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

Baroness Janke Excerpts

Monday 14th September 2020 Grand Committee

[Baroness Janke (LD) [V]]

My Lords, I support this important measure, which gives powers to the Pension Protection Fund in the event of a company—specifically, a limited liability partnership or a charitable incorporated organisation—being in financial difficulty under the new moratorium provisions brought in by the Corporate Insolvency and Governance Act 2020. I also thank the noble Baroness for her introduction and for her offers of information and the opportunities to ask questions before this debate.

As other noble Lords have said, these regulations give the board of the Pension Protection Fund rights normally exercised by pension schemes, trustees or managers. Under the new moratorium provision rather than the insolvency law, the Pension Protection Fund can end up picking up liabilities. It is therefore right that it should have a seat at the table in the same way it does in the case of insolvencies. As these regulations give the board of the Pension Protection Fund rights normally exercised by the scheme’s trustees or managers, when the trustees or managers lose their rights, the board is required to consult them as a result. That seems an important point.

The regulations enable these new rights in the context of limited liability partnerships and charitably incorporated organisations in particular. As other noble Lords have said, they seem timely in the event of the likely economic events in the wake of the pandemic. Other Members have raised a number of issues about that.

The sustainability of the Pension Protection Fund must cause anxiety in the light of potential large company failures and DB schemes in deficit. I note that the noble Lord, Lord Flight, raised in his remarks the cost of levies. The noble Baroness, Lady Drake, raised questions on a number of further risks, which I am sure the Minister will reply to, but I also particularly support her suggestion that the new arrangements should be monitored and reported. The noble Baroness, Lady Altmann, raised the specific powers of the PPF and whether it would have powers to override high-risk solutions to financial difficulties, particularly as regards safe assets and loans, which again the noble Baroness, Lady Wheatcroft, mentioned.

I share the concerns expressed by the noble Baroness, Lady Ritchie, about the protection of a scheme’s members in the event of restructuring and the reactions of markets to economic events, which we seem to be seeing much more of at the moment.

The noble Baroness, Lady Wheatcroft, raised the obligations of companies going through a moratorium, payment into deficit reduction, lending to preserve the company at the expense of the pension funds, and the PPF’s powers to do something about that.

I agree with the noble Lord, Lord Bourne, that we need to know about the time lag and the impact of the delay to these regulations, and of course, pension funds and members of pension funds need to be made aware of these new regulations, so I definitely support having more information about publicity, as well as an overview of the impact of the new arrangements, which the noble Baroness, Lady Drake, and the noble Lord, Lord Bourne, talked about.

I hope that the Minister will be able to answer those questions and make things a little clearer for us in this regard. I support the regulations and thank the Minister for her time in offering to provide information.

Jobseekers (Back to Work Schemes) Act 2013 (Remedial) Order 2019

Baroness Janke Excerpts

Thursday 3rd September 2020 Grand Committee

[Baroness Janke (LD) [V]]

My Lords, I thank the Minister for her introduction, and I support and welcome the order. The question that has not been fully answered is why it has taken so long for the relevant legislation to be amended in line with the court’s decision. Is this, as it appears, because over this period, DWP Ministers have strenuously resisted such action? Given her remarks about learning the lessons of communicating with claimants, does she recognise that senior politicians’ failure to listen to claimants has prevented effective evaluation of whether policies are achieving their objectives? Universal credit sanctions have caused such distress to the least well-off and most vulnerable people. The Government’s action in suspending sanctions until 30 June was welcome.

The report of the Select Committee, which has been referred to by colleagues in this debate, stresses that it regrets that the suspension was lifted so soon, and that threatening claimants with long and severe sanctions at this stage, so far from a labour market recovery, is unfair and counterproductive. What evidence supported the Government’s decision to reintroduce sanctions from 30 June? As others have said, there is ample evidence that sanctions disproportionately affect people with mental illness and that, at best, evidence on the effectiveness of sanctions is mixed. At worst, it shows them to be counterproductive.

Do the Government share the view of the Select Committee that the UK has some of the most punitive sanctions in the world? Removing people’s main source of support for extended periods risks pushing them further into poverty, indebtedness and reliance on food banks. The National Audit Office observed that the UK’s unusually severe sanctions regime compared to other countries is not grounded on a strong evidence base, nor has the department attempted to fully analyse the data it has at its disposal.

As to the impact of sanctions, 80% of sanctions challenged are overturned on appeal. Does the Minister agree with the Select Committee that the report into the efficacy of sanctions should have been made public before the decision to reintroduce them was announced, as the noble Lord, Lord Forsyth, the chair of the committee, has said? What evidence in the review supported the decision to reintroduce sanctions and why it was not made public? Will she also say when the review will be made public, in line with the recommendations of the Select Committee, along with a statement on what action the Government propose to address the failings of the current policy?

Children Living in Poverty

Baroness Janke Excerpts

Wednesday 15th July 2020 Lords Chamber

[Baroness Janke (LD) [V]]

My Lords, in her first reply the noble Baroness referred to children in two-parent families. I point out that many of the working poor are single parents and that half the children in one-parent families are in poverty. They are doubly disadvantaged. What are the Government doing to ensure that these children’s futures are not blighted by the scourge of poverty in their early years?

[Baroness Stedman-Scott]

In my original Answer, I said it was very clear that people in work have a much better opportunity not to be in poverty. The noble Baroness raises the issue of lone parents, who have enormous issues to overcome. The Government are doing everything they can to make sure that people are supported, and the best route out of poverty for this group is to be in work.

Pension Schemes Bill [HL]

Baroness Janke Excerpts

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

[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.

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[Lord Blunkett (Lab) [V]]

My Lords, I will not detain the House for very long. I draw attention to the interchange and interface between the insolvency legislation that has now passed into law, on which I spoke a short time ago, and this Bill. The reason for that is that we are at a moment of the trigger events being more likely than in our recent history. The noble Baroness, Lady Altmann, referred to the pension freedoms. It struck me as I was listening to the debate today how relevant that is because five years ago the then Chancellor decided to provide a stimulus to the economy as PPI out-payments were drawing to a close, and he did so with an understanding that that would not destroy the pension entitlement or, as provided in Amendment 32, the balance of fairness between generations.

I am supporting both Amendment 8, moved extremely well by my noble friend Lady Drake, and Amendment 32. Anything that puts people and the wider scheme at risk, including these CMP schemes, is dangerous not only to the individuals concerned but in the dislocation of something broader—that is, the commitment that I commenced when my noble friend Lady Drake, along with John Hills and the chair of the commission back in 2005, Adair Turner—the noble Lord, Lord Turner—proposed auto-enrolment.

We are at a moment when, following the withdrawal of the furlough schemes, we face enormous unemployment, great insecurity and risk. At this moment we need to be able to secure not just the present but the future, and that future has to be about those young people contributing, as has already been said in relation to Amendment 32, and the danger that those who find themselves in temporary need of funding will withdraw funds at a moment that is deeply inappropriate for the viability of the programme as a whole. I hope that the Minister will respond positively and, if not, that we will press Amendment 32 to a vote.

[Baroness Janke [V]]

My Lords, I support Amendment 8 but I will address my remarks to Amendment 32. The amendment seeks to ensure fairness for all members of CDC schemes, especially between different generations who may stand to gain or lose from future circumstances, as noble Lords have already referred to.

In Committee we debated this issue at length and a number of issues emerged. The Bill states that the scheme provides for intergenerational fairness among its members, specifically in connection with the amount of benefits paid to pensioners, proposed adjustments to annual benefits and cash-equivalent values provided to members wishing to transfer out of the scheme. A requirement of collective money purchase schemes requires outperformance or underperformance to be reflected in the benefits paid to all members. However, there is usually a reluctance to deliver pension cuts, as in the Netherlands example that the noble Lord, Lord Vaux, described in Committee: when the Government intervened temporarily to avoid a cut in pensions, younger members of the scheme lost out as pensions were kept higher than the scheme could afford.

CDC schemes are required to agree a pension target rather than a firm outcome, and the expectation of pensioners may be different in the event of the underperformance of investments over time. So unless pensions were to be cut, which is a decision that is largely avoided, younger members of the scheme could lose out in the interests of existing pensioners. In the instance of a large number of people choosing to cash in their pensions, as others have said, there is a risk to new and younger entrants to the scheme, particularly if the value of the scheme is significantly reduced.

Our Amendment 32 seeks to press the Government into being more explicit and much clearer in their commitment to fairness across the board to all members of the scheme by requiring the trustees to make an assessment of the fairness of the scheme. The amendment addresses the interests of transparency and fairness and the welfare of all members of the scheme, and I support them.

[Lord Naseby]

I think the amendments have been extremely well aired and I await the response from my noble friend on the Front Bench.

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[Baroness Bennett of Manor Castle [V]]

My Lords, I rise—at least metaphorically—to speak to Amendment 34. I will also refer to Amendments 73 and 79, to which I have attached my name. I pay tribute to the Minister, who has been very generous with her time on those two later amendments addressing the climate emergency. Her department has paid a great deal of attention to them; this is an area on which progress has been made, which is appreciated. It is a positive sign.

However, Amendment 34 addresses the fact that the climate emergency is only one of the critical factors facing our society today. “Environmental, social, and governance” is one of those buzz-phrases that does not exactly trip off the tongue. It means this: how does a company perform as a steward of the natural world and as a part of the society from which it makes, hopefully, its profits? What is its impact on its employees, suppliers, customers and the community in which it operates? We are talking about systems thinking of the kind that lies behind the sustainable development goals, to which this Government and most others around the world have signed up. It means having a decent life within the physical limits of this one fragile planet.

You might say that that is a pretty good goal that we should write into pensions legislation anyway. Even if you do not think that it is something this legislation should try to achieve, if you consider the narrower situation of the direction and risks of investments, there is increasing awareness in the investment community that environmental, social and governance issues are also a very good measure of risk. In some of the great financial and natural disasters of recent times, such as the BP Deepwater Horizon oil well blow-out in 2010 that had such enormous environmental impacts and the Volkswagen “Dieselgate” scandal, we have seen a problem with a company’s actions, but with a narrow focus on the climate emergency and not considering other factors that proved to be a real issue.

On the technicalities of this amendment, I stress that it has taken on board the Minister’s comments in Committee. The amendment then suggested that this information be included in the pensions dashboard; it now proposes that it could be included elsewhere when supplied to the Pensions Regulator—perhaps on its website or the SIP repository.

I know that the noble Baroness, Lady Ritchie of Downpatrick, will say later in the debate on this group of amendments that some of the amendments relate to Northern Ireland and that pension Bills have previously been left to the Assembly. I would appreciate it if the Minister would address that in her response. I would also appreciate a response on the fact that, while the climate emergency is one of the critical issues we face, we are in an age of shocks. There are many others: the nature crisis, the social emergency and the big impacts some of our largest companies are having around the world, as we see in the protests and extreme distress in garment factories in countries such as Bangladesh, India and Cambodia. Pension investors should be able to take account of these issues.

I suggest to your Lordships’ House and the Minister that taking account of the climate emergency is a necessary condition in this Bill, but for the Bill to be sufficient for the 21st century, we also need to include the broader environmental, social and governance issues. I beg to move.

[Baroness Janke [V]]

My Lords, I thank the noble Baroness, Lady Bennett, for her speech and her amendment. I also thank the noble Baroness, Lady Hayman, for her work on this issue and the Minister for all her work in achieving the government amendments on this important matter. While I recognise the major progress that has been made, I shall speak in support of Amendments 72 and 74, which are signed by my noble friend Lord Sharkey and myself. I shall speak also in support of Amendments 73 and 79 from the noble Baronesses, Lady Hayman, Lady Jones and Lady Bennett. I had also intended to sign these amendments and I apologise for not doing so.

In Amendments 72 and 74, the intention is to strengthen the obligation to ensure that the regulations of the scheme reflect the importance of the issue. Replacing “may” with “must” in the amendments to the Pensions Act strengthens the requirement on trustees to ensure that there is effective governance of the scheme with respect to the effects on climate change.

Amendment 73 strengthens the regulations and adds to our Amendments 72 and 74 by ensuring that relevant information in relation to climate change must be considered as part of the regulations.

Amendment 79 aims to ensure that the regulations place an obligation on trustees or fund managers to report on and publish how they have taken into account relevant treaties and other government commitments on climate change. The improvements to the Bill already made are very much welcomed, and we support these amendments today in the spirit of strengthening them. It has been well documented that more and more savers are keen that their savings should serve to strengthen ethical policies, particularly on climate change. As a result, they require more transparency on how their savings are invested.

Pension funds have huge economic power and must play their part in meeting our 2050 targets. UK pension funds hold more than £1.6 trillion in assets. The size and influence of pension schemes means they have a vital role to play in ensuring that the UK meets its climate commitments. It is essential that the Bill enables that to happen.

[Baroness Hayman (CB)]

My Lords, I remind the House of my interests as a co-chair of Peers for the Planet. I should perhaps also declare that my son works for a new campaign, Make My Money Matter, which is being launched today by Mark Carney and Richard Curtis. It encourages all of us to be more active to ensure that our pension schemes reflect our values and that they protect both our financial and environmental future—an indication perhaps that consumer pressure on issues like climate change in relation to pensions is on the rise from that described by the noble Lord, Lord Balfe. In that context, perhaps I should warn the noble Lord, Lord Naseby, that as a pensioner under the parliamentary fund, I may come and discuss these issues with him later.

As the noble Baroness, Lady Janke, said, I have Amendments 73 and 79 in this group, which are cross- party. I will also speak to government Amendments 75, 76, 77 and 78, which cover the same ground—I know that the Minister would say “cover that ground more comprehensively”.

At this stage, it is appropriate that I join others in thanking and praising both the Minister and her officials for the amount of work and careful consideration they have given to these issues and for their responsiveness to the issues that have been raised. We have moved some distance from the start of the Bill, from a position where there was no provision on climate risks to provisions for a regulatory framework that takes into account our objectives under the Paris agreement and which will ensure that trustees and managers are required to assess and report on their scheme’s alignment with the objective to keep global warming to 1.5 degrees centigrade. That includes assessing and reporting on how their schemes are exposed to the effects of climate change and on how the assets of the scheme themselves contribute to climate change.

Improving disclosure in this way is essential for consumers, who need to understand the risks attached to their personal investments. It is also essential for trustees, as greater transparency will help drive their behaviours and decisions, and trustees will need clarity on what is required of them and a clear signal of the long-term trajectory that the sector will need to follow if we are to achieve our net zero targets.

The two amendments that I have tabled are drafted very simply—some might say simplistically. They are broad and would apply to any regulations made under the Bill. Amendment 73 ensures that, in making regulations, the Government take account of international climate change treaties of which the UK is a signatory. It also ensures in turn that regulations require trustees or managers to take account of such treaties in addition to the existing general provisions to secure effective governance of a scheme with respect to the effects of climate change.

Amendment 79 ensures that regulations can place requirements on trustees or managers to publish information about how schemes have taken into account the objective to keep global warming well below 2 degrees centigrade or any other future targets under international treaties. That is critical, because disclosure will create pressure on trustees to reduce schemes’ contribution to climate change.

As I have said, the Minister has been extremely responsive, and we have had a constructive dialogue about these amendments. She has put down Amendments 75 to 78, which are, I hope, more comprehensive but slightly less comprehensible to the lay person. I will ask a couple of more technical questions, which I would be very grateful if she could respond to.

The first question is on Amendment 75 and addressing climate risk. Although the most significant climate-related risks which pension schemes face long-term are not idiosyncratic to particular companies, sectors or geography, they arise from system-level macroeconomic and financial stability risks caused by the impacts of climate change and a disorderly transition. Yet in fact the three material climate risks to portfolios that managers identify tend generally to focus on the risks associated with the transition to a low-carbon economy over the physical risks of climate change. I therefore hope that the Government will confirm the broadest possible definition of the risks in the Bill, meaning transitional, physical, financial and systemic.

On Amendment 76, I would be grateful if the Minister could confirm that proposed new Clause 41A(4A) and (4B) apply across all the regulations to be made under the Bill, rather than applying only to regulations referred to in new Clauses 41A(3)(b). That is essential if consideration for international and other climate change goals is to permeate the regulatory framework as it should.

On Amendment 76, again I would like some confirmation. There is reference to

“or other climate change goal.”

Can the Minister confirm that that includes our domestic net zero target—I think that was very much the intention—and that there will not be any diminution of our targets?

On Amendment 77, again, the reference is to Article 2(1)(a) of the Paris agreement, but does that encompass provisions in Article 2(1)(c) as well, which relate to financial flows and therefore seem to be relevant?

Lastly—the Minister will be glad to know—on technical issues, can the Minister assure me that Amendment 78 does not limit publication requirements to information on the effects of climate change on schemes but that it also covers the contribution of the assets of schemes to climate change?

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[Baroness Neville-Rolfe [V]]

My Lords, as noble Lords know, I am as concerned as anyone with consumer protection. I therefore welcome the amendment which we have agreed to during the passage of the Bill to ensure that the Money and Pensions Service provides a public-owned dashboard. That was a great step forward, and we will come on to that on the next amendment.

However, I fear that this amendment could stop commercial experimentation, which is desirable if properly regulated. As I understand it, any organisation providing a pension dashboard must achieve authorisation from the FCA. Innovation is important and can help consumers and pensioners. If the amendment were passed, it could have a chilling effect and prevent innovation until another Bill had cleared Parliament—not, I suspect, a welcome prospect for HMG after the extent of the amendments made to this Bill.

I have a question for the Minister. I am a little concerned about compliance with GDPR, which obviously is important in securing equivalence in the EU context, where portability is a key requirement. I wonder if the amendment could run us into any trouble on that aspect of regulation.

[Baroness Janke [V]]

My Lords, I support Amendment 52. I also support the other two amendments tabled by the noble Baroness, Lady Altmann, as a result of the matter being much debated in Committee, I am very grateful to the noble Baroness, Lady Drake, for her clear analysis of the issues involved.

Many would say that pensions dashboards are long overdue. They enable people to plan their future finances taking account of existing pensions, and to take a long-term view of future financial provision. However, the challenge of producing a dashboard that will adequately cover the complexity of the pensions landscape should not be underestimated. We are talking about millions of people, and the enormous number of lost pensions that we hear about shows both the need for and scope of the task. Given the level of complexity, the scope for scams and fraudulent actions increases and it is therefore essential that members of the public are sufficiently protected.

As many noble Lords have said, the vulnerability of many people means that they can be much more susceptible to scams and bogus claims and apparently attractive offers from the commercial sector. The additional factor that digital literacy and access can be problematic for some people also needs to be considered. That and the lack of sound advice can lead to bad decisions and life-changing, irreversible mistakes, as we heard from the noble Baronesses, Lady Drake and Lady Altmann, in Committee.

Pensions is a complicated subject; it is not easily accessible by everyone. Lack of engagement, which has already been talked about, is a result and, as the noble Baroness, Lady Drake, said, people often take the line of least resistance and take wrong decisions that they are unable to change. I hear the arguments made by the noble Baroness, Lady Neville-Rolfe, about innovation. Certainly, it is an important factor, but I feel that the protection of pension holders is more important. Measures to provide full protection should be the subject of further primary legislation rather than secondary legislation, as indicated in the Bill.

[Baroness Sherlock [V]]

My Lords, I will deal first with the data issues. There are known to be problems with data quality in many pension schemes that need to be addressed. The regulator has rightly been pushing trustees to improve the accuracy of their data and to evidence that they are doing so. But as we move to a world of pension dashboards, with a consumer’s savings all being displayed in one place and the expectation that behaviour will be influenced by it, data accuracy and standards are key, so I hope the Minister will take to heart the issues raised today.

On transactions, done well, a pensions dashboard can be a really useful service, helping savers to locate lost pots and see all their different pensions in one place—state and private—and work out if they are saving enough for retirement. But there are big risks, especially because the Bill leaves almost every aspect of the dashboard service wide open. In Committee, we tried to put some boundaries around this. We tabled an amendment to insist that there must be a public dashboard from the outset, and I am delighted to see the government amendment now requiring that. Another of our amendments required the FCA to regulate the provision of dashboard services; again, Ministers confirmed that that would happen. Another of our amendments proposed that using the dashboard to see your own data must be free, and Ministers confirmed that it would be. We have come a long way and I am really grateful to the Government for engaging with our concerns.

But two important issues are still outstanding, and they are addressed in this and the next group. As my noble friend Lady Drake explained so well, Amendment 52 would stop delegated powers in the Bill being used to authorise commercial dashboards to engage in transactions. We simply believe that the risks of this are such that Ministers should have to come back to Parliament and seek further authorisation before going down that road. Remember, we still do not know how many dashboards there will be, who will run them or what information can be put on them. We do not know where liability will lie for each link in the chain or how consumers will be compensated if they lose out. We do know that there will be a public dashboard and that the Government want commercial dashboards running alongside it from the start.

But let us think for a moment. If a company cannot charge to look at a dashboard, why would they create one, unless they can profit from it in some other way? How might that be? Could a company show a consumer their data and say, “Look, you’ve got all these different pots. Wouldn’t it be tidier if your brought it all over into this fund here, which my firm happens to run?” Could they fund it by taking advertising? Could a consumer log on to a commercial dashboard and see an advert popping up, inviting her to connect with an adviser, or saying, “Have you ever thought about equity release?” There are even risks just in presenting data in a way that could privilege some kinds of assets over others, depending on who is running the scheme.

This is a risky market—a point that my noble friend made very well. Those who sell complicated pension products generally know and understand a lot more about them than those who buy them. Let us remember the history of financial services mis-selling—from personal pensions through to endowment mortgages, to the PPI scandal, as a result of which, firms are likely to end up repaying up to £50 billion to consumers. The average pension pot is worth rather more than the average PPI policy. The dashboard project could extend to some 22 million people. It is a powerful tool.

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[Baroness Neville-Rolfe [V]]

I welcome my noble friend Lord Young’s probing amendments on verification and timing, and I look forward to hearing from the Minister. I was very struck by the summing-up on the previous amendment by my noble friend the Deputy Leader of the House, who showed just how strong the Bill is on consumer protection and to what lengths the Government have gone to meet the House’s concerns. But others have just tried to use the Bill to bring in yet more burdensome measures.

For me, Amendment 63 takes the biscuit, because the Government have agreed to bring in a Money and Pensions Service dashboard so that there is a government, public-funded version that includes people’s various pension pots and the old-age pension. The proponents of this amendment are then trying to exclude the trail-blazing commercial version, which was behind the Bill in the first place and is designed to help savers, building on the good practice that exists out there in the best pension funds and elsewhere. The amendment would lead to a delay of a year for those dashboards, yet they will all be properly regulated and monitored and MaPS would be in the lead. Competition from others will be an incentive to quality and speed, helping to identify the bugs that the noble Baroness, Lady Drake, who knows so much about pensions, referred to.

I cannot support this amendment. It is worrying that the Government are losing on a series of inappropriate amendments because noble Lords are not coming to the House to speak and listen, but can vote from their garden benches.

[Baroness Janke [V]]

I support Amendment 63 and am not voting from a garden bench. The case for this amendment has been very well stated and I will therefore not take up time by repeating it here. I support Amendment 63 and will vote for it if there is a Division.

Universal Credit: Court of Appeal Judgment

Baroness Janke Excerpts

Monday 29th June 2020 Lords Chamber

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

I can advise the noble Baroness that, during our consideration of the outcome of the court’s verdict, we will consider any necessary retrospective payments.

[Baroness Janke (LD) [V]]

Will the Minister confirm that as many as 85,000 claimants are affected by this judgment? Will she confirm that the Government will publish an action list, detailing when and how the claimants affected by this ruling will cease to be subject to these wild fluctuations in income? Will she also undertake to look into the support available to people in arrears with their rent, or suffering from other financial penalties, as a result of this “irrational and unlawful” action, to use the words of the judge who delivered the verdict, Lady Justice Rose?

[Baroness Stedman-Scott [V]]

I am pleased to say that the figure of 85,000 that the noble Baroness refers to is not one that resonates with us. We believe that the number of people impacted by this judgment is in the region of 1,000. We are assessing the situation. We got the judgment only on Monday, but we will keep the House fully up to date with decisions made in relation to it.

Covid-19: Child Poverty

Baroness Janke Excerpts

Monday 15th June 2020 Lords Chamber

[Baroness Stedman-Scott [V]]

I am aware of the letter and the Trussell Trust figures the noble Baroness refers to, but we have put more money into helping with food poverty, as I have said before. We had an all-Peers briefing about universal credit at which the two-child limit and benefit cap were talked about at great length. I am sorry that I cannot add anything to that at the moment.

[Baroness Janke (LD) [V]]

Half the total number of children in one-parent families are in poverty; the pandemic is disproportionately affecting these families. What specific measures will the Government take to improve the circumstances of these doubly disadvantaged children?

[Baroness Stedman-Scott [V]]

My Lords, our current focus is on supporting people financially through these unprecedented times. We are actively reviewing all measures at our disposal to identify how we can best support the economic recovery and ensure that the best possible employment support is in place. We will continue to look at these things. We understand the impact on single parents and lone parents, and I assure the House that the Government are doing everything they can at the moment to help in these difficult times.

Universal Credit

Baroness Janke Excerpts

Tuesday 2nd June 2020 Lords Chamber

[Baroness Stedman-Scott]

Non-repayable advances cannot be implemented without significant changes to the system; this is not currently our policy intent. Funding to do it would be needed from the Treasury, costing an estimated £2 billion to £2.7 billion. With an advance, there are 13 payments over a year instead of 12, and as of next year the period over which advances have to be repaid will be extended from 12 months to 24 months.

[Baroness Janke (LD)]

People who are suddenly faced with zero income are unable either to wait five weeks for funds or to repay an advance by receiving lower payments, as required by universal credit. Will the Government consider providing an additional dedicated hardship fund via local authorities to provide immediate relief for people in urgent need?

[Baroness Stedman-Scott]

The issue of a local hardship fund has been raised and there is a recommendation for it to be put in place. I am afraid that we will have to wait for the outcome of those deliberations.

Unemployment: Support

Baroness Janke Excerpts

Thursday 21st May 2020 Lords Chamber

[Baroness Stedman-Scott]

As it stands, the Government are not going to change the benefit cap, but it will be reviewed at some point. The noble Baroness’s point about people’s circumstances in terms of loss of income and not being able to move house is a very fair one; I thank her for raising it and I will take it back to the department. Tomorrow we have the all-Peers briefing with the Minister for Welfare Delivery, and I urge the noble Baroness to raise this point yet again.

[Baroness Janke (LD)]

What will the Government do to address the needs of under-25s and care leavers who find themselves on zero income and are currently treated unfairly under universal credit?

[Baroness Stedman-Scott]

The issue of care leavers is very important. We are providing a range of support. I am not aware of any changes to our position on universal credit regarding them, but I will take the matter back to the department and write to the noble Baroness.

Automatic Enrolment (Offshore Employment) (Amendment) Order 2020

Baroness Janke Excerpts

Tuesday 19th May 2020 Lords Chamber

[Baroness Janke (LD)]

My Lords, I thank the Minister for her introduction and welcome the continuation of seafarers and offshore workers in the automatic enrolment scheme.

As other noble Lords have said, the success of automatic enrolment to date has been very clear, with more than 10 million people brought into workplace savings since its implementation in 2012. However, for the continued success of automatic enrolment, the Government must further extend and embed the scheme, as the 2018 review report recommends. For example, the reduction of the lower age limit to 18 and the removal of the lower earnings limit would mean that people could save a further £2.6 billion annually, which shows the importance of savings in early career and their impact on the size of retirement savings.

Scrapping the lower earnings limit would also mean that pension contributions are calculated from the first pound earned, and would bring some 10 million lower earners into pension saving. Many of the workers whom we clap every Thursday would benefit from this. Some 240,000 more people would be brought into pension saving, most of them women, if the earnings threshold were aligned with the national insurance primary threshold. This would reduce the gender pensions gap, which currently means that the average pension pot for a woman aged 65 is one-fifth of a 65 year-old man’s, and women receive £29,000 less state pension than men over 20 years. That deficit is set to continue, all else being equal, closing by only 3% by 2060. We know that large numbers of our women key workers will suffer from pension poverty unless something is done about this.

Will the Government commit to a timetable for implementation of policy to provide certainty to savers, employers and the pension sector? In addition, are the Government considering introducing auto-enrolment for the self-employed, many of whom have no pension savings and whose savings will have been particularly affected by the Covid-19 crisis? Since 2001, the proportion of self-employed in the workforce has increased. At the same time, the number of self-employed people who actively contribute to a pension has decreased steadily since the late 2000s, from 27% in 2008-09, to 15% in 2017-18. Can the Minister give some assurances about this? I fully support these orders.

Universal Credit

Baroness Janke Excerpts

Wednesday 13th May 2020 Lords Chamber

[Baroness Stedman-Scott]

I draw the noble Baroness’s attention to the fact that, in a repeated Oral Statement and at Oral Questions, the Secretary of State was absolutely clear that this benefit will not be changed. I agree with her that things are very difficult at the moment. That is why we have tried to be as flexible as we can by introducing this £7 billion package which gets to the people who are in the most difficult group, removing the minimum income floor, increasing UC, pausing deductions for historic debts, introducing statutory sick pay from day one and increasing working tax credits from over £1,000 to £3,000. I cannot give her any other answer than that, but I can make a commitment to take her question back to the department and again ask what she and others would like me to ask.

[Baroness Janke (LD)]

Is the Minister aware that 85% of those who have had benefits capped are single parents, many of whom have lost jobs through the current crisis? To ease the severe hardship these families are suffering, will the Government at least consider suspending the benefits cap pending a future review?

[Baroness Stedman-Scott]

The benefit cap is reviewed once in every Parliament. The Secretary of State will do this, although I cannot tell noble Lords when. Until that happens, I am not aware of any intention or plan by the Government to remove the cap.