Gender Pay Gap

Baroness Altmann Excerpts

Thursday 31st October 2019 Lords Chamber

[Baroness Williams of Trafford]

As I said to the noble Baroness, Lady Crawley, I agree regarding the problems that women face, and, as I acknowledged to the noble Baroness, Lady Burt, particularly when they take time out of work for caring and other responsibilities. However, I must tell her that, in 2012, 40% of women in the private sector were participating in a workplace pension. As of 2018, that has increased to 85%, which is now equalling the participation rate of men.

[Baroness Altmann (Con)]

My Lords, there are a number of ways in which women tend to be losing out in the pension system and in the workplace. Over the last 20 years, the number of women working in their 50s and 60s has increased by 75%. I urge the Minister and the Government to look seriously at ways in which we can help women overcome age and gender discrimination, which still exist in the labour market, and address the pension shortfalls that women face, both in the state pension and the private pension. However, I congratulate the Government on the work that they are doing to improve the situation.

[Baroness Williams of Trafford]

I thank my noble friend for those points and acknowledge that she is far more expert in this area than me. Noble Lords have been talking about women in their 50s; that is the most disadvantaged decade for women in their working lives. In Greater Manchester, which I always like to promote, we have a returners project which will support people over 50, and those with lower-level qualifications, who want to return to work, because they are at even more of a disadvantage. The programme began in June and runs until May 2020. We are awarding money to Greater Manchester Centre for Voluntary Organisation to recruit private sector employees and support them to develop their recruitment and employment practices to make their job opportunities accessible for those returners.

Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2019

Baroness Altmann Excerpts

Thursday 28th February 2019 Lords Chamber

[Lord Pickles (Con)]

My Lords, it is a great honour to follow the noble Lord, Lord Judd, whom I have known and admired for a good few years. I am delighted to say that he has lost none of his firebrand qualities. He articulated what the Labour Front Bench and the Liberal Democrat Front Bench were saying in shades of blancmange—as a kind of procedural thing, that somehow we have to make sure the procedures are right. I kind of understand that, when the issue is very difficult and you would like to say “Let’s ban them” but you do not want to do that, you hide behind a load of procedures.

Essentially, this is a subjective decision for the Minister to make. The Minister receives advice, weighs that advice and has to come to a conclusion. There will be no magic moment at which the Minister says, “This is the advice that has changed”. If noble Lords on the Opposition Benches do not like this order, they should vote against it. They should not say that they will not oppose it but that they think in their hearts that they should oppose it, or that they would like to oppose it but it would look bad with some members of their party. It is important to decide on the issue.

Much has been said about my honourable friend the Security Minister, whom I have known for a good few years. In a brief gap in the proceedings of this House, I took the opportunity to go into the Gallery of another place and watch the proceedings. Having had the opportunity to watch the Minister in his previous speech, when I watched him on the Front Bench his body language looked much more relaxed on this occasion than it did on the previous one. I have no doubt that this is the right decision. I argued with my party, and I pay tribute to my right honourable friend the Home Secretary for coming to this decision.

If the House will allow me, I also pay tribute to my noble friend Lord Polak, who has been a champion of this over a number of years and has kept this issue in the minds of both Houses of Parliament. He deserves considerable credit for arriving at this decision.

The strange thing is that the difference between the military wing and the political wing is an entirely separate western construction. It does not exist in the minds of Hezbollah. We know that those who chair the grand jihad council and the Shia council are one and the same people. They do not see any distinction. It has been a convenient device for us to talk to them. The Minister made an immensely important point: Hezbollah is not just against Israel; it is against the Jewish people.

We heard the noble Baroness, Lady Deech, quoting Hassan Nasrallah; perhaps for reasons of delicacy she did not read out the quotation in full. I will do so:

“The Jews are a cancer which is liable to spread at any moment … If they all gather in Israel, it will save us the trouble of going after them worldwide”.


That is pretty unambiguous.

It is not a question of saying that, if we help the political wing, we will somehow help the military wing; they are the same person. The military wing does not decide to go around bombing various people and trying to organise the deaths of British soldiers or citizens elsewhere, while the political wing discusses the price of tickets at the theatre in Lebanon; they are one and the same people, and we need to recognise that.

We also need to recognise one other thing. The noble Baroness, Lady Ludford, commented very reasonably on this and made an interesting pitch, perhaps offering her services as a spin doctor to No. 10. The point is that our population—and our British Jewish citizens—need to feel safe; it is about their ability to go out without facing these flags of hate or the chanting, about feeling safe in the United Kingdom. It is important to set down the message that this country will have no place for anti-Semitism. You cannot have that view if you allow an organisation like this to move freely.

We must also remember that the issue is not just about security concerns; a substantial part of this organisation is funded by the smuggling of drugs. It is a main player in the trafficking of drugs throughout the world. We have seen arrests in France and in the United States. It is not a single part of our community only that is affected, but the whole community. Our streets will be perhaps just that little bit safer by removing from this organisation a convenience that, frankly, we should never have granted it.

[Baroness Altmann (Con)]

My Lords, I would like to congratulate the Government—my right honourable friends in the Home Office and Foreign Office, my noble friend the Minister and her department—for this decision and for bringing forward this legislation. I am delighted that the Opposition is not opposing it, but I must express disappointment that it is not actually in support.

Hezbollah is a radical Shia Islamist terror group backed by Iran, which seeks to impose its totalitarian ideology, with violence, on other Muslims. It wants to drive out western influences from the Muslim world. The organisation itself says, as we have heard from many noble Lords in this debate, that there is no distinction between its military and its political wings. It poses a threat not only to Israel and Jews—and I declare an interest—but to other citizens in the Middle East, of all religions, as well as here in Europe and elsewhere in the West. It has also been established, as my noble friend Lord Pickles rightly said, that Hezbollah is involved in drug trafficking and money laundering, and trafficks large amounts of cocaine through Europe and the US, as was uncovered in 2016 by the US Drug Enforcement Administration, Europol and Eurojust.

So I hope the Minister will agree that proscription will help to restrict Hezbollah’s ability to undertake such criminal activities in our own country, which pose huge threats to British citizens, and that banning the entirety of Hezbollah, as well as Ansaroul Islam and JNIM in the Sahel region of Africa, further demonstrates this Government’s determination to stand up against terrorism and groups dedicated to opposing our western civilisation, values and way of life.

Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019

Baroness Altmann Excerpts

Monday 18th February 2019 Lords Chamber

[Baroness Bowles of Berkhamsted]

I thank the noble Lord for that intervention. A statutory instrument on the endorsement of IFRS will be coming along from BEIS—I am already taking an interest in that. IFRS will still be a global standard, but I think there are now 144 countries that adopt and endorse them, in their own particular way. They normally go straight through, but there is sometimes a certain amount of adjustment; the Japanese have made some adjustments, as have the Australians. In fact, the EU has also done so here and there. I do not think the intention is that the UK-endorsed IFRS will differ from the EU ones, but—I say this with regret—that does not stop the EU saying that it will not recognise as equivalent those that are endorsed in the UK.

Recognising the need for continuity and stability in the financial markets, although the UK might have made rather a mess of it at the Brexit negotiation level, we probably have the high ground when it comes to how we are dealing with the conversion of legislation, given that it has to happen. However, I am just pointing out that some of the asymmetries—not these two, particularly—cause some difficulty. I think the IFRS one, such as it is, will cause more difficulty to the EU than to the UK.

[Baroness Altmann (Con)]

My Lords, I rise briefly to express my concern from these Benches that we may set some dangerous precedents in the processes that we are adopting in discussing and passing these SIs. I understand the difference between consultation and engagement on these issues but I have significant concerns. If the SI was indeed ready on 21 November, there has been time for a proper consultation, which does not seem to have occurred. It would be helpful to the House if we had more information on what engagement has taken place.

I fully accept that, as my noble friend Lord Leigh has said, industry is in favour of adopting these regulations, should we enter a no-deal scenario. However, there are reasons for us to be concerned across the House at the procedures taking place. We are being asked to approve legislation based on evidence that we perhaps feel is incomplete. I will not vote against the Government but I would like to express my concerns.

[Lord Tunnicliffe]

My Lords, in trying to take my role seriously, I staggered my way through the Explanatory Memorandum to try to understand this SI. It all seemed pretty straightforward. Basically, at the moment if you have a prospectus approved by an EEA regulator, it can be used in the UK. We are foolishly—no, that is not the party line, is it?—considering crashing out of the EU and we need some substitute regulation. It seems that the bulk of this statutory instrument is saying that whereas before you would have it approved anywhere in Europe, now if you want to market it in the UK it has to be approved in the UK. That seems to be a consequence of leaving the club. I regret that we have not had the level of consultation that Members would have liked but I find it extraordinarily difficult to believe that the alternative—not approving this SI—is anything like as consequential as the intrinsic costs. No matter how much consulting we did, we would still have come to the conclusion that we should approve the SI.

As ever, I tried to look at the Explanatory Memorandum in the context of the basic assumption of the withdrawal Act: everything is transferred and no new concepts are introduced. The one area where I have some questions is on a very narrow point, which is the exemption for certain government and local authority securities. The memorandum says:

“Under the current Prospectus Directive rules, certain public bodies are exempt from the requirement to produce a prospectus when they undertake to offer securities to the public or request the admission of securities to trading on a regulated market. This includes EEA States, EEA local authorities, EEA central banks, and public international bodies of which one or more EEA States are a member”.


The dilemma is whether we continue that exemption. There is an argument that we should but, in order not to recognise EEA states, there then comes the decision to extend that exemption.

There are two ways that that exemption is described. The third bullet point of paragraph 2.5 of the Explanatory Memorandum states:

“Extending the existing exemption from the requirement to produce a prospectus and certain exemptions under the Transparency Directive that currently apply to certain EEA public bodies, to certain third country public bodies”.


That would seem to be a controlled extension of the exemption, which took account of the countries to which the exemption was applied, whereas paragraph 7.22 says:

“To address this deficiency, the government will extend these types of public bodies exemptions to the same types of public sector bodies of all third countries”.


I think Venezuela is a third country, and the idea that the public offers of securities in Venezuela should be treated the same as those in other EEA states would seem somewhat anomalous.

Economy: Budget Statement

Baroness Altmann Excerpts

Tuesday 13th November 2018 Lords Chamber

[Baroness Altmann (Con)]

My Lords, I declare my interest as chair and adviser to pension firms and as adviser to a social enterprise specialising in helping employees manage high-cost debt with workplace loans.

It is an honour to speak in this debate and to follow so many excellent contributions from noble friends and colleagues from all sides of the House. I welcome this Budget, but it may be entirely irrelevant, because Brexit and the terms on which we may leave the EU are far more important for our economy.

In general, the Budget had giveaways for many different groups. I commend the sensible, time-limited encouragement of business investment, help for the high street, the plans—albeit limited—for a digital platform services tax and the announcement of austerity coming to an end. The national productivity fund, mentioned by my noble friends Lord Gadhia and Lord Leigh, is definitely welcome. Productivity in the workplace has been impacted by ongoing financial concerns among those becoming ever more indebted. Therefore, I welcome the help for those struggling with excessive debts, the £55 million from dormant assets to help the problem of unaffordable credit and the 60-day breathing space.

It is also vital to build on the national retraining scheme plans—I welcome the £100 million from the Government to help job-specific training. I urge my noble friend the Minister to ask the Chancellor to make sure that this works for older employees, too. Men and especially women face ongoing discrimination in the labour market, within both the workforce and the recruitment process, which undoubtedly damages productivity and growth.

I welcome in particular the absence of radical pension reform—there have been so many changes. I am pleased that the basic framework remains for now while auto-enrolment continues to roll out until next April when it reaches the full rates. Small changes such as pension funds being allowed to invest in growth assets and encouragement of moves towards a pensions dashboard are also welcome. Increasing the personal tax threshold to £12,500 next April will help protect the pensions auto-enrolment programme from a rising number of opt-outs as employee contributions rise from 2% to 4% of relevant earnings.

However, this rise has a major downside because it worsens the social injustice in pensions inflicted on low earners, who are mostly women. More than 1 million people earning between £10,000 and the personal tax threshold, which is currently £11,850 but will rise sharply next April, will be forced to continue paying 25% extra for their pension if their employer chooses the wrong type of administrative arrangement, as so many have done. This scandal has been ignored time and again. I hope that my noble friend will urge the Government to show that they care about these lowest-paid workers and remedy the injustice.

There were some other missed opportunities, in particular on social care. There is no money in the system, at public sector level, local government level or at individual level, to pay for social care. We need urgently to ensure that measures are introduced to incentivise people to put money aside for funding long-term care needs. A Green Paper is promised “shortly”. Meanwhile, families are unprepared for care needs. Baby boomers, that huge demographic chunk of the population, have not planned to set aside money for care. If we were to introduce incentives to help families put some funds away to pay for care, they would be able to choose when, where and how, and what quality of care they might prefer, rather than just relying on whatever the state might provide. Eight million over-60s have more than £300 million in ISAs and billions of pounds in pensions. Those baby boomers could be incentivised to keep some of that money for their 80s in case they need care. If we do not act soon, more of that money will be spent.

I declare an interest in that I own an electric vehicle. I was disappointed that benefit-in-kind company car tax rates were not addressed in the Budget. They will rise next year from 13% to 16%, which goes entirely against the thrust of policy and the Road to Zero strategy. Sales of zero-emission cars are flat year on year, and we are falling ever further behind other countries. The rise in the benefit-in-kind tax will hit demand in that most important company car market, yet in the following year the tax will drop to 2%. Clearly, people will delay purchasing electric vehicles. I hope that the Chancellor might reconsider at the very least bringing forward the 2% tax rate or perhaps abandoning altogether for a year the company car tax for electric vehicles—the benefit-in-kind tax. If we want to be a leader in this area, it is a shame that the Chancellor has not responded favourably to the letter that I and many others sent to him requesting such action.

There is one more issue I want to mention. I understand my noble friend Lord Northbrook’s concerns about the post-Budget announcement on reform of probate fees, but I find the criticism rather harsh. I am pleased that the Government have listened to previous concerns and reduced the planned fees that they announced in 2017, but under the new plans 60% of estates will pay just £250, similar to today. The cost of legal or professional fees are far larger than this probate fee. For example, an estate of £100,000 is estimated by Which? to be charged, on average, £4,000 by a bank, while a £500,000 estate would face bank charges of closer to £10,000 to £20,000. In that context, a few hundred pounds from the probate fee is desperately needed to keep the court and tribunal system up to date and ensure that there is continued free access to justice in cases such as child support cases, domestic violence cases, mental health reviews and female genital mutilation protection cases. I think that all such cases deserve some small cross-subsidy from the biggest estates.

I was also encouraged to see the clear threat from the Chancellor that the giveaways in this Budget will not be available in a no-deal Brexit scenario—presumably to entice the ERG to support any deal put to Parliament. In that context, I remain horrified by the continued talk of no deal. Let me be clear: if we do not reach any deal with the EU, we will be undoing far more than this Budget. Our 40 years of industrial success are at risk. National security, the national health, food supplies, manufacturing jobs, peace for Northern Ireland— the list goes on. How any even semi-responsible Member of Parliament could seriously still be considering leaving the EU on so-called WTO terms is beyond my comprehension. This game of bluff must stop. Our country has large debts—it needs business success and international co-operation, especially with our nearest neighbours.

I believe that this Budget was judiciously judged, but quite frankly, whatever is pencilled in for next year or thereafter in terms of taxation and spending could be entirely swept away by a damaging Brexit. I hope that the Government will ensure that the voices in our party who seem determined to risk our future on a kamikaze no deal, or even a Canada-style agreement, are sidelined as soon as possible.

Prudential Regulation Authority: Equity Release Sector

Baroness Altmann Excerpts

Wednesday 5th September 2018 Lords Chamber

[Lord Bates]

That is of course why within the industry itself—and indeed with the regulator—the normal level at which borrowing is taken from the home is between 30% and 40%, to allow for that cushion. We have to recognise also that this has two benefits: to individuals as, for most people, their home is their largest asset and being able to release some capital to enhance their quality of life in later life is good; and to the annuity holders on the other side of the balance sheet from the equity release, who have been suffering badly as a result of gilt yields being around 1.5%. The ability of life insurance companies to match these two needs and to offer a better deal to both is something to welcome. The noble Lord is absolutely spot on when he says that we need to watch it; we need to watch it very carefully and what I have outlined is what the regulator is doing already and the rules that it has applied, and also the consultation that is open at this moment to see whether more needs to be done.

[Baroness Altmann (Con)]

My Lords, I support wholeheartedly what my noble friend has said about the importance of the equity release market for certain families. Does he also agree with me that, as the Equity Release Council figures show, most equity release loans are only about 30% of loan to value—some may be around 50%? Even if house prices were to decline by 30% or more, the problems in the conventional mortgage market would be far greater than those in the equity release market. I was rather surprised to see such scary headlines on this particular segment of the market.

[Lord Bates]

My noble friend has great expertise in this area, which she brings to our consideration. Of course, the amount of capital at risk in the non-asset linked security on balance sheets amounts to some 3% of the total. It is, therefore, a relatively small amount but it is growing fast. We want to make sure that two things happen: first, that balance sheets correctly reflect the risks that are inherent in them and, secondly, that consumers get independent advice, take the right decisions and are aware of the risks that they face. Both are responsibilities that have to be shared between the PRA and the Financial Conduct Authority. We are watching this very carefully; we are not complacent and we want to make sure that that happens.

Taxation (Cross-border Trade) Bill

Baroness Altmann Excerpts

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 4th September 2018 Lords Chamber

[Baroness Altmann (Con)]

It is a pleasure to follow so many excellent speeches. This Bill is meant to help us deal with any outcomes that arise from our negotiations for leaving the EU. Its aim of establishing an independent UK customs regime based on the EU regime, adjusting VAT and giving powers over customs duties, makes sense if we are leaving the EU single market and customs union, although of course ostensibly—I will return to this in a moment—the Bill also gives the Government the power to establish a new customs union.

I welcome the hard work carried out in the other place by honourable and right honourable colleagues and many others to maximise the use of affirmative procedures to ensure that important taxes and tariffs are properly scrutinised by Parliament, and I welcome the Government’s acceptance of the sunset clauses—all changes called for by the excellent House of Lords Delegated Powers Committee.

Following last-minute amendments narrowly passed, by just three votes, in the other place, unfortunately the Bill before us today is poorly drafted with some worrying potential flaws. The UK, for example, is now able to enter into a customs union with the EU only if this is passed by a separate Act of Parliament. From a scrutiny and consistency point of view, this seems problematic. Why should an Act of Parliament lock be just for one territory? The scrutiny that comes with joining or establishing a customs union should surely apply equally to all territories. This amendment also means that the Bill cannot now be the conduit for the UK to be in a customs union with the EU, even if that becomes government policy. The Government would still need primary legislation, which is contradictory given that this Bill is the very primary legislation that should give the Government the power to do that, having repatriated those powers from Brussels. It is of concern that we would allow bad legislation to reach the statute. Of course, I respect the House of Lords’ constitutional role to resist amending a supply Bill, but the Government must be careful not to abuse their constitutional role.

This important piece of technical and complex legislation has been rendered incoherent and inconsistent to appease the European Research Group, while actually killing the main government proposal for customs in the process. If we wanted the EU to take the Chequers proposal seriously, it was not terrible helpful for the Government to accept the ERG’s wrecking amendments to the Bill almost immediately. The Government have said that they do not view these as wrecking amendments, but they were clearly intended as such: the EU thinks they are such and many on these Benches can see that too—indeed, many noble Lords have stated so this evening. Arguing that black is white does not change the colour.

Clause 54 is not consistent with the Government’s supposedly agreed position. Section 1.2.1 of the Chequers White Paper refers to the facilitated customs arrangement that the Government hope to enter into with the EU, and I have welcomed that as a starting point to get us to the negotiating table. It states that,

“the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK”.

So the Government now find themselves in direct conflict with their own White Paper. As the noble Lord, Lord Kerr, and so many others have already stated, the EU cannot be expected to do this. Worryingly, therefore, the ERG amendments are forcing us closer to no deal.

I note with disquiet the increasing voices that seemingly are willing to support no deal. Moving to a regime based on WTO rules would not be in our national interest. Let us be absolutely clear: no deal is unquestionably a bad deal. It would be disastrous for our country and, indeed, for the EU—it would be like launching an economic war on the EU. The declaration that this is “not the end of the world” is scant comfort for our country. Yes, no deal would not be as bad as nuclear Armageddon, but the British people were promised that Brexit would mean a better future. By demanding the impossible of the EU and then blaming it for not giving it to us, we cannot help our country’s future.

The Conservatives are the party of free trade. How then could we seriously be countenancing a no-deal outcome which would mean losing the great free trade deals that we currently have, not just with the EU but with so many other countries outside the EU, which our membership has delivered? Operating under WTO rules would mean that we must follow the internationally agreed norms. We would undermine our integrated supply chains and put British manufacturing at risk. This is not what people voted for.

As the noble Lord, Lord Hain, and many others have so rightly said, no deal would be disastrous for Northern Ireland and Ireland. There are no technological solutions that would allow for a frictionless and free border without a proper customs partnership—or whatever one calls it; some kind of customs union—and regulatory alignment. The lack of serious concern for this issue, and the careless statements dismissing concerns about honouring the Good Friday agreement, should, I would have hoped, be anathema to the Conservative and Unionist Party. However, the obsession with “Brexit at all costs” seems to trump all else.

The Bill is about tariffs, but what about the vitally important non-tariff barriers and rules of origin, which would hamper our trade with or without this Bill? Unless we can retain customs union and regulatory alignment, or something that delivers the same but may not be called that, it is difficult to see our national economic success continuing.

I had other points to make, specifically on various amendments, but as so many other noble Lords have expressed the same sentiments so well, I finally ask my noble friend to please relay concerns from these Benches and respectfully request that more care be taken before sending a Bill to this House in this state. It is particularly important to legislate responsibly if the Bill in question is a supply Bill or a money Bill.

Tackling Financial Exclusion (Financial Exclusion Report)

Baroness Altmann Excerpts

Monday 18th December 2017 Lords Chamber

[Baroness Altmann (Con)]

My Lords, as another of the immigrants identified by my noble friend Lord Patten, I commend the report of the Select Committee on Financial Exclusion under the sterling chairmanship of the noble Baroness, Lady Tyler.

I am pleased that the Government have decided to accept some of the excellent recommendations—they have appointed a new Minister for Financial Inclusion, and I congratulate them on measures included in the Financial Guidance and Claims Bill. I echo the words of the noble Lord, Lord McKenzie, who explained the importance of the amendments added by this House, and I also say what a pleasure it was to work with the DWP Ministers and noble Lords on all sides of the House to improve protection for vulnerable or highly indebted citizens. I look forward to further possible additions in the other place, such as on cold calling and perhaps a duty of care. With the worrying rise in household indebtedness, it is more important than ever to help the public understand financial management and also to improve the financial resilience of the population. Debt worries can have negative implications for workplace performance and productivity, and financial worries can damage or exacerbate existing issues with mental health.

It is estimated that 17.5 million working hours a year are lost as workers take time off due to financial stress. As we head towards a period where interest rates are likely to rise from current exceptionally low levels, and where the economy may be unsettled by Brexit uncertainties, action is urgent. I hope we will see a consumer-focused approach to improving this financial resilience. In this connection, I also hope that we will see more initiatives that use workplace payroll to help people merge their debts and reduce the interest rate payable, as well as allowing them a more secure repayment programme. I declare an interest as an adviser to a social enterprise helping workers in many large organisations to reduce their debt interest costs and manage them more efficiently.

I certainly agree that it is welcome that banks should promote basic bank accounts, but I remain concerned about the important issues highlighted by my noble friend Lord Northbrook and about continuing bank branch closures. The loss of local branches particularly disadvantages those who are disabled or elderly, if they cannot manage telephone or online banking. I am pleased they will be able to use post offices, but we need to monitor this situation carefully to ensure that vulnerable individuals are not excluded as banks continue to pursue cost-cutting agendas.

On the topic of older people, too often their needs are overlooked by mainstream financial services providers. I welcome the Financial Conduct Authority’s work on vulnerable consumers and developing a strategy for the ageing population. However, I hope this strategy will urgently include helping people to prepare for later-life care. There is no prefunding or financial planning for future long-term care needs at national, local or individual level, and no incentives to help families to save for care costs. Financial exclusion in later life will be badly affected by the failure to prepare for potential care needs. The inadequacies of the current social care system are well documented.

There are many aspects to this debate and the excellent Select Committee report, many of which have been thoroughly covered by other noble Lords, so I have chosen to highlight some that are relevant specifically to financial exclusion in connection with pensions. As auto-enrolment extends pension coverage to millions more workers across the country, it is vital to improve the understanding of and engagement with workplace pensions and other financial matters. I hope the Government will consider making workplace financial education a key component of the auto-enrolment programme so that all workers are better equipped to look after their finances. I realise the new financial guidance body may have some input here. However, I believe we may be missing an opportunity to improve financial education and inclusion while millions of workers are being nudged into pension saving. The opportunity is there for the taking.

In connection with auto-enrolment, there is an important issue that I must once again raise in your Lordships’ House, and hope that other noble Lords may join me in pressing for urgent action. This relates to the lowest-paid workers who are being automatically enrolled in, or opting to join, workplace schemes. Most workers do not understand pensions; indeed, many of the smallest employers setting up pension schemes for their staff also know little about the subject. This has resulted in a major injustice that has so far been all but ignored by the Government, regulators and the pensions industry. Low earners, mostly women, are losing money because of a particular type of pensions administration arrangement called net pay. All workers earning over £11,500 who are basic rate taxpayers pay £8 of their earnings and automatically receive £10 into their pension, as the scheme adds the extra £2 for them. This is the 25% bonus that results from basic rate tax relief. However, any worker earning below £11,500 in a net-pay scheme cannot get the £2 that they are entitled to under pensions law; they have to pay a full £10 for every £10 going into their pension. If their employer uses a scheme with a different administration system called relief at source, these low earners only have to pay £8 to get the £10 in their pension. In other words, with these net-pay schemes the lowest earners are forced to pay 25% more for their pensions—a classic example of financial exclusion where the poor pay more.

I have asked numerous Written Parliamentary Questions and raised this issue in several debates in this House, yet Ministers seem unwilling to address this injustice. Employers often know nothing about the issue; the workers themselves probably have no idea and, even if they did, there is nothing they could do about it as the employer chooses their scheme; and the pension providers do not normally warn the employer or the worker that their scheme is not suitable for those earning less than £11,500. Providers are not obliged to pay the low earners—mostly female—this extra money, although a couple have decided to do so. The Treasury has refused to allow schemes to reclaim the money on behalf of the low earners. Even the new master trust assurance framework, supposedly the regulator’s endorsement of a high-quality master trust, can operate a net-pay system and take on low-paid workers without having to compensate them for this lost money. This would not happen if people understood pensions or if providers were required to explain things clearly. However, the current regulatory oversight is compounding problems for low earners, failing to protect them and thus leaving them financially excluded. This is a classic example of how the complexity of our system and a lack of consumer focus is causing financial exclusion, and will mean that the lowest earners have less disposable income for their general spending. The duty of care highlighted by my noble friends Lord Holmes and Lord Shinkwin extends to the Government and the regulators, not just providers.

The noble Viscount, Lord Brookeborough, eloquently explained the importance of financial education in schools, but there is an equally important issue that is often overlooked. The FCA has a duty to ensure that people understand financial products, and the new financial guidance body will also have a remit to include this. However, we must not assume that just giving people information and disclosure will improve financial inclusion. Indeed, I argue that the current financial services industry approach is almost guaranteed to exclude most consumers even if they understand finance because the reams of paperwork that they receive, full of jargon and impenetrable terms, written in language that may as well be Latin or Ancient Greek, is impossible for almost all ordinary people to understand. Even my friends with PhDs in scientific subjects are utterly baffled by pensions literature.

The regulatory approach designed to protect consumers is not working well enough. Just assuming that sending people disclosure and information about products and the choices they have will improve consumer outcomes is sadly misguided. Some of the problems stem from a lack of financial education in schools, and I am delighted that the Government intend to tackle this. However, most people in this country are beyond school age now and they need to know how to plan their finances. Whether in connection with managing debt, avoiding high-cost credit or making long-term investment decisions, the Government and the regulators must act now.

Improving financial inclusion will require urgent action across many areas. Helping vulnerable individuals, those with illnesses such as cancer and the wider population is an urgent task. I hope our new Minister for Financial Inclusion can make meaningful and timely improvements, perhaps even in the Financial Guidance and Claims Bill as it goes through the other place, as many other noble Lords have requested.