Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) (No. 2) Order 2023

Lord Davies of Brixton Excerpts

Wednesday 26th April 2023 Grand Committee

Moved by

[Lord Davies of Brixton]

That the Grand Committee takes note of the Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) (No. 2) Order 2023, given the impact of current increases in the cost of living on pensions payable by the Pension Protection Fund.

Relevant document: 30th Report from the Secondary Legislation Scrutiny Committee

[Lord Davies of Brixton (Lab)]

My Lords, this order is routine and has little practical impact on the PPF. The levy that is currently payable is only 16% of the cap set by the order. However, having it before us provides an opportunity to discuss the operation of what is becoming—a bit under the radar—one of the country’s biggest financial institutions.

I have a particular interest as I like to think that the PPF, or at least the name, was my idea. Back in 1995, following the Maxwell scandal, I drafted a paper for the TUC that proposed, among other things, that there should be a central discontinuance fund that should be called—wait for it—the Pensions Protection Fund, or PPF. Of course, the proposal was not accepted at that time, but it was introduced subsequently in the Pensions Act 2004.

Before getting to the focus of my speech, I have a couple of questions. First, the Minister should provide the Committee with some explanation of the error that was made with this order. I am not trying to embarrass anyone, but it surely suggests excessive pressure on DWP staff, so the question is: has the situation been rectified?

Secondly, as was raised in the 30th report from the Secondary Legislation Scrutiny Committee, can the Minister tell us where we have got to in following the recommendations in the departmental review? I will highlight two recommendations from the review. First, recommendation 2 is that

“the DWP and the PPF work together to understand the implications of the PPF’s funding position in light of expected future developments in the population of Defined Benefit (DB) pension schemes and plan well ahead for any legislative changes that might be needed; for example, to address what happens to any funding which is surplus to requirements”.

It is worth noting that the current legislation says nothing about what should happen to any assets that, in the event, are not needed to pay members’ benefits. Given the PPF’s policy of building up a substantial buffer that, even on its own figures, is unlikely to be needed, the question needs to be addressed.

Any money that is left over cannot go back to the employers, because things will have moved on and employers will have moved on. It also seems wrong that it should go to the Government. The only just solution is for it to be used, as far as possible, to provide benefits for members. In practice, this means that the buffer should not be excessive. In these circumstances, where there is no residual legatee, bigger is not necessarily better. It might be unjust, and its level therefore becomes not just a technical issue but an issue of fairness to members.

Recommendation 6 states:

“The PPF should consider how the Board could hear more directly about the member perspective to inform its deliberations”.


It should be a matter of concern that currently there is no formal procedure to reflect the interests of members. So what thought are the Government giving specifically to these two recommendations in the context of the review?

These two recommendations also bring me to focus on the central issue of my remarks: the impact of high rates of inflation on pensions in payment from the PPF and the scope for the fund’s assets to be used to protect their real value. The problem is that the limits on annual pension increases are severe in current circumstances: none at all for benefits accrued before 1997 and only 2.5% per annum for benefits accrued thereafter. Until recently, the PPF operated in a period of relatively low inflation. The problem of inflation has always been there, but it has become more salient now we have moved into a period of materially higher rates of inflation—most obviously in the current year, but the issue is not going to go away.

The net effect of these limits is that the real value of members’ pensions has been cut significantly. Pre-1997 benefits have already been cut by up to one-third, while benefits accrued after that date have fallen by up to one-sixth. It is important to understand that these are reductions so far; they are going to continue. There is bound to be another cut next January, which will be based on the level of inflation this coming May. It is potentially another 7% if we believe the OBR’s forecasts. In the longer term, I am a relative pessimist about inflation —but even optimists do not expect a return to CPI increases of 0% or even 2.5%. So the need to protect the real value of members’ benefits will only increase.

The reductions in the real value of members’ benefits must be seen in context: the funding position of the PPF, in its own words, is “strong”. As a result, the PPF levy has, quite rightly, been reduced and there are plans to reduce it further. I have no problem with that. According to the PPF’s latest annual report and accounts, the scheme held £39 billion in assets as at 31 March 2022. At that point, the PPF estimated that, of that figure, £11.7 billion—almost £12 billion—was in excess of what it needed to pay every current member and their dependants their compensation for life. This represented a funding ratio of 137.9%. I think that would be broadly recognised as going a bit beyond “strong”.

Given the experience of the last 12 months, it is likely that the position this March will be materially stronger. It also needs to be understood that these figures are already being calculated—I presume—on a prudent basis. The general practice is to undertake these valuations on a prudent basis. Unless the PPF advises me otherwise, I assume that this is the case here, so we have prudence placed on top of prudence.

The problem with all this is that PPF members have not shared the benefits of this strong funding position. Indeed, it is the reduction in the real value of their benefits that has been one of the contributing factors to the strong position. This situation is wrong and should be remedied as soon as possible. This will probably require legislation because the board of the PPF has limited ability to pay compensation over the levels set in the Pensions Act. The lack of increases for compensation in respect of pre-1997 service is devastating for the members who are affected, especially during the current cost of living crisis.

As well as the size of the impact, it is also important to appreciate the differential effect on various groups of members. Information released to the trade union Prospect through a freedom of information request shows that the lack of inflation protection for pre-1997 service disproportionately impacts women and older members. There is no rational justification for this discriminatory treatment. Ministers have sought to justify the discrimination by saying that there was no statutory right to increases before 1997—true, but there was no statutory right to have an occupational pension at all. The idea that the initial pension is the real benefit and the increases are an optional extra is fundamentally wrong.

In practice, the majority of pre-1997 scheme members were either accruing benefits to which they were entitled through RPI increases, typically capped at 5%, or were in the many schemes funded on the basis that such increases were going to be provided and members had a reasonable expectation of receiving them. In other words, such increases were part and parcel of the package of scheme benefits, and their effective exclusion from protection must be open to legal challenge. Such a challenge becomes more likely as higher rates of inflation persist. So we should, first, provide higher rates of protection to better reflect modern rates of inflation and, secondly, eliminate the arbitrary and unfair difference in treatment for compensation in respect of pre-1997 and post-1997 service.

On a Brexit note, it is a matter of much regret that the Retained EU Law (Revocation and Reform) Bill does not provide for the retention of the minimum levels of compensation established in the Hampshire and Bauer cases. When that Bill was debated in the Commons, a Minister even went so far as to state that the Hampshire case

“is a clear example of where an EU judgment conflicts with the United Kingdom Government’s policies”.—[Official Report, Commons, Retained EU Law (Revocation and Reform) Bill Committee, 22/11/22; col. 169.]

To conclude, is it the Government’s intention to cut the potential benefits that members might receive from the PPF to below the level to which they are entitled at present? I beg to move.

[Baroness Drake (Lab)]

My Lords, the PPF provides real support to some 295,000 pension scheme members who have entered it, including through the £1.1 billion paid out in compensation each year. It provides security to those in current DB schemes who may need to call on it in future. Add to those figures the Financial Assistance Scheme, which covers a further 150,000 members and, following the Pensions Act 2004, is administered by but not funded through the PPF, and we are providing a blanket of considerable security to heading for half a million people.

It is very important to remember that, before the 2004 Act, members could lose all or much of their pension savings when employers became insolvent or simply walked away from their liabilities. When the Labour Government created the PPF, there were many doomsayers who predicted that it would not be sustainable. In fact, the PPF has defied those doubters: it is financially resilient, has been well run, and has weathered the various economic storms that have occurred over the past 15 years.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

Absolutely. That plays well into what I said in that I will reflect on what I and the noble Baroness have said, and there may well be a letter coming to add to the one that I will send to my noble friend.

I will address a couple more questions before I wind up finally. The noble Baroness, Lady Drake, and indeed the noble Baroness, Lady Sherlock, asked whether the PPF is right to build reserves at a slower pace than it has been doing. It is a fair question but that is, as the noble Baroness will expect me to say, very much a matter for the PPF board.

On whether there will be an update on the levy discussions, I may have alluded to this earlier—it was raised not only by the noble Baroness, Lady Drake, but by my noble friend Lady Altmann and indeed the noble Baroness, Lady Sherlock. I will certainly happily make inquiries, and that will be an addition to the letter which is growing bigger by the moment. There may be some other questions that I have not answered, but I will certainly look very closely with my team at Hansard.

To conclude, again I thank the noble Lord, Lord Davies, for providing us with this opportunity to discuss the UK’s flexible and robust regime for funding and protecting defined benefit pensions, which, as was mentioned, is an important subject. This regime has enabled most schemes to weather the severe economic downturns following the crash in 2007-08—the financial crisis, I should better call it—and the Covid pandemic, as well as the prolonged period of historically low interest rates. In fact, the aggregate scheme funding position on a Pension Protection Fund basis improved from 83.4% on 31 March 2012 to 113.1% on 31 March 2022 —an interesting statistic to reflect on. These improvements to scheme funding mean that fewer and fewer members of DB schemes will require the safety net of the PPF. That is of course good news for members, who are increasingly likely to receive their full pension entitlement. This is progress indeed but there is more to do, although of course we cannot eliminate all risk. When employers become insolvent, the PPF continues to stand by as a well-funded and responsibly managed safety net.

[Lord Davies of Brixton (Lab)]

I thank the Minister for his detailed and considered response to what I have certainly found a useful debate. I just need to say that I do not think that the issue will go away. As I suggested, the attrition of members’ benefits will continue, and pressure to do something will get stronger. It would be useful if a meeting could be organised—it is probably just as easy to do it directly with the PPF, but Ministers and officials might like to be involved in it as well, so I will write and suggest that. I thank the Minister again for his attention to this important topic.

Motion agreed.

Pension Schemes: Guidance

Lord Davies of Brixton Excerpts

Monday 13th March 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

Well, I will not be drawn on that by my noble friend, but the comments that she makes are broadly correct. It is very important that pension schemes, particularly those for purpose, encourage investments that align with the environment and society, and that includes climate change. I believe that the report, One Year On, outlines some pointers, insights or challenges. For example, most funds are using their investment consultants, while some are not yet using or including carbon offsets in their TCFD reports, but nothing in the findings so far is unfamiliar to DWP. We know there is work to do to improve the reports and build an element of expertise across the industries more generally.

[Lord Davies of Brixton (Lab)]

My Lords, I welcome the report. The question is whether the advice can effectively come from the Government against the background—I hope the Minister will agree—that it is the members’ money that is intended to provide them with a retirement income and should be used in accordance with their wishes and views. Can the Minister confirm that that is his view of how money in pension funds should be used?

[Viscount Younger of Leckie (Con)]

I think it is important that the right advice is given. I start by saying that this is pretty ground-breaking, because the UK is the first country in the world to make occupational pension schemes consider, assess and report on the financial risks of climate change. In terms of what I would call “the push”, we have consulted with the pensions industry and certainly think it is right that guidance is given. For example, my department has introduced guidance alongside the TCFD requirements to help pension schemes understand how to identify, manage and assess climate-related risks and opportunities.

Social Security Benefits Up-rating Order 2023

Lord Davies of Brixton Excerpts

Wednesday 22nd February 2023 Grand Committee

“The cost of living has strangled us. Stopped us from living normal, healthy lives … Nothing is affordable. Our children are hungry. Schools report ‘short concentration’ and ‘unmanageable moods’. They have lost their childhood … we are sick with anxiety, drowning in financial doom. And the government has offered nothing but a flimsy life jacket. We need more … Perhaps you don’t see desperation unless you have lived it? Well learn from us. Because we are living it.”

[Lord Davies of Brixton (Lab)]

My Lords, I, too, welcome the noble Viscount to our deliberations. He was possibly here as a Whip last year. I took the opportunity to look again at what I said then and, in fact, it would be possible for me to repeat what I said for the benefit of the new Minister, but I have amended it slightly and added some detailed comments on GMPs, which I am sure the Minister will look forward to.

There is no doubt that because of the lag in carrying out a pension increase the poorest in our society lose out. A figure has been calculated, which I was given by the researchers who work for the parliamentary party, that it is of the order of £520. That is the cash loss that they have incurred this year because of last year’s inadequate increase.

The important point is that it is no consolation to those who have lost that money to be told, “Okay, you’ll catch up next year” or, in the Minister’s words, “the fluctuations even out”. We are talking about the poorest people here; they are in no position to even out their income, as they have no savings worth addressing. The year of plenty when they are nudged marginally higher within the range of poverty does not ameliorate in any way at all the loss they incurred in the year that they fell behind. We are talking about pensioners in poverty. Let us not pretend that there are not millions of pensioners still in poverty. For them, this is simply not good enough; they suffer the effects in the current year.

The question is: what can be done about it? Last year, the Minister said that

“it is not possible to undertake the uprating exercise any later than currently timetabled.”

But she gave the game away a bit by also telling the Grand Committee:

“All benefit uprating since April 1987 has been based on the increase in the relevant price inflation index in the 12 months to the previous September.”—[Official Report, 9/3/22; col. GC 484.]


In truth, the seven-month delay goes back even longer. I can recall being in discussions with officials in the relevant department on this topic in the early 1970s, so we are going back on a system that has existed for 50 years. I find that less than impressive. Seven months is too long when inflation can change so rapidly. Given all the changes there have been in handling and processing data in the past 35 or 40 years, it is amazing that we cannot do any better.

I quite understand why officials tell the Minister “It has to be that way” but, really, with modern systems of handling data, it is simply untrue to say that nothing can be done and that we cannot move to a system that more closely aligns increases in prices with increases in benefits. Even if it were not possible—which I do not accept—could we not move to a system where the increase allows some provision for back-payment to make good the shortfall that people have suffered in the seven-month interim? I really do not accept the department’s line that nothing can be done about the delay in the increase.

My second point is about the triple lock. Last year, I asked how much credence we could give the Government’s repeated promises to keep the triple lock for the basic state pension and new state pension. The Secretary of State said last year:

“I am again happy to put on record that the triple lock will be honoured in the future.”—[Official Report, Commons, 21/3/22; col. 99.]


but she said the same thing in 2020 when she went on to break the triple lock. We know that the Government are prepared to break the triple lock—that is a fact—but we do not know what they count as the exceptional circumstances in which they are prepared to break it. The important thing about the Government trying to justify it last year is that they quoted exceptional circumstances, but those are not unique circumstances.

I was very pleased that the Minister, in his introductory remarks, reaffirmed the commitment to the triple lock. It is perhaps unfortunate that the Minister in the Commons, when introducing the same order, failed to refer to the triple lock at all even though it was mentioned several times in the debate. I was going to ask the Minister to give a commitment, but he has already done so.

It is worth stressing again the importance of the triple lock in this current period. Views differ, I know that, but I am totally committed to it so long as and until the state pension reaches an adequate level. When we compare it with the figures quoted by the Joseph Rowntree Foundation about what constitutes an adequate retirement income, we still have some way to go. If and when we reach that sort of level, we can have a debate about the triple lock but, at the moment, it is important that people receive the benefit.

I will just explain the triple lock a bit more. People refer to pensioners’ incomes but it only partly affects those. Pensioners who depend on the state pension, who by definition are on very low incomes, get the full triple lock. The people a bit above that level, who are not on massive incomes but whose additional income is from a personal or an occupational pension, are not getting triple-lock increases on those pensions; their overall increase is somewhat less. So long as we have this unequal and inadequate benefit system, the triple lock retains its justification.

I will make two more points. First, this is about taxation. I am sorry that the noble Baroness, Lady Penn, has left because this is really a Treasury point. It is important for the department to understand the implications of the decision to freeze the personal allowance until 2028. People have not realised how significant that is in terms of running the social security system. The state pension is not subject to PAYE. That works as a system where almost everyone has a state pension below the personal allowance, so they pay the tax on any income they get over the state pension. But we are heading towards the personal allowance being the same as the new state pension in 2028. Any income a person receives from the state over that level—and many do, because of retained rights from the state earnings-related pension scheme—has to be taxed from their other income. They may not have any other income, so in the following year, they will start receiving the brown envelopes saying, “You owe the tax system and HMRC significant sums of money”, which will have to be paid as a lump sum.

This situation needs to be addressed at some stage but I have seen no indication by the Government that they understand this problem coming down the tracks. The most appropriate way would be to include PAYE to cover the state pension. It is a historic anomaly that it does not. I hope that the Minister, who may not accept all my arguments, will agree that this needs to be looked at now, and that we do not need to wait until 2028 before it is resolved.

Finally, I come to my point on the GMP. I think I have said previously in this Room that if I was ever on “Mastermind”, my specialist subject would be the GMP.

[Baroness Lister of Burtersett (Lab)]

There would not be much competition for that.

[Lord Davies of Brixton (Lab)]

Yes, I agree. In the Commons, the Pensions Minister said:

“Under the Guaranteed Minimum Pensions Increase Order 2023, there will be an increase of 3% paid by occupational pension schemes, which means that that part of the GMP will increase by 3% from April 2023.”


The important bit is this:

“The 3% cap strikes a balance, I suggest, between providing members with some protection against inflation and not increasing scheme costs beyond what can be afforded.”—[Official Report, Commons, 6/2/23; col. 681.]


This is rewriting history. That is not in any way, shape or form why that 3% is there. It is to relieve strain not on the pension schemes but on the state pension, because it was the state pension scheme that was meant to be paying for any increases required over that 3%. I listened carefully to what the Minister said in his speech today, and it was a bit more nuanced than what the Minister said in the Commons the week before last.

This fiction is given a bit of support in the Explanatory Memorandum on the GMP increase order which says, in words very similar to those of the Minister:

“Guaranteed Minimum Pensions are increased yearly to help ensure that the value of a member’s pension has some protection against the effects of inflation”.


It is only “some protection” because the state was meant to be paying the excess over the 3%. The issue is complicated because, in some ways, people with GMPs got favourable treatment from the new state pension. That was reflected in some of the Minister’s words, but we need to be clear that we should not let the Government get away with the idea that it is only 3% because we do not want to put the burden on the schemes. It is only 3% because the Government previously promised to pay that excess, so perhaps the Minister could clarify that and tell me that I have got all the points from my “Mastermind” entry.

Bereavement Benefits (Remedial) Order 2022

Lord Davies of Brixton Excerpts

Tuesday 17th January 2023 Grand Committee

[Baroness Altmann (Con)]

My Lords, I too very much welcome this order. I am most grateful to my noble friend the Minister for his excellent introduction and explanation.

Enabling co-habiting bereaved partners to be treated the same way as those who are legally married in claiming the widowed parent’s allowance or bereavement support payments is something for which I think there is unanimous support. Indeed, I have found it extraordinarily difficult to justify denying these payments to cohabiting couples in the past when, in other tax and benefit calculations, there is no differentiation in this way; often, that can be to their financial detriment. This order is most welcome.

Echoing the words of the noble Baroness, Lady Hayman, I pay tribute to my noble friend Lady Stedman-Scott and welcome my noble friend Lord Younger to his position. I am most grateful to the Low Incomes Tax Reform Group for its briefing and the work it has been doing on this change and want to raise a few issues relating to the potential tax and benefit consequences of surviving partners receiving backdated lump-sum payments pursuant to this order. If the Minister does not have the answers today, I am happy for him to write to me.

The first issue relates specifically to the widowed parent’s allowance, as this benefit is taxable, unlike bereavement support payments. Lump-sum back payments could well give rise to tax demands for the recipients, when they are applied to past tax years for which they were due. In many cases, recipients are unlikely to have a tax adviser to help them look back over past years. They may have spent the money and, as a consequence of this order, face sudden tax demands and penalties for which they are unprepared. The documents accompanying this order state that the DWP will flag cases to HMRC, but how will this work in practice? Could it give rise to a potential problem for the claimants which, after all the years they have been waiting for this money, seems to be something to be avoided—if we can?

Paying the lump sums gross runs the risk of the money being spent. What measures can the Government implement in practice to protect claimants? Could my noble friend tell us, for example, how the DWP might work with the Treasury to jointly identify those who may be affected, perhaps by using national insurance numbers to link up records, and help people to understand how much tax they need to pay? The JCHR recommends that recipients should be clearly reminded, but might my noble friend consider going further and, perhaps, more proactively involving MoneyHelper or some other direct communication that clearly warns that tax may be due on this money, so that it does not come as a surprise?

The second issue relates to recipients of back payments who are on means-tested benefits. I welcome my noble friend’s confirmation that the lump sums resulting from this order will indeed be disregarded, but I hope he can also reassure us on a point that has been raised—it may already have been catered for—about whether, as I hope, there is a sensitive interpretation of the deliberate deprivation of capital rules. People who suddenly have a change in lifestyle because they have received a lump sum that they should have had over a period should not then be considered as deliberately depriving themselves of capital or should not lose out in some other way.

How will backdated lump-sum awards be treated for tax credits? I thought I heard my noble friend say that these are disregarded for universal credit and means-tested benefits, but is that the same for tax credits? I suspect it is not, from listening to my noble friend. It seems wholly unfair for the DWP to treat the payments as capital and disregard the income, other than that relating to the current year, when HMRC treats them as income in that year for the purpose of tax credits.

I know that tax credit legislation is complicated, and it refers to the amount of widowed parent’s allowance being payable. That may be what is driving some of this, but as this relates to past years, it was actually payable previously rather than being—one could argue—payable today. It seems like a grey area. I wonder if the Government might consider building a specific income disregard into regulations if the current position cannot be remedied.

Finally, I echo the comments of the noble Baroness, Lady Hayman, on the importance of reaching out to potential claimants, particularly as there is a time limit, to ensure that people know that they can claim and come forward with their claims. This could be through some national advertising campaign, or maybe the Government already have a database with some indication of cohabiting couples or past claimants who were turned down who can be contacted. Overall, I very much welcome this order and thank my noble friend for his introduction.

[Lord Davies of Brixton (Lab)]

My Lords, I thank the noble Viscount for his useful introduction and give a more general welcome; I suspect that we will be endlessly discussing a series of regulations over the coming months. I thank the noble Baroness, Lady Hayman, for reminding us that there are people involved here. It is easy when you just have a printed set of regulations to think it is just shuffling paper, but there are real people out there who will benefit from these changes. Clearly, we have to welcome that.

Part of the problem is—I take the points raised by the noble Baroness—the mechanics of how this is operated: not what is set out in the regulations but how it will be applied in practice by the officials involved. It should be done as sensitively and practically as possible. I am particularly interested in taxation and how tax is applied to these payments. This is a particular problem which is going to get bigger, and we will be discussing it again. It is a result of the fact that, for all intents and purposes, state benefits are outside the PAYE system.

The problem is that we know the personal allowance will be frozen for a number of years, at a time when inflation is at high levels. With benefits tied to inflation and a frozen personal allowance, more and more pensioners are going to be dragged into the PAYE system on relatively limited amounts of non-state pension income, which will have to be used to pay the tax, potentially, on their state pension. Many people have state pensions in excess of the personal allowance given their credits under SERPS. I think this is going to be a growing problem. It is one I hope the DWP will be able to discuss with HMRC.

My personal situation is that I suffer from this. I have a pretty good state pension and I have to pay tax on quite a large slice of that income out of other income. I manage it because I have the resources to do so, but people on the margin are going to find it increasingly difficult. The example mentioned is one where the closest co-operation between DWP and HMRC is crucial. Politically, it would be advantageous to get the situation sorted, because it will lead to a lot of concern and debate.

My final point relates to the evidence requirements for cohabitation. Most rules applied in the social security sphere about cohabitation tend to be there to take away benefits rather than grant them. Will the department apply the same rules that it applies when it comes to means-tested benefits about cohabitation, or will there be a separate set of rules? If there is a separate set of rules, is there a possibility that it will work against the individual at both ends? To just put in the Explanatory Memorandum that the evidence requirements will be produced “in due course” rather misses the sharp end of this legislation. How it works in practice will depend on the evidence requirements, and it would be useful if we could be told a bit more about where the evidence requirements will fit as compared with other examples where cohabitation affects benefits of different sorts.

Pensions Dashboards Regulations 2022

Lord Davies of Brixton Excerpts

Tuesday 15th November 2022 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, as I said all those years ago when we were discussing what is now the Pension Schemes Act, I also greatly support the concept of the introduction of pension dashboards. I am probably one of the people the Minister referred to who has that dusty box under the stairs, so I welcome this SI in principle. I have a few questions that I would be grateful if she could answer. Unfortunately, I was unable to attend the briefing that she kindly arranged, so I apologise if some of these questions were dealt with then, but there is probably no harm in the answers being on the record.

First, like the noble Baroness, Lady Drake, I agree that the six-month notice period makes sense. I hear what the Minister said about progress in creating the dashboards, but she has not said when she expects the public to be able to access them. The year is probably broad enough, but it would be interesting to understand when we think these dashboards, or at least the first dashboard, will be available.

The SI enables the establishment of dashboards additional to the MaPS dashboard. Things have obviously moved on a bit since we were discussing the then Pension Schemes Bill, so could the Minister give us some idea of how much genuine interest there has in fact been in creating other dashboards? Is she aware of any being worked on at the moment? There is not very much in this SI to incentivise the creation of private dashboards, nor anything that sets out who would be allowed to do so or how they might generate revenue. I understand that that will be covered by the FCA consultation she referred to. Under this SI, all they will have to do is meet the dashboard requirements.

We had many discussions in previous debates around the use of dashboards for selling advertising, transacting, et cetera. The SI is silent on those matters. I would be interested to know whether the Government’s thinking has evolved since our previous discussions. Perhaps the Minister can let us know. She mentioned in her opening speech the dashboard not allowing transactions, but I think that relates only to the MaPS dashboard. I am not sure whether she intended that to mean private dashboards; perhaps she might clarify that. For example, is there anything that would prevent a large pension provider or a consolidator creating a dashboard and then using it to encourage users to transfer, perhaps from a smaller provider, to its products or services? Does the Minister agree that there might be a conflict of interest, or even a competition issue, in that sort of situation?

That leads on to the use of the data by the dashboard provider. I was not clear from the SI what was allowed in that respect. Regulation 9 seems relevant, but I am not sure I fully understood it. As an example, could a dashboard provider—perhaps a big tech company such as Google or Meta—create a dashboard and use the data it holds or acquires to target advertising for competing products? If that is or will be possible, that would worry me. It would be a really serious fraud risk. We need safeguards over who is allowed to create dashboards and the way that revenue will be generated from them. The SI is silent on that.

I also have some questions on the impact assessment. Some surprisingly big numbers are there, with a wide range of outcomes. The best-estimate case comes out at a convenient figure of £30 million positive, just about breaking even. Am I being slightly cynical to think that has been slightly massaged or managed? The net present values for the first 10 years range from a worst case of £1.016 billion negative to a best case of £1.220 billion positive. Frankly, all that says to me is that there is still a very high level of uncertainty about the actual costs and benefits of the dashboards. It is also true that the bulk of the cost will fall on the industry and the benefits, which are less tangible, will go to members. To what extent is it expected that these costs, which are somewhere in the region of £700 million to £1.6 billion if the impact assessment is to be believed, will be passed on to pension funds? What impact will that have on pensioners? In particular, one has to assume that the cost will be higher as a percentage of funds for smaller funds, as the level of bureaucracy is similar with a smaller amount of money to spread it across, so what impact is expected, particularly on smaller funds and their beneficiaries? Is any support anticipated by the Government?

Related to the impact assessment, despite the expected annual cost being approximately £100 million a year, which is 20 times the statutory guidance level of £5 million, the Government have decided not to include a review clause in this SI. Instead, they have opted for what they call a multi-strand monitoring and evaluation strategy, which is subject only to ministerial review and approval. That is regrettable, and I am not even sure what a multi-strand monitoring and evaluation strategy actually is. Can the Minister put on record what form she expects that multi-strand monitoring and evaluation strategy to take, when and how often it will happen, and what will be reported publicly or to Parliament?

The Secondary Legislation Scrutiny Committee’s report makes it clear that

“the system has not been fully worked out yet and will remain under development for some time.”

Can the Minister give us some insight about what further developments are still to come, what further SIs she expects to bring to us and when, and whether they might cover some of the matters that I have mentioned?

[Lord Davies of Brixton (Lab)]

My Lords, I am happy to take part in this debate. I need publicly to declare an interest as a fellow of the Institute of Actuaries, albeit non-practising. A dashboard is a very good thing, and we want to see it introduced. In truth, my perfect pension system would be one in which you never have to think about it until you retire, and we could dispense with dashboards, but we are not in that space, we have to have a dashboard, and this is the dashboard we have.

As I say, I welcome it. I was involved 25 years ago in discussions about an early progenitor of what we have. At that time it was just too difficult, but with the development of digital capabilities, it has now become a practical reality, and I look forward to it becoming a useful tool for people as they plan for their retirement. Noble Lords can probably tell from my tone of voice that I am heading towards a “but”, but I want to do that emphasising my gratitude for all the work that has been done by the department, the officials and the Pensions Dashboards Programme, as we call it now, although I rather wish they had not adopted the word “ecosystem”.

The regulations before us have to be judged in terms of what the objectives are. What are we having a dashboard for? The starting point was to connect people with their pensions. There was a lack of connection and the figures we have had of the orphan pots are truly staggering and concerning, so any step towards avoiding that problem is to be welcomed. Obviously, people want to know what they have got in those pots. That is straightforward and should be done.

Then we move on to a further stage, of people’s likely income in retirement. This is where things start to get sticky, because the point of telling people that likely income in retirement is as a “prompt for necessary action”—which I think are the words used on the PDP website. The Minister, whom I should have thanked for her detailed and helpful introduction, used the term “informed decisions”—so that people can take decisions commensurate with their retirement aims. I think the model people have in mind is that you look at your pension statement, you think that it is not enough, so you start saving more money. In that sense, it is inevitably and inherently a sales tool. That is one of the problems we face in setting up a dashboard that works in people’s interests.

A point that I have made consistently in discussions about a dashboard is that it has to have the state pension there, but an equally valid—in my view, more important—conclusion that you can draw from your pension statement, if you think your pension is not good enough, is “Well, I’ve got to start campaigning for a better state pension”.

I am going to look in particular, on the basis of that, at what Schedule 3 calls the “value data”. The regulations lead via the 2013 regulations to AS TM1 from the FRC. That is Actuarial Standard Technical Memorandum 1 from the Financial Reporting Council. A new version of that will come into effect from 1 October next year. I picked that up at the very useful meeting that we had with Ministers, but the first DAP for the larger schemes is supposed to be from 31 August 2023, or it could be earlier, which is before we have the new technical memorandum. The whole point of achieving this technical memorandum—it is spelled out in the work that has been undertaken—is that the previous version was not good enough for the dashboard statements. We had to have the new technical memorandum because the old one simply did not work. People could do it on all sorts of bases. You would have a consolidated statement with several figures which could all be calculated on a different basis and were not comparable. So we came up with this new technical memorandum which requires schemes to do it on a standardised basis.

I think it is important when you do that to understand what you are really getting. Is this really an estimate of people’s likely retirement income? I think we need to hesitate before encouraging people to place too much confidence in that understanding of what these figures will be. They will be figures calculated on the basis of a single, predefined set of assumptions. The technical memorandum is well within the bounds of plausibility. It is not necessarily the technical memorandum I would have come up with if I had had to decide, but I cannot point to it and say it is nonsense or misleading. However, it is important to understand that it is only one among a range of possible views of the future, and we are misleading people if we give them any idea that this is what is going to happen. I think it is fair to say that the figure you are presented with is probably the least likely figure of all possible outcomes.

Just as an aside, it is also important that this will be a government-endorsed figure. Make no mistake: the ordinary person seeing this on their pension statement, knowing that this dashboard has been legislated for by the Government, will see an implicit government guarantee for that figure. There is no way of avoiding that. That is what will happen. Government Ministers can say for all they are worth, “No, we are just facilitating this; it is not our figure”. If, over time, these figures turn out to be woefully positive, the Government will be held to account. A similar disaster happened with endowment mortgages, and we saw what happened there. People believe the figures they are given, are gravely disappointed when they do not appear and look for reimbursement.

Universal Credit

Lord Davies of Brixton Excerpts

Thursday 9th September 2021 Lords Chamber

[Lord Davies of Brixton (Lab)]

My Lords, it is good to see the Minister again; we have spent a lot of time together this week.

We have to give credit to the Government for having had the sense and the compassion to introduce the £20 uplift in the first place, so equally we must now condemn them now that they want to take it away. It goes without argument that we should have a proper assessment of the impact of withdrawing the uplift. Indeed, we have several clear assessments and measured judgments of the impact—just not from the Government. We have the assessment of reputable organisations including the Joseph Rowntree Foundation and Citizens Advice, and they have made the position clear. I also had the privilege of attending a meeting of the All-Party Parliamentary Group on Universal Credit earlier this week. We heard from a wide range of organisations, including the Trussell Trust, which has been mentioned, but also, crucially, from individuals who were able to enlighten us about their real experiences and their fears of what faces them after the cut in their benefits.

We are recovering from the pandemic, but much more slowly than we hoped and expected earlier in the year, not least with the expected increases in unemployment and the consequent poverty and financial difficulties. It is also worth mentioning the loss of the economic stimulus that will arise because of the withdrawal of the uplift; that money is being taken out of local economies across the country.

My question to the Minister is simple: given the overwhelming weight of opinion and evidence, from and on behalf of those in receipt of universal credit, how can the Government in all conscience proceed with this action?

Universal Credit: People with Mental Health Problems

Lord Davies of Brixton Excerpts

Wednesday 8th September 2021 Lords Chamber

Asked by

[Lord Davies of Brixton]

To ask Her Majesty’s Government what assessment they have made of (1) the report by the Money and Mental Health Policy Institute Set Up To Fail: Making it Easier to Get Help with Universal Credit, published on 26 May, and (2) any barriers to people with mental health problems receiving support for the management of their Universal Credit accounts.

[Lord Davies of Brixton (Lab)]

My Lords, one in four of us will experience a problem with our mental health at some stage in our lives, and we know that concurrent financial problems almost always make the problem worse. In particular, experiencing a mental health problem makes it much harder for people to manage their universal benefit account, which is, of course, the background to this debate.

This is a circular problem. If we can improve the support that people with mental health problems receive in handling their finances, we not only help the individuals themselves but creditors and, not least, the National Health Service. We must therefore welcome the Money and Mental Health Policy Institute’s report, Set Up to Fail. Based on detailed research, it is compelling reading. My question, therefore, is: what will the Government do in response?

I am not going to talk about the rights and wrongs of universal benefit today; there will be other opportunities. I shall just concentrate on what we need to do to help people through the current system. But even in a reformed system, the same problems would need to be considered.

The challenge is that people with a range of mental health problems, such as low energy levels, memory loss or difficulties in dealing with complex situations, find it hard to manage their universal benefit account. Claimants report significant mental distress when faced with requirements such as preparing for work, responding to messages and attending appointments, which can be problematic to complete when you are on your own, or simply feeling helpless when dealing with complex situations. Again, we have the circle of cause and effect.

Any failure to navigate the system can have devastating consequences. Sanctions, deductions or lost entitlements mean that people cannot meet their basic living costs, which can further aggravate mental health problems and delay recovery. Faced with these challenges, people with mental health problems are bound to rely on support from family or friends—so-called third parties: typically, but not only, their spouse. From the institute’s survey, we know that more than half of the people affected have needed help from family or friends to manage their account, and more than one in four always or often need such help.

People needing help with their universal benefit are not asking for much; they just want a benefits system that is accessible and empowers them to get support from loved ones when they need it. I spoke to Gary, who told me that he just wanted a little help and some sympathy. He has worked all his life, but now he and his family rely on universal benefit. With his depression, he struggles to cope with everyday life, including managing his universal benefit account. He has help from his wife, but he finds they face a wall of complications.

Based on the lived experience of people in the survey, we know that getting third-party help with managing their universal benefit is confusing and challenging. Third-party help needs explicit consent, which requires claimants to set out precisely what information they want to be shared and what tasks they would like assistance to resolve. The fundamental problem is that the system for giving this consent requires people to undertake the same tasks that led them to need help in the first place. If people in receipt of universal benefit cannot navigate the main system, they are unlikely to be able to navigate the procedures required for accessing help and support. It could all be so much easier.

Without straightforward systems for delegating consent to another person, people find it a struggle to get the assistance they need, compounding the risk of harmful financial and mental health consequences. Almost half of the people in the survey who had relied on help with their universal benefit management had used informal workarounds, such as sharing their usernames and passwords to get the support they wanted. This is risky in itself and should not be necessary. Third-party support should be more straightforward to use, while maximising the control of the people in receipt of the benefit.

I know that some noble Lords are concerned about changes that would increase opportunities for economic coercion, but this is a problem for everyone with universal benefit. The institute argues that giving people more choice and flexibility over what aspects of the account they share with another person and for how long would increase the protection that people can exercise over their account.

The report recognises that the DWP has committed to look at how the consent procedures could be improved, but with the pandemic leading to worse mental health, unemployment forecast to rise and many of those transferring likely to have additional needs, delivering third-party support that lets people get the help they need must be an urgent priority for the Government.

What exactly needs to be done? From the report, we know that those affected want the process to get third-party support to be easier to understand and navigate. Too often, people who need third-party support are not aware of how to arrange it. The institute’s report sets out relatively simple steps for the Government that would make it easier for people to get the support from others to manage their account. This can make a big difference in reducing the stress and difficulty that too many people with mental health problems face when navigating the system. It is not rocket science. First, there are some relatively simple changes that make it easier to designate where help can be provided and who can provide it. Ideas include clearer, more consistent prompts on what information is required when navigating the computer application and drop-down menus clarifying what information claimants wish to share and for how long.

Then there are changes to facilitate how the designated third parties can provide the necessary help both quickly and efficiently. Suggestions in the report include developing a system of view-only access for authorised third parties, which would allow claimants to share specific screens with a friend or family member; introducing a system of duplicate notifications to authorised third parties, alerting both the claimant and their third party about new messages or tasks within their account; and improving the current appointeeship system, which grants great power to third parties. It would be better to make this more proportionate and tailored to the specific tasks and challenges that individuals face while managing their universal benefit.

What is the Government’s assessment of the barriers that people with mental health problems face in the management of their universal benefit accounts and, in particular, the excellent report by the Money and Mental Health Policy Institute, Set Up To Fail? I look forward to the Minister’s reply. Will she agree to meet with the institute to discuss these issues and its valuable work?

Pensions Regulator (Employer Resources Test) Regulations 2021

Lord Davies of Brixton Excerpts

Monday 6th September 2021 Grand Committee

[Lord Vaux of Harrowden (CB)]

My Lords, it seems like quite a long time ago that we were last in this Room. In fact, I think the last time I spoke in this Room was in the discussion on pension schemes, so it is nice to see a lot of old faces. There is a nice feeling of déjà vu about it. These regulations are reassuringly brief, so I will try to keep my comments equally brief, if I can.

First, I was a bit confused by the name of this, which refers to an employer resources test, that test being profit before tax. Profit before tax is not a measure of a company’s resources. It is a backward-looking measure of a company’s profitability. I question the comments in the Explanatory Memorandum that

“profit before tax … is less subjective than other options”.

Notoriously, profit before tax can be made to be whatever one wants it to be. A cash-flow measure would be an altogether less subjective, more objective measure. Profit before tax also does not, as the noble Baroness, Lady Drake, has said, take account of other forms of leakage of resources out of the company, be they dividends, share buybacks or massive capital expenditure. It is perfectly possible for a company to be highly profitable and highly indebted at the same time and therefore to have very low levels of employer resources.

I was a bit confused by the title, and would therefore like to add my name, as it were, to the question asked by the noble Baroness, Lady Janke, about why the Government did not go down the holistic route of looking at multiple measures that give a full picture of the employer resources rather than this one very narrow picture which is only a backward snapshot.

I have two other questions that relate to the discussions we had at the time of the Pension Schemes Bill. This instrument is obviously relevant to the subject of dividends that companies with deficits pay. The noble Baroness will remember that we had quite a lot of discussions about that back then. Indeed, the Minister at the time agreed that the Government would keep the question of dividend payments by companies in deficit under review.

I have two questions. First, can the Minister explain what assessment the Government have made of the impact that these regulations might have on the ability of companies to pay dividends? There has been some speculation in the press that it might significantly depress the payment of dividends by companies, something which on the whole is a good thing, but there could be situations where that could be a negative. Secondly, I would welcome confirmation from the Minister that the Government are still keeping under review the question of payment of dividends by companies that have deficits, as they promised.

[Lord Davies of Brixton (Lab)]

I am glad that it was an accountant who made the comment that profits can be whatever you want them to be, which was my concern. However, I am struggling to grasp what role this is playing. In some ways, I suspect that we could overengineer the definition of “resources” and make it very complicated. There are strong arguments for keeping it as simple as possible so that the regulator can take a holistic view. This is what I understood the process to be. My guess is that the regulations will enable the regulator to do what we always thought it could do in the first place, and it tripped over some regulatory legal point. There are strong arguments in favour of keeping it simple and leaving it essentially to the judgment of the regulator.

Whenever I mention the regulator, I have to add my qualification that of course it does not represent scheme members in any way. It does not have the accumulated knowledge of unions and employers who actually do the business of agreeing pension schemes. I have questions about the Pensions Regulator but the ideal should be a Pensions Regulator that knows the field and can apply the test proportionately.

I have one specific question. I have no idea what this means. Regulation 4(8) says that

“the Regulator must take into account all relevant information in its possession”.

Well, yes, it is not going to take into account information that is not in its possession. However, it goes on to use the word “verification”. I am not sure what “verification” is doing in that paragraph.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her explanation of the reasoning and intent behind the employer resources test, and all noble Lords who have spoken. I too welcome a move to strengthen the power of the Pensions Regulator. We should say that most employers with DB schemes act professionally and responsibly and maintain good relations with their scheme trustees. However, the Pension Schemes Act 2021, from which these regulations flow, rightly gave the Pensions Regulator stronger powers to deal with the small number of circumstances where parties decide to evade their obligations to their pension schemes or behave recklessly. The test is whether these measures will enable the regulator’s approach to be clearer, quicker and tougher. This is what we are exploring today, so I hope that the Minister can help to reassure us on that point.

I will not go back over what the regulations do, but as we have heard, employer resources will be assessed through normalised annual profit before tax, with non-recurring or exceptional items removed. The Minister explained how that would happen: you would take NAPBT, the regulator would then look at the impact on NAPBT caused by the act or the failure to act, produce an adjusted NAPBT and then decide whether to issue a contribution notice. It would compare the two and then argue that the reduction was material in relation to the estimated Section 75 debt.

The case for the test must be that it removes the evidential challenges and uncertainties in forecasting how the employer might or might not perform in the future— absent the act or failure to act—and therefore presumably would provide a quicker measure of assessing the employer’s ability to support the scheme and reveal whether a reduction in resources was material.

Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021

Lord Davies of Brixton Excerpts

Monday 6th September 2021 Grand Committee

However, charges and member value remain important, and the governance around such a policy is key. The Government need to create the environment to allow that virtuous alignment, but not to transgress into appropriating the long-term private savings of many millions of people. It is those with a fiduciary duty who should decide which particular investments are in the interests of their scheme members. Any assurance from the Minister about the intent behind the 4 August letter on “Investment Big Bang” would be reassuring in that context.

[Lord Davies of Brixton (Lab)]

My Lords, I thank my noble friend very much for her remarks. She has obviously been much more deeply involved than I have been. I have come to these regulations pretty fresh, but a number of points strike me about them, and I would be grateful for the Minister’s comments.

It is important to appreciate that we are only talking about the default schemes. To get a feel for the significance of this impact, we need some idea of how significant default schemes are. My understanding, having seen figures, is that virtually everyone joins the default schemes, but this applies only to the default arrangements within a scheme. Does that mean that those people who for whatever reason choose the non-default arrangements are left uninformed about these important arrangements? Surely value for money is just as important? I accept that they are very difficult to judge, but value for money applies as much to the non-default arrangements as to the default ones.

The other exclusion from the regulations is that of small, self-administered schemes and EPPs. The notes are a bit weak on justifying that exclusion. There was probably more debate during the course of the consultation, but the comment is made that most small businesses do not run their own schemes. Well, “most” implies that some do run their own schemes. Will they be left to drift? Why do they not fall within the remit of this protection for members?

Regarding small schemes, I never believe very round figures, and £100 million is an extremely round figure. The table in the Explanatory Memorandum had the number of schemes in different sizes. The issue comes up of why, if we are going for £5 billion, why not to go for £5 billion? I think that I am echoing my noble friend’s question. Another question lies behind that. Is this really just a way of getting rid of small schemes? Are we establishing a bureaucratic mechanism that will make small schemes think that it is just not worth the candle? Which of those small schemes that we are envisaging will say: “We are prepared to go through this process, we believe that we are providing value for money, and we want to continue?” Which are the schemes that this regulatory structure is being introduced to cater for? Would it not be more straightforward just to say “£5 billion is it” and that you want to get rid of small schemes?

On the policing of the process, the question of who selects the three comparators is being asked. Is there some scope there for gaming the system? What protection do we have on which schemes get selected as comparators? Advisers could have 10 comparator schemes that were not really suitable. Will the Pensions Regulator have the power directly to prevent the choice of inappropriate comparators? It may be explained somewhere, but I can see nothing explaining how the choice of comparators will be policed.

It comes back to the question of what is perceived by the Government and/or the regulator as the endgame here. Is this a one-off, and we will continue with this situation, or is this just one step in a longer term process of eliminating smaller schemes and ending up with a relatively limited number of mega-schemes catering for this particular market? I am not convinced that this is necessarily in the members’ favour. It would be good to have an idea of whether this is part of a longer process, whether there is an endgame here and this is just one move on the chessboard, with other complicated moves coming up later, or whether it is just there on its own terms?

Then there is the more important question. In setting up this structure and this process, how meaningful is the information that is going to be provided to members? Is this the sort of information that members are looking for? Is it the sort of information they will understand? Has there been any research into the value and effect of providing this information for members? We also need a bit more clarity, which perhaps the Minister cannot give. I believe the Pensions Regulator could be clearer as to what exactly it will do if the trustees produce a report saying that they are not providing value for money, in effect—I am sure they will dress it up in particular words—but in practice are not going to do anything about it. We need greater clarity on what steps the regulator will then take in response. It is all very well having the information that a scheme is not providing good value for money, but the regulator needs to be clear in exactly what it will do in response to that situation.

Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021

Lord Davies of Brixton Excerpts

Monday 5th July 2021 Grand Committee

[Lord Davies of Brixton (Lab) [V]]

My Lords, I am in favour of these regulations and I take this opportunity to thank and congratulate the Minister and her colleagues, to whom she has given much of the credit, on the work they have done on climate change. I will pass on the opportunity to say something more generally about the Government’s record on the issue, but here we are on the right track. This is not the end of the journey, of course, because there is always further to go.

Today, it is appropriate to pay tribute to all the work that was done in the Lords during the passage of the Pensions Scheme Bill. I was frustrated in my wish to take part, but no matter. The level of expertise as well as of concern about the issue was outstanding. I have thought of naming names, but having gone back and reread the debates it was interesting that there was clearly a collective effort in the House and behind the scenes. Those who took part know who they are, not least those taking part in today’s debate, and they are owed a sincere vote of thanks.

The adoption of these requirements is one element in a wider push to ensure that the effects of climate change become routinely considered in business and investment decisions. The adoption of these recommendations would also help a range of institutions better demonstrate responsibility and foresight in their consideration of climate issues. That will lead to smarter and more efficient allocation of capital and help smooth the transition to a more sustainable, low-carbon economy.

We must therefore welcome the recent move by the FCA to consult on a climate-related financial disclosure regime for asset managers, life insurers, and, not least in this context, FCA-regulated pension providers. That will be consistent with the recommendations of the task force on climate-related financial disclosure. The FCA states that its proposals aim to increase transparency and enable clients and consumers to make considered choices while remaining proportionate for firms. These proposals will need to be considered carefully as the term “proportionate” can hide a multitude of problems, but let us see.

One issue that arose during the passage of the Bill was the Government’s claim that their intention was to ensure effective governance of climate change risk but not to direct trustees’ or managers’ investments. The Minister reiterated that point in her remarks. This was specifically with reference to the proposed requirement that the governance of schemes align with the Paris Agreement’s objective of global warming of well under 2 degrees Celsius. During those debates, the Minister expressed the view that this could be tantamount to directing schemes’ investment, which the Government had ruled out. I have some difficulty here because my understanding is that progress towards the Paris target is now legally binding, not a matter of personal preference. The distinction being made is, in practice, without a difference. Ultimately this is going to affect investment decisions, or we will fail in the objective of combating climate change.

Another issue that arose in the debates on climate change during the passage of the Bill was use of the words “may” and “must”. I am pleased to report that in the regulations “must” is in the lead with 50 occurrences compared with 30 for “may”, but I am unclear what this means in practice. As a rough generalisation, it appears that “may” is used more in the context of enforcement, which means that discretion of some sort is being exercised by the appropriate regulator. It would be good if we had the possibility—at an appropriate stage, not now—for interested parties to discuss how this discretion will be exercised, which bodies will have enforcement taken against them, which will not, and what criteria are to be applied in making that choice.

Lastly, this is just to demonstrate that I am paying attention. Can the Minister assure us that the loss of a hyphen in the term “ear-marked scheme” between where that is defined in the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 and these regulations is of no significance?