Household Support Fund
Lord Young of Cookham Excerpts(4 months ago)
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Baroness Sherlock (Lab)
My Lords, I assume that the noble Lord is talking about a vote in the other place on the two-child limit. I certainly would not comment on the decisions of the Chief Whip here—never mind at the other end—who is of course always right. I simply take gentle issue with the suggestion that people taking a particular view are putting party before country. I recognise that there is a concern about the two-child limit, but our new Prime Minister could not have shown a greater commitment on child poverty. One of the earliest major announcements he made, in his second week, was to create a major commission on child poverty, with Ministers drawn from across government. It will of course look at important questions such as household income, but poverty is not just about that. It is going to draw in and look at education, childcare and health—all the things that prevent our children having the best start in life—and I am really excited about that.
Lord Young of Cookham (Con)
Does the Minister recall that, the last time we debated this, the outgoing Government agreed to extend the household support fund for a further six months until September? Does she recall that, at that time, I intervened to suggest that, instead of a cliff edge at the end of September, there should be some form of taper? Will the Government consider that?
Baroness Sherlock (Lab)
I remember that very well. In fact, I read the Hansard of the last time this came up and noticed that the noble Lord made that point. When I looked at how the financing had been provided, I saw that the money had been provided for only six months. Therefore, there is currently nothing in the budget to go beyond that. But I take his broader point about cliff edges and short notice being unhelpful. As I said, we need to get back to a space where we can support councils with longer, multiyear funding to give them the kind of stability they need but simply have not had recently.
Health and Disability Reform
Lord Young of Cookham Excerpts(6 months, 4 weeks ago)
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Viscount Younger of Leckie (Con)
I know that we— the noble Baroness, Lady Bennett, and I—have had several sessions across the Chamber, and I say gently that, for her to say that all the instances of mental health that have cropped up are purely to do with decisions that the Government have taken wholly misrepresents the situation. She will know, as I think most of the House will, that it is much more complex than that. It is linked to all kinds of issues: for example, the rise in social media and the fact that more young people are on their phones is talked about a lot. So I might chide her that she might have mentioned that, for example.
This allows me also to give one reason why now is the time to look at PIP, given the very sobering figures that I gave out slightly earlier. I now want to go a little further. If we did nothing, over the coming four years PIP spending alone is forecast to rise by 63%, from £21.6 billion to £35.3 billion. That would be for the period 2023-24 right up to 2028-29. But it is not just about the cost. As I said earlier, I hope fairly, it is important that we review PIP to be sure that it is directed in the right way, targeted at those who need it most, delivering the right sort of support for people with disabilities and health conditions and, as I said earlier, providing better value for the taxpayer.
Lord Young of Cookham (Con)
My Lords, I agree with what my noble friend has just said and the point made by my noble friend Lady Bottomley that, whoever is in power, the present regime is financially unsustainable. However, I also agree with what the noble Baroness, Lady Sherlock, said at the beginning: the tone and language that one uses when discussing reform is crucial. My noble friend gets that right, but can I ask him about the proposals for the so-called sick note?
At the moment, yes, GPs are under pressure, but they at least know the patient and have access to a wide range of information before they come to their decision. Under the proposals, this will be done by a DWP assessor, who will not know the claimant and will have a limited amount of background information—and relatively limited interaction with the claimant. How confident is my noble friend that that process will be fair and robust?
Household Support Fund: Children’s Bed Poverty
Lord Young of Cookham Excerpts(8 months, 1 week ago)
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Viscount Younger of Leckie (Con)
Of course I will take that point back, but the noble Baroness will be aware that much thought and work is going into this area. In terms of targeted support locally, she will know that the Government have delivered a balanced package of funding through the local government finance settlement for this coming year, 2024-25, which makes available up to £64.7 billion for local authorities in England to target in the right place. I reassure her that this targets the deprived areas of England, particularly the upper decile of the index of multiple deprivation, and they will receive 18% more per dwelling in available resource than the least deprived areas.
Lord Young of Cookham (Con)
My Lords, I very much welcome the Government’s decision to extend the household support fund for a further six months, but further to the right reverend Prelate’s supplementary question, I ask: what steps can my noble friend take to ensure a smooth transition, particularly for families with children, when the scheme comes to an end on 30 September—which may be a sensitive time in the political calendar?
Viscount Younger of Leckie (Con)
I am well aware of the sensitivities if decisions are made for that particular time. We will have to wait and see. But as inflation falls, as in the good news yesterday with the fall to 3.4%, and with evidence of some price falls and, as the Prime Minister said yesterday, some evidence of some green shoots, notably with energy prices coming down as well, the Government will want to take careful stock over the next few months. Of course, any decision on the future of the household support fund after 30 September will be a matter for the Chancellor when he deems the timing to be right.
Disability Action Plan
Lord Young of Cookham Excerpts(9 months, 3 weeks ago)
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Lord Young of Cookham (Con)
My Lords, the Disability Action Plan deserves a slightly warmer welcome than it has received so far. The 32 actions will make a difference in the daily lives of disabled people, but we have further progress to make.
I will pick up on two points, one of which was touched on by the noble Baroness, Lady Brinton. The summary of the consultation findings at page 18 says:
“The need for more disability inclusion in local and national planning was another strong theme”.
I do not know whether my noble friend was in his place yesterday when there was an exchange about the building regulations and the proposed improved accessibility for new homes. Everybody welcomed the decision to move to the new standards, but there was some difficulty in finding a date when they would be introduced. Can my noble friend liaise with his colleagues in DLUHC and use his influence to ensure that the remaining consultations that still need to take place can be done very quickly so that we can have a start date for these new accessible homes?
The second point relates to parents with a child who has a learning difficulty. I welcome the recent announcements extending free childcare, which will be rolled out first in April, then in September and again next year. There is some anecdotal evidence that parents with a child who has a learning disability are finding it difficult to find a place in a nursery or other daycare facility for their child. I know that there is some assistance available if the child gets DLA. There may be other forms of assistance to day nurseries in other circumstances, but they sound a bit bureaucratic. Can my noble friend liaise with colleagues in the DfE to make sure that children under five with a learning disability get the support they need? They need that support every bit as much as, if not more than, children without a learning disability.
Viscount Younger of Leckie (Con)
I thank my noble friend for not one but two questions. Perhaps I can answer the first one by saying, as I think my noble friend said, that the Government have set out their intention to mandate higher accessibility standards for all new homes by raising the minimum standard in building regulations in England. I am not sure that I can help with the date, but I will certainly take that back to my colleagues in DLUHC. We will consult further on the technical changes needed to mandate the higher M4(2) accessibility standard, on changes to statutory guidance and on our approach to how exceptions will apply. Making the M4(2) the new default standard will require additional features, including a living area at entrance level, step-free access to all entrance-level rooms and facilities, and wider doorways and corridors, as well as clear access routes to windows. I hope that helps my noble friend.
He asked about day nurseries and support for disabled children under five. I happened to hear the Secretary of State for Education say that she was confident about the demand for nurseries being in a better place. I had better write to my noble friend about this specific issue. I hope I can provide similar reassurances.
Household Support Fund
Lord Young of Cookham Excerpts(10 months ago)
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Viscount Younger of Leckie (Con)
I have outlined some of the measures. Perhaps the noble Baroness is alluding to the benefit cap, which we always keep an eye on. We believe that this provides a very strong work incentive and fairness for hard-working, tax-paying households and encourages people to move into work where possible. I reassure the noble Baroness that we are keeping that under review. The Secretary of State is not minded to review the levels, as there is no statutory obligation to do so. There was a significant increase, as the noble Baroness will know, following the review in November 2022.
Lord Young of Cookham (Con)
My Lords, the house- hold support fund has given a lot of help to vulnerable families, not least unpaid carers. I very much hope it will be possible to continue it. However, if the resources are not there, could my noble friend consider some sort of tapering, rather than a sharp cut-off at the end of March?
Viscount Younger of Leckie (Con)
My noble friend is right that we should continue to recognise the important role that unpaid carers play around the country. Our guidance asks that local authorities consider the needs of various households, including unpaid carers. The Government have increased carer’s allowance by around £1,200 per year since 2010-11.
Employment and Support Allowance
Lord Young of Cookham Excerpts(1 year, 1 month ago)
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Lord Young of Cookham
To ask His Majesty’s Government what progress has been made on getting those on Employment and Support Allowance into work.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, in 2017 the Government set a goal to see 1 million more people in work by 2027. Last year, we surpassed that goal five years early. The Government have a range of initiatives to support disabled people and people with health conditions to start, stay and succeed in work. This includes work to further join up employment and health systems, including employment advice in NHS talking therapies and individual placement and support in primary care.
Lord Young of Cookham (Con)
My Lords, I welcome the initiatives taken since 2017 to help back into work those who can and to support those who cannot with appropriate measures without penalising them. But is there not a worrying underlying trend in a country that ought to be getting healthier? There are now 2.5 million people out of the workforce due to long-term sickness; that figure is up half a million in the last four years. Last year, there were double the number of new claimants for disability as against the year before. In the last six months, over half those under 24 in work have taken time off because of mental illness. In the last Budget, I welcomed the £2 billion allocated to support back into work those in poor health, but can my noble friend explain how that initiative will reverse the trend I have mentioned in the interests of those who are out of work but also in the interests of the wider economy?
Viscount Younger of Leckie (Con)
The House will not be surprised when I say that that is one of the Government’s biggest challenges—that is very clear. People with long-term sickness are some of the hardest to help and often face multiple barriers in returning to the labour market. There is a range of complex and interacting factors that contribute to the rise in economic inactivity due to long-term sickness, such as changes in population demographics and the increasing prevalence of work-limiting health conditions. On my noble friend’s question, regarding the support in the spring Budget, announcements included Work Well and universal support, and we have increased our support in particular for helping people to get back into work, where they can, with additional work coach time. There are other multiple national strategies and initiatives, including Excellence in Continence Care and the major conditions strategy, and we are moving at pace on a number of these initiatives.
Pensions Dashboards (Amendment) Regulations 2023
Lord Young of Cookham Excerpts(1 year, 4 months ago)
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, I am pleased to introduce this statutory instrument, which, subject to approval, will make amendments to the Pensions Dashboards Regulations 2022. The instrument removes the staging profile from the 2022 regulations and introduces a single connection deadline of 31 October 2026 for relevant occupational pension schemes to connect to pensions dashboards.
The successful introduction of automatic enrolment more than a decade ago, combined with a trend towards people working multiple jobs in their lifetime, has seen a substantial increase in smaller pension pots. Without intervention, the number of lost and forgotten pots will remain exactly that—lost and forgotten—and financial planning for retirement will become still more complex. Pensions dashboards will help hard-working savers to locate pension pots that they have accumulated over time, reconnecting them with lost and forgotten pension pots and supporting better planning for retirement. People will be able to view their various pensions, including their state pension, securely and all in one place online.
There can be no doubt that pensions dashboards have the potential to become a game-changer that will revolutionise the pensions landscape. The UK is not alone in realising the enormous potential that pensions dashboards bring. Countries such as Denmark, Israel and Australia have all established pensions dashboards as a feature of their financial landscape. However, the UK’s pensions industry is arguably unique by virtue of its scale and complexity. We should not underestimate the ambition and challenge of securely connecting thousands of schemes and of presenting data in a coherent manner, from state and private pensions, for the benefit of savers. We anticipate that, once all schemes in scope of the regulations are connected, the pension records of over 71 million memberships from relevant occupational pension schemes and providers of FCA-regulated entities will be accessible to people at the touch of a button, at a time of their choosing.
The reason for bringing forward these amendment regulations is that, at the end of last year, the Pensions Dashboards Programme, which is responsible for delivering the digital architecture that underpins pensions dashboards, informed my department that more time was required to complete the build of the digital architecture. The PDP faced several key issues: the technical solution has not been sufficiently tested and there is still work to do to finalise the necessary supporting documentation and to get the necessary systems in place to support the pensions industry with the connection process. It was concluded that more time was needed to successfully deliver dashboards and that a reset of the programme was required.
The Minister for Pensions subsequently issued a Written Statement in March 2023, announcing the delay and setting out that the Pensions Dashboards Programme would be reset to get it back on to a path for successful delivery. The decision to pause, review and reset the programme will provide it with the time to ensure complete delivery of the ecosystem and supporting documentation before industry begins to connect. So far, the reset has assessed the digital architecture and I am pleased to report that no fundamental issues have been identified. This has provided reassurance to the Government to move forward with amending the regulations.
The staging profile in Schedule 2 to the 2022 regulations set out the order in which different types of schemes, categorised by size and type, would connect to pensions dashboards. However, the 2022 regulations did not provide the flexibility necessary to deliver a programme of this magnitude—a digital undertaking that will enable users to search over 3,000 schemes to find their pensions.
This instrument curtails the period of uncertainty for the pensions industry. The staging profile in the 2022 regulations required the first schemes to connect at the end of August 2023. By laying these amendment regulations, we are seeking to avoid any perception that schemes would be in breach through no fault of their own. As mentioned, all schemes in scope will now be required to connect to dashboards by 31 October 2026 at the latest. The regulations will provide more flexibility to deliver pensions dashboards while retaining the broad framework of a phased approach to help to manage the flow of connections and maximise coverage as early as possible.
The Government will work with partners and the pensions industry on a connection timetable to be published in guidance. We expect that the connection timetable in guidance will prioritise large schemes with the greatest number of members. This will maximise the potential for savers to realise the benefits of dashboards as early as possible. The dashboards available point—the point at which dashboards will be available for widespread public use—could therefore happen before the October 2026 connection deadline in the regulations. Although the connection timetable set out in guidance will not be mandatory, there is a requirement for scheme trustees or managers to have regard to this guidance. Not doing so would be a breach of the regulations. The Financial Conduct Authority will ask its board to make corresponding deadline changes in the dashboard rules for FCA-regulated pension providers shortly after Parliament approves these amending regulations.
I will now explain what has not changed. Although the instrument amends the requirements on trustees or managers by removing Schedule 2, there are no other material changes to the regulations. All other requirements have been retained, including the requirements to be satisfied for qualifying pensions dashboard services, connection duties and requirements on “find” and “view”. Crucially, the requirement for the Secretary of State to provide six months’ notice ahead of the dashboards available point remains unchanged. The Government will continue to work with the industry on the matters that must be considered before dashboards are launched to the public.
The consumer is at the heart of all our endeavours. These relevant matters are important to ensure that pensions dashboards are launched to the public safely and securely, having been rigorously tested. Protecting the best interests of savers is the core principle behind dashboards and the Government remain firmly committed to ensuring that people’s data is accurate, simple to understand and, above all, secure. Dashboards will ensure that people always remain in control over who has access to their data, as existing legislation, including data protection duties, underpins the requirements that must be adhered to by pension providers, schemes and qualifying pensions dashboard services.
Accurate and high-quality data is essential to delivery and the success of pensions dashboards rests on the pensions industry’s ability to successfully match consumers to their information. The Government and the regulators have repeatedly advised the industry to get its data ready for dashboards. It should use the extra time to ensure that it can meet its dashboard obligations. Schemes and providers are already subject to existing statutory and other protections on data, including the accuracy principle under UK GDPR, which places a requirement on schemes to take all reasonable steps to erase or rectify inaccurate data without delay. It is crucial that dashboards give power to savers and not to scammers. Robust controls and standards will be built into the digital architecture to prevent potential scammers or fraudsters from gaining access to people’s information.
These amendment regulations will facilitate a collaborative approach to connection that delivers on our commitment to introduce pensions dashboards. Pensions dashboards have the potential to transform retirement planning for ever and these regulations are another step in the right direction. I therefore commend them to the Committee. I beg to move.
Lord Young of Cookham (Con)
I am most grateful to my noble friend for the clear exposition of this statutory instrument and for the very helpful meetings that he and his officials have held with noble Lords over the past few months. I am also grateful to him for the letter that he wrote to me following the last meeting.
Looking around, I see some aficionados from our earlier debates on the pensions dashboard. I was looking at a debate from 28 January 2020, when I said:
“Over the weekend, I logged on to the Pensions Dashboard Prototype Project, which I found informative, but right at the end it said: ‘The industry and government hope to have Pensions Dashboard services ready by 2019’”.
At that time, we were debating a consultation document and the response to it. Again, I quote:
“Reading the response to the consultation document, we are told: ‘Once the supporting infrastructure and consumer protections are in place, and data standards and security are assured, most pension schemes should be ready to provide consumer’s information to them within three to four years’”.—[Official Report, 28/1/20; col. 1373.]
That was in January 2020. My noble friend knows that this project has been dogged by uncertainty and delay.
I have a specific point to raise about the identification service. Consumers will obviously have to identify themselves before they can access the dashboard. The Government’s initial proposal was to use Verify, a system sponsored by the Government with ambitious targets to have 46 government services accessible by March 2018. Sadly, that project was not a success. The NAO said that
“it is difficult to conclude that successive decisions to continue with Verify have been sufficiently justified”,
and the Government withdrew support from Verify in 2020. The pensions dashboard has had to develop its own service in the meantime.
In my noble friend’s very helpful letter, he referred to the new government service, GOV.UK One Login. He said:
“The core of the system has been launched: its sign-in element, a web-based identity verification journey, and a fast-track identity checking app”
are up and running. I have actually connected to and logged into One Login, and am now registered.
In his letter to me, my noble friend went on to say:
“As you may recall, the PDP”—
pensions dashboard programme—
“has procured an interim identity service provider, whose contract runs until January 2024”.
At what point will the pensions dashboard transfer from this interim service? Will it transfer to the government-run One Login, which seems the obvious thing to do, assuming that it is as robust? By the time the system is launched in 2026 or earlier, will the interim service have been put to one side and will we all have moved over to One Login; or will the interim service still be the one that we have to use, for the next few years? I hope to hear that it will have transferred to One Login, so that we do not have to register twice—first with the interim one and then with One Login. That is my main point.
My final point is on the Secondary Legislation Scrutiny’s Committee report on this statutory instrument, published on 22 June, which I am sure my noble friend has seen. The committee raised two points in its conclusion, to which I am sure my noble friend will reply. In paragraph 27, it quoted its 16th report:
“We encourage the Government to take this opportunity to address the complexity and costs of the dashboard … by simplifying and standardising the system wherever possible”.
The committee confirmed that that remains its position in its latest report on this instrument. Finally, it said:
“We are disappointed to, once again, find our Report supplying basic information to the House that DWP should have published in the EM”—
the Explanatory Memorandum. I am sure my noble friend will respond to those points, in addition to my main point about the verification service.
Lord Young of Cookham (Con)
My noble friend has been very helpful. Is it the Government’s objective that the Government’s One Login will be the access point to the pensions dashboard?
Viscount Younger of Leckie (Con)
The answer is yes, eventually, but I will need to write to my noble friend to qualify what I mean by that. That is the aim and it makes sense, but I cannot say that it will be by a particular date. I shall write to my noble friend.
I shall conclude quickly because I realise that others are waiting for the next debate. I thank all noble Lords in the Committee for the points that they have made. I commend the regulations to the Committee.
Cost of Living Support
Lord Young of Cookham Excerpts(1 year, 5 months ago)
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Lord Young of Cookham (Con)
My Lords, unlike others, I find much to welcome in the Statement, not least the increase in the maximum payments of 50% to those on universal credit for childcare, which will help them find work. However, is my noble friend confident that the childcare market will be able to respond to the increased demand that is likely to result from this increased beneficence from the department?
Viscount Younger of Leckie (Con)
My noble friend makes a good point about childcare, and the House will be aware of the announcements that were made recently. We are determined to support as many families as possible with access to high-quality affordable childcare, which is why the Spring Budget announced these significant new investments to expand free early education entitlements from 2024-25, together with uplifts in 2023-24 and 2024-25 for the existing entitlement offers.
On his specific question about demand versus supply, that is a very good point. We are confident that supply will meet demand, but we are also aware—certainly I am aware of some anecdotal evidence—that demand is going up, and we want to be sure that demand meets supply. Although I do not have any figures, I reassure my noble friend that we are aware of this particular matter.
Pensions Dashboards (Prohibition of Indemnification) Bill
Lord Young of Cookham ExcerptsFriday 21st April 2023
(1 year, 7 months ago)
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Lord Young of Cookham (Con)
My Lords, I am pleased that the Pensions Dashboards (Prohibition of Indemnification) Bill has now reached its final stage in your Lordships’ House. I thank my noble friend the Minister and his officials for their support, as well as those noble Lords who supported the Bill on Second Reading: my noble friends Lady Altmann and Lord Holmes, who flank me on either side, the noble Baroness, Lady Sherlock, and the noble Lord, Lord Sharkey, all of whom who are present in the Chamber this morning to ensure the safe passage of this legislation. I am also grateful to Mary Robinson for introducing the Bill and expertly steering it through all stages in the other place.
The Bill’s purpose is clear. It will increase protection for pensions savers by making it a criminal offence for trustees and managers of occupational pension schemes to reimburse themselves using assets of the pension scheme for penalties imposed on them due to non-compliance with any relevant pensions dashboard regulations. I hope noble Lords recognise the importance of the Bill and agree to its passage today. I beg to move.
Baroness Sherlock (Lab)
My Lords, I congratulate the noble Lord, Lord Young of Cookham, on piloting the Bill through the House with his usual flair, and it is very nice that we can all be here to see it on its way. It is a narrowly focused Bill which simply addresses a lacuna in the original legislation, and we are happy to support it. I also thank the noble Viscount for giving us an assurance at Second Reading that before long, we can look forward to an update on the likely implementation of the pensions dashboards themselves. It remains of paramount importance that people can save for their retirement with confidence and with an understanding of all the implications of the choices they are making or that have been made on their behalf. We support the creation of a pensions dashboard to contribute to that goal, although we will continue to debate with Ministers choices about how it can best be done. For today, we are pleased to wish this Bill on its way.
Viscount Younger of Leckie (Con)
My Lords, I, too, am grateful to my noble friend Lord Young of Cookham for presenting his Bill to the House, and to my honourable friend in the other place, Mary Robinson, for her skilled stewardship of the Bill. It is a pleasure again to offer my support for the Bill on behalf of the Government. I, like my noble friend, also thank all noble Lords who were present for Second Reading for their interest in the Bill and for supporting it as it moved towards its final stage.
I committed to follow up on the topics relating to this Bill and questions about pensions dashboards more broadly that were raised by noble Lords during the previous debate. I have placed copies of letters I sent after Second Reading in the House Library, and they are also available on the Bill’s webpage—hopefully, noble Lords have had a look at them. I hope the letters sent have helped to address these queries, which included asking for an update on progress on the department’s state pension records correction exercise, the readiness of public service pension schemes to connect to dashboards, and whether penalties could be incurred for loading incorrect data to pensions dashboards. Queries were also raised more specifically about the penalties which could be imposed on trustees and managers of occupational pension schemes under the proposals in the Bill, and for compliance breaches under the pensions dashboards regulations.
I further addressed questions about the challenges faced by the pensions dashboards programme in delivering the digital architecture underpinning pensions dashboards. On this final point, I made clear to the House during Second Reading the importance of this Bill, and that it is needed irrespective of the delivery timeline for pensions dashboards. To be helpful to the noble Baroness, Lady Sherlock, I also pledged—and I stick to that pledge—to update noble Lords as soon as is reasonably possible, and an invitation will be forthcoming.
To reiterate why the Bill is required, it corrects a legislative gap which, left as it is, means that no provision would prohibit trustees or managers from reimbursing themselves using pension scheme assets to pay penalties in respect of breaches of any relevant pensions dashboards regulations. There was unanimous agreement among noble Lords at Second Reading that this would be unacceptable.
The proposals under this Bill seek to deter rogue actors from reimbursing themselves using the assets of pensions scheme members by allowing criminal proceedings to be brought against trustees or managers of occupational pension schemes if they are reimbursed and knew or had reasonable grounds to believe that they had been reimbursed as such. If a trustee or manager is found guilty of this offence, the Bill’s provisions allow for a maximum sentence of up to two years in prison, or a fine, or indeed both.
As I emphasised at Second Reading, the Bill does not place any new requirements on trustees or managers of occupational pension schemes or burden them with additional costs. It simply extends an existing prohibition in Section 256 of the Pensions Act 2004, which already applies to a number of areas of pensions legislation, to include pensions dashboards.
To conclude, the Bill rightly increases protection for consumers saving for their retirement. I do hope, therefore, that the whole House will join me in its support for my noble friend’s Bill and agree to its passage.
Lord Young of Cookham (Con)
My Lords, I am grateful to both Front-Benchers for their support and to my noble friend the Minister for addressing in correspondence some of the broader issues that were raised in a recent meeting on the pensions dashboard.
Pensions Dashboards (Prohibition of Indemnification) Bill
Lord Young of Cookham ExcerptsFriday 3rd March 2023
(1 year, 8 months ago)
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Lord Young of Cookham (Con)
My Lords, in moving that the Pensions Dashboards (Prohibition of Indemnification) Bill be read a second time, I reassure noble Lords that these dashboards are totally different from the ones in the REUL Bill which have generated such excitement this week.
After gathering significant cross-party support in the other place, where Mary Robinson successfully steered the Bill through the parliamentary process, I am hopeful that it will receive a similarly positive reaction here. This is a simple yet important measure designed to safeguard the interests of those saving for their pension.
By way of background, I have a long-standing interest in pensions legislation, having spoken in the 1970s when Barbara Castle introduced the state earnings-related pension scheme, and more recently speaking about the potential benefits of the pensions dashboard during the passage of the pensions Act 2021. I see in their places today several aficionados from that debate.
With record numbers of people saving for retirement, it is more important than ever that people understand their pensions information and prepare for financial security in later life. Pensions dashboards will be digital tools available free of charge to consumers, designed to bring together individuals’ different pensions, including the state pension, in one place online. This will fundamentally change the way that people interact with their pensions, thereby helping to support more informed retirement planning.
As my noble friend the Minister will confirm, the Government continue to work closely with industry and their key delivery partners, such as the Pensions Dashboards Programme—which is part of the Money and Pensions Service—the Pensions Regulator and the Financial Conduct Authority, to progress this dashboards project. I am grateful to my noble friend for arranging meetings for noble Lords with the FCA to update us on that progress, and I am grateful to his officials for their briefing for this debate.
While it is true that millions of people are saving for their retirement, it is also the case that consumers are not generally well engaged with their different pensions. This has been highlighted by the FCA, which estimates that 53% of adults contributing to a defined contribution pension have not reviewed how much their DC pension pots are worth in the last 12 months. In addition to this, the Pensions Policy Institute estimates that over 2.8 million pension pots were considered to be lost in 2022, representing an increase of 73% since 2018. Pensions dashboards can help to address this issue by bringing together people’s various pensions, including state pension, in one place online. This will reconnect savers with their lost or forgotten pension pots, and by doing so will help people plan for their well-deserved retirement.
There is a requirement in the Pension Schemes Act 2021 for the Money and Pensions Service to provide a pensions dashboard service. This was a welcome addition to that Act which I pressed for at the time, along with other noble Lords. Moreover, it will also be possible for others to enter the market and provide dashboards, which will be bound by requirements set out in the Pensions Dashboards Regulations and regulated by the FCA. That will provide scope for innovation, helping to engage a broad range of users and meet the varied needs of the millions of people with pensions savings. Importantly, individuals will see the same information regardless of which dashboard service they use, and robust rules will be in place to ensure consumers’ interests are at the forefront of all dashboards.
The Pensions Dashboards Regulations 2022, which were approved by this House in November last year and subsequently came into force in December, place requirements for occupational pension schemes to be connected to a digital ecosystem designed by the Money and Pensions Service. These requirements include, for example, the need for pension schemes and providers to continue to comply with the connection, security and technical standards published from time to time by the Money and Pensions Service. There are also requirements relating to the provision of pensions information at the request of a pension scheme member.
Under the Pensions Dashboards Regulations, the Pensions Regulator may, if necessary, take enforcement action against trustees or managers of occupational pension schemes in the event of non-compliance. For each breach of the regulations, this could result in penalties being imposed of up to £5,000 for individuals or up to £50,000 in other cases, such as for corporate trustees. These are significant penalties, but the House may be surprised to hear that there is nothing in the legislation which prohibits the trustees or managers being reimbursed for those penalties using the assets of the pension scheme. My noble friend the Minister can confirm, but I understand that this was simply an oversight during the passage of the Pension Schemes Act 2021, and the omission escaped the eagle eyes of noble Lords scrutinising the Bill.
My Bill addresses this critical issue by making it a criminal offence for trustees or managers of occupational pension schemes to reimburse themselves from the assets of the pension scheme for penalties imposed for compliance breaches under the Pensions Dashboards Regulations. If a trustee or manager was found guilty of this offence, the Bill’s provisions would allow for a maximum sentence of up to two years in prison, or a fine, or both. This is intended to provide an effective deterrent to such unscrupulous behaviour.
The Bill does not place any new costs or requirements on occupational pension schemes but rather works by extending existing legislation which provides for a similar prohibition in a number of other areas of pensions legislation, including automatic enrolment. I hope noble Lords agree that it increases protection for pension savers from any unscrupulous persons. I look forward to working with the Minister and other noble Lords as we aim to secure its swift passage through the House. I beg to move.
Lord Young of Cookham (Con)
My Lords, I am grateful to all noble Lords who have taken part in this debate and for their support for this modest legislation. As my noble friend Lady Altmann said, the Bill is impossible to oppose, and I hope that optimistic forecast is carried out. She raised issues about penalties. My noble friend the Minister answered that, but so far as this Bill is concerned it seems to me that two years in prison is quite a severe deterrent for anyone who seeks to break the rule set out in the Bill.
The noble Lord, Lord Sharkey, fired at me four technical questions about penalties, and I am grateful to him. Fortunately, the bullets were intercepted by my noble friend the Minister, who answered them. As we have heard, if by any chance the replies do not come up to standard, my noble friend has promised to write to the noble Lord.
I am grateful to my noble friend Lord Holmes, who reminded us about the success of auto-enrolment. I agree with what he said about the need to promote early investment in pensions to get the benefit of the magic of compound interest. He also touched on a subject close to my heart; namely, digital identification and the history of the Verify programme. My noble friend the Minister dealt with that, but as I understand it, rather than wait for the Government to come up with their solution, the programme dashboard is developing an interim programme which will be compatible with the one the Government end up with.
Those who came along to listen to the longer speech of the noble Baroness, Lady Sherlock, on pensions will have been disappointed, as she decided not to deliver it. We look forward to hearing that on a separate occasion. She referred to the Written Ministerial Statement announcing a delay in the programme. I want to congratulate the Whitehall wordsmith who came up with the expression “initiated a reset”. I think the train operating companies will want to follow that example, and I look forward to hearing on Monday that Great Western Railway has “initiated a reset” to the 8.14 from Cookham to Paddington.
Finally, I am very grateful to my noble friend the Minister, who answered, I hope, all the questions that were theoretically directed at me. He reminded us of the large sum of money—£26 billion—represented by “lost” pensions and reminded us about the complexity of the plumbing involved in getting the dashboard going. I am also very grateful to him for his comprehensive reply to the debate and for the Government’s support.