Tuesday 27 February 2018
Arrangement of Business
If there is a Division in the Chamber, the Committee will adjourn for 10 minutes.
Social Security Benefits Up-rating Order 2018
Guaranteed Minimum Pensions Increase Order 2018
Considered in Grand Committee
My Lords, these orders were laid before the House on 15 January. In my view, the provisions in both orders are compatible with the European Convention on Human Rights.
I will start by touching briefly on the Guaranteed Minimum Pensions Increase Order. This order provides for contracted-out defined benefit occupational pension schemes to increase members’ guaranteed minimum pensions that accrued between 1988 and 1997 by 3%, in line with inflation as measured by CPI.
Moving on to the Social Security Benefits Up-rating Order 2018, this Government are once again making good on our guarantee to the country’s pensioners that we will continue to apply the triple lock to the basic state pension and the full rate of the new state pension for the duration of this Parliament. For 2018-19, this means an increase of 3%, in line with inflation. The rate of the basic state pension for a single person will thus rise by £3.65 to £125.95 a week from April 2018. Pensioners who receive this rate will from April 2018 be £1,450 a year better off than they were in April 2010. The basic state pension will be worth around 18.5% of average earnings, which is one of the highest levels relative to earnings for over two decades. The full rate of the new state pension for people reaching their state pension age from 6 April 2016 onwards will rise by £4.80 to £164.35 a week, which is around 24.2% of average earnings.
With regard to pension credit, we are making sure that the poorest pensioners in the UK will see the full benefit of the triple lock by increasing the standard minimum guarantee in pension credit by £3.65 to match the cash rise in the basic state pension. This is a year-on-year increase of 2.29%, marginally exceeding annual growth in earnings of 2.2%, which we will fund by raising the savings credit threshold. From April 2018 the standard minimum guarantee for single people will be worth £163 a week, while the equivalent rate for couples will rise by £5.55 to £248.80 a week. With regard to the additional state pension, state earnings-related pension schemes will rise by 3%, in line with inflation, as will protected payments in the new state pension.
With regard to disability benefits, we continue to support carers and those with additional needs as a result of disability and will increase the benefits they receive by 3%, in line with inflation. These include: disability living allowance; attendance allowance; carer’s allowance; incapacity benefit; the personal independence payment; disability-related and carer premiums paid with pension credit and working-age benefits; the employment and support allowance support group component; and the limited capability for work and work-related activity element of universal credit.
In conclusion, total government spending on uprating benefit and pension rates in 2018-19 comes to an extra £4.2 billion. This is £4.2 billion that we are using to support pensioners, disabled people and carers. On this basis, I commend the orders to the Committee and I beg to move.
My Lords, I had not planned to speak this afternoon, since I was supposed to be in two different places. But then I had this horrible memory of reading Hansard from our most recent debate on the uprating order, and of my noble friend Lady Sherlock naming and shaming me, in the nicest possible way, for not being there. I thought that I could not let this happen two years running, so here I am.
The Minister rightly said that the orders are compatible with the European Convention on Human Rights. However, there are other international obligations with which I do not think they are compatible. I would like to talk about the elephant in the room—those benefits that are not being uprated. This happened last year and the Minister very fairly accepted that it was a reasonable thing for us to do, because we cannot talk about uprating the benefits without thinking about benefits in the round.
As the Minister is aware, the European Committee of Social Rights recently issued a report, saying that levels of contributory benefits to the sick and unemployed are inadequate and therefore do not conform with Article 12 of the European charter. That was based on 2015 levels on benefits, so they would be even more inadequate now because of the benefits freeze in most working-age benefits.
In a report published last week the Resolution Foundation said that,
“in every year from 2016-17 to 2022-23 the UK is projected to miss its international commitment—through the 2030 Sustainable Development Goals”.
Those goals apply to us, as well as to poorer countries. The report said that it will fail,
“to deliver higher growth for the poorest 40 per cent of the population than for the population as a whole”.
Inequality is projected to rise to record highs by 2022-23. The Resolution Foundation says that this is,
“a story of the poorest working-age households being left behind”.
A key driver is the freeze in most working-age benefits. This is a policy choice. The Minister will talk about the living wage and personal tax allowances at some point but all this is taken into account. The fact is that the poorest people are falling behind, largely because of the benefits freeze.
According to the Resolution Foundation report, by 2020 jobseeker’s allowance and child benefit beyond the first child will be worth less than 32 years ago and child benefit for the first child will be at its lowest real-terms level in 20 years. I am sure that the noble Lord, Lord Kirkwood, will feel the same as me: as someone who has been working in this area for so long I find it very depressing to see how seriously we are going backwards.
The Minister gave us the welcome news about how pensions are improving relative to average earnings, but child benefit for a two-child family is less generous that at any previous point in the almost 40 years since it was fully introduced. It is set to fall even further over the next five years. Jobseeker’s allowance—unemployment benefit as was—was around a fifth of average full-time pay in the 1970s. It is now around 11% and is on track to fall to 10% by 2022, which will be a new low.
Does the Minister have the figures for what these key benefits, for people of working age and their children, would have been had they been uprated in line with prices since 2010? If she does not have them here—I would not expect her to read them all out anyway—would she be able to send them to Members of the Committee? It is important that we know what effect this freeze is having.
Given the way benefits are falling behind, it is hardly surprising that more people are turning to food banks and that poverty, especially child poverty, has started to rise again and is projected to increase by more than 1 million by the next decade. It is quite shocking. We are happy to allow the poorest to pay the price of increased inflation while the better off continue to enjoy cuts in taxation which do nothing for those whose income is too low even to pay income tax. I was very struck by reading in the paper yesterday that the Archbishop of Canterbury has said:
“Austerity is a theory for the rich and a reality of suffering for the poor”.
As the Resolution Foundation and others have said, these are choices. How we have responded to the financial crisis has been a matter of choices. I believe they are the wrong choices and that those with the narrowest shoulders are being asked to carry the burden. With inflation continuing to be significantly higher than it was projected to be at the point when the benefit freeze was first announced, is it not time that the Government think again about that policy and come back at the next available opportunity to say that they will now lift the benefit freeze?
My Lords, I shall briefly follow the points that my honourable friend made and developed to ask the honourable Lady—I beg their pardon; I am not in the other place and should say my noble friend and the Minister—some specific questions about the Social Security Benefits Up-rating Order with regard to child benefit and child tax credit, which are not in the order, and in particular how it fits with previous decisions by this Government to cap uprating at 1% between 2013 and 2015 and subsequently to put a freeze on the vast majority of social security payments.
I want to address rising child poverty and, in particular, the rise of absolute child poverty. I am sure that the Minister will be aware that the evidence shows that money paid through child benefit and tax credits directly to the parent, mainly the mother, is spent directly on children, yet in this period we have seen a shocking increase in child poverty in a country which has the sixth largest economy in the world, notwithstanding the points that my noble friend made. While the price of food and energy is rising at 4% and more, the poorest families will see their income drop as they struggle to balance feeding their children and heating their home, and many of them will fall prey to loan sharks.
Does the Minister accept that, as CPAG has said, as a result of the cumulative cuts to social security, which are pushing more people into poverty, the failure to uprate benefits in line with inflation is the single biggest driver of child poverty? What is her assessment of the impact of the decisions contained in this uprating order on poverty levels and, in particular, child poverty? Does she accept the CPAG’s analysis that 1 million more children will be pushed into poverty? One million! I mean, one child would be awful; I cannot think of a word to describe adequately the prospect in our society of 1 million more children in poverty as a direct result of this Government’s policies and the cuts to universal benefit.
By continuing the freeze on social security payments that are not included in this area, 10.5 million households will see their average yearly income cut. That simply is not sustainable. So the obvious question is: why target children? Why allow the Treasury to benefit by something like £4.7 billion in savings by cutting these benefits while seeing the appalling prospect of more children being pushed into poverty? What are the Government seeking to achieve here with regard to child poverty targets? Do they have a target or a strategy and, if they do, how will they reduce child poverty? It is a test of our society not only how we treat our pensioners and those vulnerable in our community but how we treat our children, who are the potential for the future.
I would be very grateful if the Minister could touch on those points and, if she cannot because of time constraints today, I will be more than happy for her to write to me explaining exactly what the Government’s strategy is here.
It is a pleasure to follow the noble Baroness, Lady Primarolo, who did some excellent work on child poverty when she was a Treasury Minister, and I agree with everything she has said. I am pleased to join with the noble Baroness, Lady Lister, in that my reason for being here is that my public last year discovered that I was not here either. So here I am—but I am escaping the hour and a half of the consideration of the Secondary Legislation Scrutiny Committee by being here, and I have more friends in this Committee than I have upstairs.
I have not had a chance to say this, but I am very pleased to welcome the Minister to the Dispatch Box; I was dismayed by the wholesale shift of the ministerial team at the DWP recently—the only bright spot was that she survived. But I make a serious as well as a flippant point. With a change of that scale at a stage like this, in the middle of all sorts of huge policy changes, and—I am going to mention it once, because every meeting is allowed to mention it only once—the EU withdrawal process, it is very difficult to be confident that any Minister, no matter how engaged and diligent, can really grasp the full complexities of this subject area. It makes my heart sink when I think about exactly what the chances are facing the department, but I am pleased that the Minister is here. I know that she will make a contribution and listen carefully to today’s debate.
I award the DWP employee of the month prize to Mr Ben Pugh who at paragraph 7.7 of the draft Explanatory Memorandum to the statutory instrument came up with this marvellous sentence, which I shall keep as a special uprating debate moment:
“These amounts will therefore be increased by 3.0085%—the difference between £159.55 and £164.35 as a percentage of £159.55, taking account of the rounding of the new full rate to the nearest 5p”.
I think the paperwork we are presented with in consideration of these orders is becoming less useful. The noble Baroness, Lady Lister, asked a couple of really pertinent questions which would be much more relevant to understanding where we have been and where we are going, in terms not just of the spend that we have seen in the past but the affordability of what is going on, and a comparison. Anybody who has a Twitter account can see that the Resolution Foundation is drop-dead marvellous at putting these things in graphs—it makes them so much clearer and so much starker. Admittedly, the Government’s opening statement concentrated on the welcome additions to the pensions, the disability premium and all the rest, at 3%. I think they are right to do that and it is very welcome, but when you look at some of the disparities in the other spendings and you factor in the cuts, caps and freezes, some of these situations are much easier to understand if seen visually.
This is not making the Government’s job any easier but I make a plea that in future, we have an intelligent discussion about affordability, even if it is one of the little round tables that we often have and the Minister is kind enough to arrange. That is what I am driving at, because I am very nervous. In terms of the demographic change, I do not think we can afford the triple lock. I am not saying that it is my party’s policy to abolish it but if I have my way, it will be, because after 2020 the thing becomes impossible to sustain if you look at the economic picture over 20 years.
The Office for Budget Responsibility Welfare Trends Report was very instructive about the fragility, if I can put it that way, of the basis of universal credit. At the end of the day this will be a £60,000 million spend, covering 7.7 million households across the country. If the OBR cannot say one way or the other whether this is going to work properly—it is a very interesting report if that is what it is saying—that has to be taken into account in considering these orders, because we are setting the policy for the next few years. It is something we need to think more carefully about. We need to try to get better value for the spend we are making in these orders.
One of my most recent visits to universal credit—it is something I am thinking more clearly about and organising some extra visits, with the Minister’s help—led me to think about our ability to support families, not just with money but with signposting and warm handovers. There is a big difference between the two, but that can and should develop so that we are not just offering people a guarantee of 3% or whatever it is. We need to get better value for money by, for example, liberating the ability of people who are recently retired and are still relatively healthy: the longevity bonus, if you like. We need to take a community approach and offer them some incentives, to operate alongside families with chaotic lifestyles.
We need a long-term plan. Before the end of 2020, I would like us to structure a social protection system that is open about what percentage of the national wealth should be devoted to it. Then, if the economy goes up, we all enjoy the benefits; if it goes down, I think people would be prepared to accept that that is the way the world works. That is much fairer than imposing cuts, caps and freezes between now and 2019-20. The evidence indicates that low-income households will be assessed in a much harsher context than I have seen in my time in public life. I am older than I look and I have been round the block, but, seriously, come 2020, that will be the result if the benefit freeze is allowed to continue. The evidence is clear. My two colleagues earlier referred to their takes on this issue. We have the IFS, the Joseph Rowntree Foundation and the End Child Poverty coalition. The United Kingdom is blessed with an experienced and trusted research community that can be relied upon to carry out this work.
Of course, no one has the ability to foretell the future but all the indicators suggest that this situation will get a whole lot worse before it gets better. I do not think that it is sensible merely to tackle this from year to year and stick with policies crafted when inflation was 1%. It is now 3% and we are told that local authorities are contemplating putting up council tax by 6%. That just will not work. The End Child Poverty campaign has said that the poverty premium is now £1,700 a year for some households in some parts of the United Kingdom. That is a much higher figure than I have ever seen, so this is all pointing in the wrong direction. It is not safe to leave this freeze in place without thinking very carefully about where it is going and what we are going to do at the end of it. My honest opinion is that public opinion will not put up with the consequences of the current policy if it continues to 2020 and 2022.
I know that the Minister will think about this issue sensitively and carefully and will use her influence as one of the most senior Ministers in the DWP to twist people’s arms. I hope that she will kick down the door of the Treasury to try to inject a bit more realism with regard to what the department is facing. If she does not, the consequences will be picked up by low-income households and children living in poverty, as we heard earlier. They do not deserve that. We as legislators should pay more attention to putting these things right before they get too out of hand.
My Lords, I thank the Minister for her exposition, which was, as ever, very precise, and welcome my noble friend on the Opposition Front Bench. I also welcome both these orders. The triple lock is welcomed by millions of people. Looking at the complexity of these two orders and at the long list of the Committee’s business today, I might be forgiven for expressing the personal view that perhaps they should have been taken on the Floor of the House. We have discussed a huge range of benefits in a short period of time. We have had a short debate, yet the issues are huge, the moneys are mighty and they all relate to the citizenry—our people. All of us want better things for the people of our nation.
In Part 2, the DLA is increased by £2.50 a week. That is surely welcome, but will the Minister say why the increase could not have been bigger, given the difficult times that are experienced by so many people, who are just getting by or not even getting by? Part 2 also refers to bereavement benefits and the bereavement support payment. The latter is not to be increased. Will the Minister, in the fullness of time, say why not? Surely that is worthy of an increase.
Schedule 5, on page 29, refers to the carer premium, the total of which is £36. Will the Minister comment on this? Is it more? Is it new? Perhaps she can say a few words about it. We would all agree that carers in society save the state billions of pounds and, in many cases, make sacrifices to be a good carer. It might be reasonable to ask the Minister to make some observations on that.
Lastly, in this Siberian winter spell, as the beast from the east makes itself known most forcefully, particularly in the north of my homeland, will the Minister say whether any component of these generally welcome upratings is a response to these terribly icy conditions? People on benefits have no spare money and, this week, tens of thousands of our fellow citizens on benefits are facing difficulties in heating their houses, which may well be old and not necessarily draft-proof. The choice may be to pay either the rent or the heating bill or to pay either for meat or for heat. These are troubling days for many people and the Minister might have a view on that when she gives her summation.
My Lords, I thank the Minister for introducing the orders and all noble Lords who have spoken today. It is a delight to be reunited with my noble friend Lady Lister and the noble Lord, Lord Kirkwood. I assure my noble friend that I was far from intending to name and shame her; I was in fact paying tribute to her years of service and those of the noble Lord, Lord Kirkwood, in coming back year after year to address these issues in defence of the poor in our society. I commend her for that.
It is also a delight to see my noble friend Lady Primarolo here. It is great to be reunited with her, in a different way. I had the privilege of being able to support her and other Ministers when she was doing such good work as Paymaster-General in developing tax credits, which have been so important in supporting working families and children in this country.
It is a delight also to hear my noble friend Lord Jones battling from the Back Benches. We are glad that he is here. He made a good point. I understand that, in the Commons, this order is always taken on the Floor of the House and not in a Delegated Legislation Committee. The order is of such importance to so many of our citizens that I commend that suggestion to the Government for next year.
I will deal first with the benefits uprating order. As we have heard, its purpose is to uprate those social security payments that are fortunate enough to have escaped the clutches of the Government’s damaging benefit freeze, of which we have heard so much. We will see them uprated by 3%, as that is the level of the CPI. That also applies to the new state pension, in accordance with the triple lock, and the pension credit. But the main means-tested working age benefits are not covered so, although I welcome the uprating of those elements that are being uprated, I am deeply concerned to see the value of the main means-tested working age benefits being cut yet again.
By way of background, the principle should be that all social security benefits should be uprated by the rate of inflation so that they retain the value that Parliament voted to set them at, unless Parliament decides to do something different. Anything other than that is undemocratic, as well as being unfair in its consequences to recipients. Of course, before 2011 they were tied to the RPI—or in fact to Rossi, a variant on RPI that excludes housing and council tax—then in 2011 it shifted to the CPI. That saved the Treasury a lot of money. Although that was contested, at least it retained the concept that benefits should retain their value year on year.
In 2013-14, the coalition limited most working-age benefits to a 1% annual increase. This Government then went further and froze them in cash terms at 2015-16 levels for four years, so they will not rise again in cash terms until 2020. That includes some of the benefits on which the poorest of our society depend, including JSA, ESA, income support, housing benefit for those under women’s state pension age, and LHA, as well as the benefits for children, a point made clearly by my noble friends Lady Lister and Lady Primarolo. While I welcome the uprating of disability premiums, the support group component of ESA and the limited capability for work and work-related activity element of UC, I express deep concern that nothing else has been included.
As we have heard, the freeze of payments and support is having a damaging impact on millions of people on low incomes across the UK. Inflation is now far higher than when the Welfare Reform and Work Bill was passed. I went back again to the impact assessment for that Bill, which cited the OBR’s forecasts for CPI inflation for each year of the freeze period. At the time, they varied between 0% and 1.9%. The forecast when Parliament passed the Bill was 1.7% for this year. In fact, the CPI 12-month rate was 3% last month. That difference is good news for the Exchequer, which is saving a lot of money, but that money is coming directly out of the pockets of those who would have got and depend on these benefits. David Finch of the Resolution Foundation points out that his team’s estimate is that by 2020 the freeze will save the Exchequer £4.7 billion. That is £1.2 billion more than previously forecast.
Of course, inflation for the poor is always higher. Food prices are up 4.1% and transport costs up 4.5%. The Joseph Rowntree Foundation has shown that the price of essentials has risen three times faster than wages over the last 10 years. Of course, the context for this freeze has been a whole range of other cuts to social security benefits and tax credits. We have already seen the cuts in the work allowance for universal credit: the Government scrapped the severe disability premium in UC, cut help for the self-employed, limited benefits and tax credits for the first two children—I could go on. As a result, UC is already failing to make work pay. Instead of reducing poverty, as we were promised, it is exacerbating it. The final straw is the Government’s plans to change the way free school meals are provided to those on universal credit, which will introduce the mother of all cliff edges, but I will come back to that another day.
By continuing the freeze on social security payments not in this order, as my noble friend Lady Primarolo said, the Government are subjecting 10.5 million households to an average cut of £450 a year up to 2020. The order underscores the fact that, because the Government are choosing to uprate some discretionary payments, they recognise that some benefits need to increase because inflation is increasing. Yet we have not seen any such increase for the ones that are most needed by many people in our country. When the Minister replies, could she give us a reason why some of those need increasing and some do not? These are choices, as my noble friend Lady Lister clearly expressed. The point was well made because austerity, as she pointed out, as experienced by the poor is a choice made by the Government.
The noble Lord, Lord Kirkwood, raised the question of affordability. He is right. The best indicator of the affordability of our social security system is the spend we have on social security as a proportion of GDP. That has been broadly similar for decades now, but I have no doubt that the Minister will be aware of the work done by Ruth Lupton et al, who looked at the coalition’s social policy record. She found that overall on the decisions made the welfare cuts and more generous tax allowances balanced each other out, contributing nothing to deficit reduction.
The Welfare Trends Report from the OBI states that by 2021 social security support for children will be at the lowest share of GDP since 1990-91. I do not think that the affordability arguments work. These are choices and I suggest to the Minister that they are bad choices, so I would like to ask her some questions. I am very much with my noble friend Lady Primarolo in wanting to know what assessment the Government have made of the impact of the social security freeze on poverty levels. I would also like to know the Government’s latest estimate of the savings to the Exchequer of this four-year benefit freeze, over and above the amount originally scored and showed to Parliament in the impact assessment when we were asked to vote through these measures in the Welfare Reform and Work Bill. Do the Government have a view about how big that gap would have to get before they felt obliged to revisit the question?
In my final point on the Social Security Benefits Up-Rating Order, I am very much with the noble Lord, Lord Kirkwood, on the nature of the information that we now get. I have been doing this work for quite a long time, but we are now at a level of such complexity, where some benefits have to be uprated, some are discretionary and some are not being uprated, that just by reading the order and the Explanatory Memorandum it is not easy to find out what falls into what category, let alone its impact. Will the Minister be willing to go back and have a think about how that information is presented and about ways in which it will be more accessible? There are a fair few geeks on social security in this Room and, if we are struggling, I suspect that others may be finding it even less appealing. Perhaps she can dwell further on that.
Moving on to the pensions element, we welcome the uprating of the state pension by the triple lock, but I want to put on record concerns about levels of public understanding about the new single-tier pension. We know that there are winners and losers as a result of the Government’s changes and we also know that most new pensioners will not receive the full single-tier pension. Before its introduction, it was estimated that only around 22% of women and half of men reaching state pension age would be entitled to the full single-tier pension. Can the Minister update the Committee with any figures on this point?
I also note that, in addition to the various social security payments that are subject to the freezes and are not uprated in this order, there are other omissions in this area. While the state pension is being uprated, people with frozen pensions are excluded from the uprating and will not see an increase in their state pension in line with inflation. Also, the Government have still failed to address the injustice faced by many millions of women born in the 1950s. At the very least, they should bring forward retirement for women born in the 1950s and enable an early draw-down of their pension. If that were possible alongside our proposals to extend pension credit, they would at least have the option to retire early with some much needed financial support.
Turning to the specifics of the Guaranteed Minimum Pensions Increase Order 2018, we support the uprating of the guaranteed minimum pension in line with inflation as set out in this order, but I have some questions for the Minister. They were raised by my honourable friend Debbie Abrahams when this order was considered in another place but they received no reply. I am sure that the Minister can do better than that, not just because, obviously, the Lords is a marvellous place, but because, one hopes, she will have had an opportunity to read the exchanges in another place and so will know the questions that are coming.
Under the old state pension, there were two main components: the basic state pension and SERPS. People who paid national insurance contributions at the full rate built up a basic state pension, but an option was created in 1978 in which somebody could contract out into another pension scheme if the scheme met certain criteria. Schemes taking on such new members were required to provide a guaranteed minimum pension, but the scheme was discontinued by the Government in 1997. In 2016, the Government’s introduction of the new state pension ended contracting out by replacing the additional state pension with a single pension. Working-age people now have their existing state pension entitlement adjusted for previous periods of contracting out and transferred to the new state pension scheme. For people who have guaranteed minimum pension rights under an old scheme but who reach retirement age after April 2016, when the new system kicked in, the Government no longer take account of inflation increases to guaranteed minimum pensions when uprating their new state pension. That means that any guaranteed minimum pensions accrued between 1978 and 1988 will not be uprated and the scheme provider will uprate guaranteed minimum pensions built up between 1988 and 1997 only, up to a maximum of 3% each year.
The National Audit Office investigated the impact of the changes in a report in 2016 and concluded that there would be winners and losers under the new arrangements depending on the amount of time that people were contracted into a scheme. Those whose state pension has been pushed back because of the rise in state pension age will lose out on the guaranteed minimum pensions inflation-linked increases that they would have received under the old rules. But it noted that those who lose out under the new rules might be able to build up additional entitlement to the state pension. The issue was one about lack of information. The NAO said in its report:
“Some people are likely to lose out and they have not been able to find the information they need”.
How did that come about? The NAO concluded:
“We are concerned that the Department has limited information about who is affected by the impact of pension reforms on Guaranteed Minimum Pensions … It … will need to help people identify how they are affected and provide them with accurate and more complete information so that they can make informed decisions about their future pension arrangements”.
In the light of that, I ask the Government two questions. Can the Minister provide an update on the numbers of people affected since the new legislation came into effect? Secondly, what help is currently available to support people in their understanding of the changes? I hope that the Minister will take the opportunity to address those issues and I look forward to her reply.
This has been a really lively and interesting debate. It is right that I emphasise that these orders are not about the benefit freeze and a fair number of other issues raised by noble Lords. However, having said that, I shall attempt to do my best to reply to noble Lords.
I have some news, also, for the noble Lord, Lord Kirkwood. He was here last year. Indeed, there are some similarities in his speech. I have to say that some aspects of it I have enormous sympathy with, so I shall come to that, and I welcome his contribution to this debate.
I shall cut straight to the issues of benefit freeze. It is not a cut—it is a freeze—and it is part of a package of welfare reforms designed to incentivise work, which we know is the best route out of poverty. I want to talk about the things that we have done that are really positive, because I fear that if one listened just to noble Lords opposite one would have a sense that somehow everything is going completely wrong—but that simply is not the case. However—and I shall come to this again in a few minutes—the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Sherlock, touched on the issue of affordability, which is a really tough and prescient one. Indeed, it has exercised my mind and thoughts since I arrived at the Department for Work and Pensions, given the huge sums of money that we are spending on welfare. We are spending more on pensions alone than we are spending on education and defence put together—£100 billion a year out of a total government budget of £750 billion. That is a huge proportion. Yes, there are some really difficult choices; it is all about choices—so are we making the right ones? We believe that we are, but we will have disagreements, of course. Indeed, there will be disagreements not only across the House but in another place as well, which is entirely laudable. But as the noble Lord, Lord Kirkwood, said, all of us need to keep thinking in terms of the future sustainability of the welfare system which really looks after those who are most in need.
The benefit freeze is part of a package of welfare reforms that are designed to incentivise work, which is the best route out of poverty. We have brought in 30 hours a week of free childcare for working families in England, cut income tax for 30 million people and provided the lowest earners with their fastest pay rise in 20 years through the national living wage. So yes, that is one choice that that we have made, but we have to support those who are earning and those on low wages to the best of our ability. We see that welfare reform is working. The employment rate is at a near record high and there are fewer households where no one is in work than at any time since comparable records began. However, I will say, 14.5% of all households in the UK are still workless, which is far too many.
The noble Baroness, Lady Lister, referenced the Resolution Foundation saying that inequality is projected to rise to record levels in the coming years. We simply do not believe that that is the case. There are choices. We have to make difficult choices and believe that we should focus our spending on those who need it most.
On the question raised by the noble Baroness, Lady Lister, of the burden falling on the poorest, Her Majesty’s Treasury published a cumulative distributional analysis alongside the Budget in November 2017, showing the impacts on household income of tax, welfare and public expenditure changes implemented or planned to be implemented since the 2010 general election. This analysis shows that the state is highly redistributive. On average, the 10% of households with the lowest incomes receive more than four times as much support in spending as they contribute in tax, while the 10% of households with the highest incomes contribute more than five times as much in tax as they receive in spending.
The noble Baroness, Lady Primarolo, asked whether we will lift the freeze on working tax credits, child tax credits and child benefit. I respond by simply saying that the Treasury is responsible for these benefits and it announced the 2018-19 rates at the same time as the Budget in November 2017. The noble Baroness talked a lot about children and families. We are committed to supporting families and tackling the root causes of child poverty and disadvantage. If you are a child growing up in a household where no one is in work you are almost twice as likely to fail at all stages of your education than if you lived in a working family. Children in households where no one is in employment are five times more likely to be in poverty than those in households where all the adults work. Nearly three-quarters of children from families where no one has been in employment moved out of poverty when their parents entered full-time work. That is why we are supporting parents to find and stay in work.
We have made the childcare element of universal credit more generous. Parents on universal credit can now claim back up to 85% of eligible childcare costs, compared with 70% in working tax credit, a change that is benefiting 500,000 working families. This Government are investing record amounts in childcare. By 2019-20 we will be spending more than £6 billion per year to support working families in this way. For families who face additional, complex barriers to finding work, we set out our framework for action when we published our strategy, Improving Lives: Helping Workless Families in April. I can tell noble Lords that we are doing a huge amount of work on this in the department. As I said earlier, the number of households where no one is working is actually at a record low: it is 954,000 households lower than it was in 2010, which means 608,000 fewer children in such households than seven years ago. We believe we are on the right trajectory. On a before-housing-costs basis, there are now 200,000 fewer children living in absolute poverty than in 2010.
I want to confirm for the noble Baroness, Lady Primarolo, that inflation is not at 4%; it is actually at 3%. Indeed, that is something that I double-checked with our researchers at the department. The noble Baroness, Lady Lister, asked for figures on the poverty rate since 2010 and the impact of the benefit freeze. We do not actually have those figures but the benefit freeze is part of a package of welfare reforms designed to incentivise work and support working families, including, as I have said, increasing the national living wage, reducing income tax and, of course, the rollout of UC. I will write to the noble Baroness with those figures.
Is there any programme to evaluate the work-incentive point? Of course it is a perfectly obvious point and it may be working, but the only place where the data can be found is in the department. Is the department doing any work that will evaluate whether the powerful work incentive point that she has just made is actually making a positive difference?
Yes. Work is being done and I am very conscious of the fact that we should be talking more about that. We have been saying that work pays— I prefer to say that work transforms lives. The noble Lord is right. We need to do more to articulate our belief and the reasons why we are confident that we are right and that work transforms lives. It relates hugely to outcomes. It is not a simple, overnight back of the envelope matter, but we are working on it.
The noble Baroness, Lady Primarolo, asked about targets for child poverty. The income-related targets set out in the Child Poverty Act 2010 have been replaced by two new statutory measures of parental worklessness and children’s educational attainment. This will drive continued action on the areas that can make the biggest difference to children’s outcomes now and in the future. The noble Baroness also asked whether the Government would lift the freeze on working tax credits. The answer is that the Treasury is responsible for working tax credits.
The noble Lord, Lord Kirkwood, made his point with feeling, and I can only say that we are working hard and thinking about our policies going forward. The huge question is affordability. We are spending £95 billion—that is, ninety-five thousand million pounds—a year on benefits for people of working age. For how long is that sustainable? Our department accounts for 25% of the whole of the Government’s budget, which in terms of expenditure is now the size of Chile or similar, I understand. The noble Baroness, Lady Lister, referred to some overseas organisation, saying that we are behind the curve in terms of our expenditure. I simply do not recognise that, in terms of how much other countries are spending or of the choices that they have made. For example, are they paying the similar amount of 0.7% of their national income, which is what we are paying, on overseas aid?
I am sorry to interrupt. I may not have made myself clear. I was not referring to some international organisation. The Resolution Foundation pointed out that we will not be meeting our obligations under sustainable development goals not because of overall expenditure levels but because the lowest 40% are going to do worse than the population as a whole. That goes against what we have signed up for under the sustainable development goals. We think of the SDGs as being for the poorer countries, but they are for us as well.
I accept that, but it has to be comparative in terms of the goals that we have set. In the back of my mind I have the response to that particular figure that was quoted and we do not recognise that as being correct. I think that I have said that on the Floor of the House in another debate.
The noble Baroness, Lady Sherlock, raised a number of questions, the first of which was about contracting out. If a person was previously contracted out for a long period they may have a lower starting amount for a new state pension than someone who had built up some additional state pension. This is because they paid lower national insurance when they were contracted out and have built up an occupational pension as a result of these arrangements. Part of their occupational pension replaces the part of the state pension they were contracted out of. People who were previously contracted out are therefore not missing out. Although some people will get a lower starting amount from the state, many will have more than the new full rate in total if they add their state pension and their contracted-out private pension together. If no adjustment was made, people who had been contracted out would be paid twice for the same national insurance contributions. The transitional arrangements ensure that everyone who qualifies for the new state pension will get at least as much as they would have done under the old system, based on their own national insurance contributions to 6 April 2016.
With regard to the GMP indexation, the transitional arrangements in the new state pension are particularly beneficial to people who have been contracted out. People with pre-2016 national insurance records have a starting amount calculated for them based on their national insurance position at 6 April 2016, which includes a reduction to account for the GMP. People can build on this starting amount either until they reach the full rate of the new state pension, which is £164.35 from April 2018, or until they reach state pension age. For some, this can be up to an additional £38 a week. People with a new state pension starting amount will also have benefited from the triple lock of the basic state pension. People with 30 pre-2016 qualifying years will from April 2018 be just under £13 a week better off than if the basic state pension had been uprated by earnings since 2010, when the triple lock was announced.
With regard to communications, the Government have run a comprehensive advertising campaign on the new state pension, including advertisements in the press and on radio and social media. Something called the Check your State Pension forecast service has had more than 7 million visits since it was launched.
The noble Baroness, Lady Sherlock, asked about state pension uprating for people living overseas. The policy on uprating the UK state pension overseas is a long-standing policy of successive Governments. It has been in place for around 70 years. The Government uprate the UK state pension where there is a legal requirement to do so, such as for state pension recipients living in the European Economic Area, Switzerland, Gibraltar and countries with which there is a reciprocal agreement that provides for uprating. Restoring the pension to UK levels for all overseas pensioners, where we do not currently uprate, would cost more than £500 million extra a year. Here we come to affordability: my note says categorically that there is no money available for this.
The noble Baroness also referenced what we colloquially refer to as WASPI, which is the proposal allowing early draw-down of state pensions for women affected by changes to the state pension age. Evidence submitted by the Government Actuary to the Work and Pensions Select Committee in April 2016 showed that it would be extremely complex to accurately predict the costs of such a policy. At the very least it would involve bringing forward significant amounts of expenditure, with the associated burdens on the taxpayer, and would risk leaving pensioners with an inadequate income in later life. Even if it were actuarially neutral, the option of allowing people to retire early and receive a reduced state pension would result in additional costs to the state from the loss of taxes. There would be further costs from the wider impact on the economy, as adding one year to working lives would result in sustained increases to annual GDP of over 1%, which is worth around £20 billion at current levels of GDP. We also understand that these proposals do not have the support of the WASPI campaigners.
Those are a number of questions that I hope I have managed to respond to. In addition, I thank the noble Lord, Lord Jones, for welcoming these upratings. I think that he was alone in doing that.
My Lords, I would love to concur with the noble Lord. The following point is certainly not in my brief but is something that I think about a lot. The children we have referenced today will sooner or later become the working young. I think of my three children, who are all working now but do not earn very much. The issue is how the working young will afford pensions in the future. In probably about an hour’s time we will debate the order on auto-enrolment, which shifts the culture in terms of people contributing to their future pensions. There is very much a cross-party consensus on working out how we can make pensions sustainable in the long term. However, in the short term, I hope that the noble Lord will accept that, notwithstanding the fact that we would like to be ever more generous, it simply is not possible.
I thank the noble Lord. I have just found the answers in my array of papers. He asked about different benefits, particularly disability and carer benefits. We now spend over £50 billion a year on benefits to support disabled people and people with health conditions, which is over £7 billion more than in 2010. The noble Lord asked about disability living allowance and benefits for carers. We are increasing benefits for the additional costs of disability and for carers in line with inflation. Recipients of carer’s allowance will now get £550 more per year than in 2010, while the monthly rate of disability living allowance paid to the most disabled children will have risen by more than £104. On a before-housing-cost basis, the absolute poverty rate among people living in a family where someone is disabled has fallen to a record low.
I am sorry that I have not been able to respond to noble Lords’ questions, particularly those of the noble Lord, Lord Jones, in relation to cold weather payments. That was discussed in the department yesterday, but I will write to the noble Lord.
I am grateful to the Minister for giving me quite a lot of information about the way the GMP system will work. The specific questions that I raised were raised by the NAO—whether the department had enough information about who would be affected in terms of the GMP and what it was doing to tell people about that. I am happy for the noble Baroness to write to me, but perhaps she could have a look at the specific questions in the record and write to me on those. I do not know whether I missed it, but will she confirm that she told the Committee what the latest estimate is of the savings to the Exchequer of the four-year benefit freeze over and above the amount originally scored? I apologise if I missed that.
I apologise to the noble Baroness; I had hoped that I would be able to reply to those questions today but, given the time as well, it is much better that I write to her and copy in others.
To conclude my closing remarks, the Government are maintaining their commitment to the triple lock for both the basic state pension and full rate of the new state pension, increasing the pension credit standard minimum guarantee so that the poorest pensioners see the full benefit of the increase in their basic state pension and increasing benefits to meet additional disability needs and carer benefits in line with inflation. I commend these orders to the Committee.
Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2018
Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2018
Considered in Grand Committee
My Lords, I am required to confirm to the Committee that these provisions are compatible with the European Convention on Human Rights and I am happy so to do.
These two statutory instruments will increase the value of lump sum awards payable under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and the diffuse mesothelioma scheme, which was set up by the Child Maintenance and Other Payments Actusb 2008. These two schemes stand apart from the main social security benefits uprating procedure and there is no legislative requirement to review the level of payments each year. None the less, I am happy to increase the amounts payable by the consumer prices index of 3%. This is the same rate that is being applied to industrial injuries disablement benefit and certain other disability benefits under the main social security uprating provisions. These new amounts will be paid to those who first satisfy all the conditions of entitlement on or after 1 April 2018.
The Government recognise that people who have contracted one of these diseases as a result of exposure to asbestos or one of a number of other listed agents may be unable to bring a successful claim for civil damages. This is mainly due to the long time lag between exposure and onset of the disease, which can make it impossible to trace those responsible or their insurers. Therefore, by providing these lump sum compensation payments through these two schemes, we fulfil an important role to people with these dust-related diseases. As well as compensating people who cannot make civil claims, another aim of the schemes is to ensure that people with these diseases receive compensation in their lifetime, while they themselves can still benefit from it, without first having to await the outcome of civil litigation.
Although improved health and safety procedures have restricted the use of asbestos and provided a safer environment for its handling, the legacy of its common use is still with us. That is why we are ensuring that financial compensation from these schemes is available to those affected. I will briefly summarise the specific purpose of the two compensation schemes.
The Pneumoconiosis etc. (Workers’ Compensation) Act 1979 scheme, which for simplicity I will refer to as the 1979 Act scheme, provides a lump sum compensation payment to those who have one of five dust-related respiratory diseases covered by the scheme, who are unable to claim damages from employers because they have gone out of business and who have not brought any action against another party for damages. The five diseases covered by the 1979 Act scheme are diffuse mesothelioma, bilateral diffuse pleural thickening, pneumoconiosis, byssinosis and primary carcinoma of the lung, if accompanied by asbestosis or bilateral diffuse pleural thickening.
The 2008 mesothelioma lump sum payments scheme, which I will refer to as the 2008 scheme, was introduced to provide compensation to people who contracted diffuse mesothelioma but were unable to claim compensation under the 1979 Act because, for example, they were self-employed or their exposure to asbestos was not due to their work. The 2008 scheme allows payments to be made quickly to people with diffuse mesothelioma at their time of greatest need. Under both schemes, a claim can be made by a dependant if the person with the disease has died before being able to make a claim.
Payments under the 1979 Act scheme are based on the age of the person with the disease and the level of their disablement at the time they are diagnosed. The highest amounts are paid to those diagnosed at an early age and with the highest level of disablement. All payments for diffuse mesothelioma under the 1979 Act scheme are automatically made at the 100% disablement rate—the highest rate of payment—to reflect the seriousness of the disease. Similarly, all payments under the 2008 scheme are made at the 100% disablement rate and based on age, with the highest payments going to the youngest people with the disease. In the last full year, April 2016 to March 2017, 3,620 people received payments under both schemes, totalling just over £50 million.
I am well aware that in previous debates on the subject of increasing the value of these lump sums noble Lords have asked about equalising the payments to dependants who claim after the death of someone who had the disease with those made to people who actually have the disease and claim in their lifetime. However, I must tell noble Lords that we do not intend to equalise payments this year. We will continue to keep the matter under review but I think that it is right to focus resources on people who are actually suffering from these diseases.
I am aware that the incidence of diffuse mesothelioma is a particular concern of noble Lords, with the number of deaths in Great Britain at historically high levels. Diffuse mesothelioma has a strong association with exposure to asbestos; current evidence suggests that around 85% of all male mesotheliomas are attributable to asbestos exposures that occurred through work. Those diagnosed with diffuse mesothelioma usually have a short life expectancy, with many people dying within 12 months of diagnosis. The number of cases currently occurring reflects the long latency period of the disease, which can take decades from the time of exposure to become apparent. Latest available information suggests that there will continue to be around 2,500 diffuse mesothelioma deaths per year for the rest of this decade, before annual cases begin to fall, reflecting a reduction in asbestos exposure following its widespread use between 1950 and 1980.
These regulations increase the level of awards made through the two statutory compensation schemes. I am sure that we all agree that, while no amount of money can ever compensate individuals and families for the suffering and loss caused by diffuse mesothelioma and the other dust-related diseases covered by the 1979 Act, those who have them deserve some form of monetary compensation. These statutory schemes deliver an essential part of that. I commend the increase of the payment scales for these schemes, I ask approval to implement them and I beg to move.
My Lords, I welcome these regulations and congratulate the Minister on getting all the names right: they are not easy to say and I am going to say none of them. I have three quick questions. First, will she acknowledge that the success of the scheme has been the speed at which the decisions have been taken and the process that has managed the one-off, upfront payments to the people suffering these grievous illnesses and to their dependants, in the cases where that applies? Is there a follow-up procedure to the sending of the cheque? That is to say, is there an evaluation of the needs of the families? It seems to me that common themes might emerge, in terms of other support that might be offered to them, should they want to take it. I think that the process is part of the success of this scheme.
It is a shame that the disparity between the sufferers and their dependants is not being addressed. My information—the noble Lord, Lord McKenzie, did a lot of work on this in his time in government—is that it would cost, if I can put it like this, a mere £2 million to fix in the long run. Over a period of time, it should be possible out of the departmental expenditure limit to phase this in until we get to a position of equality. I think that the Minister said that it is still actively under review. I hope that that is the case and that it will bear fruit in next year’s uprating.
Is anything more being done to prevent further injury from this terrible affliction? New iterations of it are emerging in small pockets here and there year on year. The information and the communication necessary to try to prevent further injury are important.
Finally—we were talking about this earlier—is there any way to evaluate whether the 2008 and 1979 schemes are working properly? Will the department do some work to see whether they meet all the needs that the families are experiencing? Other than that, I welcome these regulations and I hope that the Government will continue to take them as seriously as they have in the past.
My Lords, I thank the Minister for her introduction and I acknowledge the great expertise of my noble friend Lord McKenzie from all the years of his work. He puts the rest of us on this side of the Committee in the shade. I welcome the regulations and the 3% increase.
In the late 1960s, factory workers in Hebden Bridge were playing snowballs with deadly blue asbestos. At that time and later, medical experts and legislators began to take an interest in this dreadful problem and its dreadful consequences. I was alongside the late Mr Michael Foot in Prime Minister Harold Wilson’s Administration as long ago as 1975 when he introduced his historic health and safety at work legislation. The legislation got through, but it was strongly opposed. Good things have arisen from Michael Foot’s historic measure.
One welcomes the reference at paragraph 2.1 of the Explanatory Memorandum to dependants, although I have a point of issue. Like a previous speaker, I wonder whether the Minister might enlarge on how that paragraph might affect dependants—that is, the conditions of entitlement. Surely the Government might look again at this matter and reconsider their decision not to increase.
There are historical references in relation to the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations. This legislation arose out of the interest of a former Leader of the Opposition in the House of Lords, the late Cledwyn Hughes, who was of course for many years Member of Parliament for Ynys Môn—Anglesey—the activity and interest of a distinguished solicitor in Anglesey, Sir Elwyn Jones, and that of a leader of the Transport and General Workers’ Union in north Wales, based in Caernarfon, Mr Tom Jones. Their intervention on the worries of quarrymen in north Wales led directly to this legislation, which we are now renewing. I had the honour of serving in Harold Wilson’s Administration alongside Mr Cledwyn Hughes. With Sir Elwyn Jones and Mr Tom Jones, we worked hard on getting a fair deal for those quarrymen.
It is a matter of social history. In north Wales, the quarrymen who went underground had to bring their own candles into the caverns before they hacked out the slate that roofed the world—the new world and the old world. This is the origin of the struggle of the quarrymen. Ultimately, this legislation gave them some recompense—those who survived, of course.
There may be Members of your Lordships’ Committee who from time to time go to Penrhyn Castle in north Wales, a National Trust property. The owner was a quarry owner. He built it on the massive profits made from roofing the world. There was a great dispute between the quarry owner in a mighty mansion and the poor striving quarrymen who had to bring their own candles underground and who suffered injury and disease. That was history. I make these remarks with regard to the late Michael Foot and fellow Welshmen from my homeland because, although the Minister may well know these details that I put before the Committee, her youthful advisers in the department may not know them. It is important for the passage of legislation that the people who power the department know the history and the origin. Too often, they do not.
I have previously asked why this lengthy agenda cannot be taken on the Floor of the House, because the issues, the values and the money are mighty in total. It is not good enough that we know that there are the usual channels. We know that. I thought it only right that I should intervene.
I say to conclude that there was that great quarry owner in that great castle in Penrhyn and there were the quarrymen with very little, who, to use a common phrase now, were barely getting by. It may be of interest that at the end of the strike many of those quarrymen buried their hammers and chisels and left for ever and we were left with terrible bitterness. It is only right that this Committee should know from whence the legislation came and those who brought it about.
My Lords, that very powerful speech by the noble Lord, Lord Jones, has certainly put the history of north Wales into the context of this measure. I shall bring us up to the present day and I am sure that the noble Lord will agree with me that there is ongoing concern, particularly in Wales, where we know that there is still asbestos in schools. I have asked a lot of questions about asbestos in schools in Wales, and there has been a real problem about who actually has responsibility for dealing with it because it seems to fall between the devolved Government and the Westminster Government. I do not expect the Minister necessarily to have an answer to that today. I would love it if she did because I worry that we may be sitting on a future epidemic, another cohort. One of the problems in schools is that if you bang nails into the wall or children fall very heavily against a wall that is cracked, you will get a shower of asbestos dust coming out from the hole or the crack. The children are running around, breathing fast and inhaling the dust, and it will sit in their lungs for many years. We know perfectly well that not everybody who inhales asbestos fibres goes on to develop mesothelioma, but a significantly large percentage does.
This is indeed a horrible tumour. Speaking from a professional point of view, it is worth remembering that even today the mean survival time in this country is just over eight and a half months from diagnosis to death. We are not doing very well compared with some other countries, particularly across Europe. The condition has a nasty invasive feature and therefore you get severe pain with it which needs to be managed with specialist palliative care. It is not straightforward and may require complex nerve blocks and so on, so these people really do need specialist care.
Having said that, on behalf of my noble friend Lord Alton and the noble Lord, Lord Wigley, I welcome these regulations. I have spoken to mesothelioma patient groups, which welcome the fact that these regulations are coming through and that the provision is being updated. That sends an important message—namely, that the Government recognise the importance of the compensation and acknowledge the importance of recognising that people who have worked hard to the best of their ability have in so doing become victims. The harder they have worked when exposed to an asbestos environment, the higher the risk they face. As I said, we welcome the regulations and are grateful that the Government have listened. We have had several debates during the course of this Government and the previous Administration, for which we are grateful.
The Minister looks as if she may be able to answer my question about asbestos in schools. Can she assure me that the payments we have discussed will not be included in assessments of eligibility for social care during the last phase of a person’s life? This is a nasty tumour and people can require a lot of social care. If they want to be at home, this provision will fall to their local social services to deal with. If the tumour invades around the spinal cord and they lose motor function in the legs, the arms or both, they certainly will need help with intimate care as well as other aspects of daily living. It is important that we do not see a situation in which the Government give generously without ensuring that their generosity cannot be eroded in providing for people’s specific needs.
My Lords, I welcome the first scheduled visit of the noble Baroness, Lady Stedman-Scott, to the Dispatch Box. I think this is the first set of regulations to which she will respond. There is a substantial degree of consensus around the Committee on this very important issue, as we have heard in this brief but inspired debate.
It is always a pleasure to listen to my noble friend Lord Jones speak on these occasions, not only because of the manner of his presentation but because he knows the history of this subject. He gave us a history lesson today, particularly in regard to quarrymen.
The noble Baroness, Lady Finlay, referred to the very important issue of asbestos in schools. The HSE may have proposals and procedures for dealing with that but that does not address the circumstances that she identified. It is good to know that we are on the same page as the noble Lord, Lord Kirkwood, in supporting these changes. However, I have one or two questions. We know that these are appalling diseases, particularly mesothelioma, with its long latency but, once diagnosed, as we have heard, there is a very short life expectancy. Because of that a good deal of work has been done by some noble Lords, including the noble Baroness, and the noble Lords, Lord Alton and Lord Wigley, to make sure that medical research is appropriately focused on this. The hope was that that would be paid for in substantial part by the insurers which escaped liability way back when these diseases were being contracted. So my first question for the Minister is: how is that research project proceeding?
As far as pneumoconiosis is concerned, I think we had some aggregate figures on the contributions that were being made but what is the actual level of payments under that scheme, perhaps for the most recent years? Can it be analysed between the various different diseases? How is that programme funded? I will come on to the 2008 Act scheme in a moment. Is it just direct government funding or is there some other cost recovery arrangement under procedures which operate for the 2008 Act?
Perhaps I might ask also about the tracing office. One of the problems with this is the extent to which insurers of the liability insurance can be identified and contacted. A lot of work was done, particularly by the noble Lord, Lord Freud, when he was Minister, to try to change the arrangements and accelerate circumstances in which the employers’ liability insurance could be identified. Obviously, that is relevant for where there is an employment nexus. It does not work particularly well for the 2008 Act. I think there were various iterations to try to improve the tracing but it recognises that where there is an employment situation, the obligation on employers, going back to the 1970s, was to have employers’ liability insurance. To the extent that there was, and that can be identified, that should bear the costs of this. Perhaps we could have an update on the tracing office.
Similarly, on the 2008 Act diffuse mesothelioma scheme, could I have an update—the noble Baroness may have given it to us—on how many cases were involved and the most recent cost figures for the year that is just about to end? As I understand it, that was being funded, in part if not wholly, from cost recoveries from pursuing those who should be making payments. I think there are two bits to the issue of equalisation: equalisation between sufferers and dependants. I join those who say that there should be an equalisation. But at the start of the 2008 Act scheme there was a fear that there was not going to be enough money in that to pay compensation levels which equated with the 1979 Act scheme. Ultimately, there was enough money so those two are equalised, at least at the sufferer level, but I am interested in whether the recovery has gone beyond that needed just to make the payment and whether there is a surplus which could be deployed in a different way to increase the payments. That is an issue that we need to try to get to the bottom of.
The orders do not touch upon the 2014 mesothelioma payment scheme—the brainchild of the noble Lord, Lord Freud, who did an excellent job in bringing it to fruition. Here we were dealing with circumstances in which there was an employment connection and simply an inability to trace the employer liability policies. The rationale for the scheme was that the insurers should have been bearing the cost of this. They escaped by one means or another. Suggestions that they were then not aware nor back in the 1960s even of the effects of the asbestos are not wholly borne out. The point was to get insurers to cough up and deal with matters for which they were responsible. When that scheme was introduced payment levels were less than 100% of the general tariff of compensation under the 1979 Act scheme. It was subsequently increased and the limit on that was that insurers were not prepared to pay more than 3% of the growth rate in premiums of employer liability insurance. I am interested in an update on that scheme. Are full compensation levels now being met? Are the insurers meeting their full 3% agreement under those arrangements?
I am sorry that those are some detailed points for the Minister, but this is an occasion to focus on this very important matter. I thank the Government for the updating that is before us today, continuing in the spirit of co-operation that there has been on this issue.
I thank all noble Lords who have spoken in the debate for their many helpful contributions—and the generous number of questions. This is designed to keep one on one’s toes. This is my first time doing an SI. I can only plead noble Lords’ indulgence. If I do not answer something properly or I fail to answer it at all, please will noble Lords tell me and I will make sure that they get the answer as quickly possible.
These two schemes play a most important part for these people who have these terrible diseases and it is the very least we can do to get the help that they so rightly deserve. In trying to answer just some of the points—and, again, your Lordships will keep me on my toes to make sure that I do that—I say to the noble Lord, Lord Kirkwood, that I acknowledge that the success of the scheme is in the speed that it is dealt with. That is quite right. Is there a follow-up procedure for the payment of the cheque? I am told that there is not. I do not know if that means that I need to talk to the officials to see if there should be or if it is even possible. I am not promising anything but the point has been made.
On the disparity in equalising the payments, we estimate the cost of equalisation to be around £5 million per year. Following on from the previous debate, there is an affordability issue, although when people are suffering like this it is even more acute. At the moment we are trying to get resources to where they are needed most, to people actually living with the disease. We will keep this under review. I can be clear about that. I hope that that answers the question.
I am advised that I should write to the noble Lord on that. I do not have the information, so I will make sure that he gets an answer to that question.
Is anything more being done to prevent the disease? It is. A grant of £5 million from liable funds was awarded to Imperial College in 2016 to establish a national centre for mesothelioma research. The Government have also committed to a number of other measures to stimulate an increase in the level of mesothelioma research activity. The Department of Health’s National Institute for Health Research undertook a priority-setting exercise to stimulate an increase in mesothelioma research. As a result, five studies are under way following an NIHR themed call, with total funding in the region of £2.6 million. The first two are due for completion this year, although we would not expect results to be published for some time after the completion date. From the fact that noble Lords are nodding, that seems pretty reasonable, which is good.
Funding continues to be available from the NIHR and the Medical Research Council, as well as from other sources. The British Lung Foundation recently launched the UK’s first mesothelioma research network, with the involvement of key stakeholders, including the Department of Health. In 2016-17, expenditure on research directly relevant to mesothelioma by the Medical Research Council was £2 million. So work is going on to try to find out more about this disease.
The noble Lord, Lord Kirkwood, asked whether anyone had evaluated whether the schemes were working properly. The answer is no, but I shall make sure that we have a talk about that and see what can be done. On prevention, the Health and Safety Executive continues to do what it can, including having campaigns to try to prevent disease as a result of this awful thing. In 2014-15, the campaign was focused on helping at-risk workers recognise that asbestos is relevant to them, encouraging them to seek reliable information about how they can protect themselves, and encouraging and enabling safer working with asbestos through behaviour change.
I think that I gave a response on equalisation. It will cost about £5 million a year, and at the moment we are keeping it under review and prioritising where the money needs to go to have the biggest effect.
As for the noble Lord, Lord Jones, I have never been to north Wales—there is a confession—but the noble Lord has inspired me. I shall go in the summer; I do not fancy going right now.
Cledwyn, okay. I was not quite quick enough to get there. I am glad that the legislation has helped, and I appreciate the noble Lord’s thanks and the comments of other noble Lords that what we are doing is right. As for the debate on the Floor of the House, that is a bit above my pay grade.
The usual channels. I will find out who they are now I am in my new role.
The noble Baroness, Lady Finlay, expressed an ongoing concern about asbestos in schools. I had a good look at this, because I thought it was important, so I can tell noble Lords that the Department for Education and the Health and Safety Executive are proactive in promoting good asbestos management in schools. They run an asbestos in schools steering group made up of experts and campaigners. In 2015, they published a policy review on asbestos management in schools which says what the Government are going to do; developed better and more targeted guidance; published refreshed guidance in 2017; and enhanced the scrutiny on duty holders for managing asbestos in schools by asking all responsible bodies to provide an assurance on schools compliance. An assurance process is now being developed with an aim to publish in early spring 2018—so any minute now. We are looking at ways in which to improve the evidence base and are continuing to fund the removal of asbestos where appropriate, directly and indirectly through our funding programmes for rebuilding and refurbishing schools. The final point on this is about encouraging more academies to join the risk protection arrangement, which is a government-backed alternative to commercial insurance for academy trusts.
I take this opportunity to thank the Minister for the way she is handling our questions and to congratulate her on her role. I shall make a small point and ask a question. The scheme she is talking about relates to England. The problem we have is who is responsible for paying for refurbishment in Wales. The Welsh Government believe that it is the Health and Safety Executive, which covers England and Wales, and the Westminster Government have said that this is a devolved issue because it comes under education, which is devolved. There is a problem there and somewhat of a gridlock. I do not expect the Minister to give me an answer today, but I would be most grateful if we could pursue this outside the Committee. Oddly enough, I think it fits completely into the need for there to be national frameworks for issues that are covered between the devolved Governments and the Westminster Government, which we will be dealing with in a much larger context in relation to the European Union (Withdrawal) Bill.
I am very happy to undertake to meet the noble Baroness and others to discuss that and, I hope, to resolve it without it costing lots of money. I am told that the social care disregard is complex, but in broad terms the lump sum is treated as capital, not income, and is disregarded for income-related benefits for a period of 52 weeks. I think I have dealt with asbestos in schools.
I think I have touched on the point made by the noble Lord, Lord McKenzie, about research. I will have to write to the noble Lord on the actual level of payments. I think the answer is in my notes, but I will keep Members of the Committee for ever if I try to find it. The combined cost of the 1979 Act scheme and the 2008 scheme payments outweighs the money received from compensation recovery. There is an overall cost to the Government. In 2016-17, £27 million was recovered and just over £50 million was paid out. Civil damages under the new tariff compensation payments have risen to match 100% of average civil claims, which is up from 80%. I was asked how the 1979 Act scheme and the 2008 scheme are funded. The 2008 scheme was set up on the basis that it would be funded by compensation recoveries from civil claims and the 1979 Act scheme is funded partly by civil compensation recoveries and partly by the department. The net cost to the department of making payments under both schemes in the past financial year was £23 million, which is the difference on that.
If I have missed anything out—I am sure I will find out—I will come back to noble Lords. In the meantime, I commend the uprating of the payment scales for these schemes and ask for approval to implement them.
Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2018
National Employment Savings Trust (Amendment) Order 2018
Considered in Grand Committee
My Lords, I am pleased to introduce these instruments, which were laid before the House on 29 January and 31 January 2018. Subject to approval, the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2018 reflects the conclusions of this year’s annual review of the automatic enrolment earnings thresholds required by the Pension Act 2008. It has considered both the automatic enrolment earnings trigger, which determines the point when someone becomes eligible to be automatically enrolled into a qualifying workplace pension, and the qualifying earnings band, which determines those earnings which the enrolled employee and their employer have to pay a proportion of into a workplace pension. This order sets a new lower and upper limit for the qualifying earnings band and will be effective from 6 April 2018. The earnings trigger is not changed with the order and remains at the level set in the automatic enrolment threshold review order 2014-15, so no further provision is required.
Subject to approval, the National Employment Savings Trust (Amendment) Order 2018 will facilitate the effective operation and development of the NEST pension scheme and improve the way the scheme operates for participating employers and scheme members. From 6 April 2018, the proposals will allow the NEST trustee to accept people who are contractually enrolled by their employer, give the trustee the discretion to remove members with empty accounts, allow bulk transfers in with consent, and require NEST Corporation to carry out research. I am satisfied that the orders are compatible with the European Convention on Human Rights.
Automatic enrolment has been hugely successful in achieving its aim of getting millions more people saving into their pensions. Since its launch in 2012, more than 1 million employers have complied with their automatic enrolment duties and more than 9 million people have been successfully enrolled into a workplace pension. The vast majority of people who have been automatically enrolled are choosing to continue saving, with opt-out rates remaining consistently low at around 9%. Such progress and success, supported by all sides of the Committee, is truly to be commended and celebrated.
This is a big year for automatic enrolment and one which marks several key milestones for the policy and programme. First, the final and most challenging phase of rollout concludes this month when the last month group of the smallest employers take on their duty to automatically enrol all staff. These employers will have to declare their compliance by the end of July 2018. This means that all established employers are now subject to automatic enrolment. From last October, the duties also began to apply to all new employers as a matter of course.
Secondly, in April this year, the first of the two planned increases in minimum contribution levels for automatic enrolment will occur with contributions rising to 2% and 3% of band earnings for employers and jobholders respectively. Automatic enrolment continues to be a programme that works. It is re-establishing a culture of saving and making workplace pension saving the norm for a new generation. However, the Government recognise that there is still more to do as they continue to work towards their commitment of improving retirement outcomes for millions of savers.
This time last year we were embarking on the early stages of the 2017 review of automatic enrolment. Last December, the report from this work, Maintaining the Momentum, was published—I think we should change the name—setting out a clear path for the future of workplace pension saving. The comprehensive and balanced package of proposals that it detailed are intended to build on the remarkable success of automatic enrolment to date, increasing the number of people saving and the amount that they will save. We are now embarking on the process of building consensus around these proposals. It is my Government’s ambition to implement these changes in the mid-2020s, subject to discussions with stakeholders around their detailed design, learning from the contributions increases in 2018-19 and finding ways to make the changes affordable. I am sure noble Lords will join me in welcoming and supporting our continued progress with this crucial agenda.
Turning now to the orders of the day, I will first describe impacts of the automatic enrolment thresholds order. As signalled by the Minister for Pensions and Financial Inclusion in his Written Statement in another place on 18 December 2017, the order will, as previously, align the both the lower and upper limits of the qualifying earnings band with the national insurance lower and upper earnings limits of £6,032 and £46,350 respectively, ensuring stability and consistency in the light of the key milestones already highlighted. By continuing to align the limits to the national insurance thresholds, the changes relating to payroll systems are kept to a minimum. Simplicity is maintained and this approach helps employers to manage costs while they adjust to the overall increases in contributions from April. Setting the thresholds at these levels will also ensure that contribution levels continue to be meaningful for savers.
It is important to be clear that the proposal outlined in the 2017 review of automatic enrolment to remove the lower earnings limit is setting the direction for the future of the policy and is not reflected in a current-day change; neither does the proposal to remove the lower earnings limit in future pre-empt or prejudice any future annual statutory review of the automatic enrolment earnings thresholds.
The order does not change the earnings trigger, which remains at £10,000, striking a balance between bringing in those most likely to benefit from pension saving and maintaining affordability for employers. By continuing to bring in lower-paid workers, we continue to address the savings needs of those traditionally underrepresented in workplace pension saving. We have gained the greatest ground on participation among younger workers and low earners, and seen gender parity in participation achieved among eligible men and women in the private sector. By 2019-20 an extra £20 billion a year is estimated to go into workplace pensions as a result of automatic enrolment.
Maintaining a stable trigger is hugely important with the upcoming rollout of phased increasing contribution rates. As these contribution rates increase, consistency and stability are key for both employers and jobholders. Due to anticipated wage growth and with the maintenance of the existing trigger, the effect is a real-term lowering of the trigger. We expect that an additional 100,000 individuals, the majority of whom are women, will now meet the earnings criteria and be brought into the automatic enrolment population. Individuals earning below the £10,000 earnings trigger but above the lower earnings threshold will still have the option to opt in to a workplace pension and benefit from their employer contributions, should they wish.
To conclude on this point, the decision to maintain the earnings trigger at £10,000 will increase the number of low earners who meet the earnings criteria and who are therefore automatically enrolled into a workplace pension, and will therefore increase the total numbers saving into a pension, and total savings. In addition, the decision to maintain the alignment of the lower and upper earnings qualifying bands with those for national insurance contributions maintains simplicity and consistency and minimises burdens on employers. Taken together, these changes will mean that total pension saving is expected to increase by £48 million.
On the second instrument we are debating, the National Employment Savings Trust—commonly known as NEST—was established to support automatic enrolment by ensuring that all employers have access to a low-cost workplace pension scheme with which to meet their duties. NEST was specifically designed for, and targeted at, low to moderate earners and smaller employers that the wider pensions market had historically failed to serve adequately. It has a public service obligation to admit any employer that wishes to use the scheme to meet its automatic enrolment duties. NEST has also been a tremendous success. So far, it has more than 6 million members, in excess of 554,000 participating employers and over £2.4 billion of funds under management.
All the measures in this amendment order will improve the way in which the scheme works for participating employers and members. There are four minor and technical changes, which I will briefly outline. The first is contractual enrolment, which describes a process whereby a worker is enrolled into a scheme by their employer through contractual agreement—usually via their employment contract. The order will make it possible for participating employers to enrol their workers into NEST whether or not the automatic enrolment duties apply to the employer. Currently, an employer may enrol their workers into NEST only before these duties apply. This extension of contractual enrolment into NEST will enable employers to enrol all their workers into NEST and thus consolidate provision through the use of a single scheme.
The second change is to the research duty. The order will require NEST Corporation to carry out research with scheme members and participating employers or their representatives in connection with the operation, development or amendment of the NEST pension scheme. Research is an integral feature of the administration and management of any pension scheme, including NEST. All the major pension schemes have insight or research teams that reach out to employers and savers to improve their service and inform management and administrative decisions on product development, investment et cetera. NEST’s research will focus on underresearched groups, such as NEST members on low to moderate incomes. The introduction of a duty is designed to align NEST’s operation to changes in data protection law as a result of implementing the General Data Protection Regulation—GDPR—and provide it with a clear basis on which lawfully to process data going forward.
The third component in this instrument will give NEST Corporation the ability to remove a member with an empty account from the scheme where certain conditions are met, including that the account has been empty for at least 12 months. These accounts are of no value to the member and incur administrative costs for other members. In April 2017, NEST had around 60,000 members with no funds in their accounts. Making the change will reduce administrative burdens on the scheme and will not impact on individuals whose accounts are closed, as they can still be automatically enrolled again in future.
Fourthly, the final part of this instrument will clarify that individuals may join NEST in the event of a bulk transfer with consent. Previous wider restrictions on transfers into and out of NEST were removed on 1 April 2017, and this measure complements NEST’s ability to accept bulk transfers without consent. In doing so, it will facilitate the scope for NEST members to consolidate their pension savings into NEST.
I finally turn to what the evidence shows. All the changes are deregulatory and positive for employers, but minimal, are not expected to have a material impact and will also mitigate NEST scheme inefficiencies. The changes should give NEST the freedom to continue to serve its employers and members in a straightforward and efficient manner and also bring NEST into line with the rest of the pensions industry. I commend these instruments to the Committee and beg to move.
My Lords, it is getting later in the afternoon and there are some important debates following this, so I will be very brief on these two orders. The Minister is quite right to declare that the auto-enrolment provisions have been successful. She is also right to say that this year there are two, if not more, big changes and reforms in the existing system as it relates to small employers and to 3% contributions for employees and employers. We wish these changes well. These orders are perfectly sensible in promoting the agenda. She is also right to say that Maintaining the Momentum is a less than appropriate name for any kind of government report at the moment, but it was a good solid document and it gave confidence that there is a real prospect of delivering this scheme and building on the progress that has been made. Speaking for myself, I wish it well. I agree that the new opportunities for women in future are a signal and ambitious plan that we hope works in the way that the Minister set out, so I am very happy with the automatic enrolment order.
I have one or two pedantic questions about the NEST order. I spend a lot of time looking at secondary legislation. Paragraph 8(1) of the Explanatory Memorandum states:
“The Department for Work and Pensions consulted on the National Employment Saving Trust (Amendment) Order from 7 November 2017 to 27 November 2017”.
According to my arithmetic, that is a 20-day consultation. The next sentence is shorter: “It received five responses”. It occurs to me that one may be a consequence of the other. I understood that government consultations had to be slightly longer than that. Of course, it is a technical matter, I understand that, and the stakeholders involved might not be that numerous, but if it received five responses it is a bit rich to claim that, “the majority of the respondents were in favour” of the consultation as set out. Is that 3:2 or 4:1? I am being slightly facetious, but it is an important issue and consultation is an important part of getting these statutory instruments correct.
Coming to the substance, I think that the noble Baroness’s four recommended changes are entirely sensible. I am particularly interested in the revisions for research, because I have been involved as a trustee of schemes in the past and it is a struggle to keep the data up to date. Will the research function assist the trustee in being able to ensure that the data is as clean as it can be? Sometimes with some of these schemes, particularly involving bulk transfers, the data gets out of date—the members change their addresses, their occupations and their other personal details.
I did not know that there was no ability to carry out research as a trustee, but I think that making it explicit is a very good idea. Contractual enrolment is absolutely sensible, and removing empty schemes and accounts makes perfect sense as well. I think that NEST is also a success, as far as it has gone, so more power to its hand. I hope that both these orders work, and I will be watching developments, as I am sure everyone will be, in this important area of auto-enrolment over the rest of 2018 as these significant events come to pass.
My Lords, I thank the noble Baroness for her introduction of these two orders. I shall start with that relating to auto-enrolment. As the noble Baroness and the noble Lord, Lord Kirkwood, said, auto-enrolment has, by any measure, been an important policy success. It was founded on the independent work of the Pensions Commission, legislated for by a Labour Government, first implemented by the coalition Government and sustained by the current Conservative Administration. The broad consensus and robust analytical underpinning has been key to its success thus far, along with a design and implementation approach that encompassed government, regulators, employers, payroll firms, intermediaries and the pensions industry. This does not mean that there has always been an identity of view across parties or that the job is complete. It is not.
The noble Baroness referred to the big year 2018, which indeed has some important matters to consider but, as the earnings triggers and qualifying bands analysis for 2018-19 sets out, as at the end of November last year more than 9 million people have been successfully auto-enrolled and more than 900,000 employers—possibly now a million—have met their auto-enrolment duties. By the time the staging process is complete, the government analysis estimates that around 10 million people will be newly saving or saving more.
However, we know that just as the staging process is being completed, we are entering the year when the first phased increase in minimum contributions is to take place, leading eventually to 8% minimum contributions. Notwithstanding this, the Automatic Enrolment Review 2017 refers us to the Pensions Commission work that estimated that 8% of relevant earnings, together with the state pension, would deliver about half the level of income needed for an adequate retirement income. That is, around 12 million individuals will still be under-saving for retirement and, of these, 87%—10.4 million—earn more than £25,000 a year, so 13% earn less. While the 2017 review sets out a package of reforms to address this, it does not propose to see these completed until the mid-2020s. This package will include lowering the age threshold from 22 to 18 for young people, removing the lower earnings limit to help those with lower earnings and multiple jobs, as well as seeking to improve the retirement outcomes of the self-employed. These are worthy ambitions, but why do we have to wait for so long? Why is the current review concluding that the lower limit of the qualified earnings band should be raised, while arguing for it to be removed? Are the Government to find time for a full debate on this 2017 review in fairly short order? The review came out in December and it is very important. We ought to have the opportunity to debate it in Parliament.
As for the 2018-19 review, we note the retention of the earnings trigger at £10,000, which is a minor real reduction. While we support the Secretary of State in resisting the alignment of this with the income tax threshold, it leaves too many of the lower paid having to opt in to take the benefits of pension savings. However, we see the need for a smooth transition from the post-staging period as contribution increases are the order of the day. Maintaining affordability is a key function of the earnings trigger in the qualifying earnings band, but we agree that the overriding factor should be to enable individuals to build up greater security in retirement.
We would raise again the disparity of income tax arrangements under the net pay arrangements and relief at source. In brief, those earning below the personal tax threshold and contributing to a pension receive more tax relief under a relief at source system than under an NPA. Higher-rate taxpayers receive less tax relief under an RAS system.
Keeping the earnings trigger frozen at £10,000 while the personal allowance increases will increase the number of individuals who would not benefit from tax relief on their contributions if a net pay arrangement is used. The numbers involved mean an increase from 50,000 to 340,000 people who would be missing out. The Government say that this is difficult, but what options have they looked at to date?
As has been said, NEST was established in 2010 to support automatic enrolment and address a market failure for low to moderate earners and smaller employers. We accept that all the measures in the order seek to improve the way the scheme can operate for employers and members. We will of course support the order, but we have a few questions.
On contractual enrolment, can the Minister say something about the emerging scale of the push for contractual enrolment emerging from employers? As far as research is concerned, it is noted that the change is primarily about compliance with the GDPR. Can the Minister say how far adrift NEST’s current arrangements are in the new requirements? It seems to be the case that a member can be removed if 12 months have elapsed, starting from the date on which the members are admitted to the scheme, but when the member’s account has been zero over that period. We accept that empty accounts are inefficient and understand that there were about 60,000 that had been empty for 12 months, presumably from first admittance. Can the Minister say what it is about the enrolment process that may have given rise to the scale of the build-up of those accounts? It is noted that the Government have set their face against formalising the requirement that employers should be notified when NEST pension accounts are closed. Can we take it from the consultation response that this will nevertheless be part of the implementation design?
As for bulk transfers, it is understood that there is a clarification of the changes made a year ago facilitating the opportunity for NEST members to consolidate their pension savings into NEST. We support that and we support both these orders.
I thank the noble Lords, Lord Kirkwood and Lord McKenzie, for their contributions to this debate and for their incisive questions. I also thank the noble Lord, Lord Kirkwood, for saying that the whole concept of automatic enrolment and the process through to its delivery and implementation has been successful. As the noble Lord, Lord McKenzie, said, this came about through a considerable amount of consensus. We hope that the changes—albeit fairly minor—that we have made to NEST will work well. Certainly for us, the whole process has been a huge success, and we hope that it will also work well into the future.
One reason why we have brought forward this order on NEST is that it is important to keep tidying up the legislation to ensure that certain requirements make sense—for example, in relation to research, as the noble Lord, Lord Kirkwood, said. He asked a question which I asked of officials while I was learning about this issue in recent weeks. Why were there only five responses to a small consultation? The truth is that of the five responses, four said, “Thank you so much for asking us but we really have no comment”. The fifth was a little bit negative, and that was it.
I am glad that the noble Lord has said so. I take that as a very good sign that we are doing the right thing. Let us hope that it continues. We will ensure that we keep tidying up where necessary to keep this whole process—the implementation, the work of NEST and the work of developing auto-enrolment—as simple as possible while retaining an important balance between what is fair for the employer and what makes sense for us in communicating changes and developments in the whole programme.
The noble Lord, Lord McKenzie, asked some questions about automatic enrolment and the review proposal, including why we are not doing anything until the 2020s. Our review proposal is a comprehensive and balanced package, recognising that costs will be shared between individuals, families and businesses, who need time to plan for change. Over the coming year, we will work to build a renewed consensus to deliver the detailed design and implementation of our proposals. We need to learn from the implementation of the contribution increases, starting from this April. The support of employers and their advisers has been key to the success of automatic enrolment. We recognise the importance of giving them and savers sufficient time to plan for further changes. Our ambition is to implement changes to the automatic enrolment framework in the mid-2020s, subject to discussions with stakeholders around the detail of the design, learning from the contributions increases in 2018 and 2019, and finding ways to make the changes affordable, followed by formal consultation with a view to introducing legislation in due course.
The noble Lord, Lord McKenzie, asked about the timing of the implementation. It is important to put on the record that through the 2017 review we have set a clear direction to build a more robust and inclusive savings culture, specifically supporting younger generations with the opportunity to save for a more secure retirement.
The noble Lord, Lord Kirkwood, raised the issue of women. Increased gender parity is something that we are very pleased about, and it is making such a difference. Automatic enrolment was designed specifically to help groups who historically have been less likely to save, such as women and lower earners. The decision to freeze the trigger again for 2018-19 is estimated to bring an additional 100,000 individuals into workplace pension saving, of whom 72% are expected to be women. The gender gap in private sector pension participation has now been closed. In 2012, 65% of women employed full-time in the private sector did not have a workplace pension. As of 2016 this had fallen to 31%. I hope noble Lords will agree that that is real progress.
The noble Lord, Lord McKenzie, asked about net pay arrangements versus relief at source. Pensions taxation policy is a matter for Her Majesty’s Treasury—that sounds as if I am proposing a get-out clause. We continue to work with the Treasury and officials on this matter but a straightforward or proportionate fix has not yet been identified. However, alongside further work on the automatic enrolment changes outlined in the recent automatic enrolment review, the Government will examine the processes for payment of pensions tax relief for individuals to explore the current difference in treatment and ensure that we can make the most of any new opportunities that emerge, balancing simplicity, fairness and practicality, while engaging with stakeholders to seek their views.
I was asked why NEST needs to offer contractual enrolment. Contractual enrolment was raised in a response to the DWP call for evidence on the policy framework underpinning NEST, NEST: Evolving for the Future. Contractual enrolment is where workers are enrolled with their consent into a pension scheme under a contract and by reference to the rules of the scheme. By contrast, automatic enrolment is where workers are enrolled automatically into a qualifying scheme in accordance with the Pensions Act 2008. Contractual enrolment often covers groups of workers who do not qualify for automatic enrolment, such as those earning less than £10,000 per year or those aged under 22.
The majority of respondents who mentioned it in the call for evidence thought that any qualifying scheme should be open to all of a participating employer’s workers, including those who are contractually enrolled into it, as is normal in the industry. The Government expect that this change could ease administrative burdens on some employers who are already using NEST, and could result in small increases in the number of workers benefiting from workplace saving and an employer contribution. This change is minor and technical in nature and supports the delivery of the service of general economic interest defined in the approval granted to NEST.
The noble Lord also asked about empty accounts. Very briefly, it is just an issue of churn. Some people fall out of the system; more come in. We wanted to make sure that we tidied up the process. In fact, we are reducing the number of schemes, which will make it easier to administer. It is not anything that we feel we should be particularly concerned about, it is just a general issue of churn.
I hope that I have been able to answer all noble Lords’ questions. If I have failed in any way, I would be very happy to write. The long downward trend in pension saving has reversed. The number of workers saving into a workplace pension scheme has increased to almost 9.3 million. In practice, the changes will be delivered largely by the payroll and advisory communities, which have worked hard to support the introduction of automatic enrolment, providing a range of products to help employers comply with their automatic enrolment duties. NEST is playing its vital part in this success story and we need it to continue to do so.
Waste Enforcement (England and Wales) Regulations 2018
Considered in Grand Committee
My Lords, these regulations are a single composite statutory instrument which applies to both England and Wales but is made by the UK Government in relation to England and by the Welsh Government in relation to Wales. The Welsh Assembly is due to debate the regulations on 6 March. These regulations will strengthen the regulators’ arsenal to deal with non-compliant activity at waste sites by providing them with a further two powers: the power to restrict entry of persons and further waste to the site, and the power to require the removal of all waste at a non-compliant site.
Your Lordships are aware that, to minimise waste, our aim is to have a more circular economy so that resources are used more efficiently and kept in use for longer. A well-functioning waste industry, operating within a regulatory framework and in accordance with environmental permits or registered exemptions, is essential to achieve this. A small number in the industry hamper resource efficiency, damage the environment and seek to gain profit illegitimately by operating outside the regulatory framework. Ensuring that the regulators have a full range of enforcement powers is essential to bear down on that non-compliant part of the industry to ensure that waste is managed properly with no damage to the environment or to local communities.
Over the past 25 years, the nature of the waste industry has changed and government action has been needed to meet the challenges. As well as ensuring that the regulators have robust powers, since 2014 we have given the Environment Agency an additional £60 million for waste enforcement, and have recently published a consultation on proposals to tighten up the waste permitting and exemptions regime.
The two powers before your Lordships today are technical in nature. The development of these regulations included a public consultation in both England and Wales with a range of organisations, including various parts of the waste industry, the regulators, local authorities, householders and NGOs. The regulations insert new sections into the Environment Act 1995. It is a power just for the Environment Agency. If a waste site currently stockpiles more waste on its site than its permit allows, the Environment Agency is able to restrict access in certain circumstances. This can be done only in order to remove waste that is causing a serious pollution risk and only after giving a waste operator five days’ notice. This clearly limits the agency’s ability to act quickly to stop further waste entering a site and does not put the onus on the waste site operators to be responsible for waste on their site. The agency can also revoke a permit and close down a site, therefore restricting access, but it is not always proportionate to close down a waste site immediately if it does not comply with its permit.
This first new power will therefore fill this gap. The Environment Agency will be able to act immediately to restrict access by locking the gates or barring access to stop more waste coming on to a site. The Environment Agency will be able to issue an immediate restriction notice for up to 72 hours where there is a risk of serious pollution to the environment or harm to human health as a result of the waste on the site and action is necessary to prevent the risks continuing. The Environment Agency will also be able to apply to a magistrates’ court for a restriction order for an initial period of six months when there is a risk of serious pollution to the environment or harm to human health, or when an offence, such as a breach in permit conditions, has been committed which is resulting in pollution. No legitimate waste operator should fear the introduction of this new power. It has been drafted in a proportionate way and includes a right to appeal a restriction order within 21 days of the order being made. Access will remain restricted pending the determination of the appeal.
The regulations also introduce new sections into the Environmental Protection Act 1990. The second power will be available to the Environment Agency and local authorities in their capacity as waste-collection authorities, because both the agency and local authorities are responsible for different aspects of waste management regulation under the Environmental Protection Act 1990. As with the previous power, the Environment Agency and local authorities’ ability to require the clearance of waste at non-compliant sites needs strengthening. Currently, the Environment Agency and local authorities can require an occupier or a landowner to remove only waste that has been illegally deposited at a non-compliant site; for example, waste not deposited in line with the conditions of a permit. We are therefore extending the scope of the current power to enable the Environment Agency and local authorities to require operators or landowners to clear all the waste at a non-compliant site, so no waste is left at the site. The power will not be applied retrospectively and will include a two-month transition period. Like the previous power, we think it is proportionate for operators and landowners to have the ability to appeal. Giving the regulators these two additional powers will bear down on the non-compliant part of the waste industry with rigour, as part of our quest for a healthy environment for future generations. That is why I commend the draft regulations to your Lordships. I beg to move.
My Lords, I am grateful to the Minister for his detailed introduction of this waste enforcement SI. There are many SIs coming down the track and a great deal of detailed and complex information for your Lordships to get their heads around. It is estimated that there are currently around 600 illegal sites operating in England, Wales and Northern Ireland. The Environment Agency already has the power to shut down illegal waste sites due to the damage they cause to their surroundings.
In 2016, the Environment Agency prosecuted 110 businesses and individuals for offences related to illegal waste sites. In some cases, landowners caught by this illegal activity were unaware of it taking place. Illegal waste sites are a blight on communities and undermine legitimate landfill operators. It is to be welcomed that the Government have listened to concerns raised by businesses and local communities and are taking action to tackle this crime—a crime which not everyone in society will recognise, but doubtless it goes towards the ever-increasing crime figures, which are regularly published.
In 2015, waste crime cost the English economy more than £600 million. This included lost landfill tax revenues and clean-up costs. It creates severe problems for people who live or work nearby, with odour, dust, litter, vermin, fly infestations, pollution and fires blighting lives. These criminals undercut genuine businesses that dispose of waste responsibly. The new powers introduced for the Environment Agency to lock the gates or block access to problem waste sites to prevent thousands of tonnes of waste illegally building up are very welcome. The powers will also enable the Environment Agency to force operators to clear all the waste at a problem site, not just the illegal waste, as the Minister has just said.
I have consulted with my local waste authorities and they report that there is little or no problem in Somerset with either waste sites operating without a licence or in breach of their licence. That is good news, but it would appear that the north of England and London are the worst-hit areas. During 2016-17, more than 850 new illegal waste sites were discovered by the Environment Agency. While an average of two illegal waste sites are shut down every day, they continue to create problems for local communities and businesses, as well as posing a risk to key national infrastructure. In 2013 a fire at a waste site in Stockport resulted in the closure of the M60 and three weeks of disruption to traffic, residents and businesses.
I am grateful to the Minister for sending me the sentencing guidelines for the offences committed by these environmental criminals. I found them most interesting. The range of classifications gives due consideration to whether the offence was deliberate, reckless, negligent or of no culpability; in other words, those who deliberately and knowingly flout the law and cause the most harm to the environment can expect the penalty to be severe, whereas those who find they are the subject of a breach of the law through no fault of their own, and little harm ensues, will be penalised at a much lower level. The range of fines, from £100 to £3 million, gives plenty of scope to the Environment Agency to ensure that culprits, both unwitting and serial offenders, realise that they cannot continue to flout the law and pollute the countryside.
However, I am concerned that the extra £30 million over four years that is to be made available to the Environment Agency to tackle waste crime, in the form of illegal sites and misclassification of waste, may not be enough. That sum sounds a lot but equates to only £7.5 million a year. Given the scale of the problem in recent years, I am not convinced that this sum will be adequate. I seek assurance from the Minister that sufficient resources will be made available to the Environment Agency to enable it to carry out its new legal duties to the degree that we all wish to see. That apart, I am happy to support this very important statutory instrument.
My Lords, I am grateful to the Minister for introducing these regulations and for our earlier meeting to talk through the proposals, which I found very useful. We support these new powers: obviously, they will help tackle illegal activity at waste sites and will be an important additional tool for waste regulation and collection authorities in tackling the growing menace of waste crime. As we know, this takes many forms, from fly-tipping by builders and illegal dumping on farmland to large-scale criminal activity involving illegal sites and operators misclassifying waste to evade millions of pounds of tax, and so on. It is definitely time to take action.
Diverting waste from landfill, and increasing our capacity to store, sort and treat it for recycling and recovery, has to be an essential element of a future circular economy based on the waste hierarchy. If it is done well, it will bring economic and environmental benefits. In that context, the majority of waste sites play within the rules and understand their responsibilities. Unfortunately, there appears to be a sizeable minority of sites which seem to take pleasure in stretching the rules or operating completely outside the legislation. Not only is this illegal but it creates an unfair advantage over the more responsible operators. As the Explanatory Notes make clear, illegal waste sites can cause pollution to the environment as well as endanger public health. They pose a risk of fire, water pollution and other irritants such as odour, litter and fly infestations, which can cause misery for nearby communities. All too often, it is left to public bodies and owners of land to clear up the mess.
The recent Environmental Services Association Education Trust report, Waste Crime: Tackling Britain’s Dirty Secret, estimates that waste crime costs the UK £560 million a year. The Chief Fire Officers Association estimates that the cost of dealing with fires at waste sites across the UK is around £16 million a year. By any measure of cost-benefit analysis, it makes sense to crack down on the gangsters who are creating the problems in the first place, rather than leaving it to the public purse to clear up the mess. So these measures to restrict access to sites and to enforce clean-ups, as well as to fine and in more serious cases to jail those involved, have to be welcomed.
In this context, I have a few questions for the Minister. First, he referred to £60 million for waste enforcement—the noble Baroness mentioned £30 million, but I am pretty sure the Minister said it was £60 million. Either way, I reiterate the noble Baroness’s question. Is the Minister convinced that that is enough to give the Environment Agency additional resources so that it is able to use these powers quickly and effectively, so that communities will see real benefits? It does not seem a great deal if it is spread across the whole of the waste enforcement role, over a number of years.
Secondly, what plans do the department or the Environment Agency have to publicise these new powers to the public, so that the public themselves can become the eyes and ears of the regulators and report suspicious behaviour more quickly? I think I read in the Explanatory Notes that no additional resources were being set aside for communications, but I would have thought that that was an essential part of extending these powers.
Thirdly, is the Minister convinced that the courts will recognise the enormity of many of the clean-up costs and be prepared to set fines which will truly act as a disincentive for illegal operators? It does seem that many of the people involved are repeat offenders. Again, like the noble Baroness, I am grateful to the Minister for sending through the sentencing guidelines, which I found very interesting reading, but they are dated July 2014. It seems to me that if we are serious about enforcement, maybe we need tougher penalties to act as proper deterrent. We know that so far there has not been sufficient deterrent. Is there a case for reviewing and updating the sentencing guidelines to make sure that they truly become a deterrent?
Finally, what can be done to help legitimate owners of waste sites avoid becoming victims of crime? It is often difficult to identify who is doing the illegal dumping, and whether it is being done covertly or overtly with the support of the owner of the land or whether it is something that they themselves are a victim of. I know that the noble Lord talked about this when we met earlier, but will these regulations help the many thousands of farmers each year who are victims of illegal dumping? Obviously, some of them are landowners; others, as we know, just find fly-tipping on their land when they were never intending to operate waste sites in the first place. Either way, they are being left to pick up the cost of clean-up from their own resources. Can the Minister guarantee that the farming community will not be caught by these new powers, particularly when farmers are the innocent victims of crimes by others? Will proving who created and caused the illegal waste in the first place be an issue?
There are a few questions there, but I very much welcome these measures and hope that, at the end of the day, the Environment Agency has enough resources to make a real difference to people’s lives.
My Lords, I am most grateful for the endorsement of these regulations by the noble Baronesses. As I said, we so want to enable the Environment Agency and local authorities to act more quickly, but we also want to ensure there that is no adverse impact on compliant waste businesses. Clearly it is important that landowners are vigilant in leasing land to responsible waste operators and that these measures are part of a range to tackle all forms of waste crime. Indeed, the focus of our forthcoming resources and waste strategy is on preventing, detecting and deterring waste crime.
I was pleased to hear from the noble Baroness, Lady Bakewell, that the situation in Somerset is good, but I am conscious of the cost to the economy. That is why, when we consider spending on waste crime and the enforcement yield, it is interesting to note that there is a £5 benefit to society for every £1 spent by way of investment. On resources, let me repeat that since 2014 we have given the Environment Agency an additional £60 million for waste crime enforcement work up to 2022. We gave the Environment Agency £30 million in the 2017 Budget, which brings the total spend on waste crime to £25 million a year. Of course, as a responsible Government we always need to ensure that we keep these matters under review, but the Environment Agency now has extra resources—we recognised the need for them—to address this problem. The noble Baroness, Lady Bakewell, was also right to say that the penalties involve imprisonment and a range of fines depending on the severity of the crime. When we had our meeting I was able to outline some of the detail, which demonstrated that there are actually a number of people who are in prison for quite a considerable period.
The noble Baroness, Lady Jones of Whitchurch, was absolutely right to say that we need to tackle waste crime not only because it is an assault on local communities and the environment, but because of the very considerable evasion of tax. That is why in 2015 the cost of waste crime in England was more than £600 million. HMRC estimates that around £100 million of landfill tax revenue is lost each year through the misdescription of waste and other evasions. Not only Defra but a number of other departments are keenly interested in this issue, and I suspect that that may be one of the reasons why there has been additional resource because it is important that we take action.
The noble Baroness, Lady Jones, was also right to talk about “the minority” and the advantage that they are taking in causing pollution, fires, odours and vermin infestations and generally making the lives of those in communities around these sites unbearable, so we need to address that. That is why a number of points have arisen about awareness. I understand that the Environment Agency takes a sophisticated intelligence-led approach which involves local residents and businesses having direct communications with the agency. I also understand that aerial drones are now being used quite widely as part of surveying land for illegal waste activity. That is an interesting use of drones, for instance.
The noble Baroness also highlighted how we deal with the repeat and persistent offender. That is why we want to deal with the core of people who are behaving badly and causing such problems. We are taking these extra powers in order to be able to take immediate action so that communities have this proliferation of waste. Indeed, we can insist and require that all waste is removed.
The noble Baroness also raised a side issue to this issue, but it is hugely important. She referred to landowners who have to deal with fly-tipping. I should perhaps express a personal interest in that on my farm people arrive and leave rubbish and waste. It is extremely distressing and extremely costly. I have not had a major incident, I hope, but I know that it is extremely aggravating.
Separate to these regulations because they are about the Environment Agency and the waste sites that have been mentioned, we are conscious of the need to do more about fly-tipping. That is why, in the consultation we have just published, we will give local councils the power to issue fixed penalty notices to householders who pass their waste to a fly-tipper. That is because two-thirds of fly-tipping incidents involve household waste. We are also giving local councils in England the power to issue fixed penalty notices for small-scale fly-tipping. For instance, more than 56,000 fixed penalty notices were issued against fly- tippers in 2016-17. That is a frightening number of people who received these notices. What on earth were they doing in blighting their communities with their waste?
We are doing a number of things on littering from vehicles. A Member of our House did much to pioneer this work. I know he was frustrated by the length of time it took to secure this advance, but I am pleased that we have ended with a positive result. We have also recently strengthened the powers of local councils to search and seize the vehicles of suspected fly-tippers.
The noble Baroness, Lady Jones of Whitchurch, was right to highlight the cocktail of problems that face people, communities and the countryside—including the matters for which these two additional powers to enable more speedy action have been introduced—and the great problems that landowners, public and private, up and down the country face with people who are behaving criminally and badly. Whether it is fly-tipping, waste or litter, we need to do all we can to transfer words into action. I know the noble Baronesses often say, “There are a lot of fine words from the Minister but what we want is action this day”, but no one could be more keen than I am to achieve better results in deterring and confounding those who undertake waste crime. That is why I commend these two extra powers to the Committee.
Human Fertilisation and Embryology (Amendment) Regulations 2018
Human Tissue (Quality and Safety for Human Application) (Amendment) Regulations 2018
Considered in Grand Committee
My Lords, today we are debating two regulations which are part of a wider set of European Union directives that set quality and safety standards for human tissues and cells that are used in patient treatment.
It is vital that UK patients should have every opportunity to access the kind of life-changing therapies covered by these regulations, such as stem cells used to treat blood cancers, corneas to restore sight, heart valves to treat heart conditions or skin grafts to treat burns. As noble Lords are probably aware, these tissues and cells may be donated in the UK or anywhere in the world and of course we need to know that they are safe to use.
I will touch on the history of the European tissues and cells directives. As the world leader in tissue banking, the UK welcomed the proposals to introduce a European tissue and cells directive. The Government supported the directive because it meant the voluntary accreditation scheme for tissue banks in operation at that time was placed on a statutory basis. The first directive included provision to make four Commission directives setting out the detail of the procedures needed to meet the prescribed standards. The coding and import directives are the final two of these Commission directives which we are discussing today.
Traceability of tissue and cells from the donor to final use in a patient’s treatment is important for identification purposes. If a patient suffers a serious adverse reaction, donors and other recipients can be traced quickly to minimise the risk of further harm. Tissue and cells now regularly move across borders, making the need for an international, recognisable identification code. This is essential to mitigate future patient safety risk. While UK legislation largely achieves the aims of the coding and import directives, it does not meet all the specific requirements. These regulations transpose the provisions in the coding and import directives, making us consistent with the EU. With exit negotiations ongoing, our priorities are to maintain the high standards for safety and quality after our exit from the EU and to find a way to continue to share tissues with EU countries.
One possible outcome of the negotiations is that the UK decides to maintain equivalence with the EU provisions in this area. In that situation, we need to demonstrate that the coding and import directives have been implemented. Because of pre-existing UK legislation, we have drawn up two sets of regulations, the Human Fertilisation and Embryology (Amendment) Regulations 2018, for reproductive cells, and the Human Tissue (Quality and Safety for Human Application) (Amendment) Regulations 2018 for all other human tissues and cells. Both regulations will come into force on 1 April 2018. That is what leads us here today.
Let me explain the two directives. First, the coding directive establishes the single European code, designed to provide important basic information on the origin, properties and use-by date for the tissue of cells. As I mentioned, the primary purpose of the code is to enable material to be traced throughout its journey from the donor to final use in treatment of the recipient patient. Effective traceability is vital to investigating any serious adverse reaction to the tissue suffered by the recipient, or any serious adverse event that may have compromised its quality or safety.
Secondly, the import directive ensures that tissues and cells imported from countries around the world meet equivalent quality and safety standards to that of tissue procured within the EU. It also determines what documentation must be provided to the importing country’s competent authorities to enable them to be satisfied as to the quality and safety of the imported tissues and cells.
Ahead of where we are now, a range of consultation activities have taken place to consider how these provisions would work in the UK. The Department of Health and Social Care set up an advisory group which included representatives of professional bodies, tissue banks and service providers. The competent authorities consulted their licensed establishments and a public consultation exercise ran from 10 March to 7 April 2017, receiving 15 responses. While there are gains for the UK in transposing the directives, there will be a cost to licensed establishments, including those in the NHS, in implementing these regulations. Importantly, the regulations have been drafted to ensure that no unnecessary administrative burdens or costs are placed on the UK’s licensed establishments. They simply transpose the directives while avoiding any add-ons.
These regulations fulfil a UK obligation as a current member of the EU. Importantly, they bring into UK law provisions to enhance our existing robust controls that ensure donated human tissue and cells used in the treatment of others meet the highest quality and safety standards. These tissues and cells are increasingly travelling between countries. We want a safety system that protects patients and supports wide access to treatments. These regulations do just that.
My Lords, I thank the Minister for explaining these regulations with clarity. I have to confess that I have form with regard to the Human Fertilisation and Embryology Authority and its regulations which goes back to when I first arrived in your Lordships’ House 20 years ago. I have been involved in the development of these regulations at each stage as a Back-Bencher or a Health Minister or in opposition. The meticulous attention that this House has given to these matters at each stage is one of the reasons why we are a world leader in the use of embryos and human tissue to advance medical and fertility science, and we should be proud of that.
Like my honourable friend Sharon Hodgson in the Commons, we on these Benches will be supporting the updating and tightening of the regulations that these statutory instruments contain. It is important that these objectives support our aim of making sure that human tissue is stored and used safely, ethically and with proper consent, and is moved properly. I am pleased that the chief executive of the Human Tissue Authority, Allan Marriott-Smith said:
“We are committed to working with our stakeholders to ensure a smooth transition and proportionate approach to implementation”.
I have two questions for the Minister. First, how will that implementation be monitored by the Government? I am not actually expecting her to answer my second question today but I would like the Government to address it. Her remarks and those of her honourable friend the Minister in the Commons show, in almost their first sentence, that these regulations are being laid as a result of a European directive, so she will not be surprised that my question relates to that. In the Commons, the Minister’ said:
“the regulations fulfil a UK obligation as a current member of the European Union. More importantly, they bring into UK law provisions to enhance our already robust controls”,—[Official Report, Commons, Third Delegated Legislation Committee, 31/1/18; col. 4.],
and so on. The Minister must therefore have anticipated that my question is: what will happen to these regulations and to this function after Brexit? Are those discussions in hand? What is their timescale? If the Minister does not have those answers to hand, I am very happy for her to write to me about them.
My Lords, I thank the Minister for her introduction. I do not intend to detain the Committee long. These two regulations are, I suspect, the first of many health regulations that transpose EU law into UK law. I shall outline my understanding. As the Minister has just outlined, there are two key directives: the coding directive and the import directive, the first to ensure traceability and the second to ensure imported tissues and cells meet quality and safety standards. As I see it, the aim of these SIs is to transpose these provisions in the coding and import directives. For many patients, it is critical that this is right. What was particularly interesting in the briefings were the impact assessments that accompanied them. The transition tables enable clarity about how elements of EU legislation are put into UK law and allow us to match one for one to ensure that nothing has been altered or omitted. As far as my inexperienced eye could tell, that has been achieved. Another interesting point is the cost to the sector of the work to achieve this.
I have a few questions for the Minister, of which I have given her prior notice. Will she tell the Committee what consultations were done and with whom? What practical changes will the sector see and how long is the sector allowing for such changes to take place, if any? What cost implications are there for both organisations? Much work has been done. Was it budgeted for in their income when they were funded or has the cost had to be found from existing budgets?
As I said earlier, these are our first regulations, and I wonder whether the Minister could tell us how many more to expect and the likely total cost of this exercise to the NHS. Does she anticipate that we will be able to process these changes before leaving the EU? Does she have any indication of whether this exercise is prioritised, or do the regulations come as they are available? I spoke to both the HFEA and the HCA and they are both content with these regulations, so we are also happy to endorse them.
My Lords, I congratulate my noble friend on the elegant way in which she dealt with a very difficult issue. The only reason why I am speaking is that on every occasion we should draw the attention of the House to the fact that merely taking EU legislation into British law does not actually meet the case, because that is of no use unless there is equivalence. We cannot in future operate as if we could operate on our own, because the whole purpose of this legislation is that we can pass these things without difficulty across the whole of the EU.
I do not expect my noble friend to answer what I have to say. As I said, I thought her presentation of this difficult situation was as elegant as it is humanly possible to be. But we cannot escape the fact that this is another example where leaving the EU does not solve problems but causes really serious ones. When she said that we are looking for equivalence, I have to say that there is nothing else that we could look for because nothing else would meet the needs. Anything else would cease to enable us to use these very important elements across the whole of the EU; we would have our own system.
I have just spoken to the Society of Motor Manufacturers and Traders, and again I had to say that the idea that Britain is going to have her own rules about the carbon exhausts of vans is just barmy because we are not big enough to do that. Here, similarly, what we are seeing in reality in this SI is the serious damage that is being done by this whole enterprise. Although it may bore Ministers and some of my colleagues on this side of the House to be reminded of it, I do not think any of these should be passed without reminding people of the huge cost, the vast inconvenience and maybe even the lives that will be endangered by behaving as stupidly as we are by believing that we can operate without a connection with our neighbours. Indeed, we do not believe that; that is why the answer is that we will look for equivalence. If you look for equivalence, of course, what you are really doing is saying that the rules will be made by someone else and we will merely accept them.
I thank all noble Lords for taking part in this debate. It is a great pleasure to have the noble Baroness, Lady Thornton, here, because she is a great expert on these regulations. The reason why we in this country are so expert on these particular issues is probably that the noble Baroness helped to take the regulations through in the first place.
The noble Baroness asked whether we monitor. The department meets the HFEA and the HTA, and implementation will be on the agenda for discussion on a regular basis. On her other question, I might have to write to her if that is all right.
The noble Baroness, Lady Jolly, asked several questions, including one on the consultation. As I mentioned in my speech, the Department of Health and Social Care set up a stakeholder advisory group that included representation of professional bodies, tissue banks and service providers to give guidance on transposition and the potential impact on licensing establishments. I am also aware that the regulators, the Human Tissue Authority and the Human Fertilisation and Embryology Authority, have done a lot of work on the development of these regulations and preparing licensed establishments for implementation, and I am grateful to them for that.
There was also a public consultation exercise which ran from 10 March to 7 April 2017. The question in the consultation document focused on practicalities and implementation, such as whether new IT systems would be required for coding and what the potential cost of compliance would be. Fifteen responses were received, largely from the non-reproductive cell sector. The responses made useful suggestions on a number of operational issues, including the practical implementation of exemptions.
The noble Baroness asked about practical changes. Licensed establishments will now use the single European code, so for the first time any licensed establishment anywhere in the EU will be easily able to read the code and know what tissue is in the package, where it came from and its use-by date. Licensed establishments will also now have written agreements with exporters outside the EU that spell out who is responsible for each safety requirement. For the first time the regulators must be allowed to inspect the exporter’s paperwork and even the premises themselves. These provisions come into force from 1 April 2018 and the regulators have been supporting the sector to prepare for the implementation.
The noble Baroness also asked about costs. We expect that most establishments in the fertility sector will fall under the exemptions and therefore expect the cost to the HFEA will be negligible. In the non-fertility sector, the HTA reviews fees on an annual basis to reflect the costs of licensing and any marginal costs associated with the implementation will be included in this assessment. She asked how many more regs were necessary. The main regulations on the safety and quality of tissues were introduced in the UK in 2007 so the regulators and the sector are very familiar with implementing safety and quality standards. The main directive sets out the overarching framework and makes provision for four further commission directives to set out detailed provision of the requirements. These regulations are the final tool in that series.
The noble Baroness mentioned timing and benefit. These regulations will come into force this April and are not being introduced as a result of the decision to leave the EU.
I did not mean to mislead the Minister, I just anticipated that many more regs would need a similar sort of exercise to that we have done today—in the NHS health sphere and in general. The question was really about workload: how many more do we expect to come down the track, when do we expect them to come and are we anticipating that they will be finished by Brexit date? Is there any indication that they are being done on a slightly ad hoc basis or are some being prioritised over others? I am sorry if the Minister is unable to answer that now, but if she wants to write to me, that will be fine.
I cannot give a timing on that now so I will have to write. These regulations needed to be dealt with anyway and they are slightly late, partly due to a general election, so we have to put them in place now. It actually has nothing to do with Brexit. We have to put them in place now, otherwise we would have heavy fines. In a way, that slightly answers the question from my noble friend Lord Deben about why we are doing it. We are making sure that our standards are as high as those of other EU countries, so this is actually transposing existing regulations and making us consistent with the EU; we are not adding anything new.
The logic is that if the EU then changes regulations in this area, the UK will also change the regulations here, because of the point made by the noble Lord, Lord Deben. Or are we, having established that currently we will remain with European regulation, going to go out in Dr Fox’s brave new world and develop our own provisions?
No. We have to do these regulations anyway, that is the point. They should have been implemented on 29 April 2017 and, as I said, the delay was due in part to the complexity of the directives themselves—other member states have also experienced delays—and the initial timetable to make the regulations before the Summer Recess was paused because the general election was called in March 2017 and we then had a recess period. That is why we are doing the regulations now.
I think I have answered all noble Lords’ questions, so I commend the regulations.
Representation of the People (England and Wales) (Amendment) Regulations 2018
Representation of the People (Northern Ireland) (Amendment) Regulations 2018
Representation of the People (Scotland) (Amendment) Regulations 2018
Considered in Grand Committee
That the Grand Committee do consider the Representation of the People (England and Wales) (Amendment) Regulations 2018, the Representation of the People (Northern Ireland) (Amendment) Regulations 2018, and the Representation of the People (Scotland) (Amendment) Regulations 2018.
The purpose of the draft regulations is to make registering to vote anonymously more accessible for those who need it most. They will also strengthen the integrity of the electoral register and improve the registration system for electors. The changes affect both the parliamentary and local government registers across the UK, with the exception of the local government register in Scotland. As local government electoral registers are a devolved matter in Scotland, the Scottish Government have brought forward similar legislation in the Scottish Parliament.
This year we celebrate 100 years since legislation was passed to give some women the right to vote in the UK. This was the first step to equal franchise in the UK, but the journey to maximise electoral registration still continues. For some, the fear of having their name and address appear on the electoral register is a barrier to registering to vote and engaging in democracy.
Anonymous registration was first introduced in Great Britain by the Electoral Administration Act 2006 and provided for the overall structure of the scheme. It was extended to Northern Ireland in 2014. The scheme protects those whose safety would be at risk if their name or address appeared on the electoral register: for example, victims of harassment or stalking, as well as some witnesses in criminal court cases.
An applicant must provide evidence to their local electoral registration officer which demonstrates that their safety would be at risk. The evidence accepted is prescribed in legislation as either a live court order or injunction from a set list of orders and injunctions or an attestation. An attestation is a signed statement certifying that the applicant’s safety would be at risk if the register contained their name or address. It can be made only by professions listed in the legislation as qualifying officers, such as a police superintendent or a director of social services.
About two years ago, Mehala Osborne, with the support of Women’s Aid, started a petition to make anonymous registration more accessible for those who need it most. After consultation, the Government proposed changes that make the scheme more accessible to those who need it.
The draft regulations update the list of court orders and injunctions which can be provided to an electoral registration officer as evidence to demonstrate that an individual’s safety would be at risk if their name or address appeared on the register. As evidence, applicants would be able to use domestic violence protection orders made under the Crime and Security Act 2010 or the Justice Act (Northern Ireland) 2015, once that is in force. They would also be able to use female genital mutilation protection orders made under the Female Genital Mutilation Act 2003. These are new and relevant orders that have been created since the anonymous registration scheme came into force.
The draft regulations will also broaden those who can provide attestations that an individual’s safety would be at risk. The seniority required for an attestation from a police officer would be lowered from the rank of superintendent to inspector. Medical and health practitioners registered with the General Medical Council or the Nursing and Midwifery Council and refuge managers would also be able to act as attesters. Including these professionals will make it easier for applicants to obtain an attestation, as they are frequently in contact with survivors and are qualified to assess the level of risk to an individual’s safety. These changes make the evidence required to register to vote anonymously more reflective of the experiences of survivors of domestic abuse.
The Government have consulted widely with stakeholders and there is general agreement that the changes being brought forward are desirable to ensure that those whose safety would be at risk if their name or address appeared on the electoral register are able to engage in our democratic system. Women’s Aid strongly welcomed the changes made by this statutory instrument, saying:
“The proposed new measures send out a clear message to all survivors of domestic abuse: that their voices matter, and their participation in politics matters ”.
I turn briefly to the changes to the wider registration system, which relate only to Great Britain. The first two changes address recommendations 12 and 14 in Sir Eric Pickles’s review into electoral fraud. The others have been identified through extensive consultation with the electoral community. The first proposed change adds a statement to the application form which states that persons who are not eligible electors are ineligible to register to vote and that in relation to nationality, applicants may be required to provide additional information or checks may be carried out by the electoral registration officer against government records. This change seeks to enhance the deterrent against applicants providing false information in respect of their nationality.
The second proposed change adds another statement to the application form which informs applicants that their application may be delayed if they do not provide the previous addresses at which they have ceased to reside within 12 months of the date of their application. This statement aims to minimise the number of incomplete applications being submitted on paper forms to ensure that electoral registration officers can remove redundant entries from the register, thus maintaining accuracy.
The third proposed change brings England and Wales into line with Scotland by ensuring all the publicly published monthly changes to the register will be taken into account when an electoral registration officer is checking the eligibility of an attester. This change is being made only in the regulations that cover England and Wales and ensures consistency across the registration system.
The fourth proposed change expands the number of sources of information which an electoral registration officer can use to remove deceased electors from the electoral register. Where electoral registration officers have not been able to obtain a death certificate or a registrar’s notice, they will be permitted to use four further sources of evidence to support their decision to remove a deceased elector. They are: information from a close relative; a canvass form; a care home manager; or other local records. I am sure that noble Lords would agree that using this information is an appropriate response to avoid unnecessary distress for the relatives of any deceased elector. It balances the need for evidence with the sensitivity of providing a service to the citizen that they would expect. It also helps effectively to maintain the accuracy of the register.
The final proposed change to the registration system streamlines correspondence that electoral registration officers are required to send to electors. These changes are designed to reduce the cost of the registration system and provide greater discretion to electoral registration officers to tailor their approach based on the needs of local electors.
The draft regulations make sensible and proportionate changes to the wider registration system. Making it easier to register to vote without a name and address appearing on the electoral register may be a small thing, but it makes a big difference. It means the freedom to live your life, cast your vote and make your choice. As Mehala Osborne said:
“Survivors in the future will not be denied their voice and democratic right to vote”.
I commend the draft regulations to the Committee and beg to move.
My Lords, I welcome these regulations. I understand the fear of somebody who has been a victim of harassment and domestic violence, and not wanting to see their name and address appear on a public document. For people who have been subjected to that sort of treatment, anonymous registration is an excellent idea. The point I want to make is that the men—we must remember that one in three victims of domestic violence is a man—are very often the good guys, who want to leave the family in the domestic home and move on to get somewhere where they can be away from the family. It is very important that that offer is open to men and is known to be open, because all the blurb refers to women, women’s refuges and so on. In this year of 100 years of women having the vote, we must not forget that families are made of male and female. Long may it be so.
My Lords, I too support these regulations, but I will probe my noble friend Lord Young on them and their position in the reform of electoral law that we are proposing to undertake, or have been talking about for some time.
First, on the change to the anonymous registration scheme, I of course absolutely support the widening of this gate. The fear of being bullied, threatened or attacked is very real. Therefore, people should be provided with the appropriate anonymity to protect their democratic right. But, of course, there is a balance to be struck because the transparency of the electoral roll is a very important part of our democratic system. Therefore, we need to bear in mind the extent to which the gate is being widened and the appropriateness of it being widened.
As my noble friend explained, the attestation procedure has now been widened quite a lot. While I absolutely understand about the police and the reduction of the rank to inspector, where it is quite an impersonal relationship, the other two categories move to a much more difficult and much closer relationship in the sense that a registered healthcare professional, as listed in the regulations, will be under a lot of moral pressure, come what may, to look after their patient. They will perhaps find it difficult to make a completely dispassionate judgment about whether anonymity should be granted in a particular case. That is referred to in paragraph 7.7 of the Explanatory Memorandum.
Paragraph 7.8 concerns refuge managers. That is an even wider category of individuals. It is clear from reading the Explanatory Memorandum that the Electoral Commission was concerned about this. Paragraph 8.2 says that it was concerned about,
“how widely the definition of a refuge manager may apply”.
The Government’s response is that its concerns were addressed,
“through a tightening of this definition”.
It would be helpful if my noble friend could give us a little bit of information about what took place in that regard. The problem is that it is not really clear how controlled that category may be. Obviously, refuge managers have a particular position and role to play, but we need to know that they are being properly watched over. There is a mention in paragraph 7.8 of the register of refuge managers. It says:
“The Electoral Registration Officer can then confirm that the refuge is registered on the ‘Routes to Support’ directory, a UK-wide online database”.
Do they have to be on that database to be permissible or is it at the discretion of the local electoral returning officers? My concern is that the gate is being widened. I understand why—my noble friend Lord Young made a powerful case for it, which I understand—but I hope that the Government will perhaps take a look at the situation in a couple of years and see to what extent it is being used properly in achieving the balance between this very proper area and the need to have a properly transparent electoral roll.
Turning to the changes to the wider registration system, I understand the need to simplify it and tighten it up against misrepresentation and fraudulent behaviour. It was not entirely clear to me why individuals should not be allowed to be told. This relates to paragraph 7.16: the Government have decided that they should not be told whether they are to be included on or excluded from the register, and that paragraph says:
“There is no added benefit to the elector of this letter”.
It seems to me that people should be told whether they have been successful or unsuccessful, as opposed to just finding out from examining the electoral roll themselves. There are some issues about how the local returning officer and the Electoral Commission work together.
Before I conclude, I want to draw my noble friend’s attention to two further points. I do not ask him to respond to them today but, as he pointed out in his opening remarks, we are all agreed that we need to maximise voter registration and participation. There is a strange anomaly where if you seek to register to vote in person, you can use a pretty wide range of identity documents, such as your passport or driving licence. But if you choose to register online, you have to use your national insurance number and no other document will do. I do not know about other noble Lords but my knowledge of my national insurance number and my accessibility to it is a great deal less than for my driving licence, which is probably in my wallet, or my passport, which will be to hand. So I wonder why we have that strange anomaly where online registration, which we are trying to encourage people to use, can be done only if you have your national insurance number to hand. I suspect that many people do not have it to hand and have some difficulty finding it out. As I say, I am not asking my noble friend to reply to that today but perhaps he could write to the Members of the Committee about it.
My very last point relates to where this fits into the situation for the reform of our electoral law. These are some welcome and important bits of sticking plaster but there is a large Law Commission Bill on electoral law, which it says is shovel-ready. You have only to consider the headings of the chapters in that important document to see how it goes to the heart of our electoral system. Those headings include: “Management and Oversight”, “The Registration of Electors”, “Manner of Voting”, “Absent Voting”, “Notice of Election and Nominations”, “The Polling Process”, “The Count and Declaration of the Result”, “Electoral Offences”—that includes the important issue about bribery and treating which we debated in this Room not so long ago, and where we are working from a Victorian statute which is now not really fit for purpose—and “Regulation of Campaign Expenditure”. Those are some serious issues, raised by an apolitical body which has a chance to bring our system up to date and in line with modern practice. At a time when people have concerns about the way our system is working, we should make every effort to make it as clear, transparent and modern as possible.
My noble friend will forgive me if I refer to an Answer he gave to a Question I tabled just before Christmas on whether the Government planned to introduce any Bills in the current Session using the Law Commission procedure. On 8 January, he very kindly responded, saying that the Government work closely with the Law Commission and support its work to improve the statute book, and that the introduction of new Bills would be announced “in the usual manner”. I am sure my noble friend will forgive me if I say that I do not find that an entirely satisfactory Answer.
My Lords, in our various debates on electoral registration issues our usual mantra is about the accuracy and completeness of the electoral register. The measures before us may be of some marginal help in improving the completeness of the register and its accuracy, but in very small ways. They may mean that some of the victims of domestic abuse, or people who are vulnerable as a result of other serious criminal activity, will now register to vote when they may not be able to do so otherwise. There is certainly evidence that some of these people may have feared the consequences of registering and this may have deterred them from complying with their obligation to co-operate with the electoral registration process. We need to safeguard the interests of such people and guarantee their democratic rights.
My only concern about the new rules for anonymous registration is that some people may feel that they have to pay a charge to a GP as part of the process. If someone is a victim of domestic violence, or under any threat of violence which means that they should be registered to vote without publication of their address, I cannot think that it would be right for them to be charged by anyone in return for certifying their status and enabling them to register anonymously. It would effectively be a charge to register to vote.
Of course, GPs are very hard pressed and there may be better routes for people to secure a statement confirming that anonymous registration is necessary. I cannot believe that many GPs would feel it necessary to make a charge for confirming the status of a victim of domestic violence, or of someone living in fear of violence, if their address can be identified from the electoral register. The evidence submitted by the Cabinet Office suggests that 90% of GPs will not make a charge, but that of the 10% who might, their charges might range from £30 to £63. It seems potentially misleading for that evidence to suggest, therefore, that the average charge may be around £4, based, I assume, on the estimate that 90% of GPs will not make such a charge and the charges made by 10% of GPs is averaged out across all of them. It would be equally true to say that of those GPs who might make a charge, the average could be over £45.
There are, of course, many other health professionals, refuge managers or police inspectors able to attest to the need for anonymous registration without someone going to their GP. However, going to a GP to secure anonymous electoral registration may also help identify significant health issues that need to be addressed, so there could therefore be many benefits in going to the GP to discuss these issues. The suggestion that such vulnerable people might be expected to pay to secure anonymous registration via a GP seems utterly wrong to me. Therefore, I hope that the Minister will comment on this issue and say what guidance may be issued to GPs on informing some of their patients that anonymous registration may be necessary for them, and on how the GP can attest to their status, if appropriate, without such people being expected to pay for it.
Other issues that have been set out may be considered relatively minor, in my view. Explaining on registration forms who may not be entitled to vote if they are not qualifying Commonwealth citizens, citizens of the Irish Republic, citizens of the UK, et cetera, is not something with which one can argue, but the need to explain this highlights the complexity of the franchise issues. As we prepare to extend the franchise to people who have moved abroad for longer than 15 years, it is high time that we looked again at the franchise issues, including extending the franchise to those who are legally entitled to live and work here permanently. I believe that that should include many of the 3 million EU citizens who currently enjoy the right to live and work here. Does the Minister agree that there should at least be a debate about such issues?
Making it easier for electoral registration officers to sensitively remove from the electoral rolls the names of people who have died should not require much debate, but in terms of preventing abuse of the electoral system, I believe that the impersonation of dead people is probably not very common in the UK. A much bigger problem remains the fact that about one in six people who are living and are entitled to be on the electoral register are not included on it. According to the Electoral Commission, most people believe that the process of electoral registration is automatic and they do not understand that they may need to act to ensure that they are registered and that failure to comply with the process may lead to fines or civil penalties. Will the Minister assure us that the Cabinet Office is working with the Electoral Commission to make sure that all relevant forms in the electoral registration process make this clear and follow standardised best practice to promote the completeness of the electoral register?
My Lords, I, too, welcome these provisions as far as they go. Clearly, it cannot be right that survivors who face a physical, emotional and psychological impact from abuse are then silenced from our democratic process because it is too dangerous for their names and addresses to be listed on the electoral register and too difficult for them to register anonymously under the current provisions.
I take this opportunity to thank Women’s Aid, which has been at the forefront of shaping and co-ordinating the responses to domestic violence and abuse for over 40 years, including the legislation before us. The question is whether these measures go far enough. One of my concerns is that survivors will have to re-register to vote anonymously year on year, and those who move home will have to repeat their applications. For many survivors, anonymity is a matter of life or death, and they will often be on the run from domestic abuse for the rest of their lives. I know that Women’s Aid has been calling on the Government to use the domestic violence and abuse Bill to pass legislative changes to make anonymous voter registration for survivors valid indefinitely so that they can vote in safety for life. What is the Minister’s position on that proposal?
I also want to raise a point that Mr Stephen Doughty raised in the other place about credit reference agencies. His concern was the interaction of individuals with credit reference agencies once they had registered anonymously. From examples in his constituency, he knew that individuals who had registered anonymously had then had significant difficulty in getting agencies such as Experian, Core Credit and others to acknowledge their anonymous registration without going through cumbersome processes. Many of the people we are talking about today are in a vulnerable situation; they need to be able to access credit and to do so without being disadvantaged. Will the Minister say a little more about whether the Government will work with the agencies to ensure that the process is as transparent and easy as possible? We know that in some cases agencies have refused to accept anonymous registration certificates, and clearly that is not right.
I would also like to pick up a point raised by the noble Lord, Lord Rennard. I welcome the proposals to remove entries from the register as a result of death—clearly that is a sensible measure. However, I would also have liked to see some provision for taking steps to increase voter registration and turnout. A question I put to the Government is this: why can they not examine the use of government data to automatically place eligible electors on the electoral roll, given that the integrity and accuracy of that roll is so important? In welcoming these provisions, I hope that we will hear a bit more about how the Government are going to increase the number of eligible people on the electoral register.
My Lords, I am very grateful for the general support for the measures before us and for all the contributions. I will try to respond to the points that have been raised, starting with that of my noble friend Lady Seccombe. She rightly pointed out that, if you look at the latest figures from the ONS, you will see that 1.9 million adults between the ages of 16 and 59 experienced domestic abuse in the past year—1.2 million women and 713,000 men—a statistic that many people will find surprising. When I first became involved in this issue, back in the 1970s, I was on a Select Committee dealing with violence in the family. That was in the era of Erin Pizzey and the first refuges. At that point, the focus was almost exclusively on women who had suffered physical violence. Over the past decades, the definition of domestic violence and abuse has broadened: it now includes psychological as well as physical abuse; sexual, financial and emotionally controlling behaviour; and coercive behaviour. That has broadened the range of people who might be susceptible to domestic violence. Men are victims, and the new provisions that we debate this evening cover both men and women—and rightly so.
My noble friend Lord Hodgson was worried that broadening the range of people who can attest might open the scheme to some abuse. It is important to keep this in perspective. At the moment, 2,300 people are anonymously registered—an infinitely small proportion of the total voting population. The estimate we have made is that, as a result of the changes we debate this evening, that figure might triple to 6,900. If one puts that in the perspective of the millions of people who are entitled to vote, one will see that the possibility of abuse is relatively small.
We consulted the Electoral Commission about the process. My noble friend asked whether refuge managers have to be in the directory. The answer is that they do not. However, the definition was restricted by being narrowed to managers of refuges, in direct response to the Electoral Commission’s concerns.
On the issue of telling people whether they have been removed from the register, the statutory instrument gives the electoral registration officer the discretion to include in the first communication information that they will not get a further one later on. It is discretionary and it is open to the electoral registration officer whether to follow it up, and there will be guidance from the Electoral Commission on how that discretion should best be used.
My noble friend asked also why one had to provide a national insurance number, given that, if one registered online, one did not have to. My noble friend is certainly different from me in having his driving licence and his passport information as accessible as his national insurance number. As far as I am concerned, all three have to be looked at in some database. I will write to him, if I may, about why there is that discrepancy between the information you have to provide if you register in person and the information you have to provide if you register online.
My noble friend raised some broader issues, which were touched on also by others who contributed to the debate, about the progress that the Government are making in their review of electoral law. I am not sure that my reply this evening will take my noble friend much further than the reply that I gave him but a few weeks ago, but we are working closely with the Law Commission in bringing forward a programme of reform using secondary legislation. It is hoped that the work can lead to the consolidation of 10 statutory instruments and 25 amending instruments into two, an affirmative and negative SI respectively. These will cover local, PCC and mayoral elections as well as local planning and council tax referendums. The Law Commission will then utilise its in-house parliamentary counsel to oversee the drafting process. On top of that, Cabinet Office staff will form part of an inner circle alongside representatives from the Electoral Commission, Solace and AEA—the Association of Electoral Administrators—to oversee the drafting process and participate in necessary policy decisions. So work is under way on broader reforms.
The noble Lord, Lord Rennard, asked about GPs and whether they would charge those who want the attestation form signed. I entirely agree with him that those in a vulnerable position should not have to pay. The Electoral Commission will provide revised guidance in the light of the changes we debate. We hope that GPs will choose not to charge for attestations but, as the noble Lord said, other avenues will remain open for electors to seek attestations. It strikes me that somebody who perhaps has just moved into a new refuge will have to go and see a GP anyway to register. That is the point at which the patient could provide the attestation form and just ask the GP to sign it. If it was in that context, I honestly do not see that the GP would need to charge.
On automatic registration, I think that this was looked at some time ago; it may even have been when there was a coalition. The Government did not introduce automatic registration, as it went against the underlying principle of IER—namely, that individuals should take ownership of registering to vote and deciding where they want to register. I shall come in a moment to what we are doing to improve take-up. There are no plans to introduce a system of compulsory registration; that has been looked at before. It is up to all of us to explain to people the importance of registering to vote.
The noble Lord, Lord Hunt, raised a question asked in the other place about why those who register anonymously have to re-register each year. It is a valid question. The provisions on yearly renewal are in primary legislation and could not be addressed through the SIs before us today. The intention of Parliament when the scheme was introduced in 2006 was to enable individuals with a current risk to register anonymously. If one had it automatically carrying forward year after year then, by definition, the risk might not be “current”. However, I think that the principal reason was that you simply cannot do it by secondary legislation; you need primary legislation.
The noble Lord then raised the valid point that, if you are not on the register, credit reference agencies cannot check that you are who you say you are. There is a certificate of anonymous registration, which can be used as evidence to overcome some of the restrictions to which the noble Lord referred. He implied that this was bureaucratic and not always acceptable to the credit reference agencies, and that again is something that I would like to take away and reflect on.
I have tried to answer all the points that were raised. If I have not answered all of them, I shall write to noble Lords.
Immigration and Nationality (Fees) (Amendment) Order 2018
Considered in Grand Committee
My Lords, this fees order is to be made using the charging provisions in Sections 68 to 70 of the Immigration Act 2014 and its purpose is to make only a relatively small number of changes to the Immigration and Nationality (Fees) Order 2016, which, along with the Immigration and Nationality Fees (Amendment) Order 2017, remains in place. The changes are needed to ensure that the charging framework set out in secondary legislation for immigration and nationality fees remains current and supports plans for the next financial year.
The Committee will wish to be made aware that there is an error in the draft order and its Explanatory Note. Following further review of the section of the order that deals with circumstances in which a fee may be set in respect of the provision of biometric identity documents, it has been identified that the change we were seeking to make by Article 2(4)(a) has no effect. This is because of the way in which the related legislation—the Immigration (Biometric Registration) Regulations 2008—operates. The intention was to permit the Home Office to charge a fee when a person fails to collect their biometric residence permit within the required time limit, which is not intended as a penalty or fine, but is in line with fees charged for replacement biometric residence permits, where the department incurs extra production costs. However, the Immigration (Biometric Registration) Regulations do not in fact require an application in those circumstances—hence there is no service for which a fee could be charged. Though the Explanatory Note states that Article 2(4)(a) does have an effect, this is incorrect. Before such a change can take effect we will need to amend the Immigration (Biometrics Registration) Regulations 2008. In the interests of transparency for all, the accompanying Explanatory Memorandum has also been amended to clarify the issue.
The 2016 order continues to set out the overarching framework and maximum amounts that can be charged for immigration and nationality functions over the current spending review period, as previously agreed by Parliament. Changes made by this order are intended to clarify existing powers in connection with entry clearance to the Bailiwick of Guernsey, the Bailiwick of Jersey and the Isle of Man. The order will update powers to charge fees when offering premium services in relation to the islands and also make clear that the current definitions of a “sponsored worker”, “unsponsored worker”, “sponsor” and a “certificate of sponsorship” apply in respect of applications to the Isle of Man. Two further changes will delete obsolete provisions, for which no fee is currently set within regulations.
The 2016 order also permits a fee to be set for the acceptance of applications at a place other than an office of the Home Department. This provision currently allows the Home Office to charge a fixed fee when delivering an entirely optional, premium service to enrol biometrics at a place of convenience to service users. Under plans to modernise services offered, the order will now allow for fees to be set at an hourly rate. This will provide greater flexibility and allow a fee to be charged at a level that is commensurate with the time taken to deliver such services.
To be absolutely clear, this change does not affect the Home Office’s basic services, for example, as provided to applicants who enrol their biometric information at a local post office. The amendment is applicable only to those who seek to enrol their biometrics at a place of convenience that they themselves want to specify.
Finally, the order will also update the power to charge for services offered on behalf of certain Commonwealth countries and British Overseas Territories, where such services may not be offered within consular premises.
To recap, we are seeking to make a small number of changes to the 2016 order and maintain the framework for immigration and nationality fees. We are not seeking to make changes to the overarching charging framework, nor to the maximum fee levels that were agreed by Parliament and set out in the 2016 order, other than in respect of the premium service fee about which I have spoken. Individual fee levels to be charged over the course of the next year will be set by new regulations that are due to be laid before Parliament in March 2018.
I commend the order to the Committee.
My Lords, I thank the Minister for explaining the order and for her confession about the error in it. We have a fundamental objection to the approach that the Government are taking to move to a position where fees are charged to cover the costs of providing border, immigration and citizenship services. The security of the UK border is one of the most important mechanisms by which the Government keep us safe and we should not expect those who want to do the right thing and apply for leave to remain and, eventually, citizenship, some of whom come to this country as destitute refugees, to be forced to fund what is fundamentally the duty of the Executive.
Having said that, I understand that these regulations make only one change to the overall fee structure, where the biometric capturing part of an application comes to you and where the eye-watering fixed fee of £10,500 is to be replaced by an extraordinary hourly rate of £2,600. Will the Minister confirm that this is not the actual cost of providing the service, but a fee based on what the market can bear? Will she also explain why the Home Office is not maximising the profit from such a service to enable it to reduce fees in other areas, rather than giving this lucrative money-earner away to a private company? I understand that there needs to be two people to carry out the biometric capture, but if this is purely on the basis of cost recovery are we paying Home Office officials £1,300 an hour? Can I apply for a vacancy?
We support these regulations as far as they go and we look forward to the main event, when the actual fee levels for 2018 are set out in the forthcoming regulations next month. I give the Minister notice that those regulations are likely to be a completely different ball game.
My Lords, I too thank the Minister for setting out the reasons behind this order and for the clarification she gave in her opening remarks. I too was fascinated by the level of fee charged changing from an overall maximum fee of £10,500 to a fee of £2,600 per hour. Some of us have occasionally done per diem work—I suppose we are not unused to it now—but our eyes can only water at the thought of such an hourly rate. It would be good to know where the justification comes from.
I also add to a point made by the noble Lord, which is that essentially a commercial provider is going to do the work. Although the Home Office will retain full oversight and jurisdiction, the relevant fee will relate to the cost associated with the commercial partner travelling to the location of choice as requested by the applicant. The mind boggles. Can they go anywhere? Without detracting from the quality of the people who will be applying for this service, it makes one wonder what exactly the commercial provider is there to do. Is this rate seriously based on the cost of that commercial provider? Does it build in a profit? It must. I must say that the Explanatory Memorandum begs more questions than it answers on those details.
I thank the noble Lords, Lord Hunt and Lord Paddick, who both asked questions about the rather lucrative £2,600 hourly rate. I absolutely understand why the noble Lords asked that question. It is not the actual fee; it is the maximum. The actual fee will be set in regulations later this year, but it is important to understand what the amount is modelled on. It is modelled on existing costs and location of customers using the current service. The average time is two hours and for security reasons it requires two members of staff actually to do the work. It is a maximum amount and that needs to be borne in mind in the context of what noble Lords are asking.
As regards the organisations working with vulnerable people suggesting that the destitution assessment applied to those who make applications on the basis of private and family life is too stringent, our policy states that a fee waiver will be granted to applicants who demonstrate with evidence that they are destitute. That may well bring in the point that the noble Lord, Lord Paddick, made. The onus is on the applicant to demonstrate by way of evidence, which I am sure that a refugee or asylum seeker could, that they meet the terms of the fee waiver policy. It is open to such individuals to re-apply for a fee waiver on the evidence that supports their request.
The question about the supplier ensuring that they give value for money and account strictly for the time taken in each case was a very valid one. The Home Office’s chosen commercial provider will be required to demonstrate a clear and transparent method of calculation of the service cost, based on the applicant’s location, to deliver an on-demand service. This is an on-demand and premium service to a customer at a location of their choice. The contractual clauses will require that partner to undertake open book accounting to allow visibility of costs and charges for services provided to customers, which in turn will be reviewed by robust commercial oversight. I hope that that answers the noble Lord’s two very simple questions.
Committee adjourned at 7.42 pm.