Pension Schemes Bill [HL]

Debate between Lord McKenzie of Luton and Baroness Janke

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

[Baroness Janke]

My Lords, I have three amendments in this group. Amendments 87 and 88 relate to auto-enrolment to reduce the lower age limit to 18 and introduce a review of auto-enrolment which could also examine the possibility of removing the lower earnings limit.

As many noble Lords have said, the success of auto-enrolment is clear, with 87% of eligible employees participating in a workplace pension in 2018. However, by reducing the lower age limit to 18 and removing the lower earnings limit, a further £2.5 billion could be added to savings.

There would also be advantages for younger people in starting to save for pensions earlier in their working lives. It is estimated that the average 18 year-old will end up with a pension pot at retirement around £18,000 lower if they have to wait until 22 to be automatically enrolled. Given that we want people to start saving for a pension as soon as possible, an age limit of 22 seems increasingly hard to defend. Even employers would generally have a simpler system were they to enrol everyone, rather than having different rules for those above and below different age thresholds.

Moreover, further extending the coverage of auto-enrolment by reducing the earning threshold to the national insurance primary threshold would bring 480,000 people, mostly women, into pension-saving. It would also help to improve the gender pensions gap, which is the subject of Amendment 96 in the same group and a growing matter of concern. A woman aged 65 has one-fifth of a 65 year-old man’s pension.

Private pension schemes seem to be the main reason for the gender gap, placing women at a disadvantage, mainly due to domestic roles and lower pay. Among 65 to 74 year-olds, median private pension wealth is £164,700 for men and £17,300 for women, who have just over 10% of the private pension wealth of men. Among the population as a whole, women’s median pension wealth is £4,300, less than a quarter of the £19,800 held by men.

Although auto-enrolled private pensions include all employers, they exclude low-paid employees. Like other private pensions, they make no allowance for periods of caring, hence they perpetuate further the pensions gender gap. New modelling has shown that a family carer top-up in an auto-enrolled pension would substantially boost women’s private pension wealth. Also, the suggestion of a voluntary earnings-related state pension addition—a fully portable auto-enrolled option that allows carer credits—would be simpler and would better meet women’s need for extra pension savings. Amendment 96 provides the opportunity for an early review of issues affecting the pensions gender gap in CMP schemes.

I support the amendments in the group in the name of the noble Baroness, Lady Drake, which address similar and related issues. I beg to move.

[Lord McKenzie of Luton]

My Lords, Amendment 95 in this group is in my name. It seeks to press the Minister to make three important changes to the current auto-enrolment scheme—there are some overlapping issues in this. The changes are: to remove the threshold requirement for earnings over £10,000 to be auto-enrolled; to remove the qualifying earnings deduction; and to extend the threshold down to the age of 18 for workers. As NOW: Pensions points out, these would be positive steps in helping to narrow the pensions gender gap and would be a significant step in boosting participation in pension saving. This should be uncontroversial, as it goes with the flavour of the deliberations of the 2017 automatic enrolment review.

However, on timing, the Government’s ambition is to phase in the abolition of the LEL, with broader changes to the framework, until the mid-2020s. We suggest that this is a weak ambition and urge the Government to reconsider. We recognise that the changes cannot all happen overnight, but the longer we wait, the more difficulty there will be in getting younger people into the savings habit. Abolition of the LEL and making contributions payable from the first £1 of earnings will help to build financial resilience. If implemented, these measures would eventually—I stress “eventually”—bring an additional 910,000 workers into auto-enrolment with, as we have heard, an additional £3.8 billion of pension savings. It would be a good first step in addressing the pensions gender gap.

Pension Schemes Bill [HL]

Debate between Lord McKenzie of Luton and Baroness Janke

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd March 2020 Grand Committee

[Baroness Janke (LD)]

I have some amendments which we will come to later concerning similar issues. I very much support this amendment. The briefing that we had from the ABI gave us quite an insight into the way that women suffer as a result of not having a proper pension settlement. I very much welcome Amendment 78, which seeks to get the spouse’s permission for the transfer of a pension.

[Lord McKenzie of Luton]

My Lords, there are three amendments in this group. Amendment 78, in the name of the noble Baroness, Lady Altmann, focuses on the evidence of a member’s spouse’s consent when a transfer is to be made. We believe that this amendment has considerable merit and are supportive of it. Quite what the technicalities that come to confront us might be remain to be seen, but certainly we should seek to make progress on it.

Regarding the other two amendments in this group, Amendment 99 is simply the Northern Ireland equivalent of Amendment 77, which, as we have heard, deals with unfunded public service DB schemes. I am alarmed to hear that without this amendment they would be attacked by some source. That is rather worrying. Regarding the prescribed conditions that must be satisfied for the purposes of the provision, can the Minister outline what those might contain?

Child Support (Miscellaneous Amendments) Regulations 2019

Debate between Lord McKenzie of Luton and Baroness Janke

Tuesday 2nd July 2019 Lords Chamber

[Baroness Janke (LD)]

My Lords, clearly, we are in favour of all measures to ensure that children are getting the financial support they need. A large part of this is making sure that both parents contribute to the raising of a child, through official child support or otherwise. According to the charity Gingerbread, child maintenance alone lifts a fifth of low-income single parents out of poverty. Where parents are unequal in income, as is often the case after a separation, it is right that suitable payments for child maintenance are made. It is good to hear of the proposed changes to the Child Maintenance Service scheme, which has been a long, infamous project, causing disastrous circumstances for children and families and costing a great deal in time and resources for all involved, including the Government.

Although we are generally wary over giving powers of enforcement, we are in favour of the proposed changes to inspection. Requesting information from mortgage lenders will cut down on the number and intrusiveness of current inspections. It is important that both parents support their children; the cost of bringing up a child is considerable and generally falls on the mother, who is more likely to be in low-paid, insecure employment. Some 90% of single parents are women, and they are twice as likely to be in poverty as any other group.

However, in recognising and enforcing payments for child support, the Government need to recognise and act on the issues that drive child poverty. For example, the two-child limit, which restricts support to a family’s first two children, is one of the key factors of child poverty, as demonstrated by many recent reports. The benefit cap also hurts families and households with multiple children, or those who live in expensive areas.

I draw the Minister’s attention to the report published last week, All Kids Count: The Impact of the Two-Child Limit After Two Years, produced jointly by the Church of England and the Child Poverty Action Group. This presents detailed and disturbing evidence of this policy’s impact after two years. It is based on interviews with more than 430 families. I urge the Minister and all Members of your Lordships’ House to give the report careful consideration, and the Government to take action on its findings.

I would welcome a new approach by the Government towards child poverty, which is widely acknowledged to be growing. Having said that, I broadly support this statutory instrument.

[Lord McKenzie of Luton (Lab)]

My Lords, I have just two quick questions. First, where the recipient who is due to make payment is subject to a benefit sanction, what impact does that have on the amounts that are collectable, as proposed in this order? Secondly, the £8.40 can be an amalgam of the collection fee and the maintenance payment. So far as the government accounts are concerned, how is that split and dealt with?

Cities and Local Government Devolution Bill [HL]

Debate between Lord McKenzie of Luton and Baroness Janke

Wednesday 24th June 2015 Lords Chamber

[Lord McKenzie of Luton]

My Lords, I will be brief with this amendment because I anticipate that the Minister’s response will be that it is too prescriptive and that the Government want to leave everything off the face of the Bill and see what happens along the way.

The amendment was raised with us by the RSPB and it raises a particular point that I would like to address. Specifically, it causes the Secretary of State to consult combined authorities over a number of strategic planning areas, in particular areas of,

“mitigation of and adaptation to impacts of climate change … natural resource use including water management … delivery of low-carbon energy sources and infrastructure … landscape-scale conservation, including green infrastructure”.

The helpful briefing note reminds us that the NPPF contains very positive policies for planning for biodiversity, such as planning for the creation, protection, enhancement and management of networks of biodiversity and green infrastructure.

The point that the society makes is that to be effective, it is essential that devolved strategic planning powers enable combined authorities to address and plan for social, economic and environmental issues in an integrated way across England. It points out the failure of the duty to co-operate because it is simply not strong enough. The key point I would raise on this is that whether it is on a more proactive basis or just a wait-and-see approach with piecemeal devolution of some of these strategic planning issues, the opportunity actually to join up across the country will inevitably be limited. Some of these issues ought to be looked at on a basis which is wider than any particular combined authority. It seems to be a component of this debate which perhaps we need to reflect on a bit more. I beg to move.

[Baroness Janke (LD)]

My Lords, I certainly support the amendment. Given that the combined authorities will cover quite large areas, I would say that it is essential that an integrated approach is guaranteed and not left to a kind of wider discretion, perhaps as part of a deal if it is less convenient for one combined authority—or, worse still, if there is disagreement within the combined authority. We need to know where these obligations will lie. There is a need for clarity here. I appreciate that we are talking about bespoke deals and that they will be different for different authorities. I am sympathetic to that because we do not have uniformity across the country. Nevertheless, these are important issues which have suffered from a piecemeal approach. There is now a real opportunity for a much more strategic approach and I am sure that the combined authorities will see this as an important matter, not least because some of these areas are quite controversial. So I hope that there will be some clarity around this, despite the need for the Secretary of State to have some kind of wider discretion. These are responsibilities and obligations, and we need to be clear about where they lie.

Cities and Local Government Devolution Bill [HL]

Debate between Lord McKenzie of Luton and Baroness Janke

Monday 22nd June 2015 Lords Chamber

[Lord McKenzie of Luton]

My Lords, a moment ago I touched on Amendment 4. The other amendments in this group are Amendments 5, 6 and 7. Given the hour, I will not reopen the Amendment 4 debate. We will, I know, return to it.

Amendment 5 is a small amendment clarifying the consequences of the appointment of an elected mayor who becomes a member of and chair of the combined authority. The amendment seeks to ensure that by virtue of being chair the mayor does not automatically have any casting vote in the affairs of the combined authority, although of course, depending on the number of members of that authority, that is clearly a matter that could be agreed. Will the Government explain why they consider that an elected mayor should always be the chair? Leadership skills required to deliver a change of dynamic growth in complex situations will not inevitably be the same as those to engage and persuade individual members, who are likely to be powerful and able individuals in their own right.

So far as the Government’s expectations on governance go, looking at the Manchester agreement, it appears that for non-mayoral functions decision-making will be by way of one member, one vote, including one for the mayor. Interestingly, the Manchester agreement requires the mayor to consult the combined authority cabinet on: strategy, which could be rejected on a two-thirds vote; spending plans, again amendable on a two-thirds vote; and the spatial framework, which needs unanimous approval. Would the Government expect these constraints on the mayor’s freedoms to be the norm in any agreement?

Amendments 6 and 7 enable the revocation of an order that provides for a combined authority to have an elected mayor. This is consistent with the Bill proposed by the noble Baroness, Lady Janke, and an amendment that we both supported in a debate in the last Session in relation to Bristol. If a combined authority has a mayoral model and wishes to change it, there should be the right to do so. We accept that the consequences of unpicking a mayoral combined authority will not always be straightforward, especially if PCC functions have been devolved to the mayor. Clearly, there should be protections against chopping and changing every few years, but potentially being locked into an arrangement, particularly when it might be accepted by all as not working, does not seem to be a sensible position to end up with. I beg to move.

[Baroness Janke (LD)]

My Lords, I support Amendments 6 and 7. I am a former leader of Bristol City Council and have raised this issue in the House before. The fact that a city may opt to have an elected mayor does not mean that the city wishes to keep the mayor in perpetuity. Some allowance should be made for the authority, whether or not it is a combined authority, as in this case; I will return to that later in the Bill when I refer to existing city authorities. It seems to me that the people who are being governed need to be able to express their view. In Bristol, a petition has been signed by I do not know how many thousands expressing the wish to have the right to change the system. That does not necessarily mean that they are rejecting the mayor. I know the mayor well because he is a former colleague. I would not wish this to be an intervention that talks in any way about the specifics of the situation in Bristol, but I support the amendment because local government is constantly changing. That does not mean to say that you would want to change frequently, but if we are to govern by consent, as many Members have said in our debates, people must be reassured. The Minister has already said that the Government will not impose mayors on authorities and the amendment is in that spirit: it says that, should there be a mayor, the combined authority will have the chance to set up proceedings to ask the Secretary of State to revoke the order and thus change the system.

Deregulation Bill

Debate between Lord McKenzie of Luton and Baroness Janke

Thursday 5th February 2015 Lords Chamber

[Baroness Janke (LD)]

My Lords, in speaking to Amendment 30, I declare my interest as a member of Bristol City Council. This amendment seeks to restore to Bristol people the same right that people of other cities have to change their system of government, subject to conditions required by the Local Government Act. A section added in 2011 relates to local authority referendums for elected mayors ordered by the Secretary of State. Noble Lords may recall that in 2012, the Government required that the 12 largest cities in England call referendums on whether their residents wished them to introduce a system of directly elected mayors. Bristol was the only city to vote narrowly in favour of such a system.

The section removes the right of Bristol citizens to change their system of government in perpetuity. This fact was not made at all clear when they voted in the referendum. As more and more people have found out that that is the case, they are quite outraged and feel that they are being discriminated against by virtue of having supported the Government’s arguments for a mayoral system. Whatever the view is about elected mayors—and there are many—many Bristol people are astounded that they have been denied the democratic rights that other cities enjoy as to whether or not they have a mayoral system. I can believe that this was not an intended consequence of the legislation. Nevertheless, it clearly is unjust and needs to be changed.

I say, “in my view”, but this view is also supported across the political parties in Bristol and by the mayor, as he said at a recent council meeting when a motion was unanimously passed supporting change—change not necessarily from a mayoral system but change to enable the citizens of Bristol to decide themselves what system of government they wish to have.

The Local Government Act lays down clear conditions as to how a local authority may change its governance arrangements, including the need for a referendum as fully described in Section 9N. The current situation is unnecessary, unjust and discriminatory in that Bristol people should be deprived of their democratic rights to determine their own system of governance, which is the case in every other English city.

I hope the amendment will receive support and that the Minister will consider how the current situation could be redressed and restore democratic rights to the people of Bristol. I hope the House will give its support in taking this matter forward. I beg to move.

[Lord McKenzie of Luton (Lab)]

My Lords, we have a good deal of sympathy with the amendment, which, as the noble Baroness said, has cross-party support in Bristol. I have been in touch with the leader of the Labour group there, who confirms her support for it.

As we have heard, Bristol was one of 12 cities that had a referendum foisted on it by this coalition Government, and it is worth reflecting on the extent of that mandate. The turnout was 24%, with 41,000 voting for and 36,000 against. So 77,000 people voted and the majority was about 5,000.

We know also that central Governments have an appetite for elected mayors that is not altogether reflected at local government level. The noble Baroness was right to point out how you change your system of governance and the constraints that you have. I have a helpful briefing from the House of Commons Library, which states:

“Under the 2000 Act, any local authority wishing to establish a mayoralty required a ‘yes’ vote in a local referendum. The 2007 Act changed this, permitting local authorities to adopt a mayor by resolution. However, an authority can still choose to hold a referendum on the issue. Alternatively, authorities can be obliged to hold a mayoral referendum if 5% or more of the local electorate sign a petition demanding one … The Government may also compel an authority”—

which is what happened in this case—

“to hold a referendum. The result of a mayoral referendum is binding on a local authority.

The Localism Act 2011 permitted a referendum to be held on abolishing an elected mayor, subject to time limits; and for a referendum to be held on establishing a leader and cabinet, or on using the committee system. Four authorities have held referendums on whether to retain their mayoral system. Electors in Doncaster … and Middlesbrough … voted to retain their elected mayor, whilst those in Hartlepool … voted to replace it with the committee system, and those in Stoke-on-Trent … voted to replace it with a leader and cabinet system.

Authorities which have changed their governance arrangements as a result of a referendum can only make a further change following a further referendum”.

That is not unreasonable. It goes on:

“Where a local authority has held a referendum on its governance arrangements, a further referendum may not be held for ten years (five years in Wales). Conversely, where a mayor has been created by resolution of the council, five years must elapse before the council may resolve to abolish the mayor. However, there is no time limit on holding a referendum (whether initiated by the council or by a petition) to reverse a decision made by a resolution”.

I come to the crucial point:

“Further, where a local authority has been required by the Government to hold a referendum and voted for an elected mayor, it may not hold a further referendum at any time. Bristol City Council is the only authority affected by this: as the law stands it cannot move away from its elected mayoralty”.

As the noble Baroness has said, it is held in that position in perpetuity. That just does not seem right, and perhaps the Minister will take the opportunity to explain why the Government think it is. However, if they do see it as an anomaly and an injustice, what do they propose to do about it?