Foreign Policy

Baroness Stedman-Scott Excerpts

Wednesday 3rd May 2023 Grand Committee

[Baroness Stedman-Scott (Con)]

With no disrespect to my noble friend, the noble Baroness was not here at the beginning. It may be a rule that she is not familiar with.

[Lord Goldsmith of Richmond Park (Con)]

The noble Baroness does make a very important point. I will be touching on it in the remaining stages of my speech but yes, absolutely that must be a focus. That is at the heart of our critical minerals strategy but it goes way beyond that, for precisely the reasons that she has said.

Responding to this ever faster-moving global context means stepping up to protect the UK’s economic resilience, not least by acknowledging the point made by the noble Baroness. We have established a new directorate in the FCDO, incorporating the government information cell, to increase our capacity to assess and counter hostile information manipulation where it affects UK interests overseas. A new economic deterrence initiative will build our diplomatic and economic toolkit. With initial funding of up to £50 million over two years, the initiative is designed to strengthen our sanctions implementation and enforcement, and to give us new tools to respond to hostile acts and crack down on sanctions evasion. A new national protective services authority, located within MI5, will provide UK businesses and other organisations with immediate access to expert security advice. We will be publishing the UK’s first semiconductor strategy, which will grow our domestic industry for that vital technology, as well as the updated critical minerals strategy that I mentioned a few moments ago.

On science and technology, I want to acknowledge a point made by the right reverend Prelate on the importance of investment in science and technology. In a world of technological change, we are investing more in the UK’s science and tech ecosystem than ever before. Through our international tech strategy, we have laid out how we will cement the UK’s place as a science and tech superpower, working with partners to secure strategic advantage and ensure that technology promotes our shared values of freedom. We have already reorganised government to focus better on this area and are increasing our resilience for the long term, spending around £20 billion a year across government on research and development by the next financial year.

The noble Lord, Lord Browne, raised the issue of AI. I cannot go into detail but AI technology is a step forward, which offers potential answers to questions that we have never been able to answer. It is an incredibly powerful tool and there is a question of whether we have demonstrated that we have sufficient wisdom to control such a powerful tool. Rather than rushing in as we are, we should be discussing, debating and figuring out what we want from AI and how we can prevent that incredibly powerful new thing from falling into the hands of people who will not be approaching issues in the benign manner that noble Lords have in this debate today.

I want to talk about Horizon very briefly. A number of speakers, including the noble Lord, Lord Bilimoria, mentioned it. Yes, we are discussing association. We want negotiations to be successful. Clearly the outcome needs to be in our interests, but that is very much a government policy and will continue to be.

On soft power, I will talk on international development, because that is probably one of the best examples of where we deploy soft power. Sustainable international development clearly is and remains central to our foreign policy. It is fundamental to the goals of the integrated review. I apologise to the right reverend Prelate the Bishop of Leeds for having left the Committee to answer the call of nature half way through his speech. I very much share his views on Lord Mitchell—or rather Andrew Mitchell; he is not a lord, although he may become one—who is one of this country’s great experts when it comes to development, as you could see by the reception he received when he was given that appointment. We spent £11 billion on international development assistance last year, including on climate, girls’ education, global health and so on, and we remain absolutely committed to that broader agenda.

To support our commitment to development earlier this year, we launched the women and girls strategy to tackle threats which have been debated and discussed—three minutes to go; halfway through. This year we will go further and faster to deliver that strategy, the IDS. The IDS was not given the prominence that it merited, and I encourage noble Lords to really have a look at it to see what is driving our approach to international development.

I will have to use the last few minutes to talk about climate change. The noble Baroness, Lady Northover, described it as an existential threat, and the noble Lord, Lord Bilimoria, praised the King for his history of involvement long before others, at a time when it was almost crank-like to worry about these issues, which have become mainstream, and I totally agree. I also just emphasise the UK’s leadership on this issue. COP 26 was the first COP where nature was brought in from the outside and put at the centre, with 90% of the world’s forests covered in commitments to end deforestation this decade, and 90% of the global economy signed up to net zero—it was only 30% when we took on the presidency. Real leadership through the UK resulted in a COP which again surprised the world in its effectiveness and how far-reaching it was. Our job now is to make those commitments real. We saw some of that at COP 27, where the UK had, other than the hosts, probably the most impactful interventions. We saw that in Montreal, which I mentioned earlier, where the UK did more heavy lifting to get that agreement over the line than any other country, including the presidents and the hosts of that conference. Many countries would agree that we would not have succeeded had it not been for the UK’s involvement.

I see I have only 30 seconds left, which is awful, and I have not even begun to address the comments from my noble friend Lord Popat on Africa, but I agree with him very strongly that there is huge promise there. The noble Lord, Lord Coaker, made an interesting point about why investing in and supporting Africa is in our interest. One example of that is that the Congo Basin produces nearly two-thirds of Africa’s rainfall, yet it has been cut down at a rate of half a million hectares a year. If that were to continue—it will if we do not intervene—we will see a humanitarian crisis on a scale that exceeds anything even in the Bible. We would be looking at something off the scale. That is not a question for debate. We know that the forests generate rainfall and that cutting down the forests will stop rainfall, and we know that rainfall is necessary for the lives and livelihoods of hundreds of millions of people and those to whom that food is exported.

I apologise that I have to conclude. I was going to address the 0.7% question, but I will simply say that I agree very much with the comments made. I urge the Government to move as quickly as possible to restore that 0.7%. It is an incredibly valuable thing the UK has in its armoury, not only doing good but benefiting us as well.

The UK has committed to work with our allies to shape an open, stable, international order with co-operation and partnership at its heart. Today, in a climate-threatened and geopolitically contested world, we are taking steps to adapt. We commit to taking the long-term view, acting with agility and, as always, being a champion for the values that we hold dear. I thank noble Lords again for their insightful comments and I apologise for not answering every question.

Chemicals (Health and Safety) Trade and Miscellaneous Amendments Regulations 2022

Baroness Stedman-Scott Excerpts

Wednesday 20th July 2022 Lords Chamber

Moved by

[Baroness Stedman-Scott]

That the draft Regulations laid before the House on 23 June be approved.

Considered in Grand Committee on 19 July.

Motion agreed.

Chemicals (Health and Safety) Trade and Miscellaneous Amendments Regulations 2022

Baroness Stedman-Scott Excerpts

Tuesday 19th July 2022 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Chemicals (Health and Safety) Trade and Miscellaneous Amendments Regulations 2022.

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

My Lords, this draft statutory instrument was laid before Parliament on 23 June. As part of this Government’s ambitious international trade agenda, the United Kingdom signed a free trade agreement last year with the European Economic Area and European Free Trade Association countries, such as Iceland, Liechtenstein and Norway. This agreement included a chemicals annex as part of the technical barriers to trade provisions, which committed both parties to co-operate in the field of chemicals regulation.

This draft statutory instrument makes a provision for this chemical annex so that the Health and Safety Executive can share information on chemicals it holds, such as individual regulatory substance evaluations and risk assessments, with the authorities in those countries. The SI also allows the UK authorities to make use of information received from EEA/EFTA countries to help to ensure protection in the areas of health and safety, the environment and consumers. This sharing of information will promote greater transparency and understanding of our respective regulatory approaches and of chemicals safety. It will also help to create a greater understanding of the decision-making processes in the UK, which will build trust and confidence with EEA/EFTA countries, enhancing the robustness of decision-making, and thereby reduce regulatory costs for UK businesses wishing to place chemical products on the market in EEA/EFTA countries.

This SI also corrects minor outstanding deficiencies such as references to EU institutions in several pieces of retained chemicals law arising from leaving the EU, to ensure that the relevant chemicals regimes continue to operate effectively. There are no policy changes or changes to duties but, since it is such a technical instrument, I am sure that a brief summary of the changes will be welcomed.

The first of the three retained regulations to be amended is the GB biocidal products regulation, which governs the placing on the market and use of products that contain chemicals that protect humans, animals, materials or articles against harmful organisms such as pests or bacteria. It is in place to ensure these chemicals are safe for humans, animals and the environment while improving the functioning of the biocidal products market. This market covers a wide range of products, such as wood preservatives, insecticides such as wasp spray, or anti-fouling paint to remove barnacles from boats.

The second is the GB classification, labelling and packaging of substances and mixtures regulation, which ensures that the hazardous intrinsic properties of chemicals are properly identified and effectively communicated to those throughout the supply chain, including to the point of use, partly through standardised hazard pictograms and warning phrases associated with specific hazards, such as explosivity, acute toxicity or carcinogenicity.

The third amendment is to the GB prior informed consent regulation, which implements the UK’s obligations under the international Rotterdam convention and requires exports of listed chemicals to be notified to the importing country; for some chemicals, the consent of the importing country must be obtained before export can proceed.

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her introduction to these regulations and for explaining them. I confess that I read both the regulations and the Explanatory Memorandum more than once, and stopped only when I realised that every successive reading was adding nothing to my understanding or indeed knowledge of the subject in question. So, I appreciate her summary.

I thank the noble Baroness, Lady Barker, for some great questions. She is absolutely right that, while they seem dry, questions such as the easily comprehensible labelling of dangerous objects could hardly be more important in terms of protecting life and limb. I will ask some questions, and I apologise in advance if they are basic. However, I trust that the Minister has cavalry behind her who can assist should that be necessary.

As far as I can understand it—I know that the Minister will correct me when she responds if I have got it wrong—the instrument appears to do two main things. First, it provides for the creation of an information- sharing gateway so that the Health and Safety Executive can disclose information that it is required to disclose under the terms of the trade agreement between the UK and the EEA/EFTA. My first question is: what is it? What will the gateway look like? Is it a process or a piece of software? Is it online and is it secure?

The second question is fairly obvious: what will it do? The Explanatory Memorandum says:

“HSE needs a power in order to share information such as individual substance evaluations and risk assessments that it holds on chemicals to assist the UK in meeting its obligations on regulatory co-operation contained in the Chemicals Annex of this trade agreement.”


Can the Minister give me an example—I am a bear of very little brain—of some information that the UK is required to disclose as a result of this trade agreement which is in the gift of the HSE and which it currently does not have the power to disclose but, as a result of this regulation, will then be able to disclose?

Can the Minister also tell us where the information is coming from? She mentioned information coming from EFTA or EEA trade partners, but are we also talking about information that British firms have supplied to the HSE in the ordinary run of business? I am interested in the line of liability and the control of the data. Whose data is it, who controls it and where will it end up?

What are the limits on disclosure? Regulation 3 sets out three “permitted purposes” under which this information can be disclosed:

“to ensure health and safety … to ensure protection of consumers”

and

“to ensure protection of the environment.”

That is pretty broad. Given that it is that wide-reaching, can the Minister say what the boundaries are for disclosure and whether there will be any monitoring of the HSE’s decision-making in relation to it? Since the received information can be used only for a permitted purpose, what will be in place to monitor the use after the information has been disclosed?

There is a lot of amending and repealing going on here—amending the biocides regulation, amending and repealing two EU directives. How can you amend and repeal things? Do you amend them and then repeal them? I suppose it would not make any sense the other way around, but perhaps the Minister can shed some light on that. There was also amendment of the CLP regulation, the PIC regulation and related retained legislation

“to ensure the regulations continue to operate effectively.”

At this point I had completely lost any sense of which regulations were being enabled to operate effectively.

I am trying to get at what the end state is—the noble Baroness, Lady Barker, put it much more crisply. Where will we land once all this amending and repealing has happened? Are we back where we were before Brexit? Are we in a parallel space to where our EEA/EFTA trade partners are? Are we on some different diverging path? Where will we land? Also, can she assure us that, once all this amending and repealing has happened, the legislation—both retained and secondary—relating to health and safety in chemicals will be fit for purpose?

To give the Minister a bit of time, I will summarise the questions. What is the gateway? What information will go through it? Can we have an example of it? Where does the information come from? What are the limits on the information that can be disclosed, given the very wide-ranging parameters in the regulations? Where will we land once all this has happened? I am very excited to hear her reply.

[Baroness Stedman-Scott (Con)]

I thank the eloquent noble Baronesses for their questions. As they say, this is a very technical piece of work, but I will do my best to respond. My cavalry is working very hard to ensure that I can do so with accuracy. I thank both noble Baronesses for contributing to this debate. In closing, I will try to deal with some of the issues. If I do not, noble Lords know that I will go away and do my homework to get the answers they deserve.

The noble Baroness, Lady Barker, asked about the Northern Ireland protocol. This instrument makes no changes in relation to Northern Ireland beyond correcting references in EU-derived domestic legislation to EU law which should reference the Protocol on Ireland/Northern Ireland and ensuring that the definition of “export” in the GB PIC regulation clearly captures the removal of chemicals from Great Britain to Northern Ireland, as intended.

The noble Baroness also asked whether the regulations simply return GB regulations to their state when we left the EU. The CLP regulation has been retained as domestic law and now establishes a GB CLP system that is independent from the EU CLP regulation. It is therefore necessary to ensure our regulations no longer make deficient references to EU institutions or their processes and authority. These proposed changes ensure the last remaining references to the European Commission and its delegated powers to make amendments to specified articles and annexes are removed from the retained GB CLP regulation.

The noble Baroness, Lady Barker, referred to the biocidal products regulation, or BPR. The regulations were brought into GB from EU BPR, but during this process, as I have said, some EU references within the legislation were not removed, so the changes in this SI ensure that GB BPR works as a piece of domestic legislation.

The noble Baroness also asked about estimated costs. There will be no costs to businesses arising from the regulatory information-sharing arrangements in the UK-EEA/EFTA trade agreement. The corrections to the retained chemicals regulations are to address deficiencies and inoperabilities. They allow the regulations to function as originally intended and do not have any financial implications.

The noble Baroness, Lady Sherlock, challenged us on what the information-sharing gateway will look like. It will be mostly regulatory information held by the HSE or parties to agreements, so it will be information on risk assessments—not confidential business info. Trade data will be for the Department for International Trade.

The noble Baroness, Lady Sherlock, raised the issue of disclosure. The GB PIC regulation implements the UK’s international obligations under the Rotterdam convention on the prior informed consent procedure for severely hazardous pesticides. The regulation establishes a system of export notification and information exchange to allow countries to make informed decisions about the chemicals they import. The GB regulation has been retained as domestic law, and now establishes a GB PIC export notification system that is independent from the EU PIC regulation.

--- Later in debate ---

[Baroness Sherlock (Lab)]

I shall not press the Minister any further now. She has helpfully described what the regulations are intended to do, but she has not helped laypeople such as the noble Baroness, Lady Barker, and I to understand what the end state will look like as a result of them. For example, she said that through removing deficiencies, we will have an independent GB CLP regulation process. It is great that it will not be deficient any more; I have no idea what it will look like, and I realise I should. If possible, when she writes, given the complexity of the regulations and the question, if she could describe the end state, we would be very grateful.

[Baroness Stedman-Scott (Con)]

I am very happy to commit to doing that, subject to agreement from my officials. We are fine.

To conclude, the instrument will give HSE the power it needs to share regulatory information it holds on chemicals to assist the UK in meeting its obligations on regulatory co-operation contained in the chemicals annexe to the free trade agreement with the EEA/EFTA countries. This removes the barrier which was stopping information sharing under the free trade agreement, which would have been detrimental to HSE making informed decisions about the chemicals being imported and exported. By also correcting the outstanding deficiencies related to EU exit, we will ensure that retained and EU-derived domestic chemicals legislation continues to operate effectively. Therefore, I commend the instrument.

Motion agreed.

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

Baroness Stedman-Scott Excerpts

2nd reading
Friday 15th July 2022 Lords Chamber

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

My Lords, I am grateful to the noble Lord, Lord Faulkner, for bringing to the House this important debate, which I believe he has tried to secure since 2017. I congratulate him on his tenacity. The Government think that it is important to recognise and support the valuable opportunities that young people have through volunteering. I stress that modern health and safety legislation does not prevent children and young people volunteering on heritage railways or tramways, which I believe is a great experience for all involved. Also, the noble Lords, Lord Faulkner and Lord Jones, referred to the difference these activities make to the local economies in which they are based.

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 Health and Safety Executive requires duty holders to demonstrate that they understand any potential hazards that may come to young people when volunteering. Those hazards should be set out in the duty holders’ risk assessments, along with the steps they have taken to minimise them. To increase compliance levels in managing risks, the Health and Safety Executive uses a range of regulatory actions, from influencing behaviours across whole industry sectors to targeted interventions on particular sectors and activities. The Health and Safety Executive will continue to hold to account those duty holders who fail in their responsibilities to protect workers through proportionate enforcement action. Because the Health and Safety Executive takes a proportionate, evidence-based approach, the Government are convinced that modern health and safety legislation does not prevent children and young people from volunteering on heritage railways and that there is no reason to amend or repeal current legislation.

The law protecting children in the UK is a complex area, and this Bill touches on not only health and safety protections but also child labour laws and local authority by-laws. These are all devolved matters in Northern Ireland, and this Bill would impose changes there too. To repeal or amend the Employment of Women, Young Persons, and Children Act 1920 may initially seem the best course of action; however, this involves a level of complexity and risk that makes it undesirable and unnecessary. This would still leave legislation owned by the Department for Education—the Children and Young Persons Act 1933—in place which limits young volunteers to undertaking light work only. In addition, many local authorities have by-laws under the 1920 Act which contain prohibitions on types of work that are not suitable for young people. Repealing the Act could have unintended consequences across a number of sectors.

The Government’s view is that there is no need to introduce additional legislation to ensure young people can volunteer on heritage railways. The Health and Safety Executive has policy responsibility for the 1920 Act, but in the case of heritage railways the Office of Rail and Road is the enforcing authority. Previously, both the Health and Safety Executive and the Office of Rail and Road considered what powers they have and how they would be applied in the case of young people volunteering on a heritage railway. Both regulators have reconfirmed that they would not enforce the 1920 Act solely to prevent children and young people from volunteering on heritage railways. The 1920 Act has never been used for this purpose.

A point worth emphasising is that modern health and safety legislation already applies to the activities of children and young people volunteering and requires a risk assessment approach to managing their health and safety. So, if there was evidence of poor supervision, exposure to risk or danger, the Health and Safety Executive and/or the Office of Rail and Road would take action under health and safety legislation, not the 1920 Act.

I think the noble Lords, Lord Berkeley and Lord Jones, stressed very well the importance of young people having exposure to heritage railways, because it can inspire them in subjects they want to study and in careers they want to take, and we should make sure that opportunity is available to them. So, the Government support volunteers and volunteering. Volunteering can be a rewarding experience for young people and allows them to gain new skills, meet new people and make a difference in their communities.

I would like to recognise the noble Lord, Lord Faulkner, and the Heritage Railway Association for the important work they do in preserving this part of our nation’s cultural and industrial heritage, as well as for the opportunities that they and their members provide for children and young people on our heritage railways and tramways. My noble friend Lord Shrewsbury mentioned that he had put on a tie today, which is a major achievement, for this Bill, so we should recognise that. I would also ask your Lordships to take a look at the tie of the noble Lord, Lord Faulkner, which is absolutely fit for today and a great credit to him to promote his field of work.

I live literally yards away from the line that goes from Tenterden through to Bodiam on the steam railway. On a really great day, when the wind is blowing in the right direction, I can smell the steam when I am sitting in my garden—it is that close. It is very evocative and encouraging. I have gone on Thomas the Tank Engine, gone there for Sunday lunch and gone on the Santa special many times. The difference that it makes to young people and the economy is terrific. The young volunteers on that railway line thrive on their activities.

The noble Lord, Lord Berkeley, mentioned the point made by the noble Lord, Lord Ashton, about trying to find a solution. I will come on to that later because I will make a definite commitment with a definite timetable.

The UK is a true pioneer in the history of railway, nurturing and benefiting from the talents of Brunel and Stephenson, among others. We are rightly proud of this legacy and must ensure that the next generation is endowed with the skills and passion to protect it. Volunteering is vital for the future sustainability of the heritage rail sector, with approximately 22,000 people giving their time and expertise to support heritage steam organisations across the country. We know from the All-Party Parliamentary Group on Heritage Rail’s 2018 report, Young People and Heritage Railways, that almost 800 under-16s successfully volunteer without intervention from regulators.

This shows that modern health and safety legislation works. There is supporting guidance freely available, and the Health and Safety Executive and the Office of Rail and Road have previously offered—and are still willing—to work with the Heritage Railway Association to update their guidance for its members; to set out what tasks would be suitable for children and young people to perform on the railways; and to give heritage railway and tramway operators the assurance they require to be able to offer safe and appropriate volunteering opportunities.

As has been said, this is an ongoing issue, with a meeting between the noble Lord, Lord Faulkner, and my noble friends Lord Ashton and Lady Buscombe to discuss it further planned for the autumn of 2019. I understand that, unfortunately, diaries did not align, for which I apologise; I am grateful to the noble Baroness, Lady Wilcox, for pointing out that the past three years have not been easy. Anyway, we must move this on and end the delay in resolving this matter. I make a commitment that officials from the Health and Safety Executive and the Office of Rail and Road, with support from DCMS—I am prepared to join that meeting—will offer to meet the noble Lord, Lord Faulkner, to discuss this issue further, particularly how the HRA guidance can be amended to better support managing the health and safety risks for young volunteers.

The noble Earl, Lord Shrewsbury, mentioned coal. The Government appreciate the unique importance of the heritage steam industry both in promoting the UK’s rich industrial heritage and for the wider visitor economy. We acknowledge the difficult circumstances facing the heritage steam sector at this time in light of the rising cost of coal on international commodity markets, due in part to the Russia-Ukraine conflict. We are in regular communication with the heritage rail sector to explore how we may be able to assist, including ministerial engagement with the Heritage Rail Association. However, ultimately, we view the decision on where to source coal for use in heritage steam and other industries as a private matter for the companies involved.

The noble Lord, Lord Snape, referred to insurance. The detail of each railway’s insurance policies is a matter between the insurer and the heritage railway operator. However, in 2018, the All-Party Parliamentary Group on Heritage Rail heard from a witness representing the insurance industry that the 1920 Act would not make any difference to the cost or cover of insurance.

The noble Baroness, Lady Wilcox, asked why children are prevented from volunteering on heritage railways. As I have said, the Government support volunteering and recognise the benefits for all those involved. They are not limiting the opportunities for children to safely volunteer on heritage railways.

In conclusion, the Bill tabled by the noble Lord, Lord Faulkner, seeks to allow children to gain valuable experience volunteering on heritage railways and tramways. The Government support this aim. However, we believe that the current framework does just that: existing modern health and safety laws allow children and young people to volunteer on heritage railways, while protecting their education and health and safety. Nothing would be gained from a change to legislation when other, simpler and more effective options are available. The existing framework is fair and effective, which is why the Government do not believe that the Bill is necessary. Nevertheless, the Government are committed to working with the noble Lord, Lord Faulkner, and all interested parties to achieve a solution; we will meet in the autumn when the House returns.

Women and Girls: Economic Well-being, Welfare, Safety and Opportunities

Baroness Stedman-Scott Excerpts

Thursday 14th July 2022 Lords Chamber

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

I start by echoing many of the tributes paid to the noble Baroness, Lady Gale, for bringing forward this debate, and to all Members who have spoken and contributed to such an all-encompassing discussion. I would also like to pay tribute to those men who have joined us today and made very forthright contributions. It is great that you respect women, and their role and potential in the country. I thought the noble Viscount, Lord Stansgate, gave five minutes of excellent value, and it was a very significant contribution which I will refer to as I go through.

One thing is as sure as eggs: I am never going to be able to answer everybody’s questions. If I do not answer your question, it is not because I do not want to, or I am disrespecting you, but I will, at the end, make sure I write to all noble Lords who took part in the debate, and make sure all your questions are answered to your satisfaction.

I had the great pleasure of being part of the International Women’s Day debate held in March, when again the noble Baroness, Lady Gale, made a very powerful and eloquent speech. While that debate was not all that long ago, I will never turn down a chance to highlight the great work taking place across government to ensure that everyone can access opportunities and reach their full potential.

I suspect that for most Members here, as is certainly the case for me, 2010 now feels like a very distant memory, although it was a momentous time for me, being the year that I first took my seat in this place. I am conscious that, while this Chamber still looks the same, the world around us has changed immeasurably. A great number of things may be different, including those currently in government. However, one thing that has remained constant is our commitment to achieving gender equality. Each successive Government have reaffirmed their resolve to make the UK a place where women and girls can access all opportunities on an equal basis and be able to thrive.

We know that this is not something that can be achieved overnight; there are no quick fixes or silver bullets, much to the frustration of probably everybody in this Chamber. It can often feel as though the pace of change is too slow, and progress is always just out of reach. But this week I have more than one reason to step back and appreciate just how far we have come since 2010.

On Monday, we celebrated—and the noble Baroness, Lady Goudie, was there—10 years of the Women’s Business Council, and I was overwhelmed to hear what it has achieved within that time. In 2010, the gender pay gap was 19.8%, and in 2021 it was 15.4%. There are nearly 2 million more women in work since 2010, and the number of women in FTSE 100 boardroom roles has jumped to 39% from 12.5% 10 years ago. At the 2010 election, 143 women were elected to the other place; in 2019, it was 220. We have got some way to go on this, and more about that later. While we can all agree there is more to do, and my ministerial colleagues and I are certainly not complacent when it comes to tackling that challenge head on, it is remarkable to see the strides that we have already made in such a short space of time.

I do not believe that we should dwell on the past or rest on our laurels, so I want to focus on the exciting work that we are doing now to ensure that this progress does not stall but in fact is accelerated. The underpinning principle behind government work undertaken since 2010, is that women should have the economic freedom to make choices about their lives and careers, unconstrained by inequalities or expectations. We want women to be economically empowered, and to remove the barriers that prevent them from reaching their full potential.

The noble Viscount, Lord Stansgate, and the noble Baronesses, Lady Bennett of Manor Castle, Lady Prosser and Lady Thornton, all talked about the importance of women in careers where they could really achieve their potential, not least of all construction and science. I am pleased that one of the ways in which we are doing this is by ensuring women can enter into higher-paid sectors and positions. The STEM world is calling for people with the right skills to come and help them meet the needs of our future economy, yet women currently make up only 24% of the STEM workforce. If we are to meet those challenges, then we need to first tackle this occupational segregation.

Of course, much of this relies on inspiring girls to consider STEM careers and study STEM subjects from a young age. We are already making some progress here, with girls representing 44% of all STEM A-level entries in 2021, and the proportion of women entering full-time undergraduate courses taking STEM courses having increased to 42.2%. The Department for Education is currently supporting a number of initiatives to encourage a more diverse uptake of STEM subjects and pathways. To name but a few, it funds the Inclusion in Schools project and the Stimulating Physics Network, it is researching interventions to tackle the barriers young women encounter to studying STEM, and it is enhancing mathematics teaching through a national network of 40 school-led maths hubs and funding the Advanced Mathematics Support Programme.

However, it is not just getting young women interested in STEM that is important; the real challenge is how we get them into STEM and keep them there. On International Women’s Day, I announced a programme to encourage more women to return to STEM careers after taking time out for caring. The pilot will give them the opportunity to refresh and grow their skills in sectors where their talents are most needed, and will build on what we have learned from previous government returner initiatives.

The noble Baroness, Lady Goudie, also mentioned women and diversity on boards and women in leadership. We are not just supporting women into higher-paid STEM careers; it is also about helping them to reach the top within their chosen profession across a range of sectors. Over the last 10 years, the Government have lent support to successive reviews, most recently the FTSE Women Leaders Review, to drive progress on female representation at the top of our biggest companies. This business-led framework has had fantastic success. In 2021, the UK FTSE 100 ranks in second place compared with 11 similar counties. But it has now turned its attention to fixing the pipeline of talent, making sure that this level of representation spreads through the entire leadership team and across a wider range of companies.

When the noble Lord, Lord Griffiths of Burry Port, speaks to that school tomorrow, will he pass on the very best wishes of everybody in this Chamber today to that head teacher, who has given and given, and thank her on our behalf?

We also want to help women to realise their entrepreneurial aspirations. As it stands, only one in three UK entrepreneurs is a woman—a gender gap equivalent to 1.1 million missing businesses. That is outrageous, and we must do something about that. Our aim is to increase the number of female entrepreneurs by half by 2030, so we will look very closely at that.

Many noble Lords mentioned the gender pay gap. One of the ways we are helping women in every workplace, regardless of how senior they are, is by driving transparency on pay. We will not have the situation where a woman goes for a job and is asked, “How much did you earn in your last job?” We do not want that. We want a salary on the advert so that women can negotiate the pay that shows their worth. We recently announced that we will take this transparency one step further. We will provide women with the information they need, making it easier for employees to understand whether they are being paid fairly.

However, as many of my noble friends have noted today, the world of work does not exist within a vacuum. So much of what goes into getting work right, not just for women but for everyone, is about making sure that workplace culture and practices fit with the lives that people lead outside of them. All the effort we put into empowering women and girls throughout their lives and careers goes to waste if we do not also remove the barriers that can prevent them being able to fully realise their ambitions.

The noble Baronesses, Lady Prosser and Lady Thornton, touched on the subject of childcare. This is something that is vexing me. I am on it. I cannot make promises, but I can promise to try getting to the bottom of some of the things that we can do to enable women to get the childcare that they need so that they can fulfil their potential in the workplace. The Government have doubled free childcare and have done much on tax-free childcare. But we want to help parents with the cost of childcare so we have introduced, as I have said, tax-free childcare, providing working parents with up to £2,000 of childcare support a year for each child. Much has been done on flexible working and parental leave. I am really proud that we extended the right to request flexible working to all employees with 26 weeks of continuous service with their employer.

Half the time has gone already, and I will not be able to answer everything, but let me turn to some of the other points that were raised. The noble Baroness, Lady Gale, and the noble Lord, Lord Griffiths of Burry Port, spoke about the remit of the Government Equalities Office being reduced. The equality hub will move beyond the narrow focus of protected characteristics and drive real change that benefits people across the United Kingdom. We have announced a new approach to equality, which will extend the fight for fairness beyond the nine protected characteristics covered by the Act, to include socioeconomic and geographical equality.

The noble Baroness, Lady Gale, raised Section 106. If the aims of Section 106 are to be realised, all political parties must be truly committed to it rather than be forced to do something. It is our job to drive that change to come naturally. The noble Baroness, Lady Gale, and the noble Lord, Lord Griffiths of Burry Port, raised the Istanbul convention. We are delighted to be ratifying the convention. This will send a clear message, not only within the UK but overseas, that Britain is committed to tackling violence against women and girls. Whatever the differing views on the two reservations, we can all agree about the vital importance of ratification. Ratifying will make it easy for us to hold to account those countries elsewhere in Europe that are pulling away from the convention.

Many noble Lords have raised the cost of living crisis and the impact on women, particularly lone parents. We understand completely that millions of households across the UK are struggling to make their incomes stretch to cover the rising cost of living. That is why the Government have provided an extra £37 billion this year. On a point of difference that the noble Baroness, Lady Donaghy, raised about giving one-off grants as opposed to fixing the system as one would like, the Government are not standing there watching people struggling. We are adding vast sums of money for people as quickly as possible. Our Plan for Jobs campaign is working, as is the Way to Work campaign, which got over half a million people into work. As my Secretary of State, Thérèse Coffey, an outstanding woman, said, we want people to be in work. Once they have a job, it is easier for them to get a better job and then into a career. I cannot say more about the benefits system than I have said and said yesterday. We are doing all that we can to support people.

On the point raised by the noble Baronesses, Lady Chakrabarti and Lady Gale, about what we are doing to improve rape prosecutions, protecting women and girls from violence is a key priority for this Government. We have made it clear that we need to make improvements to restore victims’ faith in the criminal justice system. We published our rape action plan setting out clear measures to more than double the number of adult rape cases reaching court by the end of this Parliament. However, there are no holds barred here. There is still work to be done, still progress to be made. We will not stop driving actions forward to rebuild confidence in the criminal justice system to pursue justice for rape victims.

My noble friend Lady Jenkin, the noble Baroness, Lady Gale, and others mentioned women in politics. If I may, I will take a moment to congratulate my noble friend on the work she and others have done on Women2Win. She does not take her foot off the pedal at all on this. We have more women MPs than ever before and political parties, as I said, are responsible for their candidate selection and should lead the way in improving the diversity of representation. Let us all redouble our efforts to see whether we can get to that 50:50 target. I would also say that we need to understand why people do not want to enter politics. I had a conversation with someone about this earlier and if we can address the reasons why people do not want to do it, perhaps we will inspire some younger people to take it up.

The noble Lord, Lord Addington, got us off to a great start about the football. The noble Baroness, Lady Chakrabarti, is obviously very excited about the performance of our wonderful team. The noble Baroness, Lady Bennett of Manor Castle, a rugby star in her own right—

[Baroness Bennett of Manor Castle (GP)]

Not a star!

[Baroness Stedman-Scott (Con)]

Oh, she has changed her mind. Noble Lords are absolutely right that these women are doing a great job.

I was at the football on Monday in Brighton. I have never been to a football match in my life. Before I went, my other half said to me, “Please behave. Don’t start shouting out and telling people what to do. You know nothing about football.” I had been there about 10 minutes and I was alive with it. They were like rockets running round the field. They were absolutely fantastic. I just wondered why I had not seen them before. They are doing a great job and if they get to the final at Wembley, I will be pleased to represent all noble Lords and shout. I started to get excited and then realised that I was sitting next to the Duke of Gloucester and I had to calm down. I take on board the challenge from the noble Lord, Lord Addington. I will speak to my noble friend Lord Parkinson about investment in sport.

The noble Lord, Lord Strathcarron, raised the issue of transgender athletes participating in sport. All sports which compete internationally must comply with their international federation rules on that level and the Government are clear that a way forward is needed that protects and shows compassion to all athletes while maintaining the integrity of the competition. I heard the concerns of the noble Baroness, Lady Nicholson, and others in the Chamber today. I am very happy to commit to meeting the noble Baroness and other noble Lords to discuss this.

The gender pensions gap was raised. We take this very seriously. Our reforms, including automatic enrolment, have helped millions more people save into a pension. Pension participation among eligible women working in the private sector was 86% in 2020, up from 40% in 2012.

I congratulate the noble Baroness, Lady Goudie, on her 30% Club. I will have to write regarding 50% of women on government boards because I do not have that figure to hand. The noble Baroness also mentioned women and girls in the Ukraine conflict. To mark International Women’s Day this year, the UK was proud to launch new funding for women’s rights organisations and civil society actors working to support the critical needs of women and children both inside and displaced outside Ukraine. There is more information, but I will include that in my letter.

The noble Baroness, Lady Prosser, mentioned levelling up for men and women. I thought her explanation of the fact that if we levelled up, it would still be unequal was really quite interesting—

[Baroness Prosser (Lab)]

I did not say that if we levelled up for everyone, it would still be unequal. I said that the Minister who responded to the debate seemed to think that levelling up for women, men and everyone was the answer. My point was that we start off unequally so we end up unequal at the end. My point is that we should level up for women and make it equal.

[Baroness Stedman-Scott (Con)]

I thank the noble Baroness for clarifying that and I agree with her.

My noble friends Lady Meyer and Lady Eaton raised the issue of the protected characteristic of sex. This is a subject that we shall have to come back to and debate. As I have said, everyone must be free to express what they feel about it, but everyone must be respectful and tolerant when some people have different views from theirs.

I am afraid my time is up. I knew this would happen and I am sorry, but I am incredibly grateful to all noble Lords who have contributed to this debate. As such, I will write, as I promised, and have the meetings that we so need to have.

Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022

Baroness Stedman-Scott Excerpts

Wednesday 13th July 2022 Lords Chamber

Moved by

[Baroness Stedman-Scott]

That the draft Regulations laid before the House on 6 June be approved.

Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 12 July.

Motion agreed.

Cost of Living: Low Income Families with Children

Baroness Stedman-Scott Excerpts

Wednesday 13th July 2022 Lords Chamber

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

My Lords, our £37 billion cost of living package is particularly focused on low-income households. Children living in families receiving qualifying means-tested benefits will receive the cost of living payment of £650 in two instalments. Households with a domestic electricity bill will receive the £400 energy bill rebate. We require at least a third of the current £421 million household support fund in England to be spent on supporting households with children. That fund will continue with a further £421 million from October, for which guidance will be announced in due course. The devolved Administrations have received separate funding through the Barnett consequentials.

[Baroness Lister of Burtersett (Lab)]

My Lords, children, especially those in larger or lone-parent families, are at disproportionate risk of poverty. This has been made worse by a decade of social security cuts. Children in poverty are among those hardest hit by the cost of living crisis. Ministers stress that the latest help with the crisis targets those who most need it, yet, as the Children’s Commissioner lamented last week, children were overlooked—and not for the first time. What will the Government now do to ensure there is specific support —not discretionary support through local authorities but specific, as of right, national support for children—as the cost of living crisis worsens this autumn?

[Baroness Stedman-Scott (Con)]

The Government’s position is that we have made money available throughout the cost of living crisis. We are doing extra things for children, such as free school meals and all the other holiday support payments. As it stands at the moment, I am not able to say if we will be doing anything further. As we have always promised, we keep everything under review and respond where we can.

[Baroness Eaton (Con)]

Does my noble friend agree that the cost of living measures are more beneficial than uprating benefits?

[Baroness Stedman-Scott (Con)]

We are spending over £5 billion for qualifying means-tested benefits, which is around £2 billion more than the additional cost had the qualifying benefits been increased in July 2022 to 9% higher than the previous year. By delivering flat-rate payments at pace we can make transfers to over 8 million people, and 6 million disabled people. The IFS has said that government support means that, on average, the poorest households will be approximately compensated for the rising cost of living this year. The Resolution Foundation said that the May 2022 packages were highly progressive. There is support for what the Government are doing.

[Baroness Hollins (CB)]

My Lords, does the Minister agree that one of the most effective ways that financial support could be provided to larger families would be to scrap the two-child limit on universal credit payments?

[Baroness Stedman-Scott (Con)]

The two-child limit on universal credit is the subject of much debate, and much angst for many people. The right reverend Prelate the Bishop of Durham has a Private Member’s Bill going through Parliament, and no doubt that will be discussed in full. As I have said before, the Government keep everything under review.

[Baroness Hussein-Ece (LD)]

Is the Minister aware that children in lone-parent families are almost twice as likely to be in poverty than children in two-parent families? The evidence is overwhelming, as recorded in a report by the Institute for Fiscal Studies. Does she believe that all children deserve a decent start in life and, if so, what measures will the Government be taking to ensure that these children do not suffer a double disadvantage?

[Baroness Stedman-Scott (Con)]

Of course we agree. All young children should have a good start in life, even if their circumstances vary. I pick up on the point about lone-parent families that the noble Baroness raises. I have received a number of documents from Gingerbread, which is a real advocate for this and does a terrific job. One of the ways in which we can help is to make sure that people who should pay child maintenance actually pay it. I know there is a lot of criticism of the Child Maintenance Service, and I for one would not stand here and say it is perfect. But let me tell the noble Baroness that we are using enforcement powers, because that is one way we can get money to children who really need it.

[Lord Woodley (Lab)]

My Lords, Loughborough University research shows that the temporary £20 uplift to universal credit helped reduce the number of children in poverty from 3.8 million to 3.6 million. That is a sizeable amount, without a shadow of a doubt. The report warns that the decision to end the uplift threatens to reverse this positive trend, and that in-work poverty has now become a major issue for many families. Does the Minister agree that the Government should be taking every possible step to reduce the scandal of child poverty, starting with restoring the uplift and raising social security by at least the rate of inflation, so that no child has to stare poverty in the face?

[Baroness Stedman-Scott (Con)]

I think it was said by our previous Chancellor and many others that the Government cannot solve every problem. That does not mean that we reduce our efforts to do so. The £20 uplift was, at the risk of boring everybody, a temporary measure and has been stopped, but we will have the annual uprating of benefits and the Secretary of State will look at it in September this year.

[Baroness Redfern (Con)]

My Lords, with the increased cost of living hitting many families who are continually trying to balance their finances day by day, just how did the Government arrive at these amounts for cost of living payments? Does my noble friend think they are enough?

[Baroness Stedman-Scott (Con)]

I have listened to the questions today and there is a real swell of opinion that the payments are not enough—I doubt that we could ever do enough. The package of measures we have provided is designed to target support to those most in need. It will make a real difference and, I am sure, help people through these very difficult times.

[Baroness Sherlock (Lab)]

My Lords, I fully accept that the Government cannot solve every problem, but one of the problems is that they cut billions off the value of benefits and tax credits, which meant that we went into the pandemic and then the cost of living crisis with families unable to manage. The Government’s response, which is welcome, is to give exactly the same amount of money to a single person living on their own as to a couple with three children, even though their costs of energy, clothes, shoes and everything else are way higher. Does the Minister not accept that families out there are seriously desperate and need more help?

[Baroness Stedman-Scott (Con)]

I accept that families are struggling and that some are desperate. We have tried to make the process of giving the money we are giving as simple and unbureaucratic as possible. That is why we are making the payments as we are, starting this week, I think. We hope to have them all done by the end of July.

[Baroness Watkins of Tavistock (CB)]

My Lords, can the Minister be precise about what families will get during the coming summer holidays, given that free school meals cease for most children next Friday?

[Baroness Stedman-Scott (Con)]

On free school meals, children will get what we have already announced. We are not proposing to increase free school meals rates to reflect rising inflation at the moment. They will get their holiday breakfast clubs and the support we have previously announced.

[Lord Young of Cookham (Con)]

My Lords, in her initial Answer, my noble friend mentioned the household support fund, which gives valuable support to low-income families. It was due to close in September, but I think she announced that it will now be extended into October, which is welcome news. Can she give guidance to local authorities so that there is some similarity in the assistance given to low-income families and not a postcode lottery?

[Baroness Stedman-Scott (Con)]

It is correct that the household support fund has been extended until March 2023. The Government have kept it under review and extended it where possible and appropriate. The guidance for the household support fund is being written, and there will be a heavy emphasis on one-third of that money going to families with children.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, the Minister has a good heart. She says that she has a range of options which the Government are keeping under review. Can she share with the House which of those options she would like to see implemented?

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

We will have a new Prime Minister and anything could happen with jobs, so I will wait until then—before I get my P45. As soon as I can tell the noble Lord and the whole House what we can do, believe me, I will be the first one here to do so.

Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022

Baroness Stedman-Scott Excerpts

Tuesday 12th July 2022 Grand Committee

Moved by

[Baroness Stedman-Scott]

That the Grand Committee do consider the Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022.

Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee

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

My Lords, I am pleased to introduce this instrument, which brings into pension law various duties of trustees of defined benefit and defined contribution occupational pension schemes relating to the appointment of fiduciary managers and the use and performance review of investment consultants. These duties will replace those currently set out in an order made by the Competition and Markets Authority, the CMA, in 2019 following an investigation into competition in the relevant markets. Compliance with these duties will now be overseen by the Pensions Regulator instead of the CMA.

These regulations contribute to the Government’s objective of improving pension schemes’ administration and governance standards, transparency and decision-making, which will in turn drive better outcomes for the millions of hard-working savers in occupational pension schemes now and for years to come. I am satisfied that the regulations are compatible with the European Convention on Human Rights.

These regulations bring into pension legislation the obligations on trustees of occupational trust-based pension schemes contained in the CMA’s order in relation to the provision of investment consultancy and fiduciary management services. Before setting out more about what the regulations do, it is worth explaining the background to how they have come about.

In simple terms, investment consultancy is the provision of advice to trustees on investment strategy and related matters. Fiduciary management involves the delegation of some investment decisions by trustees to advisers alongside providing advice on investment-related matters. The use of these services has grown over the last decade. The complexity of investments, lack of investment knowledge and challenge of managing defined benefit scheme liabilities has led to an increased dependence on both services. Good investment is a key element in any well-run pension scheme. Trustees are responsible for investment governance and are accountable for any investment decisions taken. They also have a duty to consider proper advice and act in the best financial interests of beneficiaries.

In December 2018, the CMA, following a referral by the Financial Conduct Authority, published its report on its market investigation into the supply and acquisition of investment consultancy and fiduciary management services to and by various investors and employers. The CMA found that among pension schemes there was a low level of engagement by trustees and a lack of clear and comparable information on which to assess value for money.

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

The CMA found among pension schemes that there was a low level of engagement by trustees and a lack of clear and comparable information on which to assess value for money. Trustees were being steered by consultants towards their own higher-cost fiduciary management services, giving them an incumbency advantage. Ultimately, trustees were more likely to pay higher prices for these services than they should. Overall, the CMA found that this was having an adverse effect on competition for these services and likely bringing financial detriment for employer sponsors of defined benefit pension schemes and savers in defined contribution pension schemes.

It is important to note that both services were said to influence decisions affecting pension scheme assets worth over £1.6 trillion and the retirement incomes of millions of people. Any negative impact on scheme outcomes will be significant, and will accumulate and compound over the long term in which pension assets are invested. The CMA’s report proposed recommendations and remedies to encourage better trustee engagement when buying services, and better disclosure of fees and performance. The CMA made it clear that some of these remedies would be implemented by an order. That order was made in June 2019 and came into effect later that year.

The CMA also recommended that the Department for Work and Pensions take forward legislation to bring into pensions legislation the provisions of the order for two specific remedies: first, the requirement to carry out a competitive tender in certain circumstances before appointing, or continuing to use, a fiduciary manager; and secondly, the requirement to set objectives for, and review the performance of, investment consultants appointed by the trustees.

The CMA also recommended that legislation should provide for the Pensions Regulator to oversee these new duties on trustees, rather than leave long-term enforcement action against occupational pension scheme trustees to the CMA. The DWP, on behalf of the Government, committed to do this in early 2019 and consulted on its proposed legislation in summer 2019. However, because of necessary reprioritisation brought on by the Covid-19 pandemic, work on this was delayed until this year.

The regulations before the Committee fulfil the commitment the Government made in 2019 to accept the CMA’s recommendation and to integrate the requirements in the CMA’s order that apply to trustees of occupational pension schemes into pensions legislation. Subject to approval, this instrument will require trustees of occupational pension schemes to set objectives for persons who provide them with investment consultancy services, to review those objectives at intervals of no more than three years, and to annually review the performance of those providers against those objectives. This setting of objectives will enable trustees to monitor the performance of their advisers.

The regulations also require trustees to carry out a qualifying tender process when continuing to use existing fiduciary management providers, or appointing new ones, if the scheme meets the asset management threshold. The threshold is met when fiduciary managers covered by the regulations manage 20% or more of in-scope assets. The regulations also set out what the qualifying tender process is and when it must be carried out. Additionally, through the regulations the Government have defined “investment consultancy provider”, “investment consultancy services”, “fiduciary management provider” and “fiduciary management services” for the first time in pensions legislation.

The Government believe that these duties will encourage trustees to become more engaged with the way services are bought, monitored and evaluated, or to consider more efficient consolidation options. In turn, this will lead to better outcomes for scheme members and employer sponsors of schemes.

For the most part, the regulations replicate the effect of the relevant provisions in the CMA’s order. However, there are some small differences that reflect government policy. One such difference is about the type of schemes that are exempt from the requirement to set objectives. The CMA excluded trustees of schemes that are sponsored or funded by providers of investment consultancy and fiduciary management services from setting objectives for their investment consultant and from tendering for fiduciary management. The regulations bring these schemes back into scope of the requirement for trustees of such schemes to set objectives for their investment consultant. It is government policy that members of such schemes should still benefit from a well-governed, high-performing investment consultant, despite the trustees and the investment consultant being part of the same organisation.

The regulations also do not make any provision about local government pension schemes. This is a matter for the Department for Levelling Up, Housing and Communities and the devolved Administrations in Scotland and Northern Ireland to bring forward their own legislation. As such, for local government pension schemes, the CMA’s order, to the extent that it imposes requirements relating to investment consultants, will continue to remain applicable for the time being.

Finally, this instrument does not create any exceptions from the requirement to tender for fiduciary management services in cases where parties are connected only because they are participating in a joint venture. This is to avoid the risk that, where a scheme sponsor and a fiduciary manager had a joint venture, they would not be required to run, or bid for, a tender. The CMA order contains a limited exception for joint ventures. This change has been made to disincentivise firms from creating joint ventures to circumvent this duty.

As stated earlier, the regulations bring the monitoring and enforcement of these trustee duties into the regulatory remit of the Pensions Regulator. Trustees will be required to provide certain information about the use of investment consultancy and fiduciary management providers in the scheme return which they must complete each year and return to the Pensions Regulator. The information enables the Pensions Regulator to monitor compliance with the duties set out in the regulations. The regulator has said it will update its published guidance to reflect the final regulations ahead of them coming into force.

In conclusion, these trustee duties concerning the way investment consultancy and fiduciary management services are bought and evaluated will facilitate good governance, which will ultimately mean services that are better value for money, benefiting members and the employer sponsors of pension schemes. Of significant importance is that the regulations bring compliance, monitoring and enforcement of the duties under the remit of the Pensions Regulator. I therefore commend this instrument to the Grand Committee and beg to move.

[Baroness Janke (LD)]

My Lords, I thank the Minister for her presentation and explanation of why the Government are introducing this statutory instrument. The Explanatory Memorandum states that it

“will encourage better trustee engagement, transparency and governance when buying investment consultancy and fiduciary management services. It will require trustees of occupational pension schemes … to set objectives for their investment consultant and carry out a tender exercise in certain circumstances before appointing a fiduciary manager. It will also enable The Pensions Regulator … to oversee the remedies which apply to such trustees and ensure compliance.”

The problem that the regulations are designed to address is focused mainly on smaller occupational pension schemes which need to take advice on their investment strategy. The investigation by the CMA of advice to pension schemes found that there was a low level of engagement with trustees, a lack of information for assessment of value for money, and that customers were steered by consultants towards their own higher cost fiduciary management services giving them incumbent advantage.

The remedies proposed by the CMA are to become part of the new regulations, with TPR ensuring compliance. We are broadly supportive of the measures in the SI but have a few issues for the Minister to address. First, can she reassure us that the new process is not onerously bureaucratic and time-consuming for small schemes? Certainly, the introduction of competitive tendering has in some cases led to a very time-consuming process, so I would like her assurances on that.

What about the cost to smaller pension schemes? The impact assessment has detailed calculations but, probably because it is very long and detailed, I did not find a great deal on the need to empower and train trustees and managers to introduce the new system.

Also, the DWP has a strong view that bigger is better as far as pension schemes are concerned. These regulations are needed to improve the quality of advice to smaller schemes with less experienced trustees. Will the Minister say how the consolidation of DB and DC schemes is going? The Minister urges consolidation and the Government are starting to put in place a “comply or explain” duty on small pension schemes to show that they are providing value for money for members or, if not, to merge into something bigger. Has this been successful? How has it been evaluated? Can she say something about what the Government are doing about the barriers to consolidation? For example, what is the cost of legal advice and consultation with members to wind up a scheme and merge into something bigger? In small schemes, costs could be high relative to the gains from consolidation, so what are the Government doing about that?

We support the proposals and look forward to best-quality advice and higher transparency for members of the scheme. I look forward to the Minister’s response to the points that I have raised.

--- Later in debate ---

Action to address the weaknesses of investment consultancy and fiduciary management markets is welcome, but I will be interested to hear the answers to the many very good questions asked of the Minister by noble Lords today.

[Baroness Stedman-Scott (Con)]

I thank all noble Lords for their contributions. While some of the participants in today’s debate stand in awe of the brain power on pensions of some of the people in this room, they are not alone. Many of the points raised by noble Lords go much wider than these regulations, and there are many things on which we will have to write to noble Lords to ensure we can answer these important questions. We will do so and put a copy in the Library.

The noble Baroness, Lady Janke, raised consolidation and what plans the Government have to accelerate the pace of consolidation in the DC market. The DWP continues to champion the benefits that consolidation can bring in improved governance, lower cost and enabling schemes to reach the scale needed to access a broader range of investments. Last year, regulations were introduced requiring all DC schemes with less than £100 million in assets to undergo a rigorous value-for-money examination each year, the intention being that schemes that cannot prove value will put members first, make improvements or wind up. Data from the Pensions Regulator shows that consolidation is happening at a healthy rate, but we will continue to keep this area under review to ensure that savers are not left in small, poorly governed, underperforming schemes. In the meantime, we are working with the Pensions Regulator and the Financial Conduct Authority to create their value-for-money framework and metrics that will enable genuine comparisons to be made and encourage competition across the DC market.

The noble Baroness, Lady Janke, asked a question about processes being onerous and bureaucratic for small schemes, and the cost to smaller schemes in terms of charges, et cetera. Trustees of schemes of all sizes have been complying with the CMA’s order since December 2019. They have reported compliance without further issues raised. The CMA investigation found that

“the potential benefits of our remedies package are likely to substantially outweigh the potential costs … even small improvements in quality of these services or reductions in price will produce substantial benefits which will likely increase over time. In comparison, the likely cost of our remedies is small.”

The noble Baroness, Lady Drake, asked what we are doing to improve transparency of pension charges and choices for members. The Government consulted last year on a proposal to move to a single universal charging structure across all providers of qualifying defined contribution pension schemes used for automatic enrolment. Responses to that consultation and other evidence are being considered to determine our next steps. Additionally, as part of the Government’s commitment to protect individuals in automatically enrolled schemes from higher and unfair charges, secondary legislation is being enacted to implement a de minimis threshold of £100 on the value of members’ rights, below which the flat fee element of the combination charge cannot be charged.

I thank the noble Baroness, Lady Drake, for the points that she raised about pension credit uptake. There has been a great effort to promote it to the pensioners who need it. There was a great campaign, resulting in Len Goodman doing a video, which has gone down very well with people and has had a massive effect. He gave the campaign a 10. Having got a 10 from Len, I am hoping that we can get a 10 from your Lordships, and particularly the noble Baroness.

The noble Baroness also raised consolidations on scheme. There are one-off costs within consolidation but, in our view, the long-term benefits of moving to bigger, better-run schemes with a more diverse investment strategy are in savers’ best interests.

I thank the noble Lord, Lord Davies, for his contributions. We will take note of what he said on the regulations, and I apologise for the mistake in the Explanatory Memorandum.

The noble Baroness, Lady Sherlock, asked how Parliament will be informed as to the progress—or lack thereof—addressing the weakness in these markets prior to the publication of the Secretary of State’s report in 2028. The report referred to is the post-implementation review of the legislation. In the interim, the duties that these regulations place on trustees will be monitored by the Pensions Regulator. Reviews between the Pensions Regulator and the DWP will take place on a regular basis.

The noble Baroness also raised an issue regarding trustees. The Secretary of State has announced her intention to make 2023 the year of the trustee. Although final proposals are still being developed, the department is keen to explore what additional support can be given to trustees, and how diversity on trustee boards could be improved.

The noble Baroness, Lady Sherlock, also asked about cost estimates for setting objectives in the CMA final report, similar to the DWP impact assessment. DWP cost estimates for setting objectives are based on information gathered by the CMA as part of its investigation into the investment consultancy markets. The DWP, the CMA and the Pensions Regulator have continued to share analysis throughout the construction of the impact assessment to ensure consistency.

The noble Baroness asked whether the legislation could reduce benefits to members as additional costs will be passed on. Replicating the CMA order places a direct cost to pension schemes, but it is anticipated that schemes will benefit from lower fees, increased quality, greater choice of services and accelerated innovation benefits, which may be passed to members. As highlighted in the CMA report,

“the potential benefits of our remedies package are likely to substantially outweigh the potential costs”.

Since DWP legislation largely replicates the CMA order, it is anticipated that benefits will continue to outweigh costs. However, potential benefits are hard to quantify, which is why they could not be monetised in the impact assessment.

Universal Credit (Removal of Two Child Limit) Bill [HL]

Baroness Stedman-Scott Excerpts

2nd reading
Friday 8th July 2022 Lords Chamber

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

I thank the right reverend Prelate the Bishop of Durham for introducing this Bill and for the opportunity to debate again a subject dear to his heart and to those of others in the House.

My department is committed to supporting families and helping parents into work. This requires a balanced system that provides strong work incentives and support for those who need it, but also ensures a sense of fairness to the taxpayer and to the many working families who do not see their incomes rise when they have more children. We judge that the policy to support a maximum of two children is a proportionate way to achieve these objectives. Our overall approach is working, as evidenced by the fact that, between 2016 and 2021, the number of couples in employment who have children increased by 460,000—a 2.3 percentage point increase in the employment rate for this group.

The two-child policy was introduced five years ago and, since 6 April 2017, families have been able to claim support for up to two children. There may be further entitlement for other children if they were born before that 6 April or if an exception applies. The child element of universal credit is worth £290 for the first child born before 6 April 2017. It is worth a standard rate of £244.58 per child for the second and any other eligible children. Child benefit continues to be paid for all children, plus the additional element in child tax credit or universal credit for any disabled children. Additional help for eligible childcare costs through working tax credit and universal credit are also available, regardless of the total number of children in the household.

We recognise that some claimants are not able to make the same choices about the number of children in their family. That is why exceptions have been put in place to protect certain groups. Exceptions apply to third and subsequent children who are: additional children in a multiple birth, where an extra amount is payable for all children other than the first child; or likely to have been born as a result of non-consensual conception, which for this purpose includes rape or where a claimant was in a controlling or coercive relationship with the child’s other biological parent at the time of conception. An exception also applies to any children in a household who are: adopted when they would otherwise be in local authority care; living long-term with friends or family and would otherwise be at risk of entering the care system; or where a child under 16 living with their parents or carers has a child of their own, until they make a separate claim upon turning 16.

Statistics from the Office for National Statistics show that in 2020, of all families with dependent children, 85% had a maximum of two in their family. For lone parents, this was 83%. On the latest figures, 62% of households with a third or subsequent child who are in receipt of universal credit or child tax credit are not affected by the two-child policy.

This Government have always believed, and continue to believe, that the most sustainable way to lift children out of poverty is by supporting parents into work and, importantly, to progress in it, wherever possible. As I said, there has been a significant rise in the number of couples with children in employment between 2016 and 2021. I take the point the noble Baroness made that many of these people are in work, but one of the ways that we can help them is by them getting a better job and earning more income. That is a policy of this Government and one that we will be pursuing vigorously.

With 1.3 million vacancies across the United Kingdom, our focus remains on continuing to support parents into work and to progress in work, as I have already said. This approach is based on clear evidence about the importance of parental employment, particularly where it is full-time, in substantially reducing the risks of poverty and improving long-term outcomes for children.

[Baroness Sherlock (Lab)]

Does the Minister accept that encouraging parents to get better jobs and allowing them to have benefits for all their children are not mutually exclusive?

[Baroness Stedman-Scott (Con)]

I think it is fair to say that the Government have a differing view from that of the noble Baroness and people on the Opposition Benches. It is exactly that our helping people to get a better job, if they can, and more income—plus all the support that we are putting through the welfare system—is the policy that the Government are pursuing. We want everybody to be able to find a job, progress in work and thrive in the labour market, whoever they are and wherever they live. Our support for people out of work is tailored—

[Baroness Bennett of Manor Castle (GP)]

The Minister just said “wherever they live”. Does she agree that the two-child benefit policy has different impacts in different parts of the country, and that there are parts that are supposed to be subject to the government’s levelling up agenda where it is much more difficult to get a higher paying job?

[Baroness Stedman-Scott (Con)]

Of course we accept that there are regional variations, which is why, with the levelling-up agenda, we are doing our very best to improve the work opportunities for people in those areas and to support them. That is, again, another policy of this Government that we are actively pursuing. Our support for people out of work is tailored to individual circumstances, recognising the different issues that people face in the labour market, notwithstanding the points that the noble Baroness, Lady Bennett, made about the regional differences.

Improving work incentives was a key design criterion for universal credit. We have cut the universal credit taper rate from 63% to 55%—a major step forward—and increased the universal credit work allowance by £500 per year. These two measures mean that 1.7 million households will keep, on average, an extra £1,000 a year. These changes represent an effective tax cut for low-income working households in receipt of universal credit worth £1.9 billion a year in 2022-23. This will allow working households to keep more of what they earn and strengthen incentives to move into, and progress in, work.

The noble Baroness, Lady Brinton, raised the issue of the cost of living, which is a subject on all our hearts and minds. Millions of households across the UK are struggling to make their incomes stretch to cover the cost of living. The Government have stepped up to the plate in order to make sure that we support people, providing £37 billion, which includes the £650 payment, as I have regularly repeated in the House—I do not intend to do today, as I want to get on to some of the other issues that noble Lords have raised.

The right reverend Prelate the Bishop of Durham raised the issue of poverty increasing due to policy choices. Again, providing £22 billion of funding in 2022-23 to help families with the cost of living, including through universal credit changes, means that working families and households are much better off, as I have already said.

The delicate subject of abortion has been raised, which I completely understand. Research from the Nuffield Foundation larger families consortium of researchers published this month has outlined that fertility rates for those claiming or eligible to claim benefits have changed very little since the introduction of this policy. This evidence refutes earlier evidence from the British Pregnancy Advisory Service, which suggested that people were having abortions in response to the policy. The report argues that this was in fact a small and self-selected sample. This wider, more robust study takes evidence from administrative data on births and the annual population survey and uses a difference-in-differences approach to compare before and after the policy for different groups. It concludes that, while fertility rates have fallen, this has been the case for all socioeconomic groups.

The right reverend Prelate asked if I could commit to carrying out an impact assessment and to taking all this back to the Government. To be truthful and straightforward, I cannot commit to an impact assessment. I do not believe, with what I know, that the Government would welcome from me the request that he has made; however, having said that, I will make sure that they understand that it is in Hansard.

The right reverend Prelate also asked about policy exemptions not accounting for those from ethnic backgrounds. The Government’s published impact assessment noted that ethnic minority households may be more likely to be impacted by the policy. This is because they are, on average, more likely to be in receipt of tax credits and universal credit and, on average, have larger families.

The noble Baroness, Lady Brinton, raised the issue of half of all children living in lone-parent households living in relative poverty. The latest available data on in-work poverty shows that, in 2019-20, children in households where all adults were in work were around six times less likely to be in absolute poverty, before housing costs. Through our plan for jobs campaign, the department is providing broad-ranging support for all jobseekers with our sector-based work academy programme and job entry targeted support scheme.

The right reverend Prelate the Bishop of Durham and the noble Baroness, Lady Brinton, raised the important point, as did others, about claimants being aware of the policy. There is information on the GOV.UK website, but this is something I am absolutely content to take back to the department to review how we communicate it and see if there are other things we can do to promote it. The noble Baroness, Lady Sherlock, and the right reverend Prelate the Bishop of Durham talked about paying childcare costs up-front being a barrier to moving into and progressing in work. Where people need up-front childcare costs on universal credit, the flexible support scheme is used and will continue to be so; if anybody knows of anybody who has been denied that, let me know and I will sort that out.

The noble Baroness, Lady Sherlock, asked me what level of spending on benefits is sustainable. I can only tell her that in 2021-22 we spent around £244 billion on welfare, with £41 billion on UC specifically. On the exam question, “How did the Government decide on two children?”—for which I thank her—I will need to write to her. She made a point about the two-child limit increasing policy and punishing families, so I say that the Government have a range of policies which support children and families across the tax and benefit system and public services. We remain committed to supporting families on low incomes and will spend around £108 billion through the welfare system, as I have already said.

In conclusion, the most sustainable way to lift children out of poverty—I keep going on and on about this, but it is government policy—is by supporting people and parents to progress in work wherever possible. This Government have a range of policies to support children and families across the tax and benefits system and public services. The policy to support a maximum of two children must strike a balance between providing support for those who need it and ensuring a sense of fairness to taxpayers, which I know noble Lords have already raised. I am quite sure that the answers I have given today have not been well received, but I am sure the debate will continue.

Shortage of Workers

Baroness Stedman-Scott Excerpts

Wednesday 6th July 2022 Lords Chamber

[Lord Londesborough]

To ask Her Majesty’s Government what steps they are taking to address the shortage of workers in the United Kingdom.

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

My Lords, with around 1.3 million vacancies currently available, the Government recognise the importance of filling vacancies in support of business and economic growth. Our approach focuses on how we can best support jobseekers and employers to overcome the barriers to recruitment, retention and progression in their sector. The Way to Work campaign focused on bringing employers and claimants together in our jobcentres to fill vacancies faster. As of 29 June, we estimate that at least 505,400 unemployed universal credit and jobseeker’s allowance claimants moved into work between 31 January and the end of 26 June.

[Lord Londesborough (CB)]

I thank the Minister for her detailed response, but the UK is suffering an employment crisis. Our workforce has shrunk by at least 500,000, with some estimates saying nearer 1 million —the biggest percentage drop of any G7 economy—and as the Minister says, we now have more than 1.3 million unfilled vacancies. Labour shortages do not just cause economic disruption; they fuel wage inflation and damage productivity—a classic recipe for stagflation.

Some employers are now employing underqualified or untrained staff and having to pay them 20% more. When will the Government respond to the scale of this crisis and come up with a comprehensive package of new measures to address this mass exodus of workers?

[Baroness Stedman-Scott (Con)]

The DWP is running numerous programmes to get people back to work to try to fill those vacancies, because, as the noble Lord said, the lack of workers and skills is not helping the economy. We do have a new Chancellor.

[Noble Lords]

Oh!

[Baroness Stedman-Scott (Con)]

I know that he is full of ideas, and I am sure we will hear from him very soon.

[Baroness Sherlock (Lab)]

My Lords, there are indeed lots of vacant jobs with no applicants, but that is just for government Ministers of course.

The Government approach the problem of vacancies as though the basic problem is lots of idle, unemployed people. They pour money into restarting Kickstart and start big sanctions, but what we have is a crisis of economic inactivity. For example, we have a whole load of people aged over 50 who either lost or left their jobs in the pandemic and never came back, and we have a post-pandemic crisis of mental and physical ill-health. Is not that where the Government should direct their energies?

[Baroness Stedman-Scott (Con)]

I am very pleased to tell the noble Baroness that that is exactly what we are doing. For older workers—those over 50—there is a £22 million fund to boost employment support. I can assure the whole House that we are not looking at people as being idle; we are looking at them as people with potential and the ability to add value to an employer. We are working very carefully with them to get them in a position to do that.

[Lord Young of Cookham (Con)]

My Lords, I hope my noble friend will stay in post whatever happens. She will know that there are many thousands of people with a disability who are none the less capable of filling some of the vacancies now available. While the Government have an excellent record with their Access to Work scheme, could they do more to unlock the talents of disabled people by beefing up some of the other schemes, such as the Work and Health Programme and the Disability Confident employer scheme?

[Baroness Stedman-Scott (Con)]

Again, I am pleased to respond to that question, because we set a target to have 1 million more disabled people in work between 2017 and 2027. By Q1 2022, we had 1.3 million, so we have smashed the target and are not stopping now. I assure all noble Lords that we are working to get disabled people into work, because they have great skills and employers are taking them very seriously.

[Baroness Randerson (LD)]

My Lords, I welcome the Government’s Statement on the 22 measures they intend to take to support the aviation industry. Eight of those relate to improving recruitment of staff. It is now six years since the Brexit vote, and we have had two and a half years of the pandemic. That made it clear to the Government that they would no longer be able to rely on the pool of European labour and of previously trained labour. Why did it take the Government so long—until this week—even to start to address the inevitable staff shortage that has flowed from this?

[Baroness Stedman-Scott (Con)]

I note the point the noble Baroness makes about shortages in the aviation sector, and there have in fact been problems in road haulage and other sectors. But the Government and the DWP have been working closely with trade bodies and employers to try to work things through. All I can say is that I am sorry we were not quick enough.

[Lord Woodley (Lab)]

We all know—indeed, the last speaker just pointed it out—that one of the main reasons for the shortage of labour is Brexit. As the CEO of Ryanair said, that is the single biggest problem, but it is not helped either by Covid. However, there is a solution the Government unfortunately will not consider, even though it builds on their tremendous work to fast-track Ukrainians with relatives in the UK. What is stopping the Minister from doing the same for refugees from other countries, with relatives who are prepared to sponsor them? Let them work; let them live; let them contribute to British society.

[Baroness Stedman-Scott (Con)]

Immigration policy is not in the DWP’s gift. I suggest the noble Lord takes that up with the Home Office, although I am happy to help by diverting his question to the Home Office. The noble Lord is correct about Ukrainian refugees: we have done a lot to get them into the benefits system and get them national insurance numbers. I am pleased to say that a lot of them are highly skilled and qualified, and we look forward to integrating them into the workforce.

[Baroness Butler-Sloss (CB)]

My Lords, fruit and vegetables are rotting in the fields. What on earth are the Government doing to get enough seasonal workers to pick them?

[Lord Cormack (Con)]

Send Boris!

[Baroness Stedman-Scott (Con)]

I will leave that to my noble friend to make the suggestion.

The SAWs visa scheme makes sure that people can have a visa if employers promise to pay them over £20,000. I am pleased about that, because then the “cheap labour” heading goes. One swallow does not make a summer, but today I spoke to one of the biggest fruit providers in Kent and it has managed quite well in getting in seasonal workers. If you pay and treat them well, and give them good accommodation, it seems they will come.

[Baroness Altmann (Con)]

My Lords—

--- Later in debate ---

[Lord Lilley (Con)]

That is why, when Tony Blair justified opening our boundaries to free labour from eastern Europe because there were 1 million vacancies, 3 million more people entered but there were still 1 million vacancies.

[Baroness Stedman-Scott (Con)]

I wonder whether the noble Lord will allow me to read Hansard and respond to him in writing.

[Baroness Bennett of Manor Castle (GP)]

My Lords—

[Baroness Altmann (Con)]

Thank you, my Lords. I commend the Government on protecting jobs and preserving high employment levels, but I put in a plea regarding the immigration situation. Health and care workers are put into the same bracket when we talk about special visas, but the majority of care workers—more than 90%—earn less than the £20,000 limit. Would it be possible to have a special channel for overseas care workers in the current emergency situation where so many vulnerable and elderly people are left without care and homes are having to close?

[Baroness Stedman-Scott (Con)]

We are working with the DHSC and the DfE to promote opportunities and routeways into adult care. We are using our sector-based work academies to get people skilled, but the health and care visa is available to qualified professionals looking for work in the sector as long as they meet the minimum eligibility criteria, which includes a salary minimum of £20,000.