Bereavement Services

Baroness Sherlock Excerpts

Thursday 13th February 2020 Lords Chamber

[Baroness Stedman-Scott]

I fully appreciate the impact of a bereavement on individuals; I am sure that all noble Lords have had that at some point in their lives. We have talked about the Tell Us Once service. The noble Baroness—I am saying this respectfully—in true spirit raises a challenge. It is not one that we should dismiss, although people are saying that it cannot be done. I talked to Cruse yesterday after our meeting. It has a campaign called Bereaved Customers First, and it is trying to get banks, building societies, utility companies and other organisations to collaborate and to have what my pension friends would call a dashboard. I would like to speak to Cruse further. I urge the noble Baroness to carry on with this thinking. If it would help, I would be very happy to meet with her to take that forward.

[Baroness Sherlock (Lab)]

My Lords, in the Pensions Act 2014 the Government rather controversially reformed bereavement payments to families who had lost a parent. However, last Friday they lost a case in the High Court in which the court ruled against them, saying that the policy was in conflict with the Human Rights Act because it did not extend bereavement support payments to fathers who had been living with the mother of their children for many years but were not married. I am interested in what the Government are going to do about this. They lost an equivalent case on the old system, Widowed Parent’s Allowance, 18 months ago and we have been waiting for a response to that court case ever since. Yesterday at PMQs, the Prime Minister had this case raised with him. He described the latest case as an injustice and said that

“we will do all we can to remedy it.”—[Official Report, Commons, 12/02/20; col. 852.]

When are we going to get a review both of the new bereavement support arrangements and, crucially, of the position of cohabiting couples?

[Baroness Stedman-Scott]

I am not one to contradict the Prime Minister, and I am not going to try to do that. [Laughter.] I was really trying hard not to make fun of today, given the subject matter, but noble Lords are spot on. We have the judgment on the Jackson case, and officials are considering it. The Prime Minister has said more than I have been allowed to, so let us just let what he has said stand. The McLaughlin case that the noble Baroness has referred to is a bit more complicated—this is not an excuse—and our officials are working with Northern Ireland officials to see what can be done.

Universal Credit

Baroness Sherlock Excerpts

Tuesday 4th February 2020 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Answer. Universal credit should have been rolled out by April 2017. It will now be September 2024—seven and a half years late. There have been many delays. After each one, Ministers normally get up and say something like: “We’d rather be right than on time.” At this stage, I would settle for either. We are not very close to either of these happening.

We were told in the Statement and the noble Baroness’s letter that the reason for the delay this time was that fewer people had had a change in their circumstances that meant they moved across to universal credit early rather than waiting for their benefits to be shut down. That was due to good news, like the labour market. Alongside the official Statement, yesterday the BBC—which is filming in DWP for a series on universal credit—filmed the director-general in charge of universal credit, who said this:

“We’ve got a lot of anecdotal evidence of people being scared to come to universal credit.”


This is another way of thinking about the delay.

People are scared, but in the Commons today the Minister blamed the Opposition for scaremongering, which I find disappointing. I am relieved to be in the House where I know the Minister will not try out a line like that. People are scared because universal credit is full of problems. They are especially scared because you wait five weeks for your first payment. You can get an advance, but that is just debt that gets taken off your universal credit week by week. People can only live on it as it is, so they are scared of that as well. I have only one question for the Minister: will the Government please abolish the five-week wait in universal credit once and for all?

[Baroness Stedman-Scott]

My Lords, the five-week wait is a cause for concern for many people; I am not denying that at all. I have been out on visits and spoken to various work coaches and Jobcentre Plus staff, and I am assured that if people come with the right paperwork—I accept that some do not—and need an advance there and then, they will get it. I accept that it has to be paid back. At the moment, many people are raising the five-week wait. I hope all noble Lords believe that we are listening. We are aware of the vulnerability of the client group, but our work coaches are doing a great job. We are listening and hearing.

Pension Schemes Bill [HL]

Baroness Sherlock Excerpts

2nd reading & 2nd reading (Hansard): House of Lords & 2nd reading (Hansard)
Tuesday 28th January 2020 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, this has been an interesting and thoughtful debate and I have learned a lot during the evening. I now know a lot more about doctors’ pay, thanks to the noble Lord, Lord Warner, and more about actuaries, thanks to the noble Viscount, Lord Eccles. I should draw the attention of the House to an historic interest: I am former senior independent director of the Financial Ombudsman Service, to which I will refer later. I, too, look forward to my first Bill with the Minister and her team and I look forward to engaging with them in the weeks ahead.

I thank the noble Baroness, Lady Fookes, for reminding us of what the world was like without pensions and how important it is to get this right. I am grateful to her for that piece of context.

Labour is in broad agreement with the aims of the Bill, but we will want to see clarifications, assurances and improvements. As we have heard, this is a framework Bill with many delegated powers—a point made very elegantly by the noble Baronesses, Lady Fookes, my noble friend Lady Donaghy, the noble Lord, Lord Sharkey, and others. I am delighted to hear that the Minister will bring forward some illustrative regulations—I am not sure what they are but I look forward to seeing them —for Part 1. I hope she will heed the recommendations from her noble friend, the noble Baroness, Lady Fookes, my noble friend Lord Hutton and others that other areas will also need this detail. I refer in particular to Part 4 which, essentially, is simply the granting of powers to Ministers to do things by regulation. If we see those regulations not, we know not what those things are. So I encourage the Minister to draw those together before we get much further.

I have many questions for the Minister, but this is in fact an attempt to be helpful. If some of them can get dispatched, we will not need to spend too long in Committee, and at the moment we have only four days in Grand Committee.

Let me look at the main provisions of the Bill. First, on CDC schemes—I will try to learn to call them CMPs but I am not there yet—Labour broadly welcomes the proposals and my noble friends Lord McKenzie of Luton and Lord Hain have made the case for the Royal Mail scheme. But we are also concerned to see protections for existing public sector DB schemes—a point referred to by the noble Lord, Lord Vaux, and others.

My noble friend Lady Drake raised the crucial issue of the sustainability requirement and of the potential difference between the way in which that may operate here and the way it operates in master trusts. I will be interested to hear the Minister’s response on how that will work in CDCs.

A number of noble Lords made reference to the fact that, although a CDC scheme may give a better pension than the alternatives available, of course it is not guaranteed. So I look forward to the Minister telling us how workers will properly be informed about the risks and potential changes in what is coming their way.

The noble Baronesses, Lady Noakes and Lady Altmann, expressed concerns about the way in which pension freedoms operating in CDC might impact back on the scheme and the shared risk of those remaining in the scheme. I am also interested in how that might affect the person wanting to move out because, as far as I can see, there is no requirement for someone to take advice when transferring out of a CDC scheme. Why not?

I read somewhere that Julian Barker, the DB lead at DWP, said at a meeting in the other place that the Government intend to introduce a £30,000 advice threshold similar to the one that operates in DB transfers some time in the future. Is that definitely happening and, if so, at what point in the future might we look forward to it? Will the FCA be responsible for creating new rules for financial advice on CDCs in that context?

Let me turn now to the pensions dashboard. The case for a dashboard was made by many noble Lords, including the noble Lords, Lord Flight, Lord Young of Cookham, and Lord Freeman. The big question is who is going to run it or them? My noble friend Lady Drake made a strong case for this, because my understanding of the Bill is not simply that there will be many dashboards—many flowers will bloom, one of which will be bloomed out of the Money and Pension Service—but that there is no requirement that I can see that there should be a public-good dashboard. Can the Minister tell us about that? It seems obvious that that should be the place to start, but it seems that there is not even a requirement there should be one. I may have misread this, and I would welcome the Minister’s clarification. However, that is my reading of the impact assessment.

If that is the case, are the Government seriously planning, as my noble friend Lady Drake said, to compel all pension schemes to release data on £7 trillion of assets and 22 million people, and then tell those people that they can access their own data only in a commercial setting? We do not know how many dashboards there will be. Can the Minister tell us how many have been tested? We have heard concerns about how the dashboards will be used in commercial settings. How are the Government going to protect consumers against the misuse of commercial dashboards by providers when the Bill does not contain, as my noble friends Lord Hutton and Lady Donaghy pointed out, even a legal duty on operators to act in the best interests of savers?

I shall listen carefully to the Minister’s response to my noble friend Lady Drake, who said that transactional dashboards specifically should not be allowed without further legislation. Imagine the position of the Government if a misselling scandal were to ensue in a market created by the Government having compelled the release of data on individual pensions. If that happens, we will not be talking PPI; Ministers will not simply have failed to stop a scandal, they will have legislated to create it. So I ask the Minister to think carefully before moving any further down this road.

There were a number of questions about other issues such as data quality, as raised by my noble friend Lady Donaghy. Some interesting points were made by the noble Lord, Lord Young of Cookham, about identification and access by widows and widowers. I will be interested to hear the Minister’s response.

I have a few other questions. How much transparency will there be around the FCA’s criteria and process for authorising dashboards? Who will oversee dashboard complaints? Will it be the Financial Ombudsman Service or somebody else? There are clearly already demands for more information on the dashboards, whether from the noble Baroness, Lady Altmann, on other savings holdings, or the points made by the noble Baroness, Lady Hayman, and my noble friend Lady Jones of Whitchurch, about the crucial information relating to the climate emergency the savers will want to see. What are the Government doing to plan for those developments.

On the powers of the Pensions Regulator, my noble friend Lady Drake again made a clear assessment. The two questions are: first, are the regulator’s powers currently being used adequately and appropriately; and, secondly, does it need more powers? Those are the two things to hold on to. We have had pushes from both sides—from those who think there are not enough powers and from those who think the powers are too strong—but I take the view that, if you read the reports from the Select Committees on BHS and Carillion, it is hard to conclude that the chief danger facing the pension sector is an over-zealously interventionist regulator. So we should look carefully at how we decide to get that balance right as we move forward.

Having said that, Committee here will be a good point to probe some of the questions about drafting and scope. There are some important questions. Is there a risk that the Bill as drafted could criminalise minor actions or ordinary business activities? Could it catch third parties such as banks and trade unions who interact with the sponsoring employer? Could it even, in theory, catch government entities that contract with a private pension scheme? We will need to explore those questions in Committee.

The Bill also proposes that the regulator will additionally be able to issue a contribution notice in new circumstances where an act or failure to act materially reduced the resources of the employer or materially reduced the debt likely to be recovered from an employer in the event of an immediate insolvency. One can see in recent history where the inspiration for those came from, of course, but contribution notices have rarely been issued. Do Ministers expect that these changes will increase the likelihood of the regulator using the moral hazard powers. Will these new triggers for contribution notices be easier to activate, as it is currently a long and developed process with many stages?

The Bill also creates new duties on employers and others to notify the regulator about certain events relating to the sponsoring employer of a scheme—the noble Lord, Lord Vaux, mentioned this—and there are certainly questions to be asked about what those circumstances are. We will want to understand that more in Committee in order to get a sense of the range of circumstances and what it is intended to be, while understanding that it is impossible to nail everything down, even in regulations.

As the Bill substantially increases the role and powers of the regulator, what is the Government’s thinking about whether it will need additional resources to enable it to do its job? We need to make sure that it is able proactively and effectively to use the powers it has been given to implement the law and ensure that it is enforced.

The killer question is this: are the Government confident that this new legislation plugs the holes in the regulator’s powers that were highlighted by the failures of BHS and Carillion? The Minister should think carefully, because that is one of the questions they have to answer, otherwise they have failed.

Finally, some broader points were raised in the debate. Auto-enrolment was raised by my noble friends Lady Drake and Lady Donaghy, the noble Baroness, Lady Janke, and others. I would be interested to hear why the Bill has not addressed issues such as minimum contribution rates, age thresholds, income thresholds or the extension of auto-enrolment to the self-employed.

My noble friend Lady Bryan of Partick made another passionate plea for the WASPI women born in the 1950s who lost out so much when the state pension age was equalised so sharply. My noble friend Lady Drake raised the important issue of the lack of a credit for carers in auto-enrolment. I will be interested to hear the Minister’s reply. My noble friends Lady Warwick of Undercliffe and Lord McKenzie of Luton raised the important issue of the role of superfund consolidators. As noble Lords will know, they offer to take over DB schemes, thereby relieving the sponsoring employer of any future responsibility, but at a cheaper price than entering the more secure insurance buyout market. That of course poses a risk of regulator arbitrage. Can the Minister update the House on the Government’s current thinking on DB scheme consolidation? This is an issue now and it will become more so.

My noble friend Lady Donaghy, the noble Viscount, Lord Eccles, and others talked about wider issues around the changing nature of the pensions landscape: inequality, the climate emergency and other issues and the way future policy is shaped. I thought the noble Viscount’s comments about the 100-year time span and his future matrimonial plans were interesting. It is a reasonable guide to what we are thinking about and how challenging it is. Have the Government given thought to the best way to shape pensions policy going forward, given how long-term it is? Is a pensions commission the way forward, or are there other ways in which they should do it? I will be interested in their thinking.

We have much to explore in Committee, and I urge the Minister to come armed with detail. Concerns were expressed in the House last week that the Government had refused to engage with any amendments to the EU withdrawal Bill. We all hope that that was a Brexit thing and that now we are on to other legislation we will not see a similar response. It really matters because this is precisely the sort of legislation on which this House adds real value. There is broad agreement on the principles, but there are huge dangers lurking in the detail. That is what we are for. It is almost the definition of a revising Chamber such as this. Those dangers have to be flushed out before the Bill is sent to the other place. So I urge the Government to listen as they may find that, once again, in those circumstances, this House serves not only to protect consumers but to protect the Government from themselves. I look forward to the Minister’s reply.

Low-income Families: Benefits Freeze

Baroness Sherlock Excerpts

Monday 13th January 2020 Lords Chamber

[Baroness Stedman-Scott]

Again, I understand the points that the noble Baroness makes. We can all recall incidents in our families—I can in my own; my niece is a single parent, and life is a challenge at the best of times. The benefit cap levels were put in place to try to restore some fairness to the system. Due to the election taking place, the levels were not reviewed in the last Parliament, but there remains a statutory duty to look at them, which will be done at an appropriate time.

[Baroness Sherlock (Lab)]

My Lords, the benefit freeze was not a reform but a straightforward cut: it simply cuts the value of certain benefits every single year, year on year, for five years. The result is that the welfare state, the point of which is to support children and families when the parents cannot earn money, is now providing a record low level of benefits compared to average wages. The basic JSA of £73 a week is just 14% of average earnings, according to the Resolution Foundation. When Beveridge started his system, the figure was 27%. We cannot have a welfare state in which, if you find yourself unable to work, you are literally thrown on to the scrapheap and become dependent on food banks. Therefore, if the Prime Minister, as he said, believes that austerity was the wrong choice, is not the logical step to accept that, since these cuts should not have been made, they should now be made good?

[Baroness Stedman-Scott]

I would not want to contradict the noble Baroness—I have the greatest respect for her—but I think the Prime Minister said that austerity must stop, and that it was necessary at the time. I do not want to go over all those arguments again. In the eight years following the financial crisis and leading up to the benefits freeze, jobseeker’s allowance grew by 21%, whereas median earnings grew by only 12%. We want a welfare state that works for people and enables them to have a decent way of life, but the legacy benefit system was unsustainable, and I am afraid we have taken very difficult decisions to try to balance it out and to make work pay for people. I know that the noble Baroness does not agree with me, but we now have more people in work than we have ever had—

Policy-making: Future Generations

Baroness Sherlock Excerpts

Tuesday 1st October 2019 Lords Chamber

[Baroness Stedman-Scott]

I would be foolish to say that we have not got some catching up to do, but I assure all noble Lords that we wish to work hard to achieve this. In terms of cross-government working, I have been in the department only a short while, and I have met with people in other government departments to talk about things that we can do together to make the impact better. The principle is well understood, and I assure all noble Lords that we are completely committed to making sure that the resources we have are deployed well for the benefit of all generations.

[Baroness Sherlock (Lab)]

My Lords, the Minister referred to The Green Book as being the means by which the Government decide how to adjudicate between the interests of different generations. But The Green Book, which is a Treasury document, sets out the tool for analysing or comparing policy objectives using things like net present social value or social time preference rates; you can work out how to judge those transfers. Will the Government publish the results of those analyses in the impact assessment along with everything else? More importantly, the young people I saw in Durham on the climate strike were convinced that we are not prioritising their interests. What tools can the Government use to assess damage done to the climate and to the planet—although, of course, there is no planet against which we can compare it?

[Baroness Stedman-Scott]

Well, there is an exam question! On the question of publishing the impact assessment, I will go back and ask my boss. Do not think that that is a cop-out; I do not actually know. I will ask my boss and then write to the noble Baroness, and everybody will receive a copy of his response through the Library.

On climate change, I think that we have done really well to be the first country to legislate for long-term climate targets. Between 1990 and 2017 we reduced emissions by 42%, so we are serious about this. I hope that the efforts of young people in this respect will help them realise that they are having a great impact on the activities of the Government to make that happen.

Universal Credit: Managed Migration

Baroness Sherlock Excerpts

Tuesday 23rd July 2019 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Statement. We have had a lot of Statements from DWP in the last year, and there is beginning to be a rule of thumb that the gentler and blander they sound at the time, the more they contrast with the story behind them. I will try to unpack what I think has happened to get us to this point, and I invite the Minister to correct me when she responds if I make any mistakes.

I think this is now the fourth version of these regulations, and the plot has thickened with every turn. We have been awaiting a debate on them for months and suddenly, in the very last days of this Session, they have been snatched away and replaced with a negative version. These regs cover two things: the process of moving people en masse on to universal credit—known as managed migration—and the losses faced by people getting the severe disability premium in legacy benefits, who lose out a lot when they go on to universal credit because there is no equivalent in UC.

The Government originally published some draft regs in June last year. These prompted outrage because the process of managed migration turned out not to be managed at all, but meant that millions of people would simply get a letter saying, “Your benefits will stop on date X. It is up to you to apply for universal credit. If you do not apply for that date then you will not get any money, and if you do not apply within a month, even if you get money later, you will lose the right to make sure that you get transitional protection, which stops you being worse off”. That went down very badly. The Government had intended always to pilot these, but the regulations covered managed migration as a whole.

The same month, Esther McVey, then Secretary of State, had announced that nobody else who was getting the severe disability premium would be forced on to universal credit until the managed migration stopped, so they could not lose out on that transitional protection, and that the Government would compensate people who had already gone across for the money they had lost. That statement, as it happened, coincided with a successful legal challenge against the Government by two people who had moved house, had to go on to universal credit and lost out as a result. The Government were then required to pay them damages and ongoing payments of nearly £180 a month. I wonder whether the Government are still appealing the various decisions on this.

The Social Security Advisory Committee then consulted on the regulations, and eventually some slightly revised regulations were tabled on 3 November together with a very critical report by that committee. That version of the regs still covered the whole managed migration process, involving up to 3 million people, even though everybody had urged the Government to take powers only for the pilot and then to come back to Parliament. There was also strong criticism of this approach from voluntary organisations working with claimants, because they were worried that many vulnerable people getting benefits would struggle simply to take responsibility for making the transition to the new system alone. The SSAC report also flagged up that the payments being made to people who had been moved across under UC and had lost this disability benefit were actually only £80 a month, whereas their losses were £180 a month.

Then, Amber Rudd became Secretary of State. She admitted to the Work and Pensions Select Committee that the Government had thus far failed to obtain cross-party support for these regulations. In January, they withdrew the SI laid in November and brought in two new SIs: a negative one, which prevented anyone else getting this disability payment from transferring to UC before managed migration, which came into force in January; and an affirmative SI which was to provide for a year-long pilot for managed migration and set the level of transitional payments for those who had been moved on to UC loss of disability payment. With me so far? Excellent.

We have been waiting since then to debate this affirmative SI. The Secretary of State said in March that the pilot would begin in July, and said again on 1 July that the pilot would definitely begin this month, yet there was no debate on the regulations which would provide for the pilot to take place. That is possibly because the regulations contained provisions for payments to people on this disability benefit which have been found to be unlawful. However, Ministers had promised that the pilot would not start without Parliament having had a debate first. In fact, on 8 January, the Minister for Employment, Alok Sharma, told the House of Commons:

“We will also ensure that the start date for the July 2019 test phase involving 10,000 people is voted on”.—[Official Report, Commons, 8/1/19; col. 175.]


Well, it has not been.

There were serious questions about the pilot. Ministers needed to be clear about the aims and the success criteria and whether or not the nature of the pilot would satisfy people. Those were the questions that Parliament wanted to debate before the regulations were approved. Then, the final twist: yesterday those regulations were withdrawn and a new negative regulation was tabled instead, published in the last week of term to take effect in the same week. The Government are not even abiding by the convention that 21 days should elapse between tabling regulations and their taking effect. Moreover, although it is a wonderful thing that the eyes of the country are on the Palace of Westminster this week, they may not be looking at us primarily for the purpose of considering universal credit and the managed migration pilot regulations.

I am really worried about universal credit and how it is rolling out. The Government should stop rolling it out while they fix it. But that is for another day. These regulations affect two specific but important issues and Parliament has a right to consider them properly. There may be an urgency but it is entirely of the Government’s making; handling it in this way is disrespectful to Parliament.

I ask the Minister three questions. First, can she explain why, having promised that Parliament would debate the regulations before starting the pilot, Ministers have reneged on that commitment? It cannot surely be simply because Amber Rudd admitted that she did not know that she could get them passed in the other place. We surely cannot have come to the point where Parliament will no longer be asked questions unless Ministers are satisfied that the answers will be the ones they want.

Secondly, can she guarantee that everybody who was getting STP and has been moved across to universal credit will be no worse off than they would have been, and that the Government’s new plans satisfy the requirements of all the legal judgments against them?

Finally, will she promise that Ministers will return to Parliament with a full report of the results of the pilot and give us the chance to debate them before laying any further regulations for a full rollout of managed migration?

I do not blame this Minister, but it is the responsibility of her department. I urge her to answer those questions as fully as she can in order to start trying to rebuild some trust.

[Baroness Janke (LD)]

My Lords, I too am grateful to the Minister for repeating the Answer to the Urgent Question and would like to ask some questions about the pilot.

I am not completely familiar with processes of this kind and am grateful to the noble Baroness for raising a lot of issues that had occurred to me. I would be grateful if we could have more detail of the scope, approach and methodology of the pilot, when the findings are likely to be made public, when there will be an opportunity for external agencies to examine and question the report and, indeed, when there will be a debate here before the Minister comes back to Parliament for permission to carry out managed migration.

I hope that the pilot will look at some of the needs as expressed by the various groups and that they will be taken account of and reviewed: for example, bringing assessments back in-house for people with disabilities, following the whole record of the assessment process; providing split payments to protect vulnerable women; reviewing the work search process requirements, particularly for women with young children or caring responsibilities; and the piloting of different approaches to digital accessibility, particularly for disadvantaged groups and people with disabilities.

I welcome the proposed action on the judgment of the High Court and would like more detail as to how it will communicate to all people who are eligible, with a report back from the Minister on how that is being carried out. I very much hope that the pilot will provide us not only with insight and the chance to review some of the problems that I have been aware of since I have been covering the issue, but the opportunity for debate and external scrutiny before the managed migration process is carried out in full.

Universal Credit Fraud

Baroness Sherlock Excerpts

Wednesday 10th July 2019 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Answer. Claimants need these advances because they have to wait five weeks to get their universal credit in the first place, and that money must be repaid. Now the BBC tells us that tens of millions of pounds have been stolen in fraudulent advance claims. It saw DWP messages on an internal forum describing lots of suspicious claims, from a 19 year-old with six blind children to those inventing street names or people, where the landlord was called Harry Kane and the kids were Homer, Bart and Lisa.

In other cases, a genuine claimant has been conned into giving their details to someone who says that they can get them a government grant or payday loan. Instead, that person applies for universal credit in the claimant’s name, and they find out only when they are taken off their old benefits and put on to UC; the claimant then finds themselves worse off and may have to pay back a debt of £1,500 in the bargain.

Can the Minister tell us two things? First, assuming that the Government are not about to stop the rollout—which I think they should—where a legacy benefit claimant was scammed and a UC claim was made without their knowledge, will the DWP allow them to return to legacy benefits, especially if they are worse off? Secondly, eight leading banks have signed up to a new code to reimburse victims of fraud on a no-blame basis. Will the DWP do the same?

[Baroness Buscombe]

My Lords, I repeat that we take this issue incredibly seriously. First, there is no question of us stopping the rollout; we will not. It is already completed in that it is now in every jobcentre in the country. The termination of legacy benefits is triggered simply where a UC claim is made, not where it is treated as made. It is essential for a smooth transition from legacy benefits to universal credit that the trigger for the move is simple, and that legacy benefit overlap is avoided as far as possible or is otherwise accounted for. The chief goal is prompt and accurate payments of UC to claimants, and, where fraud is alleged, a fraud referral is raised so that the case can be investigated to assess the evidence to establish the facts and determine who was involved, including any third parties. In deciding whether the claim is valid, the consideration needs to factor in whether, or the extent to which, the claimant is involved in the claim.

We at the Department for Work and Pensions are doing all we can to take this matter extremely seriously. We are talking about crime and the money of the poorest being taken away and going to the wrong people. It is important to properly investigate every circumstance; we deal with this on a case-by-case basis.

Work Capability Assessment

Baroness Sherlock Excerpts

Thursday 4th July 2019 Lords Chamber

[Baroness Sherlock (Lab)]

I thank the Minister for repeating that slightly opaque Answer. This is really serious. There have long been complaints about the WCA process from campaigners concerned about the impact on people—including, in some cases, their deaths—following assessments.

The DWP conducts peer reviews into serious outcomes and deaths associated with DWP activity. The independent statutory reviews the Minister mentioned were conducted by Paul Litchfield in 2013 and 2014. Disability News Service reported earlier this year that letters to Ministers from coroners, along with several peer reviews, were not given to Dr Litchfield’s team. The DWP will not confirm that, but DNS says that it then lodged a complaint with the Information Commissioner and that the summary of its discussions with the DWP shows that that information was not passed along to the review team.

In response to a letter from my honourable friend Debbie Abrahams, the DWP finally said that it has had a good look around the department and that despite,

“a robust and thorough search”,

it could not find any information about this, citing,

“the length of time since the reviews were carried out”,

and,

“factors such as document retention”.

It also implied, as the Minister did, that the review team did not ask for them. These were documents related to the circumstances of people’s deaths. The independent reviewers were investigating the WCA process, including its impacts on the clients. Either these documents were withheld from the reviewers or the DWP’s record keeping is so poor that the department does not know whether they were passed across. I regret that, given the level of anger and mistrust of the DWP out there as a result of repeated cuts and the profoundly dysfunctional nature of the benefit assessment system, this will inevitably fuel suspicions that there was something in those documents that the DWP did not want an independent reviewer to see.

Does the Minister accept that it is the department’s responsibility to ensure that an independent reviewer has any potentially relevant information? It is not their responsibility to work out what to ask for. If that is true, why did it not include all peer reviews and coroners’ letters?

Secondly, since trust is now so low, will the Government accede to the widespread calls for an independent inquiry into how assessments are carried out and the medical evidence of their impact on the health and well-being of claimants? Will she guarantee that all documents relating to deaths or serious and complex cases related to DWP activity will be shared with any future independent reviewer? This is a matter of justice and it is the only way to restore trust in a deeply discredited system.

[Baroness Buscombe]

My Lords, I refute the allegation that this is a deeply discredited system. The Department for Work and Pensions takes the death of any claimant very seriously. Where it is made aware that a person has died and it is suggested that that is associated in any way with the department’s activity, a review will be undertaken to identify any lessons that can be learned. It is important to make it very clear that in a case of suicide, a mandatory internal assessment review is undertaken. All these reports will be kept for six years from the date of the final report.

In October 2015, we moved from peer reviews to an internal review process, which is what I meant to call it in the first place. That process means that we hold more information, including all emails relating to the case, the original commission, the final report and any recommendations resulting from the internal process review. That relates to the death of any individual who has been in receipt of any benefit—not necessarily just the work capability assessment but any benefit at all.

It is important to make the point that we retain that information for six years. Some of it is highly confidential. What we do not retain for more than one year is the day-to-day business on emails which is where requests come in and out about who is asking for what information. That is in line with normal practice. We retain that information for only one year. Complex issues are involved in the decision-making for this, however, and we examine those issues with great care, also taking into account letters from the coroners’ courts. Once again, the department takes the death of any claimant seriously and always conducts an investigation into the circumstances.

Mental Illness: Job Security and Inequality

Baroness Sherlock Excerpts

Thursday 4th July 2019 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Bird, for using the initiative he described to us at the start to seize the opportunity of securing this debate and giving us the chance to talk about these issues. I thank all noble Lords who have spoken, for some very interesting speeches. I thank the right reverend Prelate the Bishop of St Albans for some really thoughtful reflections on the interaction between mental health and employment, issues around stigma and discrimination, and the role of the Church and communities. There is so much more that one could go into.

I thank the noble Baroness, Lady Hollins, for another piece of articulate advocacy on behalf of those with learning disabilities and autism. I loved that story about an employee and the impact that one person with learning disabilities can make. It reminded me so much of the lessons taught to us by the late and much-lamented Jean Vanier on how much we could all benefit by taking them on. I also thank the noble Baroness, Lady Jolly, for a really interesting approach, talking about risks and interventionist factors and how we could use those on a rights-based agenda, as well as the existing health and LEP programmes we have to tackle these issues.

I am being quite literal. I want to look at the title of the debate and ask: do job security and inequality impact on mental health? What does the evidence say? There are two questions. First, does inequality have an impact? Yes, it does. There is clear evidence, summarised well by the Equality Trust, that a much higher percentage of the population suffers from mental illness in more unequal countries; for example, the evidence from the USA is that rates of depression in US states are associated with income inequality. The evidence and the academic side are clear. While I am here, it is worth noting that poverty is also a significant driver of stress and poor mental health, a point made by the right reverend Prelate. The 2016 report from the Mental Health Foundation and the JRF found that:

“Poverty increases the risk of mental health problems and can be both a causal factor and a consequence of mental ill health”.


Secondly, what about job insecurity? Various studies have looked at the impact of the nature of employment on mental health. I read one just this morning. Research by Menéndez-Espina et al, published in February, observed that,

“job insecurity … has direct effects on the different areas of mental health evaluated, in men as well as in women”.

Of course, the report of the UN rapporteur, which we have already heard about, draws attention to the fact that the way work is organised has profound and lasting social and psychological repercussions.

Does the UK have a problem with either inequality or job security? Yes, it does. The Equality Trust shows that, according to the most recent data from 19 OECD member states in the Luxembourg Income Study dataset, the UK is the fifth most unequal country and the fourth most unequal in Europe. Figures from 2016 show that the poorest fifth of society has only 8% of the total income, whereas the top fifth has 40%. The figures for wealth are even worse. We are not talking about poverty, but the figures on poverty show that it is rising and the problem is getting worse for those in and out of work.

What about job insecurity? A recent spate of company closures from retail to steel has put many people out of work and made other people very nervous about what is happening to their jobs. Also, we have 850,000 workers on zero-hours contracts, two-thirds of them stuck on them for more than a year. A TUC-commissioned poll of workers on zero-hours contracts found that more than half had had shifts cancelled with fewer than 24 hours’ notice. Nearly three-quarters had been offered work with fewer than 24 hours’ notice. More than a third have been threatened with not being given shifts in the future if they turn down work. It also found that only 12% get sick pay, only 7% would get redundancy pay and 43% do not get any holiday pay.

This is really stressful and insecure work. If you have no idea how many hours you will get each week, you do not know whether you can pay your rent or feed your kids. If you do not get sick pay or any other pay, you will be afraid to turn down work. You will go to work when you are sick or injured because you do not have any alternative. If you are threatened with not been given work if you turn down shifts, you will go even if you are not up to doing it. That is bad for people’s physical and mental health. Other TUC analysis found that those on zero-hours contracts were twice as likely to be working night shifts or seven-day weeks. They earn less per hour as well. This is not good work.

What is the Minister going to do about it? First off, does she accept this association between job insecurity and inequality on the one hand and mental ill-health on the other? If she does, I have some serious questions to ask. What might she do about it? Will the Government look again at the rights extended to workers on insecure jobs? Why should they not get the full range of rights that other workers do? If she is in the position to, will she look again at whether people should be presumed to be employed, with the burden of proof going on to the employer to show that they are not? Does she recognise that, in fact, most workers’ rights have been won by trade unions over the years? History shows that. The reduction in collective bargaining and unionisation in many sectors has been clearly associated with a reduction in rights. What will the Government do about that? Will she consider revisiting some of the anti-union legislation or making it easier for people to organise to get the rights they deserve?

Also, what will the Government do about addressing the fall in living standards, especially for those in low-paid work? What are they going to do about the inequality that has been revealed by the studies I have mentioned? Will the Government look again at the way they use the tax and benefits system to address inequality? What will they do about those who are in work, or those who want to get into work, but are struggling with mental health? All the evidence we have heard from people is that the nature of the assessment process they have to go through to get help—with PIP, for example, to get help with moving into work or trying to get help because they cannot work—actually makes people’s mental health worse.

I have personally sat down with someone who had an appalling time applying for PIP. She was turned down, but she got it on appeal. She said that the process was so bad for her mental health that she would never again apply for it, no matter how desperate she got. I know that that is a single case, but I have heard over and again that people find the process so stressful that something has to be done about it.

That is an amazing canter through what is there, but I suggest that if we take seriously the association between job insecurity and poor mental health, and between inequality and poor mental health, it is not enough simply to buy a much bigger box of sticking plasters. We need to tackle the root causes.

Child Support (Miscellaneous Amendments) Regulations 2019

Baroness Sherlock Excerpts

Tuesday 2nd July 2019 Lords Chamber

[Lord McKenzie of Luton (Lab)]

My Lords, I have just two quick questions. First, where the recipient who is due to make payment is subject to a benefit sanction, what impact does that have on the amounts that are collectable, as proposed in this order? Secondly, the £8.40 can be an amalgam of the collection fee and the maintenance payment. So far as the government accounts are concerned, how is that split and dealt with?

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her explanation of these regulations, and all noble Lords who have spoken, particularly my noble friend Lord McKenzie; he always comes up with questions I would never have thought to ask, and they are always excellent. I hope the Minister had thought further ahead than I did—although I see someone running to the Box so perhaps she had not.

I very much agree with the points made about child poverty and the role that child support plays in helping to provide a platform on which single parents can build an income which helps lift their children out of poverty. So we do not oppose these regulations. It is important, wherever possible, that both parents should contribute towards the cost of raising a child after a break-up. An adult may leave their partner but they do not get to leave responsibility for their children.

I accept that the regulations are designed to provide a series of changes and clarifications to make it easier to collect arrears and maintenance payments under the Child Maintenance Service scheme. I will concentrate on a few specific points: the proposal to allow deductions for child maintenance to be made from universal credit where a non-resident parent has earnings and meets the criteria to be eligible for the flat rate; the increase in the amount, plus collection charges, that can go towards paying arrears; extending the scope; and the enforcement points.

The proposal to allow deductions of £8.40 from benefits for arrears in cases where the non-resident parent is no longer paying ongoing maintenance seems sensible. I can understand that for someone on a low income, £8.40 is a lot of money, but it is entirely possible that the single parent on a low income could also be on benefits, and both parents may well have suffered from the cut in living standards brought about by the benefits freeze and the other cuts in benefits. That seems to be an element of fairness that has to be addressed.

It is also very important that non-resident parents are clear that they will be chased for any arrears they owe. I ask the Minister for a broader update on this. She mentioned that we debated some child maintenance regulations last November. At that point the key thing the Government did was to write off billions of pounds of arrears from the old CSA system, and the quid pro quo for that, because we pushed them at the time, was that they would promise to pursue enforcement. This really matters because otherwise there is a moral hazard question. If a message goes out to parents: “If you just hold off long enough and don’t pay, in the end the Government will give in and write it off”, clearly that creates a disincentive to pay the money that should be paid for your children. So it is really important that we do not get back into that question. Ministers made the case in those regulations for a clean break with the old system, but that places a huge onus on them to make sure that arrears do not build up again in the new system.

I looked at the latest statistics and I am a bit worried. Since the new Child Maintenance Service began, a total of £259.2 million of child maintenance is unpaid, which should now be paid through the collect and pay service. That is 11% of all child maintenance due to have been paid since the service began. In the last quarter of last year, only 66% of paying parents using that collect and pay system were compliant; and compliant does not mean that they pay all of it but that they are paying some of it. So only two-thirds who were using the actual statutory system of compliance were paying anything at all. I may have misread those figures, but can the Minister confirm whether that is right? If the figures are right, is she happy with them? If she is not happy with them, how much difference does she expect these regulations to make to that performance?

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank the noble Baronesses, Lady Janke and Lady Sherlock, for their contributions. I am pleased that the noble Baroness, Lady Janke, is supportive of the statutory instrument. We have been working hard since 2012 to ensure that this system is fairer. It is important that, wherever possible, we encourage both parents to support their children.

The noble Baroness, Lady Janke, referred to the two-child limit, which is not actually related to these statutory instruments but I will touch on it very briefly. We are very clear that people should take responsibility and think hard about whether they can afford additional children, in the same way that those who do not rely on the state often make the difficult decision to limit the number of children they have to how many they can afford. It is also important to point out that, although the limit was introduced for children born after April 2017 and the change of policy was notified a good two years earlier, people continue to receive child benefit for as many children as they have.

On the benefit cap, it is very important to note that the cap is lifted when the parents are working a sufficient number of hours. Indeed, a couple with three children have to work only 24 hours a week between them—just 12 hours a week each. The benefit cap is then lifted and they are then in receipt of income equivalent to a net income of £35,000 a year, plus their housing benefit. I think most noble Lords would agree with me that that is generous. This is funded by the taxpayer.

The noble Lord, Lord McKenzie, asked what happens in cases where the parent has a fraud penalty or is sanctioned and is possibly in financial hardship because of the sanction. Some clients will have a fraud penalty or undergo sanctions while claiming benefits and may be eligible to claim a recoverable hardship payment. If a claimant has a fraud penalty or sanction applied to their universal credit award which is equal to or more than 40% of their standard allowance, the only deductions that can be taken at the same time are arrears of housing service charges or rent and fuel. These are to help protect the claimant and their family from being made homeless or having their fuel supply disconnected. All other deductions cease while the fraud penalty or sanction is being applied, so no child maintenance deductions will be taken. From October 2019, the 40% maximum deduction rule will be reduced to 30%.

I congratulate the noble Baroness, Lady Sherlock, on her ordination last weekend. That was very good to see, although it has not put her off from taking time out to ask me some difficult questions.

On the question of write-off statistics, up to the end of March 2019 217,500 cases held on the CSA computer systems with non-paying historical debt had the debt adjusted or written off. Some cases on the CMS system with debt below representation thresholds have also had their debt adjusted or written off. Activity on CMS system cases started later than on the CSA system and the data we need to report on them is not available yet. However, the CSA case load continues to reduce: the number of CSA cases held on CSA or CMS IT systems decreased from 809,000 in December 2018 to 674,00 in March 2019. The reduction in case load is mainly due to the closure of cases with government-only debt—a debt owed to parents of less than a thousand pounds. This historic debt continues to reduce, but the CSA has written to 125,200 parents with care to ask if they want a last attempt to be made to try to collect the debt owed to them.

We have not written off any debt without authority. As part of the case closure process, we brought to account some outstanding payments and activities and tidied up details of some cases. A significant number of CSA cases involved moneys being transferred directly between the two parties, and the case records have been adjusted to reflect this.

In July last year, the Government published their new compliance and arrears strategy for the Child Maintenance Service. This sets out how we are tackling the legacy of the failed Child Support Agency and the steps we will take to prevent arrears accruing at such a high rate again. Where it is cost effective and reasonable to do so, we are offering parents the choice of whether they would like us to make one last attempt to collect their debt. Where the collection of the outstanding debt is not possible or appropriate, we are writing it off. It was a difficult decision—we took some time to come to it because we strongly believe in enforcement—but many of the sums involved were very small. At the same time, it was costing the Government—in other words, the taxpayer—a lot of money to maintain this system and the debt within it. We prioritised the collection of maintenance for today’s children over historic debt where no child stands to benefit. The majority of the historic debt was owed to parents, not the taxpayer.

There was another question on how many parents on “collect and pay” actually pay. In the quarter ending March 2019, 67% of paying parents using the collect and pay service were compliant, up from 60% for the same period in 2018. This includes parents who transferred from the direct pay service having failed to pay their liabilities.

The noble Baroness also asked whether parents would be encouraged to be non-compliant, as they have seen outstanding CSA debt being written off. The write-off of CSA arrears is a one-off exercise and the regulations allowed us to do this only for debt accrued on the CSA schemes. These were historical arrears and this was in recognition that the majority of the CSA debt could not be collected, given its age and the circumstances of the parents. Where there is a possibility of successful collection at a reasonable cost to the taxpayer, we continue to do that. Looking forward, we believe that we are building a better CMS. In this package of regulations, we are making further provision to collect payments and stop arrears like this building up again.

Have we made use of the new enforcement powers? We have started to use the powers from the previous package of regulations, which allow us to deduct from joint and business accounts and disqualify a parent from holding a passport. In these early stages, the new enforcement powers are proving successful, and we continue to monitor their implementation. Where a parent fails to pay on time or in full, we aim to take immediate action to re-establish compliance before enforcement action is needed, but new powers introduced in the 2018 regulations enable disqualification from holding or obtaining a UK passport and deductions from joint and business bank accounts.

Moving on, we are proposing to change our power of entry process so that inspectors must seek a judicial warrant to access premises where they have previously been refused entry or may apply for a warrant to enter premises at which they expect to be refused. Inspectors will also be able to apply for a warrant authorising entry if they are unable to contact the occupier of the premises in advance. A judicial warrant is a safeguard, which will allow occupiers to make representation before a magistrate as to why an inspector should not be allowed to enter, but we expect this to be quite a low-impact change, with the Child Maintenance Service expected to apply for fewer than 20 judicial warrants a year. This change brings us into line with the Protection of Freedoms Act 2012, and we believe that it adds a modest protection in a very small number of cases.

Deductions from universal credit will come into force on the day after the day these regulations are made.

I think that I have covered most of the questions. The fee for an application to the Child Maintenance Service is £20. This is intended to encourage parents to consider whether they really need a statutory scheme case, but it is not so high that it creates an obstacle to entering the scheme. Where an applicant has experienced domestic abuse or is under the age of 19, they are exempt from paying the application fee. It is not our intent to create a barrier of any sort for vulnerable claimants.

These regulations build on our earlier changes as part of the child maintenance compliance and arrears strategy. They will make deductions from benefit more consistent, allow writing-off of unenforceable debts suspended on the CMS systems, improve our information-gathering processes and update the CMS calculation and fees regulations. I commend this statutory instrument—

[Baroness Sherlock]

My Lords, before the Minister sits down I want to thank her for her kind words. I should perhaps have reminded the House of a now rather historic interest, as a former board member of the Child Maintenance and Enforcement Commission. Can I press her on a couple of questions which I think she did not pick up?

In one question, I was asking whether the Minister was happy with the compliance rate. I think we agree broadly what it is, at 66% or 67% of those paying something. That seemed quite low to me. I wondered whether the Government were satisfied with that and, if not, what difference these regulations might make. The other question I asked was about the proportion of parents who currently have an effective child maintenance arrangement in place, and how that compares to before when there was a more widespread statutory system. Is she able to comment on either of those points?