Employment: Universal Jobmatch

Baroness Sherlock Excerpts

Wednesday 19th March 2014 Lords Chamber

[Lord Freud]

My Lords, we take security very seriously. One of the reasons that there is a difference between the standard Monster site and that run by the state is exactly to make sure that there is security in our site. We work closely with Monster on that. People have to be careful with their information on the site, as for anywhere else on the internet. We make sure that there is proper support for people and instruction on how to keep their information safe.

[Baroness Sherlock (Lab)]

My Lords, when I asked a Question on this subject last week, the Minister was very reassuring. He told the House that:

“Universal Jobmatch has revolutionised the service of Jobcentre Plus. It is a transformative service”.—[Official Report, 11/3/14; col. 1673.]

He added that, of 500,000 employers, only 179 had been looked at for breach of conditions. However, this week the Daily Mail reported that, at the beginning of March, 125,000 jobs—a fifth of the total—were taken off the site. The Guardian reported that, in fact, the department was going to scrap the site in 18 months because there were so many problems.

I invite the Minister to reconsider the answer he gave to me then. Did he know then that the Universal Jobmatch website had so many problems? If so, why was he so reassuring? If he did not know, why did he not know?

[Lord Freud]

My Lords, I am pleased to say that I do know and can reconfirm what I said last week; I can actually amplify it. We are currently investigating about 17 sites for potentially being in breach of our terms and conditions. That does not mean that they are fraudulent; it just means that they may have mistakes in them, they may be duplicates, they may be from job boards, or there may not be a contract with the end user. That is what we mean by being not in compliance with our terms and conditions.

Universal Jobmatch is a very successful system. We are working closely with Monster and the contract runs to 2016. To the extent that there may be some misunderstanding and misrepresentation, the phrase “extend a contract” has a precise meaning: that you run a contract to a certain point, and do not go on extending but renew. We have a policy to work closely with Monster right up to 2016.

Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2014

Baroness Sherlock Excerpts

Monday 17th March 2014 Grand Committee

[Lord McKenzie of Luton (Lab)]

I am grateful to the noble Lord, Lord Alton, for taking us back to those earlier days and the discussions we had at that time. I have the same question for the Minister: what progress are we planning to make on closing the gap between amounts paid to dependants and to sufferers? From recollection, the first task was to close the gap between the 2008 scheme and the 1979 scheme, but that gap between dependants and sufferers remains open still.

As I recall, the funding for the 2008 scheme was to come from recoveries of civil compensation claims. There was always a bit of a mystery about how you got those claims in what was meant to be a no-fault scheme, but there is no doubt that recoveries were made and that they funded the 2008 scheme. Will the Minister tell us the current recovery level and how it relates to the 2008 scheme expenses?

We have debated extensively the broader issue of the consequences of exposure to asbestos, and I am sure that we will come on to it in the regulations that we are to consider next. Will the Minister confirm that the HSE will switch on its awareness-raising campaign on asbestos? It ran a very effective campaign that was curtailed a couple of years back. My understanding is that it is going to be revived. If the Minister can confirm that, it would be very helpful. In doing so, will he tell us something about the funding for the HSE to make sure that it is not just a nominal effort but a really effective campaign? Asbestos is, sadly, still with us in too many parts of our infrastructure, and we need to keep messages going about all the risks of exposure to it.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his explanation of these regulations, and I thank all noble Lords for their contributions. Like the noble Lord, Lord Wigley, I recognise that there is no statutory obligation to uprate these amounts, and therefore I, too, welcome the Government’s decision to uprate the pneumoconiosis and mesothelioma lump sum payments under the 1979 and 2008 schemes.

A number of the questions that I wanted to raise have been asked, but I want to return to one point, which was raised by the noble Lord, Lord Alton, and my noble friend Lord McKenzie, about the difference between payments made to applicants in life and those made to dependants under both schemes. The noble Lord, Lord Alton, explained the three points of difference between the two. As he reminded us, in 2010 my noble friend Lord McKenzie reduced the differential in lump sum payments between in-life claimants and claims from dependants, but there has been no further narrowing of the gap between the two. When regulations equivalent to those here today were before the Grand Committee on 7 March last year—with a very similar cast, I notice from Hansard—representations on this very point were made by the noble Lord, Lord Wigley, and the noble Lord, Lord Avebury, who is not in his place. In his reply on that occasion, the noble Earl, Lord Howe, to whom it fell to respond, said:

“Ministers have to balance competing priorities, and because of the current financial situation, it is our duty to ensure that all available resources are well targeted. As around 85% of payments made under these schemes are paid to those who are suffering from the disease, I believe that they are currently rightly targeted on the sufferer to help them and their families to cope while living with the stress that illness inevitably brings”.—[Official Report, 7/3/13; col. GC 314.]

I remind the Committee of the point that the Minister made in his opening remarks, which is, in fact, that people live for a very short time knowing that they have the disease. If people on average live only nine to 12 months after diagnosis, I wonder whether the Minister still feels that that argument for focusing resources holds water.

When the regulations were debated in another place on 7 March last year, the then Minister, Mr Mark Hoban, acknowledged the discrepancy and said:

“It is something that we need to keep under review, and if the resources are available, we will see whether we can introduce measures to do that. The point about the difference between payments made to a sufferer and to their dependants is well made”.—[Official Report, Commons, Delegated Legislation Committee, 7/3/13; col. 9.]

I have three questions for the Minister. First, will he tell the Grand Committee whether the Government have indeed kept this issue under review and, if so, what conclusions they have drawn? Secondly, will he tell the Committee what percentage of payments is currently made to dependants rather than sufferers? Finally, what estimate has the department made of the cost of narrowing further or, indeed, eliminating the differential between the two? I look forward to the Minister’s reply.

[Lord Freud]

My Lords, as ever, noble Lords have asked a set of sizzling questions, which I shall do my best to address, although they are getting so technical now, because we have gone round this subject so many times, that I think that I shall end up writing quite a bit of it out, if noble Lords will excuse me for doing so.

On the question from the noble Lord, Lord Wigley, on the breakdown of the figures for the latest year, 2012-13, there is a total of 3,180 cases due to the 1979 Act. That represents the bulk of the expenditure, at £43.6 million. The 2008 scheme figures are 500 cases and £9.6 million of expenditure. I think that we have the breakdown figures that the noble Lord requested from 2002-03 onwards, but not to hand; I shall need to write with them. I did not anticipate that particular run of figures. I think that that will tie up with the recovery figures for the noble Lord, Lord McKenzie, and how they relate to the 2008 figures. I think that I will tie that up—I shall aim to do some tables.

On the split between sufferers and dependants, again, I shall use the latest year. Under the 1979 Act, of the total the bulk were the sufferers—2,900 out of the total—and 280 were the dependants. With the 2008 scheme, 450 were sufferers and 50 were dependants. That testifies to the speed with which the money gets out, given the sad mortality expectation that we were discussing. I am in no position today to move much further on making any progress in closing that gap between dependants and sufferers, but it is something that we keep under review. Clearly, we have been looking very closely at this whole area over the past year, and we will keep it under review. That is the best that I can do, speaking today.

I hope that I have covered everything, except for the HSE questions, with the awareness-raising scheme. I will write on the actual cost of what it would be to close that differential on the figures that I have just provided, which will give a baseline on what we are keeping under review. I shall also need to write on the detail of the HSE awareness-raising campaign. I feel somewhat embarrassed that I have resorted quite so much to the written word. If there is anything else at all, I shall include that in the letter. These are two important schemes. I commend the uprating of the payment scales and ask approval to implement them.

Diffuse Mesothelioma Payment Scheme Regulations 2014

Baroness Sherlock Excerpts

Monday 17th March 2014 Grand Committee

[Lord McKenzie of Luton]

My noble friend is too kind, but I am conscious of the fact that this Bill has been forged in very difficult economic circumstances, and it is a splendid result that we are where we are. Like others, I also welcome the increase in the level of payout. As I remember it, when we were discussing this during the passage of the Bill, there were two versions of the gross tariff: one from the ABI and one from the DWP. I think the difference between them was based on the projections of the age profile of those who contract mesothelioma. We focused on the higher, DWP, one. Will the Minister confirm that this is still the gross tariff that we are working to and that it will be 80% of that?

A number of noble Lords have raised the 3% of gross written premiums. I am not sure that I heard the Minister actually say that this is where the levy is going to start, and it will be helpful if he could confirm the position. I thought his expression was “within that 3%”, but it would be good to know when we will see the levy regulations and whether the expectation is that it will be fixed, initially, and thereafter, as my noble friend Lord Howarth said, at 3% of gross written premiums. Obviously, this is to the extent to which they did not produce more than a 100% payout.

The Minister confirmed that the legal fees at £7,000 per case would be paid on top of that. I am not quite sure that I followed the reasoning of how that will be dealt with in alternative regulations. I would appreciate it if the Minister reiterated what he said. The noble Lord, Lord Alton, has been steadfast on the issue of research. Will the Minister take the opportunity to tell us where he thinks the insurance industry now stands, and what the prospects are of getting extra funding from it one way or another?

I have a couple of technical questions. Can we have an update on the oversight arrangements? I do not think there is a specific reference in these regulations to the oversight committee and whether there should be any obligation on the administrator. I should say that the Minister has been true to his word in terms of the process of appointing the administrator of the scheme, but I do not think there is anything in these regulations which requires co-operation and engagement with the oversight committee. Perhaps the Minister will say how he sees that working.

There was an issue over Schedule 3 to these arrangements, which deals with the application. This sets out all the information that needs to be provided and includes the names of all the person’s employers and the description of the arrangements under which the person was engaged by each employer. One of the issues that cropped up just at the tail end of the Bill’s consideration in the other place was HMRC policy on work histories and the extent to which a court order is now necessary for HMRC to provide them. I hope that this issue has gone away, but I would appreciate an update from the Minister on that point.

On a smaller point, will the Minister clarify where the administrator can impose conditions on a claimant? I think we understand why that would be but, as I understand it, there seems to be some differentiation. Conditions can be imposed where a dependant is an applicant, but where the applicant is deceased and the payment goes to the personal representative I am not sure that the constraints or conditions on that payment would apply. Maybe that is not necessary because it would be the role of the personal representative to make sure that that was effectively dealt with. Can the Minister confirm that?

Finally, I just ask about the Ministry of Justice procedure for reforming mesothelioma claims. In a sense, the Government backed up what was originally proposed but paragraph 39 of their response to the consultation on these proposals states:

“The stated purpose of the Secure Mesothelioma Claims Gateway was to support the proposed Mesothelioma Pre-Action Protocol. As the Government has declined to take forward the MPAP supported by a fixed recoverable costs regime, the ABI will no doubt want to consider whether and how it would wish to take forward its proposal for funding and hosting a SMCG and how claimants and defendants might voluntarily make use of it”.

Could the Minister give us an update on that and what it means in the current situation?

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his explanation of these regulations and all noble Lords who have spoken. I am reminded of what an effective Committee process we had during the passage of the Bill. The Minister must feel a certain sense of déjà vu that he is back here yet again being interrogated quite so effectively about the detail. I join other Members of the Committee in congratulating the Minister on pioneering this and pushing it through. I also thank my noble friend Lord McKenzie. I am grateful that my noble friend Lord Howarth included him for all his sterling work in getting this show on the road in the first place and helping to steer it through Committee.

It is very good to see the progress made towards the introduction of the scheme. I am very pleased by the decision to raise the level of payment to 80% of average civil compensation. I also place on record a tribute to all those who campaigned for a higher payment, not only Members from all sides of this House, including my noble friend Lord McKenzie and many Members of this Committee today, but also victims’ groups, trade unionists and Members of another place such as my honourable friend Kate Green and other MPs, including the late and still very much missed Paul Goggins, who was such a strong fighter on these issues. Many in this field will be very grateful.

Clearly, as we have heard, the amounts of scheme payments in Schedule 4 do not now represent the levels of payments we expect, but I thank the Minister for explaining that we may expect imminently some negative orders to come into force to affect that. The Minister said that the Government are able to increase payments because of savings in administration costs. We are indebted to my honourable friend Kate Green who suggested that in the Public Bill Committee in another place—something acknowledged by the Minister there—but it would be very helpful if the Minister here could explain to the Committee precisely where those savings were found.

The impact assessment produced last November indicated that an uplift in payments from 75% to 80% would cost an extra £11 million in the first four years of the scheme and an extra £22 million over the first 10 years. With payments set at 75%, it also stated:

“The costs of the scheme are split between a levy of £371m on the insurance industry and £17m in government funding. This covers scheme payments direct to individuals (£261.4m), benefit recovery (£72.2m), applicant legal fees (£24.6m) and admin of £30.0m (including case legal fees of £24.2m, set up of £1.4m and running costs of £4.4m)”.

To focus in on that, that impact assessment showed two sets of legal fees provided for: applicants’ fees at £24.6 million and case legal fees at £24.2 million. There was some debate as to what the case legal fees covered but the Minister in another place assured the Public Bill Committee that they were for the benefit of applicants. Originally, claimants’ legal fees were set at £7,000 a case, when payment was at 70% of average civil damages. During the passage of the Bill through this House, that payment rose to 75% and legal fees were reduced to £2,000 per case.

In the Public Bill Committee in another place, legal fees reverted to £7,000. The Minister there said that he had had discussions with the Association of Personal Injury Lawyers and felt £7,000 to be a reasonable figure after all. Crucially, he also said that if cases could be conducted more cheaply, applicants would none the less receive the full £7,000. We now know that extra moneys have been squeezed out of administration costs to fund this uplift but can the Minister explain where they come from? I presume that they do not come from a further squeezing of legal fees. He also confirmed—and this was very helpful—that £7,000 per head remains the sum allocated to applicants for their legal fees. Can he confirm for the record that, if the legal fees in some cases fall short of this amount, applicants will still receive the difference in cash up to £7,000?

Assuming that there are no changes in respect of the position relating to applicants’ legal fees, can the Minister tell us where the additional £11 million or £22 million to pay for the uplift has been found? On the face of it, it must have come in some combination from other administration costs. Can he also say what he assesses the running costs and set-up costs of the scheme now to be? Can he also tell us how much is now allocated for case legal fees as opposed to applicant legal fees? If those case legal fees have been reduced and, as the Minister in another place explained, they were to be for the benefit of applicants, will the applicants suffer in any way as a result of that? If the extra money is not coming from there, where is it coming from?

Can the Minister also confirm that payment at 80% is to be met within the planned levy of 3% on the industry, including in the first four years of the scheme? I will turn in a moment to the levy and the points raised by various noble Lords, but I want to talk briefly about a few other aspects of the scheme.

Regulation 5(4) requires the scheme administrator to ensure that there are sufficient numbers of suitably qualified persons to determine applications under the scheme. Does the Minister have any more information that he could share with the Committee about the likely professional background and qualifications of those people and, in particular, about their independence and how they will be employed? Will they be employees of the scheme administrator or might they work on a freelance basis? In particular, if they are freelance, is there any possibility that there could be a conflict of interest if they have other roles within the industry at the same time? The crucial question is: if that is the case, how will such conflicts be identified and dealt with so that the public and the applicants can be reassured of the independence of the people making the determinations?

I welcome the provisions in Regulation 9(2)(a) regarding time limits for applications. It makes it clear that applicants would have three years from the date of diagnosis or, if diagnosis is after 25 July 2012 but before the regulations come into force, three years from the date they come into force. However, there are still some concerns about time limits when we look across to Regulation 18. Generally, if a claimant dies before the case is determined, a payment may be made to his or her personal representative if the claimant leaves no dependants, but that still leaves a small group, admittedly, of mesothelioma sufferers without dependants who were diagnosed on or after 25 July 2012 but who died before they could make an application simply because the forms to do so were not yet available. I understand that they will be available from April, and perhaps the Minister could confirm that. In those cases, I understand that payment will not be made to the deceased’s personal representative. Can the Minister clarify that? If that is so, it seems unjust. It has been quite clear that the Government’s firm intention was for claims to be backdated to 25 July 2012 in all circumstances, but I should be interested to hear the Minister’s response.

I welcome Regulation 11, which sets time limits for the provision of additional information—a suggestion from my noble friend Lord Browne of Ladyton. I am sure that he will be very glad to hear it, and I shall make sure that I communicate the information to him. I am very grateful to my noble friend Lord McKenzie for raising the question about HMRC and the fact that it needs a court order to release the employment records of deceased claimants. This is really serious. I understand that a letter from the Minister to my honourable friend Kate Green in the other place suggests that progress was not being made very quickly on this. I look forward to hearing whether this can be resolved before the scheme is launched.

I also welcome the provision in Regulation 18 which provides for the applicant to request a review of a determination. That was another suggestion from my noble friend Lord Browne, about which I predict he will be even more pleased.

Finally, two important commitments made by Ministers do not appear in the regulations before us today. The first concerns the levy, which was raised by my noble friends Lord Howarth and Lord McKenzie and others, and, in particular, the absence of any reference at all to it in the regulations. I confess that I was a bit surprised about that, but I may have misunderstood where it is to be dealt with. Will the Minister explain whether there is a reason why the levy and the rate at which it is to be set are not included in these regulations? It is important that people are reassured that 3% is to be the amount, although if the Minister wants to adopt the formulation offered by the noble Lord, Lord James of Blackheath, I am sure we will all be very keen to hear that today.

--- Later in debate ---

[Lord Freud]

Noble Lords could go on about this, but I cannot.

On the other point made by the noble Lord, Lord James, about the crossover between the schemes supporting the Royal British Legion, I am not aware of the issue he raises, but I shall look into it for him.

On the point made by the noble Lord, Lord McKenzie, on the oversight committee, we are not legislating for that, but we have discussed the matter with the AVSG, the TUC, insurers, personal injury lawyers and accident insurance lawyers. We are agreeing with those groups how the committee could operate. We intend that it will look at various aspects of the running of the scheme, particularly in the early period. We envisage it considering complaints against the scheme, redacted claims and decisions. It will then send a report to the Secretary of State, who will include the issues raised by the committee in his published annual report. It will be quite transparent.

On the point made by the noble Lord, Lord McKenzie, about HMRC, we continue to work with other departments to seek a resolution to this issue. Regrettably, that is still ongoing work. We have encouraged the ABI to continue to engage with the MoJ as they look to improve the process for mesothelioma cases in regard to the portal.

In response to the question asked by the noble Baroness, Lady Sherlock, the reason we can increase the payments to 80% is because the scheme administrators have now been selected and the costs have been finalised. Those costs fall well below projected costs, and this allows us to increase the payments while keeping the levy the same.

In the November impact assessment the net benefit to lawyers was expected to be £2.69 million over 10 years. That has reduced to £1.6 million. The reason for this difference is that the original scheme administration costs used in all previous versions of the impact assessment assumed that some legal administration costs would benefit lawyers working on the scheme. These costs were estimated to be £23 million from successful cases, £1.7 million from unsuccessful cases and £1.2 million from ad hoc legal administration costs. Due to further understanding of the way in which the scheme will be administered, it is now recognised that these legal administration costs are not necessary, meaning that overall it is expected that lawyers will benefit by less. I can confirm that applicants will still receive the difference between the £7,000 and the legal costs, if there is a positive difference.

[Baroness Sherlock]

Before the noble Lord leaves that point, can he confirm that the figure that was previously £24.2 million has now either disappeared or is in single figures and that there will be no other loss or additional costs for the applicant as a result of those costs being taken out of the scheme altogether?

[Lord Freud]

Yes, I can confirm that. In the tendering process resulting in the appointment of Gallagher Bassett, the company was required to demonstrate that it had sufficient resources to process the expected volume of claims. We have reviewed its tender to ensure that it is accurate and realistic and have satisfied ourselves that it can deliver as part of our due diligence. The administrators will be employees of the scheme administrator. If the person with mesothelioma dies before an application can be made, their dependant can make the application. If the person dies after making an application but before a payment is made, the payment is made to their personal representative.

--- Later in debate ---

[Baroness Sherlock]

I thank the Minister for clarifying that point. I was talking about people who have died who do not have dependants. It seems that the Minister was saying that the personal representative can receive a payment even in the circumstances that I have described: when people were diagnosed on or after 25 July 2012 but had not made an application because the process was not available to them.

[Lord Freud]

They cannot make one in that period.

[Baroness Sherlock]

Can the Minister please explain why? These are people who the scheme is explicitly designed to cover. They simply had the misfortune to die before the Government had been able to put the scheme in place and give them an application form to fill in. Why should they be excluded?

[Lord Freud]

I think it is because they do not have dependants. However, I will write to justify what that difference is and why we have designed the scheme in that way. Our estimate is that the 80% payment will be within the 3%, but that is clearly based on our figures. As to the final question on the setup and running costs of the scheme, I cannot go into too much detail for reasons of commercial confidentiality. I will write carefully and provide as much information as I safely can.

Pensions Bill

Baroness Sherlock Excerpts

Wednesday 12th March 2014 Lords Chamber

[Lord German (LD)]

I shall say a few words about the two issues raised by this amendment. They are important issues, albeit for a small number of beneficiaries, although that number will increase over time, as the noble Lord, Lord McKenzie, has just said. It strikes me that because of the loss of one part of pension credit, the part that gives this passported benefit for cold weather payments, the Government presumably have to have something in place to ensure that people are in receipt of that payment. Will my noble friend reassure the House that it is not the intention that eligibility for cold weather payments will be reduced so that only a few will be able to receive them for the very important purpose for which they are drawn? Can he tell us about the fuel poverty strategy which I understand the Government are consulting on and whether these issues are rightfully the sorts of issues which could be debated and discussed during the consultation? If that is the case, there is clearly a route forward, but I seek reassurance from my noble friend that both these schemes are intended to continue and that their purpose and scope will not be diminished.

[Baroness Sherlock (Lab)]

My Lords, I am pleased to support Amendment 1 which is tabled in the name of my noble friend Lord McKenzie of Luton. My noble friend has been like a terrier chasing the Minister on the subject of passported benefits and payments. The Minister may have thought he had shaken him off as he left the Moses Room at the end of the Committee stage, but I am sure he knew better. Indeed, it is to the Minister’s credit that he was content to return to this subject at Third Reading, knowing that he would face the onslaught of yet more gentle but expert and determined questioning from my noble friend Lord McKenzie.

I express my appreciation to the Minister for allowing his officials to brief us and to his officials for giving us for the first time a detailed list of all the benefits that are being passported from pension credit. However, that left some clear question marks about the future strategy for passported benefits. If the Minister is in a position to tell us where the Government’s forward plans are taking them, not just on these two, but on any of the other benefits that are not clearly passported from pension credit, I think the House would appreciate that.

My noble friend has set out the case characteristically clearly, and I need add little to it, but the House and the country will want to hear the Minister answer the questions asked by the noble Lord, Lord German. We want to be satisfied that people will not lose out and that there is an alternative plan for arrangements to replace the passporting of cold weather payments and access to the warm home discount scheme.

The point made by my noble friend Lord McKenzie about the role of rising energy prices in the cost of living crisis is visible to all noble Lords at the moment. This is a particular issue in relation to these two benefits in parts of the country that obviously suffer from lower temperatures. I should perhaps declare an interest as a resident of Durham where, despite the fact that we have a world heritage site and much to commend us, with lower rainfall on average, even I have to confess that our temperatures are on average perhaps a whisker below those on the tropical Riviera of Cornwall. On the other hand, this will not affect me until I reach state pension age and that is receding ahead of me at some rate, so perhaps no declaration of interest is needed.

The Government have indicated that they propose to introduce the new single-tier pension above the current level of the guarantee credit in pension credit. But it is clear that that could come in at just a shade above. If Ministers want to carry on asserting that reducing means-testing is an important part of these pension reforms, then they have to have a strategy on passporting—otherwise they will end up with the kind of cliff-edges which anyone who worries about means-testing will know can really be a trap for the unwary.

Maybe the Government have had the opportunity since Report stage to think through how this will be taken forward and can give the House the kind of assurances that have been sought by both noble Lords who have spoken. If they have not, which I will understand, I very much hope that the Minister can accept the amendment. Parliament has a right to know what will happen to these payments, and by the time we get regulations it will be too late. I look forward to the Minister’s reply.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, I am glad to have the opportunity to discuss the amendment, which the noble Lord, Lord McKenzie, was understandably unable to move on Report. I hope that I will be able to offer him some reassurance about the current arrangements and the further work that we are planning.

As noble Lords will be aware, pension credit acts as a passport to a number of other benefits, most of which are linked to an individual being in receipt of the guarantee credit element. That element will continue to be available for the poorest, whether they reach state pension age before or after the introduction of the single-tier pension, and will continue to act as a passport to cold weather payments.

I also remind noble Lords that the single-tier pension itself promotes savings, removing the need for savings credit. The full single tier will be set above the level of the basic means test, removing the current problem whereby the state pension has not kept pace with the means test and therefore the need for a complex reward system. Together with other reforms to the pension system over time, the poorest pensioners are also the most likely to have higher incomes than they would have done if the current system had been rolled forward.

While I understand concerns about knock-on effects for vulnerable pensioners, there is actually relatively little in the pensioner welfare system that depends entirely on receipt of pension credit. For example, housing benefit and council tax reductions can already be claimed on low-income grounds, regardless of receipt of pension credit, and this will continue. Other benefits such as free television licences and travel concessions can be claimed on the grounds of age. The only significant benefits that are truly passported from pension credit are cold weather payments and the warm home discount scheme.

Cold weather payments, as noble Lords are of course aware, provide help with the additional costs of heating during periods of severe weather. The scheme runs from 1 November to 31 March each winter. A payment of £25 is made to someone when the average temperature has been recorded as, or is forecast to be, zero degrees or below over seven consecutive days at the weather station linked to their postcode. In some winters there are relatively few triggers, in some years there are many triggers; in fact, there have been very few indeed this year.

Cold weather payments are made to people who receive certain income-related benefits and satisfy the eligibility conditions set out in the Social Fund Cold Weather Payments (General) Regulations 1988. All those who receive pension credit are eligible, whether they receive the guarantee credit or the savings credit element, or both.

The noble Lord, Lord McKenzie, asked about universal credit. Those eligible for cold weather payments are those who are not employed or self-employed and they or their partner receive either a limited capability for work element or a limited capability for work element with a work-related activity element, or who receive a disabled child element within their assessment, or who have a child under the age of five years in the family. Universal credit recipients who are employed or self-employed will be eligible for cold weather payments only if they have a disabled child in the family.

Our predicted expenditure on cold weather payments is based on the average number of payments over the past 10 years. On that basis, while we cannot predict the actual impacts, we might expect around £2 million to have been spent in 2020 on cold weather payments for people who would have received pension credit under the current system, but who would not under the single -tier system. That is based on our calculation of 20,000 single-tier pensioners being raised above the standard minimum guarantee, and 60,000 who would have been entitled to a savings credit under the pre-single tier system.

That expenditure is of course by no means certain, which is why we have not assumed any savings from cold weather payments as a result of the Bill. However, we are not complacent about that issue and that group of people. That is why we are already considering ways in which it might be possible to identify, for cold weather payment purposes, single-tier pensioners whose income will be above but close to the level of the standard minimum guarantee.

In response to the question from my noble friend Lord German, I can reassure the House that it is not our intention to reduce eligibility.

The noble Lord, Lord McKenzie, also asked about the warm home discount scheme. That is a rebate on electricity bills for pensioners aged 75 or over who receive the guarantee credit in pension credit, and for pensioners under 75 who receive the guarantee credit without a savings credit. From 2014-15 it will be extended to all pensioners receiving the guarantee credit. Rebates may also be available for a broader group including those in receipt of the savings credit as well as certain other groups below pension age, but those broader group rebates are subject to a cash limit and to the policies of individual suppliers, as agreed with Ofgem. We have committed to extending the warm home discount scheme into 2015-16, but we have not made plans for 2016-17 and beyond.

On the question asked by the noble Lord about discussions with electricity suppliers, that will be part of the consultation in the spring on extending support for the core group. Access to cold weather payments and the future of the warm home discount scheme are part of a broader set of issues around targeting spending to combat fuel poverty among older people. As I said, we will consult later in the spring on a new fuel poverty strategy, which will include the question of reducing fuel costs for those pensioners in the second income quintile, which is where savings credit recipients are clustered.

For single-tier cohorts, it will not be possible to identify exactly which household might have been entitled to a savings credit without retaining the savings credit assessment itself. We are assessing the cost and capacity issues of doing that, as well as the trade-off for intrusion into pensioner households. However, the department’s initial assessment is that there are likely to be better and more cost-effective ways of reducing fuel costs for that group, especially by using recently developed datasets that allow us to identify poorly insulated homes and the characteristics of the households living there, with a view to making infrastructural as well as cash interventions.

I can reassure noble Lords that cold weather payments and the warm home discount scheme are an important part of our fuel poverty strategy, and major components of our work to improve the well-being of older people. However, that is a separate issue from promoting savings through pension reform, and we are not wedded to particular ways of meshing the two together.

On the question put by the noble Baroness, Lady Sherlock, on our passporting strategy, we will continue to use a mixture of age, low-income and passporting from means-tested benefits to target different benefits and services to different groups. I understand the concerns raised by the noble Lord, Lord McKenzie, and I hope that I have been able to provide him with reassurances.

--- Later in debate ---

I refer, finally, to the issue of European requirements, because it has been raised in the debate on the transparency of transaction costs. I know from speaking to one or two colleagues that there is a little uncertainty about the extent to which European requirements may be brought to bear on any action taken by the Government on the transparency requirements on transaction costs. Can the Minister confirm that the UK Government are free to set requirements on the transparency of transaction costs for occupational and money purchase personal pensions; that the Government will do so; and that they are not constrained from doing so by the EU rules on retail investment products?

[Baroness Sherlock (Lab)]

My Lords, I remind the House of my registered interest as a non-executive director of the Financial Ombudsman Service.

I thank the Minister for explaining his amendments and all noble Lords who have contributed to this debate for their insights. On Report the Government were understandably worried by the alliance building up between the noble Lord, Lord Lawson, and my noble friend Lord Browne, who regrets that he is unable to be here as a result of the date of Third Reading being moved. In order to head off a possible defeat, the Minister made a speech offering strong reassurances. It is against those reassurances that the House should judge the amendments that the Government have brought forward today. Let us remind ourselves what those reassurances were.

The Government were keen to assure the House that whatever their amendment said, their intention was that all costs would be covered by their proposals. On 26 February, the noble Lord, Lord Freud, told the House:

“We are looking for transparency on all charges. We are looking to ensure that that is published”.

He reinforced that point today. I think that I heard him say that there will be full transparency on all costs and charges.

My noble friend Lord Browne then intervened on Report to seek clarification on how transparency would be handled in relation to transaction costs, since it seemed that the Government were proposing to exempt areas where there were existing FCA rules in relation to transparency. The existing FCA rules on transparency exempt transaction costs, he noted, so how would the transaction costs in such cases be dealt with? The Minister replied:

“I am putting it on the record that we will aim to capture all costs, including all transaction costs”.

A little later, he went on to say:

“It is not to do with the EU”.—[Official Report, 26/2/14; cols. 967-68.]

What could be clearer? However, the current government amendments give the Secretary of State the responsibility for regulating disclosure of charges only for occupational schemes, leaving it to the FCA to do so for money purchase schemes.

Therefore, the first and most obvious question to the Minister, touched on by my noble friend Lady Drake, is: why is the Secretary of State divesting himself of the power to set the requirements for securing transparency of transaction costs in relation to money purchase personal pension schemes by giving the responsibility for the requirements on disclosure of information to the FCA?

Secondly, Amendment 3 has the effect of explicitly excluding defined benefit schemes from the regulations on the publication of costs and charges, and the Minister gave some indication of the Government’s thinking on that. However, I was very pleased that the noble Lord, Lord Lawson, raised the questions that he did, supported by my noble friend Lady Drake, because this is indeed not a victimless area. Not only are there costs to the companies that are the employers but there are potential risks to the sustainability of the pension schemes if employers find themselves carrying unreasonable and unnecessary levels of cost. It must be remembered that there are employers who may be well equipped to understand and challenge the nature of the charging structure but there are many others who are not, and they deserve protection as well. Perhaps the Government could explain some more about that. In particular, can the Minister tell the House what the timescale will be for this consultation and, if the Government decide to bring forward regulations, when the House may expect to hear more about that?

My noble friend Lady Drake then raised a series of important questions regarding what this dual regulatory regime will mean in practice, given that the FCA currently does not require transaction costs to be published for DC pensions. Amendment 4 makes it clear that the FCA must consult the Treasury and the Secretary of State before making rules about the disclosure of costs. The supplementary memorandum from the DWP to the Delegated Powers and Regulatory Reform Committee on the Bill reminds us that Section 138(1) of the Financial Services and Markets Act 2000, known as FiSMA, requires the FCA also to consult the Prudential Regulation Authority before making rules and then to publish those rules in draft, to seek representations and not to make rules without having regard to those representations.

Therefore, the Minister is left with the crucial question from my noble friend Lady Drake as to the extent to which the PRA’s concern for the sustainability of financial services companies may constrain the Government’s apparent desire for the FCA to make rules to ensure disclosure of all transaction costs, as again promised by the Minister today. What happens if the Secretary of State believes that the decisions that the FCA takes in this respect are not properly aligned with his or her own decisions on transparency in relation to occupational schemes? As my noble friend asked: what happens then?

Finally, there is the interesting question of the role of the EU. The Minister has said clearly that this is not a matter for the EU but my noble friend has sought clarification. I certainly understand that the publication of transaction costs with respect to retail products is covered by EU rules but that the publication of transaction costs with respect to workplace pensions is not, and I look forward to the Minister confirming that. However, one hears that EU rules may or may not lead to increased transparency of all transaction costs some time after 2016. I should like to test the Minister. Does he think that it would be acceptable if the FCA decided not to do anything about transaction costs but simply to await the decision of the EU? One assumes not, as not only would that not seem to chime with the Government’s general rhetoric about ceding powers to Europe but it is hard to see that the Minister’s words to the House on Report would imply that level of uncertainty, since he made it clear that it was nothing to do with the EU.

In the end, it is up to this House to decide whether it believes that the government amendments brought forward today have the ability to honour the cheque that they wrote to the noble Lord, Lord Lawson, on Report. The Opposition are not, as yet, persuaded. However, it is for the Minister to tell the House how precisely he can guarantee to deliver on the assurance that the Government will capture all costs and charges and, crucially, by what date that will happen.

Finally, and even more importantly, there remains the unresolved issue of a cap on charges. In his extremely impressive speech when we debated these matters on Report, the noble Lord, Lord Turner, put the matter succinctly when he said:

“I do not think that transparency is an alternative to a charge cap”.—[Official Report, 26/2/14; col. 966.]

Nor do I. If the Government really have the interests of consumers at heart, they will take much stronger action right now.

[Lord Freud]

My Lords, let me start by dealing with the question raised by the noble Baronesses, Lady Drake and Lady Sherlock, on the way in which the regulation works between two groups. The Pensions Regulator and the FCA work closely together to ensure that the regulatory frameworks for trust-based pensions under the regulator and contract-based pensions under the FCA are aligned and provide for a robust system of governance and fair treatment for members. The Government are not looking to change the current regulatory structure, as was confirmed in the DWP’s Triennial Review of Pensions Bodies, which was published in December 2013. Structuring the duties in this way is necessary to reflect the dual regulation structure and the fact that the FCA is an independent body in statute. Without this approach, there would be no duty on the FCA to make these rules.

In addition to their existing duties to consult, the amendments mean that both the Secretary of State and the FCA will be under statutory duties to consult one another in making regulations and rules, enabling us as far as possible to ensure consistency of approach with the rules following the regulations. There is absolute commitment from the Government and from the FCA to aim for consistency. The FCA would not propose to deviate from government regulations. The aim of a separate duty is not to provide room for inconsistency—far from it; it is about giving the FCA the flexibility that it needs to use its powers and expertise to respond as an independent regulator.

The noble Baroness, Lady Drake, raised a question on hybrid schemes. The regulations will be able to extend the disclosure rules to the DC element of hybrid schemes. The duty is in addition to the existing power in Section 113 of the Pension Schemes Act 1993.

The noble Baroness also raised a question on the relative position of the PRA—the prudential regulator—and the FCA. The FCA, as per its rules, will be consulting on the development of disclosure and requirements and will work closely with both Her Majesty’s Treasury and the PRA. Treasury Ministers are committed to strong disclosure of member-borne costs and believe that the FCA is best placed to make those rules.

On the question of the SORP code, raised by the noble Baroness, Lady Drake, the Government recognise industry initiatives to improve transparency of pension costs and charges, but as the OFT noted, such measures are voluntary and can be piecemeal. That is why the Government believe that transparency measures should be compulsory and standardised.

--- Later in debate ---

[Lord Freud]

My Lords, I have not carried out a detailed analysis of the SORP code. I can assure the noble Baroness that, under the regulations and rules that we will now develop, we will capture all costs. To the extent that those are not in the SORP code, that would be a wider requirement.

On what will happen if the FCA rules are not found to be adequate, the Secretary of State retains the power in Section 113 of the Pension Schemes Act 1993 to make regulations about both occupational and personal pension schemes disclosure.

On the timescale issue raised by the noble Baroness, Lady Sherlock, assuming that this Bill receives Royal Assent, I believe that regulations will be brought forward later this year. The Government will consult on these regulations before they are laid. The Government’s proposals on charges, transparency and governance will be published soon. I have not changed the position on that after our rather enjoyable debate on the matter on Report.

[Baroness Sherlock]

Is the Minister saying that the Government propose to consult on whether DB schemes should be included and then publish a single set of regulations, or will they go ahead on the basis he has outlined and subsequently consult on DB?

[Lord Freud]

The DB element will be part of the consultation. Depending on that consultation, we will have to decide how to treat that particular aspect.

On the questions around the EU, clearly right now we are free to write these regulations and rules and there are no EU rules to hinder that. However, that might change in the future. One of the attractions of pulling the FCA into this process is that it has technical expertise in this area and is the body negotiating in Europe on relevant EU legislation. It is therefore best placed to work with DWP on determining how costs and charges can be defined, captured, measured and disclosed. By using its own rule-making power, the FCA may be able to respond quicker than the parliamentary process to changes in the market or from the EU.

I think I have dealt with all the issues.

--- Later in debate ---

[Lord Freud]

My Lords, on Report I regrettably said that we had completed the legislation required to cover the change to the Pension Protection Fund compensation cap. Clearly, that was tempting fate because we have noticed that the wording in a particular place is not as clear as it could be, and this amendment addresses that. We made an amendment on Report to the PPF compensation cap measures setting out how the length of pensionable service should be determined for an individual who was a member of connected schemes; that is, for someone who was a member of a multi-employer scheme and who had worked for two or more of the companies attached to that scheme. That amendment allowed for the discrete periods of pensionable service to be added together. Crucially, if the person had worked for two employers at the same time—that is, the periods of employment overlapped—the amendment sought to prevent the overlapping period from being counted twice. Unfortunately, the wording of the amendment could be read as meaning that the period of overlap should not be counted at all. This would clearly not be right. This amendment therefore clarifies the wording to ensure it cannot be read in that manner. As a result, overlapping periods of employment will be counted correctly—in other words, once.

This is the final amendment to which I will speak and so before I sit down, I would like to take a moment to thank all those who have worked so hard on this Bill. Many colleagues across the House have contributed their time and substantial expertise to understanding and improving these landmark reforms. In particular, I am delighted that the Bill now contains measures that will help improve the retirement income of the spouses of service personnel. Preparing a Bill and supporting its passage through both Houses is a significant undertaking. This Bill contains a wide range of measures relating to state pensions, private pensions and bereavement benefits, and so has involved a large number of different policy teams. I estimate that close to 200 policy officials, analysts and lawyers have been involved. Many of them have been directly involved in attending briefing meetings or providing materials that have contributed to the excellent level of debate we have seen.

It has been especially gratifying to hear so many noble Lords mention the assistance of DWP officials in their speeches both in this Chamber and during Committee stage. It is a fitting tribute that their work is recognised in this way. I am grateful to them and to the excellent draftsmen in the Office of the Parliamentary Counsel who have worked so hard on this Bill. The Bill team deserves a special mention and so I would like to take this opportunity to thank Rez Mossavat, Jo Foakes, Megan Rooney, Helen Kelly and the Bill manager, Michael Cordy, for all their work and support. With that, I beg to move.

[Baroness Sherlock]

My Lords, I congratulate the Minister on having spotted the error before Royal Assent and the Opposition have no problem with the amendment.

I, too, would like to take this opportunity to say a few words of thanks to my colleagues for all their wisdom and support. I thank especially my noble friend Lord Browne of Ladyton for doing so much work on this Bill and for being such a constant source of support. I would also very much like to thank the Minister for the way he has handled the Bill—for his openness and his willingness to engage with appeals from all parties and to share the information and knowledge of his department. I thank the noble Lord, Lord Bates, for adopting a similar style and for his engagement. I thank the officials, too, for their helpfulness and their willingness to answer so many questions—in my case, often very stupid ones, which they have answered with graciousness and lots of information. We have all very much appreciated that.

The Bill has benefited from scrutiny in this House and leaves this place a better Bill than when it arrived, as is so often the case. It is the first Bill I have taken all the way through from the Front Bench and I have learnt a great deal from noble Lords on all sides. I have been grateful for the kindness and indulgence of the House as I have learnt on the job—a sort of apprenticeship, as one might have it. As the Minister said, the Bill has now benefited not only from the one victory that the House scored on mini-jobs—we hope very much that the other end will see the wisdom of that but, if not, we stand by our beds awaiting its return should that prove necessary—but from concessions around things such as service wives, auto-enrolment and categories of employer, and in other ways as we have gone through it. I pass my thanks to all noble Lords who have contributed at any point in the process. We all share a common objective of getting people in Britain saving for their retirement and I hope this Bill will help contribute to that objective.

[Lord German]

My Lords, I add thanks from these Benches to my noble friend and to the staff who have been behind all the detailed benefits we have received from having such a deep level of understanding and knowledge of the Bill throughout. I want to mention two particular things. One is the recognition during the Bill’s passage through this House that my noble friend will look very carefully at the needs of children who are in distress. I look forward to seeing that coming forward again in future months as we come to a response to whatever my noble friend is able to deduce from that investigation.

The second piece of thanks that I have to give to my noble friend is for his ability to bring Her Majesty’s Treasury to a meeting with officials of the DWP. That way, there was a coalition not only of Members of your Lordships’ House but of my noble friend’s staff. That ensured that we got a recognition that where pensions in the public sector would be affected by some of the matters in the Bill, they would put an architecture in place for whenever some new money might become available.

While using this opportunity to put this on the record, I want to thank my noble friend for all the support that he has given. The quantity of literature and number of pages that we have received is something that we will weigh with great pleasure during the years to come, because of course the measures which this House is taking in this Bill will affect the population of this country for many generations in the future. It has been very significant to see the Bill pass through the House.

Employment: Universal Jobmatch

Baroness Sherlock Excerpts

Tuesday 11th March 2014 Lords Chamber

Asked by

[Baroness Sherlock]

To ask Her Majesty’s Government what steps they are taking to ensure that all vacancies advertised on Universal Jobmatch are genuine.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

The vast majority of employers post genuine jobs, and we do not hesitate to take action against those who do not follow our rules. We regularly monitor Universal Jobmatch to ensure that accounts comply, including that vacancies are genuine. If there is any cause for doubt, we will remove the vacancies until we have investigated. We continuously improve the service and are working with the provider to enhance our validation of employer accounts and vacancies.

[Baroness Sherlock (Lab)]

I thank the Minister for that very reassuring Answer. How does he then explain the fact that the media are reporting that a third of a million jobs on that website are ghost jobs? The Government were warned. The site has been found to be vulnerable to hackers. In the National Online Recruitment Awards, it won the wooden spoon for being a,

“mongrel of a recruitment website”,

that,

“commits almost every online recruitment crime, and then some”.

Channel 4 investigated last month. It found that one in 50 jobs had been placed by one man in Coventry. He could not prove that they existed, but it turned out that he made money every time he passed on a CV to a real agency. Channel 4 found out that, of the 600,000 jobs there, 118,000 were from one door-to-door catalogue company. This is a disgrace. You could not make it up. Will the Minister tell the House two things: first, when did the Government first know that there were problems with ghost jobs on this site; secondly, can he assure the House that no jobseeker has been sanctioned for refusing to apply for a ghost job or a job which they feared was there just to harvest their personal details?

[Lord Freud]

My Lords, Universal Jobmatch has revolutionised the service of Jobcentre Plus. It is a transformative service. We have many people registered on it on a paperless basis. Half a million employers are on that service. As I said, we monitor it the whole time. We are now looking at 179 employers who may be in breach of our conditions and will suspend them if they prove in breach. I can assure noble Lords that no jobseeker will be sanctioned for not applying for a job that does not exist.

Income Support (Work-Related Activity) and Miscellaneous Amendments Regulations 2014

Baroness Sherlock Excerpts

Tuesday 11th March 2014 Grand Committee

I conclude by saying that the Government believe that providing more flexible support to meet the needs of the individual is the right thing to do and will have a valuable impact on the lives of lone parents and responsible carers up and down the country. We aim to implement this from 28 April this year to ensure that lone parents and responsible carers can benefit from it as soon as is possible. Jobcentre Plus preparations are well advanced. These regulations are an important part of our efforts to make Jobcentre Plus support more flexible and personalised. I hope that noble Lords will agree with me that this is a right and necessary change, and one which is appropriate to the nature of employment and parenthood in Britain today. I beg to move.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for that explanation. Labour supports the aim of these regulations. Indeed, the leader of the Opposition said in a speech last June that in a workless household, both partners or a single parent should use some of the time while their children are at nursery to make some preparations that would help them get back to work. He also stressed that there would be no requirement to go back to work until the youngest child is five years old. So we support the aim of these regulations.

When this order was debated in another place, my right honourable friend Mr Stephen Timms asked a series of questions of the Employment Minister, Esther McVey. She was able to answer only two of them and perhaps not in the depth that my right honourable friend had hoped for. I shall therefore put some of the same questions to the Minister in the hope that the intervening week will have enabled his officials to brief him to answer them perhaps more fully than was possible on that previous occasion.

First and most seriously, why is there no easement in the regulations for lone parents who have suffered domestic violence? I acknowledge that the Government have taken domestic violence seriously. In this very Room not so long ago, we debated the new cross-government definition of domestic violence and I was pleased to give the Government support for aiming to do precisely that. In the Universal Credit Regulations 2013, there was a clear easement for domestic violence which stated that, for 13 weeks, there would be no work-related requirements. In jobseeker’s allowance, the claimant is exempt for four weeks, which can be rounded up to 13 weeks. But in these regulations, there is nothing.

On 3 March in the Delegated Legislation Committee in another place, Stephen Timms asked Esther McVey this question:

“Can she confirm that it is her intention that there will be guidance that makes it clear that there will be the 13-week easement for people who suffer domestic violence, in line with other regulations?”.

The Minister replied:

“I will indeed; it is right that, as such support is given in other areas, it should be given in this area”.—[Official Report, Commons, First Delegated Legislation Committee, 3/3/14; col. 14.]

Can the Minister confirm that it is indeed the Government’s intention that there will be guidance that makes it clear that there will be the 13-week easement for people suffering domestic violence? If so, can he explain why that is not in these regulations, as it is in the corresponding regulations on income support and jobseeker’s allowance? Finally on this first point, can he explain what a lone parent would have to do if a decision-maker should require her to undertake some work-related activity despite suffering domestic violence? After all, Gingerbread reports many cases of lone parents being pushed to do things which they are not required to do by regulations or by guidance, perhaps because of a misunderstanding among generalist advisers in jobcentres. What should a lone parent do in these circumstances?

The second question that I want to ask is on the issue of parents of children aged five who have not started school and are not legally required to receive full-time education. Parents have to explain why it would be unreasonable for them to find other arrangements for the care of the child until he or she is in full-time education. Why is that easement not in these regulations?

Thirdly, under the regulations and as the Minister explained, single parents cannot restrict their availability for work-related activities during their child’s normal school hours—which is to be expected—or when their child is under the temporary supervision of another adult. Gingerbread is concerned that the latter issue causes a potential problem, because it means that a single parent could be sanctioned for being unable to undertake work activities because informal childcare arrangements had broken down. The Minister may say that childcare is covered in the “good cause” provisions, but that is not acceptable because of the process that would have to be gone through to try to sort that out. In JSA, informal childcare is not taken into account when compliance is being determined, presumably for precisely this reason, so why is it here?

What would happen to a single parent asked to attend an interview or other work-related activity whose three or four year-old was not in nursery and who did not have access to reliable free childcare? How should she pay for childcare? In another place, when Stephen Timms asked about this, Esther McVey referred to the childcare subsidy available for the first year when a parent first starts work. She also referred to Childcare Assist, which helps with childcare costs in the week before a single parent starts work. What about someone who is not working and not required to work? How should she pay for her childcare in these circumstances? Gingerbread suggests that Jobcentre Plus should pay for the childcare. What does the Minister think of that?

Finally, there is the question of travel time. The JSA and universal credit regulations place a limit of 90 minutes’ travel time to and from an interview. Can the Minister confirm that that limit will apply also to single parents undertaking work-related activity? If so, will that be made clear in the guidance to decision-makers? I look forward to the Minister’s reply.

[Lord Bates]

I am grateful to the noble Baroness for her response and for generously saying that support for this initiative in preparing people for the world of work is shared across parties. When we are dealing with some of the most vulnerable people in the country, it is important that, as far as possible, such agreement exists.

The noble Baroness referred to domestic violence. Again, I preface my remarks by welcoming the fact that she acknowledged that the Government had taken this very seriously and it was of great concern. We do not believe it is necessary to put an easement for domestic violence into these regulations. The draft regulations are flexible enough for advisers to apply the policy when appropriate. The income support guidance will reflect the position in jobseeker’s allowance and universal credit by stating that when a person satisfies the policy requirements, they are eligible to receive the easement, which includes deferring interviews and not setting mandatory work-related requirements. Providing the domestic violence easement in guidance mirrors the current approach taken for claimants who are victims of domestic violence and abuse who are entitled to old-style employment and support allowance.

We believe that these regulations are broadly enough worded for that to be taken into account as a good reason why certain requirements may not be met. We do not think it is necessary to put it in the regulations, as has been requested. But in response to Stephen Timms in the other place, my colleague Esther McVey, who is the Minister responsible for this area, has said that she will issue guidance in this area to the workplace advisers. I hope that will go some way towards reassuring the noble Baroness on this point.

The noble Baroness asked what would happen if the coach made a claimant do something despite them being subject to restrictions. The requirement to undertake activity when subject to domestic violence would be a matter of good cause to be considered, and would also be subject to appeal if that was something that was disputed.

[Baroness Sherlock]

I just want to be sure that I have understood this correctly. Three questions occur. First, why would the Government use as their comparator the position in old-style ESA rather than JSA or universal credit—the creature of their own invention, which they have just introduced? What is the difference between somebody on universal credit and somebody on income support? Secondly, will the Minister clarify that the guidance he has just referred to will be for a 13-week easement? That was the question asked by my right honourable friend Stephen Timms. Thirdly, if a lone parent who had suffered domestic violence was then inappropriately asked to engage in work-related activity, she could appeal, but would her benefits be sanctioned in the mean time, and how long does the average appeal take? What would happen to her while she was trying to sort that out?

[Lord Bates]

While I am getting some guidance myself, I will move on to some of the other points that the noble Baroness raised. She asked: if childcare is not available, is this an excuse not to undertake a work-related activity? We have no power to mandate claimants to place their children in childcare in order that they can undertake work-related activity. Claimants may also restrict their availability for work-related activity to times when they do not have childcare responsibilities. However, claimants cannot use the unavailability of childcare as a reason for not undertaking work-related activity. Even with the ability to restrict their availability, the requirement to undertake work-related activity remains. Claimants must accommodate this requirement or face the possibility of sanction. Claimants would therefore need to be reasonable about what they could do, which may involve taking up the offer of free childcare. If a claimant fails to comply with work-focused interview or work-related activity requirements, the regulations prescribe that the availability of childcare must be taken into account in determining whether that is a good cause, although it is not determinative of good cause in itself.

The noble Baroness asked about comparisons with jobseeker’s allowance and universal credit and the limit of 90 minutes’ travel time to and from the place of interview. A 90-minute travel time to work in each direction applies to those claimants who are expected to look for, and be available for, work. It does not apply to lone parents affected by this change, not does it apply to claimants on employment and support allowance. Any work-related activity which a claimant is required to undertake must be reasonable, taking the claimant’s personal circumstances into account, including the time that it would take for the claimant to get there. When determining what is reasonable, matters such as the availability and practicality of using public transport, the location of work-related activity and childcare responsibilities must be considered. Guidance will be updated to ensure that advisers are aware of this and take account of claimants’ individual circumstances.

Another question was about what support the group could get from the flexible support fund. The flexible support fund can be used in a number of ways, including paying for travel and replacement adult or child care to enable lone parents to undertake training, attend interviews or start work.

On why we use comparator old-style ESA, not JSA or universal credit, the JSA easement is for jobseekers. The ESA easement is in guidance. We will consider the need to place this in regulations.

[Baroness Sherlock]

I thank the Minister. I urge him strongly to take the question of domestic violence back to his colleagues and to think again. I take the Minister’s line as possibly a hint that Ministers may indeed be doing that; I hope very much that I have not overinterpreted it. I look forward to hearing some more information about that. I do not think that the distinction between someone being a jobseeker or not seems to be a good reason why someone who has suffered domestic violence should be treated any differently. If one is coming out of that circumstance, the ability to look for a job, whether mandated to do so, or just to prepare for it, would both seem to be of comparable difficulty and ought to be treated similarly. I look forward to hearing some good news on that before long.

I want to clarify a couple of the Minister’s other points as I may have misheard them. When this matter was discussed in another place, the question of childcare—particularly the position of someone whose child was not in nursery having to use informal childcare—my understanding was that the Government’s position was that the additional childcare offer for two and three year-olds is an offer, not a requirement. I understood the Minister to say that, effectively, a lone parent would not be able to use the fact that he or she might not have access to any suitable childcare as a reason not to engage. Therefore, if they could not find anything else, they would have to take that offer up, whether they wanted to or not, or have their benefits sanctioned. Can the Minister clarify that?

On travel time, I am quite surprised to find that there is no limit. Can the Minister at least reassure the Committee that the guidance will say that one should not be expected to travel for three hours each way to do a brief interview or course? In a sense, the point of having a timeframe is that it is a time limit. If that time limit applies for a job, why would it not apply to a course or some other thing that the department might require the lone parent to do? Can the Minister reassure the Committee that there will be some limit, or some guidance, at least, given to decision-makers as to what a reasonable limit would be?

[Lord Bates]

On that point, we can safely say that that limit is consistent across JSA and ESA, and therefore the 90 minutes would continue to be the restriction. The whole point of this is to encourage an engagement to prepare people for their place of work, and therefore there is a degree of flexibility on both sides. On whether the 13-week easement in the case of domestic violence would still apply, the answer is yes.

On whether that guidance is still being formulated, of course, we introduce regulations and I would like to think that where we have had drawn to our attention certain lacunae in the regulations, particularly where they affect vulnerable people, we have shown a willingness to pause and look carefully at that. I am sure that when the guidance is issued, that will provide an opportunity for that to happen.

[Baroness Sherlock]

I thank the Minister for his graciousness in allowing me to intervene. There was one more issue, which was that of parents of children aged 5 who have not started school and are not legally required to receive full-time education, and why that easement was not in the regulations. I suspect the answer may be patterned on some of his previous answers.

Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2014

Baroness Sherlock Excerpts

Tuesday 11th March 2014 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for that explanation and I do not propose to detain the Committee long on this order.

For many years Governments of all complexions have looked at ways to encourage the UK workforce to save for their retirement. There have been several changes to pension legislation but none as big as the Pensions Act 2008 and the pension reforms that will affect every employer in the UK. Since October 2012 new regulations require every employer in the UK to enrol automatically their eligible workers—which will be almost everyone—into a workplace pension scheme.

I want to say how much I appreciate that this Government have given such strong support to auto-enrolment, which was begun by the previous Government but taken forward by the present one. We also welcome the Government’s policy intent in these regulations to allow schemes providing career average salary benefits to be used as qualifying schemes for the purposes of automatic enrolment. This is a positive step and has the support of the Opposition. The Opposition will continue to support the Government to ensure that auto-enrolment is a success and the move to ensure that both average salary benefits schemes and hybrid schemes are a part of auto-enrolment is also positive.

[Lord Bates]

I am grateful to the noble Baroness, Lady Sherlock, for that support. Auto-enrolment is very much a success story. The credit for the figures that are coming in transcends parties and Governments. It is also very encouraging for people providing for their retirement. With that support, I commend the regulations to the Committee.

Financial Assistance Scheme (Qualifying Pension Scheme Amendments) Regulations 2014

Baroness Sherlock Excerpts

Tuesday 11th March 2014 Grand Committee

[Lord McKenzie of Luton (Lab)]

My Lords, perhaps I may put two brief questions to the Minister. There is no impact assessment attached to these regulations, but my recollection is that the FAS is funded from the public purse and not, as is the case for the Pension Protection Fund, from the levy. It may be that it is just de minimis in the scheme of things because we are dealing with only one identified scheme at the moment. However, I would be interested to know what the costs of this in terms of additional FAS spending might be. Perhaps the Minister might take this chance to update us on what the annual ongoing costs of the FAS currently are. Can the Minister also clarify for me, in relation to the particular scheme that has been identified, whether it had been paying the protection levy? If not, why was it outside of that?

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his explanation and my noble friend Lord McKenzie for his, as always, insightful questions. I am very pleased to see the Government’s ongoing support of the Pension Protection Fund set up by the previous Labour Government. The PPF has made a substantial difference to people’s lives. As regards schemes including Woolworths, MG Rover and Turner and Newall, the members would all have had much lower pensions had it not been for the PPF and the Financial Assistance Scheme. I also welcome the Government’s continued support for that scheme.

I would like to ask a couple of specific questions. First, I recognise that the Minister is trying to close a specific loophole and obviously the changes relate to a particular case. I must confess that the Opposition are therefore unsighted on some aspects of this. Following on from the question of my noble friend Lord McKenzie, can he explain a bit more about the Government’s thinking in deciding to plump for the FAS as opposed to the PPF, rather than leaving the members of a scheme ineligible for either, because that would seem to be the key question?

Secondly, obviously, the Government have not brought forward an impact assessment for these regulations. The Explanatory Note was helpful in explaining the long gap between the consultation process and these being brought forward, but will the Minister confirm that there is a timescale for further consolidation of the regulations on which the Government consulted in 2011, and that an impact assessment will be brought forward to accompany those changes?

[Lord Bates]

I am grateful for those questions. In terms of context, we are talking about a specific scheme with a number of members—the George and Harding pension scheme. To answer the point made by the noble Lord, Lord McKenzie, the scheme had not been contributing to, or paying, the PPF levy and therefore was not able to claim under that procedure. Therefore, we are changing the relevant dates so that we do not break the contributory principle of the PPF but ensure that financial assistance is made available. The noble Lord, Lord McKenzie, is as astute as ever and I am sure that the noble Baroness, Lady Sherlock, as a former adviser in Her Majesty’s Treasury, will also be aware that Her Majesty’s Treasury did seek to have some idea of what the impact would be on the Exchequer. The estimated full cost of the FAS contribution is £600,000, which comes out of the Exchequer over time because, obviously, that will be the way that people will be compensated as and when the funds will need to be drawn down. That is also the reason for the specific dates because we are trying to cope with a specific scheme rather than giving an open-ended commitment. Having demonstrated this, I hope that we can point to the fact that, should similar gaps in certain schemes arise in the future, we will look very carefully at them without giving any cast iron guarantee.

[Lord Bates]

That is the net present value of the cost of the scheme. Annual ongoing cost differs depending on the schemes taken in. I do not know how helpful that is but we try to be as fulsome as we can. Has the relevant firm been paying the protection levy? I have covered that point but that does not mean that it gets entry into the scheme. It was thought that the employer supporting the scheme was a statutory employer. I think that is the point we are dealing with here—the definition of a statutory employer. It was realised that it was not only after investigation. When will we consolidate the FAS regulations? As noble Lords know, there is a great deal happening in the pensions area, to be continued on Centre Court tomorrow, I think. This requires the department to prioritise its resources. The consolidation of the FAS regulations remains on the department’s work plan but I cannot give a definite date as to when the draft consolidation regulations will be laid before Parliament. I am grateful for the probing questions I have been asked. The noble Baroness, Lady Sherlock, looks as though she wants to come back in.

[Baroness Sherlock]

I thank the Minister for those answers but just want to push a little bit more on consolidation. Is there a difference in principle with how long one might wait after consulting before consolidating legislation? I am glad things are on the departmental work plan, but I gather it is rather a busy work plan at the moment and would be grateful for any hints. The other question I asked is whether, whenever that happened, an impact assessment would be brought forward at that point.

[Lord Bates]

I think I will probably need to write to the noble Baroness on those two points, again to ensure that we get absolutely the right answer. They are good questions and we want to make sure we get a correct response. I am grateful to the noble Baroness and the noble Lord, Lord McKenzie, for raising their concerns. I commend these regulations to the Committee.

Welfare: Cost of Family Breakdown

Baroness Sherlock Excerpts

Tuesday 4th March 2014 Lords Chamber

[Lord Freud]

We are running two immediate programmes. The first is to provide help and support for separated families, running in SR10 at £14 million, £10 million of which is spent on an innovation fund that tests various interventions, involving 17 different voluntary and private groups. The other aspect is the relationship support interventions, on which we are spending £30 million. There are three main areas—something called Let’s Stick Together, marriage preparation and couples counselling.

[Baroness Sherlock (Lab)]

I would like to return to the answer that the Minister gave my noble friend Lady Lister. If the Minister does not know why people go to food banks, I commend to him the “Panorama” programme shown on television last night about food banks. Among other people, they interviewed a mother who described the fact that her benefits had been wrongly sanctioned for three months and that they had so little to eat that her milk dried up while breastfeeding.

I have two questions for the Minister. First what is the current success rate of appeals against sanctions on benefits? Secondly, what does he make of the pictures shown in the “Panorama” programme last night of the jobcentre that put up charts to show its staff how much money could be saved to the department by sanctioning people for a range of times?

[Lord Freud]

I must emphasise to noble Lords that we absolutely do not have targets for sanctioning. We have looked into this matter, and we do not have them—we do not run them. When there are exceptions, we stop it. That is not the purpose of sanctions; the purpose of sanctions is to run a system in which we provide some £85 billion to people who need it. It is our safety net to make sure that we give that properly and that people comply with the conditions required to receive that money.

Social Security (Maternity Allowance) (Participating Wife or Civil Partner of Self-employed Earner) Regulations 2014

Baroness Sherlock Excerpts

Monday 3rd March 2014 Grand Committee

[Baroness Scott of Needham Market (LD)]

My Lords, I support the social security regulation which we are debating today—not just because it avoids an €11 million fine. I think it is a good thing in its own right. For once, we have a welcome change to the benefits system in that it is beginning genuinely to reflect the diversity of people’s lives and the lives of women in the workforce. That is a very good thing indeed. It is bringing a new group of women, predominantly from the very small, micro-business sector, within the ambit of maternity benefit. I just wish that the gold-plating had been left in place just on this one occasion so that they could have had a benefit more in line with everyone else.

I want to ask two questions. The first is about disseminating information, because this is a very difficult group to reach. They do not tend to be members of chambers of commerce, and that sort of thing. I do not have a particular answer, but I wanted to put in the plea that all efforts are made to ensure that women who are likely to benefit actually know about it and are able to. We hope that the Government’s new enterprise allowance scheme will be successful, so we could have even more very small businesses starting up in the coming year or so, so we need to get on top of how we can ensure that women know that these benefits are available.

Secondly, I welcome the discussions on shared parental leave—I know that the Deputy Prime Minister has been very keen on this and it has some support within government. It would provide welcome flexibility, but I am curious as to how these arrangements might work if we have shared parental leave. With those questions, I welcome the instrument.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his explanation and I look forward to hearing the answers to those two excellent questions. I do not propose to ask any questions about the second order, as I accept the Minister’s assurance that it is consequential upon the first. However, I should like to ask a few questions so as to understand better the implications of the first order, relating to maternity allowance.

The first question relates to the point that has just been made about the rate being so low. The standard rate of maternity allowance is £136 a week, or 90% of average weekly earnings, for up to 39 weeks. In this case, the Government decided to settle on £27 a week for 14 weeks. I think I heard the Minister say that the aim of the allowance was to enable women who regularly help in the business of a spouse or civil partner to take a break from their activities towards the end of a pregnancy or the start of motherhood. Have the Government made any assessment of whether the amount of money involved is such that it is likely to make taking that break possible when otherwise it would not have been?

Secondly, the Explanatory Note says that 1,300 women will be affected by the provisions at an estimated cost of £0.5 million. No impact assessment was carried out, so we do not know whether the Government considered other approaches. Clearly, there is quite a wide range between what the Government are doing and an allowance that is fully gold-plated. Did the Government consider bringing this in at an intermediate level and, if so, what kind of cost would have been implied?

Next, I should be interested in understanding what conditions a claimant would have to meet to qualify for maternity allowance under these circumstances. We have had a question about shared parental leave. I should also be interested in knowing what happens to someone who is adopting a child rather than giving birth, as the regulations are specifically about giving birth or having just given birth. Looking at the regulations, I do not think that someone in these circumstances would be entitled to statutory adoption pay, so would they be entitled to maternity allowance? Similarly, what happens if the child is stillborn or dies immediately after birth? Certainly, I think that SMP is payable if a child is stillborn after 24 weeks, but is there a read-across to this provision?

I was pleased to hear the question about communication because I was going to ask something similar. The Minister made the very good point that there may be strong reasons why women in these circumstances may be better off being paid by the business and being able to pay national insurance. I am very conscious that the Pensions Bill is going through the House at the moment. Of course, if a woman in these circumstances does not end up with 35 years of national insurance payments in her own right, she may find that when she comes to retire she is not entitled to the new single-tier pension, and in future she will not be able to claim on her husband’s contributions either. Therefore, when the Minister looks at the communications campaign, I wonder whether anything can be done to make sure that the opportunity is taken to communicate to those women so that they understand the consequences of not paying national insurance and of not coming within the national insurance and tax system.

Finally, I have a practical question. Can the Minister explain the tax and tax credits treatment of these benefits and say whether there is any passporting or link across to any other benefits as a result of receiving this maternity allowance?

[Lord Bates]

I thank my noble friend Lady Scott of Needham Market for her contribution and I also thank the noble Baroness, Lady Sherlock, for raising these points. Some very good questions have been asked and I shall do my best to answer them.

My noble friend Lady Scott asked whether women getting this maternity allowance will have access to shared parental leave and a pay scheme. The answer is no, and I am sorry to be disappointing. The statutory shared parental leave and pay provisions are designed for employed couples to share the care of their child. It would be available to eligible women who are entitled to maternity leave, statutory maternity pay or maternity allowance because they are employed or self-employed earners—that is the key word. Therefore, women receiving this form of maternity allowance will not have access to that scheme as they will be neither employed nor self-employed in their own right.

My noble friend Lady Scott and the noble Baroness, Lady Sherlock, asked how we will encourage take-up of the allowance, and we talked about some of the publicity which is being received. We have identified stakeholder groups relating to both self-employment and maternity, and they have been informed of the change. They include Maternity Action, Netmums, Mumsnet, Bounty, Sands, Citizens Advice, the Royal College of Midwives, the British Medical Association and HMRC. We will be publicising the qualified conditions and the claim process on direct.gov.uk, as well as providing relevant guidance and claim forms. Needless to say, if there are any specific organisations which the noble Baroness thinks it would be helpful to include in that list, we will be delighted to hear from her.

I turn to the points raised by the noble Baroness, Lady Sherlock. She asked about the sad cases where there is a stillborn child. The mother would still be entitled to maternity allowance, in the way that statutory maternity pay applies at present. These provisions do not extend to adoption.

--- Later in debate ---

Turning to the question of why the rate of payment is so low, I covered that to some extent in my opening remarks, in saying that we were seeking to comply with the minimum of the EU directive. We have made no specific assessment of whether it is enough money to encourage parents to take a break. However, the Government have an overall objective to avoid gold-plating EU legislation. This means that we should not go beyond the minimum requirements of European directives. The benefit will, therefore, be paid for the minimum duration allowed by the directive—that being 14 weeks—and at a weekly rate equivalent to the lowest maternity allowance rate in payment, currently £27.

[Baroness Sherlock]

Before the Minister leaves that point, I understand the Government’s argument that they do not wish to gold-plate anything that comes from Europe. I was pushing him slightly because he gave two different reasons for doing this. One was not to gold-plate; the other was to give the women an opportunity to take a break from their activities. My question was whether he had done any assessment of whether the level and duration of the payment would be adequate to meet that objective.

[Lord Bates]

The answer is that no such assessment was undertaken.

The noble Baroness asked whether this maternity allowance will passport through to other benefits. It is up to each provider of those passported benefits to decide whether to extend their passported benefits to this group. Of course, in the same group of regulations we are talking about changes being made to the legal aid provision, so there is some element of a knock-on effect to that. I am grateful to all noble Lords who have spoken.

[Baroness Sherlock]

I am happy for the Minister to write to me but I asked about the tax treatment of the allowance and the tax credits position. He may feel free to write if that is easier.

[Lord Bates]

I apologise to the noble Baroness. I will follow that up in writing.

I am grateful to all noble Lords who have spoken. I thank them for their interest in the debate and take the opportunity to say that I hope we agree that the Social Security (Maternity Allowance) (Participating Wife or Civil Partner of Self-employed Earner) Regulations 2014 ensure that those women who participate in the business of their self-employed spouse or civil partner can receive maternity allowance to enable them to interrupt their activities due to pregnancy or motherhood, and that the Legal Aid (Information about Financial Resources) (Amendment) Regulations 2014 contribute to ensuring that those entitled to help with their legal aid costs receive that help, while those who can afford to pay, do so.