Access to Work Fund

Lord Palmer of Childs Hill Excerpts

Thursday 5th March 2026 Lords Chamber

[Baroness Sherlock (Lab)]

I thank the noble Lord for his question and for his kind words. He raises a really important point. One of the things we have discovered, both through our general work with employers but also through the report we have done in this area, is that many employers really want to help, but some small and medium-sized businesses do not know how. They are nervous, and they worry about having the right conversations and how to help. We have a special service, developed with SME employers, called SEND, where we can work with employers and bridge conversations between employer and employee to help them work out what they should do and what help they can get elsewhere.

At the same time, we need to make sure that really big employers step up to the plate. We should not be in a situation where very large employers use Access to Work for small pieces of equipment, such as buying keyboards or chairs, which one would hope they could have managed in the normal run of things. Our job is to help employers to do the right thing, because most of them want to, but the noble Lord knows very much from his experience that this can be challenging. Yet, the rewards of having a really good workforce can make all the difference in the end.

[Lord Palmer of Childs Hill (LD)]

My Lords, I compliment the Minister on the work that is being done in this area. In my view, the aim of the Access to Work fund is to get people out of the house and into work. The fund also pays for improvements and developments in the home when people are working from home. I am sure it would be of great interest to the House to know what proportion of the fund is going to support people working from home rather than working in a place of employment, which is not quite the same in what it achieves for mobility.

[Baroness Sherlock (Lab)]

My Lords, the noble Lord makes an important point: the scheme helps people to get into and stay in work. It is incredibly wide-ranging, covering anything from a customer applying for a single one-off grant of £100 to buy a piece of equipment, which they might keep for the duration of their work in that particular role, through to the other end, of a cap of £69,260 for someone who needs large levels of personal support. There are people who buy a single piece of equipment, or have British Sign Language support to do a job, and right across the piece. I do not have the figures about location, but if we have them I would be very happy to write to the noble Lord.

Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2026

Lord Palmer of Childs Hill Excerpts

Monday 2nd March 2026 Grand Committee

[Lord Mann (Lab)]

My Lords, I wish to make a couple of remarks in relation to these statutory instruments. It is a long time since the pneumoconiosis compensation schemes were brought in—so long that a photo that I was shown on Friday of a very youthful now Minister was remarkably recognisable, but not because of the length of time that has transpired. In my very first case as a Member of Parliament, at 10 in the evening on my very first day, I went to meet someone who was dying that night of mesothelioma. It was, I suppose, rewarding to be able to help push through the changes and improvements that were made a few years later.

I have two points to make. The first is that we call these social security payments, but they are social society—industrial disease—payments. Governments—and, therefore, this Government—are missing a trick. When we talk about the benefits bill, we should extract compensation for industrial disease as a separate element. That is not a benefit; it is something that pays people for the difficulties—with mesothelioma leading to death— caused by exposure that should never have happened. The fact is that there are still cases. Agriculture is a good example of where not all asbestos has been cleared out. Some industries were quicker and better organised than others. There are still schools with asbestos tucked away in all corners.

The people who were working in the collieries, shipbuilding, foundries, the baking industry and others were having to breathe in this stuff. There were sometimes asbestos gloves that they were using routinely as part of their work—then they struggled to breathe in later life. Compensation is not a benefit; it is a right. That should be extracted out and separately categorised in the statistics, so the taxpayer can see the cost of negligence by multiple employers, including—and often particularly—government over many decades.

The second point is more practical. I have been in Parliament since 2001, in one House or other, and we have had Government after Government all repeatedly talking about saving red tape and bureaucracy. I have a proposal on red tape on bureaucracy. Why are we wasting taxpayers’ money every year—on the time, involvement and work—to update something that could be updated by a little change to legislation automatically? There is no controversy in the idea that there is more accountability for diseases that are now recognised across the House as a problem, a danger and a legacy that needs to be addressed. Why are we wasting any money and time, rather than having an automatic annual increase? I put to the Minister that this would be a small but appropriate removal of red tape and bureaucracy. While it is a minor saving to the taxpayer, the principle of it seems nevertheless to be an appropriate one. I see no sufferer from these scourges objecting to an automatic increase every year.

[Lord Palmer of Childs Hill (LD)]

I thank the noble Lord, Lord Mann, for that personal information. I obviously agree with these statutory instruments; it would be strange if we did not—but it is industrial compensation rather than a benefit, and it ought to be recognised as such. Could the Minister quantify the 3.8%? I am not very happy with us just being quoted figures in terms of percentages. What is the general amount being paid, and how much does 3.8% thereof amount to? Percentages mean 3.8% of zero is zero, to take it to the very level.

Could the Minister also talk about the current occupations that give rise to these two dreadful—let us call them—diseases? They are dust related. Many industries have in many ways stopped the dust coming from their products. To deal with the point rightly raised by the noble Lord, Lord Mann, in terms of it being annual rather than just having a continuation, I speak against that, because I would rather that we increased the amount each year or considered and put forward an increase, rather than just have an automatic, modest increase, which might take no account of real values.

I agree with the 3.8%, but ask what it means in practice and whether the Minister could tell us what industries and occupations are giving rise to these dreadful diseases.

[Lord Jones (Lab)]

I thank the Minister for her masterly summation of these most welcome regulations, yet again—some of us here are the usual suspects in debate—for having some little insight as to what they mean for our communities and from whence they came as legislative devices.

In a long Westminster stay in both Houses, I have not encountered such mastery, sincerity, persuasiveness and enthusiasm from a ministerial, oppositional or advisory role in any of many committees on which I have served greater than that of the Minister. It has always been expert, committed and long-standing, from a parliamentary servant who has been at the elbow of a Prime Minister and a Chancellor of the Exchequer. It is a wonderful record of duty and expertise. The standing of this Mother of Parliaments has fallen low, but my noble friend Lady Sherlock still reaches the heights.

Primarily, these regulations centre on two great industries—and there are others. I have in mind slate and coal, quarrying and mining, both of which are in steep decline with minimal activity nowadays, but they are important to many individuals and for families. They represent great humanity, suffering and anxiety about what we know of as the dust. We debate it here, of necessity, each year in Grand Committee. Could we not just once debate on the Floor of your Lordships’ House? That would indicate an understanding of the impact of these diseases on our major communities and far-flung settlements. I recollect watching an aged former Prime Minister, Harold Macmillan, the Earl of Stockton, in your Lordships’ House making a spirited and critical speech to his own Government’s Benches. He paid moving tribute to the miners and steelmen who he said had made the difference in two World Wars, defeating first the Kaiser and secondly Adolf Hitler.

All industries come with health challenges. In these regulations, the department gives much detail, which is always welcome. Do we know how many individuals are receiving payments for both mesothelioma and pneumoconiosis? I think for certain that the increases in all payments will be welcomed when the cost of living is increasingly an issue.

Finally, I observed in the other place the distant origin of these health and safety matters. There were two great Acts in Prime Minister Harold Wilson’s third Administration. It was in 1975, I think. One was employment law, and the other was health and safety. The Secretary of State for Employment was one Michael Foot, then Member for Ebbw Vale. These legislative activities were all-night sittings, time and again. As he piloted his measures through, I recollect sitting alongside him alone at 3 am on the Front Bench in a near-empty Chamber. It was hard going. He prevailed, and the measures are social history, historic in themselves. Later, in Mr Callaghan’s Administration, the Government were without a majority and with their life ebbing away amid a winter of discontent, but plans were made to cover these terrible diseases of industrial life. I recollect the noble Lord, Lord Wigley, and the late Lord Ells-Thomas being very active on the subject of quarrying in their homeland as Members of Parliament, along with Cledwyn Hughes, then the Parliamentary Labour Party chair and later Lord Cledwyn of Penhros and Leader of the House of Lords. Another MP, a Minister like me, was Harold Walker, who was soon to be Lord Walker of Doncaster.

My own role included visiting two key players for the quarrymen and their needs. One was Mr Tom Jones, an officer of the Transport and General Workers’ Union, and the other a retired solicitor and former Member of Parliament, whose name was Jones, too. These two were detail men, and they formed the details that led to the legislation that has led to regulations such as these. I recommended solicitor Jones to Lord Cledwyn for an honour, and it happened—a knighthood, indeed.

Child Poverty Strategy

Lord Palmer of Childs Hill Excerpts

Monday 2nd March 2026 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the noble Lord is absolutely right about the importance of family stability; it is extremely important for children to grow up in a stable family wherever possible. He is right that poverty is both a driver and a consequence. We know that poverty puts huge pressures on families. Lifting the two-child limit and giving families higher rewards than those that they have now will lift over half a million families out of poverty and help to take the pressure off.

The noble Lord mentioned the better futures fund. That will be a 10-year programme focused on a range of long-term measurable outcomes, including family stability. He asked about how it will be measured. It is currently in the design phase, but the funding will primarily be used for social outcome partnerships, and those bidding will be expected to show the sustainability of their proposed ideas. We absolutely take seriously the importance of family stability. We are going to address the questions of poverty that drive problems, but we also want to do what we can to support families.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for her normal diligence on this subject. Alongside new measures

“to increase incomes, reduce essential costs and strengthen local services”—

I take those words from the Government’s own document—between 2025 and 2026 there have been 11 strategy documents. They are very good reading, but they do not help the people with the problems that I have just outlined. Can we speed this up? Let us stop talking about 10 years and instead talk about what is happening this year and next year.

[Baroness Sherlock (Lab)]

I will say two things. Children did not fall into poverty overnight and they will not all come out of it overnight. Poverty has a range of drivers. We are determined not simply to address this problem now but to find a way of tackling it in the long term. However, since the noble Lord wants examples of action, I will give him some. What have we already done? As we have made clear, we are going to put £39 billion into social and affordable housing. We are expanding free school meals to all families on universal credit, putting £600 million into the holiday activities and food programme, extending the warm home discount scheme to an extra 2.7 million people, and removing the two-child limit to lift 450,000 children out of poverty in this Parliament. That is action, and this Government are taking it.

Pension Schemes Bill

Lord Palmer of Childs Hill Excerpts

Committee stage
Monday 23rd February 2026 Grand Committee

I jumped in ahead of the noble Lord, Lord Palmer of Childs Hill—I shall reply to his speech before he gives it.

[Lord Palmer of Childs Hill (LD)]

That is always best.

[Lord Davies of Brixton (Lab)]

This is about impartial pensions advice. Had I heard the noble Lord’s speech, I would have said that I did not accept his arguments. What I want is a pensions system that works without people needing advice. Proper pensions advice is extremely expensive, and on the idea that everyone will get at least twice during their working life full and adequate pensions advice—no, we do not want to encourage that. I would encourage a pensions system that works properly.

Then we have the Police Pension Scheme. I have talked to those campaigning on the issue on a number of occasions and I totally agree that it is entirely unfair that the spouses of some members of the scheme, when those members retire and die, will receive a pension—until they are accused of cohabiting or decide to get married. That happens only in the public sector; virtually no private sector schemes do that sort of thing, and the only ones that do are those that have carried over those rules from the public sector. To be honest, that is nasty. People naturally resent losing the money, and then become open to tittle-tattle and intrusive investigations; that is just wrong. Clearly, there is a cost involved, because there is a carryover to other public service schemes—but it is just wrong; it is treating people badly for no good reason other than history.

I hope that the Government will be able to make a positive response on Amendment 215. I do not have a lot of hope, but I am eternally hopeful. I apologise for jumping in ahead of the noble Lord, Lord Palmer.

[Lord Palmer of Childs Hill (LD)]

My Lords, I say to the noble Lord, Lord Davies, that no apology is needed.

This is a wide-ranging set of review and process amendments. The noble Viscount, Lord Younger, explained what I think he described as his “modest” amendments—indeed, they are. The noble Lord, Lord Kirkhope, said that this was all set up for secondary legislation; we ought to take that point into account.

These amendments are linked by a common theme: whether the Government are willing to build a stronger evidence base for future pensions policy and to improve the basic safeguards for savers. Several of these amendments ask Ministers to review pension adequacy, contribution rules, labour market impacts and public understanding, while others seek an independent look at specific injustices or practical improvements to data accuracy.

These amendments are probing, but they raise real policy gaps. Taken together, they test whether Ministers are prepared to move beyond structural reform and address the practical foundations of trust in pensions, adequate incomes, fair treatment, accessible information and correct records. I hope that, in replying, the Minister will explain which of these issues the Government accept in principle and whether they believe that the existing powers, regulators and reviews are already sufficient. I expect that to happen. The Bill changes structures and powers, but savers also need fairness, clarity and accurate data. When Ministers resist new duties, they should set out a clear alternative route and timetable. I hope that the Minister will do so.

The noble Lord, Lord Davies of Brixton, made important points. We will disagree, but I shall pursue the amendments in my name. Amendment 214 in my name would establish a universal entitlement to free and impartial pension advice at key stages of life. It would ensure that everyone, not just the financially literate or well advised, can make informed decisions about retirement. Such advice would, I hope, be offered around the age of 40—a critical moment for mid-life planning and pension consolidation—and again within six years of expected retirement to support decisions on drawdown, annuities and retirement income options, which are a mystery to many people at that or any stage of life.

The advice would include essentials such as pension types—DB or DC schemes—investment strategies, charges and fees, consolidating multiple pension pots and retirement income choices, and would be practical, comprehensive and relevant. The advice would have to be qualified, independent and impartial. Trustees, managers and providers would have a role in facilitating access. Data sharing would be permitted, but with strong data protection safeguards.

This amendment in my name would also offer flexibility, in that responsibility could be placed with established bodies such as the Pensions Regulator, the Financial Conduct Authority and the Money and Pensions Service. It would be funded from prescribed sources to ensure sustainability. The regulations will be subject to the affirmative procedure, ensuring proper parliamentary scrutiny. Amendment 214 is designed to ensure that people have confidence in and clarity on their pensions, which, I assure noble Lords, many people do not have; to avoid poor decisions that undermine pension security, which many people make; and to make sure that everyone, not just those who can pay for private advice, gets the help they need.

The purpose of my Amendment 215 is to require the Secretary of State to commission an independent review into provisions in police pension schemes that result in the forfeiture, reduction or suspension of survivor pensions. It focuses on cases where survivor pensions are affected by remarriage—as mentioned by the noble Lord, Lord Davies—civil partnership or cohabitation.

Why is this review needed? These provisions can have significant financial, social and emotional impacts on survivors and their families. This would ensure fairness and consistency with other public sector pension schemes—the Armed Forces, the NHS and the Civil Service—and would address potential inequities or outdated rules that disproportionately affect survivors. This review would ensure an independent—that is the point—and transparent process, as well as stakeholder consultation, reporting and accountability. The review panel must publish its findings and recommendations within 12 months. The report must be laid before both Houses of Parliament, ensuring transparency and parliamentary oversight.

This amendment is designed to act to assess the fairness and impact of current survivor pension rules in police schemes and to identify practical reforms that protect survivors’ rights while maintaining scheme integrity, to ensure that the system is consistent, equitable and transparent. I look forward to hearing whether the Minister addresses my points about these amendments.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

I am grateful to all noble Lords who introduced and spoke to these varied amendments. The range of subjects covered here shows the interest across the whole pensions landscape, but at heart is the objective that we all share of putting members first.

There was a theme around adequacy in Amendments 207 and 213 from the noble Viscount, Lord Younger of Leckie. Amendment 207 seeks to introduce a statutory requirement for the Secretary of State to conduct a review of the Bill’s impact on retirement incomes five years after it is passed, and to have subsequent reviews at intervals not exceeding five years from the first assessment. Amendment 213 wants a statutory requirement for the Secretary of State to conduct a review of the relationship between employment rates, earnings patterns and pension adequacy. Although both amendments raise key issues around pension adequacy and proper monitoring, the Government’s view is that the proposals risk the duplication of work already being undertaken. I shall explain why.

There are many different strands to this Bill, which will be implemented in phases over the next several years. For example, the first small-pots consolidation will not take place before 2030, so obviously any review in the next five years will not have allowed many of the reforms any time to take effect. It is for that reason that a comprehensive impact assessment was produced, setting out not only the potential impacts but also plans to evaluate the Bill in further detail, including developing new research projects to address evidence gaps.

The Government already carry out and publish analysis of projected future retirement incomes, which provides estimates of the number and proportion of working-age individuals aged 22 to state pension age who are undersaving for their retirement. The modelling that underpins that analysis uses a number of economic factors, including employment levels based on the OBR long-term forecasts, which are regularly reviewed and updated.

Separately, the Government have revived the Pensions Commission. I say to the noble Viscount, Lord Younger, that adequacy is absolutely not a secondary issue. As I have explained repeatedly in Committee, we are doing these things in the order that is appropriate to the matters. The Bill makes sure that steps are taken so that the market works well to make sure that increased savings will get appropriate returns for the savers.

The Pensions Commission’s legacy under the last Labour Government was of course to create a system of workplace pension saving via automatic enrolment, which has transformed workplace pension saving for millions of workers. There was cross-party support for this. But the Government recognise that millions are still not saving enough for their retirement, which is exactly why we revived the Pensions Commission to finish the job we started 20 years ago.

I will respond to the noble Viscount, Lord Younger. As indicated previously in Committee, the commission will produce an interim report this spring, setting out the evidence base and strategic direction for its work on assessing the UK’s pension system. It will set a direction based on the purpose that the Government have given it to identify remedies to address pension adequacy, fairness and risk before preparing its final recommendations in early 2027 for the Government to consider.

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In each of these cases, Parliament has endorsed reforms designed to improve pensions outcomes. At the same time, the interaction between PECR, data protection law and financial promotion rules may constrain the very communications that are required to make those reforms effective. So a structured review of pensions communications and financial promotion rules is both timely and necessary. I hope that the Committee will forgive me for quite a lot of the technicalities and explanation, but I hope that I have been clear and that the Minister will give serious consideration to what I have said. In the meantime, I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, I forgive the technicalities. This group—I will not speak at length on it—focuses on employer communications and decision-making. These are not peripheral issues. Poor communications, which there often are, and unclear boundaries between information, guidance and advice, can directly affect member outcomes. Amendment 208 asks for a review of the legislation and regulatory rules on marketing, financial promotion and member communications, while Amendment 210 would support employers through guidance and tools when choosing and operating workplace pension arrangements.

There is a legitimate policy question here around whether the current rules strike the right balance between consumer protection and practical communication that helps people make informed choices. I hope that the Minister will clarify whether the Government believe that there are avoidable barriers that prevent providers and employers from communicating useful non-advisory information to members and workers. They should be able to give that information easily and freely. Good pension outcomes depend on not only product design, on which we tend to focus, but understandable communications and workable employer support.

I hope that these amendments will try to improve the communications part of the scenario. I do not think that they are mind-bogglingly important, but they would, I believe, improve the system for pensioners, which is what we all, I hope, want to do.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to noble Lords who have spoken. I absolutely agree with the noble Lord, Lord Palmer, that these are important issues. I hope to persuade him that the right action either has been taken or is being taken.

I appreciate the purpose behind the new clause proposed in Amendment 208 from the noble Viscount, Lord Younger. It aims to ensure that pension providers can communicate effectively with their members and provide appropriate guidance. The new clause would require the Government to review legislation and rules that might restrict pension providers from communicating with their members about a range of topics. I should say at the start that there is good reason to protect people from unsolicited marketing in many circumstances. Not only can irrelevant marketing be a nuisance but of course there are people who would exploit an increase in legitimate marketing as an opportunity for fraud or scams. In 2019, the last Government banned companies from making unwanted and unsolicited phone calls to people about their pensions.

At the same time, I recognise the need for clarity to help pension providers navigate the regulatory framework when communicating with their members. That is particularly important given the increased emphasis on pension providers supporting members directly through both guided retirement and, as raised by the noble Viscount, Lord Younger, the targeted support regime. The targeted support, as I have explained previously, could include helping people to make decisions about their pension.

The FCA and the Information Commissioner’s Office published a statement in December to provide clarity on the interaction between direct marketing rules and targeted support. That statement details how firms can promote their targeted support service to those who have opted out of direct marketing, while still complying with the relevant regulations. The statement also emphasises that financial services providers can send neutral, non-promotional and factual messages about important financial matters to all customers, even if they have opted out of marketing communications. That includes warning a pension member that they are undersaving for retirement or drawing down on their pension unsustainably.

However, in developing targeted support, the Government identified some specific issues in how the direct marketing rules in place for workplace pensions would interact with the new regime. The Government will be taking forward secondary legislation to address this, enabling these providers to deliver targeted support communications which amount to direct marketing to members who have not opted out of receiving it. This reflects that workplace pension providers have fewer opportunities to obtain consent for direct marketing, limiting the level of engagement they have with their members.

Turning to value for money communications, I am confident that the Bill already empowers us to achieve these aims. The Government have carefully considered the necessary requirements under the VFM framework. Clause 14 enables the provision of detailed requirements for member communications and interaction, including ensuring that guidance can be tailored to meet the needs of all members. The Government have already engaged in the process of reviewing the legislation and the rules identified in the amendment where appropriate and will continue to do so in a transparent manner.

Amendment 210, which is also from the noble Viscount, Lord Younger, seeks to require the Secretary of State to consider what steps are needed to help employers make the decisions they must make in relation to workplace pensions. While this is a positive aim, I do not think the proposal is necessary. Reasonably extensive guidance is already available to employers to support them to fulfil their pension duties. New statutory requirements are not needed in order to maintain or improve that information as the market evolves.

The Pensions Regulator has published guidance on workplace pension scheme selection, with supporting resources on what to look for in a scheme, including matters such as cost, tax treatment and different ways of making contributions. The FCA has also made guidance available to employers about providing support for employees, which includes pensions among other relevant areas. The DWP has guidance on default fund investment options, which sets out best practice concerning scheme design, governance and member communications. In response to the comment from the noble Viscount, Lord Younger, about smaller employers, that was developed particularly with those employers, including SMEs, which have been newly brought into the pensions world following the rollout of automatic enrolment.

Pensions UK also has its own independent guidance for employers, including its pension quality mark accreditation for high-quality schemes. These sources provide a wealth of information for employers and are regularly supplemented as the market evolves. There is not a need for new statutory requirements.

Once again, I highlight the VFM proposals in the Bill, which will enable the Secretary of State to place duties on trustees and managers to publish standardised performance information. This will help members and employers make informed decisions when choosing a scheme. It will also increase competition across different schemes on quality, not just cost, and could remove poor performing schemes from the market entirely, helping employers avoid low-quality options automatically.

The Government are committed to supporting members and employers to make the best decisions about pensions, but this amendment is not needed to allow the Government to continue to do that, and it does not in fact require the Secretary of State to take any steps if they do not consider them necessary. Overall, we believe there are some cases where more advice and support are needed for members, which is why we are introducing guided retirement and targeted support. We will always consider the interaction of new policies with a wider regulatory framework, but equally it is important to keep guardrails against unsolicited marketing and scams. We also believe that sufficient support is already available for employers in their decision-making, and powers are already available should more be needed. I hope that has reassured the noble Viscount and that he can therefore withdraw his amendment.

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Moved by

[Lord Palmer of Childs Hill]

216: After Clause 117, insert the following new Clause—
“Independent review into injustices in occupational pension schemes(1) The Secretary of State must, within three months of the day on which this Act is passed, commission an independent review into injustices experienced by members of occupational pension schemes as a result of the actions or omissions of employers, scheme sponsors, or scheme administrators.(2) The review must examine, in particular—(a) cases where employers or scheme sponsors failed to adequately support, inform, or protect members in relation to their pension rights or entitlements;(b) the adequacy, accuracy, and timeliness of information provided to scheme members, including information relating to—(i) scheme changes,(ii) benefit reductions or losses,(iii) transfers, mergers, or scheme restructurings, and(iv) risks to accrued pension benefits;(c) the extent to which regulatory oversight, governance arrangements, or fiduciary duties failed to prevent detriment to members;(d) the impact of such failures on affected members, including financial loss, inequality, and hardship in retirement;(e) whether particular groups of members were disproportionately affected, including—(i) lower-paid workers,(ii) women,(iii) disabled people, and(iv) those with non-standard or interrupted working patterns;(f) the effectiveness of existing routes to redress, including complaints procedures, the Pensions Ombudsman, and the courts;(g) potential options for remedy or redress, including—(i) changes to legislation or regulation,(ii) improvements to governance or communication standards, and(iii) mechanisms for compensation or restoration of benefits, together with an assessment of the likely financial implications.(3) The review must be conducted by an independent person or panel appointed by the Secretary of State with relevant expertise in—(a) pensions law and administration,(b) public policy and regulation, and(c) administrative justice and consumer protection. (4) In conducting the review, the person or panel must—(a) consult with affected scheme members and pensioner groups;(b) invite and consider written and oral evidence from stakeholders, including—(i) trade unions,(ii) employer and industry bodies,(iii) pensions experts, and(iv) relevant regulatory and advisory bodies;(c) have regard to relevant findings of Parliamentary committees and public bodies.(5) The person or panel appointed under subsection (3) must submit a report of its findings and recommendations to the Secretary of State within 12 months of the date on which the review is commissioned.(6) The Secretary of State must—(a) lay the report before both Houses of Parliament as soon as reasonably practicable after receiving it;(b) within six months of laying the report, publish a statement setting out the Government’s response to the review and any actions it proposes to take.”Member’s explanatory statement
This new clause would require the Secretary of State to commission an independent review into injustices experienced by members of occupational pension schemes where employers or scheme sponsors have failed to properly support, inform, or protect members, and to consider options for reform or redress.

[Lord Palmer of Childs Hill (LD)]

My Lords, this group concerns defined benefits, fairness and redress. Amendment 216 in my name asks for independent reviews into serious, alleged injustices affecting scheme members. It is broad and seeks an independent review into injustices in occupational pension schemes caused by actions or omissions of employers, sponsors or administrators, including failures of communication, governance and redress mechanisms. A number of campaigners and victims of injustices have reached out to share their stories; we hope that the Government will take this amendment forward in order to send a clear message to those campaigners that the Government will listen to them and rectify any wrongs that exist.

I turn to Amendment 218 in my name. I have had lots of information from the noble Baroness, Lady Altmann, who cannot be with us today; I will try to incorporate that into what I say, so noble Lords will get two speeches for one here. In our earlier debate in Committee on the amendment designed to assist members of the AEAT pension scheme’s closed section, who were advised to transfer all of their accrued pre-1997 pension rights into a new private sector pension scheme on the privatisation of part of the UK Atomic Energy Authority, the Minister stated in her response—she will remember this—that the case around AEAT pensions “has been fully considered”. She specified that there had been

“reviews by three relevant ombudsmen, debates in the Commons in 2015 and 2016 and a report by the NAO in 2023. This matter has also been considered by previous Governments in the period since AEAT went into the PPF, all of whom reached the same conclusion”.—[Official Report, 5/2/26; col. GC 668.]

It is clear that the Minister and the Committee were being told that thorough investigations had found that there was no case for remedying the loss of promised government protection of these pension rights. That is just not correct, I am afraid. It is important to set the record straight today; I hope to do so, guided by the noble Baroness, Lady Altmann, who has given me some notes on this as well.

There has been no ombudsman investigation of the core issue, which is the closed-section AEAT pensioners, now mainly in their 70s to 90s, who were misled on privatisation in 1996 by a GAD document to transfer the historic Treasury-backed—that is the point; they were Treasury-backed—public sector UKAEA benefits into the new privatised-company AEAT scheme. They were not informed that the new scheme did not have the same security, despite reassurances in both Houses of Parliament that their pensions were safe.

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[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for her customary comprehensive reply, but I do think the Government have to think outside the box. The idea that “It’s not me, guv” is not really good enough. Yes, it is long and complex, but an elegant redress could be affordable, and virtually cost-neutral, for the Government. Precedence exists and a solution to right what I still think is a wrong must be explored by the Government.

Let us not forget that those employees were promised protection by the Government and, despite assurances, I do not think they have got it. Instead, they have found that government protection was worse than no protection at all. I had hoped that the Government today could provide sufficient assurances to the victims of what I see as an injustice, and specifically answer whether they are planning to right the wrongs outlined in the NAO and PAC reports. I have not received those assurances.

I hope, trying to further this in a positive manner, that the Minister might meet with me and representatives of AEAT, who are more on the ball than I am on this subject, to discuss the issue. I see this as quite probably coming back on Report. It is not going to die here today. On that basis, I beg leave to withdraw the amendment.

Amendment 216 withdrawn.

Youth Unemployment

Lord Palmer of Childs Hill Excerpts

Thursday 5th February 2026 Lords Chamber

[Baroness Smith of Malvern (Lab)]

My noble friend raises an interesting point. There seems to be some evidence that young people are doing less of that type of work. This is part of what Alan Milburn will look at in his review, which will consider the causes of the growing numbers of young people who are neither earning nor learning. That is of course why being able to provide placements through some of the courses that young people take and the work experience that will be part of the youth guarantee gateway will be important for those young people who have not otherwise had the opportunity to understand what it is like to be in a workplace.

[Lord Palmer of Childs Hill (LD)]

My Lords—

[The Earl of Clancarty (CB)]

My Lords—

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[Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)]

My Lords, we have plenty of time. It is the Lib Dem Benches next, then the Cross Benches.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for that information, but can she say what assessment has been made of the impact of poor mental health on young people’s ability to gain work? What is the connection between the Department for Work and Pensions and the NHS in dealing with this problem?

Pension Schemes Bill

Lord Palmer of Childs Hill Excerpts

Committee stage
Thursday 5th February 2026 Grand Committee

Moved by

[Lord Palmer of Childs Hill]

184: After Clause 96, insert the following new Clause—
“Report on the impact of pension market consolidation(1) The Secretary of State must, within 12 months of the day on which this Act is passed, publish a report on the impact of consolidation in the occupational pensions market.(2) The report must include an assessment of—(a) the level of market concentration among pension scheme providers, including trends in the number and size of schemes;(b) the effects of consolidation on competition, innovation, and consumer choice in the pensions market;(c) the potential barriers to entry and growth for small and medium-sized pension providers;(d) the adequacy of existing regulatory and competition safeguards in preventing anti-competitive behaviour regarding—(i) exclusivity arrangements,(ii) exit charges, and(iii) pricing structures;(e) the role of The Pensions Regulator and the Competition and Markets Authority in monitoring and responding to market concentration;(f) the merits of policy or regulatory measures to support new market entrants.(3) The Secretary of State must lay a copy of the report before both Houses of Parliament.”Member’s explanatory statement
This new clause would require the Government to report on the impact of market consolidation on competition and new market entrants.

[Lord Palmer of Childs Hill (LD)]

My Lords, this amendment has the distinction of being in a grouping all of its own, which obviously shows how important it is. The proposed new clause in it would require the Secretary of State to publish a report within 12 months on

“the impact of consolidation in the occupational pensions market”.

It would ensure, I hope, that Parliament and the public have transparency on how consolidation is reshaping the sector. We know that consolidation is accelerating in the pensions market and, although scale can deliver benefits—I hope—it can also raise risks: reduced competition, fewer choices for savers and further barriers for new entrants. A clear evidence base is an essential part of the solution to strike the right balance.

The report referenced in this amendment calls for information on a number of things. The first is market concentration—for instance, trends in the number and size of schemes and the level of provider dominance. The second is effects on competition and innovation: whether consolidation is driving efficiency or stifling creativity and diversity. The third is consumer choice: how member options are being affected. The fourth is barriers to entry: challenges faced by small and medium-sized providers in entering or growing in the market. The last is an assessment of whether current competition and regulatory safeguards are sufficient.

The report would also have a particular focus on exclusivity arrangements, exit charges and pricing structures that may distort the market. Furthermore, the Pensions Regulator and the Competition and Markets Authority would have a role in overseeing these risks. The review would also examine potential policies or regulations to support new entrants and maintain a healthy and competitive pensions market.

To summarise, we know that consolidation must serve savers’ interests, not just the interests of the largest providers. This proposed new clause would ensure that Parliament is properly informed—it should be informed on all things, whether on this or on the noble Lord, Lord Mandelson—that regulators are held to account and that future policy is based on evidence. From a Liberal Democrat perspective, well-functioning markets matter. Competition, diversity of approach and the ability for new entrants to challenge incumbents are essential if savers are to benefit over the long term. Ministers need to explain why a formal review of consolidation is resisted, given the scale of structural change this will accelerate. We are asking just for a review, and we hope the Government will not think this too much to ask for before we enter this new realm. I beg to move.

[Baroness Stedman-Scott (Con)]

My Lords, it is a pleasure to close this debate and respond to the remarks of the noble Lord, Lord Palmer, on his Amendment 184. I am grateful to him for raising this issue, because it goes to the heart of how we ensure that pension reform delivers better outcomes for savers rather than simply neater market structures on paper. I think there is reasonably wide backing across the pensions industry for the Government’s broad objective of greater consolidation and efficiency within the defined contribution market. Many stakeholders accept, and indeed support, the proposition that increased scale, when combined with robust governance, strong investment capability and appropriate oversight, has the potential to deliver stronger long-term outcomes for members. Few would argue for fragmentation for its own sake.

However, support for consolidation is not the same as support for consolidation at any cost, or consolidation pursued without sufficient regard to its secondary effects. Well-founded concerns remain that the current design of the scale test risks it being too blunt an instrument. In particular, it does not distinguish adequately between schemes that are genuinely underperforming and those smaller or mid-sized providers that, despite operating below the proposed thresholds, none the less deliver consistently high-quality, well-governed and, in some cases, market-leading outcomes for savers. Indeed, the Government’s own analysis underlines this risk. The chart contained in paragraph 70 of the Government’s 2024 report shows no clear or consistent correlation between assets under management and gross five-year performance across large parts of the master trust and group personal pension market.

The principal scale-related concern identified appears to relate not to well-run schemes operating below the threshold but to the very smallest arrangements, in particular certain single-employer schemes where governance capacity and resilience can be more limited. That matters because consolidation in a pensions market is not a neutral process. This is not a typical consumer market. Savers are largely captive, choice is constrained, switching is rare and inertia is high. In such an environment, reductions in the number of providers can weaken competitive pressure long before anything resembling a monopoly appears. The risk is not always higher charges tomorrow but slower innovation, less responsiveness and poorer outcomes over time.

That is why this amendment is important. It would ensure that consolidation serves savers and that Parliament retains a clear grip on how the market is evolving. Small distortions in competition today—barely visible in the short term—can compound into materially worse outcomes over 30 or 40 years of saving. In a system built on long horizons, early and structured scrutiny is essential.

There is also the question of innovation. Smaller and newer providers have often been the source of advances in member engagement, digital capability, decumulation options and investment design. If consolidation raises barriers to entry through disproportionate compliance costs, restrictive exit charges or exclusivity arrangements, innovation risks being squeezed out, even where headline charges appear to fall. Efficiency gains that come at the expense of progress are a poor bargain for future retirees.

The report required by this amendment would not obstruct sensible consolidation; nor would it second-guess the direction of travel. Rather, it would provide Parliament with the evidence needed to ensure that consolidation is proportionate, targeted and genuinely in the interest of savers. It would help ensure that regulatory and competition safeguards remain fit for purpose as market structures change, and that opportunities for new high-quality entrants are not inadvertently closed off.

For these reasons, I believe that this amendment strikes the right balance. It is supportive of reform, alert to risk and grounded firmly in the long-term interests of those whose retirement security depends on the decisions we take today.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I thank the noble Lord, Lord Palmer, for introducing his amendment, which would require the Government to conduct a report on the impact of consolidation in the occupational pensions sector within 12 months of the Act being passed. I am grateful to the noble Baroness, Lady Stedman-Scott, for her remarks and her acknowledgement of the benefits of consolidation and the widespread support for it.

The fact is that consolidation is already happening across the pension landscape. The number of DC pension providers has reduced from roughly 3,700 in 2012 to about 950 schemes today. On the DB side, the number of schemes is similarly down from about 6,500 in 2012 to 4,800 in 2026, with a record number of transactions currently estimated in the buyout market. Our aim is to accelerate this trend of consolidation through the DC scale measures and DP superfunds. As I have said before, scale brings numerous benefits directed at improving member outcomes, including better governance, greater efficiency, in-house expertise and access to investment in productive markets.

I am not going to respond in detail to the comments from the noble Baroness, Lady Stedman-Scott, on innovation and other things, because we have given them a decent canter in previous meetings in Committee, but it is absolutely essential that pension schemes remain competitive post-scale. We expect that schemes with scale will innovate and drive competition, especially, for example, in consolidating single-employer trusts. The market will evolve, as will the needs of members, and we expect that the schemes and the industry will be able to align with this.

It is absolutely right that the Bill will lead to major change in the occupational pensions market. Although I do not agree with this particular proposal, I absolutely agree with the noble Lord, Lord Palmer, that we must understand and monitor the impact of these reforms, because the impacts of consolidation really matter. That is why a comprehensive impact assessment was produced, analysing the potential impacts of the Bill, with plans to evaluate the impact in further detail. An updated version of the impact assessment was published as the Bill entered this House; crucially, it included further details of our ongoing monitoring and evaluation plans, including critical success factors and collaboration across departments and regulators.

We have provided the market with clarity on our approach so that changes can be put into effect, but we need to allow time to assess and evaluate the impacts following full implementation. We will assess the overall impacts over an appropriate timeframe, given that the full effects of consolidation will be after the Bill has been implemented.

As I have mentioned before, we published a pensions road map, which clearly sets out when we aim for each measure to come into force. The fact is that many of the regulations to be made under the Bill will not have been made or brought into force within a year of the Bill becoming an Act. Any review at that point could be only very partial. However, the Government are committed to strong monitoring and evaluation of this policy, especially of its impact on members. The noble Lord, Lord Palmer, is absolutely right to point to the crucial role of the Pensions Regulator and the CMA. They are best placed, in the first instance, to monitor the impacts of consolidation as part of their respective statutory functions, including an analysis of emerging trends. The Pensions Regulator, for example, will play a key role in monitoring the impact of consolidation on the trust-based DC pensions market via its value-for-money framework.

I can therefore assure the Committee that we will keep this area under review, consistent with our stated policy aims for the sector and for good member outcomes. We will also continue to monitor our working arrangements with the regulators; this includes their ongoing monitoring of the pensions industry. We will submit a memorandum to the Work and Pensions Select Committee with a preliminary analysis of how the Act has worked three to five years following Royal Assent. The committee may then decide to conduct a fuller inquiry into the Act, consistent with standard practice, as set out in the Cabinet Office’s Guide to Making Legislation.

Given the above, a separate government report risks duplicating work while putting an undue burden on all those involved. If issues are identified by regulators before the Government submit a post-legislative memorandum, and there is a need for government action, then an evidence-based response can be taken. I completely agree with the noble Lord about the importance of this and I thank him for raising this debate. However, I hope that he feels reassured and able to withdraw his amendment.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for that; it gives me some reassurance, and I am always happy to say when that happens. The aim of the amendment is to improve the Bill, not to undermine it. Some of the things that the Minister has suggested may happen are already happening. When figures are quoted quickly—such as 950 schemes of one sort and 4,826 of the other—the numbers do not seem so large, but they are pretty substantial in terms of those impacted.

We are worried about the impact of consolidation. I rather get the impression that the Minister is aware that there could be problems that need to be reviewed as we go along, and we will need time to assess what is happening. I take cognisance of the Minister’s reassurances: they take us along the same path as I am suggesting. We will have time, obviously, to review what is happening as time progresses. In the light of that, I beg to withdraw my amendment.

Amendment 184 withdrawn.

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[Baroness Altmann (Non-Afl)]

My Lords, I support and have added my name to the amendment from the noble Lord, Lord Davies. I support all his remarks, especially on the only excuse for not recognising that people need pre-1997 indexation going forward. There is a wrong that is being corrected; therefore, that wrong probably applies even more to benefits from the past. One of the reasons why I say “even more so” is because the members who have the most pre-1997 accrual are the oldest—by definition, they must be. They have much less time left to live and many of them have, sadly, already passed away. Therefore, to right this wrong by promising people money in future that they may never see, or will see almost none of, does not seem a solid way of righting a wrong.

I understand—I will go through this in more detail in the next group—that the Financial Assistance Scheme, for example, is supposedly funded by public money, while the PPF itself and employer contributions, in the form of the levy, provides the money for PPF compensation, but £2 billion from the scheme was transferred to the public purse. Thankfully, when we were trying to improve the Financial Assistance Scheme in 2005, Andrew Young recommended stopping annuity purchase, which had been happening and, unfortunately, transferred much of the money to insurers rather than putting it towards the Government to pay out over time. Nevertheless, the Financial Assistance Scheme itself represents some of the biggest losers and the ones with the most pre-1997 accrual.

Therefore, I urge the Government to recognise that the cost of the requirements in the amendment from the noble Lord, Lord Davies, are easily affordable from the PPF reserve—£14.5 billion is available. The cost estimate for this retrospective addition to the pre-1997 accruals that were not paid in terms of inflation uplifts could be around £500 million out of the £14.5 billion, depending on how the arrears are paid. I would be grateful to the Minister if she could confirm some of the Government’s estimates for what this would be; I have looked at the PPF’s estimates.

I add that the Financial Assistance Scheme does not only help those who affected by insolvency. The European court case was about insolvency, but the MFR protected employers who just wanted to walk away from their schemes before the law changed. Paying in only the MFR was hopelessly inadequate to afford the pensions. There was a brilliant campaign by the unions that went to the European court, and the Government had a great fear that they would lose that. Prior to that, we had an appeal by the workers of Allied Steel and Wire and many of the other schemes to the Pensions Ombudsman, who found in their favour and against the Government, and to the Public Accounts Select Committee. Then we had to go to the High Court, taking a case against the Government, and we won. We also went to the Court of Appeal, taking a case against the Government, and we won on behalf of those whose schemes had failed, whether the employers were insolvent or not, which means that they are all now included.

Even so, the Financial Assistance Scheme and the PPF have not recognised the pre-1997 inflation losses that have left many of these members with half their pension, or even less in some cases. I hope that the Government will look favourably on the amendment. I welcome it, and I am very grateful to the Minister for the recognition that we need to do something—there may be further consideration of that; we will come back to it in subsequent groups—to recompense for the losses of the past.

[Lord Palmer of Childs Hill (LD)]

My Lords, I wish only to say that I agree with the comments from the noble Baroness, Lady Altmann, and the lengthy exposition from the noble Lord, Lord Davies. I give them my support.

This group deals with technical amendments in the main, but they go to a question of basic fairness for pensioners whose schemes have failed. There are eight amendments in the Minister’s name, which shows that Bills can be amended, because the Government are amending their own Bill. Their amendments are no less important than those proposed on this side of the Room or those proposed by the noble Lord, Lord Davies, on the other.

The Government have accepted the principle of restoring inflation protection for pre-1997 service in the PPF and the FAS. These amendments ensure that the policy operates as intended, covering cases where the schemes technically add indexation rules that did not apply to all pre-1997 service.

The concern here is consistency and completeness. As has been said by other speakers, without these clarifications, some pensions will fall through the cracks due to historic scheme design quirks, rather than any distinction of principle. Any schemes that were and will be proposed will have quirks that are going to be found out in due course. I ask the Minister to confirm that the Government’s intention is to deliver equal treatment for those with equivalent service histories and that no group will be excluded because of technical anomalies.

[Viscount Younger of Leckie (Con)]

My Lords, I will mainly speak to and concentre on the government amendments in this group. I start by thanking the Minister for setting them out so clearly. We welcome the additional clarity that they provide.

In particular, these amendments ensure that the Financial Assistance Scheme and the PPF payments are treated consistently where a pension scheme formally required pre-1997 indexation but where that requirement did not in fact apply to the specific pre-1997 service for which financial assistance is being paid. Put simply, this is a technical clarification to ensure that indexation under the FAS reflects a member’s actual scheme entitlement, even where a scheme nominally provided for pre-1997 indexation but did not apply it to the service being compensated. We believe that this is a useful and sensible point of clarification—one that helps to ensure that the system operates as it should do.

However, I would be grateful if, when she closes, the Minister could confirm that it is now the Government’s view that these amendments are sufficient to close what may previously have been a gap in the original drafting. In particular, can she confirm that the Government are satisfied that these changes are enough to avoid confusion, to avoid the risk of legal challenge and to ensure that the Financial Assistance Scheme remains, in essence, what it should be—a safety net—rather than becoming an unintended upgrade?

I want also to make a broader process point, because these changes emerged relatively late in proceedings in the other place. I would welcome assurances from the Minister that the relevant stakeholders have been properly consulted and that the Government do not anticipate the need for further amendments on this issue in the Commons—or, indeed, as the Bill continues to go through Parliament. The Minister for Pensions, Torsten Bell, has previously stated that this change will affect around 250,000 members of the PPF, increasing their pension payments by an average of around £400 a year. The Minister cited that figure in her opening remarks, but is that still the Government’s firm and final assessment of the scale and impact of this measure? Perhaps the Minister could clarify that for us.

I also note the comments made by Sara Protheroe, the PPF’s chief customer officer, who said:

“While implementing this change will be no small task”—


that is probably an understatement—the PPF is

“fully committed to delivering this at the earliest opportunity if and when it becomes law”.

That welcome commitment raises an important practical question for the Government, does it not? What assessment has the Minister made of the extra resources that might be required? What support will be provided to the PPF to ensure that delivery can take place smoothly and without delay? Have the Government assessed whether additional resources, which could come via capacity or funding, will be required to implement this change effectively? If so, how do they intend to provide that support?

Regarding Amendment 203ZB, in the name of the noble Lord, Lord Davies, I will have more to say in subsequent groups. As the noble Lord said, there are amendments on the FAS and PPF in three different groups today. I hope that the Committee will forgive me if I delay my brief comments. I also listened carefully to the remarks from the noble Lord, Lord Palmer, and the noble Baroness, Lady Altmann. It is best that I make comments in later groups.

--- Later in debate ---

[Lord Davies of Brixton (Lab)]

I offer my support for the amendment moved and the other amendments proposed by the noble Baroness, Lady Altmann. She suggested that, in some ways, her amendments are more important than mine. I agree and I will come on to why that is so in a moment. I recognise the importance of the government amendments but, in the words of my noble friend the Minister, we have to recognise the impact of the lack of past increases on those affected.

Retrospection has been mentioned. It is a complete red herring. By its nature, any form of compensation will be retrospective. We are not going to compensate people for what happens in the future. The compensation being paid all too slowly to the Post Office managers is retrospective. The money being paid to the infected blood victims is retrospective, but we still have to pay. “Retrospection” is not a relevant word in this context. We are clear, and we all agree, that these people have lost out, to use the words of my noble friend the Minister, so retrospection is a red herring.

My noble friend the Minister also mentioned the significant impact on public finances. That is true because it has been defined in that way, but we are setting the rules. We are not being subjected to rules imposed by outside interests. If the Treasury does not have the wit or ingenuity to adjust the rules in a way that would allow for these payments from the PPF, which, in reality, would have no impact whatsoever on public expenditure, those who have been affected by the lack of increases will draw their own conclusions as to what the Government really want to do. My noble friend also said that this is a compensation scheme and that it was never designed to offer full redress. Well, that is what we are debating; it is exactly what we are saying is wrong and should be rectified.

The point that I wish to emphasise in this section is the need for urgency. That is why this amendment is the important one. To be brutal, we are dealing with a declining population. It has been estimated that more than 5,000 pensioners with pre-1997 rights are dying each year. We have to take action. Even my amendment, which I proposed to bring the pension up to its current real value, does not address the issue for these people because many of them will not be here. Compensation via lump-sum payments, along the lines suggested in these amendments, are, I believe, the way in which this problem should be addressed. I strongly support these amendments.

[Lord Palmer of Childs Hill (LD)]

My Lords, I will briefly speak in support of the amendments. I emphasise that they look at how to do this by lump-sum payments, rather than by increasing pensions. That is important. It is what we in my profession used to call “creative accountancy”. It seeks to achieve a result by lump sums, more or less off the Government’s balance sheet. There has been some blending of the funds in the past. It is a way of doing it in a creative accountancy way, largely getting rid of the problem by lump-sum payments. I hope that the Government will look at this in a creative way in order to provide some justice without incurring an ongoing debt.

[Viscount Younger of Leckie (Con)]

My Lords, I will speak to Amendments 187A, 188A, 189A and 203ZA tabled by the noble Baroness, Lady Altmann. She has long been a formidable and principled advocate for pension savers and much of the Committee will be sympathetic to the underlying concerns that she raised in her remarks. In particular, her consistent focus on member protection, governance and long-term security has materially shaped the debate on pensions policy over many years—and rightly so.

However—the Committee might expect me to say this—while I share the noble Baroness’s objectives, I am not persuaded that the amendments, as drafted, strike the right balance in this instance. I listened carefully to her remarks and her constructive suggestions as to how such payments could be made in the form of lump sums, whether through several lump sums or another way. As ever, she is constructive and positive, and I accept that. These amendments would use the Pension Protection Fund and the Financial Assistance Scheme to make retrospective lump-sum payments to compensate for unpaid historical indexation. We think that that would represent a significant shift in principle.

I listened carefully, as I always do, to the remarks from the noble Lord, Lord Davies of Brixton, who called retrospection a red herring. I was not absolutely sure what he meant by that. As I see it, retrospection is just that: retrospection. I think that it describes the payments in the way that it is meant to do. However, the PPF was designed as a forward-looking safety net, not as a mechanism for reopening past outcomes or making retrospective compensation payments. The Minister, to be fair to her, made this clear in her closing remarks in previous groups.

Such an approach would raise serious concerns about cost, complexity and consistency. Although we are somewhat clearer about costs from the helpful remarks from the Minister in the previous group, I am still uncertain—as, I think, other Members of the Committee are—about what the overall costs would be and what the impact would be on the levy and on other contributors. That uncertainty makes me cautious about supporting these amendments, which risk turning a clearly defined insurance mechanism into an open-ended compensation scheme. I suspect that the Minister—without wanting to steal her thunder—may take a similar view in her response, judging from her remarks in the previous group.

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[Baroness Bowles of Berkhamsted (LD)]

I welcome the noble Lord, Lord Pitt-Watson, to the Committee. His comments have inspired me to make a very small intervention. It is true that there is a lot of index investment, and inevitably that will capture things inadvertently, but there are now many more indices that will be socially responsible or environmentally responsible, and trustees can choose to use them.

If pension trustees collectively and pension funds made a little more noise and made more approaches to the index providers, we may well get indices that are more pushy in what they do for social and environmental protection. Ultimately, most of the time they are paid to invent an index or they are doing it for their own platforms, but I see an open door there to apply pressure.

[Lord Palmer of Childs Hill (LD)]

My Lords, I welcome the contribution of the noble Lord, Lord Pitt-Watson—may there be many in the future. In coming to the Moses Room for the pensions Bill debate, I never thought that I would have to declare an interest, but according to the Companion I need to say that I am the president of the Liberal Democrat Friends of Israel. I need to put that on the record because of what has been said.

I understand where we are coming from, but the trouble is that in the modern world, investments are global. You do not necessarily have one cup being manufactured in the UK or in the countries mentioned by noble Lords. Very often, you have bits of equipment manufactured here, in Israel, in America and elsewhere. I give the F35 aircraft as an example: the parts are assembled from all parts of the world. It becomes a global thing, and it is difficult in the global economy to identify where something is manufactured or whatever.

The point at issue—it is a good point—is that trustees have to make the decision. They will take into account all the points made by the noble Lord, Lord Hendy, and my noble friend Lady Janke, but at the end of the day they have a fiduciary responsibility to their members. This is not the first time this has happened. Hertfordshire very recently had an amendment to divest from one country. It was passed on the chairman’s vote. What happened? It went back to the pensions committee of Hertfordshire County Council, which decided that its fiduciary duty was not to make political statements but to look after the investments under its control. Whether it is Myanmar, Israel, China or Russia, it is a very slippery slope when you do that. So, as people involved in pensions, we have to leave it to the trustees to use their judgment, taking into account all the factors that the noble Lord, Lord Hendy, and others mentioned. It is a fiduciary judgment. Our view is that the fiduciary duty should be robust, not restrictive, focused on long-term member outcomes, informed by real-world risks and clear enough to avoid defensive or overly narrow decision-making. I do not support this amendment.

[Baroness Janke (LD)]

I belatedly state my interest: I am a member of the LGPS. I apologise; I should have said that at the beginning of my speech, so I just put it on the record.

Child Poverty: Faith-based and Voluntary Sector Organisations

Lord Palmer of Childs Hill Excerpts

Tuesday 3rd February 2026 Lords Chamber

[Baroness Sherlock (Lab)]

I am grateful to the noble Baroness for a great question. I agree with her point that the role of cultural organisations and the opportunity to participate and engage with others to do collective action in different ways are crucial to children’s development—and often those are the kinds of opportunities that children from wealthier families have that others would not. In response to the specifics, Sunderland being very near to Durham, I would be delighted to learn more about what is happening there. I need to go and find out. My office can take note.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for her reply about how the charities will work, but what worries me is how small, local charities will be included in this. It rather looks as if we are encouraging the larger charities to do all the good work that they do but, as the other questioners said, there are a lot of local charities. I would like to know that they are going to be included in this process.

[Baroness Sherlock (Lab)]

That is a great question, if I may say so—there are some good questions coming out today. We absolutely are not interested in talking solely to large charities. We are interested in talking to them too, but we need to engage locally. As I am sure the noble Lord knows, one way that this Government are going about our work in the DWP is that we are devolving quite a lot. We are aware that much of the work we want to do can be done much better at a local level. For example, it is much clearer in Manchester than it is in London what should happen in Greater Manchester. So we are devolving and encouraging local organisations in many of the pilots that we are running to engage with local charities, but we will also often engage with organisations that themselves are umbrellas, which can bring together local charities to come and talk to us.

The noble Lord makes a really important point. Having worked in the voluntary sector myself for a long time, I know that there are some insights that national charities give that are really helpful, but other things you find out only when you go to the coalface. Just last week I visited a small charity in Fife that is doing amazing work, and I learned things from it that I would not have learned from the biggest charity. So that is a good point, and I take it on.

Two-child Benefit Cap: Foreign-born Children

Lord Palmer of Childs Hill Excerpts

Tuesday 3rd February 2026 Lords Chamber

[Baroness Sherlock (Lab)]

My noble friend is so right. The cost of failing to tackle poverty is too high—for those children but also for our country. Hungry children do not arrive at school ready to learn. Poorer children are more likely to have mental health difficulties by the age of 11. They are more likely to have poorer employment outcomes and earn less. She is absolutely right: the rise in child poverty in England between 2015 and 2020 is estimated to have led to 10,000 more children entering our care system, with all the consequences for those children, as well as for the country and for the Exchequer. A child’s health opportunities and prospects should not be determined by how many siblings they have or by the accident of their circumstances. We will lift children out of poverty and this country will benefit from that.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for that answer. To follow on from that—to get to the crux of the matter—could she tell us what assessment has been made of the cap’s overall effect on child poverty? Can she clarify and put on the record what the actual effect was and how we can benefit by the removal of the cap?

[Baroness Sherlock (Lab)]

My Lords, the noble Lord is absolutely right about the effects of this. The Labour Party in government pledged to tackle child poverty. What this Government have brought forward is a child poverty strategy which, including removing the two-child limit, will bring another 550,000 children out of poverty by the end of this Parliament. That is what we are here to do; that is what we are shooting for.

I stress that this is about fairness. Of course, our benefit system is there to support those for whom this is their home; those who contribute. Of course it is there to be fair, but it is also there as a safety net, and our job is to get that balance right. In the case of children, it surely has to be right to tackle child poverty, to give them the opportunity and for the country to benefit from that.

Pension Schemes Bill

Lord Palmer of Childs Hill Excerpts

Committee stage
Tuesday 3rd February 2026 Grand Committee

[Baroness Neville-Rolfe (Con)]

My Lords, it is fair to say that I am not keen on Chapter 4 of the Bill, which appears to allow the state to trample on and prevent the establishment of smaller funds, and, if necessary, requires their assets to be moved, presumably to another fund. “Squashing new entrants” was the telling phrase used by my noble friend Lady Noakes. I very much hope that the Minister will be able to provide some reassurance.

I support the amendments in the name of my noble friend Lady Noakes and have added my name to most of them. It is essential to permit the regulations to be pro- competitive rather than over-exclusionary, and for the review required by Clause 43—the timing of which we are yet to hear about—to consider the competitive landscape for pension scheme provision.

It is also important that the regulations made encourage innovation, as Amendment 170 would. The substantial £25 billion minimum provided for in the Government’s reforms seems set to deter such innovation—innovation that is characteristic of smaller, growing operators. We have heard that, at length, on several days, but we have not yet received an adequate answer. The noble Baroness, Lady Altmann, has already raised some good points about other risks that may arise from the proposed arrangements.

My noble friend Lady Noakes rightly suggested that the Pensions Regulator should be made to consider the competitiveness of new entries. I share her praise for the fintech sandbox, although I would say that that was a long time ago—indeed, when I was a Treasury Minister about 10 years ago. I am, however, less sure about the FCA’s overall success. I have therefore added my name to my noble friend Lord Younger’s stand-part notice, which questions the need for Clause 45. The Government’s Explanatory Notes are far from helpful and the implications of this clause are unclear. Why does it extend the FCA’s supervisory jurisdiction to default arrangements under Chapter 4? What, if any, new delegated powers are being given to it?

I have encountered a lot of problems with the FCA over the years. The truth is that I have not found it business or fund-friendly. It presents itself as the champion of the consumer, but adds cost, delay, bureaucracy and uncertainty in a way that often raises prices and returns to the very consumer that it was set up to protect. I am therefore of the view that its role should be minor and constrained. What is the background and rationale for this clause? We need to know more if we are going to support it.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank everyone for their contributions. It might take 300 years to get it right, but we do not have 300 years; we are trying to get it right in the course of a few meetings, as the noble Lord, Lord Fuller, pointed out. The noble Lord, Lord Kirkhope, gave us the view from the coalface with regard to the decisions that trustees have to take and about trustees working on behalf of their members. The key concern, which is why I support these amendments, is that the default should be shaped around members’ needs and outcomes, not regulatory convenience or market consolidation by default.

The amendments in this group emphasise the importance of competition, innovation and transparency. They highlight the need for clear member communication before defaults are subject to mandation, for a value-for-money framework to be in place first and, I am afraid, for Ministers to justify why mandation is limited to automatic enrolment defaults. The amendments seek to put some meat on to what this Bill is meant to do. They are, I think, necessary to make sense of the precautions that are needed if this Bill goes forward.

[Viscount Younger of Leckie (Con)]

My Lords, I hope that the Committee will think that it makes sense if I begin with the four amendments in this group tabled in my name. I start with our probing stand-part question on Clause 45. This is a short clause, but an important one. It makes changes to the Financial Services and Markets Act 2000. The purpose of the question is simply to understand the practical effect of those changes, particularly in the context of the wider programme of consolidation and reform of assimilated European Union law.

My noble friend Lady Neville-Rolfe, who I am pleased to say is in her place and has spoken so eloquently, may feel a certain sense of déjà vu, having spent a considerable time on the Front Bench examining precisely these issues. My questions to the Minister are therefore straightforward. What, in practical terms, does Clause 45 change in the operation of the Act?

I start with some fairly basic questions for clarification. Will further secondary legislation be required to give effect to these provisions? If so, do the Government have a timetable over which they envisage this process taking place? How does this clause interact with the statutory instruments recently considered by the Grand Committee as part of the wider reform programme? This is a live and important area. As assimilated European Union law becomes domestic law and increasingly interacts with our financial institutions, the FCA and other relevant regulators, it is essential that Parliament has clarity on how these changes fit together and where accountability lies.

--- Later in debate ---

There should have to be quite a high likelihood that members and others will be better off after changes. I am very sceptical about providers being able to make unilateral changes; there needs to have some evidence behind that. My amendment uses the phrase “there is evidence”, which does not mean that you have to have 100% evidence on one side of it, but it cannot just be a matter of convenience—a matter that it is easier for the providers—and therefore it is bound to be easier for the members and the scheme as a whole. That is quite simple and it needs investigating. I hope that, if the best interests test is to stay there, the Government will ensure that a high standard has to be passed, not one that is a minority standard.

[Lord Palmer of Childs Hill (LD)]

My Lords, I have just a short comment. The Minister needs to explain why existing protections are insufficient and how this power will be constrained in practice. The concern is that lowering the evidential bar for intervention risks undermining legal certainty, which we have before intervention, and then trust in the scheme governance. An override of contractual terms should be firmly evidence-based and used sparingly. When there is a contract and we are saying that the contract could be overridden, we need to know with some facts in what circumstances it can be overridden for some wider purpose which the Government think is needed. I do not think that is proven as yet.

[Viscount Younger of Leckie (Con)]

My Lords, I speak briefly to Amendment 175, tabled by my noble friend Lady Noakes and supported by the noble Baroness, Lady Bowles. This amendment relates to new Section 117D, the best interests test as set out in Clause 48. This new section establishes the test that must be satisfied before a unilateral change can be made. It requires a provider to reasonably conclude that such a change is reasonably likely to lead to

“a better outcome for the directly affected members … (taken as a whole)”

and to

“no worse an outcome for the other members of the scheme”,

also taken as a whole.

Many of the questions that my noble friend and the noble Baroness have raised reflect concerns that have been put to us during scrutiny of the Bill. In particular, there remains uncertainty about what, in practice, is meant by a better outcome, and how that judgment will be assessed, evidenced and challenged. I say again, as we have said on different parts of the Bill, that we believe we need definitions and clarity.

We will listen carefully to the Minister’s response on this point. The clarity and robustness of the best interests test are critical, particularly where changes may occur without the explicit consent of individual members. If that clarity is not forthcoming, this may well be an issue to which we will need to return.

--- Later in debate ---

[Lord Davies of Brixton (Lab)]

Once again, I find myself in the position of being in broadly the same area as the noble Lord, Lord Fuller. I agree with much of what he said. We can always be in favour of reviews. The only substantial objection is that the Secretary of State—or more accurately, the hard-pressed officials—has better things to do, particularly with having to implement the Bill when it is an Act.

The Pensions Commission is also crucial. The noble Viscount, Lord Younger, for whom I have a lot of respect, challenged me on why I am not doing more on adequacy, in effect. Of course, the answer is that I fully support the Pensions Commission; that is where the focus should be on that area. I think my noble friend the Minister is aware of some of my views on the level of inadequacy in pension provision, but the commission is where it should be at.

Pensions are inherently political. I make no apology for making political points. I am against the idea of moving towards a joint regulator. There are two broad types of pension provision: individual contracts and employer-sponsored collective provision. I am very much in favour of the latter as opposed to the former. The former has, and always will have, severe problems, whereas collective provision is what has led the high standard of private provision across, broadly, half of the working population.

The problem with having a single regulator is essentially cultural. One or the other approach is bound to predominate in its thinking. It is impossible to ride two horses, unless you are in a circus, and that is not where we want to be. We need a regulator for collective employer-sponsored provision, and a regulator for market-based provision. That is what we have got so, in a sense, in my few remarks I have already carried out the review that has been called for and reached a satisfactory solution.

[Lord Palmer of Childs Hill (LD)]

My Lords, what worries me is that the noble Baroness, Lady Coffey, says we should grab the challenge. I am not sure that I am ready to grab the challenge and not convinced that we should abandon, in any way, the Financial Conduct Authority. I wonder what representations have been made by the FCA on this. I would like to hear how the FCA feels about the Pensions Regulator taking over and what has happened in the past.

[Baroness Coffey (Con)]

I can assure the noble Lord that the FCA will not give anything up. In fact, it would probably rather swallow the Pensions Regulator.

[Lord Palmer of Childs Hill (LD)]

Maybe that would be a good thing. I am not convinced that the regulator pushing away from primary legislation to regulation is necessarily the way forward. I am not convinced that what has happened to date has failed. Therefore, I am not sure why we want to change this without adequate proof. The idea that the FCA wants to swallow up everything else is fairly normal in the gladiatorial forum that we have. I would like to see what the FCA and others have to say about this before we make a final decision.

[Baroness Stedman-Scott (Con)]

My Lords, I speak to both Amendments 180A, tabled by my noble friend Lady Coffey, and Amendment 206, which stands in the name of my noble friend Viscount Younger of Leckie and myself. Both amendments address the regulation of pensions and how the regulation is best exercised in the interest of scheme members and future pensioners.

It was the intervention of my noble friend Lady Coffey at Second Reading that first prompted me to reflect more deeply on the role of regulators. As my noble friend argued then, and has argued again today in speaking to Amendment 180A, this Bill misses a significant structural opportunity by retaining two separate pension regulators. I agree with her. There is something inherently odd about the fact that very similar pension products can be treated differently depending on whether they fall within the remit of the Pensions Regulator or the Financial Conduct Authority. That observation is not controversial; it is simply a reflection of how the current system operates.

I recall clearly the passage of the then Pension Schemes Bill in February 2020 and remember responding to amendments from across your Lordships’ House by explaining that personal pension schemes were regulated by the FCA, rather than the Pensions Regulator, and that imposing requirements on personal pension providers through that legislation would risk creating a patchwork of overlapping regulatory oversight. Providers, it was argued, would otherwise be required to respond to two separate regulators in relation to the same activity. That was the Government’s position at the time, and it illustrates that the existence of regulatory fragmentation in this area is not a matter of dispute.

A great deal of work has gone into managing the fragmentation, with strategic documents, dating back to 2018, seeking to grapple with the issue. The FCA and the Pensions Regulator have published joint regulatory strategies explicitly acknowledging the complexity that arises where their remits intersect and the need for close co-ordination. More recently, an independent review of the Pensions Regulator in 2023 again highlighted the challenges inherent in this divided regulatory landscape. Taken together, these developments point to structural issues in the regulatory ecosystem that can, at the very least, create confusion and the risk of inconsistency.

It was on the basis of that experience in government and of careful consideration since then that I sought to identify what might realistically be done in this Bill. I came to the conclusion that Amendment 206 represents a proportionate and pragmatic compromise. It would require the Government to establish a formal published protocol setting out clearly how the Financial Conduct Authority and the Pensions Regulator co-ordinate, how responsibilities are divided between them and how they communicate when regulating the pensions industry. The evidence shows that there is complexity, overlap and, at times, confusion between the two regulators. Stakeholders frequently complain of unclear lines of responsibility and the regulators themselves openly acknowledge that co-ordination is difficult, hence the repeated reliance on joint strategies and informal arrangements.

It was our sense that the problem is one not of outright contradiction but of opacity, complexity and accountability. Amendment 206 is, therefore, carefully targeted at the problem, which is clearly evidenced. It seeks to improve co-ordination and clarity without asserting a level of regulatory failure that has not yet been conclusively demonstrated. That does not place it in opposition to the argument advanced by my noble friend Lady Coffey; indeed, I would be very happy to work with her, as we did so constructively on previous pension legislation, to strengthen this area further.

In my view, a formal co-ordination protocol has three important virtues. First, it can evolve over time as the regulatory landscape changes. Secondly, it can be tightened if problems persist or new risks emerge. Thirdly, it can itself become the evidence base for any future decision to pursue more fundamental consolidation of regulatory functions, should that ultimately be judged necessary. For those reasons, I commend Amendment 206 to the Committee and urge the Government to see it not as an obstacle but as a constructive and proportionate step towards greater clarity, accountability and confidence in the regulation of pensions.

Women’s State Pension Age Communication: PHSO Report

Lord Palmer of Childs Hill Excerpts

Monday 2nd February 2026 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, I thank the Minister for repeating the Statement, but it does not, in my view, completely address directly the issue that lies at the heart of the anger felt by many WASPI women. I am assured that the maladministration identified by the ombudsman, and the associated question of a financial remedy, arose from decisions taken under a Labour Government that were the responsibility of Labour Ministers. In the years that followed, there was notable and sustained support from Labour Members for the WASPI campaign, including calls for compensation, voiced by individuals who now occupy the most senior positions in government.

Now that Labour is in power, that position appears to have been abandoned. The result is not merely disappointment, but a profound sense of betrayal. It is no wonder that WASPI women are furious. At no point in the Oral Statement, as far as I can see or understand, was this reversal acknowledged. Instead, attention was diverted towards general references to changes in the state pension age, which did nothing to address the specific findings of maladministration or the expectations that were so clearly raised.

There is a strong sense of frustration surrounding this issue, not only among Members of this House but, more importantly, among the WASPI women. Much of that frustration arises not simply from the substance of the decision but from the manner in which it has been handled and communicated by the Government. From welfare reform to the winter fuel payment, and now this, a pattern has emerged of poor communication and delayed decision-making. Too often, it is not the policy itself that causes the greatest anger but the uncertainty, delay and lack of clarity that surround it. Indecision is itself a decision. In this case, it has meant leaving people’s lives and expectations suspended for months.

In recent months, expectations appear to have been raised only to be lowered again. Following the ombudsman’s report, many campaigners believed that a different outcome was genuinely under consideration, only to be told once more that nothing had changed. The Minister will recall suggestions that decisions on this matter were left unresolved until after the general election in 2024. That is not entirely accurate. Statements made before the election set out the Government’s position with some clarity, which makes it legitimate for WASPI women to ask why more recent communications appeared to imply that the issue and situation remained open.

Against that background, can the Minister explain how the Government now intend to communicate their position clearly and directly to WASPI women? Will letters be issued setting out the decision and the reasons for it? If so, when and in what form will that communication take place? Given the strength of feeling among those affected, this must be treated with the gravity it deserves. More broadly, there is a sense that poor managerial experience has characterised the handling of this matter, further undermining trust.

That damage has been compounded by the contrast between earlier rhetoric and the position now being taken. The Deputy Prime Minister and the Justice Secretary spoke of a cliff edge facing WASPI women. The Foreign Secretary said she was fighting for a fair deal. The Chancellor said she wanted justice. The current Secretary of State for Work and Pensions publicly associated himself with MPs campaigning for a better outcome. Those who once stood beside them now appear, in their eyes, to have turned away.

I know that the Minister referred to pension credit and the importance of take-up, and I completely share that with her. I did my very best when I was in her position to make sure that we did everything we could to ensure that pension credit was taken up and increased. I am not sure if progress has stalled or whether there has been any improvement, so can the Minister clarify the position on take-up of pension credit and whether this can be used to placate some of these genuine WASPI women?

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for bringing this Statement to the House. The Government say the WASPI women should have known about the changes. I am reminded of a quote from the book The Hitchhiker’s Guide to the Galaxy:

“But the plans were on display … you found the notice, didn’t you? … It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard’”.


Another relevant quote from the same book said:

“All the planning charts and demolition orders have been on display at your local planning department in Alpha Centauri for 50 … years”.


The issue here is whether these women were communicated with adequately. Some 3.6 million WASPI women have been badly treated. They were given some hope; we have an ombudsman who made a recommendation to provide some justice and pay some compensation. Can the Minister say why this recommendation has been ignored? We have heard apologies but no compensation.

If you were a woman who knew that, at a certain age, you would receive a pension you probably did not give it another thought that the rules had changed. Of course, lots of announcements were made, and lots of letters were sent—sometimes belatedly, as the ombudsman said—but the truth is that the messages were not received or understood. The ombudsman has recommended compensation of £1,000 to £2,950 per person. I ask the Minister, very bluntly, why this recommendation has not been implemented. It is not a question of justice, but a reluctance to spend money on a group of people who cannot fight back.

Can the Minister take back to her colleagues in the department that there is a feeling—I hope—across this House that the WASPI have been maltreated and that the least they should expect is for the recommendation of the independent ombudsman to be put into effect? It is not enough, in my view, but it has come from the ombudsman, and I would like to hear what reasoning the Minister can give for ignoring this. I hope that she will take back to her colleagues in the other House and in the department the feelings of this House that the ombudsman’s decision should be honoured.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I am grateful to both noble Lords for their questions. Last November, the Secretary of State for Work and Pensions told Parliament that the Government would make a new decision in response to the ombudsman’s findings on state pension-age communications. That followed relevant evidence coming to light as part of legal proceedings challenging the original decision announced in December 2024. The Secretary of State has now concluded the process to make a new decision, and there is a copy of the Government’s full response in the Library.

We need to be clear as to exactly what the ombudsman did and did not investigate. The ombudsman did not investigate the decision, first taken in 1995, to equalise the state pension age nor to accelerate the increases. There are different views about the raising of the state pension age and about the decision of the coalition Government in 2011 to accelerate equalisation and the rise to the age of 66. However, that is not the subject of the ombudsman’s decision. What the ombudsman investigated is how the change in state pension age was communicated to the women affected and whether, within a specific and narrow time period, there was maladministration and injustice, and if so, whether it warrants compensation. The ombudsman concluded that the department’s communications met expected standards between 1995 and 2004. However, it found that between 2005 and 2007 there was a 28-month delay in the DWP sending personalised letters to the women affected. The ombudsman found that this was maladministration. We accept that those individual letters could have been sent earlier and the Secretary of State has apologised for that. We also agree with the ombudsman that the women did not suffer any direct financial loss from the delay.

The question is about the impact of the delay in sending those letters. However, the evidence taken as a whole, including that from 2007, suggests that the majority of 1950s-born women would not have read and recalled the contents of an unsolicited pensions letter, even if it had been sent earlier. Further, the evidence also suggests that those less knowledgeable about pensions, the very women who most needed to engage with a letter and where it might have made a difference, were least likely to read it. An earlier letter would therefore have been unlikely to make a difference to what the majority of women knew about their own state pension age. Indeed, the 2007 report concluded that automatic pension forecast letters had only a negligible impact on pensions knowledge and planning and the department stopped sending them.

The evidence also shows that the vast majority of 1950s-born women already knew that the state pension age was increasing thanks to a wide range of public information, including in leaflets, through education campaigns, in GP surgeries, on TV and radio, in cinemas and online.

To compensate specifically only those women who suffered injustice would require a scheme that could reliably verify the individual circumstances of millions of women. That includes whether someone genuinely did not know the state pension age was changing and whether they would have read and remembered a letter from many years ago and acted differently. It would not be practical to set up a compensation scheme to assess conclusively the answers to those questions.

The alternative might be to introduce a targeted scheme, which we considered could possibly allow people to self-certify, but that could not be done in a way that was fair and represents value for money. Even if we asked women to self-certify that they experienced injustice, we would have no way of verifying it. As for a flat-rate scheme, it would cost up to £10.3 billion and would simply not be right or fair, given that it would be paid to the vast majority who were aware of the changes.

I fully recognise the strength of feeling on this issue. Many women born in the 1950s have experienced significant disadvantage, not least in the labour market. We will continue working towards equality for women in the workplace now and in future, and ensure that those with lower pension outcomes due to the inequalities they have faced in the past receive the right support. We are delivering support to low-income pensioners and pensioners more broadly by increasing the rate of the state pension, supporting the poorest through pension credit, and investing more money in the NHS to reduce waiting lists and to strengthen vital services.

For example, as the noble Baroness, Lady Stedman-Scott, mentioned, our pension credit take-up campaign has been promoted to eligible pensioners and their friends and family. That is having a good effect and I would be very happy to talk more on that if noble Lords are interested. We are seeing significant numbers of increases in claims and awards, which is really helpful.

I turn to a couple of the other specific points that were mentioned. The noble Baroness challenged us as to why Labour in opposition took a different view. I will just say two things to her. The first is that she will appreciate, having been both in opposition and in government, that there is information that one has in government that one does not have when one is in opposition. We understand that many people are unhappy with what has happened. Although she is suggesting that it is entirely Labour’s fault, I suggest to her that quite a bit of the anger is about the rise in the state pension age and, in particular, the decision of the coalition Government to accelerate that in 2011, which meant a significant number of women finding that their state pension age went back more quickly than they had expected.

This decision is not about that; we need to separate the two things. We considered the ombudsman’s report very carefully, not just once but twice, and gave it due and proper process, including the information that Ministers were not able to see before they were in government. We concluded that it is right to apologise for the maladministration, but we believe that the decision we have taken on remedy and compensation is the right one.

In response to the noble Lord, Lord Palmer, that is the reason we made the decision. We accepted the ombudsman’s finding of maladministration. We did not accept the ombudsman’s approach to injustice for the reasons that I have explained about the impact of the not sending of those letters. The finding was narrowly about a 28-month delay. Because the evidence suggests that the majority of women were aware that the state pension age was changing, we do not accept that it is possible, on that basis, to construct a compensation scheme that would be targeted at those who experienced injustice.

The noble Lord, Lord Palmer, challenged me about the ombudsman. The ombudsman did their job, and the findings were fully and properly considered, but decisions on a compensation scheme of this scale are properly for Ministers and the Government to take. That is the case and, indeed, always will be.

This is a challenging issue, but it was right for the Secretary of State to review the evidence and to reach a decision based on due process and on the body of evidence. Looking forward to the future, we are taking important steps to support women in retirement to make sure that things like this do not happen again and to help them to build a better life for themselves and their families.