Social Security Benefits Up-rating Order 2024

Baroness Sherlock Excerpts

Tuesday 27th February 2024 Grand Committee

[Baroness Janke (LD)]

My Lords, we too welcome the uprating of benefits and will support today’s SI but, as the noble Baroness, Lady Lister, has said, there are ever-rising numbers in poverty, as drawn to our attention by the Joseph Rowntree Foundation’s 2024 report on poverty, published a short while ago. According to its previous report, around 20% of the population were in poverty in 2020-21—around 13.4 million—of whom 7.9 million were working adults, 3.9 million were children and 1.7 million were pensioners. Poverty among people on universal credit remained high at the same time at 46%, it said,

“despite the temporary £20-a-week uplift and a resetting of Local Housing Allowance”

to better reflect the level of rents in an area. Poverty rates remained highest in the social and private rented sectors

“and much higher for households including a disabled person or an informal carer”.

The cost of living crisis is having a major effect on poorer families. The Joseph Rowntree Foundation’s cost of living tracker found the following shocking results in October 2022, across the poorest fifth of families: six in 10 families were unable to afford an unexpected expense; over half were in arrears; around a quarter were using credit to pay bills; and more than seven in 10 were going without essentials. The report found that there are elements in the benefit system that increase poverty, such as the two-child limit on income-related benefits, the benefit cap, the five-week wait for the first payment of universal credit and unrealistic debt repayment deductions. Will the Minister say what plans there are to reassess the impact of these measures? I have not been doing my job in this area for some time, yet I recall that, when I was, these measures were constantly raised as causes of poverty that need to be addressed.

The report finds that the level of benefits is inadequate for people to afford the basic essentials, which is a damning finding. It also urges a resetting of benefits that would ensure that income cannot fall below these levels through debt repayment deductions or repayment of advances. This is essential for people on benefits as a proper safety net, not just during the cost of living crisis but for anyone who is on benefits. When will a full assessment take place of the efficacy of universal credit as an adequate safety net for those who need it? What is the Minister’s response to these findings?

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing this order and all noble Lords who have spoken. As he has explained, the Social Security Benefits Up-rating Order will increase most working-age benefits in line with CPI. We too welcome this instrument, because of course we want to see social security keep pace with prices, particularly at a time of spiking inflation and economic instability. That used to be the norm among both Labour and Conservative Governments, of course, but the past decade has seen a marked change.

There were of course the years of shame between 2013 and 2020, when most working-age benefits and tax credits were either frozen or uprated by small amounts, such as just 1%. Although today we are back to uprating mostly by CPI and occasionally by earnings, as my noble friend Lady Lister said, once again that uprating has been preceded by a period of speculation, which is deeply unhelpful. I can assume only that this is driven from somewhere inside the Government, because it happens too regularly. The speculation suggests that maybe this year the uprating will not be by the full amount or maybe will not happen at all.

As my noble friend mentioned, that speculation causes real stress and worry for people who depend on benefits and tax credits to survive. I begin to wonder: is it a strategy to allow Ministers the option of either freezing benefits or not uprating them fully so that, if they then finally do the right thing, people are supposed to be suitably grateful? As my noble friend Lady Lister pointed out, it is good that benefits are being uprated, but it is not an act of unusual generosity; it is simply a decision not to cut the value of benefits during a cost of living crisis.

This instrument, as we have heard, also increases the state pension by earnings in line with the triple lock. I accept the distinction that my noble friend Lord Davies helpfully made. The rates of basic and new state pensions will rise by 8.5%, as will the standard minimum guarantee in pension credit and the higher rate of widows’ and widowers’ pensions in industrial death benefit. However, this does not apply to a number of the others. I will be interested in the Minister’s response to that. In particular, can he explain the position on the deferred state pension? If someone chooses to defer their state pension and the pattern is that the deferred amount is uprated by CPI rather than the triple lock, are they made aware of that? When people make a decision about deferral, do they understand the consequences?

I had some other questions on pensions and pensioners but I was entirely thrown by the decision to separate these two instruments this year. Most years, we do them together in a single block, so I wrote a wonderful speech waxing lyrical and weaving in pensioners and old age, but now here I am. I shall come back, if the Minister will indulge me, to a couple of more general questions on pensioners when we come to debate the next instrument.

The context for this year’s uprating, as my noble friend Lady Lister expounded in some detail—aided ably by the noble Baroness, Lady Janke—is absolutely brutal. I will not repeat the extensive critique that my noble friend made or her unpacking of the economic climate in which so many families are living, but it is brutal. The basic fact is that there are now more than 4 million children living in poverty. There are 400,000 more children living in poverty now than when Labour left office in 2010.

One of the things that bothers me about this is that, whenever somebody raises this, the Minister—I know it is in his brief—will at some point in the response use the line that the Government believe that work is the best route out of poverty. Yet, clearly, the facts speak for themselves: more than two-thirds of children who live in poverty have parents in work. Something in that picture does not work. It is something that all of us in politics must address.

We in Labour have been looking at what we would do. We have a plan to give people a better life, so that they are able to make ends meet and have a good start for their children. We are looking at making sure that there is a breakfast club in every primary school and at giving people access to cheaper energy and an insulated home. We will reform universal credit, jobcentres and employment support so that people can get a better job with better pay. We will also have a child poverty strategy. Can the Minister tell the Committee in his response what the Government’s strategy is? What is their plan to do that? Other than simply declaring that work is the best route out of poverty, what is the Government’s plan to deal with the challenge of child poverty today? I look forward to the Minister’s response.

[Viscount Younger of Leckie (Con)]

My Lords, I thank all those who have spoken in this short debate. Before I attend to the number of questions asked and subjects raised, I would like to say at the outset—I normally do this but, today, I give special feeling and meaning to it—that this Government really do fully recognise the challenges facing people across the country due to the higher cost of living.

Although inflation is trending in the right direction, with the Bank of England now forecasting a fall to a target rate of around 2% in three months’ time, I acknowledge that pressures on household budgets very much persist. I saw this for myself in a recent visit to the Earlsfield Foodbank. The Government are not complacent about such matters; I hope noble Lords will recognise that the Government have taken action on a number of fronts to address these concerns, which were raised by a number of Peers—four, to be precise—this afternoon. I may not be able to answer all the questions but I will do my very best.

Let me start at the outset—I do not think I have done this before—by saying that, although I acknowledge the remarks made by the noble Baroness, Lady Lister, I am generally disappointed that every single item was a negative. I am disappointed that nothing she said seemed to support what we have done in these regulations or what we are trying to do. We really are trying. There was a long litany of faults coming from the Government: that the uprating was not enough; on the loss of the cost of living payments; on the freeze in the LHA, which is all for the future as we do not like where we stand on that yet; on the household support fund; and on the benefits cap review, including why it was not being done.

The noble Baroness is right to ask questions but I say gently that there is no mention of the genuine headwinds that all Governments have been facing. This Government have not been alone in the experiences of the pandemic and coming out of it, as well as of the war in Ukraine. There was no indication of these whatever. It is a bit disappointing. I know that the noble Baroness will understand why I have said these things but I thought it would be worth mentioning them.

Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2024

Baroness Sherlock Excerpts

Monday 19th February 2024 Grand Committee

[Lord Allan of Hallam (LD)]

My Lords, the first two instruments are of course welcome in providing the inflation-based uplift, particularly because the schemes do not require that from their inception, so it is certainly welcome that those payments will be made. I have only one question on that, which is to understand how the process of the change occurs around 1 April, as the Minister said would happen. Given the rate of inflation, the 6.7% is quite material.

I am curious to understand whether it is something that the claimant exercises some control over—in other words, if they decide to put in their claim in March, it will be at the lower rate; if they choose to wait until after 1 April, it will be the higher rate—or is there some other mechanism taking place that determines that it has to be before or after the uplift date? That will be a question for a lot of people now that we have the gap between approving the new rates and when those rates kick in. People will have questions about whether they control that or the department does. What is it that determines whether they get the old rate or this new rate, which is materially increased? I say that not to complain but to welcome it—it is extraordinarily welcome—but if somebody applied and found that by applying a week earlier, they had missed out on a significantly higher payment, it would be frustrating. I hope the Minister can deal with that.

On the final instrument, I again thank the Minister for the very clear and comprehensive explanation of how we got there. It touched on questions that I had when I read the instrument. I will play back to the Minister what I think I heard, and perhaps he can confirm in his closing remarks whether I have understood it correctly.

There are around 300 people a year in the category that we are talking about who were technically excluded from the old payment scheme. These people have been getting their money but, in effect, they have been getting it ultra vires. They should not have been getting it, technically; they have been getting it—that is not a complaint; it is extremely welcome if that is the case—but, in September last year, somebody spotted the fact that they should not have been getting it, and now we have 94 people sitting in the queue until we can fix that. Can the Minister confirm that that is the sort of number of people; that they have been getting the money and no one from the group that we are talking about was being turned away; and that it is just that from a technical, legislative point of view, we have been more generous than we should have been? If that is the case, that is great; I am happy to go with that.

I hope the Minister can just clear that up for us and confirm that, extending into the future, from the point of view of understanding whether someone is eligible, there is not a group of people who will not have applied because, under the prior definition, they thought they were ineligible. If it is the case that there is a group of people who are now eligible who were not previously eligible, I am keen to hear from the Minister how we are making sure that they are all made aware of that and encouraged to apply to the scheme.

On balance, these three instruments seem very welcome. They uplift a much-needed payment for people suffering from serious illness. The one question I have is around the mechanism for when that uplift kicks in between now and 1 April. On the third instrument, again, it is welcome, but I just seek reassurance that people in that category have not been turned away and that future claimants will be made aware of their eligibility effectively.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing these regulations to the Committee and all noble Lords who have spoken. As we have heard, the Government have decided to increase the lump sum awards payable under the 1979 Act scheme and the 2008 Act scheme by the 12-month CPI rate last September, namely 6.71%. That is obviously very welcome.

We also welcome the fact that the Government have decided to align the definitions of these diseases as set out in the 1979 Act scheme with those in the industrial injuries disablement benefit—it was helpful to get that background and the amplification from the noble Lord, Lord Allan—hence the need for the third instrument we are debating here. It will have the effect of expanding the pool of people who are definitely entitled to the lump sums payable under the 1979 Act to include those with unilateral diffuse pleural thickening and asbestos-related primary lung cancer. This expansion is welcome but, just to follow on from the question from the noble Lord, Lord Allan, for people who are in that queue and waiting for these regs to take effect in order to be able to get it, if they die before they take effect, are we in the position raised by my noble friends in terms of the differential between dependants and other schemes? Can the Minister comment on that?

The Minister is absolutely right that these schemes continue to provide crucial compensation to those who are suffering from these awful diseases and their families. Although money is obviously no substitute for a life, it can help with practical issues, especially if it is paid out fast.

Annual deaths from mesothelioma in Britain increased steeply over the past half-century, mainly due to the widespread industrial use of asbestos from about 1950 to about 1980. That accounts for the current high death rate among men over 70, whose younger working life coincided with the period of peak asbestos use. Thankfully, death rates for those below 65 have been falling. I looked through the latest statistics published by the HSE last July. They showed that there were 2,268 mesothelioma deaths in Great Britain in 2021, which is a fall of 302 from 2020 and below the average of the previous few years.

The HSE says that this reduction remains consistent with the earlier projections that the annual deaths would fall gradually during the 2020s and suggests that the variability in the figures for 2020 and 2021 may have been something to do with Covid, but it also says that predictions suggest that there will continue to be 400 to 500 deaths among females in the 2020s. If I am reading that right, that suggests that while male deaths will continue to fall, female deaths will not. Last year, in the same debate, I asked the Minister whether he could comment on that discrepancy. I did not get an answer. Can he help this year?

It occurred to me to wonder whether this had anything to do with asbestos being uncovered in schools and hospitals, which was mentioned by my noble friend Lady Blower and the noble Baroness, Lady Finlay. After all, there are reports that a lot of asbestos has been found in schools uncovering RAAC, which is not surprising given that that DfE has previously said that 81%, I think, of state schools have asbestos. I gather that attempts are being made to launch studies into the impact on teachers and students. Last year, the Guardian reported that official data had already shown that female former teachers born between 1935 and 1954 have a 40% increased rate of mesothelioma. It also reported that statisticians have now detected a rate of mesothelioma deaths that “borders on statistical significance” among teachers born between 1955 and 1974. I hope fervently that my noble friend Lady Blower will not turn out to be in this cohort.

As the noble Baroness, Lady Finlay, said, there is also a problem in hospitals, and I hope very much that she will not turn out to be caught up in this terrible situation. Last July, the Times reported on the death from mesothelioma of Guru Ghoorah, an NHS nurse, at the age of 45, leaving two children aged four and seven. Four NHS hospital trusts were ordered to make a combined compensation payment to him of £650,000. The thing that struck me about that report, apart from that tragedy, was that it noted that ONS figures state that 177 NHS staff died from mesothelioma between 2002 and 2015 and that occupations are not recorded if a person dies aged more than 75. Two-thirds of mesothelioma deaths occur after that age. Interestingly, the Times reported that a freedom of information request by Sheffield University to NHS Resolution found that, between 2013 and 2022, 360 asbestos-related mesothelioma claims were made against the NHS. Sadly, each of those will have resulted in a death. That suggests a rather higher death rate than the official ONS figures. Can the Minister comment on the risks of asbestos in these settings, which were raised by my noble friend and the noble Baroness, to which the HSE is presumably alert? What action is being taken to protect staff, students and patients? Does he think this will impact mortality rates in future?

Looking at the statistics I was struck again that the north-east always stands out in so many depressing tables. Three of the top 10 geographical areas for male deaths are in the north-east, the region I live in: North Tyneside, South Tyneside and Hartlepool; as are two of the top 10 for women: Newcastle and Sunderland. Of course, these diseases are a product of our industrial past. If my noble friend Lord Jones were here, he would talk about south Wales miners suffering from pneumoconiosis. This debate is an important annual reminder of the price paid by so many people for our industrial heritage, our infrastructure and the society we all benefit from, but it is also a reminder of the need for government and industry to take health and safety seriously. The link between mesothelioma and asbestos was found in the 1960s, but asbestos was still being used widely throughout the 1970s. The schemes that we have been debating today were needed because, as my late and much lamented friend Lord McKenzie of Luton reminded noble Lords in the past, some employers and some people involved in liability insurance did not act as they should have done with regard to their liabilities, hence the need to create these schemes, so this is a good annual prompt to be alert to new and emerging risks to health.

The position of dependants has been raised again by my noble friends Lady Donaghy and Lady Blower. I would be interested to know the Government’s current position on this. My noble friend Lady Blower mentioned the TUC’s figure of £1.5 million as the cost of equalisation. Do the Government agree with that figure? If not, will the Minister tell the Committee the figure the Government have for the cost of equalising payouts to dependants and victims?

Finally, I am sure that the Minister will have seen the reports in the news over the past few days about a new drug breakthrough to treat mesothelioma. Does he have any more information that he can share with us on that?

I am grateful to the staff who have worked on this, to the All-Party Parliamentary Group, to the charities and to all those who work in this space. It is incredibly important that we keep up the work on research, on campaigning and on support. I look forward to the Minister’s reply.

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

Baroness Sherlock Excerpts

Tuesday 13th February 2024 Grand Committee

Finally, the Minister referred to CDC schemes being integral to the UK’s private pension system but the proposition is rather stuck on the runway. I have just one observation but it is one that worries me: the department seems to be more preoccupied with individual member active engagement, although the evidence is heavily against it in terms of that producing good outcomes at scale, rather than effective collective or default solutions. I wonder whether the department’s strategic focus is necessarily delivering the collective or default solutions that we would like to see.

[Baroness Sherlock (Lab)]

I thank the Minister for introducing these regulations so clearly; I also thank all noble Lords who have spoken. I agree with my noble friend Lady Drake; she need never worry about her questions being dry. When it comes to pensions, dry is good. Dry is where the detail is and, with pensions, detail is everything. I am grateful to the officials for providing some excellent briefing and for answering questions from us. It may not reduce the number of our questions but I hope that it makes them better questions, so that we are at least debating the right things here in Grand Committee.

As we have heard, the purpose of this instrument is to make technical amendments to the 2022 regulations and do, in essence, two things: clarify the provisions governing how reductions to member benefits in CDC schemes can be managed; and specify the categories of flex-access draw-down to which accrued rights can be transferred when the scheme has been wound up.

I will make one quick point before I get stuck into the dry detail. This instrument amends the 2022 regulations, which allow CDC schemes for single and connected employers to apply for authorisation from the regulator. It does not change the intention of those regulations, as the Minister has explained, and it is obviously not adapting to experience because no CDC schemes are in operation. For the record, can the Minister tell the Committee why the Government concluded that the amendments were needed? Were these issues that could have been picked up in the original drafting?

I am needling not just for the sake of it but because I have covered the DWP brief for quite a long time. In the past couple of years, we have debated quite a few instruments in this Room that have been necessary either to correct drafting problems in previous sets of legislation or to clarify things that were deemed not clear enough in previous drafts. Is there any broader systemic issue here that the Minister wants to pick up on? Does he want to give us some assurance on that front?

Turning to the dry detail, I want to look first at the change to the means of smoothing reductions to benefits in CDC schemes in order to reduce the immediate impact on members. The efficacy of that smoothing mechanism is really important—particularly given that, as my noble friend Lady Drake pointed out, the Government set their face against having a buffer fund in CDC schemes. We raised this during the passage of the original Bill but the Government were reluctant to engage with Members at that point either on the full implications of not having a buffer in a CDC scheme or on the detail of how proposed annual adjustments and smoothing would work.

The 2022 regulations require existing benefits in a CDC scheme to be adjusted annually—including being cut if necessary, as we have heard—to make sure that we keep the value of assets held and the projected costs of benefits in balance. Clearly, the intention was that, where a market recovered during a period of benefit reduction, increases in benefits resulting from a late evaluation could help offset those cuts. As my noble friend Lady Drake explained very clearly, any quick bounceback of asset values could help avoid unnecessary cuts, provided that assets and costs are always held in balance. However, the 2022 regulations seemingly do not allow that, hence the need for today’s instrument.

The consequential changes to Regulation 19 also address the information that actuarial valuations must contain and must be shared with the regulator, including details of any variation to a multiannual reduction as a result of the offsetting; the effect that the offsetting has on the remaining years of the multiannual reduction; and, where the offsetting has eliminated the planned reductions, when the reductions ceased to have effect and whether any remaining increase has been applied. Are the trustees of a CDC scheme required to get the approval of the regulator before implementing any offset? Are there any penalties for failing to provide all that information to the regulator? When applying the offset after a bounceback, can there be any retrospective calculation of when the reductions in benefits ceased to take effect—that is, pensioners getting retrospective increased payments?

I turn to Regulation 5, which amends Schedule 6 to the 2022 regulations; that is intended to protect members of a CDC scheme when it decides to wind up by ensuring that the process is agreed and monitored by the regulator. Among other things, the regulations make it clear that, during the winding up of a CDC scheme, the accrued rights of nominees, dependants and survivors of members or dependents can be transferred to authorised flexi-access draw-down arrangements, as we have heard. My noble friend Lady Drake asked an important question about the position of successors in that situation, especially in the period between notification and winding up. I will ask a more basic question: can the Minister clarify comprehensively who qualifies as a successor who has accrued rights to benefits that can be transferred to a flexi-access draw-down? If I was listening correctly, he gave some examples of who might fall into that category, but were they comprehensive?

The Minister may reply by saying that the regulations make this clear. In a way, they do. Regulation 5 amends Schedule 6 to the 2022 regulations in order to introduce a series of definitions. For example, Regulation 5(1) says:

“Schedule 6 (continuity option 1: transfer out and winding up) is amended as follows”.


Regulation 5(2) says:

“In paragraph 1(1) … (c) after the definition of ‘quantification’ insert … ‘successor’ has the meaning given in paragraph 27F of Schedule 28 to the Finance Act 2004 … ‘successors’ income withdrawal’ has the meaning given in paragraph 27J of Schedule 28 to the Finance Act 2004 … ‘successor’s flexi-access drawdown fund’ has the meaning given in paragraph 27K of Schedule 28 to the Finance Act 2004”.


My heart leapt when I saw a little hyperlink next to each of these insertions, which I clicked on. Alas, they took me a footnote telling me, for example:

“Paragraph 27K was inserted by the Taxation of Pensions Act 2014, section 3, Schedule 2, Part 1, paragraph 3(1), and amended by the Finance Act 2015, section 34, Schedule 4, Part 1, paragraphs 13(6)(a) and (b)”.


I understand that there may be a good policy reason to point to a definition in tax law, rather than make your own up here; otherwise, every time that changes, so does yours. However, as I have said before, when the DWP is bringing forward secondary legislation that is this layered, it would be nice to have a Keeling schedule. In the end, I dug down and found it, but it is quite a long way down. The Finance Act 2004 is many hundreds of pages long and it took me a while to get down to the right place. It would be helpful if the Minister could do that in future. I am also conscious that, given that we have had problems with drafting legislation, if this House is going to do a good scrutiny job, it would be nice to make it as easy as possible.

Workers (Economic Affairs Committee Report)

Baroness Sherlock Excerpts

Thursday 8th February 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Bridges of Headley, for introducing this debate and all members of the committee for their hard work. Having heard many of them in action, I think the noble Lord’s chairing skills must be fine indeed. I imagine it was a lively committee, as the noble Lord, Lord Griffiths, described it—I would have liked to have been a fly on the wall at times.

I found the report fascinating. It had that combination of focus and sheer intellectual curiosity that characterises the best of the reports that come from this House. I hope it will prod the Government to take the opportunity to consider some of these things in a way and to a depth that they might not otherwise have done. It is a shame, as the noble Baroness, Lady Noakes, pointed out, it has taken us so long to discuss the report, because there is so much in it and it would have been even more helpful had we discussed it at the time.

“Where have all the workers gone?” is still a great question, and clearly still relevant. After all, employment levels in the UK have still not reached their pre-pandemic rates, unlike those in other countries—a point made by my noble friend Lord Chandos. Vacancies are still above pre-pandemic levels and so is economic inactivity. We will maybe get a better sense of things when the Labour Force Survey’s reweighted data come out, and I take the points made about the difficulties in getting good data. However, the noble Baroness, Lady Kramer, is right that the report is at least pointing us in the right direction. If we look at what the ONS said this week about the likely impact of the reweighting, it is clearly pointing us towards the fact that we have a bigger, sicker workforce, and that our employment rate is even lower than previously thought. It also looks as though there are at least another 100,000 more people out of work due to long-term sickness than previously thought—and previously it was at a record high.

The committee’s report answers its own exam question by pointing to four drivers, each of which I will pick up briefly. First, I will pick up the point made mainly by the noble Baroness, Lady Noakes, about the DWP review into workforce participation. This was announced in the 2022 Autumn Statement and never mentioned again. It simply did not appear in the government response to the committee. I pay tribute to the noble Lord, Lord Bridges, who did his best to track it down, having written to the Secretary of State to ask for an update and a publication date. The response from the Secretary of State, in his letter of May 2023 to the noble Lord, Lord Bridges, was frankly extraordinary. Simply to point to a bunch of measures in the spring budget and declare that that

“represents the conclusion of my review”

is just astonishing.

Does the Minister not think it a touch unorthodox for a document such as the Autumn Statement to announce a review but for Ministers to then refuse to give any information about its terms of reference, its work or its findings, even to a committee of this House? When pressed on the matter, they simply pointed to a list of Budget measures and said, “Oh, that’s it”. Really? It ended up making a mockery of the committee’s recommendations, because, not unreasonably, it thought this was an ongoing piece of work. The committee made lots of recommendations pointing to a review, only to find that apparently it had happened and we had not noticed it. Can the Minister please explain to the House what is going on?

Having got that off my chest, I will come back now to the content of the report. On the issues around early retirement, there have been some very interesting comments both here and in the report. As we heard from my noble friend Lord Chandos, the committee seems to have gathered evidence around two broad explanations: that the Covid years gave people a taste for life beyond work, and that our flexible pension access arrangements, turbocharged by the recent pension freedoms, made this possible. In other words, Covid made people think they would like to retire and the pension situation meant that they could—or at least some of them could.

I take the points given for colour by the right reverend Prelate the Bishop of Bristol that Covid had more complex relationships than we yet properly know. I suspect quite a lot of people were traumatised in ways that are only beginning to surface down the line. That may be having effects that we have not properly begun to understand. I also take the point made by the noble Lord, Lord Balfe, that one of the things that defines work and separates it from activities we choose is choice. That is pretty important to making such choices, and there is not a lot that the Government can do about that; nor, as the noble Lord said, can the Government stop people using their savings in general. However, the state has a legitimate interest in savings to which the taxpayer has contributed, by giving tax relief on pension contributions, so I am interested to hear what the Government have to say about that.

The Government response sounded as though they felt that the retirement issue was not that big of a deal. Certainly, the most recent September stats show a drop of 2.5% in those giving “retired” as the reason for leaving the labour market, but that still leaves almost a third of all those who are leaving. It is not insignificant, so I hope that is being thought about in some depth in DWP. I take the point of the noble Baroness, Lady Noakes, that, above anything else, there is an apparent lack of curiosity on the part of the Government as to what is going on, and I find that disappointing. I hope the Minister can tell us where their thinking is on that.

Sickness as a cause of economic inactivity has been raised by many noble Lords. It is worrying that the number out of work due to long-term sickness is now either at an all-time high of 2.6 million or at an all-time high of 2.8 million, depending on which figure is picked. But it is big, and it is more than twice what it was in 2010-11. We also now have more people who cannot work fully. The Health Foundation reports that 3.7 million people in work have a health condition that limits either what they can do or how much work they can do. That is also up by 1.4 million over the last decade.

As my noble friend Lord Sikka said, we also have a healthcare problem, with waiting lists for hospital appointments spiking since the pandemic. We do not yet have clear data on causal relationships. However, when the ONS figures show that almost a fifth of those aged 50 to 64 who left work since the start of the pandemic reported that they were on a waiting list for NHS medical treatment—which is noticeably higher than the average—we ignore that at our peril.

There is also the question of disability, raised by the right reverend Prelate the Bishop of Bristol. Disabled people are almost twice as likely to be unemployed and three times as likely to be economically inactive as non-disabled people, and yet they are more likely to want a job. What are we doing to make that possible? The Access to Work programme is key to this, but the waiting list quadrupled in two years, and, by last September, over 22,000 people were waiting for their applications to be heard. Can the Minister tell us what is happening with that?

The final driver was changes in the structure of migration. I do not have time to discuss them in any detail, but they were addressed by the noble Lord, Lord Bilimoria, and a number of other noble Lords. The noble Baroness, Lady Kramer, is right: we need a bigger debate on that as a matter by itself. Like others, I have received clear briefings about the impact on particular sectors, such as hospitality and agriculture, and it has been interesting today to listen to noble Lords describe the sectors they know. This issue is not just about the economy: most of us would like to drink the beer of the noble Lord, Lord Bilimoria; many of us will have pets that we would like to be treated by the colleagues of the noble Lord, Lord de Clifford; many people want to buy products from the SMEs described by the noble Lord, Lord Londesborough; and, as a Church of England priest, I certainly want to know that my bishops are properly supported and that the right reverend Prelate can get the staff she needs in her diocese. Although this issue hits certain sectors, it is not just about economic growth but about the quality of life in our country.

This is so complicated; everything is connected to everything else. What you think is wrong depends on where you stand: the macroeconomists will tell us that we are not going macro enough, while people like me, the shadow DWP person, will inevitably focus on what is happening to employment. We have heard some interesting contributions—the noble Lord, Lord Turnbull, made an interesting point on the supply side measures that need drilling down into more—but we need to know more. The noble Lord, Lord Griffiths, made a strong point: this is in essence a debate about economic growth. My noble friend Lord Layard said, interestingly, that when we talk about growth, we talk too often about things and not enough about people. While we are trying to work out what is going on, we should at least try to do what we can about that.

One of the questions is about making sure there are good enough jobs, a theme that has emerged repeatedly during today’s debate. Labour is committed to creating jobs that provide security, treat workers fairly and pay decent wages. I loved the little kick from the noble Lord, Lord Skidelsky, to the economists—which I would not dare to do—in saying that they always view work as a disutility, whereas in fact, for most people, work is much more than that. We are all looking for meaning and we find it in different ways, but we find it very much in connection and relationship with other people, as well as in wanting to be needed and in making a difference to our society—and work is a key part of that. But, as my noble friend Lord Davies, the noble Lord, Lord Balfe, and others have commented, it has to be work that makes us feel valued and fulfilled to want to carry on doing it.

This may all sound a bit bleak, and perhaps it is. I am sure the Minister will have come armed with a list of things that the Government will do—he has a big folder, and I can see that it is full of such ideas—but one of the questions is: is what has been done working? Despite the Government pouring money into their plans, the OBR is forecasting that the employment rate will stay static over the next five years at just over 60%, and that there will be 600,000 more people on health and disability benefits by 2028-29, with costs going up to somewhere around £33 billion.

I accept that it is complicated, but Labour has tried to set out what we would do, and I offer these ideas to the Minister in a spirit of co-operation, because we should be curious and look at everything going on here. We want to overhaul jobcentres so that they focus on tackling barriers to good jobs, to devolve new powers over employment support and to get collaborating with the NHS and other agencies. We want to give full-time employment support in young futures hubs and to change the benefit rules to help more sick and disabled people risk a new job without worrying about losing money or getting reassessed. We will provide money for an extra 2 million operations, scans and appointments a year to try to get people back to work. We will expand mental health support by recruiting 8,500 more staff and providing specialists in schools, because that is crucial, as many noble Lords have pointed out. I could go on for a long time, but I will not.

This important debate has focused attention in a very helpful way on one of the biggest challenges facing not just our economy but our country and who we are as a people. If nothing changes, things will carry on getting worse. But we can choose to try to get to the bottom of it and to take steps to restore hope and opportunity to millions of people who have been written off—and, in the process, give a much-needed injection to our labour market and economy. I urge the Government to seize the day.

Disability Action Plan

Baroness Sherlock Excerpts

Tuesday 6th February 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Government for advance sight of the Statement, which came out yesterday. This is the latest in a series of moves on the part of the Government designed to improve the position of disabled people and to tackle societal barriers. I am sorry to say that I think disabled people would be the first to say that the track record so far does not inspire confidence.

First, there was the National Disability Strategy, which was announced in the 2019 Queen’s Speech but did not appear until 28 July 2021. It was then held up in a lengthy court case brought by disabled people who disputed the legality of the consultation process. Then came the health and disability White Paper, which set out plans to reform employment support and disability benefits. The centrepiece of that was the proposal to scrap the work capability assessment, but that has left many disabled people concerned that the benefits system will rely solely on the flawed PIP assessment process.

Now, we have the Disability Action Plan. There are some positives in the plan. It attempts to address some of the well-known barriers disabled people continue to face, through measures such as tackling guide dog refusals, raising the profile of assistive technology and increasing support for disabled people to take part in politics. However, it is impossible to ignore the very large hole at the centre of the action plan: there is little or nothing to address the top concern facing many disabled people at the moment—the cost of living crisis.

The Government know this is an issue, because paragraph 5.12 of the plan starts by saying:

“Another theme which ran through responses to the consultation was the long-term impact of the rising cost of living on disabled people, with respondents calling for greater support for disabled people. Research has shown that disabled people are significantly affected by rising costs”.


When the Government went out to consultation, the preliminary response of the RNIB was to say that

“it’s disappointing there’s no mention of any support measures to address the rising cost of living”.

It is still an issue today. Energy bills are still high, making life very expensive if people rely on specialist medical equipment, or need to heat their home more than the average household. As Scope has calculated, on average, disabled households face extra costs of £975 per month to have the same standard of living as non-disabled households.

If the Government want to know how things are for disabled people at the moment, they need look only as far as the document Below Average Resources, published on 18 January. This was the very interesting update on the work the DWP is doing to look at developing a new poverty measure, named “below average resources”, or BAR. It compares the impact of measuring resources versus measuring income. It told us something quite interesting along the way about the position of disabled people. It says that in the financial year ending 2022,

“30% of individuals in families with a disabled person were in low resources, compared to 27% in low income. Of individuals in families without a disabled person 17% were in low resources in FYE 2022 compared to 19% in low income”.

That is quite a big gap by anybody’s measure.

However, the only commitment on this matter I could find in the action plan was action 30, which says that the disability unit

“will continue to engage across Government to highlight concerns related to disabled people and the cost of living, sharing insights from the Disability Action Plan consultation findings, stakeholder engagement and our broader disabled people’s experience panels”.

Does the Minister think that is enough on the single biggest issue facing so many disabled people right now?

There is also nothing in the plan on another challenge which is actually caused by the Government itself—the fact that our current social security system puts disabled people through multiple upsetting and dehumanising assessments. Too often, they are denied their legal entitlements unless they have the strength and support to go through the appeals process.

Let us look at the figures. Claimants who are turned down for PIP are not allowed to appeal until they have first been through the mandatory reconsideration of their claim by DWP officials, which, as of last October, was taking an average of 36 days. Last year, only 11% of claimants were successful. They are forced to go through this extra gateway and only 11% get through it. Only then can they go to a tribunal. But if they go to a tribunal, nearly 80% are awarded their enhancement. At this point, normally the Minister will say, “Ah, yes, but it is all new information”. In fact, in 2023, 55% of cases that had their decision overturned after a tribunal hearing listed

“Reached a different conclusion on substantially the same facts”


as the summary reason for the change in decision. Why is there nothing in the action plan about ensuring that DWP gets more decisions right first time?

Without addressing the fundamental problems, the actions today risk feeling like tinkering around the edges. Despite all the consultation, there is not enough action to deal with the major challenges faced by disabled people today. I think the Minister probably knows this, because the action plan says, at paragraph 4.2, that:

“Many respondents criticised the short-term focus of the plan, highlighting the need for longer term action”.


Does the Minister think the Government responded sufficiently to that critique? I look forward to his reply.

[Baroness Brinton (LD)]

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

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

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

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

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

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

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

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

The plan says:

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


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

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

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

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

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

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

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


what on earth does that mean? She continues:

“What tasks does the dog perform?”


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

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

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


Rachel Charlton-Dailey said that, this week:

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


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

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

Engineered Stone and Silicosis

Baroness Sherlock Excerpts

Monday 15th January 2024 Lords Chamber

[Viscount Younger of Leckie (Con)]

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

[Baroness Sherlock (Lab)]

My Lords, the HSE’s own website says:

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


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

[Viscount Younger of Leckie (Con)]

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

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

Baroness Sherlock Excerpts

Monday 18th December 2023 Grand Committee

[Lord Palmer of Childs Hill (LD)]

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

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

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

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

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing these regulations. I also thank the noble Lord, Lord Palmer of Childs Hill, for his careful questioning on the £7 matter; I shall leave that entirely to him and commend him on getting into the weeds in which I normally pride myself on lurking with these sorts of regulations. I very much welcome him to this space.

I was surprised and delighted to find a Keeling schedule in the Explanatory Memorandum. Can the Minister convey my appreciation of that to those responsible? It is often quite hard to track back the way in which regulations apply, so I am grateful for that.

As we have heard, these regulations do two things: they remove the £20 upfront fee payable to all those who are not exempt; and they waive arrears below £7 in certain circumstances, as described by the noble Lord, Lord Palmer. The Government introduced both this upfront fee and the ongoing fees after they reformed the child support system in 2012. The ongoing fees are to be retained, but these regulations remove the upfront fee at a cost of roughly between £1 million and £2 million a year. I should say at the outset that we also support these changes. However, I want to ask some questions, particularly about the charging point.

--- Later in debate ---

I will certainly want to read Hansard to check that I have answered all the questions—and I mean all the questions—asked. The regulations will deliver a fairer, faster service for more families, particularly the poorest. As we approach the end of the year, I am pleased to say that the regulations are not just for Christmas—they herald the start of our longer-term legislative plans to improve the Child Maintenance Service, which I am looking forward very much to progressing in the new year and in the months ahead.

[Baroness Sherlock (Lab)]

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

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

[Viscount Younger of Leckie (Con)]

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

Universal Credit

Baroness Sherlock Excerpts

Thursday 7th December 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

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

[Baroness Sherlock (Lab)]

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

[Viscount Younger of Leckie (Con)]

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

Department for Work and Pensions: AI

Baroness Sherlock Excerpts

Tuesday 5th December 2023 Lords Chamber

Asked by

[Baroness Sherlock]

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

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

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

[Baroness Sherlock (Lab)]

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

[Viscount Younger of Leckie (Con)]

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

Benefit Claimants: Free Prescriptions

Baroness Sherlock Excerpts

Thursday 30th November 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords for their contributions to this short debate, especially the right reverend Prelate the Bishop of London for making it possible and for her introduction. I remain grateful for her continued commitment to the health and well-being of the nation, especially the most vulnerable within it, and I thank her for all she does in this respect.

Before I speak on the Motion, I would like to record my sadness at the news that Lord Darling has died. Before becoming a valued Member of this House, he was Chancellor during the global financial crash. The country was fortunate to be in the hands of someone of such ability and integrity. But as this is a DWP debate, he was also a fine DWP Secretary of State, with whom I had the privilege of working when I was a special adviser to Gordon Brown. Our country is the poorer for his passing.

As we have heard, the trigger for this debate is the Government’s proposal to close the universal credit claims of some people who fail to meet employment-related requirements. As a result, they would cease to have access to passported benefits, including free prescriptions. The noble Lord, Lord Allan, explained the rationale for a prescription charging policy, but the problem is that this is not a health policy. It is a policy that would try to use access to healthcare as a tool to enforce conditionality in the welfare state. The right reverend Prelate the Bishop of London has highlighted some of the real challenges of such an approach. As she, the noble Baroness, Lady Bennett, and others, have said, this clearly risks putting the health of some individuals at risk. It will clearly not make them any more likely to work—less likely, if anything—and it will probably end up costing the NHS more in the long run, as the right reverend Prelate’s example of asthma inhalers versus asthma attack treatment has shown.

The noble Lord, Lord Allan, is on to something on the point of this policy. I am sorry to say that I think there is an attempt to create dividing lines and say, “You do not really want to do X”. To avoid jumping into that trap, I will say for the record that we believe everyone who can work, should work. That has been the basis of Labour’s policy in the past and will be again. The welfare state was created to support those who could not support themselves, and conditionality has been part of it from the start. If people refuse to engage with the system, there must of course be consequences, but not like this. The quid pro quo is that the state should provide the help people need to get into proper, sustainable jobs, and I have real questions about how well it is doing that right now. Although that is a problem, I do not think anyone really believes that this proposal is the solution, and I think Ministers know that.

The OBR forecasts, after taking account of the Government’s plans, suggest that the employment rate will remain static, there will be 600,000 more people on sickness and disability benefits and that that will put spending up 75%. That does not sound like a plan that is likely to be effective in addressing its ostensible objective. It is hard to understand what the Government want to do with this.

In opening, the right reverend Prelate the Bishop of London said that, in her conversations with the Minister, she realised that very few people would be affected and that the media may have misreported this. To be fair, I think they were meant to report it in the way they had. I would not expect the right reverend Prelate to engage in the politics, but I simply quote from the speech made to the Conservative Party conference by the Chancellor of the Exchequer Jeremy Hunt. He said:

“It isn’t fair that someone who refuses to look seriously for a job gets the same as someone trying their best”.


It was then briefed out that the intention was to signal this as a crackdown on those who do not try very hard. The job of the Minister, for whom we all have great respect, is to say that this is one of two things: it is either a major crackdown, which potentially risks the health of many people, or it does not make much difference. I would like to know which it is, so could the Minister explain that?

The most obvious question is how many people will be affected. Has the DWP done a formal assessment of that? If so, please could the Minister share it? If it has not, why not? Secondly, as my noble friend Lord Davies asked, do we know which people will be affected? Are they young or old? Do they have children? Could they be single parents or carers? Who are they? Free prescriptions are just one of the benefits passported from universal credit. Others include dental treatment, help with travel to hospital to get NHS treatment, free school meals for kids and Sure Start maternity grants. Are those included in the same policy?

The right reverend Prelate mentioned that the Minister had indicated that most of these people will be on a nil universal credit payment and therefore would not qualify anyway. Either nobody in this position would be affected or some will be. What is the process to distinguish between them? Will that action be automatic, will a case be closed at a certain point, or will an individual assessment be made? What safeguards will be put in place to check whether people were failing to engage because of health problems, whether physical or mental? Will this need extra staff and, if so, what will that cost?

I cannot help but conclude that this policy is born of failure. Britain remains the only country in the G7 where the employment rate is still not back to pre-pandemic levels. Some 2.6 million people are now shut out of work due to long-term sickness—the highest number since records began. It is hard not to conclude that a major contributory factor is that the Government have let the NHS lurch from crisis to crisis, when waiting lists have soared to 7.8 million. More and more people over 50 are out of work due to long-term sickness. We all know that large numbers are stranded on NHS waiting lists, who are desperate for treatment or in pain. Many of those are mothers caring for older relatives or other people who are sick or disabled, and they are getting precious little help from the social care system, which still goes unreformed, despite 13 years of promises.

The right reverend Prelate said that health and work are linked, and she is absolutely right. It is quite right that health and employment policies need to be considered together, especially when we have these inactivity rates, but we need to do this in a positive, strategic way. Labour has said that we would invest £1.1 billion in the NHS to provide more appointments and get the backlog down. We would recruit 8,500 more mental health staff. We would also overhaul jobcentres, so that they can provide personalised help and work in partnership with the NHS, employers and others that can help people back into proper, well-paid, sustainable jobs. We would create technical excellence colleges, so that people get the skills that would help them get jobs in their area and then bring the skills that are needed into those areas.

That is the way forward—not a policy that grabs a few headlines but probably will not make much difference anyway. We want a proper, strategic approach to the labour market, working with the health service to help get our country back to work. The social security system is there to support those who cannot work and to help those who can work get back into work. Does the Minister not agree?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Baroness Sherlock (Lab)]

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

[Viscount Younger of Leckie (Con)]

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