Data Protection and Digital Information Bill

Baroness Garden of Frognal Excerpts

Committee stage
Monday 22nd April 2024 Grand Committee

[Lord Lucas (Con)]

My Lords, in moving Amendment 199, I will also speak to the other amendments in this group. In so doing, I declare an interest as the principal proprietor of the Good Schools Guide; we make a lot of use of cookies on our website.

I am completely in favour of what the Government are doing in this part of the Bill as an attempt to reduce cookie consent pollution. It is a tiresome system that we all go through at the moment. The fact that it is tiresome means that, most of the time, we just click on it automatically rather than going through to the details. In a way, it is self-defeating. What the Government are trying to do will very much improve the quality of people’s response to cookies and will make them more aware, in situations where they are asked for consent, that this is important.

However—this will be the request at the end of my speech—between Committee and Report, I would really like to sit down with any noble Lords who are interested and are representatives of the relevant industry to discuss how we should deal with cookies that relate to supporting advertisement delivery. A lot of the web relies on advertisements for the revenue to support itself. By and large, for a lot of sites that you are not asked to pay but from which you get a lot of value, that value is supported by advertising. As a website, if you are going to charge someone for delivering advertising, you have to be able to prove that the advertisement has been delivered and to tell them something about the person to whom you are delivering it. In this process, you are not interested in having individual information. What you want is collective information; you want to know that you have delivered 24,000 copies of this advertisement and know what the audience looks like. You absolutely do not want to end up with personal information.

Within that envelope—absolutely excluding the sorts of cookies that chase you around the internet saying, “Do you want a deckchair?”, just because you bought one two days ago—this is a vital part of the way the internet works at the moment. In Amendments 199 to 201, I suggest ways in which the clauses could be adapted to make sure that that use of cookies—as I say, it does not involve the sharing of personal information; it very much involves collective information—is allowed to continue uninterrupted.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

My apologies to the noble Lord but his microphone does not seem to be working. I wonder whether he could speak more clearly.

[Lord Lucas (Con)]

I am sorry. I assumed that my microphone was on.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

It is but I do not think it is working. I do not know whether anybody else is having problems with it.

[Lord Lucas (Con)]

Okay. It does not quite reach me up here; I could sit down if that would be helpful.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

No, carry on.

[Lord Lucas (Con)]

I will try to line up with it better. Amendments 202 to 205 flag concerns with proposed new Regulation 6B, which sets out to remove cookie banners automatically when the technology is available. The concerns very much relate to that last phrase: “when the technology is available”. How will this work? How is it to be managed? There is only a thin layer of controls on the Government in the way that they will use these new powers; it is also unclear how this will affect consumers and advertisers. There could be some far-reaching effects here. We just do not know.

I am looking for, and hope the Government will agree to, wide consultation because, on something such as this, it is never true that everybody knows everything. You want to put the consultation out to a lot of different people with a lot of different experiences of how to use the net to make sure that what you are doing will have the sort of effects that you want. I want to see proper, thoroughgoing impact assessments, including of the impact on competition and on the economic health of participants in the net. I would like to see a real analysis of the readiness of the technology, not just an assumption that, because somebody likes it, it will work, but a real, critical look at whether the technology is actually up to what it is hoped it will do, and proper testing, so that, in giving the Government the carte blanche that they have asked for with these clauses, we do not end up letting ourselves in for a disaster.

As I said, most of all, I am looking for a meeting between now and Report, so that I can go through these things in detail, and we can really understand the Government’s position on these matters and, if necessary, discuss them further on Report. I beg to move.

Child Maintenance Service

Baroness Garden of Frognal Excerpts

Thursday 24th June 2021 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, I thank the noble Lord, Lord Farmer, for his question, which has led to this important, albeit short, debate. I also thank all noble Lords who have participated and made many excellent points. I completely agree with the noble Baroness, Lady Sherlock—indeed, we all agree—that this is an important subject and area of work. In summing up, I will try to address as many of the points made as I can. If I cannot address all of them, I will write to colleagues in detail.

I hold surgeries every quarter with MPs from the Commons, and for all MPs who have written to me personally about cases, I have dealt with each and every one. So I commit to organising an all-Peers child maintenance session so that we have the time after this debate to get into the detail, as I know all noble Lords want to do.

My noble friends Lord McColl and Lady Eaton wanted to know that the child maintenance system is working. We continue to keep the child maintenance policy and our operational delivery under constant review. I was pleased that my noble friend Lady Eaton referred to the new digital services, such as the apply online service that has been introduced; it has reduced average application times, is available 24/7 and allows greater flexibility for separated parents to contact the Child Maintenance Service. Operational reforms such as these help to improve outcomes for children by enabling parents to set up and manage child maintenance arrangements in ways that suit their own circumstances.

The noble Baronesses, Lady Massey and Lady Sherlock, raised the National Audit Office report. I am pleased to confirm that our officials are working well with the National Audit Office—it is work in progress. It is a value-for-money study and will be completed during October and November.

On child maintenance performance and track record, I know that many noble Lords will have experience of the various child maintenance schemes—already referred to by my noble and learned friend Lord Mackay—that there have been over the years. This is an area where the Government have learned a lot. They are completely committed to ensuring that parents play their part and take responsibility for supporting their children. The child maintenance system has had a difficult history in our country, but I am sure most colleagues would agree that the Child Maintenance Service is a significant improvement. As has already been referenced, more than 750,000 children are now covered by child maintenance arrangements. In the past year—2019-20—more than £1 billion was due to be paid through direct pay and the collect and pay service. The compliance rate for parents on the collect and pay service has increased significantly, rising by six percentage points between the quarter ending December 2018 and the quarter ending December 2020.

As the noble Baroness, Lady Massey, said, during the Covid public health emergency, a number of temporary changes were made to the Child Maintenance Service. On the question that the noble Baroness, Lady Sherlock, asked me, 1,507 FTEs were redeployed in the Covid emergency to make sure that we could get money to people. I can give noble Lords a categoric assurance that they are all back and we are back in full service mode.

In December 2020, more than 40,000 paying parents on the collect and pay service had a deduction from earnings order in place, collecting more than £25 million. More than 60,000 deductions from benefits were in force and more than 3,500 deduction orders were in place, collecting a record £3.3 million from bank accounts. I am confident that we will maintain these improvements as we move forward.

My noble friend Lord Farmer and the noble Baronesses, Lady Massey and Lady Sherlock, raised the issue of enforcement powers. The Child Maintenance Service’s enforcement powers are strong and are used widely against those who consistently refuse to meet their obligations to support their children. I have been absolutely staggered at the lengths that people will go to in order to avoid paying their child maintenance. There was an absent dad who owed £80,000 in child maintenance and thought that he could avoid paying it, despite having a great lifestyle. The financial investigation and enforcement teams were right behind him and managed to get that £80,000, which was a life-changing amount of money for the receiving parent. He had £175,000 in the bank. So we are not having any of it—I can tell you that.

The noble Baroness, Lady Sherlock, raised the issue of child maintenance and child poverty. We know that child maintenance can play an effective role in reducing child poverty and enhancing the life outcomes of children in separated families. Child maintenance helps to reduce the chances of children being raised in the lowest 20% of the income distribution, and we know that approximately 120,000 fewer children are growing up in poverty as a result of child maintenance payments.

The noble Baroness, Lady Sherlock, raised the issue of lone parents, who are much more likely to live in low-income households. Extra money coming in through child maintenance can make a real difference to these families, as it is disregarded in full in universal credit. Lone parents get to keep every pound of maintenance paid, and we encourage lone parents on benefits to make a claim for child maintenance. I am pleased to say that my very first visit as a Minister was to Gingerbread and that my colleagues and officials have a very good ongoing relationship with both Gingerbread and Families Need Fathers, and we consistently listen to the issues that they raise with us.

I come now to parental conflict, which the noble Baroness, Lady Massey, my noble friend Lord Farmer and my noble and learned friend Lord Mackay all raised. When two people fall out, the repercussions are felt far and wide by children, and we are only too aware that we have to try to intervene at the right time to reduce this conflict. That is why we have our Reducing Parental Conflict programme, and we are very pleased with the impact that it has had to date. In government, we have a cross-departmental working group on it, involving the Department for Health and Social Care, the Home Office and MHCLG.

Of course, at this point, I want to raise family hubs. We have five government departments working together on family hubs, and we hope that the Reducing Parental Conflict programme can be one of the tools in their armoury. We know that the sooner we intervene in the breakdown of a relationship, the better the outcome can be—and I would be very happy to give more information to noble Lords about that when we meet again.

Before I close my remarks today and deal with some of the other issues that were raised, I will touch on domestic abuse, which I know is a matter of deep concern to all noble Lords. It is vital that the Child Maintenance Service plays its part in supporting victims of domestic abuse. We will continue to waive the application fee for domestic abuse victims and to provide support to allow victims to set up maintenance arrangements safely. The Child Maintenance Service has ramped up domestic abuse training for front-line staff and will continue to review its ways of working to further address a culture where victims of domestic abuse are in absolute poverty—they are a priority. In that vein, I am in the process of commissioning an independent review of ways in which the Child Maintenance Service supports victims of domestic abuse.

Noble Lords raised the issue of the consultation, which we have issued and are embarking on. I give an invitation to all noble Lords: if they have other things they want us to consider, the door is open and they should let us know what those things are. I would now like to cover other important issues that have been raised.

We are grateful to SSAC for raising issues and we have had the opportunity to discuss them with concerned stakeholders. The views expressed will be used to inform future policy development. In response to the noble Baroness, Lady Sherlock, I think I have already said that the system is now fully operational, and the number of staff on child maintenance has gone from 5,500 to 4,700 due to the last CSA cases being closed. Capacity of the system is broadly at pre-Covid levels.

Noble Lords raised the issue of aligning Great Britain with other jurisdictions. We are in close contact with officials in other jurisdictions. As my noble friend Lord Farmer observed, it is hard to transplant measures from one jurisdiction to another, but we continue to monitor international developments in this field. I believe that covers the issue of the situation in Australia. Dual income adds significant complexity to a child maintenance calculation and measures that work in one place do not necessarily work in another. I am happy to continue to discuss that and keep the issue under the review.

On family-based arrangements, we recognise that conflict is harmful to children and the intent of the 2012 maintenance reforms was to try to promote collaboration between separated parents. We know that a family-based arrangement is not for everybody, so we offer people other ways of paying. I think my noble friends Lord McColl and Lord Farmer raised the issue of the appeals process and whether it works. We have made changes to the appeals process and, if a complainant is still unsatisfied with the response they have, they can escalate it to the Parliamentary and Health Service Ombudsman. Noble Lords asked me to tell them about the progress of the Government’s commitment to supporting parents to make family-based arrangements. The survey we did will be published in due course.

I am sorry to have run out of time, because this is a subject dear to my heart; I could spend all day talking to noble Lords about it and answering your questions, believe me. Please go away from here understanding that we know child maintenance is important, we are on it and we are going to make the changes we need to make to take children out of poverty so they can get the best chances in life.

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

Thank you, Minister. That completes the business before the Grand Committee this afternoon. I remind Members to sanitise their desks and chairs before leaving the Room.

Committee adjourned at 6.38 pm.

Pension Schemes Bill [HL]

Baroness Garden of Frognal Excerpts

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Tuesday 19th January 2021 Lords Chamber

[Lord Vaux of Harrowden (CB) [V]]

My Lords, we had lengthy discussions on Report around the concern that a one-size-fits-all derisking policy could render uneconomic otherwise healthy defined benefit schemes which remain open, and which are not close to maturity. The noble Baronesses, Lady Bowles and Lady Sherlock, have already described the issue in better detail than I ever could, so I will not repeat the case, but it would be a great shame if a laudable intent to derisk had the unintended consequence of leading to the premature end of healthy, well-run defined benefit schemes, which are of particular importance to lower-paid employees. I know that this is not the intention of the Government, as the Minister has just restated; I am confident that the Minister will be able to set our minds at rest by confirming the points asked by the noble Baroness, Lady Bowles, and that Divisions on Motions 4A and 4C will not be necessary.

As this is likely to be the last time I speak on the Bill, I hope the House will not mind if I take the opportunity to put on record my thanks to the Minister for her open and collaborative approach throughout its passage. She and her team have been extremely generous with their time and I am very grateful to them all. I am also grateful to all noble Lords for their patience as I have fumbled through my first involvement in amending a Bill; I have learned a lot from them. The Bill has been an excellent demonstration of the depth of expertise that resides in this House and of how well the House can work across parties to improve legislation. As the Minister said after Third Reading

“we collaborated, we talked, we listened and we made the Bill better.”—[Official Report, 15/7/20; col. 1671.]

I agree with her and, as I said earlier, I very much look forward to that same collaborative spirit continuing into the discussions on the regulations that will put the flesh on to the skeleton of this Bill.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

Noble Lords in the Chamber have indicated that they wish to speak. I call the noble Baroness, Lady Altmann.

[Baroness Altmann (Con)]

My Lords, I congratulate my noble friend the Minister on introducing this group of amendments and particularly thank her, the Bill team officials and the Pensions Regulator for engaging with us in such a collegiate manner. The co-operativeness and openness that have been shown to all noble Lords across the House have been hugely welcomed and already commented upon; I reiterate that this approach has improved the Bill and that this will continue into the future when it comes to the regulations. I congratulate the noble Baroness, Lady Bowles, the noble Lord, Lord Vaux, my noble friend Lord Young of Cookham, as well as the noble Baronesses, Lady Sherlock and Lady Drake, on the way in which we have all been able to co-operate on this important issue.

I briefly express concerns about the MaPS dashboard being sidelined and the data-security issues that may be involved in the dashboard, as well as, importantly, the fairness issues that will be dealt with in regulations of CDC schemes. Having dealt with that, I turn to Motions 4A and 4C. It is important that my noble friend can provide reassurance that scheme-specific approaches that have endured so far will be preserved. As the noble Baroness, Lady Bowles, has outlined—echoed by the noble Baroness, Lady Sherlock—there are issues on which I am confident my noble friend will be able to reassure us.

--- Later in debate ---

I believe and fervently hope that my noble friend the Minister will confirm the Government to be in agreement with the issues raised by the noble Baronesses, Lady Bowles and Lady Sherlock, and the noble Lord, Lord Vaux, about avoiding what might be called reckless conservatism or counterproductive caution, so that our £2 trillion worth of defined benefit scheme assets can feed into the rebuilding of our economy and support sustainability both of the schemes and of the environment. I once again thank my noble friend and her team for all their hard work on the Bill, and thank colleagues across the House for all the work they have done.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

I call the noble Lord, Lord Davies of Brixton.

[Lord Davies of Brixton (Lab)]

My Lords, I draw the attention of the House to my entry in the register of interests.

I need to ask the indulgence of the House because I accept that it is unusual for a Member who has not contributed at any previous stage of a Bill to intervene at this stage. However, I was not a Member of the House then, and so I was unable to take part. It will be recalled that the Bill was introduced almost exactly a year ago, and it is almost exactly a year ago that I was first aware that I would be joining your Lordships. I watched the entire progress of the Pensions Bill—with only slight exaggeration—like a child locked out of a sweet shop. I so much wanted to take part in the debate and discussions. I am not suggesting for one moment that the incredible work by my noble friends on the Bill has not been effective; I just would have liked to have been with them.

It is also worth mentioning, since the House places some stress on being a repository of expertise, that on Clause 123 I can claim considerable expertise because I am a fellow of the Institute and Faculty of Actuaries. In the course of my actuarial work I was a scheme actuary and I produced valuations, and that is what this clause is about. Since this is the first time that I have had a chance to speak when I have not been subject to a three-minute time limit, I am tempted to speak for a long time about scheme valuations, but I will spare your Lordships that.

Before I get to the substance, I thank the Minister. As I say, I have watched the debates, and I pay tribute to the way in which the Bill has been handled. I highlight that the introduction of what I still think of as collective DC is an excellent move forward and of considerable importance, as is—although of course there is more to be done—the work that has been done on the dashboard.

Turning to the amendments, I strongly support what is proposed here. The issue is the valuation of open defined benefit pension schemes. Real concern has been expressed by employers and trade unions representing their members about such schemes that the changes foreshadowed in the regulatory regime by the legislation will not work for such schemes, and the result will be higher costs and lower benefits. I am glad to see that a response has been made on the behalf of the Pensions Regulator, assuring us that it is not saying, “Don’t worry, just trust us with it all”, and making various commitments about how open defined benefit schemes will be handled. Well, why not put such assurances into the legislation? I certainly hope they will be included in the regulations.

At this point, it is worth acquainting the House with some evidence that the Institute and Faculty of Actuaries has presented on this clause. It said:

“Any employer that has left their DB scheme open to new entrants to date is highly likely to have done so as a conscious choice, and usually with strong support from members and associated trade unions. The risks inherent in DB are typically well understood not only by the employers but also by the scheme’s members, and their trade union representatives. These schemes should therefore not necessarily be treated the same, or need the same level of security, as closed schemes. In our view it is critically important that viable and successful open schemes are not caused to close through adverse legislative change or guidance from The Pensions Regulator.”


I fully endorse what the institute says there and what has been said by previous speakers, with which I concur. What is notable about what the institute said in that statement is that it emphasises how pension schemes emerged from the employment relationship. One thing that really worries me about leaving it to the regulator is that there is not a single person on the board of the Pensions Regulator who has any experience of employment or industrial relations, or at least not significant enough for them to put it in their biographical details.

I have one final point. This debate is about open schemes, as others have mentioned. I do not want anyone to think that the situation is that there is no more debate to be had about closed schemes. The noble Baroness, Lady Altmann, mentioned the issue of closed schemes. I concur with what has been said there, and that we have to get that right as well; there is more debate to be had on that issue. It is not just about open schemes. So there will be a continuing debate, but I hope the Minister will be able to give us some reassurance about the treatment of open schemes.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

I call the noble Baroness, Lady Janke, whose name was left off the list inadvertently.

[Baroness Janke (LD) [V]]

My Lords, it is a great pleasure to follow the noble Lord, Lord Davies. No doubt we will welcome his expertise and experience into what is already a considerable group of experts and knowledgeable people in your Lordships’ House.

I support the amendment of my noble friend Lady Bowles. I pay tribute to her for the way in which she has pursued this matter with great skill and tenacity by working across the parties and seeking agreement on a way forward. There is clearly a problem for open DB schemes, as has been expressed to us already, particularly by the railway workers’ union but also by other pension funds. Clearly, as my noble friend has said, it is unrealistic and wrong for the same restraints to be imposed on open DB schemes that are not destined for closure in the immediate future as those imposed on closed schemes. As others have said, if that were to be the case, currently open DB schemes not on the path to maturity would suffer and may close as a result, with dire effects for their membership and a considerable impact on the wider economy.

I very much welcome the Minister’s opening statement, in which she indicated her willingness to ensure that open schemes not on the path to maturity should not be prevented from making more beneficial investments. I hope the five points clearly outlined by my noble friend Lady Bowles will form the basis of the future operation of these healthy open schemes, as the noble Lord, Lord Davies, referred to.

I too record my thanks to all those who have contributed to the Bill, such as the ministerial team, who have provided information and expert advice, and noble Lords who have demonstrated their knowledge, experience and expertise in considering the Bill. They have shown how this House has not only provided scrutiny and challenge but enabled improvements to the legislation and benefits to those who will depend on this in future.

I thank the Minister and her colleague in the other place for their willingness to keep an open mind and not only to listen but to take on board suggestions and use their best endeavours to address the issues raised by Members. I also thank all the teams supporting Members, particularly Sarah Pughe in the Lib Dem office, who has provided us with marvellous support. I very much look forward to the Minister’s response and hope that it will reassure my colleague that she is able to let this matter move forward and that her concerns will be listened to and acted upon.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

Does anyone else in the Chamber wish to speak? I think probably not.

[Baroness Stedman-Scott (Con)]

My Lords, I will first respond to the question of my noble friend Lady Altmann on long-term horizons. The scheme funding measures in the Bill, together with secondary legislation and a revised scheme funding code of practice, seek to support trustees and employers to manage this scheme funding with a focus on longer term planning. As now, the scheme’s liquidity requirements, investment timelines and the amount of risk each scheme can support will depend on factors including its maturity and the strength of its employer covenant. Trustees can and do invest in illiquid assets such as infrastructure, and our measures do not seek to discourage such investments where they are appropriate.

I also thank the noble Lord, Lord Davies, for his contribution. The thought of being locked out of a sweet shop gives me more heartache than your Lordships will know. We will do our very best to make sure that it does not happen again. We welcome the noble Lord to the House and have no doubt that he will add a lot of expertise. He has joined the formidable band of brothers on pensions and we are very glad he is with us.

I am very grateful to the noble Baronesses, Lady Bowles and Lady Sherlock, for their amendments. I am also grateful to all those who have contributed to the debates we had relating to schemes that are open to new members. They have been highly influential and have helped us refine our thinking on how schemes in these circumstances should be treated. The Government are very sympathetic to the thinking behind these amendments, but there are good reasons why we do not want to deal with these matters on the face of the Bill.

One of the main drivers behind our reforms to the scheme funding arrangement is the desire to be able to more effectively tackle the small minority of schemes and employers who push the flexibilities of our scheme-specific arrangements further than is appropriate, to the detriment of their members. As the detail of the arrangements is necessarily complex, there is a real risk that attempting to deal with it in primary legislation will inadvertently weaken the funding regime as a whole and undermine the ability of the Pensions Regulator to tackle the very issues that these reforms were designed to address. Rather, we think that the best place to deal with these matters is in regulations—following a full consultation. That way, we can work closely with the full range of interested parties, effectively calibrate the system and get the right balance between member security and employer affordability. By placing such matters in regulations, we will retain the flexibility in the future to adjust the relevant parameters should the evolving economic situation demand it.

What I can do now is set out some key principles of how we will proceed with framing the secondary legislation, which I am happy to put on the record and am confident will provide noble Lords with the reassurance they are looking for. Much of our original thinking was driven by the fact that most schemes are closed and maturing, but we completely accept that we need to be clearer about our thinking on other important groups of schemes. These are the schemes that continue to admit new members. Many of these schemes will not be maturing in the same way as closed schemes and some of them will be admitting sufficient new members to avoid maturing at all. A genuinely scheme-specific approach has to recognise the characteristics of such schemes and treat them appropriately. I am therefore grateful to the noble Baroness, Lady Bowles, and others for helping us to focus our thinking on these schemes. Let me make it clear now that the Government, having further considered the debate on the Bill and feedback from the pensions industry, fully intend that the defined benefit funding regime will remain scheme specific, and any bespoke approach should build on this foundation. This regime will continue to apply flexibility to take account of individual scheme circumstances.

The department confirms that detailed provisions for ongoing defined benefit funding, including any necessary assessment criteria and metrics, will be set out in regulations and in the Pension Regulator’s defined benefit funding code of practice, which will acknowledge the position of open and less mature schemes. As noble Lords have said, Ministers at the DWP have gone to great lengths to make themselves available to those who have pressed them on the position of schemes that remain open to new members. Both Ministers and officials have had extensive discussions with interested Peers, and others, including on schemes that remain open to new members. I also understand that interested Peers have been able to discuss these matters in detail with senior officials at the Pensions Regulator. This has been a highly productive engagement and, as I have said, it has been instrumental in guiding us to a better and more refined policy position. That is something I expect to continue.

Prior to the publication of the draft regulations, the Government can commit to an engagement programme with interested parties, including a range of schemes. These will include those remaining open and immature. They will launch a consultation document informed by this engagement. The Government will also publish a regulatory impact assessment of the draft regulations and the Pensions Regulator will publish an impact assessment alongside its revised funding code. These will include analyses of different de-risking approaches on members and sponsors of all schemes, including those that are open or immature, and those that are not targeting buyout.

We absolutely do not want to see good and viable defined benefit schemes close unnecessarily. We want them to be treated on their merits in a truly scheme-specific regime. We have said that open schemes should be able to provide the same level of security for members as closed schemes. I want to make it absolutely clear that this does not mean that they necessarily need to invest in the same way. We simply mean that members in an open scheme should be able to enjoy the same level of confidence that the benefits they have worked hard to build up will be paid in full, as for members in a closed scheme. We completely agree that open schemes that are not maturing and have a strong employer covenant should not be forced into an inappropriate de-risking journey. We will ensure that such schemes and employers which can support a higher risk and higher expected reward investment strategy can continue to invest in this way. If they are already doing the right thing, they should not need to significantly increase contributions as a result of these new measures.

The Government accept that for some schemes, depending on the circumstances, de-risking is not the best way to safeguard members’ benefits. Member benefits can be best safeguarded by an appropriate integrated risk management strategy determined after careful analysis by the trustees, which takes account of time horizon, liquidity, employer covenant and appropriate diversification.

This is the way that we intend to proceed as, with the help of close engagement with interested parties, we work on the regulations that will set out the detail of how the funding regime will operate. I hope that what I have said reassures noble Lords of our intentions and that the noble Baroness will feel able to withdraw her amendment.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

My Lords, I have not received any requests to speak after the Minister, so I now call the noble Baroness, Lady Bowles of Berkhamsted, to reply.

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, I am not normally a speaker on DWP matters—I am usually in the business and Treasury box—but, after a first foray on this Bill, or into this sweet shop, as the noble Lord, Lord Davies, would put it, maybe I should come again.

I thank all those who have spoken in this debate. The issues have already been explained and the Minister in reply has given the reassurances that were sought. Before I formally withdraw the amendment, I thank the Minister for the way in which these proceedings have been conducted, for her geniality and openness and, similarly, thank the officials from the department and the Pensions Regulator, and everyone for tolerating me.

As has been said, the issues are complex and interlinked. I am grateful to hear the Minister say that the debate around this has been influential and has refined thinking. I acknowledge that some employers will abuse the system and, because of its complexity, I accept that the Government do not want to put words into the Bill that are hard to change and which might give rise to unintended consequences. Of course, I would have preferred to see a little something there, but I understand the reasoning. I accept that there will be good consultation around the regulations and that all of us are looking for the same results.

I thank again noble Lords who have spoken today and supported me in my previous endeavours and all those who gave their expertise in earlier stages of the Bill. I am pleased that we are joined by the noble Lord, Lord Davies of Brixton, and think that we will benefit from his presence greatly in future. Others who have also assisted include my noble friend Lord Sharkey from these Benches, as well as the noble Baronesses, Lady Drake and Lady Young. I also thank the various pension schemes that have been generous with their time and information, so we were able to look at the sort of spread of assets and risks that they were talking about and did not come to this debate without a good basis of information; we knew that our arguments were supported.

It has been a good co-operative effort. I doubt that it is the end of the story, as there will be more consultations and things to watch. I hope and expect that the engagement with noble Lords by the Minister and the department and our co-operation with one another will continue. For now, I beg leave to withdraw the Motion.

Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) (Amendment and Revocation) Regulations 2020

Baroness Garden of Frognal Excerpts

Wednesday 21st October 2020 Lords Chamber

[Baroness Altmann (Con)]

My Lords, I welcome the new regulations to ensure that the Pension Protection Fund can better protect its interests and those of pension scheme members whose supporting employers unfortunately need to enter a moratorium period or restructuring due to the current crisis. These cover the entities, including charitable organisations, friendly societies, credit unions and so on, which may be particularly vulnerable in the current circumstances.

The Pension Protection Fund is one of our flagship organisations, which has done marvellous work to protect the pensions of millions in this country and has compensated those who would otherwise have faced the potential of losing their pension rights if the employer failed, and possibly of losing their jobs too. It is vital that employers and corporate directors are not allowed to game the PPF or take advantage of financial turmoil to walk away from liabilities on which so many ordinary workers rely, as the noble Baroness, Lady Drake, just said. I congratulate the PPF and put on record that I believe its staff have done brilliant work. I am sure that they will continue to do so with efficient administration and careful stewardship.

These regulations result from new measures passed in the Corporate Insolvency and Governance Act, which potentially weaken the rights of DB scheme members, trustees and managers to funds and assets belonging to the sponsoring employer during a moratorium or restructuring. I thank my noble friend and congratulate her on the way in which she introduced the regulations.

To allow the Pension Protection Fund to represent the trustees and managers in negotiations is an important measure, since it has to safeguard the interests not only of each pension scheme but of all other schemes too, and a moratorium does not trigger a PPF assessment period. If pension sponsors can more easily find ways to walk away from their liabilities without putting extra funds into the schemes in the current crisis, because it ranks only as an ordinary unsecured creditor without super-priority, and financial firms have leap-frogged up the priority order, the Pension Protection Fund could be forced to take on extra liabilities, which will ultimately fall on other sponsors via higher levy payments. As I expressed during the passage of the Act, I am particularly concerned at the ability of the sponsor or its other creditors to ask the courts to release assets that were supposed to have been pledged to the pension scheme as part of previous scheme-specific funding arrangements, leaving the scheme far more underfunded than was ever intended. I understand that the legislation ensures that any restructuring plan must not put creditors in a worse position than on insolvency, but can my noble friend confirm that this also definitely applies to the Pension Protection Fund? If she would like to write to me on my point, that will be fine. In addition, which parts of the previous regulations that she mentioned in her introduction have been revoked by this instrument?

Finally, I will ask a few other questions of which I have given my noble friend prior notice. I note that the Pension Protection Fund will produce guidance for monitors and directors on what information it will need to receive and its general approach to a moratorium or restructuring. When will that happen? Can she confirm the assessment of the noble Baroness, Lady Drake, that no companies have yet gone into moratorium since this legislation was passed, and if any have, how many have done so and how many have a DB scheme attached?

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

The noble Baroness, Lady Greengross, and the noble Lord, Lord McColl, have withdrawn, so I call the noble Lord, Lord Hain.

Covid-19: Low-income Families

Baroness Garden of Frognal Excerpts

Thursday 8th October 2020 Lords Chamber

[Baroness Stedman-Scott (Con)]

The noble Baroness, Lady Watkins, also raised with me, outside the Chamber, the issue of food, children and holiday cover. I pledged to talk to my noble friend Lady Berridge. I have been so busy that I have not been able to do that, but I give an undertaking to do so and to write to the noble Baroness.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

My Lords, the time allowed for this Question has elapsed. I apologise to the noble Baroness, Lady Massey, that there was no time for her question. We now come to the second Oral Question, in the name of the noble Lord, Lord Polak.

Pension Schemes Bill [HL]

Baroness Garden of Frognal Excerpts

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 30th June 2020 Lords Chamber

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

My Lords—[Inaudible.]

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

We will move on because we cannot hear the noble Baroness, Lady Bennett. We will perhaps try to get her back later. I call the noble Baroness, Lady Janke.

[Baroness Janke (LD) [V]]

I took my name off the list.

[The Deputy Speaker]

I did not have a note of that. I call the noble Lord, Lord Balfe.

[Lord Balfe (Con)]

My Lords, this is the first time for two months that I have been in this Chamber. It is a bit emptier than normal but it is good to be back.

I hoped to speak after the noble Baroness, Lady Bennett, because I want to say a few words about her Amendment 33, which is about trustees. It seeks to require trustees to take age, gender and ethnicity into account. I will certainly not support or oppose this amendment but I want to make a few points on trustees and where I think she is trying to get us to. The fact of the matter is that the whole area around the appointment of trustees could do with a close look.

There are a number of problems. The first problem for any pension scheme, particularly a small one, is getting trustees from among the membership. You can always get a professional trustee because they are normally paid £1,000 or more a day for coming to the meeting, so it is not too difficult. The difficulty is getting representatives of the pensioners. The second and even greater difficulty is getting representatives of the pensioners who actually know what they are talking about, because many people are completely bewildered by pensions.

When I read through both this amendment and the amendments about ESG and environmental safeguards, I was reminded very much of pensioners who come to me and say, “All I want, Richard, is for you to pay my pension. I couldn’t care less where it comes from.” I say, “Presumably you wouldn’t like us to invest in gas ovens,” and they say, “Well, no, but you’ve got enough common sense not to do that. You don’t need me to tell you.”

So I come to the point that, when we are looking at the age, gender and ethnicity of trustees, we also need to look at their qualifications and the way in which they are allowed to come forward, because some trustee boards are effectively self-perpetuating because they govern who is allowed to stand. You are invited to apply to become a trustee, and then you are assessed as to whether you are able to become a trustee. Often, people who come forward are not highly professionally qualified, but they are qualified in one thing, which is common sense. My experience of pensions, which goes back quite a long way, is that certainly some members on a board—not a majority—who can demonstrate common sense are extremely good.

I would also like to say that dealing particularly with gender and ethnicity can lead you into many problems. My wife gets a pension from the Workers’ Educational Association pension fund. It got itself tied into complete knots trying to deal with ethnicity and gender. It ended up asking people to vote for trustees who were anonymised. They were anonymised by taking out not only their name, age, gender and ethnicity but also most of the other things about them. So the great game in this case was to look back at previous reports and try to work out which trustee was the anonymised one. Of course, that gets you nowhere and in fact is a bit of an insult to the members who have applied.

So I say to the noble Baroness, Lady Bennett, and to the Minister that this is a subject that is much wider than this amendment, but it is certainly one that needs looking at. The way in which pensioners are represented on the governing boards of pension funds is haphazard, to put it mildly. It varies enormously between funds. Although there is a great cry from professional trustees that you clearly need professionals in the room, I counsel the Minister and everybody else to beware of the cry for the professional. It is very easy to get a professional to sit there and give you advice as an employee or if they are hired for the purpose. You do not necessarily need more than the odd one of them actually on the board. They have nothing great to add than cannot be added by a professional adviser. They do not need a place on the board, although sometimes—note the word “sometimes”—having a professional trustee as a chair can add a certain amount of discipline, knowledge and structure to the way that debates go. But it can be overestimated and, particularly since the pensions industry is dominated by the professionals, there is a great danger that it gets overemphasised because it is precisely the people who write in the pensions papers who are the experts and who then promote themselves for the jobs.

So I welcome the amendment in the name of the noble Baroness, Lady Bennett; I see it just as a probing amendment, laying down a few guidelines that we could look at. I say to the Minister that when there is an opportunity, it would be well worth while to set up some sort of study or working group to look at the way in which trustees are chosen or appointed, how they work and how they are remunerated.

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[Baroness Neville-Rolfe (Con) [V]]

My Lords, I support my noble friends Lady Noakes and Lady Altmann and the strong case they have made for these amendments. Noble Lords may recall that at Second Reading on 28 January I expressed some doubts about the scale and nature of the penalties in this Bill, which include a civil penalty of up to £1 million. I am still concerned that increasing them, especially the new criminal element, will deter the respectable people we need from becoming pension scheme trustees.

The world has been changed by the challenges of the coronavirus, as we have just heard. According to Patrick Hosking in the Times yesterday, using figures from pension experts Barnett Waddingham, FTSE pension deficits have soared by £45 billion to £210 billion since the start of the year, so that companies that have a deficit are now a good deal further away from closing it. This is an enormous strain on mostly well-run companies and schemes and reflects years of low interest rates caused by QE and turbulent equity markets. Who would want to get involved in pension administration? Yet its success is at the heart of the British savings system and vital to the future livelihoods of millions of hard-working people, often of modest means, up and down the country.

The Bill rightly reflects the need to plug a hole revealed by the Philip Green case and the furious debate in Parliament before Sir Philip was persuaded to pay up. However, as is often the case with legislation that responds to scandals, it is wide-ranging and takes enormous powers. It goes too far in my view towards burdening business at the expense of other stakeholders. The result will be less willingness to become a trustee and more administrative and other costs for pension schemes paid for, in the end, by the unfortunate pensioners, and the risk of more businesses being pushed into the Pension Protection Fund. This is the background to my unease with Clause 107 and why I moved an amendment in Committee with the help of my noble friend Lady Noakes, and why I now support her and my noble friend Lady Altmann with these amendments.

The criminal offences in Clause 107 are widely drawn. They try to catch bad behaviour by anyone who might be involved. But I maintain that this may have appalling perverse effects, injecting great uncertainty into what is permitted behaviour by those involved in pensions administration. My principal concern is with trustees, having been one and knowing what fine judgments one is called to make, but also with financial advisers, actuaries, accountants, insurers, property consultants and even secretarial support, all acting in good faith. It is one thing to provide for criminal sanctions against an employer, but wrong to extend this in such a vague and general way. A number of suggestions were made in Committee as to how one might tackle this, but disappointingly the Government have not listened—or not so far.

These new criminal offences will have a chilling effect on trustees and others involved, as my noble friend Lady Noakes explained, and I ask my noble friend the Minister to agree to think again and to narrow the very wide offences in this Bill to provide some comfort, either in this House or when it proceeds to the other place.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

Lord Naseby has withdrawn, so I call Lord Blencathra. No? I gather that there have been some problems, so I call the noble Viscount, Lord Trenchard.

[Viscount Trenchard (Con)]

My Lords, while the Bill has generally been welcomed by the pensions industry and members of pension schemes, I worry that it may give the Pensions Regulator too much power. The new criminal offences contained in Clause 107 affect not only employers and senior associates of pension schemes. They could apply to anyone involved in such schemes: for example, trustees, banks and insurers. I therefore support Amendments 46 to 49, proposed by my noble friend Lady Noakes so eloquently and so well supported by my noble friends Lady Altmann and Lady Neville-Rolfe, which confine the new criminal offences to the employer and persons connected with the employer. It is absolutely right that the Government have acted to ensure that failures such as that of Carillion and BHS will no longer have a negative effect on members of pension schemes.

The offences created in Clause 107 are serious. They carry a potential seven years’ imprisonment and a civil penalty up to a maximum of £1 million. It is therefore right that these offences should apply as broadly as they do, but they should be limited in effect to the employer and the trustees of the pension scheme concerned. These penalties seem proportionate to the gravity of the crimes in certain cases, but both offences apply very broadly to “persons”, with no requirement for association with the pension scheme. The Government’s intention may be that the measures are there to catch wilful and reckless behaviour, but the problem is that their potential ambit is wider—much wider—than just the reckless.

As currently drafted, the criminal offences could impact ordinary pensions and business activity, and, in distressed situations, they might act as a disincentive to corporate or business rescue—for example, by encouraging directors to file for insolvency to avoid the risk of criminal liability that might arise through seeking a turnaround plan or a pension scheme compromise. So far, attempts at making the measures clearer and more targeted have not succeeded. Regulator guidance on how the new powers will be used has been promised, but this has no special status in law.

The Pensions Regulator is not the only possible prosecutor in Clause 107 offences, as the noble Lord, Lord Hutton, eloquently pointed out in Committee. My noble friend Lord Howe explained that the Secretary of State would prosecute only as a last resort, such as if the regulator ceased to exist or changed. I find it hard to envisage that in such circumstances the whole of the current pensions legislation would not be changed.

I think that it is necessary to confine those who might commit these two new offences to connected parties; otherwise, many other persons might unwittingly, or unintentionally, become exposed to prosecution. For example, the fund manager of a pension scheme, in handling investments entrusted to him by the trustees of the scheme, might make investments or realise sales that negatively affect the value of a pension fund’s assets.

I think that these amendments are very sensible and I look forward to hearing the Minister’s reply.

[The Deputy Speaker]

The noble Baroness, Lady Sherlock, has withdrawn. Have we had any success in finding the noble Lord, Lord Blencathra? Alas, no, in which case I call the Minister, the noble Earl, Lord Howe.

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[The Deputy Speaker]

We now come to the group beginning with Amendment 50. I remind noble Lords that Members other than the mover and the Minister may speak only once and that short questions of elucidation are discouraged. Anyone wishing to press this or the other amendment in this group to a Division should make that clear in the debate.

Clause 109: Duty to give notices and statements to the Regulator in respect of certain events

Amendment 50

Moved by

Welfare Reform Bill

Baroness Garden of Frognal Excerpts

Tuesday 31st January 2012 Lords Chamber

[Baroness Meacher]

My Lords, Amendment 1 seeks to ensure that the gap between the higher and normal-rate additions for disabled children is not too great. The Government’s proposals for these additions, according to the Minister, are designed to be revenue neutral. The money saved is to be used to raise the level of income for adults in the support group.

[Baroness Garden of Frognal]

My Lords, I apologise to the noble Baroness, but might I just suggest that people leave the Chamber quietly, because it is very difficult to hear what she is saying?

[Baroness Meacher]

The amendment proposes that Ministers revisit the relationship between the new levels of disability addition for children and allocate resources to adults in the support group when new money allows. I know that we must move on from arguments made on Report, but I must make just a few points to help my argument here to be coherent.

Very briefly, under the new provision for a disability addition and a higher addition, families who have a child who is eligible for the higher addition will receive £1.50 per week more than current claimants do, but families with disabled children who do not meet the stiff criteria for the higher addition will receive £27 per week less. Most families with a disabled child will therefore lose about £1,400 a year.

This amendment would peg the normal addition for disabled children at two-thirds the level of the higher disability addition for children. The House voted on a more radical amendment on this issue on Report and the Division was lost by two votes. We are seeking to eliminate the cliff-edge between the two levels of disability addition for children because all such families are far less likely, for example, to be able to rely on relatives or other informal carers. Their childcare costs will be far higher than those with a non-disabled child. Of course, families will have to pay 30 per cent of their childcare costs whereas today they pay, I think, 5 per cent. There really is an issue of work incentives for those parents, although I understand that the Minister will have a go at me on that issue.

On another terribly important matter, the need for high childcare costs will continue until the child is very much older, if not indefinitely. That applies to children who would not qualify for the higher rate addition yet who may be very severely disabled. That is the point. This amendment would go a long way to creating a much fairer system, which is what we are all about.

One might ask whether it really matters. It does matter because 100,000 or so disabled children affected by this loss of benefit are very likely to live in poverty. Recent research by the Children’s Society indicates that once the additional costs of disability are accounted for, four in every 10 disabled children are living in poverty and a loss of income would really matter. Therefore, disabled children would not only live in poverty but would have vastly greater costs.

The Government argue that their new additions align the levels of support for disabled children with those for disabled adults, but the levels of support are based on completely different tests. For children the test is based on eligibility for DLA, and for adults it is based on their fitness for work. So I am not quite sure how the Government are arguing that these have been aligned.

The Government argue that the changes will ease the transition to adulthood for disabled children. On Report, the Minister said:

“We want to smooth the transition from childhood to adulthood by removing that artificial divide”.—[Official Report, 12/12/11; col. 1054.]

In fact, the restructuring will reduce the support for most disabled children. It will not reduce the support for the very most disabled children who require night-time care, but it will reduce it for others. Therefore, I do not accept the argument.

There are good reasons for proposing a disability addition at two-thirds of the higher rate for children. This addition is needed to contribute to the costs of special clothing, repairing damage, safety measures and special food, and to contribute to the costs of giving disabled children access to the opportunities that other children have. We know that simple things like swimming lessons cost something like £270 for 12 lessons for a disabled child as opposed to £80 for a normal child. Where will that money come from? A summer club costs £450 per week for a disabled child compared with £100 a week for a non-disabled child. Yet these are the things that would give a parent a break and really help a child to socialise and benefit from development opportunities.

The Government’s proposed child additions go nowhere near covering these extra costs. I fear that their proposed reforms to disability additions are short-term fixes. I understand the position of the Minister, who is under huge pressure from the Treasury. One of the troubles for this House and noble Lords is that this reform, much of which we support in principle, is being tangled up with swingeing cuts to benefits which are having unacceptable impacts. Therefore, we are trying at the edge to ameliorate some of those unacceptable impacts. That is what we are about. The Government’s proposed reforms to disability additions therefore need another look by Ministers.

I turn to the particular problems of single parents with a disabled child. Many years ago I ran a group for parents of severely disabled children. I expected lots of mums and dads to turn up, and I was faced with what I thought was an absolute tragedy: the room was full of mothers who told me that the fathers had gone. Many of them had left home within months of the birth of the disabled child. It is these mothers and a great deal of others whom we need to have in our minds today.

Many parents of disabled children will be doing something very valuable for society by staying at home to develop their children’s full potential. They should not be under pressure, even in these stringent times, to go out and stack shelves. By devoting themselves full-time to therapy, play exercises and other learning activities, they are reducing the dependency levels of their children that, with luck, will last throughout their lives—some cannot make progress, of course, but many can—and increasing the possibility that their children can develop a degree of independence, and maybe even financial independence, in adulthood. It would be wise for the Government to take this issue very seriously.

I would ask the Minister to revisit the two levels of disability additions to consider whether the balance is right. Is there not merit in leaving the higher rate at £76 and retaining the basic level at two-thirds of that sum, which is something like £50? That really would make an enormous difference to these families. I would be grateful if the Minister would agree to take this matter away for further consideration, even at this very late stage, in the light of what I think are very powerful arguments for some change in their approach. Finally, will he agree to review the impact of the disability benefits changes in the universal credit system one year after its introduction—although I know that the system is to be introduced over time, so a year may not be terribly realistic? While doing that, will the Minister consider taking a look at reviewing the entire welfare reform package? I beg to move.

Welfare Reform Bill

Baroness Garden of Frognal Excerpts

Monday 23rd January 2012 Lords Chamber

I get irritated when I hear unfortunate comments, such as that families are having children in order to get more benefits. We are talking about people with a lack of education and support. Some of the women from those communities are not in a position to make such choices. It is unfortunate that that has been mentioned. We have poorer families who are entitled to social housing—but there is a lack of social housing—and then we have families who are not. Until we hear from the Government—

[Baroness Garden of Frognal]

I apologise for interrupting my noble friend, but I think that she is trespassing again on a Second Reading speech, and I invite her to bring her comments to a conclusion.

[Baroness Hussein-Ece]

I apologise. Although we have heard the assurances that there will be transitional arrangements, I have not yet heard what those protections will be for the families who will be most affected.

Welfare Reform Bill

Baroness Garden of Frognal Excerpts

Wednesday 11th January 2012 Lords Chamber

[Baroness Garden of Frognal]

With great respect to the noble Baroness, that is in the next group. We are going to stop on this group.

[Baroness Meacher]

I accept that agreement—excellent.

Pensions Bill [HL]

Baroness Garden of Frognal Excerpts

Wednesday 30th March 2011 Lords Chamber

Moved by

[Baroness Garden of Frognal]

28: Schedule 4, page 28, line 42, leave out “and (9)”

[Baroness Garden of Frognal]

My Lords, I shall speak also to Amendments 29 and 31 in this group.

These amendments relate to Schedule 4, which deals with the Pension Protection Fund. This is a complex area of legislation and further consideration has identified a few small changes that are needed to clarify the legislation. All of them are minor and technical in nature.

Amendments 28 and 29 remove the application of Section 143(9) when the board is obtaining a valuation for a scheme applying for a reconsideration to enter the fund. This reference is not relevant in the case of an application for reconsideration where the board’s power to obtain a valuation is discretionary. It will still apply to an initial scheme valuation or determination under Section 143 of the Pensions Act.

Amendments 30 and 31 result from changes made to Section 152 and Schedule 7 to the Pensions Act 2004, which deal with the duty of the board of the Pension Protection Fund to assume responsibility for a scheme on reconsideration and the pension compensation provisions. They simply update some cross-references to include new provisions that would be introduced by the Bill.

My noble friend Lord Freud has written in greater detail to noble Lords who have taken part in this House’s consideration of the Bill and placed a copy of the letter in the Library. I hope that with the detail in that letter and with this concise verbal explanation, noble Lords will feel able to support these amendments. I beg to move.

[Baroness Drake]

My Lords, I thank the Minister for her explanation and I thank the noble Lord, Lord Freud, for his prior written communications with my noble friend Lord McKenzie. We are happy with the explanations and can see the logic of the amendments. As a past member of the founding board of the Pension Protection Fund I am deeply fond of that organisation, and anything that improves its efficient operations will always have my support.

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Moved by

[Baroness Garden of Frognal]

29: Schedule 4, page 29, line 9, leave out from “section” to end of line 11