Debates between Baroness Sherlock and Earl Howe during the 2019 Parliament

Tue 30th Jun 2020
Pension Schemes Bill [HL]
Lords Chamber

Report stage (Hansard) & Report stage (Hansard) & Report stage (Hansard): House of Lords & Report stage
Wed 4th Mar 2020
Pension Schemes Bill [HL]
Grand Committee

Committee stage:Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Mon 2nd Mar 2020
Pension Schemes Bill [HL]
Grand Committee

Committee stage:Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Wed 26th Feb 2020
Pension Schemes Bill [HL]
Grand Committee

Committee stage:Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords

Pension Schemes Bill [HL]

Debate between Baroness Sherlock and Earl Howe
Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 30th June 2020

(3 years, 9 months ago)

Lords Chamber
Read Full debate Pension Schemes Act 2021 View all Pension Schemes Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 104-I Marshalled list for Report - (25 Jun 2020)
Baroness Sherlock Portrait Baroness Sherlock [V]
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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 Portrait Earl Howe
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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.

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Baroness Sherlock Portrait Baroness Sherlock [V]
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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 Portrait Earl Howe
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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.

Pension Schemes Bill [HL]

Debate between Baroness Sherlock and Earl Howe
Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th March 2020

(4 years ago)

Grand Committee
Read Full debate Pension Schemes Act 2021 View all Pension Schemes Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 4-IV Fourth marshalled list for Grand Committee - (2 Mar 2020)
Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, I want to ask a few questions on the back of that. I thank my noble friend Lady Drake and the noble Baroness, Lady Janke, for raising these issues. It is good to hear some attention being given to the fact that we have a significant problem about women and pensions. I would have liked to see the Bill take the opportunity to do something for the women born in 1950s who lost out so much when the state pension age was raised so sharply. Given that it has not done that, at least the calls for review may give an opportunity to look at the wider range of issues.

The statistics we have heard are really quite stark. If there is that huge a gap in pension wealth between men and women, the situation will only get worse. It is clearly something that the Government need to do something about.

I want to pick up on a couple of specifics. One is the issue of people with multiple jobs below the earnings threshold. This is the point at which I miss most acutely my friend Lady Hollis of Heigham, who raised this at any given opportunity. I feel that her memory is forcing me to do so now, otherwise I could not go back to my office and sit down with any peace. I ask the Minister to comment on that. We see people with multiple jobs—many are women, of course—none of whom make the threshold but who would be over the threshold if their incomes were added up, not getting into auto-enrolment. I worry that this group will keep rising as a result of part-time working and zero-hours contracts. Even the DWP, for example, encourages those on universal credit to take extra jobs to top up their hours or income. What are the Government doing about this? Do they have a sense of the scale of the problem and the direction of travel?

Secondly, I want to say a word about my noble friend’s case on carers. Clearly, women are more likely to work part-time because of caring responsibilities. That is a clear issue for public policy. A society needs women’s reproductive capabilities and their caring work. Women, in turn, deserve to be able to live adequately in retirement. I was delighted to hear my noble friend detail how we got here, not just because I probably have more of an appetite for social security detail than is strictly socially acceptable. If we do not take the time to work out how we got here, we will lose this in future. Those rights were hard-won. It took a long time, step by step, to get the caring responsibilities of women recognised in all parts of the state pension system; then they somehow got lost in the Government’s reforms. I am sure that that was not the intention and I have no doubt that the Government will come back and say, “Yes, but people will get these bigger amounts and more of them will get a full pension”, but that makes no difference. One would get those whether one was a carer or not. They have still lost any recognition of those caring responsibilities in the second state pension. Have the Government looked at the idea of a carer’s top-up, which has been around for a while? If so, what is their response to it? If they do not like it, what is their proposal for addressing this issue?

On Monday, we discussed in Committee Amendment 78 in the name of the noble Baroness, Lady Altmann. It recommended that a member of a scheme should not be allowed to use the pension freedoms to transfer out without the consent of his or her spouse or civil partner. I asked whether the Minister would go away, talk to the department, take some advice and return to it during today’s debate, which she kindly agreed to do. Can the Minister give us a reaction? Has the department established that there is an issue, and what is it doing about it? That would be really helpful.

My noble friend Lady Drake said the gender pay gap will not close until 2050 and pension parity will therefore not be reached until something like 2100. We just cannot wait that long. This is a matter of public policy, economics and societal need, but it is also a basic issue of justice. What are the Government going to do about it?

Earl Howe Portrait Earl Howe
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My Lords, the amendments tabled in the names of the noble Baronesses, Lady Janke and Lady Drake, and the noble Lord, Lord McKenzie, all concern automatic enrolment into workplace pensions.

Amendment 87 would lower from 22 to 18 the minimum age at which a qualifying worker would be eligible to be automatically enrolled by making a change to the Pensions Act 2008.

Amendment 88 would require the Secretary of State to lay a report on the effectiveness of our pension reforms within six months of this Bill becoming law. That review would mandate government to consider the minimum age at which qualifying workers must be automatically enrolled, the minimum level of pension contributions and whether existing legislation offers sufficient opportunity for low-paid workers to save for retirement. The Secretary of State would then have to make a recommendation about whether to bring forward new legislation in the light of its findings.

Amendment 95 would make changes to the criteria for a qualifying worker in automatic enrolment, known as a jobholder. These would lower the minimum age for a worker to be automatically enrolled from 22 to 18, abolish the £10,000 automatic enrolment trigger and make pension contributions payable from the first £1 of earnings.

Perhaps I may begin with the proposed changes to the automatic enrolment criteria. The amendment of the noble Lord, Lord McKenzie, would abolish the £10,000 automatic enrolment trigger. The Government review the operation of the trigger annually under the statutory automatic enrolment thresholds review. That approach means that a range of factors can be assessed, including affordability for employers and whether it pays to save for individuals. Since 2014-15, we have frozen the trigger at £10,000, which has expanded coverage each year due to wage growth. In the tax year 2020-21, this will see an extra 80,000 people brought into pension saving, of whom around three-quarters will be women. This is surely one policy area where we should aim to ensure that we proceed on the basis of sound evidence. We do not have evidence at this time that would support the abolition of the trigger. So, I am afraid that the Government cannot support this amendment.

Turning to the amendments in the names of the noble Baroness, Lady Janke, and the noble Lord, Lord McKenzie, which would reduce the minimum age to 18 and require pension contributions to be paid from the first £1 of earnings, the Government’s 2017 review of automatic enrolment—Maintaining the Momentum —has already set out our next steps in this area. The core proposals are a reduction in the minimum age for being automatically enrolled to 18 and the removal of the automatic enrolment lower earnings limit.

Our review involved extensive engagement with interested parties, including consultation, and was supported by an expert advisory group. Its conclusions were robust and remain correct. However, we have also been clear that these ambitions must be subject to learning from the contribution increases and finding the right approach to implementation. The timetable cannot be forced without risking both the consensus that we have achieved and the very significant policy achievements that have, rightly, been lauded across this House. Therefore, again, the Government cannot support these amendments.

I turn now to Amendments 90 and 91, tabled by the noble Baroness, Lady Drake, and Amendment 96, tabled by the noble Baroness, Lady Janke. They relate to the gender pensions gap and automatic enrolment. Since the introduction of automatic enrolment, workplace pension participation for all women employed full-time in the private sector— not only those eligible for automatic enrolment—has increased from 35% in 2012 to 83% in 2019. This is now the same as the participation rate for men, compared with 2012 when the participation rate for men was six percentage points higher. Our aim remains to increase the level of retirement saving across all groups. The 2017 review ambitions strengthen the framework of workplace pension saving for lower-paid workers, many of whom are women working part-time. As I have already made clear about the implementation, we will remain guided by evidence.

Amendment 90 would require the Secretary of State to undertake a review within six months of passing the Bill. The review would consider how to legislate to provide automatic enrolment contributions to people with caring responsibilities as parents or carers, with reference to a target group.

The new state pension system—introduced for people who reached state pension age from 6 April 2016 onwards—took forward the existing national insurance crediting arrangements. These included the credits brought into effect by Section 23A of the Social Security Contributions and Benefits Act 1992. The majority of people providing care and those who build a qualifying year for their state pension through the carer’s credit are women. The design of the new state pension means that, on average, women, those in lower-paid work and self-employed people receive higher outcomes than under the previous system.

More than 3 million women stand to receive an average of £550 more per year by 2030 as a result of the recent reforms. Women benefit most from the new state pension. Average weekly state pension payments for women are £152.44 under the new system, compared with £135.24 under the previous system. Outcomes are projected to equalise with those for men more than a decade earlier than they would have done under the previous system.

Under the system that operated from 2010 to 2016, people who were caring for more than 20 hours a week could claim the carer’s credit for additional state pension in addition to building qualifying years of the state pension. The full rate of the new state pension is more than £40 a week higher than the full basic state pension. As a result, unless someone had received carer’s credits for the majority of the 35 years of national insurance needed for the state pension, it is unlikely that they would have been in a better position than they will be now under the new state pension.

A key objective of the new state pension was to increase outcomes for women and lower-paid earners, accelerating the equalisation of state pension outcomes for men and women. The new state pension is successfully achieving these objectives. The settlement made in 2016 is building a clearer, simpler foundation for people’s private pension saving and we do not intend to reopen it.

I understand that the noble Baroness, Lady Drake, is concerned that parents and carers who are not working will miss out on automatic enrolment. Most parents and carers will work before or after periods of caring, or will combine part-time work with caring. The introduction of automatic enrolment has helped workers to build on the foundation of the state pension, while implementation of the 2017 review measures will enable them to build up more savings when they are working, improving their financial resilience in retirement. The amount being saved would be transformative: a national living wage earner with a 10-year career break could see an 88% increase in their pot size at retirement.

Amendments 91 and 96 would require the Secretary of State to conduct a review within six months of the Bill becoming law, concerning the sex equality impacts of the current framework. I always read amendments carefully but, if I may speak on a slightly lighter note, Amendment 91—tabled by the noble Baroness, Lady Drake—shows how important it is to read to the end of every sentence. When I first looked at it, I thought that it sought to ensure that the Secretary of State conducts a review of differences between men and women, which, it struck me, could be rather a lengthy exercise—but that is not the case at all. If one reads the amendment in full, it is a model of clarity in referring to a number of specified groups and I want to be serious in addressing it.

Amendment 91 would require the Secretary of State to make recommendations on how legislation and policy could correct any inequalities in automatic enrolment. Amendment 96 relates to the impact of public policy regarding pension schemes on women and the action being taken by government to close the pensions gap between men and women, with recommendations for possible further legislation.

The Government already carry out and publish a range of analysis and evaluation in relation to these matters, and benefit from valuable external evidence. The department currently evaluates the gender impact of changes to automatic enrolment policy on participation—in our annual thresholds review, for example, where this year we estimated that three-quarters of the employees made eligible by the freezing of the trigger were women. We measure and publish statistics on participation rates by gender. We carry out regular monitoring of the rates of stopping saving by gender. We also draw on a wide range of evidence across and outside government on the gender pensions gap, while working closely with the Government Equalities Office.

All that should, I hope, indicate to noble Lords that this is not a matter that we will just let drift and then monitor at some point in the future. We do so regularly as we go along, and in some detail. Outside of DWP’s evaluation of automatic enrolment—AE, if I may call it that—data and analysis of the gender pensions gap is produced from various sources across government. We will continue to draw on this evidence alongside our developing evaluation of AE, post phasing, to assess the impact of AE on the gender pensions gap.

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Earl Howe Portrait Earl Howe
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I hope that the noble Baroness will not go away with that impression. We are aware that there is a gap to be bridged. The key point I would ask her to reflect on is that, despite the desire to go faster in this area, there is a risk in doing so. We have learned lessons from the phased approach that we have already adopted. It was the right approach. The gradual approach brought everybody on side. We gathered evidence in the process; we are still gathering that evidence, and the evidence-based approach is the other watchword to bear in mind.

Baroness Sherlock Portrait Baroness Sherlock
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I will follow up a couple of questions that I asked the Minister: one was about mini-jobs, and I do not think that he responded to the other—I am sorry if I missed it—on the issue of spousal consent and pension freedom sharing. In Grand Committee on Monday, we were having a conversation about this. The Minister pushed back quite hard. I suggested that she go back to the department to establish whether there was a problem, and the noble Baroness, Lady Stedman-Scott said:

“The suggestion made by the noble Baroness, Lady Sherlock, is very helpful. I would be happy to do that before we come back to this on Wednesday”—[Official Report, 2/3/20; col. GC245.]


The reason I suggested that is that I knew we were going to have a debate on women’s pensions and therefore we could have it informed by some information. There is not much point in our having assurances if they do not happen. Is there anything to be said on that?

Earl Howe Portrait Earl Howe
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I understand from officials in the Ministry of Justice that there has been a relatively small number of cases where the pension scheme member has taken advantage of the pension freedoms to act in a way that frustrates the intention of an attachment order. However, I would like to establish what evidence there is of the scale of the wider problem, as outlined by my noble friend Lady Altmann and the noble Baroness, Lady Drake, in our debate on Monday, before deciding on the appropriate government response. I can tell the noble Baroness that my officials will work with others across government to gather the available evidence.

Pension Schemes Bill [HL]

Debate between Baroness Sherlock and Earl Howe
Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd March 2020

(4 years ago)

Grand Committee
Read Full debate Pension Schemes Act 2021 View all Pension Schemes Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 4-IV Fourth marshalled list for Grand Committee - (2 Mar 2020)
Baroness Sherlock Portrait Baroness Sherlock
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My Lords, I want to ask a couple of questions so that the Minister does not need to come back to us twice.

My noble friend Lady Drake powerfully picked up the points on transactions that I wanted to make. I heard the Minister say that the Government’s intention is to proceed to transactions at some point—I would be grateful if he could correct that if I misunderstood—but I did not hear him say why they feel that this is a good idea. I heard him say carefully that they would want assurances to protect consumers, but I did not hear anything about the positive driver for doing so that outweighs the risks that manifestly come with it, which my noble friend just articulated.

I apologise; I have two more questions. I should say that I am hugely grateful for the Minister’s thorough response; I appreciate him taking the time to give us that. It may be that, in all that, I missed the answers to a couple of my questions; I apologise if he gave them and I did not pick them up.

First, am I right in understanding that the dashboard will not cover legacy private pensions and new private pensions not covered by auto-enrolment? If so, do the regulations, as they stand, allow those to be included subsequently, and do the Government have any views on whether they were going to do so?

The Minister touched on my second question but did not answer it. On Wednesday, he said that

“we entirely understand the importance of having a dashboard run by a public body without any commercial interest.”—[Official Report, 26/2/20; col. GC 182.]

Why do the Government think that that is a good idea? Why are they not worried that there could be a long period when there are only commercial dashboards and no public dashboard?

Earl Howe Portrait Earl Howe
- Hansard - - - Excerpts

My Lords, on the final point made by the noble Baroness, it is fair to say that our debate last Wednesday gave my colleagues and me considerable food for thought as to the scheduling of all this. The strong wish expressed by noble Lords to prioritise a publicly funded and owned dashboard was duly noted. I hope to provide her with further thought on this as we go forward. I will come back to her in writing on her specific question on the inclusion of auto-enrolment schemes and so on.

The noble Baroness, Lady Drake, asked whether the consumer groups expressed a particular preference for the MaPS dashboard coming before any others. I bow to her on that. I will have to check whether that is a fair reading; I do not doubt that it is if she says so. I do not have the specific information to hand. The majority of respondents suggested and supported multiple dashboards, not just one. I can only repeat that the rollout of dashboards will be considered as part of a carefully controlled implementation plan.

I do not believe that I expressed a categorical government intention to include transactions on the dashboard. I said that we would make that incremental step only after the most careful consideration and public consultation, and assessment of all the risks. I freely acknowledge that risks exist in that quarter. If we venture into that sphere relating to dashboards, we must be absolutely certain that the risk of abuse, scams, misleading nudges and so forth is as minimal as it can be. Each incremental step will require further parliamentary scrutiny. The noble Baroness, Lady Drake, believes that this should be through primary legislation. I have to differ with her on that. We have made provision for secondary legislation by affirmative procedure, which provides a good measure of parliamentary scrutiny, preceded by public consultation which will inform parliamentary scrutiny. She and I have to part company in this area.

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Baroness Sherlock Portrait Baroness Sherlock
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My Lords, the six amendments in this group in my name and that of my noble friend Lord McKenzie of Luton are probing amendments designed to get Ministers to reassure the Committee that there is a robust system of regulation and supervision for those involved in the dashboards. Rather than go through them one at a time, as there are overlapping amendments from other noble Lords, it might be easier if I simply ask the Minister to clarify some of the key aspects of the supervision and regulatory regimes which the Government have in mind.

I was delighted last week when the Minister indicated that the Government have acceded to the request from my noble friend Lady Drake and many others around the Committee:

“we shall be introducing a new regulated activity under the Financial Services and Markets Act 2000 to reflect the provision of dashboard services.”

Hurrah, say I. That is marvellous. The Minister continued with only very slightly less certainty:

“Clause 118 provides the power to set out detailed requirements ‘for qualifying pensions dashboards’. It is also likely that this will be linked to the new regulated activity outlined by the Financial Conduct Authority.”—[Official Report, 26/02/20; col. GC 183.]


I think we are being told that this means providing a dashboard service will be added to the regulated activity order. I am assuming that is what that means.

Those requirements in Clause 118 may include

“what … information is to be provided”

and

“how the ... dashboard service is to be … operated.”

They may also,

“require a dashboard service to comply with standards, specifications or technical requirements published … by ... the Secretary of State ... The Money and Pensions Service”

or another specified person. Crucially they may,

“require the provider of the pensions dashboard service to be a person approved … by … the Secretary of State … the Money and Pensions Service”

or another specified person. The last of those is crucial.

If running a dashboard service is to be an FCA-regulated activity, should that not mean that those running it have to be approved by the FCA—in which case, ought that not to be made clear? It could be another body, but the bodies named do not include the FCA. If the activity is on the ROA, does that mean that the FCA will then be able to use its full range of FiSMA powers of supervision and regulation on anyone providing dashboard services? Can the Minister further confirm that that would mean that complaints about anything to do with the dashboard could be made to the Financial Ombudsman Service?

This is the train I am trying to establish. It is great that the activities are regulated by the FCA. Will the people running it have to be FCA approved and therefore subject to the full range of FiSMA powers? It seems that that is where the real firepower is located. Alternatively, are the Government envisaging that a dashboard service might be run by an organisation that was not FCA approved, supervised or regulated? Would there be a real risk of consumer detriment if the FCA cannot use its full range of powers on anyone using a commercial dashboard?

Provision of information to a dashboard also needs to be subject to a scheme of regulation and compliance. Information will come from various sources. Will the provision of information from trust-based schemes to a dashboard be regulated by the TPR? What about the information provided from contract schemes? Will that come from via the FCA? Will it be directly under FCA supervision or by the fact that they regulate the firms providing the information? Who will oversee the provision of information from the state and make sure it is accurate? Where does the consumer go to complain about their data? At the moment, if a bank misuses your data, the ICO will deal with the bank, but the consumer will go to the Financial Ombudsman Service to deal with detriment. What will happen here?

My biggest concern is what will be done with data provided on dashboards and the potential for mis-selling. Amendment 68 would require that those providing dashboard services would have to act in the fiduciary interest of savers. My noble friend Lord Hutton just made a compelling case for that. Our argument is that this is a special situation where the state has mandated that consumers’ data should all be gathered together in one place. That is helpful, but it is a little like saying, “Rather than having them wandering freely across the hillside, all the lambs have been gathered into one pen”. In that case, you want to be pretty sure that there is a good lock on the gate and that anyone coming along pretending to be a shepherd can be spotted early and—“Stop. Enough of this analogy. Ed.” I think the point is made.

Because of this higher challenge, there should be a higher duty of care to the consumer. If an organisation running a dashboard service is regulated by the FCA, it will be subject to the “treating customers fairly” FCA standard, but this goes higher. It becomes even more important if it is possible that any of those people will not be subject to the full range of FCA supervision and regulation powers. There should be a duty of care to the consumer. We can see the benefit of gathering information/lambs in one place, but it of course makes the information/lambs much easier to access. Can the Minister give us some reassurance on those points?

Earl Howe Portrait Earl Howe
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My Lords, the amendments in this group are designed to ensure that consumers are placed at the heart of dashboards and that the Financial Conduct Authority is given responsibility for certain aspects of that. I say straightaway that I wholeheartedly agree with this aim. What I cannot agree with is the way of achieving it proposed in the amendments.

The Government are persuaded that a strong regulatory regime is key to maintaining public confidence in dashboards. There are existing powers which we will use to introduce a new regulated activity for dashboard providers. We can do this by amending the regulated activities order set out in Section 22 of the Financial Services and Markets Act 2000. This will bring the provision of a qualifying dashboard service within the regulatory and supervisory the remit of the FCA. There is no need for the new dashboard-specific regulated activity to be in the Bill.

We are working with Her Majesty’s Treasury and the FCA to agree the nature and scope of the changes. Legislation amending the order will be brought forward in due course. I can also confirm that the Financial Services and Markets Act covers Northern Ireland, meaning that any new regulated activity would also extend to Northern Ireland. It is important to note that the new regulated activity will apply only to dashboard providers. Pension scheme trustees and operators are already within the regulatory remit of either the Pensions Regulator or the FCA. The requirement on pension schemes relating to the provision of information via dashboards will be set out in regulations and FCA rules pursuant to this Bill.

The noble Baroness, Lady Sherlock, asked whether the FCA will be able to use its full range of powers; yes, it will. All the FCA’s existing powers will be available where a dashboard provider must be FCA-authorised. To answer the noble Lord, Lord Hutton, the Financial Conduct Authority has an existing framework to ensure that authorised firms take the interests of customers into account. The Government will again set out in regulations the conditions that a dashboard will have to meet. This will be supported by new, dashboard-specific regulated activity, as I have just explained.

Strong consumer representation on the industry delivery group, alongside new regulations and a new, dashboard-specific regulated activity, will ensure that the design is in the interests of consumers and that they are protected. The regulatory framework for the new regulated activity will be proposed in the FCA’s consultation on the corresponding handbook rules and guidance.

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Earl Howe Portrait Earl Howe
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I believe that to be so but I need to take advice; I will write to the noble Baroness on that point.

Baroness Sherlock Portrait Baroness Sherlock
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On a related point, I tried hard to listen to what the Minister said because I am particularly interested in whether somebody can run a dashboard service if they are not FCA-authorised. I heard him say that the full range of FiSMA powers could be used, so a dashboard must be FCA-authorised, but I think I heard him say also that only FCA-approved bodies can run dashboard services. Is that right?

Baroness Sherlock Portrait Baroness Sherlock
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Excellent. In that case, I am trying to relate that to New Section 238A(5)(c), to be introduced by Clause 118(2), on page 105 of the Bill. It states that requirements prescribed under subsection (2) may, in particular,

“require the provider of the pensions dashboard service to be a person approved from time to time by—

(i) the Secretary of State,

(ii) the Money and Pensions Service, or

(iii) a person specified or of a description specified in the regulations”.

If, as the Minister just said, the FCA must authorise someone to run a dashboard, does it not make more sense for a government amendment to come forward to make that clear in the regulations, rather than naming two bodies—neither of which is the FCA—and having a catch-all for the third?

While I am on my feet—hey, why waste an opportunity?—and the Minister reflects a little more on that point, I want to ask about the duty of care and the fiduciary duty. I take the Minister’s point about the wording there, but are the Government resistant to the underlying point made by my noble friend Lord Hutton and me: that, in these particular circumstances, there should be a higher duty of care to the consumer on the part of the organisation running the dashboard services than would be the case in the general mêlée of the FCA? Treating customers fairly and related things may suit that generic environment but this is a very particular circumstance; the Government have initiated this and put all this information in one place and mandated its release. If it were more felicitously worded, would the Government resist the notion of a higher duty of care in this circumstance than the one that prevails generally in FCA supervision?

Earl Howe Portrait Earl Howe
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I will certainly go away and consider that point, even if “fiduciary” is not the appropriate word, and look in conjunction with my officials at whether there is a mechanism that would achieve that aim without inventing some new legal status. I am grateful to the noble Baroness and the noble Lord, Lord Hutton, for their points.

The question posed by the noble Baroness, Lady Drake, boils down to this: if MaPS or another specified person sets the data standards, how will they be accountable to Parliament? As I said, the regulations enable parliamentary scrutiny and debate on any specific future proposal as they come forward.

We need to ensure that dashboards are fit for purpose over the longer term. That cannot happen in a summary way. Delegating the ability to set and update standards and technical specifications support through secondary legislation will, in our view, ensure that dashboards remain beneficial and relevant to consumers.

Our approach recognises that ownership of the dashboard infrastructure and the responsibilities for the setting of standards may need to change over time, but I reiterate that, taking into account the good practice that exists, the industry delivery group will develop and make recommendations on a robust liability model to ensure that there are clear roles and responsibilities in the event of a breach. That includes a clear consumer redress mechanism. In answer to the noble Baroness, Lady Sherlock, the policy intent is that the FCA should authorise dashboard providers and that this should be achieved by order.

The FCA takes seriously the need to consult the public. It has a general duty to consult the public by publishing draft rules. This duty will apply equally in this case. The FCA will also consult the Secretary of State and Her Majesty’s Treasury prior to public consultation on draft rules. That will ensure that the rules have regard to the regulations that place obligations on trust-based schemes, which will provide a consistent and coherent approach.

We have covered quite a lot of ground, but I hope that I have effectively explained the role of the FCA in protecting consumers and provided the assurance that noble Lords are seeking that we will bring dashboard services within the FCA’s scope. If I have not covered all the ground, I hope that I can rely on meetings with noble Lords following Committee so that, by Report stage, I am able to come up with any further and better particulars that they seek. With that, I hope that for the time being the noble Baroness will feel comfortable in withdrawing the amendment.

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Baroness Sherlock Portrait Baroness Sherlock
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My Lords, I do not want to say very much, but I have a couple of questions on the back of what the noble Baroness, Lady Altmann, has said.

Can the Minister tell the Committee a little about what the regulators and the Government are doing to ensure that companies are ready to clean up data ready for transferring to the dashboard? Is there any intention for providers to check that members recognise the accuracy of the data at any point? Regarding what the noble Baroness described, if data had been wrong for decades, perhaps the member would not have known the details, but they might have known if they were not in a scheme, were in a different one, or if the basics were different.

The Cheviot Trust said that it was concerned that deferred members’ data would be less accurate. Is this on the DWP’s horizon? If so, what is being done about it?

Earl Howe Portrait Earl Howe
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My Lords, I completely appreciate my noble friend’s desire to ensure that the information on the dashboard is accurate and secure. I absolutely agree that accurate information is essential to the effectiveness of a pensions dashboard. The answer ultimately must lie with appropriate regulations and sanctions. The Government believe that these protections are in existing regulations, and that the relevant regulators have the powers to intervene if compliance is not maintained. Having said that, I shall explain in a minute what work is going on in relation to this set of proposals.

In relation to personal and stakeholder pensions, rule 9.1.1 in the FCA’s senior management arrangements systems and controls sourcebook requires pension providers to

“arrange for orderly records to be kept of its business and internal organisation, including all services and transactions undertaken by it, which must be sufficient to enable the FCA … to monitor the firm’s compliance”.

If a scheme fails to meet these requirements, the FCA will select the most appropriate regulatory tool in the circumstances. Responses are proportionate and could include supervisory intervention.

Where enforcement action is deemed appropriate, the FCA aims to ensure that the sanction is sufficient to deter the firm or individual from reoffending and deter others from offending. Where it takes disciplinary action against a firm or an individual, it will consider all its available sanctions, redress and restitution powers, including public censure, financial penalty, prohibition, suspension or restriction orders; it has quite an armoury.

Regarding occupational pension schemes, trustees and managers are also required under existing legislation to put processes in place to ensure that the data they hold is accurate. Section 249A of the Pensions Act 2004 and the internal controls regulations 2005 require occupational pension scheme trustees to establish and operate internal controls that are adequate to ensure that the scheme is administered and managed in accordance with scheme rules and the law.

If a pension scheme fails to administer the scheme to a sufficient standard, or to comply with any other aspect of pensions legislation, the Pensions Regulator is able to issue an improvement notice. Where trustees fail to comply with an improvement notice, the regulator can issue a fine of up to £5,000 in the case of an individual or £50,000 in other cases.

My noble friend and the noble Baroness, Lady Sherlock, stressed the importance of promoting data quality on dashboards to scheme providers. Pension trustees and providers have been aware of our intention to introduce dashboards for some time now. We have been clear that they should start preparing their data now. The Pensions Regulator has increased its scrutiny of scheme records in recent years, and launched a specific targeted initiative in October 2019. It will take time to resolve data issues, which have in some cases been ongoing for decades, but the regulator is seeing good results from its engagement. There is still work to do, as my noble friend will be the first to agree.

An in-depth understanding of the challenges that pension schemes and providers will face in complying with compulsion is essential. The industry delivery group has therefore commissioned specialist independent and qualitative research. This will be conducted on a completely anonymous basis and will explore the challenges of meeting the requirements on data through deep-dive interviews with sample pension providers and schemes. This builds on the Pension Regulator’s insight. It will inform the delivery group’s recommendations for data requirements, taking into account the needs of different scheme types. It may be helpful to my noble friend if I note that, as part of the delivery group’s activity, a priority is to consider these specific items of people’s pensions data, which pension providers and schemes should supply for dashboard displays.

Experiences from other countries with dashboards indicate the importance of agreeing data standards with all industry stakeholders and the benefits of using the widest possible consumer research. The industry delivery group, working with its steering group, is developing a data-scope paper, which will highlight its latest thinking on dashboards’ data across the whole pensions industry. The IDG plans to publish this paper in due course, asking industry for feedback and, in particular, its provision of additional evidence where it exists.

The first iteration of the industry working group on data will effectively involve the whole industry before a small, focused working group will then refine this data thinking as we move on through the spring. I therefore hope that my noble friend can be reassured that the process that we have in mind has several stages to it, that they are logical stages, and that they should tease out the issues that she has very rightly drawn attention to in her remarks.

I hope that I have illustrated that the current obligations placed on schemes by the FCA and TPR, together with the enforcement powers which both regulators have, combined with the work that I have just described, are sufficient to ensure that the schemes will provide accurate data to the dashboard. I hope, therefore, that my noble friend will feel able to withdraw her amendment at this stage.

Pension Schemes Bill [HL]

Debate between Baroness Sherlock and Earl Howe
Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 26th February 2020

(4 years, 1 month ago)

Grand Committee
Read Full debate Pension Schemes Act 2021 View all Pension Schemes Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 4-II Second marshalled list for Grand Committee - (24 Feb 2020)
Baroness Sherlock Portrait Baroness Sherlock
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My Lords, my noble friend Lady Drake has made a compelling case for the importance of this issue as well as giving us a helpful strategic overview of the state of the long-term savings industry and the impact of this dashboard on it. Done right, a dashboard could in time offer a useful service to savers. It would offer a chance to locate lost pots, to view in one place all the different bits of pension, state and private, and to make a realistic assessment whether someone is saving enough for retirement. But equally, the risks are huge, particularly given the scale if, as my noble friend said, data for more than 22 million people are to be channelled through this platform.

This becomes a public good only if it is designed and delivered in the right way, with transparency and all the necessary safeguards. As my noble friend Lady Drake said at Second Reading,

“public good cannot be traded off against commercial interests.”—[Official Report, 28/1/20; col. 1367.]

Labour would prefer this to be a public service, but if the Government are determined to go down the road of commercial dashboards, it is clearly essential that there be one “public good dashboard” owned, controlled and governed by a public body. My noble friend has given us a frankly staggering list of organisations supporting this that are right at the heart of the industry, including the CEO of the Pensions Regulator, who told the Work and Pensions Select Committee on 26 June 2019 that

“there must be the public dashboard”.

It is really very simple: the public should not be required to use a commercially owned dashboard to access their own data, especially in a market so susceptible to consumer detriment.

It is quite extraordinary that there is nothing in the Bill saying that there should be a public dashboard, when I think everybody had assumed this was going to happen. The Minister said at Second Reading

“MaPS committed to providing a dashboard in its 2019-20 business plan.”—[Official Report, 28/1/20; col. 1414.]

However, a Minister telling us that an NDPB has plans to do something is not the same as legislating that it must happen, so our amendments simply require that there be a public good dashboard.

The MaPS business plan said:

“It is envisaged that there will be multiple dashboards connected to the infrastructure, but also that there is merit in a consumer facing dashboard provided by a non-commercial and impartial organisation. The Money and Pensions Service, as part of its business as usual function to provide impartial information and guidance, will begin the development of a noncommercial consumer facing dashboard.”


There is not exactly a sense of urgency there; it contrasts quite markedly with what the noble Lord, Lord Young, has described as the ABI champing at the bit to get going and hoping to have it done by last year, or at the very latest this year.

That is the second point. Even if Ministers seek to assure us that MaPS is committed to producing a public dashboard, we want to know that it will be up and running before any commercial dashboards are allowed to start operating. That is what Amendment 48 is designed to ensure. I cannot see why this should be controversial. If Ministers are confident that MaPS is on target, no doubt they will accept the amendments from the noble Lord, Lord Young, and reassure the Committee that a good public dashboard will be set up. Would it not be obviously sensible to have that up and running to test the architecture and infrastructure before allowing private companies to set their own up dashboards, with the additional risks that will bring?

I suppose it is possible that Ministers are not confident that MaPS will have its public dashboard running any time soon. They could easily dispel that thought by accepting the amendments from the noble Lord, Lord Young, or indeed ours. I believe MaPS has said only that it hopes to be one of the first. The state’s recent track record with large-scale IT projects, as those of us covering DWP know to our cost, has not been fantastic. If multiple dashboards are to be allowed to be set up all at once, and if MaPS is to take its time in doing it, there could potentially be a considerable period in which consumers will be able to access their data only through a commercial dashboard. That does not seem to be in line with what we understood the Government intended to do.

Our amendments are simply designed to ensure three things: that there is a dashboard which is publicly owned, controlled and governed; that it is free to use and does not display advertising; and that if Ministers are to go down the route of commercial dashboards, they do not do so until the public dashboard has been operating for at least a year, and the Secretary of State has been able to report to Parliament on its structure and effectiveness.

I would like to ask the Minister some specific questions. They are really easy—not A-level questions but low-grade SATs questions, which I have no doubt should be in her brief somewhere. I shall read them really slowly. First, when does DWP expect the MaPS dashboard to be up and running? Secondly, when does it expect the first commercial dashboard to be up and running? Sorry, I was looking at the wrong Minister. Thirdly, how many dashboards do the Government think we will have? How many do they know of that are being tested or in the pipeline? Fourthly—this is a biggie—will commercial dashboards be allowed to charge consumers for using them? Fifthly, and this may be at GCSE standard, I understand that alongside any dashboard developed by MaPS, a liability model will need to be developed. We do not have any guarantee that the liability model will be ready before commercial dashboards become available, even if the MaPS dashboard is not ready. Is there any way that there could be a gap between people using commercial dashboards and the liability model being ready? That matters because, of course, if detriment is created then we need to know how it is to be managed and where responsibility lies.

I remain very worried about what the Government may be creating without considering all the implications, and its unintended as well as intended consequences. I look forward to the Minister’s reply to our amendments and to those tabled by the noble Lord, Lord Young. I hope the Government can reassure us that they will in fact be committed to having a high-quality, public good dashboard established before the industry is allowed to get into a free-for-all.

Earl Howe Portrait Earl Howe (Con)
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My Lords, I thank the noble Baronesses, Lady Drake and Lady Sherlock, my noble friend Lord Young and the noble Lord, Lord Sharkey, for their valuable contributions to a debate on what I am the first to acknowledge is a significant set of topics. This group of amendments explores how privately operated dashboards will work alongside a public dashboard provided by the Money and Pensions Service. They also explore whether a public service dashboard will be delivered.

I want first to reassure the Committee that the Government are absolutely committed to the Money and Pensions Service, or MaPS, providing a qualifying dashboard service. Let there be no doubt about that; it was clearly set out in our consultation response Pensions Dashboards: Government Response to the Consultation published in April last year. The MaPS business plan for 2019-20, also published last April, subsequently confirmed its commitment to deliver a dashboard.

Furthermore, to pick up the sense of Amendments 47, 48 and 70, we entirely understand the importance of having a dashboard run by a public body without any commercial interest. One of the core functions of the Money and Pensions Service under the Financial Guidance and Claims Act 2018 is to provide free and impartial information and guidance about occupational and private pensions. Read together with Clause 122, that ensures that MaPS has the legal powers to provide a pensions dashboard that includes state pension information. To be clear, I say that accessing the information on dashboards will remain free, regardless of whether a dashboard is provided by MaPS or another organisation.

MaPS will be able to include signposting to free and impartial guidance on its dashboard, as will other organisations, as that supports its pensions guidance function. However, MaPS will not be able to host any income-generating advertising. MaPS has no revenue-raising powers under the Financial Guidance and Claims Act 2018.

I turn to ownership. We expect MaPS to provide a dashboard on an ongoing basis. However, it is important for there to be flexibility in how that function is carried out in line with changing technology and consumer interests. Here I am talking about the medium to long term. We also want to maximise the Government’s ability to ensure that ownership of the dashboard is in the right place in the longer term.

On Amendment 71, I very much share my noble friend Lord Young’s desire for a dashboard to be delivered in a timely manner to help people plan for their retirement. However, setting a date in legislation may be counterproductive. It risks creating a situation where decisions are taken simply to meet a legislative deadline, regardless of outcomes, rather than to meet the needs of individuals. To my mind, more important here is that we ensure that the service is accurate, secure and consumer focused. Developing a service that gives consumers a single point of access to their pensions information is complex. There are 40,000 schemes of differing types, covering around 25 million people with private pension wealth. The staged onboarding of thousands of pension schemes covering millions of separate records will raise issues that are not currently apparent, it is safe to predict. That tells us that dashboards should be delivered only when the Government and MaPS are confident that they are ready, so that consumers can be confident in the service offered. I hope that the noble Baroness, Lady Sherlock, in particular agrees, given her apposite references to computer systems that perhaps have not quite lived up to expectations.

Through Amendments 37 and 48 the noble Baronesses, Lady Drake and Lady Sherlock, also probe the question of introducing multiple dashboards alongside a MaPS dashboard. Having the potential to offer multiple dashboards at launch maximises the possible reach of this policy from the outset and could help to meet the differing needs of the many people using them. User research completed as part of the Government’s feasibility study and consultation showed that individuals may prefer to use a dashboard provided by an organisation with which they already have a relationship—for example, their employer—due to higher levels of familiarity and trust. It is a case of one step at a time, however.

I hope that the Committee is reassured that the information shown on all dashboards, public or private, will be the same, and based on user testing. We also intend all dashboards to start with a limited functionality until we better understand how individuals interact with their information.

A majority of respondents to the government consultation were supportive of multiple dashboards, provided sufficient consumer protections were in place. The Government have considered how to ensure that consumer protection, and accordingly we shall be introducing a new regulated activity under the Financial Services and Markets Act 2000 to reflect the provision of dashboard services. As I am sure noble Lords are aware, we will cover this issue in more detail later.

Clause 118 provides the power to set out detailed requirements “for qualifying pensions dashboards”. It is also likely that this will be linked to the new regulated activity outlined by the Financial Conduct Authority. These are all provisions to ensure consumer protection in relation to privately run dashboards. Our job is to put that consumer protection regime in place, but, once it is in place, we do not wish to constrain the potential reach of the policy. Nor do we wish unnecessarily to limit consumer choice.

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Earl Howe Portrait Earl Howe
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That is a very constructive suggestion from my noble friend. I will take it away with me.

Baroness Sherlock Portrait Baroness Sherlock
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My Lords, that had better not happen too soon, though, because there might be nothing to see for a while. I am very grateful to the Minister for his thorough response, even if some of it disappoints me. I am grateful to him for taking his time to go through the questions.

My noble friend Lady Drake, as always, expresses it more cogently and thoroughly than I do, but my problem is that the Minister is essentially saying that the Government are committed to MaPS producing a dashboard. This is not the same as the Government saying that they will ensure that there is a dashboard. My worry is that I do not want to see this rushed. I have been an adviser in government myself, when tax credits were being developed. I realise the problems that come out and I know only too well that when you develop new computer systems, you do not know what will happen until you press the button on the first day. However, my worry is that that is precisely what could happen here. If the Government are determined to allow commercial dashboards to go live whenever they are ready, what if MaPS then takes years to get it right? What if it never does? What if MaPS itself fails on another front? We could end up never having a public dashboard, in which case the Minister would not have broken his word but none the less a public dashboard would never have come to pass. If it were in the Bill there would be an obligation on Ministers.

I take my noble friend Lady Drake’s point about new incumbents. I have been in my brief since I think 2011 or 2012. I think that I am on my seventh Secretary of State. Given that one of them was there for quite a long time, there has been an awful lot of turnover since. It is not impossible that a new Secretary of State could come in and take a radically different view from their predecessor, as they have in my time, on some aspect of policy. It is not really the kind of assurance that we would want.

My worry is that the Minister has not addressed one point: if the Government believe that there should be a public dashboard, but are relaxed about the fact there could be a long period of time where consumers would be able to access their data, which the Government had mandated the release of, through only a commercial dashboard, why do they think that there should be a public dashboard at all? Theoretically, there could be five years between the commercial dashboard and the MaPS dashboard. If the Government think that it does not matter that there will be no public dashboard for that interim period, why do they think that it matters at all?

My final point is about the fact that the Minister thinks that there are no risks at all. I would like to hear this conversation between him and the noble Baroness, Lady Altmann, but I think it should take place in this Committee. The Minister defended the skeletal nature of the Bill. We will come back to this in the next group on Monday, but the Constitution Committee was quite explicit in saying that the Government’s defence that the Bill is very complex, that we have to get on with it and that we should not worry because the regulations will be affirmative, is not adequate or an excuse for drafting the Bill in this way. Part 4 is almost a skeleton.

The combination of all this is that the Government are saying, “There should be a dashboard. We cannot tell you when the public dashboard will be up. Don’t worry, it’ll be fine because we will regulate it. We can’t tell you who will regulate it, or how, or any of the circumstances. We can’t even tell you how we’ll make sure the risks don’t come to pass”. The Minister says that the information will be the same, but can he tell me whether it will be displayed in the same way, who will decide what the information will be or what the time periods will be? None of these questions has yet been answered. We will come back to them with our next amendment.

The Minister is asking the Committee to take a huge amount on trust when we have literally no idea what the dashboard will look like. Yet, somehow, we are just meant to say that it will be fine and the risks are fine. I spent 10 years on the board of the Financial Ombudsman Service. Every year we had to read a selection of case files. I have a pretty long experience of all the things that have gone wrong in sectors where the Government were confident they were well regulated and controlled, and where things could never possibly go wrong. My goodness, they have gone wrong in ways one could never have imagined when the regulations were being framed.

I am glad that the Minister is confident that there are low risks. I do not share his confidence, but maybe I am an old cynic. I would be interested if he could respond in particular to the point about why there needs to be a public dashboard at all if the Government do not mind whether there is not one for as long as it takes for MaPS to catch up. Can he answer that point?

Earl Howe Portrait Earl Howe
- Hansard - - - Excerpts

I believe I am right in saying that while your Lordships’ Delegated Powers Committee had some trenchant things to say about the delegated powers in the rest of the Bill, it felt pretty relaxed about the powers in Part 4, because it recognised that it was absolutely necessary to have the kind of flexibility I referred to. We must take it that the committee looked at these matters in some depth. Clearly, it did not feel constrained in criticising the nature of the powers in other parts of the Bill. I think the delegated powers here are necessary. I do not think we should be frightened of them, but I can see that the accumulation of them might appear off-putting to noble Lords.