Delegated Legislation Committee
Draft Immigration and Nationality (Fees) (Amendment) Order 2017
The Committee consisted of the following Members:
Chair: Mrs Madeleine Moon
† Allan, Lucy (Telford) (Con)
Austin, Ian (Dudley North) (Lab)
† Brazier, Sir Julian (Canterbury) (Con)
Clwyd, Ann (Cynon Valley) (Lab)
Coyle, Neil (Bermondsey and Old Southwark) (Lab)
† Dakin, Nic (Scunthorpe) (Lab)
† Goodwill, Mr Robert (Minister for Immigration)
† Griffiths, Andrew (Lord Commissioner of Her Majesty’s Treasury)
† Harris, Carolyn (Swansea East) (Lab)
† Lopresti, Jack (Filton and Bradley Stoke) (Con)
McDonald, Stuart C. (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
† Pursglove, Tom (Corby) (Con)
Stevenson, John (Carlisle) (Con)
† Streeting, Wes (Ilford North) (Lab)
† Villiers, Mrs Theresa (Chipping Barnet) (Con)
† Warman, Matt (Boston and Skegness) (Con)
† Wragg, William (Hazel Grove) (Con)
Jonathan Whiffing, Lauren Boyer, Committee Clerks
† attended the Committee
First Delegated Legislation Committee
Monday 27 February 2017
[Mrs Madeleine Moon in the Chair]
Draft Immigration and Nationality (Fees) (Amendment) Order 2017
I beg to move,
That the Committee has considered the draft Immigration and Nationality (Fees) (Amendment) Order 2017.
I apologise at the outset for the rather dull nature of today’s debate. I generally do dull quite well all on my own, but today I will not even have to try very hard.
The draft order will make minor technical changes to the Immigration and Nationality (Fees) Order 2016, which remains in place and which continues to set out the overall framework and maximum amounts that can be charged for immigration and nationality functions, as agreed by Parliament last year. The draft order does not itself set fees; those are set by regulations that are updated annually. The regulations for the 2017-18 fees are due to be laid before Parliament in March.
The technical changes made by the draft order include express provision for the Secretary of State to charge for an approval letter in respect of applications for entry clearance to the Isle of Man as a tier 1—exceptional talent—migrant, and amendments to bring fees for entry clearance to the Channel Islands within the scope of the 2016 order. This change is being made following the extension of provision in the Immigration Act 2014 to those jurisdictions by way of Orders in Council, the effect of which is to enable the Secretary of State to set fees in relation to them. It will ensure that the scope of the charges set under the 2014 Act for above-basic Border Force officer services, such as attendance at premium airport lounges or port-owned fast-track services, is broadened to meet future demands, for example to cover above-basic services provided at sea.
The draft order will also permit a charge to be set for providing information, in addition to the current services, which involve providing advice, training and assistance. We consider that that change will better reflect the nature of the information and services provided. It will not affect the Home Office’s basic status checking services, for example those provided to employers or landlords in the United Kingdom, which will continue to be provided free of charge; the in-country service, for example calls to employers’ or landlords’ helplines or the nationality helpline, which will continue to be charged at local rates; or the availability of information for sponsors and educators. The services provided in this category, in respect of which the draft order makes provision, relate to the international service only. Customers using these services are able to access more detailed information than that relating to the basic operation of the service, which is available online. There is a standard free-to-use service available on the gov.uk website in all cases.
We are also changing the way in which the fees for certain information and advice are structured, adding scope for a fixed fee in addition to the per-minute fee currently provided for in the 2016 order. This is to accommodate likely changes to the overseas contact centre services, where a new service provider, which will assume responsibility for the service in May 2017, may offer and charge for web-chat and email services in the future. The proposed maximum amount that can be charged for these new services is based on the per-minute rate set out in the 2016 order. There are no plans to increase the per-minute fee charged for accessing telephone services overseas under the new contractual arrangements.
Finally, the draft order will also update the description of an electronic visa waiver so that it accurately matches the process and policy intent, as set out in the immigration rules. This service enables visitors from Oman, Kuwait, the United Arab Emirates and Qatar to travel to the UK without a visa.
I emphasise that we do not seek to change the overarching framework for immigration and nationality fees or the maximum fee levels that were agreed by Parliament and set out in the 2016 order. As I mentioned, the immigration fees regulations, which are due to be laid in Parliament in mid-March and will come into force in April, will remain completely within the parameters agreed by Parliament and in line with the impact assessment published with the 2016 order.
It is important that we strike a balance between the economic interests of the UK and the need to maintain a sound immigration system. I hope that right hon. and hon. Members will be reassured that the Government will ensure that fees for immigration and nationality services enable the UK to retain its position as an attractive destination for work, study and visits. I commend the draft order to the Committee.
In contrast to the Minister, who seems to be satisfied with dull and boring, I aim to spice up your life. In that vein, just to be controversial, I will say that there seems to be an irony in the fact that we can so easily discuss this order affecting the Channel Islands but we were unable to extend the same attention to tax evasion involving those very same islands in the Criminal Finances Bill that is passing through Parliament. However, the Opposition are by no means opposed to the measures.
The amendment to the 2016 order and the extension of measures to the Channel Islands are both sensible and proportionate. We particularly welcome the setting of a maximum fee. The cost to individuals and families has become extortionate. Although we recognise the need for fees, we must also acknowledge that anecdotal evidence has shown that we are losing students and tourists, particularly to other European countries. Those groups would contribute massively to our economy and it must be argued that their loss is owing to the level of fees and the complexity of the visa system. Nevertheless, we will not oppose the order today.
Question put and agreed to.
Draft Business Impact Target (Relevant Regulators) Regulations 2017
The Committee consisted of the following Members:
Chair: Joan Ryan
† Adams, Nigel (Selby and Ainsty) (Con)
† Barclay, Stephen (Lord Commissioner of Her Majesty's Treasury)
† Churchill, Jo (Bury St Edmunds) (Con)
† Cruddas, Jon (Dagenham and Rainham) (Lab)
† Debbonaire, Thangam (Bristol West) (Lab)
† Esterson, Bill (Sefton Central) (Lab)
† Ferrier, Margaret (Rutherglen and Hamilton West) (SNP)
Flello, Robert (Stoke-on-Trent South) (Lab)
† James, Margot (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)
Johnson, Alan (Kingston upon Hull West and Hessle) (Lab)
† Johnson, Dr Caroline (Sleaford and North Hykeham) (Con)
† Mak, Mr Alan (Havant) (Con)
† Morton, Wendy (Aldridge-Brownhills) (Con)
† Paterson, Mr Owen (North Shropshire) (Con)
† Perry, Claire (Devizes) (Con)
† Quince, Will (Colchester) (Con)
Sheerman, Mr Barry (Huddersfield) (Lab/Co-op)
Ben Williams, Committee Clerk
† attended the Committee
Second Delegated Legislation Committee
Monday 27 February 2017
[Joan Ryan in the Chair]
Draft Business Impact Target (Relevant Regulators) Regulations 2017
I beg to move,
That the Committee has considered the draft Business Impact Target (Relevant Regulators) Regulations 2017.
It is a pleasure to serve under your chairmanship, Ms Ryan. The purpose of this statutory instrument is to support regulatory bodies in the UK to create a healthier business environment by making regulation more proportionate, transparent and accountable. The Government are committed to ensuring that regulation supports growth and does all that it can to unlock productivity in the UK. Better regulation is central to the Government’s desire to make the UK the best place in the world to start and to grow a business. It is a key part of their commitment to driving economic growth and boosting productivity.
During the last Parliament, the Government made significant progress through programmes such as one-in, two-out and the red tape challenge, which were instrumental in delivering savings of £10 billion to business over the lifetime of the last Parliament. Those programmes encouraged a cultural shift in Government Departments towards more proportionate and smarter regulation. That approach was formalised through the Small Business, Enterprise and Employment Act 2015, which provides a transparent framework for assessing, managing and reporting on new regulatory impacts to business—known as the business impact target.
Regulatory functions carried out by, or on behalf of, UK Ministers are already covered by the business impact target. Under the Enterprise Act 2016, we extended the target’s ambition through the power to include the activities of a range of other regulators that are legally separate entities to Ministers. The regulations, which list such regulators, will support us in achieving a further £10 billion of deregulatory benefit for UK businesses during this Parliament.
The extension of the business impact target will support a positive shift in how regulation is delivered. It will help to reduce the regulatory burdens that hold businesses back and that prevent them from getting on and doing the business. The result will be another significant step towards ensuring that regulation supports growth and that Britain is the best place in the world to start and to grow a business.
The regulations specify the individual regulators that will be brought within the scope of the business impact target. The regulators listed will be required to assess the economic impact on business of changes to their regulatory policies and practices that come into force or cease to have effect during the Parliament. The assessments must be verified by the Regulatory Policy Committee and the savings or burdens that are imposed on business incorporated into the Government’s annual report, outlining their performance against the target.
The rationale for that is clear: businesses consistently tell the Government that the actions of regulators are as important as the content of legislation in determining their experience of regulation. The cost to business of regulatory activities should therefore be actively assessed and transparently reported, and the regulations deliver that. When impacts on business are imposed by changes in regulatory activities, those should be transparent. In addition, businesses should have confidence in Government estimates of that impact.
The changes do not in any way undermine the core purpose of regulators, which provide vital protections and help to ensure that markets function effectively. Regulation has important economic, social and environmental goals. For those reasons, regulation should be proportionate and at the minimum cost to business necessary to achieve the outcome required. Including further regulators in the business impact target will help regulators to make the move to smarter regulation that delivers outcomes with the minimum overhead. That will be good for British business and will contribute to a more consistent regulatory process.
The Government consulted between 11 February and 17 March 2016 on the proposed list of regulators to be brought within the scope of the business impact target. We received responses from a range of stakeholders, including businesses, regulators, trade associations and other organisations. The majority of respondents were supportive of the proposal to bring the regulators specified in the consultation within the scope of the business impact target. One respondent stated that the business impact target would result in regulators
“having to design their services, policies and procedures in a way that suits the needs of business”.
Respondents did not suggest any further regulators be brought within the scope, while a handful of regulators questioned their own inclusion. We have reviewed those responses and are satisfied that it is appropriate to bring the regulators listed in the instrument within scope of the business impact target. We have also paid close attention to issues raised around proportionality, and the Government have been working collaboratively with a wide range of regulators to design a process for implementation that minimises burdens on regulators.
The business impact target plays a central role in the Government’s agenda to improve UK regulation. It supports a positive shift in the way regulation is delivered by reducing the regulatory burdens that hold businesses back and prevent them from getting on with business. The measures are an important step towards creating a healthier business environment by making regulation more proportionate, transparent and accountable. I commend the regulations to the Committee.
It is a pleasure to serve under your chairmanship, Ms Ryan. I have not done so before, and I look forward to it. The Minister has very briefly set out the Government case for the regulations, and I will raise a series of concerns and challenges, to which I would like her to respond.
The Minister went over the Government’s one-in, two-out approach in the last Parliament, yet here we are, adding regulation to the regulators. At first glance, it looks like more regulation, not less. A long list of regulators that will see additional claims on their time and effort is included in the regulations. The Government’s claims to want to see less regulation do not always stand up to challenge, but that is not the main point. We have debated the impact of quarterly reporting before, and I am sure we will debate it again. Time, bureaucracy and cost are associated with the requirement for businesses to report their tax affairs every three months. The Federation of Small Businesses estimates that the proposal will create £2,600 a year of extra cost. We have extra regulation and extra costs to business from a Government who say they want less.
I turn to the matter at hand. A number of concerns emerged in going through the regulations. The challenge is to balance properly the short-term requirement on regulators to reduce the amount of work they are doing with the long-term impact. Has that long-term impact been measured? Has the impact assessment adequately looked at what some of the challenges, concerns and impacts may be, especially when we are talking about public safety and health? A number of the regulators concerned, including the Care Quality Commission, the Chief Inspector of Drinking Water and the Food Standards Agency, cover one if not both of those areas. Those are three examples; I could mention many more where public safety and health are paramount.
The concern must be that, in the Government asking or requiring regulators to reduce their impact on business, corners are not cut and that public health and safety are not put at risk. Can the Minister answer this simple question: what is the mechanism to avoid an increase in risk in any of the agencies referred to in the schedule and the papers in front of us? The Financial Conduct Authority is included in the regulations, and we are all acutely aware of the important lessons of the financial crash. What is the mechanism for ensuring that the reduction in the requirements on the FCA will not lead to additional problems in the financial sector, such as the crash from which some would argue we are yet to recover? That is a great concern, and that was expressed in the consultation. The point about caution and the analysis made by a range of these agencies needs a detailed answer from the Minister. I am sure that she will have that answer by the time I have finished.
I move on to the wider financial elements of the regulations. It is apparent that savings can be quickly made by reducing the activities of the regulators, but will those savings lead to longer-term costs? What work have the Government done to ensure that cost concerns and economic concerns, as well as concerns about health and safety, are being considered for the longer term? What would be the point of making short-term savings? The Minister and her colleagues in her Department and across Government are rightly committed to long-term growth, and they are happily now committed to an important industrial strategy, which was not the case with some of her predecessors. How can we be sure that the reductions in regulation will not lead to longer-term cost?
I will give an example that was raised in the Small Business, Enterprise and Employment Bill Committee by my hon. Friend the Member for Wakefield (Mary Creagh). She talked about the challenges of getting environmental regulation right. She quoted evidence that suggested that the benefits of environmental regulation—some of which can be quantified straightaway and some of which take longer—cover the costs three times over. The implication of that analysis is that, if environmental regulation is reduced, costs increase in the long term. How will increased costs to the economy and to business be avoided by reducing regulation, whether that is for the environment or the range of other areas covered by the organisations listed in the schedule?
If the Minister could answer those questions, I would be extremely grateful. I am sure it is not the Government’s intention to lose out in the long run just to make a short-term gain and to get some headlines on reducing red tape. We on the Opposition Benches fully support the need to reduce big business regulation, to improve conditions for business, to make the economy more vibrant and to create fair markets. If changes to regulation can help to achieve those objectives, that is absolutely the right way to go, but if they reduce the potential for a stronger economy in the long run, that cannot be right.
It came up during the consultation that a request from business is absent from the draft regulations. Tax accounts for a large amount of regulation that causes huge cost to business and which businesses object to massively, so why are HMRC and other bodies responsible for tax not covered by the regulations? That would be an obvious place to start and an obvious way to reduce regulation, bearing in mind the absolute purpose of reducing the cost to business. I am curious to hear the Minister’s answer to that question, which was raised in the consultation, and I look forward to her other answers. Perhaps I will pursue certain issues further through interventions as she responds.
It is a pleasure to serve under your chairship, Ms Ryan. I have a few questions for the Minister. In the context of regulatory change, are charities distinguished from small businesses? If not, why not? Are regulations being scrapped to create this one? If so, what specific regulations are being scrapped and can she provide an impact assessment for each of them? On the scrapping and replacing of regulations, will that have a behavioural impact on business? I am puzzled—the Minister has provided an overview of the regulators listed in the schedule, so can she provide information on how the change will impact on different bodies? Specifically, how would the Gambling Commission and the Human Fertilisation and Embryology Authority have to operate under the regulations?
I hope that we are not in danger of conflating smaller and smarter regulation with deregulation. That is a bit of a worry. The Scottish National party would not want to see a tax-haven style economy, which is completely incompatible with a welfare state. The removal of regulation could open the door to manipulation, so I would like an answer to that point today. Finally, has any consideration been given to how Brexit will affect the regulations?
I will start by clarifying the purpose of the regulations, in response to the questions asked by the hon. Member for Rutherglen and Hamilton West. The measures do not direct regulatory bodies to reduce regulation. They are about bringing them into the scope of the Enterprise Act such that the regulators listed will be required to assess the economic impact on business of their activities that qualify against the target. That assessment will be verified by the independent Regulatory Policy Committee, so there are safeguards in place. I hope that that reassures the hon. Lady.
On the questions asked by the shadow Minister, the hon. Member for Sefton Central, we agree that we are not after more regulation with these provisions. This sensitive approach to regulators brings them into scope such that they have to assess the economic impact of the regulations for which they are responsible. It is not a directive to the regulatory bodies to reduce regulation. Our concern in respect of regulators is that the regulations are designed to ensure that business benefits from reduced costs in complying with regulations. That does not mean they might receive less regulation, but we want them to be given every opportunity for reduced cost in compliance with regulations, so there is greater emphasis on reporting and transparency among the regulators that have been brought into scope through the regulations.
As the hon. Gentleman mentioned, tax is exempt from the target and therefore exempt from the regulations. I reassure him that HMRC is subject to a separate target of reduced regulation as regards the tax regime. Its target is that it should reduce the impact of tax regulations by £400 million by 2020. So it is subject to a reduced regulatory target, but that is not part of the business impact target—there is a separate target for which it will be held to account.
I am grateful for the Minister’s explanation, but it baffles me. At the start of my remarks, I mentioned quarterly reporting and the estimate by the Federation of Small Businesses of the average cost—£2,600 a year—to businesses. If HMRC is increasing costs to millions of businesses across the country in that way, it really is going to struggle to hit that target—unless she can tell me something I have completely missed.
It is always difficult when one is talking about a measure that is currently under discussion. The requirement on businesses to report quarterly and digitally to the Revenue for their taxes will be introduced, but the exact mechanics of that proposition are still under discussion and review. The FSB, which I met to discuss the issue, accepts that this is not set in stone yet. It is, in fact, quite encouraged by the response it has received from the Treasury on the threshold below which businesses would not have to comply with the regime. I think it does accept that in the long run this new quarterly approach and the digitisation of tax returns will save business money, while it does not dispute that it will perhaps have a regulatory burden effect on some businesses in the short term. As I said, it is a bit premature to be bandying figures around when we do not know the exact shape of the new digitisation of tax and quarterly reporting requirement.
I will move on to the concerns that the hon. Gentleman rightly raised about regulators such as the Food Standards Agency and others in health and safety—Public Health England and so forth. I draw his attention to the exclusions; there is a list of exemptions from what we are debating this afternoon. The exemptions include any regulations relating to civil emergencies and relevant to the delivery of large infrastructure projects. He also mentioned the FCA, and there is an exemption to any provisions relating to systemic financial risk. There is a large number of exemptions and that is how we have tried to allay concerns such as those he expressed.
I am grateful for that explanation, but who will determine what is in and out of scope? Many people will be extremely concerned about all those points but, to take the FCA as an example, who will make the determination? How will we know in advance whether something will contribute to a future financial problem or indeed a crisis? Is there not a danger it will be too late? What is the mechanism for avoiding that happening?
Each regulator has to provide an assessment of where it sees the impact of its regulatory activity being. That is then assessed by the Regulatory Policy Committee and, ultimately, Parliament can hold Ministers to account. The scope is designed to ensure that agencies ensure that the impact of their regulations is fully transparent. The environmental regulation impacts are included in that.
I am confident that savings are not going to lead to additional long-term costs. We are not necessarily reducing regulation. The measure is about minimising the cost to business to achieve the outcome that the regulations require.
I thank Members for their comments in Committee. The business impact target plays a central role in the Government’s agenda to improve the quality of regulation in the UK. Businesses tell us that the actions of regulators are as important as the content of legislation in determining their experience of regulation. The draft regulations will provide greater clarity and transparency for business about the impacts of the regulatory activities of Government and independent regulators. They will do so without undermining the core purpose of those regulators, and they will help to deliver smarter regulation, creating a healthier business environment, which will be good for British business.
Question put and agreed to.
Draft Bereavement Support Payment Regulations 2017
The Committee consisted of the following Members:
Chair: Mr David Hanson
† Brine, Steve (Winchester) (Con)
† Caulfield, Maria (Lewes) (Con)
† Courts, Robert (Witney) (Con)
† Cunningham, Alex (Stockton North) (Lab)
† Duddridge, James (Rochford and Southend East) (Con)
† Evans, Chris (Islwyn) (Lab/Co-op)
† Flint, Caroline (Don Valley) (Lab)
† Hall, Luke (Thornbury and Yate) (Con)
† Heappey, James (Wells) (Con)
† Knight, Julian (Solihull) (Con)
Mahmood, Shabana (Birmingham, Ladywood) (Lab)
† Mullin, Roger (Kirkcaldy and Cowdenbeath) (SNP)
† Nokes, Caroline (Parliamentary Under-Secretary of State for Welfare Delivery)
† Pawsey, Mark (Rugby) (Con)
† Perkins, Toby (Chesterfield) (Lab)
† Smith, Royston (Southampton, Itchen) (Con)
† Turner, Karl (Kingston upon Hull East) (Lab)
Rob Page, Margaret McKinnon, Committee Clerks
† attended the Committee
Third Delegated Legislation Committee
Monday 27 February 2017
[Mr David Hanson in the Chair]
Draft Bereavement Support Payment Regulations 2017
I beg to move,
That the Committee has considered the draft Bereavement Support Payment Regulations 2017.
These regulations were laid before both Houses on 12 January. They provide the details of a new benefit—bereavement support payment—that was first considered by this House as part of the Pensions Act 2014. Bereavement support payment will replace bereavement allowance, widowed parent’s allowance and the bereavement payment for those who lose a spouse or civil partner on or after 6 April 2017. The regulations set out the amounts to be paid, the duration of payments, payments for those who are prisoners, and the territories in which a person must reside in order to receive the new benefit. I am satisfied that this instrument is compatible with the European convention on human rights.
Losing a spouse or civil partner is a tragic occurrence; bereavement benefits provide important financial support during this deeply distressing time in a person’s life. Previous reforms have tended to be limited and in response to specific pressures. No one had really considered how this support fits in with the wider changes to the benefits system and, indeed, to the social landscape as a whole. Consequently, the current benefits are out of date, difficult to administer and hard to understand. Reform is essential to simplify and modernise the system.
The history of bereavement benefits is rooted in the Widows, Orphans and Old Age Contributory Pensions Act 1925—a time when most women were wholly dependent on their husband’s income. Then, if a woman was widowed, her sole source of income would disappear completely, so it was considered necessary to provide a replacement for that income in order for her to survive. Thankfully, that is no longer the case. Women as well as men are active participants in today’s workforce, and many households are now made up of and benefit from dual careers and dual incomes.
Where the loss of a spouse equates to the loss of the sole breadwinner, income-related benefits are available to make sure that nobody is left without sufficient money to live on. The bereavement support payment is designed to be significantly simpler than current bereavement benefits, with a uniform payment structure and a single contribution condition. The aim is to provide targeted financial support when it is needed most, without affecting access to additional forms of support available through other parts of the welfare system.
The reform of bereavement benefits has been welcomed by both the Social Security Advisory Committee and the Select Committee on Work and Pensions; the latter heralded many of the changes as long overdue. In addition to the scrutiny provided by those two bodies, the bereavement support payment was also the subject of a public consultation exercise that was launched in 2011. Responses to the consultation played a major part in the design of the bereavement support payment, including the carefully considered decision to structure the payments as a series of instalments as opposed to a single lump sum, and the decision that the bereavement support payment will not be subject to income tax. The evidence from our public consultation exercise found that the financial impact of spousal bereavement is particularly acute in the early months. The bereavement support payment will therefore provide a significant cash lump sum for people when they need it most. It will be a single payment followed by 18 monthly instalments.
Recognising that those with children need greater support, a higher rate will be paid to those who are pregnant or who have dependent children when they are bereaved. The duration of the payments is not intended to equate to the period of an individual’s grief; nor is it intended to provide ongoing income replacement. The fundamental design principle of the new benefit is that, as a short-term payment, it aims to address the additional costs of bereavement, rather than contribute to everyday living costs.
As the bereavement support payment is clearly distinct from income replacement benefits, we will disregard the payments for the purposes of universal credit and legacy benefits, as well as discount them from the calculations that count towards the benefit cap. This will clearly benefit the least well-off, as they will for the first time be able to receive payments of bereavement benefit in full, alongside any other benefit entitlements. Let me be clear that this reform is not about saving money; it is aimed at providing targeted financial support when it is most needed. Analysis shows that, overall, over half of new recipients will be better off after the reforms.
Looking at the welfare system as a whole, I believe that the best way to provide meaningful support to those who have been bereaved is through a shorter-term payment of bereavement benefit, combined with longer-term means-tested benefits if needed. As I have already stated, losing a spouse or civil partner is a tragic occurrence, the effects of which are likely to be felt for many years after the event. We need to keep in mind that the support we provide should be more than just help towards the initial costs; we also have a responsibility to help the bereaved to adjust to their change in situation.
For those who are not in work or who have given up working in order to care for a terminally ill spouse, part of the process of adjustment is making plans to return to the workplace. It is well known that prolonged periods away from the labour market can have a negative effect on a person’s financial, emotional and psychological wellbeing. Growing up in a workless household is known to have a detrimental impact on children, affecting everything from socialisation to educational attainment. This responsibility needs to be balanced with the need for the surviving parent to be able to spend time with their children to help them to process their grief.
In keeping with current bereavement benefits, the bereavement support payment has no work-related requirements attached. Universal credit claimants who are bereaved are exempted from work search requirements for six months. After that period has passed, we will take a flexible approach to conditionality, allowing it to be tailored to the individual. This progressive reform to bereavement support is an important aspect of the system; by providing greater flexibility and tailoring conditionality in this way, we are seeking to make it far more sympathetic to people who have suffered a tragic loss.
The bereavement support payment should not be seen as just the latest in a list of reforms to bereavement benefits. It is a brand-new approach to helping those who have been bereaved. First and foremost, it is about providing fast and direct financial help in the crucial months following the loss of a spouse. Secondly, it is about helping widows and widowers to rejoin the labour market and providing them with the right level of support to make that a reality. It is a new approach with the interests of the bereaved, of families and of children at heart. With that in mind, I commend the regulations to the Committee.
It is a pleasure to serve under your chairmanship, Mr Hanson. As the Minister said, the draft regulations will enact provisions in the Pensions Act 2014 introducing a new single payment to replace bereavement payment, bereavement allowance and widowed parent’s allowance for those whose spouse or civil partner dies on or after 6 April this year. There is tremendous merit in simplifying the approach. The Government argue that they are acting with the benevolent intention of modernising the provisions and increasing simplicity for those who are bereaved and seeking support. It must therefore be merely a matter of chance that the measures proposed in the regulations make a significant saving for the Government of approximately £100 million a year. I hope that the Minister and the Chancellor have recovered from their shock at that substantial bonus for the Exchequer.
Despite the Government’s warm words, this is a further austerity measure that is to the detriment of grieving families. We have serious concerns about the proposals. Although we recognise the need for simplicity and change, we do not support these reforms, and we have committed to reversing them under the next Government as the first step towards a wider review of support for the bereaved. Our direct concerns include questions about the shortened timetable; the impact of universal credit conditionality after the initial six-month grace period; the bizarre decision not to uprate support in line with inflation; and, finally, cohabiting couples. Let me deal with each concern in turn, beginning with the shortened timetable.
Under the current system, widowed parent’s allowance is paid to a bereaved parent until their youngest child leaves full-time education. The thorough and helpful analysis provided to hon. Members by the Childhood Bereavement Network has found that the median claim made was for between five and six years’ support. There is clear logic and an evidential basis for providing social security support to bereaved families while children are growing up: given the emotional distress that they will have to process, the child should be protected as well as possible from the financial implications of the tragic event of a parent’s death. Evidence suggests that there is a late effect of bereavement, with some children showing new and greater difficulties two or three years after the death of a parent. Indeed, the same study, which analyses the most robust longitudinal survey available, found that the availability of the consistent, nurturing presence of the surviving parent was one of the strongest predictors of bereaved children’s emotional health and behaviour.
The regulations have the potential to compound the grief that children go through, as well as that of the surviving parent. Let us face it: parenting is hard enough at the best of times. I can only imagine what it is like for people who are left behind, particularly with children, never mind putting financial pressure on top of all that. In 2015, the current support helped 40,000 children who had lost a parent; it is estimated that the regulations reduce the average award by £17,000. Is that really what the Government and the Prime Minister mean when they talk about helping hard-pressed families?
The Government originally planned to provide only 12 months’ support, but increased that to 18 months’ eligibility at the behest of the Work and Pensions Committee. That is welcome, but we question the basis for drawing the line at 18 months—a much shorter time than is currently provided for. Would it not be better for the length of support to remain the same, to ensure the best possible outcome for the child in this tragic and distressing situation? That would seem a sensible way of using the savings that the Government are making, given that they argue that this is not an austerity measure.
The Government have so far ignored our calls to scrap these cuts, preferring to pocket the £100 million that they happen to be saving from this measure. Perhaps the Minister would at least consider adjusting the Government’s actuarial assumptions and extending the period of eligibility for support, but paying it at a slightly lower amount.
On the interaction with universal credit, the Government have argued, and the Minister has said, that bereavement support is not an income replacement but a lump sum, followed by monthly instalments, to address the additional costs of bereavement. This appears to be a very murky distinction. I would like to see the Minister try to draw us a diagram—a Venn, perhaps. Nevertheless, this justification allows the Government to point to universal credit as a mechanism that kicks in to support bereaved families following the now much shorter period of social security provision. The Government have agreed to exempt the bereaved from work search requirements for six months in the light of their circumstances, and to take what they regard as a “flexible” approach to conditionality thereafter. In practice, as I understand it, this flexibility means that claimants can request an additional month every six months for the two following years.
We do not believe that obliging parents to return to work six months after a bereavement is in the best interests of the parent or the bereaved child. If the Government accept that the risk of serious distress remains high for up to two years more, why place bereaved families under the pressure of continuously having to prove themselves? This is a further example of the original policy taking a more compassionate approach. Most bereaved partners retain work, or return to or enter it after 18 months. If the Government press ahead, surely a more pragmatic compromise would be to exempt bereaved families from conditionality for that period, and not just for six months as is proposed. Given the evidence, will the Minister not just scrap this policy now, or at the very least commit to looking again at the period of initial exemption from universal credit, and consider an extended exemption?
On uprating, it was confirmed in the other place by my noble Friend Baroness Sherlock that the Government do not believe that the bereavement support payment should be uprated in line with inflation. The Minister in the other place suggested that as, in the Government’s view, this is a grant payment rather than a social security entitlement, there was no precedent for uprating the amount paid in line with inflation. At first glance, this seems odd from the Government. Usually, social security rises in line with inflation to ensure that vulnerable groups and those on the lowest incomes do not find themselves ever worse off as time goes by. Surely no one in this House wishes to see support for those suffering grief become insufficient, so why will the Minister not agree to meet the relatively small additional cost of uprating?
Finally, I turn to the point regarding cohabiting couples—another unfairness that bereaved partners have raised with MPs—which was also debated in the other place. Under these regulations, the children of couples who are married will be eligible for support, whereas those whose parents cohabit will not. Estimates by the Childhood Bereavement Network suggest that this could leave as many as 2,000 families ineligible for support. That seems a very archaic distinction and grossly unfair. It penalises bereaved families for their decision not to get married. For decades, the principle that children should not be disadvantaged by the choices of their parents has played a central role in Government policy making, and contributed to our society’s sense of fairness and social justice.
Here, yet again, we see the Government cast that principle aside in favour of an arbitrary value judgment. I cannot see any justification for why a bereaved parent who lived with a now-deceased parent should not receive the same entitlement as he or she would have had the two been married. Indeed, the Department for Work and Pensions family test includes cohabiting couples within its definition, which has prompted the Social Security Advisory Combmittee to call BSP “incompatible” with the Department’s own framework. Perhaps the Minister will respond to that point.
The armed forces pension scheme successfully uses a definition of “eligible partner” for entitlement to pensions, while tax credits and means-testing can account for cohabiting couple claims. It does not, therefore, seem beyond the administrative capability of the Government to include families with cohabiting parents within eligibility for bereavement support. Doing so under the BSP system being introduced in April would cost about £21.6 million a year—a fraction of the saving being delivered to the Treasury. Labour has committed to reviewing how cohabiting couples can be included in support for the bereaved. Will the Government start by ensuring that they are included here?
In conclusion, Labour Members believe that the reforms only serve to worsen the position of those suffering bereavement, for the many reasons I have outlined. If the Government do not want to accept what I say, perhaps they will accept the words of eight-year-old Sam, who wrote to his MP:
“I am writing to inform you that reducing the money of the widowed will cause panic and worry. The Widowed Persons Allowance is paid for by the person who has died.”
Sam goes on to say that he still feels flooded with sadness, four years after his father’s death, and describes how the WPA enabled his mother to get back to working as a teacher after two and a half years—something that would not have happened under the proposed new scheme. He says:
“WPA means that mum can still do my drop offs and pick ups at school. She can talk to my teacher if I am feeling sad or poorly.”
Out of the mouths of babes, Mr Hanson.
Those failures must be resolved by the Government if we are to provide a strong social security system for those suffering the intense financial and emotional distress of bereavement. If there is no action now, Labour will commit to scrapping the measures as a first step towards a review providing justice for the bereaved. I ask the Minister to consider again the issues I have raised, in the best interests of the bereaved families who need our support in facing the future.
What a pleasure it is, once again, to serve under your chairmanship, Mr Hanson. I do not intend to delay the Committee for long, but I want to comment on three main points.
I would imagine that everyone on the Committee knows a family in which there has been a bereavement. Sadly, I know quite a few, and none of their circumstances are identical; they all have their unique characteristics and needs. My first point, therefore, is that the Government’s proposal strikes me as very naive. It seems to imply that every bereavement can be caught by simple and fairly crude rules, such as a maximum payment period of 18 months. What would be much more appropriate is what currently exists: a payment that recognises aspects of the life cycle, rather than being subject to an arbitrary time limit. A payment that goes on until the youngest child leaves school recognises a particularly important stage in the life cycle, but imposing an arbitrary 18-month period does nothing. What is that supposed to mean for families in different circumstances?
The Government assume that the maximum period in some way encourages people back into employment earlier, but that fails to understand the geography of the United Kingdom. A bereaved person living in a city might well feel that they can seek work and still be there for a child returning from school, but would the Minister like to put people who live on the islands of Scotland in that situation? Will she reflect on the circumstances of a family living in Skye? An individual might have to travel —that is, motor, because there is no public transport— 40 miles or thereabouts to get employment and 40 miles back. The notion that they could easily fit that in while caring for their children, who may be attending school, is preposterous. They are in a completely different situation from those living in inner cities. It strikes me that the Government have come up with a proposal while thinking as though everybody lived in a city. They do not. The demands on people are very different.
On the issue raised by the hon. Member for Stockton North about cohabiting couples, why are the Government choosing to single out that arrangement for punishment? Where is the justice in that? What is that doing for the children while they are growing up? As the hon. Gentleman rightly pointed out, the needs of children after bereavement do not neatly fit into the first 12 or 18 months after that point. Educationally, the behavioural challenges created often come out three, four or five years later. The challenges to the family can often be difficult and more severe, and the Government’s proposal fails to meet them.
It is a pleasure to serve under your chairmanship, Mr Hanson. I did not intend to speak today, but I started thinking about losing my father in my mid-20s. Even though I was a grown man at the time, it took me a long period to overcome that loss.
I think of the young children who tonight may have lost a parent, and how devastating that must be for their family. Suddenly the mother or father has to provide parental care and also meet the emotional needs of that child. We debate and talk about bereavement support payments, but to the Department, it might be an accountancy exercise or a measure that will save hundreds of millions, as we have been told in Committee. Tonight we have to think before we vote. I ask Government Members to think about how they would have felt when they were 10 years of age if they came home to find that their father was not coming home, or that they would never see their mother again. These are real issues that people have to face when they are bereaved.
The Minister has said that the legislation is old and came in during a different period, when women were reliant on their fathers and partners. I agree with the Minister that thankfully that is not the case any more, but what is lacking is an understanding of what comes with bereavement. The world feels as though it is spinning at 100 miles an hour, and you just want to get off that carousel. The world has stopped. There is so much to think about. What deeply concerns me is that we are reducing the payment from 20 years to 18 months. For so many families, that will be devastating. Some 75% of widowed parents will be worse off. I always quote figures—we all do—but for those 75%, this is the most important thing in the world. When someone needs support, they need to know that financial support is there.
The Government have said that the measure is not a cost-saving exercise, but we cannot overcome the fact that £100 million a year will be saved. Politicians and parliamentarians of whatever party should support the most vulnerable in society, and there is nobody more vulnerable than somebody who has just lost a parent.
The BSP will not automatically be uprated in line with inflation. Over time, its value for families will be cut in real terms because the cost of childcare and other expenses always go up. It costs more to bury someone than it did 30 years ago. The average cost of clothes and food keep going up. We hear all the time about people who are just about managing, even though the Prime Minister has said that she does not like that phrase any more. When someone is bereaved, they are not just about managing; they are struggling to cope. I ask the Minister to look again at this policy, to look at adding to the list of benefits, to have an annual review, and to uprate the payment in line with inflation. I understand that she wants to cut the period from 20 years to 18 months, but she should ensure that the link is not broken, because so many families are depending on this.
I thank hon. Members for their contributions. As I have already stated, the Government are absolutely committed to supporting those who have lost a spouse or civil partner; financially in the shorter term by way of these payments, and then practically, if and when it is appropriate, to return to employment.
I express my appreciation for the consideration that hon. Members have given to these regulations, in what I see as the first step to ensuring that we align bereavement support with other welfare policies. I want to respond to comments made by hon. Members and the shadow spokesman. We do not believe—nor could we—that the period of payment should be equivalent to the period of grief following spousal bereavement. We heard from several hon. Members that grief is not linear; it impacts different people in different ways and at different times.
We learned through the consultation process carried out with SSAC and the Work and Pensions Committee, as well as the wider public consultation, that grief will impact at different times in different ways. It will particularly impact on anniversaries. That is one reason we listened to the comments of the Work and Pensions Committee and chose to extend this provision from 12 months to 18 months, so that there would be no coinciding with the anniversary of the death.
It is right to put on the record that we considered providing a simple, lump sum payment at the moment of bereavement, which could be described as a death grant. However, the consultations said that was not wanted and that there should be some level of ongoing support during those critical first few months.
Bereavement support is designed to support people with the additional costs associated with bereavement, rather than to provide an income replacement. That is a really important distinction to make. Income-based benefits are more suited to provide the longer-term assistance with everyday living costs. By investing an additional £45 million, the Government are seeking to provide financial support for the acute period to facilitate the process of readjustment.
The Minister heard the quotes I used from young Sam, who tells us that he is still hurting after four years. People can hurt with bereavement after almost a generation has passed. Surely there is some concession to be made by the Government for the likes of Sam, whose mother took two and a half years to get back to work and still needs some support to drop him off and pick him up from school.
I thank the hon. Gentleman for that. I was going to move on to refer to Sam’s comments. Like the hon. Gentleman, I have seen a copy of the letter that he sent to his MP, and there are some important reflections on that. On universal credit, it is important to note that the conditionality can be lifted or someone can be completely exempted. It is important to recognise in the arena of universal credit that we want a much more tailored relationship between individuals and their work coaches.
By discussion with their work coach. That is simply the way we expect that to happen. People will be able to develop that relationship and ask for that exemption. That is really important, reflecting what the hon. Gentleman, the hon. Member for Islwyn and Sam have told us: grief can strike at any time. It is not linear or necessarily over in the first 18 months, and we are not suggesting that it is.
We will be happy to publish that guidance when the legislation has been debated and completed.
Extending the provision of bereavement support payment to cohabitees was discussed during the passage of the Pensions Act 2014. Indeed, the eligibility criteria of a legal marriage or civil partnership with the deceased form part of that Act. The eligibility of cohabitees was therefore fixed in the primary legislation and is not a matter for these regulations, but I am happy to explain the decisions that Parliament took on eligibility in the Act. Marriage and civil partnership are legal contracts that are associated with certain rights, including inheritance and recognition in the tax system. Extending eligibility to cohabitees would not only increase spend but be complex to administer. Having to prove cohabitation at a time of bereavement could be a lengthy and complex process and might cause additional distress, which we seek to avoid.
Critics have suggested that those who choose not to formalise their relationship might be treated unfairly, since they can be treated as a couple for income-related benefits but not for contributory benefits. However, income-related benefits serve a very different purpose: the ongoing day-to-day needs of a household, irrespective of whether the relationship is formal. When assessing entitlement to income-related benefit payments, the state rightly assumes that couples have joint outgoings and share resources such as earnings or other income, whatever the legal status of their relationship. The position is different for bereavement benefits because they are contributory benefits; the founding principle of the contributory benefit system is that all rights to inheritable benefits derived from another person’s contribution are based on the concept of legal marriage or civil partnership.
Surely if a man and a woman live together, have children together and are on the electoral register together, they are a couple for all intents and purposes. Why on earth are we penalising the child? I cannot understand why we can make the exception in some areas of benefits but not in this one.
Which indeed is a point that the hon. Gentleman could have made back in 2013 when we debated the 2014 Act. As I said, it is a long-established principle of that Act that contributory benefits are based on the concept of legal marriage or civil partnership, and this Committee cannot change that.
The draft regulations will make no changes to conditionality. Like the bereavement benefits that they replace, bereavement support payments have no work-related conditions; any obligation to participate in any work-related activity will come from claiming other benefits. Nevertheless, as I mentioned earlier, it is well known that long periods out of work can have a negative effect on an individual’s prospect of future employment. The Government therefore think it important that people are encouraged to maintain a link with the labour market. Recipients of the bereavement support payment who also receive universal credit, jobseeker’s allowance or employment and support allowance will be able to access Jobcentre Plus on a voluntary basis from three months after bereavement and will not be subject to conditionality for a further three months. Those exemptions can apply even when there is no entitlement to bereavement support benefit. At the end of the six months, advisers will use their discretion to ensure that individuals’ capabilities and requirements are taken into account, as the hon. Member for Stockton North and I have discussed.
The hon. Gentleman raised uprating. Bereavement benefits are uprated by annual social security benefits uprating orders. The basic component—bereavement allowance and widowed parent’s allowance—must be uprated annually at least in line with price inflation, but there is no requirement to uprate the bereavement payment, which has been frozen since 2001. Bereavement support payment is a grant paid in instalments rather than an income replacement benefit, so it is treated in a similar way to the current bereavement payment: it is reviewed annually on a discretionary basis. Section 150 of the Social Security Administration Act 1992 provides for the rate of bereavement support payment to be reviewed annually. Regular review would allow the value of the benefit to be increased if that is considered necessary. Any decisions on future changes will be taken as part of the annual fiscal process in the context of wider public finances.
The Government have already committed to reviewing the 2013 impact assessment. We will do so when sufficient evidence is available to assess all aspects of the policy, including its effectiveness.
Since the regulations were laid before the House in January, what consideration have the Minister and her colleagues given to developing cost-neutral proposals that could spread the payments over three years to those with dependent children? The suggestion was made by the Childhood Bereavement Network as a way to work with the grain of the Government’s proposals while allowing families to receive the benefits for a longer period.
I thank the right hon. Lady for that suggestion. I also thank my hon. Friends the Members for Lewes, and for Thornbury and Yate, who wrote to me on behalf of their constituents Heather Smith and Sarah Metcalfe to make exactly that point. I am conscious that the suggestion comes from the Childhood Bereavement Network, which has been in touch with me personally over the last few weeks.
When we considered the proposals, as I said originally, we considered making a one-off grant at the outset, but that was rejected by both the Social Security Advisory Committee and the Work and Pensions Committee. They suggested a period of 18 months, on which we consulted the Childhood Bereavement Network. I can see the merit in considering changing it to three years, but that would halve the monthly payments in the first 18 months. We did not think that gave families the best chance of lessening the fiscal impact of losing a spouse’s income. We considered it, but we came to the view that we should adopt the Work and Pensions Committee’s suggestion of 18 months.
The hon. Gentleman will of course be aware that over the first two years of the proposed reform we will spend an additional £45 million. Any savings will be for future Governments to reinvest as they choose.
It is important to emphasise that nobody in receipt of the current bereavement benefit stands to lose out as a result of the reforms. Recipients of the current benefit will continue to receive it for the natural lifetime of their award. Furthermore, households with dependent children will receive higher payments in recognition of that fact. Analysis shows that more people stand to gain than lose from the changes, particularly the least well off, because bereavement support will be paid on top of any income-related benefits that the household receives.
As I said, we are disregarding bereavement support payment in the calculation of other benefits, which will ensure that the immediate additional costs of bereavement are met while those requiring further support will be able to obtain it from other parts of the welfare system that are better placed to provide longer-term, means-tested financial assistance. As various Members have mentioned and I have confirmed, conditionality can be tailored through the ongoing relationship with Jobcentre Plus according to a claimant’s personal circumstances.
I meant to mention Sam—apologies for not having done so. I was particularly moved by his letter and thought that he conveyed his situation both movingly and incredibly intelligently. One can only feel for a child who has lost their parent. I must emphasise that families such as his, which are currently in receipt of the benefits as they stand, will not lose. Nothing will change for them. That is an important distinction to make. As I said, it was a benefit system meant to recognise widows—women, not men—way back in the 1920s. It is important that we heed the words of the Select Committee, which said that this reform and modernisation was well overdue.
In conclusion, I reassure hon. Members that this Government have the welfare of the bereaved and their families at heart. There can be absolutely no question but that the loss of a spouse is tragic, and it is doubly so for families with children. There can be no time limit on grief for such a loss, and nor is there a pre-defined way in which grief will manifest itself, but where we can help, we will do so. We remain committed to supporting widows and widowers to adjust to their new circumstances and to providing financial help in the difficult months following their loss. On that basis, I commend the regulations to the Committee.
That the Committee has considered the draft Bereavement Support Payment Regulations 2017.