Data Protection and Digital Information Bill

Debate between Baroness Bennett of Manor Castle and Lord Davies of Brixton

Committee stage
Monday 22nd April 2024 Grand Committee

[Lord Davies of Brixton (Lab)]

Because of the way the amendments are grouped, I have the opportunity to repeat my questions. The first one is relatively straightforward. Does the Minister accept that introducing these provisions—obviously we are talking about Amendment 234 on pensions—will discourage people from claiming pension credit? Despite all the efforts of the Government to encourage people to claim pension credit, clearly this will discourage them. Have the Government made any effort to estimate what impact this will have? Obviously, it is a very difficult task, but have they thought about it and does the Minister accept that it will have a deterrent effect.

My second question relates to the issue I have already raised. The state pension or state pension equivalent is paid by the state, by a pension fund or by a personal pension provider. Does the Minister think it odd that there is a difference in treatment? Everyone is receiving their pension from the state, but with a person who receives their pension from a private pension scheme or personal pension provider there is not the same right to look at their bank accounts in relation to those benefits. Now I am not advocating that as a solution. The question is: does this not indicate the illogicality and extent of the Government’s powers over some people’s incomes that they do not have over other types of income? To me, particularly when it comes to the payment of a pension—a benefit paid as of right—this discontinuity points to the extent of the Government’s overreach.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I must begin by joining the general applause for the characteristic tour de force from the noble Baroness, Lady Sherlock. I was having a flashback because it was the noble Baroness in debate on what is now the Pension Schemes Act 2021 who taught me how to cope with Committee stage very kindly a long time ago —and we are very used to that. I rise briefly to address this group, but I start by saying in relation to the last group that I entirely agree with the proposition that Clause 128 should not stand part: the spying clause should not be part of the Bill.

I have a couple of points to make on the amendments in this group, one of which was raised by the noble Lord, Lord Clement-Jones, on the last group and is about protecting the Government from themselves. The amendments put down by the noble Baroness, Lady Sherlock, are probing. However, if we were to restrict the Government’s use of these powers, they might end up at a vaguely manageable scale. It is worth raising that point when we look at these groups.

Financial Services and Markets Bill

Debate between Baroness Bennett of Manor Castle and Lord Davies of Brixton

Report stage
Tuesday 13th June 2023 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

I will speak very briefly to offer Green support for the amendment in the name of the noble Baroness, Lady Kramer, and the most reverend Primate. The amendment, in a way, is a smaller and lighter version of my attempt to strike out the competition clause, on setting a competitiveness objective, which has sadly remained in the Bill.

In November last year, City Minister Andrew Griffith told the Financial Times:

“The overall thrust of things is to allow more risk … you shouldn’t be risk”


averse;

“we just need to manage that in an appropriate way”.

He went on to say that the aim of reducing ring-fencing was

“to release some of that trapped capital over time”.

I acknowledge that the Minister said that before the collapse of SVB and Credit Suisse, and the other crunches in the American banking system.

In an April piece in the Financial Times, Martin Wolf said:

“A shock like this should make mindless deregulation less appealing to politicians”.


As has been clearly outlined already, the amendment does not actually make anything happen; it just ensures parliamentary oversight. When we get to the dinner break business, my noble friend will seek to ensure that parliamentary oversight is included there. Surely, this is what democracy is supposed to be about.

[Lord Davies of Brixton (Lab)]

My Lords, I support the amendment. We will return to these issues on Thursday, when we discuss the regulations in Grand Committee. However, it is worth mentioning to the House the clash today between this Bill and a meeting of the Economic Affairs Committee, of which the noble Baroness, Lady Kramer, and I are members. By chance, the committee was interviewing the Governor of the Bank of England. The issue of this arrangement arose, and the governor was quizzed on these very issues. It will be useful on Thursday to explore further why and how this action was taken. The governor provided a justification, but, in the light of his remarks, it will be worth while exploring these issues in more detail when we get the regulations.

Financial Services and Markets Bill

Debate between Baroness Bennett of Manor Castle and Lord Davies of Brixton

Committee stage
Tuesday 7th March 2023 Grand Committee

[Lord Davies of Brixton (Lab)]

Both. I am not really being given that choice but, as I said, it was just a narrow point.

My question on Amendment 237 is: would you take investment advice or guidance from the Secretary of State? Is the Secretary of State even authorised to provide investment guidance or advice? I am troubled by the involvement of the Secretary of State, and I hope that we could perhaps consider a different wording if we wish to raise this on Report. If the Government want something to happen—net zero—as a matter of public policy, they have to accept the risk themselves and not pass it on to private individuals. I am talking about pension schemes, and the underlying point is that the money in a person’s pension scheme is their money, provided to them to be used in accordance with their wishes to provide them with a retirement income. Part of that retirement income depends on solving climate change—that is clear. I do not doubt the importance of taking these issues into account; I simply question the relevance and role of the Secretary of State in that process.

Over many years’ involvement with pension funds, I have seen that, when people see the massive amount of money involved, as highlighted by the noble Baroness, Lady Altmann, they see that the economic power is there, but it is there on behalf of the members’ interests and not, in principle, as a means of implementing government policies—however worthy. They might be in alignment, but the leading factor should be the members’ interests.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Lord, Lord Davies of Brixton. Since the noble Lord, Lord Lilley, appeared to be directing a question at me about whether I oppose fossil fuels, I will take a moment to answer that. Do I think that pulling up carbon which has been stored in the ground over hundreds of millions of years, which was a crucial part of delivering the Holocene that gave us 10,000 years of incredibly stable climate in historic terms, and then pumping it into the atmosphere needs to be stopped with great speed? Yes, I oppose pumping out that stored carbon.

More than that, the fact is that extracting, transporting, burning and getting rid of the waste products from that fossil fuel causes huge damage to the health of people on this planet. One in five premature deaths that occur on this planet is as a result of burning fossil fuels—that is based on a study in environmental health in 2021. So do I want to do something urgently to make this a healthier planet for people? Yes, I do. However, that is not what any of these amendments are about. These amendments are to the Financial Services and Markets Bill, and all of them are about trying to stop the crashing of the financial markets, which are also crucial to our security and health in different kinds of ways. That is what all these amendments address.

It is really interesting that we have here a set of amendments which we might, collectively, for the purposes of Committee look at how we can hone and shape—I take the point made by the noble Lord, Lord Davies. But what we have in Amendment 168 are directions to the PRA to review capital adequacy requirements. That is about the security of firms. In Amendment 201, we have directions to the FCA to direct personal pension providers. Picking up on that point, I note the figures from the Pensions Regulator’s most recent survey of defined contribution schemes, which found that more than 80% did not allocate any time or resources to managing climate risk.

Then in Amendment 233, we have sustainable disclosure requirements, so that companies would report to investors what risks they are taking with their money by not dealing with all the sustainability risks which relate to the fact that we are exceeding planetary boundaries—not just on climate but on biodiversity, the loss of ecosystems and novel entities, and on phosphate geochemical flows. All these things are taking risks with people’s money, which is what we are talking about. Amendment 233 might indeed guide us in the direction of each major company having to have a chief environmental officer, who should be of equal status and importance to a chief financial officer because it is about ensuring the sustainability of the company, as well as the sustainability of this earth. Going on to Amendment 235, we are directing the Treasury to provide government guidance on how we achieve all of this.

That is an overview but I want to pick up one specific point. I would have signed Amendment 119, in the name of the noble Lord, Lord Randall of Uxbridge, and others in a full cross-party group, had there been space. When people think about forest risk commodities, they often start by thinking, naturally enough, about timber but, if we look at some statistics, palm, beef and soya production collectively amount to 36% of global deforestation. When Orbitas, an investment body, surveyed 24 capital providers in 2020, all of which had high levels of tropical commodity exposure, not one had screened their loan books and/or investments for agricultural transition risks. I want to major on that point while we debate this today, because if we look at Indonesia, 76% of unplanted forest concessions and 15% of existing palm oil assets could be at risk—that is, financial risk—should Indonesia adopt what is seen as its essential plans to meet its Paris climate commitments.

I said that we need to look at all aspects of planetary boundaries being exceeded. We also must include water risk. Fresh water supplies rely heavy on fossil water aquifers—in the American high plains, in Mexico, in eastern Europe, in Egypt, in Arabia, Iran and China. All agricultural production of food—the big sectors globally and financially—is utterly dependent on fresh water supplies, which are not being replenished. That is a huge financial risk as well as a risk to when any of us can eat in the future, at a basic level.

Finally, I focus on Amendment 168, tabled by the noble Baronesses, Lady Worthington, Lady Drake and Lady Sheehan. I would like to work with them ahead of Report because, as others have highlighted, this focuses particularly, though not exclusively, as the noble Baroness, Lady Worthington, said, on fossil fuel exploration, exploitation and production. We must broaden this out to look at the agricultural sector, because it is an area of enormous financial risk. I draw on the work of the investment group FAIRR, which looks at the extremely high financial risks. The majority of the largest protein producer companies are at high risk for greenhouse gas emissions, deforestation, water and waste. Over 60% of them saw soya feed from areas at high risk of deforestation and have still not set deforestation targets. Fewer than one in five meat, egg and dairy firms is adequately managing the pollution of waterways from manure. Just ask the people of Herefordshire about that if you want to know more.

FAIRR finds that the volume of waste produced by the 70 billion animals processed each year is equivalent to the volume of waste produced by twice the entire human population on this planet. Only 18% of global meat and dairy producers track even partial methane emissions, even though annual methane emissions from global capital and livestock make up 44% of anthropogenic methane emissions.

We are talking about the future of our life on this planet. We are talking about a liveable planet. That is inescapable. However, today we are talking about ensuring that we do not see the next financial crash. Let us remember the last financial crash, when the cash machines were within hours of stopping working. We must do something to stop the next financial crash from being at the point where the size of the carbon bubble, the level of stranded assets across a range of sectors—fossil fuels, animal agriculture and other areas—is such that it suddenly hits the markets. The markets are not counting this now. They must count this in if we are to have a sustainable financial sector.

Schools Bill [HL]

Debate between Baroness Bennett of Manor Castle and Lord Davies of Brixton

Committee stage
Wednesday 8th June 2022 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

I rise towards what I imagine is the end of a very rich and telling debate. We have seen huge expressions of concern about this Bill, and particularly the initial stages of it, from all sides of your Lordships’ House. I agree with the noble Baroness, Lady Morris, about the difficulty of amending the Bill. I am working with a number of campaign groups and parent groups, trying to work out how to deal with the lack of clarity, the incoherence and contradictoriness of so much of the Bill, and it is proving very difficult. I apologise in advance that, normally, I try to put down all my amendments before the first day in Committee, but I have not managed it this time, because there is so much—and so much concern out there.

I shall try not to repeat what has already been said by others, but I have to begin the debate on this Bill by reflecting back on my 10 year-old self. When I was 10 years old, I was absolutely fascinated by and loved lungfish. They are absolutely amazing and fascinating creatures, and I remain amazed and fascinated by them, but I do not believe that every child in this country should be made to learn about lungfish. That picks up the point made by the noble Baroness, Lady Chapman. Many of us have things that we think that everybody should know, but the person who should help children to discover the things that they are interested in—the teacher in the classroom with them—is the person who can best help every child to learn what fascinates them, what interests them and what will be of use to them and their community. Clause 1, in particular, is heading in the opposite direction.

I attached my name to Amendment 13, in the names of the noble Baronesses, Lady Chapman of Darlington and Lady Wilcox of Newport, as a bit of a sample and a case study. This is where the Secretary of State is given the power to direct the amount of teaching across the school year. Let us think about the very different situations in which schools find themselves at this moment—although it could be at any time—at the tail-end of a hugely destructive and damaging pandemic. Let us think about a small rural school to which pupils have to travel very long distances from a very young age, with long travel times and difficult travel. How can a Secretary of State sitting here in Westminster say, “You have to do this many hours”, even when the head teacher and the other teachers know that their pupils are exhausted, worn out and struggling? There needs to be a balance in people’s lives and a balance in the way of teaching.

I am thinking about the idea that you can apply one rule to something as simple as the number of hours of teaching in a year. How do you classify what teaching is? Of a day spent going out walking through a national park and exploring it without any particular formal curriculum elements, but giving pupils the chance really to experience and be in nature, is a Secretary of State going to say that it does not count in their hours? How can that possibly work?

I want to pick up on one interesting point that the noble Lord, Lord Knight of Weymouth, made about Ofsted. He suggested that it could just inspect multi-academy trusts under the Government’s proposal. Now, the Green Party wants to abolish Ofsted but what the noble Lord proposed might be a really interesting step along the way, given that we know how immensely damaging Ofsted’s visits to individual schools are. I do not agree with making every school become an academy or part of a multi-academy trust, but that is a really interesting example of the way that this whole debate has run, and of how the Bill is half-baked and not thought through. There are so many possibilities and different ways in which it might develop.

I want to say one final thing. Perhaps to the surprise of the House, I am going to bring up Brexit—not because education ever had anything to do with the European Union but because the slogan that essentially decided the result of the Brexit referendum was “Take back control”. I do not think people were really thinking then, or think now, that the right thing is to have taking back control mean that the Secretary of State for Education has control, at a fine, detailed level, of the education of every child in this country.

[Lord Davies of Brixton (Lab)]

My Lords, I want to add one thought to the debate. As my noble friend Lady Morris said, the Bill is setting out a brand-new structure for schools in this country. What is unclear is what that structure will be. What is the dynamic or philosophy, or even the structure that lies behind this proposed new system of school education? It has been nominated as academies—it has their name attached to it. I am a doubter about academies. We could have an interesting debate, probably more on this side, about their role and what they have achieved. Because it was raised by my noble friend Lord Young, I have to say that I find his reference to failing schools in London, with the implication that there was a mass failure of schools there, offensive. However, I am not going to debate that today.

What is before us today on the structure is not about academies at all. Multi-academy trusts are, in fact, the antithesis of academies as originally envisaged. These are large, bureaucratic, non-local, geographically distributed organisations, with no local involvement other than as a toothless add-on. We will try to do our best later on to build in local and teacher involvement. I would argue for school-student involvement in the way that they are run, but these will be big organisations and the dynamic will be for them to become even bigger. They will be big, bureaucratic organisations which are effectively under the thumb of the Secretary of State. Is that the schools system that we want? I certainly do not think it is.

As a final thought, we saw research this week from the Institute of Education showing that the one thing multi-academy trusts do not do is to rescue failing schools. Its evidence showed that they had no impact on rescuing failing primary schools and very little on rescuing secondary schools. So I am incensed, in part, by the failure to recognise the role that local authorities should still play in governing our education system.

--- Later in debate ---

[Lord Davies of Brixton (Lab)]

My Lords, I support these amendments. I have just one narrow point I wish to add. One thing that is lacking and to me seems essential is some reference to school students and their participation in the governance of their schools. To me, the case for those over voting age is unanswerable: they can vote in a national election, but they have no right to participate in the governance of the institution to which they belong. Given that the Labour Party’s policy is, I think, votes at 16, I would make the case that school students from age 16 should have a statutory right to participate in governance. I would even suggest that there is some scope for clear guidance to involve even younger children. I believe that there is some interesting work done in many primary schools now where the children are involved. Unfortunately, I missed the boat on making this specific point in an amendment, but I am sure that this issue that will return on Report and I hope that, at that stage, some reference to school students could be included.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Davies of Brixton—indeed, he picked up on a point that was in my Amendment 21A about the involvement of pupils, and the follow-up question I asked the Minister. Perhaps we can work on that amendment on Report, because it is crucial and I do not think we have to keep it to voting age, or even 16. At some level, pupils should have a say in their education if we operate in a democracy.

I am aware that the noble Lord, Lord Nash, is not currently in his place, but I feel strongly that I need to respond to what he said about stars in education and star teachers. Underlying that is a real concern about importing traditional private sector approaches that have seen some executive head teachers receiving extremely high levels of pay. What we have to acknowledge, particularly in an educational setting, is that, ultimately, we are talking about a teacher who should be part of a team of teachers working together. Every teacher has something to offer and the idea that we hold up some people as stars and everyone else just has to follow what they do is a deeply damaging approach to education.

I also note the point the noble Lord made about curriculum resources. Of course we do not want every teacher to have to start from scratch, but there is also grave concern that this Bill talks about multi-academy trusts as proprietors. By law, they are not for profit, but if they are very large institutions buying curriculum resources and other supplies from commercial suppliers, we really have some questions to ask about where value for money and the right approach to public service are in that kind of structure.

Health and Care Bill

Debate between Baroness Bennett of Manor Castle and Lord Davies of Brixton

Lords Hansard - Part 2 & Committee stage
Monday 31st January 2022 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, having attached my name to Amendment 233 in the name of the noble Baroness, Lady Bull, and Amendment 235, in the name of the noble Baroness, Lady Greengross, I shall rise briefly. I am not quite sure why I did not attach my name to Amendment 234 in the name of the noble Baroness, Lady Bull. I certainly meant to, so I apologise for not doing so. I did that because I was approached to show broad cross-party support. Indeed, my name and that of the noble Lord, Lord Lansley, on the same amendment definitely demonstrates that.

As someone concerned about poverty and inequality, I could not but do that. The noble Baronesses, Lady Bull and Lady Greengross, have set out the cases very clearly. I am not going to run through again the levels of poverty and inequality and the sheer struggle that so many people currently face and will face in future. As we have been around the houses for quite a long while on whether Clause 140 stand part, I shall just refer to one sentence in the Age UK report because it sums up where we are very clearly. It says:

“It is clear that these changes have the potential to save the Government hundreds of millions of pounds, but at the expense of those on low incomes, with modest assets and living in parts of the country where houses values are lower.”


It is the very opposite of levelling up.

However, in the context of this debate and particularly after the comments of the noble Lord, Lord Lipsey, I want to set out an alternative vision—a vision that is much more radical than anything noble Lords have heard from anyone else tonight. It is the vision that was passed at the Green Party conference in October after a long and very hard-working campaign, particularly by our group of disabled members. It calls for free social care for all adults. Members of your Lordships’ House will have often heard me talking about a universal basic income, and I see the other side of that as universal basic services. I regard social care as a basic service. If you need help to eat, wash and lead a full life under your own control, that should be provided free at the point of need in the same way as the NHS is provided. This is a basic philosophical difference from others who have said that we need it all means-tested and that we need to be able to look at where a person is. I say that if someone needs this help it should be provided and then, whether or not people who have the means to contribute to that, whether they have been unfortunate enough to suffer a disability or a limiting illness, they should all be in that position.

I am aware of the time, so I will make just one final point on postcode lotteries. We often express a great deal of concern about postcode lotteries, but there is another lottery that occurs to people in this situation. Some people who suffer very serious disabilities or very serious illnesses that affect their living conditions are able, through the courts, to receive payments. Perhaps their parents are able to show that they suffered some disability at birth as a result of inadequate care, and they receive a very large payment that is set at a level to provide them with a decent level of care for life. Perhaps they are a young adult who is knocked off their bicycle and it is possible to hold a driver responsible. They get a very large court payout absolutely rightly. I am not challenging that under the current system at all, but they get that payment. Someone with exactly the same condition who cannot go to court and the people caring for them, their parents or relatives, have to struggle and fight at every level and at every moment to get the care that they need. That is just not right.

[Lord Davies of Brixton (Lab)]

My Lords, I just want to contribute to this debate. I fully support the remarks of my noble friend Lady Thornton. I was particularly struck by her dissection of this Government’s totally preposterous claim to have a plan for social care. They do not have a plan. All they have is a regressive tax and a broken promise.

I am tempted by the remarks of my noble friend Lord Lipsey to enter into a broader debate on these issues. Clearly, this issue is not going to go away. This is not the end and the issues that were raised will come back again and again until we move towards something fairer and more comprehensive. I cannot resist saying that I am unconvinced that deferred annuities will have any part in any sort of mass market provision of care. As a product, they are fatally flawed, in my view.

My noble friend’s remarks also made me think of the extent to which this debate is taking place while ignoring the key factor in these issues, which is housing or, rather, property management. That is really what we are talking about, but we do not mention it in the context of these debates, which is unfortunate. I am glad my noble friend raised these issues. However, I think the substantive point this evening is the imperative of sending this clause back to the Commons where they can reassess it with greater time than they were allowed initially.

Finally, I just want to highlight the revealing and outrageous statement by the Minister in the Commons, Mr Argar. He said the Government

“have always intended for the cap to apply to what people personally contribute, rather than on the combination of their personal contribution and that of the state.”—[Official Report, Commons, 22/11/21; col. 110.]

I do not believe that means-tested benefits are any more money being given by the state than my pension that I get from the national insurance scheme. It is outrageous to cast people as, in a sense, recipients of charity. It is their rights as citizens to have this money, and it is their money; it is not the state’s money. It reveals the Poor Law mindset of this Government.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Bennett of Manor Castle and Lord Davies of Brixton

Committee stage
Tuesday 26th October 2021 Lords Chamber

[Lord Davies of Brixton (Lab)]

My Lords, I am pleased to speak in support of my noble friend Lord Sikka and in favour of retaining the existing legislative provisions by leaving out Clause 1 entirely. As the noble Baroness said, it is about whether Clause 1 should appear in the Bill at all. Clearly, to leave it out would vitiate the entire Bill but it would invite the House of Commons to think again, which is the primary role of this House. The intention now is to enable those of us who believe it would be reasonable and right to go for the full 8.3% increase that the Government have stated is the appropriate figure to debate it.

The triple lock has come in for some criticism. It does not enjoy universal support. I understand some of those criticisms and perhaps, in a perfect world, it should not be necessary. We would like to live in a world where pensioners would simply share in the same increases in living standards as those enjoyed by the working population. This is not where we are. For me, the triple lock serves a dual purpose. First, it is needed to protect pensioners’ living standards. Secondly, and in some ways more importantly, it is a way of increasing the flat-rate benefits towards a more adequate level. I am glad to say that I do not have to expound at length on that point because the case has been made so clearly by my noble friend Lady Drake. It is an accelerator which will project the basic pension to a more adequate level.

What is clear is that it is not at an adequate level at present, which is why what is described as the “ratchet effect” of the triple lock is so important; of course, the same would be true of a double lock, based on prices and earnings, which is why we shall return in a moment to the important role of the 2.5% element. Introduced as a political fix at a time when inflation was somewhat higher than it has been for most of the last decade, it has turned out to be of real benefit to pensioners.

As was so clearly explained by my noble friend Lady Drake, the job of the triple lock is not just to protect pensioners in relation to earnings and prices; it is, over time, to achieve real increase in their incomes when measured against either of these indices. As I have said before, it is an inherent feature of the triple lock, not a bug. Whether you agree depends on whether you think the state basic pension or the new state pension are currently high enough. If you think they are, you might consider that we do not need the triple lock, but if you want to see them increase, as I do, the triple lock has a proven track record of gaining ground on that objective. The triple lock may not be pretty, but experience has shown us that it works. During periods when the triple lock—or, in the case in the long-distant past of the 1974-79 Labour Government, a double lock—has applied, we have seen a consistent incremental move of the state flat-rate pension towards a more adequate level.

The element of the triple lock that has attracted most criticism, not least from my noble friend Lady Lister, is the 2.5% minimum increase. It has been said that it is arbitrary and without any justification. Maybe, but so are many other figures in legislation. When we analyse the real increase that pensioners have benefited from since 2011 with the triple lock, almost half the improvement has been due to the 2.5% element. To me, that in itself justifies its inclusion. Does anyone here believe that the basic state pension should be 18% of earnings rather than 19%? It might not sound like much but, to the poorest pensioners, everything counts.

Perhaps we need a debate about what level of flat-rate state pension we need and what the target should be when we have a ratchet effect. I would favour a commission to address the issue, building on the work of the earlier Pensions Commission, which set out the present structure of pension provision in this country. The commission itself did not feel able to specify with any precision what the basic pension should be in earnings terms, but the structure it established depends as much on the level of the flat-rate element as it does on the pension produced by automatic enrolment. I am pleased, therefore, to see that more work is being done in this area, through initiatives such as those from the Living Wage Foundation and the Pension and Lifetime Savings Association, with its retirement living standards.

Particularly given the hour, now is not the time to have a full-scale debate on the conclusions of that work, although it would be valuable to do so when appropriate. What is clear from the work that has been undertaken is that 19% is not nearly enough; it is well short even of the 26% that was attained back in 1979. These benefits are not just inadequate; there is a long way to go before they can become adequate. Consequently, we definitely still need a triple lock and its ratchet effect, and I would be prepared to see something better and faster replace it. That brings us to the increases due in 2022, as determined by this Bill. I believe that we can and should stick to the triple lock, as provided in the legislation, which means the 8.3% increase. Taking the increases to be made in 2021, 2022 and 2023, this provides an ideal opportunity to achieve a significant increase in flat-rate pensions towards a more adequate level in the longer term, which can only be a good thing.

It will no doubt be pointed out that this would have to be paid for, with the figure of £5 billion per annum being quoted. My noble friend Lord Sikka has dealt with that but, for the purposes of today’s debate, I simply say that I support increases in general taxation on those with the broadest shoulders to meet this clear social need, with the obvious target of equalising what I still think of, in the old terminology, as unearned income, rather than earned income. I believe that this would best be done by the restoration of the Treasury’s supplement to the National Insurance Fund, for which there is already provision in legislation.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Lords, Lord Sikka and Lord Davies of Brixton. Given the hour, I will be brief. I very much endorse the comments of the noble Lord, Lord Davies, about this Clause 1 stand part debate seeking to ask the other place to think again, and indeed to ask your Lordships’ House to debate this.

I would be more radical than either noble Lord who preceded me. I believe that the state pension should be set at a level where no pensioner is living in poverty—that is looking at the relative poverty levels, as outlined and widely discussed by the noble Baroness, Lady Lister. That would mean abolishing the contributory principle. Our debate tonight has demonstrated how discriminatory and actively massively unfair that is—because, as worked through now, it largely acknowledges only contributions through paid work. We know that many people, particularly women, make huge contributions to our entire society and future through care, community work and other activities which are simply not recognised in our pension system. This is leaving huge numbers, particularly of women, in a state of living that our whole society should regard as not acceptable.

I agree again with the noble Lord, Lord Davies, that the triple lock is far from perfect. We have talked about heating costs. Of course, another way in which we have very much failed our pensioners is the quality of the housing stock that they are living in. Reference has been made to the quality of council housing, but we also have a huge problem with more and more pensioners now living in private housing due to the huge privatisation of our housing stock through right to buy. Those people are living in extremely poor conditions and are placed in very difficult circumstances in that housing.

I agree with the noble Lord, Lord Sikka, that the cost of not going forward with ending the triple lock for this year—£4.7 billion—is very modest in the overall scheme of things. We have bailed out the banks. When Covid-19 hit, we bailed out many businesses. Surely we should look to bail out our pensioners.

I finish by noting that, when we talk about £14 a week, I agree with the noble Lord, Lord Sikka. There is a relatively small number of people in our society for whom £14 a week is small change, but there are very large numbers of people and pensioners for whom it is literally a matter of life and death. I invite noble Lords to consider our excess winter deaths, many of which occur among pensioners.

Financial Services Bill

Debate between Baroness Bennett of Manor Castle and Lord Davies of Brixton

Report stage
Wednesday 24th March 2021 Lords Chamber

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord Stevenson of Balmacara, and I offer my thanks for his support for the concept of Amendment 12, to which I shall speak. It appears in my name and is kindly supported by the noble Lord, Lord Sikka, and the right reverend Prelate the Bishop of St Albans.

Amendment 12 seeks to secure a discounting of debt for people entering proposed statutory debt repayment plans—something that the noble Lord, Lord Stevenson, noted has already occurred in Scotland. I set out in Committee that that is a large group of people with incomes above those eligible for debt relief orders, but with assets and income generally below those covered by voluntary agreements on bankruptcy. All those other agreements operate in ways that can result in debt being cleared in a relatively short period, much shorter than those to be covered by statutory debt repayment plans. I will not repeat all that detail again.

However, this amendment represents a development of an amendment presented in Committee to secure a fair debt write-down in respect of debts sold on the secondary market. For that initial amendment and this amended one, I pay tribute to the large amount of work done by the Centre for Responsible Credit, from which noble Lords will have received a briefing. While a strong argument exists to support this proposal, entirely legitimate concerns were raised in the debate that the impact of such a move on the operation of the secondary market would need to be properly considered. The noble Lord, Lord True, also raised a concern about the need for equitable treatment of debtors in the scheme. Taking those concerns on board, this new amendment, rather than being prescriptive, is permissive in nature and seeks to ensure that discounts on debt are secured, where appropriate, with the full agreement of creditors.

Amendment 12 recognises that many creditors listed on debt repayment plans, regardless of whether the debt originated with them or they bought it on the secondary market, will often prefer to receive a lump sum as full and final payment as opposed to low levels of instalments spread out over many years. As a result, many creditors already offer a significant discount on the total level of debt if a lump-sum settlement can be made. While the StepChange debt charity has a dedicated team to provide advice to debtors concerning possible full and final settlements, not all debt management plan providers do so. There arises a potential conflict of interest, as SDRP providers are likely to be reimbursed on a percentage basis of the total debt collected. Securing discounts for big debtors would reduce their revenues.

This amendment would therefore ensure that the Government are provided with a power to instruct SDRP providers, where appropriate, to enter into debt settlement negotiations on behalf of debtors entering the scheme. Hopefully this is not needed, but it is important that such a power exists.

In addition, it ought to be possible for SDRP providers to go further. With appropriate funding and regulation, business models could be encouraged that would allow SDRP providers to themselves buy out, and therefore discount, debts registered on their plans. For example, in recent months we have seen instances of debt of £10,000 being discounted by as much as 40% in return for full and final settlement. Enabling such debts to be bought out and subsequently collected by SDRP providers would mean the debtor would have to repay only £6,900, even after taking into account a 15% fee for the provider. It should be possible to achieve a result that is beneficial to creditor and debtor alike. I stress that building this negotiated settlement approach into the SDRP is likely to be welcomed by creditors, who in many cases are already prepared to discount heavily for lump sums in full and final settlement.

It is not my intention to push this amendment to a vote at this stage, but I seek a commitment from the Minister to continue to explore and work on this issue. I hope he can commit to a meeting between the department and interested noble Lords to see how we can take this forward, possibly in regulation.

[Lord Davies of Brixton (Lab) [V]]

My Lords, I speak in support of Amendments 11 and 12. I do not intend to delay us particularly long at this time of night, but I want to take the opportunity to pursue an issue.

My involvement in the Financial Services Bill has been a learning experience for me, as a new Member, in the way in which we are able to progress issues through the course of a Bill and the opportunities arising at different stages to make points and develop what it is possible to achieve, as opposed to what we would like in a perfect world. I have made plain my support for a more fundamental debt jubilee, but that is clearly a discussion—a fight—for another day. The amendments before us today clearly provide a useful step forward—a small step, but one that is still worth while.

I want to say a word on behalf of the debtors, those people who have taken on debts for all sorts of reasons—some good, some bad. You cannot just look at the debtors in this situation and say, “That is where the problem arose.” Quite clearly, bad debts are part of the business plan of people who lend money. We have learnt to an extent during these debates that there are issues in how you develop a plan so that, when debts are discounted, it is not just commercial organisations that benefit and there is also the opportunity for those who have unwisely or mistakenly taken on debts to gain some advantage from the discounting of debts. That is really what we are trying to work towards here.

I support these amendments and hope the Government will be able to take on board the issues raised. The underlying issue—this is the point I have pursued before—is that there is a public interest in dealing with debt and relieving people of the debts they have taken on; it does not help just the individuals concerned. Lowering the level of debt and removing onerous debts help us all generally, and particularly at the moment when we are looking for an economic revival. I hope the Government take on board the ideas behind these amendments and work towards a scheme that helps not just the debtors but all of us.

Financial Services Bill

Debate between Baroness Bennett of Manor Castle and Lord Davies of Brixton

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 24th February 2021 Grand Committee

[Lord Davies of Brixton (Lab) [V]]

My Lords, before getting to the substance of the debate, I must express some puzzlement; obviously, I have much to learn about this House’s mysterious ways. The specific issue that concerns me is the grouping of amendments. We are sternly told that groupings are not to be changed, but here we have a significant change: what was two groups on Monday is now a single group. The issues are not that disparate, but it makes a big difference to the time we have available.

The main point I wish to make relates particularly to Amendments 10 and 71. The latter was tabled by my noble friend Lord Sikka. If I had been a bit more alert, I would have added my name.

The issue here is to whom the FCA should be accountable, given the well-established phenomenon of regulatory capture, as the previous speaker mentioned. It is worth emphasising the point that regulatory capture is where an industry regulator such as the FCA comes to be dominated by the industry it is charged with regulating. The result is that the agency that is meant to be acting in the public interest instead works in ways that benefit the industry. The important point to understand is that this does not happen because inadequate or ineffective people are running the regulator. It is certainly not about corruption. It is an institutional, not individual, problem.

It is important to understand why it happens. The reasons are manifold but I will emphasise three. First, the regulated industry has a keen and immediate interest in influencing the regulator, whereas the customers are less motivated; they have their lives to live and are engaged only for relatively brief periods anyway. Secondly, we know that industries are prepared to devote substantial resources to influencing the regulator. Thirdly, there is the inevitable commonality of work and social life for the individuals on both sides of the process.

Given that the phenomenon of regulatory capture is acknowledged and widely understood, what do we do about it? The first step is acknowledging the issue and recognising and addressing the challenge. The next step is making the regulator as accountable as possible. There are many ways of doing this, but we can leave those for another day. What we have here are Amendments 10 and 71. Under Amendment 10, the involvement of both Houses in considering draft and final rules would be valuable in itself, given the expertise available. However, it is also valuable because of the additional exposure that it brings to the workings of the regulator, which will have to make its case. In the same way, Amendment 71 would bring greater exposure to the work of the FCA, forcing it to expound on its performance and its objectives in public and in an expert forum.

There is much more to do on making the FCA fully accountable, but these amendments are a start and have my support.

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord Davies of Brixton. He addressed in useful detail the risks of industry capture of regulators, to which the financial sector is particularly prone and which is addressed by Amendment 71 in the name of the noble Lord, Lord Sikka. Like the noble Baroness, Lady Bowles of Berkhamsted, and the right reverend Prelate the Bishop of St Albans, I have attached my name to that amendment. I associate myself particularly with the remarks of the noble Baroness, who stressed that these amendments are about the rights of Parliament and access to data and detailed information—necessary for the kind of expert work at which your Lordships’ House excels.

As the noble Lord, Lord Davies, covered the need for Amendment 71 in some depth and its author—the noble Lord, Lord Sikka—is yet to speak, I will confine myself to general remarks about how all the amendments in this large group reflect the great degree of concern on all sides of the House about, given how the Bill is currently constituted, the lack of parliamentary oversight of the actions of both the regulators and the Treasury. The noble Baroness, Lady Noakes, explained this point in her highly informative introduction to the group.

This morning, thanks to their kind indulgence, I was able to join Cross-Benchers in a briefing on the Bill, where we heard how the formalisation of the relationship between regulators, Parliament and the Treasury is “on the way”. The future regulatory framework consultation closed on Friday. We heard that the Bill is not the final word on that, and that the responses to the consultation will not be ready in time for the Bill. So, yet again, we hear that democratic controls and the details of government plans will be included in future legislation and regulation. Your Lordships’ House has heard this so often on so many subjects; perhaps we could enlist the Lords spiritual in assisting us in putting it in some kind of musical form. It simply is not good enough.

We know that, despite the long run-in time, the Government were not ready for Brexit at the end of the transition period and that civil servants, through no fault of their own, are trapped in a huge scramble to catch up with the massive backlog of government inaction and indecision—the tsunami to which the noble Baroness, Lady Bowles, referred. But what we have here are sensible proposals from experienced, expert Members of your Lordships’ House. I hope that the Government will acknowledge the urgency and importance of ensuring democratic oversight and that they will take at least some of these amendments on board at the next stage of the Bill, particularly, given the arguments already made, Amendment 71. There is no need to wait. Democratic oversight should be a given, not an extra, later addition.