Covid-19: People Living in Poverty

Baroness Bennett of Manor Castle Excerpts

Thursday 30th April 2020 Lords Chamber

Asked by

[Baroness Bennett of Manor Castle]

To ask Her Majesty’s Government what assessment they have made of the number of people who will be (1) living in poverty, or (2) unable to meet their basic needs, as a result of COVID-19; and what steps they are taking to support such people.

The Question was considered in a Virtual Proceeding via video call.

--- Later in debate ---

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank everyone who has put their name down to speak in this debate and apologise that the time available is so short. I hope this is something that the Procedure Committee will look at.

In the two weeks since we have returned from recess, your Lordships’ House has heard many times about the massive, far-reaching schemes that the Government have introduced in response to the Covid-19 epidemic, as we did in this morning’s government response to my Oral Question about growth dependency. Most of these schemes were introduced when both Houses were in recess, but we have now had opportunities to subject them to scrutiny and to share concerns that noble Lords and MPs have been hearing from members of the public, many of them desperate and frightened, who have pointed to the holes that the rules of the schemes have left many in. I am sure that in this debate we will hear many more case studies.

In the other place, my honourable friend Caroline Lucas has been pointing out how the scheme for the self-employed has left out those who took pay in the form of dividends, those whose self-employment was recent, and those who were self-employed part-time. I have been contacted by many—identified by #newstartersfurlough —who started a job after 28 February, and so their employers are not able to apply for the 80% wage subsidy for them. Can the Minister tell me how many people the Government know, or estimate, are in those two groups that are missing out on help?

There are also, no doubt, huge numbers of people who were on the minimum wage—which is not sufficient to live on, as the Living Wage Foundation makes clear—and are now on 80% of an already inadequate income, their employer failing to top up the Government’s furlough payments even if, as in the case of giant multinational companies, they could well afford to do so. Can the Minister tell me how many are so affected?

I acknowledge that gaps, such as those in the self-employed and new starter schemes, were inevitable, particularly given the speed with which these schemes had to be established. However, we might want to think about having prepared schemes for times of crisis in future. Perhaps, rather than abolishing these schemes when possible, the Minister could commit the Government to look at mothballing them and having the computer systems and legal frameworks held on standby. We live in an age of shocks—climatic, financial and health; we cannot know when the next one will strike, only that it will. Putting resilience—the ability to deal with them and to ensure that households are able to deal with them—at the centre of every government policy is essential.

For the immediate future, it is important that we know how large the gaps are—something that only the Government can establish. I hope the Government already have plans to adapt the existing schemes and slash the numbers falling through the gaps. That is one way in which the Minister could perhaps answer the second part of my Question, about how they plan to help those now without adequate, or even any, income. However many patches are laid over the gaps in these schemes, some people will always fall through; that is the nature of conditionality. If one of the conditions is having to apply, that is one way in which significant numbers will always miss out. I cite the example of pension credit, for which it is estimated that 15% of eligible pensioners do not apply, leaving them living—by definition—on tiny incomes.

I can already safely speculate that the Minister will say, “Ah, but there’s universal credit”—and yes, there is. On other occasions, your Lordships’ House has heard of its many limits, horrors and inadequacies, and I am not aiming to restart that debate today. At least with all sanctions suspended—as I understand it; perhaps the Minister can confirm that—some of its worst horrors, of people being left absolutely penniless through no avoidable fault of their own, are not currently occurring. I hope the Minister will also acknowledge that its level will not meet the commitments of many people who, suddenly and entirely unpredictably, have only it to rely on. I hope that the Minister will tell us today that the Government plan to make the ending of universal credit sanctions a permanent state of affairs. Taking away an already inadequate level of income and leaving people penniless for months or years is no way for a society to treat anybody.

Again, we have the problem of conditionality—rules being applied that some are unable to meet. In recent years, we have seen the level of conditionality in social security tightened, and tightened again. We have seen our politics dominated by the disgraceful and false distinction between so-called strivers and skivers, perhaps falling to its greatest depths with a former Chancellor’s obsession with the setting of people’s window blinds. That conditionality has led many to miss out on money they desperately need and should have a right to. In the age of Covid-19, that cannot be allowed to continue. That is why, as I pre-warned the Minister, I ask her whether the Government are considering a universal basic income—a payment going to every member of this society as part of the answer to the second part of my Question. Only an unconditional, universal payment can ensure that no member of our society is left penniless, in a Dickensian world of want and misery.

I have to tell the House that I am not co-ordinating this call with the First Minister of Scotland, Nicola Sturgeon, who yesterday told her House that Covid-19 makes

“the case for a universal basic income stronger than ever”

and that she would be putting that to our Prime Minister. That coincidence reflects calls from an increasing number of directions, party political and not, for a universal basic income. An unconditional regular payment at an adequate level, going to every woman, man and child in our society, could ensure that no one is left in poverty or unable to meet their basic needs. Surely, in a society that has the capacity to deliver it, that is a basic condition to call it decent and to fit the categorisation of a human rights-respecting society.

I hope that no Member of your Lordships’ House would deny the right to life, yet we do not currently guarantee the means to deliver life: for people to put food on the table and keep a roof over their head. Charity, particularly in the form of food banks, has increasingly been left to struggle to provide that most fundamental human necessity. In the age of Covid-19, of course, that is even more difficult.

Finally, today, much of the debate around Covid-19 is about ways out of the lockdown and this debate must look forward to that period. Initial government schemes to provide people with cash have been extended and are likely to be extended again but, at some time in the not too distant future, they will start to be unwound. Inevitably, that will mean that more gaps appear in the safety net, more people will not meet the changed criteria, or their circumstances will change, and they will be left in poverty without the means to meet their basic needs.

I am, and will remain, a proponent of a permanent universal basic income. One possibility for the intermediate period, to ensure that no one is left to the vagaries of conditionality and needing to rely on the stretched resources of charity and voluntary help, is a “recovery basic income”. I am aware of two such worked-through proposals, one from the UBI Lab Network, the other from Malcolm Torry of the Citizen’s Basic Income Trust and the London School of Economics. Again, I have shared these with the noble Baroness and, time allowing, I hope she might offer some thoughts on both the principle of a recovery basic income and the proposals—and maybe even on a general universal basic income. I also look forward to hearing the thoughts of the many other noble Lords taking part in this debate.

Pension Schemes Bill [HL]

Baroness Bennett of Manor Castle Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 26th February 2020 Grand Committee

There are other amendments in this group aimed at the same objectives. I will be interested to hear what other members of the Committee have to say and the Minister’s response.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the noble Baronesses, Lady Altmann and Lady Hayman, for their powerful, comprehensive introductions to this group. I shall try not to repeat what they said, which covered much of the ground that I would have covered. I shall speak specifically to Amendments 36, 67A, 67B and 97, which are tabled in my name, and to Amendment 52, to which I have attached my name. Just to make life even simpler for novice amenders like me, Amendments 67A and 67B were previously Amendments 55 and 56. For simplicity for anyone who is looking at the old paperwork, Amendment 55, now Amendment 67A, refers to environmental and social governance, and Amendment 56, now Amendment 67B, asks for the views of beneficiaries to be taken into account. I hope that makes things clearer.

The noble Baroness, Lady Altmann, said that she believes people believe in the climate change crisis. I would go somewhat further and say that I know there is a climate emergency and I think the world knows there is a climate emergency and has acknowledged that through international declarations. I also stress the point that both noble Baronesses referred to previously: that as host of COP26, we have a particular responsibility to lead the world this year in measures such as this.

As the noble Baroness, Lady Hayman, said, Amendment 36 essentially mirrors Amendment 28. The drafting is different, as is the insertion point. I will leave it to those who know a great deal more about legal details than I do to work out which might be preferable. However, proposed new subsection (6B) goes further, because as well as having a statement of investment principles—principles are great, but what matters is what is actually happening—it requires the most recent version of the implementation statement, which states how the SIP is being implemented, and the most recent version of the statement of the chair, who is accountable for what is happening. Will the Minister consider this as a possibility?

Amendment 67A covers much the same ground as Amendment 52, which was focused on the climate emergency, but goes further by talking about environmental, social and governance factors. I am not sure how many noble Lords were at the Fairtrade Fortnight event down the corridor, but I am sure it was not just the really delicious tea, coffee and hot chocolate that produced a packed room. There is grave concern about poverty, hunger, access to education and the situation of women and girls around the world, and the way in which investment can make a difference. This amendment seeks to ensure knowledge about what people’s money is doing to address those issues; it is broader than looking at just the climate emergency.

Further to that, the world is having a major conference on biodiversity and addressing the nature crisis, the accompanying crisis to climate change. We cannot afford to simply look at the climate emergency on its own. We have to look at the broader framework. The world is doing this through the globally agreed framework of the sustainable development goals. ESG is a way of asking whether we are addressing those goals. People will have the choice; as other noble Baronesses have said, we are not mandating what happens but trying to ensure that people have a choice and know where their money goes.

Amendment 67B closely relates to Amendment 92. There is rightly a lot of focus these days on transparency in decision-making and how people know that decisions are made. I quote the Pensions Minister, who said that pension schemes,

“ought to be thinking about the assets which help drive new investment in important sectors of the economy … which deliver the sustainable employment, communities and environments which all of us wish to enjoy”.

However, I refer back to the advice from the Law Commission to trustees that they,

“may not impose their own ethical views on their beneficiaries”.


I would argue that the legislation as currently drafted puts trustees in a difficult position, because they are not allowed to impose their own views but there is no mechanism directing where the choices should be made from. If we provide a mechanism by which schemes are directed to consult their beneficiaries, that will provide the guidance that the trustees need.

We seem to have been going for a very long while. I hope that this covers the main points of the amendment I have put forward. I look forward to the contributions from others who have put forward amendments, and to the Minister’s response.

--- Later in debate ---

[Baroness Stedman-Scott]

I am advised that we need to get that information from the FCA; when we do, we will give it to all members of the Committee. I hope that that is acceptable.

[Baroness Bennett of Manor Castle]

I apologise, but this seems to be the logical point at which to do this. I echo the comments of the noble Baroness, Lady Altmann, and request to also get a copy of that. Further to that, if there are already plans to have a central index of SIPPs and that system already exists, including the implementation and chair statements would surely be a very small administrative burden. Could the Minister consider whether that is possible? She can answer now or in the future.

Pension Schemes Bill [HL]

Baroness Bennett of Manor Castle Excerpts

Committee stage & Committee: 1st sitting & Committee: 1st sitting : House of Lords
Monday 24th February 2020 Grand Committee

Moved by

[Baroness Bennett of Manor Castle]

12: Clause 46, page 37, line 14, at end insert—
“( ) require information to be made available to the Pensions Regulator relating to actions taken by the scheme to ensure diversity considerations are taken into account in the recruitment of the trustee board with regard to—(i) age;(ii) gender; and(iii) ethnicity.”Member’s explanatory statement
This amendment will require pension schemes to make available information on the diversity of the trustee board to the Pensions Regulator.

[Baroness Bennett of Manor Castle (GP)]

I ask your Lordships to note that this is the first time I have tabled an amendment in Committee, so please forgive any infelicities in my procedural approach. I would appreciate any nudges in the right direction, should I need any. In speaking to this and other amendments bearing my name, I note the assistance and initiative of the campaign group ShareAction, which has helped with what I am about to say and the amendments.

The noble Baroness, Lady Altmann, said earlier that in setting up CDCs we are starting with a blank slate. We are starting in the modern era. This is the chance to do things right. Many of your Lordships are aware of the numerous studies showing that more diverse groups of decision-makers make better decisions. If the trustee boards of the CDCs reflect the diversity of the wider groups of people they represent, their collective life experiences will improve their capacity to understand the unique challenges faced by different pension scheme members. Pension outcomes are affected by issues such as gender, ethnicity and, as we referred to in an earlier amendment, generational equity. I am sure there is a great deal of expertise on pensions in this Room. Many noble Lords will know that the gender pension gap is currently 40%—twice the gender pay gap.

I warn your Lordships that this amendment is very modest compared with many that I may put before the House. It is not calling for mandatory diversity rules. If we were talking about the composition of major company boards, I have long been a campaigner for mandatory rules on gender diversity on those. These are measures aimed to ensure that CDC trustee boards are fit for the modern era and that they have at least considered these issues of diversity that we know are so crucial to good decision-making. These are a new type of pension scheme. Let us make sure they are fit for this century. I beg to move.

[Baroness Sherlock]

My Lords, I thank the noble Baroness, Lady Bennett of Manor Castle, for raising this issue and for starting so gently with us—we look forward to seeing where she will take us in future. We do not get much excitement on pensions Bills, so we are looking forward to her giving us some.

I am glad that the noble Baroness raised diversity, because it is something that we are certainly concerned about, as most people interested in pensions should be. She is not alone in raising these concerns; the Pensions Regulator raised them, too. It published a consultation document last year on the future of trusteeship and governance, in which it made a strong case for the need to improve diversity in pension boards. It made many of the points that the noble Baroness raised about the size of the gender pensions gap, but it also flagged up the gap that those who are disabled or from a black, Asian and minority ethnic background have poorer pension outcomes than other workers.

A lack of diversity on pension scheme boards has long been acknowledged as a problem. The 2016 PLSA annual survey found that, on average, schemes had more than 83% male trustees, with one-quarter of trustee boards being all-male. We are not talking about these things not being entirely balanced. If in this day and age a quarter of trustee boards are all-male, something needs addressing.

The idea behind the noble Baroness’s Amendment 12 is that schemes should report on the action that they are taking to address diversity. It does not even mandate an outcome; it asks simply, “What are you doing about it?” In fact, TPR put that option in its consultation document. It said in response to the consultation that opinion was divided, pretty much down the middle, with half the people thinking that this was a good idea and the other half thinking that it was a bad idea. Therefore, it decided not to do it.

Obviously, I could make an alternative argument based on those same facts, but I just want to ask the Minister: if not this, then what and when? The back-up position from TPR was that it was going to have an industry working group to look at improving the diversity of scheme boards. Will that go ahead? If so, has it launched or when will it launch? Crucially, how will we know whether it works? What would success look like? If we are not going to ask people even to report on the actions they are taking, we would want to know that the alternative will make a difference. If TPR and the noble Baroness, Lady Bennett, are of one mind in saying not only that the lack of diversity is a problem but that more diverse boards make better decisions—and they are making decisions about diverse scheme membership—this is an issue on which the Government have to take some kind of action. So if not this, then what?

[Baroness Stedman-Scott]

My Lords, the two amendments tabled by the noble Baroness, Lady Bennett, to Clauses 46 and 119, both relate to issues of diversity and protected characteristics.

I will speak first to Amendment 12. I note that the aim of Clause 46, which contains requirements relating to the publication of information concerning CDC schemes, is to drive transparency about how they operate. The noble Baroness’s amendment would require CDC schemes to provide diversity information to the Pensions Regulator on what actions the scheme has taken to ensure diversity with regard to age, gender and ethnicity in its trustee recruitment. As we heard from the contributions, particularly that of the noble Baroness, Lady Sherlock, there is work to be done on this.

We recognise the importance of diversity in trustee boards, not just for CDC schemes, but across all trust-based schemes. Indeed, the Pensions Regulator has recently published its response on the future of trusteeship consultation, which considered specifically whether there should be a requirement for pension schemes to report to the regulator what actions they are taking to ensure diversity on their board of trustees.

The response to the consultation advised that there was a lack of consensus on this issue, as has been referred to, with some respondents in favour of it and others suggesting that there were initiatives already in place or that such a reporting regime would place an unnecessary additional burden on schemes. The noble Baroness, Lady Sherlock, asked, “If not this, then what?” I can tell her only that the regulator concluded that

“it would be beneficial to create an industry working group”

to further investigate raising the profile of this important issue, with a view to developing additional guidance and supporting material to help improve the diversity of trustee boards. So, I think that will happen. As I am sure noble Lords will appreciate, I would not want to pre-empt this significant work, but we will keep it under review and consider it further as it progresses.

The Government’s focus on the trustee landscape, including for CDCs, is to ensure that trustees meet standards of honesty, integrity and knowledge appropriate to their role. I think that employers and members participating in these schemes would reasonably expect that to be the case.

Together with Clause 9, Clause 11 means that the Pensions Regulator must be satisfied that the persons involved in the CDC scheme are fit and proper persons to act in relation to it. If the regulator is not satisfied, authorisation of a CDC scheme cannot be granted. We recognise that if we want to engender confidence in CDC, and ensure that the interests of members are protected, it is vital that the schemes be managed by appropriate individuals.

On Amendment 15, relating to pensions dashboards, again the Government recognise the importance of diversity on trustee boards. However, we have had to consider what information to prioritise as being required from day one. As we set out in the Government’s response to the consultation on pensions dashboards, the intention is to start with the provision of basic pensions information. This initial information is intended to help consumers plan for their retirement, in line with our primary policy objectives.

The success of dashboards is predicated on there being a good level of coverage across pension schemes. Achieving good coverage is a complex task. There are over 40,000 pension schemes, with data varying in quality and stored to different standards. The Government expect that it will take three to four years for there to be adequate coverage, with pension schemes initially providing simple levels of information. Increasing the amount and complexity of information required from pension schemes in the early stages may significantly delay delivery. The development of dashboards will be iterative, and we will continue to consider what information is placed on them following their initial delivery to the public.

TPR has not launched the working group yet, and its timescale is not confirmed, but we will monitor the situation. For the reasons that I have given, I hope that the noble Baroness will withdraw her amendment, but I am sure that she will never let up on her campaign.

[Baroness Bennett of Manor Castle]

I thank the Minister for her response. She referred to the fit and proper persons test. I am not a legal expert, but my understanding is that the test looks at people as individuals, with the Pensions Regulator being asked to judge them as such. So far as I can see, there is no requirement on the Pensions Regulator to look at the group and ask, “Is this group appropriate to represent this body?”

On the Minister’s point about an industry working group, these can be a very good thing; however, they can also be an alternative to action. This subject has been widely researched and there is a great deal of knowledge about it, so I am not sure why we need a working group rather than action.

The Minister referred to putting high-priority information on the dashboard. I strongly suggest that what I have proposed should be high-priority information when pension participants are making decisions. However, for the moment, I beg leave to withdraw the amendment.

Amendment 12 withdrawn.