Co-operatives, Mutuals and Friendly Societies Bill

Lord Kennedy of Southwark Excerpts

3rd reading
Friday 16th June 2023 Lords Chamber

Moved by

[Lord Kennedy of Southwark]

That the Bill do now pass.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, in these few brief remarks, I pay tribute to the Bill’s sponsor in the other place, Sir Mark Hendrick, the Member for Preston. I also pay tribute to Peter Hunt, Mark Willetts and all the team at Mutuo, an organisation that has done fantastic work in the co-operative sector over recent years and had many bits of legislation passed. They have done a wonderful job, and we thank them very much for all their work.

The Bill is passive: it requires no co-op, mutual or friendly society to do anything whatever, but it enables them to take action, if they want, to protect their organisations and prevent unwanted attempts to demutualise. So it is a welcome piece of legislation. I thank the Government and the Opposition for their support, and the noble Lord, Lord Naseby, for his support on these matters over many years. I also thank the Treasury and Treasury officials for their support. I beg to move.

[Lord Naseby (Con)]

My Lords, this is a vital Bill for the mutual movement of the United Kingdom. It prevents any predator trying to take away the capital put in by individual members of the society, and it is absolutely vital that this goes through. I recognise that another element sitting on the statute book that complements the Bill is the Mutuals’ Deferred Shares Act 2015, which I had the honour of taking through this House some time ago. I say to my noble friend on the Front Bench that we in this country now have a huge opportunity to benefit in the same way that Canada and Holland have from the mutual movement. It is ready to move forward, and we now look to His Majesty’s Government to implement the Bill and take the mutual movement forward. I particularly thank the noble Lord on the Front Bench on the other side of the House for all that he has done to take it this far.

Financial Services and Markets Bill

Lord Kennedy of Southwark Excerpts

Report stage
Tuesday 13th June 2023 Lords Chamber

[Lord Harlech (Con)]

My Lords, I beg to move that further consideration on Report be now adjourned until 8.31 pm.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I do not think that the debate on our regret amendment is time-limited.

Co-operatives, Mutuals and Friendly Societies Bill

Lord Kennedy of Southwark Excerpts

2nd reading
Friday 24th March 2023 Lords Chamber

Moved by

[Lord Kennedy of Southwark]

That the Bill be now read a second time.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I am delighted to present this Bill to your Lordships’ House today for its Second Reading. I thank all noble Lords who have signed up to speak and look forward to each of the contributions that will follow shortly.

I have been a supporter of co-operatives in all their forms for more than 40 years. I am one of a small group of Labour and Co-operative MPs and Peers sitting in Parliament. The Co-operative Party, of which I am a member, has since 1918 had an agreement with the Labour Party that it seeks representation on public bodies only jointly with it. The Co-operative Party today is proud to have 28 MPs, 16 Peers, 11 Members of the Scottish Parliament, 16 Members of the Senedd in Wales, five metro mayors and nearly 1,000 councillors elected in England, Scotland and Wales. I am a member of the Co-operative Group and, as detailed in my entry on the register, a director of the London Mutual Credit Union, one of the biggest credit unions in the United Kingdom. I first joined the old Royal Arsenal Co-operative Society 43 years ago—I know I do not look old enough—following a meeting with my noble friend Lady Thornton, who at that time was working for it; we have been friends ever since.

This is a small, two-clause Bill. It is another step along the road of reforming and developing the legislative framework to support the sector. I place on record my special thanks to the Member for Preston in the other place, Sir Mark Hendrick MP, for steering this Bill through the other place so skilfully, and also to Peter Hunt and Mark Willetts, the team at Mutuo, for the work they undertook in devising the Bill. I also thank officials at the Treasury for their work in getting us to the place today where the Government are happy to support the Bill. I am still struggling to get such a positive response to my other Private Member’s Bill on residential leasehold, but we struggle on with that one.

The Bill is all about protection. It is about creating the mechanism to enable mutual organisations to opt in to a restriction on the use of their assets. This is permissive, not mandatory. If a mutual organisation does not want to use the powers in the Bill, it does not have to. It allows the Treasury to make regulations that in turn will allow various mutuals, if they so wish, to opt in to a restriction on the use of their assets. Equally, those that do not elect to opt in are free to carry on as they do now. That is a very important point for the House to note, and one of the reasons why the Bill is structured the way it is. The Bill is necessary, as it enables a pathway to protect and preserve members’ accumulated assets from those who would like to mount a raid on them for profit and gain for themselves. In many cases, these assets are considerable and have been accumulated over many years and generations.

As part of our mixed economy, co-operatives, mutuals and friendly societies have their role to play, and the environment they operate in should be as supportive as possible, allowing them to remain true to their founding principles and flourish. This Bill will help them do that with the knowledge that there is a mechanism that they can take up to provide a layer of protection to maintain mutual capital for the purpose intended, if they themselves decide they need this protection.

There are important differences between companies and mutuals, which the Bill is trying to protect. Noble Lords will be aware that members of a company have the right to a share of the distributed profits, based on their shareholding, and to a share of the underlying value of the company. The more capital you own, the greater your share of the profits and the value of the company. Members of a mutual society, by contrast, generally have neither of those rights because, in mutuals, profits are generally not used as a mechanism for rewarding capital and members of a mutual do not have any expectation of or entitlement to a share in the increased value of the society.

As members of a mutual are not entitled to any share of its increased value, the amount by which the net asset value of a society exceeds the capital provided by members has no specific owner. It is in effect a legacy asset, held by the society for future generations, that enables it to provide for and invest in the future. It is a core part of a mutual’s identity. It represents the trading surplus accumulated by previous generations of members participating in their society’s business, in which they were always content to have no personal share. By implication, it is held for the benefit of future generations.

Seen through the lens of investor ownership, a capital surplus is a tempting asset for a windfall profit, which—if mutual members were replaced by investor shareholders —could be shared out among the shareholders. Capturing the asset is the usual incentive for demutualisation, which is when a capital surplus or legacy asset is divided up between the shareholders. When the mutual agreement between the former members, whereby they engaged with the society on the basis that they would not personally profit from its trade, is broken up, in short, any mutual purpose for a common good is replaced by a profit-driven purpose for private benefit.

The measures in place today provide only partial protection against demutualisation. There is currently no statutory mechanism for ensuring that surpluses, which previous generations never intended to be for private reward for anybody, remain committed to that wider public purpose. At present, it is not possible for an existing society, or those setting up a new society, to proscribe demutualisation. This leaves mutuals vulnerable to those aiming simply to liberate the legacy asset, share it out among those they choose and convert the business into an investor-owned company.

This has resulted in much of the UK’s building society sector being lost, and the businesses then either failing or being transferred into non-UK ownership. We all remember the names of those building societies that have long since disappeared, such as the Abbey National and the Bradford & Bingley. This has been bad for mutuality and bad for the economy, with damage being done to corporate diversity. Demutualised former building societies were mostly absorbed into the banks that failed in the banking crisis. Legislation is needed to help UK mutuals to preserve their legacy assets for the purpose for which they were intended, to maintain and encourage greater corporate diversity and to build a more resilient economy. Mutuals need to be able to incorporate appropriate measures into their constitutions with a statutory basis, either at the point of establishment or thereafter, with an appropriate level of member approval.

What does the Bill do? It disincentivises the raiding of legacy assets through legislation. Voluntary legislation will ensure that legacy assets are preserved for the purpose for which they were intended. It empowers mutual members to decide what should happen to the assets on a solvent dissolution. It would match the best legislation existing in many other countries around the world. The Bill introduces a voluntary power to enable a mutual to choose a constitutional change so that its legacy assets, the capital surplus, will be non-distributable, details precisely the destination of any capital surpluses on a solvent winding up, outlines the procedure necessary to include such provisions in a mutual’s rules and inserts a statutory provision for the relevant rules to be unalterable. It defines the capital surplus as the amount remaining after deducting a mutual’s total liabilities from its total assets, including repayment of members’ capital. It introduces new provisions to maintain the destination of the capital surplus and ensures that where mutual rules make the capital surplus non-distributable, any resolution to convert into, amalgamate with or transfer engagements to a company should also include a provision to transfer the capital surplus as provided by the rules in the event of a solvent winding up. That is quite a lot in a two-clause Bill.

In conclusion, I will address the issue of why corporate diversity matters. Diversity of ownership or types of business creates models of corresponding diversity in the forms of corporate governance, risk appetite and management incentive, structures, policies and practices, and corporate behaviours and outcomes. It also offers wider choice for consumers through enhanced competition that derives in part from the juxtaposition of different business models. For the wider market to benefit, each of the corporate models needs to enjoy the necessary critical mass defined as the degree of market share necessary to enable each model to operate successfully and thus provide real competitive pressure on the other players within the market.

Finally, I thank the Delegated Powers and Regulatory Reform Committee for its report, which specifically refers to this Bill. Responding to the points raised, I emphasise that this is a short, skeleton Bill. It is specific in nature and seeks to deal with a real, identifiable problem. The expertise to draw up the regulations lies in the Treasury. It is a Bill which is permissive. A mutual entity is not compelled to do anything on the Bill becoming law, and any mutual entity that does not wish to adopt or use the powers does not have to. Furthermore, the regulations must be brought back to this House and the other place for consideration and affirmative resolutions must be passed. There are proper procedures in place for proper consideration, and the regulations will be considered by the Secondary Legislation Scrutiny Committee before any such debate takes place in this House. I look forward to the contributions from other noble Lords in the debate and I beg to move.

--- Later in debate ---

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I very much thank all noble Lords who have spoken. I agree with every comment that has been made, which is very unusual in this House, so that is wonderful.

I thank the noble Lord, Lord Bourne of Aberystwyth, for the reference that he made to the campaign against the demutualisation of Liverpool Victoria. That is a recent example of the threat that mutuals face when people see their large assets. It was a great campaign that will be an eye-opener and a wake-up call for everyone, showing that something needs to be done to protect those assets. I thank him for his support, and I generally agree with all the comments that he made.

My noble friend Lord Mann spoke about sports facilities, the benefits they bring to the community and how the assets of those facilities could benefit from a change in their ownership structures. That was a really important point. He highlighted that, with legislation, lots of playing fields and sports centres and grounds could be protected for future generations. Small ones in particular are often under threat.

As my friend the noble Lord, Lord Naseby, said, we have worked together many times on these sorts of issues, and I thank him again for his support, which is really good to hear. His many years of support for the mutual sector are welcome and needed, and we thank him very much for them.

My noble friend Lady Taylor of Bolton also made reference to the Liverpool Victoria situation and highlighted the need for further protection. I agree with what she said about the special place that the Co-op has, in our memories and even today; I am a regular shopper down the Co-op, and it is a wonderful organisation, as are all the mutual organisations in our country, so it is always worth supporting that.

It was great to see the support from the Opposition for the Bill. My noble friend Lady Anderson of Stoke-on-Trent and I have been friends for many years, from long before either of us was in either House of Parliament. She used to serve in the other place. I was so pleased when she joined this House at the end of last year, and I am even more pleased and proud that she is speaking from the Opposition Front Bench. It is great to see her here.

I thank the Minister for her support for the Bill today, and I thank the officials from the Treasury for all the work that they have done. It is good to hear that there is further work going on behind the scenes in the department to look at other legislation. I was pleased that she mentioned the London Mutual Credit Union. I am proud to be a director there. It is a wonderful institution, the biggest credit union in London, and we are actually in the mortgage market now. It is a fantastic organisation. If she ever wants to visit, I would be delighted to show her around and show her all the work that we do there.

Bill read a second time and committed to a Committee of the Whole House.

Credit Unions

Lord Kennedy of Southwark Excerpts

Tuesday 3rd February 2015 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government when they plan further reform of the law regarding Credit Unions.

[Lord Kennedy of Southwark (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as director of London Mutual Credit Union.

[Lord Newby (LD)]

My Lords, on 31 December 2014 the Government published a response to the call for evidence on credit unions. In this response, the Government committed to consider, in the next Parliament, potential changes to credit union legislation.

[Lord Kennedy of Southwark]

My Lords, it is important for credit unions to be able to grow on a solid base to deliver for their members. Whichever party or parties are in government after the general election, would the noble Lord agree that two of the most important areas for reform are reform of the 2 million cap on potential members—maybe change that to actual members—and removal of the legal barriers to enable credit unions to give other financial products to their members?

[Lord Newby]

Yes, I agree with the noble Lord that those are both important issues. In the response to the call for evidence, the Government have committed to considering changes to the common bond legislation. The noble Lord will be aware that credit unions maintain their exemption from the consumer credit directive only if they have a restricted potential market. It is important that we do not expand the definition of the common bond in ways that could jeopardise that exemption.

Mutuals’ Redeemable and Deferred Shares Bill [HL]

Lord Kennedy of Southwark Excerpts

Friday 21st November 2014 Lords Chamber

All the amendments before us are hugely helpful on the issue of deferred shares. They are not a panacea, but they are a very positive start. In accepting these amendments, I place on record my thanks to Her Majesty’s Treasury for its positive response to the Bill, and, in particular, to the legislative section of the Treasury for drafting these amendments. As a former chairman of Ways and Means who knows what it is like to have to handle a major finance Bill, I know that these things are not easy to do. The number of amendments that were necessary to make a very simple change is pretty indicative of that situation. Above all, I say a particular thank you to the two Ministers who have helped the Bill to progress this far. I hope once again that this positive response will lead to the Bill reaching the statute book this Session.

[Lord Kennedy of Southwark (Lab)]

My Lords, I am delighted to be able to speak on behalf of the Opposition, particularly as a Labour and Co-operative Member of your Lordships’ House, to these amendments moved by the noble Lord, Lord Deighton. This Bill was last considered by your Lordships’ House on 24 October when we had the Second Reading debate. Both the noble Lord, Lord Newby, who spoke for the Government, and I supported the aims of the Bill and what the noble Lord, Lord Naseby, was seeking to do and congratulated him on making substantial progress in persuading others of the importance of the measures and of the need for action to be taken to support and protect the mutual insurance sector which only 20 years ago accounted for 50% of the insurance market in the UK but today accounts for just 7.5% of the same market.

As the noble Lord, Lord Deighton, explained, the Government were not persuaded that the proposed redeemable shares instrument for co-operative and community benefit societies was necessary as societies already had a means of issuing redeemable shares. Discussions took place and with the agreement of the noble Lord, Lord Naseby, the Government proposed to bring amendments in Committee, and they are what we are discussing today. I am happy to support the amendments, as is the noble Lord, Lord Naseby, which remove the proposed redeemable shares element from the Bill and restructure it in a slightly different way which is more acceptable to the Government or parliamentary draftspersons or both. I hope that the noble Lord, Lord Deighton, can assure the House that the Government will keep this issue under review and if it is felt or shown that the proposed redeemable shares instrument may be beneficial to the mutual sector he will look at it again. Perhaps we can again call on the noble Lord, Lord Naseby, to bring such a measure in the next Session because it is important that the mutual sector as whole, not just the mutual insurance sector that the Bill seeks to protect, is protected and is allowed to flourish and grow in today’s modern world of business. It is a matter of great regret that the mutual insurance sector has shrunk so much in a relatively short period of time and that we have lost so many building societies that were once household names, which has been to the detriment of consumers.

I will not detain the House any longer than necessary. I am a supporter of the aims of the Bill and am content with the amendments moved by the noble Lord, Lord Deighton. I wish the Bill a smooth and speedy passage on to the statute book. It is an excellent example of what a good Private Member’s Bill can do, identifying a problem or issue that there is no great dispute about, and seeking to make improvements to the situation which will be beneficial to everyone. This House is very grateful to the noble Lord, Lord Naseby, who is my noble friend. I hope that there will be no amendments on Report and that the Bill can leave your Lordships’ House and be on its way to the other place before Christmas.

Amendment 1 agreed.

Mutuals’ Redeemable and Deferred Shares Bill [HL]

Lord Kennedy of Southwark Excerpts

Friday 24th October 2014 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, I thank the noble Lord, Lord Naseby, for bringing forward this Private Member’s Bill for consideration in your Lordships’ House. This is the second time that he has tried to deliver these reforms. I very much hope that his Bill has a smooth and easy passage through your Lordships’ House. The co-operative and mutual sectors in the United Kingdom are very grateful to the noble Lord for what he seeks to do. This is a good Bill for a Labour and Co-operative Peer to respond to, and I am delighted to do so.

As the noble Lord said, the Bill in its simplest form will allow mutual societies to raise additional funds while safeguarding their mutual status. Why is that important? As the noble Lord, Lord Naseby, has told the House, the mutual sector faces significant problems in raising additional capital. By their construction they do not have equity shareholders. They were established to serve their members, who would be customers, employees or particular communities. Mutual businesses are strong. They grow patiently over a long time. They are very stable, but can also be said to be a bit risk-averse. It can be said that in some circumstances they struggle to respond to the ever changing needs and demands of their customers.

In large part, mutual organisations have not made major changes to their structures and have quite properly stuck to their founding principles. The Bill will enable them to continue to do so, but also allow them to raise additional capital by creating optional new classes of share through which specified mutuals can raise additional funds, provide defined rights to specified mutual society members and restrict the voting rights of certain members who hold only such shares, so that they cannot participate in any decisions to transfer, merge or dissolve the mutual. That is why the Bill is so important: it modernises the mutual structure, but also safeguards it.

A lot of excellent work has gone on looking at the problems of the mutual sector and also its great strengths. In addition to the noble Lord, Lord Naseby, I pay tribute to my friend in the other place, the shadow Financial Secretary Cathy Jamieson MP, for the work she has done, along with the All Party Group for Mutuals mentioned by the noble Lord, Lord Naseby, which produced an excellent report in September. I also pay tribute to the think tank ResPublica, which, in its report Markets for the Many, looked at how we create financial services that support small business and truly serve the needs of our citizens and communities.

It will be useful to look at the financial services scene to see why the Bill is so important and welcome. As the noble Lord, Lord Naseby, said, we have to learn the lessons. Following the financial crash there have been significant turbulent times and significant legislation has been passed, not least the Financial Services Act 2012 and the Financial Services (Banking Reform) Act 2013. These pieces of legislation are steps in the right direction, but we need diversity of ownership models in financial services to keep the sector healthy and encourage competition.

To diverge slightly, the rush to demutualise building societies in the late 1980s and early 1990s did not help consumers. All those former building societies either failed in their new-found status or were swallowed up by larger financial institutions. We know the names: Abbey National, The Woolwich, Halifax, Bradford & Bingley and many others. In the UK, building societies account for only 3% of banking assets; in many other parts of Europe co-operative and mutual banks have a much large share of the market.

There is a similar picture in our insurance sector. As the noble Lord, Lord Naseby, said, more than half of the UK insurance market was mutual in 1995, but since then, in fewer than 20 years, it has shrunk to 7.5%. In terms of our European neighbours, mutual insurers have a 50% market share in Holland and a 45% market share in Germany. The insurers demutualised in large part because they needed to raise additional capital and improve the products and services they offered to their customers. This process has not been beneficial to customers. ResPublica found in its research that policyholders often saw falling levels of customer service, higher levels of customer complaints and worse claims handling than was experienced prior to demutualisation. For example, Scottish Widows converted to a plc in 2000 and paid out a £6,000 windfall payment to each policyholder. However, prior to demutualisation it paid out £107,000 in 1998 for a 25 year with-profits policy based on premiums of £50 a month. From statistics posted in 2012, this had plummeted to £28,071, which was more than 34% less than the average mutual was paying out.

I do not intend to go on for much longer but I wish to say that this is a good Bill, a forward-thinking Bill and a Bill that seeks to protect our mutual societies, helping them to grow and compete on a more equal footing. It should have the support of the Government.

The Government should also do more to help the sector in general, as it has the potential to do real good in the UK. I like the suggestion that the Government should look at establishing a mutuals expansion project along the lines of the Credit Union Expansion Project. I think that there is a role for mutuals to help reduce financial exclusion, but they need the Government, the FCA and others to see that role for them and then enable them to deliver more financial products to those on lower incomes.

There are in general some very good Private Members’ Bills before your Lordships’ House and it is disappointing how so few of them make any progress. They are all committed to a Committee of the whole House but they then struggle to compete with other Bills in making further progress. Therefore, I ask the noble Lord, Lord Newby, to have discussions with the usual channels and also with the Clerk of the Parliaments about points 8.29 and 8.44 of the Companion. On my reading of those two paragraphs, there is no distinction between government Bills and Private Members’ Bills, and some Private Members’ Bills could be referred to a Grand Committee to deal with technical issues and speed up their consideration by this House. Just because we have never done that before does not mean that it cannot be done.

I will leave that point there and conclude by again thanking the noble Lord, Lord Naseby, for bringing this Bill forward. We are all very grateful to him and I hope that the Government help it to get on to the statute book and become law in this Session of Parliament.

Credit Unions

Lord Kennedy of Southwark Excerpts

Thursday 16th October 2014 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what plans they have to support credit unions in addition to the Credit Union Expansion Project.

[Lord Newby (LD)]

My Lords, the recent HM Treasury call for evidence sought views on how government and others could do more to support the development of the credit union movement. The call for evidence closed on 1 September. Responses are currently being considered by the Treasury and an announcement will be made in due course. We are also working with others, including the Church of England, the Ministry of Defence and banks, to facilitate increased access to credit unions.

[Lord Kennedy of Southwark (Lab)]

My Lords, I declare an interest as a director of London Mutual Credit Union. I am delighted to see the noble Lord, Lord Newby, here. I hope it is okay with the noble Lord, Lord Freud. Will the noble Lord join me in congratulating Her Royal Highness the Duchess of Cornwall on her work in support of the credit union sector? She is today hosting a reception at Clarence House to support International Credit Union Day. Will the noble Lord arrange for me to meet the relevant Minister in government to discuss how to get government departments to follow the example of Clarence House and this House and arrange for civil servants to be able to join a credit union using payroll deduction?

[Lord Newby]

My Lords, I would be happy to do that. The Government are keen that civil servants should join credit unions where possible. Some work has been undertaken on how we could do that at reasonable cost. In the mean time, civil servants are being encouraged both to join credit unions and to get involved as volunteers. For example, an accountant at DWP is the treasurer of a credit union in Sheffield. That is a good example of how civil servants can use their experience and benefit the credit union movement.

Debt Management Organisations

Lord Kennedy of Southwark Excerpts

Monday 28th July 2014 Lords Chamber

[Lord Newby]

On the second part of the noble Lord’s question, debt management companies will be required under the new rules to signpost consumers to free debt advice, which will be a major improvement. There are two elements of regulation of cold calling and unsolicited text messages. The ASA has some responsibility in that area and it has already taken action to ban payday lenders’ use of unsolicited text messages. As with its regulation of other financial services markets, the FCA is committed to ensuring that cold calling by phone, text or e-mail makes the identity of the firm and the purpose of the communication clear to those being called.

[Lord Kennedy of Southwark (Lab)]

In a recent Parliamentary Answer I found out that since 2005 companies in the financial services sector have been fined £1.2 billion. Will the Minister agree to look at the points made by the noble Lord, Lord Sharkey, and maybe use a small portion of those fines to fund good charities, good organisations and credit unions which actually help people who are in debt?

Pensions Advice

Lord Kennedy of Southwark Excerpts

Wednesday 23rd July 2014 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what safeguards will be in place to ensure that people receive sound advice when seeking to access their pension funds.

[Lord Newby (LD)]

My Lords, every individual with defined contributions pension savings will on retirement have a new right to free and impartial guidance to help them make informed decisions about how they use their pension savings in retirement. The Government will legislate to give the Financial Conduct Authority responsibility for setting standards for guidance and monitoring compliance with those standards. The FCA has published a consultation paper alongside the Government’s response on its proposed standards.

[Lord Kennedy of Southwark (Lab)]

My Lords, what has been announced by the Government so far is wholly inadequate. We all remember the pensions mis-selling scandals of the 1980s when people were enticed out of SERPS and then fleeced. What qualifications will individuals need to have in order to be able to give this advice, and what guarantees will be put in place to ensure that people do not see their pension pots go in fees, charges and wholly inappropriate products?

[Lord Newby]

My Lords, the key innovation in the way we are planning to introduce this change is that of giving every individual coming up to retirement an entitlement to free guidance. To ensure that the guidance is impartial, we have decided that it will be provided by independent organisations which have no actual or potential conflicts of interest; it is not going to be the pension companies providing that guidance. A team has been established within the Treasury to lead on service design and implementation, bringing together expertise from across government, the Pensions Advisory Service and the Money Advice Service. The FCA will be the ultimate backstop in terms of the quality of the advice given and the monitoring of it. We will legislate to give the authority that explicit power in the Pension Schemes Bill later in this Session.

Northern Ireland: Illegal Petrol and Diesel

Lord Kennedy of Southwark Excerpts

Tuesday 15th July 2014 Lords Chamber

[Lord Newby]

My Lords, there is a lot of data published about the duty rates. Noble Lords can see those. What is extremely difficult to do is to demonstrate with any great degree of precision exactly how much of a product crosses a border without a customs post. That is obviously a challenge between the Republic and Northern Ireland, as well as more generally within the EU.

[Lord Kennedy of Southwark (Lab)]

My Lords, there is also, of course, a problem of smuggling from mainland Europe into the UK. I went down to Dover a couple of years ago and was shocked to see how porous our borders are. We spoke to the customs officer there; in terms of illegal alcohol and tobacco, there just were not the staff to stop the vehicles to check them.

[Lord Newby]

My Lords, tobacco smuggling has been a problem for some time. The additional resources that have gone into HMRC over the course of this Parliament, which amount to about £1 billion, have among other things enabled more to be put into that area also.