Social Security (Up-rating of Benefits) Bill

Debate between Baroness Janke and Baroness Bennett of Manor Castle

Committee stage
Tuesday 26th October 2021 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, I begin by apologising to your Lordships for not taking part in Second Reading due to the volume of Bills currently before your Lordships’ House.

I will be very brief. I rise to offer the Green group’s support for the intention of all these amendments. I express my pleasure in following the noble Baroness, Lady Drake, and stress her point that we are not talking about a contest between generations here. There are some very poor people among our older communities, and they deserve not to live in poverty, but that does not mean taking money away from the young. I also stress the point made by the noble Baroness, Lady Wheatcroft, about how pensioner poverty is rising and that we should have a society where no pensioner is living in poverty.

I particularly want to address Amendment 3, which is the one I would most like to have attached my name to, had there been space. It is crucial: pension credit gets so many people to at least a basically decent, not awful, standard of living, but the fact is that that is useful only if you actually get it. I had a conversation—or a debate—with the Minister about a year ago. At that stage, the rate of pension credit take-up was 60%; that meant about a million pensioners were not receiving pension credit who would have been entitled to it. That was money the Government were not paying out—about £3 billion. It was estimated that it was costing the NHS and social care a spend of £4 billion. So not paying pension credit is actually costing the Government money. Can the Minister now—or later in writing, sharing it with other Peers—update me, a year later, on whether those figures still hold? Have the Government planned, as they did not plan a year ago, a programme to promote pension credit to ensure that those who are entitled to it take it up?

[Baroness Janke (LD)]

My Lords, as the noble Baroness, Lady Bennett, says, all these amendments seek to protect pensioners against price increases during a temporary suspension of the triple lock. I very much welcome the proposals made in Amendments 1, 2 and 3, and particularly welcome the proposal to include pension credit in the link with earnings.

I want to speak to Amendment 4 in my name, which seeks to base the uplift on the predicted increase as forecast by the Bank of England for April 2022. My amendment proposes that, as the pension increase will be in April 2022 and the previous pension increase was in April 2021, the best measure would surely be price increases between those two dates.

Circumstances have changed considerably since the Bill completed its passage through the Commons, including rising costs, rising inflation, unreliability of supply chains and the various pressures brought about by those circumstances. While we do not know what inflation will be by next April, there is plenty of reason to think that it will be higher than currently—that is sadly what the Bank of England thinks. For example, the energy cap went up 12% on 1 October, and is expected to go up again next April. I do not think the Government should be happy that these cost rises are not included in the inflation figure that they have used.

We know that pensioners, and older pensioners in particular, tend to spend more time at home and feel the cold more, and so energy bills tend to be a higher share of their household budgets. Given soaring energy costs, pensioner inflation is likely to be higher than average inflation. This is another reason to think that just linking to September’s average figure, when setting the state pension rate, is the answer to the wrong question. I know that some Members will think that using a forecast is not as robust as using an outturn, but this legislation is only for one year, so really we are not setting a precedent. In fact, I am reliably informed that, in the 1980s, the DWP used to use forecast inflation for benefit uprating.

Mention was made in the previous debate of the need to implement the new rates as quickly as possible. This really does not take as long, in this day and age; there are processes in place to make it much easier. Surely it would not take long for the preferred body—the Bank of England or the OBR—to come up with an inflation forecast; presumably the Budget will bring new inflation forecasts in any case.

If the Government are committed to protecting pensioners against rising prices when they set the pension in 2022, they should see that this is a more transparent, easily understood method of ensuring that pensioners are protected against the expected rise in prices, costs and pressures in the year ahead.

Pension Schemes Bill [HL]

Debate between Baroness Janke and Baroness Bennett of Manor Castle

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

[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.