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

Baroness Sherlock Excerpts

Thursday 3rd September 2020 Grand Committee

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the Minister for her introduction to the order and all noble Lords who have spoken. With apologies for length, I shall read into the record the events that brought us here today, because we have to learn from them.

In 2009, the Labour Government launched the Future Jobs Fund, which created subsidised jobs for 18 to 24 year-olds on benefits to help them avoid the risk of long-term unemployment. Official government evaluation later found this to be a highly effective programme, with participants significantly more likely to get jobs than those who did not get involved.

Sadly, the coalition Government abolished it in 2010 to save money. They also abolished Labour’s New Deal programmes and created the Work Programme. Research later found that the Work Programme was actually less effective than doing nothing, so it was itself abolished in 2015. Part of that programme was a requirement for some claimants to do unpaid work in return for their benefits. Caitlin Reilly, a graduate who had already done a paid work placement at a museum and was volunteering there to boost her chances of getting a permanent job, was told to leave that and undertake a work placement, which turned out to be working without pay in Poundland for five hours a day sweeping floors and stacking shelves. Work experience schemes have their place, but not workfare, whereby claimants are forced to act as free labour, displacing proper jobs. Reilly launched a legal challenge and the case eventually reached the Court of Appeal, which quashed the 2011 regulations on which the scheme depended, a view upheld by the Supreme Court.

Rather than reimburse those who had been unlawfully sanctioned, the Government then repealed the 2011 regulations and introduced the Jobseekers (Back to Work Schemes) Act 2013, which retrospectively made their sanctions legal. It also validated the parallel 2011 regulations. I remember that very well. I remember the 2013 Act being rushed through Parliament—I have been in my job for ever and ever—at breakneck speed, to huge protests from the Constitution Committee and from the House. I remember the Second Reading debate, when the then Minister, the noble Lord, Lord Freud, faced an onslaught of criticism, including from the noble Lord, Lord Pannick, who pointed out that the Bill

“breaches the fundamental constitutional principle that penalties should not be imposed on persons by reason of conduct that was lawful at the time of their action”.—[Official Report, 21/3/13; col. 739.]

Occasionally, all of us in politics need to reflect that when we legislate in haste, we may repent at leisure. Reilly and others went back to court and, in a case that went right up to the Court of Appeal, the 2013 Act was in turn ruled unlawful because it had interfered with ongoing legal proceedings challenging benefits sanctions by retrospectively validating those sanctions.

In 2018, the Government laid a remedial order to fix things. Third time lucky? Alas not. As we have heard, following an intervention by a tribunal judge, that order was itself deemed to be at risk of challenge as it did not cover both sets of 2011 regulations. It was withdrawn, and last September this revised remedial order was laid.

Fourth time lucky, the Government have finally landed in the right place. We welcome this remedial order, which will restore the right to a fair hearing for all affected claimants, but there are some really important questions the Minister needs to answer. I recognise that she was not in post at the time, but the Government need somehow to explain to Parliament what they have learned from this mess.

First, can she remind us what will happen to the individuals affected by the order and how many of them there are? In the Commons, the Minister mentioned 5,000 people. I was not clear whether that is 5,000 people whose benefits were sanctioned and had appealed, and what stage that had got to. How many of those are likely to be recompensed and will DWP proactively try to locate them all?

Secondly, in the seven years it has taken to get this far, what have we learned? The Minister mentioned in her introduction a need to learn lessons about communicating better, but can she tell us whether a full lessons-learned exercise has been done on this case? Have Ministers asked what could have been done to avoid these various breaches of the law happening in the first place? What actions could have resolved it sooner? Have they reviewed whether it was right to spend so much time and public money appealing the decisions all the way, or should they have acknowledged and fixed the mistake earlier? Have they asked what drove the later errors? Was it money? Was it political intransigence or determination?

How does this play in the light of the worrying noises from the top of this Government threatening the whole principle of judicial review, misleadingly presenting it as the courts interfering with Parliament, rather than what it is—the courts upholding the requirement that the Government conduct themselves in accordance with the laws passed by Parliament?

Rather than just digging in and fighting citizens in the courts—including, in this case, by taking away the rights of others to appeal—could DWP better learn what systemic change might be needed to improve the system? What have the Government learned about how they use sanctions and their impact on claimants? I heard the very moving comments from the noble Lord, Lord Forsyth, and the noble Baroness, Lady Bowles, and others. I am very grateful to them and others on the committee for the work they are doing in this area.

We knew the problems back in 2013. At a Second Reading debate, my late and much missed friend Lady Hollis reminded the Minister that the DWP’s own research showed that between half and two-thirds of those sanctioned did not know that it could happen, and when it did, they did not know why. In some cases, because they had other deductions from benefits, they did not even realise that they were being sanctioned, so it obviously had no impact on their jobseeking behaviour. I will not say any more on this, as others have covered it, but I will be very interested in the Minister’s response to that.

That takes me to my final question: what lessons have the Government learned for employment support policy? Do they now value enablement and encouragement over punishment? Will they learn from the past?

Perhaps ironically, we are debating this order the day after the Kickstart Scheme opens to bids—a scheme offering six-month work placements to unemployed 18 to 24 year-olds on benefits. However, the Future Jobs Fund was so successful because the Labour Government got the culture right from the start and because it was collaborative. Will the Government learn lessons from the Future Jobs Fund, and from all the events we have debated today, to ensure both that Kickstart works well and that the DWP is focused less on enforcing conditionality—especially in the middle of a pandemic with enormous fallout for unemployment —and more on supporting people into long-lasting employment? I hope that is a goal we can all share. I look forward to the Minister’s reply.

Pension Schemes Bill [HL]

Baroness Sherlock Excerpts

3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Wednesday 15th July 2020 Lords Chamber

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

My Lords, before we move to the technicalities of closing our debates on the Bill in this House and it moves for consideration in the other place, I want to take a moment to reflect on the Bill and its passage through your Lordships’ House.

This is important legislation that will benefit members of the public and will help people plan for their future. As I said at Second Reading, the Bill will have a far-reaching impact for people saving into pensions for their retirement. It ensures that reckless bosses cannot gamble with people’s savings; it transforms the way people get information about their retirement savings; and it introduces a whole new type of pension to the market.

It is clear from the excellent contributions and speeches made as the Bill progressed through this House that many of your Lordships agreed with its principles. Contributions and questions from all sides have been thorough and searching. I would not have expected anything different.

The Government listened to your Lordships’ arguments and concerns as the Bill progressed and made a number of amendments both in Committee and on Report— 73 in total, which I think you will agree have strengthened the Bill. We recognised the concerns of the DPRRC and this House in respect of delegated powers; we listened to your thoughts about a public dashboard; we introduced measures in respect of climate reporting and the Paris Agreement; and we have responded to the threat of scams by tightening the rules on transfers.

Your Lordships made further amendments to the Bill on Report concerning intergenerational fairness, consumer protection and scheme funding. We will look at these carefully along with the strong arguments made in support of them as the Bill progresses in the other place.

I thank all those who have engaged on the Floor of the House and in the many meetings that we have had outside, which I hope you found helpful. I thank my noble friends Lord Howe and Lady Scott for all the help and support they have given me throughout this process. This was my first Bill, and they have helped enormously to keep me on the straight and narrow. I thank the Whips office, the House staff, my private office, led by Vanessa Drury, and all those involved in helping us through the hybrid proceedings. These have been very testing times for everyone, and the fact that we are here at all bears testimony to the work they have put in.

Finally, I want to thank the Bill team and all the officials across DWP. I thank them for the extensive engagement programme that they helped me with. I thank Jo Gibson, Jane Woolley, Mike Jewell and Debbie Bullen—to name but four—but there are many support people behind them, and I would not want to miss anybody out in trying to name them all. They have put in incredibly long hours to support my noble friends and me during debates, to facilitate briefing meetings, and to provide the updates, letters and briefings that noble Lords have received. They have done this at a time of great uncertainty, with many teams reduced to help support front-line services. I hope that they will manage to get some well-deserved time away over the summer.

On that note, I thank you all again for your patience and support. I beg to move that the Bill do now pass.

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the Minister for those remarks and concur with them. We have agreed on so much about this Bill: we support the new CDC pension schemes; we all want to see financial technology harnessed to benefit consumers and to make the financial markets work more efficiently; and we are keen to work constructively with the Government to bring innovations such as the dashboard to fruition.

Where we have differed is on the extent of the protections needed to mitigate the risk of consumer detriment and poor outcomes. We still believe that the weight of evidence is with our arguments, as are reports from various regulators. I hope that by the time the Bill is debated in another place, the reasoning behind our Report amendments on the head start for the public dashboard, on the risks of dashboard transactions and on questions of fairness will find favour.

The pandemic has pushed many consumers into digital engagement far faster than they may naturally have adapted to it. While that has kept our economy and society functioning, it has also exposed some consumers to greater risk of detriment. We might not see any consequential increase in the number scams until later in the year, but that means that the provisions in this Bill will be timely and welcome. More risks will emerge, including new ones as a result of Covid, so I urge Ministers to keep the House informed as regulators scan the landscape and the Financial Ombudsman monitors new kinds of complaint. Although they are not covered in this Bill, we wait with interest to see how the Government will regulate the newly emerging superfunds, given the economic impact of Covid.

Pensions are very long term, and it will take decades for the full effects of public policy decisions by any Government to be seen. That is why it is so desirable that pensions policy be built on the foundations of political consensus, and it is why I am grateful for the significant concessions that have been given during the passage of this Bill.

I pay tribute to my noble friend Lady Drake, whose expertise and determination underpinned our campaign for the Government to commit to a public dashboard and have it operating from the start. I am grateful for support from across the House for that and for all the shared support for moves to secure commitments on governance, including ensuring that dashboard services will be regulated by the FCA. It was great to see cross-party working on climate issues, led by my noble friend Lady Jones of Whitchurch and the noble Baroness, Lady Hayman, result in an agreed position with government and the first ever reference to climate change in domestic pensions legislation. I am grateful to the Minister for yielding to pressure from many quarters for amendments on transfers and on delegated legislation.

This is a better Bill than the one which entered the House, and I give thanks to all who made that possible. I thank my noble friend Lord McKenzie of Luton, but I am sad that it will be my last time sharing the Front Bench with him. He has given so much to this House and to our country in his decades of public service. I look forward to his continued contributions from the Back Benches.

I am a grateful to Dan Harris of our staff team, who has done sterling work on this Bill and is a joy to work with, as are all my colleagues who joined in during our proceedings. I am grateful to House officials and the broadcast teams. I am very grateful to the Bill team and all the officials who have met us repeatedly and patiently answered our many questions. I am grateful, too, to colleagues across the House for intelligent and thoughtful debates. I am grateful also to the Ministers: to the noble Earl, Lord Howe, for his gentle engagement and to the noble Baroness, Lady Stedman-Scott, for her co-operative spirit and her willingness to engage and to concede. This may have been her first Bill; I am sure that it will not be the last. I look forward to joining in and occasionally doing battle yet again.

We did the Committee stage of this Bill before Covid, crammed into the Moses Room with not a hint of social distancing. We did the Report stage in hybrid mode. To be honest, I will never get to love voting on my phone or get used to making passionate speeches to my iPad, but it has shown that this process can work. We have thoroughly scrutinised a vital and highly technical Bill, and we have made it better than it was. That is the job of the House of Lords in a nutshell. I am so glad we can still do it.

[Lord Sharkey (LD) [V]]

My Lords, I thank the Minister for introducing the very important new amendments concerning transfer rights. In Committee, the noble Baroness, Lady Altmann, and I attempted to do, perhaps rather clumsily, what they do rather elegantly. We live in a time when scams are increasing, people are desperate for any return, online propositions are everywhere and can seem very tempting, and your money—occasionally all your money—is easy and quick to lose. These amendments will not solve those problems, but they will prove a valuable addition to the guidance armoury and to the better protection of consumers, and I welcome them.

My noble friend Lady Janke led the debate from these Benches with real insight and conviction. It is a pity that she cannot be with us today as the Bill concludes its passage through the House. She has asked me to thank, on her behalf, all the Members who have taken part in what has been a constructive and congenial process. She has particularly asked me to congratulate the Minister and her officials on their apparently unlimited patience, their evident willingness to listen and their responsiveness. I join my noble friend Lady Janke in her remarks, especially as concerns the Minister’s patience and forbearance. The Minister’s character determined the character of our discussions. I also thank all Members who joined in those discussions, especially my noble friend Lady Bowles and the noble Baronesses, Lady Drake, Lady Sherlock and Lady Altmann. Their expertise was evident throughout and greatly added to the value of the debate. I believe that, collectively, we have made a good Bill better.

Children Living in Poverty

Baroness Sherlock Excerpts

Wednesday 15th July 2020 Lords Chamber

[Baroness Stedman-Scott]

There is clear evidence of the important role of work in reducing child poverty. I acknowledge that we are in very difficult circumstances, but the Government are doing everything they can to ensure that people can be supported through this difficult time. Huge amounts of support are available. We have a £30 billion plan to support, protect and create jobs, and a £2 billion Kickstart scheme; we are doubling the number of work coaches; there is an expanded youth offer; the work and health programme is being expanded; and we are increasing participation in our sector-based work academies. In addition, there is £150 million to boost the Flexible Support Fund to make sure that people can be given support—and this money will filter into the lives of children.

[Baroness Sherlock (Lab) [V]]

My Lords, the Minister keeps mentioning work, but TUC research found that the number of poor children in working households rose by 38% between 2010 and 2018—and that was before Covid. Yet poverty was mentioned just twice in last week’s summer statement document: in the title of an IMF body and in the list of abbreviations at the end. We keep making suggestions, such as sorting out universal credit, increasing legacy benefits and ending the two-child limit, but they are all rejected. Can the Minister assure the House that the Government are taking working poverty seriously and tell us what their plans are to stop more of our kids growing up scarred by poverty?

[Baroness Stedman-Scott]

I assure the whole House that the Government take in-work poverty really seriously. Our plan is to build an economy that will support work, as we have said many times. Universal credit is designed to help people to move into work faster, although that can be challenging in the current circumstances. We have also set up the In-Work Progression Commission. As I have said before, people put forward ideas all the time and they are taken to the department. I assure the noble Baroness that we are taking this seriously. We might not be answering at the speed that she would like, but we are very genuine and sincere.

Pension Schemes Bill [HL]

Baroness Sherlock Excerpts

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

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

My Lords, like other noble Lords, I appreciate the government amendments to make regulations by the affirmative procedure. Having thanked the Minister for that, I will move on to speak on noble Lords’ amendments.

Amendment 2, in the name of my noble friend Lord Sharkey, would delete reference to negative procedure regulations being used to change the rules around fit and proper persons. It has been laid out how that might change who becomes a fit and proper person. My question is: would it also affect who might not become a fit and proper person and potentially elaborate further if it is found that people are doing things that should disqualify them? I sense that that might be a possibility. Although, under Clause 11(3)(b), regulators can take into account other such matters as they consider appropriate—I presume that that can be in the negative sense as well as the positive—it would be useful to know whether such powers in other areas as well as this are, in general, used. I detect that regulators are often reluctant to go beyond things that they can specifically point to in regulations. If that is the case, maybe the Minister has an excuse to have these powers. That is the area that I am interested in, but it would certainly be a much more significant move for this to be made by the affirmative, rather than the negative, procedure.

The noble Baroness, Lady Altmann, has tabled an amendment about data that I support, but like her I think that it is probably best to have just one debate on data. I will make my intervention on that later.

I also support the intention of Amendment 33 on diversity. I recognise, as the noble Lord, Lord Balfe, did, that it links to the wider issue of how trustees are appointed and where from. Many trustee appointments will link back to present or former workforces and therefore carry through any historical lack of diversity for quite a long time. Despite the fact that there might be costs to professional trustees, I still think that there should be scope to ensure that there are more additional independent external trustees, without necessarily going to people who are so embroiled in the making of regulations. It should be possible to find objective people who are not necessarily charging the equivalent of full professional rates.

Finally, my Amendment 45 is a simple one that says that regulations may not create a regulator. That might not be the intention, but Clause 51(3)(a) says that regulations may

“confer a discretion on a person”.

A discretion to do what: to allow, not allow or approve certain things? What kind of things and what kind of person? That could be wide enough to allow or disallow the doing of things regarded as being a regulator, yet there are none of the constraints in the Bill that would normally appear in such circumstances. I therefore seek some clarification about what “discretion” means and what powers it might conceal or cover.

[Baroness Sherlock (Lab) [V]]

My Lords, I should declare a historical pecuniary interest as a former independent director of the Financial Ombudsman Service. I should also declare that my home is in Durham so I have often visited Barnard Castle, but solely for the purpose of visiting the wonderful Bowes Museum. My eyesight is okay for the moment. I will save my remarks on data issues until a later group, but I will briefly address the other two issues raised by amendments in this group.

On regulations, concerns were expressed on all sides in Committee about the use of Henry VIII powers and the skeleton nature of much of the Bill, especially Part 4, but I am grateful that the Minister has engaged with us throughout this process on these and other issues. I think that it will make for a better Bill in the end.

I am grateful to have had sight of the draft regulations under Part 1, even if I would have preferred to see all the remaining draft regulations before Report. I am very glad to see the government amendments clarifying the scope of some of the regulations and those which make regulations affirmative or confirmatory. If nothing else, it saves me from tabling endless Motions just to ensure adequate scrutiny. However, I will be interested to hear the Minister’s answers to the points raised by the noble Lord, Lord Sharkey, the noble Baroness, Lady Fookes, and the noble Lord, Lord Blencathra, about the retained use of the negative procedure and other matters related to delegated powers.

--- Later in debate ---

[Lord Sharkey [V]]

My Lords, I will restrict my remarks to Amendment 32, which is in my name and the names of the noble Lord, Lord Vaux of Harrowden, and my noble friend Lady Bowles. I thank them for their support. In Committee, we spent a long time discussing intergenerational fairness in CDC schemes. We did this partly because we knew from the Government’s excellent briefing note that concern about intergenerational fairness was raised by many respondents to the consultation and because it seemed clear that the risk to intergenerational fairness was an almost inevitable feature of such schemes.

We pressed the Government to legislate the requirement for intergenerational fairness into the schemes. We knew that the Government themselves were deeply concerned about the issue and seemed to be choosing mechanisms for intergenerational fairness over benefit stability; but as I remarked at the time, it was hard to tell how they might work, since the mechanisms for bringing this about were not yet explicit and no real assessment of effect was possible.

In her response, the Minister made it clear that she shared our commitment to ensuring intergenerational fairness and that the mechanisms for achieving it would be introduced, after extensive consultation, by regulations under Clause 18. This will be long after the Bill has become an Act, and leaves open the question of how we will assess the success or otherwise of these mechanisms. It also leaves open the question of how the assessment of any such mechanisms will be communicated to members and potential members of the scheme.

Our Amendment 32 proposes a way of addressing these issues. It provides that, whenever TPR issues a notice requiring a scheme to submit a supervisory return, the notice must include a requirement that the trustees

“make an assessment of the extent to which the scheme is operating in a manner fair to all members.”

The amendment speaks of fairness. Intergenerational fairness is a critical subset of fairness, but there are other kinds of fairness, too. For example, there is gender fairness, and single versus married status and the fairness implicit in that, or not. The amendment makes no attempt to define fairness; it relies on the trustees to do that, as they should in the normal operation of the scheme. Their definitions and assessments will help members of all classes, and potential members, understand the working of their scheme and the success of the trustees in operating it fairly in the interests of all members.

As I mentioned in Committee, AJ Bell noted that the DWP leaves little doubt that it will not allow schemes to be skewed in favour of one cohort of members over another. I am sure that is the intention, but AJ Bell also noted that fairness could make outcomes in CDCs less predictable and raises the spectre of pension cuts. It goes on to say:

“The DWP itself notes any reductions in benefits will not be well received, and so clear communication of this – not just upfront but on an ongoing basis – will be absolutely essential.”


Our amendment will bring some communication and transparency to the balancing required to produce, and to the consequences of producing, fairness across all member cohorts.

In Committee, the Minister explained how the proposed headroom mechanism for the Royal Mail scheme would be fairer than a capital buffer. All classes of members and potential members of the scheme need to know how well this headroom mechanism or other mechanisms generated by Clause 18 are working. Our amendment will require the trustees to explain these things and to assess their success in managing the scheme fairly for all members.

Given the acknowledged risks to fairness inherent in the scheme, and that Parliament’s opportunity to influence the mechanisms that might arise in regulation will be as small as usual, it is vital that scheme trustees are open and transparent about their success in producing fair outcomes for all members. That is what our amendment would help bring about, and I intend to test the opinion of the House.

[Baroness Sherlock [V]]

My Lords, I say at the outset that Labour supports Part 1 of the Bill and the move to create CMP schemes, provided, of course, that they are not used as a means of downgrading good DB schemes. The two amendments in this group deal with different concerns that have been expressed about CMP schemes. Amendment 32 acknowledges that there may be a divergence of interests between different sets of members in a scheme of this kind. It does not prescribe any particular action but it does require trustees to surface the issue and to assess the extent to which the scheme is fair to all members.

--- Later in debate ---

[Lord Sharkey [V]]

My Lords, I shall speak to Amendments 72 and 74 in this group. Neither amendment in any way alters any of the important climate change amendments in the group, except in one respect: they require the Government to make something happen.

What the amendments would do is very straightforward: they would simply impose a binding legal obligation on the trustees or managers of an occupational pension scheme of a prescribed description with a view to securing effective governance of the scheme with respect to the effects of climate change. They would also impose an obligation to include, in particular, the risks arising from steps taken because of climate change, whether by the Government or otherwise, and opportunities relating to climate change.

All those things are word for word in the Bill except that they are all governed by the word “may”. Our amendments would replace the two references to “may” with “must”. As the Bill stands, the Government are not actually obliged to do any of those things, or indeed anything at all, in this clause. The word “may” in subsections (1) and (2) is permissive, not directive—a point made by my noble friend Lady Bowles and me in Committee.

The Minister kindly wrote to us all in response on 5 March. She confirmed that the Government intend to take action and were wholly committed to legislating for effective governance of occupational pension schemes with respect to climate change. She concluded by saying:

“Changing the legislation to ‘must’ would therefore make no practical difference, because as a Government we are committed to making regulations under new sections 41A, 41B and 41C introduced by the Government’s amendment.”


This argument works both ways, of course. What can be the basis of the Government’s objection to “must” if they are committed to doing it anyway? What possible reservations, hesitations or changes of mind are being contemplated here? What can be wrong with having legal certainty that what has been promised will actually happen?

There is a parallel in this Bill to our discussions on the MaPS pensions dashboard. The Committee asked why the provision for MaPS to provide a public dashboard was only a “may”, not a “must”. In reply, the noble Earl, Lord Howe, confirmed that the Government were absolutely committed to MaPS providing a qualifying dashboard service. Several Members, including the noble Baronesses, Lady Drake and Lady Sherlock, noted that the Government being committed to MaPS producing a dashboard is not the same thing as saying that they will ensure that there is a MaPS dashboard. The noble Baroness, Lady Drake, made the point that a little amendment—“may” to “must”—would capture the Government’s assurances

“so that the next Secretary of State does not change their mind.”—[Official Report, 26/2/20; col. GC 186.]

This argument clearly convinced the Government. They have now introduced their own amendments to make a MaPS dashboard a “must” rather than a “may”. I know that we are all very pleased about that.

Can the Government accept the same logic here? If it was right to change “may” to “must” for a pensions dashboard, why is it not right to do the same thing for climate change? I look forward to the Minister’s eager acceptance of the precedent and these amendments.

[Baroness Sherlock [V]]

My Lords, I am grateful to all noble Lords who raised climate issues in relation to pension schemes during our proceedings, especially those involved in the cross-party talks led by the noble Baroness, Lady Hayman, and my noble friend Lady Jones of Whitchurch. I also thank the Minister for listening and moving on from the broad government amendments brought forward in Committee.

This Bill has been on a journey. When it was first published there was no reference to climate change at all. Indeed, from having been given advice from the Library, I understand that climate change has never been included in domestic pensions legislation before in this country, so we are making history here today.

The Labour Benches had two priorities on this: first, to provide clarity on climate risk by ensuring that the Paris Agreement is referenced; and secondly, to ensure that trustees and managers take international climate treaties into account when making decisions. The word “account” is clearly significant. It recalls the Court of Appeal judgment that found that the Government had failed to take into account the Paris Agreement when permitting the Heathrow expansion. That was a good example of the need to make sure that positive action on the international level to combat climate change is not forgotten when Ministers make domestic policy decisions.

Our priorities are reflected in Amendments 73 and 79, but because we have secured cross-party consensus with the Government, they are also reflected in the government amendments in this group, especially Amendments 75 and 76. I will be interested to hear the Minister’s reply to the questions from the noble Baroness, Lady Hayman, about whether these refer also to the physical impacts of climate change and the impact of steps taken to transition towards a low-carbon economy, and for clarification that Amendment 76 includes the UK’s net-zero target.

However, as my noble friend Lady Jones said, we are only at the beginning of a journey to net zero. Divesting pension funds away from fossil fuels is a big challenge. The Government and the industry need to go further and quicker, with aligning investment strategies with domestic and international targets being the ultimate goal. For this Bill, we have reached a good place with broad cross-party support. I look forward to the Minister’s reply.

--- Later in debate ---

[Baroness Bowles of Berkhamsted [V]]

My Lords, I declare my interests as in the register: I am a non-executive director of London Stock Exchange plc, which has a pension scheme of which I am not a member.

I have signed both amendments, which are about getting priorities right on the matter of how a company uses spare cash and the importance of paying down deficits, especially if it is over too long a time. If there is spare cash around, deficit reduction should rank ahead of share buybacks and be balanced with regards to dividends. Both those issues have already been well elaborated, especially by the noble Baroness, Lady Altmann, and the noble Lord, Lord Vaux.

The amendments would not prohibit either of those eventualities; they would make them notifiable events. The regulator could then exercise discretion about whether there were good reasons; for example, checking that, in the circumstances, the quantum of the dividend was acceptable. I am less certain about good reasons for buybacks, but if there were any, they could be discussed. I therefore support the amendment. To deem it excessively cautious would not be to take it as it is intended. Although we say that the matter would need to be investigated, we would expect the Pensions Regulator to be reasonable in all the circumstances. For example, if everybody had fallen into big deficits, obviously the situation would be different, because of what was going on in the markets, from where a company was being a laggard in making up its deficits. However, we must not forget that if those deficits are not repaid and the company is under stress, it will be the workers and the pensioners who lose out in the end. They cannot always be put at the end of the queue.

[Baroness Sherlock [V]]

My Lords, I am grateful to the noble Lord, Lord Vaux, for returning to this issue. We all know that there are some DB schemes with significant deficits and employers who could be doing more to clear them more quickly. Let us not forget the work done by LCP, which showed many firms paying out dividends 10 to 20 times their pension deficit payments, or the regulator’s annual DB funding statement last year, which raised concern about the disparity between dividend growth and stable deficit repair contributions.

The problem will not disappear. As more DB schemes have closed, they will soon be paying out more in pensioner payments, leaving them less to invest and with a need to de-risk their remaining investments.

The Covid pandemic is going to make things worse. The Pensions Regulator reports that, so far, only around 10% of schemes have agreed a temporary suspension or a reduction in DRCs post Covid, but more trustees and employers are in the process of discussing possible requests to suspend or reduce contributions. We all know that the full force of the economic storm has yet to hit us.

The noble Lord, Lord Vaux, mentioned the no-dividend rules for Covid business loans. The regulator’s Covid-19 guidance on defined benefit scheme funding and investment says that, if trustees face requests to suspend or reduce contributions, then they should seek mitigations. It gives an example, saying:

“All dividends and other forms of shareholder distribution to stop throughout the period of suspension and not to start again until the deferred or suspended contributions have been paid.”


TPR will still require trustees to report agreements to suspend or reduce contributions and provide information on the mitigations.

Ministers say that the regulator can chase employers if resources are taken out that should not be taken, but we know what the danger is if action is taken only after a dividend has been paid out. If the dividends are paid out by a UK employer to an overseas parent, it can be very difficult to get them back. It is entirely possible, in these difficult times, that if a company is in trouble and its parent company is based overseas, there may well be a move to repatriate assets to the home state. These amendments seek to tackle that problem not by stopping dividends or even buybacks where there is a deficit but by making them a notifiable event in certain circumstances.

The noble Lord, Lord Vaux, has softened his amendments, but he has still made a compelling case. Therefore, if the Minister does not want to accept these amendments, can he tell the House how he will ensure that the next BHS or Carillion scandal will not be a company with a foreign parent seeking to repatriate assets before abandoning its obligations to the pension scheme? I look forward to his reply.

[Earl Howe]

My Lords, I am grateful to the noble Lord, Lord Vaux, for tabling these amendments to Clause 109, which brings us back to an issue that we debated at some length in Grand Committee. It would be helpful to consider these amendments together, as they seek to make the declaration of a dividend or share buyback the subject of a notice and accompanying statement to the Pensions Regulator and trustees of the pension scheme. In the case of a share buyback, this notification would be required where the value of the assets of the scheme was less than the amount of the liabilities. In the case of a dividend, notification would be required if the amount of the dividend exceeded the annual deficit repair contribution and the amount of the annual deficit repair contribution was less than a percentage of the scheme’s deficit. That percentage would be specified by the Pensions Regulator.

I understand where the noble Lord is coming from, but I will address his concern with an explanation of Clause 109. The purpose of the clause is to make sure that the Pensions Regulator and trustees of a defined benefit pension scheme have prior knowledge about corporate transactions or events of which they would otherwise have been unaware and that pose a risk to the scheme and ultimately the Pension Protection Fund. The clause would also ensure that the trustees work with employers to mitigate the effect of such risks.

The Pensions Regulator and the trustees of the pension scheme are able to access information about dividends and share buybacks already. There are well-established processes whereby the regulator is able to get the information that it needs on dividends and similar payments as it assesses covenant strength and the ability of the employer to make contributions to deal with any deficit. Adding additional notifications of the kind that the noble Lord is suggesting is unlikely to be of any help. What it would certainly do is put an unnecessary burden on both employers and the regulator.

The regulator simply would not have the resources to deal with these additional notifications. That is not a trivial point: let us remember that it is a risk-based regulator and must focus its resources where it can do most good. We think that this focus is best directed at ensuring that recovery plans are robust. That is the best way to ensure that schemes are treated fairly. It is the strength of the recovery plan that is key here. Of course there will be occasions when dividends are paid without the regulator’s knowledge, but even if the regulator had been able to prevent that from happening, that would not help the scheme. That is because there is no requirement for the sponsoring employer to pay anything into any scheme deficit other than what is set out in the recovery plan.

--- Later in debate ---

[Baroness Janke [V]]

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

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

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

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

[Baroness Sherlock [V]]

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

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

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

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

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

--- Later in debate ---

[Baroness Sherlock [V]]

My Lords, this has been another interesting debate. Before I address the question of the dashboard, I pay tribute to the noble Lord, Lord Young, who has been deploying his considerable stores of intellect and wit as he has politely but determinedly pursued Ministers on the matter of verifying and identity verification. I look forward to hearing the Minister’s response to him yet again.

I am delighted that Ministers have now agreed to ensure that there will be a public dashboard and that it will be available from launch. I welcome the government amendments in this group, but Amendment 63, in my name and that my noble friend Lady Drake and others, aims to push the Government an extra step further: to put in place an essential safeguard that the MaPS public dashboard must have been in operation for a year, and the Secretary of State have laid a report before Parliament on the operation and effectiveness of the service, before commercial dashboards are authorised by the FCA to enter the market.

I am sorry to hear that the noble Baroness, Lady Neville-Rolfe, regards this amendment as inappropriate, and that she somehow seems to think that people were using the Bill as an opportunity to bring in other things. The only reason that we have had to table amendments to place safeguards is because the Government have brought forward proposals without adequate safeguards in the first place. I have certainly never voted while on a garden bench and I have more confidence that my fellow Members of the House of Lords are listening to the arguments and able to make an intelligent judgment. I hope that they will feel able to support us on this amendment, as they did on the last.

I am, however, grateful for the support of the noble Lords, Lord Vaux and Lord Sharkey, the noble Baronesses, Lady Altmann and Lady Janke, and the kind words of the noble Lord, Lord Young of Cookham. The case for this amendment has been made overwhelmingly by my noble friend Lady Drake and other speakers, so I will not rehearse it in detail, but I was struck by her summary of the many complexities and challenges still to be dealt with in the dashboard project. These are building the architecture, sorting out the liability model, deciding how to compensate consumers for a detriment, managing data standards and data-sharing risks, identity verification and security, and behavioural responses. Basically, there is a lot yet to be decided, designed, operationalised and tested. The Government’s plan is to do all this with a public dashboard and commercial dashboards running alongside each other from the launch. It is our contention that that simply unnecessarily increases the risk.

--- Later in debate ---

[Lord Sharkey [V]]

My Lords, I strongly support my noble friend’s analysis of the one-size-fits-all regulatory threat to open schemes. I also strongly support the proposed remedy, which would ensure proper consideration of the essential differences between open and closed schemes, is proportionate and is not unduly prescriptive. I hope the Minister will respond positively.

[Baroness Sherlock [V]]

My Lords, we all believe that trustees of DB schemes should have a clearly defined funding and investment strategy for insuring pensions in the long term. However, if that is pursued in a way driven by the need to protect members in closed maturing DB schemes, then schemes with strong covenants open to new entrants risk being swept up in an approach that is wrong for them. As closed DB schemes increasingly mature, the regulator will expect them to de-risk and reduce their deficits. However, if that approach is applied in a blanket form it will force some open schemes to de-risk prematurely, putting pressure on employers and, in the railway scheme with its shared-cost basis, on employees too. Given all the concerns expressed, will the Minister accept this amendment?

[Earl Howe]

My Lords, I am grateful to the noble Baroness, Lady Bowles, for her amendment, which touches on a number of important factors to be considered in the development of secondary legislation, including the factors that it lists. I say immediately that I agree that these are all important factors to take into account when developing secondary legislation for defined benefit scheme funding. However, we do not need an amendment to do that. The amendment includes factors that are all taken into consideration during the whole process of framing policy, legislation and guidance.

One of the greatest strengths of our scheme-funding regime is that it operates on a scheme-by-scheme basis because every scheme is different, and it would be unhelpful and inflexible to treat them all the same. The measures in the Bill build on that approach, as will the secondary legislation. The existing scheme-funding legislation has been drafted to ensure that it is flexible enough to apply to all types of defined benefit scheme—for example, whether open or closed. Equally, the scheme-funding measures in the Bill are flexible enough to apply to all types of defined benefit scheme.

In the protecting defined benefits White Paper we were clear that there are a number of examples for suitable long-term objectives and that running on with employer support would be a reasonable course of action for an open scheme. Whether or not the strategy for ensuring that benefits can be provided in the long term is suitable will depend on the specific context of a particular scheme. Additionally, we entirely accept that schemes with different liquidity profiles and maturity will be able to take different trajectories. This is, and will remain, fundamental to the scheme-specific approach. So I assure the noble Baroness and the House that any regulations will also be formulated with considerations such as those outlined in the amendment in mind, where appropriate.

The big danger with an amendment of this kind is that it creates inflexibility. It remains our aim that the scheme-funding measures in the Bill do not change existing flexibilities but, rather, seek to make best practice universal and ensure that all schemes are planning for the long term. It is good practice for all schemes, including open schemes, to set a funding and investment strategy.

My noble friend Lord Young asked whether I could commit to a meeting along with officials to discuss these issues. Yes, I am happy to do that, and if schemes have concerns with what TPR is proposing they can engage with the current consultation. The Pension Regulator’s current consultation on the defined benefits funding code includes a twin-track compliance process that takes account of scheme and employer circumstances. Indeed, the current consultation has a full chapter on open schemes, and I encourage anyone interested to contribute their views.

Regulation-making powers exist precisely to allow the system to be calibrated effectively to ensure that this balance is struck. While the noble Baroness’s amendment reflects a number of factors that are considered while developing policy, we do not need to specify those in primary legislation and indeed, as I hope I have indicated, it would be unhelpful to do so. We need to leave room for the flexibility that I have emphasised; we must leave enough flexibility in the system to allow it to react effectively to future changes. Indeed, in the light of the current social and economic climate, it is very clear that the economic shape of the future is unknowable.

I hope that the noble Baroness will recognise from what I have said that the Government’s approach is fair and proportionate and that she will accept my assurance that appropriate flexibilities are, and will continue to be put, in place. On that basis I respectfully urge her, and urge her with some emphasis, to withdraw the amendment.

Universal Credit: Court of Appeal Judgment

Baroness Sherlock Excerpts

Monday 29th June 2020 Lords Chamber

[Baroness Sherlock (Lab) [V]]

My Lords, universal credit works on fixed assessment periods. But if, like NHS workers, you get paid at the end of the month, you can find two pay days falling in one universal credit period. The system then assumes that you have had a 100% pay rise and slashes your benefit, or even stops it altogether, thinking that you are now too rich to need it. We have raised this with Ministers repeatedly, but to no avail. It should not take four single mums going all the way to the Court of Appeal to have this obviously daft policy declared irrational. How will the Government find and compensate all those who have lost out? When will the system be changed to stop this happening in future?

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

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

Covid-19: Child Poverty

Baroness Sherlock Excerpts

Monday 15th June 2020 Lords Chamber

[Baroness Stedman-Scott [V]]

I completely understand the point the noble Baroness is making. To answer her question, I will need to go away, get the facts and write to her.

[Baroness Sherlock (Lab) [V]]

My Lords, as well as the Social Mobility Commission, the Minister could have cited the IPPR calculations that the pandemic could put 200,000 more children in poverty this year, the Trussell Trust figures showing the numbers of families with kids needing emergency food parcels twice as high as this time last year, or even the powerful open letter from Marcus Rashford today highlighting child hunger. I am sure the Minister is doing her best, but if the Government will not buy our proposals to suspend the two-child limit and the benefit cap, what is the Government’s alternative to stop more kids in Britain going hungry?

[Baroness Stedman-Scott [V]]

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

Universal Credit

Baroness Sherlock Excerpts

Tuesday 2nd June 2020 Lords Chamber

Asked by

[Baroness Sherlock]

What steps they are taking to remove the five week wait for Universal Credit payments.

The Question was considered in a Virtual Proceeding via video call.

--- Later in debate ---

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

The universal credit assessment period and payment structure are fundamental parts of its design. An assessment period must run its course, which includes a feed of earnings data from HMRC, before an award reflecting actual household circumstances can be calculated. This can be achieved only by having a model based on paying in arrears, and we have no plans to change that.

[Baroness Sherlock (Lab)]

I thank the Minister for that Answer. There have been 2.8 million claimants for universal credit since lockdown, and I fear many more will come. They are all being hit by the five-week wait. The Resolution Foundation found that on average, people going on to universal credit see their disposable income almost halved. All Ministers will offer is an advance, but that pushes people into debt and asks them to live on less than universal credit for a whole year to repay the debt. The Government have steadfastly resisted a deluge of calls from across the board to abolish the five-week wait or at least to turn advances into grants that do not have to be repaid. Why will they not do it?

[Baroness Stedman-Scott]

Non-repayable advances cannot be implemented without significant development of the universal credit system. No one has to wait five weeks. Advances are available urgently. The repayment schedule is to be extended to 24 months in 2021. Repayment can be delayed by three months in certain circumstances, and we removed the seven-day waiting period. This is all backed up by support from work coaches.

Unemployment: Support

Baroness Sherlock Excerpts

Thursday 21st May 2020 Lords Chamber

Asked by

[Baroness Sherlock]

To ask Her Majesty’s Government what steps they are taking to provide additional support to the increasing number of people claiming benefits for unemployment.

The Question was considered in a Virtual Proceeding via video call.

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

Without wishing to denigrate the size of the issue that we are facing, I make the point that although we have 2 million new claims to universal credit, this does not equate to the number of people who are becoming unemployed. Some are claiming because they are on part-time hours or their pay has decreased. Government employment Ministers are engaging with all government departments, businesses, stakeholders and front-line staff, to hear their views, learn from them, listen to ideas and make sure that we can provide the best possible support in this difficult time. I can assure all noble Lords that much is going on across government and that, in time, we will update the House with our progress.

[Baroness Sherlock (Lab)]

My Lords, those 2 million claims are up 856,000 in a month, and with one-quarter of the workforce on furlough this could get a lot worse soon. I welcome the changes that the Government have made but they do not match the scale of the crisis. People are losing jobs and hours but finding that the standard rate of universal credit is only £94 a week and the JSA just £74. When will the Government remove the savings threshold for universal credit and level up legacy benefits? Crucially, what is their plan to stop rising unemployment leading to home repossessions and widespread poverty?

[Baroness Stedman-Scott]

I am unaware of any plans to change the savings threshold at present, nor indeed to level up legacy benefits. The noble Baroness is right to keep us focused on the potential size of the problem that could be coming down the road, and I assure the House that we are closely monitoring the evolving labour market and the public health situation to identify and implement the most effective way to help people to stay in work and stay close to work.

Automatic Enrolment (Offshore Employment) (Amendment) Order 2020

Baroness Sherlock Excerpts

Tuesday 19th May 2020 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing these orders, and thank all noble Lords who have spoken.

I was delighted to hear the noble Baroness, Lady Anelay, mention the Mercy Ships, and the noble Baroness, Lady Fookes, talk about the important work of the Mission to Seafarers. Indeed, it has been a nice joint meeting of two clubs: those with an interest in maritime and offshore matters and those of us who dabble in and around the world of pensions. Let us come together again at some point and have another conversation.

I am also grateful for a history lesson from my noble friends Lord Blunkett, Lord McKenzie and Lord Hain, who gave us their insights into the history of this policy. As always, I am grateful to my noble friend Lady Drake for her clear analysis and for her original work on the Pensions Commission, which was so crucial.

It is clear that this crisis will have significant implications for pensions and future generations of pensioners. Pension funds face huge challenges. Today’s statistics on unemployment and benefit claims show the scale of the crisis facing today’s workers, many of whom are struggling today, even before saving for tomorrow. A report by the Resolution Foundation, as well as highlighting the lost generation of young workers, painted a challenging picture for a cohort of workers in their early 60s. I am with my noble friend Lady Drake, and other noble Lords. It is vital that Ministers do not weaken their commitment to auto-enrolment during this pandemic and that there is a focus on rebuilding pensions in the Government’s economic plan.

As my noble friend Lady Kennedy of Cradley said, auto-enrolment was a landmark achievement of the Labour Government. Although we legislated for it, the continuity of policy that has brought us to this point is welcome. Labour has consistently supported action to ensure that the coverage of the scheme is as wide as possible, so the Minister will not be surprised to hear that we support these orders. As noble Lords have heard, these instruments confirm the decision to include seafarers and offshore workers within the scope of auto-enrolment. Unlike the noble Lord, Lord Blencathra, I am glad to see the end of the sunset provision. Would it not be strange to repeatedly review only the position of seafarers and offshore workers, while maintaining auto-enrolment for all other sectors? I am also pleased that the DWP rejected the arguments to exclude this sector altogether from the auto-enrolment provisions, and its conclusion that “ordinarily working” in the UK remains the right test for eligibility for auto-enrolment for this group, as this captures a greater number of the target population of workers. In doing so, it had to reject the case made by some employers who wanted a looser definition of which workers should be eligible for auto-enrolment. I share the view of my noble friend Lady Drake and others on the vital importance of maintaining the comprehensive reach of auto-enrolment. It is vital that we do not start creating loopholes in the regulatory framework that could be used by those seeking to evade their auto-enrolment duties.

The effectiveness of auto-enrolment in achieving its policy objective of increasing savings is also determined by the opt-out rate. Like my noble friend Lord McKenzie, I would like some clarity from the Minister on how many workers the Government expect to be affected by these orders, and what the opt-out rate for them is likely to be. The impact assessment said that the opt-out rate, which it assumed in assessing costs to be 9%, was in line with the current national average. Does the DWP not know what the opt-out rate is for these sectors? I would be interested to know.

Although these decisions affect only a particular sector, they serve to reinforce the notion that auto-enrolment should achieve a mass pension-saving system through the workplace, with duties extending to all employers with eligible workers. That was how auto-enrolment was conceived and I am glad that the Government are holding to that policy. However, too many workers are still excluded from the eligible population for auto-enrolment. With other noble Lords, I ask the Minister when the Government intend to act on those exclusions. The first of these are the low paid, as raised by my noble friend Lord Foulkes. The auto-enrolment earnings trigger excludes many low-paid workers from saving for their retirement. When will the Government lower the earnings trigger to ensure as many low-paid workers as possible, including those in the maritime industries, can benefit from auto-enrolment?

I would also be interested to hear the Minister’s response to the noble Lord, Lord Wei, who raised the issue of people with multiple jobs. I was not sure whether he was talking about people with multiple sequential jobs—in which case, I guess he was asking about the pensions dashboard—or if, interestingly, he is talking about those with multiple jobs at the same time. Can the Minister confirm that if none of those is above the threshold it means that they do not enter the scheme at all?

The second group, raised by the noble Lord, Lord Hain, and others, is the self-employed. Excluding the self-employed from the benefits of auto-enrolment means that pension saving by self-employed workers is worryingly low. The Minister mentioned that share fishermen are not included in these regulations because they are self-employed. What progress have the Government made on options to remedy this situation, to ensure that share fishermen and other self-employed workers in the maritime industries are saving for their retirement as well?

The third group is the young. The age threshold for auto-enrolment excludes workers aged under 22. When do the Government plan to lower the age threshold to ensure that younger workers are saving into their pensions as soon as they begin working?

We are facing an economic crisis on a scale not seen in my lifetime. The implications will affect the pensioners of today and for generations ahead. Noble Lords have raised a range of important questions. If the Minister cannot answer them all today, will she consider making a Statement to the House about what the Government are doing to protect the pensioners of today and the pensioners and pension funds of tomorrow? That would give all noble Lords a chance to discuss the broader issues in more detail. I look forward to the Minister’s reply.

Universal Credit

Baroness Sherlock Excerpts

Wednesday 13th May 2020 Lords Chamber

[Baroness Stedman-Scott]

The noble Baroness makes an excellent point: these are very difficult times. People are struggling in all sorts of ways, and we are mindful of the impact of mental health issues. I am afraid that I am unable to make any commitments around the points that the noble Baroness made, but I will say that, in these very difficult times, nobody has to wait five weeks. Since 16 March, we have issued 700,000 advances, and the majority have received their money within 72 hours.

[Baroness Sherlock (Lab)]

My Lords, can I bring the Minister back to the point made by my noble friend Lady Lister? The Government’s argument for the benefit cap was that you can always escape it by just going and getting a job or moving to a cheaper house. But that is simply not possible at the moment. The Minister says that the Government are not going to lift the cap. Given the demand from the IFS and over 50 organisations, and given the Commons Library estimates that an extra 18,000 families are being drawn into the benefit cap as a result of the Government’s actions, can she tell the House not merely that they will not do it but why they will not do it?

[Baroness Stedman-Scott]

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