Public Authorities (Fraud, Error and Recovery) Bill

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Committee stage
Wednesday 18th June 2025 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, government Amendments 94 to 97 are minor and technical in nature. In England and Wales, the common law does not permit access to material protected by legal professional privilege under any circumstances. However, relying on this common-law exclusion would not extend to Scotland. In addition, a different definition of legal privilege applies in Scotland. To ensure that the original intent is maintained, this position is now set out in a single provision within new Schedule 3ZD.

These amendments make it explicit that if the information being sought relates to personal records which involve confidentiality of communications that could be maintained in legal proceedings in Scotland, it cannot be seized, copied or obtained, et cetera. This ensures that the same protections for information of this type apply in Scotland as they would in England and Wales. I hope that these amendments are clear and I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, as we turn to government Amendments 94 to 97, I wonder, as I always do when there are lots of government amendments to their own Bill, whether enough thought has gone into it in the other place.

I know that these proposals are primarily technical, with the key aim of simplifying the drafting of new Schedule 3ZD to the Social Security Administration Act 1992. Government Amendment 96 introduces a single clear prohibition on the seizure or examination of information of legal privilege. This streamlining could help to clarify the legal position for both investigators and those subject to investigation, ensuring that the Bill’s provisions are easier to interpret and apply in practice.

Clarity in legislation is always desirable, especially in complex areas such as fraud investigation, where the rights of individuals and the needs of public authorities must be carefully balanced. At the same time, it is important to consider how these amendments interact with the Bill’s wider objectives of safeguarding public money and equipping authorities with the tools needed to tackle fraud and error effectively. Ensuring that information which is subject to legal privilege is properly protected is a long-standing principle within our legal system. These amendments appear to reaffirm that commitment without substantially altering the Bill’s intent. I have no problem in agreeing with what should have been in the Bill at the beginning.

[Viscount Younger of Leckie (Con)]

My Lords, my remarks largely chime with those made by the noble Lord, Lord Palmer. The Committee will be relieved to know that this is my shortest speech. I offer some measured support for these amendments. They address the important principle of the protection of legally privileged material, and in a way that simplifies and clarifies the drafting of this part of the Bill.

The right to legal professional privilege is, of course, a cornerstone of our justice system. That principle should be unambiguous in legislation of this kind. These amendments seek to express that safeguard more clearly through a single consolidated position. There is certainly merit in that. A simplified and consolidated statement of the limitation on investigatory powers in respect of privileged material is likely to be easier to apply in practice and could reduce the risk of inadvertent overreach.

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[Lord Palmer of Childs Hill (LD)]

My Lords, as we consider Amendments 99A, 99B and 99C, spoken to by the noble Baroness, Lady Finn, it is clear that these proposals are focused on the mechanisms of independent review and oversight within the Bill. Amendment 99A would ensure that the Secretary of State cannot limit the independent person’s review to only certain timeframes, thereby supporting the principle of comprehensive and impartial scrutiny. Amendment 99B would require the Secretary of State to provide information to the independent person for the purposes of a review, which could strengthen the independence and effectiveness of the review process. Amendment 99C would compel the Secretary of State to appoint independent reviewers not just in England but also in Wales and Scotland, ensuring a degree of consistency and regional representation in oversight arrangements.

These amendments appear to reinforce the Bill’s commitment to robust oversight and transparency, aligning with the existing provisions for independent inspection and review already outlined in the legislation. At the same time, it will be important to consider whether these changes might introduce additional administrative complexity or affect the flexibility of the Secretary of State to respond to evolving circumstances. As ever, the challenge is to strike the right balance between effective oversight and operational efficiency. I look forward to hearing the views of the noble Baroness, Lady Sherlock, on whether these proposals best serve the aims of accountability and good governance within the framework of this Bill. It is amazing what changing the word from “may” to “must” can do, but it can make a big difference and I wait to hear the Minister’s reply.

[Baroness Sherlock (Lab)]

My Lords, I am grateful for the contributions to this short debate. I hope that I can answer the questions that have been raised.

The first and most important piece of information is to remind the Committee that in the Commons my honourable friend the Minister for Transformation made it clear that His Majesty’s Inspectorate of Constabulary and Fire and Rescue Services will be commissioned to inspect the DWP’s criminal investigation powers for England and Wales and HMICS for Scotland. I hope that that is helpful. I can reassure the noble Baroness, Lady Finn, that the reason why we chose HMIC is that for more than 160 years it has been carrying out independent scrutiny of law enforcement in England and Wales, including the police. There is no danger whatever that it will be any kind of box-ticking exercise, if HMIC is doing it. I am sure that she can be reassured on that front.

I hope that that shows the level of commitment that we have to the level of scrutiny. If we want to do it properly, HMIC is the body to scrutinise powers of this seriousness. But we have worked closely with HMICFRS and HMICS. We intend to operate in the same way as other law enforcement agencies that are subject to inspections by those bodies. What will happen is that, prior to each inspection, the DWP and the inspectorate body will mutually agree the period that the inspection will cover. That is to make sure that the inspection can cover all necessary activity that has been undertaken, which is a common way of operating. We have no reason to believe that it will not operate well in this case.

We understand that sharing information is essential and will obviously not seek to misrepresent or hold back any relevant information. The legislation as drafted allows us to share all relevant information. But it is essential that the Secretary of State retains discretion—for example, being able to choose not to provide information that may be particularly sensitive and where sharing it could have a detrimental impact, such as on the outcome of an active case. The DWP will fully support and co-operate with the inspection bodies and its reports will make clear if we did not do that. But we want to do so, to make sure that we can deliver on these powers to the right standard.

I am grateful to the noble Lord, Lord Vaux, for answering one question for me. There will indeed be inspectorates. HMICFRS will cover England and Wales and HMIC will cover Scotland to enable us to have a different reviewer in the two places. I hope that, given those reassurances, the noble Baroness, Lady Finn, will not press her amendments.

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[Lord Palmer of Childs Hill (LD)]

My Lords, I am pleased in this instance to express my strong support for Amendments 99D and Amendment 109ZA, tabled by the noble Viscount, Lord Younger, and the noble Baroness, Lady Finn. I have not been quite so firm in my support for others, but Amendment 99D would ensure that, before any deduction is applied to recover debt overpayment, due regard is given to the wider circumstances and vulnerabilities of the liable person. There would be a requirement for this assessment to be documented and available to the claimant on request.

This is a vital safeguard that would place fairness and compassion at the heart of the debt recovery process, ensuring that individuals are not pushed into hardship without a proper understanding of their personal situation. It aligns with my and my party’s commitment to a welfare system that is both effective and humane, recognising that people’s circumstances can be complex—gosh, they certainly can be—and that a one-size-fits-all approach to debt recovery is neither just nor practical.

Amendment 109ZA—we have a wonderful numbering system—would further strengthen these protections by requiring the Minister to consider the additional costs of living with a disability before making a direct deduction order. This would be an essential step in ensuring that disabled people, who often face higher living expenses, are not disproportionately affected by debt recovery measures. Both amendments reflect the principles of proportionality and sensitivity that should underpin all government action in this area. They represent a significant improvement to the Bill’s framework for tackling fraud and error while safeguarding the dignity and well-being of the most vulnerable.

Unlike the noble Baroness, Lady Fox, who said she was a bit hesitant on this, I urge the Committee and the Minister to support these amendments, which would ensure that the pursuit of public funds is always balanced with compassion and respect for individual circumstances. At this stage of the Bill, as mentioned by the noble Viscount, these measures need to be introduced so that we can perhaps on Report include them in the Bill.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to the noble Viscount for his amendments and to all noble Lords who have spoken. We all want to ensure that, when someone who is subject to these debt recovery powers is vulnerable, we are aware of that and take appropriate steps to treat them as we should. Before I turn to the individual amendments, I shall recap on how direct deduction orders will operate and what safeguards are there, as this is relevant to the debate.

These powers are vital to recovering funds that are owed by debtors who are—just to remind the Committee—by definition not on benefits or PAYE. If they were, we would have other ways to deal with them. These are people who have some other source of income, owe the DWP money and have simply refused to engage with us at all, at any stage. That does not mean that none of them is vulnerable—of course, they may be—but this is the category of people that we are talking about. The department has long-standing powers to recover public money that has been wrongly paid in excess of entitlement, through deductions from benefits or earnings, but not for those in that category.

There are important new safeguards for these powers. They are there only as a last resort. First, before they can be used, multiple attempts at contact must be made, of different types. We must make at least four attempts to contact someone, at least twice by letter. We not simply trying once and giving up. We must have really tried to engage with people who simply do not engage with us all.

Secondly, when a direct deduction order is necessary, the DWP must be satisfied that any deduction, whether a lump sum or a regular deduction, will not cause the debtor, other account holder or their dependants hardship in meeting ordinary living expenses. That means that, legally, the DWP must ensure that there is enough money remaining in an account after a lump sum deduction to allow the debtor to meet their essential living needs.

In response to the noble Viscount, deductions must be fair in all the circumstances. This would include consideration of any vulnerabilities or additional costs related to living with a disability. The noble Viscount helpfully outlined what some of those will be. The point is that they must be particular to the individual. Each individual’s circumstances will be different. As the noble Baroness, Lady Fox, pointed out, not everybody who is poor is vulnerable, not everybody who is on benefits is vulnerable and not everybody who is disabled is vulnerable, necessarily. We need to understand their circumstances to know what is fair and ensure that they will not be pushed into hardship by a deduction.

Thirdly, to ensure that the deduction is made in that way, the amounts will be decided following an affordability assessment based on information shared by the debtor’s bank and any subsequent representations made by the individual or their representative if they need someone to speak for them. Legislation sets out the maximum amounts that can be deducted for regular deduction orders.

Fourthly, the Secretary of State can vary or revoke direct deduction orders in the light of a change of circumstances—for example, if the debtor had a change of income, made a new claim to benefit or something else of significance happened. Fifthly, when a direct deduction order is made, notice must be given to the bank and all holders of the account in question. If an order is still upheld after a review, or after considering information that has been presented, an individual who is not happy with that has a right of appeal to the First-tier Tribunal.

Finally, I remind the Committee that a code of practice for the new powers has been made available for noble Lords to review. This sets out revised guidance on ways to identify and support those who are vulnerable. Ahead of public consultation, our team continues to work on the code collaboratively with key stakeholders, including charities such as Surviving Economic Abuse and the Money and Pensions Service. These are important safeguards which I hope will alleviate noble Lords’ concerns.

On Amendments 99D and 109ZA, it is worth looking at what these amendments would do in practice. While we all share the desire to protect vulnerable groups, these amendments would place additional legal duties on the DWP to consider the impact of any vulnerabilities that a debtor may have, even when it could not be reasonably possible for the DWP to know. These requirements would be imposed without providing any new ways for the DWP to obtain that information.

As I have said, the direct deduction order power is one of last resort, aimed at those who are not on benefits or in PAYE employment, where all reasonable attempts to engage with the individual have failed. These are individuals who have not responded to repeated contact from the DWP’s debt management officials about their debt. In the absence of meaningful engagement from the debtor or their representative, the DWP will not be aware of their current personal circumstances. This puts the DWP in a difficult, if not impossible position, regarding the obligations that the proposed amendments would impose.

However, we need safeguards. The new safeguards that are introduced in this Bill, which I outlined at the start of my speech, alongside the existing safeguards and departmental processes for supporting those who are vulnerable, reflect a better approach to protecting vulnerable people. I shall now set out some of those existing safeguards and processes that are outside of this Bill, for the record.

Layers of support already exist within the DWP to support those who are vulnerable or have complex needs. They include proactive vulnerability checks at different points in the customer journey, and where vulnerable individuals are identified, to ensure that the necessary support and adjustments are put in place. Where any additional support or adjustments are identified by a DWP official or are disclosed by the individual, they are recorded on DWP systems to ensure that all officials know how best to support them.

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[Lord Palmer of Childs Hill (LD)]

I thank the Minister very much for responding in that manner, but it is rather like a court case where they say that the jury should disregard what happened. Once the information is out there, human nature makes it very hard to avoid it. If you are the DWP and you look at a bank account and see something that you should not, it is hard then to ignore it. The nature of man and woman is not to ignore things that they see. I am afraid that that just came to my mind: it is like these television dramas where the barrister or lawyer raises points, and the judge says, “The jury should disregard that”. You cannot disregard what you see in a bank statement even if you decide that you should not really have seen it. This is a very dangerous precedent, and I do not think the Minister is living in the real world.

[Baroness Sherlock (Lab)]

I just remind the noble Lord that these DWP staff are authorised fraud investigators and they work on our fraud teams. In the nature of their work, as it is for anybody who works in fraud or law enforcement, they will end up seeing information, in the course of an investigation, that is not relevant. If he thinks that that means that that information will necessarily get into the outside world, then I ask him to rethink that. Our staff are professionally trained. They are professionals who operate under professional standards, authorisations and accreditation. They know what their job is. If staff come across information and the law quite clearly says that it may be used for only one purpose, it will be used for only that purpose.

[Lord Palmer of Childs Hill (LD)]

I am sorry, but this does not take account of rogue members of the DWP. I am sure that 99.99% are exactly as the Minister says, but the idea that everyone will observe those rules is—I say again—not the real world. I beg leave to withdraw the amendment in the name of my noble friend Lady Kramer.

Public Authorities (Fraud, Error and Recovery) Bill

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Committee stage
Monday 16th June 2025 Grand Committee

[Baroness Sherlock (Lab)]

In as much as we will say to the banks that we would like them to look at the accounts into which we pay benefits and will give them the reference numbers. Clearly, it is up to the banks how they identify those. I think it unlikely that they will take each bank account, look at it individually and make a decision, but it is up to them. We simply want them to look at those bank accounts and to tell us whether, within those bank accounts, they believe that the particular eligibility indicator that we have given them is correct.

Regarding frequency, we will negotiate that with the banks. The previous Government looked at an earlier iteration of this and ran two proofs of concept to establish that it would work and be effective. We now have to take the powers in order to be able to start doing this. So, we have agreed that we will work with a small number of banks and work out bit-by-bit how this works, bring over information as we can manage it, make sure that the system works, and build up as we go. We will determine from that how often we will need to do that and how it works. That has to be determined; we could not determine that in advance because we need the powers in the Bill to be able to start the process.

In response to the noble Baroness, Lady Fox, it is a question of proportionality. Clearly, we already ask the Revenue to tell us how much people earn in order to determine whether or not they meet the earnings criteria for, for example, universal credit. We could simply allow people to tell us, but when we did that, some of them got it wrong; many of them made mistakes; sometimes it changed, and sometimes they deliberately did not tell us. So now, we simply get information directly from the Revenue.

We think that the power is proportionate. Whenever someone compares it to something that feels disproportionate, such as spying or putting bugs in everyone’s houses, I think that we can either claim that this is a mass surveillance power like China would use and then wonder why people are getting paranoid about it, or, while I do my best to be specific about what we are trying to do, we can all try to have a measured conversation about whether or not it is reasonable, while fully accepting that for some people the line will be in a different place than for others for reasons of both philosophy and proportionality. I fully accept that.

I have done the best I can in 25 minutes. On that basis, I urge noble Lords to agree that the clause stand part.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for that tour de force. I am afraid the problem is that we all have different ideas about what is proportionate. From what I have heard, I do not think what the Government are suggesting is proportionate, and that is where the problem arises. I come from the feeling that there is a presumption of innocence, and this seems to me almost a presumption of guilt.

The Minister has not taken the point about the nervousness of banks. If a bank gets even a modest inquiry—anyone who has a bank account knows that this happens if there is a certain inquiry on your bank account—signs go up in the algorithm used by the bank saying, “We’ve got to look at this”. Anyone who is a Peer or an MP knows that their affairs can be looked at more closely just for that very reason. I hope that, on Report, we can deal in greater detail with how nervous the banks will be about what is proposed. I hope the Minister can come back and give us reassurance from real banks—joint-stock banks—that have said how they view this. I think they will view it wanting to be on the safe side.

However, at this stage, I will not press my noble friend Lady Kramer’s clause stand part notice.

PIP Changes: Impact on Carer’s Allowance

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Monday 31st March 2025 Lords Chamber

[Baroness Sherlock (Lab)]

I thank the noble Lord for that excellent question. I reiterate our absolute appreciation of the work that is done by both paid and unpaid carers. We are very conscious of the fact that, as a country, we have not been able to sort out the problems in our social care system. Adult social care has put extra pressure on to unpaid carers, which is one of the reasons—a clear reason—why we have asked the noble Baroness, Lady Casey, to produce a report by next year on the medium-term challenges, so that we can try to get a long-term fix by 2028. In the short term, I hope that carers will be reassured by the investment the Government are making to, for example, allow them, for the first time ever, if they are working alongside caring, which many are, to earn the equivalent of 16 hours at the national minimum wage before losing any of their benefit.

[Lord Palmer of Childs Hill (LD)]

My Lords, forgive me if some of the statements and replies are confusing to me. Something is said in one place and something is said in another. Can the Minister tell us why, in the debate that followed her Spring Statement last week, the Chancellor said that the Government were providing “additional support for carers”, when they are actually reducing carers’ benefits spending by £500 million by 2029-30? The statements and replies are confusing.

[Baroness Sherlock (Lab)]

My Lords, there is confusion, but I do not think it is the Chancellor who created it. I have heard a suggestion that carers’ benefits are being cut. Let me be clear: carers’ benefits are not being cut. Carer’s allowance will rise to £83.30 from next week, or the end of this week, and the Government have boosted the earnings threshold in carer’s allowance by the highest ever amount.

Secondly, reforms are being made to disability and sickness benefits. One of the consequences of those is to change some of the people who currently are entitled to the personal independence payment. Because carer’s allowance is paid to people who care for someone on personal independence payment, there will be some people currently getting carer’s allowance for whom there may not be an entitlement in future.

We spelled out clearly in the Green Paper that we would look at how we could support those who are losing entitlement in general as well as, specifically, carers who are losing entitlement. I want people to be clear: we are not cutting the value of the benefit; we are not changing the fact that they can earn more—but there will be some people who are getting carer’s allowance now, and who might have got it in the future, who will not get it. However, given the rate at which the PIP case load is growing, with all the changes that we are making we are stemming the rate at which spending on sickness and disability benefits goes up, not cutting it.

Welfare Reform

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Tuesday 18th March 2025 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, these welfare reforms aim to reduce benefit spending while encouraging greater workforce participation. I thank the Minister for reading the Statement and the noble Viscount for the useful questions that he has raised. I have respect for both of them, as they know.

From these Benches, we want to see more people in work, including those with disabilities. While the need for reform is clear, the Liberal Democrats are concerned that the current proposals risk worsening the very issues that they intend to address. We all want to see a more efficient welfare system, but that cannot come at the expense of the most vulnerable in society, particularly those with disabilities or health conditions. Instead of focusing on short-term cuts, we must reform the system in a way that is fair and compassionate and ensures dignity for all.

Does the Minister agree that one of the main aims of this reform package is, as the Statement says, to save £5 billion—often at the expense of the vulnerable in society?

One key area of concern are the proposed cuts to benefits for people with disabilities, which could push many into poverty and greater dependence on social care. The chief executive of Citizens Advice has warned that these changes could have “serious long-term consequences”, and we on these Benches passionately agree. For individuals with severe disabilities or health conditions, this reform package may well create further barriers to employment rather than removing them. The Government’s proposal to freeze the health top- up in universal credit for existing claimants, while reducing it for new ones, will only add to the pressure on disabled individuals, undermining their ability to achieve independence and security. Why are new claimants considered less vulnerable than existing claimants? Of course, that is nonsense and worthy of Ebenezer Scrooge.

These Benches welcome the idea of merging contributory benefits and creating a new unemployment insurance, but the fact remains that we are still waiting for an overdue comprehensive overhaul of the Department for Work and Pensions. Until the Government get serious about fixing health and social care—systems that are intrinsically linked to people’s ability to work—the welfare system will continue to struggle. The social care review’s three-year timeline is hugely disappointing and highlights the lack of urgency in addressing these critical issues. If the Government truly want to cut benefit spending, they must first address the root causes, not just apply superficial, short-term fixes borne by those least able to object.

These Benches remain committed to supporting people with disabilities into employment. We agree whole- heartedly with the Government’s aim to provide a right to try to work without the risk of losing benefits. However, from history, I have a sneaking premonition that it will be more difficult, and slow, to get back on to the benefits ladder once you have tried to work. That is what has happened in the past.

The wider changes, including delays in the health top-up for young people and increasing reassessments, must be approached with caution. We need to ensure that any reforms we make are sustainable and focused on long-term support for those who are most in need. Does the Minister agree that a balanced approach is needed—one that addresses the root causes of welfare dependency and puts people’s dignity and well-being at the heart of its reforms?

[Baroness Sherlock (Lab)]

My Lords, I thank both noble Lords for their comments and questions. Maybe we can start by agreeing that we all have great respect for each other, which is both genuinely true and one of the joys of this House. We are able to have conversations and respect one another while disagreeing.

Having got that out of the way, I probably need to start by saying it is possible that some of what we are trying to do has been misunderstood. So let me summarise in my own words what we are trying to do here. First, we need to recognise that the UK has a near-record number of people who are economically inactive on health grounds. The numbers on incapacity and disability benefits are rising at an unsustainable rate, and that is not just down to worsening health. The figures and the evidence show that there are more people who say they have a disability or a long-term health condition affecting their daily lives, but the number going on disability and health benefits is going up twice as fast. So it is not just about health; there is something about the way our system works.

If those numbers keep going up, as more people are driven into the system, fewer people are left to sustain it. One in 10 working-age people now gets a sickness or disability benefit. Before the pandemic, we spent £30 billion a year on those benefits; the figure is now over £50 billion and by the end of the decade it will be £70 billion on working-age benefits. That is not sustainable. So I say to the noble Lord, Lord Palmer, that I absolutely know where he is coming from but, if we cannot get the system on to a sustainable footing, it will not be there for the people who need it in the next generation and the one after that. We have to get the system working.

As well as being unsustainable, the system is failing those that it serves. The current system, as my right honourable friend described in the Statement, divides people into artificial binary categories: can and cannot work. Those who are deemed able to work are put out there, given support, encouraged to get a job and paid a standard allowance. Those who cannot are paid more money, left alone and given no help—the system disengages. We know that that is not the reality for most people. We know that 200,000 people on incapacity and disability benefits say they could work right now with the right support and the right job, but the system does not encourage them to do that; it actually discourages them.

Social security provides a vital safety net for those who rely on it, but we need it to be there for the future as well. Our Green Paper sets out how we will refocus the social security system towards empowering people to find work, while protecting those who most need help by supercharging the employment support with an extra £1 billion and a focus on early intervention, and by separating the link between the capability to work and extra financial support, so that everyone can work and not risk their benefits.

The noble Lord, Lord Palmer, suggested that this was simply a cost-cutting measure. I hope I have explained to him why the measure is trying to do two things. It is trying to place the whole system on a more sustainable footing and it is trying to reform it to make sure that it can support all those who can work to be able to go out there and get a job, to develop in it and to build a life in it, while absolutely guaranteeing to support those who are never going to be able to work or who have the most severe needs.

The estimate—we will get the details when the OBR does the figures for the Spring Statement next week—is that this package will save £5 billion in 2029-30. When the figures come out, I encourage the noble Viscount to have a look at them and compare them with what his Government had in mind, and we can then have a conversation about them. However, even with these changes, we are not reducing spending on disability and sickness benefits. We are spending less to try to make the system sustainable, but the numbers will keep on going up.

The noble Lord mentioned the question of people being put into poverty. One thing to stress is that anyone who is getting benefits at the moment—if they are getting PIP or the universal credit health element at the moment—will keep those benefits unless and until they have a reassessment and their eligibility changes, so this is a system for the future.

The noble Lord asks why it is different for those coming in afresh. The answer is that we have to make the system sustainable and that is the best way to do it. However, we want to support people in transition. Of course, some people will end up losing entitlement, but we want to look into how we can best support them, including possibly with transitional support to make the adjustment to the new regime.

The noble Lord asked about the DWP. One of the things that has worried us as we came into government is the lack of trust and confidence in the system, and we are really determined to address that. It is one of the reasons that we say in the Green Paper that we are going to develop a new safeguarding system for DWP to try to rebuild trust and confidence in the system. That is why, for example, we are going to move to recording all assessments by default, so that people can be clear and have confidence in the process when that is happening.

Crucially, for those on the universal credit health system who have the most severe lifelong health conditions which have no prospect of improvement, so they are never going to work, we are going to look at providing an additional premium to protect them so that they are secure. For people in that group, with both new and existing claims, we will guarantee that they will never face a full reassessment in the future.

The noble Viscount asked about WCA. I think he is aware that not only were the previous Government’s proposals to reform WCA, I am sorry to say, poorly thought out, but their consultation was so bad it was actually ruled illegal by the courts, which made it simply impossible. We had a manifesto commitment to either reform or scrap the work capability assessment. We have come to the conclusion that it cannot be reformed; we are therefore going to scrap it. Apart from anything else, that will mean that people will not have to go through two separate assessments. We think that is the way forward.

I probably have to take on the noble Viscount’s challenge here that the Government were going to do lots of things. I fully accept that, when his party were in government, they had lots of ideas, but they did have 14 years to do them. We, at this point, are nine months in. We have already made some announcements, we have a detailed Green Paper for reform, we are engaged in consultations and we are going to change the system. I understand this is hard. I know change is hard, but the system has been tinkered with for far too long. We need reform and we are doing it now.

It was of course Beveridge himself who identified the establishment of comprehensive health and rehabilitation and maintenance of employment as necessary conditions of success in social security. We need more than tinkering. We need a system that will be sustainable and will support people into work, but will protect those with the highest needs who can never work. We can do both. I welcome the contributions from both noble Lords and look forward to carrying on the conversation. We all need this change to work.

National Insurance Pension Underpayments

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Thursday 13th March 2025 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, some of the cases in the LEAP exercise go back to 2006, so this is already going back a very long way, but I can reassure the noble Lord that that the exercise went back through the book. This is really complicated, as I am sure he understands, but, in summary, the exercise specifically addressed women who reached the state pension age ahead of their husbands. That was not uncommon because, in those days, the retirement age for women was 60 and for men it was 65, so the woman got to the state pension age first. If she did not have enough pension in her own right and her husband reached the state pension age, she could then have inherited more state pension from his contributions. After 2008, that should have been done automatically by the DWP. Earlier, people had to claim, but where the DWP failed to do that automatically, the department has gone back through the entire book and made payments to all those people. That is what the system has been doing.

[Lord Palmer of Childs Hill (LD)]

My Lords, there seems to be errors and more errors—a tower of errors without end. State pension underpayments have also arisen where there are errors in NI records, because of missing home responsibilities protection. The Minister mentioned pensions for women. Can she tell us how much the department has so far paid in arrears to those affected mothers? When does she expect this correction exercise to be completed?

[Baroness Sherlock (Lab)]

That was slightly different: it was about an error in people’s national insurance records. The DWP itself discovered during a fraud and error exercise that there were some historic errors in recording where people should have had home responsibilities protection in their national insurance record, which in turn would have affected their pension record. The Government have now contacted all the people they have identified as potentially missing HRP and invited them to make a claim for those missing periods. HMRC issued over 370,018 letters to potentially affected customers, and there have been approximately 493,813 hits on the GOV.UK HRP online checker. So far, the DWP has received 19,491 cases from HMRC and processed 11,694 of them, paying arrears of £42 million. I hope that answers the noble Lord’s question.

Pension Review: Phase 2

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Wednesday 18th December 2024 Lords Chamber

[Baroness Sherlock (Lab)]

I fully accept that the noble Baroness may not be alone in this place in that declaration of interest. The ombudsman’s review is something to which the Government have already made their response. It was published yesterday, and I repeated a Statement in the House that was made by my right honourable friend the Secretary of State.

As noble Lords will be aware, the Government looked very carefully at the evidence that was provided to and by the ombudsman, and we concluded that while we accept the specific case of maladministration by allowing a 28-month delay in sending out personalised letters to women born in the 1950s, the Government could not accept that that created the impact the ombudsman had described and therefore could not accept the recommendation on injustice and remedy. I am also very aware of the widespread concern among many women who had hoped to retire at 60 and found that they could not, which is a mixture of the decision back in 1995 to equalise the state pension age and the decision of the coalition Government in 2011 to accelerate those changes. That was not a subject of the ombudsman’s review, and nor is it the subject of the pensions review.

[Lord Palmer of Childs Hill (LD)]

My Lords, the Minister talks about the two stages of the pensions review, which is very important. Can she confirm that the modelling by the Government Actuary—and I stress that—shows that the measures in stage 1 of the pensions review will, at best, only slightly improve member outcomes? Those are his words, not mine. Can she give me some reassurance that stage 2 will be given the priority it deserves? Can we get a timescale for when we will get to stage 2? I know the Minister cares about pensioners, and this review is necessary.

[Baroness Sherlock (Lab)]

I thank the noble Lord. We share that; we both care about pensioners. This Government are absolutely committed to making sure that outcomes for pensioners from private pension savings are as good as they can be. Both phases matter. It matters absolutely that we get the pensions market working properly the first time around. The noble Lord will be aware that measures have been announced for the pensions Bill, but there are live consultations on a range of measures that can enhance both growth for the UK and outcomes for savers.

It really matters. We want to end up, as our proposal suggests, with fewer, but better and bigger, pension schemes. All the international evidence suggests that consolidation and scale produce better results for savers. That, in the end, is what will drive private pension incomes. If we can get the market working well, we can try to get people saving as much into it as they need to.

Social Security Advisory Committee: Winter Fuel Payment

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Thursday 14th November 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I thank the noble Baroness for her question. I am sure she is aware that the Secretary of State has replied to the Social Security Advisory Committee and has placed a copy of that on GOV.UK. She has gone through all the points raised by the SSAC and responded to them in detail, so I commend that to the noble Baroness. If noble Lords would like to ask any questions, I am happy to respond to them specifically. The department has a good working relationship with the SSAC. We welcome its observations and comments, and we always listen to the points it makes. It will be no different on this occasion.

The noble Baroness raised questions of housing benefits and costings. Final costings for the changes were certified and published by the OBR at the Autumn Budget and take account of any behavioural responses and the estimated number of people claiming pension credit in the upcoming years. I stress that if more people who are entitled to it claim pension credit, that is a good thing. It means that those people will get approaching £4,000 a year rather than or in addition to the winter fuel payment.

On the question of housing benefit, the judgment was made not to make housing benefit in itself a qualifying benefit, because it is based not only on financial circumstances but the amount of rent. As the noble Baroness will understand only too well, households that get housing benefit can go higher up the income distribution than those that get pension credit. That can be true even if they get the maximum, because of the way earned income is treated. We also have to take account of fairness between those who are renting and those who are paying mortgages. I presume that is why, when the previous Government did cost of living payments, they did not choose housing benefit as a qualifying benefit. I imagine it was for the same reasons.

[Lord Palmer of Childs Hill (LD)]

My Lords, following the Minister’s reply, the Social Security Advisory Committee recommended that the Government consider bringing forward an urgent amendment to the regulations which would, for this year only, very modestly passport those in receipt of the full rate of pensioner housing benefit on to winter fuel payments. It is a very modest request. Will the Government take that advice?

[Baroness Sherlock (Lab)]

My Lords, I think I have answered the point about housing benefit and explained why the Government took the decision we did. However, we are determined to do everything we can, so we are directly contacting approximately 120,000 pensioner households that may be eligible for pension credit, to encourage them to make a claim. We are also writing to all pensioners to make sure they are aware of the changes coming forward and to link them to where they can claim pension credit if they are entitled to it.

State Pension: Age Increase

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Thursday 14th November 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, life expectancy is increasing, but the rate of increase is slowing. Built into the Pensions Act 2014 is a requirement on the Secretary of State periodically to review the state pension age, taking into account life expectancy and a range of other appropriate factors. There have already been two of those reviews. The next one has to happen by March 2029, I think. I have no doubt that the Secretary of State will take account of precisely those matters.

[Lord Palmer of Childs Hill (LD)]

My Lords, does the Minister agree that we do not want a repeat of the WASPI women scandal? We have been here before. If individuals are not properly informed about the change to their state pension age, will the Government consider introducing a clear appeals process or a safety net to ensure that no one is financially disadvantaged due to a lack of information? From past experience, we know that there will be many people who fall through the net, and we need to have an appeals process in place.

[Baroness Sherlock (Lab)]

My Lords, it is crucial that everybody gets to know their state pension age, but the reality is that there are a lot of different ways in which people do that. I already knew that my state pension age was increasing. A lot of that was simply from information in the news and on television. One of the ironies is that, when I was first briefed about this, I was told that the department had written to everybody in that age category. I said that I had no recollection of receiving such a letter, but I was assured that it had happened. Last weekend, I moved house and, when I opened a folder of unfiled papers, what was sitting on the top but a letter dated February 2018 telling me that my state pension age would be 66 and two-thirds. The point is that different people receive information differently. I am of an age where I get most of my information on my phone, from which I am rarely parted, and from news consumption. We have to use every possible means of communicating to make sure that people get the information out there.

Health-related Benefit Claims

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Tuesday 5th November 2024 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, does the Minister believe that the reason for health-related benefits claims is the state of the health service, including people’s access to their GP for a face-to-face appointment? If we do not deal with that, we will not deal with health-related benefits. What are the Government doing to pursue those aims?

[Baroness Sherlock (Lab)]

My Lords, the noble Lord points out another of the contributory factors. A complex web of things brings people to this point. As far as we understand it, a number of contributory factors are driving the rise in health-related benefits. Disability has gone up in prevalence over the last 25 years, including a rise in mental health issues. Also, longer NHS waiting lists are thought to increase claims for benefits before people are treated, because they are waiting longer, and potentially after they are treated, because they have poorer outcomes as a result of problems in the National Health Service.

This Government are absolutely committed to fixing our NHS. We have seen record investments, and the plans that came out in the Budget mean that we are absolutely committed both to engaging directly in supporting the NHS and to tackling some of these problems. As part of “Get Britain Working”, we will have trailblazer areas across England and Wales bringing together health, employment and skills services. In three of those areas, money will go to the NHS to develop evidence on how the health system can prevent ill-health-related economic activity. We are going to sort this.

Pension Credit

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Monday 4th November 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, on that final point, which, obviously, I cannot let go, the poorest pensioners are protected because those on pension credit will still have access to the winter fuel payment.

On the bulk of the noble Baroness’s question, we continue to operate good service levels. Around 500 additional staff have now been brought in to support processing during the recent surge in pension credit claims. Processing times may increase; we have advised customers who apply that it could take nine weeks to process their claims. However, anyone who applies before the deadline of 21 December can have their application backdated, which means not only that they will get winter fuel payments but that they may well get pension credit on top of that.

[Lord Palmer of Childs Hill (LD)]

My Lords, I compliment the Minister on the work being done to make people claim pension credit they should have claimed before, in order to try to make up for the rather strange removal of the winter fuel allowance. Can she tell the House when—if we have not reached this point already—the amount of pension credit that was not being claimed before is going to exceed the amount notionally saved from the winter fuel allowance? If that point has not yet been reached, when will it be reached?

[Baroness Sherlock (Lab)]

My Lords, I was so with the noble Lord for the first 20 seconds—all the way. I am grateful for his congratulations to the department, and I shall take them back to my colleagues, who are doing a brilliant job on this front. We have written to around 12 million pensioners about the change to the winter fuel allowance, so a lot of work has been done out there to encourage people to apply—and it is having an effect. We have seen a 152% increase in pension credit claims received by the DWP in the eight weeks following the announcement on the winter fuel payment compared to the eight weeks before, and that will be updated towards the end of the month.

On the costs at the end, obviously, a lot of these claims have to be processed and we will not know for some time down the road. However, it is very clear that the DWP wants everybody who is eligible to do so to claim pension credit. As I have said before, if we end up with more people claiming the money to which they are entitled, that is a good thing. Pensioners deserve the money to which they are entitled.

Child Poverty: Benefit Cap

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Tuesday 22nd October 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the Secretary of State is currently in the process of reviewing the levels of social security benefits that are uprated annually, and a statement will be made in due course. When the benefit cap was introduced by the coalition Government in 2013, the legislation required that it be reviewed every five years. The next review is due by November 2027. However, I hear my noble friend’s comments about the challenges facing many families in poverty. The child poverty task force, which is getting to work already, is determined to use all available levers to drive forward short-term and long-term actions across government to reduce child poverty. It is taking evidence from families, activists, local government and people across the country, and I will make sure that her comments are conveyed to it.

[Lord Palmer of Childs Hill (LD)]

My Lords, I welcome the Minister’s comments about the child poverty task force, but it is an urgent question and this idea is putting things into the long grass. We want to hear from the Minister how quickly this group will report and produce some action to stop children living in poverty in this country.

[Baroness Sherlock (Lab)]

My Lords, as I said, the child poverty task force has already started urgent work to address this, and it will publish a child poverty strategy in the spring. Given that the Government have not been in place for very long, looking across the whole of government to produce a strategy by spring reflects a real sense of urgency.

Pension Credit

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Monday 9th September 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the pressures were such that some of the money had to be found in this financial year, because a series of expenditure gaps came to light in this financial year. We have already cut other capital programmes, and departments are absorbing pressures. This was a cut that could be made in-year, so it was added to it.

I am sorry to say that this is not the last difficult decision this Government are going to be forced to make, but we will try to target things appropriately. I think most Members of the House would agree that something like a winter fuel payment should not be going to the roughly quarter of pensioners who have a million pounds in assets; it should not be going to those who can manage. What we should be doing is trying to target the money at those who need it most, and that is what we set out to do.

[Lord Palmer of Childs Hill (LD)]

My Lords, the Minister has talked about encouraging people who are entitled to pension credit to claim it. Does she agree that they do not claim it for reasons of pride, or perhaps because they are unable to cope with the system? How are the Government going to encourage this large number of people to claim pension credit, because if they do not, they will not have the winter fuel allowance? I have doubts that people will actually claim it to any great degree.

[Baroness Sherlock (Lab)]

The noble Lord makes an important point and I am grateful to him for doing so. Certainly, a significant number of pensioners do claim pension credit—1.4 million have managed to claim and do get it as a result. So, our job is to get the next surge of people to do that. DWP has a big campaign on: we had a week of action last week, and we work with partners such as charities and local authorities to go out and promote the campaign. From next week, we are running a national marketing campaign on a range of channels, including national print and radio. We will be targeting people of pension age but also friends and family, who can encourage them to apply. It can be tough, but sometimes we need to make people understand that there is lots of help out there. They can call the department free of charge and get charities to help them. If people are really stuck, we have a DWP home visiting team, which will visit the vulnerable and help them make a claim. So I urge all noble Lords: by all means let us have the fight in here, but please put the word out and let us get people to claim what they are entitled to.

European Social Charter

Debate between Baroness Sherlock and Lord Palmer of Childs Hill

Tuesday 3rd September 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, in a sense we have indicated our support for the contents of the revised charter by signing it. Deciding to ratify it is a decision to be bound by its provisions, so it makes sense to be able even to consider ratification only at the point at which the Government have been able to do an assessment and conclude that domestic law and practice will be compliant with it.

[Lord Palmer of Childs Hill (LD)]

My Lords, as I understand the Minister’s reply, the Government want to ratify the treaty only when and if there are adequate resources. On the basis of adequate resources, can she say what steps her department has taken to maximise the take up of pension credit by all those entitled to it?

[Baroness Sherlock (Lab)]

Nice try. Just to clarify, I should say that I was not talking about resources in terms of ratification. To ratify a treaty is to agree to be bound by its provisions. If UK domestic law and practice will not meet those provisions, the UK cannot ratify a treaty only to find that it would be instantly in breach of it. That is what this is about; it is not about resources. However, on the question of pension credit, we are in the middle of a week of action in which the Department for Work and Pensions is working with local authorities and other partners to encourage pensioners across the country to apply for pension credit. We are developing new plans to go further through the winter. We want everybody who is entitled to it to get pension credit, and will be out there working to make sure that they do.