Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) (No. 2) Order 2023

Baroness Sherlock Excerpts

Wednesday 26th April 2023 Grand Committee

I congratulate the noble Lord, Lord Davies, on this. I echo the words of the noble Baroness, Lady Drake, who knows so much in this area, about a need to be mindful of the longer-term potential risks. I look forward to hearing my noble friend’s response.

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords who have spoken, especially my noble friend Lord Davies of Brixton for giving us this opportunity to reflect on the role and operation of the Pension Protection Fund.

My noble friend Lady Drake was right to remind the Committee of the huge value of the PPF to the thousands of members of DB schemes—both those who benefit directly from the £1 billion-plus of compensation it pays out every year and those who are happily sailing in calm pension waters but benefit from the security of knowing that the lifeboat is there, should they find they need it. Certainly, every day is a school day. I have learned a certain amount of history today, for which I thank noble Lords who have spoken, including the noble Baroness, Lady Altmann, and my noble friends on this side. They reminded me that the PPF was created by the Labour Government to protect the hard-earned pension savings of workers. It is important that we never take it for granted and that we, in our time, do all we can to keep it sustainable.

The Pensions Act 2004 requires the DWP to make an annual order to increase the PPF levy ceiling in line with the growth in earnings. As my noble friend Lord Davies noted, this year we have had two orders, as the first draft omitted the relevant figures in favour of “X”s. I do not want to make life harder for whichever poor person found that they had done that by accident, but I have to note that it is not the first error in recent times that we have had in a DWP order. When I was a non-exec on boards, we were always told that if an error is reported, the question to ask is: is it systemic? Clearly, one error is not systemic, but this is not the first. Can the Minister tell the Committee whether he is confident that his department is sufficiently well resourced with the people whose job it is to draft legislation and make sure that it is checked before it goes out?

The levy ceiling was set in primary legislation to be uprated annually in line with the growth in average weekly earnings, the rationale being that this would allow the increases in the ceiling roughly to track the increases in the pension liabilities of DB schemes, which are, in turn, linked to members’ earnings. In its 30th report, the Secondary Legislation Scrutiny Committee asked whether the policy of annual increase by the growth in earnings is still producing a sensible outcome, or whether it is far outstripping actual usage. It highlighted the gap between the levy ceiling and the actual levy. As we have heard, in 2023-24, the levy will be 16% of the ceiling, compared with 33% in 2022-23 and 43% in 2021-22.

The answer provided to the committee in that 30th report was that

“PPF investment performance has consistently performed ahead of target and combined with the PPF’s levy collection and risk reduction strategies, has resulted in a reserve of £11.7 billion and assets of £39 billion (as of 31 March 2022)”—

as mentioned by my noble friend Lord Davies. It was this which enabled the drop in the levy. The recent PPF funding review concluded that

“the PPF’s financial position has significantly strengthened in recent years, driven principally by strong investment performance, and a changed risk profile. As a result, the PPF is making a step change in its approach and entering a new phase where the focus will shift from building to maintaining its financial resilience”.

As somebody who likes the Janet and John version, I think that means that it has been building up reserves steadily and feels that the time has come to build them up more slowly in future.

The challenge for the PPF is that it has to tack a course between levying enough for its likely needs in the year ahead while ensuring that it is still able to bring in enough additional revenue if it suddenly faces large claims or a significantly riskier environment. Since it can increase the levy by only 25% a year, the decision on the levy can never just be a short-term consideration with a 12-month horizon. Is the Minister confident that the PPF has landed in the sweet spot?

I am also interested to hear the answers to the questions raised by the noble Baroness, Lady Altmann, and my noble friend Lady Drake about the consideration that is being given by the department and the PPF as to whether there is a need for more flexibility in the way that the levy is set and constructed.

Clearly, if the PPF is deemed to have more reserves than it needs, it can do one of two things: reduce the levy or spend more. My noble friend Lord Davies has come down clearly on one side of that, namely that it should choose to spend more. He rightly pointed out that this is a time of very high inflation and, therefore, the impact of the 2.5% cap on indexing is being felt particularly acutely at the moment. Clearly, that has put pressures on all pensioners, including those who rely on PPF payouts. My noble friend’s proposal has attracted support in principle from the committee. The obvious question to the Minister is: has any modelling been done on the cost of removing or raising the cap and, if so, what can he share with us on that—what did it show?

My noble friend Lord Davies also raised two of the questions from the independent review of the PPF. Can the Minister tell me whether the Government have responded to that review? I could not find it, but that may just be because of my search skills. Perhaps he could let us know.

I add another question that had been raised. The costs of administering the PPF are borne by the PPF administration fund and amounted, I gather, to £13.3 million last year. The independent review recommended folding the administration levy into the general PPF levy. Did that proposal find favour?

I am interested to hear the Minister’s take on this delicate balance facing the PPF, especially as it matures. It has been suggested that is in a healthier position than ever, but also that, as more schemes prepare to move into buyouts, the environment could get riskier in future than it has been in the past. It is perhaps time for more of the workings to be made manifest so that there is more clarity for all stakeholders—pension schemes, savers and pensioners—as to the balance of decisions that are being taken. I look forward to hearing the Minister’s reply.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I thank the noble Lord, Lord Davies of Brixton, for providing this opportunity to discuss the Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) (No. 2) Order 2023. This order enables the board of the Pension Protection Fund to raise a pension protection levy that is sufficient to ensure the safe funding of the compensation it provides, while providing reassurance to business that the levy will not be set above a certain amount in any one year.

I thank all noble Lords who have spoken in this short debate. As ever, I am somewhat daunted by the level of expertise, bar none, in this Committee. A good number of questions have been raised and, as ever, I will endeavour to answer them all—mostly at the end of my remarks, just to manage expectations.

I emphasise the Government’s continued commitment to supporting pensioners and protecting their hard-earned retirement savings. Ensuring that those who have worked hard all their lives receive a retirement income that provides them with dignity and financial security is one of our core objectives, and so it should be. We recognise that recent increases in the cost of living have placed particular pressure on pensioners’ household budgets, so we are taking action to target support specifically at pensioners. Around 12 million pensioners in Great Britain will benefit from the 10.1% increase to their state pensions from this month, fulfilling the Government’s manifesto commitment to apply the triple lock. More than 8 million pensioner households across the UK will receive an additional £300 cost of living payment this winter. To aid the most vulnerable, the pension credit standard minimum guarantee has also been increased by 10.1%.

As the Committee will know, combating inflation is one of the Government’s top priorities. Forecasts indicate that inflation is still likely to fall sharply by the end of 2023, in line with the Prime Minister’s pledge to reduce it by half by the end of the year.

I will return to the Pension Protection Fund in a moment, but first I will take a step back to consider the wider context of the schemes it protects. I pay tribute to the noble Lord, Lord Davies, for all that he has done; I was interested, pleased and perhaps not surprised that he had such a hand in the naming and setting up of the PPF—I am not sure of the precise date—back in the 1990s. With around £1.7 trillion of assets over 5,000 schemes and supporting nearly 10 million members as of March 2022, the defined benefit sector is critical for the UK population.

Set against this backdrop, the PPF’s £39 billion in assets under management as of March 2022, including £11.7 billion in reserves, certainly seem proportionate to the scale of its task. As of March 2022, since its inception in 2005 the scheme has stepped in to protect close to 300,000 members who might otherwise have received a greatly reduced retirement income. The noble Baronesses, Lady Drake and Lady Sherlock, referred to the success of this.

Despite the strength of its financial position, the PPF continues to face risks, the biggest being future claims for compensation and increased longevity. It uses its stochastic modelling tool, the “long-term risk model”, to help determine the funding it requires to protect against these future risks. Like other major financial institutions, the PPF protects against risk by holding reserves. The size of its reserve should therefore provide reassurance not only to existing members of the PPF but to members of all eligible pension schemes.

The noble Lord, Lord Davies, asked about the Pension Protection Fund’s reserve of £11.7 billion and asked whether that could be shared with its members—I think that was the gist of his question. It enables the Pension Protection Fund to protect financial security for current and future members. As I said, despite the strength of its financial position, the PPF continues to face a number of risks, the biggest being future claims to compensation and increased longevity, so there is a balance that I am sure the noble Lord could tell me much about.

The compensation provided by the PPF makes it a critical partner in delivering on the Government’s objective of ensuring financial security for pensioners. The PPF provides a crucial safety net to members of eligible pension schemes who are at risk of losing their pensions because of the insolvency of their employer. This safety net could not be more important in these challenging times.

I reiterate, however, that the Pension Protection Fund is therefore a compensation scheme; I know that my noble friend Lady Altmann defined it as an insurance scheme, which is fair enough. As such, it seeks not to replicate the benefits of underfunded pension schemes but rather to ensure that members are compensated fairly and sustainably. A balance must be struck between the interests of those who receive compensation and the levy payers who fund it. It is only by striking this delicate balance, perhaps, that the long-term stability of the PPF can be ensured.

Heritage Railways and Tramways (Voluntary Work) Bill [HL]

Baroness Sherlock Excerpts

3rd reading
Friday 21st April 2023 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, I did not speak at Second Reading, but I declare an interest as president of the Steam Boat Association. In that respect, I intervene briefly to pay tribute to the noble Lord, Lord Faulkner, for the wonderful work he has done. We have found common cause in trying to maintain coal for our respective interests in steamboats and railways.

This is an important Bill. I do not know what the outcome of it will be, but it is essential that young people should be able to become involved in heritage steam and heritage vehicles of all kinds. It brings discipline and a knowledge of engineering, and it is great fun. One of the best birthday presents I ever got was when I turned 65 and my family arranged for me to drive a steam train. It was fantastic—almost as good as my wedding.

Even if the Bill is not the right way to achieve this purpose, I say to my noble friends on the Front Bench that the purpose is very important. It is absolutely fantastic that the noble Lord does so much work in this field, which is so important to tourism and to our economy.

[Baroness Sherlock (Lab)]

My Lords, I add our thanks to my noble friend Lord Faulkner, who has piloted the Bill. I regret that I could not find a relevant interest to confess at this point, but I commend those who have. I add my hope that Lady Forsyth has a forgiving nature when she comes to read Hansard.

Our heritage railways are a joy and a blessing to the nation, as well as a big contributor to the economy. It would certainly be a shame if children and young people were prevented engaging safely in voluntary activity down to legislation from a time when heritage railways were simply railways. In the earlier stages, the Government seemed confident that there is no legislative barrier. That is not completely accepted around the table, so I hope that the Minister is able to give some reassurance to my noble friend and that discussions are carrying on to make sure that this can happen. I am happy to wait to hear what the Minister has to say.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am also grateful to the noble Lord, Lord Faulkner, for bringing this debate to the House for the fourth time, for which he is to be applauded. I agree with him that it is important to protect heritage railways for future generations.

Modern health and safety legislation—in particular the Health and Safety at Work etc. Act 1974 and relevant secondary legislation—does not prevent children and young people volunteering on heritage railways or tramways. The current legislative framework already allows for this to happen. However, it is important that such activities are carried out in a safe way with employers, organisers and those supervising the activities making sure that any risks are properly controlled.

The Government support volunteers and volunteering; to that extent, I echo the words of my noble friend Lord Forsyth. It can be a rewarding experience for young people, and it allows them to gain new skills and make a difference in their community. Volunteering is vital for the future sustainability of the heritage rail sector, with more than 22,000 people, 800 of them young people, giving their time to support heritage railway organisations across the country.

At Second Reading, my predecessor, my noble friend Lady Stedman-Scott, offered to bring officials from the Health and Safety Executive, the Office of Rail and Road, the Department for Digital, Culture, Media and Sport and the noble Lord, Lord Faulkner, together with the Heritage Railway Association to discuss how its guidance can be further strengthened. Unfortunately, unforeseen circumstances prevented this meeting happening, but I would very much like to make this offer again.

Under the 1974 Act, duty holders are required to control the risks they create from their operation. Although the Health and Safety Executive has the policy responsibility for the 1920 Act, in the case of heritage railways, the Office of Rail and Road is the regulator for health and safety legislation. Both regulators have confirmed that they would not enforce the 1920 Act solely to prevent young people volunteering on heritage railways. It has not been used in a prosecution since 2009 and, when it was, it was used alongside more modern health and safety legislation to prosecute in cases where young people were employed illegally in dangerous environments. In total, the 1920 Act has been enforced on eight occasions since 1998, and none of these prosecutions was against a heritage railway.

The law protecting children in the UK is a complex area, and this Bill would have implications not only on health and safety protections but on education legislation and local authority by-laws. To repeal or amend the 1920 Act may initially seem the best course of action; however, because of the links to other legislation, the process of making changes would be extensive. There is no evidence that this legislative change would make a difference to the number of young people volunteering, and therefore it is not proportionate to proceed with it.

I promised also to be relatively short, so I conclude by saying that the Bill seeks to allow children to gain valuable experiences volunteering on heritage railways and tramways, and the Government support this aim. However, we believe that the current legislative framework does just that. Nothing would be gained from a change to legislation when other, simpler and more effective options are available—in particular, working with the regulators to explore the types of activities and tasks that are proportionate for young volunteers.

At Second Reading, the noble Lord, Lord Faulkner, remained concerned about what would happen should something go wrong with a young person working as a volunteer, and he wanted stronger guarantees in relation to the 1920 Act. I want to reassure him that if such an incident occurred, both the Health and Safety Executive and the Office of Rail and Road have confirmed that there would be a full investigation, taking account of the risks that the young person was exposed to and how they were controlled. The existing framework is fair and effective, which is why, unfortunately, the Government oppose the Bill.

Pensions Dashboards (Prohibition of Indemnification) Bill

Baroness Sherlock Excerpts

3rd reading
Friday 21st April 2023 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I am pleased that the Pensions Dashboards (Prohibition of Indemnification) Bill has now reached its final stage in your Lordships’ House. I thank my noble friend the Minister and his officials for their support, as well as those noble Lords who supported the Bill on Second Reading: my noble friends Lady Altmann and Lord Holmes, who flank me on either side, the noble Baroness, Lady Sherlock, and the noble Lord, Lord Sharkey, all of whom who are present in the Chamber this morning to ensure the safe passage of this legislation. I am also grateful to Mary Robinson for introducing the Bill and expertly steering it through all stages in the other place.

The Bill’s purpose is clear. It will increase protection for pensions savers by making it a criminal offence for trustees and managers of occupational pension schemes to reimburse themselves using assets of the pension scheme for penalties imposed on them due to non-compliance with any relevant pensions dashboard regulations. I hope noble Lords recognise the importance of the Bill and agree to its passage today. I beg to move.

[Baroness Sherlock (Lab)]

My Lords, I congratulate the noble Lord, Lord Young of Cookham, on piloting the Bill through the House with his usual flair, and it is very nice that we can all be here to see it on its way. It is a narrowly focused Bill which simply addresses a lacuna in the original legislation, and we are happy to support it. I also thank the noble Viscount for giving us an assurance at Second Reading that before long, we can look forward to an update on the likely implementation of the pensions dashboards themselves. It remains of paramount importance that people can save for their retirement with confidence and with an understanding of all the implications of the choices they are making or that have been made on their behalf. We support the creation of a pensions dashboard to contribute to that goal, although we will continue to debate with Ministers choices about how it can best be done. For today, we are pleased to wish this Bill on its way.

[Viscount Younger of Leckie (Con)]

My Lords, I, too, am grateful to my noble friend Lord Young of Cookham for presenting his Bill to the House, and to my honourable friend in the other place, Mary Robinson, for her skilled stewardship of the Bill. It is a pleasure again to offer my support for the Bill on behalf of the Government. I, like my noble friend, also thank all noble Lords who were present for Second Reading for their interest in the Bill and for supporting it as it moved towards its final stage.

I committed to follow up on the topics relating to this Bill and questions about pensions dashboards more broadly that were raised by noble Lords during the previous debate. I have placed copies of letters I sent after Second Reading in the House Library, and they are also available on the Bill’s webpage—hopefully, noble Lords have had a look at them. I hope the letters sent have helped to address these queries, which included asking for an update on progress on the department’s state pension records correction exercise, the readiness of public service pension schemes to connect to dashboards, and whether penalties could be incurred for loading incorrect data to pensions dashboards. Queries were also raised more specifically about the penalties which could be imposed on trustees and managers of occupational pension schemes under the proposals in the Bill, and for compliance breaches under the pensions dashboards regulations.

I further addressed questions about the challenges faced by the pensions dashboards programme in delivering the digital architecture underpinning pensions dashboards. On this final point, I made clear to the House during Second Reading the importance of this Bill, and that it is needed irrespective of the delivery timeline for pensions dashboards. To be helpful to the noble Baroness, Lady Sherlock, I also pledged—and I stick to that pledge—to update noble Lords as soon as is reasonably possible, and an invitation will be forthcoming.

To reiterate why the Bill is required, it corrects a legislative gap which, left as it is, means that no provision would prohibit trustees or managers from reimbursing themselves using pension scheme assets to pay penalties in respect of breaches of any relevant pensions dashboards regulations. There was unanimous agreement among noble Lords at Second Reading that this would be unacceptable.

The proposals under this Bill seek to deter rogue actors from reimbursing themselves using the assets of pensions scheme members by allowing criminal proceedings to be brought against trustees or managers of occupational pension schemes if they are reimbursed and knew or had reasonable grounds to believe that they had been reimbursed as such. If a trustee or manager is found guilty of this offence, the Bill’s provisions allow for a maximum sentence of up to two years in prison, or a fine, or indeed both.

As I emphasised at Second Reading, the Bill does not place any new requirements on trustees or managers of occupational pension schemes or burden them with additional costs. It simply extends an existing prohibition in Section 256 of the Pensions Act 2004, which already applies to a number of areas of pensions legislation, to include pensions dashboards.

To conclude, the Bill rightly increases protection for consumers saving for their retirement. I do hope, therefore, that the whole House will join me in its support for my noble friend’s Bill and agree to its passage.

Child Support Collection (Domestic Abuse) Bill

Baroness Sherlock Excerpts

2nd reading
Friday 21st April 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Farmer, for introducing this Bill and all noble Lords who have spoken. As we have heard, the main aim of the Bill is simply to make it possible for parents who have experienced domestic abuse to ask the Child Maintenance Service to collect maintenance payments on their behalf, thus avoiding the need to communicate with the abusive parent. At the moment, they would first have to try to arrange payment directly with the abusive parent via the direct pay system and wait for that to fail, which is obviously risky.

We know that the stakes are very high in relation to domestic abuse. The noble Baronesses, Lady Berridge and Lady Burt, have mentioned the tragic case of Emma Day, who was murdered by her ex-partner in May 2017. That case could not be more directly relevant here: he had warned her not to chase him for child support, threatening her life if she did so. When she pursued her claim, he stabbed her to death. I am sure all noble Lords would like to join me in sending our sympathies to Emma Day’s family and friends, and all those who mourn her and will do so for years to come.

After Emma’s inquest, the coroner issued a regulation 28 report to prevent future deaths. It noted that Ms Day had told the CMS of the threat to her life but this was not passed to the known caseworker. The report says:

“Staff were not fully and consistently trained in domestic violence. There was no action to address the potential escalation of the risk on reinstating the claim”.


The coroner called for a review of the protocols and training of child maintenance caseworkers and then in due course, as we have heard, the report by Dr Samantha Callan looking at the CMS response to domestic abuse was published in April last year, with the Government’s response in January. I too thank Dr Callan for her work on this subject as well as Gingerbread and Surviving Economic Abuse for their campaigns for change.

We on these Benches support the Bill. It represents a welcome step forward in improving the way that the child support system serves the parents and children who suffer as a result of domestic abuse. That said, the actual impact of the Bill will depend very much on future decisions on matters that will be dealt with in regulations and operational guidance, so there are some important questions on which we need more information.

First, as noted by the noble Baroness, Lady Burt, we do not yet know what evidence of domestic abuse will be accepted by the CMS. We know it will be detailed in secondary legislation, and at Second Reading in the Commons the Minister, Tom Pursglove, committed the Government to consulting widely and said the aim would be to produce requirements

“that are sensitive to the needs of domestic abuse victims”.—[Official Report, Commons, 28/10/22; col. 568.]

That is good, but can the Minister offer us any more information? Since he is the Minister for child support, can he assure us that he is already in discussions with colleagues in other government departments to ensure consistency on matters of domestic abuse across government? Would he be willing to publish the regulations in draft so that Peers could consider them before they were finalised, or at least to engage with Peers as part of that wider consultation exercise? I would be grateful if he would reflect on that.

That leads to the second issue: how ready the CMS is to deal with these changes or with domestic abuse more broadly. Since the Emma Day tragedy, training on domestic abuse has been introduced for CMS staff. In Committee in the Commons, the Minister, Mims Davies, said that

“with particular input from Women’s Aid, a programme of domestic abuse training has been designed and delivered for all CMS caseworkers”.—[Official Report, Commons, Child Support Collection (Domestic Abuse) Public Bill Committee, 14/12/22; col. 10.]

The Minister will know that my honourable friend Jess Phillips expressed some concerns about whether the training was adequate and queried whether Women’s Aid was indeed involved in designing and delivering it. I sought the view of Women’s Aid on this issue. I was told it recommends that all CMS staff should get specialist domestic abuse training from a specialist provider to ensure that they can understand the risks facing survivors and provide a safe response. However, Women’s Aid understands that the CMS training is not designed or run by specialists but has been developed and is delivered in-house within the CMS. It told me:

“The National Training Centre at Women’s Aid assessed the delivery of one of these in-house training sessions and was severely concerned by it. Women’s Aid provided feedback to them in this regard but we had no further input or role in the training.”


Can the Minister please clarify what training is given to CMS staff and who designs and delivers it?

I have also heard concerns from charities of cases where the response of CMS staff to their disclosure of domestic abuse was not what one would have hoped. Gingerbread surveyed single parents with experience of domestic abuse and found that most did not think CMS staff had given appropriate consideration to their situation as survivors. One parent said:

“I was told that I wasn’t a victim of domestic abuse because I hadn’t experienced physical violence”.


Another said:

“The whole system was very stressful and I tried to explain how dangerous he was and how scared we were but I was just told either it’s direct pay or they will charge me lots of money and my daughter will lose out.”


How confident is the Minister that CMS staff are trained and resourced to deal appropriately at all levels with parents facing domestic abuse?

There is then the question of charges, which has been touched on already. The Government’s 2012 reforms of child support used charging to push parents into handling maintenance between themselves, without involving the state. If they make a private arrangement, there is no fee; if they use direct pay, there is just a £20 application fee. But if they use collect and pay, a collection charge of 20% of the maintenance liability is levied on the paying parent, as we have heard, and 4% on the parent receiving the money. But the whole point of this Bill is to ensure that parents who cannot safely use direct pay without putting themselves or their children at risk will in future be able to use the collect and pay service—getting the CMS to collect the money for them—without having to have contact with the abusive parent.

If the CMS accepts that someone has produced evidence that they are experiencing domestic abuse, it waives the £20 application fee. But it does not waive the 4% of the total maintenance liability fee if they use the collect and pay service. At Third Reading in the Commons, my honourable friend Vicky Foxcroft put it like this. She said that

“they are then effectively penalised every month simply for using a service that stops them having to have contact with their abusive ex-partner. I hope we can all agree that that is grossly unfair”.—[Official Report, Commons, 3/3/23; col. 1008.]

In Committee the Minister, Mims Davies, had said:

“Full consideration is being given to exempting victims of domestic abuse from collection charges”.—[Official Report, Commons, Child Support Collection (Domestic Abuse) Bill Committee, 14/12/22; col. 9.]


Can the Minister tell the House where this consideration has got to and when it will conclude?

This takes me to timing more generally. I think we are all hopeful that the Bill will become an Act this Session, in the not-too-distant future. But given that nothing can happen until we get the secondary legislation and the guidance, as so much of the detail will be in that, can the Minister give us at least an outline target timetable for when that might come on stream?

I want to make a final point about enforcement, which seems to be a problem with child support. I do not know whether I need to declare a very historic interest: a long time ago, I was on the board of the Child Maintenance and Enforcement Commission, so I understand the background to this. I have been looking at the CMS statistics and for the last quarter, to December 2022, under half of parents due to pay through collect and pay paid even the 90% that the noble Baroness, Lady Berridge, mentioned, while 35% of those on collect and pay paid nothing. Thirty-five per cent of those for whom the CMS was collecting the money paid not one pound. That is over 140,000 children for whom none of the maintenance due was paid, and this matters.

A 2019 study by Hakovirta et al found that if child maintenance were paid in full to all children in separated families living in poverty who are not getting money from their other parent, it could lift 60% of them out of poverty. It makes that much difference, so I ask the Minister, first: is the problem with enforcement in CMS about a lack of staff, a lack of money or a lack of powers? What is the drag on this? Secondly, I was really worried to hear that there is now a real backlog in CMS, with thousands of claims not even yet assigned to the service. Can the Minister tell the House if this is so and how many claims are waiting?

The noble Baroness, Lady Berridge, raised some really interesting questions. I will happily leave the Minister to respond to them, but I will listen with great interest to what he has to say. They sounded really important and are a sign to us all, and indeed to the Government, of the need to think across all areas when considering something as all-encompassing as domestic abuse.

Despite these concerns, we welcome this Bill and congratulate again the noble Lord, Lord Farmer, on introducing it here and the honourable Sally-Ann Hart MP on steering it though the Commons. I hope the Government will continue to build on this legislation and, more widely, the Domestic Abuse Act 2021 to deliver a strong, co-ordinated cross-government approach to domestic abuse.

Universal Credit

Baroness Sherlock Excerpts

Tuesday 18th April 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

It is right to say that, although the Government are very aware of the severe issues at the moment, we do not look at every single essential item because we think that individuals and households have the right to spend how they like. The benefit cap, which is probably the gist of the noble Baroness’s question, provides a strong work incentive and fairness for hard-working tax-paying households, and it encourages people to move into work where possible. Let us not forget that households will still be able to receive benefits up to the value of gross earnings of around £26,500, or £31,300 in London.

[Baroness Sherlock (Lab)]

My Lords, of course households make their own choices, but the point of this report is that we all need certain things: somewhere to live, clothes to wear, food to eat and the ability to heat our homes. The suggestion is that there simply is not enough money in the system to do that. For most of the last decade, the Government have not uprated benefits by the rate of inflation, which results in a disconnect between the cost of living and what the social security system gives people to live on. Now, we are seeing poverty, destitution, homelessness and the use of food banks are all going up. Does the Minister think it would make a difference if benefits and tax credits were automatically uprated by inflation, rather than simply being down to what Ministers want to do that year?

Occupational Pension Schemes (Administration, Investment, Charges and Governance) and Pensions Dashboards (Amendment) Regulations 2023

Baroness Sherlock Excerpts

Tuesday 28th March 2023 Grand Committee

[Baroness Drake (Lab)]

My Lords, I hold pension trustee positions, and refer to my interests as set out in the register.

These pension scheme regulations are being introduced for two reasons. First, the Government believe that they will facilitate greater investment by pension schemes into private markets, securing better returns for savers. Secondly, the Government want to increase DC pension fund investments in UK start-ups, infrastructure, green investment and illiquid asset classes in private markets.

Of course, this is to be welcomed if beneficial alignment is achieved between the best interests of the ordinary citizen and their pension pot, and investments that benefit the UK economy to achieve the win-win. However, there are barriers to be addressed in getting there. The problem with these regulations is that the exclusion of performance fees from the DC charge cap will not be the driver of significant changes of investment in illiquid asset classes, but consumer protections will be weakened where money is invested without the security of that cap. The charge cap was introduced to protect millions of people investing through inertia under auto-enrolment. To achieve the diversification of investments which would benefit the UK economy, the complexities of other barriers to investment in private markets need to be addressed. Overreliance on removing consumer protections from pension savers will not do it.

I will reflect on some of those complexities. The pension regulatory environment, which is in perpetual change, is driven by endless policy initiatives without certainty as to the Government’s underpinning strategy. Recent regulation enabled performance fees to be smoothed over a five-year period, but before even testing the efficacy of those changes the Government proposed reversing them in favour of these. Trustees need greater consistency when considering long-term investment decisions—consistency between not only one Government and the next but one Minister and the next. Also, the complexity of regulation means that government contradicts itself. For example, the Government asked the Productive Finance Working Group to make recommendations on increasing private market investments, while TPR was consulting on prohibiting the schemes from holding more than 20% of assets in unregulated investments.

There is also the need to strengthen confidence in government economic policy and governance, a sentiment captured by the noble Baroness, Lady Lane-Fox of Soho, president of the British Chambers of Commerce, in the FT yesterday, where she warned policymakers that

“businesses are holding off making big investment decisions given the UK’s recent political and economic upheaval”

and that,

“People just don’t feel like taking risks”

in the UK.

Inefficiencies from pension freedoms are weakening the long-term private pension system and the approach to illiquid assets. For example, as savers get to 55 or 57, they can take their pots as cash in a series of lump sums and draw down funds in any combination of timing and amount that they choose. Small pots are growing exponentially. People change jobs more frequently. Pension transfers are increasing, including out of workplace schemes. Trustees have to implement these freedoms, which in turn impact on investment decisions.

Higher costs incurred with illiquid assets need to be borne fairly across the members of the scheme, as they would impact members differently. Those close to retirement or who choose to exit the scheme are at greater risk of paying higher fees without the additional returns.

Then we come to the issue of how to ensure value for members and higher returns when performance fees are outside the charge cap and inert citizens directly bear the investment risk. Achieving that higher value will be very challenging, as will measuring it for the Government to see it, as it is with securing standardised disclosure of performance fees. There is a lot of history here about making fees and charges work effectively for ordinary savers.

Ensuring that fees are payable only for realised outperformance is to rest on a tighter definition of performance fees and the discipline of negotiated agreements between trustees and asset managers. Those are the two big levers that are relied on. The Explanatory Memorandum states that excluding pension fees will encourage innovation on fees, but where is the evidence? It is an assertion, and lots of people assert it in their submissions, but it is difficult to find hard evidence. Exclusion of performance fees might set a precedent for removing other charges. Having removed that hard-fought security for consumers, the gate is open. It can disincentivise innovation because the cap has been removed. It can inhibit the evolution of fee structures and private market products that better accommodate DC pensions to the benefit of the UK economy.

Testing the impact of negotiated agreements between trustees and asset managers needs to be assessed much further before weakening the charge cap, given the challenge of achieving member fairness on performance fees. It is an assertion that those negotiated agreements will produce that beneficial result, but that should be really tested before such a critical consumer protection is removed.

The Government have set up a long-term asset fund, the Productive Finance Working Group is considering recommendations and the FCA and TPR have commenced consideration of value for money. This is work in progress, yet the Government push ahead with amending the cap, increasing the risk to the saver.

Investments that help with transition to net zero, environmental protection, housing or infrastructure which support economic growth and savers’ best interest are to be welcomed. Indeed, ESG and TCFD reporting and governance requirements are nudging schemes more and more in that direction. Several pension providers have indicated that they would no longer agree to traditional performance fees but remain committed to investing in private markets. Some large schemes hold illiquid investments within the existing charge cap. Some fund managers are indicating innovating on growth equity funds, and fee and product structures will evolve from the high-growth prospects of the UK automatic enrolment market—agreements achieved through scheme scale, not by weakening consumer protection.

One of the policy options in the impact assessment was government mandating investment in illiquid assets by pension schemes. Although rejected, this is the second hint at mandation after the joint December 2021 letter from the Prime Minister and the Chancellor. These DC savings are citizens’ private assets. Mandation would replace or undermine the fiduciary duty on trustees, require private assets to be harnessed and directed to meet government policy objectives, and probably risk market distortions. It would risk imposing inappropriate risk appetites on savers and increase uncertainty on liability, consumer protection and duty of care. It would certainly weaken employer engagement, and it could seriously risk undermining public confidence in auto-enrolment. Those are big consequences from mandation.

I have four questions to ask the Minister. Can he confirm that the Government have no intention to mandate how pension schemes must invest? How will value for members assessments be altered in light of the new risks arising to pension savers from these regulations? How will the Government ensure that savers close to retirement or who exit a scheme do not pay higher fees without additional returns from illiquid investments? What new measures will be introduced to enhance the availability of charges and cost information on illiquid investments? What new initiatives are the Government expecting the FCA to take to regulate for fairness and consumer duty in all the private markets that these regulations cover? I am sure that the DWP will say that it is not within its remit to know what the FCA is doing, but to make a decision that lifts such a hard-fought-for and fundamental consumer protection on the level of evidence that is before the Government, without knowing, having considered or having discussed with the FCA its approach, is an omission. It would be helpful to leave those questions.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing these regulations and those noble Lords who have spoken. As we have heard, these regulations cover two distinct issues—one minor and the other rather less so. I will do the minor one first; it is a change to correct a drafting error in the Pensions Dashboards Regulations 2022, amending the line in Part 1 of Schedule 2 that specifies which master trusts are required to connect to the pension dashboard by 30 September this year. I do not want to kick a project when it is down, but, to me, that is not the most pressing problem attached to the Pensions Dashboards Regulations 2022. In fact, the Minister recently announced that the entire timetable, which is hard-wired into these regulations, is being scrapped, so the regulations will presumably need to be either repealed or amended. Could the Minister tell us whether the intention is to repeal them or if they are simply going to be amended and when we will know more about that?

On the major provisions in the regulations, the objective behind them is clearly to push pension schemes into investing more of their members’ money in illiquid assets. As we have heard, they will use two basic levers to do that. First, they will require all pension schemes with more than 100 members to explain their policy on illiquid assets and to disclose their schemes’ investments in them; and, secondly, they will exclude specified performance-based fees from the list of charges that fall within the 0.75% regulatory charge cap.

Just to be clear, these Benches would like to see greater investment in ways that will help the transition to net zero and in infrastructure projects that support economic growth, but we have heard today some important questions about the detail of these regulations, and I hope the Minister has some answers ready. First, the question of risk was raised. The noble Lord, Lord Sharkey, is right: I could not find a definition of illiquid assets either, but they clearly cover a wide range of investments. They are not just buildings or infrastructure but, as the Secondary Legislation Scrutiny Committee pointed out, could include art or intellectual property. Some illiquids clearly carry significant risk. This legislation also targets venture capital investments, which often have a high failure rate.

The noble Lord, Lord Sharkey, mentioned the 30th report from the Secondary Legislation Scrutiny Committee, which drew these regulations to the special attention of the House. It expressed concern that, without limits on the proportion of illiquid assets in a pension scheme, the scheme may not be able to deliver the returns that members anticipate. It pointed out that many of those members, of course, have been auto-enrolled by their employer and therefore had no involvement in the choice of their pension scheme investments.

As the noble Lord, Lord Sharkey, pointed out, the committee asked two specific questions that it thought Members of the House might like to put to the Minister. One was about how schemes’ exposure to increased risk of lower returns would be monitored, and the other was how trustees would be guided on assessing the risks to the portfolio. I may have missed this in the Minister’s comments—I heard him talk about advice to trustees on charges, but I am not sure that he talked about advice on assessing risks—so it would be helpful if he would address that.

I want now to look briefly at the proposal specifically to exclude certain specified performance-based fees from the list of charges that fall within the regulatory charge cap. As my noble friend Lady Drake has reminded us, the charge cap was introduced to protect the millions of people who are saving and investing through inertia, so surely there must be a compelling case for the Government to do anything that might weaken that. It is worth pausing briefly to remember that, in 2013, DWP research showed the impact of higher fees on pension savings. An individual who saves throughout their working life via a scheme with a 0.5%—50 basis points—annual charge cap on the value of their pot could lose 13% of their savings to charges. Push that to 1% and they could lose almost a quarter; push it to 1.5%, the figure is around a third. These basis points may sound small but their impact on the value of a fund is really quite significant.

--- Later in debate ---

[Baroness Sherlock (Lab)]

I thank the Minister for taking the time to answer those questions. I just want to ask him to explain the definition of an illiquid asset a bit more. He is right to point to Regulation 3(2)(d), which says that they are

“assets of a type which cannot easily or quickly be sold or exchanged for cash”.

I suppose most things can be sold or exchanged for cash reasonably quickly if you do not mind how much you get for them at a fire sale. I have two questions. If that means

“cannot easily or quickly be sold or exchanged for cash”

at a reasonable price, or at least at the price one had paid for them, would that apply to UK gilts last autumn? Secondly, the reason this matters is that there is a lot of money to be made from this definition. Where that is the case, the definition is likely to end up being the subject of some dispute. What is the mechanism to resolve this? Whose decision is it? Does someone just get to do it? Will the regulator push them, or will it end up in court? How will this be litigated?

[Viscount Younger of Leckie (Con)]

I hope I can be of some help. I think I should write a letter on this quite detailed question, as it takes us further from the question originally asked by the noble Lord, Lord Sharkey. Part of the answer could be—I will need to follow up with a letter—that we do not want to prescribe our approach too much. As I mentioned earlier, it will be very much up to the trustees and pension funds to decide for themselves. It might not be right to have too much prescription here, but I will go no further than that. The noble Baroness, Lady Drake, may know more than me, as one can go only so far with a definition. I will write to clarify further what we mean.

Charitable Sector: Food Provision

Baroness Sherlock Excerpts

Monday 27th March 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

My noble friend will not be surprised to hear me say that we are committed to action that helps alleviate levels of pensioner poverty. In answer to one of her questions, the HBAI statistics recorded that fewer than 100,000 pensioners were living in households where a food bank had been used. However, despite those figures, there is more to do.

The figures show that there are 200,000 fewer pensioners in absolute poverty than in 2009-10. Pension credit provides a vital financial support to pensioners. This is one of the actions that has been and is being taken by the Government, and it is proving to be very successful, with a 73% uptake in the last 12 months.

[Baroness Sherlock (Lab)]

My Lords, I am delighted that we are now asking about food bank use in the annual HBAI survey. That is great. But the results are really pretty shocking. For example, they showed that one in six of all people on universal credit used a food bank in the last financial year. When we think that, in the first half of that year, universal credit was £20 higher, furlough was still in place, inflation was 4% and energy bills were half what they are now, it begins to show the scale of the problem.

On 9 January, I asked the Minister what the Government were going to do about the shocking increase in food banks. He said that they needed to know more. Now that they do, what will they do about it?

[Viscount Younger of Leckie (Con)]

First, I welcome the noble Baroness back. It is good to see her in her place. To pick up on what she was saying, our newly published statistics on food bank use, alongside the broad suite of poverty data, will indeed help us to shape future policy considerations. There is much in these statistics—some good, some less good—and I assure the noble Baroness that we will look very carefully at them and use them to help us inform and impact on our policies.

Pension Schemes: Guidance

Baroness Sherlock Excerpts

Monday 13th March 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the report has said that, since the law was changed to require pension funds to do climate reporting as a way to nudge the companies and assets in which they invest to do better, two broad problems have emerged. First, the data out there are not consistent in timeframes or formats, or across asset classes or managers. Secondly, the regulatory regime seems to focus more on positioning pension funds than on the climate transition plans of the companies; as the report puts it,

“the world needs greening, not the pension fund”.

So will the Government look again at this?

[Viscount Younger of Leckie (Con)]

Not only will we be looking again, but this is an iterative process. As I have said, we are yet to come back on the report, One Year On, but we will come back soon. I also reiterate the fact that we are the lead in the world; I will have to check the figures from the noble Lord, Lord Teverson. For example, since our department introduced TCFDs, over 70% of occupational pension schemes—a value of £1.4 trillion—are now subject to climate disclosure, and over 80% of scheme members, some 20 million people, will be able to access their pension schemes’ disclosures on climate risks and see how they are being managed. That is being published for the first time.

Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2023

Baroness Sherlock Excerpts

Monday 6th March 2023 Grand Committee

[Lord Allan of Hallam (LD)]

My Lords, on the substance of the two instruments before us and the uprating of payments by 10.1%, we on these Benches, like the noble Lords, Lord Wigley and Lord Jones, of course welcome that. I have learned a lot from noble Lords in the debate. I know from reading Hansard on their previous appearances on these uprating instruments that they have long and honourable records of advocating for sufferers of these appalling diseases. I thank both noble Lords present and those whom the noble Lord, Lord Alton of Liverpool, reminded us are no longer with us. Their words have helped to inform me and provided me with information that I understand will be useful in future years, as we continue to come back to debate these issues.

Much has been said that I will not repeat, but I will emphasise three areas that I am interested in and where I hope the noble Viscount might be able to expand in his response. The first is the question of the latest trends in the numbers of sufferers. As he pointed out, there is an expectation that they will decline once we reach a point 30 years or so after there was a reduction in the use of asbestos. But it would be interesting to hear from the Minister the extent to which there have been any surprises in the data, to understand more about the distribution of sufferers geographically and in terms of their professions, which has already been raised, their gender and any other factors that have surprised people, given the expected exposure and rate of suffering.

The noble Lord, Lord Wigley, was right to remind us that the exposure is not finished. Indeed, as we stand here, we are standing over huge amounts of asbestos, which is securely contained within the basement but which, at some point, will have to be removed as the works take place on this building. That is true across the country: in the 20th century a huge amount of electrical infrastructure was put in using asbestos as a fire preventer, and that is being replaced; people are now saying, “We need to get rid of it”. Whether that is meters in people’s own domestic premises or something on this scale, asbestos exposure is not finished—it will be an ongoing issue. I know that is broader than the instruments before us today, but I hope the Minister will make sure that his colleagues with relevant responsibilities continue to focus on that.

The predictions of expected sufferers would be helpful—not about individuals but about the population as a whole. Making that information public would help people to understand what is taking place. The Minister raised the effect of Covid on the figures, and I think the noble Lord, Lord Alton, asked whether diagnoses were missed during that period. Again, if there were changes during the Covid period, it is really important that we understand whether they were material changes or changes because of practice—because people were no longer presenting to their doctors and, therefore, in a sense, there is a false lowering of the numbers, rather than a genuine change in what has been occurring.

The second area about which it would be interesting to hear from the Minister is research, particularly the development of international networks. It has been mentioned that this affects people across many different countries. I was interested to see PREDICT-Meso, a network of international researchers run by the University of Glasgow involving countries in the EU but also countries such as India and Brazil, which industrialised very rapidly in the 20th century and which will also, sadly, see significant issues. Given that government support for scientific research is very topical at the moment, I am keen to understand the extent to which the Government are supporting research being carried out in this area. Can the Minister say any more about government support for research networks into respiratory diseases?

My final point, which has been touched on already, is about why the uprating is a manual rather than an automatic process. I can see from Hansard that this has been repeated on many occasions. I am sure that those who support the Minister did not have to do much work to recycle the comments made in previous years, but it would be interesting to hear from him again why the Government believe that this should continue to be a manual rather than an automatic process, whereby the people planning can understand that they will be entitled to the uprating, rather than us having to debate it each year. Perhaps the Minister will surprise us and there will be a change in the Government’s position this year, but I will not hang on for that.

I hope that the Minister can put some flesh on those three points about predicted numbers, government support for research and the manual versus automatic process. I will be interested to hear about them, but, as I said, broadly speaking, we welcome the 10.1% increase.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing these regulations to the Committee, and all noble Lords who have spoken. As we have heard celebrated by my noble friend Lord Jones and others, the sums payable under the 1979 and the 2008 schemes are to be uprated by 10.1%—the rate of inflation as measured by the CPI 12-month rate last September, which is in line with other social security benefits, including the industrial injuries benefit.

First, I join the Minister in remembering all those who have suffered so much from these terrible diseases. Although many of us would like not to have to come back every year, it is at least an opportunity to pay tribute to them and to remember the lives so blighted. These schemes continue to provide crucial compensation to those who suffer from these terrible diseases and their families. Annual deaths from mesothelioma in Britain increased steeply over the last half century, due mainly, as we have heard, to the widespread industrial use of asbestos from about 1950 to 1980, which accounts for the high death rates among males over 70 whose younger working lives coincided with that period of peak asbestos use. It is good to see that death rates from mesothelioma among the under 65s have been falling.

I looked through the latest statistics on mesothelioma deaths published by the Health and Safety Executive last year, which went up to 2020. As the noble Lord, Lord Alton, said, there were 2,544 mesothelioma deaths in Great Britain in 2020, 6% up on 2019 but similar to the average across the previous eight years. But as the Minister pointed out, there are gender differences here. Those deaths comprise 2,085 men and 459 women. The projections are that annual deaths in men will reduce after 2020 but that female deaths will not, likely staying in the range of 400 to 500 throughout the 2020s but hopefully reducing further after that. Does the Minister know why there is this gender difference? I would be interested to know anything he can share on that.

Pensions Dashboards (Prohibition of Indemnification) Bill

Baroness Sherlock Excerpts

2nd reading
Friday 3rd March 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Young of Cookham, for introducing this Bill, and all noble Lords who have contributed. I am grateful to the noble Lord, Lord Young, for his characteristically clear introduction. I commend him on his many years of service in the interests of debating pensions and, like him, I say it is nice to have those of us interested in pensions dashboards back together again. It is always good to get the band back together again, even if the pensions dashboards crew is about as un-rock and roll as it is possible to be. But it is lovely to be here today.

I have a long speech on the importance of pensions, which I am going to spare your Lordships this morning because, if nothing else, the noble Lord, Lord Holmes of Richmond, has done a fine job of this and it is a very narrow Bill today. But since the discussion has ranged a bit more widely, I will say that we were supportive of the idea of pensions dashboards in the original legislation but that support came with a number of questions. Like so many things, things can be a good idea, but how they are done is crucial to whether they end up being a good idea. We raised questions about ID, data security, governance and redress. What happens when things go wrong? This is an unusual situation, where tens of billions of pounds of assets will be mandated by the state to be released and put on to this central spot. If something goes wrong, this is potentially very serious indeed.

I think that was amplified by the Government’s insistence on going with commercial dashboards from the outset. This House had to press to insist that a public dashboard be there from day one, but I still think the Government’s attachment to commercial dashboards raises some risks. Imagine for moment that you are a commercial pensions company. You can sit somebody down, show them your dashboard and say, “Look at your pots all over here. Let’s gather them all into one tidy pot in this corner. Should I just move them into this space?” It does not take very much imagination to consider the possibilities for mis-selling even within what is legal. Those questions have been raised and have yet to be satisfactorily answered.

The principle of today’s Bill is very simple. It is that the interests of pension scheme members should be protected from the actions of rogue trustees and others who fail in their statutory duties. The Bill, as we have heard, will make it a criminal offence for a trustee or scheme manager who is given a penalty for failing in their duties to dip into scheme funds to pay the penalty. Inasmuch as it aligns the position in relation to penalties for failure to fulfil dashboard requirements with those for other comparable penalties, the Bill seems straightforward and we are very happy to support it.

But I would like to add a few brief questions to those put to the noble Lord, Lord Young, and the Minister may wish to reflect his view as well, given the Government’s wholehearted support of this Private Member’s Bill. First, can somebody confirm to the House that this Bill simply replicates for dashboard-related breaches the prohibition in the Pensions Act 2004 which prevents trustees or managers using member funds to pay regulatory penalties; in other words, that there is nothing novel hidden in here?

Secondly, why was the provision not included in the Pension Schemes Act 2021? Was it, as the noble Lords, Lord Young and Lord Sharkey, have suggested, simply an oversight? If so, I do not think the noble Lord, Lord Sharkey, should beat himself up. I do not think it is his job to bury in the small print details of how things may align with the original legislation. I certainly feel no guilt at all. Frankly, I am prone to feeling guilt but, on this occasion, I feel absolutely fine.

Thirdly, will it be permissible for trustees to be covered by indemnity insurance paid for out of scheme funds? I think this can be done elsewhere.

On a related point, when we debated the Pensions Dashboards Regulations on 15 November 2022, the then Minister, the noble Baroness, Lady Stedman-Scott, said

“we accept that the regulatory requirements on trustees have grown a great deal over the years”.—[Official Report, 15/11/22; col. 839.]

It is always the case that rogue trustees can simply ignore the rules, but has the DWP made any assessment of whether there is a point at which the demands and risks of trusteeship might deter individuals and lead to a growth in the use of corporate trustees, and whether that might lead to a reduction in the important diversity of trustee experience which may be necessary to protect members’ interests?

My final question was going to be to ask whether trustees are ready for the first connection deadline on 31 August 2023. However—as the noble Baroness, Lady Altmann, rightly pointed out—yesterday, from a clear blue sky, dropped a Written Ministerial Statement which was just 418 words long. It calmly and simply said that additional time would be needed to deliver the technology and for the

“industry to help facilitate the successful connection of a wide range of different IT systems to the dashboards digital architecture.”

The Minister continued:

“Given these delays, I have initiated a reset of the Pensions Dashboards Programme in which DWP will play a full role. The new Chair of the Programme Board will develop a new plan for delivery.”


The Statement also said:

“DWP will legislate at the earliest opportunity to amend the timing of these obligations”.


We do not know, therefore, when the start date will be, but given that we are not promised another update before the Summer Recess, presumably it is not imminent. Can somebody, either the mover or perhaps the Minister, tell the House what on earth has gone wrong? Is it technical? Is it problems with schemes? Is it data?

When did the Government know? Did they know when this Bill was going through another place just recently? Did they know when we debated the regulations in November in some considerable detail? I am really interested to know to what extent the problems associated with creating commercial dashboards and connecting them to the dashboard architecture from day one have contributed to the need for a reset. What does it mean that

“DWP will play a full role”

in the new programme? Was it not playing a full role already? Has that changed?

When will the Government legislate to delay the programme? Are there plans to amend, for example, the many forthcoming pensions regulations we have before us? Also, I wonder, given that there is now no urgency at all, would government legislation not be a better way to deal even with the matters under debate today than a Private Member’s Bill which has the wholehearted support of the Government?

The Government were so confident of being able to meet their dashboards timetable—–on which we challenged them—that they hardwired the connection dates for schemes into the schedule. It says that the “staging deadline” for

“master trust schemes that provide money purchase benefits only”

for 20,000 or more relevant members is 31 August 2023, and so on. They were that confident. But since then, because that was published, pension schemes have spent time and money scrabbling to get ready for those hard deadlines. I suspect the irony will strike them that we in Parliament are debating a Bill designed to ensure that trustees pay penalties if they do not get their schemes connected to the dashboards in a timely and appropriate manner and the DWP just slips out a Written Statement saying, “You know what, we are not going to make it for August, after all. We are just going to reset the programme and we will give you some kind of update before the summer.”

I know that things go wrong. I get this. I have been a special adviser in government. I have been involved in enough programmes. But when things go wrong, I think the House is owed an explanation of exactly what went wrong. I suggest to the Minister that one thing he might usefully do is to forward to his colleagues in another place the proceedings of this House on the original legislation, the debates on the regulations and the associated debates. The Government were warned that this was incredibly complex. They were warned about the issues about data, ID and all kinds of things. I think this may be a good opportunity, since we are to have a pause enforced, for the Minister to tell the House that he will take the opportunity both to engage with the concerns raised around the House and to brief the House on how these are going to be addressed. I look forward to the replies.