Pension Schemes Bill [HL]

Debate between Lord McNicol of West Kilbride and Earl Howe

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 30th June 2020 Lords Chamber

[Earl Howe]

My Lords, there was general agreement in Committee that pension scheme members should have access to a dashboard service that is publicly owned and free of potential commercial imperatives. As we set out in Committee, the Government wholeheartedly agree that such a dashboard should be available to all users from day one, alongside dashboards offered by other organisations. We explained that the single financial guidance body, now known as the Money and Pensions Service, can provide a dashboard under its existing statutory functions, but I accept that the Government could provide further reassurance in legislation.

The government amendments reflect this commitment by placing a duty on the Money and Pensions Service to provide a pensions dashboard. The dashboard must display information from private and occupational pension schemes. These amendments also enable the inclusion of state pension information.

In addition, these amendments repurpose the provisions that were in new Section 4A(1)(b), as inserted by this clause, as new Section 4A(1A). The original purpose of these provisions, however, is unchanged. They make it clear that the Money and Pensions Service can carry out functions relating to the provision of qualifying pensions dashboard services by others as part of its pensions guidance function, including providing state pension information. This could, for example, include publishing data standards with which providers must comply.

The amendments also make minor consequential changes to Clauses 119 and 121, as well as to Schedule 9, which relates to Northern Ireland. The duty to provide a pensions dashboard will apply only once the necessary supporting technical architecture is in place and pension schemes are required to provide information to their members via dashboards. I therefore very much hope that the government amendments will be accepted when they are moved.

I will now respond to the amendments tabled by the noble Baronesses, Lady Sherlock and Lady Drake, on the Money and Pensions Service dashboard being the sole dashboard for at least 12 months. The Government have been clear throughout that offering consumers a choice of dashboards is the best way to increase engagement. Our position on this has not changed. Allowing consumers to access their pensions information in the way that they want to is key to putting people in control of their savings.

Having a period of exclusivity for the Money and Pensions Service dashboard, as is being suggested, would seem to achieve relatively little, other than to restrict people’s access to their own information through a route of their choosing. However, what we will not allow to happen is for any commercial dashboard to be launched before that of the Money and Pensions Service. I would like to be clear that the Money and Pensions Service dashboard will be available from day one, alongside dashboards offered by other organisations.

I invite the noble Baroness to note that the Money and Pensions Service has an existing legislative requirement, in the Financial Guidance and Claims Act 2018, to report to the Secretary of State annually on the achievement of its objectives and functions. This report is also laid before Parliament and will provide detailed information about the development, delivery and operation of dashboards.

The noble Baroness, Lady Drake, asked me about the liability model and whether we can guarantee that it will be ready before commercial dashboards can be used. The pensions dashboard programme will develop a robust liability model to ensure that there are clear roles and responsibilities in the event of a breach. This will be in place before the public launch of dashboards.

I hope I have given reassurance that there will be a publicly owned dashboard and that there is a range of reporting requirements that allows sufficient oversight of progress, not least in making sure that the functionality which will underpin all dashboards can be relied upon. I have to say that some noble Lords rather over-egged the argument of functionality risk.

The long and the short of it is that we remain strongly of the belief that multiple dashboards are the best way to ensure that everyone can access their pensions information in the way that they desire. Therefore, I respectfully ask the noble Baroness, Lady Sherlock, not to move her amendment when we come to it.

My noble friend Lord Young has tabled three amendments, covering the Money and Pensions Service dashboard, a date for the introduction of that dashboard, and the verification of identity. I am glad he agrees that the government amendment fully meets his desire for the Money and Pensions Service to provide a dashboard. On providing a timetable for delivery, we are all keen to see dashboards available as soon as possible. However, it is essential to get the design of the service right, to ensure that it provides accurate information and is secure and consumer focused.

On that point, I can assure my noble friend that the pensions dashboard programme put in place by the Money and Pensions Service is taking the necessary steps to deliver the dashboard architecture. In April, it published two papers relating to data. Having deferred consultation on these papers because of the impact of Covid-19, the programme will now run a call for input throughout July and August. It is also bringing together a data working group to finalise a set of data standards and requirements by the end of the year.

The programme is also making progress on the supporting dashboard infrastructure. On 22 June, it started a six-week market engagement exercise with potential suppliers of the supporting dashboard architecture for the pensions finder service and the governance register. This will help the programme to determine the most appropriate route to market in preparation for a formal procurement process, anticipated to start in autumn this year.

Finalising the data standards and the procurement route is key to informing the timetable for delivery. However, it is essential that we do not force upon the Money and Pensions Service an arbitrary timetable set by legislation. I hope that, on reflection, my noble friend will come round to that view.

I understand that my noble friend wants to maintain momentum, and I agree with that. Alongside the annual report by the Money and Pensions Service, which I mentioned, the pensions dashboard programme has committed to publishing a progress update every six months, for the length of the programme. It will also set out a detailed timetable for delivery by the end of the year.

My noble friend also brought us back to the issue of digital identity and how a user of a dashboard is verified. In the March 2020 Budget, the Government reiterated their commitment to the creation of a ubiquitous digital identity market. To achieve this, they created the digital identity unit, which is a collaboration between the Department for Digital, Culture, Media and Sport and the Cabinet Office.

As my noble friend rightly said, an identity verification service is an essential component of the dashboards infrastructure. It will provide the verification required to assure pension schemes—the data providers—that they are returning data to the correct user and to nobody else. The verification service must also meet the needs of users, enabling them to verify their identity without undue difficulty.

On a point raised by my noble friend about funding, I say that the pensions dashboard service, including ID verification, will be free at the point of use for individuals. The identify verification service for dashboards will be managed centrally as part of the supporting infrastructure, as I indicated. Funding options will be carefully considered as part of any proposed solution on identity.

As outlined in the progress update report published in April, the pensions dashboard programme will need to source a functioning, workable identity verification service. It is working with the digital identity unit and the supplier market to explore potential solutions for dashboards. These solutions will be based on managing and mitigating the type of risks associated with dashboards. Developing their requirements will enable the pensions dashboard programme to assess the suitability of available products against robust success criteria.

I say to my noble friend that we understand the need for progress on the delivery of dashboards; we recognise the need for a safe and secure method for verifying someone’s identity, and we understand how important this will be for the success of the dashboard concept. While I can go no further than that, I hope that I have said enough to convince him that his concerns are squarely on the radar, and that he will accordingly feel able to withdraw his Amendment 53.

[The Deputy Speaker]

I have received no requests for noble Lords to speak, so I call the noble Lord, Lord Young.