a year must repay not £52 but £4,331.60, plus a £50 civil penalty.

These draconian penalties were exacerbated by the failure of the DWP to alert all unpaid carers who overstepped the earnings limit, even though they had access to real-time data. This meant that, in some cases, overpayments were allowed to accumulate for years before unwitting carers were handed huge bills. This caused terrible distress, real hardship and even imprisonment.

This problem was known about for years. Carers UK began its campaign to alert the then Government to it in 2018. That year, the National Audit Office published a devastating report on the DWP’s handling of carer’s allowance, but we were assured that the problem was under control, even though a whistleblower revealed that this was far from the case. In April 2024, a Guardian investigation revealed that tens of thousands of carers were still being asked to repay huge sums, while others were being pursued for fraud claims. Still the DWP did nothing, although by then £357 million had been paid out in error.

It was a great relief when the incoming Labour Government launched an independent review, led by the much-respected disability campaigner Liz Sayce, and the then Secretary with responsibility for welfare pledged to fix the mistakes. In that year’s Budget, the earnings limit was hugely raised. The independent review found a catalogue of failure by the DWP. It found that the breaches of the rules were not wilful but honest mistakes made as a result of unclear guidance or administrative errors by the Government. There will be a review of hundreds of thousands of overpayment cases going back to 2015, which means scores of carers could be reimbursed and have unjust criminal convictions overturned.

This is a huge victory for carers, and the £75 million allocated in the Budget will make a start on fixing what the Secretary of State at the DWP has called a “mess”. It is a vital step towards addressing the injustices that have faced carers for far too long. Of course, it is as yet unclear how much of the funding will directly benefit carers, but we shall keep a close eye on how this progresses. For the present, I congratulate the Government and thank the Chancellor for making a start on righting this terrible wrong.