Universal Credit: Court of Appeal Judgment

Debate between Baroness Stedman-Scott and Baroness Neville-Rolfe

Monday 29th June 2020 Lords Chamber

[Baroness Stedman-Scott [V]]

I assure the noble Baroness that the issues and successes coming out of universal credit are continually under review. However, I will take her specific question back to the department and will write to her with an answer.

[Baroness Neville-Rolfe (Con) [V]]

My Lords, it is clear that the department should put right the particular matter identified by the Court of Appeal. I note that the Minister thinks that some 1,000 cases are involved. However, does she agree that the universal credit system has stood up very well to the severe challenges posed by the consequences of coronavirus?

[Baroness Stedman-Scott [V]]

I assure my noble friend and the whole House that the universal credit system has stood up well to the increased demand of 600% additional cost. I have repeated the Answer that my ministerial colleague gave in the other House. We are determined to find a fix for this. We will keep the House updated, but we will need time to consider the judgment, which was issued only last Monday.

Pension Schemes Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Neville-Rolfe

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th March 2020 Grand Committee

[Baroness Neville-Rolfe (Con)]

I look forward to hearing from my noble friend the Minister on this, but I confess that I have a little scepticism about this proposal. We have had many reviews of pensions, including the trailblazing Pensions Commission led originally by Adair Turner—the noble Lord, Lord Turner. Many changes have been made to the law, including auto-enrolment, which I think we in this Committee have all welcomed. Of course, those in the current Bill are important as we seek to tackle the issues raised by the BHS and Carillion cases and to introduce dashboards.

I am not convinced that this is the time for another commission and another review. I feel that this is the job of the Pensions Minister and the DWP. Quite a lot is going on in pensions, and the priority should be to make sense of the sort of issues we have discussed on this Bill or issues that arise on things such as exit from the EU, and to get on with those in a practical manner. I look forward to hearing from my noble friend. If she takes a different view, of course, I am happy to reconsider.

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

My Lords, I am grateful for the opportunity to respond to this amendment tabled by the noble Lord, Lord McKenzie. We do not think there is a need for this new clause to be included in the Pension Schemes Bill, as legislation is not needed for a pension schemes commission to be established. The pensions landscape has changed considerably since the 2006 Pensions Commission; there have been major reforms to the UK pensions system. We have successfully rolled out auto-enrolment, introduced the flat-rate new state pension, abolished the default retirement age and raised state pension age.

The first independent review of state pension age was published in 2017, and this Government have committed to undertaking a review of state pension age every six years, in accordance with statutory requirements, to enable consideration of various factors, including the latest life expectancy projections. This Government are committed to maintaining a pension system that enables financial security for current and future pensioners. Further refinement and evolution will no doubt be needed in future to take account of changes in the labour market, home ownership and debt.

However, a commission is not the only way to identify and make recommendations for the future. We continue to engage extensively with key stakeholders, including consumer and employer organisations and the pensions industry, working collaboratively to identify and take forward a robust programme of work that builds on the strong foundations now in place.

For example, the Government carried out a review of the automatic enrolment scheme in 2017. Implementation of the review measures will be subject to learning from the recent workplace pension contribution increases; discussions with employers and others on the right approach; and finding ways to make these changes affordable. Once the evidence on our reforms is clear, we will look again at the right overall level of saving and the balance between prompted and voluntary saving. We are monitoring the impact of pension freedoms and the effectiveness of regulation of the market and information and guidance.

It is right that individuals are trusted with their own hard-earned money and savings. They are best placed to manage their money throughout retirement. While it is not the Government’s role to monitor individual people and the decisions they make, we recognise that it is important to support individuals in making decisions for their retirement. That is why we established the Pension Wise service to provide free and impartial guidance to help consumers make sense of their options.

This Government are focused on delivering and improving aspects of the existing pensions system. We are open to looking at aspects of the current system, but do not feel that an examination of the fundamentals of the pensions system is appropriate at this time.

My noble friend Lord Young made the point that my colleague, the Minister for Pensions, has shown support for a commission. Noble Lords are right to pay tribute to those who were part of the Pensions Commission chaired by the noble Lord, Lord Turner, which was very successful at building consensus around the future of pensions policy. Although several individuals and groups have called for a pensions commission, there is currently little consensus about what the scope and structure of such a commission should be. We believe we can engage effectively with interested parties without needing another commission.

My noble friend Lord Young also mentioned Bright Blue and the Fabian Society calling for a pensions commission. Again, I understand that a number of key stakeholders have demonstrated their enthusiasm for a review of the pensions landscape.

I do not discount future reviews of some element of the pensions system. We have already undertaken some reviews and will no doubt undertake others. However, I believe that the fundamental structure of the pensions system, based on the recommendations from the Pensions Commission, is still valid.

Pension Schemes Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Neville-Rolfe

Committee stage & Committee: 1st sitting & Committee: 1st sitting : House of Lords
Monday 24th February 2020 Grand Committee

[Baroness Stedman-Scott]

I think the original question was around the consultation we are going to do on this. This will be resolved in the consultation.

[Baroness Neville-Rolfe (Con)]

I think this shows that it is important that we understand what the statutory instruments in this area are going to look like. It will obviously lead to a clearer conversation if the Government are able to move on that. The second thing is that, in my experience, things do not necessarily go the way you expect. When I sought my pension estimate before I retired, I ended up a year later getting a less generous pension than I had anticipated, perhaps because things had changed on the underlying demographics—health or whatever. We have to be quite careful to take account of the complexity of these things in the sorts of SIs that we make. Clearly, we need to consult on them for that very reason.

[Baroness Sherlock]

On a final point of clarification, if I have heard the Minister correctly—and I will read the record—I think she is trying to reassure us that she will consult and that this will be dealt with in regulations. The problem is that Clause 14(4)(b) states that regulations may include provision,

“specifying requirements to be met by the scheme relating to its financing, such as requirements,”

et cetera. All this amendment does is insert the words, “or by an employer”, because of the concern that the Bill may allow regulations to be made requiring the scheme to put money in. We want to be sure that the Bill will require the employer, rather than the scheme, to provide the money. That is why the amendment is written as it is, accepting that the Government will have to work out what is in the regulations and then what the regulator actually did as a result. Are the Government confident that the wording of the Bill will allow them to place a requirement on the sponsoring employer to do what the Minister has described?

Pension Schemes Bill [HL]

Debate between Baroness Stedman-Scott and Baroness Neville-Rolfe

2nd reading & 2nd reading (Hansard): House of Lords & 2nd reading (Hansard)
Tuesday 28th January 2020 Lords Chamber

[Baroness Stedman-Scott]

The noble Baroness, Lady Drake, is absolutely correct and I am glad that she pointed out the difference to me. I would like to meet her before Committee to address that issue, if she is happy to do so.

The noble Lord, Lord McKenzie, asked why the Government have not legislated for the measures in the 2017 automatic enrolment review in this Bill. The Government have set out their ambition to lower the age at which people are automatically enrolled from 22 to 18 and to abolish the AE lower earnings limit in the mid-2020s. Our approach will be to expand the coverage and increase the amounts put into retirement savings by millions of working people, focusing on younger people and lower earners.

The noble Baroness, Lady Donaghy, and the noble Lord, Lord McKenzie, raised the subject of the self-employed. The 2017 automatic enrolment review concluded that the current automatic enrolment framework is not suitable for the self-employed. They are a highly diverse group and one solution will not necessarily fit all. The Government have committed to carrying out research trials to form the evidence base and future policy.

The noble Lord, Lord Sharkey, asked what the Government are doing to tackle investment scams—an issue raised by other noble Lords. These scams are outrageous. The Government are committed to raising awareness about pensions scams to help protect consumers. As part of this, the Financial Conduct Authority launched its ScamSmart campaign to raise awareness of the steps that people can take to avoid investment scams. During the campaign, 173,000 users visited the ScamSmart site, and 376 users were warned about an unauthorised firm.

The noble Lord, Lord Sharkey, raised the need for a stronger nudge towards guidance, as provided for in Sections 18 and 19 of the Financial Guidance and Claims Act 2018. In that Act, we committed to test different approaches to providing a stronger nudge towards Pension Wise guidance. Pension Wise began this work on Royal Assent of the Act and it was picked up at the launch of the Money and Pensions Service. Trials commenced in October 2019. We are on course for those trials to finish and for qualitative work to be undertaken ready for the publication of the evaluation report in the summer.

Many noble Lords raised the question of whether there should be one dashboard or multiple dashboards, and the views on that were mixed. My noble friend Lady Fookes asked why there should not be just one, but I was interested to hear the noble Lord, Lord Sharkey, say that multiple dashboards will give consumers more choice in where they access pension information. Multiple dashboards will help to meet the varied needs of the 24.5 million people with pensions and wealth. I am sure that this is a topic on which we will have extensive discussions prior to and during Committee.

The noble Lord, Lord Vaux, made the point that the payment of dividends will not be a notifiable event. It would be disproportionate to require every dividend payment to be notified to the regulator. Hindering dividend payments could affect pension schemes, as many are shareholders in companies with DB schemes.

The noble Lord also raised the Dutch scheme. Despite communication issues in Holland, for generations the Dutch scheme worked as though it were a DB scheme. Where adjustments needed to be made, these came as a surprise. We will ensure that in communications to members, particularly at key points throughout a member’s pension scheme journey—on joining and annually, and before and during retirement—CDC schemes are clear and transparent that benefit values may go down as well as up.

The noble Lord, Lord Vaux, asked what safeguards there are to ensure that transfer values are fair. The cash equivalent transfer value represents the actual calculated cash value of providing members’ benefits within the scheme. Legislation provides a framework for the calculation of transfer values that trustees must follow.

The noble Lord also asked why companies should not be stopped from paying dividends if their pension schemes are in deficit. We do not believe that it is sensible to stop companies paying dividends to shareholders, even when a scheme is in funding deficit. Government intervention to block dividend payments could discourage investors and weaken the business, further reducing the security of the defined benefit scheme.

The noble Lords, Lord Vaux and Lord Sharkey, and others raised a lot of questions on that subject. It is not that I am not trying to give an answer; it is just that I am unable to do so at the moment, but I will get back to them.

My noble friend Lady Altmann asked what the sanctions will be for pension scheme providers who do not comply with compulsion. If a pension scheme provider fails to comply, it might be subject to penalties, including fines. The regulator will have a range of powers, including issuing compliance notices, penalty notices and fines.

My noble friend also raised the question of simpler annual benefit statements. The industry delivery group will consider the outcome of the consultation on simpler statements when making recommendations on the information to be included on dashboards.

I pay tribute to my noble friend Lady Altmann, whose tenacity on net pay allowance and tax relief is legendary. She has taught me everything that I know about it. That was a matter raised also by the noble Lord, Lord McKenzie. I am not trying to get out of anything here but it is a matter for the Treasury. However, the Government recognise the different impacts of the two systems. To date, it has not been possible to identify any straightforward or proportionate means to align the effects of net pay and relief at source. However, as announced in our manifesto, the Government will conduct a comprehensive review of how to fix this. We say that we will do it.

My noble friend Lady Altmann asked whether the new scheme’s funding requirements support the plumbing pension scheme. I am afraid that I am not able to give a response to that at the moment but I would love to meet her and give her the information that she requires, as well as making it available to other noble Lords.

I am taking a moment to look through my responses in an attempt to be fair to all noble Lords, although I do not think that I am doing a great job.

The noble Baroness, Lady Drake, raised the important point of carer’s credit and the family carer top-up. The Government recognise the valuable role of carers and the fact that they are disproportionately women. The Government Equalities Office gender equality road map, published in July 2019, set out plans to support carers. They included helping people to return to work after taking time out for caring. We are working closely with colleagues in the Money and Pensions Service to empower people to take informed decisions about saving throughout their lives. I am sure that we will revisit this very soon.

We have talked about the gender pay gap—a matter raised by the noble Baronesses, Lady Drake and Lady Bryan. As I said, automatic enrolment has helped lots of women—I have given the statistics. We want to empower them to take informed decisions about saving throughout their life, but we have made progress in bridging the gap.

The noble Baroness, Lady Drake, talked about the consumer protection regime. The Government recognise that the regulation of dashboard providers is critical to maintaining public confidence. My department has been working with HM Treasury and the FCA to decide how best to ensure that the regulatory regime is appropriate and robust.

The noble Baroness, Lady Drake, also raised the important issue of the security of data on pension dashboards. Ensuring the security of data is key to establishing consumer confidence in the dashboards. The Government are committed to ensuring that the infrastructure includes a level of identity assurance that satisfies the good practice established for national cybersecurity.

The noble Baroness, Lady Drake, and my noble friend Lady Noakes raised the subject of the Pensions Regulator. They questioned the impact of the new criminal offences and wondered whether their scope was too wide. We do not want to stop legitimate business activity, such as lenders taking security for normal financing activities. The Government are clear that businesses must be allowed to make the right decisions to allow them to develop and grow.

The majority of employers want to do right by their scheme. However, we must ensure that sufficient safeguards are in place to protect members’ pensions from the minority who are willing to put them at risk—I mention no names. The Government are committed to the Money and Pensions Service providing a dashboard, and MaPS committed to providing a dashboard in its 2019-20 business plan.

I turn to the contribution of my noble friend Lord Young. His powers of foresight are legendary; I am envious, and I am sure that many in both Houses would like to have them. The same is true of his oratory powers; he is very eloquent and his Front-Bench contributions are much missed in this House. We will meet before Committee. Time is really getting on now. I will respond directly to my noble friend Lord Young on the points he raised, and will have an answer to the point raised by my noble friend Lord Flight on equity release.

My noble friend Lady Noakes asked whether there are adequate appeal processes. The answer is yes and I would be very happy to talk her through those at a later time. Her description of a “half-baked dashboard” is interesting. We undertook a significant consultation and got more than 120 responses. These were published in April 2019 and were taken into account during the development of the legislation. We will continue to seek all views as we develop regulations.

The noble Baroness, Lady Donaghy, raised a point about holders of multiple part-time jobs. Currently, where an individual does not earn more than £10,000 per annum in a single job but earns more than the lower limit of the automatic enrolment qualifying earnings band, they can opt in to a scheme in one job and receive the mandatory pension contribution from their employer on earnings over that level.

The noble Baronesses, Lady Hayman and Lady Jones of Whitchurch, talked about climate change. This is a subject close to our hearts and I will meet with them both to talk in more detail. The Government are absolutely committed to tackling climate change and recognise the concerns that have been raised. We have already introduced legislation to require pension schemes to state their policy. In building on this, the DWP continues to work with the industry.

On dashboards, we expect that initially there will be no more information than is already available; to start with, simple information will become available. The delivery group may make recommendations for adding more detailed information as the needs and interactions of users develop.

[Baroness Neville-Rolfe]

Before the Minister sits down, would she be willing to talk to us a little more about the detail of the subordinate legislation on dashboards? She kindly said that she would do that on the first part of the Bill, but several noble Lords are interested in the subordinate legislation on the dashboard.

[Baroness Stedman-Scott]

Of course, I will do that as soon as possible. This is an important Bill with a far-reaching impact on people. We will all work together in the House to get the legislation as we want it. I extend my invitation once again to all noble Lords who may wish to discuss any further issues before Committee. Our door is always open. I thank noble Lords for their contributions today. I commend the Bill to the House and ask that it be given a Second Reading.

Small Business, Enterprise and Employment Bill

Debate between Baroness Stedman-Scott and Baroness Neville-Rolfe

Wednesday 28th January 2015 Grand Committee

[Baroness Neville-Rolfe]

My Lords, the tied model has long been part of our history. As my noble friend Lord Hodgson said, properly operated it can be beneficial to both pub company and tied tenant. However, as the Government made clear in their consultation response, the evidence has accumulated of problems of abuses of the tied relationship. In an online survey carried out in parallel with the Government’s consultation, 91% of more than 700 tenants identified the beer tie as the biggest challenge that they face. In the government amendments that I am moving we are focusing the market rent only option on the tied model, consistent with rest of this part of the Bill. All of this part will then apply to pub-owning companies which own 500 or more tied pubs.

In contrast, the MRO option inserted into the Bill in the other place would apply to companies with 500 pubs of any kind and one tenanted or leased pub. This would include free-of-tie pubs. As I have already said, the Government do not agree with that approach. There is some evidence of problems in the free-of-tie sector. Some free-of-tie tenants, for example, feel that their property insurance is too high. That is a common issue with commercial leases right across sectors. In the pub sector, by contrast, we have a large body of evidence of problems with tied pub agreements. The Government therefore wish to focus regulation where there is evidence of significant problems, not on the free-of-tie sector. I hope that the Committee will be content to support these amendments. I propose again to listen to noble Lords before responding to the other amendments in this group.

[The Deputy Chairman of Committees (Baroness Stedman-Scott) (Con)]

My Lords, I advise the Committee that if this amendment is agreed to it pre-empts Amendments 91A and 91AZA.