Pension Schemes Bill

Baroness Kramer Excerpts

Committee stage
Tuesday 3rd February 2026 Grand Committee

Moved by

[Baroness Kramer]

167: After Clause 41, insert the following new Clause—
“Pension value protection for default arrangements investing in qualifying assets(1) This section applies to a Master Trust scheme or a group personal pension scheme where—(a) an individual’s rights have been accrued wholly or partly through automatic enrolment, and(b) all or part of those rights have been invested in a default arrangement which includes qualifying assets in accordance with any agreement or policy statement made by the Government concerning minimum or expected allocations to such assets.(2) Upon the individual becoming entitled to receive retirement benefits under the scheme, the trustees or managers must obtain an actuarial assessment of—(a) the net investment return attributable to the qualifying assets held within the default arrangement over the period during which the individual’s rights were so invested, and(b) the net investment return that would have been achieved over the same period had those assets instead been invested in a prescribed benchmark fund.(3) For the purposes of subsection (2)(b), “prescribed benchmark fund” means a diversified, low-cost equity index fund of a description specified in regulations.(4) Where the actuarial assessment shows that the return attributable to the qualifying assets is lower than the return of the prescribed benchmark fund, the Secretary of State must, in accordance with regulations, secure that a payment is made by the Department for Work and Pensions to the individual equal to the difference, within a timeframe determined by regulations.(5) Regulations under this section may make provision about—(a) the form and content of actuarial assessments,(b) the appointment and qualifications of actuaries,(c) the methodology for attributing returns to qualifying assets,(d) the manner and timing of any payment under subsection (4),(e) cases in which no payment is required, including where differences are de minimis, and(f) the recovery of costs from prescribed pension schemes or prescribed persons.(6) The Secretary of State must publish guidance about the operation of this section, including guidance on the protection of members who remain invested in default arrangements throughout their working lives.(7) Regulations under this section are subject to the affirmative procedure.”Member’s explanatory statement
This new Clause would require the Secretary of State to make provision for paying the difference (if any) between returns on investments into qualifying assets held within default arrangements and returns on the same investment, had they been invested in a “prescribed benchmark fund”, meaning a diversified, low-cost equity index fund.

[Baroness Kramer (LD)]

My Lords, my noble friend Lord Sharkey sends his apologies; he is at a funeral and will read Hansard with great attention. I thank the noble Lord, Lord Vaux, for supporting me on Amendment 167. I think it is the first time in 15 years that I have degrouped an amendment to stand by itself, but I can see no other way to ensure a clear answer from the Government: will they put their money where their mouth is?

The Committee has discussed qualified assets and, while I do not intend to repeat the discussion, I hope that everyone understands how high risk a portfolio of such assets is. The Financial Services Regulation Committee, in January, titled its look at the private equity markets as Private Markets: Unknown Unknowns. Some 75% of firms invested in by venture capital fail. Complex infrastructure is both high risk and illiquid; we can think HS2, the Elizabeth Line—four years delayed and £4 billion over budget—and Hinkley Point, which seems to run out of money time after time. If someone with a substantial pension wants to invest in such assets, that is fine with me, but the Mansion House Compact —or accord, I do not care which terminology is used—covers only auto-enrolment default fund pension schemes. These are vehicles for those with the narrowest shoulders, with low incomes, small pensions and little financial knowledge. The downside risk for them means poverty.

The Government have assured us, and those pension savers with the narrowest shoulders, that under the Mansion House Compact, and by putting 10% of their pensions into qualified assets, they will be winners—to quote the Minister on the first day in Committee:

“with an average earner potentially gaining up to £29,000 more by retirement”.—[Official Report, 12/1/26; col. GC 205.]

No warning of the downside was mentioned and clearly, to the Minister, the downside does not seriously exist. I challenge that. I am always very wary of promises of low-risk, high-return investments.

The Government have argued that the Mansion House Compact, combined with the provisions in this Bill, brings great benefits because risk can in effect be eliminated by the structures that have been introduced and the use of large providers. I want to challenge some of those shibboleths. Large providers have explained to me that they can enhance pensions and use qualified assets safely through lifestyle investing, where more is invested into high-risk assets early in the life of the pension, switching later to low-risk investments. If I lose £100 in the first year that I save in a pension, the loss is compounded through the life of the pension and I will have thousands less to get me through retirement. If I lose £100 the day before my pension matures, I lose £100. Early losses are never made up by later gains because they in no way enhance the performance of other assets in the portfolio. If you lose on A, there is no sudden guarantee that you will gain on B. Lifestyle investment is a marketing tool to sell schemes to the financially anxious.

The Government and the Minister argue that the risks in qualified assets can be mitigated away through diversification. For a fund fully invested in good-quality assets, such as the FTSE 100 or the S&P 500, I see the argument for diversification to manage risk, but diversification loses its effectiveness in high-risk portfolios, as everyone should have learned from the collateralised debt obligation scandal that triggered the financial crisis in 2008. Let me illustrate with an extreme example. I go to the casino, maybe several casinos. I play the slot machine, roulette and blackjack. I am beautifully diversified. But we all know that I will still lose my money.

The Government’s case that pensioners with the narrowest shoulders should be 10% invested in qualified assets really depends on assumptions that it makes about asset allocation. The argument is that the pension companies involved would employ the best experts to pick winners among those qualified assets. Some experts are better than others, though I note that they all will find statistics and present them to show that they have the Midas touch.

I note the analysis of the Government Actuary’s Department, which shows that over time and on average—that is a key word—virtually every model portfolio tested delivers similar results. But there is a catch, as the noble Lord, Lord Sharkey, pointed out last week—the GAD’s conclusion underscored its uncertainty. It said that

“there is considerable uncertainty, particularly with the assumptions for projected future investment returns”.

The noble Lord, Lord Sharkey, also quoted from the Institute and Faculty of Actuaries, which made the point even more forcefully. I could not work out what the mean looked like when I looked at that work done by the government department. Obviously, the mean really matters because an average can be made up of a few big winners and a lot of small losers. It is the losers in the high stakes game of qualified assets that worry me.

I am not attempting to stop the Mansion House Compact and the Government’s plan to put 10% of the assets of auto-enrolment default funds into qualified assets even though they are unlisted, opaque, high-risk and illiquid. My amendment would simply require the Government to provide a safety net for those who are in no position to live with the downside in these investments.

The noble Lord, Lord Davies of Brixton, last week said that

“the inevitable corollary of mandation”,

which is where he was focused,

“is responsibility for the outcome”.—[Official Report, 26/1/26; col. GC 284.]

But I regard the Mansion House Compact as very much a government-driven agreement designed by the industry to head off even more coercive action and so I think that the same principle applies: “responsibility for the outcome”.

My amendment is simple:

“Upon the individual becoming entitled to receive retirement benefits under the scheme, the trustees or managers must obtain an actuarial assessment of—


(a) the net investment return attributable to the qualifying assets held within the default arrangement over the period during which the individual’s rights were so invested, and


(b) the net investment return that would have been achieved over the same period had those assets instead been invested in a prescribed benchmark fund”.


In the amendment, benchmark fund

“means a diversified, low-cost equity index fund of a description specified in regulations”.

If the benchmark fund would have performed better, the Government make up the difference to the pensioner. The calculation, despite what the Minister said, is very simple, requires no new data and can be crafted straightforwardly. Pension schemes would just code it into their normal reporting.

If the Minister and the Government are right, and investment in qualified assets, as structured under the Mansion House Compact and in this Bill, benefits and does not harm pensioners in auto-enrolment default schemes—those people I described at the beginning with the narrowest shoulders and least able to take risk—it costs the Government absolutely nothing to sign up to this protection provision. If the Government believe their own words, accepting my amendment means taking no risk at all for the Government or taxpayer. My amendment only costs the Government money if they are wrong in the promises that they are making. The amendment would certainly give peace of mind to the poorest pensioners and strengthen their confidence to save and to invest.

We all want auto-enrolment to better serve low earners, but that requires shaping policy around the capacity of low earners to take risk. I ask the Government to put their money where their mouth is and provide the pension value protection described in my amendment. I beg to move.

[Lord Vaux of Harrowden (CB)]

My Lords, I apologise for not being able to be here last week for Amendment 142. I am grateful that the Minister responded to it regardless of that. I have added my name to Amendment 167. I will try to be very brief because the noble Baroness, Lady Kramer, has explained it with her usual clarity, and the amendment covers some of the same ground that we debated in the last group—although it attacks the problem from the other direction.

--- Later in debate ---

[Baroness Sherlock (Lab)]

The Bill as a whole is trying to pursue scale and is trying to mirror what the Mansion House Accord did. I have been through that argument many times. We are seeking solely a reserve power to act as a backstop to an industry-led decision. The industry itself has decided to go in this direction. It is a simply a reserve power, and the reason why we are using it is that we know that there remains a risk that people will not all follow through on it because of the excessive focus on cost and the competitive advantage that may come from backsliding on that. I fully accept that the noble Baroness does not agree, but those are the Government’s arguments. I hope that the noble Baroness will withdraw the amendment.

[Baroness Kramer (LD)]

My Lords, it has been such an excellent debate that I will be extremely brief. I am troubled by two things. One is that the Minister does not seem to realise that this is not voluntary action by the pension industry. It is because it sees it as the only way to avoid actual mandation, not because people have sat down and said, “All these years we have been getting it wrong; now we have had a conversation with the Government and we’re going to get it right”. That is not what is going on here.

Secondly, I am troubled that the Minister does not understand the consequences of the level of risk that is embedded in these qualified assets. She is perfectly satisfied that, if they go wrong, the damage falls on the people with the narrowest shoulders. To me, that is seriously incomprehensible because, for those people, the consequence is frequently going to be poverty.

I ask her to sit back and think about this. The Government are right to encourage people to save for pensions, but they also need to understand that, when people have narrow shoulders, low incomes and limited financial knowledge, they are not in a position to take the kind of risks that she is, in essence, saying that they should be taking and, if they take them, they are guaranteed winners. If she believes that they are guaranteed winners, then simply step in and provide the protection that I am talking about, which would cost the taxpayer nothing. I beg leave to withdraw the amendment.

Amendment 167 withdrawn.

Pension Schemes Bill

Baroness Kramer Excerpts

Committee stage
Thursday 22nd January 2026 Grand Committee

I also support Amendment 51 in the names of the noble Viscount, Lord Younger, and the noble Baroness, Lady Stedman-Scott, which has similar aims, I think, to those that I was trying to achieve in my Amendment 47, and particularly Amendment 57 on vulnerable workers and formalising the value-for-money framework. This is an important group and I hope that we will have a good discussion. I look forward to hearing other Members’ comments and the response from the Minister.

[Baroness Kramer (LD)]

My Lords, I will be exceedingly brief. I may participate on an occasional basis on this Bill, despite the fact that it is very important. However, we have many people with exceptional expertise in the Room, for which I am extraordinarily grateful.

I have Amendment 167 in a later group on its own, which has relevance to one of the issues raised by my noble friend Lady Bowles in Amendment 46A, in which she introduces the concept that value-for-money regulations must take account of certain factors. Proposed new paragraph (c) particularly interests me, on

“the characteristics of the members of the scheme”.

In all the discussions that I have heard in the Mansion House compact and in the Bill, very little attention is paid to the characteristics of the members of the schemes, because they differ widely. I am particularly concerned that people on low salaries, whose primary savings for pensions and then investment is through auto-enrolment and default funds, have a very different risk profile from those of many people who otherwise engage in pension savings.

This is a group for whom the downside has far more serious consequences than for other groups. Many of us can afford to take a chance with parts of our pensions: if we lose some money, we are still going to be in relative comfort. That is essentially not true for this group. The upside benefit of taking risk and doing well from that risk is nice, but the consequences of taking risk and losing because of that risk are far more serious. I want to draw the Committee’s attention to that issue. As I said, I will pick it up again in Amendment 167, because to me it has been overlooked.

It is key that, when we devise pension arrangements, we recognise the very different risk profiles of members, so that what they are required to do—auto-enrolment and default schemes are in effect a requirement—matches their risk profile. I hope that we will begin to start to shift some of our thinking. There are amendments, in this group and in others, that could help very much with that issue.

[Baroness Coffey (Con)]

This group of amendments is quite interesting in starting to sketch out what is important in the value-for-money approach that is being adopted through the Bill. I did not know when the noble Lord, Lord Palmer of Childs Hill, would speak to Amendment 49 and I will be interested to hear what he has to say on this, because the only other form of occupational pension is, in effect, the defined benefit, where you know what you are getting. I was a bit surprised that he felt that that would need to go further, because that is a direct relationship between somebody and their employer. Nevertheless, I am sure he will explain further.

The noble Baroness, Lady Bowles of Berkhamsted, has tabled Amendments 55 and 56 to Clause 12, which are sensible, but one thing that concerns me at the start of that clause is the word “may”. We should be beyond that at this stage, which is why I also support my noble friends on the Front Bench in opposing Clause 13 standing part of the Bill. There are just too many ifs, buts and maybes, but when it comes to Clause 13 there is nothing at all. It is just a blank cheque for the future. I am conscious that things can vary over time, but we should be in a position where we are getting some clarity on what will be in these value-for-money assessments so that people can make choices. We should be getting that clarity now. If necessary, we can put down regulations for affirmative procedures but, candidly, I do not think it is good enough that we have this sort of approach to defining what is there for the future.

I say to the Minister that I appreciate that this is a real step forward and I welcome that. People put their money in, they are not exactly sure what return they are getting and they might look every now and again at where it is coming out. I appreciate that there is a whole journey to go on in pensions education, as well as for the trustees, in terms of what is really happening with their advisers who continue to do low-risk, low-reward. I encourage the Minister, however, to come back on Report with a much stronger sketching out of what will be in these assessments, as required by Clause 13. For example, instead of just having the word “may”, have some “must” in there and then open up the power later to adjust as necessary. It is also valuable to be able to repeal.

Amendment 74 concerns the “Duty to formalise the Value for Money framework”; I know that my Front Bench will speak to that shortly. It is a useful exercise to check whether it is working. There are other amendments which basically make comparisons with other pension providers. That gets trickier if it is done at such a detailed level because, again, people might want some basic information on what is happening with their money. To pick at random, they might want their money with Standard Life instead of Scottish Life; if there is some variation, they might want to make a change. It is those sorts of things that I encourage the Minister to have more detail on by the time we reach Report.

Employment Gap for Blind and Sight-impaired People

Baroness Kramer Excerpts

Wednesday 17th December 2025 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord for that question and agree that it is not political. I know that his approach to this is not. I am grateful for how he approaches these issues. There are different views on the statistics. We can have a conversation elsewhere. A lot depends on how the definitions are made but, either way, the disability employment gap is far too big and needs tackling. As the noble Lord will know only too well, things got worse during the pandemic and have not really recovered.

This Government have made a real commitment to engaging, investing significant additional sums of money in supporting people with a range of disabilities and health conditions, including blind or visually impaired people, back to work; lots more tailored support; investment in supported employment programmes; and making sure that there are specialist disability employment advisers and coaches who understand how they can help people. We are also working with employers. I can talk more about that if it is helpful.

I am not in a position to announce a taskforce today, but we have announced the Independent Disability Advisory Panel. The membership will be announced shortly. The Government are taking very seriously the need to listen to the voices of disabled people, including blind and visually impaired people, as well as talking to the organisations that support them. I would welcome having further conversations with the noble Lord about how we can get this right.

[Baroness Kramer (LD)]

My Lords, the Minister acknowledges the sight-loss employment gap. How many full-time equivalent disability employment advisers are employed by the DWP—and do all DEAs have specific sight-loss training? Do access to work assessors and jobcentre staff have sight-loss training and, if they do not, will the Government seek to remedy this?

[Baroness Sherlock (Lab)]

I am not sure we have any published statistics, but my best understanding at the moment is that there are more than 800 disability employment advisers and DEA leaders. The Government’s aim and commitment is that every work coach will have access to a specialist disability employment adviser. The DWP provides particular learning for those who come into that DEA role, and that includes specific content relating to blindness and visual impairment. It is intended to give awareness of the challenges that people with sight loss who come to us may face, highlights the support we can offer, and explains what the DWP’s responsibilities are. As an organisation, we are looking specifically to improve that. The Government have recognised that we need to be investing more. We are going to put more money in over the rest of this decade, investing more money in hiring, improving the quality and the quantity of support providing help to disabled customers. We aim for it to be tailored to each individual circumstance, and that is what we ought to do. The answer is yes, we are investing in training as well as in having people on the ground who can help.

Dyscalculia

Baroness Kramer Excerpts

Monday 17th November 2025 Lords Chamber

[Baroness Kramer (LD)]

My Lords, a number of people in my family have a whole variety of learning difficulties and have been successful despite that. There is a huge difference in being able to name the difficulty. Children who are not doing well find another single word if they do not get a diagnosis, usually “stupid” or “lazy”. To have a proper diagnosis makes a significant difference.

[Baroness Smith of Malvern (Lab)]

I partly accept the noble Baroness’s point, but there is a problem with suggesting that it is not possible for students who have problems with maths to get support unless they have had a diagnosis and have a single name for the issues that are causing challenges. Sometimes it is precisely the waiting for the assessment, rather than the action on the difficulties the child had, that causes the problems in our special educational needs and disabilities system. We need to identify where children have problems with learning and take action immediately, not wait for diagnoses.

Public Authorities (Fraud, Error and Recovery) Bill

Baroness Kramer Excerpts

Report stage
Tuesday 21st October 2025 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, as we have heard, this group relates to the measures in the Bill which would give the DWP the ability to require banks and other financial institutions to trawl all accounts that they hold to identify and provide information on accounts that have received certain benefits and which meet certain criteria as defined by DWP, all without any suspicion of wrongdoing. This is done by means of an eligibility verification notice, which can require periodic reporting—the noble Baroness did not mention this when she described it. For example, it could be daily, although there has been no clarity from the department or the Minister yet as to the periods that are intended. I should reiterate at this point: this is a much better Bill, and the safeguards are much greater than the last time we saw these clauses, but there is more to go.

I would like to make one other little correction to the noble Baroness on her example of universal credit. Her example was that the eligibility criterion that would be provided by DWP to the banks would be £16,000, because that is the limit. In fact, it could be a much lower number, because under the Bill:

“The eligibility indicators may be criteria to be met by a single account or by”


a number of “accounts combined”. For the universal credit example it might be £10,000 or £8,000, or something of that nature. In that situation, it is even more likely that eligibility indicators would be flagged for innocent people, but that is just a wrinkle within the Bill.

I think many of us are nervous about the introduction of what is effectively the suspicionless trawling of benefit recipients’ accounts, even with the safeguards that are there. However, I understand and have an awful lot of sympathy for the need to reduce fraud and error, and the need for the department to have the tools to do that. Amendment 45A, in the name of the noble Baroness, Lady Kramer, and others, would—as I think we are about to hear—remove the provision altogether. My approach in this group and the next has been to seek to strengthen the safeguards that surround the use of the powers rather than to remove them altogether.

To that end, I have tabled one amendment in this group, Amendment 49, which the noble Baroness has already alluded to. I am grateful to both the noble Baroness, Lady Kramer, and the noble Viscount, Lord Younger, for their support. It is very simple: it requires that the Secretary of State may issue an eligibility verification notice only if satisfied that it is necessary and proportionate to do so for the purposes set out in the Bill. It was quite surprising that this basic safeguard was not already in the Bill, because the same wording already appears in relation to all the other powers it creates. I had assumed that this was a drafting error or oversight, as I cannot imagine any reason why it should not be there in relation to these powers.

I am very pleased to say that, since I tabled Amendment 49, the Minister has tabled Amendment 48, which she has mentioned. That amendment does much the same thing, although it does not restrict the necessity and proportionality to the purposes of the Bill. That is regrettable, but I can live with the Minister’s version and I am grateful to her for doing this following the constructive discussions we have had on a range of issues throughout the process, for which we are very grateful.

The Minister’s other amendments also introduce small but useful tweaks to the safeguards, although I am not sure I would go as far as she does on their effect. With thanks to the Minister for her engagement, I will not move Amendment 49, but I should be clear that I do not believe that Amendment 48 and the others she has tabled remove the need for the changes we will discuss in the next group. We will have those discussions then, and I will obviously reflect on what she has said in the meantime.

[Baroness Kramer (LD)]

My Lords, I will be very brief. The noble Lord, Lord Vaux, has amendments in this and other groups, several of which I have signed, to try to ameliorate or provide safeguards for some of the most intrusive elements of the current draft of the Bill. I also have great sympathy with the amendments tabled by the noble Baroness, Lady Fox, around the issue of transparency, which is very evidently absent from most of the Bill. I will support those individuals if they press their amendments.

My Amendments 45A, 65 and 74A, in contrast to those of the noble Baroness, Lady Fox, and the noble Lord, Lord Vaux, are not nuanced. They would simply remove Clauses 75 and 76 and Schedule 3, in effect eliminating the requirement for banks to look into claimants’ bank accounts. They would destroy the principle that the Bill establishes: that a group of people, defined by the common characteristic that they are in receipt of benefits, should have a more limited right to privacy and data protection than the rest of the community.

I am also very concerned when banks become investigative agents of the state. I regard these as lines we simply should not cross. I know that the Minister does not share that view and is very content that those in receipt of benefits should be under a level of surveillance that is considered inappropriate for the rest of the community. To her credit, she has limited some of the most abusive features of the Bill that we received from the Commons, but she still asserts the underlying principle.

I also realise that this is very much a paving Bill for the intrusions that will follow the introduction of the digital ID. That scheme provides the tools that enable the state to carve out for surveillance any variety of groups of people whom it deems unworthy of sharing the general rights accorded under the law. I have tabled what are killer amendments, in effect, because the public need to know what exactly is at stake and what line has been crossed. I will not press my amendments, but I am also determined that the issues will not be quietly tidied away.

[Lord Sikka (Lab)]

My Lords, I will say a few words about Amendment 60. I thank the noble Baroness, Lady Bennett of Manor Castle, for her support.

My concern is about justice. People on the receiving end of DWP penalties and accusations of fraud will predominantly be old, sick, disabled and the poor. Most would not be able to afford legal advice or qualify for legal aid, which is scarce in any case. DWP actions and penalties could arise because people have made errors in completing very long and complex forms. For example, the pension credit form is 24 pages long and has 243 questions on it. Errors can be made in completing the forms and interpreting the questions on them, and in the DWP’s assessment of the answers given to those questions.

There is a high probability that some people may eventually be unjustly accused of committing fraud and face the removal of money from their bank accounts without their express approval. It will be the might of the state on one hand and a poor person who does not have any legal advice on the other. We know from the Post Office scandal that innocent individuals can be pressurised into admitting fraud that they did not commit and into handing over money that they did not steal or do not owe. There is enormous scope for injustice in the Bill.

The 2023 High Court case of R v Secretary of State for Work and Pensions related to a single mother of two disabled adults who was receiving universal credit and was overpaid by £8,623, entirely due to the fault of the DWP. The DWP sought to recover the money. The High Court’s judgment said that, under certain circumstances, benefit claimants may be able to argue that recovering the debt would be an unlawful breach of their legitimate expectation and the debt need not actually be paid. Would many claimants who are accused of committing fraud or receiving overpayments be aware of these things?

Steve Webb, the former Pensions Minister, said:

“It can be difficult for people to understand whether the demands they are being sent for overpayments are a mistake, as benefits such as tax credits and pension credit are so complex”.


Without legal advice, these people become even more vulnerable.

Last year, a lot of press coverage was given to the plight of a 75 year-old pensioner who was chased by the DWP for pension credit fraud, adding up to £22,000. The Sun newspaper took up the case, and eventually the investigation showed that there was no fraud—it was all due to errors by the DWP. This case, obviously, is not unique; there are many others that do not get the publicity. I cannot help wondering how many people over the years have been pressurised into admitting guilt when they are not guilty. How many more will admit guilt when they are simply pressed into it?

Last year, data secured by Big Brother Watch showed that more than 200,000 people wrongly faced investigation for housing benefit fraud and error after the performance of the Government’s algorithm fell far short of expectations. Earlier this year, 30 charities wrote to the Government, pointing out the dangers of this legislation and previous legislation, and they identified 686,756 new official error overpayments on universal credit.

Eventually, at some point, people who are accused need some advice. Amendment 60 suggests that the Government ought to provide legal advice to people who may well qualify for it. On 9 October this year, the Government announced that all victims of the Post Office Horizon IT scandal who are claiming compensation will be entitled to free legal advice. Why wait until people suffer? Why not offer this advice up front to save anguish to millions of people? That is what a civilised society would do.

I am sure the Minister will not support this and will possibly refer to the cost associated with it, but the cost of injustice is even higher. I hope that the Minister will be able to offer some help with this.

Public Authorities (Fraud, Error and Recovery) Bill

Baroness Kramer Excerpts

Report stage
Tuesday 21st October 2025 Lords Chamber

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I shall speak to government Amendments 89, 91, 101 and 102; I start with Amendments 89 and 91. I tabled these amendments because it has been clear that, despite all my attempts to reassure noble Lords at earlier stages, concerns continue to be raised as though DWP’s new recovery powers could be applied to debtors who are in receipt of benefits. Indeed, I think that may be the concern of the noble Baroness, Lady Kramer, as the explanatory statement on her Amendment 92 in this group relates to the use of these powers on benefit claimants. To be clear, this is not the case.

The DWP’s new debt recovery measures can be applied only to debtors who are no longer receiving DWP benefits and where we cannot recover from PAYE. However, to further reassure noble Lords and everybody else, we are making it even clearer in the legislation, through new Section 80AA, that the new powers cannot be applied to those receiving benefits from my department. This provides further clarification that a direct deduction order or immediate disqualification from driving order must always be suspended or revoked if the debtor subsequently receives a benefit payment from the DWP while that order is ongoing. I hope that provides further assurance to the House.

Amendment 101 is a procedural amendment regarding the technical mechanisms for DWP to make applications to the court for disqualification orders. The Bill already allows DWP to make an application to the magistrates’ court for a suspended or immediate DWP disqualification order. The purpose of this amendment is to introduce a regulation-making power enabling DWP to set out at a later stage any practical steps necessary for those applications to be made and considered. This engages commonplace procedure rules, dealing with practical matters to ensure cases are progressed fairly and efficiently for all parties involved, such as the type of form used or how notices and orders are served on parties.

Amendment 102 is a technical amendment which ensures that the term “processing” is correctly understood in new Section 80D, which establishes the DWP debt code of practice. It is a small change to provide clarity by linking the term “processing” to the definition already set out in Section 3(4) of the Data Protection Act 2018. This helps avoid any ambiguity in interpretation and ensures consistency with existing data protection legislation.

None of these government amendments changes the existing policy intent for how the powers will be used or the safeguards that are set out in the Bill. These will continue to be powers of last resort, to be used only after DWP has made all reasonable attempts to negotiate an affordable and sustainable repayment plan. These amendments support the policy intent and delivery of the Bill, and I urge noble Lords to accept them. I beg to move.

[Baroness Kramer (LD)]

My Lords, I will be very brief. I laid Amendment 92 in the same spirit as the amendments that I laid in an earlier group. The part of paragraph 3 of Schedule 5 that I find most difficult is a subset of the requirement for banks to provide information. The overarching requirement instructs banks to hand over to the Government, on request, three months of account statements for them to examine. The schedule says that the information must be used only to help determine whether or not to make a deduction under the Bill. I was trying to find out from the Minister what assurances there are that the use will be that narrow. It may be that I have misread it, but I cannot see any form of transparency or accountability that would provide that kind of assurance. It all seems to be completely internal to the DWP. My first question to the Minister is therefore this: how will the scheme verify that the information is not used for other purposes, because detailed account statements undoubtedly have information that could interest all kinds of people? Most importantly, will that information be destroyed after an investigation is closed?

The part of paragraph 3 that exercised me the most, in the original language of the Bill that came from the Commons, is that which prohibited banks from ever notifying the account holder that their information has been handed over to the state and for what purpose. To the Minister’s credit, that now seems to have been amended to say that the account holder can be told after three months. I am unclear whether that is an automatic notification, notification at the bank’s choice, or notification that requires a request from the account holder. To me, this matters, because I suspect that transparency is the only way to ensure that the information in the account is not used for purposes other than those stated in the Bill.

I am generally exceedingly uncomfortable with the idea that the original version basically required a sort of covert process, in which the information held on an individual by the state was not disclosed to that individual. The Minister has often suggested that the monitoring of accounts is to start a dialogue to see if a person has made a mistake in overclaiming rather than committing fraud. If somebody is not told that their information has been taken, read through, examined and dealt with in detail, I cannot see how they can possibly enter into a constructive discussion to explain what is happening.

I want to draw the attention of the Minister to an underlying principle. Jonathan Fisher KC has published part 1 of an independent review of disclosure and fraud offences, which was commissioned by the Government. I want to quote his words on transparency, because it seems that transparency was not built into the original Bill and is still limited in the revised version. He said that:

“A modern disclosure regime must require the prosecution”—


he is talking about the courts—

“to be honest concerning the reasonable lines of inquiry that have been pursued and how investigative material has been gathered, handled, and interrogated”.

I would very much like to see those principles embedded in this part of the Bill. I think we need assurances from the Minister that if we cannot find the language then they will in practice be embedded in this part of the Bill, because transparency is fundamental.

[Viscount Younger of Leckie (Con)]

My Lords, the amendments in this group tabled by the Government contain a mixture of substantive safeguards and some technical improvements designed to tidy up and clarify the Bill.

The main amendment, government Amendment 91, introduces further restrictions and procedural safeguards around the use of the new recovery methods created by Schedules 5 and 6. It requires that liable persons are properly notified and given an opportunity to settle their liability before enforcement action is taken, and that alternative routes of recovery, such as deductions from earnings or benefits, are considered before more intrusive powers are used. These are sensible and welcome provisions that strengthen procedural fairness and ensure that the new powers are exercised proportionately.

We do, however, note that these changes have come rather late in the passage of the Bill. They are substantive clarifications, going to the heart of how these powers will operate in practice. However, I listened to the explanations from the Minister on an earlier point I made about this and I now understand her position—while not necessarily agreeing with it, I understand it.

The group includes two largely technical amendments. The first, to Schedule 6, allows the Secretary of State to make regulations relating to applications to or appeals from magistrates’ courts in England and Wales, ensuring clarity and consistency in procedure. The second, to Clause 94, aligns the Bill with the Data Protection Act 2018 by confirming that “processing” has the same meaning as in the Act. This is a straight- forward but important clarification. It is my view that these amendments strengthen the fairness and clarity of the Bill, ensuring that it operates in a way that is proportionate, consistent and aligned with existing law. We therefore support them.

On Amendment 92, tabled by the noble Baroness, Lady Kramer, she may not be surprised that we do not support this amendment. It would remove a key part of the machinery that underpins the operation of this Bill—specifically, the ability of the Department for Work and Pensions to obtain limited, relevant bank information to determine whether a direct deduction order should be made. I realise that this chimes with the noble Baroness’s earlier Amendment 45A, so I will not repeat the comments I made then, save to say that this is a considerable change and would strike at the heart of the framework that enables the recovery of money lost to fraud and error.

The Government must have the legal capacity to verify whether an individual is eligible for the payments they are receiving and whether further action is required to prevent overpayment or recover funds that are owed to the state and, by extension, to the taxpayer. If a person receives money from the state, the state has both the right and the duty to ensure that this money is not being misused—and certainly is not ending up in the pockets of fraudsters or criminals. The Minister has already made clear that individuals in receipt of benefits will be informed that the Government may access certain account information for the purposes of investigating suspected fraud or error.

We are satisfied with the Government’s assurance that the information obtained under these provisions will be high level, proportionate and strictly limited to what is necessary for the purpose of recovering money lost to fraud and overpayment. Far from being excessive, the powers set out in this part of the schedule are a necessary and measured tool to protect public funds. For those reasons, we oppose Amendment 92.

Public Authorities (Fraud, Error and Recovery) Bill

Baroness Kramer Excerpts

2nd reading
Thursday 15th May 2025 Lords Chamber

[Baroness Kramer (LD)]

My Lords, this is not my usual field, so I shall be listening with great interest to the various speeches, including the maiden speech of the noble Baroness, Lady Spielman. Stamping out public sector fraud, including public authority and welfare fraud, is clearly a priority. These are despicable crimes that undermine our public services and, in the end, hurt the most vulnerable. However, this Bill, at least to my eyes, has some serious flaws.

Part 1 focuses on investigation of fraud outside the tax and benefits system. As I read it, I was surprised to find that it has nothing to say on whistleblowing. I am certain that, without a powerful whistleblowing framework that keeps whistleblowers safe from retaliation and leads to investigation, most bad actors will escape investigation. If the Minister doubts me on the importance of whistleblowing, I ask her to look at the speeches by Nick Ephgrave, director of the Serious Fraud Office, who is even willing to incentivise whistleblowers because they are so vital. In April, he told the All-Party Parliamentary Group on Anti-Corruption and Responsible Tax that his number one need from parliamentarians is to get him more whistleblowers.

Whistleblowers identify where in the haystack wrongdoing is hidden and provide vital evidence. The noble Lord, Lord Livermore, is more frequently the Minister engaged in debates in which I am involved. In response to a question from me in February, he said:

“I met Tom Hayhoe, the Covid Counter-Fraud Commissioner … he told me that he is considering a whistleblowing mechanism to enable the public to draw attention to abuses they are aware of”.—[Official Report, 5/2/25; col. 690.]


I ask the Minister to go back and look at this issue, because, if she talks more broadly to investigators, she will discover this is a critical area which needs to be seized upon immediately.

On the second part of the Bill, I take on board the concerns of UK Finance that the Bill risks not achieving its objectives. The role given to banks to verify eligibility for benefits and recover money seriously needs a rethink to provide proper customer safeguards. It makes no allowance for people of low financial capability, for example, nor even for those hiding funds to escape domestic abuse. I am really concerned that it creates two classes of citizen: those with full rights in our society, protected by the FCA’s consumer duty, for example, and a lower class, defined as benefit recipients, who are investigated without cause and treated as a suspect class.

Listening to the finance industry, it is absolutely clear that bad actors, especially the gangs, will have no difficulty at all working around all the new rules and programmes. The Minister must be aware that any serious crackdown on fraud has to tackle the organised crime gangs who conspire to commit welfare fraud on an industrial scale. Last year, one gang alone was convicted of defrauding £53 million of universal credit. That was a very rare success, unfortunately. Since I cannot find it anywhere, can the Minister say today what percentage of welfare fraud is the work of these organised gangs? I suspect that the number is very large.

The main tool in this Bill is to initiate fishing expeditions and, from wide experience across the fields of investigation and fraud, they are the laziest and most ineffective way of fighting wrongdoing. If anyone doubts the capacity of the DWP to get schemes such as this one wrong, look at the carer’s allowance scandal, which particularly exercises my colleagues. My noble friend Lord Palmer of Childs Hill will elaborate, but 136,730 people are at present caught in outstanding debt for carer’s allowance overpayments which were not their fault, but for which their lives are being devastated. I fear that, in the way this Bill is crafted, they and people like them will be among the primary targets, even though they never actually committed fraud; they just failed to understand impossibly complex rules or to identify the DWP’s mistakes.

The DWP must of course crack down on fraud, but it needs to be informed by best practice. On that basis, I believe this Bill needs a significant rethink.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I thank all noble Lords who have contributed to today’s thoughtful and decidedly not-at-all dull debate. Committee will be some fun indeed. It was a particular pleasure to hear the maiden speech of the noble Baroness, Lady Spielman, whom I welcome to the spreadsheet fan club. Frankly, I could have done with one of her spreadsheets to keep track of all the questions that I have been asked today. In the absence of that I am bound to miss some, for which I apologise in advance, but I will do my best. It is good to have her among our number, and I look forward to hearing more from her in future.

Perhaps we should start briefly with the challenge that the Bill is designed to address. As my noble friend Lady Anderson made clear at the start, public fraud is simply not acceptable—as the noble and learned Lord, Lord Garnier, said, fraud is not acceptable generally, but public sector fraud is also not acceptable. Fraud does not become a victimless crime because it is directed at the state: it will cheat the public purse of money that could be spent on public services, which could help this Government deliver an NHS fit for the future or invest in our children to give them the best start in life.

Listening to some of the examples given by my noble friends Lord Rook and Lady Alexander, it is so shocking that, during Covid, when people and charities were out there breaking their backs trying to serve people who were in desperate need, others were out there lining their pockets. It is a disgrace. It was very moving to hear from my noble friend Lady Alexander about what is happening when people are doing all that they have had to do in the British Council to pay that back when others do not want to pay back the money that they should be paying back to the state. That cannot be right.

I also think that fraud in our social security system is damaging in a different way, whether it is undertaken by individuals or organised criminals. I think the noble Baroness, Lady Kramer, asked what the breakdown of that was. I can tell her that, in 2023-24, of the £7.3 billion lost in fraud in social security, 6% was taken by organised gangs and the rest was taken by individuals.

[Baroness Kramer (LD)]

My Lords, is that the number of cases that were identified because there was enough evidence and people were arrested, or does she believe that that is an estimate of the total amount of organised fraud in the system?

[Baroness Sherlock (Lab)]

It is a percentage of the amount of fraud that was recognised. Clearly, we do not have figures for the amount of fraud of any kind that has not been identified or recognised. That was the figure for the amount we have on our books as organised fraud.

The reality is that, whether it is done by organised criminals or by individuals, this is not okay. It is not fair to taxpayers who fund social security, nor to the vast majority of people who claim only the benefits to which they are entitled. In my job, when money is as tight as it is now, I want every penny available for social security to go to the people who need it most.

This Government are determined to tackle the issue head-on with a Bill that will provide the right tools to protect public money and fight modern fraud, coupled with the right safeguards. The Bill is tough on those who commit fraud against our public services or our welfare state. In doing so, it gives reassurance to taxpayers. One of the side effects is that it will be helpful to DWP claimants who make genuine mistakes, by helping to spot errors earlier so they can avoid getting into lots of debt.

I thought the point made by the noble Baroness, Lady Spielman, about reciprocity was there. If people do not have confidence in our welfare state and the underpinning mutual shared obligations, that challenges our ability to maintain confidence and carry on supporting people in the future. We need to get this right, but we do not need to demonise people to do that. We just need to make it clear that people should get what they are entitled to, and, if they are not getting that, we should address it.

We believe this Bill strikes the right balance, giving the Government new powers proportionate to the problem we are tackling while ensuring that those powers are wrapped around with effective safeguards and protections to give confidence to Parliament and the country. Having said that, and having listened to the debate, I recognise that it is just possible that not everybody agrees with us—or, at least, not yet. We have some way to go. I have every confidence that, once I have fully explained this, there will be unanimity across the House—or near-unanimity at least, being a realist.

Having listened to the debate, it seems to me that there are a number of challenges. First, I offer a couple of truisms. There is no silver bullet to fraud. If there were one single thing to do, the previous Government would have tackled this, or some other Government would have done it. Tackling fraud is an accretion of a series of small decisions which, between them, add up to make a difference. Therefore, this Bill does what it does and does not do other things: it does not tackle bank robbers or tax evasion. It is a contribution, and I think it is an appropriate one.

Secondly, we have to be a bit careful that the best is not the enemy of the good. What is in front of us is action that this Government will take that has not been done before, and I commend it to the House. The challenges that we have seem to come in three broad categories: we are not going far enough, we are going too far, or there are some challenges in the way that we are doing this. I will briefly look at each in turn.

I start with the challenges that we are not going far enough, which have come from a number of noble Lords. The noble Baroness, Lady Stedman-Scott, and I have great respect for one another, but I say very gently that some of the critiques she has made of the Bill strike me as a little ironic, given that the last Government were in for 14 years and had all that time to take action. What did we get? We got one predecessor of one of these measures, which was put in at the fag end of the last Government and dropped into the other place after Committee, with none of the information that the noble Baroness is demanding from me—nothing at all, not even a requirement to produce a code of practice, never mind actually producing one, and absolutely none of the safeguards or protections. Now she is in opposition, I fully respect that it is the job of the Opposition to demand things of the Government, and she does a fine job of doing that. She also will not mind if, in turn, I occasionally throw back at her what her own Government failed to do. In this area, I think we are doing rather better.

Having got that off my chest, let us move on. It is worth saying that this Government are actually doing something. We committed to the biggest-ever savings package on fraud, error and debt at the Autumn Budget. Along with the Spring Statement, DWP fraud and error measures are estimated to achieve £9.6 billion of savings by 2029-30, of which up to £1.5 billion will be generated by this Bill. So this Bill is not all that we are doing, but it is an important thing that we are doing.

The noble Baroness, Lady Stedman-Scott, asked about cost. In the end, the costs of DWP working through these measures will be dependent on the munificence of the Treasury at the spending review, which I am not allowed to pre-empt. The impact assessment sets out our estimate and shows that around four times the benefit of every pound of our departmental spending will come back on scored measures to 2029-30.

On not doing enough, the noble Baroness asked about “sickfluencers”. She is right—it is the view of this department that we have the powers to deal with these crimes at the moment. We think the Bill will help the PSFA to do that at the same time. But, if she has ideas about other ways in which that could happen, I look forward to hearing them, along with her many other ideas for tackling fraud, which I have no doubt Committee will give us every opportunity to discuss.

While I am on the point, the noble Baronesses, Lady Kramer and Lady Stedman-Scott raised the question of whistleblowing. We absolutely agree; we want people to pass on information about fraudsters who are taking from our public services. We are open to keep looking at the best way to do that. We are working with partners such as Action Fraud to make it simple and easy for the public.

In the case of DWP, benefit fraud can be reported by the public online, by phone or by post—and, trust me, it is. But also, DWP staff have clear channels to report. On top of that, the PSFA will look into the possibility of being listed by the Department for Business and Trade as a body with which individuals can raise concerns around public sector fraud. That will help on that side.

While we are on the PSFA, concerns were raised by the noble Baroness, Lady Finn, the noble and learned Lord, Lord Garnier, and others about whether it is doing enough and about the scale. The PSFA’s enforcement unit is relatively new in what it does. The noble Baroness, Lady Finn, was a little a little bit harsh on test and learn. When the enforcement unit is as new as it is and will only with the passage of the Bill get the powers it needs to do any of these things, surely testing and learning is the right thing to do. If it can demonstrate clearly that results come from that, the possibility for scaling will be significant. I promise I am not making any assumptions of the Treasury.

The noble and learned Lord, Lord Garnier, asked whether the Government audit the work of the PSFA and whether the powers in the Bill will add anything. The PSFA publishes annual reports and has benefits audited by the Government Internal Audit Agency. Examples were given in my noble friend’s opening speech of where the PSFA currently cannot make the desired progress because it has not got the powers it needs. The Bill will give them to it.

That is, briefly, the case for not going far enough. Let us now do the going too far case. A number of noble Lords, including the noble Baroness, Lady Fox, to a degree, the noble and learned Lord, Lord Garnier, my noble friends Lord Davies and Lord Sikka, and the noble Lord, Lord Vaux, are concerned about possible infringements on the right to privacy or other aspects of the reach of the Bill. I am grateful to the noble Lord, Lord Vaux, for acknowledging the improvements made by the Bill. I raised a number of reservations when the last Government introduced their third-party data measure, because I felt that the powers were simply not proportionate and that there were not enough safeguards around them.

While I am here, I say to my noble friend Lord Davies that the fact that that we provide safeguards does not mean the powers are wrong. That is what safeguards are for. There are safeguards in all aspects of life. I will come back to that. It means that we want to be transparent and show people that powers the state is taking are used appropriately. That is what they are for. The noble Lord explained the limitations.

We are now limiting the benefits in scope. For all the measures there will be clear limits about what information can be requested, for what purpose, and how the PSFA and DWP will use it. That is all new, and the Bill introduces considerable oversight and reporting requirements.

I believe the Bill strikes the right balance and, in answer to my noble friend Lord Sikka, I am confident that it is complying with the Government’s duties under the ECHR. The Government’s detailed analysis on compatibility is set out in the published ECHR memorandum.

I need to take on a couple of noble Lords who have suggested that this is a sort of broad trawling expedition. It has been described as DWP going out there and trying to have access to everybody’s bank accounts—suspicion-snooping. That is a simple misunderstanding of the nature of the powers. Let me try to explain why. DWP will not be given access to people’s bank accounts by this measure, which is about banks being asked to examine their own data, which they already have and can already look at. They have been asked to provide DWP with the minimum amount of information necessary to highlight whether there is a possibility that someone may not be meeting a specific eligibility rule for a specific benefit. At the point the information is shared with DWP, no one is suspected of having done anything wrong. The presumption of innocence is still there.

Workers (Economic Affairs Committee Report)

Baroness Kramer Excerpts

Thursday 8th February 2024 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I was privileged to be part of the committee that delivered this report, serving under the noble Lord, Lord Bridges, who has so effectively presented the conclusions in our report and given an update based on the additional data that has become available. I am probably rather redundant in this debate, but that has never stopped me before and I am afraid it will not do so today.

Economic activity matters to economic growth—the noble Lord, Lord Griffiths, rehearsed this issue well—so it was not great news when on Monday the ONS revised its figures for the three months to November 2023, showing economic inactivity at 21.9% rather than 20.8%. I accept, as the noble Lords, Lord Bridges and Lord Willetts, the noble Baroness, Lady Noakes, and others have pointed out, that the ONS is finding it extremely difficult to get sound survey statistics in this changing labour market. On its behalf, I point out that it is not alone; the FT ran an article last week entitled “Guess the US job numbers”. This is really difficult, and we must accept that we will never get pure statistics, but our goal must be to get enough to drive us in the right direction.

It is clear from all the numbers we have that Covid left a different impact in the UK from other developed countries, as the noble Lords, Lord Skidelsky, Lord Turnbull and Lord Bilimoria, pointed out. Other countries found that economic inactivity during the Covid period recovered post Covid, but we have found the reverse. If anything, it has intensified. It is important to say that, when we began our report, we honestly did not expect to find that early retirement among the 50 to 64 year-old cohort would be such a powerful factor in economic inactivity. If anything, we assumed when we began that a post-Covid rise in sickness and long NHS waiting lists would be the cause. They are important parts of the problem, but our report clearly demonstrates that increased ill health, as others have said, typically came after retirement rather than causing it.

The noble Lord, Lord Skidelsky, caught this rather well. The scale of the significant lifestyle change that we identified, which caught me unawares, is still in many ways a mystery. We have heard a number of potential answers to that question today. The noble Lord, Lord Hendy, talked about terms and conditions and the noble Lord, Lord Skidelsky, about people just not finding their work enjoyable. The noble Viscount, Lord Chandos, and others also addressed this and the noble Lord, Lord de Clifford, gave us an example from veterinary services of why it is so hard to retain people in work, which must be part of their choosing early retirement. We almost have a vicious circle; as people fall out of the workforce, the stress that falls on those who remain is higher than ever. I very much hope the Minister will explore this and that the Government will do significantly more work in this area. I know that the OBR is treating this cohort of 50 to 64 year-olds retiring early as a temporary change; I am less sure, but that is another reason why we need to explore this.

However, I do not think that recognising early retirement negates the urgency of dealing with the NHS backlog. Virtually every speaker made the point that this is a critical area on which we must focus. If people in the 50 to 64 retired cohort become and remain ill, any chance that they will rejoin the workforce is pretty much lost, no matter what support and incentives are on offer. Yesterday’s ONS figures suggesting that some 2 million people in work are underperforming because of sickness underscore the issue. There was a further warning in more recent evidence given to the Economic Affairs Committee, on a different issue, by Richard Hughes, chair of the OBR:

“People used to be getting healthier as they aged, but the data has been more disappointing recently, in the sense that you are getting more years of unhealthy life rather than more years of healthy life”.


We have to find a way to change that, for many reasons, including the workforce. I see no way other than a significant investment in reform to increase services and deal with both prevention and treatment. The noble Lord, Lord Layard, underscored the importance of ensuring that mental health is not neglected in that focus on reforming health and investing in improved health.

In undertaking this report, we were beginning to focus on a much more fundamental problem which may not have been as fully discussed in this debate: the changing ratio between our working-age population in the UK and our dependant population. Richard Hughes said:

“The underlying demographics remain pretty stark, in the sense that, in the 1970s, we had about two people in work for every one person in retirement. At the moment, we have about one and a half people in work for every one person in retirement. By the time we get out to 2070, we have only one person in work for every one person in retirement”.


This is despite expected future increases in the state pension age. The noble Lord, Lord Davies, has a point: for some jobs it is easy to think of asking people to work longer, but for many it would not be appropriate.

There was a time, perhaps until 2018 or 2019—and the noble Baroness, Lady Noakes, made this point—that bringing women into the workforce and raising the state pension age and free movement sustained our working-age population. The first two have largely run their course, and, as we know, free movement has ended. This is not a debate on immigration or Brexit, but I am quite taken with the fact that, according to the OBR, historic data showed EU migrants as having higher employment rates and making fewer demands on public services than the general population, while migrants under the current system are now forecast to mirror the population. This highlights that we need a proper immigration debate in which workforce issues are properly included, and the noble Lord, Lord Bilimoria, underscored that point.

This is also not a debate on productivity, but obviously increases in productivity can substitute for workforce. The noble Lord, Lord Willetts, talked about technical and educational qualifications, and indeed childcare, as playing an important part in releasing people into the workforce. Better training, better use of the apprenticeship levy and return to work schemes are all important, but we should not fool ourselves that these will provide us with a sufficient number of people to make up the workforce shortfall in the demographics we are looking at.

Like a lot of people, I very much hope that Al will give us a productivity revolution and, essentially, resolve our demographic shortfall. One hears this spoken of widely. The right reverend Prelate the Bishop of Bristol made the point that AI comes with many issues, complications and moral questions. I would add another word of caution around the simple assumption that AI will drive forward this kind of change in productivity. The House will remember that, many years ago, we discussed the notion that first came the agricultural revolution, which drove up productivity, and then the Industrial Revolution drove it up, and then in the 1990s we expected that the digital revolution would follow the same pattern. But in the UK at least—quite a number of noble Lords have talked about our weak productivity performance—the digital revolution changed the way we work but led to no rise in our productivity.

I am desperately concerned that, in looking at this issue—the noble Lord, Lord Londesborough, gave us the statistics on how productivity has been scraping along, barely above zero—we recognise that, if we are going to use AI as the offset, we need a proper strategy in place to be able to do so. It has got to be comprehensive and challenging, and not the bitty and scattered arrangements or pieces of policy that we have today.

I close by picking up the point made by the noble Baroness, Lady Noakes, and the noble Lord, Lord Davies. Frankly, the Government’s reply to the report is pretty complacent and largely misses the point. It does not recognise the scale of the issue that we are dealing with. Yes, we need better data, but we also need the Government to understand that there are real and fundamental issues around the size of the workforce and our demographic profile. These issues have to be thought through and encompassed in every plan that we have for the economy, or else we will not see the economic growth that we want to see to sustain our population and our quality of life.

Cost of Living Support

Baroness Kramer Excerpts

Thursday 22nd June 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

I hope I can help the noble Lord. As I have already mentioned, inflation really is one of the Prime Minister’s key priorities. He has made it clear, as we have, that reducing inflation is absolutely key. He also speaks about growth, while making it clear that growth comes as a secondary item to inflation. However, it is also important that the economy grows. In previous answers, I have made it clear that we are doing as much as we possibly can to look at what more banks can do to be helpful. One thing which I have not said is that we are working closely with the Bank of England, while making it clear that the Bank is independent in also working as hard as it is in the fight to bring down inflation. It is not just us in the UK; as others have said, there are similar issues in other countries, particularly in Europe. However, I realise that in the UK we still have a lot of work to do.

[Baroness Kramer (LD)]

My Lords, the Minister looks to a negotiation with the banks to provide better terms to mortgage holders who are under pressure. He must surely accept that the banks will offer those terms to those they deem their most attractive customers, not to low-income house owners, who cannot take the required flexibility of interest-only or a long extension to their mortgage’s life. That is the group, surely, which needs to be served by an emergency mortgage fund to rescue this situation. Surely he could find the money to support those who will see their mortgages rise by more than 10% of their disposable income and take the money back from the banks, which are seeing bumper profits off the back of rising interest rates.

[Viscount Younger of Leckie (Con)]

I certainly note what the noble Baroness has said. I have mentioned already that the Chancellor is meeting the banks. I do not want to pre-empt the outcome of those discussions. What is important are the initiatives we have taken already to help people. There is support for people who have mortgages. We have increased the generosity and availability of the support for mortgage interest scheme, meaning that those on universal credit can apply for a loan to help cover interest repayments after three months rather than nine and can now receive support while working.

A new Financial Conduct Authority customer duty, coming into effect next month, will ensure that firms put customers first, delivering fair value and ensuring good outcomes for those in financial difficulty. The noble Baroness raises a very important point and I hope that further measures can be produced. We await the outcome of discussions.

Pensions: Online Dashboard

Baroness Kramer Excerpts

Tuesday 24th July 2018 Lords Chamber

[Baroness Buscombe]

My Lords, let me first say that the figure of 50 million referred to is an estimate made in 2012 of the number of dormant, not lost, pension pots by 2050. To suggest that 50 million pension pots will be lost unless a pensions dashboard is introduced is wholly inaccurate: I want to make that very clear. We are looking through the whole process and at experience overseas in order to understand more about pensions dashboards. The noble Lord knows that the whole process is very complex. We are working through the options around scheme participation in any potential pensions dashboard. The decision whether to compel participation depends on a number of issues, such as the functionality, delivery model and governance of the dashboard. We will set out the Government’s view in due course.

[Baroness Kramer (LD)]

My Lords, can the Minister address this feet-dragging? George Osborne announced that this project would go ahead in 2016, it was meant to be up and running next year, and Guy Opperman, in his role, constantly says that he is actively supporting it. The industry is—to put it mildly—cross, having done all the work it needs to contribute towards creating a pensions dashboard. It is vital so that savers can make the best investments of their pension money, and it is key to fraud prevention. Both of those are crucial issues. Can the Minister confirm that the rumours that the scheme is in jeopardy are false, and can she please finally give us a timetable?