Pension Schemes

Debate between Julian Lewis and Paul Maynard

Thursday 2nd May 2024 Commons Chamber

[Paul Maynard]

That is very much the approach that I am taking with this matter. It has been discussed at great length at the sector roundtables that I have been present at. It has been a very strong theme that I have heard, so I can assure the right hon. Gentleman that I am acutely conscious that that is the lens through which I am looking at the issue.

[Sir Julian Lewis]

My hon. Friend did say that things had moved on since January. May I gently remind him that it was in January that he told the Work and Pensions Committee that he was waiting to hear from his officials who were in discussions with the Cabinet Office about the AEA Technology pension scandal? He has since been saying that there is no timeline for how these people will be advised of appropriate redress. Does he expect there to be no timeline between now and the general election, or can they expect a definite answer at some point before then?

[Paul Maynard]

My right hon. Friend has pre-empted a topic that I was about to come to, because I could see that it was going to come up in the discussion on the Select Committee report. I have now been to see the Cabinet Office Minister with my officials, and my officials then went back for a second visit. So although I cannot give him a timeline, I can say that I am motoring this issue along as rapidly as I can. When I say that this is complex, it is because it is complex; it is not merely because that is a useful and convenient word to cover a multitude of things. We continue to work as fast as we can to try to reach a conclusion. I hear the points that he has made to me, both in this place and outside, about wanting to draw this to a conclusion as best we can.

The regulations that I referred to on the funding and investment strategy clarify what prudent funding plans look like, allow open schemes to take account of new members and future accrual, make it explicit that there is headroom in the regulatory environment for schemes to invest more productively, and require all schemes to be clear about their long-term strategy to protect member benefits.

DB funding levels have improved in recent years, and it is important that schemes take advantage of the opportunities that this brings. The scheme funding regulations will help schemes get the most from their assets, while at the same time ensuring that scheme members can be confident that they will receive the benefits that they are promised.

The regulations embed good practice and build on the existing funding regime for DB schemes by providing clearer funding standards, which will ensure, as far as possible, that schemes are properly funded over the long term. Scheme members can and should be confident that the regulations provide increased security for their promised pensions, which is important to many of the people whom the right hon. Member for Orkney and Shetland is trying to support through this debate.

In addition, the new general code for the Pensions Regulator has come into effect since we last discussed these issues. The new general code consolidated and simplified 10 of the existing codes to make it easier for trustees and those running occupational pension schemes to find the information they need on the regulators’ standards of conduct and practice. It came into force at the end of March this year.

I will do my best to reply to some of the points that have been raised in the debate before I continue with my speech. I am grateful to the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), for covering many of the issues in what was a very helpful report on DB schemes. I know that we often discuss Select Committee reports in this place on a Thursday, and it is quite right that we should do so. Normally, however, we do so after the Government have issued their official response to that Committee report. If the Chair of the Select Committee will forgive me, I will not pre-empt every recommendation in the report. But I can assure him that I sat down for a marathon session with my officials not so long ago, going through every last sentence in the report, so I can tell him that I am giving the matter full consideration.

It is worth noting that both the right hon. Member for East Ham and the hon. Member for Strangford (Jim Shannon) mentioned the auto-enrolment reforms. I am happy to place on the record today our ongoing commitment to consult in the mid-2020s on that issue. I am keen to make progress. I hear all across the Chamber that there is a recognition of why it is important that we make as rapid progress as we can.

The right hon. Gentleman mentioned that he will have to provide a consultation. He summarised the general tone of the contributions very well. Certainly there have been more responses to that consultation than to any other during my time in the Department. I have read most of them myself, rather than just waiting for the summary. I have absorbed similar mood music to the right hon. Member for East Ham, and I hope that we can have a proper Government response very soon.