Reducing Parental Conflict

Viscount Younger of Leckie Excerpts

Thursday 20th July 2023 Lords Chamber

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

My Lords, since its announcement, we have allocated £77 million to the reducing parental conflict programme, 151 local authorities have been directly supported, and the programme has developed evidence and approaches to relationship support that benefit families. We are committed to a cross-government approach to provide a strong, early help offer to families, and we continue integration into local services and alignment with other key government programmes, including family hubs and Supporting Families.

[Baroness Stedman-Scott (Con)]

My Lords, I thank my noble friend for that Answer. I am very encouraged about the encouragement of cross-government department working. If I have understood it correctly, Supporting Families is being more aligned to DfE work and family hubs. Does my noble friend agree that there is much to be gained by aligning the reducing parental conflict programme in this way?

[Viscount Younger of Leckie (Con)]

I believe the work achieved and continuing to be done within the RPC is invaluable. The programme has had three interim reports published that give strong evidence for that. As announced yesterday, three reports to be published in due course further demonstrate the impact of the programme with more granular detail. We are working to integrate RPC outcomes into other key government programmes, including family hubs and the Supporting Families programme, but for the moment the RPC programme remains firmly within DWP.

[Baroness Thornton (Lab)]

My Lords, for this programme, the DWP developed a national offer of parental relationship support. In 2015 it piloted a local family offer in local areas, in 2019 it invited top-tier authorities to apply for strategic leadership support funding and developed a practitioner training offer, in 2021 the DWP offered workforce development grants, and last month it announced £2.8 million funding for eight projects to reduce parental conflict. The Government have just now committed £33 million to be spent on this programme between 2022 and 2025. Will the Minister tell the House where the £33 million is going and the outcome of all these activities?

[Viscount Younger of Leckie (Con)]

It certainly remains work in progress. As the noble Baroness said, the reducing parental conflict programme was initiated in 2017 in response to two key pieces of evidence, one of which was the number of children who live in coupled families reporting conflict, which in 2020 was as much as 12%. We have three further evaluation reports coming out. They are enormous—I have seen them. This granular detail will be coming out shortly. It shows, for example, that 90% of those parents who have gone through it have a satisfaction rate, meaning that there is already some valuable information about its success.

[Lord Palmer of Childs Hill (LD)]

My Lords, I am not reassured by what the Minister said about how this is being rolled out. Is there adequate support for people without easy access to digital services? We seem to have an academic exercise. The Minister said it is being rolled out through local authorities. He will know that most local authorities have straitened financial circumstances at the moment. Does the Minister have evidence that they are actually doing something to give face-to-face support to families with these problems?

[Viscount Younger of Leckie (Con)]

Very much so. The noble Lord may know that we had a first challenge fund, and we now have a second challenge fund with eight interesting initiatives as part of RPC. For example, one of the challenge funds is looking at the digital side. This has a particular focus on ensuring that those who are not particularly digitally aware can be. The results of that will come out in due course, but I hope that answers directly the noble Lord’s question.

[Baroness Altmann (Con)]

My Lords, I am delighted to hear about all the work that my noble friend and the department are doing and that they have recognised how important the role of stability and the family unit is in creating family cohesion. Does my noble friend agree that it is also important to include the role of grandparents and intergenerational aspects? What are the Government doing in this respect on policy and actions?

[Viscount Younger of Leckie (Con)]

My noble friend makes an excellent point about the role of grandparents because I think, and I am sure that the Government think, that for stability within families—which now come in all shapes and sizes, and we must recognise that—the role of grandparents is incredibly important to feed down to their grandchildren certain lessons in life. The family test, which the House will know about, was introduced by the Government in 2014. It aims to bring a family perspective into policy-making, and various tests are used. This is something for which we are responsible in my department, particularly looking at the guidance and the raising of awareness about this initiative.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, can the Minister assure the House that his civil servants are briefing Opposition spokesmen on this and other DWP programmes to ensure that there is a smooth transition to the next Labour Government?

[Viscount Younger of Leckie (Con)]

I am not going to be tempted into giving an answer to that. I have to tell the noble Lord, as he will expect me to say, that we are fully focused on a major programme of change, including in my particular area. Our aim is to focus on children, and that is the most important thing that we are doing.

[Lord Farmer (Con)]

My Lords, it is heartening to hear that there is integration going on between departments of government, which has always been a bugbear for us to contend with. I just mention family courts, which post-separation conflict clogs up very expensively, leaving families in destructive limbo. Is my noble friend the Minister taking this area into account to integrate into the policy?

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

Yes, and my noble friend makes an important point about the link with the MoJ, particularly its work in the family courts. We are watching with interest the progress of work on mediation between parents who are separating. I also endorse my noble friend’s point on wider integration. I would like to reassure the House that the Government are working closely with a focus on relationship dynamics. That is what it is all about. Evidence shows that conflict, which can be intense, frequent and poorly resolved, as we know, can really damage children’s mental health and their longer-term outcomes, including attainment and employment.

[Baroness Butler-Sloss (CB)]

My Lords, as a former family judge, I saw a great deal of this. To what extent are the Government able to help with the traumatic effect on so many of these children?

[Viscount Younger of Leckie (Con)]

I think I have already alluded to a number of points of help because, first of all, the reducing parental conflict programme sits within my department. We have the Supporting Families programme, which is moving into the DfE quite shortly, and we have the family hubs. On the noble and learned Baroness’s question, we are working across government on family-focused policies, and it is very important that we continue to do that to provide cohesive answers to these very challenging matters.

[Baroness McIntosh of Pickering (Con)]

My Lords, will my noble friend pay tribute to the work of volunteers who man child contact centres, which permit access to warring parents often in a very tense situation? They do a fantastic job. Will he ensure, through the MoJ, that they are properly funded, whether they are in the public or the private sector?

[Viscount Younger of Leckie (Con)]

Yes. My noble friend makes a very good point about those who are outside the main programmes but set aside their own time to help, often with some extremely challenging matters. That is often within families themselves. The role of grandparents was mentioned. If there are some issues regarding the parents, the grandparents often have a most important role to step in and help in linking in with those who are skilled and trained in these matters.

[Lord Polak (Con)]

My Lords, has the Minister seen the report by Domestic Abuse Commissioner Nicole Jacobs, The Family Court and Domestic Abuse: Achieving Cultural Change, produced this week? I refer the Minister to it in this discussion. It is a very simple but important report that I hope he will take account of.

[Viscount Younger of Leckie (Con)]

I have not seen that report. I want to provide clarification for my noble friend that reducing parental conflict and domestic abuse are not exactly linked. It is easy to make a link, but the RPC programme seeks to address conflict, not domestic abuse. Having said all that, as my noble friend will know, domestic abuse is incredibly important and this Government are very much committed to preventing it and to ensuring that victims get the support they need.

Pensions Dashboards (Amendment) Regulations 2023

Viscount Younger of Leckie Excerpts

Monday 17th July 2023 Lords Chamber

Moved by

[Viscount Younger of Leckie]

That the draft Regulations laid before the House on 8 June be approved.

Relevant document: 44th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument). Considered in Grand Committee on 12 July.

Motion agreed.

Child Support (Enforcement) Bill

Viscount Younger of Leckie Excerpts

3rd reading
Friday 14th July 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Redfern, for piloting the Bill through this House and, along with the rest of the House, wish her a speedy recovery. I also thank the noble Baroness, Lady Pidding, for standing in for her today so crisply and effectively. Thanks are due too to the Minister and his team, both for their work on this Bill and for their briefing of Peers to help us understand the context in which it sits. I am grateful also to Gingerbread and the charities that work so hard in this area.

We on these Benches wholeheartedly support the principle that non-resident parents should pay child maintenance and that there should be enforcement for those who fail to pay. The Bill should make a small but welcome contribution to that end by speeding up the process by which the non-resident parent who is in arrears can be made to pay what they owe. I hope that in future, we will see a further reduction in the amount of child maintenance that goes unpaid. There is still work to be done to increase compliance with the child support regime and to ensure that it becomes the norm that both parents continue to support their children, whatever happens to their relationship with one another.

For now, I simply thank again the noble Baroness, Lady Redfern, and Siobhan Baillie MP, and wish the Bill well.

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

My Lords, I congratulate my noble friend Lady Pidding, speaking on behalf of the main sponsor of the Bill, my noble friend Lady Redfern, on ensuring that the Bill has reached its final stages. I wish my noble friend Lady Redfern a speedy recovery.

As mentioned at Second Reading, the Bill has the full backing of His Majesty’s Government, and it gives me great pleasure to speak in support of it today once again. I also thank the noble Baroness, Lady Sherlock, for the thoughtful questions she raised at Second Reading. I hope the letter I sent in response has provided her with some clarity on the issues raised. I very much take note of her comments today.

This Government are committed to improving the support the Child Maintenance Service offers to separated families, so the Bill makes important improvements to CMS enforcement processes by amending existing powers. Once commenced, this will allow the Secretary of State to make an administrative liability order where the paying parent has failed to pay an amount of child maintenance, without the need to make an application to court.

On the point raised at Second Reading by the noble Lord, Lord Palmer, who is not in his place, I would like to reassure the House that the central protections for paying parents will be provided through secondary legislation. This will give parents the right of appeal, while setting out some parameters around the appeal process. First, this will include the period within which the right of appeal may be exercised, and, secondly, the powers of the court in respect of such appeals. Secondary legislation will follow the affirmative procedure, so your Lordships will be able to debate the proposals eventually when they are put forward.

To conclude, I am very pleased that there is cross-party support for my noble friend’s Bill, and that this House will agree to its final passage today.

Bill passed.

Pensions (Extension of Automatic Enrolment) (No. 2) Bill

Viscount Younger of Leckie Excerpts

2nd reading
Friday 14th July 2023 Lords Chamber

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

My Lords, I am pleased to add my support to my noble friend Lady Altmann’s Bill. This legislation would bring into workplace pensions more younger people, women and those in part-time work, including workers not already benefiting from an employer pension contribution. My noble friend eloquently set out further detail of the Bill, its benefits and its beneficiaries.

The Government are committed to building on the success of automatic enrolment to date with a stronger, more inclusive savings culture for younger people. The noble Baroness, Lady Sherlock, was right to remind us of some of the historical context. My noble friend’s Bill would expand the automatic enrolment framework, which was one of the most radical reforms to the pensions landscape since Lloyd George enacted the first state pension nearly 120 years ago. This Bill builds on the undoubted success of workplace pensions and sits firmly within the political consensus established by the independent Turner commission, on which the noble Baroness, Lady Drake, served, as has been mentioned, and which set out the road map for these reforms in 2005. I add my name to those who have paid tribute to the noble Baroness in this respect.

I want to move straight on to the subject of small pots, which was raised by the noble Lord, Lord Davies. I hope that I can help in providing some answers because I agree—he is right to raise this issue—that the growth of deferred small pots is a huge challenge for the workplace pension market. We know that it acts as a burden on providers, reducing the value for money that pension schemes can provide and negatively impacting retirement outcomes for their members.

I assure the noble Lord and the House that the Government are taking decisive action to address this issue. We are consulting now on our ambition to deliver a framework for a default consolidator approach, which will enable a small number of authorised schemes to act as consolidators for deferred small pots in order to provide greater value for money for their members. In this way, we are working to address the current and future stock of deferred small pots. I note the comments made by the noble Lord today in this respect; we would very much welcome his contribution to the consultation if he has not already given his views, as I suspect he may well have done.

I turn to some of the points made by my noble friend Lady Altmann and the noble Baroness, Lady Sherlock. We had an interesting, brief debate on the lowering of the age limit, which we reckon is about right at 18. The Bill provides for regulation-making powers to reduce the age for AE, rather than setting a specific number. This has been done to avoid pre-empting the statutory consultation. We do not wish to close off our ability to respond openly and thoughtfully to stakeholder proposals.

The 2017 review found 18 to be the appropriate minimum age for automatic enrolment. The current minimum of 22 has failed to keep pace with changes elsewhere, such as to the national minimum wage. The lower age also aligns with the entitlement to social security benefits, such as universal credit. Moving to 18 is seen as an effective way to embed the habit of workplace pension saving for young people as they start work for the first time. Indeed, the Government’s commitment for young people below the age of 18 in England and Wales to remain in education or receive training and employment through apprenticeships has resulted in a decrease in 16 and 17 year-olds in the labour market. Workers aged 16 and over will still be entitled to opt in to AE and receive an employer contribution if they choose to save into a workplace pension.

I also want to touch on pension tax relief. The Government recognise the different impacts of the two systems of paying pension tax relief on pension contributions for workers earning below the income tax personal allowance. This picks up on some points raised by my noble friend Lady Altmann. We have announced a new system that will make top-up payments to low earners in net pay schemes, many of whom are women—I think that she made this point—to address the net pay relief at source anomaly. The Treasury has confirmed that this will be introduced for contributions from 2024-25 onwards. In 2025-26, we estimate that up to 1.2 million individuals, 75% of whom are women, could benefit from top-ups worth on average around £50 each year. The Office for Budget Responsibility assesses that the cost to the Exchequer could be between £10 million and £15 million per year.

My noble friend Lady Altmann also raised the issue of low earners, as did one or two other Peers. The AE framework has an earnings trigger that is set at a level that aims to bring those individuals for whom it pays to save into pension saving automatically. The Secretary of State must review this trigger each year to help to make sure that it remains appropriate. As my noble friend mentioned, currently the trigger is set at £10,000. However, if an eligible worker earns below this amount, they can still choose to opt in to a workplace pension if they want to save, as mentioned earlier. The Bill is the essential first step to allow the expansion of AE. The Government are clear that these measures are the best route to enabling low and medium earners to save more, with more workers benefiting from the employer contribution to help them to build their retirement savings.

I will now move on to a few general comments about pensions and, indeed, the state pension, which was alluded to by the noble Lord, Lord Davies. I hope that I am not going too far in terms of his remarks, but hopefully this will set the scene a bit. I reassure the House that we believe that the state pension remains the foundation of the UK pension system. In April 2023, the state pension saw its biggest ever cash increase, rising by 10.1%, so that the full yearly amount of the basic state pension will be over £3,050 higher in cash terms than in 2010.

Workplace pensions sit on top of that foundation, helping to maximise individual retirement saving. This is an approach guided by the work of the independent Pensions Commission, which made clear the importance of reinvigorated private saving to help individuals to achieve their retirement aspirations. The Government continue to support the success of automatic enrolment, which has seen 10.9 million workers enrolled into a workplace pension since 2012, with an additional £33 billion saved in real terms in 2021 compared to 2012.

I move on to a more substantive point raised by the noble Lord, Lord Davies—I think that he mentioned it twice—which is what we are doing to reduce the gender pensions gap. As he will know, the pensions gap is a complex issue tied to the labour market, the pensions system and demographic differences, but one that the Government take seriously. We remain committed to implementing the 2017 review measures, which will disproportionately benefit lower earners, including people working in multiple jobs, who are predominantly women.

Going back to the basic concept of automatic enrolment, AE came along at a time when the UK was towards the very bottom of the OECD league tables on retirement saving. A radical reversal has taken place in the past decade putting us close to the top, with the UK now having the largest pension market in Europe. I pay tribute to those, some of whom are in the House today, for their efforts to make this happen.

In the private sector, workplace pension participation for eligible employees has increased from 42% in 2012 to 86% in 2021, representing a 44 percentage point increase. As my noble friend Lady Altmann said, it has been especially transformative for women, low-earners and young people. Her Bill would enable the Government to build on that success and deliver the expansion of AE.

There are a couple of other questions I want to answer—actually, about three—particularly from the noble Baroness, Lady Drake, from the noble Lord, Lord Davies, and from the noble Baroness, Lady Sherlock, on timing, which is a very fair question. The Government are committed to making progress in implementing the 2017 review measures, including lowering the age for being automatically enrolled and reducing the lower earnings limit so that pensions contributions are payable from the first pound of earnings, in the mid-2020s. We have always been clear that implementation of these measures and the timing must be done in a way and at a time which is affordable, balancing the needs of savers, employers and taxpayers, with a suitable lead-in time for implementation. I am afraid that that is as far as I can go on that, but as soon as I have any further detail I will certainly let the House know.

The noble Baronesses, Lady Drake and Lady Sherlock, are right that we need to look at any opt-out rate with great care in monitoring, and I reassure the House in that respect. The noble Baroness, Lady Drake, raised a very important point about AE enforcement. The regulator has a statutory duty to enforce compliance with employer AE duties. Employers must provide information about AE to each eligible employee, including their right to an employer contribution. If a worker has concerns about whether their employer is complying with the law, they can report their concerns to the regulator in confidence—as I suspect noble Lords will be aware.

[Baroness Drake (Lab)]

My point was that the regulator is doing a good job on enforcement, but very young people are quite vulnerable, and I was just saying that it needs a new lens brought to enforcement activity.

[Viscount Younger of Leckie (Con)]

Absolutely. Again, I provide reassurance that we are very much alert to the issue and we shall be sure that we monitor it and keep the House updated.

The noble Lord, Lord Davies, raised the important subject of carers, and I have a couple of brief answers for him. The Government recognise the valuable role of carers and that they are disproportionately women. Where carers are working, if eligible, they will be automatically enrolled into a workplace pension, or they can opt in. The expansion of AE will see all those participating get an employer contribution from their first pound of earnings, and that will help to improve the incentive to save for those who are in lower-paid or part-time work, including carers.

Finally, to touch on consultation, which was raised by the noble Lord, Lord Davies, and others, the use of the Bill’s powers would be subject to a statutory consultation requirement and the affirmative procedure in both Houses to gain consensus on the implementation approach and timetable, so that the measures can be introduced in a way that is affordable for all parties, as mentioned earlier. This is a crucial point. While we are all rightly keen to build on the success of AE—and many Peers call for more and faster change, hence the questions on timing—the approach needs fully to take account of the impact of these measures on employers, workers and the Exchequer in a way that makes the changes both beneficial and affordable for all. To clarify, we intend to consult in the autumn with employers, payroll and delivery partners throughout the supply chain to get the implementation approach and timetable right before changes are introduced.

I again thank my noble friend Lady Altmann for taking the Bill through and for helping more people gain the benefits of retirement saving. I judge from the mood in the House that it shares my view of the importance of the Bill and the positive and sensible way in which it would allow for the future expansion of automatic enrolment, which I believe is an ambition we all share.

Pensions Dashboards (Amendment) Regulations 2023

Viscount Younger of Leckie Excerpts

Wednesday 12th July 2023 Grand Committee

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Pensions Dashboards (Amendment) Regulations 2023.

Relevant document: 44th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument).

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

My Lords, I am pleased to introduce this statutory instrument, which, subject to approval, will make amendments to the Pensions Dashboards Regulations 2022. The instrument removes the staging profile from the 2022 regulations and introduces a single connection deadline of 31 October 2026 for relevant occupational pension schemes to connect to pensions dashboards.

The successful introduction of automatic enrolment more than a decade ago, combined with a trend towards people working multiple jobs in their lifetime, has seen a substantial increase in smaller pension pots. Without intervention, the number of lost and forgotten pots will remain exactly that—lost and forgotten—and financial planning for retirement will become still more complex. Pensions dashboards will help hard-working savers to locate pension pots that they have accumulated over time, reconnecting them with lost and forgotten pension pots and supporting better planning for retirement. People will be able to view their various pensions, including their state pension, securely and all in one place online.

There can be no doubt that pensions dashboards have the potential to become a game-changer that will revolutionise the pensions landscape. The UK is not alone in realising the enormous potential that pensions dashboards bring. Countries such as Denmark, Israel and Australia have all established pensions dashboards as a feature of their financial landscape. However, the UK’s pensions industry is arguably unique by virtue of its scale and complexity. We should not underestimate the ambition and challenge of securely connecting thousands of schemes and of presenting data in a coherent manner, from state and private pensions, for the benefit of savers. We anticipate that, once all schemes in scope of the regulations are connected, the pension records of over 71 million memberships from relevant occupational pension schemes and providers of FCA-regulated entities will be accessible to people at the touch of a button, at a time of their choosing.

The reason for bringing forward these amendment regulations is that, at the end of last year, the Pensions Dashboards Programme, which is responsible for delivering the digital architecture that underpins pensions dashboards, informed my department that more time was required to complete the build of the digital architecture. The PDP faced several key issues: the technical solution has not been sufficiently tested and there is still work to do to finalise the necessary supporting documentation and to get the necessary systems in place to support the pensions industry with the connection process. It was concluded that more time was needed to successfully deliver dashboards and that a reset of the programme was required.

The Minister for Pensions subsequently issued a Written Statement in March 2023, announcing the delay and setting out that the Pensions Dashboards Programme would be reset to get it back on to a path for successful delivery. The decision to pause, review and reset the programme will provide it with the time to ensure complete delivery of the ecosystem and supporting documentation before industry begins to connect. So far, the reset has assessed the digital architecture and I am pleased to report that no fundamental issues have been identified. This has provided reassurance to the Government to move forward with amending the regulations.

The staging profile in Schedule 2 to the 2022 regulations set out the order in which different types of schemes, categorised by size and type, would connect to pensions dashboards. However, the 2022 regulations did not provide the flexibility necessary to deliver a programme of this magnitude—a digital undertaking that will enable users to search over 3,000 schemes to find their pensions.

This instrument curtails the period of uncertainty for the pensions industry. The staging profile in the 2022 regulations required the first schemes to connect at the end of August 2023. By laying these amendment regulations, we are seeking to avoid any perception that schemes would be in breach through no fault of their own. As mentioned, all schemes in scope will now be required to connect to dashboards by 31 October 2026 at the latest. The regulations will provide more flexibility to deliver pensions dashboards while retaining the broad framework of a phased approach to help to manage the flow of connections and maximise coverage as early as possible.

The Government will work with partners and the pensions industry on a connection timetable to be published in guidance. We expect that the connection timetable in guidance will prioritise large schemes with the greatest number of members. This will maximise the potential for savers to realise the benefits of dashboards as early as possible. The dashboards available point—the point at which dashboards will be available for widespread public use—could therefore happen before the October 2026 connection deadline in the regulations. Although the connection timetable set out in guidance will not be mandatory, there is a requirement for scheme trustees or managers to have regard to this guidance. Not doing so would be a breach of the regulations. The Financial Conduct Authority will ask its board to make corresponding deadline changes in the dashboard rules for FCA-regulated pension providers shortly after Parliament approves these amending regulations.

I will now explain what has not changed. Although the instrument amends the requirements on trustees or managers by removing Schedule 2, there are no other material changes to the regulations. All other requirements have been retained, including the requirements to be satisfied for qualifying pensions dashboard services, connection duties and requirements on “find” and “view”. Crucially, the requirement for the Secretary of State to provide six months’ notice ahead of the dashboards available point remains unchanged. The Government will continue to work with the industry on the matters that must be considered before dashboards are launched to the public.

The consumer is at the heart of all our endeavours. These relevant matters are important to ensure that pensions dashboards are launched to the public safely and securely, having been rigorously tested. Protecting the best interests of savers is the core principle behind dashboards and the Government remain firmly committed to ensuring that people’s data is accurate, simple to understand and, above all, secure. Dashboards will ensure that people always remain in control over who has access to their data, as existing legislation, including data protection duties, underpins the requirements that must be adhered to by pension providers, schemes and qualifying pensions dashboard services.

Accurate and high-quality data is essential to delivery and the success of pensions dashboards rests on the pensions industry’s ability to successfully match consumers to their information. The Government and the regulators have repeatedly advised the industry to get its data ready for dashboards. It should use the extra time to ensure that it can meet its dashboard obligations. Schemes and providers are already subject to existing statutory and other protections on data, including the accuracy principle under UK GDPR, which places a requirement on schemes to take all reasonable steps to erase or rectify inaccurate data without delay. It is crucial that dashboards give power to savers and not to scammers. Robust controls and standards will be built into the digital architecture to prevent potential scammers or fraudsters from gaining access to people’s information.

These amendment regulations will facilitate a collaborative approach to connection that delivers on our commitment to introduce pensions dashboards. Pensions dashboards have the potential to transform retirement planning for ever and these regulations are another step in the right direction. I therefore commend them to the Committee. I beg to move.

[Lord Young of Cookham (Con)]

I am most grateful to my noble friend for the clear exposition of this statutory instrument and for the very helpful meetings that he and his officials have held with noble Lords over the past few months. I am also grateful to him for the letter that he wrote to me following the last meeting.

Looking around, I see some aficionados from our earlier debates on the pensions dashboard. I was looking at a debate from 28 January 2020, when I said:

“Over the weekend, I logged on to the Pensions Dashboard Prototype Project, which I found informative, but right at the end it said: ‘The industry and government hope to have Pensions Dashboard services ready by 2019’”.


At that time, we were debating a consultation document and the response to it. Again, I quote:

“Reading the response to the consultation document, we are told: ‘Once the supporting infrastructure and consumer protections are in place, and data standards and security are assured, most pension schemes should be ready to provide consumer’s information to them within three to four years’”.—[Official Report, 28/1/20; col. 1373.]


That was in January 2020. My noble friend knows that this project has been dogged by uncertainty and delay.

I have a specific point to raise about the identification service. Consumers will obviously have to identify themselves before they can access the dashboard. The Government’s initial proposal was to use Verify, a system sponsored by the Government with ambitious targets to have 46 government services accessible by March 2018. Sadly, that project was not a success. The NAO said that

“it is difficult to conclude that successive decisions to continue with Verify have been sufficiently justified”,

and the Government withdrew support from Verify in 2020. The pensions dashboard has had to develop its own service in the meantime.

In my noble friend’s very helpful letter, he referred to the new government service, GOV.UK One Login. He said:

“The core of the system has been launched: its sign-in element, a web-based identity verification journey, and a fast-track identity checking app”


are up and running. I have actually connected to and logged into One Login, and am now registered.

In his letter to me, my noble friend went on to say:

“As you may recall, the PDP”—


pensions dashboard programme—

“has procured an interim identity service provider, whose contract runs until January 2024”.

At what point will the pensions dashboard transfer from this interim service? Will it transfer to the government-run One Login, which seems the obvious thing to do, assuming that it is as robust? By the time the system is launched in 2026 or earlier, will the interim service have been put to one side and will we all have moved over to One Login; or will the interim service still be the one that we have to use, for the next few years? I hope to hear that it will have transferred to One Login, so that we do not have to register twice—first with the interim one and then with One Login. That is my main point.

My final point is on the Secondary Legislation Scrutiny’s Committee report on this statutory instrument, published on 22 June, which I am sure my noble friend has seen. The committee raised two points in its conclusion, to which I am sure my noble friend will reply. In paragraph 27, it quoted its 16th report:

“We encourage the Government to take this opportunity to address the complexity and costs of the dashboard … by simplifying and standardising the system wherever possible”.


The committee confirmed that that remains its position in its latest report on this instrument. Finally, it said:

“We are disappointed to, once again, find our Report supplying basic information to the House that DWP should have published in the EM”—


the Explanatory Memorandum. I am sure my noble friend will respond to those points, in addition to my main point about the verification service.

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We on these Benches have been very supportive of the creation of a public dashboard but we really do not want to be back here next July doing the same thing again. I hope that this is the beginning of a new start. I urge the Minister to keep engaging with us all and to keep us informed as we go. Let us hope that we get this right the next time.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the Committee for its broad approval for these regulations. I start by making the point that it was helpful to hear from the noble Baroness, Lady Drake, who is highly respected in this House for her pensions expertise. She welcomed the regulations and pointed out that, back in 2019, in her view, these regulations were far from being ready—she is of course correct in saying that. I value her broad support this afternoon. However, I acknowledge that there are a huge number of questions to answer in this debate, for which I thank noble Lords.

Throughout their development, pensions dashboards have received cross-party support in both Houses. Your Lordships will no doubt share my disappointment that we have needed to amend the original timeline. It is vital that the foundation upon which the dashboards ecosystem is built is safe and secure, as I said in my opening remarks. However, I am certain that the Government have made the right decision in slowing things down for the benefit of consumers.

I thank my noble friend Lord Young. I am grateful to him for reminding us of past deadlines—and indeed of past deadlines missed. I reassure him and the Committee that we are getting back on track. I hope that, in answering a lot of the questions raised today, I provide reassurance on that.

My noble friend raised the revised Explanatory Memorandum. During scrutiny of the regulations, the Secondary Legislation Scrutiny Committee felt that the EM could have provided more detail on the impact of the amendment regulations. Officials in my department subsequently provided a written response to the committee, and the department has replaced the EM with a revised version that provides the further detail requested by the committee. The DWP recognises the value of parliamentary scrutiny and the requirement for comprehensive explanatory material. It has begun internal action to strengthen its assurance processes.

I will answer the question raised by my noble friend Lord Young on the One Login, probably towards the end of my speech. I very much take note of what he asked.

I turn now to the broader issues regarding the dashboards and the reset. This was raised by the noble Lord, Lord Vaux, and the noble Baroness, Lady Sherlock, but it is a general theme. For example, he asked whether we had made the reset too complex. He also asked how much the scope has changed. As I said in my opening remarks, dashboards are complex, but the design is right. It is based on security and information, and on an understanding, from user research, about the information that users expect. The scope has remained the same throughout.

The noble Lord, Lord Vaux, went further, in asking questions about why the delay came about. I am probably repeating myself, but it is a project of significant undertaking, requiring the development of new technology that will permit individuals to find their pensions by searching thousands of pension schemes, which collectively hold millions of pension records. It became clear that the PDP would require additional time to deliver the complex technical solution to enable the connection of pension providers and schemes. I believe that my department took swift action to address the issues as soon as we knew that they had arisen. As I said earlier, the delay is frustrating, but it is vital that the foundation on which the dashboard’s ecosystem is built is safe and secure.

The noble Lord, Lord Vaux, also asked about the cost to the taxpayer. The dashboard project is funded by the financial services levy and the general pensions levy. These levies pay for the Pensions Dashboard Programme and the MoneyHelper dashboard, including staffing costs. The PDP has a spending review allocation through to 2025-26, and allocations beyond this point have not yet been determined. As the regulatory impact assessment shows, there is an increase in direct costs to industry of £69 million. I hope that provides some help.

The noble Baroness, Lady Drake, raised the so-called Mansion House package. I will give an overarching response on that. Since her appointment, the Minister for Pensions has focused on reforms to the private pension system, which have centred on introducing greater fairness, adequacy and predictability for today’s auto-enrolled generation of savers. The DWP has been working closely with the Treasury on a package of measures set out by the Chancellor in his speech the day before yesterday, as the noble Baroness knows, all designed to drive better outcomes for pension savers.

These are all part of a wider government agenda to improve the opportunity for investment in alternative assets, including high-growth businesses, and to improve saver outcomes. We believe that a higher allocation to high-growth businesses as part of a balanced portfolio can increase overall returns for pension savers, leading to better outcomes in retirement. We want to ensure that our high-growth businesses of tomorrow can access the capital that they need to start up, scale up and list in the UK. I am happy to write to the noble Baroness with further information. She asked about the value for money framework, so I will write to her about that.

My noble friend Lady Altmann asked about enforcement actions for schemes and whether or not they adhere to the guidance. The timeline in guidance will not be mandatory. However, trustees and managers must have regard to the guidance on connection. Trustees and managers will be expected to demonstrate how they have had regard to the guidance, and a failure to do so will be a breach of the regulations and therefore could result in enforcement action. All trustees and managers must connect by the deadline set out in legislation. I reassure my noble friend that failing to do so could result in action by the regulator, as I suspect she probably knows.

Then the question of liability arises. If an individual makes a poor decision based on inaccurate information, what then happens? Making pensions dashboards work involves multiple parties, so the question of liability if something goes wrong needs to be considered, but on a case-by-case basis. Pension schemes, qualifying pensions dashboard services and MaPS will all be subject to complaints management by the relevant ombudsman. This means that if the party at fault does not deal with the user complaint satisfactorily, the relevant ombudsman may investigate complaints and make determinations to put things right.

My noble friend Lady Altmann asked about standardisation of data, which is an important question. The Pensions Dashboard Programme is seeking to standardise many aspects of data. The regulations set out clear requirements relating to connection and the value and other data. MaPS will publish standards relating to data. The Financial Reporting Council had updated its requirements regarding the calculation of values to improve the consistency of projections.

The noble Lord, Lord Palmer, asked about digital access. His specific question was about those who do not use it, which is a fair point. It is true to say that, moving forward, this is primarily a digital solution we are providing, but there are existing resources still available, including the provision of annual statements. I hope that gives him some reassurance about those who are not quite as digital as others.

The noble Baroness, Lady Sherlock, asked about transparency on progress. I remind her and the Committee that the PDP publishes a six-monthly report. Additionally, it holds a briefing sessions with interested Peers—which I pledge to do on a regular basis—and we are keen to give as much information as we can. I hope that, from past form, she will be reassured on that.

A number of questions were raised by not only my noble friend Lady Altmann but the noble Baroness, Lady Sherlock, and I will attempt to whisk through them in the time available. The noble Baroness asked whether, with a single compulsory connection deadline, there is a risk of a backlog of schemes trying to connect as the deadline—31 October 2026—approaches. That is a fair question, and other Peers raised the same point. The regulations include a requirement to have regard to guidance issued on connection. We will be engaging with industry on guidance that will set out the proposed connection timetable. There have been positive signs among leading providers of their intent to adhere to the guidance, which is helpful. Similarly, the ABI published a statement indicating that its members would look to connect as per the guidance. The Pensions Regulator may take action where the trustees or scheme managers fail to have regard to the connection guidance and is assessing whether any changes need to be made to its compliance and enforcement policy.

The noble Baroness also asked what action the department would take if there was evidence of back-ending and backlogs building up. The DWP will work with the Pensions Dashboard Programme and regulators to monitor connection activity, and will use insight from industry to inform how we can best help to maximise adherence and remove potential barriers for schemes. Our expectation is that, given the widespread support for dashboards, the schemes will adhere to the connection profile in guidance. However, to provide more reassurance, we will keep this approach under review and will consider changes, including further legislation—note that—if problems emerge.

The noble Baroness, Lady Sherlock, asked several questions in relation to our intention to publish a revised connection timeline in guidance. She asked—as did my noble friend Lady Altmann—when the guidance on proposed connection dates will be published. We will work with industry this year on agreeing the connection timetable to be published. We intend to publish it as soon as possible.

The noble Baroness, Lady Sherlock, asked what role the regulator would play in encouraging schemes to follow the guidance, given that trustees and managers must have regard to it. She and the noble Lord, Lord Palmer, also asked about clarity on encouragement to compliance. The regulator will write to all schemes, informing them of their proposed connection date, as set out in guidance, and the action that they need to take to connect by the set date. The regulator will expect trustees to be able to demonstrate how they have had regard to the guidance. As I mentioned earlier, failure would result in enforcement action.

--- Later in debate ---

[Lord Young of Cookham (Con)]

My noble friend has been very helpful. Is it the Government’s objective that the Government’s One Login will be the access point to the pensions dashboard?

[Viscount Younger of Leckie (Con)]

The answer is yes, eventually, but I will need to write to my noble friend to qualify what I mean by that. That is the aim and it makes sense, but I cannot say that it will be by a particular date. I shall write to my noble friend.

I shall conclude quickly because I realise that others are waiting for the next debate. I thank all noble Lords in the Committee for the points that they have made. I commend the regulations to the Committee.

Motion agreed.

Pension Funds: Investments and Tax Relief

Viscount Younger of Leckie Excerpts

Thursday 29th June 2023 Lords Chamber

[Baroness Altmann]

To ask His Majesty’s Government, further to tax relief provided to pension funds, what assessment, if any, they have made of the actions taken by pension trustees to ensure their investments (1) effectively manage climate risk, and (2) comply with treaties on human rights.

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

My Lords, the Government have introduced legislation and published guidance alongside the TCFD requirements to help pension schemes improve the quality of governance and manage climate risk. DWP committed to review the requirements in late 2023. These reviews will utilise insights from the regulator’s review of early reports and will also consider clarifications of fiduciary duty. DWP also launched an industry-led task force on social factors, which aims to produce a guide for industry by this November.

[Baroness Altmann (Con)]

I congratulate my noble friend the Minister and the Government on their work so far, but as at least 25% of all pension fund assets originated from taxpayer reliefs, does he agree that the Government have ample justification to expect pension funds to invest responsibly, supporting national objectives? Does he share my concern that this seems not to be happening? For example, Corporate Adviser magazine’s February 2023 ESG report shows that the three largest pension providers invest in cluster munitions, even though the UK is recent president and signatory of the international agreement to end their use, and that investment in domestic companies and green projects has been weak. Will the Government encourage or ensure that more of the taxpayer contribution to all pension funds helps UK markets and supports UK sustainable growth and climate and nature protections, to meet social or national objectives?

[Viscount Younger of Leckie (Con)]

I hope I can answer a number of the points that my noble friend made. On her general push, she is right: there is a lot more we need to do to encourage pension funds to invest in net zero. The introduction of the TCFD reporting requirements for pension schemes was pioneering; these regulations are still relatively new and it would be premature to judge their effectiveness, but a lot more is happening in this space, as my noble friend will be aware. As well as the task force, we have a stewardship review, which will assess the effectiveness of the guidance, and alongside this the Financial Reporting Council, which works alongside the FCA, my department and the regulator.

[Lord Rooker (Lab)]

What legal authority do the Government have to attempt to create a de facto sovereign wealth fund by manipulating our pension assets? Unlike countries such as Norway, we do not have experience of running a sovereign wealth fund. I feel uneasy. I want the investment to be in this country—that makes sense—but doing it in the way it seems to be being done is fraught with difficulty. Will the Government take extra care over this attempt to manipulate pension funds, because we now have trustees with powers they did not have 30 years ago?

[Viscount Younger of Leckie (Con)]

I do not know about manipulation of pension funds, but I can say that there are strong fiduciary duties on trustees. The noble Lord will know that in the green finance strategy, published in March, the Government committed to engaging with interested stakeholders on how we can continue to clarify fiduciary duty through a series of round tables and a working group of the Financial Markets Law Committee. I think it fair to say that many larger schemes consider climate change risk, which I think is the gist of his question, to be financially material; we have made this clear in guidance.

[Lord Palmer of Childs Hill (LD)]

My Lords, debate on how pension fund assets can be used more productively has focused on defined contribution pensions, rather than traditional defined benefit or final salary-type pensions. Given the large sums currently held in defined benefit pension schemes under a very tight regulatory regime, what plans do the Government have to allow such schemes to invest more productively, as other speakers have said in other contexts, while ensuring members’ benefits continue to be secured?

[Viscount Younger of Leckie (Con)]

The noble Lord makes an important point about defined benefit schemes, which he will know are still maturing, with decreasing numbers of active contributing members and increasing numbers of pensioner members. It is therefore important that their pensions are properly protected and that these schemes are properly funded. The majority of schemes in the DB sector are well run, plan for the future and manage their risks effectively, but the gist of the noble Lord’s question is that there is still more to be done.

[Baroness Stedman-Scott (Con)]

What assessment has been made of the burdens placed on trustees in respect of reporting? This must have a chilling effect on getting people to become trustees of pension funds.

[Viscount Younger of Leckie (Con)]

We are not unaware of this. We have carefully considered the balance between the burden of reporting requirements for trustees on climate risk and the need for urgent action in this area. That is why we have introduced TCFD requirements only for the very largest schemes, as my noble friend will probably be aware, which have, let us face it, more capability and capacity. It gives us the widest coverage of pension scheme numbers while minimising burdens on trustees.

[Baroness Hayman (CB)]

My Lords, I draw attention to my interests as recorded in the register and to the fact that I have a son who works in this area. The Minister referred to the complexities and nuances of the clarification of fiduciary duty, an issue that was much debated during consideration of the Financial Services and Markets Bill. What interaction is His Majesty’s Government having with the Financial Markets Law Committee, which is looking at this, and the round tables? Will parliamentarians have the opportunity to be involved in those?

[Viscount Younger of Leckie (Con)]

I would hope that parliamentarians have a role in this; I shall certainly get back to the noble Baroness on that point. As she will know, guidance states that trustees can consider climate change, but we acknowledge that there is some ambiguity, which I think is the gist of the noble Baroness’s question. That is why we are engaging with the Financial Markets Law Committee working group, which is discussing further fiduciary duty. The next meeting will take place at the end of the month.

[Lord Deben (Con)]

May I encourage the Government to do what they have sought to do, but to recognise too that the speed at which climate change is happening is right at the top end of what the scientists thought? Therefore, the fiduciary duty of pension funds to take that into account becomes the more urgent. I hope that in the review later on in the year, the Minister makes sure that they understand the devastating effects on those investments.

[Viscount Younger of Leckie (Con)]

I know that my noble friend is extremely active in this area, and I reassure him that we continue to encourage pension schemes to commit to net zero in a way that works for them. As mentioned earlier, from October 2022 we introduced this requirement in the TCFD regulations, which is specifically to calculate and report the extent to which their investments are aligned with the Paris agreement goal.

[Baroness Sherlock (Lab)]

My Lords, the Climate Change Committee has just reported that the Government are missing climate targets on nearly every front, which makes it all the more disappointing that they opposed a recent Labour amendment to the Financial Services and Markets Bill that would have required the Treasury carefully to review the case for pension funds investing in green infrastructure while maintaining the soundness of funds. Can the Minister tell the House why?

[Viscount Younger of Leckie (Con)]

No, I cannot, but I can say that the introduction of TCFD reporting requirements for pension schemes was pioneering. We are a leader in this field. As I say, these regulations are still very new and there is a lot going on in this space, and we will be reporting by the end of the year.

[Baroness Sheehan (LD)]

I refer to my interests as per the register. The FCA, in its consultation on AGM voting, proposes that standardised vote reporting be wholly voluntary, with zero incentives for firms to adopt the framework. However, earlier this month, the noble Baroness, Lady Penn, in her role as the Minister taking the Financial Services and Markets Bill through this House, said that

“the Government will carefully consider whether its recommendations go far enough to address existing issues of transparency, and what further action may be appropriate”.—[Official Report, 6/6/2023; col. 1326.]

It is now clear that they do not go far enough to allow trustees to fulfil their fiduciary duty, so what further action does the Minister think appropriate?

[Viscount Younger of Leckie (Con)]

Well, indeed. There is a point of contact, which may be helpful for the noble Baroness, called the UK National Contact Point, which is part of the Department for Business and Trade. It is responsible for promoting the Organisation for Economic Co-operation and Development. It may be helpful to know that considerable guidance has been given for pension schemes in this respect.

Cost of Living Support

Viscount Younger of Leckie Excerpts

Thursday 22nd June 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Baroness, Lady Sherlock, and the noble Lord, Lord Palmer, for their comments and questions. I will start by addressing a point the noble Baroness made. We wanted to use this opportunity to explain the help we have already given and are continuing to give to those who are definitely suffering as a result of the problems in the economy at the moment; “problems” is an understatement, and I am the first to say that. We wanted to make it clear that it is not just about the £150, which was the gist of the Statement; the Government are providing total support of more than £94 billion during 2022-23 and 2023-24 to help households and individuals with the rising cost of living.

Cost-of-living payments are only one part of the overall support. We want to get that message across if we have not done so already. It includes support for energy costs, which was alluded to by the noble Lord, Lord Palmer, and the extension of the household support fund in England, which helps with rents, which again were raised by the noble Lord. In 2023-24 we increased benefits, state pensions and the benefit cap by 10.1% and made further increases to the national living wage.

I want to say quite a bit more because one of the issues to raise, which is obviously very topical at the moment, is mortgages and inflation. I reassure the House that tomorrow, the Chancellor will meet with principal mortgage lenders to ensure that they are living up to their responsibilities to their customers, and to ask what help they can give to people who are struggling—I do realise that they are struggling—to pay more expensive mortgages and what flexibilities may be possible for families in arrears. Of course, I am aware of the announcement today.

We have a clear target to halve inflation this year and to support the Bank of England as it returns it to the 2% target. I remind the House that the IMF forecasts that inflation will reduce substantially to around 5% by the end of the year, which would be a large fall from the highs we saw last year. I remind the House that in March, the OBR forecast that inflation would be 2.9% by the end of the year, and that the last Bank of England forecast, which was in May, was for inflation to go down to 5.1% by the end of the year. However, we are not complacent. This is a serious time, as everyone has been saying. We remain focused on our very important ambition, which is to drive inflation down while providing a cost-of-living package worth about £3,300 per household on average over this year and last. The IMF has already noted the “decisive and responsible steps” that we have taken, and we will continue to take such steps to deliver on this priority.

The noble Baroness, Lady Sherlock, asked about other countries. I have already made the point that we are on track to halve inflation and continue to support the Bank in delivering the 2% target. We believe that inflation is on a downward trajectory, although I understand that it is stubborn. Even though the reduction is quite small, it is in part thanks to our action to hold down energy bills and freeze alcohol and fuel duty, which is having a direct impact on driving down inflation.

The noble Baroness, Lady Sherlock, and the noble Lord, Lord Palmer, asked about Scope. I am very aware of the report. They have been many studies estimating the cost of disability, including this latest Scope report and previous ones from Scope and other organisations. The common feature of these reports is that their findings vary due to the definitions of disability and methodology being used. Our view is that there is no objective way of deciding what an adequate level of benefits should be, as everyone has different requirements. Beneficiaries are free to spend their benefits as they see fit, and in the light of their individual commitments, needs and preferences.

The noble Baroness, Lady Sherlock, focused on the disabled and support for them, and she made some very important points. I hope she knows that we will be spending around £78.6 billion in 2023-24 on benefits to support disabled people and people with health conditions, which is around 3.1% of GDP. The Government are providing a further disability cost-of-living payment of £150, which is part of the gist of the Statement. The majority of these payments will be made to eligible claimants this week. Indeed, many have been made already.

The noble Lord, Lord Palmer, focused on fuel poverty. I make the point, which he would expect me to make, that advanced economies around the world share the challenge of high inflation arising from the energy shock, and the UK has been affected by those global factors. The energy price guarantee, as he will know, was extended at the same level for an additional three months, to the end of June 2023, and it will remain in place as a safety net until the end of March 2024. There are some signs that energy costs are reducing, but again, we are not complacent.

The noble Lord, Lord Palmer, asked a focused question about the use of food banks. He will know that we have some recent data from the latest Family Resources Survey. The Government are using that data to better inform them about the use of food banks. We are well aware that food banks are being used as never before—we are very aware of that.

The noble Lord, Lord Palmer, makes a very good point about repossessions. At the moment, although we are not complacent, repossessions remain at a lower rate than before the pandemic. We are not complacent because of course we see the pressures around.

[Lord Young of Cookham (Con)]

My Lords, unlike others, I find much to welcome in the Statement, not least the increase in the maximum payments of 50% to those on universal credit for childcare, which will help them find work. However, is my noble friend confident that the childcare market will be able to respond to the increased demand that is likely to result from this increased beneficence from the department?

[Viscount Younger of Leckie (Con)]

My noble friend makes a good point about childcare, and the House will be aware of the announcements that were made recently. We are determined to support as many families as possible with access to high-quality affordable childcare, which is why the Spring Budget announced these significant new investments to expand free early education entitlements from 2024-25, together with uplifts in 2023-24 and 2024-25 for the existing entitlement offers.

On his specific question about demand versus supply, that is a very good point. We are confident that supply will meet demand, but we are also aware—certainly I am aware of some anecdotal evidence—that demand is going up, and we want to be sure that demand meets supply. Although I do not have any figures, I reassure my noble friend that we are aware of this particular matter.

[The Lord Bishop of St Edmundsbury and Ipswich]

My Lords, we recognise the value of the immediate and urgent provision that is being suggested and those points being argued for. However, in the light of our experience of the deepening crisis, I wonder whether, because of the interlocking nature of so many factors, now is the time to be looking at a comprehensive anti-poverty strategy.

[Viscount Younger of Leckie (Con)]

We have already taken a number of initiatives, which the right reverend Prelate will be aware of, to look at poverty. As I say, this is a particularly difficult time. Although I cannot comment on a particular poverty strategy, the important point is that we have a number of initiatives across government to address specific aspects of poverty. That includes families and children, and of course it includes those who are homeless, who we are very aware of, as well as the increasing homelessness issue.

[Baroness Hollins (CB)]

My Lords, at the same time as the cost of living crisis, local authorities’ social care budgets are under pressure. I have heard from some disabled people who have a personal budget that they are being asked to make an increased contribution, thus significantly reducing their direct payments. I do not think the proposed new payment will eliminate even those increased contributions, let alone really help with the cost of living situation.

[Viscount Younger of Leckie (Con)]

As I said earlier, the £150 should be taken at face value, and I think I made the point that there are a number of other initiatives to help those who are disabled. It is important, as the Minister in the other place said on Tuesday, to look at the total package, including the £150, that we have in place to help those who are disabled.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, I thank the Minister for repeating the Statement. However, neither his remarks this morning nor the Statement acknowledge the real size of the problem that we now have. I am almost sorry for him that so many things have happened since the Statement was first made on Tuesday, one of which was yesterday’s Joseph Rowntree Foundation report showing that 5.5 million people in lower-income households did not have food last year—they skipped meals and had poor meals, which of course affects their health—while 4.5 million lower-income households are now in debt, many of them to people who will then demand very high rates of interest and so on. They cannot get credit in the way that he and I could get it, at lower interest rates—although all the interest rates are going up now. These are really scary numbers, and the JRF has shown that this is now embedded across our society.

I talked this morning for an hour and a half with organisations in the north-east that are working with the most vulnerable families. I came off that call really scared about the future, because of the numbers involved. Does the Minister understand that this is far more serious than the way we have paid attention to it so far suggests? We really need a serious, overarching strategy to tackle poverty and improve public services, so that the most at risk get the best and the most help, which they cannot get at the moment.

[Viscount Younger of Leckie (Con)]

I hope the House will recognise that I am certainly not playing down the seriousness of the position at the moment. I am very aware, as the House is, of the further interest rate rise today. The Government absolutely recognise the pressures that people are facing and have acted, providing total support of over £94 billion, which I mentioned earlier, over 2022-23 and 2023-24. I have already mentioned the uprating, which I will not go over again, and that we will be making further cost of living payments totalling £900.

However, there is more to say, given the noble Baroness’s question. I have already mentioned that the Chancellor is meeting mortgage lenders tomorrow to see what more can be done, but he has already met the Competition and Markets Authority, to be sure that there is fair competition between the supermarkets so that we make sure that food prices come down. As we are all aware, food inflation is still far too high. It was 19% last month; it has now nudged down a bit but it is still far too high. That is really important, particularly for those who are the most vulnerable. I reassure the noble Baroness that we really do take this seriously. I think we all know that it is a defining moment.

[Lord Bilimoria (CB)]

My Lords, I remind the Minister that, in February 2021, when I was president of the CBI, I asked Rishi Sunak, when he was Chancellor, if he was worried about inflation, because I was worried about it then. Today, we have the highest inflation in the G7, while the United States of America is already at 4% inflation—less than half our rate. Today, our interest rate is at 5%, the highest in 15 years, and we have the highest level of tax burden in seven decades. Today, we have a debt to GDP ratio of 100%; the last time it was at that level was over six decades ago. Does the Minister acknowledge that two of the Prime Minister’s five priorities are growth and halving inflation? Given the situation we are in now, where households are struggling to make rental and mortgage payments, which are increasing as a proportion of their income, is a recession likely? What are the Government’s plans to help people deal with their mortgage and rental payments, because there is a crisis looming in front of our eyes?

[Viscount Younger of Leckie (Con)]

I hope I can help the noble Lord. As I have already mentioned, inflation really is one of the Prime Minister’s key priorities. He has made it clear, as we have, that reducing inflation is absolutely key. He also speaks about growth, while making it clear that growth comes as a secondary item to inflation. However, it is also important that the economy grows. In previous answers, I have made it clear that we are doing as much as we possibly can to look at what more banks can do to be helpful. One thing which I have not said is that we are working closely with the Bank of England, while making it clear that the Bank is independent in also working as hard as it is in the fight to bring down inflation. It is not just us in the UK; as others have said, there are similar issues in other countries, particularly in Europe. However, I realise that in the UK we still have a lot of work to do.

[Baroness Kramer (LD)]

My Lords, the Minister looks to a negotiation with the banks to provide better terms to mortgage holders who are under pressure. He must surely accept that the banks will offer those terms to those they deem their most attractive customers, not to low-income house owners, who cannot take the required flexibility of interest-only or a long extension to their mortgage’s life. That is the group, surely, which needs to be served by an emergency mortgage fund to rescue this situation. Surely he could find the money to support those who will see their mortgages rise by more than 10% of their disposable income and take the money back from the banks, which are seeing bumper profits off the back of rising interest rates.

[Viscount Younger of Leckie (Con)]

I certainly note what the noble Baroness has said. I have mentioned already that the Chancellor is meeting the banks. I do not want to pre-empt the outcome of those discussions. What is important are the initiatives we have taken already to help people. There is support for people who have mortgages. We have increased the generosity and availability of the support for mortgage interest scheme, meaning that those on universal credit can apply for a loan to help cover interest repayments after three months rather than nine and can now receive support while working.

A new Financial Conduct Authority customer duty, coming into effect next month, will ensure that firms put customers first, delivering fair value and ensuring good outcomes for those in financial difficulty. The noble Baroness raises a very important point and I hope that further measures can be produced. We await the outcome of discussions.

[Lord Liddle (Lab)]

My Lords, I have a great deal of personal sympathy for the noble Viscount in having to make this Statement to the House on this of all days. I do not doubt his personal commitment to ensuring fairness and help for the people in the most desperate situations in our society, but I would like him to respond to two observations.

First, the main problem we have, which my noble friend Lady Armstrong referred to, is the number of families who can no longer afford the basics of life. In thinking about policy as it goes forward, we have to think harder about the generational distribution of impacts. I am a wealthy pensioner. I got the generous support for energy bills. Is that right, when families are in such desperate need?

Secondly, Conservative Back-Benchers need to stop talking about the urgent need for tax cuts. The fact is that we face desperate pressures on public services and benefits. We have debt at 100% and there are no proposals coming forward from the Government for credible reductions in public spending. The consequence of tax cuts is that there would be a tension between the monetary policy of the Bank, which is trying to deal with inflation through interest rates, and the fiscal policy. We would be at risk of prolonging high interest rates if we went ahead with irresponsible and unfunded tax cuts.

[Viscount Younger of Leckie (Con)]

I think the noble Lord made three points altogether. I can only reiterate that I am aware of the impact on households, particularly those at the vulnerable end of society. I have already mentioned a number of initiatives and points that are being made outside government, particularly what the supermarkets are doing. At the end of the day, it is the basics that count. That includes, as the noble Lord alluded to, where the next meal is going to come from.

The noble Lord made a good point about the generational aspect, which ought to be in all of our minds. Whatever is happening now, we need to think about the next generation and generations after that, helping children and looking at the educational side and the health aspects of children. Of course, I understand that the current situation does not particularly help.

Finally, on the noble Lord’s point about tax cuts, we have made it clear that we on this side wish to make tax cuts but are not in a position to do so. It is important to make the point again that tackling inflation is by far the biggest challenge. Although there are some signs that it will come down—we have the predictions and forecasts—there is a lot more work to do. But that is the most important point, and No. 10 made it as well.

[Baroness Thornhill (LD)]

My Lords, the Minister mentioned homelessness, and the best model currently available for that predicts 300,000 more homeless people over the next year. The group in that category that I believe is most vulnerable is low-income earners in the private rented sector. Of course, evictions in the private rented sector have more than doubled in the last year. As rents have risen, their benefit, based on the local housing allowance, has been frozen at 2018 levels—we all know that a lot has happened since then. So have the Government given any thought to unfreezing the local housing allowance, even if only temporarily?

[Viscount Younger of Leckie (Con)]

We keep it under review, but we are not looking at that at the moment. I understand the point that the noble Baroness makes about the LHA, but she will know that we have the discretionary housing payments, which are currently being delivered through local authorities to the most vulnerable. I reassure the noble Baroness that we keep a close eye on that to be sure, and to get the feedback, that these payments are being given and are helping those at the vulnerable end of society. Echoing the noble Baroness’s point, I am very aware that rents are very high—far too high—in the private rented sector, and seeing what more can be done is certainly very high among the Government’s priorities.

[Baroness Donaghy (Lab)]

As my noble friend Lord Liddle said, some of us are sympathetic to the noble Viscount’s predicament. It cannot be easy when the Bank of England has just announced a 0.5% increase in Bank interest rates. He said seven times—I counted—“We are not complacent”, and I know that he is sincere; he is much respected by this House. It would have helped if the Statement from the Government had not been quite so complacent. The reference to “global factors” does not seem to take any account of government responsibility over the last 12 or 13 years. Do the Government take any responsibility whatever for trashing the economy? Did Prime Minister Truss actually exist? If she did not, does that mean that she will not be able to put forward any peerages to this House? It would be interesting to know what precise responsibility the Government take for the current predicament: that our inflation rate is higher than in any other country in the G7, as the noble Lord, Lord Bilimoria, said.

The Minister himself said that 3.1% of GDP is not that high for helping our most vulnerable. Why will the Government not consider uprating some of these benefits to assist them? Even the 10.1% rate for pensioners scales into insignificance when the rate of inflation is 8.7%. It is probably still going up—the Minister said that it was going down, but that is slightly misleading, if he does not mind me saying so. Inflation is going not down but up. I think he is referring to the rate of increase slowing down, which is a very different matter. In view of the urgent situation, will the Government not think of more emergency uprating for some of these benefits?

[Viscount Younger of Leckie (Con)]

There are a number of points from the noble Baroness, who I respect very much, but I will not be drawn into some of the political points that she started off by making. What I will say—and this was in the Statement—is that a lot of what we are facing is to do with the post-pandemic issues that have arisen. As the House will know full well, the war in Ukraine has certainly been quite a factor in that.

I remind the noble Baroness—I think she said it herself—that the uprating of 10.1% we have made to a number of benefits was, we felt, generous. Others would say that we should have done more, but we felt that it was generous at the time. To go back to the beginning of her remarks about the Statement itself, whatever she made of the Statement, as I have said before, we are continuously looking at what more we can do to help those people at this particular time.

Child Support Collection (Domestic Abuse) Bill

Viscount Younger of Leckie Excerpts

3rd reading
Friday 16th June 2023 Lords Chamber

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

My Lords, before we commence proceedings on the Bill, I am obliged to make a statement on legislative consent in relation to it. The Bill was amended in the other place to make provision across the United Kingdom. As noble Lords will know, child maintenance policy is transferred to the Northern Ireland Assembly, and the usual process would be for it to provide a legislative consent Motion for any provision relating to a transferred area. However, due to the continued absence of the Northern Ireland Assembly and Executive, a legislative consent Motion cannot be secured.

Historically, the Northern Ireland legislation in this area has mirrored that in Great Britain. Following engagement with the Northern Ireland Department for Communities, the Government’s position is that it is important that this legislation proceeds to apply in Northern Ireland in the absence of a legislative consent Motion. This will ensure that the people of Northern Ireland can benefit from the provisions in the Bill.

Motion

Moved by

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Farmer, and congratulate him on having brought the Bill to fruition in this House. I add my thanks to the Minister and his team for having supported it, to the honourable Lady, Sally-Ann Hart, who piloted it through the other place, and to the charities, such as Gingerbread, which put so much work into supporting parents in this area.

Although this is a brief and focused Bill, it achieves one incredibly important task: it enables parents who have experienced domestic abuse to use the Child Maintenance Service without having to communicate directly with the abusive parent. It is a good example of how a Private Member’s Bill can do something quite specific but incredibly important to those affected by it.

We might have considered tabling some amendments to it, to explore some of the issues, but we want to make sure that the Bill reaches the statute book in this Session. I am very conscious that it is six years since Emma Day was murdered by her ex-partner. He threatened her life if she chased him for child support, and when she pursued a claim for child support, he stabbed her to death. I hope that those who still mourn Emma to this day will see the Bill, and the work of the noble Lord, Lord Farmer, and others, as a small step forward in protecting those who face domestic abuse in our time.

The absence of a Committee stage prevented me from following up on one specific question I asked at Second Reading, which the Minister missed the opportunity to answer. In Committee in the Commons, the Minister, Mims Davies, said:

“Full consideration is being given to exempting victims of domestic abuse from collection charges”.—[Official Report, Commons, Public Bill Committee, 14/12/22; col. 9.]


Can the Minister, either now or in writing, tell the House where that consideration has got to?

For today, we are pleased to offer our support for the Bill, and we wish it fair speed.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Baroness, Lady Sherlock, for her support for my noble friend’s Bill. I will most certainly write a letter to her, over and above the letters I have already written to her, which I hope she has received.

I am grateful to my noble friend Lord Farmer for presenting his Bill to the House, and to my honourable friend Sally-Ann Hart for introducing the Bill and guiding it through its stages in the other place. I am also very grateful to the Minister for Social Mobility, Youth and Progression for her support.

I remain very grateful to Dr Samantha Callan for conducting the independent review of the ways in which the CMS supports victims of domestic abuse, and for her excellent report. As your Lordships are aware, Dr Callan’s report includes a recommendation to enable cases to be moved to collect and pay where there is evidence of domestic abuse—precisely what this Bill aims to do.

To ensure that the Bill targets parents appropriately, the types of domestic abuse evidence that will be required will be set out in secondary legislation. This will reassure not only the noble Baroness, Lady Sherlock, but my noble friend Lord Farmer in particular. We will engage with stakeholder groups, other government departments and the devolved Administrations, where appropriate, to ensure that appropriate processes are established for verifying evidence of domestic abuse.

I hope that the whole House will join me in supporting my noble friend’s Bill and agree to the final stages of its passage.

Bill passed.

Food Price Rises: Impact on Low-Income Families

Viscount Younger of Leckie Excerpts

Thursday 25th May 2023 Lords Chamber

[Baroness Hussein-Ece]

To ask His Majesty’s Government what assessment they have made of the impact of the rise in food prices on low-income families.

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

My Lords, we remain concerned about the impact of current global inflationary pressures on low-income families. This is a government priority and the reason why we have taken decisive action to support those on low incomes. The Chancellor met food manufacturers on Tuesday to discuss food costs and to explore ways to ease pressure on households. He also met the Competition and Markets Authority to discuss its investigations into the fuel and grocery markets.

[Baroness Hussein-Ece (LD)]

I am grateful to the Minister for his reply and that the Government are now seriously looking at this, but we know that inflation in basic foods is running at 19%, the highest rate since 1977, and polls show that one in six parents is going without—going hungry—so they can afford to feed their children, while supermarkets are still making record profits. The Minister may have seen reports that families with babies cannot afford baby formula, with the CEO of the British Pregnancy Advisory Service warning:

“We know that families experiencing food poverty resort to unsafe feeding methods, such as … watering down formula”.


What is the take-up of the Healthy Start allowance? Will the Minister urge his department to at least look at increasing its value, which is just £8.50 a week for children from birth to one year old and a staggeringly low £4.25 a week for children between one and four? Are the Government really going to stand by as babies are placed at risk of malnutrition and serious illness due to the cost of living crisis and the soaring cost of infant formula?

[Viscount Younger of Leckie (Con)]

There were a number of questions there from the noble Baroness. We know that it is tough for households and businesses across the UK at the moment and are doing whatever we can to support them with the cost of living. The noble Baroness will know that £94 billion is earmarked for giving out. On her question about supporting families who cannot afford the rising cost of infant formula, she will know that in cases of difficulty all local authorities should have an emergency formula provision pathway in place. Families can access this by talking to their health visitor or midwife, who can signpost them to local support. For women who cannot or choose not to breastfeed, Healthy Start provides support towards the cost of first-stage infant formula.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the Government on organising the Farm to Fork summit but echo the sentiments of the noble Baroness who asked the Question. Does my noble friend share my concern that farmers are not receiving these increasing costs, which they are covering, of energy prices and food production, added to the shortage of staff? Will the Government use every opportunity to investigate the rising profits that the supermarkets are recording?

[Viscount Younger of Leckie (Con)]

I take note of my noble friend’s point on the Farm to Fork food summit, which allowed the sector to get together, discuss the future, provide further innovative methods on food supply and discuss the current situation. Supermarkets’ profit margins are actually surprisingly low; I have some figures that I can pass on.

[Lord Sahota (Lab)]

My Lords, with ever-increasing food prices, the Trussell Trust has said that 40% of people on universal credit are using food banks. Is it not about time that the Government looked at this benefit and increased it?

[Viscount Younger of Leckie (Con)]

We remain very aware that food banks are being used to a great extent. As I have done before, I pay tribute to those, including charities, who so ably and selflessly run them. With the Family Resources Survey that we picked up on recently, we are very aware of the issues and are determined to ensure that people do not and should not have to go to food banks.

[The Lord Bishop of Chelmsford]

My Lords, in the diocese which I serve, charities in Harlow alone have fed more than 1 million people in the last year, which, frighteningly, represents a slower than the average demand for food banks nationally. I draw the Minister’s attention to the Bounty Club, which works with local businesses and people on the edge of crisis, helping them access a large bag of fresh food for £2.50, saving households on average £20 to £40 a week. Demand in Harlow is such that queues are regularly seen from St Paul’s Church right down the street. What assessment have the Government made of the number of people who are on the cusp of falling into poverty? What strategies are they considering to prevent people requiring the use of their local food bank or even charities such as the Bounty Club?

[Viscount Younger of Leckie (Con)]

I take note of the point the right reverend Prelate makes about Harlow. We are alert to those who do fall into poverty. What I can tell her is that in 2021-22, there were 1.7 million fewer people in absolute poverty after housing costs than in 2009-10, but I am very aware of the current situation. All I can say is that we continue to keep an eye on this: we are spending £276 billion through the welfare system in 2023-24, including around £124 billion on people of working age and children, and £152 billion on pensioners, to help with this aspect.

[Baroness Sherlock (Lab)]

My Lords, the reality is that food is now the new energy; but it is worse, because households spend more of their budgets on food and it is not cheaper in the summer. In fact, it is worse, because the kids do not get free school meals. Food price inflation of 19% is a disaster for poor families. The Minister will know—because he has read the evidence—that those on low incomes, even in work, are already buying own-brand supermarket goods; they are already skipping meals; and they are already going to food banks. There is nowhere else for them to go. Is any thinking going on in the Government as to what they will do right now to help those families this summer?

[Viscount Younger of Leckie (Con)]

Of course, the noble Baroness is right. I said at the beginning that much work is going on with regard to interaction with the supermarkets. A number of supermarkets have some urgent initiatives on the go. For example, ASDA has invested £73 million, allowing it to drop and lock prices for over 100 household products. The prices of these products were dropped by 12% on average and will remain this way until the end of the year. Morrisons has similar initiatives: it has cut prices on more than 500 products. It is more than this, and the noble Baroness will know that it is not just the UK. There are other countries, including Germany, where food price inflation remains high, at around 18% or 19%.

[Lord Dodds of Duncairn (DUP)]

My Lords, have the Government made any assessment of the impact on the food industry, and therefore the impact on prices for consumers, of the new labelling requirements, which appear to be quite onerous and are required under the Windsor Framework? The Government are now saying that these will apply not just to goods going to Northern Ireland but right across the United Kingdom. Severe concerns have been raised about the impact on food prices of those requirements.

[Viscount Younger of Leckie (Con)]

I do not have any figures to support an answer to give to the noble Lord, but what I can say—to which I alluded earlier—is that, in terms of supermarkets and profits, looking at the money side, there is no reason to believe that supermarket profit margins have significantly increased recently. The overall profits of Tesco and Sainsbury’s fell by 51% and 62% respectively in 2022-23. On the link with Northern Ireland, I will certainly look at my answer, and I may well write to the noble Lord.

[Lord Marlesford (Con)]

My Lords, does the Minister agree that the big problem is with processed food—the more processing, the higher the prices? Fresh food is another matter. The price of wheat this time last year was more than £300 a tonne; it is currently less than £200 a tonne. That is actually less than it was before the Ukraine war started. What effect does the Minister think that will soon start to have on the price of bread and meat?

[Viscount Younger of Leckie (Con)]

The truth is that many people on low incomes find it easier, and sometimes cheaper, to buy processed food. That is a fact. Having said that, we would encourage people to go to the local market to buy food. Again, the supermarkets are really stepping up to help those on low incomes.

[Lord Palmer of Childs Hill (LD)]

My Lords, I heard what the Minister said about the Government doing everything they can to help, but I do not think that it is everything. Are they considering extending free school meals? What are they doing about energy bills? An earlier questioner asked about this, but there was no real answer. What are they doing to crack down on the profiteering by supermarkets? The Minister gave an example of one or two supermarkets, but they are not helping people on low incomes.

[Viscount Younger of Leckie (Con)]

I take issue with the noble Lord, because they are, and I have made that clear with some examples. On his point about free school meals, under this Government eligibility has been extended several times, and to more groups of children than under any other Government over the past half a century. That includes the introduction of universal infant free school meals and further education free school meals. Approximately 1.9 million pupils are claiming free school meals, and it cost about £1 billion a year. A lot has been done in this area.

Child Support (Enforcement) Bill

Viscount Younger of Leckie Excerpts

2nd reading
Friday 19th May 2023 Lords Chamber

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

My Lords, I congratulate my noble friend Lady Redfern on her excellent introduction to the Bill and for initiating this important debate on Child Maintenance Service processes. As has been said, it has the full backing of His Majesty’s Government, and it gives me great pleasure to speak in support of it today. I will say something about my role, just to reassure the House: far from being a hospital pass, it is generally a great privilege to take on. There is a lot to do in this respect on the Child Maintenance Service, and I want to take forward many of the initiatives and changes that my noble friend Lady Stedman-Scott commenced.

There were a number of questions from the noble Baroness, Lady Sherlock, and I am very grateful for some advance notice of them. I may not be able to answer all of them, but I will do my best. I will answer most of them towards the end of my remarks.

As has been said, this is ultimately about helping children who have faced a particularly traumatic experience. Parental separation can be devastating for children. The work of the CMS cannot entirely put that right, but it can help to give those children a much better start in life that they otherwise would not have had. That is why the Child Maintenance Service exists. I am particularly grateful to my noble friend Lady Bottomley for giving us some history and context, going back to two redoubtable ladies, Barbara Castle and Margaret Thatcher.

Let me start by giving the Bill some of my own context. The purpose of the CMS is to facilitate the payment of child maintenance between separated parents who cannot reach their own agreement. In the financial year ending 2022, it is estimated that there were 2.5 million separated families in Great Britain. In the three-year period covering the financial years from 2020 to 2022, it is estimated that parents with care in separated families received a total of £2.6 billion annually in child maintenance payments, through both private and CMS arrangements. These payments helped to keep around 160,000 children out of poverty each year, a subject raised by my noble friend Lady Bottomley. I hope this has helped to answer one or two points she raised.

I understand how complex and traumatic separation can be for families, and we know that the vast majority of parents want to do the right thing and provide financial support for children they no longer live with. This is a challenging job undertaken in very difficult circumstances; these points have already been made by some other Peers in this short debate. CMS staff work incredibly hard to collect maintenance so that separated families receive the financial support they are due.

My noble friend Lady Redfern so eloquently explained how the CMS manages cases through one of two service types, and how it will take action to re-establish compliance and collect any unpaid amounts that have accrued. For parents who choose not to comply with their obligations, the CMS will attempt to deduct their maintenance and any arrears directly from their earnings. This is done via a deduction from earnings order or request, and employers are obliged by law to take this action. Where parents are self-employed, deductions can be made directly from solely held, joint and business bank accounts.

The aim of enforcement is to recover money needed to support children, as mentioned earlier, not to punish paying parents. However, where parents refuse to pay and all other avenues have been exhausted, the CMS can apply to the magistrates’ court, or sheriff courts in Scotland, to obtain a liability order. This enables the use of more stringent enforcement powers, such as instructing enforcement agents and other court-based enforcement actions.

However, the liability order process is now outdated, and making an application to court in each case is administratively burdensome. Currently, applications to court for liability orders typically take about 20 weeks to process, meaning five months where no tangible activity can take place to get that money where it is needed. Moreover, the debt will accumulate, putting the parent further into debt and making it harder to exit that spiralling situation.

This Bill, through my noble friend, amends existing powers which, once commenced, will allow the Secretary of State to make an administrative liability order where the paying parent has failed to pay an amount of child maintenance, without the need to make an application to court. This means that the CMS can react quickly and start those crucial first steps on the enforcement journey much sooner, which will substantially speed up the enforcement process, as was raised by my noble friend Lady Stedman-Scott in her eloquent speech. I applaud her, adding to the complimentary comments made by my noble friend Lady Bottomley. She has made vital important improvements to the CMS. She was a staunch advocate for its work securing money for children, as she said.

Most paying parents want to do the right thing and support their children, but we recognise that some of those parents might be struggling. I was struck by the important comments made by the noble Lord, Lord Palmer, who highlighted that some of them genuinely struggle and that there is a sensitivity involved in ensuring that we remember that. The noble Lord asked how often assessments are revalued if paying parents are struggling. Parents can report changes of income at any time. Where the change is greater than 25% of the income recorded in our system, we will alter the liability. He will know that the calculations are reviewed annually. In these tragic cases where parents cannot afford to pay their arrears because of other debt, which does happen, in most circumstances the CMS will aim to agree an affordable and sustainable payment arrangement which settles the outstanding arrears within two years. The CMS can also signpost paying parents to relevant organisations if there is a declaration of hardship. I say again that these are very sensitive issues. I add my comments to those of noble Lords concerning those on the front line for the Child Maintenance Service, who do their best in these difficult circumstances.

However, rest assured, as I know that the noble Baroness would wish me to say, we will not hesitate to use our enforcement powers wherever necessary for those relatively few parents who will find every which way not to pay. We are targeting our use of enforcement agents and liability orders more effectively, and the processes are more efficient. To answer a question raised by my noble friend Lady Stedman-Scott, in the year to December 2022, the CMS was granted 9,600 liability orders in England and Wales. The CMS has worked to target the use of liability orders more effectively. Processes are now more efficient and on average the CMS is collecting more money per liability order in process. To ensure that these powers are used proportionately, the Bill will stipulate that they will only be used where a deduction from earnings order is inappropriate or has been ineffective. The Bill will also allow the liability order to be varied if, for example, the amount of arrears upon which the liability order is based is subsequently found to be incorrect because investigations have revealed further details about a paying parent’s finances which were divulged to the CMS previously.

Further protections will be made available through secondary legislation, which will give parents the right of appeal while setting out some parameters around the appeal process—including the period within which the right of appeal may be exercised, the powers of the court in respect of those appeals, and for a reliability order not to come into force in specified circumstances. I will say more about secondary legislation in response to the questions raised by the noble Baroness, Lady Sherlock.

The appeal provisions through secondary legislation will be reflective of powers already in use and working well for other child maintenance enforcement measures, such as those which allow for deductions directly from a parent’s bank account. Where a valid appeal has been made, the CMS will not act on a liability order until the appeal has been resolved by a court. I hope this answers the question raised by my noble friend Lady Stedman-Scott. They will also reflect current provisions for liability orders by preventing the court questioning the maintenance calculation as part of the enforcement process. Where a parent disagrees with the calculation, there are already alternative routes they can take. They can ask the CMS to reconsider it through the mandatory reconsideration process and subsequently appeal to the Tribunals Service if they are dissatisfied, or they can report a new change of circumstances, which could lead to a new calculation.

To develop the secondary legislation on the Bill, my department will consult and engage with stakeholder groups, as well as other government departments, such as the Ministry of Justice, and the devolved Administrations, where appropriate, to ensure that parents are suitably supported. The secondary legislation will follow the affirmative procedure, so this House will be able to debate the proposals put forward.

My noble friend Lady Bottomley touched on enforcement improvements, and I shall go a little further and reassure her. The House will know that the CMS has made improvements to enforcement processes to increase the effective use of powers. This includes simplifying deductions from earnings and increasing efficiency by reducing the manual intervention required, and the CMS is also making better use of deductions from bank accounts. This has increased the volume of deductions and means that money is being collected more quickly for children even before the Bill. Working in partnership, the CMS has improved court processing times by introducing virtual court presenting and electronic exchange of documentation. Only 8% of the total maintenance due to be paid since the start of the CMS remains to be collected through collect and pay. Just to put this in context, this was as high as 17% in March 2015.

My noble friend Lady Bottomley also touched on paying parents—there was a theme anyway about paying parents and some of them avoiding their obligation to pay. I say again that we are aware of a small number of parents whose maintenance liability is inconsistent with their financial resources. Cases involving complex income or suspected fraudulent behaviour can be looked into by the FIU, the financial investigation unit. This is a specialist team that can request information from a wide range of sources to check the accuracy of information that the CMS is given.

The noble Baroness, Lady Sherlock, asked about Section 33(5) of the 1991 Act. I can give her some assurance—it may be that I have to follow up with more detail—that this power is not used because, since 2015, regulations have allowed the CMS to share information directly with credit reference agencies. The Bill does not affect those data-sharing provisions and the CMS will retain the means of disclosing information to credit reference agencies when required.

The noble Baroness also asked why the provisions that the Bill amends are not shown in the 1991 Act on GOV.UK. I may have to follow up with a letter on this, but they are not on GOV.UK in the 1991 Act because they are uncommenced. I think that is what the noble Baroness said, but I will look at my reply and see if I can enhance what I have just said.

I have a very short reply to the noble Baroness’s very important point about the missing letter to Matt Rodda: yes, we have written and, yes, it is now deposited in the Library, so I hope that is helpful for the House in general.

The noble Baroness, Lady Sherlock, asked a broader question about what the Bill actually does. I think she knows what the Bill does, but she focused on the commencing of administrative liability orders and the appeal routes, and I will say a little more about that. One of the questions was why the provisions were not commenced in 2012. We considered commencing these powers in the past, but the powers as originally drafted included a right of appeal to the First-tier Tribunal. This would be an expensive option for the Child Maintenance Service and would create unnecessary demand for the Tribunals Service. Linked to that is the question of why there is a change to the appeal route; I think this is central to the questions she raised. Our intention is now to commence these powers with certain changes we are making through the Bill, including replacing the requirement to create a right of appeal to the First-tier Tribunal with a more appropriate court-based appeal. Provisions relating to appeal rights will be set out in regulations, so there is more discussion to be had on this and I hope that provides some help.

I am aware of the time. I hope the House recognises the importance of this Bill; it has the full support of His Majesty’s Government and I very much welcome it.