Pension Schemes Bill

Baroness Stedman-Scott Excerpts

2nd reading
Thursday 18th December 2025 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, I too look forward to the maiden speech of the noble Baroness, Lady White. I have every confidence that she will make a great contribution, including to the work of the House generally. Having had some interface with her at the DWP, I am very confident that will happen.

Although the Bill is not perfect, I hope the Minister will take comfort from the broad cross-party consensus that exists around many of its core measures. Across your Lordships’ House, we share a common ambition: having a pensions system that delivers strong returns for those it serves.

In 2010, we inherited from the previous Labour Government a private pensions system that was not fit for purpose. The shift from defined benefit to defined contribution had left millions behind and, in 2011, just 42% of people were saving into a workplace pension. The cornerstone of reform was auto-enrolment—a Conservative innovation and an undeniable success. Today, around 88% of eligible employees are saving for retirement, with most opt-outs made on the basis of sound financial advice.

Workers deserve dignity in retirement, not merely a safety net. That is why, before the last election, the Government rightly focused on two enduring challenges: value for money and pensions adequacy.

Let me begin by acknowledging what the Bill gets right. We welcome progress on the pensions dashboard, which will help savers access their information more easily and plan for retirement. We also support the Bill’s emphasis on consolidation, including larger pension funds, the consolidation of the Local Government Pension Scheme, and the long-overdue merging of small, stranded pots—all of which have the potential to improve efficiency and value for money, provided that risks are properly managed. Finally, we welcome the humane and necessary measures to improve access to pensions for those facing terminal illness. Taken together, these provisions represent steps in the right direction.

However, while there is much to commend, there are also areas where we believe the Bill falls short, and in ways that matter deeply to the millions depending on it. The most striking omission in the Bill is the absence of any meaningful progress on pension adequacy. The uncomfortable truth is that too many people are simply not saving enough to secure a decent standard of living in retirement: a situation made all the more difficult in the current economic circumstances.

Auto-enrolment was never intended to be the finished article. It was a foundation, not the building itself. Yet the Bill proceeds as though the task were complete. The central question of whether current savings levels are sufficient is not confronted but deferred: pushed into the second stage of the review. This is not reform: it is a holding space, in which difficult but necessary decisions risk being postponed rather than resolved.

Adequacy should have been the organising principle of this legislation. Instead, it has been quietly parked for another day. In its place, the Government have focused on taxing pension contributions, increasing the cost of employment, and layering additional regulation on to the terms and conditions of work. We are regulating, taxing and constraining the very mechanisms through which retirement savings are generated, yet we have failed to address the most basic and consequential question of all: are people saving enough to retire with security and dignity?

A further missed opportunity is the failure to support the self-employed with new and innovative ways to save affordably for their retirement—more than 4 million people who drive our economy, create jobs and take risks, yet too often face retirement with no provision at all. Only around one in five self-employed workers earning over £10,000 a year currently saves into a pension. This is not a marginal problem; it is a structural gap in our pensions system. We need practical and pioneering solutions to support this growing group, and the Bill should have set that direction. We have spoken directly to the self-employed in preparation for this legislation, and in Committee we stand ready to assist the Minister by bringing that engagement and evidence to bear.

Our wider engagement also brought into sharper focus the Bill’s treatment of public sector pensions. This Bill is, in our view, decidedly LGPS-light. We will therefore table amendments to address that omission, ensuring that the scheme operates with greater clarity, flexibility and accountability. At the heart of our concern is the need for a more transparent, simpler and reformed approach to reviewing employer contribution rates for local authorities. This is not about loosening discipline or weakening the scheme. It is about prudent financial management and giving councils the tools they need to govern responsibly. This is what local authorities deserve and it is good financial governance.

The Bill shows no enthusiasm for addressing excessive prudence and the record surpluses within the Local Government Pension Scheme. We are not naive enough to suggest that the LGPS surpluses can be extracted or treated in the same way as those of private defined benefit schemes. But, under the Chancellor’s revised fiscal rules, those surpluses are now treated as assets offsetting public debt. That may be fiscally convenient but it represents a missed opportunity to enhance councils’ resilience. In appropriate circumstances, those surpluses could—and should—be used to support reductions in employer contribution rates. However, too often, overly cautious actuarial methodologies, excessive prudence and a lack of transparency have locked councils into contribution rates that are simply too high.

Proportionality and openness in how assumptions are set and decisions are reached are pivotal. Without transparency, those assumptions cannot be properly challenged through due diligence, and Section 151 officers cannot fully discharge their statutory duties. We must therefore ensure that interim reviews of employer contributions are more accessible, transparent and accountable, through clearer statutory trigger conditions, published policies, improved actuarial transparency and strengthened statutory guidance.

Kensington and Chelsea demonstrated precisely that approach in the aftermath of the Grenfell tragedy. Yet, across the country, councils are still forced into an exhausting and uncertain process to navigate the existing regulatory framework simply to secure interim contribution reductions after a formal valuation. We look forward to engaging constructively with the Government to ensure that councils are properly supported in delivering services while fully meeting their LGPS obligations.

Finally, I turn to what I regard as the most troubling element of the Bill: the proposed reserve power to mandate pension fund investment strategies within master trusts and group personal pension schemes used for automatic enrolment. Mandation is not a neutral tool; it is the quiet nationalisation of pension investment strategy. It is a fundamental shift in who ultimately controls investment decisions. Automatic enrolment has succeeded because it is trusted. Mandation threatens that trust: automatic enrolment is trusted by employers, by industry, and above all by millions of ordinary savers who have neither the time nor the confidence to manage complex financial decisions themselves.

It is therefore deeply concerning that this power is targeted specifically at automatic enrolment default funds. These are the schemes used disproportionately by those with the least means and the least financial confidence: the very people who rely most heavily on the integrity and independence of the system we have built over decades.

This is where the injustice bites. Those with the fewest means and the least financial confidence are the ones Labour’s mandation would trap. The savviest can opt out; the poorest get locked in. That is the injustice of mandation. Those savers need our protection, not a situation in which their pension outcomes become indirectly shaped by ministerial preferences, however well intentioned. Conservatives built automatic enrolment; Labour now stands a chance of threatening it.

We built automatic enrolment on a simple settlement: the state sets the framework, but trustees make the investment decisions. The Bill risks blurring that line. At stake here is trustee independence and fiduciary duty, principles that sit at the very heart of pensions policy. Trustees are bound, both legally and morally, to act in the best financial interests of their beneficiaries. Pension schemes exist to serve savers, not to serve the shifting political priorities of the day.

In this context, I am reminded of the warning offered by the respected pensions expert Tom McPhail, who invoked Chekhov’s famous dramatic device: the gun on the wall. If the gun is hung on the backdrop of the stage in the first act, it will be fired by the third. Once a Government arm themselves with a power, no matter how benignly it is presented, history suggests that it will eventually be used. If the Government do not intend to use the power, why is it in the Bill?

Rather than relying on the logic of “mandation as a backstop”, I urge the Minister and her team to step back and address the underlying reasons why pension funds are not investing more in the UK in the first place. Low domestic investment is not simply a collective action problem, as the Government suggest. It reflects real structural barriers, and the Government should compile the relevant evidence and report back on how those obstacles might be removed.

Will the Minister undertake to do this? There are better and far less constitutionally troubling ways to unlock long-term investment. I offer her just one example. Solvency rules continue to constrain insurers from investing in productive UK assets that offer stable long-term returns. Reforming those outdated rules could, according to Aviva, unlock billions of pounds over the next decade. That is how we should be driving growth, by removing barriers to investment and not by inserting the state into decisions that properly belong to independent trustees acting solely in the interest of savers. It is therefore striking that the Government have chosen to expend so much political capital on a mandation policy that commands little support beyond the DWP and lacks a wider consensus across the industry. Can the Government provide assurances that savers in auto-enrolment pension schemes will not subsequently discover that their pension providers have been instructed to invest in specific entities such as Thames Water?

I close by reaffirming our commitment to work constructively with the Government. Stability and confidence in the pensions market are paramount. It is in that spirit that we approach this Bill. Where improvements can be made, we will table amendments. We will engage in good faith to ensure that the detail is right and that the framework ultimately serves savers, schemes and the wider economy. We broadly support the direction of travel that the Government are pursuing. However, as today’s debate has made clear, there remain important questions around the detail, the intent of forthcoming regulations and what has been omitted from the Bill.

When closing today’s debate, my noble friend Lord Younger of Leckie will expand on these points, set out further concerns and put several direct questions to the Minister. We hope that the Government will reflect carefully on those issues as the Bill progresses. I look forward to working with the Minister in the weeks and months ahead and to continuing this constructive, robust dialogue as we seek to strengthen the legislation.

Young People not in Work, Education or Training

Baroness Stedman-Scott Excerpts

Monday 8th December 2025 Lords Chamber

[Baroness Smith of Malvern (Lab)]

I am sure that the noble Lord will therefore welcome the announcement that we also made today of fully funding small and medium-sized businesses to take on apprentices. These are the businesses that are more likely to take on young people, including disadvantaged young people, and they are being supported by this Government. That will help to turn around the 40% decline in young people starting apprenticeships over the past 10 years.

[Baroness Stedman-Scott (Con)]

My Lords, does the Minister accept that the most effective way to reduce the number of young people who are NEET is to secure stronger economic growth, giving employers the confidence, incentive and capacity to hire? Furthermore, under Labour’s proposed new youth guarantee, which is very welcome, how will the Government ensure that young people are matched to sectors for which they are genuinely suited, so that employers are not left exasperated by placements that break down almost immediately due to poor alignment?

[Baroness Smith of Malvern (Lab)]

I am very glad to hear the noble Baroness’s recognition of the importance of the youth guarantee announcements that we have been making today. We also announced the first six areas in which we will work with intermediaries, and directly with employers, to find those placements. An important element of the job guarantee will be the additional support that we can place around young people, who, by virtue of having been unemployed for 18 months, will undoubtedly need that additional support, including identifying where their talents lie so that they can then be used to the max.

Carer’s Allowance: Overpayments

Baroness Stedman-Scott Excerpts

Tuesday 2nd December 2025 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, if I could give the noble Lord a precise date on which all the computer systems and all the systems will have changed, I would be glad to do it. Let me put this in context: we estimate that about 15% of people who get a carer’s allowance payment are also in paid work and 90% of people who reported earnings did so without difficulty, so we are talking about a very important but specific subset of people, most of whom had fluctuating earnings, which this is designed to address. The biggest challenge in the short term is to make sure that we have clear guidance, we communicate with people, they know what to tell us and we are able to manage that. There is a big prize at the end as we modernise all DWP systems to get this right. A lot of the improvements will be made by really old-fashioned analogue systems—by making sure that we have the right information, communicate well with carers and make it as easy as possible to get the information. Those recommendations may not be exciting, but they actually make a lot of difference.

[Baroness Stedman-Scott (Con)]

My Lords, given that some 185,000 unpaid carers will now have their carer’s allowance overpayments reviewed following the independent report, will the Minister set out how these carers will be notified of the reassessment process and what steps the Government will take to ensure that communications are clear, timely and accessible?

[Baroness Sherlock (Lab)]

I am grateful to the noble Baroness for her important question. Our data suggests that there are around 212,000 overpayment cases in the relevant period, between 2015 and September 2025. We will set out the details in the new year, but we plan to review every case to understand where mistakes were made. Cases that were affected specifically by our unclear guidance will have their overpayment reassessed. If the review confirms that the money was not due, we will make an appropriate refund or reduction. I should say that if it were to result in a higher overpayment, we will not ask anyone for additional money—I just want to reassure anyone who is listening. If the review confirms that the person still owes money, we will give the usual support to make sure that it can be repaid appropriately, because it is not to do with this question.

I want to reassure those who are listening that nobody needs to get in touch with DWP at the moment. Our intention is to work through the cases. We have data for most of these cases and we will contact people proactively. We will set out in the new year how that process will work and what we will do in any remaining cases, but no one needs to get in touch. Please do not phone us at the moment.

Equality Act 2010: Supreme Court Judgment

Baroness Stedman-Scott Excerpts

Thursday 27th November 2025 Lords Chamber

[Baroness Brown of Silvertown (Lab)]

My Lords—

[Baroness Stedman-Scott (Con)]

My Lords—

[Baroness Hayter of Kentish Town (Lab)]

My Lords—

--- Later in debate ---

[Baroness Smith of Malvern (Lab)]

I thank my noble friend not only for that question but for her history of work in the area she outlined. As I suggested earlier, there is no benefit to anybody, particularly those who most need the clarity that application of the code can bring—for example, to lawfully provide single-sex spaces for women—to sidetrack the correct and careful process the Government are following. The Government are following the process for laying the code in Parliament set out in the Equality Act 2006. The Minister for Women and Equalities is considering the EHRC’s updated draft code, as I have already outlined, and if the decision is taken to approve it, she will lay it before both Houses over a 40-day period, as per the process set out in Section 14 of the Equality Act 2006.

[Baroness Stedman-Scott (Con)]

My Lords, on 5 November the Minister was asked this by the noble Lord, Lord Pannick:

“Does the Minister agree that, today, it is the obligation of all persons, whether private or public, to comply with the judgment of the Supreme Court, whether they agree with it or not, and without waiting for guidance?”.—[Official Report, 5/11/25; col. 1926.]


She helpfully responded by saying, “I do agree”, so the Government have said they support the Supreme Court’s ruling, yet the EHRC’s updated guidance reflecting that ruling has sat with Ministers for almost three months. Can I push the Minister a little more to say when it will be published? Every week of delay fuels confusion over a legally settled issue and leaves service providers without the clarity they need. Will it be one month, three months, six months; or, even better, will it be very soon?

[Baroness Smith of Malvern (Lab)]

It will be at the point at which we have fulfilled the process that I have outlined to the House today. It will be at the point at which we can all be confident that what we provide in clarifying the application of the law will support providers in delivering for all those with protected characteristics, which is of course the role of the code. But the noble Baroness is right: I was clear in response to the noble Lord, Lord Pannick, about the clarity of the law and the requirement for all to be following it at this point. That is the position taken by the Prime Minister in the last week, and that is what everybody should be doing.

Jobs Market

Baroness Stedman-Scott Excerpts

Thursday 13th November 2025 Lords Chamber

[Baroness Sherlock (Lab)]

I am delighted to welcome that. It was a really exciting announcement, and the Government are committed to investing in new high-quality, highly skilled jobs. We want to be a country that brings inward investment in, trains people up, gets them into good jobs and keeps them there. That is a good example.

[Baroness Stedman-Scott (Con)]

My Lords, we are losing around 5,000 people a day from the labour market on to benefits. What is the department’s latest projection for the number of people expected to flow on to out-of-work and health-related benefits over the next 12 to 24 months? What are the main drivers behind that projection? Will the Government publish the underlying assumptions of the quarterly progress data so that your Lordships can track whether the interventions that the noble Baroness refers to are working?

[Baroness Sherlock (Lab)]

My Lords, we have made clear what our ambitions are with Get Britain Working and that we will have metrics and publish regular data on them. One thing I want to take the opportunity to say at the Dispatch Box is that I have seen headlines this week suggesting that large numbers of people are flowing on to universal credit, as though this was a reason they were flowing out of work. I know the noble Baroness knows this and she is far too smart to raise it at the Dispatch Box, but I remind the House that the key reason for that is that the previous Government decided to close the legacy benefits and move anyone on to universal credit. For example, 800,000 people have left old benefits and made a claim to universal credit. I would encourage noble Lords, if they see those kinds of headlines, to think twice.

Youth Unemployment

Baroness Stedman-Scott Excerpts

Thursday 11th September 2025 Lords Chamber

[Baroness Sherlock (Lab)]

I have just talked about what happens with young people who are hidden NEETs, as he describes. Let me turn to those who are NEET who we do know about—for example, those on sickness or disability benefits. The Government are determined to transform that. The noble Lord will have seen our Pathways to Work Green Paper, in which we describe wanting to create a new transition phase for young people from 18 to 21, such that, if they are looking to go on to sickness or disability benefits, we will treat them in a special way. We will support them from the beginning and give them the kind of help that they need. A lot of help is already out there; there is help for people with mental health and physical health issues. The bottom line is that almost everybody should be able to get a job. A small minority will not, but most will. Our job is to help them.

[Baroness Stedman-Scott (Con)]

My Lords, KPMG and the Recruitment and Employment Confederation have launched their August 2025 jobs report. Permanent placements fell for the 17th consecutive month. The number of candidates looking for work has increased, fuelled by redundancies, fewer job openings and economic business threats. Merck has pulled the plug on a £1 billion research site, and the prospect of the Employment Rights Bill and its impact is sending economic shivers down the spines of business. At the end of the list, as the Minister has said, are young people who are struggling to enter the labour market for the first time. I am grateful for the explanation about the programmes that the Government are undertaking, but can the Minister tell us what work they are doing with employers—the only ones that can create jobs—to incentivise them to help young people and integrate them into their workforce?

[Baroness Sherlock (Lab)]

My Lords, the noble Baroness commented on vacancies. She is very aware, as I am, of the facts of the economy and will know that vacancies have been declining steadily since spring 2022, when they reached a historic high. The decline in vacancies is a continuation of longer-term trends, but the noble Baroness is absolutely right: our job is to make sure that we give young people the chance to do this. She will know, for example, that employers who take on a young person under 21 or an apprentice under 25 are given complete relief on basic national insurance class 1 contributions until they hit £50,000. That makes a real difference. Above all, what will make a difference, if we want employers to take on young people, is to make them worth having. We have to skill them up, and give them the confidence to get out there and the ability to work in the workplace. That is what we are investing in now.

Sickness Benefits: In-person Interviews

Baroness Stedman-Scott Excerpts

Wednesday 10th September 2025 Lords Chamber

[Baroness Sherlock (Lab)]

The noble Baroness is absolutely right: there is no doubt that there has been a growth in people claiming support and not being in work as a result of mental health conditions, but also because of other conditions as well. There are other clear patterns, such as musculoskeletal conditions and a range of other things. That is partly about changes in our population and about trends in society.

Our job is to invest in trying to tackle those early enough. One thing that the Government have done is invest money in putting mental health support into schools. In the case of young people, let us tackle those questions early. We consulted in the Green Paper about what we will do in future, but we have announced that we are going to have a youth guarantee. We have a Question tomorrow on youth unemployment. For those who are aged 18 to 21 and are perhaps heading for sickness and disability benefits, let us find a transition phase for them where we find out what the challenges are, figure out how we can support them and then, hopefully, get them on to a path. Sadly, some people will never be able to work, but, for many people, the evidence is that good work is good for their physical and mental health—we just need to help them get into it.

[Baroness Stedman-Scott (Con)]

My Lords, can the Minister set out how increasing in-person assessments, which we on these Benches fully support, will help reduce fraud and error, thus protecting taxpayers’ money, while ensuring another thing that we on these Benches support—that those who can work, do, and those who cannot, get the support they need? Will the Minister encourage her colleagues and the Secretary of State at the DWP to take up the serious and mature offer made by the leader of the Opposition to work with the Government in order to help them cut and reduce benefits?

Child Poverty Strategy

Baroness Stedman-Scott Excerpts

Wednesday 10th September 2025 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, if I can persuade the Cross Benches and the Bishops to raise it, I will have a full house. I completely understand the wider point that my noble friend makes. There is an issue in this country for larger families who are facing poverty. However, perhaps I can reassure him by pointing out the impact of some of the things we are doing: for example, expanding free school meals to all children in households. Those meals go to each of the children in that household. We have tripled investment in breakfast clubs to over £30 million, which is worth another £450 to parents. The Healthy Start scheme supports over 356,000 children. We are extending the household support fund, bringing in a new crisis and resilience fund. All these things help families, and bigger families most of all. I hope that reassures him.

[Baroness Stedman-Scott (Con)]

My Lords, I am not going to mention the two-child benefit cap. Can I say how pleased I am to see the Minister in her place? As always, I look forward to working with her. Can she reassure the House that the child poverty strategy will avoid a narrow focus on short-term income measures and instead promote long-term opportunity, resilience and self-reliance for families?

[Baroness Sherlock (Lab)]

I thank the noble Baroness for her kind words. I am very grateful and I agree with her very much indeed on that—I am very glad to be here as well.

She makes a really important point. One of the reasons we have taken our time and been thoughtful about the child poverty strategy is that it cannot ever be just about income transfers. The strategy will be looking across four key themes. Increasing incomes is one of them, but so is reducing essential costs, increasing financial resilience for families and looking at better local support, especially in the early years. We must take action across all those if we are to find a way to tackle the scourge of child poverty in this country in a way that builds in structural improvements for the future. She makes an important point.

Universal Credit Bill

Baroness Stedman-Scott Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 22nd July 2025 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, I thank the Minister for her introduction to the Bill and for the ability to speak openly to her in the lead-up to today. I completely agree with the Minister that benefits should be easy to access for those who are in genuine need and difficult—even impossible—to access for those who are not in need.

I warmly welcome my noble friend Lady Shawcross-Wolfson to your Lordships’ House and congratulate her on her maiden speech. I have no doubt that my noble friend will make a significant contribution to the work of this House. The strength of that contribution was clearly understood today. My noble friend and I spent many interesting times in the DWP debating the merits of changes to the Child Maintenance Service with our own other noble friend Lady Coffey.

I wish the noble Baroness, Lady Bryan of Partick, well as she leaves your Lordships’ House. I thank her for her service and can confirm 100% that the noble Baroness is no fraud.

I want to focus your Lordships’ minds on the realities facing millions in this country and on the striking absence of ambition in this Bill. I will summarise the issues I believe the Government should address and attempt to solve, and where they ought to have begun before embarking on this legislation. I have always tried to be balanced and measured in my approach to this subject matter, and today will be no exception. I want to discuss the facts, which are important. We should be straightforward about them because, in discussing and debating them, we might get some solutions that benefit the people we exist to serve.

First, I was surprised that there is nothing in the Bill that addresses the deep-rooted challenge of long-term benefit reliance. People have always depended on the state when they see no other path forward. I was delighted that my heart was beating in concert with that of the noble Lord, Lord Liddell, when he talked about it being outrageous that people should get more on benefits than they would if they went to work. There are people who say, “Why should I work when I can get this?” The other day I was with somebody who works goodness knows how many hours a week. He told me that his friend, who is on benefits, was on Brighton beach. I suppose that is legit. When she went for a benefit assessment with her doctor, she used to put thick mascara around her eyes and Vicks underneath to make herself cry. Well, it worked. We should not have those sorts of things.

There is nothing in the Bill for those who have tried and failed; for whom interventions and standardised work programmes have never worked. Some people have been on every government programme that has ever been devised and delivered, but, to our shame, they still remain out of work. In one area of the country, they call these people their “beached population”, because they are completely held out of work by various conditions, or simply a lack of opportunity.

The right reverend Prelate the Bishop of Newcastle made a very good point that we cannot standardise things. One size does not fit all, and having flexibility in the service we offer people is going to be really important. I note the points made by the Minister on PIP assessments. I congratulate her on the commitment to do them face to face. The only reason that face-to-face assessments were stopped was Covid, and I am glad that they are coming back.

We must do better, especially for those living with disabilities and battling severe conditions every day. I recognise the Government’s progress on the Conservative principle of the right to try and welcome recent investments in skills, but without real, personalised, wraparound support, these efforts will continue to fall short for some people who need them. I have had loads of emails, as I am sure other noble Lords have, from people concerned about the impact on disabled people. I completely agree with the noble Baroness, Lady Grey-Thompson, that the media have not helped one little bit in the way that they have frightened people into believing that certain things will happen, when maybe they will not.

Why can we not offer real choices and a sense of purpose to those who have never truly had one—a point well made by my noble friend Lady Browning. Where is the choice for the choiceless? I thought that the noble Baroness, Lady Bennett, had pinched my speech, because we were sharing those words, so we are at one on that. I am very happy to confirm that the family the noble Baroness told us about should get the help that they really do deserve.

Secondly, our labour market is faltering. The most recent figures show that payrolled employees have fallen by 0.6% on the year, vacancies are down by 63,000 in the last quarter and the universal credit claimant count rose again in June to 1.743 million—up on both the month and the year. Yet this Bill offers no road map or plan to reverse the trend.

The West Midlands and London, two of the most populous and diverse economic regions, have experienced some of the weakest labour market recoveries. The constituencies with the highest universal credit claimant rates dominate the top of the list. This is no coincidence. The data reveals a stark truth: high claimant rates correlate directly with underperforming local labour markets. Jobs created are either out of reach or out of sync with the people who need them most. Nothing in the Bill seeks to address this reality. Where is the effort to connect talent to opportunity? Where is the connection for the unconnected?

We also know that adult education and skills training are the key to unlocking potential but, for too many, those doors remain shut. Whether it is basic maths and English or technical qualifications, acquiring skills later in life is profoundly difficult. Even when the financial support is there, awareness is lacking. Claimants are struggling to find tailored practical pathways that fit around the daily grind. Nothing in the Bill seeks to address this reality. Where are the accessible education opportunities for those who need them most? Where are the education opportunities for the forgotten?

In my 32 years of helping people into work, I—like all noble Lords—have seen the battles people face, the demons behind closed doors and the slow grinding effort required to turn lives around. Although the Government can do a lot, they cannot do it alone, and neither should they. Civil society must meet the challenge with urgency, and very often they are the best people to engage with the people we are talking about and trying to help this evening. What we need is not another scheme; we need belief and commitment. We need to support people who walk life’s tightrope every day, to keep them in work—not just for their finances but for their sense of purpose. Nothing in the Bill seeks to address this reality. Where is the direction for those who need it most? Where is the hope for the hopeless?

Nowhere is this more critical than with our young people, especially those who are NEET. This is a group that I and others in this House have worked with very closely, and I am sure we all care deeply about it. Today, over 800,000 young people in the UK fall into this category, and that should be a shock to us all. It should stir us into action—a point well made by the noble Lord, Lord Rook, who mentioned one of my favourite organisations: the Salvation Army. It was William Booth who set up the first labour exchange; the Government nicked the idea, and today we have Jobcentre Plus. Behind that number are real lives—real young people who were told to work hard, go to school and go to university. They did, but they now find that promise broken. How will the Government stop young people becoming NEET in the first place?

Graduate jobs are also vanishing as AI and automation reshape the economy. Up to one-third of traditional graduate roles are expected to disappear. These young people are not lacking in ambition; they are simply not being met with opportunity. The consequences are severe: studies show that time spent NEET leads to worse mental and physical health and a greater likelihood of unemployment or poor-quality work for years to come.

Consider the broader economic picture regarding inactivity. The UK inactivity rate for working-age adults is now 21%. Some 37,000 working days were lost to labour disputes in May alone. We face a softening labour market, falling payroll numbers and growing economic disengagement. At the moment, the Bill does nothing to respond to this. My noble friend Lord Elliott made the point that it is only employers who create jobs. Nobody else does that. You cannot buy jobs; it is only employers who create them. We need to work with employers to make sure that those jobs are created. Even I cannot offer the Minister the offer that my noble friend made, so if I were her I would grab it quickly. Meanwhile, we are told that the Bill delivers value, but the Institute for Fiscal Studies has shown that there are no net savings—yet we still plan to spend £2.2 billion immediately. Where is the fiscal prudence in that?

Hanging over all of this, our welfare bill is forecast to exceed £100 billion by the end of this Parliament. Our national debt, enormous in size, is even more concerning in composition—much of it inflation linked, meaning that prices rise directly and raise the cost of our repayments. This is a dangerous fiscal position. As my noble friend Lady Shawcross-Wolfson said, we cannot borrow, and we cannot borrow our way to opportunity. We need growth and reform and, above everything else, people in work. We will not reduce the bill until we reduce the dependency; that is the fundamental truth at the heart of this debate. We must win the argument that an ever-expanding welfare budget is not an act of kindness—it is a form of cruelty. It traps people, robs them of dignity and hollows out society’s productivity.

The Government, through the NICs Act—I know that it is a sore subject—have taxed work at the expense of people and of what employers are able, or now not able, to do. We need a new vision, one rooted in belief, backed by action and committed to the conviction that everyone deserves the chance to thrive through work. Many may ask, “What does that matter to me?” The answer lies in the long-term health and balance of our economy and of the people impacted. We risk drifting towards a situation where the welfare state outpaces the economy that sustains it—a point made by the noble Lord, Lord Palmer of Childs Hill. A fair and sustainable system depends on a strong workforce and a thriving labour market.

Britain needs people like us who will speak plainly about the scale of the challenge, and many in this Chamber are doing that. Your Lordships’ House knows me well, and I will continue to speak for the voiceless, the choiceless, the hopeless and the workless, and I know that noble Lords will all join me in that. I will continue to challenge the silence in this Bill and continue to fight with noble Lords for a future where work is not only possible but purposeful.

Welfare Reform

Baroness Stedman-Scott Excerpts

Wednesday 2nd July 2025 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, I apologise for the repetition, but for 32 years I dedicated my working life to helping people into work, not just by finding them jobs but by opening their eyes to the opportunity, purpose and dignity that meaningful employment brings. I do not rise today to lecture the Minister on the challenges that her department faces, nor do I believe that it serves this House to relay political refrains about the past 14 years, which do little to address the pressing realities we face.

We all recognise the scale of the task ahead, which is why yesterday’s events were so concerning. In response to widespread unease across Parliament, key elements of the Bill were withdrawn. The result is a significantly weakened piece of legislation that now faces serious questions about its purpose, scope and impact. Even with those changes, more than 40 Labour MPs felt compelled to vote against it. That should give us all cause for concern and cause to pause. It reflects not just concern with the process but discomfort with the overall direction.

I genuinely do not envy the Minister. Ministers were asked to defend proposals that have since been fundamentally altered. In the process, the Government have not only damaged their credibility but opened a £4.5 billion hole in their fiscal plans.

These Benches are clear: urgent welfare reform is necessary, but it must be long-term, evidence-led and considered. Reforming PIP or any other benefit should never be reduced to short-term savings driven by arbitrary fiscal targets. We were told that the Bill would reform personal independence payments, but this approach to welfare has been crude and alarmingly hasty. Both the Institute for Fiscal Studies and the Resolution Foundation confirm that the revised proposals will deliver no net savings this decade. This is not just a missed opportunity but a collapse of any clear policy.

Welfare is a vital lifeline for people facing illness, disability or disadvantage. Reform must focus on strengthening this support, securing long-term financial sustainability and maintaining public confidence. This starts with asking the right questions. Is the current system sustainable? No. Are eligibility criteria fair and effective? No. Why are 3,000 people entering incapacity-related benefits each day? How do our costs compare internationally and are those differences justified? How do we strike the right balance between compassion and cost? These are not questions for headlines or quick fixes; they are serious questions about complex and long-term governance, requiring thoughtful cross-party collaboration.

This also highlights the limits of top-down approaches. Tackling entrenched unemployment, or an ever-increasing PIP bill, requires more than a new set of policies; it requires moral leadership, cultural awareness and deep community engagement. If we are to tackle the welfare challenge, policy must be person-centred, culturally intelligent and grounded in the lived experience of the communities it seeks to serve. Real fiscal gains come from reform: a smarter, outcome-focused approach that helps people to move into work. That is how we reduce the welfare bill: not by crudely cutting support but by reducing the need for it, while protecting those with serious health conditions.

I urge Ministers to take stock. Do not confuse speed with strategy. Do not mistake cuts—much needed as they are—for reform. Go back, reflect, consult widely and return to Parliament with a plan that meets the scale of the challenge, with the care and responsibility it demands.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the noble Baroness, Lady Stedman-Scott, for introducing questions on the Statement. She quite rightly talks about missed opportunities of not only the current Government but the previous Government.

Welfare provision is a broken system. We should not proceed until we hear from the Timms review. I hope the Minister will comment on that. There is no doubt that we are abandoning valuable members of our society. People within the leadership of the Labour Party who described PIP as “pocket money” should know better. We are enshrining in law that we have a system that all disabled people are equal, but some are more equal than others—this is an early proclamation by the pigs who control government in Animal Farm; the phrase is a comment on the hypocrisy of Governments.

Let us be clear: the proposals are a leap in the dark and not even the Ministers know where they are going to land. The proposals are ill thought-out, rushed and continually amended. As days, weeks and months pass, we will see the unedifying and unintended consequences.

The access to work scheme for those with a disability needs to be urgently fixed. Could the Minister tell the House what consultations have been made with carers about this legislation?

The Universal Credit and Personal Independence Payment Bill sends a message to disabled children that those who have gone down the path of their disability degenerating to the extent that they can claim PIP will be over the line, but those youngsters who know they have a degenerative condition can look forward to no PIP under the Bill.

PIP is a passport to other levels of support, such as blue badges or railcards, which give people the opportunity of getting out and living their best lives. Perhaps the most passported benefit from PIP is the carer’s allowance. On these Benches, we have grave concerns about the Bill’s impact on those families who will no longer benefit from carer’s allowances. They will be robbed of up to £12,000 a year.

We recognise the benefit system is broken and needs resolving, but it needs to be co-designed with disabled groups and carers groups to make sure that we get it right for our people.

The root of the problem, sadly, is the NHS, which is where a lot of these problems start. We really need to sort out the National Health Service and social care. They are part of the problem and the solution. This so-called reform sticks a piece of sticking plaster over it, pats it on the head and says, “Now leave it to Auntie”. Sadly, Auntie has not a clue.