Pension Review: Phase 2

Baroness McIntosh of Pickering Excerpts

Wednesday 18th December 2024 Lords Chamber

[Baroness Sherlock (Lab)]

I think I can agree with the last statement firmly. I will try to avoid being facile and empty of content; I cannot make permanent promises, but I will do my best. I understand the point my noble friend is making, but I can perhaps offer him some reassurance. The pensions review is going to be conducted in two phases, and it matters that they are structured in the right way. The first phase, which was launched by the Chancellor in July, is aiming to boost investment, so it offers a win-win. It will boost investment for the country and provide better saver outcomes, alongside economic growth.

Phase 1 launched two significant consultations: one about DC schemes and the other about the Local Government Pension Scheme. It is right that we focus on delivering the first phase before moving on to phase 2. But the second phase, my noble friend will be glad to know, will focus on pensions adequacy and further measures to improve outcomes for pensioners. I take his point about the need to be clear about what adequacy means, and I will take that back. The scope of the second phase will be announced in due course, but I will take that comment back to my colleagues as that is being developed.

[Baroness McIntosh of Pickering (Con)]

My Lords, will the Minister confirm that the pensions review will cover the ombudsman’s recommendations for WASPI women, on which subject I declare an interest?

[Baroness Sherlock (Lab)]

I fully accept that the noble Baroness may not be alone in this place in that declaration of interest. The ombudsman’s review is something to which the Government have already made their response. It was published yesterday, and I repeated a Statement in the House that was made by my right honourable friend the Secretary of State.

As noble Lords will be aware, the Government looked very carefully at the evidence that was provided to and by the ombudsman, and we concluded that while we accept the specific case of maladministration by allowing a 28-month delay in sending out personalised letters to women born in the 1950s, the Government could not accept that that created the impact the ombudsman had described and therefore could not accept the recommendation on injustice and remedy. I am also very aware of the widespread concern among many women who had hoped to retire at 60 and found that they could not, which is a mixture of the decision back in 1995 to equalise the state pension age and the decision of the coalition Government in 2011 to accelerate those changes. That was not a subject of the ombudsman’s review, and nor is it the subject of the pensions review.

Food Banks

Baroness McIntosh of Pickering Excerpts

Thursday 31st October 2024 Lords Chamber

[Baroness Sherlock (Lab)]

I thank my noble friend for raising this extremely important issue. I join her in paying tribute to the Trussell Trust and to the many community and faith groups that run food banks. I have seen them in churches, mosques and community centres, and it is wonderful that people volunteer. However, like her, I am concerned that they have gone from something at the margins to help someone when they run into trouble, to mass dependence and an integrated part of the system. Something has gone wrong in recent years that we now see 2.3 million people living in households where a food bank was used in the last 12 months. We are committed to ending mass dependence on emergency food banks.

My noble friend talked about families with children. The Secretary of State made this one of her early priorities. She gathered around her a food poverty round table with experts and charities. She has a child poverty strategy, which will be produced in the spring. In the meantime, as a down payment, the Budget yesterday announced additional help for those struggling with debt and for carers. We will offer free breakfast clubs in primary schools. We are getting in and doing things at the start, but above all we need to make sure the system works for families, and we will.

[Baroness McIntosh of Pickering (Con)]

My Lords, does the Minister not share my concern that the need for food banks might actually grow in the coming months? There has been a bad harvest and we produce only 16% of our own fruit and vegetables. Food prices are going up and the Budget yesterday will impact negatively on farmers. What does she propose to do to reduce the dependence on food banks, rather than increase it?

[Baroness Sherlock (Lab)]

My Lords, what we are going to do is to support families. People should be able to support their own families, but research has found that if you look at households where somebody had used a food bank in the previous 12 months, 40% of those people are in jobs. Working people should be able to go to work and bring home enough money to feed themselves and their families so, for a start, the Government have just made a significant announcement about an increase to the national living wage. We have a plan to make sure that work pays so that people get into decent jobs and keep them, bringing home enough money to support their families. In the short term, we will make a real difference: free breakfast clubs in every primary school mean that children will not be hungry there. That helps the children and takes a big pressure off their families.

Pensions Regulator Defined Benefit Funding Code of Practice 2024

Baroness McIntosh of Pickering Excerpts

Monday 21st October 2024 Grand Committee

Finally, what desire do they and the regulator have for flexibility and diversity of investment strategy within open schemes? If they all invest similarly, surely there is a dangerous concentration of risk. We saw some of that in 2022 when low-volatility matching assets turned out to be more volatile than the highest-volatility asset type that one might have thought of. The schemes and, perhaps, the economy suffered huge losses. Do the Government think there is merit in encouraging the code to have a broader opportunity set of risk-taking among different schemes, especially for those that are open or cannot realistically head to buyout in the nearer term, so that there is a different approach to the long-term strategy?

[Baroness McIntosh of Pickering (Con)]

My Lords, I was not intending to speak because this is way out of my comfort zone, but I congratulate the noble Lord, Lord Davies of Brixton, on securing this debate. I spent a year in opposition as a shadow Minister trying to encourage women in particular to enter into a pension scheme. This is a classic example of how fiendishly complicated UK pensions are.

I have a number of questions for the Minister, who is quite an expert in this field having shadowed it for a number of years. I welcome her to her place in this Administration. The Secondary Legislation Scrutiny Committee says in its second report that it remains concerned about the cumulative burden of so much regulation on the schemes. While the Explanatory Memorandum states that there were two waves of consultation, it is still not entirely clear how much support for and understanding of the scheme there is.

However, my main concerns relate to paragraphs 9.3 and 9.4 of the Explanatory Memorandum, which cover the impact assessment and the schemes’ mind-boggling costs. Paragraph 9.3 states:

“Initial implementation costs, including familiarisation, could total around £36.8 million in the first year”


alone; I am not surprised, given how complicated it is. It goes on to say:

“Schemes may then face ongoing administration costs of £5.4 million per annum”.


However, paragraph 9.4 states that there will be

“an estimated increase of around £7.1 billion to around 1200 schemes over the 10-year period”.

Will there be any sort of watch to see whether those figures are final—or, indeed, whether there may be some liquidity in them? They might not represent the final cost going forward but they are eye-watering. It is right to update the code but, in view of the figures, have the Government reached a verdict on what the cumulative burden on the schemes will actually be?

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the noble Lord, Lord Davies. Indeed, I thank all the speakers for the expertise gathered in this Room on what is an unlikely subject for many people.

On the DB funding code, first, with all the expertise that has been expressed—and for those reading Hansard who have no expertise—perhaps I ought to say something basic. For the record, what is a defined benefit pension? It is a type of workplace pension that guarantees you a specific income for life throughout retirement. The amount that it pays out depends on things such as your final salary, your average salary and how long you have been a member of your employer’s scheme. I know that everyone in the Room knows that, but people outside it may not.

The DB code has been many years in the making, as the noble Lord, Lord Davies, said. It sets out in detail how defined benefit pension schemes will have to approach funding in future, including things such as how quickly they must deal with any deficit that may arise. The code was arguably written in an era of deficits, whereas the majority of DB schemes are now in surplus, but I agree that you still need a set of rules for those schemes that are short of funds.

Despite all the worthy speeches, most of the code is uncontroversial, in my view, and has my general support. The response from the industry has been broadly positive; it appears to give trustees and scheme sponsors flexibility while ensuring that they carry out proper risk management as it relates to their pension products. Numerous articles have been written on it; given the length of this debate, I will not go into them in any great detail, but I highlight an article entitled “PwC Comments on The Pensions Regulator’s New Defined Benefit Funding Code of Practice” and an article in Pensions Age Magazine headed “Industry expresses ‘relief’ as TPR confirms final DB Funding Code”. So the industry and commentators have been complimentary in general terms.

However, I wish to raise some issues on which I would appreciate the Minister’s views. First, how far does the code truly accommodate the needs of remaining open DB schemes? This was a big topic of debate in the Lords during the passage of the Pension Schemes Act 2021. Does it allow them to take an appropriate level of investment risk for the long term, rather than having to go for lower-risk assets prematurely? This simply means that they cost more to run, as the noble Baroness, Lady Altmann, said in another way.

Secondly, how far does the code recognise the particular position of charities and other not-for-profit sponsors of pension schemes? Is there a risk of charities being forced to close deficits too quickly and, therefore, having to divert a loss of revenue income into the pension scheme? There would then be a risk of it appearing to donors to those charities that their money is not being used for front-line charitable purposes, thereby weakening the charities’ futures. I would appreciate the Minister’s comments on that.

Finally, I am sure the Minister has read the blog by David Fairs, who worked at the Pensions Regulator. It was headed: “At long last, new regulations fire the starting gun for the new funding regime”. He stresses the challenges and opportunities missed. He queries—and he is an expert—whether the new funding code will make a significant difference. I ask the Minister the same question.

Reducing Parental Conflict

Baroness McIntosh of Pickering Excerpts

Thursday 20th July 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

I think I have already alluded to a number of points of help because, first of all, the reducing parental conflict programme sits within my department. We have the Supporting Families programme, which is moving into the DfE quite shortly, and we have the family hubs. On the noble and learned Baroness’s question, we are working across government on family-focused policies, and it is very important that we continue to do that to provide cohesive answers to these very challenging matters.

[Baroness McIntosh of Pickering (Con)]

My Lords, will my noble friend pay tribute to the work of volunteers who man child contact centres, which permit access to warring parents often in a very tense situation? They do a fantastic job. Will he ensure, through the MoJ, that they are properly funded, whether they are in the public or the private sector?

[Viscount Younger of Leckie (Con)]

Yes. My noble friend makes a very good point about those who are outside the main programmes but set aside their own time to help, often with some extremely challenging matters. That is often within families themselves. The role of grandparents was mentioned. If there are some issues regarding the parents, the grandparents often have a most important role to step in and help in linking in with those who are skilled and trained in these matters.

Food Price Rises: Impact on Low-Income Families

Baroness McIntosh of Pickering Excerpts

Thursday 25th May 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

There were a number of questions there from the noble Baroness. We know that it is tough for households and businesses across the UK at the moment and are doing whatever we can to support them with the cost of living. The noble Baroness will know that £94 billion is earmarked for giving out. On her question about supporting families who cannot afford the rising cost of infant formula, she will know that in cases of difficulty all local authorities should have an emergency formula provision pathway in place. Families can access this by talking to their health visitor or midwife, who can signpost them to local support. For women who cannot or choose not to breastfeed, Healthy Start provides support towards the cost of first-stage infant formula.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the Government on organising the Farm to Fork summit but echo the sentiments of the noble Baroness who asked the Question. Does my noble friend share my concern that farmers are not receiving these increasing costs, which they are covering, of energy prices and food production, added to the shortage of staff? Will the Government use every opportunity to investigate the rising profits that the supermarkets are recording?

[Viscount Younger of Leckie (Con)]

I take note of my noble friend’s point on the Farm to Fork food summit, which allowed the sector to get together, discuss the future, provide further innovative methods on food supply and discuss the current situation. Supermarkets’ profit margins are actually surprisingly low; I have some figures that I can pass on.

Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2021

Baroness McIntosh of Pickering Excerpts

Thursday 25th February 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am delighted to follow the noble Lord, Lord Hain, and thank him for his part in introducing auto-enrolment. I join others in welcoming the order and congratulate the Minister on bringing this forward. With her, I also celebrate what we have achieved so far with the auto-enrolment scheme. I have a couple of questions.

My first concern relates to the impact on small businesses of the increase set out in paragraph 12.2 of the Explanatory Memorandum, which states:

“Due to the changes, private-sector employers will pay an estimated £5 million more in employer pension contributions in 2021/22 than they would have done had the thresholds been uprated in line with earnings.”

Can my noble friend say what the impact of the crisis will be on SMEs? How have the Government borne in mind the impact of Covid-19 on the performance of many companies, particularly small and medium-sized companies, during the ongoing pandemic?

I would also like to raise the plight of women workers, particularly exacerbated in the circumstances of Covid, and their ability to save for pensions. Women are now required to work until 66 years of age, yet the pandemic has removed many of these women from employment opportunities and placed them at greater risk of vulnerability, catching infection and being seriously ill from it due to age. Many may be shielding older or younger relatives and have caring responsibilities. That is one issue facing older women who are not yet of retirement age or who are unable to afford to retire and continue to work, but the job opportunities are not there.

Within this category of women I would like to look at women of all ages, and actually all workers, who may have more than one job. We are told that each job is treated separately for the purposes of auto-enrolment pensions. Some jobs will sign a person up to pay into a pension automatically; others will not. We are told an individual can pay into more than one pension, but charges will apply. It may be that you pay two sets of charges if you have contributions to two separate pensions. Have my noble friend and her department had the opportunity to look at this category of women who are caught out in this regard? It would be ideal if people were in full-time positions, but many do not have the opportunity and have to work part-time in more than one or two positions just to make ends meet. Many in this category, women and men, may be reliant on temporary and zero-hour contracts.

It is notable that the Office for National Statistics confirmed there has been an 11% increase in unemployment in women over the age of 65 who have not chosen to take a pension or perhaps do not have one. I would be delighted if, in response to my remarks and questions, my noble friend could write to me if she is unable to answer them today. I will be supporting the order, but I have these concerns.

Social Security Benefits Up-rating Order 2021

Baroness McIntosh of Pickering Excerpts

Wednesday 10th February 2021 Grand Committee

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am delighted to follow my friend, the noble Baroness, Lady Ritchie. I congratulate my noble friend the Minister on all that her department has achieved, particularly the new uptake of universal credit claimants, for which she is responsible. This has been a mega-task and it has passed smoothly, so congratulations are in order. An extra £2.3 billion on increasing benefit and pension rates is commendable.

I thank my noble friend for bringing these two orders before the Committee. I am anxious for her to respond to matters that were raised at the end of January, when there was a situation relating to a small but defined cohort of women whose state pension records had not been manually updated. These were women born before 6 April 1953 who were not automatically paid their state pension benefit uplift, which was based on their husband’s national insurance contributions. This has caused a lot of concern to the pension sector and I know that the department will seek to resolve it as quickly as possible.

Like other noble Lords, I would like to comment on the point raised by the noble Lord, Lord Foulkes, that only those on pension credit can claim the free television licence. It is a matter of record that the Government made specific provision with the BBC for the continuation of free television licences for all pensioners over the age of 75, irrespective of whether they were in receipt of pension credit. It behoves the department to go back to the BBC and ask what that money, which was allocated for this purpose, is being used for. If it has gone into the general pot and is being used for productions, that is not a good use of the money; it is not what it was specifically allocated for. I hope that my noble friend will use her good offices to look into that matter. Otherwise, I congratulate her on bringing forward these two orders, which I support.

Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment etc.) (EU Exit) Regulations 2020

Baroness McIntosh of Pickering Excerpts

Wednesday 9th December 2020 Grand Committee

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I too welcome the regulations before us and thank my noble friend for moving them so eloquently. If she would permit me, I will put a couple of questions to her.

My noble friend explained the role of the Health and Safety Executive in becoming the regulatory authority for Great Britain under these regulations. We heard this week from my noble friend Lord Goldsmith, in connection with the REACH regulations that we considered in a similar statutory instrument Committee, that the department has recruited only 30 of the 300 staff needed to act to bring in GB REACH under this new regime, albeit that is a separate statutory instrument. Given the enhanced role that the HSE will play in setting up GB REACH, will my noble friend confirm that there will be sufficient staff in the Health and Safety Executive and that it will have sufficient resources to take on this additional role? Presumably it will already have been involved in liaising with ECHA or whichever EU body is concerned with this, but I have grave concerns that we will overtask the Health and Safety Executive with new responsibilities and find that it is understaffed and underresourced. I would be very grateful to have an assurance in that regard.

My next concern relates to paragraph 2.2 of the Explanatory Memorandum, which refers specifically to the fact that the biocidal products regulation

“sets timelines for Member State evaluations, opinion-forming and decision-making.”

It goes on to say that it

“promotes the reduction of animal testing by establishing mandatory data sharing obligations and encouraging the use of alternative testing methods.”

I am fully signed up to and very much support the mandatory data-sharing obligations and the use of alternative testing methods. What checks does my noble friend envisage there will be on these mandatory data-sharing obligations? I presume she will reassure me that we have come a long way from certain shops, which I will not name, that claimed that none of their products were tested on animals, only for us to find out after we had all bought them that in fact they had been. How do we know this data is tested and accurate?

Secondly, I am fully signed up to and would encourage the use of alternative testing methods, but can my noble friend explain what these alternative testing methods are and what regime is in place, and how these are monitored to ensure that they are fit for purpose? Again, this is an area that captures the public mood. The public want to buy products—cosmetics or whatever—that have not been tested on animals. This is something that captures the public imagination, so what alternative testing regime is in place?

Finally, paragraph 2.5 on page 2 of the Explanatory Memorandum to these regulations, to which my noble friend referred in her introduction, talks of

“measures for the contained use of genetically modified micro-organisms with a view to protecting human health and the environment.”

I feel that we still need to know a lot more about, and understand better, the use of GMOs. My question to my noble friend is a simple one. We were covered by the EU regime in this regard, and are now transitioning out and will, after 31 December, have left the European protections that we have previously enjoyed. Will my noble friend give a commitment today that any future use beyond the contained use which we currently understand will be brought forward by legislation—most likely, I presume, secondary legislation? Will she give a commitment that there will be no change to the current contained use, as set out today, without a further chance to have scrutiny of the necessary regulations ?

Having put forward my concerns, I hope that my noble friend will be able to give me the reassurance I am seeking.

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

Baroness McIntosh of Pickering Excerpts

Wednesday 21st October 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I thank my noble friend for bringing forward this statutory instrument. I also congratulate her and the Secretary of State on the quiet way in which they have handled the Covid virus fallout, in particular by adding thousands of those who have lost their jobs on to universal credit. I pay tribute to her and her team in that regard.

I join with my noble friend Lady Altmann in recognising the work and the contribution of the Pension Protection Fund, particularly at this very difficult time. I want very much to lend my support to the regulations before us, extending as they do the provisions to co-operative societies and benefit societies. Perhaps I may put a couple of questions to my noble friend.

I notice that it has not been deemed necessary to prepare an impact assessment when bringing forward these regulations, but as was noted in the House of Commons and as others have mentioned today, there is increasing concern about the resources that will be at the disposal of the PPF. Can my noble friend say what the take-up has been, to date, since these regulations came into effect?

I turn now to the Explanatory Memorandum, in particular Paragraph 7.5. It states:

“Whilst a moratorium is not in itself a procedure for a business to shed its liabilities, it will become the point at which discussions about a restructuring deal begin.”


In my noble friend’s view, who will be best placed to advise co-operative and community benefit societies if they wish to exercise their right to restructure under the provisions of the regulations? Does she share my concern, as well as the increasing unhappiness in the country, about something that perhaps might not occur in this instance but would do so in other cases where restructuring has taken place to try, as she put it, to prevent the unnecessary closure of firms in these circumstances? The big accountancy firms—I shall call them the “Group of Four”—while no doubt playing a great role, are charging huge fees for the privilege of advising these firms, and that very process may actually tip some firms over the edge into administration and closure.

Those are my two questions, but I broadly welcome the chance to debate and support these regulations. I echo how much we owe the Pension Protection Fund for the work that it is doing at this very difficult time. I also pay tribute to my noble friend, her team and the department.

Pension Schemes Bill [HL]

Baroness McIntosh of Pickering Excerpts

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

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord Foulkes. I should say that I grew up near Barnard Castle and it was not notorious at that time.

I echo the tributes that have been paid to my noble friend the Minister. It plays to her strength, charm, innate graciousness and wisdom that she has listened to the concerns expressed at the earlier stages of the Bill. Therefore, I, too, pay tribute to her and thank her most warmly for the work that she and her team have done in this regard.

I also echo the comments about the remaining instruments that will be taken by the negative procedure, particularly where they have an impact and perhaps have to be taken urgently. It is always important to have proper parliamentary scrutiny of these instruments.

For a year—I think at the invitation of my noble friend Lord Blencathra or his successor—I was asked to look at, and shadow, the impact on women’s pensions. During that time, I learned how difficult it is for women to seek advice at the earliest possible stage. I take this opportunity to ask the Minister to reassure the House today that, not just on the face of the Bill but particularly in the regulations that we are empowering under it, trustees, board members and all those concerned, including financial advisers, will be asked to urge women —particularly younger women at the start of their careers—to take advice at the earliest possible opportunity. Never is that more appropriate than with CDC schemes, which are a new form of pension scheme. Echoing the thoughts of my noble friend Lord Holmes of Richmond, I suppose that pensions from defined benefit schemes were deemed to be a sort of deferred income. Now, the situation is completely different with defined contribution schemes and with a generation coming through, many of whom will have student loans to repay and difficulty in entering the workplace at this time.