Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2021

Lord Bourne of Aberystwyth Excerpts

Thursday 25th February 2021 Lords Chamber

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Drake, who has such broad and deep knowledge in this area. I well remember the powerful contributions that she made to the Pension Schemes Bill, as it was, when it went through the House.

Along with others, I thank my noble friend for setting out the order with such clarity. I join others in noting the great success of auto-enrolment in pensions since 2012, particularly through this difficult period. I understand the thinking behind the decision not to change the qualifying trigger level. I appreciate that in the challenging environment of the last year there has been very little earnings growth. However, as has been acknowledged, freezing the threshold at £10,000 increases the number of people saving into a workplace pension by only 8,000, raising contributions by just a small amount.

Perhaps I may delve a little deeper into the current position on savings more generally. With spending by individuals lower than normal because of the constraints on spending in lockdown and during the pandemic, surely, despite the slowdown in earnings growth, there has been an upswing in savings. Should we not encourage those in employment to save into pensions? Perhaps we are doing that, but I worry about the fact that we are increasing the number of people auto-enrolling by just 8,000. What are the Government generally and the department specifically doing to encourage pension savings? What publicity and education are being provided, quite apart from the auto-enrolment scheme?

It is gratifying that, of the new savers, 72% will be women. This is welcome news, although of course it may well indicate the lower wages of women, as well as, admittedly, a reflection of more part-time working among women, but there remains a challenge to get more women into the auto-enrolment scheme. I wonder whether that statistic worries the Government or heartens them and what the thinking is here.

Perhaps I may also press my noble friend for some broader thoughts on the longer-term thinking of the department and the Government on pensions in general—in particular, on a point made by the noble Baroness, Lady Bowles of Berkhamsted, with regard to what we are going to do with people who, I fear, are in and out of employment in the current challenging circumstances, and how we are going to encourage pension savings in this difficult environment. Those points were also touched upon by the noble Baroness, Lady Drake. I assume that there is a desire to extend automatic enrolment in the future and to lower the trigger for automatic enrolment, but what is the current thinking and the longer-term outlook?

I join others—my noble friend Lady Altmann, for example—in noting the tax trap, or non-tax trap, for lower earners, and the need to incentivise savings for those people. The position at the moment is not satisfactory. I wonder whether my noble friend can give some indication of when the Government are going to get their teeth into this problem and come up with a solution.

Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) (Amendment and Revocation) Regulations 2020

Lord Bourne of Aberystwyth Excerpts

Wednesday 21st October 2020 Lords Chamber

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord Loomba, and I thank him very much for his analytical review, which I found very helpful. I thank my noble friend for setting out the background to these regulations so clearly. I welcome the regulations, which I understand are needed because of an oversight.

My noble friend Lord Trenchard is quite right that a moratorium or restructuring against creditor enforcement is not an insolvency proceeding, which is the reason we need these regulations to facilitate pension protection, and I strongly support that. I have several questions for my noble friend the Minister, of which I have given her some notice, but I understand that she may want to correspond in writing on some of the points and will copy answers to the Library if that is necessary.

First, what is comprehended by “co-operative and community benefit societies”? I strongly agree about the protection for them, and I understand that the term includes credit unions. Do we also need to take special measures to protect the pension schemes of friendly societies, building societies and other mutual societies—and, indeed, trade unions? Are they also covered? Perhaps my noble friend can answer that point.

Paragraph 3.9 of the Explanatory Memorandum talks of an ongoing risk that, during any break in the application of the provisions, a relevant co-operative and community benefit society could obtain a moratorium from its creditors, or a relevant society could propose a plan to restructure its business, without the Pension Protection Fund being able to intervene as a creditor to protect its interests. How real is that break and how much of a danger is there of that eventuality?

How healthy is the position of the Pension Protection Fund? I know that the Minister for Pensions spoke to the chair and chief executive of the fund over the summer and was reassured about its resilience. Indeed, my noble friend also gave us reassurance in September. However, when did a Minister from the department last speak to the chair and chief executive about the standing and resilience of the fund? It would be good to hear about that.

More generally, can my noble friend give an update on the institution of the moratorium, a point that several noble Lords have raised? I believe that it has not been used much since its inception, although there is clearly a difference of opinion between the noble Lord, Lord Callanan, and the noble Baroness, Lady Drake, on whether it has been used at all. Is the Minister in a position to shed some light on this and whether the moratorium is likely to be used much, if it has not yet been used?

Finally, has there been any contact with the Insolvency Practitioners Association to obtain its views on the regulations, regarding the need for more protection for bodies other than those covered? Is there an ongoing dialogue with the association, which would be desirable because it is expert in these areas and steeped in insolvency and related restructuring proceedings? Subject to those considerations, I strongly support the regulations.

Social Security (Up-rating of Benefits) Bill

Lord Bourne of Aberystwyth Excerpts

2nd reading
Tuesday 13th October 2020 Grand Committee

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Greengross, who has done so much in our House on issues of longevity. I always listen to her with great pleasure. I thank my noble friend the Minister for setting out the Bill with characteristic grace and good humour. It is indeed a very short Bill.

Like others, I look forward immensely to the maiden speeches of the noble Lord, Lord Field of Birkenhead, and the noble Baroness, Lady Stuart of Edgbaston. They are two very distinguished parliamentarians, who I know will add massively to the strength of our House. I have known the noble Baroness for a long time. I taught her company law and I recall that on one occasion, before either of us got very involved in politics, she said to me that I was a far better lawyer than a politician. I think that my repost was that she was a far better student than she was a politician. We both find ourselves in the House of Lords and I look forward to her contribution to our House immensely.

I believe that this Bill is necessary. It ensures that state pensions can potentially be uprated, despite the likely fall in earnings. It is matter of pride to me that our country and our Government believe in the pension triple lock—it is something that we should welcome, as indeed I do. I recognise that there is a great issue of intergenerational unfairness at present and I would like to say something about that, too. The Bill is necessary to amend legislation because of earnings falling, albeit by a relatively small amount, and it is necessary that the Bill gets Royal Assent, I understand, by mid-November, which I am sure will happen.

It is right to say, as others have, that many pensioners are well off now—the noble Baroness addressed this point. However, there are still some 2 million pensioners living in poverty—that is according to the Joseph Rowntree Foundation, and the Government’s own figures are only just under that. Despite the financial security that many pensioners enjoy in retirement, there is still a real issue for many others. We should rejoice that pensioners are living longer, but we need to recognise that there are ongoing issues of poverty in retirement for many people.

I want to say a little about intergenerational fairness, which was addressed briefly also by the noble Lord, Lord Blunkett. Many people at the young end of the age spectrum—16 to 24—will be massively disadvantaged through this crisis. They have seen their education missed, disrupted apprenticeships and lost jobs, and they will continue to do so. According to a report this year by the Social Metrics Commission, chaired by my noble friend Lady Stroud, an estimated 8.5 million people of working age are living in families in poverty. Can the Minister say something about that? I know that it is something that the Secretary of State will come to, but can my noble friend say something about the timing and the likely thinking, because there is a much greater issue here than the important points about pensions that we are addressing. Yes, this Bill is important and it is right that we focus on it today, but, for the next 10 years, the issue will be the fairness that we need to apply to the younger generation, who are likely to have to pay the bills of this crisis and who have seen their education and jobs disrupted. I shall certainly support the Bill, but I hope that my noble friend will be able to say something about the broader picture of benefits for those at the other end of the age spectrum.

Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) Regulations 2020

Lord Bourne of Aberystwyth Excerpts

Monday 14th September 2020 Grand Committee

[Lord Bourne of Aberystwyth (Con) [V]]

My Lords, it is a great pleasure to follow my noble friend Lord Flight. I thank the Minister for setting out the regulations so clearly. I support the regulations; there is clearly a necessity for them and I am pleased that they seem to command support from around the Committee.

The Corporate Insolvency and Governance Act 2020 introduced new and updated restructuring procedures—it was the first significant alteration of these since the 1980s. It included the new moratorium procedure and restructuring plan for companies, limited liability partnerships and charitable incorporated organisations. This procedure had been waiting in the wings for some time—it was nothing particularly to do with the Covid outbreak, although the Corporate Insolvency and Governance Act was concerned with measures that were needed because of the outbreak. In consequence of this new process, these regulations are needed to make provision for the new regimes for pension funds and, specifically, the Pension Protection Fund so that it is able to exercise creditor rights.

I have several questions for the Minister. Is there a particular issue in relation to the time lag? The Explanatory Memorandum refers to a danger of something effectively falling through the cracks. There is reference to the need for the regulations to come into force as soon as possible after Royal Assent to minimise the gap in the application of the regime. Indeed, the Minister referred to the need to do so. What is the significance of this gap? Could the Minister clarify that? Does it apply to the other regulations the Minister referred to which are being delayed? I do not know how long the delay is and whether there is a greater danger to do with the gap referred to. Perhaps the Minister can also advise us about that.

My second point relates to publicity for these measures to ensure that pension funds are aware of these provisions and their impact. What is being done about publicity for the regulations?

I appreciate the reserved nature of these regulations, but given the interlink with other matters such as economic development, where there is a devolved dimension, can the Minister indicate how the department and the Government have engaged with the devolved Administrations to ensure that they are aware of the impact of these regulations and possible interlink with economic development?

Lastly, like the noble Baroness, Lady Drake, I wonder whether the Minister could give us a general overview of—a sort of preliminary canter through—the impact of these new procedures. I appreciate that it is early days yet, but perhaps she can indicate the impact that the new procedures have had and whether there is any particular concern, over and above the concern that we have been addressing today, regarding the impact on pension funds. The noble Baroness may need to write to us on these points, and I will certainly understand if that is the case. With that, I conclude with my wholehearted support for these regulations.

Automatic Enrolment (Offshore Employment) (Amendment) Order 2020

Lord Bourne of Aberystwyth Excerpts

Tuesday 19th May 2020 Lords Chamber

[Lord Bourne of Aberystwyth (Con)]

My Lords, I thank the Minister very much for introducing these instruments, which I, like others, strongly support. I also welcome the government help that has been provided in relation to furloughed employees, as announced by the Chancellor, Rishi Sunak. It is a great help at this time.

The instruments refer to “seafarers”. There is more than a whiff of Joseph Conrad about that. Although it is a rather old-fashioned term, this industry is vital for our country, as others have noted. “Offshore workers” perhaps has a more contemporary feel, but, like other noble Lords, I welcome the fact that the term extends to these categories.

The Minister noted how many people are within scope of the instruments: some 26,000, I think. How many workers in toto will be subject to automatic enrolment pensions after the instruments are passed? Other noble Lords, notably the noble Lord, Lord Blunkett, have noted that the instruments are extremely important to our society—indeed, more important than ever, not less so. I hope that any review of these automatically enrolled pensions will be about extending the pensions to other categories or to people who are not subject to them at the moment, rather than about contracting the scheme at a time when, as we all know, there is a surge of public spending—rightly so—which will continue. We know that that will put pressure on the state pension, so supplementary saving for workplace pensions should be very much encouraged.

Can the Minister say something about fiscal relief? I realise that she will not be able to say too much as this is not within the scope of her brief, but my noble friend Lady Altmann’s point about tax relief for low-paid workers who are not drawing this relief at the moment was extremely well made. They should receive this, as others do. It makes automatically enrolled pensions that much more attractive.

In short, as other noble Lords have done, I welcome the instruments wholeheartedly. I look forward to hearing what the Minister has to say about extending and embedding this to make sure that it is part of the pensions landscape long into the future.